COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Coleman and Willis Argued at Alexandria, Virginia
ROBERT H. DEWITT MEMORANDUM OPINION * BY v. Record No. 1636-95-4 JUDGE JAMES W. BENTON, JR. AUGUST 6, 1996 DONNA D. DEWITT
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY Quinlan H. Hancock, Judge Kathleen O'Brien (Lorraine Nordlund; Margaret B. Craig; Fite, O'Brien, & Byrum, LTD., on briefs), for appellant.
Brian D. West (Erika B. Schiller; Sandground, Barondess & West, P.C., on brief), for appellee.
Robert H. DeWitt appeals the equitable distribution portion
of a final decree of divorce. He contends that the trial judge
committed ten errors in decreeing as to the property he and his
wife, Donna D. DeWitt, owned. We affirm the decree, in part,
reverse, in part, and remand the case to the trial judge. Facts
Robert H. DeWitt and Donna D. DeWitt married in 1973 shortly
after he was discharged from the U.S. Army. During the early
years of the marriage the husband enrolled at a university and
obtained undergraduate and dental degrees. The wife, who was a
recent university graduate, was employed by a federal government
agency, where she continues to work. Although both parties * Pursuant to Code § 17-116.010 this opinion is not designated for publication. contributed to the family finances, the wife was the major
contributor while the husband attended school.
After graduation from dental school in 1980, the husband
began his practice with another dentist. The husband opened his
own dental practice in 1985. He financed the construction and
equipping of his new office with inherited funds, a bank loan,
and a loan from his wife's father. The parties separated in 1992
and were divorced by a final decree entered June 23, 1995. The record contains numerous transcripts and a large number
of exhibits. Therefore, we will discuss other facts only as they
are pertinent to the issues raised by the husband's appeal.
Analysis
"'Under familiar principles, we view [the] evidence and all
reasonable inferences in the light most favorable to the
prevailing party below.'" Pommerenke v. Pommerenke, 7 Va. App.
241, 244, 372 S.E.2d 630, 631 (1988)(citation omitted). We are
also guided by the following principle: "In reviewing an equitable distribution award on appeal, we recognize that the trial court's job is a difficult one. Accordingly, we rely heavily on the discretion of the trial judge in weighing the many considerations and circumstances that are presented in each case."
Artis v. Artis, 4 Va. App. 132, 137, 354 S.E.2d 812, 815 (1987).
"Unless it appears from the record that the [trial judge] has
abused his discretion, that he has not considered or has
misapplied one of the statutory mandates, or that the evidence
- 2 - fails to support the findings of fact underlying his resolution
of the conflict in the equities, the . . . equitable distribution
award will not be reversed on appeal." Brown v. Brown, 5 Va.
App. 238, 244-45, 361 S.E.2d 364, 368 (1987)(citation omitted).
Applying these principles, we examine the ten rulings by the
trial judge which the husband contests. 1. Money inherited by the husband from his father's estate
The husband contends that the trial judge erred in finding
that the wife was entitled to half of the husband's inheritance
from his father. He denies that he gifted the money to her and
argues that his inheritance is separate property pursuant to Code
§ 20-107.3(A)(1)(ii). Citing 20-107.3(A)(3)(d-f), the husband
also claims that he retraced his inheritance into the different
marital assets and was entitled to recover his separate property. The evidence proved that after the husband's father died in
1981, the husband received an inheritance of approximately
$320,000 over a five year period. The husband deposited all of
his inheritance into the couple's various, existing joint
accounts. His income and the wife's income were also deposited
into those joint accounts. Over the years, the husband used the
money in the couple's joint accounts to establish his private
dentistry practice and to purchase various retirement accounts.
Using funds from joint accounts and other marital funds, they
built a new house (the Beresford Court property) in 1982.
In his finding that the husband gifted his inheritance to
- 3 - the marital estate, the trial judge cited McClanahan v.
McClanahan, 19 Va. App. 399, 451 S.E.2d 691 (1994), and wrote: It is undisputed that [the husband] (with one exception) deposited all of these funds into joint accounts with [the wife] and commingled them with marital funds. She had access to them and could have used them at any time. Most of this hearing was consumed by [the husband's] attempt to prove that his inheritance was separate property, but at . . . his deposition . . . he testified . . . "The reason for that deposit and not keeping the money separate is because I had trust in the marital relationship. I thought until death do you part. I had no idea that she would leave." And also . . . "Well, you put it into the account and it was an act of the heart?" - Answer: "Yes." There is no evidence that there was any agreement between the parties or even an understanding that if [the wife] left the marriage that the funds were not a gift and were to be reclassified. The Court finds that the words "as an act of the heart are comparable to the legal consideration of 'love and affection,'" and acknowledge an irrevocable gift.
