COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Fitzpatrick, Judges Benton and Clements Argued at Chesapeake, Virginia
ANDREW ANTHONY OTT MEMORANDUM OPINION * BY v. Record No. 0614-00-1 CHIEF JUDGE JOHANNA L. FITZPATRICK JANUARY 16, 2001 SUSAN ANN GELBER OTT
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH Frederick B. Lowe, Judge
Jack E. Ferrebee for appellant.
Henry M. Schwan for appellee.
In this domestic appeal, Andrew A. Ott (husband) appeals from
a final divorce and equitable distribution decree. Husband argues
the trial court erred in: (1) granting Susan A.G. Ott (wife) a
divorce based upon a one-year separation; (2) fixing the date of
separation as August 30, 1997; (3) awarding wife spousal
support; (4) awarding the child dependency exemption to wife;
(5) the valuation of stock and its classification as marital
property; (6) failing to credit husband for taxes paid in the
exercise of stock options; (7) its classification of a portion
of an antique car collection as marital property and its
division of the antique car collection; (8) granting a monetary
* Pursuant to Code § 17.1-413, this opinion is not designated for publication. award to wife; and (9) failing to credit husband for $10,000
given to wife. Finding no error, we affirm.
I. BACKGROUND
Under familiar principles of appellate review, we examine
the evidence in the light most favorable to wife, the prevailing
party below, granting to her evidence all reasonable inferences
fairly deducible therefrom. See Juares v. Commonwealth, 26 Va.
App. 154, 156, 493 S.E.2d 677, 678 (1997). So viewed the
evidence established that Susan and Andrew Ott were married on
August 8, 1978 and had 3 children. In December 1996 or January
1997, husband moved out of the marital home and began living
above the garage. On August 30, 1997, husband left the garage
apartment and moved to an apartment owned by the couple, the
Burlington Road property. On September 4, 1997, wife filed for
divorce on grounds of desertion. Husband filed a cross-bill
alleging constructive desertion by wife.
The case was tried before a commissioner in chancery on
January 4 and 5, 1999. The commissioner filed his initial
report, both parties filed objections and the commissioner later
filed an amended report. Both parties again filed exceptions.
On March 13, 2000, the trial court issued a final divorce decree
confirming and approving the commissioner's report with some
modifications. Husband appeals from numerous of the trial
court's rulings. We address them seriatim.
- 2 - II. GROUNDS FOR DIVORCE
Husband first contends the trial court erred by granting a
divorce based on separation for more than one year rather than
his ground of desertion. Assuming, without deciding, that the
evidence was sufficient to establish desertion, the trial court
was not required to "'"give precedence to one proven ground of
divorce over another."'" Sargent v. Sargent, 20 Va. App. 694,
707, 460 S.E.2d 596, 602 (1995) (quoting Williams v. Williams,
14 Va. App. 217, 220, 415 S.E.2d 252, 253-54 (1992) (quoting
Robertson v. Robertson, 215 Va. 425, 426, 211 S.E.2d 41, 43
(1975))). If multiple grounds for divorce exist, "'the trial
judge can use . . . sound discretion to select the grounds upon
which . . . to grant the divorce.'" Sargent, 20 Va. App. at
707, 460 S.E.2d at 602 (quoting Lassen v. Lassen, 8 Va. App.
502, 505, 383 S.E.2d 471, 473 (1989)). In the instant case, the
evidence established that the parties had been living separate
and apart for more than one year. Therefore, the trial court
did not err in awarding wife a divorce on the ground of the
parties having lived separate and apart without any cohabitation
and without interruption for more than one year.
III. DATE OF SEPARATION
Husband next argues that the trial court erred in fixing
August 30, 1997 as the date of separation rather than January
1997. Resolution of disputed facts is within the purview of the
fact finder. Howell v. Howell, 31 Va. App. 332, 341, 523 S.E.2d
- 3 - 514, 519 (2000). When the trial court accepts the
commissioner's findings of fact, this Court will presume those
findings are correct and the trial court's decision will not be
disturbed on appeal unless plainly wrong or without evidence to
support it. Id.
