Frederick C. Whitehead v. Pati Anderson Whitehead ( 2001 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Frank and Humphreys
Argued at Chesapeake, Virginia
FREDERICK CUMMINGS WHITEHEAD
MEMORANDUM OPINION * BY
v. Record No. 2883-00-1 JUDGE LARRY G. ELDER
JUNE 26, 2001
PATTI ANDERSON WHITEHEAD
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
H. Thomas Padrick, Judge
John R. Lomax (Berry, Ermlich, Lomax &
Bennett, on brief), for appellant.
Grover C. Wright, Jr., for appellee.
Frederick Cummings Whitehead (husband) appeals from a final
decree of divorce granting his former spouse, Patti Anderson
Whitehead (wife), a lump sum equitable distribution award,
periodic spousal support and payment of a portion of her
attorney's fees. On appeal, husband contends the trial court
erroneously classified certain separate property as marital,
failed to award him credit for his interest in the marital home
and the marital portion of wife's retirement benefits, and
awarded wife spousal support and attorney's fees. We hold the
attorney's fee award was not an abuse of discretion under the
facts of this case. As to the equitable distribution, we hold
* Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
the trial court's failure to award husband a share of the
marital home or wife's retirement also did not constitute an
abuse of discretion and conclude that husband failed properly to
preserve his objection to the classification of the boat as
marital property. However, we conclude the trial court's
classification of $9,100 husband withdrew from the parties'
joint account as marital was erroneous because undisputed
evidence retraced the funds to husband's separate property, an
inheritance from his mother. Thus, we reverse the equitable
distribution award and remand to the trial court for further
proceedings consistent with this opinion. Because we reverse
the equitable distribution award, we do not reach the issue of
spousal support, and we direct the trial court to consider this
issue anew in light of the changed equitable distribution award.
A.
EQUITABLE DISTRIBUTION
"Fashioning an equitable distribution award lies within the
sound discretion of the trial judge . . . ." Srinivasan v.
Srinivasan, 10 Va. App. 728, 732, 396 S.E.2d 675, 678 (1990).
Unless it appears from the record that the
chancellor has abused his discretion, that
he has not considered or has misapplied one
of the statutory mandates, or that the
evidence fails to support the findings of
fact underlying his resolution of the
conflict in the equities, the chancellor's
equitable distribution award will not be
reversed on appeal.
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Smoot v. Smoot, 233 Va. 435, 443, 357 S.E.2d 728, 732 (1987).
On appeal, we review the evidence in the light most favorable to
the party prevailing below. See, e.g., Anderson v. Anderson, 29
Va. App. 673, 678, 514 S.E.2d 369, 372 (1999).
1.
Classification of Property
Inheritance
Code § 20-107.3(A) provides that
Separate property is . . . all property
acquired during the marriage by bequest,
devise, descent, survivorship or gift from a
source other than the other party . . . .
When marital property and separate property
are commingled by contributing one category
of property to another, resulting in the
loss of identity of the contributed
property, the classification of the
contributed property shall be transmuted to
the category of property receiving the
contribution. However, to the extent the
contributed property is retraceable by a
preponderance of the evidence and was not a
gift, such contributed property shall retain
its original classification.
Code § 20-107.3(A)(1), (3)(d). "[T]he party claiming a separate
interest in transmuted property bears the burden of proving
retraceability." von Raab v. von Raab, 26 Va. App. 239, 248,
494 S.E.2d 156, 160 (1997). "This process involves two steps:
a party must first (1) establish the identity of a portion of
hybrid property and (2) directly trace that portion to a
separate asset." Rahbaran v. Rahbaran, 26 Va. App. 195, 208,
494 S.E.2d 135, 141 (1997). "When a party satisfies this test,
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and by a preponderance of the evidence traces his or her
separate contributions to commingled property, the Code states
that the contributed separate property 'shall retain its
original classification.'" Hart v. Hart, 27 Va. App. 46, 68,
497 S.E.2d 496, 506 (1998) (quoting Code § 20-107.3(A)(3)(d),
(e)) (emphasis in Hart).
