Ranney v. Ranney

COURT OF APPEALS OF VIRGINIA

Present: Judges Humphreys, Felton and Senior Judge Annunziata∗
Argued at Alexandria, Virginia

CAROL M. RANNEY
OPINION BY
v. Record No. 0979-04-4 JUDGE ROBERT J. HUMPHREYS
FEBRUARY 1, 2005
TIMOTHY RANNEY

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Arthur B. Vieregg, Judge

Paula W. Rank (Byrd Mische, P.C., on briefs), for appellant.

Raymond D. Battocchi (Gabeler Battocchi Griggs & Powell, PLLC,
on brief), for appellee.

Carol M. Ranney (“wife”) and Timothy Ranney (“husband”) have each appealed an

equitable distribution award entered pursuant to their no-fault divorce. Wife contends that the

trial court erred in the classification and valuation of the marital property, and she also argues

that the court abused its discretion in the distribution of the marital estate. Husband, in a

separate appeal, contends that the trial court erred in failing to reduce wife’s equitable

distribution award based on her fraudulent inducement of the marriage.1 For the reasons that

follow, we hold that the trial court did not err in either its classification of the property or the

distribution of the marital estate, and we therefore affirm the judgment of the trial court.

∗
Judge Annunziata participated in the hearing and decision of this case prior to the
effective date of her retirement on December 31, 2004 and thereafter by her designation as a
senior judge pursuant to Code § 17.1-401.
1
See Ranney v. Ranney, Record No. 1051-04-4 (2004) (Va. Ct. App. Feb. 1, 2005).
 I. BACKGROUND

Wife and husband married on April 11, 1998. Although this was wife’s fifth marriage,

wife indicated on the parties’ marriage certificate that she had only been married once before.2

Throughout the first three years of the marriage, husband continued to believe that this was only

wife’s second marriage. In June 2001, however, husband discovered that wife had, in fact, been

married at least twice before. At that point, husband broke off all sexual contact with wife. On

April 5, 2002, after husband discovered that wife had actually been married four times before,

the parties separated.

Wife filed a Bill of Complaint, seeking a divorce on the fault-based ground of desertion.

In January 2003, husband filed a Cross-Bill, alleging post-separation adultery. In light of

allegations that both parties were dissipating marital assets, the trial court entered a decree

freezing the marital estate.

On March 25, 2003, husband filed a separate action at law, alleging that wife committed

actual fraud by “induc[ing] [husband] to marry her through a carefully calculated scheme to

defraud.” Husband requested compensatory damages consisting of “the more than $500,000 in

extravagant expenditures [wife] made during the marriage with money [husband] earned, and the

more than $250,000 he paid to compensate [wife] for money she lost in the stock market.”

Husband also requested an award of punitive damages in the amount of $1,000,000. The trial

court in that proceeding granted wife’s demurrer, noting that the fraud allegations would be

“completely cognizable within the context of the divorce” proceedings and that “the judge in the

equitable distribution case can adjust the equitable distribution to address the equities.”

2
Although she never attended college, wife also told husband before the marriage that
she had received a college education.
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 Husband then sought to amend his answer to wife’s Bill of Complaint, requesting

permission to add a fraudulent inducement claim. The trial court denied that motion.

A. The Commissioner’s Report

A commissioner in chancery conducted an evidentiary hearing on October 16, 2003. In

the commissioner’s report, issued after the hearing, the commissioner found that “[husband]

deserted [wife] and the marriage on April 5, 2003 [sic] with the intention to remain away

permanently, and that such intention has continued to the present time.” The commissioner also

noted, “[Wife] admitted that she committed adultery.”

The commissioner observed that, once husband learned in June 2001 “that [wife] had

more than one prior marriage, he broke off all sexual contact with [wife].” The commissioner

additionally acknowledged that “the parties may not have had much of a sex life with each other

prior to June, 2001.”

The commissioner also found that, “during the prior three years of the marriage

[husband] had earned over $4,000,000, and that the parties had spent money lavishly, and that

large sums were spent unilaterally by each of them.” The commissioner noted that, “[d]uring the

period both before and after [husband’s] income ceased, the parties had argued over money.”

The commissioner additionally found that, “[a]t the time of the marriage in April, 1998

and for most of the subsequent period prior to the separation, [wife] failed to disclose that she

had been married four times previously, rather than only one time as indicated on their marriage

record.” The commissioner observed:

There is a substantial difference between marrying someone with
one former marriage and marrying someone with four. At the very
least, the difference is important enough that the other party should
have the right to know, to try to understand, and to decide whether
to go ahead with the relationship. [Wife] made a material
misrepresentation on her marriage certificate, and the
Commissioner believes the [husband’s] testimony that he did not
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 know at the time of their marriage, and for three years thereafter,
that she had more than one prior marriage.

The commissioner, however, declined to hold that wife’s misrepresentations about her prior

marriages justified husband’s desertion, noting that, “[a]lthough this may have been a ground for

annulment on the basis of fraud had it been discovered in a timely manner and pursued as such,

there is no basis in the Virginia case law for treating this as continuing legal justification for his

departure in a divorce action.”

Based on these factual findings, the commissioner concluded that three factors led to the

dissolution of the marriage: (1) disagreements over financial decisions; (2) sexual matters; and

(3) wife’s continued active concealment of three of her four prior marriages. As to the

disagreements about finances and the sexual matters, the commissioner found that, on both of

these matters, “there may be some blame to be attributed to each party, but it would not be

appropriate to single out just one party.” The commissioner then observed that wife’s “most

serious fault during the marriage was her continued active concealment of three prior marriages

during the three year period when she was enjoying the benefits of the [husband’s] then very

substantial income.” Ultimately, the commissioner left “it to the Court as to what weight to give

this matter in regard to the financial issues . . . since the Commissioner’s findings on this point

need to be considered in the context of all of the other evidence, and especially the financial

evidence, to be reviewed at the trial.”3

3
On the issue of spousal support, the commissioner found that “[t]he party seeking to
avoid payment of spousal support (the [husband]) has proved adultery on the part of the [wife]
and is himself guilty of desertion.” However, the commissioner declined “to make a
recommendation as to whether these technical fault grounds recriminate each other so as to erase
both grounds.” The commissioner also noted that “[wife’s] adultery, being post-separation and
having nothing to do with the breakup of the marriage, may not of itself be so serious as to
justify a denial of spousal support,” concluding that

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 Ultimately, the commissioner recommended that the trial court award wife a divorce a

vinculo matrimonii on the grounds of marital separation for a period in excess of one year. The

commissioner did not recommend granting the divorce on grounds of desertion, reasoning that

“even though [husband’s] reasons for leaving on April 5, 2002 technically do not constitute legal

justification, they are nevertheless understandable under the circumstances.” The commissioner

also recommended “the divorce not be granted on the ground of adultery,” reasoning that the

adultery “was post-separation and there is absolutely nothing to indicate that it had anything to

do with the breakup of the marriage.”