Code § 20-107.3 provides that property is to be classified
as of "the last separation of the parties, if at such time or
thereafter at least one of the parties intends that the
separation be permanent." Thus, there must not only be a
physical separation but also "proof of an intention on the part
of at least one of the parties to discontinue permanently the
marital cohabitation." Hooker v. Hooker, 215 Va. 415, 417, 211
S.E.2d 34, 36 (1975); see also Luczkovich v. Luczkovich, 26 Va.
App. 702, 713, 496 S.E.2d 157, 162 (1998). Matrimonial
cohabitation consists of more than sexual relations. It also
includes the performance of other marital duties and
responsibilities. See Petachenko v. Petachenko, 232 Va. 296,
299, 350 S.E.2d 600, 602 (1986); see also Dexter v. Dexter, 7
Va. App. 36, 44, 371 S.E.2d 816, 820 (1988).
Husband testified that wife wanted the marriage to end and
demanded that husband move into the bedroom above the garage in
December 1996 and January 1997. Wife denied that this was her
intention and presented evidence that she and husband acted as
husband and wife and that she performed marital duties until he
moved out August 30, 1997. Thus, credible evidence supports the
- 4 - trial court's determination that the parties separated on August
30, 1997 1 when husband moved into the Burlington Road apartment.
IV. SPOUSAL SUPPORT
Husband asserts that the trial court erred in its award of
spousal support. First he argues that Code § 20-107.1(F)
requires "[i]n contested cases in the circuit courts, any order
granting, reserving or denying a request for spousal support
shall be accompanied by written findings and conclusions of the
court identifying the factors in subsection E which support the
court's order." However, the provision requiring written
findings and conclusions "shall apply only to suits for initial
spousal support orders filed on or after July 1, 1998." 1998
Va. Acts, ch. 604, clause 2. This case was filed September 4,
1997, and not subject to the statutory provision requiring
written findings and conclusions.
Husband also argues that the amount of spousal support
awarded, $525 per month, was an abuse of discretion. The
determination of whether a spouse is entitled to support and, if
so, how much support rests within the sound discretion of the
trial court and will be reversed on appeal only if plainly wrong
or unsupported by the evidence. Sargent, 20 Va. App. at 703,
460 S.E.2d at 600. In reaching this decision, the trial court
1 Several of husband's questions presented and/or assignments of error involve the trial court's determination of the date of separation. As such, our holding on this issue is dispositive of those issues appealed by husband.
- 5 - must weigh the needs and abilities of the parties and consider
the factors set forth in Code § 20-107.1. Dukelow v. Dukelow, 2
Va. App. 21, 26, 341 S.E.2d 208, 210 (1986).
In the instant case the commissioner's written findings
supporting the $525/month spousal support award provided:
I have considered all of the statutory factors. I find that the parties had an often contentious marriage for 19 years; that each party will receive a substantial sum of money from the marital assets, including a monthly payment from the husband's military retirement. I further find that the parties' marital debt is not significant in view of their assets. I find that the parties have enjoyed a reasonable standard of living and that their ages, physical and mental conditions will not prevent either of the parties from maintaining current employment, nor are there any special conditions that will interfere with the parties' respective careers.
(Emphasis added). Viewed in the light most favorable to wife,
the prevailing party, husband had an annual income of
$108,293.90, including bonuses, plus $30,758.76 from military
retirement benefits while the wife had an annual income of
$45,604.80 plus $2,720 from summer employment plus $700 from
work over Christmas break plus $4,426.32 from husband's military
retirement benefits. Thus, we cannot say the trial court abused
its discretion in granting a spousal support award of
$525/month.
- 6 - V. CHILD DEPENDENCY EXEMPTION
Husband argues the trial court erred in awarding the child
dependency exemption pursuant to Code § 20-108.1 to wife.
