COURT OF APPEALS OF VIRGINIA 

Present: Judges Baker, Willis and Bray 

Argued at Norfolk, Virginia 

MEREDITH ALEXANDER CHALLONER 

 

v. Record No. 1847-96-1 

CYNTHIA PRESSON CHALLONER MEMORANDUM OPINION* BY 

 JUDGE JERE M. H. WILLIS, JR. 

MEREDITH ALEXANDER CHALLONER APRIL 1, 1997 

v. Record No. 2294-96-1 

CYNTHIA PRESSON CHALLONER 

 FROM THE CIRCUIT COURT OF THE CITY OF NEWPORT NEWS 

Verbena M. Askew, Judge 

 Player B. Michelsen (Donald K. Butler; 

Morano, Colan & Butler, on briefs), for 

appellant. 

 John F. Rixey (Rixey and Rixey, on brief), 

for appellee. 

 Meredith A. Challoner appeals from a final decree granting 

his wife, Cynthia P. Challoner, a divorce, and from an order 

denying his petition for modification of support. Mr. Challoner 

contends that the trial court erred (1) in classifying certain 

stock as marital property, (2) in fashioning the equitable 

distribution award, (3) in determining spousal and child support, 

(4) in denying his petition for modification of support, and (5) 

in awarding Ms. Challoner attorney's fees. Because the trial 

court erred in classification of the parties' property, we 

 

 *Pursuant to Code § 17-116.010 this opinion is not 

designated for publication. 
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reverse on all issues and remand to the trial court. 

 Mr. Challoner contends that the trial court erred in finding 

that stock in Hampton Roads Chemical Corporation (HRCC), a 

family-owned business, was transmuted from separate property to 

marital property. The parties were married December 16, 1972. 

In 1972, prior to the marriage of the parties, Mr. Challoner 

received five shares of HRCC from his father. In 1974, Mr. 

Challoner began working for HRCC. Thereafter, he received stock 

in HRCC as follows: thirty-nine shares in 1984; ten shares in 

1987; eleven shares in 1988; and eleven shares in 1989. Mr. 

Challoner argues that the stock was a gift, and, therefore, his 

separate property. 

 The trial court erred in classifying the five premarital 

shares as marital property, determining that this separate 

property had been transmuted into marital property. Plainly, the 

five shares of stock acquired by Mr. Challoner prior to his 

marriage were separate property. See Code § 20-107.3(A)(1). 

Despite the significant nonmonetary contributions made by Ms. 

Challoner to the marital relationship, the statutory framework of 

Code § 20-107.3 prevents the transmutation of the stock into 

marital property. 

 Prior to equitable distribution, a trial court must classify 

the parties' property as marital, separate, or part marital and 

part separate. See Code § 20-107.3(A). The so-called "hybrid," 

or part marital and part separate, property classification 
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permits the retention of separate property by the acquiring 

spouse, while simultaneously affording the marital partner the 

increase in value attributed to the separate property during the 

course of the marital relationship. See Code § 20-107.3(A)(3). 

 However, the non-owning spouse must prove that the separate 

property increased in value due to contributions of marital 

property or the personal efforts of either party. Id. While the 

trial court found that Mr. Challoner's personal efforts led to a 

significant increase in the value of the HRCC stock, no evidence 

was presented regarding the premarital value of the stock shares 

acquired by Mr. Challoner. Therefore, we cannot determine the 

amount, if any, of the value of the shares that constitutes 

marital property. 

 We have previously held that: "prior to the 1990 amendment 

to Code § 20-107.3 . . . if the non-owning spouse nevertheless 

makes significant monetary or nonmonetary contributions to the 

marital relationship, that contribution is sufficient to 

transmute what was separate business property into marital 

property where the owning spouse devotes his efforts throughout 

the marriage to working in the business." Barnes v. Barnes, 16 

Va. App. 98, 104-05, 428 S.E.2d 294, 299 (1993) (emphasis added). 

See Lambert v. Lambert, 6 Va. App. 94, 367 S.E.2d 184 (1988). 

Citing Barnes, the trial court found that Ms. Challoner: 

 Made significant non-monetary contributions 

to the marital relationship which allowed 

[Mr. Challoner] to spend an enormous amount 

of time developing and enhancing the 
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business. Based on the evidence, the Court 

finds that HRCC was transmuted to marital 

property. 

 The 1990 amendment to Code § 20-107.3 limits the potential 

transmutation of separate property to marital property to 

include: (1) retention of the classification of the receiving 

property when separate and marital property commingle, with a 

resulting loss of identity of the contributed property; (2) 

acquisition of new property through the commingling of marital 

and separate property resulting in the loss of identity of the 

contributed properties; and (3) retitling separate property in 

the joint names of the parties. See Code § 20-107.3(A)(3)(d-f). 

