COURT OF APPEALS OF VIRGINIA 

Present: Judges Coleman, Elder and Senior Judge Cole 

Argued at Salem, Virginia 

JAMES P. HART, III 

v. Record No. 0931-97-3 

MARIE HOLT HART OPINION BY 

 JUDGE SAM W. COLEMAN III 

MARIE HOLT HART MARCH 31, 1998 

v. Record No. 0979-97-3 

JAMES P. HART, III 

FROM THE CIRCUIT COURT OF ROANOKE COUNTY 

Roy B. Willett, Judge 

 Charles B. Phillips (Phillips & Swanson, on 

briefs), for James P. Hart, III. 

 William H. Cleaveland (Leisa Kube Ciaffone; 

Rider, Thomas, Cleaveland, Ferris & Eakin; 

Gentry, Locke, Rakes & Moore, on briefs), for 

Marie Holt Hart. 

 James P. Hart, III (husband) and Marie Holt Hart (wife) 

separately appeal the trial court's divorce decree and equitable 

distribution award. Husband contends the trial court erred when 

it: (1) divided in kind real property titled jointly to both 

parties; (2) designated a boundary line between two of the 

parcels different from the boundary recommended by the 

commissioner; (3) created joint easements of ingress and egress 

on the partitioned parcels and ruled that each party would bear 

the entire costs of maintaining the sections of such easements 

located on their respective tracts regardless of the extent of 

use by the other, their tenants, and licensees; and (4) 
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classified husband's Central Fidelity account as marital property 

and distributed one-half of the account assets to wife. Wife 

contends the trial court erred when it: (1) calculated the value 

of husband's separate share of a certain mortgage note; (2) 

failed to classify as wife's separate property certain money in a 

USAA bond fund which she claims she traced to money she 

inherited; and (3) estimated husband's contributions to the USAA 

bond fund when it divided the fund upon consideration of the 

factors under Code § 20-107.3(E). For the reasons that follow, 

we affirm in part, reverse in part and remand to the trial court 

for further proceedings in accordance with this opinion. 

I. BACKGROUND

 The parties were married in New York in 1968 and lived in a 

home that husband had purchased before the marriage. In 1986, 

they sold the New York home, receiving $40,000 part payment and a 

$219,000 twenty-year promissory mortgage note. They relocated to 

Virginia, where they purchased a forty-two acre parcel of land 

adjacent to Smith Mountain Lake (Plantation Point) which they 

jointly titled. At Plantation Point, they built a marital home 

and eight rental units. Due to the parties' concerns over the 

health of wife's parents (the Holts), they also constructed a 

separate residence for the Holts on the Plantation Point property 

(Hillsdale). Mrs. Holt contributed approximately $48,000 to 

purchase the building materials for Hillsdale. The parties and 

the Holts established neither a repayment nor lease agreement nor 
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did they execute a deed that conveyed any estate or interest in 

the property to the Holts. The parties merely acknowledged that 

Hillsdale was built as a residence for the Holts to live in "as 

long as they were able." 

 After selling the New York home in 1986, the parties opened 

a USAA Virginia Bond Fund account using the $40,000 down payment 

from the New York home as the initial deposit. Over the years, 

money from various sources was deposited into the fund, including 

amounts contributed by Mrs. Holt, the New York mortgage note 

payments, rental receipts from the lessees of the Plantation 

Point rental units, husband's IBM pension payments, and $20,500 

that wife inherited from her great aunt. 

 The parties separated on February 4, 1994. They executed a 

separation agreement in which they agreed to temporarily "split 

their net income" pending a judicial determination and award of 

equitable distribution. Husband deposited his share of the 

income into a Central Fidelity bank account that he opened after 

the parties separated. 

 In October 1994, husband filed for divorce on the ground of 

adultery. The trial court appointed a commissioner in chancery 

to hear evidence, report factual findings, and make 

recommendations regarding, among other matters, how to equitably 

distribute the parties' marital property. After receiving the 

commissioner's report, the trial court specifically found that 

the wife had committed adultery but granted husband a divorce on 
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the ground of having lived separate and apart and approved the 

commissioner's equitable distribution recommendations with some 

modifications. 

 II. GENERAL PRINCIPLES

 Code § 20-107.3 governs how property shall be equitably 

distributed when a marriage is dissolved. The statute provides 

that the court shall determine legal title as between the 

parties, shall classify the parties' property as separate or 

marital property, shall evaluate the marital and separate 

property, and shall determine the rights and interests of the 

parties in the marital property. The court must then equitably 

divide the marital property in the manner authorized by the 

statute, taking into consideration the factors enumerated in 

subsection (E). See generally Code § 20-107.3. 

