Charles S. Rowe v. Mary Anne Rowe

                   COURT OF APPEALS OF VIRGINIA


Present: Chief Judge Moon, Judges Fitzpatrick and Annunziata
Argued at Alexandria, Virginia


MARY ANNE ROWE

v.   Record No.   0843-96-2

CHARLES S. ROWE                              OPINION BY
                                      CHIEF JUDGE NORMAN K. MOON
CHARLES S. ROWE                           FEBRUARY 4, 1997

v.   Record No.   0845-96-2
MARY ANNE ROWE


      FROM THE CIRCUIT COURT OF THE CITY OF FREDERICKSBURG
                   Richard H.C. Taylor, Judge

          Donald K. Butler (Ann Brakke Campfield;
          Morano, Colan & Butler, on briefs), for
          Mary Anne Rowe.

          Carl F. Bowmer (Christian & Barton, on
          briefs), for Charles S. Rowe.



     Charles S. Rowe ("husband") and Mary Anne Rowe ("wife") each

appeal the circuit court's order affirming the commissioner in

chancery's equitable distribution and spousal support award.

Husband contends (1) the trial court erred by classifying the

entire increase in value of husband's newspaper stock as marital

property; (2) the $14,000,000 in salary and stocks received by

husband as compensation from the paper, which was more than fair

compensation for husband's efforts, precludes classification of

the stock appreciation as a marital asset; (3) the trial court

erred in treating all but $41,000 of the parties' marital

residence as marital property; (4) the trial court erred in
awarding wife $10,000 per month in spousal support without

considering the division of marital property as a factor in

making the support award.

     We hold that: (1) the trial court erred in classifying the

entire increase in the value of husband's stock as marital

property because fifty percent or more of the increase was

attributable to the efforts of husband's brother and/or passive

economic factors; (2) compensation by the paper, whether

inadequate or excessive, is but a factor in determining the

amount of marital wealth attributable to marital effort; and (3)

the trial court erred in treating only $41,000 of the Ingleside

Drive home proceeds invested in the parties' marital abode as

gifted property.   Because the trial court must reconsider

classification of the increase in the value of husband's stock

and distribution of the $82,000 proceeds of the Ingleside Drive

home, the spousal support award must also be reconsidered.
     Wife contends in her appeal that: (1) the trial court erred

by accepting husband's valuation of his newspaper stock; (2) the

trial court erred in failing to order a distribution of husband's

retirement benefits consistent with the commissioner's finding

that wife was entitled to one-half of the marital share of the

retirement benefits; (3) the trial court erred in giving husband

credit for post-separation contributions to various marital

accounts while not requiring husband to account for

post-separation withdrawals from the accounts; and (4) the trial

court erred by valuing wife's marital accounts without deduction

                               - 2 -
for her litigation expenses.

     We find that: (1) the court did not err in evaluating the

newspaper stock; (2) the court properly refused to award wife

one-half of husband's retirement benefits and/or be allowed to

name an alternate beneficiary; (3) the court erred in classifying

all of husband's post-separation contributions as marital but did

not err in refusing wife's proffer concerning husband's separate

contributions as wife failed to timely offer supplemental

evidence; and (4) the trial court correctly deducted wife's

litigation expenses in valuing her accounts because she failed to

timely present evidence concerning her litigation expenses.
     Husband and wife married on May 1, 1970.   A no-fault final

decree of divorce was entered on December 1, 1993.   On March 15,

1996, the circuit court entered its equitable distribution and

spousal support decree, confirming the recommendations of the

commissioner in chancery.

     The vast majority of the parties' assets was generated by

virtue of husband's position as a principal stockholder,

coeditor, and copublisher of the Free Lance-Star, a family-owned

newspaper in Fredericksburg, Virginia.   Husband and his brother

became coeditors and copublishers of the Free Lance-Star upon

their father's death in 1949.   They divided the duties of the

paper.   As coeditor, husband was responsible for the

news-editorial side of the paper while husband's brother served

as business manager, overseeing all other aspects of the

operation, including advertising, production, circulation,

                                - 3 -
distribution, accounting, as well as operation of the paper's

radio station.   The paper profited substantially under their

control and expanded as the Fredericksburg area experienced rapid

population growth.   The paper's plant, under the supervision of

husband's brother, was expanded in 1965, 1980 and in 1990.

Husband's expert calculated the paper's stock increased in value

from $500 per share in 1970 to $9,500 per share in 1991.