Thus, a court commits reversible error in refusing to
classify as separate property a spouse's inheritance where the
spouse proves she deposited the inheritance into a joint account
from which the parties subsequently made no withdrawals. See
id. "Under these circumstances, the Code mandates that [the
spouse's] deposit be classified as separate property." Id. at
68, 497 S.E.2d at 507; see also Brown v. Brown, 324 S.E.2d 287,
289 (N.C. Ct. App. 1985) (holding that separate property
deposited into marital bank account was retraceable where no
withdrawals were made after deposit and balance never fell below
amount of deposit), cited with approval in Hart, 27 Va. App. at
68, 497 S.E.2d at 506.
However, where a spouse makes a deposit of separate funds
into a joint account into which
unspecified sums of marital funds were
thereafter deposited and withdrawn . . . ,
[with] the balance regularly ebbing and
flowing for months[,] . . . the identity of
[the spouse's] separate funds ha[s] been
lost in countless unspecified transactions
involving marital funds, resulting in the
irreversible transmutation of separate into
marital property. Under such circumstances,
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[a] court [is] unable to properly trace and
preserve the integrity of [the spouse's]
separate property.
Asgari v. Asgari, 33 Va. App. 393, 403, 533 S.E.2d 643, 648
(2000).
Here, the commissioner concluded that the $9,716.65 husband
withdrew from the parties' joint account was marital property
under Asgari because it was transmuted and its separate identity
lost. The trial court adopted this classification. We hold
that this classification was erroneous because even the evidence
offered by wife proved that $9,100 of the money husband withdrew
was retraceable as his separate property.
Wife offered into evidence an account statement which
established that the parties' transactions involving the joint
account were minimal. As of March 6, 1998, the account had a
balance of $703.55. On that day, husband deposited $9,100 into
the account, bringing the balance to $9,803.55. Wife agreed
that the source of the $9,100 deposit was husband's inheritance
from his mother, and she did not argue at any point in these
proceedings that his deposit of the money into the joint account
constituted a gift. During the six weeks following that
deposit, only four account transactions occurred. In three
different transactions, husband withdrew $3,000, $1,000, and
$5,717.65, for a total of $9,717.65. The only other transaction
occurring during that period was a deposit of $14.10 from an
unknown source. Thus, unlike in Asgari, "unspecified sums of
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marital funds" were not "deposited and withdrawn from the
account, [with] the balance regularly ebbing and flowing for
months." 33 Va. App. at 403, 535 S.E.2d at 648.
The facts of this case are more similar to those of Hart
and Holden v. Holden, 31 Va. App. 24, 520 S.E.2d 842 (1999). In
Hart, we held inheritance money was retraceable because no
withdrawals were made from the account after the inheritance
money was deposited. 27 Va. App. at 67-68, 497 S.E.2d at
506-07. In Holden, we held that Mr. Holden's separate funds
were retraceable even though other deposits and withdrawals
occurred during the relevant time period. 31 Va. App. at 29,
520 S.E.2d at 845. In Holden, it was uncontested that the
February 1992 deposits into the parties' joint account were
derived from the sale of Mr. Holden's separate property; that
the deposits were made so the parties would have sufficient
funds for a down payment on a piece of real estate; and that,
absent the deposit of Mr. Holden's separate funds, the parties
would have lacked sufficient funds to make that down payment in
April 1992. Id. Under those circumstances, we reversed the
trial court's conclusion that Mr. Holden failed to retrace the
separate property that had been commingled with marital
property. Id. at 29-30, 520 S.E.2d at 845.
