COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Fitzpatrick, Judges Annunziata and
Bumgardner
Argued at Alexandria, Virginia
PETER FELIX MATTHEWS
OPINION BY
v. Record No. 0678-97-4 JUDGE ROSEMARIE ANNUNZIATA
FEBRUARY 24, 1998
SUZANN GAIL WILSON MATTHEWS
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Robert W. Wooldridge, Jr., Judge
Robert E. Shoun (Peter M. Fitzner; Shoun &
Bach, P.C., on briefs), for appellant.
Dexter S. Odin (J. Patrick McConnell;
Elizabeth L. Salans; Odin, Feldman &
Pittleman, P.C., on brief), for appellee.
Peter Felix Matthews (husband) appeals the order of the
trial court determining the equitable distribution award in his
divorce from Suzann Gail Wilson Matthews (wife). Husband
contends the trial court erred in failing to give proper weight
to husband's contributions to the marriage, in relying on
improper factors, and in failing to give weight to wife's
unilateral decision to end the marriage when determining the
equitable distribution award. Wife contends on cross-appeal that
the trial court erred in awarding husband most of the assets
acquired after the date of separation. We find no error and
affirm.
Husband became interested in commodities futures trading in
1972. At the time, husband was studying statistics and completed
his Ph.D. course work in 1974. The parties met in February 1975,
and were married later that year. At the time of the marriage,
neither party was employed; the parties had a few assets but,
also had substantial debts.
At the time of the marriage, husband had begun trading in
commodities futures but experienced gains and losses which
maintained the parties' trading account at roughly $5,000. The
pattern of gains and losses continued through 1979, although by
1979 the parties were losing and gaining hundreds of thousands of
dollars.
In 1980, the parties formed Quantec, Inc. Wife handled the
incorporation of Quantec, performed research for the company, and
owned one-half of the stock. Quantec performed government
subcontracting work but did not engage in commodities trading or
giving trading advice. The parties continued to trade
commodities while operating Quantec.
In 1980, husband and Larry Hite agreed to begin a joint
venture using a statistical approach to trading commodities
futures. During the first two years of the operation, wife
performed historical research on commodities prices, compiled
market data, and traded commodities according to trading rules
established by husband. Wife was involved in the daily operation
of trading and record-keeping until 1984, when her functions were
duplicated by computers. Although wife did not play a role in
developing the computer programs, her market research provided
data used in the programs.
2
In 1984, husband and Hite entered into a partnership, known
as MINT, with E.D. & F. Man Group, a London-based financial
institution, to trade commodities using the statistical approach
developed by husband and Hite. Wife assisted husband in drafting
and negotiating the partnership agreement. Husband's interest in
the MINT partnership was represented by Peter Matthews, Inc.
(PMI), a corporation wholly owned by husband. The parties
received roughly equivalent salaries from PMI through 1988, after
which time for tax reasons PMI stopped paying wife a salary.
Wife handled tax, corporate, financial planning, legal, and other
issues in the daily operations of MINT and PMI but did not play a
role in the formulation of trading strategy. Wife was the
primary liaison with the partnerships' account and tax planner,
as well as their attorney, until the early 1990's. Several
witnesses who worked with MINT described the parties as a team
working together to achieve the goals of MINT.
MINT experienced extraordinary growth during the 1980's and,
at one point, managed over a billion dollars in assets. As
shareholder, husband received millions in profit from PMI. The
parties' child, Lucy, was born on June 30, 1989. Husband became
an internationally respected commodities trader. Wife often
travelled with husband on business trips. At the same time, wife
assumed primary responsibility for the household affairs and the
care of Lucy.
In 1992, wife informed husband that she wanted a divorce.
3
In 1993, wife explained that she felt husband was not emotionally
supporting her and continued to want a divorce. Husband and wife
lived together until March 1994, when husband moved out of the
marital home. Husband filed a bill of complaint for divorce on
February 13, 1996, and wife filed a cross-bill of complaint on
March 20, 1996.
A commissioner took evidence and in a written report
addressed the issue of the breakup of the marriage. The
commissioner detailed the parties' contributions and roles in the
relationship and concluded that neither party should bear
disproportionate blame for the breakup of the marriage. Neither
party filed exceptions to the commissioner's report.
After hearing evidence, the trial court concluded that wife
had played a significant role in the parties' business success in
the early 1980's but that her role diminished after the formation
of MINT. It noted:
As between the parties, Mr. Matthews played a
more substantive role than Mrs. Matthews in
the initial start-up years of the commodities
endeavors and played a far more significant
role in the marketing and success of
MINT. . . . [I]t is clear that the success
of MINT was attributable to a brilliant idea,
perseverance, and hard work in
implementation, hard work in arranging
funding, and persistence and skill in
marketing. Mrs. Matthews played a greater
role in that lengthy process than most
persons do in their spouse's business. She
played an active role in the inception of the
parties' business endeavors and a much
decreased one as the business endeavor
flourished. But her role pales compared to
that of Mr. Matthews.