     In addition to running the paper, both brothers were heavily

involved in outside activities.   Husband was involved in state

and national level newspaper organizations.   He served as

president of the Associated Press Managing Editors Association in

1969 and was elected to the Board of Directors of the American

Society of Newspaper Editors.   He was also elected to the

Associated Press Board in 1976 and served as director until 1985.

Wife accompanied him to all major board meetings and conventions

and was described as "an integral part of the life of the board."

As a result of husband's heavy involvement with these and other

newspaper organizations, a managing editor was hired in 1975.

The managing editor assumed responsibility for the day-to-day

news responsibilities at the paper, leaving husband free to

devote additional time to his national newspaper activities.    No

evidence showed that the stock increased in value due to these

activities by husband.
     During the course of the parties' marriage, husband received

$14,000,000 in salary and dividends.    These funds were used to

support the parties and their children from prior marriages.    At

                                - 4 -
the time of their marriage, the parties moved into husband's home

on Ingleside Drive.   Four years later, they acquired a new home

at 501 Hanover Street in Fredericksburg.   Husband invested the

$82,000 proceeds from the sale of his Ingleside home in the

purchase and/or refurbishing of the Hanover residence, which was

conveyed to the parties by joint title.    In the ensuing years,

husband spent an additional $250,000 to $300,000 for improvements

and maintenance of the Hanover Street home.   Wife oversaw

refurbishing and decoration of the home and subsequently oversaw

a major addition to the home.   At the time of the hearing, the

net value of the home was calculated at $512,992.   The parties

also acquired, with funds from husband's salary and dividends, a

home on John's Island, Florida.
     Husband left the marital home in November, 1991.    Wife

subsequently learned that husband had been having an affair

during the time leading up to the separation and had engaged in

another affair during the course of the marriage.   Husband filed

for divorce on February 18, 1993, on the ground that the parties

had been living separate and apart for more than one year.      Over

the wife's objection, a decree of divorce was entered on December

1, 1993.   Issues of spousal support and equitable distribution

were referred to a commissioner in chancery and following

extensive discovery, a hearing was conducted by the commissioner

in June, 1994.   The commissioner's report and recommendation was

filed August 14, 1995.   The final decree of the trial court was

entered on March 15, 1996.

                                - 5 -
     During the interim between the parties' separation and entry

of the final decree, husband paid many of wife's expenses

directly, but did not pay wife's legal expenses.     Consequently,

wife paid her litigation expenses with funds withdrawn from her

marital accounts.    Husband also continued to receive his salary

and stock dividends during this time and continued to make

deposits, withdrawals and transfers to and from the marital

accounts.
     The trial court made an equitable distribution award to wife

of $4,204,530 and a monthly spousal support award of $10,000.

                    HUSBAND'S ASSIGNMENTS OF ERROR

                      Increase in Value of Stock

     Husband argued that the trial court erred in classifying the

entire increase in the husband's newspaper stock as marital

property.   He asserted that his brother was more responsible for

the increase in value of the stock and that the marital portion

should have been considerably reduced in light of the fact that

from 1970 to 1991, the value of the stock increased dramatically

as a result of passive, external factors.

     Code § 20-107.3(A)(3)(a) provides that "[i]n the case of the

increase in value of separate property during the marriage, such

increase in value shall be marital property only to the extent

that marital property or the personal efforts of either party

have contributed to such increases . . . ."    If husband proved

that passive factors, such as the rapid population growth in the

Fredericksburg area and low inflation rates accounted for a
                                - 6 -
portion of the increase in the value of his stock, such increase

cannot be properly classified as marital property.    Similarly, we

have concluded that where third parties contribute to the

increase in value of separate property, the marital portion is to

be reduced proportionately.     Decker v. Decker, 17 Va. App. 12,

435 S.E.2d 407 (1993).

        Here, husband produced evidence that from 1971 to 1991 the

population in the Fredericksburg area increased from 77,425 to

180,500; the circulation of the newspaper grew from 16,490 to

41,161; and gross income increased from $1,175,539 to

$14,890,035.    Husband's expert, Mr. Lee Dirks, who has

participated in sixty-five sales of privately owned newspapers,

testified that the most important factor in the increase in the

value of the stock was the dramatic increase in the number of

households in the Fredericksburg area over a twenty-one year

period.    Wife's experts also agreed that the dramatic population

growth in the market area was one of the most important factors

in the increase in the paper's value.    In addition, husband's

experts testified that slow inflation contributed to the increase

in the paper's value.
        Husband also produced evidence that his brother was more

responsible for the increase in value of the paper than husband.

