COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Willis and Annunziata
Argued at Richmond, Virginia
RICHARD L. BARKER
OPINION BY
v. Record No. 0812-97-2 JUDGE ROSEMARIE ANNUNZIATA
JUNE 16, 1998
NANCY J. BARKER
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Melvin R. Hughes, Jr., Judge
Andrea R. Stiles (Williams, Mullen,
Christian & Dobbins, on briefs), for
appellant.
Lawrence D. Diehl for appellee.
Richard L. Barker (husband) appeals the order of the trial
court granting him a divorce from Nancy J. Barker (wife) on the
basis that the trial court erred in determining the spousal
support and equitable distribution awards. Specifically, husband
argues that the court overestimated his earning capacity for
purposes of spousal support, improperly applied the tracing
doctrine, and failed to properly consider the statutory factors
in determining equitable distribution. We affirm in part and
1
reverse in part.
Husband and wife were married on December 10, 1978. Wife's
1
Wife has filed a motion to delete or disregard a portion of
husband's designation of the record for the appendix, alleging
that a portion of the appendix is improperly before this Court.
Husband did not respond to this motion. Our review of the record
supports wife's allegations. Accordingly, we grant the motion
and will not consider or rely upon the portion of the appendix
that was improperly filed.
three children from a previous marriage lived with the parties
for a number of years. At the time of the marriage, husband owed
his former spouse over $50,000 in spousal support, payable over a
period of ten years. Although wife did not work outside the home
for the majority of the marriage, both parties contributed funds
to buy their first marital home. During the marriage, husband
was employed as an upper management business executive.
Husband admits that he committed adultery during the period
1986-1989. After husband told wife of the affair in 1989, the
two reconciled and joined an adultery self-help group. In 1990
or 1991, wife discovered evidence that husband had resumed his
affair. After her discovery, wife moved out of the marital
bedroom, although she remained in the marital home. Husband lost
his job in May 1991, although he continued to receive income from
his position until May 1992. On January 30, 1993, husband moved
out of the marital home, and wife filed for divorce.
The trial court referred the case to a commissioner, who
held hearings and filed a report. After the parties filed
exceptions to the commissioner's report, the trial court issued a
letter opinion sustaining husband's exception as to the
commissioner's recommendation for spousal support and related
issues and overruling most of husband's exceptions. After
holding an evidentiary hearing, the court awarded wife less
spousal support than recommended by the commissioner.
2
I.
Spousal Support
After taking evidence as to the past and present
circumstances of the parties, the commissioner to whom the case
had been referred noted that, "[w]hile husband is currently
unemployed, the commissioner feels that he has the ability to be
employed at an income which would warrant an award of spousal
support to wife of $2,000.00 per month." The trial court elected
not to follow the commissioner's recommendation, and held
additional hearings on the issue of spousal support.
In its letter opinion of July 17, 1996, the trial court
noted that husband, age 62, had been temporarily employed at a
rate of $75,000 per year from August 1995 to October 1995, but
that husband had virtually no income for 1994, and was currently
unemployed. The court also noted that husband had attended real
estate school, had obtained a Virginia real estate license, had
taken the necessary steps to obtain a New Jersey real estate
license, and "hoped" to earn $2,000 per month. The court
explained that wife, in her fifties, earned $300 per week
designing jewelry, had been diagnosed with carpal tunnel
syndrome, and could earn a maximum of $25,000 per year as a
secretary. The court concluded, "[l]ooking first at the
considerable resources the parties have resulting from equitable
distribution and the pertinent factors under § 20-107.1 according
to the evidence, the court will require that husband pay to the
3
wife . . . the sum of $600.00 per month." The trial court did
not find that either party was voluntarily under-employed or
unemployed, and did not impute income to husband or wife.
Husband argues that the trial court erred in ordering him to pay
spousal support to wife because he has no income, actual or
imputed.
Whether and how much spousal support will be awarded is a
matter of discretion for the trial court. Jennings v. Jennings,
12 Va. App. 1187, 1196, 409 S.E.2d 8, 14 (1991) (citing McGuire
v. McGuire, 10 Va. App. 248, 251, 391 S.E.2d 344, 347 (1990)).
Code § 20-107.1 requires a court "to consider the circumstances
and factors which contributed to the dissolution of the marriage,
specifically including adultery," in determining whether to make
an award of spousal support. If the court determines that an
award should be made, the court is required to consider all the
factors outlined in Code § 20-107.1. See Rowe v. Rowe, 24 Va.
App. 123, 139, 480 S.E.2d 760, 767 (1997) (citing Woolley v.
Woolley, 3 Va. App. 337, 344, 349 S.E.2d 422, 426 (1986)). Among
the other statutory factors, the trial court must evaluate the
earning capacity of both parties. See Stumbo v. Stumbo, 20 Va.
App. 685, 691, 460 S.E.2d 591, 594 (1995) (citing Goetz v. Goetz,
7 Va. App. 50, 51, 371 S.E.2d 567, 567 (1988)) (requiring the
trial court to consider earning capacity); Srinivasan v.
Srinivasan, 10 Va. App. 728, 734, 396 S.E.2d 675, 679 (1990)
(citing McGuire, 10 Va. App. at 251, 391 S.E.2d at 347)
4
(emphasizing that the court must consider the earning capacity of
both the payor and payee spouse).
Code § 20-107.1, like its predecessor Code § 20-107,
authorizes courts "to consider not only earnings but also
'earning capacity.'" Jacobs v. Jacobs, 219 Va. 993, 995, 254
S.E.2d 56, 58 (1979). "Although 'earning capacity' necessarily
includes actual earnings, it is a broader concept that allows the
trial court to consider more than actual earnings." Frazer v.
Frazer, 23 Va. App. 358, 378, 477 S.E.2d 290, 300 (1996). The
spousal support award, however, "must be based upon the
circumstances in existence at the time of the award." Payne v.
Payne, 5 Va. App. 359, 363, 363 S.E.2d 428, 430 (1987). The
relevant time period includes the immediate past, Stubblebine v.
Stubblebine, 22 Va. App. 703, 709, 473 S.E.2d 72, 75 (1996) (en
banc), as well as the "'immediate or reasonably foreseeable
future.'" Srinivasan, 10 Va. App. at 735, 396 S.E.2d at 679
(quoting Young v. Young, 3 Va. App. 80, 81-82, 348 S.E.2d 46, 47
(1986)). A spousal support award may not be "premised upon the
occurrence of an uncertain future circumstance." Jacobs, 219 Va.
at 995-96, 254 S.E.2d at 58.