B. The Equitable Distribution Proceedings

The trial court conducted an equitable distribution hearing in October 2003. By letter

opinion issued on March 4, 2004, the trial court issued its factual findings, classified and valued

the parties’ assets, and divided the marital property.

In its letter opinion, the trial court found that husband “earned more than $6.3 million in

stock options and salary” during the marriage and that wife “came into the marriage with almost

$600,000.” Also, the court observed that husband “had debts approximating $400,000” at the

start of the marriage and that “[t]hose debts were paid off in the course of the marriage.” The

court further noted that, “[d]uring their first year of marriage the parties principally lived off of

[husband’s] salary.” However, because of a prior disability settlement, wife “had significant

funds at her disposal.”

[w]hether [wife’s] marital fault in failing to disclose the number of
her prior marriages at the time of the marriage and continuing to
conceal this information is such fault as would be relevant in a
consideration of manifest injustice is a matter that the
Commissioner chooses to leave to the Court without any
recommendation.

Ultimately, however, neither party requested an award of spousal support.
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 The court also found that neither party made significant non-monetary contributions to

the marriage, observing that wife “made scant non-monetary contributions to the marriage” and

that husband “similarly made some, but few non-monetary contributions.” The court

additionally found that

The evidence persuasively demonstrates that while [wife] was
solicitous of [husband’s] affections before the marriage, once
married her conduct changed. She became largely self-absorbed,
dominating, and often threatened divorce. During the marriage,
[husband] was principally devoted to his work, lived modestly, and
financed his wife’s lavish shopping and expenditures without
significant objection.

Moreover, the trial court expressly “found [wife’s] testimony, unless wholly corroborated, was

generally not worthy of belief.” By contrast, the court “found [husband’s] testimony, though

uncorroborated, generally credible.”

The court’s findings as to the specific property subject to this appeal are discussed in

more detail below.

1. The Stock Options

In March 1998, approximately one month before the parties’ marriage, husband entered

into an employment contract with Network Solutions. As part of that employment contract,

husband received 25,000 stock options that were scheduled to vest at various times over the next

four years. Of those options, 20,000 were contingent only upon husband’s continued

employment, with thirty percent to vest at the end of the first year of employment, thirty percent

after the second year, twenty percent after the third year, and the final twenty percent after the

fourth year. The remaining 5,000 stock options were contingent on the “achievement of certain

business production milestones.”

During the course of his employment, husband “was awarded the additional 5,000 stock

options.” Beginning in 1999, the parties began selling husband’s stock options. Although
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husband “produced no documentary evidence confirming when he received or exercised any of

the Network Solutions stock options issued to him . . . [h]e also testified he had received over

$6.3 million from the sale of stock options and salary from which, after taxes, he had realized

about $3.5 million.” Husband’s employment was terminated in July 2001 after Network

Solutions was purchased by another company.

The trial court found that husband “was awarded, but not necessarily issued, the 20,000

Network Solutions options before the parties’ marriage.” Thus, the court concluded that the

20,000 stock options were husband’s separate property because he “acquired” those options prior

to the marriage. The court also found, however, that husband failed to prove that the additional

5,000 stock options – which were not awarded until after the marriage – were his separate

property, and therefore classified those options as marital property.

2. The Land in South Carolina and the SeaRay Boat

During the course of the marriage, the parties purchased unimproved land in South

Carolina with a stipulated value of $975,000. The parties also purchased several boats, including

a twenty-nine foot SeaRay boat valued at approximately $63,000. Both the South Carolina land

and the SeaRay boat were jointly titled in both parties’ names.

The court found that, although husband’s earnings “ultimately financed the purchase of

. . . the South Carolina land, the evidence also indicates that some portion of the South Carolina

land down payments and maritime purchases were made either with [wife’s] funds or were

borrowed and secured for a time by her accounts.” The court further noted, however, that “[t]he

credible evidence also reflects that [husband] either paid off the loans secured by wife’s assets or

deposited moneys used from his wife’s accounts for these purposes. The source of these

payments and deposits were his stock option proceeds.”

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 Thus, the court found that, although husband “testified, in a conclusive fashion,” that the

South Carolina property and the SeaRay boat “had been purchased with the proceeds from the

sale of his Network Solutions stock options,” the totality of the evidence “showed that, in

addition to his stock option sales proceeds, the parties had other available marital assets to

purchase the contested assets.” The court noted that, because these assets were purchased during

the marriage, husband had the burden of proving that they were his separate property, concluding

that husband’s evidence was insufficient to carry that burden. Accordingly, the court classified

these assets as marital property.

3. The Morgan Stanley Stock Accounts

During the marriage, the parties established three stock trading accounts with Morgan

Stanley. The first account, deemed the “Campbell Account,” was titled solely in wife’s name,

and it contained approximately $121,000. The trial court found that this account was wife’s

separate property and, therefore, not subject to equitable distribution. The second account,

deemed the “Rohrer Account,” was jointly-titled in both parties’ names, and it contained

approximately $32,000. A third account, deemed the “money market” account, was also

jointly-titled in both parties’ names, and it contained approximately $14,000. The trial court

classified both the second and third accounts as marital property, and it awarded both of these

accounts to husband.

