COURT OF APPEALS OF VIRGINIA

Present: Judges Frank, Felt on and Kelsey Argued at Richmond, Virginia

JOHN RHODES CONGDON, JR. OPINION BY v. Record No. 0522-02-2 JUDGE D. ARTHUR KELSEY APRIL 8, 2003 MARY EVELYN DAVIS CONGDON

FROM THE CIRCUIT COUR T OF HENRICO COUNTY Lawrence D. Diehl, Judge Pro Tempore Donald K. Butler (Mar y Beth Joachim; Morano, Colan, Cook & Butler, on briefs), for appellant. Terrence R. Batzli (Charles E. Powers; Barnes & Batzli, on brief), for appellee.

In this divorce ca se, John Rhodes Cong don claims the trial court erred by awardi ng his wife spousal support despite her admitted adultery during the ma rriage. The tr ial judge, the husband argues, mi sapplied the manifest injustice ex ception to Code § 20-107.1(B)'s statutory bar ag ainst awarding support to adulterers. In addition to defe nding her award of support, Mary Evelyn Davis Congdon claims that the tria l court erred in its equitable dist ribution calculation of the marital sh are of the appreciation of her husband's sepa rately owned stoc k in the family trucking business. We agree with the husband that the tria l judge mi sread our precedents on th e manifest injustice except ion, but we nonetheless- 2 - affirm because his fa ctual findings suppor t the result reached under a proper interpre tation of the law. As to the equitable distribution calculatio n of stock appr eciation, we di sagree with the wife and find no reversible error in th e trial cour t's method of classifying the increase instock value.

I. When reviewing a tr ial court's deci sion on appe al, we view the evidence in the light most favorable to the prevailing party, granting it the be nefit of any reason able inferences. Wright v. Wright , 38 Va. App. 394, 398, 564 S.E.2d 702, 704 (2002); Donnell v. Donnell , 20 Va. App. 37, 39 , 455 S.E.2d 256, 257 (1995). That principle requir es us to "'discar d the evidence'" of the appellant which conflict s, either directly or inferentially, with the evidence presented by th e appellee at trial. Wactor v. Commonwealth , 38 Va. App. 375, 380, 564 S.E.2d 160, 162 (2002) (quoting Watkins v. Commonwealth , 26 Va. App. 335, 348, 494 S.E.2d 859, 866 (1998)). We view the facts of th is case, therefore, through this evid entiary prism. Mary Evelyn Davis (known as Lynn ) and John Rh odes Congdon married in 1977. Du ring their twenty-two year marriage, the couple had three chil dren. John filed fo r divorce in 1999 alleging adultery, and Lynn filed a cross-bi ll assertin g cruelty- 3 - and constructive desertion. The parties agreed to the appointment of a judge pro tempore to decide the case. 1 In addition to re ceiving depositi ons, the tria l judge heard testimony ore tenus from multiple witnesses over four days. Much of the testimony desc ribed the nature of the marriage and the circumstances that led to its di ssolution. At the beginning of the trial, Lynn conceded that sh e was guilty of adultery and did not contest John's request for a fi nal divorce on this ground. The evidence showedthat she engaged in an extramar ital affair for at least five years during the marriage. Viewed in the ligh t most favorable to Lynn, however, the evidence also portrayed John as a profane and ve rbally abusive man. John frequented"strip joints and to pless bars" and told Lynn about, among othe r things, the "o il wrestlers" that performed at these places. He would indiscri minately engage in these conversations in the presence of his children an d Lynn's family, at times even "boastin g or bragging about th ose places." "It was not an infrequent topic of conversation." John went to these places, he explained to one witness, "because they have the best p----." John "frequ ently talked crudely about sexual type