Here, also, it was uncontested that the monies originally
deposited were husband's separate property. Although husband
subsequently withdrew monies from the joint account, these
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withdrawals were virtually the only transactions that occurred
involving the account and, therefore, to the extent the
withdrawals equaled the sum of $9,100 husband had deposited,
should have been viewed by the court as husband's reclamation of
his separate property rather than as an improper withdrawal of
marital funds in anticipation of separation. However, as to the
portion of the withdrawals exceeding husband's $9,100 deposit,
the funds were properly classified as marital because husband
offered no additional tracing evidence to establish that they
were separate. Therefore, $617.65 was properly classified as
marital and subject to division by the court.
Boat
Husband contends the trial court erroneously classified the
boat, motor and trailer as marital property, contending the
evidence established the parties' agreement that these items
were husband's separate property. Wife asserts that husband
failed properly to preserve this issue for appeal because his
exceptions to the commissioner's report positively admitted the
boat was marital property.
We hold that our review of this issue is, in fact, barred
due to husband's failure properly to present it to the trial
court. See Rule 5A:18. Husband's only reference to the
commissioner's and trial court's treatment of the boat, motor
and trailer was in exception 8 to the commissioner's report:
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The Commissioner erred in paragraph 22(F) of
his Report in recommending that Wife receive
a monetary award of $4,982.32 for the
reasons stated in Exception 6 in that it is
based on [Husband's] separate property[, the
money Husband inherited from his mother].
The only marital property on which to base a
monetary award was the boat, motor and
trailer, which is more than offset by
[Husband's] interest in the marital home.
Husband's reference in the first sentence of exception 8 to
husband's separate property referred to his inheritance. In the
second sentence of exception 8, husband specifically referred to
the boat, motor and trailer as marital property, and nowhere in
his exceptions did he reference paragraph 22(B)II. and III., in
which the commissioner specifically classified the boat, motor
and trailer as marital property and classified the motor
vehicles as separate property pursuant to the parties'
separation agreement. Thus, the trial court had no opportunity
to consider this claimed error, and we will not consider it for
the first time on appeal.
2.
Interest in Marital Home and Wife's Retirement
Marital Home
Husband, when asked at the commissioner's hearing to state
"[his] position regarding . . . the division of [the marital]
residence," said he "was willing to let [wife] have the house
along with everything in it." When his own attorney asked him
what he "want[ed] in consideration of giving [wife] the house,"
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husband responded, "Not a thing." Although husband's attorney
seemed surprised by that answer, wife's counsel then observed,
"That is the same answer he gave in his interrogatory answer.
It is no surprise. There is no equity in it." Based expressly
on husband's testimony that he wanted nothing for his share of
the marital residence, the commissioner recommended that the
property be transferred to wife. Although husband subsequently
objected, the trial court adopted the commissioner's
recommendation.
Husband concedes the evidence supported the trial court's
finding that the net equity in the marital residence was
$3,355.56. No presumption exists in Virginia law favoring an
equal division of property, see, e.g., Robinette v. Robinette,
10 Va. App. 480, 486, 393 S.E.2d 629, 633 (1990), and the
decision whether to award husband a share of the equity in the
marital residence rested within the discretion of the trial
court, Srinivasan, 10 Va. App. at 732, 396 S.E.2d at 678. We
hold the trial court did not abuse its discretion, especially in
light of husband's interrogatory answers and testimony that he
was "willing to let [wife] have the house" and wanted nothing in
return. See Asgari, 33 Va. App. at 403-04, 533 S.E.2d at 648
("Husband will not be permitted to approbate and reprobate,
ascribing error to an act by the trial court that comported with
his representations."); Anderson, 29 Va. App. at 691, 514 S.E.2d
at 378 (holding court did not abuse its discretion in refusing
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to permit husband to withdraw from stipulation that parties
would themselves determine classification and value of tangible
personal property rather than submitting that issue to court).
Wife's Retirement
The evidence husband offered regarding wife's retirement
plan was limited to wife's testimony that she had worked for
Chesapeake General Hospital for five years and that "[t]here is
a small retirement plan . . . after twenty years of working."
