John Douglas Clark v. Susan Little Bundy Clark ( 1998 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Elder and Bumgardner
Argued at Richmond, Virginia
JOHN DOUGLAS CLARK
MEMORANDUM OPINION * BY
v. Record No. 1531-97-2 JUDGE JAMES W. BENTON, JR.
SEPTEMBER 15, 1998
SUSAN LITTLE BUNDY CLARK
FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY
Paul M. Peatross, Jr., Judge
J. Barrett Jones (Jones & Green, on briefs),
for appellant.
Ronald R. Tweel (Elizabeth P. Coughter;
Michie, Hamlett, Lowry, Rasmussen & Tweel, on
brief), for appellee.
In this appeal from a divorce decree, the parties challenge
numerous rulings of the trial judge concerning equitable
distribution, spousal support, and attorney's fees. For the
reasons that follow, we affirm the trial judge's rulings in part,
reverse in part, and remand for reconsideration.
BIFURCATION OF PROCEEDINGS
The husband contends the trial judge erred in failing to
bifurcate the divorce proceedings from the equitable distribution
proceedings or, in the alternative, enter the divorce nunc pro
tunc to 1996.
The record establishes that on August 22, 1996, the husband
moved the trial judge to bifurcate the proceedings and grant a
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
divorce a vinculo matrimonii. At the December 5 hearing on this
motion, the trial judge requested that the husband "satisfy the
Court that the granting of a divorce [without simultaneous
adjudication of equitable distribution] would not have any effect
on the rights of [the wife] in and to a marital share of his
pension plans." In response, the husband proffered a proposed
"bifurcation agreement" by which the trial judge would retain
jurisdiction over the remaining matters in the case in the event
one of the parties should die prior to a final adjudication.
The husband wanted the divorce entered in 1996 to enable him
to use the "single" filing status on his 1997 income tax return.
He alleged that if the divorce decree was not entered until
1997, he would be forced to file as "married filing separately"
and would pay approximately $6,165 more in taxes. The judge
declined to bifurcate the proceedings or grant the divorce in
1996.
Code § 20-107.3(A) authorizes a trial judge to enter a
divorce while retaining jurisdiction to adjudicate equitable
distribution. In relevant part, it provides as follows:
Upon decreeing the dissolution of a marriage,
and also upon decreeing a divorce from the
bond of matrimony, . . . [t]he court, on the
motion of either party, may retain
jurisdiction in the final decree of divorce
to adjudicate the remedy provided by this
section when the court determines that such
action is clearly necessary, and all decrees
heretofore entered retaining such
jurisdiction are validated.
Code § 20-107.3(A) (emphasis added). Nothing in the statute
- 2 -
requires a trial judge to grant every motion for bifurcation.
Indeed, this Court recently held that the statute requires "that
the trial [judge] must make a specific finding of clear necessity
for granting the divorce while retaining jurisdiction to decide
equitable distribution issues." Christensen v. Christensen, 26
Va. App. 651, 655, 496 S.E.2d 132, 134 (1998).
The husband was unable to provide the trial judge assurance
that the wife's interest in the marital share of the husband's
pension would not be adversely affected if the trial judge
granted the divorce and the husband died prior to equitable
distribution. In view of the trial judge's finding that the
husband's proposed agreement to address the issue did not satisfy
this requirement, we cannot say that the trial judge erred in
failing to find that the potential tax savings rendered
bifurcation "clearly necessary." Thus, we hold that the trial
judge did not abuse his discretion in refusing to bifurcate the
proceedings.
"An order entered nunc pro tunc cannot create a fiction that
an act not yet performed has already occurred. Rather, the power
of the trial court to amend by nunc pro tunc order is restricted
to placing upon the record evidence of judicial action which has
already been taken, but was earlier omitted or misstated in the
record." Holley v. City of Newport News, 6 Va. App. 567, 568,
370 S.E.2d 320, 321 (1988) (citation omitted). By denying the
motion to bifurcate the proceedings, the trial judge denied the
- 3 -
request to grant the divorce in 1996. Accordingly, the trial
judge did not err in refusing to enter the divorce decree nunc
pro tunc to be effective in 1996.
- 4 -
INCORPORATION OF MARITAL AGREEMENT
The trial judge denied the husband's request that the trial
judge incorporate the parties' marital agreement of October 29,
1992 into the final divorce decree. The husband argues that
because the parties separated in July 1994, they never
"reconciled." Thus, he contends the agreement remained valid and
enforceable. Furthermore, he contends that even if the parties
did reconcile, the provisions of the agreement evince the
parties' intent that the agreement would not be abrogated by
reconciliation.