During husband's marriage, his newspaper duties decreased, most

notably after the managing editor was hired in 1975, while

husband's brother's duties increased substantially from 1970 to

1991.    Husband's brother was solely responsible for the three
                                 - 7 -
expansions of the newspaper plant and was in charge of every

other activity and function of the paper, with the exception of

the news department.   Wife indicated at trial that husband's

brother was at least equally responsible for the increase in the

value of the paper.    In addition, wife and husband spent

considerable time away from Fredericksburg, engaged in "national

newspaper activities," which consumed a significant portion of

husband's time and detracted from his involvement with the Free

Lance-Star.   The evidence also proved that a managing editor was

hired because of husband's national newspaper activities.

     Based on this evidence, we hold that the trial court erred

in finding that the entire increase in the value of husband's

Free Lance-Star stock was due to his personal efforts.       The

increase classifiable as marital should reflect only that

attributable to husband's personal efforts and not those of

husband's brother or passive factors, such as population growth

and minimal inflation.
  Compensation as Fair Return on Increase in Separate Property

     Husband also argued at trial that assuming, arguendo, that

his personal efforts were entirely responsible for the increase

in the value of the Free Lance-Star stock, the $14,000,000 he

received in salary and stock dividends constituted more than

adequate return to the marital estate for his efforts and

consequently classification of the entire increase as marital

should not be permitted as this would constitute double recovery

for the marital estate.   While we have not addressed this

                                - 8 -
argument in the context of the modern statutory scheme, we

concluded in Huger v. Huger, a divorce case filed under the

unitary property scheme, that the evidence indicated that the

husband's separate property stock was not transmuted into marital

property as the parties' efforts which enhanced the stock's value

had been fully compensated for by the corporation.   Consequently,

we held the stock was not transmuted into marital property.    16

Va. App. 785, 789, 433 S.E.2d 255, 258 (1993).
     Here, as discussed above, husband has introduced evidence

indicating that the appreciation of the Free Lance-Star stock was

a result not only of his efforts, but also of passive market

forces, i.e., economic conditions and the efforts of his brother.

Husband was very well compensated for his efforts, earning a

total of $14,000,000 in salary and stock dividends between 1970

and 1991.   The adequacy of this compensation is not in dispute,

as evidenced by wife's expert, who testified that both husband

and his brother were in fact overcompensated; each receiving a

salary roughly twice the industry standard for positions of equal

standing.   Wife's expert estimated that husband and his brother

were each paid roughly $100,000 more per year in salary than was

appropriate according to the industry standard.

     In light of this evidence, in classifying the increase in

stock value, in addition to considering the impact of passive

economic factors and the efforts of husband's brother, the trial

court should consider the extent to which the marital estate has

already been adequately compensated for the husband's efforts.
                               - 9 -
                     501 Hanover Street Home

     Husband argues that the trial court erred in treating all

but $41,000 of the Hanover Street property as marital property.

Husband asserts the $82,000 generated by the sale of his

Ingleside home, which husband subsequently invested in the

Hanover Street home, should be treated as separate property

because wife did not prove it was gifted to her.   Further,

husband asserts that a sum of the appreciated value of the home

proportionate to husband's $82,000 contribution should also be

treated as separate property.
     Under Code § 20-107.3(A)(3)(d), "when marital property and

separate property are commingled by contributing one category of

property to another, resulting in the loss of identity of the

contributed property, the classification of the contributed

property shall be transmuted to the category of property

receiving the contribution.   However, to the extent the

contributed property is retraceable by a preponderance of the

evidence and was not a gift, such contributed property shall

retain its original classification."

     Here, it is undisputed that in anticipation of the parties'

relocation to the Hanover Street home, husband sold his separate

residence on Ingleside Drive for $82,000.   Wife argues the

commissioner's finding of one-half of the $82,000 as marital

property is justified because she contributed her pre-marital

cash resources, as well as time and energy, in refurbishing the

Ingleside Drive home prior to its sale.   However, the record
                                - 10 -
contains no evidence of the value of wife's contributions.

Accordingly, as prescribed by Code § 20-107.3, her contributions

were transmuted into husband's separate property when they were

commingled with husband's separate property.