 On appeal, the trial court's award of equitable distribution 

will not be reversed "unless it appears from the record that the 

chancellor has abused his discretion, that he has not considered 

or misapplied one of the statutory mandates, or that the evidence 

fails to support the findings of fact underlying his resolution 

of the conflict of the equities." Robinette v. Robinette, 10 Va. 

App. 480, 486, 393 S.E.2d 629, 633 (1990) (citations omitted). A 

decree confirming a commissioner's report is presumed correct and 

will not be disturbed unless plainly wrong or without evidence to 

support it. Pelfrey v. Pelfrey, 25 Va. App. 239, 244, 487 S.E.2d 

281, 283 (1997); Gamer v. Gamer, 16 Va. App. 335, 339, 429 S.E.2d 
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618, 622 (1993). 
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III. DIVISION OF PLANTATION POINT PROPERTY

 Upon consideration of the factors enumerated in Code 

§ 20-107.3(E), the commissioner recommended that the Plantation 

Point property be divided into three parcels: one parcel to 

husband, which included the marital home and four rental units; a 

second parcel of equal value to wife, which included the 

Hillsdale home and four rental units, and a third parcel which is 

to remain titled to both parties as tenants in common. The 

commissioner recommended that the parties be given the option of 

purchasing the undivided interest of the other in the third tract 

and if they failed to agree upon such a sale, the third tract 

would be sold. The commissioner further recommended that 

easements for ingress and egress be established on the 

partitioned properties, which would be a joint easement along a 

driveway that runs through both tracts of land. The commissioner 

recommended that wife should be solely responsible for the cost 

of maintaining the portion of the easement that is solely located 

on and serves only her property and that both parties should be 

equally responsible for the cost of maintaining the easement that 

is located on husband's property and serves both tracts. 

 The trial court approved the commissioner's recommendations 

with two exceptions relevant to this appeal. First, the trial 

court referenced the lake's 800-foot contour line in designating 

the boundary line between the two parcels; the commissioner had 

generally referenced that line as the lake's "water line." 
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Second, the trial court ruled that the cost of maintaining the 

joint easement "shall be the sole responsibility of the 

respective owners" of the tracts across which the easements run. 

A. Division In Kind

 We hold that the trial court did not err by dividing the 

Plantation Point property into separate parcels rather than 

allotting the whole property to James P. Hart in exchange for his 

agreement to purchase wife's interest at fair market value. Code 

§ 20-107.3(C) authorizes the trial court to "order the division 

or transfer, or both, of jointly owned marital property . . . 

based upon the factors listed in subsection E." Under this 

provision, the trial court may, in its discretion, order a 

division in kind of the property, permit either party to purchase 

the interest of the other and direct the allocation of the 

proceeds, or order a public or private sale of the property. See

id.; Gaynor v. Hird, 11 Va. App. 588, 592, 400 S.E.2d 788, 790 

(1991). 

 Code § 20-107.3(C), when enacted in 1982, did not authorize 

a trial court to divide or transfer title to property except that 

"in the final decree of divorce the court may partition marital 

property which is titled in the names of both parties." The 

initial equitable distribution statute permitted trial courts in 

their final divorce decrees to partition jointly titled property 

in order to effectuate a property division according to the 

parties' legal title rather than be required to file a separate 
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suit for partition. Morris v. Morris, 3 Va. App. 303, 309-10, 

349 S.E.2d 661, 665 (1986). Partition as authorized in the 

divorce case was, however, no different from partition prior to 

equitable distribution and was required to conform with Code 

§ 8.01-81 et seq. Clayberg v. Clayberg, 4 Va. App. 218, 221, 355 

S.E.2d 902, 904 (1987). Code § 8.01-83 required trial courts, 

when partitioning realty, to partition the property in kind, 

except when "partition cannot conveniently be made, [in which 

case] the entire subject may be allotted to any one or more of 

the parties who will accept, and pay therefor to the other 

parties such sums of money as their interest therein may entitle 

them to," or, alternatively, to sell the property and divide the 

proceeds. See Sensabaugh v. Sensabaugh, 232 Va. 250, 256, 349 

S.E.2d 141, 144-45 (1986); Nickels v. Nickels, 197 Va. 498, 

501-02, 90 S.E.2d 116, 118 (1955) (applying Code §§ 8-690 and 

8-692). In a partition proceeding, the court was not authorized 

to order a sale or an allotment of the property to one of the 

owners in exchange for its value if the property could have been 

divided in kind. Leake v. Casati, 234 Va. 646, 649, 363 S.E.2d 

924, 926 (1988). Property rights were considered "[s]o sacred 

. . . that to take it from one man and give it to another for 

private use [was] beyond the power of the state itself, even upon 

payment of full compensation." Id. (citation omitted). 