Husband's argument is without merit as the trial court
unequivocally stated "neither party shall be required to sign
documents to grant to the other the right to take the income tax
dependency for any child."
VI. SAIC STOCK
Husband next alleges that 230 shares of SAIC stock he
received in March 1998 should not have been included in the
trial court's calculation because they were non-vested and no
evidence established a value of non-vested stock. "'In
determining whether credible evidence exists [to support the
court's finding,] the appellate court does not retry the facts,
reweigh the preponderance of the evidence, or make its own
determination of the credibility of witnesses.'" Luczkovich, 26
Va. App. at 712, 496 S.E.2d at 162 (quoting Moreno v. Moreno, 24
Va. App. 190, 195, 480 S.E.2d 792, 795 (1997)). In the instant
case, husband testified that the 230 shares of stock were
"non-vested stocks." However, he also testified that this was a
"[v]ested stock grant." The trial court's determination that
this stock was vested is supported by the evidence and will not
be altered by this Court on appeal. 2
2 Husband also states that the trial court improperly valued this stock because there was no evidence as to the value of
- 7 - Appellant contends that the award of 230 shares of stock,
acquired in March 1998, was separate property because it was
acquired after the date of separation. Property acquired after
the last separation is presumed to be separate property. See
Luczkovich, 26 Va. App. at 712, 496 S.E.2d at 162-63; see also
Price v. Price, 4 Va. App. 224, 231, 355 S.E.2d 905, 909 (1987).
A party claiming property acquired after separation can overcome
the presumption by establishing that the property was "acquired
while some vestige of the marital partnership continued or was
acquired with marital assets." Dietz v. Dietz, 17 Va. App. 203,
211-12, 436 S.E.2d 463, 469 (1993). Thus, the 230 shares
delineated as a bonus was awarded for work done both before and
after the date of separation. Thus it is marital property to
the extent that it was awarded for work done before the date of
separation even though it was received after the date of the
last separation. See Howell, 31 Va. App. at 347-50, 523 S.E.2d
at 521-23.
In the instant case, the trial court classified the bonus
as part marital and part separate property on a prorated basis.
Husband testified that he was unsure whether the bonus was for
his work on a specific project or for the entire year. Husband
believed it might have been a bonus primarily for his work on a
non-vested SAIC stock. However, the trial court set the value of vested SAIC stock at $58.87 per share. As such, our holding on this issue is dispositive regarding the valuation of the stock, as the stock was determined to be vested.
- 8 - "very successful project -- [that] contributed inordinately to
our bottom line." He testified that this contract was awarded
in July of 1997, before the date of separation. However, he
also conceded that he was "responsible for about a third of the
company and that includes about $20,000,000 worth of performing
contracts." Thus, in the instant case, wife has met her burden
of proving that at least a portion, if not all, of the bonus was
earned prior to the date of separation. Under the facts of this
case, it was not an abuse of discretion to prorate the bonus,
8/12 as marital and 4/12 as separate property based upon the
portion of 1997 that the parties were together. See generally
Howell, 31 Va. App. at 347-50, 523 S.E.2d at 521-23.
VII. TAXES PAID IN EXERCISE OF SAIC STOCK OPTIONS
Husband states that the trial court failed to account for
taxes imposed upon him in the exercise of his SAIC stock
options. The commissioner in chancery's report provided that
"[i]t does not appear that the husband can simply transfer stock
to the wife as one could transfer a listed stock. Accordingly,
I [sic] the following monetary award has taken into
consideration the capital gains tax that will be assessed
against the husband." Although the trial court's order does not
specifically state that it accounts for the capital gains tax,
the award was nearly identical to the commissioner's
recommendation; $48,500 by the commissioner compared to $51,800
by the trial court. Furthermore, although husband alleges the
- 9 - trial court did not consider income taxes paid in exercising the
stock options, there was no evidence presented regarding taxes
other than the capital gains tax. Therefore, based upon the
record before us, we cannot say that the trial court failed to
account for taxes assessed upon the husband in exercising his
stock options.