4
The court found that the parties' income between 1985 and 1995
had exceeded $80 million and that the parties had approximately
$50.7 million in assets to be divided between them.
In its letter opinion, the trial court stated that it
considered the factors enumerated in Code § 20-107.3(E).
Specifically, the court concluded that the circumstances and
factors contributing to the dissolution of the marriage were not
significant to the division of property, that the parties had
"considered their marital property to be equally owned and
accessible, regardless of the fact that Mr. Matthews principally
generated it," and that wife had played a greater role than
husband in monitoring the parties' investments and making
non-monetary contributions to the family. The court awarded a
total of approximately $22.1 million to wife and approximately
$28.6 million to husband. In this division, husband received
100% of the parties' interest in PMI and MINT and approximately
56.4% of the total assets. The court stated that it had "taken
into account Mr. Matthews' contributions to the acquisition of
the marital property of the parties following the separation, and
have allocated an appropriate share to him based on that factor."
On appeal, we view the evidence in the light most favorable
to the party prevailing below. Wagner v. Wagner, 16 Va. App.
529, 532, 431 S.E.2d 77, 79 (1993) (en banc). The determination
of an equitable distribution award rests within the sound
discretion of the trial court and will not be reversed unless
5
plainly wrong or without evidence to support it. McDavid v.
McDavid, 19 Va. App. 406, 407-08, 451 S.E.2d 713, 715 (1994)
(citing Srinivasan v. Srinivasan, 10 Va. App. 728, 732, 396
S.E.2d 675, 678 (1990)). "[A]s long as the trial court considers
all the factors, it is at the trial court's discretion to
determine what weight to give each factor when making the
equitable distribution award." O'Loughlin v. O'Loughlin, 20 Va.
App. 522, 527, 458 S.E.2d 323, 325 (1995) (citing Booth v. Booth,
7 Va. App. 22, 28, 371 S.E.2d 569, 573 (1988)).
I.
Husband's Contributions to the Marriage
Husband first contends the trial court erred in awarding
wife $22.1 million of $50.7 million in marital assets, arguing
that his "[s]uperior" contributions to the marital property,
specifically, his disproportionate contributions to the parties'
commodities futures trading business, mandate a "[s]ubstantially
[d]isparate" award in his favor.
In its letter opinion, the trial court summarized the
evidence as showing that wife played a significant role in the
parties' business during the first ten years of the marriage.
Conversely, the trial court found that wife played a diminished
role in the success of MINT and that "her role pales compared to
that of Mr. Matthews." The court found it significant that the
parties viewed their marriage as "an equal sharing of the fruits
of the marriage, regardless of which spouse generated the
6
family's income." The court also observed that wife had played a
primary role in monitoring the family's investments and making
non-monetary contributions to the family.
Husband does not challenge the court's findings but claims
the court's award of approximately 56.4% of the marital estate to
him was inadequate. In his brief, husband catalogues his primary
and extensive role in the extraordinary success of MINT and
argues that the trial court should have exercised its discretion
to award him a larger proportion of the marital estate.
As husband notes, Virginia law does not establish a
presumption of equal distribution of marital assets. Papuchis v.
Papuchis, 2 Va. App. 130, 132, 341 S.E.2d 829, 830 (1986). It is
within the discretion of the court to make an equal division of
assets, see Bentz v. Bentz, 2 Va. App. 486, 490, 345 S.E.2d 773,
775 (1986), or to make a substantially disparate division of
assets, see Aster v. Gross, 7 Va. App. 1, 8, 371 S.E.2d 833, 837
(1988), as the factors outlined in Code § 20-107.3(E) require.
See Alphin v. Alphin, 15 Va. App. 395, 403, 424 S.E.2d 572, 576
(1992). In determining an equitable distribution award, the
trial court must make "delicate and difficult judgments," Bentz,
2 Va. App. at 489, 345 S.E.2d at 774, and "weigh[] the many
considerations and circumstances that are presented in each
case." Klein v. Klein, 11 Va. App. 155, 161, 396 S.E.2d 866, 870
(1990). It is precisely "because rights and interests in marital
property are difficult to determine and evaluate and competing
7
equities are difficult to reconcile," that "the chancellor is
necessarily vested with broad discretion in the discharge of the
duties the statute imposes." Smoot v. Smoot, 233 Va. 435, 443,
357 S.E.2d 728, 732 (1987).
In support of his argument for a greater share of the
marital estate, husband cites cases upholding disparate equitable
distribution awards. See Gottlieb v. Gottlieb, 19 Va. App. 77,
448 S.E.2d 666 (1994); Srinivasan v. Srinivasan, 10 Va. App. 728,
396 S.E.2d 675 (1990); Zipf v. Zipf, 8 Va. App. 387, 382 S.E.2d
263 (1989). Husband's reliance on these cases is misplaced.
