Utsch v. Utsch

PRESENT: All the Justices

JULIE ANDREWS UTSCH
                                            OPINION BY
v.   Record No. 021987               JUSTICE DONALD W. LEMONS
                                           June 6, 2003
FRANCIS VINCENT UTSCH

                FROM THE COURT OF APPEALS OF VIRGINIA


      Shortly after his marriage to Julie Andrews Utsch (“Wife”),

Francis Vincent Utsch 1 (“Husband”) transferred title of their

marital residence from his name solely to himself and his wife

as tenants by the entirety.    The conveyance was made by deed of

gift and recited “love and affection” as consideration for the

transfer.    Additionally, the deed of gift recited that the

conveyance was exempt from recordation taxes under Code § 58.1-

811(D). 2   In the divorce and equitable distribution proceeding,

the trial court held that the deed of gift was unambiguous and,

consequently, that parol evidence concerning the circumstances

surrounding the execution of the deed of gift was inadmissible.




      1
       Mr. Utsch died during the pendency of his appeal to the
Court of Appeals. Pursuant to Code § 8.01-20, the Court of
Appeals retained jurisdiction “as if such event had not
occurred.” This Court will retain jurisdiction under the same
statute.
      2
       Code § 58.1-811(D) states the following: “No recordation
tax shall be required for the recordation of any deed of gift
between a grantor or grantors and a grantee or grantees when no
consideration has passed between the parties. Such deed shall
state therein that it is a deed of gift.”
     On appeal, the Court of Appeals reversed the judgment of

the trial court and held the following:

     [A]lthough the deed is clear and unambiguous on
     its face as to [H]usband’s intent to transfer
     legal title of the marital residence to himself
     and [W]ife jointly as tenants by the entirety
     without consideration, it is not clear and
     unambiguous with regard to [H]usband’s intent to
     make a gift of the marital residence to the
     marital estate. Thus, the fact finder must
     consider not only the terms of the deed itself,
     but also other competent evidence of the
     circumstances surrounding its execution and
     delivery.
          Consequently, we conclude the trial court
     erred in finding the language of the deed of gift
     unambiguous, in finding the deed of gift
     conclusive on its face to establish [H]usband’s
     donative intent, and in excluding the
     introduction of parol evidence relating to the
     circumstances surrounding the execution of the
     deed of gift.

Utsch v. Utsch, 38 Va. App. 450, 463, 565 S.E.2d 345, 351-52

(2002).   We awarded Wife an appeal from the adverse judgment of

the Court of Appeals.   Because we hold that the deed of gift was

unambiguous on its face, both for the purpose of retitling and

proof of donative intent, parol evidence surrounding its

execution was not admissible.

                           I.   Analysis

     In equitable distribution proceedings, the determination of

title to property is a separate inquiry from the classification

of property for the purposes of making an award pursuant to Code

§ 20-107.3.   The case before the Court involves a narrow



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question concerning the proof necessary to determine

classification of separate property that has been subsequently

retitled in the joint names of the parties.

     Both Husband and Wife agree that the marital residence

before retitling would have been classified as separate property

pursuant to Code § 20-107.3(A)(1).   However, Code § 20-

107.3(A)(2) provides in part that marital property consists of

“all property titled in the names of both parties, whether as

joint tenants, tenants by the entirety or otherwise, except as

provided by subdivision A 3.”

     Code § 20-107.3(A)(3)(f) provides the following:

          When separate property is retitled in the
     joint names of the parties, the retitled property
     shall be deemed transmuted to marital property.
     However, to the extent the property is
     retraceable by a preponderance of the evidence
     and was not a gift, the retitled property shall
     retain its original classification.

The question presented in this appeal is whether the retitling

in this case was a gift.   If so, the marital residence is

properly classified as marital property.   If not, subject to

proof of retracing, the marital residence retains its

classification as separate property.

     The burden of proof that the transfer was a gift is upon

the party seeking to establish the gift.   No presumption of gift

arises from the act of retitling.    Code § 20-107.3(A)(3)(g).

Additionally,


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     [i]t is well settled that the law does not
     presume a gift and where a donee claims title to
     personal property by virtue of a gift inter
     vivos, the burden of proof rests upon him to show
     every fact and circumstance necessary to
     constitute a valid gift by clear and convincing
     evidence.

Rust v. Phillips, 208 Va. 573, 578, 159 S.E.2d 628, 631 (1968).

Proof of donative intent, delivery, and acceptance are necessary

to sustain the burden.    Id., 159 S.E.2d at 632.   In this case,

only donative intent is in controversy.

