Congdon v. Congdon

COURT OF APPEALS OF VIRGINIA

Present: Judges Frank, Felton and Kelsey
Argued at Richmond, Virginia

JOHN RHODES CONGDON, JR.
OPINION BY
v. Record No. 0522-02-2 JUDGE D. ARTHUR KELSEY
APRIL 8, 2003
MARY EVELYN DAVIS CONGDON

FROM THE CIRCUIT COURT OF HENRICO COUNTY
Lawrence D. Diehl, Judge Pro Tempore

Donald K. Butler (Mary Beth Joachim; Morano,
Colan, Cook & Butler, on briefs), for
appellant.

Terrence R. Batzli (Charles E. Powers;
Barnes & Batzli, on brief), for appellee.

In this divorce case, John Rhodes Congdon claims the trial

court erred by awarding his wife spousal support despite her

admitted adultery during the marriage. The trial judge, the

husband argues, misapplied the manifest injustice exception to

Code § 20-107.1(B)'s statutory bar against awarding support to

adulterers. In addition to defending her award of support, Mary

Evelyn Davis Congdon claims that the trial court erred in its

equitable distribution calculation of the marital share of the

appreciation of her husband's separately owned stock in the family

trucking business.

We agree with the husband that the trial judge misread our

precedents on the manifest injustice exception, but we nonetheless
affirm because his factual findings support the result reached

under a proper interpretation of the law. As to the equitable

distribution calculation of stock appreciation, we disagree with

the wife and find no reversible error in the trial court's method

of classifying the increase in stock value.

I.

When reviewing a trial court's decision on appeal, we view

the evidence in the light most favorable to the prevailing party,

granting it the benefit of any reasonable inferences. Wright v.

Wright, 38 Va. App. 394, 398, 564 S.E.2d 702, 704 (2002); Donnell

v. Donnell, 20 Va. App. 37, 39, 455 S.E.2d 256, 257 (1995). That

principle requires us to "'discard the evidence'" of the appellant

which conflicts, either directly or inferentially, with the

evidence presented by the appellee at trial. Wactor v.

Commonwealth, 38 Va. App. 375, 380, 564 S.E.2d 160, 162 (2002)

(quoting Watkins v. Commonwealth, 26 Va. App. 335, 348, 494 S.E.2d

859, 866 (1998)). We view the facts of this case, therefore,

through this evidentiary prism.

Mary Evelyn Davis (known as Lynn) and John Rhodes Congdon

married in 1977. During their twenty-two year marriage, the

couple had three children. John filed for divorce in 1999

alleging adultery, and Lynn filed a cross-bill asserting cruelty

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and constructive desertion. The parties agreed to the appointment

of a judge pro tempore to decide the case. 1

In addition to receiving depositions, the trial judge heard

testimony ore tenus from multiple witnesses over four days. Much

of the testimony described the nature of the marriage and the

circumstances that led to its dissolution. At the beginning of

the trial, Lynn conceded that she was guilty of adultery and did

not contest John's request for a final divorce on this ground.

The evidence showed that she engaged in an extramarital affair for

at least five years during the marriage.

Viewed in the light most favorable to Lynn, however, the

evidence also portrayed John as a profane and verbally abusive

man. John frequented "strip joints and topless bars" and told

Lynn about, among other things, the "oil wrestlers" that performed

at these places. He would indiscriminately engage in these

conversations in the presence of his children and Lynn's family,

at times even "boasting or bragging about those places." "It was

not an infrequent topic of conversation." John went to these

places, he explained to one witness, "because they have the best

p----." John "frequently talked crudely about sexual type

1
Under Code § 17.1-110, a judge pro tempore is "vested with
the same power and authority and shall be charged with the same
duties as to the cause in and as to which he is appointed as
though he were the regularly elected and qualified judge of such
court."
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things." He carried on with this practice "[p]retty much the same

the whole 20 years."

John also directed his profanity toward his children. In one

instance, John's son Michael had accidentally kicked his father's

head while both were lying on a bed watching television. Though

realizing it was simply an accident, John "started yelling . . .

God damn you, Michael. Why in the f--- did you kick me in the

face. . . . Why did you f---ing have to kick me in the face?" In

response, Michael ran out of the house. On another occasion, John

was having a "food fight" with his twelve-year-old daughter when

John accidentally got hit in the eye. He "started screaming . . .