 In this case, the shares of stock owned by Mr. Challoner prior 

to his marriage were not retitled in the parties' joint names, 

commingled with marital property to acquire new property, or 

commingled with marital property in such a manner as to lose its 

separate identity. Therefore, the five shares of stock in HRCC 

owned prior to marriage were not transmuted and remain Mr. 

Challoner's separate property. 

 As for classification of the remaining shares, 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." Code § 20-107.3(A)(2); Bowers v. Bowers, 

4 Va. App. 610, 615, 359 S.E.2d 546, 549 (1987). Thus, if the 

donee presents "sufficient evidence," and the other party 

presents no evidence to the contrary, the statutory presumption 
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of marital property is rebutted. See Huger v. Huger, 16 Va. App. 

785, 788, 433 S.E.2d 255, 257 (1993). 

 In this case, Mr. Challoner failed to rebut the statutory 

presumption. While he testified that the shares were gifts, the 

commissioner found, and the trial court accepted, that the shares 

received during marriage were marital property. The commissioner 

noted that: "While a gift by definition is normally transferred 

'without consideration,' the stock interests conveyed to the 

husband were not in reality 'gifts,' but were in return for the 

services he rendered" to HRCC. See Brett R. Turner, Equitable 

Distribution of Property, § 5.16 (2d ed. 1994). 

 Because the parties' assets were improperly classified, the 

trial court must reconsider its equitable distribution, child 

support, and spousal support awards. While we recognize that our 

reversal abrogates the trial court's award of attorney's fees to 

Ms. Challoner for the hearing on Mr. Challoner's petition to 

modify his support obligations, we note that the decision to 

grant attorney's fees lies in the trial court's sound discretion 

with the key being reasonableness under all of the circumstances. 

Graves v. Graves, 4 Va. App. 326, 333, 357 S.E.2d 554, 558 

(1987); McGinnis v. McGinnis, 1 Va. App. 272, 277, 338 S.E.2d 

159, 162 (1985). 

 In addition, we recognize that the trial court may be called 

upon to reconsider whether to deviate from the child support 

guidelines to accommodate the tuition costs for the parties' 
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children's attendance at private schools. While not addressing 

this issue specifically on appeal, we suggest the following as 

guidance to assist the trial court in resolving this matter. 

 "Implicit in the [child support] statutory scheme is that 

educational expenses are included in the presumptive amount of 

child support as calculated under the Code." Smith v. Smith, 

18 Va. App. 427, 435, 444 S.E.2d 269, 275 (1994). See Code 

§ 20-108.1(B)(6). "Code § 20-108.1(B) expressly provides that 

when a trial court deviates from the presumptive amount 

recommended by the guidelines, it must provide written findings 

of fact that 'shall give a justification of why the order varies 

from the guidelines.'" Solomond v. Ball, 22 Va. App. 385, 391, 

470 S.E.2d 157, 159-60 (1996) (citation omitted). 

 In the final decree of divorce, the trial court deviated 

from the child support guidelines to include the private school 

expenses of the parties' children. In justifying the increase in 

support, the trial court opined that: 

 [T]he presumptive amount of child support 

 . . . would be unjust and inappropriate in 

this case based upon the standard of living 

of the family established during the 

marriage, the particular problems of one or 

more of the children, the indicated desires 

of both parties to continue with the private 

education of the children, and the earning 

capacity, obligations, needs and financial 

resources of both parties . . . . 

 In Ball, the trial court failed to consider whether the 

father was required to pay for his children's transfer from one 
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private school to a more "preferred," and, expensive, private 

school. In reversing that judgment, we noted that "the trial 

court must consider, together with each parent's ability to pay, 

whether a reason or need is shown to justify a change of schools 

before increasing a noncustodial parent's support obligation." 

Ball, 22 Va. App. at 392, 470 S.E.2d at 160. In determining 

whether requiring a parent to pay for a child to transfer to a 

more expensive school is justified, relevant factors include: 

the availability of satisfactory public schools, attendance at 

private school prior to the separation and divorce, special 

emotional or physical needs, religious training and family 

tradition. Id. at 391-92, 470 S.E.2d at 160. 

 In this case, the trial court grounded its decision to 

deviate upward from the child support guidelines upon the 

parties' standard of living, earning capacity and the "particular 

problems of one or more children." See Code § 20-108.1(B)(6), 

(10) and (11). Prior to the separation, the parties' children 

attended private school, with tuition costs estimated at $11,050 

in 1993. However, since the parties' separation, one child moved 

to a different private school, and the eldest child went to 

boarding school. The evidence showed that tuition expenses 

totaled $23,790. The trial court modified the presumptive 

monthly child support obligation from $2,487 to $3,787 per month, 

which included health care coverage. 

 In deviating from the presumptive child support guidelines, 
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the trial court should consider what specific circumstances 

justified requiring Mr. Challoner to pay for significantly 

increased tuition costs resulting from the transfer of the 

parties' children to different, and more expensive, private 

schools. 

 For the foregoing reasons, we reverse and remand to the 

trial court for further proceedings consistent with this opinion. 

 Reversed and remanded.