COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Willis and Clements
Argued at Richmond, Virginia
FRANCIS VINCENT UTSCH
OPINION BY
v. Record No. 1583-01-2 JUDGE JEAN HARRISON CLEMENTS
JULY 2, 2002
JULIE ANDREWS UTSCH
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
T. J. Hauler, Judge
Charles E. Powers (Christine M. Schiller;
Barnes & Batzli, P.C., on brief), for
appellant.
Donald K. Butler (Mary Beth Joachim; Morano,
Colan, Cook & Butler, on brief), for
appellee.
Francis Vincent Utsch (husband) 1 appeals the equitable
distribution decision of the trial court awarding Julie Andrews
Utsch (wife) one-half of the value of the marital residence. On
appeal, husband contends the trial court erred (1) in classifying
the marital residence, which he conveyed during the marriage by
deed of gift to wife and himself as tenants by the entirety, as
wholly marital property and (2) in dividing the value of that
property equally. For the reasons that follow, we reverse the
trial court's decision and remand for further proceedings.
I. BACKGROUND
1
Mr. Utsch died during the pendency of this appeal. The
appeal, however, will not abate, and we will "retain
jurisdiction and enter judgment . . . as if such event had not
occurred." Code § 8.01-20.
The parties married on August 23, 1987. On September 13,
1988, husband executed a deed of gift conveying the marital
residence, which husband had obtained prior to the marriage, to
himself and wife as tenants by the entirety with the common law
right of survivorship. The deed of gift provided that the
conveyance was made "for and in consideration of the love and
affection of [husband] for [wife]" and that the "conveyance [was]
exempt from recordation taxes pursuant to [Code] § 58.1-811(D)." 2
The parties separated on June 28, 1998.
Husband argued at the equitable distribution hearing on
December 7, 2000, that the marital residence was not transmuted
into marital property under Code § 20-107.3(A)(3)(d) because his
separate portion of the property was retraceable and was not a
gift. The transfer by deed of gift, he argued, was a mere
conveyance of title necessary to obtain refinancing on the
property. He proffered deposition testimony regarding the
circumstances surrounding the execution of the deed of gift to
show that he did not intend to make a gift of his separate
interest in the property to wife. Wife, who argued the deed of
gift was sufficient by itself to prove husband's donative intent,
renewed the objection she had raised at the deposition to
husband's testimony, asserting that, under the parol evidence
2
Code § 58.1-811(D) provides as follows:
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.
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rule, husband could not introduce parol evidence to refute the
donative intent clearly and unambiguously expressed in the deed
of gift. The trial court agreed with wife.
By letter opinion dated January 26, 2001, the trial court
ruled that, in conveying the marital residence by deed of gift to
himself and wife as tenants by the entirety, husband made a gift
of an interest in the marital residence to wife. Finding the
deed of gift "clear and unambiguous on its face," the trial court
excluded husband's evidence regarding the circumstances
surrounding the execution of the deed of gift. Such parol
evidence, the trial court held, was inadmissible under the parol
evidence rule to "rebut the intent expressed within the four
corners of the deed." Finding the deed sufficient on its face to
establish husband's donative intent, the trial court concluded
that the marital residence was transmuted wholly into marital
property under Code § 20-103.7(A)(f). The trial court then,
"[a]fter fully considering the evidence, the arguments of
counsel, and the factors in [Code § 20-107.3(E)]," awarded each
of the parties half of the value of the marital residence.
On May 22, 2001, the trial court entered a final decree of
divorce incorporating the equitable distribution award. This
appeal followed.
II. ANALYSIS
"In making an equitable distribution, the court must
classify the property, assign a value, and then distribute the
property to the parties, taking into consideration the factors
listed in Code § 20-107.3(E)." Theismann v. Theismann, 22 Va.
App. 557, 564, 471 S.E.2d 809, 812, aff'd en banc, 23 Va. App.
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697, 479 S.E.2d 534 (1996). "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.
Smoot v. Smoot, 233 Va. 435, 443, 357 S.E.2d 728, 732 (1987).