A marital agreement is not abrogated by a later
reconciliation of the parties where the agreement provides
otherwise. See Jennings v. Jennings, 12 Va. App. 1187, 1198, 409
S.E.2d 8, 15 (1991); Smith v. Smith, 19 Va. App. 155, 156, 449
S.E.2d 506, 506 (1994). The agreements in Jennings and Smith
contained provisions stating that "[i]n the event of a
reconciliation and resumption of the marital relationship between
the parties," the agreement "shall continue in full force and
effect without abatement of any terms." Jennings, 12 Va. App. at
1198, 409 S.E.2d at 15; Smith, 19 Va. App. at 156, 449 S.E.2d at
506. By statute, such agreements "may be amended or revoked only
by a written agreement signed by the parties." Code § 20-153.
The issue in this case is whether the terms of the agreement
provide that the agreement not be abrogated upon reconciliation.
Section (H) of the agreement provides as follows:
In the event that the reconciliation
- 5 -
efforts prove successful, the parties
acknowledge that, at some point, the Court
must by law consider the marriage to be
resumed and the separation ended, which may
affect their mutual rights and claims, as
well as the date determined by the Court to
be appropriate for evaluating marital
property.
The evidence in the record proves that the wife filed for
divorce in July 1992. The parties then agreed to attempt a
reconciliation. They entered into this marital agreement in
October 1992. The husband and wife resumed cohabitation for
almost two years until they finally separated in July 1994.
The trial judge "[found] that the parties reconciled and the
terms of the agreement do not call for its enforcement in light
of a reconciliation. Instead, the agreement leaves to the Court
a fair adjudication of matters pertaining to equitable
distribution." The evidence supports the trial judge's finding
that the parties reconciled. The trial judge also correctly
interpreted the agreement because the terms of the agreement did
not require enforcement if a reconciliation occurred. Therefore,
we affirm the trial judge's ruling that when the parties
reconciled, the agreement was not enforceable.
EQUITABLE DISTRIBUTION
"Fashioning an equitable distribution award lies within the
sound discretion of the trial judge and that award will not be
set aside unless it is plainly wrong or without evidence to
support it." Srinivasan v. Srinivasan, 10 Va. App. 728, 732, 396
S.E.2d 675, 678 (1990).
- 6 -
In reviewing an equitable distribution
award on appeal, we have recognized that the
trial court's job is a difficult one, and we
rely heavily on the discretion of the trial
judge in weighing the many considerations and
circumstances that are presented in each
case. Unless it appears from the record that
the [judge] has abused his discretion or has
failed to consider or has misapplied one of
the statutory factors, his determination will
not be reversed on appeal.
Klein v. Klein, 11 Va. App. 155, 161, 396 S.E.2d 866, 870 (1990)
(citations omitted).
Defined Benefit Retirement Plan
Asserting that the wife presented no evidence regarding his
defined benefit retirement plan, the husband contends the trial
judge's refusal to grant the husband's motion to strike the
evidence on this issue was error. We disagree.
Code § 20-107.3(A) requires a trial judge to determine the
ownership and value of all real and personal property of the
parties before making a monetary award. "The burden is always on
the parties to present sufficient evidence to provide the basis
on which a proper determination can be made." Hodges v. Hodges,
2 Va. App. 508, 517, 347 S.E.2d 134, 139 (1986). However, a
trial judge "may not arbitrarily refuse to classify or evaluate
marital or separate property where sufficient evidence to do so
is in the record." Bowers v. Bowers, 4 Va. App. 610, 618, 359
S.E.2d 546, 550 (1987). Furthermore, the trial judge "may not
refuse or fail to give parties a reasonable opportunity to
develop and present evidence of value." Id.- 7 -
The trial judge overruled the husband's motion to strike the
evidence and noted that the plan was an asset that had been
disclosed pre-trial. At trial, the wife presented evidence of
the length of the marriage. The evidence disclosed the husband's
length of employment. These two factors were sufficient to value
the wife's share in the pension plan. The husband, on
cross-examination, testified to the formula to which these
figures would be applied. The trial judge was aware of the plan
and used this formula as the basis for his award. The marital
share of the fund was easily identifiable from evidence before
the judge concerning the date of the marriage and the length of
service of the husband in the plan. Thus, we cannot say that the
trial judge abused his discretion in overruling the husband's
motion to strike the evidence.