We view the evidence in the light most favorable to wife,
the prevailing party below. Cook v. Cook, 18 Va. App. 726, 731,
446 S.E.2d 894, 896 (1994) (citing Steinberg v. Steinberg, 11 Va.
App. 323, 325, 398 S.E.2d 507, 508 (1990)). So viewed, the
evidence supports the court's assessment of each of the parties'
5
earning capacity. The court heard testimony that since the
separation, wife had worked at a number of low-paying jobs.
Wife's most recent job prior to the separation had been in 1986,
and she had attempted but failed to bring her typing and
accounting skills up to date. Wife had been diagnosed with
carpal tunnel syndrome in 1980, and had four bones in her hands
surgically fused together. At the time of the hearing, wife was
performing piecework jewelry design, for which she was paid up to
$300 per week.
The court also heard evidence that husband received his real
estate license in January 1995, joined Coldwell Banker real
estate company, and earned $8,497 in 1995 before taking a
ninety-day position with One Call Medical. Husband worked for
One Call Medical until February 12, 1996, where he earned
approximately $6,000 per month. At the time of the hearing,
husband had passed the New Jersey real estate examination,
rejoined Coldwell Banker, and had been in training for three
weeks. As a real estate agent, husband hoped to earn $2,000 per
month selling real estate. This evidence supports the findings
of the court, and the court did not abuse its discretion in
fashioning a spousal support award of $600 per month based on
this evidence.
Husband also alleges that the trial court required him to
use his portion of the equitable distribution award to pay
spousal support. Code § 20-107.1(8) requires the trial court to
6
consider "[t]he provisions made with regard to the marital
property under § 20-107.3" in fashioning spousal support. As
husband argues, however, it is improper for a trial court to
treat assets divided in equitable distribution as income. Ray v.
Ray, 4 Va. App. 509, 514, 358 S.E.2d 754, 757 (1987); see, e.g.,
Dotson v. Dotson, 24 Va. App. 40, 44, 480 S.E.2d 131, 132-33
(1997) (describing the "'distinct difference . . . between a
spousal support award and a monetary award'" (quoting Brown v.
Brown, 5 Va. App. 238, 246, 361 S.E.2d 364, 368 (1987))). "[A]
decree which singles out this factor [regarding distribution of
the marital property] to the exclusion of others, and which
essentially treats the . . . spouse's marital assets as income,
cannot withstand scrutiny on appeal." Zipf v. Zipf, 8 Va. App.
387, 399, 382 S.E.2d 263, 270 (1989).
The trial court did not abuse its discretion in fashioning
the spousal support award. It is important to note that the
trial court's decision turns on husband's earning capacity rather
than imputed income or principal or income from the distribution.
The trial court's letter opinion of July 17, 1996, reveals that
the trial court gave primary consideration to the age and earning
capacity of the parties. The court reviewed the current earnings
and earning prospects of the parties, and considered the
testimony of husband, wife, and the vocational expert. The court
also considered the expenses claimed by each party. Finally, the
court stated that it had considered "the pertinent factors under
7
§ 20-107.1." We find that the trial court properly considered
the age, expenses, distribution of assets, and earning capacity
of the parties, as well as other statutory factors, in fashioning
the spousal support award, and thus acted within its discretion.
8
II.
Classification of Property
The trial court affirmed the commissioner's decision to
trace the contributions of both parties to the first marital home
and award both parties a credit for their contributions. The
commissioner recommended that "the proceeds should be divided
equally with offsets to each party for their contribution of
separate property when the cycle of home buying began in 1978."
The commissioner recommended a credit of $23,500 for husband and
a credit of $50,061 for wife to reflect each party's separate
contributions to the purchase of the first marital home on John
Drive. Husband excepted to this recommendation, arguing that
wife could not trace $20,061 of the $50,000 she was credited to
the separate contribution she made to the purchase of the marital
property and that he could trace an additional $20,000 as his
separate property.
In affirming the finding of the commissioner, the trial
court agreed with wife that, apart from the $23,500, "any other
contributions cannot be traced directly from 1978 to the current
equities or properties of the parties." The court found,
"[t]here is no direct tracing evidence resulting from this sale
[of the John Drive home] to the present asset picture to mandate
or require any additional credit where there might otherwise be
on actual value tracing to current assets." The court went on to
note "that the proceeds from the sale of the parties' home in
9
Richmond cannot be directly traced to a specific source [because]
the many prior sale proceeds from other homes purchased during
the marriage and the commingling of other funds[] mak[e] tracing
difficult if not impossible." The trial court concluded that
wife's credit was justified because all of her contribution went
to pay marital bills, even though $20,061 was not used to
purchase the first marital residence or other identifiable asset.
A commissioner's findings of fact which have been accepted
by the trial court "are presumed to be correct when reviewed on
appeal and are to be given 'great weight' by this Court. The
findings will not be reversed on appeal unless plainly wrong."
Rowe, 24 Va. App. at 140, 480 S.E.2d at 768 (citations omitted).
According to Code § 20-107.3(A)(3)(e), "[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 deemed transmuted to
marital property," unless the contributed property is retraceable
and not a gift. We have explained the requirements of tracing
under Code § 20-107.3(A)(3):
In order to trace the separate portion of
hybrid property, a party must prove that the
claimed separate portion is identifiably
derived from a separate asset. This process
involves two steps: a party must (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, 207, 494 S.E.2d 135, 141
(1997) (citing Code § 20-107.3(A)(3)(d)-(f)). "[T]he party
10
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) (citing Code
§ 20-107.3(A)(2)). 2
Assuming without deciding that husband's $20,000
contribution was separate property when he acquired it, we hold
that the trial court did not err in finding that husband failed
to present sufficient evidence of tracing to establish his claim
that he should be awarded $20,000 as his separate property.
Viewing the evidence in the light most favorable to wife,
husband cannot establish the separate identity of any portion of
the hybrid property, or directly trace the claimed separate
portion to his original contribution of separate property. In
Rowe, 24 Va. App. at 136, 480 S.E.2d at 766; von Raab, 26 Va.
App. at 249, 494 S.E.2d at 161; and Rahbaran, 26 Va. App. at
209-10, 494 S.E.2d at 142, we addressed the question of "multiple
source tracing," in which marital and separate property are
combined to acquire a single piece of hybrid property. See Brett
2
It is important to note that two tracing issues are not
presented by this case because they are not argued by the
parties. Neither party claims that he or she is entitled to
tracing of appreciation on separate assets. See Code
§ 20-107.3(A)(1); Mann v. Mann, 22 Va. App. 459, 464-65, 470
S.E.2d 605, 607-08 (1996); Lambert v. Lambert, 6 Va. App. 94,
104-05, 367 S.E.2d 184, 190-91 (1988). In addition, neither
party addresses the gift provisions of the transmutation statute.
See Code § 20-107.3(A)(3)(d)-(g); Lightburn v. Lightburn, 22 Va.
App. 612, 616-17, 472 S.E.2d 281, 283 (1996); Theismann v.
