COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Fitz patrick, Judge Clements and Senior Judge Coleman Argued at Alexandria, Virginia

TIM PRICE O’HARA

v. Record No. 0038-04-4

SANDRA H. O’HARA OPINION BY JUDGE SAM W. COLEMAN III SANDRA H. O’HARA JUNE 7, 2005

v. Record No. 0087-04-4

TIM PRICE O’HARA

FROM THE CIRCUIT COUR T OF FAUQUIER COUNTY Jeffrey W. Parker, Judge Robin C. Gulick (T. Huntley Thorpe, III; Gulick, Carson & Thorpe, P.C., on briefs), for Tim Price O’Hara. Ann M. Callaway for Sandra H. O’Hara.

Tim Price O’Hara (husband) a ppeals a decision of the trial court denying his petition to terminate his spousal support obliga tion. On appeal, husband conte nds the trial court erred by: (1) ruling husband had the burde n to prove by clear and convincing evidence that Sandra H. O’Hara (wife) habitually cohabi tated with another person in a relationship analogous to marriage for more than one year; (2) failing to grant the petition to terminate spous al support pursuant to the terms of the parties’ prope rty settlement and separation agr eement; and (3) failing to award husband attorney’s fees. Wife file d a cross-appeal, contending the trial court erred by: (1) ruling that the exception to the termination of spous al support providing for “unconscionability” of

termination as set forth in Code § 20-109(A) was inapplicable to th e case; and (2) finding wife is employable.-2- We hold the trial court applied the incorrect burden of proof in determining whether wife habitually cohabitated with another person in a relationshi p analogous to marriage for one year or more. Accordingly, we reverse and vacate the trial court’s decision not to terminate husband’s spousal support obligatio n. We remand the case to the tr ial court for consideration of the issue applying the preponderance of the evidence burden of proof. Background

Husband and wife were married in 1981. Th e parties separated in 1998. On February 8, 2000, they entered into a property settlement and separation agreement (PSA) which was affirmed, ratified, and incorporat ed, but not merged into the fina l divorce decree dated March 9, 2000. In paragraph 5(A) of the PSA, the pa rties agreed husband would pay wife $1,750 per month in spousal support until the death of [w]ife, the death of [h]usband, [w]ife’s remarriage, [w]ife’s habitual cohabiting with another person in a relationship analogous to a marriage for one year or more , or until further order of a court of co mpetent jurisdiction based upon a proper petition filed by either pa rty based upon a material change in circumstances. (Emphasis added.) In February 2003, husband filed a petition to terminate spousal support pursuant to the cohabitation provision of the PSA, alleging wife had been cohabitating in a relationship analogous to marriage with Donald Sowers, Jr. fo r more than one year. Alternatively, husband requested a modification of the support award ba sed upon a material change of circumstances, asserting that wife was currently gainfully employed. At the November 5, 2003 evidentiary hearing, Sowers testified he had known wife for about three and one-half years. Sowers had listed wife’s addr ess as his address on numerous court documents dating from November 2001 to October 2002. He indicated on court documents requesting court-appo inted counsel that he was un employed and had no income. A-3- document entitled Pretrial Services Court Report specified Sowers’s address as the street address of wife. In the same document, Sowers indicate d he had lived at that address for two years and that he lived with wife, whom he referred to in the document as his “significant other.”

Sowers testified he resided with wife “ on and off” since October 2000, stating he had no permanent residence and he moved from place to place, living with friends and relatives. He

stated he used wife’s residence as his maili ng address for court related documents. Sowers

testified he has cooked meals for wife and ha s performed maintenance on her property. He stated he slept in the same bedroom with wife a nd had sexual intercourse with her during part of their relationship. Carrie Pearson, Sowers’s probati on officer, testified that Sowe rs had indicated to people

in her office that his address was the same street address as wife’s. P earson met with Sowers on twelve occasions between February 2002 until the e nd of 2002. At every meeting she asked if he had changed his address. Sowers never indi cated, as was required as a condition of his supervision, that his address had changed. Pear son stated that over th e two-year period her office supervised Sowers’s probation, he ne ver indicated a change in address. In November 2001, Deputy John Cox of the Fa uquier County Sheriff’s Office answered a

