Loretta A McManus v. Steven J Neuschulz ( 2002 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Annunziata and Agee
Argued at Alexandria, Virginia
LORETTA A. McMANUS
MEMORANDUM OPINION * BY
v. Record No. 0731-02-4 JUDGE LARRY G. ELDER
NOVEMBER 19, 2002
STEVEN J. NEUSCHULZ
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
R. Terrence Ney, Judge
Dorothy M. Isaacs (Cory A. Frederick;
Surovell Markle Isaacs & Levy PLC, on
briefs), for appellant.
David E. Roop (Dov M. Szego; Condo &
Masterman, P.C., on brief), for appellee.
Loretta McManus (wife) appeals from an order entered
February 21, 2002, dividing certain property owned by her and
her former husband, Steven J. Neuschulz (husband). On appeal,
she contends the trial court erroneously divided the disputed
property based on 2001 account values rather than the values set
out in the parties' property settlement agreement of October 8,
1993, which was incorporated into the parties' 1993 divorce
decree. In the alternative, she contends that the 2001
valuation failed to take into consideration her post-separation
contributions to her Lufthansa 401(k) plan and, thus,
* Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
erroneously awarded husband a portion of those contributions and
their growth. Finally, she contends the trial court abused its
discretion in awarding husband attorney's fees and costs.
We hold that the trial court erroneously divided the
disputed property based on 2001 account values rather than the
1993 values set out in the parties' property settlement
agreement. Thus, wife's post-agreement contributions to the
account were irrelevant to the division, and we need not reach
wife's second assignment of error. Finally, because we hold
that wife should have prevailed on the question of the values to
be used in making the division, we remand to the trial court to
reconsider its award of attorney's fees and costs. Thus, we
reverse and remand.
I.
A.
PRESERVATION OF VALUATION ISSUE FOR APPEAL
Rule 5A:18 provides that "[n]o ruling of the trial court
. . . will be considered as a basis for reversal unless the
objection was stated together with the grounds therefor at the
time of the ruling, except for good cause shown or to enable the
Court of Appeals to attain the ends of justice." As we
previously have made clear, a party "may meet the mandates of
Rule 5A:18 in many ways." Lee v. Lee, 12 Va. App. 512, 515, 404
S.E.2d 736, 738 (1991) (en banc). The party
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may make clear the ground for his objection
in a motion to strike the evidence[,] . . .
closing argument[,] . . . a motion to set
aside the verdict or a motion to reconsider.
Likewise, [a party] may, if he or she has
previously failed to do so, include an
objection, and the reasons therefor in the
final order . . . .
Id. at 515-16, 404 S.E.2d at 738 (emphasis added) (citations
omitted).
Thus, the Supreme Court has held that where a party "during
[a specific motion hearing] repeatedly made known to the court
his position," filed a timely motion for rehearing arguing the
same grounds, and endorsed the final order as "'SEEN: and all
Exceptions noted,'" the party sufficiently preserved his stated
position for appeal. Id. at 516, 404 S.E.2d at 738 (quoting
Wiedman v. Babcock, 241 Va. 40, 44, 400 S.E.2d 164, 167 (1991)).
As Code § 8.01-384 expressly states,
Formal exceptions to rulings . . . [are]
unnecessary; but for all purposes for which
an exception has heretofore been necessary,
it shall be sufficient that a party, at the
time the ruling or order of the court is
made or sought, makes known to the court the
action which he desires the court to take or
his objections to the action of the court
and his grounds therefor.
Here, the court made the first ruling to which wife objects
in its order of October 12, 2001, when it held that "the parties
shall equally divide the present value of the accounts listed in
Paragraph 1 of the Property Settlement Agreement." (Emphasis
added). At the December 14, 2001 hearing, wife specifically
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argued that the accounts should be divided as per the 1993
agreement and that husband was due only $18,000. In entering
the February 21, 2002 order, the trial court noted generally
"wife's exceptions to this order." Thus, wife's specific
objection to the use of 2001 account values rather than 1993
account values as contained in the agreement was sufficient to
preserve this issue for appeal.