Theismann, 22 Va. App. 557, 578, 471 S.E.2d 809, 818 (1996)
(Annunziata, J., concurring in part and dissenting in part),
aff'd, 23 Va. App. 697, 479 S.E.2d 534 (1996) (en banc) (mem.).
11
R. Turner, Equitable Distribution of Property 266 (1994). This
case, in addition, presents the additional problem of "multiple
destination tracing," in which only a portion of hybrid property
is used to acquire or invest in additional properties, either
simultaneously or successively. Id. at 268. To determine
whether a party's separate property can be retraced under such
circumstances, courts have adopted widely varying approaches to
address the character of withdrawals from hybrid accounts. See
J. Thomas Oldham, Tracing, Commingling, and Transmutation, 23
Family L.Q. 219, 230-33 (1989) (describing approaches). Whatever
approach is used, it is clear that in the absence of sufficient
evidence establishing the identity of separate funds throughout
the multiple investments and withdrawals, the asset in question
must be deemed marital. Rahbaran, 26 Va. App. at 208-09, 494
S.E.2d at 141.
During the time in which the funds used to purchase the
houses were placed in various bank and investment accounts, the
parties continued to conduct withdrawal and deposit transactions
on the accounts. The record contains numerous gaps in recording
the simultaneous and sequential uses of the funds husband seeks
to trace. The evidence showed that husband contributed the
claimed $20,000 to the first marital home in Wheeling, Illinois.
Similarly, wife contributed the proceeds of the sale of her
separate townhouse to the purchase of the Wheeling house. The
parties subsequently placed the proceeds of the sale of the
12
Wheeling home into an account along with the parties' paychecks,
and subsequently invested a portion of the money from the account
in a home in Freeland, Michigan. The record does not reveal what
proportion of the money in the account represented the proceeds
of the Wheeling home, and what proportion represented the
parties' paychecks. When the parties sold the house in Freeland,
Michigan, unspecified proceeds of the sale went into an account
identified as a predecessor to the parties' Merrill Lynch Cash
Management Account (CMA), which also contained an unknown amount
of other marital funds. The parties moved to London, England,
and then back to Connecticut. Upon their return to the United
States, the parties used a portion of the money in the parties'
CMA to purchase a house in Westport, Connecticut. The record
does not establish the proportion of money in the CMA which
represents the proceeds of the sale of the Freeland home.
The parties sold the Westport house and used at least some
of the proceeds to buy a house in McLean, Virginia, the precise
amount of which was not established at trial. During the same
time period, the parties also owned a house in Bloomfield,
Michigan, although it is unclear what funds were used to purchase
the Bloomfield house. The parties sold both the McLean and
Bloomfield houses, and used proceeds in the amount of $500,000 as
a down payment on the Richmond, Virginia home owned at the time
of separation.
Thus, the record makes clear that husband presented
13
insufficient evidence from which the court could determine the
identity of his separate funds, and distinguish them from the
marital property in the hybrid asset, viz., the parties' last
house in Richmond. Therefore, "'the unknown amount contributed
from the separate source transmutes by commingling and becomes
marital property.'" Rahbaran, 26 Va. App. at 208-09, 494 S.E.2d
at 141 (quoting Turner, supra, at 268); see also Minter v.
Minter, 432 S.E.2d 720, 725 (N.C. App. 1993) (holding that party
did not carry his burden to trace transactions made on a marital
account).
Applying the same tracing principles to the classification
of wife's contribution, we hold that wife's evidence of tracing
does not support the court's award to her in the amount of
$20,061. 3 The evidence revealed, and the commissioner noted,
that wife contributed $20,061 of the $50,061 credit to pay
unspecified "marital bills." The evidence fails to establish
that wife contributed these funds toward the value of an
3
In an attempt to avoid the application of the tracing
doctrine and its result, wife argues that the trial court awarded
her a credit under equitable distribution principles, rather than
applying tracing rules to determine her separate property under
classification principles, citing Pommerenke v. Pommerenke, 7 Va.
App. 241, 249, 372 S.E.2d 630, 634 (1988), in support. In
Pommerenke, 7 Va. App. at 249, 372 S.E.2d at 634, we held, under
a previous version of Code § 20-107.3(A), that "the restoration
of a down payment made from separate property based on the
application of the eleven factors of Code § 20-107.3(E), rather
than the automatic restoration of such down payment, constitutes
the proper application of the statute." Our reading of the
rulings of the commissioner and the trial court, however, reveals
that the trial court applied tracing principles to both wife and
husband.
14
identifiable asset, or to the acquisition of an identifiable
asset. In short, wife has not pointed to any separate or hybrid
asset owned at the time of separation to which she claims the
$20,061 of her separate funds may be traced. Accordingly, the
trial court erred in identifying this portion of wife's
contribution as separate. Rahbaran, 26 Va. App. at 208, 494
S.E.2d at 141.
III.
Equitable Distribution Award
The trial court affirmed the commissioner's rulings on the
issue of equitable distribution, and issued a final decree
setting out the terms of the equitable distribution. Husband
contends that the commissioner and court erred in their
consideration of the statutory factors.
A commissioner's findings of fact which have been accepted
by the trial court "are presumed to be correct when reviewed on
appeal and are to be given 'great weight' by this Court. The
findings will not be reversed on appeal unless plainly wrong."
Rowe, 24 Va. App. at 140, 480 S.E.2d at 768 (citations omitted).
The amount and form of any equitable distribution award "are
matters committed to the sound discretion of the trial court,
[but] 'any division or award must be based on the parties'
equities, rights and interests in the property.'" Theismann v.
Theismann, 22 Va. App. 557, 565, 471 S.E.2d 809, 812 (1996)
(quoting Alphin v. Alphin, 15 Va. App. 395, 403, 424 S.E.2d 572,
15
577 (1992)), aff'd, 23 Va. App. 697, 479 S.E.2d 534 (1996) (en
banc) (mem.). In fashioning an equitable distribution award, the
trial court must consider each of the statutory factors, but may
determine what weight to assign to each of them. Booth v. Booth,
7 Va. App. 22, 28, 371 S.E.2d 569, 573 (1988). In challenging
the court's decision on appeal, the party seeking reversal bears
the burden to demonstrate error on the part of the trial court.
D'Agnese v. D'Agnese, 22 Va. App. 147, 153, 468 S.E.2d 140, 143
(1996) (citing Lutes v. Alexander, 14 Va. App. 1075, 1077, 421
S.E.2d 857, 859 (1992)).
A.
Consideration of Husband's Support
for Former Spouse and for Wife's Children
Husband contends that the trial court erred in giving
consideration to his use of at least $50,000 of marital funds to
make court-ordered support payments to a former spouse. Husband
also contends that the court failed to consider his support for
wife's children during the marriage.