domestic assault call from wife’s residence. Cox testified that wife told him that Sowers was her “live-in boyfriend.” Later, in a sworn affidavit th at was part of a criminal complaint wife filed against Sowers in May 2002 she referred to Sowe rs as her “boyfriend of three years.” Wife admitted that she told the magistrate Sowers was her “live-in boyfriend” or her “cohabitor.” In January 2003, wife listed Sowers as an emergenc y contact in her employe r’s personnel records, referring to him as her “significant other.” Th e emergency contact information for Sowers listed wife’s telephone number and her post office box as where Sowers could be contacted. At one-4- time, the message on wife’s answering machine c ontained wife’s greeting stating, “Donnie and I aren’t here. Please leave a message.” Wife testified that Sowers first began st aying at her residence in October 2000 during which time they were sexually intimate. She stat ed that Sowers lived with her “off and on” and only “continuously” resided with her “basica lly from February 2001 until November 2001.” Subsequently, they had tried to “patch things up” on several occasions during which time Sowers periodically would stay at her residence for several days. Wife stated that in May 2002, the relationship ended when Sowers was seeing another woman.

Wife testified that Sowers “sometimes” cooke d for her and that they ate meals together. She stated Sowers helped with “some heavy wo rk” on her property and she did not compensate him for that work. She gave So wers permission to use her maili ng address for court documents, and she posted a $1,000 bond for Sowers on one occas ion. Wife testified both she and Sowers contributed money for groceries, but Sowers di d not pay any monthly liv ing expenses. She did not share any bank accounts with Sowers, who she said was employed sporadically during their relationship. Several neighbors of wife testif ied that over the past three or four years, they have seen Sowers working on wife’s lawn, shopping with he r at the grocery store, sitting on wife’s porch, eating dinner with wife at local re staurants, and riding in wife’s ve hicle. Husband testified that

he had been to wife’s residen ce twice since their separation and Sowers was present both times. Wife has numerous health problems which she contends make it difficult for her to be employed full time. She pays more than $400 per month for health insurance, which she says

will end in March 2005. She testif ied the Social Security Administ ration has declared her totally disabled for which she receives $799 per month in Soci al Security disability benefits. Also, wife received $177 per week in unemp loyment benefits for the week s she qualified. In 2002, wife-5- earned “about” $10,000, but she said the $10,000 included business expenses and her net income was about $4,500. In 2003, she was employed as a “permit runner” for a deck construction company from January until August, earning a pproximately $2,500 per month. Wife’s employer terminated her employment in August 2003 after a disagreement concerning wife’s compensation. Wife testified she had worked in or der to obtain health in surance and she planned to quit as soon as she qualified for health insurance.

The trial court found that wife and Sowers ha d cohabitated, however, the court held that it could not “find by clear and convincing eviden ce that this is a rela tionship analogous to marriage.” The trial court cited as factors in its decision the lack of an expression of a

commitment between wife and Sowers and the lack of financial contributi ons to the relationship by Sowers. The trial court further stated it was a “close case” and that had it applied a preponderance of the evidence burden of proof, the court “might be persuaded” that the relationship was analogous to a marriage. Thus , using the clear and convincing standard, the trial court denied husband’s petiti on to terminate spousal support. The trial court found, however, that a materi al change in circumstances had occurred warranting a reduction in the amount of wife’s s pousal support award. The trial court found that, despite wife’s serious medical issues, she is em ployable and that she was terminated from her last job due to a disagreement with her employer, not because she was physically unable to work. The court imputed annual income of $12,000 to wi fe, considered husband’s current income, and reduced wife’s monthly spousal support aw ard from $1,750 to $1,200, effective November 1,

2003.

The trial court also ruled that the unconsciona bility provision of Code § 20-109(A)(ii) did not apply, and the court denied hus band’s request for attorney’s fees . Both parties objected to