God damn you. God damn, you hit me in the eye." His daughter

"just sat there and started crying," not at all understanding her

father's outburst. Other times John would come home from work

angry and declare, in ear-shot of his children, that "one of the

girls at the office" was a "bitch or a c---." His use of

vulgarity, in the presence of his family and others, "was quite

frequent."

Several witnesses who knew John and Lynn over the years

testified that they had never once seen John show any affection or

any kindness toward Lynn. Over the course of the marriage, John

chronically complained (both to Lynn and others) about Lynn's

weight, appearance, housekeeping, and spending habits. John

referred to Lynn as "Witch." He was a "heavy drinker," sometimes

starting as early as "10:00 in the morning." Because John
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maintained strict control over the financial accounts, Lynn was

not "privy to the family finances at any time during the

marriage." John particularly disliked Lynn's family and

threatened on one occasion to move her out of town if she did not

"stop speaking with her parents."

Despite these problems, John and Lynn enjoyed considerable

financial security. John has a college degree, a stable and

long-term career in a family trucking business, an annual salary

exceeding $250,000, and additional income from corporate dividends

and family related gifts. John's interests in stocks, real

estate, and tangible assets exceeded $6 million. In contrast,

Lynn has not held a full time job since the early years of her

marriage, choosing instead to stay at home to raise their three

children. She has no college degree, giving her a future earning

capacity far below her husband's. At the time of trial, Lynn was

earning $10.00 an hour as a receptionist.

The trial court also heard evidence that John's stock in his

family business increased in value over the course of the

marriage. Conceding that John acquired the shares as a gift from

his family and thus should be considered separate property, Lynn

argued that under Code § 20-107.3(A)(3)(a) the appreciation

portion of the stock's present value should be treated as marital

property. In reply, John presented extensive testimony on the

internal management of the business and the role of six other key

employees in the company's success.
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 After the close of the evidence, the trial court issued a

comprehensive letter opinion detailing each aspect of the court's

rulings on divorce grounds, equitable distribution, and spousal

support. On the first issue on appeal, the adultery bar against

spousal support, the court invoked the "manifest injustice"

exception in Code § 20-107.1(B). After considering the additional

factors in Code § 20-107.1(E), the court awarded support of $2,300

per month to Lynn to continue until her death or remarriage. On

the second issue on appeal, the classification (marital or

separate property) of the stock appreciation, the court found that

90% of the increase in value should be deemed separate property

given the extensive efforts of other key employees and the extent

of "passive growth" in the stock value.

II.

Under Code § 8.01-680, a factual determination cannot be

reversed on appeal unless "plainly wrong or without evidence to

support it." See Schweider v. Schweider, 243 Va. 245, 250, 415

S.E.2d 135, 138 (1992); Torian v. Torian, 38 Va. App. 167, 181,

562 S.E.2d 355, 362 (2002). This standard applies to a "trial

court's decision to award spousal support to a party despite his

or her adultery" as it does to any other domestic relations

case. Rahbaran v. Rahbaran, 26 Va. App. 195, 212, 494 S.E.2d

135, 143 (1997) (citing Williams v. Williams, 14 Va. App. 217,

219, 415 S.E.2d 252, 253 (1992)).

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 "Whether and how much spousal support will be awarded is a

matter of discretion for the trial court." Northcutt v.

Northcutt, 39 Va. App. 192, 196, 571 S.E.2d 912, 914 (2002)

(quoting Barker v. Barker, 27 Va. App. 519, 527, 500 S.E.2d 240,

244 (1998)). On appeal, a trial court's decision on this

subject will not be reversed "unless there has been a clear

abuse of discretion." Id. (quoting Moreno v. Moreno, 24

Va. App. 190, 194-95, 480 S.E.2d 792, 794 (1997)); see also

Gottlieb v. Gottlieb, 19 Va. App. 77, 84, 448 S.E.2d 666, 671

(1994).

An abuse of discretion can be found if the trial court uses

"an improper legal standard in exercising its discretionary

function," Thomas v. Commonwealth, 263 Va. 216, 233, 559 S.E.2d

652, 661 (2002), because a trial court "'by definition abuses

its discretion when it makes an error of law,'" Shooltz v.

