COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Elder and Senior Judge Cole Argued at Richmond, Virginia
GILBERT EVERETT SCHILL, JR. MEMORANDUM OPINION * BY v. Record No. 1636-96-2 JUDGE LARRY G. ELDER JUNE 10, 1997 NANCY JOAN LENAHAN SCHILL
FROM THE CIRCUIT COURT OF HENRICO COUNTY George F. Tidey, Judge
Donald K. Butler (Player B. Michelsen; Morano, Colan & Butler, on briefs), for appellant.
John F. Ames for appellee.
Gilbert Everett Schill (husband) appeals the trial court's
awards of equitable distribution, spousal support and attorney
fees. Nancy Joan Lenahan Schill (wife) appeals the trial court's
award of equitable distribution and the omission of any decision
regarding child support in its final decree. For the reasons
that follow, we affirm in part, reverse in part, and remand.
The parties are familiar with the record and this memorandum
opinion recites only those facts necessary to the disposition of
the issues before the Court.
* Pursuant to Code § 17-116.010 this opinion is not designated for publication. I.
EQUITABLE DISTRIBUTION
Husband asserts that the trial court made four errors in its
award of equitable distribution. He contends that the trial
court erred (1) when it classified all of his capital account
with his law firm as marital property; (2) when it valued his
capital account without deducting a $27,000 encumbrance on it;
and (3) when it accepted wife's valuation of the parties' four
joint bank accounts. Husband also argues that the trial court's
division of the marital property was erroneous because its
analysis of the statutory factors of Code § 20-107.3(E) was
flawed. Wife contends that the trial court erred when it
concluded that husband had no professional goodwill to be
included in the marital property. A.
CLASSIFICATION OF HUSBAND'S CAPITAL ACCOUNT
We hold that the trial court did not err when it declined to
classify husband's capital account with his law firm as part
marital and part separate property. Under Code § 20-107.3(A), a
trial court must classify the property of parties to a divorce
suit into one of three categories: separate, marital or part
marital and part separate. Marital property includes "(ii) that
part of any property classified as marital pursuant to
subdivision A 3, (iii) all other property acquired by each party
during the marriage which is not separate property as defined
-2- above." Code § 20-107.3(A)(2). Property is presumed to be
marital if it was "acquired by either spouse during the marriage,
and before the last separation of the parties," unless evidence
proves that the property is separate. Id.
Husband's capital account was marital property because the
evidence conclusively proved that it was initially acquired
during the marriage. This marital property had a value of
$91,853 at the time the parties separated. However, on the date
of the hearing, the value of this marital property had increased
to $108,219. Husband argues that the trial court should have classified
the capital account as part marital and part separate property.
He argues that the increase in the value of the capital account
was caused by his post-separation contribution of $16,366 and
that the trial court erred when it declined to classify this
amount as his separate property. We disagree.
First, we disagree with husband's contention that wife had
the burden of proving that the increase in the value of the
capital account was marital property. Property acquired after
the last separation is presumed to be separate property unless
the party claiming otherwise proves 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). However, this rule
does not apply to the capital account because it was initially
-3- acquired during the marriage. All property acquired by either spouse during the marriage is presumed to be marital property in the absence of satisfactory evidence that it is separate property. The party claiming that property should be classified as separate has the burden to produce satisfactory evidence to rebut this presumption.
Stroop v. Stroop, 10 Va. App. 611, 614-15, 394 S.E.2d 861, 863
(1990) (citation omitted). Moreover, because the capital account
is marital property, wife did not have the burden of proving that
the increase in its value after the parties separated was also
marital property. Rather, the valuation date of the capital
account was the date of the hearing before the trial court
because neither party moved for the use of an alternative
valuation date. See Code § 20-107.3(A).
Instead, the classification of the post-separation
contribution to the capital account is governed by the rules
addressing commingled property. Under Code § 20-107.3(A)(3)(d),
separate property becomes transmuted to marital property if the separate property is "commingled by [being contributed]" to
marital property and the separate property loses its identity.
The separate property retains its identity as separate property
if it is "retraceable by a preponderance of evidence and was not
a gift." Id. A corollary of Code § 20-107.3(A)(3)(d) is that
marital property commingled with other marital property remains
classified as such.
