COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Felton, Judge Humphreys and Senior Judge Clements Argued at Richmond, Virginia

MICHAEL KIPLING COOK MEMORANDUM OPINION * BY v. Record No. 0155-09-2 CHIEF JUDGE WALTER S. FELTON, JR. JUNE 8, 2010 TERESA JANE CROSS

FROM THE CIRCUIT COUR T OF ALBEMARLE COUNTY Cheryl V. Higgins, Judge Michael Kipling Cook, pro se . Ralph E. Main, Jr., for appellee.
Michael Kipling Cook (“husband” ) appeals from a final judgmen t of the Circuit Court of Albemarle County (“trial court”) finding husband in br each of his property settlement agreement with Teresa Jane Cross (“wife”). Husband contends that the trial court erred in (1) ruling that wife’s constructive receipt of a small portion of the pr oceeds from the sale of th e parties’ rental property prevented wife from comp leting a like-kind exchange pursuant to Internal Revenu e Code, 26 U.S.C. § 1031 (“1031 Exchange”); (2) de nying husband’s motion to modi fy judgment; (3) finding wife sustained $12,084 in damages arisin g out of estimated capital gain ta xes from the sale of the rental property; and (4) awarding $5,000 in attorney’s fees to wife. For the reasons stated, we affirm in part, reverse in part, and rema nd for further proceedings co nsistent with this opinion.
BACKGROUND Husband and wife were married on June 1, 1997 and separated on September 1, 2000. They were divorced by final decree entered December 15, 2008. The final decree “ra tified, confirmed

* Pursuant to Code § 17.1-413, this opin ion is not designated for publication.- 2 - liability on her share of th e Tallwood sa le proceeds. 3 She also contended that husband failed to and approved and incorporat ed,” but did not merge, the parties’ property se ttlement agreement dated January 6, 2006, as amended by addenda dated April 28, 2006 an d Jul y 27, 2006 (collectively “PSA”). The PSA provided, among other things, that husband woul d allow wife to copy marital documents in his possession, that the parties woul d sell their jointly owned rental property, known as the Tallwood property, and that the parties co uld choose to decrease their capital gains tax liability from the Tallwood sale by purchasing “like- kind” property using the Tallwood sale proceeds. The closing for the sale of the Tallwood property wa s held on May 19, 20 07. Sale proceeds were distributed to the parties ex cept for $5,000, which was placed in escrow by agreement of the parties. 1 The $5,000 escrow was releas ed to the parties on August 20, 2007. Wife initially did not receive the check for her portion of the escrowed fund s and was issued a re placement check on September 10, 2007. On August 10, 2007, pr ior to the release of the escrowed funds, wife filed a “Notice of Motions” with the trial co urt alleging that husband breached the parties’ PSA for a number of reasons. Specifically, she contended that becaus e $5,000 of the Ta llwood sale proceeds were held in escrow, she was unable to defer her cap ital gains taxes throug h a 1031 Exchange. 2 She asked that the trial court award her $12, 084, an amount representing her estimated capital gains tax

1 Husband asserted wife owed money to him for his repair work on the Tallwood property, and insisted that a portion of the sale proceeds be escrowed until an agreement was reached r to not
ayer to defer recognition of capital gain or capital lo ss tax liability “‘when a direct exchange of prope rty between the taxpayer and another party takes place.’” as to how much was due him. Wi fe testifie d that she agreed to the escrow in orde lose the sale of the Tallwood property.

2 A 1031 Exchange allows a taxp

Little v. Cooke , 274 Va. 697, 705 n.8, 652 S.E.2d 129, 134 n.8 (2007) (quoting Bell Lines, Inc. v. United States , 480 F.2d 710, 713 (4th Cir. 1973)).- 3 - allow her to copy certain marital documents. Additionally, wife as ked for an award of attorney’s fees. On October 29, 2007, the partie s appeared before the trial court on wife’s “Notice of Motions.” 4 Rebecca Butler, a CP A and wife’s accountant , testified as an expe rt witness. Butler testified regarding wife’s projected capital gains tax liab ility from the Tallw ood property sale proceeds. 5 She testified that wife would have had to invest all of her share of the Tallwood property sale proceeds in order to qualify for a 1031 Exchange. She explained that be cause $5,000 of the Tallwood property sale proceeds were held in escrow , wife was unable to qual ify for the tax benefits of a 1031 Exchange. The hearing on wife’s “Notice of Moti ons” was continued to April 25, 2008. 6 At the reconvened hearing, Janet Shumaker, a CPA, testifie d as an expert witness for husband. Shumaker testified that in order to complete a 1031 Exch ange, wife would have had to include specific language related to the proposed 10 31 Exchange in both the contract for the sale of the Tallwood property and in the Settlement Statement. 7

4 A court reporter was not present at the October 29, 2007 hearing. On appeal, a statement of facts was timely filed pursuant to Ru le 5A:8 of the Rules of the Supreme Court. However, the statement of facts does not contain any objections by the part ies or any rulings of the trial court in response to any objections. See Rule 5A:8(c).

