Dickson v. Dickson

COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Moon, Judge Annunziata and Senior Judge Duff
Argued at Alexandria, Virginia

DON W. DICKSON
OPINION BY
v. Record No. 1081-95-4 JUDGE CHARLES H. DUFF
AUGUST 20, 1996
PAULA JEAN DICKSON

FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
Frank A. Hoss, Jr., Judge
Patricia F. Hammond (Smith, Hudson, Hammond &
Alston, P.C., on briefs), for appellant.

Robert J. Zelnick (Szabo, Quinto, Zelnick &
Erickson, P.C., on brief), for appellee.

Don W. Dickson (husband) appeals the trial judge's decision

modifying the amount of monthly spousal support in the original

divorce decree. He contends (1) that the trial court lacked

jurisdiction to modify its prior order of spousal support because

the spousal support award was a lump sum award rather than a

periodic payment; (2) that the trial judge erred in ruling that

husband's discharge in bankruptcy of the equitable distribution

award was a sufficient change in circumstances to justify

modification of the spousal support award; and (3) that the trial

judge erred in awarding attorney's fees to Paula Jean Dickson

(wife).

We hold that the original spousal support award was a

periodic payment award. Thus, the trial court did not lack

jurisdiction to modify the spousal support award. In addition,

we hold that the trial judge did not err in concluding that the
discharge in bankruptcy was a sufficient change in circumstances

to justify modification of the spousal support award. We also

affirm the trial judge's award of attorney's fees to wife.

Background

On January 25, 1993, the trial court entered the parties'

"Final Decree of Equitable Distribution, Permanent Spousal

Support, Attorney's Fees and Costs." The final decree made a

partial equitable distribution award to wife of $24,442.53, plus

an additional amount of money from stock options held in

husband's name and unexercised at the time of trial.
The decree contained the following language concerning

spousal support:
[H]usband shall pay wife the sum of one
thousand ($1,000) dollars per month as
spousal support and maintenance for twelve
months beginning October 1, 1992; eight
hundred ($800) dollars per month for twelve
months, beginning October 1, 1993, and six
hundred ($600) dollars per month, for twelve
months, beginning October 1, 1994; with the
husband's obligation to provide spousal
support to cease on September 30,
1995 . . . .

About six weeks after entry of the final decree, husband

filed a petition for voluntary bankruptcy. On December 27, 1994,

the United States Bankruptcy Court released husband from all

dischargeable debts, including the equitable distribution award,

resulting in a discharge of over $620,000 in debts. Husband has

not paid any portion of the equitable distribution award to wife.

On November 9, 1994, wife petitioned the trial court for an

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increase in the amount of spousal support awarded to her in the

final decree, asserting that the discharge in bankruptcy of

husband's equitable distribution obligations constituted a

material change in circumstances. On November 22, 1994 husband

filed a "Petition to Reduce or Terminate Spousal Support

Obligation," seeking to decrease the amount of spousal support he

was obligated to pay.

On February 22, 1995, husband filed a motion for a judicial

determination that the spousal support award in the final decree

was a lump sum award and was, therefore, not subject to

modification. The trial judge found that the spousal support

award was one for periodic spousal support, and that the trial

court had jurisdiction to modify the award.
At a hearing held on April 10, 1995, the trial judge ruled

that there had been a material change in circumstances after the

entry of the final decree, entitling wife to an increase in the

amount of spousal support. The trial judge modified the final

decree and ordered husband to pay $600 per month in support,

subject only to termination by operation of law, or remarriage of

wife, or subject to future modifications.

At the hearing, the trial judge said that when he initially

determined the amount of spousal support, he "place[d]

considerable weight on all of the factors [listed in Code

§ 20-107.1]," but he considered the equitable distribution award

as a "central factor" in the equation. The trial judge then

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found that the wife's failure to receive the equitable

distribution award was "a change of circumstances" that merited a

modification of the spousal support award. In his order

reflecting his ruling, he also noted that husband had an annual

net income of about $65,000 to $70,000, while wife had annual

earnings of about $27,000.

The trial judge also found that husband's actions

exacerbated the time involved on this issue and awarded wife

attorney's fees.