1 Under Code § 17.1-110, a judge pro tempore is "vested with the same power and authority and shall be charged with the same duties as to the cause in and as to which he is appointed as though he were the regularly elected and qualified judge of such court."- 4 - things." He carried onwith this practice "[ p]retty much the same the whole 20 years." John also directed his profanity to ward his childr en. In one instance, John's son Michael had ac cidentally kickedhis father's head while both were lying on a bed watching television. Though realizing it was simply an accident, John "started yelling . . . God damn you, Mi chael. Why in the f--- did you kick me in the face. . . . Why did you f---ing have to kick me in th e face?" In response, Michae l ran out of the house. On another oc casion, John was having a "food figh t" with his tw elve-year-old da ughter when John accidentally got hi t in the eye. He "s tarted screaming . . . God damn you. God da mn, you hit me in the eye." His daughter "just sat there an d started crying," not at all un derstanding her father's outburst. Ot her times John would co me home from work angry and declare, in ear-shot of his children, th at "one of the girls at the office" was a "bitch or a c- --." His use of vulgarity, in th e presence of hi s family and othe rs, "was quite frequent." Several witnes ses who knew John and Lynn over the years testified that they had never once seen John show any affection or any kindness toward Ly nn. Over the course of the marr iage, John chronically co mplained (both to Lynn and others) ab out Lynn's weight, appearance, housekeeping , and spending habits. John referred to Lynn as "Witch." He was a "h eavy drinker, " sometimes starting as earl y as "10:00 in the mo rning." Because John- 5 - maintained strict cont rol over the financia l accounts, Lynn was not "privy to the family finances at any time during the marriage." Jo hn particularly dislik ed Lynn's family and threatened on one occasion to move her out of town if she did not "stop speaking wi th her parents." Despite these problems, John and Lynnenjoyed co nsiderable financial secu rity. John has a college degree, a stable and long-term career in a family trucking bu siness, an an nual salary exceeding $250 ,000, and addi tional income from corporate dividends and family related gi fts. John's intere sts in stocks, real estate, and tangib le assets exceeded $6 million. In contrast, Lynn has not held a fu ll time job since th e early years of her marriage, choo sing instead to stay at home to rais e their three children. She has no college degree, giving her a future earning capacity far below her hu sband's. At the time of trial, Lynn was earning $10.00 an hour as a receptionist. The trial court also heard evidence that John's stock in his family business incr eased in value over the course of the marriage. Conceding that John acquired the sh ares as a gift from his family and thus sh ould be consid ered separate property, Lynn argued that under Co de § 20-107.3(A)(3)(a) the appreciation portion of the stock's present value sh ould be treate d as marital property. In re ply, John presen ted extensive te stimony on the internal management of the business and the role of si x other key employees in the co mpany's success.- 6 - After the clos e of the eviden ce, the trial co urt issued a comprehensive letter opinion deta iling each aspect of the court's rulings on divorce gr ounds, equitable dist ribution, an d spousal support. On the firs t issue on appeal, the adultery bar against spousal support, the court invo ked the "manifes t injustice" exception in Code § 20 -107.1(B). Af ter considering the additional factors in Code § 20-1 07.1(E), the court awar ded support of $2,300 per month to Lynn to continue until her deat h or remarriage. On the second issue on appeal, the cl assification (marital or separate property) of the stock appreciation, the cour t found that 90% of the increase invalue should be deemed sepa rate property given the extensiv e efforts of other key em ployees and the extent of "passive growth" in the stock value.

II. Under Code § 8.01-680, a factual determination cannot be reversed on appeal unless "plainly wrong or without evidence to support it." See Schweider v. Schweider , 243 Va. 245, 250, 415 S.E.2d 135, 138 (1992); Torian v. Torian , 38 Va. App. 167, 181, 562 S.E.2d 355, 362 (2002). This standard applies to a "trial court's decision to award spousal support to a party despite his or her adultery" as it does to any other domestic relations