     The $82,000 was subsequently invested in the Hanover Street

home, which was conveyed to the parties by joint title.      Although

husband and wife disagree as to the exact use of the $82,000 in

the Hanover Street property, it is evident from the record that

the entire $82,000 was invested in some manner in the property,

as the commissioner concluded, "to reduce the mortgage and/or

renovation costs of the property."       This evidence is sufficient

for purposes of Code § 20-107.3(A)(3)(d) to retrace the property

claimed as separate by husband.
     Having found the $82,000 was husband's separate property,

the commissioner further concluded that husband "made a gift of

those separate sale proceeds to [wife] . . . ."      While the

Hanover Street home was conveyed by joint title to the parties,

no presumption of gift arises from the mere fact that the

property was jointly titled.    Code § 20-107.3(A)(3)(g).    The fact

that property is jointly titled must be considered by the trial

court in determining if a gift was made, but alone, it is

insufficient proof of a gift.    To have found that a gift

occurred, the trial court must have found that wife met her

burden of proving the three elements of a gift: (1) intention on

the part of the donor to make a gift; (2) delivery or transfer of

the gift; and (3) acceptance of the gift by the donee.       Theismann

                                - 11 -
v. Theismann, 22 Va. App. 557, 566, 471 S.E.2d 809, 813 (1996).

Here, the only element disputed by the parties is the element of

husband's intent.

        Husband argues that he did not intend to make a gift of the

$82,000 invested in the acquisition of the parties' marital home

and that there is no evidence of such intent in the record. 1    The

record shows that the parties purchased the home to serve as

their home and that the new home was purchased in order to

accommodate the parties' growing family.     Husband placed no

reservations on the transfers of title permitting him to reclaim

the property upon divorce or any other circumstance.     Further,

wife testified that husband had said to her that his property was

also her property.    These circumstances, in combination with the

fact that the house was conveyed by joint title, are evidence

that a gift was intended and therefore that the entire sum of

$82,000 was marital property.     See id.   Accordingly, we find the

trial court erred in determining that only $41,000 of the

property was gifted marital property.
    1
       Husband argues that our holding in Lightburn v. Lightburn,
22 Va. App. 612, 472 S.E.2d 281 (1996), where we reversed the
trial court's order awarding wife a one-half interest in a tract
of jointly titled marital property, supports husband's assertion
that the trial court erred by finding a gift on the facts of this
case. Husband misconstrues our ruling in Lightburn. In
Lightburn, we reversed on the basis that the trial judge failed
to determine or address the statutorily prescribed "equities and
the rights and interests of each party in the marital property,"
in determining the wife's share of the retitled property. 22 Va.
App. at 619, 472 S.E.2d at 284. There was no issue, as there is
here, as to whether a gift had occurred, as we "accept[ed] the
trial court's finding and the appellant's concession that an
interest in the marital property was a gift to the wife." Id. at
617, 472 S.E.2d at 283.

                                - 12 -
      However, while we find that the entire $82,000 is

           properly classified as marital, the trial

           court was not bound to make an equal

           distribution of the property.     Id. at 568,

           471 S.E.2d at 814.   The trial court must give

           careful consideration to the gifted status of

           marital property, but the equitable award of

           marital property is ultimately to be

           determined by the trial court's consideration

           of the evidence and application of the Code §

           20-107.3(E) factors.   Id.    The gifted status

           of the property is relevant to several of the

           factors in subsection (E), in particular Code

           § 20-107.3(E)(6) and (10), which require

           consideration of "[h]ow and when specific

           items of such marital property were acquired"

           and "[s]uch other factors as the court deems

           necessary or appropriate to consider in order

           to arrive at a fair and equitable monetary

           award."

Id.   As the trial court erred in determining that only $41,000 of

the gifted property was marital, we remand for reconsideration of

the equitable distribution of the entire $82,000 consistent with

our holding herein.

                          Spousal Support


                                - 13 -
        Husband was ordered to pay wife $10,000 a month in spousal

support.    Husband argues this sum was reached in error by both

the trial court and the commissioner because each failed to

consider provisions made with regard to marital property, as

required by Code § 20-107.1(8).

        Code § 20-107.1(8) provides that "[i]f the court determines

that an award should be made, it shall, in determining the

amount, consider . . . the provisions made with regard to the

marital property under § 20-107.3 . . . ."    Here, the

commissioner found $10,000 the appropriate support amount prior

to quantifying the equitable distribution award.    In addition,

the "Value Chart" prepared by the commissioner did not include

nine assets of the parties, having a total value of $641,838.