The Tangible Personal Property
The husband contends the trial judge erred in classifying as
marital property certain tangible personal property purchased by
the husband with funds from a money market account, which
contained his separate funds. The husband argues this property
should have been classified as separate property because it was
purchased with separate funds. He also argues that because he
kept a ledger of all purchases he made from the separate funds,
these funds and any purchases from these funds were maintained as
separate property.
At the evidentiary hearing, the husband testified that upon
- 8 -
his marriage he deposited $80,000 of his separate inheritance
into a money market account. The husband also deposited marital
funds into that account. The husband testified that he kept
detailed computer records of the purchases he made from this
account in order to "trace" the source of the funds used for each
purchase. The evidence proved, however, that the husband did not
start to create this computer ledger until after the parties
separated in 1992. Therefore, from October 1989, the date of the
marriage, until July 1992, there was no "tracing" of the
husband's spending from this account. Furthermore, the husband
did not contemporaneously track his spending. He testified that
he usually waited at least until the end of the month to record
the transactions. He also arbitrarily decided "at the time [he]
wrote the check whether it was [his] intent that it be separate
or that it be marital."
"All property acquired by either spouse during the marriage
is presumed to be marital property in the absence of satisfactory
evidence that it is separate property. . . . The party claiming
that property should be classified as separate has the burden to
produce satisfactory evidence to rebut this presumption." Stroop
v. Stroop, 10 Va. App. 611, 615-16, 394 S.E.2d 861, 863 (1990).
As pertinent to this issue, the statute also provides that
"[w]hen marital property and separate property are commingled
into newly acquired property resulting in the loss of identity of
the contributing properties, the commingled property shall be
- 9 -
deemed transmuted to marital property." Code
§ 20-107.3(A)(3)(e). The contributed property only retains its
original classification "to the extent the contributed property
is retraceable by a preponderance of the evidence and was not a
gift." Id.
The trial judge found that the property was purchased with
commingled funds and that the property had been enjoyed by both
parties during the marriage. The evidence proved the husband did
not track any of his expenditures for marital property.
Furthermore, the husband's evidence failed to prove that funds
withdrawn from the account were designated at the time of
purchase as separate or marital. Therefore, the judge found that
the husband had not met his burden of proving that the tangible
personal property acquired during the marriage using the funds
from this account was separate property. The evidence supports
the trial judge's finding. In view of the evidence and the trial
judge's findings, we hold that the trial judge did not abuse his
discretion in classifying the tangible personal property
purchased by the husband with funds from this account as marital
property.
Marital Share of Husband's Separate Real Estate
The wife contends the trial judge erred in finding the
evidence insufficient to prove she was entitled to an interest in
the husband's three parcels of real estate. The wife argues the
evidence proved that marital property was contributed to the
- 10 -
husband's separate property and that she was able to retrace the
contributed property. Thus, she argues that under Code
§ 20-107(A)(3)(d) the marital property retains its original
classification and does not become transmuted into the separate
property.
Code § 20-107.3(A)(3) creates hybrid property that is "part
marital and part separate." See also Rahbaran v. Rahbaran, 26
Va. App. 195, 205, 494 S.E.2d 135, 140 (1997). In pertinent part
the statute states that "[w]hen 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)(3)(d).
"The goal of the retracing process is to link a transmuted
asset to its primary source, which is either separate property or
marital property." von Rabb v. von Rabb, 26 Va. App. 239, 248,
494 S.E.2d 156, 160 (1997). As we noted in Rahbaran, marital
property "'does not become untraceable merely because it is mixed
with [separate] property in the same asset. As long as the
respective marital and separate contribution to the . . . asset
can be identified, the court can compute the ratio and retrace
- 11 -
both interests.'" 26 Va. App. at 209, 494 S.E.2d at 141-42(citations omitted).
The trial judge found that $119,800 of marital funds were
used to make mortgage payments on the husband's separate parcels
of real estate. The judge also found that marital funds were
used to repair a furnace ($2,715), to provide gravel for the
roadway of one of the properties ($750), to pay taxes on the
properties ($4,200), and to pay insurance ($1,665). These
findings establish that the evidence was sufficient to retrace
the contribution of marital funds. Cf. Rowe v. Rowe, 24 Va. App.