Husband brought approximately $50,250 in intangible personal
property into the marriage. Husband argued that he should
receive a greater portion of the intangible property than the
principal owned at the time of marriage because of the earning
record of the funds, while wife argued that husband's share of
the intangible property should be reduced by the spousal support
paid by husband to his former wife during the marriage, which
totalled more than $50,000. The trial court found that the funds
16
husband brought into the marriage were transmuted by commingling
into marital property, and could not be treated as his separate
property as they could not be traced to a current asset. Thus,
in fashioning a monetary award which reflected this contribution,
the trial court was guided by the statutory factors for equitable
distribution of marital property set forth in Code § 20-107.3(E).
In considering the statutory factors, the court, inter alia,
balanced husband's monetary contributions to the marriage against
his use of marital funds to support his former spouse, and
awarded husband $44,856 for the intangible personal property,
with the remainder of the assets divided equally.
The specific question to be addressed by this Court is
whether the payment of separate debt with marital funds may be
considered by the trial court as a factor in fashioning an
equitable distribution award. We hold that the court may, in the
exercise of its discretion, consider payment of separate debt
with marital funds in fashioning an equitable distribution award.
While the specific question husband raises is a matter of
first impression in Virginia, the principles underlying its
resolution are well established. It is beyond dispute that the
trial court is required to consider all the factors set forth in
Code § 20-107.3(E) in determining the amount of any monetary
award and the division of marital property. See, e.g., Taylor v.
Taylor, 5 Va. App. 436, 444, 364 S.E.2d 244, 249 (1988). Code
§ 20-107.3(E)(2) requires the court to consider "[t]he
17
contributions, monetary and nonmonetary, of each party in the
acquisition and care and maintenance of [the] marital property of
the parties." "[C]ircumstances that affect the [marital]
partnership's economic condition are factors that must be
considered for purposes of our equitable distribution scheme."
Aster, 7 Va. App. at 5, 371 S.E.2d at 836. This Court has made
clear that both affirmative and negative monetary contributions
to the marital partnership are to be considered. See, e.g.,
O'Loughlin v. O'Loughlin, 20 Va. App. 522, 526, 458 S.E.2d 323,
325 (1995); Traylor v. Traylor, 19 Va. App. 761, 766, 454 S.E.2d
744, 747 (1995). Indeed, there appears to be general agreement
with this principle. Turner, supra, at 565. Those contributions
which impact on the value of the marital estate have been of
particular concern to this Court. O'Loughlin, 20 Va. App. at
528, 458 S.E.2d at 326; Smith v. Smith, 18 Va. App. 427, 431, 444
S.E.2d 269, 273 (1994); Gamer v. Gamer, 16 Va. App. 335, 341, 429
S.E.2d 618, 623 (1993); Aster, 7 Va. App. at 5-6, 371 S.E.2d at
836. A court need not find waste in order to consider negative
contributions in fashioning an equitable distribution award. See
O'Loughlin, 20 Va. App. at 528, 458 S.E.2d at 326; cf. Booth, 7
Va. App. at 29, 371 S.E.2d at 573 (holding that unpaid attorneys'
fees constitute debt which the trial court properly considered in
fashioning equitable distribution award although the debt was not
waste).
In dual classification states such as Virginia, the use of
18
marital funds for non-marital purposes can be considered as a
factor in determining an equitable distribution award. Turner,
supra, at 572. For example, where marital funds are used to pay
the separate debts of one of the parties, a court may properly
consider that fact as a negative monetary contribution to the
marital property. Adams v. Adams, 443 S.E.2d 780, 781 (N.C. App.
1994) ("A reduction in the separate debt of a party to a
marriage, caused by the expenditure of marital funds . . . is
properly considered as a distributional factor . . . ."); Fenske
v. Fenske, 542 N.W.2d 98, 102-03 (N.D. 1996) (holding that trial
court did not err in considering husband's premarital debts paid
off during the marriage with commingled funds in the equitable
distribution award). In addition, we have found that support
obligations arising from a prior marriage may constitute such a
separate debt. Hayes v. Hayes, 21 Va. App. 515, 519, 465 S.E.2d
590, 592 (1996) (finding that debt incurred to pay child support
to a former spouse was separate debt); see Orlandi v. Orlandi, 23
Va. App. 21, 29, 473 S.E.2d 716, 720 (1996) (indicating that a
new spouse is not required to support the other spouse's
children), reh'g en banc granted, appeal withdrawn (1996).
Based on Virginia's statutory scheme and the cases which
have applied it, we hold that the trial court could properly
consider husband's use of marital funds to pay his prior support
obligations as a negative monetary contribution in fashioning its
equitable distribution award. Accord Dobbyn v. Dobbyn, 471 A.2d
19
1068, 1076-78 (Md. Ct. Spec. App. 1984); Jensen v. Jensen, 877
S.W.2d 131, 135 (Mo. Ct. App. 1994); McGee v. McGee, 648 A.2d
1128, 1133-34 (N.J. Super. Ct. App. Div. 1994); Turner, supra, at
594. 4 This view is premised on the clear language of Code
§ 20-107.3(E) and the underlying legislative intent to allow the
court to consider all contributions to the acquisition, care, and
maintenance of the marital property, both positive and negative.
See Code § 20-107.3(E)(2). Consideration of the use of marital
funds to pay separate debt, such as support to a former spouse,
properly falls under the trial court's consideration of the
statutory factors. As such, this case does not turn on the
5
application of the doctrine of "waste." In short, under
Virginia's statutory scheme, which encompasses broad directives
to the trial court to consider the parties' monetary and
4
In Bliss v. Bliss, 898 P.2d 1081, 1083-84 (Idaho 1995), the
Supreme Court of Idaho held that a husband's use of marital funds
to pay attorney's fees and a judgment from a prior divorce did
not meet the requirements of the community property
"reimbursement to the community" doctrine because the community
funds "were used to pay [his] antenuptial, unsecured debts"
rather than "used to enhance the value of [his] separate
property," and therefore fell outside the scope of the
"reimbursement" doctrine.
5
The doctrine of waste is implicated where a spouse
dissipates assets "in anticipation of divorce or separation for a
purpose unrelated to the marriage and in derogation of the
marital relationship at a time when the marriage is in jeopardy."
Booth, 7 Va. App. at 27, 371 S.E.2d at 572. In Rosenfeld v.
Rosenfeld, 597 So. 2d 835, 837 (Fla. Dist. Ct. App. 1992); and In
re Marriage of Burgess, 568 N.W.2d 827, 828-29 (Iowa 1997),
courts held that support payments to a former spouse do not
constitute waste. We express no opinion on whether support
payments to a former spouse might, in a proper case, constitute
waste, as that issue is not before us.