case. Rahbaran v. Rahbaran , 26 Va. App. 195, 212, 494 S.E.2d 135, 143 (1997) (citing Williams v. Williams , 14 Va. App. 217, 219, 415 S.E.2d 252, 253 (1992)).- 7 - "Whether and how much spousal support will be awarded is a matter of discretion for the trial court." Northcutt v. Northcutt , 39 Va. App. 192, 196, 571 S.E.2d 912, 914 (2002) (quoting Barker v. Barker , 27 Va. App. 519, 527, 500 S.E.2d 240, 244 (1998)). On appeal, a trial court's decision on this subject will not be reversed "unless there has been a clear abuse of discretion." Id. (quoting Moreno v. Moreno , 24 Va. App. 190, 194-95, 480 S.E.2d 792, 794 (1997)); see also Gottlieb v. Gottlieb , 19 Va. App. 77, 84, 448 S.E.2d 666, 671 (1994). An abuse of discretion can be found if the trial court uses "an improper legal standard in exercising its discretionary function," Thomas v. Commonwealth , 263 Va. 216, 233, 559 S.E.2d 652, 661 (2002), because a trial court "'by definition abuses its discretion when it makes an error of law,'" Shooltz v. Shooltz , 27 Va. App. 264, 271, 498 S.E.2d 437, 441 (1998) (quoting Koon v. United States , 518 U.S. 81, 100 (1996)). See also Mughrabi v. Commonwealth , 38 Va. App. 538, 545, 567 S.E.2d 542, 545 (2002). An abuse of discretion also exists if the trial court fails to consider the statutory factors required to be part of the decisionmaking process, Rowe v. Rowe , 24 Va. App. 123, 139, 480 S.E.2d 760, 767 (1997), or makes factual findings that are plainly wrong or without evidence to support them, Northcutt , 39 Va. App. at 196, 571 S.E.2d at 914.- 8 - III.

A. John challenges the trial court's aw ard of spousa l support to his wife. Code § 20-1 07.1(B) bars anaward of support to any spouse found guilty of adultery, John argues , except in narrow circumstances not present in this case. John di sagrees with the trial court's in terpretation of Co de § 20-107.1(B), as well as its factual findings in support of applying the statutory exception. We agree with John th at the trial court rest ated the § 20-107.1(B) standard incorrectly, but conclude th at the trial co urt's factual findings support its de cision in any event. With respect to spou sal support, Code § 20-107.1(B) provides that "no permanent main tenance and supp ort shall be awarded from a spouse if there ex ists in such spouse's fa vor a ground of divorce under the provis ions of subdiv ision (1) of § 20-91," which includes adultery. This statute bar, howeve r, is subject to a narrow exception: However, the court may make such an award notwithstanding the existence of such ground if the court determin es from clear and convincing evidence, that a denial of support and maintenance would constitute a manifest injustice, based upon the respective degrees of fault during the marr iage and the relative economic circumstan ces of the parties. Code § 20-107.1(B). The language of this statute circumscribes the scope of the exception in three ways.- 9 - First, the evidence must rise to the level of "clear and convincing" proof. A more stringent standard than preponderance of the evidence, "clear and convincing" proof requires "that measure or degree of proof which will produce in the mind of the trier of facts a firm belief or conviction as to the allegations sought to be established." Lanning v. Va. Dept. of Transp. , 37 Va. App. 701, 707, 561 S.E.2d 33, 36 (2002) (citations omitted). "It is intermediate, being more than a mere preponderance," but less than the criminal "reasonable doubt" standard. Gifford v. Dennis , 230 Va. 193, 198 n.1, 335 S.E.2d 371, 373 n.1 (1985) (citation omitted). Second, the exception applies only in cases of "manifest injustice." The expression, often found outside of domestic relations law, has been used synonymously with the phrase "miscarriage of justice." Harris v. DiMattina , 250 Va. 306, 318, 462 S.E.2d 338, 343 (1995) (interpreting the duty imposed by Code § 8.01-1 on trial courts to prevent unjust results in the application of a new provision of law). The "manifest injustice" expression also serves as shorthand for the narrow exception to Rule 5A:18's contemporaneous objection requirement. M. Morgan Cherry & Assocs. v. Cherry , 38 Va. App. 693, 702, 568 S.E.2d 391, 396 (2002). The legislature has put the expression to use limiting the ability of a criminal defendant to withdraw a guilty plea after judgment. See Code § 19.2-296 (after- 10 - judgment, a guilty plea may be withdrawn only "to correct manifest injustice"). Third, the statute limits the fact finder's discretion to two specific variables: (i) the relative degrees of fault and (ii) the economic disparities between the parties. The statute requires the decision to be "based upon" these factors. Code § 20-107.1(B). This language implies a higher level of justification than a statutory command that merely requires the trial judge to consider this or that factor. In this case, the dispute focuses on whether the trial court must base its decision on both variables or may rest it exclusively on only one. John argued before the trial court that under Code § 20-107.1(B) a trial court "must consider and weigh bothprongs of the test for manifest injustice." (emphasis in original). The trial court disagreed, concluding that under Calvin v. Calvin , 31 Va. App. 181, 186, 522 S.E.2d 376, 378 (1999), "it can be argued that only a finding of a manifest injustice as to either prong is sufficient to overcome the bar to support." The trial judge erred in reading our precedent to permit a purely disjunctive test, one in which the manifest injustice conclusion could be based on either the relative degrees of fault or the economic disparities of the parties. "In order to find that denial of support will constitute a manifest injustice, the court must base that finding on the parties'- 11 - comparative economic circumstances and the respective degrees of fault." Barnes v. Barnes , 16 Va. App. 98, 101-03, 428 S.E.2d 294, 298 (1993) (emphasis in original). We italicized the word "and" in Barnes precisely because the statute makes clear that the decision must be rooted in both factors. 2 We disagree with the trial court's view that Calvin effectively retooled Code § 20-107.1(B) into a disjunctive test.