B.
INTERPRETATION OF THE PARTIES' AGREEMENT
AND APPRECIATION IN VALUE OF ACCOUNTS
On appeal, wife contends the trial court erred in ordering
her to execute a qualified domestic relations order (QDRO)
requiring a transfer of funds to husband which was based on the
2001 values of their marital accounts rather than the values the
parties assigned to those accounts in their 1993 property
settlement agreement. Wife relies on our decision in Fahey v.
Fahey, 24 Va. App. 254, 481 S.E.2d 496 (1997) (en banc), in
support of her argument. Based on the language of the
agreements at issue, we hold that Fahey is controlling, and we
reverse the ruling of the trial court.
Fahey involved a property settlement agreement in which the
parties agreed to divide three Keogh accounts owned by Mr.
Fahey. Id. at 255-56, 481 S.E.2d at 496. The agreement valued
the accounts at $214,000 and required Mr. Fahey to "'promptly
arrange to transfer to [Mrs. Fahey] one-half (1/2) of each of
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these accounts . . . [,] pursuant to a [QDRO], if requested by
either party.'" Id. at 256, 481 S.E.2d at 496. The agreement,
dated July 28, 1994, was incorporated into a consent order dated
August 31, 1994. Id. at 256-57, 481 S.E.2d at 496. A dispute
arose over the division, but the parties were able to resolve
it. At the request of the parties, the court entered an order
of June 6, 1995, which established a QDRO for the account
referred to as the "IDEX" plan. Id. at 256, 481 S.E.2d at
496-97. That QDRO "allotted 'one-half of the accrued value of
the Plan as of July 28, 1994,' the date of the agreement, to
Mrs. Fahey, and neither party appealed that order." Id. at 256,
481 S.E.2d at 497.
A dispute then arose between the Faheys over whether the
amount divided should include appreciation on the account after
the date of the July 28, 1994 agreement. Id. The court
concluded that it should and entered an amended QDRO, "which
assigned to Mrs. Fahey 'one-half of the shares of the Plan as of
July 28, 1994, together with any appreciation or depreciation
that has accrued since that time until the time of
distribution.'" Id.
On appeal, we noted that the court retained the authority
under Code § 20-107.3(K)(4)
"to revise or conform [the] terms [of the
QDRO] so as to effectuate the expressed
intent of the [original decree]," Code
§ 20-107.3(K)(4), provided such modification
is "consistent with the substantive
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provisions of the original decree" and not
"simply to adjust its terms in light of the
parties' changed circumstances[,]" Caudle v.
Caudle, 18 Va. App. 795, 798, 447 S.E.2d
247, 249 (1994).
Id. at 256-57, 481 S.E.2d at 497. Based on the language in the
"original order" of July 28, 1994, which valued the accounts at
$214,000 and directed that Mr. Fahey "promptly" transfer to Mrs.
Fahey "one-half (1/2) of each of these accounts," we held that
the "manifest intent of the original order was to allot Mrs.
Fahey one-half of the value of the IDEX account on July 28,
1994." Id. at 256-57, 481 S.E.2d at 496-97. We "recognize[d]
that this method of division later disfavored Mrs. Fahey because
the account increased in value," but we held that "the court was
without authority to substantively modify its order to redress
this changed circumstance." Id. at 257, 481 S.E.2d at 497; see
also Wilson v. Wilson, 25 Va. App. 752, 758, 492 S.E.2d 495, 498
(1997) (holding that court entering QDRO "was without authority
to substantively modify its original order equitably
distributing [Mr. Wilson's] pension benefits, irrespective of
any agreement by the parties to the contrary" because "[t]he
jurisdiction of the court cannot be established by consent").
In reaching this decision in Fahey, we rejected the view
advanced by the panel dissent. See Fahey v. Fahey, Nos.