20
nonmonetary contributions to the marital estate, the trial court
properly considered husband's use of marital funds to pay support
to his former spouse.
Husband also contends that the commissioner failed to
consider his support for wife's children by a prior marriage in
determining the equitable distribution. After the parties
married, they supported three of wife's children and one of
husband's children in the marital home. The trial court
concluded that the commissioner considered husband's support of
wife's children under Code § 20-107.3(E)(10), the so-called
"catchall" factor, notwithstanding the absence of any reference
to the factor in the commissioner's report.
The court could consider husband's support for wife's
children pursuant to two statutory provisions: (1) as a
"contribution[], monetary and nonmonetary, of each party to the
well-being of the family"; and (2) as an "other factor[] as the
court deems necessary or appropriate to consider in order to
arrive at a fair and equitable monetary award." Code
§ 20-107.3(E)(1), (10); accord Cox v. Cox, 882 P.2d 909, 920
(Alaska 1994) (citing Burcell v. Burcell, 713 P.2d 802, 805
(Alaska 1986)). Husband's contribution to support for wife's
children, however, need only be considered under the factors
outlined in Code § 20-107.3; he is not entitled to a
dollar-for-dollar credit for contributions he may have made. See
Ellington v. Ellington, 8 Va. App. 48, 56, 378 S.E.2d 626, 630
21
(1989). The commissioner heard evidence on husband's support for
wife's children, and the trial court ruled that the commissioner
had considered this factor. Husband does not point to any
evidence that this conclusion is unjustified or unsupported by
the record, and we find none.
B.
Consideration of Fault
Code §§ 20-107.1 and 20-107.3 require a court to consider
"the circumstances and factors which contributed to the
dissolution of the marriage," including adultery, in determining
an equitable distribution award. A party claiming adultery by
the other party must prove it by clear and convincing evidence.
Seeman v. Seeman, 233 Va. 290, 293, 355 S.E.2d 884, 886 (1987).
Condonation of adultery nullifies the legal effect of the
adultery, but "[c]ondoned adultery is revived where the guilty
party resumes his association with his paramour." Cutlip v.
Cutlip, 8 Va. App. 618, 621, 383 S.E.2d 273, 275 (1989) (citing
McKee v. McKee, 206 Va. 527, 532, 145 S.E.2d 163, 166 (1965)).
In Aster, 7 Va. App. at 5-6, 371 S.E.2d at 836-37, this
Court held that a trial court must consider fault in terms of its
economic impact on the marital estate. In O'Loughlin, 20 Va.
App. at 528, 458 S.E.2d at 326, however, we held that a court may
consider a party's negative nonmonetary contributions to a
marriage arising out of his or her adultery regardless of its
economic impact. We also "reaffirmed our holding in Aster that
22
fault could not be used as a 'wild card' to justify an otherwise
arbitrary award." Theismann, 22 Va. App. at 569, 471 S.E.2d at
815 (citing O'Loughlin, 20 Va. App. at 528, 458 S.E.2d at 326).
The commissioner found that husband committed adultery
during the marriage. The commissioner stated that he had
considered the relevant statutory factors in fashioning the
equitable distribution award, but did not explicitly rely on the
finding of adultery in explaining the award. The trial court
granted a divorce on the basis that the parties lived separate
and apart for more than one year.
After husband excepted to the commissioner's finding, the
trial court reviewed the issue of adultery. The court affirmed
the commissioner's finding, explaining the evidence supported the
commissioner's finding that "the earlier condonation was
eliminated by later conduct even though the later affair may have
extended to the time the parties had become separated." The
court also noted that the evidence supported a finding that "wife
was reasonably suspect that relations with the first paramour had
resumed, contributing to the dissolution of the marriage." The
court stated that although the adultery did not have direct
economic impact, the commissioner could consider the adultery as
a negative nonmonetary contribution to the marriage, "if indeed
he did."
Husband argues that the evidence showed that the evidence
was insufficient to support a finding of uncondoned adultery and
23
that the court should not have considered his adultery for
economic impact or as a negative nonmonetary contribution. We do
not reach the question of the sufficiency of the evidence because
we conclude that the commissioner and trial court did not base
their equitable distribution award on husband's adultery. The
commissioner and trial court both referred to the evidence of
husband's adultery, but did not explicitly base any distribution
decision on husband's adultery; upon noting that both parties had
made nonmonetary contributions to the marriage, the commissioner
merely mentioned that husband had committed adultery during the
marriage. In turn, the trial court noted that the commissioner
could consider husband's adultery as a negative nonmonetary
contribution under O'Loughlin, but expressed skepticism that the
commissioner had actually done so.
In the absence of a specific finding by the commissioner or
trial court that husband's adultery affected the distribution of
assets, we will not presume that the court improperly relied on
husband's adultery. See Pommerenke v. Pommerenke, 7 Va. App.
241, 251, 372 S.E.2d 630, 635 (1988) ("Viewing the totality of
the evidence as it relates to other factors in Code
§ 20-107.3(E), we would be required to speculate to assign merit
to [wife's] argument. The trial court in fashioning the monetary
award certainly did not state that it was influenced by or
attributed any particular weight to the fact that it found [wife]
guilty of adultery."). The brief mention of husband's adultery
24
among many other factors considered by the commissioner and court
does not support an inference that the commissioner and trial
court improperly relied on husband's adultery, particularly in
the absence of a specific, express finding that they did so. Id.
Husband has not shown otherwise. See D'Agnese, 22 Va. App. at
153, 468 S.E.2d at 143 (citing Lutes, 14 Va. App. at 1077, 421
S.E.2d at 859) (explaining that the party seeking relief on
appeal bears the burden to show reversible error).
Husband also argues that the court erred in adopting the
commissioner's finding that wife was without legal fault in the
dissolution of the marriage. In order to constitute legal fault,
marital cruelty "must be so serious that it makes the
relationship intolerable or unendurable." McLaughlin v.
McLaughlin, 2 Va. App. 463, 467, 346 S.E.2d 535, 537 (1986)
(citing Hoback v. Hoback, 208 Va. 432, 436, 158 S.E.2d 113, 116
(1967)). All of the evidence of marital cruelty came from
husband, and wife and her three children all contradicted
husband's testimony. Under the governing standard of review, we
find that the trial court resolved this conflict in the evidence
in wife's favor, and will not reverse the trial court's
determination. See Farley v. Farley, 9 Va. App. 326, 328, 387
S.E.2d 794, 795 (1990).
C.
Allocation and Consideration of Marital Debt
In determining an equitable distribution award, a court must
25
consider the "debts and liabilities of each spouse [and] the
basis for such debts and liabilities." Code § 20-107.3(E)(7).