-4- The trial court did not err when it did not classify the
post-separation increase in the value of the capital account as
separate property because the record does not establish that the
increase in the capital account was due to the commingling of
this marital asset with husband's own separate funds. The
testimony of the controller of husband's law firm indicated that
each partner at the firm is periodically required to contribute
funds to the capital of the firm and that the aggregate amount of
capital that each partner has contributed is referred to as his
or her "capital account." Although husband made a contribution
to his capital account after the parties' final separation, the
record does not indicate the source of the funds used by husband
to make this contribution. Husband offered no evidence showing
that his post-separation contribution was made entirely with
post-separation income or with other separate property. Because
the record does not establish that this is a case in which
separate property was commingled with marital property, the trial
court's classification of the post-separation increase in the
capital account as marital property was not erroneous. B.
VALUATION OF HUSBAND'S CAPITAL ACCOUNT
deduct the $27,000 loan from the value of the capital account.
When determining the value of marital property, the trial court
is required to consider whether the property serves as security
-5- for any valid debts of either party. Trivett v. Trivett, 7 Va.
App. 148, 151, 371 S.E.2d 560, 562 (1988). If the trial court
finds that marital property is encumbered by debt and that this
debt was not deliberately "created in anticipation of divorce" in
order to reduce the other spouse's monetary award by reducing or
eliminating the value of such property, then "the amount of the
indebtedness should be deducted from the unencumbered value of
such property." Id. at 152, 154-55, 371 S.E.2d at 562, 564. As
with cases involving the dissipation of assets, when an aggrieved
spouse shows that marital assets were encumbered by debt at a
time when the marriage is undergoing an irreconcilable breakdown,
the burden is on the party charged with creating the encumbrance
to prove that it was created and used for a proper purpose. See
Clements v. Clements, 10 Va. App. 580, 587, 397 S.E.2d 257, 261
(1990).
In this case, the trial court did not state any basis for
its conclusion that the $27,000 loan should not be deducted from
the value of husband's capital account. However, "'we will start
from the premise that the chancellor knows the law and properly
applied it even when he or she does not mention [the applicable
law].'" Woolley v. Woolley, 3 Va. App. 337, 344-45, 349 S.E.2d
422, 426 (1986) (quoting Campolattaro v. Campolattaro, 66 Md.App.
68, 502 A.2d 1068 (1986)).
Thus, we presume that the trial court knew the law regarding
the valuation of encumbered marital assets and concluded that
-6- husband failed to meet his burden of persuasion that the $27,000
loan on his capital account was used for proper purposes. Based
on the record before us, we cannot say that this was error. The
evidence did prove that husband obtained this loan after the
parties separated and that this loan was secured by his capital
account. However, husband's proof that these funds were used
solely for proper purposes amounted to little more than an
undetailed list of expenses that he testified were paid for with
the loan. He testified that he used the proceeds of the loan to
pay for income taxes, medical expenses, including an uninsured
hospitalization of wife costing $900, living expenses of wife and
two children, and the college tuition of a daughter, which costs
$1,600 per month. While husband testified that he incurred these
expenses, he did not prove either their total amount or that they
added up to $27,000. Moreover, no evidence established that
husband had actually spent all of the $27,000 as of the date of
the hearing. [T]he burden is always on the parties to present sufficient evidence to provide the basis on which a proper determination [of the value of marital property] can be made . . . . [R]eviewing courts cannot . . . reverse and remand . . . [equitable distribution] cases where the parties have had an adequate opportunity to introduce evidence but have failed to do so. Parties should not be allowed to benefit on review for their failure to introduce evidence at trial . . . .
Bowers v. Bowers, 4 Va. App. 610, 618, 359 S.E.2d 546, 550 (1987)
-7- (citations omitted). Based on this scant evidence, we cannot say
that the trial court erred when it was not persuaded that the
$27,000 loan was used entirely for proper purposes.
-8- C.
VALUATION OF JOINT BANK ACCOUNTS
We hold that the trial court did not err when it valued the
parties' four joint bank accounts on a date earlier than the
equitable distribution hearing. The evidence established that
these accounts were marital property. Wife offered evidence that
the value of the joint accounts was at one time $2,500,
$2,000.46, $630, and $2,630.46. Husband testified that the
current balances of these accounts were $215, $0, $275, and $0.