Furthermore, the fact that property may be less valuable when 

divided in kind is "insufficient to deprive a co-owner of his 
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'sacred right' to property." Sensabaugh, 232 Va. at 258, 349 

S.E.2d at 146. 

 In 1988, the General Assembly amended Code § 20-107.3(C) to 

delete the provision authorizing partition and substituted in its 

stead the authority, "based upon the factors listed in subsection 

E, [to] divide or transfer or order the division or transfer, or 

both, of jointly owned marital property, or any part thereof." 

The statute expressly authorized the court either to divide the 

property, permit one party to purchase it with the court 

allocating the proceeds, or direct that it be sold, in whole or 

in part, by public or private sale "without the necessity of 

partition." Id. The amendment has the effect of permitting the 

court to divide jointly owned realty as a marital asset subject 

to equitable distribution according to the rights and equities of 

the parties and subsection (E) factors rather than partition the 

property according to legal title and adjust the equities by a 

monetary award. See Frazer v. Frazer, 23 Va. App. 358, 371-72, 

477 S.E.2d 290, 296-97 (1996). 

 We hold that the trial court did not err in accepting the 

commissioner's factual findings and conclusions of law to support 

the in-kind division of the property. 

 The commissioner found that "the lifetime goals of both

parties for retirement was the occupancy of this unique parcel of 

land." The commissioner visually inspected the property and 

heard testimony from an expert witness describing how the 
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property could be partitioned. Based on these facts, the 

commissioner concluded that Plantation Point should be 

partitioned so that both husband and wife could occupy the land. 

 The evidence supports the commissioner's finding that Mrs. 

Hart's mother, Mrs. Holt, contributed substantial funds to buy 

materials for the construction of the Hillsdale home on the 

property and that the parties contemplated that Mrs. Holt would 

live in the Hillsdale home for her lifetime. Although a third 

party cannot be granted a monetary award or a trust in marital 

property, Wooley v. Wooley, 3 Va. App. 337, 349 S.E.2d 422 

(1986), on these facts the commissioner did not err in awarding 

Mrs. Hart an equal in-kind share of the Plantation Point property 

in view of her monetary and non-monetary contributions to the 

acquisition, improvement, maintenance and construction on the 

property, including the monetary contributions from Mrs. Hart's 

mother, Mrs. Holt. Both the commissioner and the trial judge 

considered the factors under Code § 20-107.3(E) in arriving at 

the in-kind division. See Frazer, 23 Va. App. at 372, 477 S.E.2d 

at 296. "Fashioning an equitable distribution award lies within 

the sound discretion of the trial judge and that award will not 

be set aside unless it is plainly wrong or without evidence to 

support it." Srinivasan v. Srinivasan, 10 Va. App. 728, 732, 396 

S.E.2d 675, 678 (1990). Accordingly, we cannot say the trial 

court's decision to divide in kind Plantation Point was plainly 

wrong or without evidence to support it, or that it was an abuse 
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of 

discretion.1

B. Boundary Lines

 Husband contends the trial court abused its discretion when 

it referenced the lake's 800-foot contour line as one boundary 

between the parties' properties. He claims the commissioner, in 

recommending a division of the property, intended that the 

boundary be referenced to the 795-foot contour line of the lake. 

 The trial court's adjustment of the boundary line will have the 

effect of reducing the size of husband's tract and increasing the 

size of wife's tract by a small strip of property. Thus, he 

argues, the trial judge abused his discretion when he "overruled 

the Commissioner and set the line to the 800-foot contour line" 

without specifying his reasons for doing so. 

 Husband's contention lacks merit. In recommending an 

in-kind division, the commissioner referenced the boundary line 

in dispute to the "water line." The commissioner's report does 

not indicate whether the "water line" refers to the 795-foot 

contour line, as husband presumes, or the 800-foot contour line. 

 It appears from the record that the commissioner alluded to the 

"water line" because no plat or geological survey had been made 

 

 1On brief, husband contested the trial court's assignment of 

sixty percent of the Hillsdale property to wife in partitioning 

the property. At oral argument, husband conceded that the trial 

court did not abuse its discretion in dividing the partitioned 

property, and, therefore, we shall not consider that argument in 

this appeal. 
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of the property at the time of the commissioner's report. We do 

not believe the trial court "overruled" the commissioner's 

recommendation. Moreover, the 800-foot contour line was used by 

the surveyor in determining the acreage of the respective 

parcels. It was from these measurements that the trial court 

determined the property value of each parcel in fashioning the 

equitable distribution award. Accordingly, we cannot say the 

trial court abused its discretion by designating the boundary 

line of the respective properties in reference to the 800-foot 

contour line. 

