Opinion
Record No. 0954-93-1 Record No. 1923-93-1
Decided: January 3, 1995
FROM THE CIRCUIT COURT OF THE CITY OF PORTSMOUTH, L. Cleaves Manning, Judge
Richard S. McLellon for Lloyd Bradley Havird.
Michael F. Fasanaro, Jr. (Abrons, Fasanaro Sceviour, on brief), for Iris Henry Havird.
Present: Judges Baker, Koontz and Bray
Pursuant to Code Sec. 17-116.010 this opinion is not designated for publication.
In separate appeals consolidated for argument, Lloyd Bradley Havird (Mr. Havird) and Iris Henry Havird (Mrs. Havird) challenge various aspects of a final decree of divorce entered April 2, 1993. Mr. Havird asserts that the chancellor erred in failing to require Mrs. Havird to adduce evidence of the present value of his military pension and in awarding her a percentage of his periodic pension benefit without limitation in equitable distribution. Mrs. Havird asserts that the chancellor erred in awarding Mr. Havird a divorce on the ground of her desertion of the marriage, in denying permanent spousal support to her, and in failing to direct Mr. Havird to name Mrs. Havird as a beneficiary of Mr. Havird's pension survivor's benefit insurance. We agree that the chancellor erred in failing to receive evidence and consider the present value of Mr. Havird's pension prior to making an award of periodic benefits pursuant to Code Sec. 20-107.3(G). We find no error with respect to the other issues raised by the parties.
The parties are familiar with the facts of this case. Accordingly, we restate only those facts necessary to explain our holding. The couple's twenty-eight year marriage ended when Mrs. Havird left the marital home on September 22, 1987. She did not file her Bill of Complaint seeking a divorce until September 24, 1987. Reviewing the evidence in the light most favorable to the party prevailing below, Schoenwetter v. Schoenwetter, 8 Va. App. 601, 605, 383 S.E.2d 28, 30 (1989), it appears that while the couple had discussed meeting with an attorney, there was no formal agreement to separate at the time Mrs. Havird departed.
"[O]ne spouse is [not] legally justified in leaving the other spouse merely because there has been a gradual breakdown in the marital relationship." Sprott v. Sprott, 233 Va. 238, 242, 355 S.E.2d 881, 883 (1987). While the evidence shows that the couple's marriage had deteriorated to an extreme level of incivility, it also supports the chancellor's finding that Mrs. Havird left the marital home of her own accord and with the intent of permanently deserting the marital relationship. Under the applicable standard of review, we cannot say that this finding was in error.
When this case was filed in 1987, it was "settled law in this Commonwealth that a party shall not be required to pay permanent spousal support if there exists in such spouse's favor a ground of divorce under Code Sec. 20-91(6)." Zinkhan v. Zinkhan, 2 Va. App. 200, 210, 342 S.E.2d 658, 663 (1986). The chancellor denied Mrs. Havird permanent spousal support based on the finding that Mr. Havird had established a ground of divorce based on his wife's desertion, a fault ground enumerated in Code Sec. 20-91(6). That finding is consonant with the law applicable to this case.
Subsequent to the commencement of this case, Code Sec. 20-107.3 was amended to allow the chancellor to direct that a former spouse be named as a beneficiary to a pension survivor's benefit. See Code Sec. 20-107.3(G) (2). There is no indication that the legislature intended for its amendment of Code Sec. 20-107.3 with respect to pension survivor benefits to apply to pending litigation. Cf. Gaynor v. Hird, 11 Va. App. 588, 591, 400 S.E.2d 788, 789 (1991). Accordingly, it was not error for the chancellor to refuse to order this benefit in favor of Mrs. Havird.
With respect to Mr. Havird's assertion that Mrs. Havird is not entitled to any portion of his military pension, it is well settled in Virginia that all pensions, including military pensions, may be classified as marital property subject to equitable distribution. See Holmes v. Holmes, 7 Va. App. 472, 478, 375 S.E.2d 387, 391 (1988); Sawyer v. Sawyer, 1 Va. App. 75, 78, 335 S.E.2d 277, 279-80 (1985). In addition, we find no error in the chancellor's finding, based upon the evidence in the record, that Mrs. Havird was entitled to an equitable portion of this pension.