Because the evidence proved that husband had used the funds in
these accounts after the parties separated, he had the burden of
proving that these funds were spent for a proper purpose. See
Clements, 10 Va. App. at 587, 397 S.E.2d at 261. If husband was
unable to meet his burden of proof, the trial court was required
"to value the property at a date other than the date of the
evidentiary hearing . . . ." Id.
We cannot say that the trial court erred when it concluded
that husband failed to prove that he used the funds in these
accounts for proper purposes. Husband's proof that he used the
funds in the joint bank accounts for proper purposes consisted of
his testimony that a portion of one of the accounts "was used to
pay down life insurance premiums" and his sweeping statement that
"generally" the remaining funds were used to pay "regular
expenses of the marriage." However, husband offered no evidence
proving how much of these funds were actually used to pay his
-9- life insurance premiums or any other marital expense. His
lawyer's only question on this subject directed husband not to
account for his use of these funds. The trial court was within
its discretion not to be persuaded by husband's sketchy, vague
evidence that he used the funds in the joint bank accounts for
proper purposes.
D.
HUSBAND'S PROFESSIONAL GOODWILL We hold that the trial court did not err when it concluded
that husband had no professional goodwill. On appeal, the trial
court's decision regarding goodwill "will not be disturbed if it
appears that the court made a reasonable approximation of the
goodwill value, if any, of the professional practice based on
competent evidence and the use of a sound method supported by
that evidence." Russell v. Russell, 11 Va. App. 411, 417, 399
S.E.2d 166, 169 (1990). The expert testimony on this issue
conflicted, and the trial court's conclusion was supported by
credible evidence.
E.
ANALYSIS OF FACTORS IN CODE § 20-107.3(E)
Husband contends that the division of the marital property
by the trial court was erroneous because the trial court
incorrectly applied the factors of Code § 20-107.3(E).
Specifically, husband contends that the trial court failed to
consider the negative impact of wife's alcoholic behavior on the
-10- marital estate and improperly considered punishment as a factor
in its analysis. We disagree. Equitable distribution is predicated upon the philosophy that marriage represents an economic partnership requiring that upon dissolution each partner should receive a fair portion of the property accumulated during the marriage. Therefore, circumstances that affect the partnership's economic condition are factors that must be considered for purposes of our equitable distribution scheme.
Aster v. Gross, 7 Va. App. 1, 6, 371 S.E.2d 833, 836 (1988)
(citation omitted). In any equitable distribution proceeding, the trial judge must consider all the specifically enumerated factors in exercising his or her discretion, and ". . . it is reversible error for the trial judge to fail" to do so.
Alphin v. Alphin, 15 Va. App. 395, 405, 424 S.E.2d 572, 577
(1992) (citation omitted). "The appropriate consideration of the
factors entails more than a mere recitation in the record or
decree that all the statutory factors have been considered or
reviewed." Id. at 405, 424 S.E.2d at 578. However, the trial
court is not required "to quantify the weight given to each
[factor], nor is it required to weigh each factor equally." Marion v. Marion, 11 Va. App. 659, 664, 401 S.E.2d 432, 436
(1991). Instead, "[the trial court's] considerations must be
supported by the evidence." Id.
Husband contends that the trial court gave no consideration
-11- to the impact of wife's alcoholism on the marital estate. We
disagree. Although we agree with husband that the trial court
was required to consider wife's alcoholism because it was a
circumstance that affected the economic condition of the
marriage, see Aster, 7 Va. App. at 6, 371 S.E.2d at 836, the
record indicates that the trial court was aware of and gave
consideration to the impact of wife's alcoholic behavior on the
marital estate. Husband argued in both his closing argument at
the hearing and in a post-hearing memorandum that wife's
alcoholic behavior had negatively impacted the marital property
and the well-being of the family and that wife's portion of the
marital property should not exceed 25%. In its opinion letter,
the trial court stated: I have considered [husband's] position with regard to [wife's] alcohol addiction . . . . I feel that if I adopted [husband's] position with regard to a property division I would be unnecessarily punishing [wife] for a disease that she has not learned to cope with despite everyone's efforts.
Because the trial court stated that it considered husband's arguments, which expressly addressed the impact of wife's
alcoholic behavior on the marital estate, we cannot say that the
trial court failed to consider this circumstance when it
fashioned its award.
