Opinion
Record No. 1523-92-4
September 28, 1993
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY THOMAS S. KENNY, JUDGE.
Beth A. Bittel (Joseph A. Condo; Rees, Broome Diaz, P.C., on brief), for appellant.
Kaletah N. Carroll for appellee.
Present: Judges Barrow, Coleman and Koontz.
Argued at Alexandria, Virginia.
Pursuant to Code § 17-116.010 this opinion is not designated for publication.
By final decree entered on July 2, 1992, the Circuit Court of Fairfax County granted Jeanne F. Beckwitt a final divorce from David M. Beckwitt pursuant to her Bill of Complaint filed on June 3, 1988. In this appeal, Mr. Beckwitt challenges the provisions of this decree that granted Mrs. Beckwitt a monetary award, spousal support, child support, attorney's fees and costs.
The record in this case is voluminous. It reflects numerous hearings held by the chancellor, opinion letters issued by the chancellor and motions to reconsider in this protracted litigation. Because the parties are familiar with the facts, we recite them here only to the extent necessary to explain our holdings.
I. The Monetary Award Issue
Initially, we reject Mr. Beckwitt's contention that the chancellor erred in determining that a monetary award in favor of Mrs. Beckwitt was warranted. When applying the provisions of Code § 20-107.3 to the facts of this case, such an award is clearly appropriate to distribute equitably the marital wealth of the parties. However, the chancellor's refusal to consider evidence of the value of the property at a date closer to the decree granting the monetary award was an abuse of discretion where the property value had fluctuated significantly since the last hearing solely due to economic conditions.
By letter opinion on May 31, 1991, the chancellor determined that the marital property of the parties had a total value of $728,971. The marital property consisted of assets jointly titled, separately titled, and untitled in the possession of one or the other party. The most significant assets were the jointly titled marital home, with a stipulated net value of $312,761, a jointly owned individual retirement account (Keogh plan), valued at $209,850, and a Lincoln Benefit Life insurance policy, owned by Mr. Beckwitt and valued at $107,403. From this pool of marital wealth, the chancellor determined to grant Mrs. Beckwitt a monetary award of $400,000. This amount specifically included the marital property already titled to Mrs. Beckwitt and the untitled marital property in her possession. The chancellor then directed that "if the parties are unable to agree on how the remaining assets are to be divided to satisfy the balance of the monetary award, then I will divide the jointly-owned property in order to accomplish it. Counsel should advise me whether they want me to make the division."
The parties were unable to agree on a division of the remaining marital assets to satisfy the balance of the monetary award. Essentially, they disagreed over the current values of some of the assets and the potential costs and tax consequences in liquidating others. Accordingly, the chancellor issued another opinion letter on October 30, 1991. At that time, the chancellor declined to hear evidence concerning the current values of the marital property. After crediting Mrs. Beckwitt with the marital property already titled solely in her name or untitled in her possession, the chancellor determined that the balance due on the monetary award was $379,696. The chancellor directed the parties to sell the jointly titled real property and allotted the net proceeds equally to the parties. Mr. Beckwitt's share of the net proceeds would be applied toward the satisfaction of the monetary award after crediting Mrs. Beckwitt's share for that purpose. The chancellor also directed that the remaining jointly owned marital property, intangible property primarily in the form of individual retirement accounts, be transferred solely to Mr. Beckwitt subject to a lien in Mrs. Beckwitt's favor for any balance remaining on the monetary award. Finally, pertinent to this appeal, the chancellor directed that any balance remaining on the monetary award after the distribution of the proceeds from the sale of the real estate were to be satisfied from Mr. Beckwitt's personal assets within thirty days.