Classification of Spousal Support Award
A periodic payment is a specified amount
payable at designated intervals with the sum
total uncertain; the amount of the payment
can be modified by the court, if one of the
parties can show a change in circumstances,
or the amount of payment can be modified by
agreement of the parties. The total amount
of periodic support due is contingent upon
future events; the right to each periodic
payment becomes fixed and vested only as each
payment is due. See Eaton v. Davis, 176 Va.
330, 342, 10 S.E.2d 893, 898 (1940)
("[A]limony to accrue in future monthly
installments, though fixed by a final decree,
is not a vested property right.") In
contrast, a lump sum award is an order to pay
a specific amount. The lump sum award is a
fixed obligation to pay a sum certain when
the decree is entered but the amount may be
payable either in deferred installments or at
once. That the payment method may allow for
deferred installment payments does not change
the character of the award. Thus, the right
to the amount, whether payable immediately or
in installments, is fixed and vested at the
time of the final decree and the amount is
unalterable by court order, remarriage, or
death.

Mallery-Sayre v. Mallery, 6 Va. App. 471, 474-75, 370 S.E.2d 113,

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115 (1988).

In this case, the original spousal support award did not

establish "a fixed obligation to pay a sum certain when the

decree [was] entered." The award specified an amount payable at

designated intervals, and the amount due became vested only as

each payment was due. The final decree did not establish a total

amount of support. In addition, the trial judge made no findings

of any "special circumstances or compelling reasons" requiring a

lump sum award, such as husband's inability to pay future

periodic payments or wife's immediate need for a lump sum to

maintain herself or satisfy debts. See Blank v. Blank, 10 Va.

App. 1, 5-6, 389 S.E.2d 723, 725 (1990).

Further, the final decree does not use the words "lump sum"

or "total amount" or words of similar import. On the contrary

the decree expressly characterizes the spousal support as a

"periodic payment." The decree does not provide that the monthly

installment payments are to continue in the event of wife's

remarriage or husband's death. See Code § 20-109.

Finally relative to this issue, husband impliedly recognized

that the spousal support award was modifiable by filing his

Petition to Reduce or Terminate Spousal Support Obligation. He

expressly sought a reduction in an award which he now contends

was not modifiable. His petition was never withdrawn, but was

actively pursued until denied by the trial court in an order of

March 17, 1995. It is well established in Virginia that a

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litigant will be precluded from taking inconsistent and mutually

contradictory positions. Winslow, Inc. v. Scaife, 224 Va. 647,

653, 299 S.E.2d 354, 358 (1983); Berry v. Klinger, 225 Va. 201,

207, 300 S.E.2d 792, 795 (1983).

Nor does the fact that the support award had a specific

termination date convert it into a lump sum award. In Radford v.

Radford, 16 Va. App. 812, 813-14, 433 S.E.2d 35, 36 (1993), the

parties agreed that "the husband shall pay unto the wife $200.00

per month for a period of 5 years." This agreement was

incorporated in the decree. The wife appealed the circuit

court's order terminating the award upon her remarriage. We

affirmed, holding that any inference that the parties intended a

lump sum award by multiplying the monthly obligation by the

number of months did not overcome the direction of Code § 20-109.
Husband relies on Losyk v. Losyk, 212 Va. 220, 183 S.E.2d

135 (1971), in support of his position. Although the spousal

support award in this case has similar wording to the spousal

support award in Losyk, Losyk is distinguishable.
In Losyk, the final decree stated:
"the Defendant shall pay to the Complainant
for her own support and maintenance the sum
of $100.00 per month, beginning on the 3rd
day of November, 1968, and continuing $100.00
on the 3rd day of each and every month
thereafter until October 3, 1969, at which
time this temporary alimony payment shall be
terminated . . . ."

Id. at 221, 183 S.E.2d at 136. On October 3, 1969, the date on

which the last alimony payment was due, the wife filed a petition

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asking for a "'final determination of alimony.'" Id. The

Supreme Court held that "there was no alimony to accrue after

October 3, 1969, when all monthly payments were completed. Hence

there was nothing to 'increase, decrease or cause to cease' and

the court was without statutory authority to reopen the final

decree . . . as to alimony." Id. at 223, 183 S.E.2d at 137.

Here, the final decree awarded monthly spousal support

payments until September 30, 1995. Wife filed her petition

seeking an increase in spousal support on November 9, 1994, prior

to the completion of the monthly spousal support payments.

Therefore, unlike in Losyk, there was "alimony to accrue" after
wife filed her petition. Thus, there was something to

"'increase, decrease, or cause to cease.'" Accordingly,

husband's reliance on Losyk is misplaced.

We conclude that, because the spousal support award was in

the form of periodic payments, the trial court had jurisdiction

to modify the award pursuant to Code § 20-109, provided there was

a material change in circumstances meriting the modification.
See Mallery-Sayre, 6 Va. App. at 474, 370 S.E.2d at 115.

