Michael Charles Fries v. Patricia Ann Kelly Fries

• Court: Court of Appeals of Virginia
• Decided: July 23, 2002
• Docket: 1029013
• Status: Unpublished

Opinion

Tuesday 23rd

July, 2002.

Michael Charles Fries, Appellant,

against Record No. 1029-01-3 Circuit Court No. CH95-76-02

Patricia Ann Kelly Fries (now Carroll), Appellee.

Upon a Rehearing En Banc

Before Chief Judge Fitzpatrick, Judges Benton, Willis, Elder, Bray, Annunziata, Bumgardner, Frank, Humphreys and Clements

Frank K. Friedman (Richard C. Maxwell; John Cotton Richmond; Woods, Rogers & Hazlegrove, P.L.C., on briefs), for appellant.

J. Emmette Pilgreen, IV (Jonathan S. Kurtin; Harvey S. Lutins & Associates; Shapiro & Kurtin, on brief), for appellee.

By memorandum opinion, a divided panel of this Court

affirmed in part, reversed in part, and remanded to the trial

court for further proceedings. We subsequently granted a

rehearing en banc and stayed the mandate of the panel decision.

Upon rehearing en banc, it is ordered that the stay of

the January 15, 2002 mandate is lifted, and the judgment of the

trial court is affirmed, in part, reversed in part, and remanded

to the trial court for further proceedings in accordance with

the majority opinion of a panel of this Court. Judges Benton, Willis and Frank concur, in part, and

dissent, in part, for those reasons expressed in the concurring

and dissenting opinion of the panel.

This order shall be certified to the trial court.

A Copy,

Teste:

Cynthia L. McCoy, Clerk

By:

Deputy Clerk

COURT OF APPEALS OF VIRGINIA

Present: Judges Benton, Elder and Bumgardner Argued at Salem, Virginia

MICHAEL CHARLES FRIES MEMORANDUM OPINION * BY v. Record No. 1029-01-3 JUDGE LARRY G. ELDER JANUARY 15, 2002 PATRICIA ANN KELLY FRIES (NOW CARROLL)

FROM THE CIRCUIT COURT OF BOTETOURT COUNTY George E. Honts, III, Judge

Frank K. Friedman (Richard C. Maxwell; John Cotton Richmond; Woods, Rogers & Hazlegrove, P.L.C., on briefs), for appellant.

J. Emmette Pilgreen, IV (Jonathan S. Kurtin; Harvey S. Lutins & Associates; Shapiro & Kurtin, on brief), for appellee.

* Pursuant to Code § 17.1-413, this opinion is not designated for publication.

- 2 - Michael Charles Fries (Fries) appeals from a circuit court

(trial court) ruling determining the ownership of real and

personal property as between Fries and his former wife, Patricia

Ann Kelly Fries Carroll (Carroll), and finding, pursuant to a

1978 separation agreement between the parties which was

expressly governed by New York law and was never abrogated, that

Fries owed Carroll spousal and child support for the period of

their sixteen-year reconciliation. Carroll contends the trial

court erroneously concluded the parties did not repudiate the

1978 separation agreement. We hold the evidence supported the

trial court's conclusions that the agreement remained valid and

that wife had a half interest in the marital residence and

subject bank accounts. However, we reverse the trial court's

award of spousal and child support for the period during which

Carroll and the parties' daughter resided with and were at least

partially supported by Fries, and we remand to the trial court

to determine whether Carroll was entitled to an award of child

support for the period of time from the parties' 1995 separation

until their daughter's twenty-first birthday.

I.

A.

REPUDIATION OF THE AGREEMENT

In Fries v. Fries, No. 2803-99-3, 2000 WL 527675 (Va. Ct.

App. May 2, 2000) (hereinafter Fries I), we held that New York

- 3 - law governed the parties' agreement. "Whether there has been a

mutual rescission of a separation agreement through repudiation

of the agreement by one party acquiesced in by the other is

generally a question of fact." Zambito v. Zambito, 566 N.Y.S.2d

789, 791 (N.Y. App. Div. 1991). In determining whether

rescission by repudiation and acquiescence has occurred, "the

courts look to whether there are unequivocal acts demonstrating

that the parties no longer intend to rely upon or be bound by

the terms of the agreement." Id.