Husband contends that the commissioner and trial court failed to
properly consider the debt associated with the marital property
known as Rochester Housing Associates Two Limited Partnership and
the preparation of the parties' joint 1992 tax return by DeLoitte
& Touche. Husband introduced evidence that Rochester Housing
Associates was encumbered by $22,400 in debt, which he reduced to
$17,000 after the parties' separation, and that he paid Deloitte
& Touche approximately $2,300 to prepare the parties' joint 1992
tax return.
Husband's argument is without merit. In allocating the
marital liabilities, the commissioner found that husband should
receive a credit of $44,856 against the intangible marital
assets. In making this recommendation, the commissioner stated
that, "[h]usband should not be allowed an offset for the
Rochester Housing Associates account or the DeLoitte and Touche
bill when making an accounting, the commissioner having already
taken these into account in making an equitable distribution of
the property." Similarly, evidence of husband's $5,400 payment
to reduce the debt on the Rochester Housing Associates account
was before the commissioner, and there is no reason to believe
that the commissioner did not take the payment into account. The
trial court addressed husband's arguments, affirmed the
commissioner, and noted that the commissioner properly resolved
26
the conflicts in the evidence.
We find no basis in the record in support of husband's
contention that the court failed to consider husband's debt.
Husband is not entitled to a dollar-for-dollar credit for
post-separation contributions made to the care, acquisition, or
maintenance of marital property. von Raab, 26 Va. App. at
249-50, 494 S.E.2d at 161 (citing Ellington, 8 Va. App. at 56,
378 S.E.2d at 630). The court was not presented with an issue of
valuation, in which debt must be fully considered in establishing
6
value, but rather with the issue of fashioning an equitable
distribution award, in the exercise of its discretion after
considering the statutory factors. See Booth, 7 Va. App. at 28,
371 S.E.2d at 573. Unless a party can show evidence to the
contrary, we presume that the trial court properly applied the
law to the facts. Bottoms v. Bottoms, 249 Va. 410, 414, 457
S.E.2d 102, 105 (1995) (citing Yarborough v. Commonwealth, 217
Va. 971, 978, 234 S.E.2d 286, 291 (1977)).
Because we find that the trial court improperly awarded a
$20,061 credit to wife, we reverse its decision and remand so
that the trial court may address the issue.
Affirmed in part, and
reversed in part.
6
See, e.g., Trivett v. Trivett, 7 Va. App. 148, 151, 371
S.E.2d 560, 562 (1988) (holding that a valid debt secured by
marital property reduces the value of the property by the amount
of the debt).
27
Benton, J., concurring in part and dissenting in part.
I concur in Parts I and II; however, I dissent from Part
III. Therefore, I would reverse the decree and remand for
reconsideration of the monetary award for the reason stated in
Part II and for the additional reasons contained below.
(A)
The evidence proved that the husband brought into the
marriage $239,000 in assets that were used for marital purposes.
During the marriage, he annually earned substantial salaries,
including $409,000 in one year, that were used to support the
wife and her children from a prior marriage. At trial, the wife
argued that, during the course of their nineteen-year marriage,
the husband "depleted the marital estate by $50,000 to pay a
separate debt [of court-ordered support to his former spouse]."
Apparently believing the evidence proved dissipation, the trial
judge agreed with the wife's argument and "conclude[d] that the
commissioner recognized [the wife's] argument that [the
husband's] contributions to the marriage should be reduced by
spousal support he paid to his ex-wife and that . . . [the
commissioner] considered these payments." The majority opinion
rules that the trial judge did not err because the husband's
payments were appropriately considered under Code
§ 20-107.3(E)(2) as a negative monetary contribution to the
marriage. I believe both rulings are incorrect.
"Code § 20-107.3, providing for equitable distribution, is
28
based on the notion that marriage is an economic partnership in
which the parties, through varying contributions, monetary and
nonmonetary, to the acquisition, maintenance, and care of
property and to the well-being of the family, may accumulate
marital wealth." Dietz v. Dietz, 17 Va. App. 203, 210, 436
S.E.2d 463, 467 (1993). Code § 20-107.3 mandates an equitable
distribution of the parties' accumulated marital wealth. See
Gamble v. Gamble, 14 Va. App. 558, 570, 421 S.E.2d 635, 642
(1992). Thus, we have ruled that "what has always been
contemplated by the Code § 20-107.3 scheme for equitable
distribution of the marital wealth of the parties . . . [is] a
distribution which will equitably 'compensate a spouse for his or
her contribution to the acquisition of property obtained during
the marriage.'" Id. at 569, 421 S.E.2d at 642 (citation
omitted).
A trial judge may not apply the statute in a manner that
does not further the statute's purpose and policy. "Every
statute is to be read so as to 'promote the ability of the
enactment to remedy the mischief at which it is directed.'"
Bulala v. Boyd, 239 Va. 218, 227, 389 S.E.2d 670, 674 (1990)
(citation omitted). Nothing in the letter or the spirit of the
statute authorizes judges to examine the parties' lifestyle
choices and conclude post facto that they could have better used
their incomes to accumulate more wealth. Thus, a trial judge may
not, under the guise of applying Code § 20-107.3(E), rotely
29
consider a party's use of income or marital assets to pay a debt
during the course of marriage as a factor in the distribution of
marital property or in making a monetary award. We have
recognized that the statute is not a license for judges to make a
post facto examination of the spending of the husband and wife
during the marriage to determine whether they made prudent
decisions in using their incomes or marital assets to pay for
necessities of life. Thus, we previously have stated that, "at
least until the parties contemplate divorce, each is free to
spend marital funds." Booth v. Booth, 7 Va. App. 22, 27, 371
S.E.2d 569, 572 (1988).
Although some of the factors in Code § 20-107.3(E) might be
broadly read to encompass future conduct, in Marion v. Marion, 11
Va. App. 659, 401 S.E.2d 432 (1991), we noted that the
legislative purpose had to be considered in making equitable
distributions. See id. at 668, 401 S.E.2d at 438. We held that
"'Code § 20-107.3 provides for the equitable distribution of the
accumulated marital wealth between the marital parties; it does
not contemplate consideration of the future ability of one spouse
to accumulate what will be separate property or the future needs
of the other spouse.'" Id. (citation omitted). See also
Stainback v. Stainback, 11 Va. App. 13, 21-22, 396 S.E.2d 686,
691-92 (1990).
We also have ruled that not all past conduct of the parties
during a marriage affects the equitable distribution of property.
30
In Smith v. Smith, 18 Va. App. 427, 444 S.E.2d 269 (1994), the
wife contended the trial judge erred by not considering as a
factor the "husband's dissipation of marital assets, which she
alleges occurred . . . during the course of his fifteen-year
extramarital affair." Id. at 430, 444 S.E.2d at 272. In
rejecting that contention, we ruled as follows:
Our case law uniformly holds that the
challenged use of funds must be "in
anticipation of divorce or separation . . .