C. Maintenance of Joint Easement

 Husband next argues the trial court erred when it ruled that 

the costs of maintaining the driveway as a joint easement shall 

be the sole responsibility of the party who owns the parcel over 

which the easement runs. We agree. 

 Under the common law, the power to grant easements in a suit 

for partition is necessarily implied in the court's power to make 

the partition. See Martin v. Martin, 95 Va. 26, 29-30, 27 S.E. 

810, 811-12 (1897) (upholding creation of easement to allow 

access to water source located on servient estate after 

partition); see also 59A Am.Jur.2d Partition § 299 at 172-73 

("Since the beneficial and convenient partition of real estate 

will often require that a right of way . . . or easement, be 

given to one share in the parts assigned to other shares, the 

power to create such rights and privileges is held to be 
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necessarily implied in the grant of jurisdiction to make 

partition."). Partition, as it was authorized under Code 

§ 20-107.3, is no different from partition at common law and as 

codified in Code § 8.01-81 et seq., except that it could be done 

in the divorce proceeding rather than a separate suit. Clayberg, 

4 Va. App. at 221, 355 S.E.2d at 904. Thus, although the power 

of the divorce court to divide jointly owned property has been 

expanded beyond the power to partition property according to 

legal title, it follows that a trial court has the same power to 

establish easements for ingress and egress when dividing real 

estate in a divorce case as it would have had in a partition 

suit. 

 However, the trial court abused its discretion by ruling 

that the cost of maintaining the joint easement "shall be the 

sole responsibility of the owners" across whose property the 

easement runs. The effect of this ruling is to place the sole 

responsibility of maintaining and repairing a jointly used 

roadway upon the owner and successors in title of the servient 

tract, with no responsibility of the owner or lessee of the 

dominant tract who may use and benefit from the easement equally. 

 Generally, under the common law, the owner of an easement has a 

duty to maintain the easement and must bear the entire cost of 

its maintenance and upkeep. See Anderson v. Lake Arrowhead Civic 

Assoc., 253 Va. 264, 273, 483 S.E.2d 209, 214 (1997); Oney v. 

West Buena Vista Land Co., 104 Va. 580, 585, 52 S.E. 343, 344 
- 14 - 

(1905). This general rule only applies where the dominant estate 

owner is the sole user of the easement. See 1 Friedman, 

Contracts and Conveyances of Real Property § 4.9(m) (5th ed. 

1991). "[W]here the easement owner is not the sole user of a 

private right-of-way, but uses it in common with the servient 

[estate], then the costs of repair and maintenance should be 

[proportionately] distributed among all users" between both the 

dominant and servient estates. Lindhourst v. Wright, 616 P.2d 

450, 454-55 (Okla. App. 1980) (quoted in Marvin E. Nieberg Real 

Estate Co. v. Taylor-Morley-Simon, 867 S.W.2d 618, 623 (Mo. App. 

1993)); see Bowen v. Buck and Fur Hunting Club, 550 N.W.2d 850, 

851 (Mich. App. 1996); Janes v. Politis, 361 N.Y.S.2d 613, 615-16 

(Sup. Ct. 1974); McManus v. Sequoyah Land Assoc., 20 A.L.R.3d 

1015, 1023 (Cal. App. 1st Div. 1966); see also 25 Am.Jur.2d 

Easements and Licenses § 85 at 492 (1966) ("[W]here a private 

road is used in common by the owner of land across which such 

road runs and by a person who has an easement of way over it, the 

burden of reasonable repairs must be distributed between them in 

proportion as nearly as possible to their relative use of the 

road."). Thus, we hold "that the duty of repair [for a jointly 

owned easement for ingress and egress] should fall where reason, 

convenience and equity require" and should be apportioned among 

all those who own and have the right to use the easement. 

Lindhourst, 616 P.2d at 455 (citation omitted). 

 Because both parties and their tenants will use the joint 
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driveway easements to access the public road and the waterfront, 

the costs of maintaining and repairing the easements should be 

apportioned between the parties. Accordingly, we reverse the 

trial court's ruling concerning the maintenance costs of the 

easements and remand the case for the trial court to enter a 

decree and take such further action in conformity with this 

holding that shall be necessary to define the parties' property 

rights and responsibilities upon the appropriate real estate 

records. 