Here, the parties' agreement provided it could be amended

or modified only "by an agreement in writing duly subscribed and

acknowledged with the same formality as this agreement." As we

discussed in Fries I, the agreement also provided that a

reconciliation or resumption of marital relations would not

invalidate or otherwise affect the agreement unless the parties

cancelled the agreement in writing. Assuming without deciding

that at least one of the parties repudiated the agreement and

the other acquiesced therein, here, as in Fries I, these acts

nevertheless were insufficient to overcome the express

requirements of the agreement that any modification, waiver or

revocation must be in writing.

Thus, the evidence supports the trial court's finding that

the parties did not abrogate the agreement through repudiation

and acquiescence.

B.

- 4 - OWNERSHIP OF PROPERTY

"Where the terms of a separation agreement 'are clear and

unambiguous, the intent of the parties must be found therein.'"

Fries I, at **1 (quoting Nichols v. Nichols, 119 N.E.2d 351, 353

(N.Y. 1954)). The trial court observed that the parties'

agreement did not specifically address "post-reconciliation

gifts," but it held, in essence, that Fries' titling the

properties jointly in his and Carroll's names nevertheless

resulted in Carroll's obtaining an interest in those properties

under the terms of the parties' agreement.

The agreement addresses the ownership of subsequently

acquired property, "property . . . of any kind . . . which may

hereafter belong to . . . or come to him or her." (Emphasis

added). In defining ownership of property, the provision

speaks, inter alia, to property "owned by him or her" or "in his

or her name." (Emphasis added). Thus, the separation agreement

provides, in effect, that ownership may be determined by title.

The trial court found that "[Fries] was free under the

[agreement] to conceal, waste, accumulate and firmly hold his

separately titled property free from [Carroll's] demands" but

that when Fries titled this property jointly, Carroll obtained

"interests in the bank accounts and the marital home." Although

the trial court said that Fries "gifted" those interests to

Carroll, it also emphasized the existence of a "valid contract"

between the parties and held that the existence of the contract

- 5 - rendered "meaningless" Fries' "prolonged efforts to trace his

assets." Thus, the trial court's statements, although

inartfully phrased, indicate it held that an interest in the

bank accounts and marital home passed to Carroll under the

agreement when Fries titled these properties jointly in his and

Carroll's names. The trial court was free to reject Fries'

claim that he acted with a contrary intent when he titled the

property jointly and to rely on the evidence of mutual intent

demonstrated by the contract itself.

C.

SUPPORT AWARDS

New York law provides that an obligor parent paying support

pursuant to a separation agreement for a child in the custody of

the obligee parent is entitled to cease those support payments

to the obligee parent when the obligor parent assumes full

custody. See Goldberg v. Benner, 668 N.Y.S.2d 659, 660 (N.Y.

App. Div. 1998); Souran v. Souran, 363 N.Y.S.2d 511, 514 (N.Y.

Dist. Ct. 1975). We hold these same principles apply to Fries'

obligation to pay spousal support. Thus, Fries was entitled

under New York law to credit for the "in kind" payments he made

while the parties resided together with their daughter. Because

the trial court found Fries' "in kind" payments exceeded the

child and spousal support he owed Carroll pursuant to the

agreement, we reverse the trial court's award of spousal and

child support for the time during which Carroll and the parties'

- 6 - daughter resided with Fries and were supported, at least

partially, by him. Pursuant to the agreement, however, Carroll

remained entitled to spousal support from the time the parties

separated on April 14, 1995, until she remarried on May 23,

1997.

We remand to the trial court to make the necessary findings

of fact regarding whether Carroll was entitled to receive child

support during the period from the parties' 1995 separation

until their daughter turned twenty-one on October 10, 1996.

Fries represents that their daughter resided with him and at

college during this period of time and, accordingly, that

Carroll was not entitled to receive child support for this

period. However, the parties' daughter testified that Carroll

wrote her checks and gave her cash while she was in college. On

remand, the trial court should take additional evidence if

necessary to determine whether Carroll was entitled to child

support, pursuant to the agreement, during this period of time.

II.

For these reasons, we affirm the trial court's ruling

finding the agreement valid and awarding wife a half interest in

the marital residence and subject bank accounts. However, we

reverse the trial court's award of spousal and child support for

the period during which Carroll and the parties' daughter

resided with and were at least partially supported by Fries, and

we remand to the trial court to determine whether Carroll was

- 7 - entitled to an award of child support for the period of time

from the parties' 1995 separation until their daughter's

twenty-first birthday.

Affirmed in part, reversed in part and remanded.

- 8 - Benton, J., concurring, in part, and dissenting, in part.

I join in Parts IA and IC of the majority opinion. For the

reasons that follow, I dissent from Part IB.