4. Division of the Marital Estate

After classifying the marital assets, “considering each of the factors contained in [Code

§ 20-107.3(E)],” and “considering all of the circumstances of the parties,” the court awarded

husband $1,344,868.84 in marital property and awarded wife $677,453 in marital property.

Thus, husband received approximately two-thirds of the marital estate, and wife received

approximately one-third of the marital estate.
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 The court also ordered that husband “be awarded any tax write-offs to which the parties

might be entitled.” The court further noted that “[t]hese awards are . . . inclusive of findings that

[husband] committed waste, both in the sale of the gold coins shortly before trial and dissipation

of the assets from the E-Trade Account amounting to $259,000, and assumes [wife’s] entitlement

to half the value of those assets, or $129,500.”

In reaching its decision, the court observed that:

After taking into account all of the evidence . . . it is apparent that
this marriage was of short duration. Moreover, it was a marriage
in which both parties were personally absorbed by pursuit of
financial gain: [Husband] by pursuing his career with Network
Solutions and later Verisign; [wife] by trading in the stock market.
[Wife] otherwise engaged in lavish expenditures, including
spending on clothes and in architectural planning for a luxurious
home in South Carolina. It is apparent that [wife’s] premarital
assets afforded liquidity to the marriage, before [husband] began
receiving and cashing in his Network Solutions stock options. I
also find that [wife’s] stock market trading eventuated in
significant but un-quantifiable losses. On balance, I conclude that
the diminution of [wife’s] premarital assets is offset by the
expenditure of [husband’s] salary and stock options to her benefit
during the marriage.

On April 2, 2004, the trial court entered a final decree granting wife a divorce on the

ground that the parties had lived separate and apart for more than one year. The parties appeal

from this ruling.

II. ANALYSIS

On appeal, wife contends that the trial court erred in the classification and valuation of

various property. Specifically, wife argues that the trial court erred in classifying: (1) husband’s

stock options as his separate property; (2) the property in South Carolina and the boat as marital

property rather than wife’s part-separate property; and (3) wife’s stock account as marital

property rather than wife’s separate property.

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 Both parties contend that the trial court abused its discretion in distributing the marital

estate. Wife argues that the court erred by: (1) failing to adequately consider that husband

dissipated $250,000 in marital assets in anticipation of divorce; (2) failing to adequately consider

that wife made substantial monetary contributions of her separate property to the marriage and

toward husband’s separate debt; (3) awarding husband all the future carry-over stock losses for

tax purposes despite finding that the stock accounts were marital property; and (4) improperly

considering wife’s fraudulent inducement of the marriage. Husband, in contrast, contends that

the trial court abused its discretion by failing to adequately consider wife’s fraudulent

inducement of the marriage.

For the reasons that follow, we hold that the trial court did not err in either the

classification of property or the distribution of the marital estate, and we therefore affirm the

judgment of the trial court.

A. Classification of the Marital Property

On appeal, we view the evidence in the light most favorable to the prevailing party.

Congdon v. Congdon, 40 Va. App. 255, 258, 578 S.E.2d 833, 835 (2003). Also, we “do[] not

retry the facts, reweigh the preponderance of the evidence, or make [our] own determination of

the credibility of witnesses.” Moreno v. Moreno, 24 Va. App. 190, 195, 480 S.E.2d 792, 795

(1997). Rather, “[w]here, as here, the court hears the evidence ore tenus, its findings are entitled

to great weight and will not be disturbed on appeal unless plainly wrong or without evidence to

support it.” Alphin v. Alphin, 15 Va. App. 395, 399, 424 S.E.2d 572, 574 (1992). Because the

trial court’s classification of property is a finding of fact, that classification will not be reversed

on appeal unless it is plainly wrong or without evidence to support it. McDavid v. McDavid, 19

Va. App. 406, 407-08, 451 S.E.2d 713, 715 (1994); Srinivasan v. Srinivasan, 10 Va. App. 728,

732, 396 S.E.2d 675, 678 (1990).
- 10 -
 The equitable distribution statute defines “separate property” as “all property, real and

personal, acquired by either party before the marriage.” Code § 20-107.3(A)(1)(i). “Marital

property,” in turn, encompasses “all property titled in the names of both parties,” as well as “all

other property acquired by each party during the marriage which is not separate property.” Code

§ 20-107.3(A)(2)(iii). Property acquired during the marriage is presumptively marital property,

unless shown to be separate property. See id.; see also Rahbaran v. Rahbaran, 26 Va. App. 195,

209, 494 S.E.2d 135, 142 (1997); Barnes v. Barnes, 16 Va. App. 98, 104, 428 S.E.2d 294, 299

(1993) (“[P]roperty acquired during the marriage is presumed to be marital and property

acquired before marriage is presumed to be separate.”). Also, the party contending that property

acquired during the marriage is separate property bears the burden of proving that the property

was acquired “for or from the proceeds of the sale of separate property.” See Code

§ 20-107.3(A)(1); see also Courembis v. Courembis, 43 Va. App. 18, 34, 595 S.E.2d 505, 513

(2004) (“The party claiming that property acquired during the marriage is separate property bears

the burden of rebutting this presumption.”).

The equitable distribution statute also allows for the classification of certain property as

“hybrid,” or part-marital, part-separate. See Code § 20-107.3(A)(3). Property may be classified

as hybrid when, inter alia, “marital property and separate property are commingled into newly

acquired property resulting in the loss of identity of the contributing properties,” but only if “the

contributed property is not retraceable by a preponderance of the evidence and was not a gift.”

Id. Otherwise, “the commingled property shall be deemed transmuted to marital property.” Id.

1. Stock Options

Wife initially contends that the trial court erred in classifying the stock options as

husband’s separate property. Wife argues that, because husband’s ability to exercise the stock

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options was contingent upon his continued employment, any options that vested during the

marriage constitute marital property. We agree.

As noted in Dietz v. Dietz, 17 Va. App. 203, 436 S.E.2d 463 (1993), stock options made

contingent on continued employment are akin to “deferred compensation.” Id. at 215, 436

S.E.2d at 470. The equitable distribution statute provides that the “portion of the total interest,

the right to which was earned during the marriage and before the last separation of the parties”

from “any pension, profit-sharing, or deferred compensation plan or retirement benefit,”

constitutes marital property. Code § 20-107.3(A)(3)(b) & 20-107.3(G) (emphases added).

