Rakesh Kumar Dhawan v. Bonita Dhawan

Court of Appeals of Virginia·Decided August 1, 2023·No. 0887224·Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA UNPUBLISHED

Present: Judges Athey, Ortiz and Senior Judge Clements Argued at Leesburg, Virginia

RAKESH KUMAR DHAWAN

MEMORANDUM OPINION* BY

v. Record No. 0887-22-4 JUDGE JEAN HARRISON CLEMENTS AUGUST 1, 2023

BONITA DHAWAN

FROM THE CIRCUIT COURT OF LOUDOUN COUNTY Jeanette A. Irby, Judge

Samuel A. Leven (The Baldwin Law Firm, LLC, on briefs), for appellant.

Brandy M. Poss (Barnes & Diehl, P.C., on brief), for appellee.

Rakesh Kumar Dhawan (husband) appeals a final order of divorce, which the circuit court entered on May 17, 2022. Husband argues that the circuit court erred when “it placed prohibitions and restrictions on the parties’ business.” Husband further contends that the circuit court erred in distributing assets of the business and ordering husband “to personally pay debts belonging to the parties’ business” “despite said business being a separate corporate entity.” Husband also challenges the circuit court’s distribution of the business “when there was no evidence in the record as to the valuation of the business.” In addition, husband argues that the circuit court erred in determining his income for spousal support and child support purposes and ordering that the support be retroactive. Husband asserts that the circuit court erred in ordering husband to pay Bonita Dhawan (wife) $6,400 for her “post-separation paychecks.” Finally, husband contends that the circuit court abused its discretion by ordering him to pay wife’s attorney fees “when the award was

*

This opinion is not designated for publication. See Code § 17.1-413(A).

based at least in part on other erroneous rulings and was not justified by the equities of the case.” For the reasons stated below, we affirm the circuit court’s decision in part, reverse in part, and remand this case to the circuit court for further proceedings consistent with this opinion.

BACKGROUND

“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.” Shah v. Shah, 70 Va. App. 588, 591 (2019) (quoting Congdon v. Congdon, 40 Va. App. 255, 258 (2003)). Here, wife is the prevailing party, so we consider all the evidence in the light most favorable to her.

The parties married in 1995 and had two children. During the marriage, the parties started Falco eMotors, Inc., an American corporation, (Falco) and Falco eMotors Private Limited, an Indian company (Falco India).1 Falco “markets and sells electric bike conversion systems”; whereas Falco India “manufactures and sells commercial fans” from India. Husband owned 79% of the Falco shares, and wife owned 21%. Both parties also served as directors of Falco; husband was the president, and wife was the vice president.

On August 1, 2019, the parties separated, and approximately three months later, husband advised wife that she was “terminated” from Falco. He blocked her access to Falco and its emails. Husband also withdrew funds from Falco for personal expenses. Wife subsequently filed a complaint for divorce and an emergency motion to enjoin husband from “disposing [of] and/or encumbering any assets” and “taking any adverse action against [her] with regard to her position” with Falco. After wife filed her pleadings, husband removed wife as a director of Falco, claiming that she stole money from the company. Husband opposed wife’s emergency

1 The parties were equal shareholders in Falco India. The circuit court did not “make any equitable distribution of this asset,” which is not challenged on appeal. Therefore, all references to Falco in this opinion are to the American corporation.

motion and denied her claims that he was “wasting” corporate funds. On January 31, 2020, the parties appeared before the circuit court for argument on wife’s emergency motion. Husband agreed “to provide a full detailed accounting for any funds dispersed from the company accounts” and represented that the accounting would be provided in discovery. In addition, husband agreed to not “take[] any steps . . . to economically isolate [wife] by blocking her access and/or use of the parties’ financial accounts or assets.” Husband and wife also agreed to a mutual injunction against the “waste of marital assets.”

Then the parties each presented their arguments regarding husband’s management of Falco’s assets and liabilities and wife’s involvement in the business. In her motion, wife had requested an order enjoining husband from “selling, gifting, transferring, pledging and/or otherwise disposing and/or encumbering any assets . . . or otherwise diminishing the marital estate or increasing marital debt . . . , except as necessary in the ordinary course of business and only as mutually and expressly agreed to by the [p]arties.” Acknowledging that the circuit court could order husband “not to waste” a business asset, husband argued that there was “no authority” to allow wife to “control” how he used business funds because as president and majority shareholder, only he managed the business. Over husband’s objections, the circuit court granted wife’s request. The circuit court did not address wife’s request to reinstate her as vice president of Falco.

After the hearing, both parties sought clarification of the circuit court’s ruling, and husband moved for reconsideration, which the circuit court denied.2 Furthermore, Falco, by special appearance of counsel, moved to intervene and challenge the circuit court’s jurisdiction to “enter an order regarding the assets and interests of Falco.” The circuit court denied Falco’s

2

Husband also filed an amended motion for reconsideration, which the circuit court denied.

motion because it had not yet entered an order after the hearing on wife’s emergency motion and “therefore there [was] no order controlling corporate assets that are not marital property.” Several months after the hearing, the circuit court entered an order memorializing its ruling on wife’s emergency motion. As part of its order, the circuit court “reserved for further adjudication” wife’s request to enjoin husband from “taking any adverse action against [her] with regard to her position with the [c]ompany and to reinstate her as [v]ice [p]resident thereof.”3 In addition to the orders regarding Falco, the circuit court entered a pendente lite support order, directing husband to pay $4,317 per month for spousal support and $1,508 per month for child support, as of September 1, 2020.4 In addition, the circuit court granted wife’s request for “retroactive” spousal and child support for the period between December 2, 2019 and August 31, 2020, and ordered husband to pay a lump sum amount totaling $52,425.

After the entry of the pendente lite order, wife filed a petition for a rule to show cause, arguing that husband was not complying with the injunction order.5 Wife alleged that husband had transferred and/or disposed of assets without “the mutual and express agreement” of the parties and “[n]ot within the ordinary course of business.” Claiming that husband had transferred funds from Falco to pay his retroactive support obligations, wife sought an order requiring husband to “restore” the money he took and enjoin him from using marital funds to pay his support obligations. In response, husband reiterated that wife “improperly allege[d] that the assets of the corporation in the ordinary course of business are subject to the [c]ircuit [c]ourt’s

3 Husband had retained new counsel, who endorsed the order as “Seen and Agreed.”

4 The circuit court determined husband’s monthly income was $15,417 and wife’s monthly income was $0. The parties had agreed that wife would have primary physical custody of the children.

Upon entry of an agreed order, wife filed an “Amended Verified Petition for Rule to 5

Show Cause.”

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