McClanahan was decided under the statute in existence prior
to 1990. 1 The amended statute, as now written and applicable to
this case, states that "[w]hen separate property is retitled in
the joint names of the parties, the retitled property shall be
deemed transmuted to marital property . . . [unless] the property
is retraceable by a preponderance of the evidence and was not a
gift. . . ." Code § 20-107.3(A)(3)(f). In addition, the statute
states that "[n]o presumption of gift shall arise . . . where
1 In 1990 the General Assembly added subsection 3 to Code § 20-107.3(A) and made the provisions effective for all divorces filed after July 1, 1990. The wife filed for divorce in 1994.
- 4 - . . . newly acquired property is conveyed into joint ownership."
Code § 20-107.3(A)(3)(g). In explaining these provisions, this
Court stated: Virginia does not presume a gift simply by virtue of jointly titling or retitling property. A party claiming entitlement to rights and equities in marital property by virtue of an interspousal gift must prove the donative intent of the donor spouse and the nature and extent of the donor's intention.
Lightburn v. Lightburn, 22 Va. App. 612, ___, ___ S.E.2d ___, ___
(1996) (citations omitted). See also Theismann v. Theismann, 22
Va. App. 557, ___, 471 S.E.2d 809, ___ (1996). Thus, the wife
must bear the burden of proving "every fact and circumstance
necessary to constitute a valid gift by clear and convincing
evidence." Rust v. Phillips, 208 Va. 573, 578, 159 S.E.2d 628,
631 (1968).
The trial judge found persuasive the following portion of
the husband's deposition testimony: Q Where did you put those funds?
A I deposited them into similar accounts that I have established previously that [the wife] and I both used.
The reason for that deposit and not keeping the money separate is because I had trust in the marital relationship. I thought until death do you part. I had no idea that she would leave.
Q At the time that you put those funds into these joint accounts, was it an act of the heart, because you believed that's as it should be, right?
A Yes. Subject to that premise, clearly if a person leaves, that would violate the
- 5 - trust, and then I think it should be retracted.
Q So it is, in effect, a revoked gift, then?
A It was not a gift.
Q Well, you put it into the accounts and it was an act of the heart?
A Yes.
Q But it was contingent upon her continuing to be with you or in the marriage, is that right? A Yes. I was advised to do that.
Q By whom?
A By an investment counselor who knew nothing about taxes and marital relationships.
Q When you put these funds into these various accounts as an act of the heart, did you ever in any writing indicate that the titling of the property was contingent upon your continuing in the marital relationship?
A No. Actually, I am having a problem with the word "act of the heart," because it has a certain feeling to me, but it may not have the same feeling in the context of law, so I am having a problem with that phrase now.
Q Okay. Did you make any writings indicating that the titling of these accounts was contingent upon her continuing in her married relationship?
A No.
The wife never presented any evidence of the husband's
intent other than this testimony. Although the husband initially
agreed with wife's counsel that he placed the money in the joint
- 6 - account "as an act of the heart," he also disavowed that phrase
because it may have had a legal context that did not describe his
motives. He further testified that an investment counsellor
advised him to deposit the funds into the joint account. This
testimony falls short of clear and convincing evidence of a gift.
The husband's testimony that he trusted the relationship would
last does not prove a gift occurred when the money was jointly
titled. Prima facie evidence of a gift is not established under this
new statute when separate property is jointly titled in both
spouses' names. Code § 20-107.3(A)(3)(g). Furthermore, the
trial judge improperly placed the burden on the husband to prove
the absence of a gift. The lack of any evidence concerning an
agreement or understanding does not indicate that the husband
intended a gift. Based on the evidence below, we find that the
wife did not meet her burden of proving by clear and convincing
evidence that the inherited property was a gift.