Gottlieb, Zipf, and Srinivasan demonstrate that a disparate award
is permissible if the trial court properly exercises its
discretion; they do not indicate that a trial court must fashion
a disparate award if one of the parties has made substantially
larger monetary contributions to the marital estate than the
other. Gottlieb, 19 Va. App. at 95, 448 S.E.2d at 677; Zipf, 8
Va. App. at 392-93, 382 S.E.2d at 266; Srinivasan, 10 Va. App. at
733, 396 S.E.2d at 678. Indeed, in Zipf, 8 Va. App. at 393 n.2,
382 S.E.2d at 266 n.2, we noted:
Nothing herein should be construed, however,
to sanction a disproportionate division of
assets in favor of one party simply because
that party has been primarily responsible for
the development of the marital assets. The
non-monetary contributions of each party, as
well as the other factors specified in Code
§ 20-107.3(E) must be considered.
In this case, the trial court was required to balance
husband's greater monetary contributions in the second half of
8
the marriage against wife's substantial contributions to the
family business in the first half of the marriage and wife's
superior non-monetary contributions throughout the marriage.
While the value of the marital estate may be characterized as
"exceptional," we cannot say that the evidence relevant to the
trial court's equitable distribution award presents the
"exceptional circumstances" which would warrant this Court's
interference with the exercise of the trial court's discretion.
Aster, 7 Va. App. at 8, 371 S.E.2d at 837.
II.
Consideration of Factors
Husband also argues the trial court considered improper
factors in determining the equitable distribution award,
specifically that the parties held their property jointly during
the marriage. In addition to the enumerated factors, Code
§ 20-107.3(E)(10) requires the trial court to consider "[s]uch
other factors as the court deems necessary or appropriate to
consider in order to arrive at a fair and equitable monetary
award." In its letter opinion, the court wrote,
[s]ignificantly, Mr. and Mrs. Matthews both
testified that throughout their marriage they
considered their marital property to be
equally owned and accessible, regardless of
the fact that Mr. Matthews principally
generated it. Throughout the marriage, all
of the parties' assets were jointly titled or
kept in joint accounts. Both Mr. and Mrs.
Matthews testified that during the marriage,
there was no effort to designate some assets
as Mr. Matthews' and others as Mrs.
Matthews'. Their notion of marriage was an
equal sharing of the fruits of their labor,
9
regardless of which spouse generated the
family's income.
Citing Westbrook v. Westbrook, 5 Va. App. 446, 364 S.E.2d
523 (1988), 1 husband argues the court could not consider the
parties' "notion of marriage" or the title of their assets.
Husband's arguments fail to consider the language of Code
§ 20-107.3(E)(10), which requires the court to consider "[s]uch
other factors as the court deems necessary or appropriate to
consider in order to arrive at a fair and equitable monetary
award." The court considered the parties' conception of marriage
and the joint title of their assets as evidence of the parties'
treatment of income from PMI and other sources; the court treated
this evidence as one factor among many in determining the
equitable distribution award.
Equitable distribution in Virginia, as codified in Code
§ 20-107.3, "is predicated on the philosophy that marriage
represents an economic partnership requiring that upon
dissolution each partner should receive a fair proportion of the
property accumulated during marriage." Roane v. Roane, 12 Va.
App. 989, 994, 407 S.E.2d 698, 701 (1991) (emphasis omitted). We
find that by its consideration of the parties' "notion of
1
In Westbrook, 5 Va. App. at 455-57, 364 S.E.2d at 529-30,
the husband argued the court should have struck the wife's
testimony because she had committed perjury and, thus, had not
come to the chancery court with "clean hands." We noted that,
"[n]either the equitable maxims nor perjury are included among
the factors to be considered" in Code § 20-107.3(E), but went on
to hold that the subject of the perjury, the wife's adultery, was
a permissible consideration. Id. at 457, 364 S.E.2d at 530.
10
marriage" and the joint title of their property, the court sought
to further the announced purpose of the statute and that
consideration of such evidence is permitted under the statutory
"catchall" factor. 2 See Smith v. Smith, 331 S.E.2d 682, 686
(N.C. 1985) (holding that catchall factor is to be construed
consistent with the purpose of the enumerated factors); cf. White
v. White, 324 S.E.2d 829, 832 (N.C. 1985) (explaining that courts
have broad discretion under the catchall factor); Booth v. Booth,
7 Va. App. 22, 28-29, 371 S.E.2d 569, 573 (1988) (holding that
court may consider waste of marital assets under catchall
factor).