Here, husband could not exercise the stock options described in his employment contract

until after he had remained with Network Solutions for a specified length of time. With the

exception of the first month, the entire term of husband’s employment with Network Solutions

occurred during the parties’ marriage. Because the condition necessary for the vesting of

husband’s right to exercise the stock options (i.e., his continued employment) was not fulfilled

until after the parties’ marriage, husband “earned” the right to exercise the stock options “during

the marriage.” See Cirrito v. Cirrito, 44 Va. App. 287, 605 S.E.2d 268 (2004) (holding that

money received in exchange for complying with a non-competition agreement was marital

property even though the agreement was signed before the marriage, rejecting the husband’s

argument that he “earned [the] money as soon as he signed the contract” because, “[a]lthough the

agreement was negotiated prior to the marriage, the right to receive payment was contingent

upon the husband not engaging in a particular business in the future” and that, “[w]hile married,

husband fulfilled this obligation”). Accordingly, the stock options should have been classified as

marital property, and the trial court clearly erred in classifying the options as husband’s separate

property. See id.

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 We also hold, however, that this error was harmless. As husband notes, the trial court

found that husband “had not sustained his burden of proving that substantial assets acquired

during the marriage could be traced to the proceeds of his stock option sales.” As a result, the

trial court classified all of the assets that were purchased with proceeds from the sale of the stock

options (including any bank accounts that may have retained funds from the sale of those

options) as marital rather than separate property. Husband has not appealed this finding.

Because the misclassification of the stock options therefore constitutes harmless error, we will

not reverse on this ground.

2. The South Carolina Property and the SeaRay Boat

Both the SeaRay boat and the South Carolina property were acquired during the parties’

marriage. Thus, both of these assets are presumed to be marital property. Barnes, 16 Va. App. at

104, 428 S.E.2d at 299. Wife, however, contends that the trial court should have classified these

assets as her part-separate property. Wife argues that she paid, from her separate account, the

$545,985.04 purchase price of the South Carolina property as well as $87,193 of the purchase

price of the SeaRay boat. Because a portion of the funds used to purchase these assets may have

come from her separate account, wife contends that the trial court therefore “erred in classifying

both items of property as completely marital.” We disagree.

To prove that either the SeaRay boat or the South Carolina property were her

part-separate property, wife had the burden of producing evidence sufficient to establish, by a

preponderance of the evidence, that “the claimed separate portion is identifiably derived from a

separate asset.” Rahbaran, 26 Va. App. at 208, 494 S.E.2d at 141. If the party claiming a

separate interest in property acquired during the marriage fails to provide sufficient tracing

evidence, an asset purchased with both marital and separate funds “shall be deemed transmuted

to marital property.” Code § 20-107.3(A)(3). Thus, “even if a party can prove that some part of
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an asset is separate, if the court cannot determine the separate amount, 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 (internal quotations omitted).

Here, husband and wife presented conflicting evidence as to the source of the funds used

to purchase the South Carolina property and the SeaRay Boat. As to the South Carolina

property, wife testified that “money was borrowed against [her] account for the down payment

and then it was repaid during the marriage.” Wife also testified that the remaining funds used to

purchase the property came from both her separate account and the proceeds from the sale of

husband’s stock options. Husband, however, testified that no money was actually taken out of

wife’s separate account for the purchase of the South Carolina property. Rather, he testified that

all three of the Morgan Stanley accounts were used as collateral for a loan, and the loan was then

used to purchase the property. Husband additionally testified that he paid off the loan from the

sale of his stock options and that he reimbursed the Morgan Stanley accounts in full.

As to the SeaRay Boat, wife testified that the $10,000 down payment was paid from her

separate Merrill Lynch account. Wife also testified that the remaining funds used to purchase the

boat came from both the parties’ jointly-titled bank account and funds that wife had deposited

into the jointly-titled Morgan Stanley stock accounts. Husband, however, testified that the down

payment on the boat was made from the loan collateralized by the Morgan Stanley accounts.

Husband also testified that the remaining funds used to purchase the SeaRay Boat were derived

from the sale of his stock options.

In its letter opinion, the trial court noted that wife’s “testimony, such as it was, conflicted

with [husband’s].” Although husband “testified, in a conclusive fashion, that the [assets] had

been purchased with the proceeds from the sale of his Network Solutions stock options,” wife

“assert[ed] that her funds were the source for acquiring . . . [these] assets.” The court, in
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resolving this conflicting testimony, observed that “[t]he evidence considered globally . . . makes

plain that [husband’s] stock options must have been the source of most of the monies necessary

to acquire the disputed assets.” The trial court also noted, however, that the money used to

purchase these assets could have come from multiple other sources, including wife’s separate

account, the loan collateralized by the Morgan Stanley accounts, the parties’ various joint

accounts, and husband’s salary.

Overall, the trial court accepted husband’s version of events rather than wife’s. In doing

so, the trial court expressly found that husband’s testimony was more credible than wife’s, noting

that, although “[wife’s] testimony, unless wholly corroborated, was generally not worthy of

belief, . . . [husband’s] testimony, though uncorroborated, [was] generally credible.” The court

further observed that wife’s “demeanor and fencing manner of testifying, her un-denied

misrepresentations made at the beginning of the marriage, and the content of her testimony in

light of the other evidence, all are material factors in the determination that [wife’s] trial

testimony was unreliable.”

On appeal, we “do[] not retry the facts, reweigh the preponderance of the evidence, or

make [our] own determination of the credibility of witnesses.” Moreno, 24 Va. App. at 195, 480

S.E.2d at 795. Here, the trial court determined that the proceeds from the sale of husband’s stock

options were primarily used to purchase the South Carolina property and the SeaRay boat. In

making this factual determination, the trial court expressly found husband’s testimony more

credible than wife’s. We will not disturb that credibility finding on appeal.

