Saundra L Ash v. Raymond D Ash

• Court: Court of Appeals of Virginia
• Decided: July 23, 2002
• Docket: 3043012
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Elder, Bumgardner and Clements Argued at Richmond, Virginia

SAUNDRA L. ASH

v. Record No. 3043-01-2

RAYMOND D. ASH MEMORANDUM OPINION * BY JUDGE LARRY G. ELDER JULY 23, 2002 RAYMOND D. ASH

v. RECORD No. 3072-01-2

FROM THE CIRCUIT COURT OF HANOVER COUNTY John Richard Alderman, Judge

C. A. Barranger for Saundra L. Ash.

Jennifer E. Crossland (William H. Parcell, III; Parcell, Webb & Wallerstein, P.C., on briefs), for Raymond D. Ash.

Saundra L. Ash (wife) and Raymond D. Ash (husband) appeal

from a final decree effecting the equitable distribution of

their property following referral of the matter to a

commissioner in chancery. On appeal, husband contends the trial

court erred in considering wife's late-filed exceptions to the

commissioner's report because the court made no finding of good

cause for the late filing and, thus, lacked jurisdiction. Wife

* Pursuant to Code § 17.1-413, this opinion is not designated for publication. contends the trial court erroneously denied her motion to compel

husband to provide information she requested in interrogatories

regarding the severance package husband would receive following

termination by his employer. She also contends the court

erroneously classified the severance package as husband's

separate property and various credit card debts as marital

property. 1

We hold a finding of good cause was implicit in the trial

court's consideration of wife's late-filed exceptions to the

commissioner's report and that its consideration of the

exceptions was not error. We also find that the trial court's

classification of the challenged credit card debts as marital

was not error. However, we hold that the court's failure to

grant wife's motion to compel discovery deprived wife of the

opportunity to obtain evidence relevant to whether any portion

of husband's severance package was marital property. Thus, we

reverse the trial court's equitable distribution award and

remand for further proceedings consistent with this opinion.

1 Wife's assignments of error complain of the trial court's decision that the credit card debts "were marital debts to be divided equally by the parties." However, wife's analysis addresses only the classification of the property as marital, not the trial court's decision to divide it equally. Thus, on appeal, we do not consider the trial court's decision concerning the division of those debts.

- 2 - I.

FILING OF WIFE'S EXCEPTIONS TO COMMISSIONER'S REPORT

Code § 8.01-615 provides that when a cause is referred to a

commissioner in chancery and the commissioner issues a report,

"[e]xceptions to the commissioner's report shall be filed within

ten days after the report has been filed with the court, or for

good cause shown, at a later time specified by the court."

Although that code section uses the word "shall," it also

expressly provides that the court may allow the filing of

exceptions "at a later time" "for good cause shown." Id. The

statute does not require a court to extend the time for filing

exceptions before the ten-day deadline has expired, and Rule 1:9

expressly provides that a court may extend "[t]he time allowed

for filing pleadings . . . although the time fixed already has

expired." Finally, the Supreme Court has held that a trial

court abused its discretion in denying a motion of a party

presenting good cause to extend the time for filing of

exceptions to a commissioner's report, even though the extension

request was made after the ten-day time for filing already had

expired. Lannon v. Lee Connor Realty Corp., 238 Va. 590,

592-94, 385 S.E.2d 380, 381-82 (1989).

Further, we hold that a finding of good cause was implicit

in the trial court's ruling to permit the late filing of wife's

exceptions. Cf., e.g., Harris v. Commonwealth, 258 Va. 576,

582-84, 520 S.E.2d 825, 828-29 (1999) (holding that evidence - 3 - supported trial court's granting of nolle prosequi motion under

Code § 19.2-265.3, which required finding of good cause).

Wife's counsel represented her "belie[f] [that] the Court had

been closed because of bad weather at that time." Although the

clerk of court reported that the court was open on the day the

exceptions were due but closed for two days following that date,

the trial court expressly ruled at the hearing on July 10, 2000,

that it would "allow [the exceptions] to be filed" "under the

circumstances . . . given the snow days." Under the facts of

this case, which include the absence of a showing of any

prejudice to husband from the late filing, we perceive no abuse

of the trial court's discretion in allowing wife's late filing

and considering her exceptions. See Lannon, 238 Va. at 594, 385

S.E.2d at 382.

II.