5 The statement of facts does not provide the asserted estimate of capital gains tax liability, but cites to “DEF. EX. 1” that was entered into evidence at trial. “DEF. EX. 1” is not included in the joint appendix.

6 A court reporter was present at the Apr il 25, 2008 hearing. Husband failed to timely file the transcript of that heari ng. A statement of facts filed pursua nt to Rule 5A:8 in lieu of the transcript includes evidence pe rtinent to the April 25, 2008 hear ing, but does not include any objections by the parties or rulings by the trial court on any objections made.

7 Neither document contained the required la nguage. At trial, wife’s “1031 Deferred Exchange Option” addendum to the sales contract, signed only by her, was ad mitted into evidence.  The record contains no evidence that wi fe in fact sustained capital gains tax liability in that amount from the sale of the Tallwood property.- 4 - On August 29, 2008, the trial court issued a lette r opinion. It found that husband breached the parties’ PSA by failing to deliver certain marital documents to wi fe for copying, and by preventing wife from ta king advantage of th e 1031 Exchange because he insisted on escrowing $5,000 of the Tallwood prop erty sale proceeds to pay debts he claimed wife owed him for his work on that property. The trial cour t ordered husband to pay $12,084 in damages to wife, an amount equal to her estimated capital gains tax lia bility from the Tallwood proper ty sale proceeds. The trial court also ordered husband to pay $5, 000 of wife’s attorney’s fees in curred at trial, explaining that its award of attorney’s fees was related to the 1031 Exchange issue and because husband caused wife “to take longer than necessary to present her case.” The trial court’s rulings in the letter opinion were included in its fina l order entered on December 15, 2008. No subsequent order was entered by the trial court vacating, modifying or suspending the or der of December 15, 2008, which became final on January 5, 2009 pursuant to Rule 1:1 of th e Rules of the Supreme Court. 8 On September 9, 2008, prior to the entry of the December 15, 2008 final order, and later on January 5, 2009, and March 3, 2009 , after entry of the De cember 15, 2008 final order, husband filed motions asking the trial court to modify its rulings. The trial court denied each of husband’s motions to modify on April 3, 2009.
ANALYSIS
I. Husband contends that the trial court erred in ruling that wife suffer ed damages of $12,084 in estimated capital gains taxes as a result of her constructive receipt of a small part of the proceeds from the sale of the parties’ rental property, thereby preventing her from being able to complete a 1031 Exchange.

8 Rule 1:1 provides that a decr ee of the trial court becomes final unless vacated, modified or suspended within twenty-one days of entry.- 5 - “Where, as here, the [trial ] court hears the evidence ore tenus , its finding is entitled to great weight and will not be disturbed on appeal unless plainly wrong or without ev idence to support it.” Martin v. Pittsylvania Dep’t of Soc. Servs. , 3 Va. App. 15, 20, 348 S. E.2d 13, 16 (1986). We review de novo the trial court’s application of defined le gal standards to the pa rticular facts of a