Husband also argues that the trial court's reference to
"punishment" in its opinion letter indicates that it improperly
considered punishing the parties with its award. We disagree.
-12- Husband is correct that "[e]quitable distribution is not a
vehicle to punish behavior," and a trial court's consideration of
marital fault is limited to its negative impact on either the
family, the other spouse or the marital property. See O'Loughlin
v. O'Loughlin, 20 Va. App. 522, 526-27, 458 S.E.2d 323, 325
(1995); Aster, 7 Va. App. at 5-6, 371 S.E.2d at 836. However,
when read in context with husband's memorandum, the trial court's
reference to punishment is nothing more than a response to
husband's request for a division that would award only 25% of all the marital property to wife and 75% to husband. By stating that
husband's proposed division would "unnecessarily punish" wife,
the trial court was indicating its awareness that it was
prohibited by Code § 20-107.3 from fashioning an award to
penalize wife for her behavior. The trial court's comments
indicate that it intended its division to be based solely on the
ten factors of Code § 20-107.3 and that its consideration of
wife's alcoholism was limited to the actual impact it had on the
marital estate and the family.
Finally, we hold that the trial court's application of the
statutory factors of Code § 20-107.3 was not erroneous. "[I]n reviewing an equitable distribution award, we rely heavily on the trial judge's discretion in weighing the particular circumstances of each case. Only under exceptional circumstances will we interfere with the exercise of the trial judge's discretion."
Gamble v. Gamble, 14 Va. App. 558, 573, 421 S.E.2d 635, 644
-13- (1992) (quoting Aster, 7 Va. App. at 8, 371 S.E.2d at 837). In
its opinion letter, the trial court stated that it "considered
all of the factors listed in Code §20-107.3" and outlined the
circumstances of the marriage that it considered, all of which
were relevant to equitable distribution and supported by credible
evidence in the record. Based on these findings, the trial court
divided the nonbusiness-related marital property "50-50" and
husband's law firm accounts "60-40" in favor of husband.
Overall, because the vast majority of the marital property was
related to husband's various law firm accounts, husband was
awarded roughly 60% of all of the marital property while wife was awarded roughly 40%. Because the trial court gave consideration
to all of the statutory factors and factual circumstances
relevant to making an award under Code § 20-107.3, we cannot say
that its award was an abuse of discretion.
II.
SPOUSAL SUPPORT
We disagree with husband's contention that the amount of
support awarded by the trial court was excessive and an abuse of
discretion. When spouses are divorced, "'the law imposes upon
the [supporting spouse] the duty, within the limits of [his or
her] financial ability, to maintain [his or her] former [spouse]
according to the station in life to which [he or she] was
accustomed during the marriage.'" Via v. Via, 14 Va. App. 868,
870, 419 S.E.2d 431, 433 (1991) (quoting Klotz v. Klotz, 203 Va.
-14- 677, 680, 127 S.E.2d 104, 106 (1962)). "In fixing the amount of
the spousal support award, a review of all of the factors
contained in Code § 20-107.1 is mandatory, and the amount awarded
must be fair and just under all of the circumstances." Gamble,
14 Va. App. at 574, 421 S.E.2d at 644. "When the record
discloses that the trial court considered all of the statutory
factors, the court's ruling will not be disturbed on appeal
unless there has been a clear abuse of discretion." Id. In this case, the trial court awarded wife spousal support
of $7,500 per month. However, neither the trial court's opinion
letter nor the final decree quantifies how the trial court
arrived at $7,500 as the amount of spousal support. Instead, the
trial court stated only that the award was "[b]ased on [wife's]
needs and [husband's] ability to pay." Thus, we must examine the
record to see if the evidence supports the trial court's award.
See Gibson v. Gibson, 5 Va. App. 426, 435, 364 S.E.2d 518, 523
(1988).
