Michael R. Scott v. Elizabeth G. Scott ( 2004 )

  •                                COURT OF APPEALS OF VIRGINIA
    Present: Judges Benton, Bumgardner and Kelsey
    Argued at Alexandria, Virginia
                                                                  MEMORANDUM OPINION* BY
    v.     Record No. 0815-04-4                                    JUDGE D. ARTHUR KELSEY
                                                                      DECEMBER 7, 2004
                                     Jonathan C. Thacher, Judge
                     Michael R. Scott, pro se.
                     Sean P. Kelly (Eva N. Juncker; Robert Lunger; Condo Roop Kelly &
                     Byrnes, P.C., on brief), for appellee.
           In 2002, the trial court entered a final decree divorcing Michael R. Scott and Elizabeth G.
    Scott. Wife appealed, claiming error in various aspects of the equitable distribution award. We
    affirmed in part and reversed in part. Scott v. Scott, No. 2804-02-4, 2004 Va. App. LEXIS 4
    (Jan. 6, 2004) (Scott I). The trial court on remand made additional findings, which husband now
    appeals. For the following reasons, we affirm the trial court’s final judgment.
           “When reviewing a trial court’s decision on appeal, we view the evidence in the light
    most favorable to the prevailing party, granting it the benefit of any reasonable inferences.”
    Congdon v. Congdon, 
    40 Va. App. 255
    , 258, 
    578 S.E.2d 833
    , 835 (2003). The evidence in this
    case comes from the trial court’s original evidentiary hearing in 2002 and from the remand
    hearing following the first appeal.
               Pursuant to Code § 17.1-413, this opinion is not designated for publication.
            In 1978, Michael Scott purchased a condominium in San Diego, California, paying $17,000
    down on a total purchase price of $85,000. In 1980, Mr. Scott refinanced the condo for $93,750 and
    took $23,361 out. In 1981, Michael and Elizabeth Scott married. They resided in the condo until
    1983, when they moved to the East Coast. From 1983 to 1999, they leased the condo to tenants.
    Ms. Scott managed the property, determining the rent and maintaining the premises. She also dealt
    with tenants and the homeowners’ association. In his testimony, Mr. Scott agreed that all rent
    payments “went to Libby, and it was part of her -- part of her monthly cash flow. She just collected
    it and deposited it in her account,” which was used for marital purposes. Mr. Scott paid the
    mortgage from an account funded by his salary. “The mortgage payment for the condo,” Mr. Scott
    conceded, “came out of the marital account.”
            The parties refinanced the condo in 1990, taking a little over $30,000 out to pay a number of
    marital debts. At that time, Ms. Scott signed as co-borrower on the promissory note and assumed
    joint-and-several liability for the debt. In 1997, they refinanced the condo yet again to obtain a
    lower interest rate. This time the condo, which had been titled solely in Mr. Scott’s name, was
    retitled to “Michael R. Scott and Elizabeth G. Scott, Husband and Wife as Joint Tenants.” Mr. Scott
    testified that this retitling was done solely as a requirement of the lender and that he did not intend it
    to be a gift to his wife. Ms. Scott, however, testified that the joint titling “wasn’t a question. We
    owned it jointly.” “I assumed I was on the title the whole time,” she explained. The trial court
    accepted Mr. Scott’s view and declared the condo to be his separate property.
            The parties also presented conflicting testimony on a $22,609 tax refund received on their
    2000 federal income tax return. Mr. and Ms. Scott testified that they initially agreed to roll $10,000
    over toward their 2001 taxes, leaving approximately $12,000 that they would split. Mr. Scott,
    however, later determined he could not afford to do so and rolled over only “about $2,000 or
    $3,000.” He claimed that he and his wife agreed to have the balance of the overpayment deposited
    to his account so that he could use it to pay their son’s college tuition and capital gains taxes they
    owed on the sale of marital property in Georgia. Ms. Scott denied any knowledge of this change in
    plans and asked the trial court to equitably distribute the entire refund amount. The trial court
    apparently overlooked this issue and failed to make any disposition.