case. Lewis v. Lewis , 53 Va. App. 528, 542, 673 S.E.2d 888, 895 (2009). “[A] ‘tax-free exchange’ is designed ‘to defe r recognition of gain or loss when a direct exchange of property between the taxpay er and another party takes place.’” Little v. Cooke , 274 Va. 697, 705 n.8, 652 S.E.2d 129, 134 n.8 (2007) (quoting Bell Lines, Inc. v. United States , 480 F.2d 710, 713 (4th Cir. 1973)). “The very essence of an exchange is the transfer of property between owners, while the mark of a sale is the receipt of cash for the property.” Carlton v. United States , 385 F.2d 238, 242 (5th Cir. 1967). In a typical § 1031 transaction, an exchanger, such as wife contends she was here, assigns its rights as seller under a purchase agreement for the disposition of business or investment propert y to a qualified intermedia ry. The purchaser of the relinquished prope rty transfers the net sale proceeds directly to the qualified intermediary. Here, wife was required to abrogate all control over the net sale proceeds until the exchange was completed. “If the taxpayer actually or cons tructively receives money or property in the full amount of the consideration for the relinquished property before the taxpa yer actually receives like-kind replacement property, the transaction will c onstitute a sale and not a deferred exchange, even though the taxpayer may ultimately receiv e like-kind replacement property.” Treas. Reg. § 1.1031(k)-1(f). The record on appeal reflects that when the parties sold the Tallwood property, $5,000 of the net sale proceeds were placed in escrow by agreement of the pa rties. Because wife’s entire portion of the net sale proceeds was not “earmarked” for use in purchasing a like-kind rental property, she was ineligible to complete a 1031 Exchange. See Carlton , 385 F.2d at 243 (“The- 6 - money received from [purchaser] by the appellants for the ranch property was not earmarked . . . to be used in purchasing [like- kind properties]. It was unrestric ted and could be used by the appellants as they pleased.”). We are mindful that wife agreed to pl ace $5,000 of the net sale proceeds in escrow because husband refused to allow the sale of the Tallwood property to be completed without the escrow ag reement. Nevertheless, wife agreed to the escrow. Additionally, under § 1031, wife wa s required to identify like-ki nd replacement property within 45 days of the sale of the Tallw ood property in a written document. I.R.C. § 1031(a)(3); Treas. Reg. § 1.1031(k)-1(c). Wife had 180 days from the sale of the Tallwood pr operty to close on the replacement property. I.R.C. § 1031 (a)(3). The record on appeal contains no evidence that wife met those requirements. Accordingly, we conc lude the trial court erred in finding husband prevented wife from being eligible to complete a 1031 Exchange. Husband also assigns error to the trial court’s finding that wife suffered $12,084 in damages arising from an estimated capital gains tax liability as a result of his insistence of escrowing a portion of the Tallwood sale proceeds, thereby preventing wife from completing a 1031 Exchange. Because we conclude that hu sband’s actions did not prevent wife from completing a 1031 Exchange and because no evidence exists in the record to show wife actually suffered $12,084 in damages arising from capital gain s tax liability from the sale of the Tallwood property, we conclude that the trial court erred in finding that wife was entitled to damages resulting from her failure to qualify for a 1031 Exchange.
II. Husband also contends that the trial court e rred in denying his motio n to modify its final judgment. 9 Wife asserts the trial court did not err because no order was entered vacating,

9 Husband’s motion to modify judgment asked the trial court to re verse its award of attorney’s fees to wife and its finding that he wa s at fault for wife’s inability to complete a 1031 Exchange.- 7 - suspending or modifying the trial co urt’s final order of December 15, 2008. See Rule 1:1. Rule 5A:20(e) mandates that appellant’s opening brief include “[t]he principles of law, the argument, and the authorities relating to each ques tion presented . . . .” Husband did not comply with Rule 5A:20(e) because his opening brief does not contain any principles of law or citation to legal authorities to support his asserted trial court error. Husband has the burden of s howing that the trial court e rred in denying his motion to modify judgment. See Lutes v. Alexander , 14 Va. App. 1075 , 1077, 421 S.E.2d 857, 859 (1992).
“Even pro se litigants must comply with the ru les of court.” Francis v. Francis , 30 Va. App. 584, 591, 518 S.E.2d 842, 84 6 (1999). We conclude that hu sband’s failure to comply with Rule 5A:20(e) is significant. Accordingly, we will not consider husband’s asserted trial court error that the trial court erred in denying husband’s motion to modify judgment. See Fadness v. Fadness , 52 Va. App. 833, 851, 667 S.E.2d 857, 866 (2008) (“If the parties believed that the circuit court erred, it was their duty to presen t that error to us with legal authority to support their contention.”).
III. Husband also contends that the trial court erred in awarding wife $5,000 in attorney’s fees. “In considering a trial court’s decision to award at torney’s fees, ‘an award of attorney’s fees is a matter submitted to the trial court’s sound disc retion and is reviewable on appeal only for an abuse of discretion.’” Richardson v. Richardson , 30 Va. App. 341, 351, 516 S.E.2d 726, 731 (1999) (quoting Graves v. Graves , 4 Va. App. 326, 333, 357 S.E.2d 554, 558 (1987)). The trial court specifically stated that its awar d of attorney’s fees wa s related to the 1031 Exchange issue and because husband caused wife “to take longer than necessary to present her case.” Because we reverse the tria l court’s ruling that hu sband’s actions caused wife to incur an estimated $12,084 in capital gain s taxes, and we are unable to ascertain from the record what portion of its award of attorney’s fees to wife was related to the 1031 Exchange issue and what- 8 - portion was related to its determination that husband caused wife “to take longer than necessary to present her case,” we reverse its award of $5,000 in attorney’s fees to wife and remand for additional consideration of attorney’s fees consistent with this opinion.
CONCLUSION For the reasons set forth above, we affirm in part, revers e in part, and re mand for further determination of attorney’s fees. Affirmed in part, reversed in part and remanded.