The trial court affirmed the support award at the October 30,

1995 hearing, four and one-half months before Schedule A, 2

quantifying the equitable distribution award, was adopted by the

court in its final decree on March 15, 1996.    The trial court

heard evidence addressing the factors in Code § 20-107.1;

however, it is unclear from the record whether the court

considered the impact of the final $4,204,530 equitable

distribution award on the spousal support needs of wife.

        Wife argued that a significant portion of the $4,204,530 was

    2
       The trial court, recognizing that the Value Chart prepared
by the commissioner did not include all of the parties' assets,
directed counsel to prepare "Schedule A," a classification and
valuation of all assets and proposed division thereof for the
court.

                                - 14 -
to be conveyed in the form of non-income producing assets,

including the parties' residence and wife's automobile and

jewelry.   However, $1,872,834 of the award is a monetary award.

Wife dismissed this sum as being owed to wife and not available

to her because of this appeal.    In determining spousal support,

the commissioner and trial court must consider all factors

contained in Code § 20-107.1; failure to do so constitutes

reversible error.   Woolley v. Woolley, 3 Va. App. 337, 344, 349

S.E.2d 422, 426 (1986).   Accordingly, when determining spousal

support, the trial court must consider the income generating

potential of the marital award as well as other income and

expenses generated by the asset assignment constituting the

equitable distribution award.
     As we have found the trial court erred in classifying the

full appreciation of husband's Free Lance-Star stock as marital

property, a new equitable distribution award must be made,

requiring reconsideration of the spousal support award.

Accordingly, we remand for reconsideration of the spousal support

award consistent with this opinion.
                    WIFE'S ASSIGNMENTS OF ERROR

              Valuation of the Free Lance-Star Stock

     Extensive evidence was presented by both parties with regard

to the value of husband's Free Lance-Star stock and each party

presented significantly different valuations.     Wife contends that

the commissioner "devoted only one sentence in his Report to the

actual valuation issue. . . . He simply commented that
                                - 15 -
`[husband's] experts are more competent as to the valuation

process due to their experience and consistent testimony.'"    Wife

further notes that in setting out the values of the marital

assets in the Value Chart, the commissioner calculated a value

for husband's stock of $5,517,125, achieved by averaging the

values presented by husband's and wife's experts.   When the

inconsistency in the Chart and the commissioner's report were

brought to his attention, he issued a clarification letter,

stating that "the value of the stock should be value as stated by

[husband's] expert and should not be the value that I have

listed."   On the basis of these observations, wife argues the

commissioner erred in accepting husband's valuations.
     Wife also argues that the court erred in accepting the

valuations because the trial court should not delegate to the

commissioner its judicial functions or its duty to make factual

determinations.

     Where experts offer conflicting testimony, it is within the

discretion of the trial court to select either opinion.     Reid v.

Reid, 7 Va. App. 553, 563, 375 S.E.2d 533, 539 (1989).     Here, the

commissioner heard considerable evidence from both parties'

experts regarding the proper value of husband's stock.    In his

report, the commissioner concluded that based on the evidence

presented, "[husband's] experts are more competent as to the

valuation process due to their experience and consistent

testimony."   The trial court accepted the commissioner's findings

and having done so, the findings are presumed to be correct when

                              - 16 -
reviewed on appeal and are to be given "great weight" by this

Court.     Pavlock v. Gallop, 207 Va. 989, 994, 154 S.E.2d 153, 157

(1967).    The findings will not be reversed on appeal unless

plainly wrong.     Chaney v. Haynes, 250 Va. 155, 158, 458 S.E.2d

451, 453 (1995).

        Wife did not object to qualification of husband's witnesses

as expert.    Rather, wife asserts that her witnesses were more

qualified than husband's to determine the value of husband's

stock.    The relative qualification of expert witnesses goes to

the weight of the evidence presented by the expert, but is not

determinative of the matter.
        The trial court also properly exercised its discretion in

accepting the commissioner's findings.    The commissioner's

findings are supported by credible evidence and consequently, the

findings, as approved by the trial court, must be affirmed.       Id.

at 158, 458 S.E.2d at 453.

