Opinion
Record No. 1965-93-3
Decided: November 29, 1994
FROM THE CIRCUIT COURT OF THE CITY OF WAYNESBORO, Rudolph Bumgardner, III, Judge
Affirmed in part, reversed in part, and remanded.
Bonnie L. Paul (Litten Sipe, on briefs), for appellant.
Katherine Carruth Link (Nelson, McPherson, Summers Santos, on brief), for appellee.
Present: Judges Koontz, Elder and Bray
Pursuant to Code Sec. 17-116.010 this opinion is not designated for publication.
Nancy F. Crummett (wife) appeals the trial court's equitable distribution and support orders. Wife contends: (1) she is entitled to more than forty percent of the equity in the marital residence; (2) she is entitled to fifty percent of the monthly income from the retirement benefits; (3) the DuPont Plan survivor benefits and life insurance were admissible evidence upon which to make an award; (4) the chancellor's valuation and allocation of the personal property were contrary to the evidence; (5) husband is accountable for dissipation in marital savings; and (6) she is entitled to additional spousal support. For the reasons that follow, we affirm in part, reverse in part, and remand to the trial court for further proceedings consistent with this opinion.
On October 21, 1991, Jack R. Crummett (husband) filed his bill of complaint seeking a divorce from wife on the ground of separation for one year and seeking equitable distribution of the marital property. Wife filed her answer and cross-bill. The commissioner, to whom the cause was referred on July 8, 1992, filed his report on July 16, 1993. He recommended that a no fault divorce decree be entered, that both the marital residence and the pension income be divided sixty percent for husband and forty percent for wife, and that wife receive $200 per month spousal support and $3,000 attorney's fees. Each party filed exceptions to the report, which were overruled by the chancellor, who entered his final decree of divorce on September 24, 1993.
I. 40% EQUITABLE SHARE IN MARITAL RESIDENCE
Wife argues the trial court erred in awarding her only a forty percent share in the marital residence. This argument is based on three specific findings by the trial court, the last two of which wife asserts are erroneous: (1) equal contribution of the parties to the care and maintenance of the marital property; (2) wife having substantially more in value in marital and separate personal property than husband; and (3) a severe adverse tax consequence to husband as a result of wife's "less than good faith effort" to market the marital residence. As a reviewing court, we accord deference to the broad discretion of the trial court and will not reverse in the absence of an abuse of that discretion. Marion v. Marion, 11 Va. App. 659, 663-64, 401 S.E.2d 432, 435 (1991).
First, we consider the valuations of personal property adopted by the commissioner. "Under familiar principles we view [the] evidence and all reasonable inferences in the light most favorable to the prevailing party below. . . . [The trial court's] finding[s] [are] entitled to great weight and will not be disturbed on appeal unless plainly wrong or without evidence to support [them]." Pommerenke v. Pommerenke, 7 Va. App. 241, 244, 372 S.E.2d 630, 631 (1988) (citation omitted).
We hold the chancellor erred in valuing wife's ring at $10,000, a value based on husband's recollection of the purchase price. This Court may disturb the trial court's valuation only when insufficient evidence supports the valuation. See Frye v. Spotte, 4 Va. App. 530, 537, 359 S.E.2d 315, 319-20 (1987). The court relied only upon husband's recollection of the ring's purchase price. Wife's testimony, on the other hand, was supported by the actual receipt, which more accurately reflected the ring's value at $7,804. Neither party presented any evidence regarding the ring's value other than its purchase price. Thus, we reverse and remand to the trial court for reconsideration of the ring's value.
The chancellor did not err, however, in accepting husband's estimate that the fair market value of wife's art work and inventory was $10,000. Wife failed to attach a value to her art work, instead ascribing a $1,000 value only to the art inventory. In contrast, husband, who was responsible for the tax aspects of wife's business, attached a credible value of $10,000 to both the art work and inventory.