Code § 20-107.3(A)(3)(f) provides that "[w]hen separate
property is retitled in the joint names of the parties, the
retitled property shall be deemed transmuted to marital property,
. . . [unless] it is retraceable by a preponderance of the
evidence and was not a gift." Hence, an interspousal gift of
jointly retitled separate property "becomes marital property
subject to division pursuant to the factors listed under Code
§ 20-107.3(E)." Kelln v. Kelln, 30 Va. App. 113, 122, 515 S.E.2d
789, 793 (1999) (citing Theismann, 22 Va. App. at 567-69, 471
S.E.2d at 813-14). However, no presumption of gift arises from
the fact that the "property is conveyed or retitled into joint
ownership." Code § 20-107.3(A)(3)(g). Thus, when separate
property that has been transferred into joint title is shown to
be retraceable, "the party seeking to have [the] property
acquired by interspousal transfer retain its classification as
marital under [Code] § 20-107.3(A)(3)(g) must prove the property
was a gift." Theismann, 22 Va. App. at 578, 471 S.E.2d at 819
(Annunziata, J., dissenting).
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Here, the evidence is uncontroverted that husband brought
the marital residence into the parties' marriage as separate
property. During the marriage, however, husband executed a deed
conveying the marital residence to himself and wife as tenants by
the entirety. Thus, assuming husband could prove by a
preponderance of the evidence that his separate portion of the
marital residence was retraceable, 3 the burden was on wife to
prove that husband made a gift of an interest in the property to
her. Only then could the marital residence be classified as
marital property under subsections (f) and (g) of Code
§ 20-107.3(A)(3).
To establish the existence of a gift, the donee must prove
by clear and convincing evidence: "(1) the intention on the part
of the donor to make the gift; (2) delivery or transfer of the
gift; and (3) acceptance of the gift by the donee." Id. at 566,
471 S.E.2d at 813; see also Dean v. Dean, 8 Va. App. 143, 146,
379 S.E.2d 742, 744 (1989) (holding that one who claims ownership
of property by virtue of a gift bears the burden of proving by
clear and convincing evidence the donor's donative intent and
delivery of the gift). In this case, the only element necessary
to prove a gift that was in dispute before the trial court was
husband's donative intent.
Wife argued that the terms of the deed showed husband
intended to make a gift of his separate interest in the marital
3
Proceeding directly to the issue of whether husband's
transfer of the marital residence into joint title constituted a
gift, the trial court made no finding in its letter opinion
regarding the issue of whether husband's separate portion of the
marital residence was retraceable.
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residence to the parties jointly. She pointed to the words "deed
of gift" and "consideration of love and affection" in the deed.
Husband denied he intended, in executing the deed, to make a gift
of his separate property to wife. He proffered parol evidence
regarding the circumstances surrounding the execution of the deed
to show he intended to transfer the marital residence into joint
title solely to obtain refinancing on the property. Wife
objected to this testimony on the ground that it was inadmissible
under the parol evidence rule.
Relying on the fact that the instrument used to convey the
marital residence was termed a deed of gift and that the
conveyance was expressly exempt from recordation taxes because it
was without consideration, the trial court found that the deed
clearly and unambiguously established husband's donative intent.
The trial court refused, therefore, to consider husband's parol
evidence and held that husband's conveyance of the marital
property to the parties jointly constituted a gift.
On appeal, husband contends the trial court erred in finding
the deed sufficient on its face to establish his donative intent
under Code § 20-107.3(A)(3)(f) and in refusing to consider parol
evidence regarding the circumstances surrounding the deed's
execution that he proffered to show he did not intend to make a
gift of his separate interest in the marital residence to wife.
We agree.
To determine whether a deed "contains sufficient evidence of
donative intent" to transform separate property into marital
property for purposes of equitable distribution, the court
charged with that determination must construe the deed in
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accordance with the applicable rules "governing the construction"
of deeds, including, if appropriate, the parol evidence rule.