Change in Circumstances

Husband contends that the trial judge erred in modifying

the spousal support award when the changes in circumstances were

such that both husband's ability to pay spousal support and

wife's need for spousal support decreased. In particular,

husband contends that the discharge in bankruptcy of the

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equitable distribution award was not a change in circumstances

sufficient to warrant a modification of support. Husband also

alleges that the modification in spousal support "punish[ed]"

husband for his bankruptcy filing and awarded wife cash "far in

excess of the monetary award."
Code § 20-109 provides that "[u]pon the
petition of either party the court may
increase . . . spousal support and
maintenance . . . as the circumstances may
make proper." The party moving for a
modification of support payments must prove
"both a material change in circumstances and
that this change warrants a modification of
support."

Furr v. Furr, 13 Va. App. 479, 481, 413 S.E.2d 72, 73 (1992)

(citation omitted).

The trial judge found that the discharge in bankruptcy of

the equitable distribution award was a change in circumstances

justifying modification of the spousal support award, stating:
[I]n making [the spousal support] award, I
did place considerable weight on all of the
factors, but particularly, the factor such as
the length of the marriage, which in this
case was not very long, [wife]'s
underemployment at the time, and the
equitable distribution of the parties'
marital assets. Now, as I said, what has
unfolded today, a central factor has been
removed from this equation, that factor being
the equitable distribution proceeds, [wife]
never received them. That was something I
thought she was going to receive when I was
determining what the spousal support should
be.
In my view, as the cases hold, I think
that does constitute a change of
circumstances. And upon consideration of all
the evidence and the factors under Code
§ 20-107.1, I think it also calls for a
modification of the spousal support in this

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 case.

Whether the discharge in bankruptcy of an equitable

distribution award is a change in circumstances justifying

modification of the original spousal support award is an issue of

first impression in Virginia. Thus, for guidance, we look to

authority from other jurisdictions that have addressed this

issue. In Siragusa v. Siragusa, 843 P.2d 807 (Nev. 1992), the

Nevada Supreme Court, citing cases from New Mexico, California,

Minnesota, Washington, and Wisconsin, stated:
While we have never addressed the issue,
both state and federal courts in other
jurisdictions have uniformly determined that
the discharge of a property settlement
obligation in bankruptcy may be taken into
account in determining whether the parties'
circumstances have changed sufficiently to
justify a modification of alimony. The
uniformity of decisions does not mean that
the question is not a close one, and two
strong competing interests must be weighed.

* * * * * * *

[T]he mandates of the Supremacy Clause
of the United States Constitution compete
with the equitable interest in preventing one
spouse from unilaterally acting to deprive
1
the other spouse of marital assets.

Id. at 812 (citation and footnote omitted).

The objective of the federal bankruptcy system is to

"'relieve the honest debtor from the weight of indebtedness which

has become oppressive and to permit him to have a fresh start in
1
The Supremacy Clause prevents states from enacting laws
that, among other things, "'sufficiently injure the objectives of
the federal program.'" Siragusa, 843 P.2d at 812-13.

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business or commercial life.'" Id. (citation omitted).

Therefore, an increase in alimony payments after an equitable

distribution award has been discharged in bankruptcy arguably

frustrates the "fresh start" policy of bankruptcy relief. But

see Eckert v. Eckert, 424 N.W.2d 759, 762 (Wis. Ct. App.) ("The

exercise of judicial power modifying spousal support

post-bankruptcy is not antagonistic to the federal 'fresh start'

policy of bankruptcy relief"), review denied, 430 N.W.2d 351

(Wis. 1988).
The Siragusa court found that state courts "have resolved

the tension between federal and state objectives in favor of the

state interest in resolving domestic disputes." Siragusa, 843

P.2d at 813. The court held:
[A] district court may consider a spouse's
discharged property settlement obligation as
a "changed circumstance" in ruling upon a
motion for modification of alimony.
Modification of an alimony award based upon a
discharged property settlement obligation
does not re-create a debt discharged under
federal bankruptcy laws, and therefore the
district court . . . properly considered [the
husband]'s discharged property settlement
obligation in ruling upon the motion for
modification of alimony.

Id. 2
2
Dr. Siragusa, the husband, later brought an action claiming
that the state court's modification of alimony based on the
bankruptcy court's discharge of property settlement violated the
discharge injunction. The United States District Court affirmed
the bankruptcy court's dismissal of his complaint, and Dr.
Siragusa appealed to the Ninth Circuit. In Siragusa v. Siragusa,
27 F.3d 406 (9th Cir. 1994), the Court held that the divorce
court properly considered Dr. Siragusa's discharge in bankruptcy
of the property settlement as a "'changed circumstance.'" Id. at

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 Here, when the trial judge made the initial award of spousal

support, he was required to consider all of the factors listed in

Code § 20-107.1, including "[t]he provisions made with regard to

the marital property under § 20-107.3." Code § 20-107.1(8). The

trial judge stated that he considered these factors when making

the original award of spousal support and that he considered the

equitable distribution award as a "central factor" in determining

the amount of spousal support.
We agree with the majority of states that the discharge in

bankruptcy of a property settlement agreement or equitable

distribution award may be considered as a change in circumstances

justifying the modification of spousal support obligation. Here,

husband's discharge in bankruptcy of over $620,000 in debts

greatly improved his ability to pay spousal support. See Ganyo

v. Engen, 446 N.W.2d 683, 686 (Minn. Ct. App. 1989).