We hold that the amount of spousal support awarded by the
trial court is supported by the record and is fair and just under
the circumstances of this case. The record indicates that
husband is a successful attorney and that his average monthly
income, after deducting taxes, for the three years preceding the
spousal support hearing was $14,626.80. The record indicates
that wife has no current income from employment, has not worked
since the late 1960s and has a high school education. The length
-15- of the marriage was 26 years, during which the parties
established a high standard of living. Both parties are fifty
years old. With the exception of a bad back, husband is in good
physical and mental health. Wife suffers from the disease of
alcoholism. During the marriage, husband made nearly all of the
financial contributions to the family. Wife made significant
non-monetary contributions to the family during the first seven
or eight years of the marriage until her addiction to alcohol
worsened. During the remaining years of the marriage, wife's
alcoholic behavior had a substantial negative impact on the well-being of the family. In addition, the bulk of wife's
immediate disbursement from the equitable distribution award was
in the form of non-liquid assets such as the marital home and an
automobile. The record indicates that husband's monthly
expenses, exclusive of amounts expended on his children, totaled
$6,871. Wife's monthly expenses were at least $7,500.
Considering that husband's monthly after-tax income is $14,626.80
and that his personal monthly expenses are $6,871, the trial
court's award leaves husband with $7,755.80 to pay his $7,500
monthly support payment. In light of husband's earning capacity
and current ability to pay, the standard of living established
during this lengthy marriage, and considering wife's medical
problems, financial needs, and prospects for employment, we
cannot say that the amount of the trial court's spousal support
award was an abuse of discretion.
-16- The dissent contends that wife's estimation of her monthly
expenses was "grossly overinflated" and that the trial court
failed to consider the estimate's flaws in its determination of
wife's monthly expenses. Although we agree that both husband's
testimony and husband's lawyer's cross-examination of wife
revealed some overstatements in wife's estimation of her
expenses, we disagree that the trial court did not account for
these inaccuracies in its determination. On her list of expenses, wife estimated that her monthly
expenses totaled $10,995. The trial court discounted this
estimation by $3,495 when it awarded wife spousal support of
$7,500. Evidence introduced by husband established that wife
overestimated her mortgage payment by $400, her monthly insurance
expense by $305, and mistakenly listed that her house had a
monthly utility expense for gas of $200. During his
cross-examination of wife, husband's lawyer also impeached, but
did not disprove, the accuracy of wife's estimation of her
monthly expenses for property taxes, electricity, water/sewer,
cable television, transportation, life insurance, eyeglasses,
hospitalization, gift giving and vacations. However, even when
using husband's estimations for all of the figures that his
lawyer challenged on cross-examination, except for those related
to transportation, 1 and after excluding wife's estimation of 1 We disagree with both husband's and the dissent's contention that wife was overreaching when she claimed a monthly expense of $500 under the "automobile" category of her expense sheet and a monthly expense of $500 for automobile insurance
-17- expenses related to the children, wife's total monthly expenses
were at least $6,585. Thus, contrary to the assertion by the
dissent, the record indicates that the trial court did discount
wife's estimation of her expenses to account for all of its
actual overstatements and for at least some of its questionable
estimates. Moreover, because the portions of wife's estimation
of her monthly expenses that were not proven to be overstated
totaled at least $7,500, we cannot say that the trial court's
determination of wife's monthly expenses was erroneous. III.
ATTORNEY FEES
Husband challenges the trial court's award of attorney fees
for wife's representation in both a post-separation criminal
proceeding and the divorce proceeding.
A.
POST-SEPARATION CRIMINAL PROCEEDING
We hold that the trial court erred when it ordered husband
to pay wife's attorney fee that arose from her post-separation
charge of driving while intoxicated. First, the trial court had
because she is legally prohibited from driving for at least three more years. First, the "automobile" expense category on wife's expense sheet includes a subcategory for "other transportation." Wife's estimation of a $500 monthly expense for this category was supported by her testimony that she does not live on a bus line and relies primarily on cabs for her daily transportation. In addition, even though wife cannot drive, we cannot say that her claim that she incurred a monthly expense for automobile insurance was unwarranted in light of the fact that the trial court awarded her an automobile in its equitable distribution of the marital property.
-18- no authority under Code § 20-79(b) to award attorney fees
relating to wife's post-separation criminal proceeding. Although
Code § 20-79(b) authorizes a trial court to award "counsel fees
. . . if in the judgment of the court . . . the foregoing should
be so decreed," this statute is expressly limited to counsel fees
"[i]n any suit for divorce." In addition, the trial court could
not have apportioned this debt as a marital debt under Code
§ 20-107.3(C). Code § 20-107.3(C) empowers a trial court "to
apportion and order the payment of the debts of the parties, or
either of them, that are incurred prior to the dissolution of the
marriage, based upon the factors listed in subsection E."