Kelln, 30 Va. App. at 122, 515 S.E.2d at 793; see also Langman v.
Alumni Ass'n of the Univ. of Virginia, 247 Va. 491, 498, 442
S.E.2d 669, 674 (1994) (noting that the parol evidence rule
applies to deeds).
The prime consideration [in construing a
deed], as with any writing, is to determine
the intention of the parties executing the
instrument. The intention . . . should be
ascertained from the language used in the
deed, if possible. If the language is
explicit and the intention is thereby free
from doubt, such intention is controlling, if
not contrary to law or to public policy, and
auxiliary rules of construction should not be
used.
Camp v. Camp, 220 Va. 595, 597-98, 260 S.E.2d 243 (1979)
(citation omitted).
Thus, "when 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'" to
ascertain the donor's intent. Pyramid Dev., L.L.C. v. D&J
Assocs., 262 Va. 750, 754, 553 S.E.2d 725, 728 (2001) (quoting
Langman, 247 Va. at 498-99, 442 S.E.2d at 674). "Only when the
language is ambiguous may a court look to parol evidence, or
specifically, to the language employed 'in light of the
[surrounding] circumstances . . . at the time the deed was
executed.'" Id. (quoting Gordon v. Hoy, 211 Va. 539, 541, 178
S.E.2d 495, 496 (1971)). "An ambiguity exists when language is
of doubtful import, admits of being understood in more than one
way, admits of two or more meanings, or refers to two or more
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things at the same time." Allen v. Green, 229 Va. 588, 592, 331
S.E.2d 472, 475 (1985).
"[T]he question whether a writing is ambiguous is not one of
fact but of law." Langman, 247 Va. at 498, 442 S.E.2d at 674.
"On appellate review, we are not bound by the trial court's
conclusions regarding an instrument's ambiguity because we are
provided with the same opportunity as the trial court to consider
the written provisions of the deed in question." Pyramid Dev.,
L.L.C., 262 Va. at 754, 553 S.E.2d at 727.
Guided by the foregoing principles, we turn to the deed in
question here. It provides, in pertinent part, as follows:
THIS DEED OF GIFT made this 13th day of
September, 1988, by and between [husband],
homme sole, party of the first part, and
. . . husband and wife, parties of the second
part;
WITNESSETH:
That for and in consideration of the
love and affection of [husband] for [wife]
and other good and valuable consideration,
the receipt of which is hereby acknowledged,
the party of the first part does hereby grant
and convey . . . unto parties of the second
part as tenants by the entirety with rights
of survivorship as at common law the [marital
residence].
* * * * * * *
This conveyance is exempt from
recordation taxes pursuant to § 58.1-811(D)
of the Code of Virginia (1950), as amended.
Plainly, the language of the deed makes it clear that
husband intended to transfer legal title of the marital residence
to himself and wife jointly without consideration. It does not
necessarily follow, however, that husband intended to convey the
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property into the marital estate and thus relinquish his separate
interest in the property for purposes of equitable distribution.
As we pointed out in McDavid v. McDavid, 19 Va. App. 406,
410, 451 S.E.2d 713, 716 (1994), "[h]ow the property is titled
generally is not dispositive of its classification." In other
words, "whether the property is separate or marital is determined
by the statutory definition and is not determined by legal
title." Garland v. Garland, 12 Va. App. 192, 195, 403 S.E.2d 4,
6 (1991). Hence, "[a] party claiming entitlement to rights and
equities in marital property by virtue of an interspousal gift
must prove the donative intent of the donor spouse and the nature
and extent of the donor's intention." Lightburn v. Lightburn, 22
Va. App. 612, 617, 472 S.E.2d 281, 283 (1996) (emphasis added).