VIII. ANTIQUE CAR COLLECTION
Husband contends the trial court erred in the
classification of his antique car collection as marital property
and in granting wife fifty percent of the value of the
collection, exclusive of his $1,500 separate interest.
Classification of property rests in the sound discretion of the
trial court and will not be reversed unless it is plainly wrong
or without evidence to support it. See Rahbaran v. Rahbaran, 26
Va. App. 195, 205, 494 S.E.2d 135, 139 (1997). Code
§ 20-107.3(A)(3) instructs the trial court on how property is to
be classified:
The court shall classify property as part marital property and part separate property as follows: a. In the case of income received from separate property during the marriage, such income shall be marital property only to the extent it is attributable to the personal efforts of either party. In the case of the increase in value of separate property during the marriage, such increase in value shall be marital property only to the extent that marital property or the personal efforts of either party have contributed to such increases, provided that any such personal efforts must be significant and
- 10 - result in substantial appreciation of the separate property. For purposes of this subdivision, 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. "Personal effort" of a party shall be deemed to be labor, effort, inventiveness, physical or intellectual skill, creativity, or managerial, promotional or marketing activity applied directly to the separate property of either party.
* * * * * * *
e. When marital property and separate property are commingled into newly acquired property resulting in the loss of identity of the contributing properties, the commingled property shall be deemed transmuted to marital property. However, to the extent the contributed property is retraceable by a preponderance of the evidence and was not a gift, the contributed property shall retain its original classification.
(Emphasis added). Thus, if a party "'chooses to commingle
marital and non-marital [property] to the point that direct
tracing is impossible,' the claimed separate property loses its
separate status." Rahbaran, 26 Va. App. at 208, 494 S.E.2d at
141 (citations omitted). The party claiming the property to be
marital property must establish that marital funds or personal
efforts of one party were expended and this expenditure resulted
in an increase in value. Code § 20-107.3(A)(3)(a). The
- 11 - personal efforts of only the owner-spouse are sufficient to
cause the property to lose its separate status. See Rowe v.
Rowe, 24 Va. App. 123, 130-34, 480 S.E.2d 760, 763-65 (1997);
Peter N. Swisher et al., Virginia Family Law Theory and Practice
§ 11-13 n.14 & Ch. 11 app. 1, at 561-64 (2d ed. 1997). "For
personal labor [or marital funds] contributed to property to be
'significant' and to cause or result in a substantial increase
in value, without proof to the contrary, the personal labor [or
marital funds] must amount to more than customary care,
maintenance, and upkeep." Martin v. Martin, 27 Va. App. 745,
757, 501 S.E.2d 450, 456 (1998). Once established, the party
claiming the property to be separate must then "(1) establish
the identity of a portion of hybrid property and (2) directly
trace that portion to a separate asset." Rahbaran, 26 Va. App.
at 208, 494 S.E.2d at 141. This tracing does not require the
segregation of the separate portion. Id. at 207, 494 S.E.2d at
141. However, "[e]ven if a party can prove that some part of
the 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.'" Id. at 208-09, 494 S.E.2d at 141 (citations
omitted).
In the instant case, wife established that only four of the
eight cars were purchased prior to marriage for approximately
$1,260. The remaining vehicles were purchased during the
- 12 - marriage for $9,000. At the time of the divorce, the vehicles
were valued at $29,125. Husband claimed to have an agreement
with his wife that would allow him to deposit $100 into a
separate account every two weeks (i.e. $2,600 per year). Wife
denied the agreement existed. Furthermore, she established that
expenses for the cars far exceeded the $2,600 per year;
$3,739.71 was spent in 1995, $7,717 in 1996, and $4,070 in 1997,
the year they separated. Additionally, "he bought a lot of
stuff. There was stuff being delivered to our house by UPS
every day practically, every other day at least. He went -- he
went on big buying trips." She testified that:
He put a lot of time into the cars. You have a picture of the house that shows that big, huge garage full of parts. We have a rental garage -- rental house with a big, huge garage behind that that he's got stuffed with cars. The room over the garage was also his -- stuffed with cars, and he spent the majority of his time on that -- every night of the week on that -- antique car hopping -- and most of the weekends. A lot of time.