IV. CENTRAL FIDELITY ACCOUNT

 The parties' separation agreement provided that they would 

"split" their net income earned from the time of separation until 

the court's equitable distribution decree. Husband was to 

"arrange the split by sending a check on the first of each month 

to the wife in the amount of $3,630.22," which represented 

one-half of the income derived from the couple's rental receipts, 

mortgage note payments, and IBM pension payments. The agreement 

further provided that "[a]fter 45 days, [one-half] of the cost of 

Husband's efforts to manage, maintain, but not to improve, the 

rental properties shall be credited in the final division of 

assets." (Emphasis added). Contrary to the terms of the 

agreement, husband contemporaneously deducted the expenses 

associated with the rental units from the couple's share of gross 

total income each month. He paid wife one-half of the net income 

and placed his net share into the Central Fidelity account, which 
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he opened after separation. 

 The commissioner recommended that under the terms of the 

agreement husband was required to pay wife one-half of the 

couple's post-separation income each month and subsequently 

receive "credit" for the rental expenses when the court made its 

equitable distribution award. In determining the amount of 

rental expense to credit husband, the commissioner calculated the 

amount of the expenses that had been deducted from wife's monthly 

payments and subtracted that amount from one-half of husband's 

total rental expenses incurred after separation. The 

commissioner determined from his calculation that husband was 

entitled to an additional credit for expenses that he had paid in 

the amount of $2,199.39, which amount was to be offset against 

the wife's total equitable distribution award. Additionally, 

 the commissioner recommended classifying the account as 

marital property and dividing the account assets as part of the 

court's monetary award. The trial court approved the 

commissioner's recommendations. Husband contends the 

post-separation income was not marital property subject to 

equitable distribution under Code § 20-107.3(A)(2) and, 

therefore, the trial court erred in classifying it as marital and 

including it in the equitable distribution award. 

 The trial court did not err when it classified the account 

as marital property. Under Code § 20-107.3, all property 

acquired during the marriage and before the last separation of 
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the parties is presumed to be marital property in the absence of 

satisfactory evidence that it is separate property. See

Stainback v. Stainback, 11 Va. App. 13, 17, 396 S.E.2d 686, 689 

(1990); see also Stratton v. Stratton, 16 Va. App. 878, 881, 433 

S.E.2d 920, 922 (1993) ("[T]he character of property at the date 

of acquisition governs its classification pursuant to Code 

§ 20-107.3."). The fact that a portion of the parties' income in 

the fund was received after the separation does not control the 

classification of income from jointly titled property whether 

received before or after the separation. The evidence 

established that the account accumulated payments from assets 

that were acquired during the marriage. Moreover, under Code 

§ 20-107.3(A)(2)(i), "all property titled in the names of both 

parties, whether as joint tenants, tenants by the entirety, or 

otherwise" is marital property. The rental properties were 

titled in the names of both parties, and, thus, any income from 

such jointly owned properties was also jointly owned and was 

properly classified as marital property. See Dietz v. Dietz, 17 

Va. App. 203, 211, 436 S.E.2d 463, 468 (1993). "[M]arital 

property, in the absence of a valid, express agreement by the 

parties, cannot become the separate property of one of the 

parties." Wagner v. Wagner, 4 Va. App. 397, 404, 358 S.E.2d 407, 

410 (1987). Here, rather than stipulate that the post-separation 

income is separate property, the separation agreement states that 

the parties shall divide "their" net income. 
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 Although the commissioner correctly found that the account 

assets were marital property and recommended that the monetary 

award be properly adjusted by crediting husband for rental 

expenses that had not been previously deducted from the wife's 

share of the income, he improperly included the husband's 

post-separation income as marital property in calculating the 

monetary award. Code § 20-109 provides that divorcing parties 

may agree to the "terms of a monetary condition or 

consideration." Here, the separation agreement stipulated how 

the parties would split their post-separation income. Husband 

paid wife her share of the income in accordance with the 

agreement. The trial court may not enter a decree that is 

inconsistent with a valid agreement between the parties. See

Westbrook v. Westbrook, 5 Va. App. 446, 452, 364 S.E.2d 523, 527 

(1988) (reversing court's classification of real estate as 

separate where parties executed postnuptial agreement stating 

that property was marital property). Because the parties' 

post-separation income had already been distributed according to 

the terms of the separation agreement, the trial court erred in 

accepting the commissioner's recommendation to include husband's 

share of the income in its equitable distribution award. 

According to the agreement, the trial court's only task was to 

calculate husband's "credit" for rental expenses not already 

deducted. The Central Fidelity account assets should have been 
- 19 - 

left alone.2

 Accordingly, we affirm the trial court's ruling 

crediting husband against the monetary award with having paid 

wife's one-half of the rental expenses. However, we reverse the 

trial court's inclusion and division of the Central Fidelity 

account assets in the monetary award. On remand, the trial court 

shall deduct from the marital estate one-half of the total 

Central Fidelity account assets. 