408. The Court further found that

the amount awarded in alimony is not a substitute for
the amount of the discharged property settlement. The
alimony modification merely takes into account the fact
that Ms. Siragusa would no longer receive the property
settlement payments upon which the original alimony was
premised. The discharge altered both Ms. Siragusa's
need and Dr. Siragusa's ability to pay.
Id. See also Richardson v. Richardson, 868 P.2d 259, 262 (Wyo.
1994) ("[T]here is a significant body of authority which
consistently supports the district court's decision to treat the
results of the bankruptcy proceeding as a change of circumstances
justifying modification of the original decree") (citing Gavin L.
Phillips, Annotation, Divorce: Court's Authority to Institute or
Increase Spousal Support Award After Discharge of Prior Property
Award in Bankruptcy, 87 A.L.R.4th 353 (1991)).

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 However, husband contends that his income has decreased,

thereby impairing his ability to pay spousal support. Husband

testified that his income was $211,000 in 1992, $130,000 in 1993,

and $99,000, less business expenses, in 1994. Husband stated

that his net income is about $60,000 to $70,000. Husband also

testified that he owes more than $72,000 in attorney's fees and

income taxes. In addition, husband pays $1,700 per month in

rent.
In contrast, there was evidence that husband had a matched

asset plan containing about $50,000 and that he owned a vacation

condominium in Myrtle Beach. Husband testified that he exercised

stock options in October, 1992, but the amount he received from

this transaction is disputed. These stock options appear to have

been made a part of the equitable distribution award. However,

wife testified she has not received any of the proceeds from the

transaction.

At the time of the equitable distribution award, wife was

unemployed. At the time of the hearing on this matter, she

earned $8 per hour and worked thirty hours per week. Wife

testified that, at the time of the divorce, her IRA account

contained $12,000. Subsequently, she used this account for

living expenses, leaving a balance of about $500. She also faces

ear surgery, has no health insurance, and has unpaid medical

bills, credit card bills, and attorney's fees. Wife has borrowed

about $56,000 from her father for living expenses. She rents a

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room in her house to a boarder for $90 per week.

"We will not disturb the trial court's decision where it

is based on an ore tenus hearing, unless it is 'plainly wrong or

without evidence in the record to support it.'" Furr, 13 Va.

App. at 481, 413 S.E.2d at 73 (citation omitted). The evidence

indicates that both parties have experienced material changes in

their income and expenses after the entry of the 1993 final

decree. However, ample evidence supports the trial judge's

ruling increasing husband's monthly spousal support obligation.

Wife never received any portion of the equitable distribution

award of $24,442.53 or the undetermined amount of money from

stock options exercised by husband. Husband discharged over

$620,000 in debts after the final decree was entered, thereby

greatly decreasing his monthly expenditures. Wife has borrowed

money and used her IRA account to pay living expenses. Although

husband's income may have decreased following the entry of the

final decree, his overall financial condition has improved since

1992 due to the discharge in bankruptcy of over $620,000 in

debts. Accordingly, the trial judge's modification of the

spousal support award was not plainly wrong or without evidence

to support it.
Attorney's Fees

"An award of attorney's fees is a matter submitted to the

trial court's sound discretion and is reviewable on appeal only

for an abuse of discretion." Graves v. Graves, 4 Va. App. 326,

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333, 357 S.E.2d 554, 558 (1987). "[T]he key to a proper award of

counsel fees [is] reasonableness under all of the circumstances

revealed by the record." McGinnis v. McGinnis, 1 Va. App. 272,

277, 338 S.E.2d 159, 162 (1985).

The trial judge found that husband caused an "exacerbation

of the time involved in what is really a fairly simple

issue . . . ." The judge then awarded wife $1,580 in attorney's

fees. Based on the issues involved and the respective abilities

of the parties to pay, the award was not unreasonable and the

trial judge did not abuse his discretion in making the award.
For these reasons, we find that the trial judge properly

modified the monthly spousal support obligation, and the trial

judge did not abuse his discretion in awarding attorney's fees to

wife.

Affirmed.

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