CLASSIFICATION ISSUES

"[A] commissioner in chancery . . . [is] 'an officer

appointed by the chancellor to aid him [or her] in the proper

and expeditious performance of his [or her] duties.' When a

trial court refers a cause to a commissioner in chancery, it

does not delegate its judicial function to the commissioner

. . . ." Kelker v. Schmidt, 34 Va. App. 129, 136-37, 538 S.E.2d

342, 346 (2000) (quoting Raiford v. Raiford, 193 Va. 221, 226,

68 S.E.2d 888, 891 (1952)) (citations omitted).

- 4 - "[W]hen the commissioner's finding[s] [are] specifically

based on what the commissioner saw and heard," i.e., credibility

determinations based on "demeanor and appearance," and "the

commissioner [makes clear this reliance by] describ[ing] such

observations in his or her report," "the commissioner is in a

better position than the trial judge to make factual findings on

that basis," and the chancellor must "give 'due regards' to the

commissioner's factual findings." Id. at 139-40, 538 S.E.2d at

347-48. Conversely, "if the commissioner's determination is

based on the substance of the testimony and not upon the

witness' demeanor and appearance, such a finding is as

determinable by the trial judge as by the commissioner." Id. at

139, 538 S.E.2d at 347. Under these circumstances, the

chancellor's review of the commissioner's determination is akin

to review of a conclusion of law. Thus, absent a clearly

articulated credibility determination by the commissioner, the

chancellor is free to reach a conclusion contrary to that of the

commissioner, see id., and on appeal, we affirm the chancellor's

determination unless it is plainly wrong, see, e.g., Snyder

Plaza Props., Inc. v. Adams Outdoor Advertising, Inc., 259 Va.

635, 641, 528 S.E.2d 452, 456 (2000) (noting that chancellor

owes no deference to "pure conclusions of law contained in

[commissioner's] report").

Pursuant to Code § 20-107.3, a court dissolving a marriage,

"upon request of either party, shall determine the legal title - 5 - as between the parties, and the ownership and value of all

property" and classify that property as separate property,

marital property, or part separate and part marital property.

Code § 20-107.3(A). "The court shall also have the authority 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."

Code § 20-107.3(C).

Marital property is all property titled in the names of

both parties and all other property acquired by each party

during the marriage which is not separate property, i.e.,

property received during the marriage by bequest, devise,

descent, survivorship or gift from someone other than the

spouse. See Code § 20-107.2(A). "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." Id. This presumption applies to the

parties' assets as well as their debts. Cf. Stumbo v. Stumbo,

20 Va. App. 685, 692-93, 460 S.E.2d 591, 595 (1995) (referring

to "marital property" as defined in Code § 20-107.3 as including

both assets and debts).

A.

CREDIT CARD DEBT

Wife contends the trial court erred in affirming the

commissioner's conclusion that the balances owed on the MBNA, - 6 - First Union and Discover credit cards should be classified as

marital property and in concluding sua sponte, contrary to the

commissioner's report, that the balance owed on husband's GM

credit card should also be classified as marital.

We disagree. Because the commissioner's conclusion

regarding the GM credit card was not based on specifically

articulated credibility determinations, the trial court owed no

deference to the commissioner's classification of the GM debt as

separate. Further, the trial court had a duty to "reject [the

commissioner's] report in whole or in part" if it was contrary

to "the law and the evidence," Code § 8.01-610, and we are aware

of no principle in the relevant statutes or case law which would

prevent the court from doing so sua sponte, see, e.g., Cloutier

v. Queen, 35 Va. App. 413, 420-21, 545 S.E.2d 574, 577-78 (2001)

(holding in child custody dispute that court had authority under

Rule 1:1 to modify its decree sua sponte where "chancellor,

after reflection, determined that his initial decision was

erroneous and timely corrected it in the same proceeding").

Finally, the evidence, viewed in the light most favorable

to husband, the prevailing party below, supported the trial

court's conclusion that the balances on all four cards should be

classified as marital debt rather than as husband's separate

debt. As set out above, the debts acquired by the parties

during their marriage are presumed to be marital debts. Code

§ 20-107.3; Stumbo, 20 Va. App. at 692-93, 460 S.E.2d at 595. - 7 - Wife bore the burden of proving that the disputed credit card

debts were husband's separate property, and the evidence, viewed

in the light most favorable to husband, proved those debts were

marital. Although husband testified that he and wife made few

directly marital purchases using those cards, his evidence

established that the debts on those cards nevertheless were

marital debts. Husband paid business expenses with those credit

cards, received reimbursements from his company for those

business expenses and, instead of applying all reimbursements to

the balances on those credit cards, made the minimum payments

and used the remaining expense money "just trying to keep the

family going." Whether or not wife approved of this method of

managing the family's finances, the trial court concluded the

reimbursement funds became part of "the family budget," such

that the credit card debt was marital. The evidence, viewed in

the light most favorable to husband, supports this conclusion.