V. MORTGAGE NOTE

 Husband purchased the New York home prior to the marriage 

for $27,000 financed by a mortgage on the property. Husband 

testified that he improved the property before the marriage by 

installing a pool and adding carpet to the home "at a cost of 

$10,000." At the time of marriage, the balance on the mortgage 

was $20,835. Eighteen years later, the parties sold the home for 

$259,000, receiving a $40,000 cash down payment and a $219,000 

mortgage note payable over twenty years. 

 Citing Code § 20-107.3(A)(3)(d-e), the commissioner 

classified the mortgage note as hybrid property and determined 

the respective marital and separate property portions of the note 

using "the methodology of hybrid tracing." The commissioner 

 

 2The trial court found that an additional $10,000 repaid by 

husband's sons in satisfaction of a previous loan was marital 

property and should also be distributed in the decree. The loan 

was made with funds that had already been distributed pursuant to 

the separation agreement and should not have been redistributed 

in the equitable distribution award. Because husband used funds 

from the Central Fidelity account in order to make this loan, the 

trial court also erred in including this amount in the monetary 

award. 
- 20 - 

found that husband separately contributed $16,265 to the purchase 

and improvement of the home, which included $2,700 from husband's 

down payment on the house, pre-marital mortgage payments in the 

amount of $3,565, and "the pool construction and carpet costs [in 

the amount of] $10,000." (Emphasis added). He further found 

that the parties contributed $17,335 of marital property to the 

post-marital mortgage payments. Based on these figures, the 

commissioner found that 48.4% of the New York property was 

husband's separate property and that 51.6% was marital property. 

 Thus, the balance of the mortgage note was 48.4% the husband's 

separate property and 51.6% was marital property. 

 Pursuant to the 1990 amendments, the General Assembly 

adopted the concept of hybrid property and established principles 

to govern its classification and distribution.3 See Code 

 

 3Code § 20-107.3(A) provides, in pertinent part: 

 (3) The court shall classify property as 

part marital property and part separate 

property as follows: 

* * * * * * * 

 d. When marital property and separate 

property are commingled by contributing one 

category of property to another, resulting in 

the loss of identity of the contributed 

property, the classification of the 

contributed property shall be transmuted to 

the category of property receiving the 

contribution. However, to the extent the 

contributed property is retraceable by a 

preponderance of the evidence and was not a 

gift, such contributed property shall retain 

its original classification. 
- 21 - 

(..continued) 

§ 20-107.3(A)(3). Wife does not challenge the commissioner's 

classification of the promissory note as hybrid property under 

Code § 20-107.3(A)(3). Rather, she contends the commissioner 

erred when he calculated the value of husband's separate property 

in the home and promissory note by including the amount husband 

paid for the improvements rather than the value which the 

improvements added to the property. The issue has not been 

previously decided in Virginia. 

 The hybrid tracing methodology employed by the commissioner 

 e. When marital property and separate 

property are commingled into newly acquired 

property resulting in the loss of identity of 

the contributing properties, the commingled 

property shall be deemed transmuted into 

marital property. However, to the extent the 

contributed property is retraceable by a 

preponderance of the evidence and was not a 

gift, the contributed property shall retain 

its classification. 
- 22 - 

was adopted in the case of Brandenburg v. Brandenburg, 617 S.W.2d 

871 (Ky. Ct. App. 1981). In Brandenburg, the Kentucky Court of 

Appeals approved a formula that apportioned the marital and 

non-marital components of hybrid property in "the same 

percentages as their respective contributions to the total equity 

in the property." 617 S.W.2d at 872. It stated: 

 [T]here is to be established a relationship 

between the nonmarital contribution and the 

total contribution, and between the marital 

contribution and the total contribution. 

These relationships, reduced to percentages, 

shall be multiplied by the equity in the 

property at the time of distribution to 

establish the value of the nonmarital and 

marital properties. 

 With this principle established, we 

provide the following definitions: 

 Nonmarital contribution (nmc) is defined 

as the equity in the property at the time of 

marriage, plus any amount expended after 

marriage by either spouse from traceable 

nonmarital funds in the reduction of mortgage 

principal, and/or the value of improvements 

made to the property from such nonmarital 

funds. 

 Marital contribution (mc) is defined as 

the amount expended after marriage from other 

than nonmarital funds in the reduction of 

mortgage principal, plus the value of 

improvements made to the property after the 

marriage from other than nonmarital funds. 

 Total contribution (tc) is defined as 

the sum of nonmarital and marital 

contributions. 

 Equity (e) is defined as the equity in 

the property at the time of distribution. 

This may be either at the date of the decree 

of dissolution, or, if the property has been 

sold prior thereto and the proceeds may be 

traced, then the date of the sale shall be 
- 23 - 

the time at which the equity is computed. 