III.
Dissolution of the Marriage
Husband's final argument is that the court erred in finding
that the circumstances and factors leading to the dissolution of
the marriage were not a significant factor in the equitable
distribution. Specifically, husband contends he should have been
allocated approximately $10.5 million for his net earnings from
1992, when wife first asked for a divorce, through the date of
separation.
After taking evidence on the circumstances and factors
2
The catchall factor, however, is not unlimited in scope. We
have held that courts may not use the catchall factor to defeat
the statutory distinction between equitable distribution and
spousal support. See Reid v. Reid, 12 Va. App. 1218, 1234, 409
S.E.2d 155, 164 (1991); Reid v. Reid, 7 Va. App. 553, 564, 375
S.E.2d 533, 539 (1989). This concern is not implicated here.
11
leading to the marital breakdown, the commissioner wrote at
length about the causes of the dissolution of the marriage. The
commissioner wrote: "This marriage gradually broke down over a
long period of time because it was not properly nurtured by
either party." The commissioner noted that neither party acted
to save the relationship and concluded, as follows:
It takes two to make a marriage and in this
case it took two to end it. Accordingly, I
do not place the blame for the breakup of
this marriage on either party, but believe
their separation was due to the parties
drifting apart as a result of their different
personalities, their desired future goals in
life, and their failure to communicate with
each other.
The court found "that the circumstances and factors present
contributing to the dissolution of the marriage are not
significant for purposes of equitable distribution."
Husband is barred from raising this issue on appeal because
he filed no exceptions to the commissioner's report. A party who
believes the commissioner's report to be in error must except to
the perceived error and "[i]t is too late to do so for the first
time on appeal." McLaughlin v. McLaughlin, 2 Va. App. 463, 470,
346 S.E.2d 535, 539 (1986) (citing Cralle v. Cralle, 84 Va. 198,
201, 6 S.E. 12, 13 (1887)).
IV.
Post-Separation Acquisitions
Wife argues on cross-appeal that the trial court erred in
awarding husband the majority of the assets acquired subsequent
12
to the parties' separation. Specifically, she argues that the
assets acquired after separation with funds from PMI and the sale
of SSL/Chardant were not acquired as a result of any effort on
husband's part but were merely distributions from marital
holdings.
Code § 20-107.3(E) requires the court to consider both the
contributions of each party to the acquisition of marital
property as well as the timing and manner of its acquisition. In
its letter opinion, the trial court explained that it had "taken
into account Mr. Matthews' contributions to the acquisition of
the marital property of the parties following the separation, and
have allocated an appropriate share to him based on that factor."
Because the post-separation distributions were generated by
marital property, the court properly considered the distributions
as marital property, and husband does not argue otherwise. See
Rowe v. Rowe, 24 Va. App. 123, 143-44, 480 S.E.2d 760, 769-70
(1997); Dietz v. Dietz, 17 Va. App. 203, 210, 436 S.E.2d 463, 468
(1993).
"SSL" was begun in 1983 and bought shares in Chardant, a
"set fund" established in 1986 or 1987. Husband received a final
distribution from SSL/Chardant after the date of separation and
continued to receive funds from PMI after the parties'
separation. Husband acquired some assets after the date of
separation with funds distributed from SSL/Chardant and PMI,
including vacation property, mutual funds, startup company
13
investments, and cars, worth a total of $3,554,050. As part of
its equitable distribution award, the court allocated most of
these assets to husband, although it did not identify the assets
as obtained from the PMI funds and the proceeds of the sale of
SSL/Chardant.
With respect to the PMI distributions, we find the evidence
in the record supports the court's finding that husband expended
significant effort on behalf of MINT after the separation,
especially after becoming CEO of MINT in November 1994. Since
1994, MINT's performance has declined, and husband has been
active in attempting to keep MINT's large international
customers.
Addressing the distribution of funds from SSL/Chardant, we
find that the record does not support wife's argument that the
court awarded husband a larger award because it believed husband
was individually responsible for generating the funds obtained
from the sale of SSL/Chardant; indeed, the court's award to wife
of a car acquired with SSL/Chardant funds contradicts such a
suggestion. Wife, as the party alleging reversible error, bears
the burden to show that such error occurred. 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)). We find that the court allocated the
post-separation assets, like the pre-separation assets, after
considering the Code § 20-107.3(E) factors. In the absence of
14
evidence in the record that the court awarded husband the assets
purchased with the proceeds of the SSL/Chardant funds because
husband had "earned" these funds, we find that the court did not
abuse its discretion.
For the foregoing reasons, we affirm.
Affirmed.
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