Shooltz, 27 Va. App. 264, 271, 498 S.E.2d 437, 441 (1998)

(quoting Koon v. United States, 518 U.S. 81, 100 (1996)). See

also Mughrabi v. Commonwealth, 38 Va. App. 538, 545, 567 S.E.2d

542, 545 (2002). An abuse of discretion also exists if the

trial court fails to consider the statutory factors required to

be part of the decisionmaking process, Rowe v. Rowe, 24 Va. App.

123, 139, 480 S.E.2d 760, 767 (1997), or makes factual findings

that are plainly wrong or without evidence to support them,

Northcutt, 39 Va. App. at 196, 571 S.E.2d at 914.

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 III.

A.

John challenges the trial court's award of spousal support to

his wife. Code § 20-107.1(B) bars an award of support to any

spouse found guilty of adultery, John argues, except in narrow

circumstances not present in this case. John disagrees with the

trial court's interpretation of Code § 20-107.1(B), as well as its

factual findings in support of applying the statutory exception.

We agree with John that the trial court restated the § 20-107.1(B)

standard incorrectly, but conclude that the trial court's factual

findings support its decision in any event.

With respect to spousal support, Code § 20-107.1(B) provides

that "no permanent maintenance and support shall be awarded from a

spouse if there exists in such spouse's favor a ground of divorce

under the provisions of subdivision (1) of § 20-91," which

includes adultery. This statute bar, however, is subject to a

narrow exception:

However, the court may make such an award
notwithstanding the existence of such ground
if the court determines from clear and
convincing evidence, that a denial of support
and maintenance would constitute a manifest
injustice, based upon the respective degrees
of fault during the marriage and the relative
economic circumstances of the parties.

Code § 20-107.1(B). The language of this statute circumscribes

the scope of the exception in three ways.

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 First, the evidence must rise to the level of "clear and

convincing" proof. A more stringent standard than preponderance

of the evidence, "clear and convincing" proof requires "that

measure or degree of proof which will produce in the mind of the

trier of facts a firm belief or conviction as to the allegations

sought to be established." Lanning v. Va. Dept. of Transp., 37

Va. App. 701, 707, 561 S.E.2d 33, 36 (2002) (citations omitted).

"It is intermediate, being more than a mere preponderance," but

less than the criminal "reasonable doubt" standard. Gifford v.

Dennis, 230 Va. 193, 198 n.1, 335 S.E.2d 371, 373 n.1 (1985)

(citation omitted).

Second, the exception applies only in cases of "manifest

injustice." The expression, often found outside of domestic

relations law, has been used synonymously with the phrase

"miscarriage of justice." Harris v. DiMattina, 250 Va. 306,

318, 462 S.E.2d 338, 343 (1995) (interpreting the duty imposed

by Code § 8.01-1 on trial courts to prevent unjust results in

the application of a new provision of law). The "manifest

injustice" expression also serves as shorthand for the narrow

exception to Rule 5A:18's contemporaneous objection requirement.

M. Morgan Cherry & Assocs. v. Cherry, 38 Va. App. 693, 702, 568

S.E.2d 391, 396 (2002). The legislature has put the expression

to use limiting the ability of a criminal defendant to withdraw

a guilty plea after judgment. See Code § 19.2-296 (after

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judgment, a guilty plea may be withdrawn only "to correct

manifest injustice").

Third, the statute limits the fact finder's discretion to

two specific variables: (i) the relative degrees of fault and

(ii) the economic disparities between the parties. The statute

requires the decision to be "based upon" these factors. Code

§ 20-107.1(B). This language implies a higher level of

justification than a statutory command that merely requires the

trial judge to consider this or that factor.

In this case, the dispute focuses on whether the trial

court must base its decision on both variables or may rest it

exclusively on only one. John argued before the trial court

that under Code § 20-107.1(B) a trial court "must consider and

weigh both prongs of the test for manifest injustice."

(emphasis in original). The trial court disagreed, concluding

that under Calvin v. Calvin, 31 Va. App. 181, 186, 522 S.E.2d

376, 378 (1999), "it can be argued that only a finding of a

manifest injustice as to either prong is sufficient to overcome

the bar to support."