Although the trial court generally believed husband’s testimony rather than wife’s, the

court also recognized that, in addition to the proceeds from the sale of the stock options, money

from wife’s separate account could have been used when the parties purchased the South

Carolina property and the SeaRay boat. However, wife’s evidence was insufficient to prove, by
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a preponderance of the evidence, that an identifiable portion of her separate funds was used to

purchase either the SeaRay boat or the South Carolina property. As we have noted, “if a party

chooses to commingle marital and non-marital funds to the point that direct tracing is impossible,

the claimed separate property loses its separate status.” Rahbaran, 26 Va. App. at 208-09, 494

S.E.2d at 141 (internal quotations omitted). Here, wife failed to produce financial records or

other documentation sufficient to trace an identifiable portion of the purchase price to an

expenditure of her separate funds. 4 Because any money that might have been taken from wife’s

separate account was therefore hopelessly commingled with marital funds, the trial court did not

err when it classified these assets as marital property. Cf. Barker v. Barker, 27 Va. App. 519,

533, 500 S.E.2d 240, 246 (1998) (“[I]t is clear that in the absence of sufficient evidence

establishing the identity of separate funds throughout [] multiple investments and withdrawals,

the asset in question must be deemed marital.”).

Because wife failed to produce evidence sufficient to overcome the presumption that the

South Carolina property and the SeaRay boat were marital property, we affirm the trial court’s

classification of these assets.

3. The Morgan Stanley Stock Accounts

In her initial brief on appeal, wife presents a two-sentence argument on this issue, as

follows:

It was undisputed that funds in the Morgan Stanley Dean Witter
account in the Wife’s name only were her separate funds, traceable

4
On appeal, as proof that her separate funds were used to purchase these assets, wife
asserts that husband repaid $585,000 into wife’s separate “accounts.” According to the record,
however, husband actually testified that he paid $585,000 into the money market account – one
of the jointly-titled Morgan Stanley accounts – rather than into wife’s separate account.
Specifically, husband testified that the $585,000 deposited into the money market account was
intended to repay the collateralized loan from Morgan Stanley as well as to reimburse stock
trading losses incurred by wife. The trial court found, and wife has not disputed, that the money
market account is a marital asset, not a separate asset.
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 to her pre-marital assets. Accordingly, the Trial Court erred in
classifying this account as marital property.

(Emphasis added). However, in footnotes 10 and 15 of the letter opinion, as well as in its final

decree, the trial court expressly found that the only Morgan Stanley account titled in solely the

wife’s name (the “Campbell account”) “is [wife’s] separate property which is not subject to

equitable distribution.” Accordingly, this assignment of error is without merit.

In her reply brief, however, wife argues that the trial court erred in classifying a different,

jointly-titled Morgan Stanley account (the “Rohrer account”) as marital property, reasoning that

“Husband admitted he never put any marital funds in that account.” Wife explains that she

“misspoke” in the opening brief “when she indicated the Rohrer account was titled in her name

only.” We note that wife never indicated, either in her opening brief or in her assignments of

error, which of the three Morgan Stanley accounts she was discussing and that this confusion

could have been avoided in its entirety had she done so. We further note that wife’s own error

has deprived husband of the opportunity to substantively address the issue. We therefore

conclude that wife’s failure to properly present the issue of the classification of the Rohrer

account precludes us from considering it on appeal. See Rule 5A:20(e).5

B. Distribution of the Marital Estate

In reviewing an equitable distribution award on appeal, “we rely heavily on the discretion

of the trial judge in weighing the many considerations and circumstances presented in each

case.” Artis v. Artis, 4 Va. App. 132, 137, 354 S.E.2d 812, 815 (1987); see also Gilman v.

Gilman, 32 Va. App. 104, 115, 526 S.E.2d 763, 768 (2000). Also, “[t]he court need not quantify

5
We note that, in her exceptions to the final decree, wife did object to the classification
of “Morgan Stanley Account 637 04392 016” – the Rohrer account – as marital property. But
even though wife preserved her objection to the classification of the Rohrer account, she has
failed to adequately present the issue to this Court for consideration on appeal.

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or elaborate exactly what weight was given to each of the factors.” Taylor v. Taylor, 5 Va. App.

436, 444, 364 S.E.2d 244, 249 (1988). Rather, “[u]nless it appears from the record that the trial

judge has not considered or has misapplied one of the statutory mandates, this Court will not

reverse on appeal.” Holden v. Holden, 31 Va. App. 24, 27, 520 S.E.2d 842, 844 (1999) (citing

Ellington v. Ellington, 8 Va. App. 48, 56, 378 S.E.2d 626, 630 (1989)); see also Hart v. Hart, 27

Va. App. 46, 53, 497 S.E.2d 496, 499 (1998). And, on appeal, “[t]he judgment of the trial court

is presumed to be correct[,] and the party who asserts the contrary is required to overcome the

presumption by record proof.” Broom v. Broom, 15 Va. App. 497, 504, 425 S.E.2d 90, 94

(1992).

Here, neither husband nor wife made any significant non-monetary contributions to the

marriage. Husband, however, contributed substantial monetary assets to the marriage, earning

more than $6.3 million in stock options and salary over the course of the marriage. Wife, by

contrast, was unemployed throughout the marriage, and she contributed relatively few monetary

assets to the marriage. Of the three grounds the commissioner identified as leading to the

dissolution of the marriage, wife was solely responsible for one of those grounds, and jointly

responsible for the other two. There were no children born during this marriage, and it was of a

relatively short duration. During the marriage, wife was “largely self-absorbed, dominating, and

often threatened divorce,” whereas husband “was principally devoted to his work, lived

modestly, and financed his wife’s lavish shopping and expenditures without significant

objection.” Considering all of these circumstances, and for the reasons discussed in more detail

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below, we hold that the trial court did not abuse its discretion in awarding husband

approximately two-thirds6 of the marital assets.