2477-95-4, 2773-95-4 (Va. Ct. App. July 23, 1996). That dissent
emphasized the parties' agreement to divide the assets both
"equally" and "promptly." Id. It noted that if one-half of Mr.
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Fahey's Keogh accounts had been distributed "promptly" after
entry of the consent order, the dispute over how to distribute
the appreciation in the plans likely would not have arisen.
Thus, the dissent would have held that failure to divide the
accounts promptly required the court to ignore the dollar value
the agreement placed on the accounts and to divide the accounts
equally to effectuate the parties' intent.
Here, the parties' agreement set out the total value of the
listed funds as "equal[ling] $95,632.47" and expressly stated
that "[t]his figure should be divided by two to determine the
amount of money each party is to equally receive, to-wit:
$47,816.24." Thus, here, as in Fahey, the parties not only
agreed to divide the accounts equally but also placed a dollar
value on the accounts and indicated that the division should
occur promptly, "within thirty days of the execution of [the]
Agreement." See also Hastie v. Hastie, 29 Va. App. 776, 514
S.E.2d 800 (1999) (holding that where order made award of
specific percentage of pension but used the phrase, "to-wit," to
link that percentage to a specific dollar amount, trial court
could not alter that dollar amount when pension, and thus
spouse's proportional share, subsequently increased in value).
As we held in Fahey, the parties' failure to comply with
the time provisions of the agreement did not permit the court to
adjust the values they had placed on the accounts or the manner
in which the agreement proposed to divide those values. 24
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Va. App. at 257, 481 S.E.2d at 497. Thus, despite the fact that
"this method of division later disfavored [husband] because the
account increased in value, . . . the court was without
authority to substantively modify its order to redress this
changed circumstance." Id. at 257, 481 S.E.2d at 497.
Despite husband's contention to the contrary, the parties'
failure to specify in the agreement which accounts belonged to
which spouse is not dispositive. Although the agreement did not
specifically list all of the accounts belonging to each spouse,
the record from the present proceedings contains sufficient
evidence of this fact to permit a determination that the 1993
value of husband's accounts equals $29,739.76, and the 1993
value of wife's accounts equals $65,892.71. 1 Thus, a total of
$18,076.47 is due from wife to husband.
Because the court should have used the 1993 values for the
accounts as listed in the agreement, wife's post-separation
contributions and withdrawals, if any, to the Lufthansa 401(k)
account are irrelevant to its value in this proceeding, and we
need not consider her claim that the trial court erroneously
failed to consider those contributions in calculating the value
of the account.
1
The court's October 12, 2001 order directed wife to
provide statements for the Lufthansa 401(k), Vanguard Prin LN,
and Vanguard-UAL accounts. It directed husband to provide
statements for the remaining six accounts listed in paragraph 1
of the agreement. The exhibits husband presented confirmed that
these accounts were in his name.
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C.
ATTORNEY'S FEES AND COSTS
Wife also challenges the trial court's award of attorney's
fees to husband. Husband contends wife failed to preserve this
issue for appeal.
We hold that wife's objection to the trial court's
indication in its show cause decree of October 12, 2001, that it
was considering an award of attorney's fees and costs was
sufficient to preserve for appeal her objection to the award
subsequently made. Further, her objection on appeal is
expressly linked to her claim, properly preserved below, that
the valuation of accounts should have occurred based on 1993
values. Thus, we review the trial court's award of attorney's
fees and costs. Because the trial court's order is silent on
the basis for its award of fees and costs and we reverse its
decision regarding the date on which the accounts should be
valued, we vacate the award of attorney's fees and costs and
remand to the trial court to consider anew whether to award
attorney's fees and costs and, if so, in what amount.
II.
For these reasons, we hold that the trial court erroneously
divided the disputed property based on 2001 account values
rather than the 1993 values set out in the parties' property
settlement agreement, and we remand to the trial court to enter
an appropriate order dividing the property. We vacate the award
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of attorney's fees and costs and remand that issue for
consideration anew.
Reversed and remanded.
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