(Emphasis added.) The record is devoid of any evidence regarding
the dates on which wife's attorney provided legal representation
and advice relating to her criminal defense. Although the record
establishes that wife was arrested for driving while intoxicated
and bailed out of jail in August, 1994, the evidence does not
support a finding that wife's legal expenses were incurred prior
to January 3, 1995, the date of husband's divorce from wife.
B.
DIVORCE PROCEEDING
We disagree with husband's contention that the trial court
abused its discretion when it awarded wife attorney fees for the
divorce proceeding. Code § 20-79(b) empowers a trial court
hearing a suit for divorce to award attorney fees "if in the
judgment of the court . . . [an award] . . . should be so
-19- decreed." "An award of attorney fees is a matter submitted to
the trial court's sound discretion and is reviewable on appeal
only for an abuse of discretion." Graves v. Graves, 4 Va. App.
326, 333, 357 S.E.2d 554, 558 (1987). Based on all of the
circumstances and equities of this case, including the length of
the marriage, wife's needs, and husband's resources, we cannot
say that the trial court abused its discretion when it ordered
husband to pay $10,000 of wife's attorney fee of $39,702.88 for
the divorce proceeding.
-20- IV.
CHILD SUPPORT
Wife contends that this case should be remanded because she
requested the trial court to determine child support and the
trial court did not address this issue in its decree. We agree.
Both parties requested the trial court to make a determination
regarding child support. The trial court failed to decide this
issue and failed to state any rationale for this inaction. In
our opinion, the trial court abuses its discretion when it fails
to decide whether or not to award child support in its final
decree when this issue is presented for adjudication by one of
the parties. Cf. Conway v. Conway, 10 Va. App. 653, 659, 395
S.E.2d 464, 467 (1990) (holding that the trial court abused its
discretion when it failed to set forth a rationale for its child
support award).
V.
CONCLUSION
In summary, we affirm the trial court's awards of equitable
distribution, spousal support and attorney fees for the divorce
proceeding. We reverse the trial court's award of attorney fees
arising from wife's post-separation charge of driving while
intoxicated. Finally, we remand the issue of child support to
the trial court to determine if an award is justified in this
case and, if so, the amount of such award. Affirmed in part, reversed in part, and remanded.
-21- Benton, J., concurring and dissenting.
I concur in Parts I(C), I(D), III, and IV. I dissent,
however, from Parts I(A), I(B), I(E), and II.
I disagree with the majority that the husband's capital
account was proved to be wholly marital. The evidence proved
that as of the date of separation the husband's capital account
was worth $91,853, less a loan of $27,000. The husband's post-separation contribution was $16,366. Generally, property acquired by one partner after the last separation when "at least one of the parties intends that the separation be permanent" is not "acquired . . . during the marriage" or as part of the marital partnership and will not be marital property, unless it was obtained, at least in part, with marital funds. Property acquired by one partner totally separate and apart from the marital partnership does not imbue the other partner or spouse with rights and equities in such property. Where partnership efforts have contributed nothing to the acquisition or maintenance or preservation of the property, no basis exists for its being classified as a marital asset.
* * * * * * *
While Code § 20-107.3(A)(2) does not expressly state that property acquired after the last separation shall be presumed to be separate property, it necessarily follows that if the marriage partnership is presumed to have ended as of the date of the last permanent separation, in order for property acquired after that date to be classified as marital, the party so claiming will have the burden of proving, without the benefit of a presumption, that it was acquired while some vestige of the marital partnership continued or was acquired with marital assets. Thus,
-22- if the party with the burden of proving that the property is marital fails in his or her burden, then necessarily, the property acquired after the marital partnership ended is separate property.
Dietz v. Dietz, 17 Va. App. 203, 210-12, 436 S.E.2d 463, 468-69
(1993) (citations omitted). Because the wife failed to prove
that the husband's post-separation contribution to his capital
account was made with marital funds, the trial judge erred in
holding that it was not separate property. B.
I would also hold that the trial judge erred in ruling that
the $27,000 loan that husband made from the capital account was
not a proper marital expenditure. The trial judge gave no
explanation for his decision.