[and] at a time when the marriage is in
jeopardy." Wife is correct in her assertion
that the Court in Booth defined waste only
"generally" and did not purport to set forth
"an exclusive definition." Nevertheless, to
date, Virginia's appellate courts have
applied this rule only to funds spent
contemporaneously with the marital breakdown,
and we will not expand the definition to
cover expenditures made for a fifteen-year
period which were not specifically for the
purpose of depleting the marital estate and
where there was no evidence that there was an
irreconcilable breakdown of the marriage.
Accordingly, we conclude that the trial court
did not err by finding that wife failed to
show that husband's pre-separation
expenditures constituted dissipation of
marital assets.
Id. at 430-31, 444 S.E.2d at 272 (citations omitted).
During the marriage, the parties may at any time properly
use marital income that they earn for nonmarital purposes. Only
when one party claims an impropriety or improper dissipation of
marital assets that impacts a statutory purpose should the court
intervene and construct a financial accounting of income and
expenditures during the marriage. No valid purpose of Code
§ 20-107.3 is served by analyzing the debts the parties paid
31
during the marriage to determine which spouse gained the greater
benefit from payment of the debt and then using that benefit
analysis to support a set-off to the other spouse when making a
distribution of property upon divorce. Obviously, if the debt
bears some significance to the purpose of the property division,
such as dissipation in contemplation of or after marital
dissolution, the evidence establishes a nexus to the statutory
purpose.
In this case, the husband's payment during the marriage of
spousal support to a former spouse bears no significant
relationship to the statutory purpose of Code § 20-107.3. It is
not unusual that parties enter into marriage with either or both
having separate antenuptial debts. The payments of spousal
support in this case were not made to obtain or maintain a
separate asset that the husband can sell, trade, or transfer for
money after the divorce. No inequity justifies the trial judge's
use of these payments to increase the property distributed to the
wife on divorce. The husband's spousal support payments were no
different than any other expenditure made during the marriage for
a purpose solely benefitting the husband, such as dues to a golf
association, membership in a racquetball club, contributions to a
church building fund, dues at a private club, or expenditures on
a hobby that did not result in the acquisition of an asset.
To authorize a set-off or credit in the distribution of the
marital property because certain expenditures made during the
32
marriage benefitted the husband finds no support in the language
or purpose of the statute. Indeed, the lack of logic in this
decision is doubly manifest because the record contains no
indication that the trial judge considered the favorable tax
benefits the parties received as a result of the spousal support
payments. To the extent the wife contends the husband's payments
deprived her of the ability to spend the money during the
marriage for something that directly benefitted her, she ignores
the benefit the tax savings provided.
No evidence in this record tends to prove the husband's
payment of spousal support to his former spouse pursuant to a
court's order affected any factor contained in Code
§ 20-107.3(E). Clearly, the trial judge confused this issue with
"dissipation" or "waste."
Although not an exclusive definition[,]
"waste" may be generally characterized as the
dissipation of marital funds in anticipation
of divorce or separation for a purpose
unrelated to the marriage and in derogation
of the marital relationship at a time when
the marriage is in jeopardy. Just as a court
may consider positive contributions to the
marriage in making an equitable distribution
award, it can also consider "negative"
contributions in the form of squandering and
[d]estroying marital resources. The goal of
equitable distribution is to adjust the
property interests of the spouses fairly and
equitably. The mechanism to accomplish that
goal is the monetary award. To allow one
spouse to squander marital property is to
make an equitable award impossible. On the
other hand, at least until the parties
contemplate divorce, each is free to spend
marital funds.
33
Booth, 7 Va. App. at 27, 371 S.E.2d at 572.
The Virginia cases do not support either the trial judge's
ruling or the majority's opinion. In Gamer v. Gamer, 16 Va. App.
335, 429 S.E.2d 618 (1993), the husband and wife received during
the marriage money that should have been sent to the husband's
former spouse. The husband and wife spent the money for living
expenses. See id. at 338-39, 429 S.E.2d at 621. The debt, which
was created by their receipt and expenditure of money that was
not theirs, was reduced to a judgment and became a lien against
the marital residence. See id. at 341, 429 S.E.2d at 623.
Applying Code § 20-107.3(E)(7), we ruled that "[w]here the debt
was secured by marital assets or was a lien on marital property,
the purpose, nature, and character of the debt and who benefitted
from it were factors to be considered by the chancellor in
distributing the property or in fashioning the monetary award."
Gamer, 16 Va. App. at 341, 429 S.E.2d at 623. Obviously, when
the husband and wife misappropriated and spent funds during the
marriage that were not theirs and thereby created a debt that
resulted in a lien on marital property, that debt was a marital
debt created by the husband and the wife.
In Hayes v. Hayes, 21 Va. App. 515, 465 S.E.2d 590 (1996),
we did not rule that the husband's share of the marital estate
could be reduced by the amount of child support payments the
husband made during the marriage for the child of his prior
marriage. Because the wife had made loans to the husband "for
34
the benefit of the husband's separate property," id. at 515, 465
S.E.2d at 591, the trial judge found that the husband's debt to
the wife was separate debt. See id. at 519, 465 S.E.2d at 592.
We upheld the trial judge's finding that the debt was a separate
debt, and we ruled that the trial judge erred in not determining
pursuant to Code § 20-107.3(C) whether the husband was required
to repay the borrowed funds. See id. We remanded the matter to
the trial judge to determine whether to order the husband to pay
the debt that arose from the loan. See id. In the case we
decide today, no claim has been made that the husband borrowed
funds from the wife or that the husband used the wife's funds to
improve his separate asset.
The decision in Orlandi v. Orlandi, 23 Va. App. 21, 473
S.E.2d 716 (1996), has no bearing on the issues that arise in
this case. Orlandi concerns issues of child support between two
divorced parties. No issue of equitable distribution or the
interpretation of Code § 20-107.3 arose in that case.
The majority erroneously treats this issue as if the
husband's spousal support payments were a contribution made to
enhance a nonmarital asset that is extant at the divorce. It was
not. The husband's payment of court-ordered spousal support was
not a ruse to fund a separate asset. Many of the cases cited by
the majority were not decided under Virginia law and contain
instances in which a spouse spent marital assets to obtain or
enhance a separate asset. In those instances, courts of other
35
states have deemed that a diversion of marital funds to enhance a
separate asset creates a marital interest in the enhanced
property.
The evidence in McGee v. McGee, 648 A.2d 1128 (N.J. Super.