The trial judge erred in reading our precedent to permit a

purely disjunctive test, one in which the manifest injustice

conclusion could be based on either the relative degrees of

fault or the economic disparities of the parties. "In order to

find that denial of support will constitute a manifest

injustice, the court must base that finding on the parties'
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comparative economic circumstances and the respective degrees of

fault." Barnes v. Barnes, 16 Va. App. 98, 101-03, 428 S.E.2d

294, 298 (1993) (emphasis in original). We italicized the word

"and" in Barnes precisely because the statute makes clear that

the decision must be rooted in both factors. 2

We disagree with the trial court's view that Calvin

effectively retooled Code § 20-107.1(B) into a disjunctive test.

In Calvin, we noted only that the "respective degrees of fault"

in that case weighed "heavily" in favor of the husband because

of the wife's adultery and, thus, any manifest injustice

resulting from a denial of spousal support "must derive from the

relative economic circumstances of the parties." Calvin, 31

Va. App. at 186, 522 S.E.2d at 378. We made that observation

based upon the facts in the appellate record and the specific

argument presented to us on appeal. The appellee in Calvin did

not file a brief on appeal or participate in oral argument. Id.

at 182 n.1, 522 S.E.2d at 376 n.1. Calvin did not expressly

mention, much less analyze, whether Code § 20-107.1(B) requires

2
In Barnes, 16 Va. App. at 103, 428 S.E.2d at 298, for
example, we noted that the marriage disintegrated because of the
"mutual inattention and fault of both parties." The wife's
post-separation adultery occurred long after the marriage had
been "irretrievably lost." Id. As a result, we held that the
"trial judge did not disregard the parties' respective degrees
of fault during the marriage and base her finding of manifest
injustice solely upon the parties' disproportionate economic
circumstances." Id. at 102, 428 S.E.2d at 298.
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a conjunctive or a disjunctive test. To be sure, Calvin cited

Barnes without noting any conflict between the two decisions.

Under Virginia law, a decision of one panel "becomes a

predicate for application of the doctrine of stare decisis" and

cannot be overruled except by the Court of Appeals sitting en

banc or by the Virginia Supreme Court. Johnson v. Commonwealth,

252 Va. 425, 430, 478 S.E.2d 539, 541 (1996). This principle

applies not merely to the literal holding of the case, but also

to its ratio decidendi —— the essential rationale in the case

that determines the judgment. Absent a clear indication to the

contrary, therefore, we must presume that the panel deciding

Calvin did not intend to undermine Barnes.

Despite the trial court's mistaken restatement of the legal

standard, the court made alternative factual findings on both

prongs of Code § 20-107.1(B). On the "respective degrees of

fault" factor, the trial court correctly observed that in this

context fault "encompasses all behavior that affected the

marital relationship, including any acts or conditions which

contributed to the marriage's failure, success, or well-being."

See Barnes, 16 Va. App. at 102, 428 S.E.2d at 298. Using this

definition, the trial court rejected the contention that Lynn's

adultery rendered the balance of wrongdoing "completely

one-sided." Though the trial court did not enumerate the

various aspects of fault attributable to John, Code

§ 20-107.1(B) does not require that this enumeration be done.
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What § 20-107.1(B) does require, the trial judge did. He

weighed the respective degrees of fault by considering the

essential question of culpability for the marriage's demise.

The ultimate issue remains, then, whether clear and

convincing evidence of John's and Lynn's respective degrees of

marital fault —— coupled with an examination of the economic

disparities between them —— supports a finding of manifest

injustice. This issue resolves itself under our appellate

review standard. Under this standard, if "the record contains

credible evidence in support of the findings made by that court,

we may not retry the facts or substitute our view of the facts

for those of the trial court." Calvin, 31 Va. App. at 183, 522

S.E.2d at 377 (quoting Ferguson v. Stafford County Dep't of

Social Servs., 14 Va. App. 333, 336, 417 S.E.2d 1, 2 (1992)).

On the "respective degrees of fault" issue, the evidence

before the trial judge pits Lynn's admitted adultery against

John's twenty-year showing of base and profane behavior, not

only with his wife, but with his children and his extended

family. We believe a reasonable jurist could put John's "fault"

in a league apart from the type of mere incivility or petulance

of manners ordinarily alleged, and often proved, in nearly every

contested divorce case. We thus dismiss as exaggerated John's

argument that sustaining the trial court's finding on these

facts would effectively write the "respective degrees of fault"

factor out of Code § 20-107.1(B). Nor do we believe, as John
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contends, that the trial court's finding essentially declares

that John's behavior "amounted to a justification for adultery."