[H]e had them sandblasted, made castings, completely redid them, painted them. He puts them together like models.
Husband testified that his intent was for the car hobby to
become a business "to sell reproduction parts for white steam
cars." In doing so he "bought a lot of car parts." During
their marriage in 1978, he spent many hours working on the
automobiles. Credible evidence proved that marital funds and
- 13 - extensive personal efforts of one party, the husband,
contributed to the substantial increase in value of the antique
cars. The personal effort and marital funds expended were more
than simple customary care, maintenance and upkeep of the cars.
Having met her burden of establishing that the increase in
value resulted from marital funds and personal efforts, it was
husband's burden to establish that the increase was not caused
by the contributions of marital property or personal efforts.
See Code § 20-107.3(A)(3). Husband failed to meet this burden.
Husband offered no evidence to prove that a portion of the
increased value of the antique car collection was attributable
to either passive forces or the result of separate property
being expended. We hold that the trial court did not err in
finding the antique car collection, except for $1,500 of the
collection, was marital property and that wife had an interest
therein.
IX. MONETARY AWARD
Husband next argues that the trial court's monetary award
of $51,800 to wife was not supported by the record and
additionally the trial court failed to explain its rationale.
"[B]ased upon (i) the equities and the rights and interests of
each party in the marital property, and (ii) the factors listed
in subsection E, the court has the power to grant a monetary
award." Code § 20-107.3(D). Although, the amount of a monetary
award is within the sound discretion of the trial court, we must
- 14 - be able to determine that the trial court has made a
determination based upon the evidence as it relates to this code
section. See Trivett v. Trivett, 7 Va. App. 148, 153-55, 371
S.E.2d 560, 563-64 (1988). However, this does not require the
trial court to "'quantify or elaborate exactly what weight or
consideration it has given to each of the statutory factors. It
does mean, however, that the court's findings must have some
foundation based on the evidence presented.'" Id. at 154, 371
S.E.2d at 563 (quoting Wagner v. Wagner, 4 Va. App. 397, 410,
358 S.E.2d 407, 414 (1987)).
The commissioner's report, as adopted by the trial court,
provides:
It is regrettable that the husband's SAIC stock is restricted as to transfers and ownership. It does not appear that the husband can simply transfer stock to the wife as one could transfer a listed stock. Accordingly, I [sic] the following monetary award has taken into consideration the capital gains tax that will be assessed against the husband. As part of the wife's monetary award (other parts coming from the husband's military pension, the husband's 401K plan, and the sale and division of certain assets), recommend that the husband pay to wife a partial award for other assets titled in his name of $48,500.00.
Furthermore, the trial court's order provides, "with this
payment the defendant shall retain the SAIC stock, SAIC stock
options, coin collection, and antique car collection." This
monetary award was to compensate wife for her interests in
- 15 - non-liquid items. Thus, we cannot say that the trial court's
grant of a monetary award was an abuse of discretion as it was
supported by the evidence.
X. $10,000 CASH
Lastly, husband claims the trial court should have credited
him with $10,000 he gave to wife during their separation.
Resolution of a dispute of facts is within the discretion of the
trial court. Howell, 31 Va. App. at 341, 523 S.E.2d at 519.
When the trial court accepts the commissioner's findings of
fact, this Court will presume those finding are correct and the
court's decision will not be disturbed on appeal unless plainly
wrong or without evidence to support it. Id. In the instant
case the husband testified that he gave his wife $10,000. Wife
testified, "He never gave me $10,000 to pay my bills." The
trial court resolved this dispute in favor of the wife. This
finding is supported by credible evidence and will not be
disturbed on appeal.
XI. CONCLUSION
For the reasons set forth above, we affirm the judgment of
the trial court.
Affirmed.
- 16 -