Mr. Havird further asserts that the chancellor erred in failing to determine the present value of his pension prior to making a percentage award, payable as a portion of his periodic benefit, to Mrs. Havird. The apparent underpinning of this assertion is his belief that a present value determination of his pension would establish a "cap" on the total amount of future periodic benefits Mrs. Havird would receive. We agree that the chancellor was required to determine the present value of Mr. Havird's pension, but reject the assertion that this value necessarily establishes a limitation on total benefits when received periodically.
Before a trial court determines to award equitable distribution of pension benefits by periodic installment rather than by lump sum monetary award, there must first be a determination of the pension's present value. Code Sec. 20-107.3(E) (8) (repealed 1988). Although some confusion existed with respect to the application of Code Sec. 20-107.3 with respect to pensions prior to the repeal of subsection (E) (8), we resolved this issue in Artis v. Artis, 4 Va. App. 132, 354 S.E.2d 812 (1987). There, we held that "the [trial] court should not determine the method of payment pursuant to [Code Sec. 20-107(G)] until it has fully complied with the previous subsections and requirements of Code Sec. 20-107.3, including valuation and a monetary award." Id. at 135, 354 S.E.2d at 814. Accordingly, the chancellor erred in failing to determine the present value of Mr. Havird's pension.
However, in subsequent consideration of cases governed by Code Sections 20-107.3(E) (8) and (G) as in effect before the 1988 amendments, we rejected the argument that an award based on a portion of a pension benefit made pursuant to subsection (G) was limited by the present value determination made pursuant to subsection (E) (8). See Zipf v. Zipf, 8 Va. App. 387, 382 S.E.2d 263 (1989). In Zipf, we held that limitation of a pension award, payable in the future, to a "present value calculation" denied the benefit of "future earnings and adjustments that are attributable to the . . . deferred share" and its "future appreciation." Id. at 397, 382 S.E.2d at 268-69. Because subsection (G) permits the distribution of benefits to be deferred by the obligor spouse until actual payment of the benefits, "[i]t is only fair that both parties share in the increased value of the pension," or one will be "receiving the increase in value" over time which is attributable to the other's marital interest. Primm v. Primm, 12 Va. App. 1036, 1038, 407 S.E.2d 45, 47 (1991).
In Zipf, we noted that the purpose of determining the present value of a pension benefit was twofold:
First, it provides the trial judge with an informational base figure to assist in calculating the amount of the award. In addition, the present value of a pension would be useful information for the "party against whom a monetary award is made" who might wish immediately to "satisfy the award, in whole or in part, by conveyance of property, subject to the approval of the court." Code Sec. 20-107.3(D). "The only reason for discounting to present value is to justify the payment in present dollars of a sum of money which is not due, if at all, until sometime in the future." Whitfield [v. Whitfield, 222 N.J. Super. 36, 51, 535 A.2d 986, 994 (N.J.Super.Ct. App. Div. 198 7)].
Zipf, 8 Va. App. at 397-98, 382 S.E.2d at 269. Here, the chancellor's award without first determining the present value of the pension denied Mr. Havird the opportunity to immediately satisfy the award in whole or in part.
Accordingly, we remand to the trial court with instructions to: (1) determine the present value of Mr. Havird's pension on the date of Mrs. Havird's desertion of the marital home or other such valuation date as the chancellor deems appropriate; (2) reconsider the award of a 35% periodic benefit, specifying that the total benefit Mrs. Havird may receive is not subject to limitation by the present value of the pension; and (3) consider any offer of whole or partial present satisfaction Mr. Havird may wish to present, adjusting the award if the court deems the offer of present satisfaction to be appropriate. In all other respects, we affirm the chancellor's decision.
Affirmed in part, reversed in part, and remanded with instructions.