Sofia T. Washington v. Steven G. Washington

CourtCourt of Appeals of Virginia
DecidedMay 3, 2005
Docket2188042
StatusUnpublished

This text of Sofia T. Washington v. Steven G. Washington (Sofia T. Washington v. Steven G. Washington) is published on Counsel Stack Legal Research, covering Court of Appeals of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sofia T. Washington v. Steven G. Washington, (Va. Ct. App. 2005).

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Elder, Frank and Humphreys Argued at Richmond, Virginia

STEVEN G. WASHINGTON

v. Record No. 2100-04-2

SOFIA T. WASHINGTON MEMORANDUM OPINION * BY JUDGE LARRY G. ELDER SOFIA T. WASHINGTON MAY 3, 2005

v. Record No. 2188-04-2

FROM THE CIRCUIT COURT OF HENRICO COUNTY George F. Tidey, Judge

W. Joseph Owen, III (Christopher F. Cowan; Samuel J. Kaufman; Cowan & Owen, P.C., on briefs), for Steven G. Washington.

Susanne L. Shilling (E. Ryan Meyer; Shilling & Associates; E. Ryan Meyer, PLLC, on briefs), for Sofia T. Washington.

Steven G. Washington (husband) and Sofia T. Washington (wife) have filed

cross-appeals from a circuit court ruling resolving issues related to their divorce. On appeal,

husband contends the trial court erroneously valued and divided husband’s business and

erroneously refused his request to use an alternate valuation date. Husband also contends the

trial court erred in awarding sole custody of the parties’ two minor children to wife and in

limiting the amount of his visitation with the children. Finally, he contends the court erred in

awarding attorney’s fees to wife. In her cross-appeal, wife contends the trial court erroneously

failed to classify and divide between the parties the portion of student loan debt she incurred that

* Pursuant to Code § 17.1-413, this opinion is not designated for publication. she contended was used for the family’s living expenses. Wife also seeks an award of attorney’s

fees on appeal. We hold the evidence supports the trial court’s rulings and decline wife’s request

for an award of attorney’s fees on appeal. Thus, we affirm.

I.

A.

EQUITABLE DISTRIBUTION

“Fashioning an equitable distribution award lies within the sound discretion of the trial

judge . . . .” Srinivasan v. Srinivasan, 10 Va. App. 728, 732, 396 S.E.2d 675, 678 (1990).

Although the trial court must consider all factors set out in Code § 20-107.3(E), it “need not

quantify or elaborate exactly what weight was given to each of the factors” as long as its

“findings . . . [are] based upon credible evidence.” Taylor v. Taylor, 5 Va. App. 436, 444, 364

S.E.2d 244, 249 (1988).

1. Husband’s Business

a. Valuation Date and Value

A court effecting an equitable distribution of marital property “shall determine the value

of any such property as of the date of the evidentiary hearing on the evaluation issue. Upon

motion of either party . . . the court may, for good cause shown, in order to attain the ends of

justice, order that a different valuation date be used.” Code § 20-107.3(A) (emphasis added).

Where an asset that is subject to equitable distribution is retained by one of the parties for a period of time . . . before the equitable division occurs and the asset significantly increases or decreases in value during that time through neither the efforts or fault of either party, neither party should disproportionately suffer the loss or benefit from the windfall.

Rowe v. Rowe, 33 Va. App. 250, 263-64, 532 S.E.2d 908, 915 (2000).

Here, husband moved the court to value his interest in Washford Enterprises as of the

date of the parties’ separation, February 15, 2002, rather than the date of the evidentiary hearing, -2- held over two years later on April 23, 2004. 1 Thus, pursuant to Code § 20-107.3(A), husband

bore the burden of establishing good cause for his request. See Kaufman v. Kaufman, 7

Va. App. 488, 499-500, 375 S.E.2d 374, 380 (1988).

Although the evidence established husband’s business increased in value between the

date of the parties’ separation and the date of the evidentiary hearing, no evidence established

that this increase occurred due to any extraordinary effort on husband’s part, beyond the effort he

was already expending before the separation to develop the business and fill the group home

with clients. See Rowe, 33 Va. App. at 263-64, 532 S.E.2d at 915. Any increase could just as

easily have been attributable to husband’s and wife’s pre-separation efforts to set up the

necessary physical facilities and make the necessary professional contacts in the community, or it

could have resulted from post-separation factors not directly within husband’s control, such as a

decrease in the number of homes competing for similar clients or an increase in the number of

available clients. Absent evidence of extraordinary effort, husband has not established he was

entitled to have the court use an alternate valuation date.

In valuing a business for purposes of equitable distribution, the standard is that value that

represents the property’s “intrinsic worth” to the parties upon divorce. E.g. Bosserman v.

Bosserman, 9 Va. App. 1, 6, 384 S.E.2d 104, 107 (1989).

Because intrinsic value must depend on the facts of the case, we give great weight to the findings of the trial court. We affirm if the evidence supports the findings and if the trial court finds a reasonable evaluation based on proven methodology and on the application of it to the particular facts of the case.

1 The dates for which evidence was actually presented were December 31, 2001, and December 31, 2002, because these were the dates closest to the separation and evidentiary hearing for which accurate financial information was available. -3- Howell v. Howell, 31 Va. App. 332, 339, 523 S.E.2d 514, 518 (2000). “The trial court has

discretion to resolve conflicting expert testimony to determine an asset’s value.” Id. at 341, 523

S.E.2d at 519.

The trial court expressly accepted the testimony of wife’s expert, William Dacey, who

valued husband’s share of Washford Enterprises at $176,000 using an income method of

valuation involving the capitalization of historical earnings. Under the facts viewed in the light

most favorable to wife, we hold the court’s decision to accept this valuation was not erroneous.

Citing Shooltz v. Shooltz, 27 Va. App. 264, 274-75, 498 S.E.2d 437, 442 (1998), husband

contends that the business’ historical earnings could not be capitalized because the business was

new and had no earnings history. However, Shooltz involved two businesses that were not yet

operational and unrebutted expert testimony that “valuation methods which depend on earning

. . . are never used for the valuation of a business with no operating history.” Id. at 272, 274-75,

498 S.E.2d at 441, 442. Based on that evidence, the trial court held that a valuation based on

projected future earnings was speculative, and we affirmed that ruling. Id. at 274-75, 498 S.E.2d

at 442. Here, by contrast, the business at issue was incorporated in 2000, had been operating

since March 2001, and was valued as of December 31, 2002. When husband attempted to

challenge Dacey’s evaluation on cross-examination based on a lack of historical earnings, Dacey

testified, “I had the historical earnings of the business.” Thus, Dacey’s expert opinion was that

the business’ earnings records for tax years 2000, 2001, and 2002 were sufficient to provide him

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