Thereafter, in another letter opinion issued on May 28, 1992, the chancellor acknowledged the error in ordering the parties to sell the real property and in ordering the transfer to Mr. Beckwitt of the jointly-owned intangible property. The chancellor correctly reached this conclusion. Mrs. Beckwitt's Bill of Complaint was filed on June 3, 1988. The provisions of Code § 20-107.3(C), effective prior to the July 1, 1988 amendments, were controlling and did not authorize the chancellor to assign, allot, or divide jointly titled marital property except pursuant to the partition statute. See Gaynor v. Hird, 11 Va. App. 588, 400 S.E.2d 788 (1991); Morris v. Morris, 3 Va. App. 303, 349 S.E.2d 661 (1986). Accordingly, the chancellor modified his prior opinion, referred the matter to a commissioner, and directed that the parties' real property in Virginia and their jointly owned intangible personal property be partitioned. To the extent that the monetary award was not satisfied from the proceeds of the partition, Mr. Beckwitt was ordered to satisfy the balance by a cash payment.
The parties jointly owned marital real property outside of Virginia. The chancellor determined that he had no jurisdiction over this property for purposes of partition and, thus, determined that "the parties will be left to whatever remedies are available under the law where the property is located."
The parties filed motions contesting various aspects of the chancellor's May 28, 1992 letter opinion and the chancellor conducted a hearing on those motions on June 29, 1992. A partial transcript of that hearing is in the record before us. It is clear from that transcript that the chancellor, with specific reference to the marital home which Mr. Beckwitt asserted had declined in value, was "being asked to reconsider values that have changed dramatically." However, the chancellor declined to reconsider the current value of the marital property and the amount of the monetary award or to permit the award to be partially satisfied based upon a transfer of Mr. Beckwitt's interest in the marital home at the value stipulated by the parties and accepted by the chancellor in May, 1991. Rather, the chancellor concluded that "the risk of loss, as was the risk of gain, happened to be allotted to [Mr. Beckwitt]. In this particular case he loses as a result of [the decline in the value of the marital home]."
The final decree of divorce incorporated the rulings contained in the chancellor's prior letter opinions and essentially fashioned the payment of a monetary award of $400,000 based on the May, 1991 valuations of the marital property. The mandate of Code § 20-107.3 is and always has been for the chancellor to reach an equitable result based upon the notion that the marital wealth has been accumulated by the efforts of a marriage partnership and that wealth should be equitably distributed upon the dissolution of that partnership. The most current valuation of the marital property permits the court to avoid inequitable results and to arrive at a fair and equitable monetary award.See generally Mitchell v. Mitchell, 4 Va. App. 113, 355 S.E.2d 18 (1987).
In the present case, the record clearly reflects that the chancellor was aware that the value of certain marital assets had declined "dramatically" and that other assets may have increased in value after their initial evaluation. The chancellor also knew that the parties were unable, and undoubtedly unwilling, to agree on how these assets were to be divided to satisfy the monetary award. However, the chancellor ordered that these assets be partitioned and the net proceeds be applied toward the satisfaction of a $400,000 monetary award based upon values stipulated by the parties and determined by the chancellor over a year previously. Cf.Anderson v. Anderson, 9 Va. App. 446, 389 S.E.2d 175 (1990) (addressing change in value of marital property in a partition proceeding following an equitable distribution proceeding). In short, the value of the marital property in 1991 purportedly did not represent the value of the property at or near the date of the decree granting the monetary award. Specifically, with reference to the marital home, the court made a monetary award in June 1992 based on inflated May 1991 values. This action resulted in an award determined on the basis of what may have been inaccurate values and placed Mr. Beckwitt in the position of having to satisfy the award from allegedly devalued assets. The chancellor abused his discretion by not considering current value of the property when making a monetary award.
In addition, the chancellor abused his discretion in requiring Mr. Beckwitt to bear the total cost incident to the liquidation or transfer of the jointly owned marital assets.
For these reasons, we reverse the monetary award and remand this matter for reconsideration. In doing so, we direct that the chancellor reconsider both the amount of the monetary award based upon current values of the marital property, see Wagner v. Wagner, ___ Va. App. ___, 431 S.E.2d 77 (1993) (en banc), and the manner in which the award is to be satisfied. The chancellor shall also be guided by our determination that he correctly concluded in his May 31, 1991 opinion letter that the parties' retirement funds are not "retirement benefits" within the meaning of Code § 20-107.3(E)(8), effective prior to the repeal of this subsection. In addition, he shall be guided by our determination that he correctly determined the issues raised by Mr. Beckwitt regarding the First Virginia Bank account and the credit of $2,300 cash value of the canceled life insurance policy to Mr. Beckwitt.