The trial judge found that Michael Fries gave Patricia

Carroll gifts, which were not addressed by the provisions of

their contract. He, therefore, ruled that Carroll was entitled

to an interest in property that had been Fries' separate

property. His findings on this issue are as follows:

In the fact of that contract, upon which Husband has consistently insisted was binding and upon which he has now prevailed, he took actions to gift certain properties to Wife. Among them were interests in bank accounts and the Virginia real estate. The contract, which was never modified by the parties, does not address these post-reconciliation gifts.

We also note that with a valid contract in place and subsequent gifts to Wife by Husband, Husband's much prolonged efforts to trace his assets becomes meaningless. Husband was free under the contract to conceal, waste, accumulate and firmly hold his separately titled property free from Wife's demands. He voluntarily opted not to do so in those instances wherein he gifted property to Wife. As to such property he is, and should be, impaled on the skewers of his voluntarily acts.

It appears to this Court that Wife is entitled to the value of such property and property interests as were gifted to her by Husband subsequent to the execution of the New York contract.

- 7 - I would hold that the trial judge erred in ruling that

Fries made gifts to Carroll. Furthermore, I can discern nothing

in the trial judge's finding that supports the majority's

conclusion that these gifts "resulted in Carroll obtaining an

interest in those properties under the terms of the parties'

agreement."

The undisputed evidence proved that when the parties moved

to Virginia, Fries used money that was his separate property to

acquire real estate and to open two bank accounts. He purchased

the real estate without a mortgage, and he jointly titled the

real estate in his and Carroll's names. He also opened the bank

accounts in both names. The trial judge correctly found that

these transactions took place "subsequent to the execution of

the New York contract" and that "[t]he contract . . . does not

address these post-reconciliation" acts. I would hold that,

because these properties were titled in Virginia during the

marriage and were not covered by the New York contract, the

issue whether Fries made gifts of these properties to the wife

is a question to be determined by Virginia law.

In pertinent part, Code § 20-107.3(A)(3) provides as

follows:

f. When separate property is retitled in the joint names of the parties, the retitled property shall be deemed transmuted to marital property. However, to the extent the property is retraceable by a

- 10 - preponderance of the evidence and was not a gift, the retitled property shall retain its original classification.

g. Subdivisions A 3 d, e and f of this section shall apply to jointly owned property. No presumption of gift shall arise under this section where (i) separate property is commingled with jointly owned property; (ii) newly acquired property is conveyed into joint ownership; or (iii) existing property is conveyed or retitled into joint ownership. For purposes of this subdivision A 3, property is jointly owned when it is titled in the name of both parties, whether as joint tenants, tenants by the entireties, or otherwise.

Thus, the domestic relations law in "Virginia does not presume a

gift simply by virtue of jointly titling or retitling property."

Lightburn v. Lightburn, 22 Va. App. 612, 616-17, 472 S.E.2d 281,

283 (1996).

As the "party claiming entitlement to rights and equities

in . . . property by virtue of an interspousal gift," Carroll

bore the burden of "prov[ing] the donative intent of [Fries] and

the nature and extent of [his] intention." Id. at 617, 472

S.E.2d at 283. See also Theismann v. Theismann, 22 Va. App.

557, 565-66, 471 S.E.2d 809, 813 (1996). "The fact that

property is jointly titled . . . is [alone] insufficient proof

of a gift." Rowe v. Rowe, 24 Va. App. 123, 137, 480 S.E.2d 760,

766 (1997). The record in this case proves no more than joint

titling and, thus, is insufficient to support the trial judge's

ruling that Fries gifted the real estate or bank accounts to

Carroll.

- 11 - I believe the majority reads into the trial judge's opinion

a finding that the trial judge never made. The trial judge

specifically found that the parties' "contract . . . does not

address these post-reconciliation gifts." The judge's reference

to Fries' efforts to trace his assets clearly relates to the

statutory requirements contained in Code § 20-107.3(A)(3)(f).

The judge's further reference to Fries' efforts at retracing to

be "meaningless" flows from the judge's finding of "gift," which

statutorily renders tracing irrelevant. See id. In short, the

trial judge's findings and analyses are strictly confined to the

requirements of Code § 20-107.3(A)(3)(f) and do not support the

majority's conclusion that the trial judge was addressing "an

interest . . . pass[ing] to Carroll under the agreement."

I would hold that Carroll failed to prove a gift and,

therefore, the trial judge erred in ruling that the real estate

and the bank accounts were not Fries' separate property.

Accordingly, I would direct the trial judge on remand to amend

the final decree to reflect the classification error.

- 12 -