123, 136, 480 S.E.2d 760, 766 (1997) (holding that evidence which
proved the husband invested $82,000 of his separate funds was
"sufficient for purposes of Code § 20-107.3(A)(3)(d) to retrace
the property claimed as separate by the husband"). See also Hart
v. Hart, 27 Va. App. 46, 63-66, 497 S.E.2d 496, 505 (1998)
(approving the use of the Brandenburg v. Brandenburg, 617 S.W.2d
871 (Ky. App. 1981), methodology for tracing).
Accordingly, we reverse the trial judge's ruling on this
issue, and we remand to the trial judge for reconsideration of
the equitable distribution decision. Because the trial judge
must reconsider the award, we need not address the husband's
argument on a related issue, i.e., that the trial judge
improperly considered as a factor under Code § 20-107.3(E)(10)
the husband's expenditure of $130,000 of marital funds on his
separate real estate.
- 12 -
HUSBAND AS WITNESS
The wife contends the trial judge erred in refusing to allow
her to call the husband as a witness in her case-in-chief. The
trial judge based his decision on the wife's failure to designate
the husband as a witness in accordance with the pretrial order,
which provided that "counsel shall serve on other counsel a list
of witnesses proposed to be called" and "[w]itnesses not so
identified shall not be called . . . at trial."
Ordinarily, a judge's "decision of whether and how to
enforce [a pretrial] . . . order is reviewed only for an abuse of
discretion." Parish v. Spaulding, 26 Va. App. 566, 576, 496
S.E.2d 91, 96 (1998). However, we note that in Gumenick v.
United States, 213 Va. 510, 193 S.E.2d 788 (1973), the Supreme
Court stated that plaintiff's counsel was entitled to call the
defendants as adverse witnesses even though the defendant
complained that the "names of these defendants had not been
furnished [to opposing counsel] as persons the plaintiff intended
to call as witnesses and plaintiff's counsel issued no summons
for their attendance in court." Id. at 520, 193 S.E.2d at 796.
The Court reasoned that "[p]arties to a civil action being tried
in court are customarily expected to be present" and that a party
"was entitled to call the [other parties] as adverse witnesses
irrespective of whether or not they had been summoned." Id.
In this case, the trial judge's refusal to allow the wife to
call the husband to testify in her case-in-chief was an abuse of
- 13 -
discretion. The obvious purpose of the pretrial order was to
prevent surprise testimony from previously unidentified witnesses
and to permit parties to prepare for trial. A party cannot claim
that the substance of his own testimony could have surprised him.
Moreover, the husband ultimately testified at trial. Thus, his
testimony as an adverse witness would not have violated any
substantial policy behind the requirements of the pretrial order.
This error may have been prejudicial to the wife because she was
unable to elicit detailed information from the husband concerning
the various contributions of marital property to the husband's
separate real estate. Indeed, at the close of the wife's
case-in-chief, the trial judge granted the husband's motion to
strike the wife's evidence as insufficient to prove the marital
contributions caused an increase in the value of the property.
We note the record indicates that when the wife sought to
call the husband as an adverse witness, he was not then in the
courtroom. In view of the uncertainty of this circumstance and
because we must remand this matter for reconsideration of the
equitable distribution award, we will not analyze further whether
the trial judge's refusal to allow the wife to call the husband
as an adverse witness was harmless error.
SPOUSAL SUPPORT
Whether to award spousal support and the particular amount
lies within the sound discretion of the trial judge.
A spouse's entitlement to support and the
amount of a support award are matters lying
within the sound discretion of the trial
- 14 -
court. Any such award "will not be disturbed
on appeal unless it is clear that some
injustice has been done." In calculating the
amount of spousal support, the trial court
must consider the factors set forth in Code
§ 20-107.1. However, "[t]his does not mean
that the trial court is required to quantify
or elaborate exactly what weight or
consideration it has given to each of the
statutory factors."
McCombs v. McCombs, 26 Va. App. 432, 436, 494 S.E.2d 906, 908
(1998) (citations omitted).
Among the factors listed by the trial judge in calculating
the award were the parties' earning capacity, financial
resources, education, standard of living during the marriage, the
equitable distribution award, and the tax consequences of the
spousal support award. The evidence before the judge related to
all of these factors as well as such other factors as were
necessary to consider the equities between the parties. No
evidence supports the husband's claim that the trial judge abused
his discretion. However, because the trial judge must reconsider
the equitable distribution award, the trial judge should
reconsider the award of spousal support. See Code § 20-107.1(8).