1. Consideration of Husband’s Dissipation of Assets

Wife contends that the trial court abused its discretion by failing to adequately consider

“that Husband committed Two Hundred Fifty-Nine Thousand Dollars ($259,000) of waste.” The

record, however, does not support wife’s argument. In its letter opinion, the trial court explicitly

stated that “[t]hese awards are . . . inclusive of findings that [husband] committed waste, both in

the sale of the gold coins shortly before trial and dissipation of the assets from the E-Trade

Account amounting to $259,000, and assumes [wife’s] entitlement to half the value of those

assets, or $129,500.” (Emphasis added).7 Contrary to wife’s assertion, then, the trial court

expressly considered husband’s dissipation of marital assets, and factored that dissipation into

wife’s equitable distribution award. Thus, this assignment of error is without merit.

2. Wife’s Contributions of Separate Property

Wife next contends that the trial court abused its discretion in failing to adequately

account for the fact that “Wife made substantial monetary contributions of her separate property

to the marriage and toward the Husband’s separate debt.” Wife notes that she “came into the

marriage with nearly Six Hundred Thousand Dollars ($600,000) in separate funds, and that the

vast majority of those funds were depleted during the marriage” and that husband “came into the

6
There is some dispute as to whether the ratio of distribution should be classified as 67%
to 33% or 71% to 29%. Regardless of which ratio is used, however, we hold that the trial court
did not abuse its discretion in awarding husband a substantially larger share of the marital estate.
7
In her reply brief, wife states that “[t]he trial court did NOT find, as the Husband
alleges, that the Husband’s violation of the pendente lite non-dissipation order . . . constituted
waste.” (Emphasis in original). Wife’s repeated mischaracterization of the record below
troubles us.
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marriage with approximately Four Hundred Thousand Dollars ($400,000) in debt, all of which

was retired during the marriage.”

Again, wife’s argument is directly contradicted by the record itself. In its letter opinion,

the trial court expressly found:

It is apparent that [wife’s] premarital assets afforded liquidity to
the marriage, before [husband] began receiving and cashing in his
Network Solutions stock options. I also find that [wife’s] stock
market trading eventuated in significant but un-quantifiable losses.
On balance, I conclude that the diminution of [wife’s] premarital
assets is offset by the expenditure of [husband’s] salary and stock
options to her benefit during the marriage.

(Emphasis added).8 Thus, the trial court expressly considered wife’s contribution of pre-marital

assets when it entered the equitable distribution award.

Wife, however, relying on the quoted paragraph, contends that the trial court found that

her initial contribution of pre-marital assets balanced all of husband’s later monetary

contributions, resulting in an equal contribution of monetary assets to the marriage. We do not

accept wife’s strained and rather fanciful interpretation of this language. The trial court clearly

found that wife’s contribution of pre-marital assets was balanced by husband’s later expenditure

of funds on her behalf, not by husband’s entire contribution of $6.3 million in assets.

Because the trial court clearly considered wife’s contribution of pre-marital assets in

distributing the marital estate, this argument is without merit.

8
The court noted that, “[i]n addition to [wife’s] lack of credibility, she failed to produce
evidence related to her brokerage accounts,” further observing that “[t]his failure lends added
credence to [husband’s] testimony both (1) that his wife heavily engaged in stock market
transactions and suffered huge losses and (2) that he had contributed funds from his stock option
sale to cover these stock trading losses.”
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 3. Award of Carry-Over Stock Losses to Husband for Tax Purposes

Wife next contends that the trial court abused its discretion by awarding “Husband any

future tax write-offs to which the parties might be entitled.” Wife reasons that “[t]his award

appears not to correspond with the Trial Court’s additional finding that the Wife, rather than the

Husband, was responsible for the stock trading decisions which resulted in the stock losses” and

that the award thereby “increased the Husband’s disproportionate share of the marital estate.”

Wife cites no authority for the proposition that a tax write-off should be distributed to the

party responsible for that loss. Indeed, the very proposition is counterintuitive to the overall

purpose of equitable distribution: to give each party a “fair” portion of the property accumulated

during the marriage. See Theismann v. Theismann, 22 Va. App. 557, 564-65, 471 S.E.2d 809,

812 (“The goal of equitable distribution is to adjust the property interests of the spouses fairly

and equitably.”), aff’d on rehearing en banc, 23 Va. App. 697, 479 S.E.2d 534 (1996). It would

be vastly inequitable to permit a party to deflate the marital estate by gambling away marital

funds on the stock market, and then to grant that same party a benefit in the form of a subsequent

tax write-off.

Because wife advances no further arguments in support of this assignment of error, we

conclude that the trial court did not abuse its discretion in awarding husband the carry-over tax

losses. See Rule 5A:20(e).

4. Wife’s Fraudulent Inducement of the Marriage

Finally, wife contends that the trial court’s equitable distribution award “is not supported

by evidence in the record relevant to the statutory factors.” Wife argues that, although “[t]he

Trial Court made a recitation that it had considered all the factors . . . in its letter opinion, the

Trial Court only discussed some of the factors, and the evidence related to those factors does not

support the division of property and allocation of debt.”
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 As wife correctly notes, in performing equitable distribution, the trial court is required to

consider all the factors enumerated in Code § 20-107.3(E). See Alphin v. Alphin, 15 Va. App.

395, 405, 424 S.E.2d 572, 577 (1992). This requires more than a mere recitation that all of the

statutory factors have been considered. See id. at 405, 424 S.E.2d at 578. Thus, where the trial

court states without further explanation that it has considered each of the statutory factors, we

“must examine the record to determine if the award is supported by evidence relevant to those

factors.” Id.

Code § 20-107.3(E) requires the trial court to consider the following factors before

entering an equitable distribution award:

1. The contributions, monetary and nonmonetary, of each party to
the well-being of the family;

2. The contributions, monetary and nonmonetary, of each party in
the acquisition and care and maintenance of such marital
property of the parties;

3. The duration of the marriage;

4. The ages and physical and mental condition of the parties;

5. The circumstances and factors which contributed to the
dissolution of the marriage, specifically including any ground
for divorce under the provisions of subdivisions (1), (3) or (6)
of § 20-91 or § 20-95;

6. How and when specific items of such marital property were
acquired;

7. The debts and liabilities of each spouse, the basis for such debts
and liabilities, and the property which may serve as security for
such debts and liabilities;

8. The liquid or nonliquid character of all marital property;

9. The tax consequences to each party;

10. The use or expenditure of marital property by either of the
parties for a nonmarital separate purpose or the dissipation of

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 such funds, when such was done in anticipation of divorce or
separation or after the last separation of the parties; and

11. Such other factors as the court deems necessary or appropriate
to consider in order to arrive at a fair and equitable monetary
award.