the trial court’s final decisions a nd filed appeals in this Court.-6- Analysis The trial court ruled that, in determining whether wife had cohabited with Sowers in a relationship analogous to marriage, the provisions of Code § 20- 109(A) applied and that husband had to prove the cohabitation by clear and convinc ing evidence. Husband argues that his petition for termination of spousal support was governed by the terms of the part ies’ PSA, not by Code § 20-109(A). Therefore, he contends the court erred by determining that husband had to prove cohabitation by clear and convincing evidence, ra ther than the contractual standard of a preponderance of the evidence. We agree with husband. Code § 20-109(A) provides in pertinent part: Upon order of the court based upon clear and convincing evidence that the spouse receiving support has been habitually cohabiting with another person in a relati onship analogous to a marriage for one year or more commencing on or after July 1, 1997, the court shall terminate spousal support and maintenance unless (i) otherwise provided by stipulation or contract or (ii) the spouse receiving support proves by a prepon derance of the evidence that termination of such support w ould be unconscionable. The parties entered into a PSA which was a ffirmed, ratified, and incorporated into the March 9, 2000 final divorce decree. Thus, the final decree “embodied and enforced . . . a negotiated agreement between the parties ves ting” husband with a “contractual right” to terminate wife’s spousal support in the event that wife habitu ally cohabitated with another person in a relationship analogous to a marriage for one year or more. See Baldwin v. Baldwin , 44 Va. App. 93, 98, 603 S.E.2d 172, 174 (2004). See also Hering v. Hering , 33 Va. App. 368, 374, 533 S.E.2d 631, 634 (2000) (“the parties’ agreemen t, which was affirmed and incorporated, but not merged, into the final decree, remained a separate, enforceable, contractual obligation”). Furthermore, “[t]he decree’s contractual character places it within the general rule recognizing that vested contractual rights – whether incorporated by, memoriali zed in, or merged into a final decree – ‘cannot be judicially modi fied or terminated at the unilate ral request of a contract party-7- unless the agreement expressly auth orizes such relief.’” Baldwin , 44 Va. App. at 99, 603 S.E.2d at 174 (quoting Newman v. Newman , 42 Va. App. 557, 568-69, 593 S.E.2d 533, 539 (2004) ( en banc )). The PSA, which was affirmed, ratified, and inco rporated into the fi nal decree, expressly authorized the termination of spousal support if wi fe habitually cohabited with another person in a relationship analogous to a marriage for one ye ar or more. Husband filed the petition for termination of spousal support pursuant to the PSA, which we note does not reference Code § 20-109(A). Accordingly, Code § 20-109(A), a nd its clear and convincing burden of proof, does not apply to this case involving the en forcement of a negotiated agreement between husband and wife. Rather, because this case involve s an action to enforce a contract between the parties, husband’s burden was to prove by a preponde rance of the evidence that wife habitually cohabited with another person in a relationship an alogous to a marriage for one year or more, not to prove cohabitation by clear and convincing evidence. See Hammers v. Hammers , 216 Va. 30, 31, 216 S.E.2d. 20, 21 (1975); Crosby v. Crosby , 182 Va. 461, 464, 29 S.E.2d 241, 242 (1944). Therefore, the trial court applied the incorrect evidentiary standard when considering this issue. Accordingly, we reverse and vacate the trial co urt’s holding and remand the case to the trial court for reconsideration of this issue using th e preponderance of the evidence burden of proof.

We also note that this case is di stinguishable from Hardesty v. Hardesty , 40 Va. App. 663, 581 S.E.2d 213 (2003) ( en banc ). In Hardesty , the parties signed a PSA which was “affirm[ed], ratif[ied] and in corporate[d]” into the fi nal divorce decree. Id. at 666, 581 S.E.2d at 215. The Hardesty PSA provided that spousal “s upport cannot be terminated for any reason.”

Id. at 665, 581 S.E.2d at 215. Mrs. Hardesty file d an action with the trial court seeking a declaratory judgment holding th at the PSA precluded the termination of spousal support upon her remarriage. This Court affirmed the trial court’s ruling that spousal support would terminate-8- upon Mrs. Hardesty’s remarriage pursuant to the terms of Code § 20-109. We stated: “‘The public policy clearly declared by Code §§ 20-10 9 and 20-109.1 is that spousal support does not survive the recipient’s re marriage. To create an exception to that policy, the agreement must be equally clear.’” Id. at 668, 581 S.E.2d at 216 (quoting Langley v. Johnson , 27 Va. App. 365, 371-72, 499 S.E.2d 15, 18 (1998)). Thus, Hardesty held that the public policy underlying termination of spousal support upon remarriage as provided in Code § 20-109(D) could not be overcome by the general proposition prohibiting te rmination “for any reason.” Here, no public policy is at play that draws th e statutory and contractual provis ions, both of which provide for termination upon cohabitation analogous to marriag e, into conflict with one another. The provisions of the PSA and Code § 20-109(A) are compatible with one another as to their purpose and function. They differ as to what burden of proof rests with the proponent. Therefore, Hardesty is inapplicable to the analysis of this case.