The husband testified that those funds were expended for
marital purposes in 1995 when his salary was reduced. He used
the loan proceeds to pay taxes, expenses for his operation, $900
for his wife's uninsured hospitalization, expenses for meningitis
treatment for the two youngest children, and tuition of $1,600
per month for a third child who was in college. The wife offered
no evidence to dispute that these funds were used for those
purposes. Thus, I would hold that the husband met his burden of
proving that the funds were used for proper purposes.
C.
I disagree with the majority's conclusion that the trial
judge properly considered the impact of the wife's alcoholism on
-23- the marital estate when rendering its equitable distribution
award. In a memorandum submitted to the trial judge, the husband
argued that (1) the wife's alcoholism directly affected the
monetary value of the marital estate and, thus, could be
considered pursuant to Aster v. Gross, 7 Va. App. 1, 371 S.E.2d
833 (1988) (holding that marital conduct cannot be used to
"punish" the offending spouse in the equitable distribution
award; such conduct can only be considered to the extent that it
affects the economic condition of the marital estate), and (2)
the wife's alcoholism negatively impacted her non-monetary
contributions, and thus it could be considered pursuant to O'Loughlin v. O'Loughlin, 20 Va. App. 522, 458 S.E.2d 323 (1995)
(holding that marital conduct could be considered in determining
an equitable distribution award if the evidence shows that the
conduct hindered the non-monetary contributions of a spouse).
The husband requested the trial judge to consider the wife's
long-term alcoholism as a factor in making the equitable
distribution award. He argued that her long-term alcoholism had
a direct bearing on her significant lack of contribution to the
acquisition and maintenance of the marital property. In
particular, the husband argued that the wife's alcoholism "is
relevant to both the monetary and non-monetary contribution
factors because it negatively impacted . . . both." The husband
argued that when proper consideration was given to the impact of
the wife's alcoholism, the wife should receive only 25% of the
-24- marital estate.
The trial judge issued an opinion letter in which he found
that "[t]he tragedy of the marriage is that the [wife] is an
acknowledged alcoholic." The trial judge nonetheless ruled as
follows: I have considered [husband's] position with regard to [wife's] alcohol addiction and how it has affected the marriage and the children. . . .
I feel that if I adopted [husband's] position with regard to a property division I would be unnecessarily punishing [wife] for a disease that she has not learned to cope with despite everyone's efforts.
(Emphasis added.)
That ruling demonstrates that the trial judge misperceived
the husband's argument regarding the impact of the wife's
alcoholism on the marital estate. I disagree with the majority's
conclusion that the trial judge subsequently factored in wife's
addiction when determining the equitable distribution award. The
judge's opinion reveals that the judge concluded that he could
not factor in the wife's alcoholism because to do so would be to
punish her for a disease she was unable to overcome. The trial
judge's ruling misperceived the argument and the purpose of Code
§ 20-107.3.
"The purpose of Code § 20-107.3 is to divide fairly the
value of the marital assets acquired by the parties during
marriage with due regard for both their monetary and nonmonetary
contributions to the acquisition and maintenance of the property
-25- and to the marriage." O'Loughlin, 20 Va. App. at 524, 458 S.E.2d
at 324. The reason to consider the wife's alcoholism is not to
penalize her but, rather, to recognize the additional burden
placed on the husband. The wife's alcoholism is a factor that
tends to make the husband's non-monetary contributions more
significant. Accord Crowe v. Crowe, 602 So.2d 441 (Ala. Civ.
App. 1992); In re Marriage of Bulanda, 451 N.W.2d 15, 17 (Iowa
Ct. App. 1989). After O'Loughlin, it is clear that a trial judge can
consider marital conduct as it impacts a spouse's non-monetary
contributions to the well-being of the family. See 20 Va. App.
at 528, 458 S.E.2d at 326. It is also clear that if the conduct
in fact did affect a spouse's non-monetary contributions,
consideration of the conduct does not constitute "punishing" the
spouse for that conduct as prescribed in Aster. See O'Loughlin,
20 Va. App. at 528, 458 S.E.2d at 326. Moreover, giving
consideration to the wife's alcoholism does not depend upon a
finding that the alcoholism constituted marital fault. O'Loughlin could not be clearer in ruling that any behavior that
negatively impacts the non-monetary contributions of one spouse
to the marriage can be considered. See 20 Va. App. at 528, 458
S.E.2d at 326 ("[O]ur ruling in Aster did not establish that the
negative impact of marital fault or other behavior could not be
considered in light of the other factors, such as the couple's
nonmonetary contributions, under Code § 20-107.3(E).") (emphasis
-26- added).