            Ms. Scott appealed and argued, among other things, that the trial court erred by declaring the
    condo Mr. Scott’s separate property. We began our analysis by pointing out that the trial court
    mistakenly “concluded the condominium was ‘simply separate property of the husband,’ without
    making a finding that either the deed was not a deed of gift or husband had retraced the jointly
    titled property to separate property.” Scott I, slip op. at 4, 2004 Va. App. LEXIS 4, at *6. We
    then held that even if Mr. Scott had no donative intent at the time the parties jointly titled the
    condo, he still failed to establish through tracing principles exactly what portion of the resulting
    hybrid property should be classified as separate. We explained the failure of proof this way:
               But, accepting for our analysis that the husband carried his burden of proof
               that the deed was not a gift, the burden remained on husband in order to
               establish that the condominium was his separate property to establish that
               all of the funds used to pay for and acquire the property during the marriage
               could be traced to his separate funds.
                                  *        *       *         *     *       *
               Thus, the rental funds were not maintained in a separate and discrete fund
               from which we can say or the trial court could conclude that the purchase
               money mortgage was serviced exclusively from separate funds. Therefore,
               while husband may have adequately retraced the rental payments to
               accounts used to pay the mortgage payments, the husband failed, as a
               matter of law, to retrace the funds as his separate property. Thus, the
               evidence failed to rebut the marital property presumption and the court
               erred in classifying the condominium as the husband's separate property.
               Therefore, we reverse the trial court's classification of the San Diego
               condominium as separate property, and remand for the court to reclassify
               the property and to equitably distribute the value of the condominium
               according to the rights and equities of the parties. See Code § 20-107.3(A),
               Hart, 27 Va. App. at 65-66, 497 S.E.2d at 505, and Rahbaran v. Rahbaran,
    26 Va. App. 195
    494 S.E.2d 135
     (1997) (addressing hybrid property).
    Scott I, slip op. at 4-5, 2004 Va. App. LEXIS 4, at *6-9 (emphasis added).
           Ms. Scott also challenged the trial court’s failure to rule on the 2000 tax refund issue.
    We agreed “the court did not address the issue and made no disposition of this marital asset.” Id.
    slip op. at 6, 2004 Va. App. LEXIS 4, at *10. We directed the trial court, on remand, to address
    the issue and to determine the parties’ respective rights to the refund.
           Scott I concluded by holding Ms. Scott was entitled to reasonable attorney fees on appeal.
    We ordered the trial court to “determine that amount upon remand.”
           On remand, the trial court took additional testimony and argument from Mr. Scott.
    “That’s all the evidence I have, Your Honor,” he concluded. The court ruled against Mr. Scott,
    finding that the condo should be classified as wholly marital property and divided evenly
    between the parties. Regarding the tax refund, the court divided it equally after debiting the
    gross amount by $12,000 to take into account the tuition payment. Finally, the court awarded
    Ms. Scott half of her attorney fees on appeal because she “only prevailed on half of the issues.”1
           In his pro se brief on appeal, Mr. Scott asserts nine separate questions presented. Seven
    of the nine deal with the condo. The remaining two address the tax refund and the award of
    attorney fees. We find no error in the trial court’s decision on any of these issues.
                                     A.   THE SAN DIEGO CONDO
           The trial court’s decision in classifying, valuing, and equitably distributing the San Diego
    condo involves matters within the sound discretion of the chancellor. We overturn decisions of
    this kind only on a “showing of an abuse of that discretion.” Smith v. Smith, 
    43 Va. App. 279
    597 S.E.2d 250
    , 254 (2004) (citations and internal quotation marks omitted).
             In Scott I, we rejected Ms. Scott’s challenge to the trial court’s calculation of spousal
    support and its decision to not award attorney fees incurred during the trial court proceedings.
           We find no error in the trial court’s final decision to classify the condo as wholly marital
    property. We reversed the trial court in the first appeal because “husband failed, as a matter of
    law, to retrace the funds as his separate property.” Scott I, slip op. at 5, 2004 Va. App. LEXIS 4,
    at *8. We came to that conclusion because “the burden remained on husband in order to
    establish that the condominium was his separate property to establish that all of the funds used to
    pay for and acquire the property during the marriage could be traced to his separate funds.” Id.
    slip op. at 4, 2004 Va. App. LEXIS 4, at *7.
           On remand, the chancellor initially stated that no further evidence need be taken because,
    as we had stated in our opinion:
                   All of the income from the condo became marital property. All of
                   the payments to the condo the Court has ruled -- the Court of
                   Appeals has ruled was marital property. It is not a Brandenburg
                   issue. It is transmuted into marital property by the conduct of the
                   parties, and that is the Court’s ruling.