After husband elicited that testimony, wife's counsel responded,
"[W]hat are we doing now? You never asked for any part of her
retirement and he didn't ask for it in his answers to
interrogatories, either. What is the point of this?" Husband's
counsel gave no response, asked wife no additional questions
about her retirement, and offered no evidence as to its value.
Wife, by contrast, offered into evidence a statement from the
administrator of husband's retirement plan detailing the
benefits to which husband would be entitled upon his retirement.
Based on wife's evidence, the commissioner recommended a
division of the marital share of husband's pension and said
husband should be ordered to elect payment of the benefits so as
to provide a survivor annuity. He noted in his report that
"[n]o evidence was produced [from which] to determine an
appropriate award for the husband for the wife's anticipated
retirement," and he "decline[d] to speculate." The trial court
agreed with the commissioner's recommendations, overruled
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husband's exceptions, and awarded wife fifty percent of the
marital share of husband's pension.
We hold the trial court did not err in failing to award
husband a portion of wife's retirement benefits while
simultaneously awarding wife a share of husband's retirement
benefits.
Virginia's [equitable distribution] statute
"mandates" that trial courts determine the
ownership and value of all real and personal
property of the parties. But, consistent
with established Virginia jurisprudence, the
litigants have the burden to present
evidence sufficient for the court to
discharge its duty. When the party with the
burden of proof on an issue fails for lack
of proof, he [cannot] prevail on that
question.
Bowers v. Bowers, 4 Va. App. 610, 617, 359 S.E.2d 546, 550
(1987). Because husband offered no evidence of the value of
wife's retirement benefits, the trial court did not abuse its
discretion in excluding it from the equitable distribution
award.
C.
SPOUSAL SUPPORT
A court determining whether to award spousal support
pursuant to Code § 20-107.1 must consider, inter alia, "[t]he
provisions made with regard to the marital property under
§ 20-107.3." Code § 20-107.3(E)(8). Because we reverse the
trial court's equitable distribution ruling insofar as it held
husband failed to prove retraceability of funds he inherited
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from his mother, we direct the trial court to reconsider the
spousal support award in light of this fact. Thus, we do not
consider the merits of husband's claim that the current spousal
support award is erroneous, but we note that decisions
concerning spousal support, like decisions concerning attorney's
fees, see discussion infra Part II.D., "rest within the sound
discretion of the trial court and will not be reversed on appeal
unless plainly wrong or unsupported by the evidence." Calvert
v. Calvert, 18 Va. App. 781, 784, 447 S.E.2d 875, 876 (1994).
D.
ATTORNEY'S FEES
Husband contends the trial court erred in directing him to
pay $2,500 of wife's attorney's fees, which constituted almost
the entire bill. He argues that his 1999 adjusted gross income
of $23,179.00 was not sufficiently different from wife's income
of $20,391.77 to justify such an award. We disagree.
Whether to award attorney's fees is left to the sound
discretion of the trial court. See, e.g., Lightburn v.
Lightburn, 22 Va. App. 612, 621, 472 S.E.2d 281, 285 (1996).
Here, despite husband's assertions regarding the similarity in
the parties' respective incomes, the evidence indicated that
husband's 1999 income was substantially lower due to a one-time,
four-month strike. During the first half of 2000, immediately
prior to the commissioner's hearing, husband earned a monthly
average of $3,252.80 as compared to wife's monthly average of
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$1,726. In light of these figures, we cannot say the trial
court abused its discretion in ordering husband to pay $2,500
toward wife's attorney's fees of $2,575. However, in view of
the disposition of the equitable distribution issue, we remand
to the trial court for reconsideration of the amount of the fee
award. See id.
III.
For these reasons, we affirm the equitable distribution
award in part and reverse it in part. We also direct the trial
court to reconsider the attorney fee issue and to consider the
spousal support award anew in light of the alterations in the
equitable distribution award.
Affirmed in part,
reversed in part,
and remanded.
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