As discussed above, before entering the equitable distribution award, the trial court

expressly considered, inter alia, the monetary and non-monetary contributions of both parties,

the duration of the marriage, the age of both parties, and the factors leading to the dissolution of

the marriage. Indeed, wife does not contend that the trial court failed to give inadequate weight

to any of the above-listed statutory factors. Rather, she contends that the trial court placed

inappropriate weight on her pre-marriage misrepresentations about the number of times she had

previously been married.

Code § 20-107.3(E) does not expressly list “fraudulent inducement of the marriage” as a

factor that should be considered during equitable distribution. Thus, the trial court was not

required by statute to give any weight to wife’s fraudulent inducement of the marriage.

Regardless, under the circumstances of this case, we hold that the court properly gave some, but

not controlling, weight to wife’s pre-marriage misrepresentations.9 And, because the trial court

did not abuse its discretion when it took those misrepresentations into consideration, we affirm

the equitable distribution award. Cf. Barker, 27 Va. App. at 540, 500 S.E.2d at 251 (affirming

9
Husband, however, contends that the trial court “gave no indication that it adjusted
[wife’s] award because of her fraud.” We disagree. The trial court expressly stated that it was
“taking into account all of the evidence” when it entered the equitable distribution award. The
court also observed that it considered wife’s “un-denied misrepresentations made at the
beginning of the marriage” when deciding that her testimony generally lacked credibility. Thus,
the record indicates both that the court was aware of wife’s misrepresentations and that it took
those misrepresentations into account when weighing the evidence and resolving conflicting
testimony. Thus, the record does not support husband’s argument that the trial court utterly
disregarded wife’s misrepresentations when it entered the equitable distribution award.
Regardless, even if the trial court had declined to consider wife’s fraudulent inducement of the
marriage, this decision would not necessarily have amounted to an abuse of discretion.
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equitable distribution award where “[t]he 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,” reasoning that “[i]n 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”).

Initially, we agree with husband that the record supports a finding that wife induced the

marriage through her fraudulent misrepresentations.10 Specifically, husband testified that, had he

known wife had already been married four times, he would not have married her. And, as the

commissioner observed:

There is a substantial difference between marrying someone with
one former marriage and marrying someone with four. At the very
least, the difference is important enough that the other party should
have the right to know, to try to understand, and to decide whether
to go ahead with the relationship. [Wife] made a material
misrepresentation on her marriage certificate, and the
Commissioner believes the [husband’s] testimony that he did not
know at the time of their marriage, and for three years thereafter,
that she had more than one prior marriage.

10
In this divorce proceeding, wife served husband with a “Request for Admissions”
pursuant to Rule 4:11. In her pleading, wife requested, inter alia, that husband admit “[t]hat all
of the allegations contained in the attached Motion for Judgment [that husband had filed in his
separate action at law] are true and accurate.” Among those allegations are statements that wife
“induced [husband] to marry her through a carefully crafted scheme to defraud,” that wife made
various misrepresentations of fact “knowingly and intentionally, and with actual knowledge that
they were false . . . for the specific purpose of misleading [husband], and to induce him to rely on
them in marrying her,” and that husband “reasonably and detrimentally relied upon these
statements in marrying [wife].”
Husband, unsurprisingly, responded to wife’s Request for Admissions by “[a]dmit[ting]
that all of the allegations contained in the [] Motion for Judgment are true and accurate.” Thus,
despite wife’s assertions to the contrary, husband’s admission that the allegations contained in
the Motion for Judgment were “true and accurate” establishes those allegations as true for
purposes of this proceeding. See Rule 4:11(b) (“Any matter admitted under this Rule is
conclusively established . . . for the purpose of the pending action only . . . .”).
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The commissioner found, and the trial court accepted, that wife’s fraudulent misrepresentation

was one of three factors that led to the dissolution of the marriage. Indeed, wife concedes, both

in her appeal and in husband’s separate appeal, that her misrepresentation factored into the

dissolution of the marriage.

According to Code § 20-107.3(E), when entering an equitable distribution award, the trial

court must consider both “[t]he circumstances and factors which contributed to the dissolution of

the marriage,” Code § 20-107.3(E)(5), 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.” Code

§ 20-107.3(E)(11). Here, wife’s misrepresentation was both a factor that may have been

“necessary or appropriate to consider in order to arrive at a fair and equitable monetary award,”

id., and a “factor[] which contributed to the dissolution of the marriage.” Code § 20-107.3(E)(5).

Fraud in the inducement of a marriage is a situation the trial court would be permitted, in

its discretion, to consider under Code § 20-107.3(E)(11) “in order to arrive at a fair and equitable

monetary award.” As husband testified, had wife not made her various misrepresentations, there

would have been no marriage, and therefore no marital estate to divide. We further note that the

fact that these misrepresentations occurred before the marriage does not bar their consideration,

for “[n]othing in Code § 20-107.3 limits consideration of the various subsection (E) factors to the

time frame of the marriage.” Floyd v. Floyd, 17 Va. App. 222, 226-27, 436 S.E.2d 457, 460

(1993) (holding that the trial court could “consider[] premarital contributions to the acquisition

or maintenance of property later deemed marital property in fashioning an equitable

distribution”).