Because we remand the case to the trial court for a determination of the first issue using the preponderance of the evidence standard, we do not address husband’s second issue--whether under either the preponderance of the evidence or the clear and convincing evidence burden of proof, the evidence showed wife cohabitated with Sowers in a relationship analogous to marriage for more than one year. We are not prepared to say on this record that, as a matter of law, wife habitually cohabitated with Sowers in a relati onship analogous to marriage for more than one year. That is a factual determination that the tr ial court must consider upon conflicting evidence upon remand. Because we have found that Code § 20-109 doe s not apply to this ca se, we do not address wife’s first issue raised in her cross-appeal–w hether the trial court erred by ruling that the “unconscionability” provision of Code § 20-109(A)(ii) is ina pplicable to this case.-9- Wife also contends the trial court erre d by finding that she is employable despite a declaration from the Social Security Admini stration that she is totally disabled. The declaration of the Social Security Admi nistration was not dispos itive of whether the trial court properly imputed income to wife. “[ A] court may impute income to a party who is voluntarily unemployed or underemployed. Imputation of income is based on the principle that a spouse should not be allowed to choose a low paying position that penalizes the other spouse

. . . .” Calvert v. Calvert , 18 Va. App. 781, 784-85, 447 S.E.2d 875, 876-77 (1994) (citations omitted). Whether a person is voluntarily unemployed or underemployed is a factual determin ation. In evaluating a request to impute income, the trial court must “consider the [parties’] earning capacity, financial resour ces, education and training, ability to secure such educati on and training, and other factors relevant to the equities of the parents and the children.” Blackburn v. Michael , 30 Va. App. 95, 102, 515 S.E.2d 780, 784 (1999) (citation omitted). “Imputation of income is within the trial [c ourt]’s discretion . . . .” Sargent v. Sargent , 20 Va. App. 694, 704, 460 S.E.2d 596, 601 (1995). The evidence showed that wife was employed in a full time job for about seven months in 2003 and the job terminated due to a disagreeme nt between wife and her employer concerning her compensation. Therefore, wife did not l eave her employment for health reasons. Although

the evidence shows wife has serious health i ssues, we cannot say the trial court abused its discretion by finding that wife is able to be employed and imputing to her an income of $12,000 per year, which the court based on an average of wife’s income over the pa st several years. Husband contends the trial court erred by de nying his request for a ttorney’s fees on the ground that the PSA provides that “[ i]n the event one of the parties defaults in the performance of any of the provisions of [the PSA], the defaul ting party will indemnify the other party for all reasonable expenses and costs, in cluding any attorney’s fees, in curred in successfully enforcing- 10 - the terms of [the PSA].” The trial court ruled that husband was not entitle d to attorney’s fees because his action to modify and terminate s pousal support was not an attempt to enforce a “default in the performance” of the PSA. Rather, the trial court viewed the matter as “a proceeding to modify the existing support arra ngements [based upon contractual provisions in the PSA, but was] . . . not the enforcement of a default” in performing the PSA. Accordingly,

the trial court ruled that husband was not entitled to attorney’s fees pursuant to the terms of the

PSA. Husband’s request for attorney’s fees is governed by the express provisions of the PSA for attorney’s fees. See Rutledge v. Rutledge , 45 Va. App. 56, 67, 608 S.E.2d 504, 509 (2005) (applying Code § 20-109(C) and affirming the tr ial court’s denial of attorney’s fees in accordance with the terms of the parties’ PSA). Here, paragraph 14 of the PSA, which expressly provided for reasonable attorney’s fees “[i]n the event th at either party defaults in the performance of any of the provisi ons of [the PSA],” is not applicable because this was not an action enforcing a default in the terms of the PSA. (Emphasis added.) We agree with the trial court’s ruling that this case involves a proceed ing to modify or terminate the spousal support award as provided by the PSA but was not a pro ceeding to enforce a default. Accordingly, the trial court did not err by refusing to award attorn ey’s fees based upon the provisions in the PSA. For the foregoing reasons, the judgment of the trial court is affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion. Affirmed in part, reversed in part and remanded.