The trial judge also found that the husband "failed to prove
by a preponderance of the evidence that the contributed property
is retraceable and was not a gift." The letter opinion does not
provide any explanation for the finding that the husband failed
to trace his inheritance. The husband's testimony and exhibits
prove that the husband invested a total of $61,000 of his
inheritance into the purchase, construction and improvement of
the Beresford Court residence. Accounting for appreciation, the
- 7 - husband claimed that $112,700 of the house's $490,000 current
value was his separate property. He also testified that he put
$6,000 and $8,000 from his inheritance into two individual
retirement accounts. At trial, he valued these contributions at
$10,000 and $13,000, respectively. The husband testified that he
invested $21,435 of his separate property into his Keogh pension
and $23,691 into his dental practice. The wife's evidence did
not contradict any of these financial figures. In view of the husband's testimony and the exhibits, the
record does not reveal the deficiency the trial judge found in
retracing the husband's separate property. Therefore, because
the wife failed to prove the jointly titled property was a gift,
we reverse that decision and we remand the case to the trial
court. After further factual findings, the trial judge shall
determine to what extent the husband can retrace his inheritance
by a preponderance of the evidence. 2. Fidelity accounts
The trial judge identified three Fidelity Accounts (Contra,
Spartan, and Puritan) and classified all three as marital
property. The husband testified that he inherited $8,084.78 in
Fidelity Puritan stock from his grandmother, and therefore, a
part of the Puritan account represented separate property. The
wife admitted that the husband had inherited Fidelity Puritan
stock but testified that the account was closed in 1991. She
also testified that three years later the husband opened a second
- 8 - Fidelity Puritan account with a different account number. The
exhibits confirm that the accounts were closed and opened. The
husband offered no evidence to explain what happened to the money
inherited from his grandmother once he closed the first Puritan
Account.
Therefore, the husband did not trace by a preponderance of
the evidence the separate funds withdrawn from the account in
1991. Thus, the trial judge properly found the second Puritan
account contained marital property only. The account was opened
during the marriage using income that was not shown to be
separate property. Code § 20-107.3(A)(2)(iii). The evidence
also failed to prove that the Spartan and Contra funds were the
husband's separate property. 3. Rosecroft Place
The wife testified that she borrowed $45,000 to make the
downpayment on her post-marital residence, Rosecroft Place, and
made all of the mortgage payments with her separate earnings.
Only the $3,000 earnest money deposit represented marital
property. Although the husband contested the wife's claims, "in
reviewing an equitable distribution award, we rely heavily on the
trial judge's discretion in weighing the particular circumstances
of each case." Aster v. Gross, 7 Va. App. 1, 8, 371 S.E.2d 833,
837 (1988). No evidence supports the husband's contention that
the trial judge abused his discretion in designating the
property, except for the $3,000 earnest money deposit, as the
- 9 - wife's separate property. 4. Credit union accounts, Shearson-Lehman accounts, and bank accounts.
(a) The husband contends on appeal that the trial judge
erred in finding that three of the four Northwest Federal Credit
Union accounts are the separate property of the wife. During his
testimony at trial, however, the husband conceded that, "I think
after three years of separation, you have to draw a line
somewhere. I think at this point [the credit union accounts] are
all hers." We will not entertain an appeal of an issue conceded
by the party during trial. Kelly v. Commonwealth, 8 Va. App.
359, 367, 382 S.E.2d 270, 274 (1989).
(b) At trial the husband explained the two different
Shearson Lehman investment accounts. The first account, known as
the "12" account, was titled jointly and was marital property.
The husband opened the second account, known as the "10" account,
in his name only after the couple's separation. He argues that
the "10" account is his separate property.
Although the husband argues that the wife and the trial
judge confused the two accounts, the trial judge recognized that
two Shearson Lehman accounts existed. The evidence at trial,
including the wife's testimony, proved that the husband opened
the "10" account immediately after closing a number of joint
accounts. The wife's testimony, the husband's testimony, and the
documents provide a sufficient basis upon which to prove that the
- 10 - husband opened the "10" account with funds from other joint
accounts. The trial judge did not err in finding that the "10"
account was funded from marital property and, thus, was marital
property.
(c) We next address three bank checking accounts in the
husband's name, identified as the personal, household and office
accounts. Both parties agree that the office account constitutes
the separate property of the husband. The husband contends that
the trial judge erred in classifying his personal and household
accounts, opened after the separation, as marital property. Even though the husband deposited $99,000 of marital funds
into the household account, the record supports his testimony
that he spent $105,548 on marital or joint expenses. The wife's
claim apparently rests solely on the fact that the husband
deposited marital assets into the fund. The record proved that
any remaining funds in the account were deposited by the husband
from his post-separation income. Accordingly, the trial judge
erred in classifying the account as marital property.