B.

HUSBAND'S SEVERANCE PACKAGE

Wife contends the trial court erroneously denied her motion

to compel husband to provide certain information about his

entitlement to a severance package following termination by his

employer. We agree and hold that the trial court's ruling on

the suppression motion was an abuse of discretion. Thus, we

vacate its ruling classifying husband's severance package, if

- 8 - one existed, as his separate property and remand for additional

discovery.

Rule 4:1(b)(1) provides that "[p]arties may obtain

discovery regarding any matter, not privileged, which is

relevant to the subject matter involved in the pending action,

whether it relates to the claim or defense of the party seeking

discovery or the claim or defense of any other party . . . ."

"[T]he granting or denying of discovery is a matter within the

discretion of the trial court," but a discovery ruling may be

reversed on appeal if "'the action taken was improvident and

affected substantial rights.'" O'Brian v. Langley Sch., 256 Va.

547, 552, 507 S.E.2d 363, 366 (1998) (quoting Rakes v. Fulcher,

210 Va. 542, 546, 172 S.E.2d 751, 755 (1970)).

Here, the commissioner's conclusion, adopted by the trial

court, was that "a severance package, if paid, would be paid

post-separation" and that wife "has duly received her share of

husband's pension and savings plan from A&P [husband's former

employer]." However, the mere fact that the severance package

would have been received after the last separation of the

parties was not dispositive of its classification. In

classifying a severance package acquired by a party after the

last separation, "the touchstone . . . is whether the severance

package was intended to compensate the employee for efforts made

during the marriage or to replace post-separation earnings."

Luczkovich v. Luczkovich, 26 Va. App. 702, 708-09, 496 S.E.2d - 9 - 157, 160 (1998). Because Code § 20-107.3 presumes that property

acquired after the parties' last separation is separate

property, a spouse claiming a severance package received after

the parties' separation is marital property bears the burden of

overcoming the presumption by showing the lump sum payment

compensated the receiving spouse for services rendered during

the marriage. 26 Va. App. at 710-11, 496 S.E.2d at 161.

In order to attempt to meet the burden of proof set out in

Luczkovich, the non-owning spouse is entitled to discover all

information bearing upon these issues, including whether or when

a severance package has been or will be received and the nature

of the severance package as described in any written or oral

communications between the receiving spouse and his employer.

Wife's interrogatory asked, "What has [husband] been told by his

employer about his job including but not limited to how long he

can expect to be employed, whether he will be able to transfer

to another location, and what his severance package will be."

This broadly worded interrogatory was likely to yield evidence

relevant to classification of the severance plan under

Luczkovich, and the court's refusal to compel the requested

discovery deprived wife of information which "substantially

affected [her] ability and right to litigate" the classification

of husband's severance package if he received one. O'Brian, 256

Va. at 552, 507 S.E.2d at 366. See id. at 551, 507 S.E.2d at

365 (holding court abused discretion in refusing to compel - 10 - discovery about actual damages in contract dispute because party

seeking discovery needed information to litigate the validity of

contract's liquidated damages clause). Therefore, the trial

court's denial of the motion to compel was an abuse of

discretion. 2

III.

For these reasons, we hold a finding of good cause was

implicit in the trial court's consideration of wife's late-filed

exceptions to the commissioner's report and that its

consideration of the exceptions was not error. We also find

that the trial court's classification of the challenged credit

card debts as marital was not error. However, we hold that the

court's failure to grant wife's motion to compel discovery

deprived wife of the opportunity to obtain evidence relevant to

whether any portion of husband's severance package was marital

property. Thus, we reverse the trial court's equitable

2 Despite husband's argument to the contrary, wife's failure to attempt to obtain this information by subpoena from husband's employer is irrelevant to both (1) husband's duty to provide it in response to wife's interrogatory and (2) the trial court's error in refusing to compel same. Husband could have moved to quash a subpoena directed to his employer on the same grounds he asserted in his motion to have the severance package classified as separate property, and we presume the trial court would erroneously have granted the motion to quash for the same reasons it erroneously denied the motion to compel. - 11 - distribution award and remand for further proceedings consistent

with this opinion.

Affirmed in part, reversed in part and remanded.

- 12 -