We hold the chancellor did abuse his discretion in using the value of wife's separate property to determine the amount of marital property to be awarded to each spouse. Under familiar principles of equitable distribution, trial courts have no authority to transfer or divide separate property without the agreement of the parties. See Code Sec. 20-107.3(C); Ellington v. Ellington, 8 Va. App. 48, 378 S.E.2d 626 (1989); Taylor v. Taylor, 5 Va. App. 436, 364 S.E.2d 244 (1988); McGinnis v. McGinnis, 1 Va. App. 272, 338 S.E.2d 159 (1985). In discussing the different amounts of personal property owned by the parties, the commissioner's report acknowledged that "Mrs. Crummett has substantially more in value than Mr. Crummett," and the commissioner took "those vagaries into consideration" in making his distribution award. The commissioner was without authority to do so.
The trial court may properly consider evidence of wife's separate property in light of the statutory factors set out in Code Sec. 20-107.3(E) (1). This provision allows trial courts to consider the monetary contributions of each party to the well-being of the family. Evidence in the record proved that wife kept her separate property partially shielded from the family's use, unlike husband, who used his separate property for the benefit of the family. However, nothing in the record showed that the trial court considered this statutory factor in relation to the separate property when making its distribution award.
Code Sec. 20-107.3(E) (9) specifically authorizes the trial court to consider the tax consequences to each party in making a division of marital property. The commissioner and trial court properly considered that husband would be adversely affected by the eventual sale of the marital residence, a sale which was found to be delayed by wife's uncooperative efforts at marketing the residence.
II. MONTHLY INCOME FROM THE RETIREMENT BENEFITS
We will not disturb the trial court's ruling that forty percent of husband's retirement benefits should be awarded to wife. The equitable distribution statutes do not provide for a presumption of a fifty-fifty division in every case; instead, the finder of fact must make a distribution based on what is fair and equitable utilizing the factors specified in Code Sections 20-107.3(G) and 20-107.3(E). See Aster v. Gross, 7 Va. App. 1, 7-8, 371 S.E.2d 833, 837 (1988) (sustaining a 65-35% distribution award); Papuchis v. Papuchis, 2 Va. App. 130, 132, 341 S.E.2d 829, 830-31 (1986) (stating that Code Sec. 20-107.3 contains no presumption favoring an equal distribution award). There was no abuse of discretion in awarding wife forty percent of the pension, as almost all of the financial contributions of the marriage were made by husband. A review of the record indicates that the statutory factors of Code Sec. 20-107.3(E) were properly considered in the commissioner's report, and the trial court's determination of the equitable distribution is supported by credible evidence.
III. DuPONT PLAN SURVIVOR BENEFITS AND LIFE INSURANCE
We hold that wife waived her right to any DuPont benefits when she signed an official waiver form. In 1985, husband retired from his employment at DuPont and began drawing a pension, which at the time of the hearing paid $2,028 a month. Upon husband's retirement, the parties agreed to opt for "income leveling" with respect to the pension, with wife executing a waiver of her right to post-retirement survivor benefits as the participant's spouse under the Retirement Equity Act (REACT) of 1984, Pub.L. No. 98-397, 98 Stat. 1426 (collectively ERISA). The results of this waiver were that husband could freely change the beneficiary and that the pension payment during husband's lifetime was increased so that the couple could maintain its comfortable standard of living.
Code Sec. 20-107.3(G) (2), which became effective on July 1, 1992, states in pertinent part:
To the extent permitted by federal or other applicable law, the court may order a party to designate a spouse or former spouse as irrevocable beneficiary during the lifetime of the beneficiary of all or a portion of any survivor benefit or annuity plan of whatsoever nature, but not to include a life insurance policy.
(Emphasis added.)
Even if we were to decide that this Code section could be applied retroactively, the trial court still lacked statutory authority to award the DuPont benefits to wife. The statute allows courts to award such benefits only as "permitted by federal or other applicable law." The federal Retirement Equity Act (REACT) recognizes a spouse's right in pension benefits, but this right can be, and was in the instant case, waived. The waiver notified wife that she was forfeiting her protection, and she acknowledged reading the notice. While wife waived her protection, she reaped the benefit of sharing in the significantly greater monthly payment during husband's lifetime. Wife's contract-based theories do not overcome her voluntary waiver of her protection.