II. The Spousal Support Issue
Because we have reversed the provisions made with regard to the marital property, we remand for reconsideration the spousal support award granted by the chancellor in favor of Mrs. Beckwitt. See Code § 20-107.1(8). Because we are unable to determine the disposition that will be made concerning Mr. Beckwitt's various accounts, we express no opinion on his assertion that the chancellor erroneously imputed income to him from earnings of "tax-deferred retirement investment accounts" in determining the amount of the spousal support award.
III. The Child Support Guideline Issue
Pursuant to Code §§ 20-108.1 and 20-108.2, the chancellor set Mr. Beckwitt's child support obligation for the parties' two children at $847 per month "commencing July 1, 1991, and continuing until May 31, 1992, at which time said child support shall be reduced to the sum of $653 per month, and continue through June 30, 1992, at which time said child support is to be reduced to a total of $363 per month as a result of [the older child's] graduation from high school on June 16, 1992." Thus, Mr. Beckwitt is currently under an obligation to pay child support for the remaining minor child of the parties.
Mr. Beckwitt contends that the chancellor erroneously imputed income to him from certain retirement accounts in calculating the amount of support he was required to pay from June 1, 1991 until May 31, 1992. He also contends that the older child became legally emancipated when this child became eighteen years of age and was not living with Mrs. Beckwitt for three months prior to his graduation from high school. See Code § 20-107.2. Consequently, he contends that the chancellor erroneously required him to pay child support for this child during these months. In addition, Mr. Beckwitt contends that the chancellor erroneously credited Mrs. Beckwitt with business expenses related to her automobile in calculating her gross income pursuant to Code § 20-108.2(C). On appeal, Mr. Beckwitt seeks restitution for the amounts he asserts he has paid in excess of the amounts he would have been required to pay during these periods of time had the chancellor not erred in calculating his child support obligation.
There is no merit to Mr. Beckwitt's contention that the older child became emancipated prior to his graduation from high school or that Mrs. Beckwitt was erroneously credited for business expenses concerning her automobile which was used in her business as a real estate salesperson. Moreover, there is no merit to Mr. Beckwitt's assertion that, even assuming an error in the calculation of the amount of the child support, Mr. Beckwitt is entitled to restitution. The chancellor's decree, even if erroneously calculated on imputed income, was not a void decree. We draw no distinction between erroneously awarded spousal support and erroneously awarded child support. Cf. Reid v. Reid, ___ Va. ___, 429 S.E.2d 208 (1993). In addition, because the older child is now emancipated and there is no ongoing obligation to support that child by Mr. Beckwitt, there is no means by which to credit against future payments Mr. Beckwitt with erroneous child support payments made in the past. Cf. Hughes v. Hughes, 173 Va. 293, 4 S.E.2d 402 (1939).
Finally, we do not address Mr. Beckwitt's contention that his current child support obligation is excessive. Because the accounts on which the chancellor imputed income to Mr. Beckwitt in calculating the child support obligation are to be reconsidered as a result of this opinion, Mr. Beckwitt will be entitled to a reconsideration of the child support award when the equitable distribution of the marital property is resolved.See Code § 20-108.
IV. Attorney's Fees and Costs Issue
Upon well established principles, "[a]n award of attorney's fees [and costs] is a matter submitted to the trial court's sound discretion and is reviewable on appeal only for an abuse of discretion." Graves v. Graves, 4 Va. App. 326, 333, 357 S.E.2d 554, 558 (1987). Because the record does not establish an abuse of discretion in the chancellor's award of attorney's fees and costs to Mrs. Beckwitt, we affirm that award.
For these reasons, we reverse and remand for further consideration of the monetary and spousal support awards granted by the chancellor in this case.
Affirmed in part, reversed in part, and remanded.