The husband argued the relevance of the wife's alcoholism to
the factors of Code § 20-107.3(E). The trial judge implicitly
ruled that the evidence was not relevant to those factors because
consideration of that issue would be punitive. The question of
alcoholism goes not to punishment or fault but, rather, to
"determining whose labor or negatively productive conduct was
responsible for creating or dissipating . . . marital assets."
In re Marriage of Clark, 538 P.2d 145, 147 (Wash. Ct. App. 1975)
(footnote omitted). One spouse's addiction to alcohol over a
long period of the marriage, which places a great burden on the
other spouse, is a factor that justifies awarding the other
spouse a substantial portion of the marital assets. See Crowe,
602 So.2d at 443; Carpenter v. Carpenter, 573 N.E.2d 698, 701
(Ohio Ct. App. 1988); Handrahan v. Handrahan, 547 N.E.2d 1141,
1142-43 (Mass. Ct. App. 1989); In re Marriage of Clark, 801
S.W.2d 496, 500 (Mo. Ct. App. 1990). Thus, a trial judge errs
when he fails to consider the economic impact of a spouse's
alcoholism on the acquisition of the property of the marriage. See O'Loughlin, 20 Va. App. at 528, 458 S.E.2d at 326; see also
Peirson v. Calhoun, 417 S.E.2d 604, 606 (S.C. Ct. App. 1992).
The evidence proved that the wife was not employed during
the marriage. She made no monetary contribution to the
acquisition or maintenance of the marital property.
The evidence also proved that the wife's non-monetary
-27- contributions to the well-being of the family during the last
eighteen years of the marriage were negligible. The wife is an
alcoholic, who was in confined treatment on three occasions and
was jailed three times as a result of her alcoholism.
Tragically, she had serious difficulty with alcohol for eighteen
of the twenty-six years that the parties were married. The
record overwhelmingly establishes that her alcoholism negatively
affected the home lives of her husband and her children during a
substantial portion of the marriage. The evidence also proved
that the wife's alcoholism on occasion negatively affected the
husband's career and his ability to develop business
opportunities. Thus, the evidence tends to prove that the wife's
condition had a direct bearing on both the well-being of the
family and the ability of the parties to accumulate and maintain
assets during the marriage. Simply put, the trial judge's emphasis on fault failed to
address the relevant issue. Evidence proving that "[d]ue to her
illness and the attendant hospitalization [a spouse was] able to
function only sporadically," establishes factors that are
properly used to make an unequal property award in favor of the
other spouse. See In re Marriage of Milsten, 598 P.2d 1268, 1269
(Or. Ct. App. 1979).
The record raises substantial doubt that the trial judge
properly applied the equitable distribution factors set forth in
Code § 20-107.3. The principle is long standing that a trial
-28- judge's misapplication of one of the statutory factors is ground
for reversal on appeal. See Ellington v. Ellington, 8 Va. App.
48, 56, 378 S.E.2d 626, 630 (1989). Thus, I would reverse the
equitable distribution decision and remand that issue to the
trial judge for reconsideration.
-29- D.
I also would reverse the spousal support award and remand
for reconsideration. The wife listed her total monthly expenses
as $10,995. However, her own testimony proved that those
expenses were grossly overinflated. For example, she listed
$1,200 for gifts, $200 for a property tax that was already
accounted for in the mortgage payment, $500 for telephone bills,
$1,000 for automobile expenses and insurance even though she is
an habitual offender and is barred from driving, $500 for health
insurance that was proved to be $195, $300 for eyeglasses, $850
for vacations, and $200 for gas utilities even though her
residence has no such utility. I find no evidence in the record that in making the spousal
support award the trial judge factored in these and other grossly
inflated items that the wife listed as monthly expenses. I
believe that when these monthly expenses and others are adjusted,
the evidence does not support an alimony award of $7,500 per
month.
For these reasons, I would also reverse the spousal support
award and remand for reconsideration.
-30-