 The formula to be utilized is: 

 nmc x e = nonmarital property 

 tc 

 mc x e = marital property 

 tc 

Id. (emphasis added). 

 We hold that the Brandenburg formula is an acceptable method 

of tracing and determining the value of the marital and separate 

property components of hybrid property under Code 

§ 20-107.3(A)(3).4

 However, the commissioner misapplied the 

Brandenburg formula to the facts of this case. Brandenburg

specifically provides that a party's non-marital contributions to 

hybrid property may include "the value of improvements" to the 

property. 617 S.W.2d at 872 (emphasis added). It is the value 

that improvements add to the property, not their cost, that is 

the proper consideration because the court is apportioning the 

equity in the hybrid property when it traces the sources of 

contributions to that property. Here, the commissioner made no 

finding as to the value added to the equity in the New York home 

by the addition of the pool and carpeting. Rather, the 

commissioner accepted the total cost of the improvements as 

though they increased the value of the property to that degree 

when he calculated husband's separate property portion of the 

 

 4By approving this formula, we do not intend to imply that 

this is the only acceptable method of tracing and determining the 

marital and separate property interests of hybrid property. 
- 24 - 

promissory note. Accordingly, the trial court erred in accepting 

the commissioner's finding concerning the values of the separate 

and marital shares of the mortgage note. On remand, the 

chancellor shall determine the husband's separate interest based 

on the value added by the improvements rather than their cost. 

VI. USAA BOND FUND

 As previously noted, the USAA bond fund consisted of monies 

the parties accumulated from different sources, including rental 

receipts, the husband's IBM pension fund, contributions from Mrs. 

Holt, and $20,500 that wife inherited as her separate property. 

The commissioner classified the bond fund as marital property. 

He found that the parties had extensively commingled separate and 

marital property in the fund and that neither party had traced 

his or her separate contributions as a discrete identifiable item 

in the account, including wife's deposit of $20,500 from her 

inheritance. The commissioner concluded that because the 

parties' respective contributions to the fund could only be 

approximated, the entire fund was marital property that would be 

subject to equitable distribution based upon consideration of the 

source of contributions as provided in Code § 20-107.3(E)(2). 

 In order to approximate husband's contributions to the bond 

fund, the commissioner performed a series of calculations. 

First, he calculated the deposits of IBM pension payments and 

the contributions from Mrs. Holt. Then, he determined the gross 

rental receipts and deducted from that figure the rental expenses 
- 25 - 

as shown on husband's tax forms, from which he was able to 

determine the amount of the deposits that were net marital rental 

income. Then, he subtracted the total of these amounts from the 

total deposits to the fund to determine the portion of deposits 

attributable to the mortgage note payments. Finally, the 

commissioner determined the value of the marital and separate 

property shares of the mortgage payments by multiplying the 

balance in the fund by the separate and marital property 

percentages calculated in the hybrid trace of the mortgage note. 

 After consideration of the subsection (E) factors, the 

commissioner recommended dividing the fund's assets in the amount 

of fifty-seven percent (57%) to husband and forty-three percent 

(43%) to wife. The trial court approved the commissioner's 

recommendations and divided the fund accordingly. 

 Wife argues the trial court erred when it failed to credit 

her $20,500 deposit of inheritance proceeds as separate property. 

 We agree. We recently held that: 

 [i]n order to trace the separate portion of 

hybrid property, a party must prove that the 

claimed separate portion is identifiably 

derived from a separate asset. This process 

involves two steps: a party must first (1) 

establish the identity of a portion of hybrid 

property and (2) directly trace that portion 

to a separate asset. 

Rahaban v. Rahaban, 26 Va. App. 195, 208, 494 S.E.2d 135, 141 

(1997). When a party satisfies this test, and by a preponderance 

of the evidence traces his or her separate contributions to 

commingled property, the Code states that the contributed 
- 26 - 

separate property "shall retain its original classification." 

Code § 20-107.3(A)(3)(d-e) (emphasis added). 

 Here, the commissioner found that wife deposited $20,500 

from an inheritance into the account on March 25, 1991. Under 

Code § 20-107.3(A)(1)(ii), wife's inheritance was separate 

property which she commingled with marital property in the USAA 

bond fund. The evidence established that no withdrawals were 

made from the account after wife deposited the inheritance money. 

See Brown v. Brown, 324 S.E.2d 287, 289 (N.C. App. 1985) 

(separate property deposited into marital bank account was 

retraceable where no withdrawals were made after deposit and 

balance never fell below amount of deposit); cf. Pollock v. 