Absent clear and convincing evidence that the donor spouse
intended to convey the jointly retitled property into the marital
estate, the transfer of separate property into joint title will
not constitute a gift under Code § 20-107.3(A)(3)(f). See
generally Rowe v. Rowe, 24 Va. App. 123, 137, 480 S.E.2d 760,
766-67 (1997) (holding that the husband's statement to the wife
that the home conveyed into joint title was hers was evidence
that husband intended to make a gift for equitable distribution
purposes); Theismann, 22 Va. App. at 566, 471 S.E.2d at 813
(holding that the husband's giving the wife cards when his
separate property was jointly retitled indicating that the
property was now "our home" was evidence of husband's donative
intent under Code § 20-107.3(A)(3)(f)).
Accordingly, in considering equitable distribution, a trial
court must consider all tendered competent evidence of the
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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). It cannot ignore the context as a whole
simply because the deed, standing alone, says "gift" and clearly
and unambiguously appears to reflect the donor spouse's intention
to transfer title to the parties jointly without consideration.
By statute, "[n]o presumption of gift shall arise . . . where
. . . property is conveyed or retitled into joint ownership."
Code § 20-107.3(A)(3)(g). The events and circumstances giving
rise to the retitling of property must be considered in
determining the agreement of the parties.
"[I]t is . . . elementary that the [parol
evidence] rule does not apply where the
writing on its face . . . does not embody the
entire agreement. In such a case, parol
evidence is always admissible, not to
contradict or vary the terms, but to
establish the real contract between the
parties."
Prospect Dev. Co. v. Bershader, 258 Va. 75, 84, 515 S.E.2d 291,
296 (1999) (alterations in original) (quoting Georgiades v.
Biggs, 197 Va. 630, 634, 90 S.E.2d 850, 854 (1956)).
Deeds generally do not address the underlying issue of
donative intent relative to property division, but some do. In
McDavid, the parties executed a deed transferring the wife's
interest in marital property to the husband. 19 Va. App. at 411,
451 S.E.2d at 717. The deed recited that it was a deed of gift
and provided that
the property was to be held by husband "in
his own right as his separate and equitable
estate as if he were an unmarried man . . .
free from the control and marital rights of
his present . . . spouse" and "with full and
complete power . . . [to] dispose of the
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. . . property . . . during his lifetime
. . . [or by] devise."
Id. (alterations in original). On appeal, we affirmed the trial
court's holding that the deed's language "clearly and without
ambiguity . . . grant[ed] title to [husband] as his separate
property." Id. at 412, 451 S.E.2d at 717 (second alteration in
original) (emphasis added).
Here, however, unlike in McDavid, the deed does not
explicitly set forth the nature and extent of the donor's
donative intent. The deed says it is a "deed of gift." It is
not clear from the language of the deed, however, whether
husband, in transferring title to the parties jointly, intended
to make a true gift to wife such that the marital residence was
transformed from separate property into marital property for
purposes of equitable distribution, as wife claims, or intended
merely to convey legal title into joint ownership in order to
obtain refinancing on the property without affecting the parties'
equitable distribution rights, as husband claims. See Brett R.
Turner, Equitable Distribution of Property § 5.18, at 187 (2nd
ed. Supp. 2001). Furthermore, while evidence, certainly, of the
former intent, the fact that the conveyance instrument is a deed
of gift, the stated consideration for the conveyance is "love and
affection," and the deed states the conveyance is not subject to
recordation tax under Code § 58.1-811(D) is not conclusive proof
of that intent, foreclosing consideration of other competent
evidence to the contrary.
We find, therefore, as a matter of law, that, although the
deed is clear and unambiguous on its face as to husband's intent
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to transfer legal title of the marital residence to himself and
wife jointly as tenants by the entirety without consideration, it
is not clear and unambiguous with regard to husband'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 husband's donative
intent, and in excluding the introduction of parol evidence
relating to the circumstances surrounding the execution of the
deed of gift. Accordingly, we reverse the trial court and remand
for reclassification of the marital residence after consideration
of parol evidence and for adjustment of the division of the value
4
of that property, as appropriate under Code § 20-107.3.
Reversed and remanded.
4
Because the trial court must reconsider the classification
of the marital residence and the distribution of its value, we
will not address husband's challenge to the trial court's
distribution of that property's value.
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