IV. VALUATION, ALLOCATION, AND DISSIPATION OF THE PROPERTY
We hold the chancellor's findings as they relate to the valuation and allocation of relevant personal property are supported by the evidence in the record, except with respect to the repaired vehicle, which was improperly counted as husband's separate property. We have already disposed of wife's arguments concerning the valuation of the ring, the art work and inventory, and the separate property ( see supra, section I). We now address the alleged improper dissipation of marital property.
When a spouse removes joint marital funds and converts them to his or her own dominion and control, that spouse has the burden of establishing by a preponderance of the evidence that the funds were used for living expenses or some other proper purpose. Alphin v. Alphin, 15 Va. App. 395, 402, 424 S.E.2d 572, 576 (1992). The choice of valuation date must be one that "will provide the court with the most current and accurate information available which avoids inequitable results." Mitchell v. Mitchell, 4 Va. App. 113, 118, 355 S.E.2d 18, 21 (1987). However, this Court also stated in Mitchell that "for the purposes of making a monetary award a trial court should determine the value of the parties' assets as of a date as near as practicable to the date of trial." Id. An alternative date should be used only where it is necessary to arrive at an award more consistent with the factors enumerated in Code Sec. 20-107.3. Id. Using this standard, we find no error in the trial court's decision to select the date of the hearing for such valuation, as the trial court determined that husband's uses were proper. Husband provided the commissioner with a detailed accounting of the funds he had expended. These funds were used for the payment of joint expenses and debts, living expenses of husband, and the costs of litigation.
Nevertheless, while the trial court did not err in determining that the majority of husband's living expenses were proper, it did err in failing to compute husband's $3,000 expenditure for repair of the parties' vehicle as part of the parties' marital property. According to testimony, the vehicle had been originally titled in wife's name, but was retitled in husband's name after he had spent $3,000 of marital funds to restore it to a functional level. While husband's expenditure of $3,000 (out of the full $22,000 that wife claims was dissipated by husband) is not enough evidence to have mandated a new valuation date, its classification as separate property was erroneous because the vehicle is marital property. Husband did not demonstrate that he met the statutory factors listed in Code Sec. 20-107.3(A) (1). See Garland v. Garland, 12 Va. App. 192, 195-96, 403 S.E.2d 4, 7 (1991). Thus, the $3,000 value of the vehicle should have been considered as marital property when the trial court was determining the distribution award.
Code § 20-107.3(A)(1) defines separate property as (1) all property acquired before marriage; (2) all property acquired during marriage by bequest, devise, descent, survivorship or gift from a source other than the other party; (3) all property acquired during the marriage in exchange for or from the proceeds or sale of separate property; or (4) that part of any property classified as separate under the provisions governing part marital/part separate property.
V. ADDITIONAL SPOUSAL SUPPORT
The award of spousal support was fair and reasonable in view of all of the statutory factors that govern such determinations. Credible evidence existed to support the commissioner's findings. Seemann v. Seemann, 233 Va. 290, 293, 355 S.E.2d 884, 886 (1987). The evidence before the commissioner was conflicting and therefore his report is deemed to be prima facie correct. Hoffecker v. Hoffecker, 200 Va. 119, 124, 104 S.E.2d 771, 775 (1958).
The commissioner without error examined the statutory factors listed in Code Sec. 20-107.1. "It is presumed that a trial judge properly based his decision on the evidence presented . . . and properly applied the law." Alphin v. Alphin, 15 Va. App. 395, 400, 424 S.E.2d 572, 575 (1992) (citations omitted). After ascertaining that the only remaining income to husband, beyond his DuPont pension, was his social security, the commissioner reviewed, among other factors, the evidence concerning income, age of the parties, and earning ability, and determined that an award of $200 per month to wife was appropriate in view of wife's ability to obtain Social Security benefits for herself. This award was reasonable under the circumstances.
Based on the foregoing analysis, the order of the trial court is affirmed in part, reversed in part, and remanded.
Affirmed in part, reversed in part, and remanded.