    In response, Mr. Scott argued that our opinion could be interpreted to allow additional evidence
    on tracing so that he could attempt to demonstrate the hybrid nature of the property and to
    quantify his separate property component. Recognizing the possibility that Scott I gave him “all
    those options . . . all three options,” the chancellor agreed to consider Mr. Scott’s additional
    evidence and argument.2 At the end of the hearing, however, the court ruled: “Having heard all
    the evidence and all the argument, I still remain where I was before.” The court declared the
    condo wholly marital and ordered that it be divided equally.
             We acknowledge that the panel citations to Code § 20-107.3(A), dealing with all three
    property classifications (marital, hybrid, and separate), as well as Hart v. Hart, 
    27 Va. App. 46
    497 S.E.2d 496
    , 505 (1998), and Rahbaran v. Rahbaran, 
    26 Va. App. 195
    , 205, 
    494 S.E.2d 135
    , 139 (1997), two hybrid property opinions, created some ambiguity regarding the
    scope of the remand.
           We need not determine the exact contours of the law-of-the-case doctrine as it applies to
    this case.3 Even if our remand order authorized the trial court to take additional evidence on
    retracing, Mr. Scott’s evidence in toto failed to persuade the factfinder. At the original equitable
    distribution trial in 2000 and the remand hearing in 2004, the chancellor heard extensive
    evidence of the financial circumstances of the condo ⎯ its purchase price, the circumstances of
    various refinancings, its retitling as joint property, Ms. Scott’s assumption of joint and several
    liability, as well as the condo’s income and expense cash flow.4
           As a factfinder, the chancellor was well within his decisionmaking discretion to find Mr.
    Scott’s evidence of retracing unpersuasive. Mr. Scott’s original downpayment with separate
              Under the law-of-the-case doctrine, a party is not “entitled to relitigate unappealed
    issues on remand.” Lockheed Info. Mgmt. Sys. Co. v. Maximus, Inc., 
    259 Va. 92
    , 108, 
    524 S.E.2d 420
    , 429 (2000). “Where there have been two appeals in the case, between the same
    parties, and the facts are the same, nothing decided on the first appeal can be re-examined on a
    second appeal. Right or wrong, it is binding on both the trial court and the appellate court, and is
    not subject to re-examination by either.” Kaufman v. Kaufman, 
    12 Va. App. 1200
    , 1208, 
    409 S.E.2d 1
    , 6 (1991) (citations omitted). This rule has long applied “where the question raised on
    the second appeal was necessarily involved in the first appeal, whether actually adjudicated or
    not.” Searles’ Adm’r v. Gordon’s Adm’r, 
    156 Va. 289
    , 296, 
    157 S.E. 759
    , 761 (1931) (quoting
    Steinman v. Clinchfield Coal Corp., 
    121 Va. 611
    , 620, 
    93 S.E. 684
    , 687 (1917)); Kaufman, 12
    Va. App. at 1208, 409 S.E.2d at 6.
              During the remand hearing, Mr. Scott sought to introduce into evidence “official copies
    from the San Diego Assessor’s office” that he suggested would show the amount of the condo’s
    appreciation during the relevant time period. The trial court refused to admit the tax assessor
    documents. Mr. Scott did not proffer the excluded documents at trial, and thus, waived any
    appellate challenge on this issue. See Gamache v. Allen, 
    268 Va. 222
    , 230, 
    601 S.E.2d 598
    , 603
    (2004); Smith v. Hylton, 
    14 Va. App. 354
    , 357-58, 
    416 S.E.2d 712
    , 715 (1992); Klein v. Klein,
    11 Va. App. 155
    , 160, 
    396 S.E.2d 866
    , 868 (1990). Mr. Scott also presented other documents,
    some of which the trial court admitted, that do not appear in the trial court record submitted to us
    in this appeal. We thus do not consider them. See Lawrence v. Nelson, 
    200 Va. 597
    , 598-99,
    106 S.E.2d 618
    , 620 (1959) (“An appellant who seeks the reversal of a decree on the ground that
    it is contrary to the law and the evidence has the primary responsibility of presenting to this
    court, as a part of the printed record, the evidence introduced in the lower court, or so much
    thereof as is necessary and sufficient for us to give full consideration to the assignment of
    error.”); Oliver v. Commonwealth, 
    35 Va. App. 286
    , 297, 
    544 S.E.2d 870
    , 875 (2001) (“The trial
    court had those records in its files and took judicial notice of them at trial, without objection.