Also, we have noted that, although circumstances “that lead to the dissolution of the

marriage but have no effect upon marital property [or] its value . . . need not be considered”

under Code § 20-107.3(E)(5), Aster v. Gross, 7 Va. App. 1, 5-6, 371 S.E.2d 833, 836 (1988)
- 25 -
(emphasis added), a trial court does not automatically abuse its discretion if it takes those factors

into account. As we explained in O’Loughlin v. O’Loughlin, 20 Va. App. 522, 458 S.E.2d 323

(1995), factors and circumstances leading to the dissolution of the marriage may be considered

during equitable distribution – even if those factors have no financial impact on the marriage – as

long as those factors detracted from the overall “marital partnership.” Id. at 528, 458 S.E.2d at

326 (holding that long-term infidelity and abusive behavior could be considered, in the court’s

discretion, “under any of the factors of Code § 20-107.3”); see also Budnick v. Budnick, 42

Va. App. 823, 595 S.E.2d 50 (2004) (trial court did not err in considering criminal business

activities under Code § 20-107.3(E)(1)); Watts v. Watts, 40 Va. App. 685, 581 S.E.2d 224

(2003) (trial court did not err in considering husband’s adultery under Code § 20-107.3(E)(1) and

former § 20-107.3(E)(10)).

Here, wife’s ongoing misrepresentation had a negative non-monetary impact on the

marriage. The evidence establishes not only that wife lied to husband at the beginning of the

marriage, but that she continued to do so throughout the marriage. More importantly, when

husband discovered in June 2001 that wife had neglected to tell him about one prior marriage, he

ceased all sexual relations with wife.11 Overall, then, wife’s misrepresentation – in addition to

contributing to the dissipation of the marriage – had a non-monetary, negative impact on the

marriage. Thus, to the extent that trial court did consider wife’s misrepresentation when it

calculated the equitable distribution award, the court did not abuse its discretion.

However, we decline to hold, as husband suggests, that wife’s fraudulent inducement of

the marriage should act as a complete bar to receiving marital assets in an equitable distribution

proceeding. Eliminating wife’s equitable distribution award would, in essence, be equivalent to

11
Husband did not separate from wife until he learned several months later that there
were, in fact, four prior marriages.
- 26 -
declaring the marriage void ab initio. Because husband did not challenge the validity of the

marriage in an annulment proceeding, we must assume that a valid marriage existed.12 Thus, we

cannot eliminate wife’s award in its entirety. Cf. Kleinfield v. Veruki, 7 Va. App. 183, 190, 372

S.E.2d 407, 411 (1988) (holding that the trial court has no jurisdiction to fashion an equitable

distribution award if the marriage is void ab initio).

Moreover, although divorce cases are resolved in chancery, “‘[t]he many limitations, both

in respect to jurisdiction and procedure, placed upon divorce suits by [] statute, differentiate the

divorce case from ordinary suits in equity and render it a chancery case sui generis.’”

Westbrook v. Westbook, 5 Va. App. 446, 455-56, 364 S.E.2d 523, 529 (1988) (quoting McCotter

v. Carle, 149 Va. 584, 593, 140 S.E. 670, 673 (1927) (first alteration in original)). In other

words, a chancery court exercising jurisdiction over a divorce proceeding has “limited statutory

12
We note that both parties discuss at length whether fraud in the inducement of a
marriage would constitute proper grounds for obtaining an annulment under Virginia law.
However, issues relating to the validity and voidability of a marriage are generally determined
based on the law of the jurisdiction where the marriage was celebrated, barring a conflict with
Virginia’s established public policy. See Farah v. Farah, 16 Va. App. 329, 429 S.E.2d 626
(1993); Kleinfield v. Veruki, 7 Va. App. 183, 372 S.E.2d 407 (1988). Here, the parties were
married in Florida. Although neither party has addressed the issue, Florida law is quite clear that
fraudulent inducement is not grounds for an annulment after the parties have consummated the
marriage. See Adler v. Adler, 805 So. 2d 952, 953 (Fla. Ct. App. 2001) (holding that the trial
court erred in granting annulment on grounds of fraudulent inducement where wife “stated to
[husband] that she had been married two times,” she “was actually married four times, and all of
those marriages ended by divorce,” she “also misrepresented the number of previous marriages
on her marriage application with the state of Florida,” and husband testified that “he would not
have married [wife] had he been aware of her actual marital history,” reasoning that “‘it is
established law that one who has become a party to that ceremony by fraud of the other party
may secure annulment [only] if the marriage has not been completed by sexual intercourse’”
(quoting Rubenstein v. Rubenstein, 46 So. 2d 602, 603 (Fla. 1950))); see also Tsapelas v.
Tsapelas, 69 So. 2d 315, 316 (Fla. 1954) (chancellor did not abuse his discretion in declining to
annul a marriage where wife fraudulently induced marriage by failing to disclose that she had
tuberculosis); Savini v. Savini, 58 So. 2d 193 (Fla. 1952) (affirming denial of annulment of
grounds of fraud based on concealment of prior criminal history, reasoning that the parties had
already consummated the marriage); Rubenstein v. Rubenstein, 46 So. 2d 602, 604 (Fla. 1950)
(noting that “lack of consummation is a prerequisite to the annulment of a marriage on the
ground of fraud”).
- 27 -
jurisdiction.” Id. For this reason, traditional equitable defenses – such as “unclean hands” – are

unavailable when asserted in the context of an equitable distribution proceeding. See id. at 457,

364 S.E.2d at 530. Permitting husband to argue that wife is not entitled to an equitable

distribution award because of her fraudulent inducement of the marriage would be equivalent to

reviving fraud as a defense to equitable distribution, thereby thwarting the “purpose and intent of

Code § 20-107.3.” Id. at 457-58, 364 S.E.2d at 530.

Finally, we note that wife’s equitable distribution award, which totaled approximately

$800,000 when combined with her separate property, is not significantly greater than the

$600,000 in pre-marital assets that she contributed to the marriage. Considering that husband’s

award of approximately $1.3 million was significantly in excess of his pre-marital assets, wife

did not, as husband contends, “profit [] handsomely from her fraud.” Although wife recognized

a net gain in assets, this gain was not so overwhelming as to signal an abuse of discretion.

III. CONCLUSION

In determining an equitable distribution award, the trial court must make “delicate and

difficult judgments,” Bentz v. Bentz, 2 Va. App. 486, 490, 345 S.E.2d 773, 775 (1986), and

“weigh[] the many considerations and circumstances that are presented in each case.” Klein v.

Klien, 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 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). Considering all of the circumstances of this case, we hold that the trial court did not

err either in classifying the marital property or distributing the marital estate. Thus, we affirm

the judgment of the trial court.

Affirmed.
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