The law does not excuse, condone, or justify Lynn's infidelity.

But neither does the law turn a blind eye to John's behavior,

which multiple witnesses described as both unrestrained and

longstanding.

On the second factor, the "relative economic circumstances

of the parties," Code § 20-107.1(B), the trial court found

"extreme disparities in their relative economic situations, both

in terms of earning capacity, current incomes and other economic

assets and resources." Ample evidence supports this finding.

John has a secure job with a family company paying over $250,000

a year plus corporate dividends and family related gifts.

John's interests in stocks, real estate, and tangible assets

exceeds $6 million. On the other hand, Lynn has no separate

assets of any significance and holds down a $10.00-an-hour job

as a receptionist.

For these reasons, the trial court was not plainly wrong in

finding, by clear and convincing evidence, that denying spousal

support under Code § 20-107.1(B) would constitute a "manifest

injustice" based upon the respective degrees of fault

attributable to John and Lynn as well as their disparate

financial circumstances. Because credible evidence supports

that conclusion, we affirm the trial court on this issue.

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 B.

Lynn contends that the trial court erred by not classifying

as marital the full appreciation in John's stock in his family's

trucking company that occurred during the marriage. The court

divided the appreciation component of the stock value into 90%

separate and 10% marital. We find no error in the trial court's

factual findings on this matter.

Separate property that increases in value during the

marriage "shall be marital property only to the extent that

marital property or the personal efforts of either party have

contributed to such increases, provided that any such personal

efforts must be significant and result in substantial

appreciation of the separate property." Code

§ 20-107.3(A)(3)(a). Separate property that has appreciated in

value due to forces other than either party's efforts, such as

passive appreciation or the personal efforts of others, remains

separate property. See Martin v. Martin, 27 Va. App. 745, 750,

501 S.E.2d 450, 452 (1998) (en banc). In addition,

the nonowning spouse shall bear the burden
of proving that (i) contributions of marital
property or personal effort were made and
(ii) the separate property increased in
value. Once this burden of proof is met,
the owning spouse shall bear the burden of
proving that the increase in value or some
portion thereof was not caused by
contributions of marital property or
personal effort.

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Code § 20-107.3(A)(3)(a); see Gilman v. Gilman, 32 Va. App. 104,

120, 526 S.E.2d 763, 771 (2000). Slight efforts are not enough;

the nonowning spouse must prove that personal efforts "were

significant and resulted in substantial appreciation of separate

property." Bchara v. Bchara, 38 Va. App. 302, 314, 563 S.E.2d

398, 404 (2002).

In this case, credible evidence supports the trial court's

determination that John's stock appreciated greatly because of

passive growth and the efforts of others. The court examined in

detail the "extent that Mr. Congdon's efforts were an active

part of the company's overall growth." Taking into account that

John's father, brother, and other key officers played more

active managerial roles in the family business, the trial court

found John's efforts contributed to only 10% of the stock

appreciation. See Rowe v. Rowe, 24 Va. App. 123, 133-34, 480

S.E.2d 760, 764-65 (1997) (recognizing that brother's efforts

and growth in surrounding areas undermined the significance of

husband's contributions to the stock's increase in value);

Decker v. Decker, 17 Va. App. 12, 17-18, 435 S.E.2d 407, 411-12

(1993) (finding that husband's value to company illustrated his

"substantial contribution" to the stock's increase in value).

Lynn has not shown this factual finding to be plainly erroneous

or without evidence to support it.

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 IV.

The trial court did not err in awarding spousal support

under the "manifest injustice" exception to the adultery bar of

Code § 20-107.1(B). Despite articulating the legal standard

incorrectly, the court's factual findings show that it applied

both factors in reaching its decision. We thus reject John's

challenge to the support award.

We also affirm the trial court's decision to classify 90%

of the stock appreciation as separate property. The court

applied Code § 20-107.3(A) properly and rested its conclusion on

a satisfactory factual basis.

Affirmed.

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