           Division of Marital Share of Retirement Benefits
        Wife argues that the trial court erred in failing to order

that she receive a portion of husband's survivor benefits under

his Free Lance-Star Retirement Plan.     Husband asserts that

because the commissioner found wife was entitled to 25.6% of

husband's survivor benefits, 3 and the husband's retirement plan

only allows for survivor benefits in 50%, 75% and 100%

    3
       The commissioner recommended Wife receive one-half of the
marital portion of Husband's Free Lance-Star Retirement Plan
pension, which constitutes 25.6% of husband's pension.


                                - 17 -
designations, the trial court properly found it could not order

relief not permitted under the plan.

        Federal law prohibits the trial court from "requir[ing] a

plan to provide any type or form of benefit, or any option, not

otherwise provided under the plan."      26 U.S.C. § 414(p)(3).   Code

§ 20-107.3(G)(1) provides that:
          [t]he court may direct payment of a
          percentage of the marital share of any
          pension, profit-sharing or deferred
          compensation plan or retirement benefits
          whether vested or nonvested, which
          constitutes marital property and whether
          payable in a lump sum or over a period of
          time. The court may order direct payment of
          such percentage of the marital share by
          direct assignment to a party from the
          employer trustee, plan administrator or other
          holder of the benefits. However, the court
          shall only direct that payment be made as
          such benefits are payable.


(Emphasis added).    Accordingly, while the trial court has no

authority to order direct payments from a retirement plan in

contravention of that plan's provisions, Code § 20-107.3(G)(1)

does not mandate that payments come directly from the retirement

plan.    The court is free to order that husband, not the plan, pay

wife her share of husband's retirement benefits.     Consequently,

if the court desires to award benefits to wife in a manner not

encompassed by the plan, the court may require husband to make a
                                                       4
lump sum payment out of his share of the martial estate or to
    4
       Such a lump sum payment is permitted under Code
§ 20-107.3(G) which permits a trial judge to determine the
present value of the marital portion of the pension and in
dividing that portion, to include the awarded amount in a
monetary award under Code § 20-107.3(D). Gamble v. Gamble,
14 Va. App. 558, 421 S.E.2d 635 (1992).

                                - 18 -
pay wife a percentage of the retirement benefits as he receives

those benefits.   See Gamble v. Gamble, 14 Va. App. 558, 421

S.E.2d 635 (1992).

     Wife also contends that the trial court erred in not

requiring that she be allowed to name an alternate beneficiary

for her portion of the marital share of husband's retirement

benefits.   Husband argues that wife's request to be allowed to

name an alternate beneficiary was properly denied by the trial




                              - 19 -
court under both state and federal law because his retirement

plan does not allow for the naming of an alternate beneficiary.

     "Under federal law, qualified domestic relation orders

[(QDROs)] are an exception to ERISA's proscription against

alienation and assignment of pension benefits."    Wilson v.

Wilson, 18 Va. App. 193, 200, 442 S.E.2d 694, 698 (1994).      In

order to qualify as a QDRO, a domestic relations order must "not

require a plan to provide any type or form of benefit, or any

option, not otherwise provided under the plan," and must "not

require the plan to provide increased benefits."   26 U.S.C.

§ 414(p)(3).   Here, because husband's retirement plan does not

make provisions for payment by the plan to an alternate

beneficiary, the court cannot order such payment from the plan.

However, as noted above, this does not preclude the court from

exercising its discretion to have the payments made from husband,

either in lump sum or as the benefits are paid to him, instead of

directly from the plan.   Accordingly, not only may the court

require that husband pay wife 25.6% of his retirement benefits,

in the event that wife predeceases husband, the court may also

instruct husband, not the plan, to pay wife's designee.
     On remand the trial court, in reconsidering the marital

award, should consider whether to order that a lump sum or

payments equal to the wife's share of the retirement benefits due

her under the equitable distribution award be made to wife or her

beneficiary.


                              - 20 -
             Post-Separation Deposits and Withdrawals

     Wife argues that the commissioner and trial court erred in

awarding husband credit for post-separation contributions to

various marital accounts.   The post-separation deposits were made

with distributions from the husband's Free Lance-Star stock, the

appreciation of which was classified as part marital and part

separate.   Accordingly, a portion of the post-separation

distributions which husband deposited were earnings on the

marital stock and therefore should have been classified as

marital property.
     Code § 20-107.3(A)(2) addresses the classification of

property acquired post-separation:
          Marital Property is . . . all property . . .
          acquired by either spouse during the
          marriage, and before the last separation of
          the parties, if at such time or thereafter at
          least one of the parties intends that the
          separation be permanent, is presumed to be
          marital property in the absence of
          satisfactory evidence that it is separate
          property.