A.D. 1994), proved that prior to their marriage, the husband
purchased the wife's house to save it from foreclosure and to pay
debts the wife owed. See id. at 1129. He paid only $63,000 for
the house even though it was valued at $150,000, exclusive of
furnishings and the surrounding eleven acres of land. The value
of the furnishings and eleven acres was unknown. See id. After
the marriage, the husband "denuded the house of $134,000 of
equity" by borrowing against the property, used the borrowed
money to pay an obligation to his former spouse, and then
conveyed the property to himself and the wife. Id. at 1131. The
court ruled that the husband's conduct effectively used the
wife's separate assets to pay the husband's pre-existing
obligations to his former wife. See id. at 1134. Because of the
husband's misuse of the wife's house prior to and during the
marriage, the court ruled that under New Jersey law, "[t]he case
can be viewed from the vantage point of the shared enterprise of
marriage beginning before the ceremonial act, or as one in which
equitable remedies such as constructive trust, quasi contract or
quantum meruit are invocable for equitable reasons." Id. at
1134. That ruling is not dispositive of issues in this case.
In Dobbyn v. Dobbyn, 471 A.2d 1068 (Md. Ct. Spec. App.
36
1984), the court was not concerned with a party's payment of
support to another spouse during the marriage as a basis for
making a monetary award. The issue in Dobbyn was whether the
trial judge could consider the divorced husband's new and future
family obligations under Maryland's statutory requirement to
consider '"[t]he economic circumstances of each spouse at the
time the award is to be made.'" Id. at 1077.
In Jensen v. Jensen, 877 S.W.2d 131 (Mo. Ct. App. 1994), the
court ruled that the husband's payment of child support to a
former spouse and to a former lover after the husband's
separation from his current wife was the husband's separate debt.
See id. at 135. Thus, when the husband liquidated marital
assets during the separation to pay those debts, the court set
aside those funds as credits against the husband's share of
marital assets. See id.
In Fenske v. Fenske, 542 N.W.2d 98 (N.D. 1996), the trial
judge found "that the parties had paid off their individual and
marital debts 'by commingling everything they had.'" Id. at 102.
Nothing in the Fenske opinion suggests that the trial judge gave
either party a distribution based upon a party paying a
pre-marital debt with marital funds.
North Carolina courts have ruled that "[a] reduction in the
separate debt of a party to a marriage, caused by the expenditure
of marital funds, is, in the absence of an agreement to repay the
marital estate, neither an asset nor a debt of the marital
37
estate." Adams v. Adams, 443 S.E.2d 780, 781 (N.C. Ct. App.
1994). Under that state's law, any such reduction in the
separate debt may only be considered as a factor if a justifiable
reason exists. See id. (citing N.C. Gen. Stat. § 50-20(C)(12)).
In the case before us, the trial judge accepted the
commissioner's recommendation "that [the husband's] contributions
to the marriage should be reduced by spousal support he paid to
his ex-wife." I believe that the following reasoning, employed
in Rosenfeld v. Rosenfeld, 597 So.2d 835 (Fla. Dist. Ct. App.
1992), is more pertinent to the issues that arise in this case:
The wife in this case took the position at
the time of the divorce that the trial court
should revisit the parties' expenditures
throughout the marriage, and should
retroactively decide that certain of the
expenditures should not have been made. . . .
[T]his amounted to a request for "a
financial accounting of all of the marital
years to determine which spouse was the more
prudent investor and spender. We do not
choose to start down such a path with this
case."
In the present case the wife complains
because the husband paid court-ordered
support to his previous wife, and made other
payments required by the divorce decree. The
wife's position is entirely without merit.
* * * * * * *
Payments made to an ex-wife or children
pursuant to a court order cannot be
considered as waste or misuse of the marital
assets of the successor marriage. Those
obligations were incurred before the
successor marriage, and obviously the
subsequent spouse was well aware of them
prior to the successor marriage. In any
event, a party cannot refuse to make court
ordered payments on the grounds that he or
38
she has now remarried. Likewise, payment of
expenses incident to a prior dissolution,
such as attorneys' fees, does not constitute
waste or misuse of marital funds.
Id. at 837 (citation omitted) (footnotes omitted).
Using similar reasoning, the court in In re Marriage of
Burgess, 568 N.W.2d 827 (Iowa App. 1997), ruled that, in the
division of marital property upon divorce, a wife was not
entitled to a set-off or credit for the husband's payment during
the marriage of spousal and child support to his former wife.
See id. at 828. The court concluded that it would be inequitable
to consider those payments as a distribution factor because "the
payment of the [support] obligation [by the husband] was a
reasonable and expected aspect of the particular marriage." Id.
The majority correctly notes that Bliss v. Bliss, 898 P.2d
1081 (Idaho 1995), involved a division of property on divorce in
a community property state. However, the principles applied to
"community" property are not completely unrelated to issues that
arise regarding "marital" property. In Bliss, the court held
that the use of community funds to pay antenuptial debts, where
such payment is unrelated to the enhancement of a separate asset,
is not a basis upon which a party upon divorce may seek
reimbursement to the community funds. See id. at 1084. That
reasoning is valid when analogized to the issue in this case.
Simply put, Code § 20-107.3(E) does not authorize judges to
enrich one of the parties based upon the mere finding that the
other party, who was the sole source of income during the
39
marriage, used portions of that income to pay debts that the
party incurred prior to the marriage. In particular, no evidence
tended to prove that the husband's payment of spousal support to
his former spouse negatively contributed to his marriage to the
wife. For these reasons, I would reverse the trial judge's
equitable distribution decision and remand for reconsideration.
(B)
Although the trial judge expressly noted that he was
reducing the husband's equitable distribution award for payments
the husband made under a court order to support the husband's
spouse of a prior marriage, the record contains no indication
that in making the monetary award the trial judge gave any
consideration to the husband's support, during the marriage, of
his wife's children from a prior marriage. The trial judge noted
that "[t]here is no mention by the commissioner of these matters
[in the report]." Yet, the trial judge assumed the matter was
considered because the commissioner "does say he has considered
all the relevant factors which, of course, includes the catch all
one in § 20-107.3(E)." The irony of the disparity between the
treatment of this issue and the issue of the husband's payment of
spousal support to his former wife is palpable.
The evidence proved that when the wife's former spouse
stopped paying child support, the husband supported the three
children from the wife's prior marriage beginning when the oldest
child was age fifteen. One of the wife's children continued
40
living in the house four years past the child's majority. The
husband's salary was the family's sole source of financial
support.
On remand, I would direct the trial judge to expressly
consider the husband's payments and conduct which contributed to
the well-being of the family. See Code § 20-107.3(E)(1).
(C)
The evidence proved that the husband paid $5,400
post-separation to reduce a marital debt that was associated with
an asset that had no value. I find no evidence in the record
that the trial judge adjusted the award to consider that payment.
Likewise, the evidence proved that the husband paid $2,282 for
the preparation of the parties' joint tax return and received no
credit for that payment. I would also require the trial judge to
reconsider on remand adjustments for those payments.
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