     The parties agree and the Court of Appeals held that the

deed of gift was unambiguous concerning the intent to retitle

the property.    The Court of Appeals held that “[i]t does not

necessarily follow, however, that [H]usband intended to convey

the property into the marital estate and thus relinquish his

separate interest in the property for the purposes of equitable

distribution.”    Utsch, 38 Va. App. at 461, 565 S.E.2d at 350.

Further, the Court of Appeals held that “in considering

equitable distribution, a trial court must consider all tendered

competent evidence of the context in which a deed is executed

and delivered in order to determine whether that deed effects a

donative intent under Code § 20-107.3(A)(3)(f).”     Id.   In

reaching these two holdings, the Court of Appeals added

requirements to the elements of proof required under Code § 20-

107.3(A)(3)(f) and eliminated the parol evidence rule from

application in determining a gift in the context of


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classification for equitable distribution purposes.   In each

holding, the Court of Appeals erred.

     Nowhere in Code § 20-107.3(A)(3)(f) is there a requirement

of proof that a gift was intended for a particular purpose.     The

proof required under the statutory provision is simply that the

transfer was a gift.   As we have previously held in a case

involving a grantor’s intent in a deed, “[i]f [the party]

intended the deed to be operative for one purpose, he must be

taken to have intended it to be operative for all purposes

apparent on its face.”   Capozzella v. Capozzella, 213 Va. 820,

824, 196 S.E.2d 67, 70 (1973).

     In determination of what is apparent on the face of a deed,

we must consider the application of the parol evidence rule.

Contrary to the holding of the Court of Appeals, nothing in the

statutory scheme suggests that the parol evidence rule is not to

be applied in the determination of donative intent for equitable

distribution purposes.   The legislature is fully capable of

stating that the parol evidence rule does not apply to such a

determination.   In the absence of such a declaration, the courts

should not supply it, particularly where such a rule of law has

been routinely applied to interpret deeds in Virginia.   See

Adams v. Alliant Techsystems, Inc., 261 Va. 594, 598-99, 544

S.E.2d 354, 355-56 (2001).




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     “[T]he question whether a writing is ambiguous is not one

of fact but of law.”   Pyramid Dev., L.L.C. v. D&J Assocs., 262

Va. 750, 754, 553 S.E.2d 725, 727 (2001) (quoting Langman v.

Alumni Assoc. of the Univ. of Virginia, 247 Va. 491, 498, 442

S.E.2d 669, 674 (1994)).    Just as we are not bound by the trial

court’s conclusions regarding an instrument’s ambiguity, neither

are we bound by the conclusion of the Court of Appeals.    Id. at

754, 553 S.E.2d at 727.    “[W]hen the language of a deed is

‘clear, unambiguous, and explicit,’ a court interpreting it

‘should look no further than the four corners of the instrument

under review.’ ”   Id., 553 S.E.2d at 728 (quoting Langman, 247

Va. at 498-99, 442 S.E.2d at 674).

     Within the four corners of the instrument in question in

this case are the declaration that it is a “deed of gift,” the

recitation that the conveyance is for “love and affection,” and

the reference to Code § 58.1-811(D) permitting exception from

recording taxes for gifts.   We hold that the deed was

unambiguous on its face and that the parol evidence rule applies

to the determination at issue.   The deed not only shows by clear

and convincing evidence the intent to jointly title the marital

residence, but it also shows the donative intent of Husband in

making the transfer.




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     Failure to recognize the applicability of the parol

evidence rule in this context would result in unacceptable

uncertainty in the law.   As one noted commentator observed:

     If [there were no parol evidence rule], no lawyer
     would be safe in advising upon the construction
     of a written instrument, nor any party in taking
     under it; for the ablest advice might be
     controlled, and the clearest title undermined,
     if, at some future period, parol evidence of the
     particular meaning which the party affixed to his
     words, or of his secret intention in making the
     instrument, or of the objects he meant to take
     benefit under it, might be set up to contradict
     or vary the plain language of the instrument
     itself.

11 Richard A. Lord, Williston on Contracts § 33.1, at 556 (4th

ed. 1999) (citation omitted).

                          II.   Conclusion

     Because the Court of Appeals reversed the judgment of the

trial court concerning its classification of the marital

residence and ordered a remand, the court did not address

Husband’s challenge to the trial court’s distribution of that

property’s value in the equitable distribution award.     Utsch, 38

Va. App. at 464 n.4, 565 S.E.2d at 352 n.4.

     For the reasons stated, we will reverse the judgment of the

Court of Appeals and remand to the Court of Appeals for

consideration of the remaining unaddressed issue.

                                              Reversed and remanded.




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