     Dividends received post-separation from husband's separate

property are properly classified as non-marital.   However, if the

property or some portion thereof which generated the dividends

was marital, the dividends attributable to the marital property

would be properly classified as marital.   Here, we have remanded

for reconsideration the classification of the increase in the

value of husband's stock.   Once the trial court determines what

portion of the appreciation is marital and what portion is

husband's separate property, the trial court must also classify
                              - 21 -
earnings attributable to the marital portion as marital.

     Wife also argues that husband made post-separation

withdrawals from the accounts and that the trial court erred by

failing to require husband to account for these withdrawals.

Wife argues that because of the complex tracing involved in order

to verify husband's figures regarding the various account

balances, she did not discover the numerous discrepancies in the

multiple accounts in time to present evidence at the June 29,

1994 hearing.   A subsequent motion for leave to present

supplemental evidence was denied.    Wife proffered that husband

made numerous post-separation withdrawals and transfers and that

in total while making $285,000 in post-separation contributions,

he withdrew $372,562.   Wife argues that the commissioner and

trial court erred in failing to accept her proffer and in failing

to require husband to account for the $87,562 net discrepancy.
     The granting or denying of a motion to hear additional

evidence is within the sound discretion of the trial court.      See
Morris v. Morris, 3 Va. App. 303, 307, 349 S.E.2d 661, 663

(1986).   In Morris the trial court refused to reopen the

proceedings at the wife's request to hear additional evidence

concerning an asset the wife asserted should not have been

classified as marital property.     Id.   We concluded that since the

request to hear additional evidence "came six weeks after the

evidentiary hearing consisting of two full days of testimony

during which each party had ample opportunity to present

evidence, it was within the court's discretion to refuse to take

                              - 22 -
further evidence . . . ."     Id. (citations omitted).

     Here, the wife's motion for leave to present supplemental

evidence was made nine weeks after the hearing.       Wife asserts

that she was unable to present evidence at the hearing regarding

discrepancies in the accounts because husband failed to fully

disclose information about some of the Fidelity accounts until a

few days prior to the hearing.    Assuming, arguendo, that wife's

assertions accurately represent the facts, such untimeliness in

providing wife with the account information may have excused

wife's failure to present evidence on this matter at the hearing;

however, it does not explain wife's nine week delay in moving for

leave to present additional evidence.    Consequently, we find that

neither the trial court nor the commissioner erred in rejecting

wife's proffer, as the decision was within the sound discretion

of the court.
                   Deduction of Litigation Expenses

     Wife argues that the trial court erred in failing to deduct

her litigation expenses from the valuation of wife's accounts.

Alternatively, wife argues that if she is not given credit for

her litigation expenses, husband should be ordered to pay all of

her litigation fees and costs, not merely the $50,000 awarded by

the trial court.

     The trial court and commissioner could have properly

considered evidence in the record of the depleted value of wife's

marital accounts attributable to her litigation expenses.      This

is especially true because some four years and four months passed
                                - 23 -
between the time of separation and entry of a final decree.

However, at the extensive hearing wife did not address the

stipulated values and subsequent depletion due to significant

legal fees.   Rather, wife sought to have this evidence admitted

nine weeks after the hearing.    Both parties had ample opportunity

during the hearing to present evidence regarding the value of

accounts and the costs of litigation.

     The trial court's and commissioner's decision to receive

additional evidence after the close of the record is within the

discretion of the court.    Morris, 3 Va. App. at 307, 349 S.E.2d

at 663.    The commissioner exercised his discretion not to do so

and given wife's opportunities to address this matter on the

record, we find no abuse of discretion.

     Wife's alternate argument is also unpersuasive.    The

commissioner indicated that in considering the sizable legal fees

claimed by wife and in light of the equitable distribution and

spousal support awards, $50,000 was an appropriate payment to

wife for her legal expenses.    Wife presents no argument that

suggests the commissioner or trial court abused their discretion

in ordering payment of $50,000 and no evidence in the record

suggests that as a matter of law, a larger sum should have been

awarded.   However, in view of our remand of the equitable




                                - 24 -
distribution award and the spousal support award, the trial court

should reconsider the attorney's fee award.
                                        Affirmed in part,
                                        reversed in part,
                                        and remanded.




                             - 25 -