Pollock, 499 P.2d 431, 437 (Wash. App. 1972) (separate property 

deposited into marital bank account was community property where 

party failed to establish character of funds withdrawn 

thereafter). Wife identified the $20,500 portion of the USAA 

bond account and directly traced that portion to her deposit of 

separate property in the form of inheritance proceeds. Under 

these circumstances, the Code mandates that wife's deposit be 

classified as separate property. See Peter N. Swisher et al., 

Virginia Family Law § 11-6 at 408-09 (2d ed. 1997). Accordingly, 

the commissioner erred in finding that wife failed to trace the 

$20,500 inheritance deposit, and the trial court's approval of 

this finding and classification of the bond fund as marital 

property was plainly wrong. 
- 27 - 

 We also hold that the trial court erred in accepting the 

commissioner's division of the bond fund. As noted in Part V, 

the commissioner erred in tracing husband's separate property in 

the mortgage note based on the costs of improvements rather than 

value added. Because the commissioner also based his calculation 

on the erroneous separate property percentage of the note in 

approximating husband's separate contributions to the bond fund, 

the commissioner's calculations to divide the fund on this basis 

were also erroneous. Accordingly, we hold that the trial court's 

division of the bond fund was erroneous. On remand, the 

chancellor shall allow Mrs. Hart $20,500 from the fund as her 

separate property and shall redetermine how the balance shall be 

distributed in accordance with the subsection (E) factors. To 

the extent the mortgage note payments are to be reclassified as 

marital and separate, the chancellor shall apply the correct 

formula according to our holding in Part V. 

 Finally, we disagree with wife's contention that the 

commissioner erred when he approximated the source of 

contributions to the bond fund by attempting to calculate the net 

amount of marital rental income deposited to the fund rather than 

the gross rental receipts received. She claims that because of 

the extensive commingling of funds in the account, the 

commissioner could not accurately determine whether marital or 

separate funds were used to pay for the rental expenses and that 

his determination of net rental income was speculative. In this 
- 28 - 

respect, she argues, the commissioner underestimated the amount 

of funds attributable to marital rental income and thereby 

overestimated the amount of funds that had been deposited from 

the mortgage note payments, a substantial part of which the 

husband was awarded as his separate property. Thus, she 

contends, the trial court's approval of the commissioner's 

application of the statutory factors was erroneous. 

 In reviewing an equitable distribution award on appeal, "we 

rely heavily on the discretion of the trial judge in weighing the 

many considerations and circumstances presented in each case." 

Artis v. Artis, 4 Va. App. 132, 137, 354 S.E.2d 812, 815 (1987) 

(citations omitted). "The court need not quantify or elaborate 

exactly what weight was given to each of the factors." Taylor v. 

Taylor, 5 Va. App. 436, 444, 364 S.E.2d 244, 249 (1988). "The 

judgment of the trial court is presumed to be correct and the 

party who asserts the contrary is required to overcome the 

presumption by record proof." Broom v. Broom, 15 Va. App. 497, 

504, 425 S.E.2d 90, 94 (1992) (citation omitted). 

 Here, the wife's primary concern that she was not awarded 

from this fund her separate property which she inherited has been 

addressed and should eliminate much of her concern that the 

husband will receive an undue proportion of the fund as his 

separate share of the mortgage note payments. Furthermore, the 

proportion of the fund attributable to separate and marital 

property from the mortgage payments must also be adjusted on 
- 29 - 

remand. On this record, we cannot say the commissioner erred in 

making his calculation by approximating the amount of net rental 

income deposited into the bond fund by extrapolating data from 

the couple's tax forms or by estimating the balance attributable 

to the mortgage payments. The process of determining the 

contributions of each party to the acquisition, care and 

maintenance of marital property necessarily entails approximation 

and estimation by the chancellor or commissioner. We cannot say 

the commissioner erred when he approximated the rental income by 

considering the rental expenses claimed on husband's tax forms. 

VII. CONCLUSION

 In summary, we affirm the trial court's partition of the 

Plantation Point property and designation of the boundary lines. 

 We reverse the trial court's rulings: (1) concerning the 

maintenance costs of the joint easements; (2) distributing the 

Central Fidelity account as part of the monetary award; (3) 

determining husband's separate property part of the mortgage 

note; and (4) classifying and dividing the USAA bond fund. On 

remand, the trial court must: (1) redetermine the parties' 

responsibilities for the maintenance costs of the joint easements 

in accordance with our holding in Part III; (2) deduct from the 

marital estate one-half of the Central Fidelity account assets in 

accordance with our holding in Part IV; (3) redetermine husband's 

separate property portion of the mortgage note in accord with our 

holding in Part V; and (4) reclassify the USAA bond fund taking 
- 30 - 

into account wife's separate property contribution of her 

inheritance proceeds as well as the correct separate property 

percentage of the mortgage note. 

 Affirmed in part,

reversed in part,

and remanded.