After the separation the husband deposited $6,000 of his
post-separation income into the couple's joint personal account
in order to cover a number of outstanding checks. After those
checks were paid, he closed the account and transferred the
remaining balance, $4,842 to his separate checking account. All
other deposits were post-separation earnings. Because the
evidence proved that this account contained only post-separation
- 11 - earnings, the trial judge erred in designating the account
marital property. 5. 1992 Mitsubishi
The parties stipulated the then current value of the
Mitsubishi to be $20,800. The purchase price was $32,090. The
husband used $12,000 in marital assets (approximately
thirty-seven percent of its purchase price) when he purchased the
vehicle. In designating $12,000 of the stipulated value as
marital property, the trial judge did not distribute pro rata the
depreciation of the vehicle. No evidence proved that the marital
portion of the vehicle represented more than thirty-seven percent
of the current stipulated value. Thus, we reverse the trial
judge's valuation and remand for an assessment of the wife's one-half interest in the marital portion of the vehicle. 6. Investment accounts
In dividing the Janus Fund, MFS Hi-Yield Bond Fund, and
Shearson Lehman "12" account, the trial judge awarded the husband
fifty-five percent of their value and the wife forty-five
percent. The trial judge reached this decision upon his finding
that the husband "has been the one to invest the time and effort
into the investment program." The remaining investment accounts
were divided equally between the husband and wife.
The husband contends that he should receive fifty-five
percent of all of the investment funds because of the time and
effort he expended in opening and maintaining the accounts. Upon
- 12 - this record, we cannot find that the trial judge abused his
discretion in apportioning the investment accounts. Artis, 4 Va.
App. at 137, 354 S.E.2d at 815. 7. The husband's non-monetary and financial contributions
The evidence proved that the husband was responsible for the
majority of the couple's income. His private dentistry practice
and inheritances produced substantial income. However, the
evidence also proved that the wife worked and produced
significant income. During their marriage, the couple agreed to
invest the husband's income and to pay their living expenses,
except the mortgage, from the wife's income. We find no merit in the husband's contention that the trial
judge failed to consider his non-monetary contributions and his
significant financial contributions. The trial judge found that
"[b]oth parties have made significant contributions to the
marriage both monetary and non-monetary." The record supports
that finding. The record does not support the husband's claim
that the trial judge abused his discretion. 8. Credit for the pendente lite support
The trial judge ordered the husband to pay the wife $22,000
for her support during the divorce proceedings. The trial judge
stated that the payment "shall be without prejudice as to the
claims of either party." The husband contends that he should
have been given credit for $11,000 in the final distribution of
- 13 - Although no specific mention was made of this money in the
equitable distribution findings, the evidence proved that the
husband withdrew the money from one of the joint accounts and the
wife deposited the money into her savings account. The funds
remaining in both accounts were treated as marital property. We
cannot conclude solely from these facts that the trial judge
abused his discretion in not specifically making an adjustment
more favorable to the husband. 9. Wife's pension plan
The husband argues that the trial judge erred in not
requiring the wife to designate the husband as the irrevocable
beneficiary of the survivor benefit plan on the wife's pension.
Under Code § 20-107.3(G)(2) the trial judge may order that a
spouse be designated an irrevocable beneficiary of a survivor
benefit plan.
In the divorce decree, the trial judge denied husband's
request by stating that the husband "is entitled to Fifty (50%)
percent of the marital share of her pension on an if[,] as[,] and
when received basis." The trial judge has discretion in deciding
whether to order the designation of the husband as an irrevocable
beneficiary. No evidence supports a finding that the trial judge
abused his discretion in refusing to order the wife to designate
the husband as an irrevocable beneficiary. Id. 10. Attorney Fees
"[A]n award of attorney's fees is discretionary with the
- 14 - [trial judge] after considering the circumstances and equities of
the entire case and is reviewable only for an abuse of
discretion." Gamer v. Gamer, 16 Va. App. 335, 346, 429 S.E.2d
618, 626 (1993). The trial judge awarded the wife $15,000 in
attorney's fees. The husband urges us to award him attorney's
fees because the wife refused to stipulate and the trial judge
made numerous errors. The trial judge made no finding that the
wife acted improperly in refusing to stipulate. We find no basis
to conclude that the failure to stipulate was improper.
Moreover, the trial judge's decisions are not a basis to
determine an award. Accordingly, we find no error.
- 15 - Conclusion
For these reasons, we reverse the trial judge's ruling that
the husband had the burden of proving no gift and that the
evidence proved a gift. Therefore, we remand for reconsideration
and findings whether the husband retraced his inheritance by a
preponderance of the evidence. Upon further factual findings,
the trial court shall distribute these interests to conform with
Code § 20-107.3 and this opinion. We also reverse the trial judge's finding that the household
account and personal account were marital property, and we
reverse the trial judge's valuation of the wife's interest in the
1992 Mitsubishi. The trial judge shall order the equitable
distribution of these assets to conform with this opinion.
Affirmed, in part, reversed, in part, and remanded.
- 16 -