ATTORNEY'S FEES
"An award of attorney's fees to a party in a divorce suit is
a matter within the sound discretion of the trial judge, after
consideration of the circumstances and equities of the entire
case." Ellington v. Ellington, 8 Va. App. 48, 58, 378 S.E.2d
626, 631 (1989); see Graves v. Graves, 4 Va. App. 326, 333, 357
S.E.2d 554, 558 (1987). The husband contends the trial judge
- 15 -
erred in disallowing evidence from the husband's attorneys
regarding the amounts of fees attributable to the wife's conduct
in the litigation and thereby abused his discretion by failing to
award the husband attorney's fees.
The trial judge disallowed the evidence because (1) the
attorneys could only provide estimates of their fees attributable
to enforcement of discovery requests and time spent on motions to
dismiss and to consolidate and (2) the records kept by the
attorneys, rather than the testimony of the attorneys, would be
the best evidence of this information. In his letter opinion,
the trial judge took notice of the fact that the wife filed five
separate suits against the husband from 1992 through 1995 and
that the present suit is a consolidation of the separate
maintenance claim and a suit for divorce. He recognized that
those suits resulted in hearings, dismissals, and consolidation
of the suits. The judge also noted that there were a number of
motions regarding temporary spousal support and motions to compel
discovery.
Noting that the trial judge denied attorney's fees to the
wife in the two orders granting pendente lite awards, the husband
also argues the that trial judge abused his discretion in
awarding the wife $750 relating to the temporary spousal support
awards. However, this Court has ruled that "[t]he matter of
pendente lite support remains within the control of the court and
the court can change its mind while the matter is still pending."
- 16 -
Pinkard v. Pinkard, 12 Va. App. 848, 853, 407 S.E.2d 339, 342
(1991). The record establishes that the trial judge took under
advisement the matter of the wife's attorney's fees for the
temporary support awarded to the wife. The judge then found that
it was appropriate to award her $750 regarding this support. The
record fails to establish that the trial judge abused his
discretion.
The wife argues the trial judge erred in failing to award
her attorney's fees other than those associated with obtaining
temporary spousal support and in defending the husband's motion
to disqualify the wife's attorney. She bases her argument on the
following language in Thomas v. Thomas, 217 Va. 502, 229 S.E.2d
887 (1976): "where, as here, the trial [judge] finds the wife
needs and is entitled to maintenance and support and the husband
has the financial ability to meet those needs, [his] failure to
award counsel fees to her is, in our opinion, an abuse of [his]
discretion." Id. at 505, 229 S.E.2d at 890.
However, in Artis v. Artis, 4 Va. App. 132, 354 S.E.2d 812(1987), this Court stated the following:
We do not believe that the court in Thomas
intended to adopt a rule that whenever a wife
is granted support, the trial court must
automatically award attorney's fees. An
award of attorney's fees to a party in a
divorce suit is a matter for the trial
court's sound discretion after considering
the circumstances and equities of the entire
case. The equities in the Thomas case
warranted an award of attorney's fees.
Id. at 138, 354 S.E.2d at 815 (citations omitted).
- 17 -
In the present case, the evidence proved that the wife's
attorney's fees totaled approximately $32,000 and the husband's
attorney's fees totaled over $90,000. The trial judge awarded
the wife $500 for her attorney's fees incurred in defending the
husband's motion to disqualify the wife's counsel and $750
regarding the temporary award of spousal support. The judge
stated that "the parties shall bear his or her own attorney's
fees for the other aspects of these suits." The trial judge
concluded that the wife had ample resources to pay her own
attorney's fees. The evidence proved that the wife was employed,
making a reasonable salary, and had a number of assets. Under
these circumstances, we cannot hold that the limited award of
attorney's fees was an abuse of discretion.
"We have said that 'the key to a proper award of counsel
fees . . . [is] reasonableness under all of the circumstances
revealed by the record.'" Westbrook v. Westbrook, 5 Va. App.
446, 458, 364 S.E.2d 523, 530 (1988) (citation omitted). Upon
consideration of the entire record before us, we conclude that
neither party has met his or her burden to prove the trial judge
abused his discretion relating to the award or denial of requests
for attorney's fees.
For the foregoing reasons, the decree is affirmed in part,
reversed in part and remanded for reconsideration. On remand,
the trial judge shall award the wife her reasonable attorney's
fees expended on this appeal.
- 18 -
Affirmed in part,
reversed in part, and
remanded for reconsideration.
- 19 -