    Those records, however, were not made a part of the record before us.”).
    funds could not be easily saved from the dissipating effect of the various refinancings. The
    market value of the condo (at least at the time of the refinancings) could not be determined with
    any confidence. Mr. Scott’s explanation, which focused on then-prevailing loan-to-value
    practices of lenders, was a sensible one ⎯ but not of such convincing clarity that the chancellor,
    as factfinder, had no choice but to accept it. We thus hold that the chancellor did not abuse his
    discretion in classifying the condo as wholly marital property and in rejecting Mr. Scott’s effort
    at establishing a separate property component through retracing principles.
           Mr. Scott also claims the trial court erred in ordering a reappraisal of the condo, rather
    than relying on the $280,000 value stipulated at the 2002 equitable distribution trial. We discern
    no error in the trial court’s decision on this issue. See Holden v. Holden, 
    35 Va. App. 315
    , 324,
    544 S.E.2d 884
    , 888 (2001) (holding that “re-valuation on remand is necessary ‘to obtain the
    most accurate valuation and equitable distribution’” (citations omitted)); Wagner v. Wagner, 
    16 Va. App. 529
    , 531, 
    431 S.E.2d 77
    , 78 (1993) (en banc). 5
                              B. DIVISION OF THE 2000 TAX REFUND
           In Scott I, we directed the trial court to address the unresolved dispute concerning the
    parties’ 2000 tax refund. On remand, the trial court divided the refund evenly between Mr. and
    Ms. Scott after debiting the tuition payment from the gross figure. Mr. Scott argues on appeal
    that, pursuant to an “agreement of the parties,” he was entitled to the entire refund. No written
    contract substantiated the alleged agreement. Ms. Scott denied it. With the evidence in
    equipoise and the burden of proof on Mr. Scott, see Valjar, Inc. v. Maritime Terminals, Inc., 220
             We find no basis whatsoever in the record for Mr. Scott’s assertion on brief that the trial
    court “tended to ignore all of Husband’s evidence” and “issued its ruling” before giving him a
    chance to present his side of the case. We view as similarly meritless Mr. Scott’s allegation that
    Ms. Scott’s counsel “repeatedly tried to stampede the trial court into a ruling ignoring Husband’s
    evidence on retracing his separate contribution to the San Diego property.”
    Va. 1015, 1018, 
    265 S.E.2d 734
    , 736 (1980), the trial court did not err in refusing to enforce the
    putative agreement.
                                   C. ATTORNEY FEE AWARD
           In Scott I, we directed the trial court to award attorney fees related to her appeal. On
    remand, the court awarded Ms. Scott half of her fees on the ground that she prevailed, roughly
    speaking, on half of the issues. In the present appeal, Mr. Scott claims the award should be
    vacated because he received the fee petition for the first time at the remand hearing and that,
    upon later examination, he concluded that the fee request included excessive and improper
    billing entries. Mr. Scott also asserts on appeal a broad-based ad hominem against Ms. Scott’s
    counsel and claims they should be precluded from recovering any fees.
           Mr. Scott failed to raise these arguments in the trial court, and thus, cannot do so for the
    first time on appeal. Newsome v. Newsome, 
    18 Va. App. 22
    , 25, 
    441 S.E.2d 346
    , 348 (1994)
    (applying Rule 5A:18 procedural bar to attorney fee award). Because Mr. Scott does not assert
    the ends-of-justice exception to Rule 5A:18’s procedural bar, we likewise do not address its
    applicability to this case. See Widdifield v. Commonwealth, 
    43 Va. App. 559
    , 564, 
    600 S.E.2d 159
    , 162 (2004) (en banc) (holding that exception to Rule 5A:18 should not be raised sua
           In sum, we find no error in the trial court’s decision to classify the San Diego condo as
    wholly marital property and to distribute it evenly between the parties. We likewise find no
    abuse of discretion in the trial court’s distribution of the 2000 tax refund or its award of attorney
    fees to Ms. Scott. For these reasons, we affirm.6
              In addition, we (i) deny Ms. Scott’s request for attorney fees incurred during this appeal,
    (ii) deny Mr. Scott’s request for fees and costs incurred during this appeal, (iii) grant Ms. Scott’s
    motion to strike to the extent Mr. Scott relies on attachments to his appellate briefs that are not
    part of the trial court record, (iv) deny Ms. Scott’s motion for sanctions pursuant to Rule 5A:26
    and Code § 8.01-271.1, and (v) deny Mr. Scott’s motion for sanctions under Code § 8.01-271.1.