In Calvin , we noted only that the "respective degrees of fault" in that case weighed "heavily" in favor of the husband because of the wife's adultery and, thus, any manifest injustice resulting from a denial of spousal support "must derive from the relative economic circumstances of the parties." Calvin , 31 Va. App. at 186, 522 S.E.2d at 378. We made that observation based upon the facts in the appellate record and the specific argument presented to us on appeal. The appellee in Calvin did not file a brief on appeal or participate in oral argument. Id. at 182 n.1, 522 S.E.2d at 376 n.1. Calvin did not expressly mention, much less analyze, whether Code § 20-107.1(B) requires

2 In Barnes , 16 Va. App. at 103, 428 S.E.2d at 298, for example, we noted that the marriage disintegrated because of the

" mutual inattention and fault of both parties." The wife's post-separation adultery occurred long after the marriage had been "irretrievably lost." Id. As a result, we held that the "trial judge did not disregard the parties' respective degrees of fault during the marriage and base her finding of manifest injustice solely upon the parties' disproportionate economic circumstances." Id. at 102, 428 S.E.2d at 298.- 12 - a conjunctive or a disjunctive test. To be sure, Calvin cited

Barnes without noting any conflict between the two decisions. Under Virginia law, a decision of one panel "becomes a predicate for application of the doctrine of stare decisis " and cannot be overruled except by the Court of Appeals sitting en banc or by the Virginia Supreme Court. Johnson v. Commonwealth , 252 Va. 425, 430, 478 S.E.2d 539, 541 (1996). This principle applies not merely to the literal holding of the case, but also to its ratio decidendi —— the essential rationale in the case that determines the judgment. Absent a clear indication to the contrary, therefore, we must presume that the panel deciding Calvin did not intend to undermine Barnes . Despite the trial court's mistaken restatement of the legal standard, the court made alternative factual findings on both prongs of Code § 20-107.1(B). On the "respective degrees of fault" factor, the trial court correctly observed that in this context fault "encompasses all behavior that affected the marital relationship, including any acts or conditions which contributed to the marriage's failure, success, or well-being."
See Barnes , 16 Va. App. at 102, 428 S.E.2d at 298. Using this definition, the trial court rejected the contention that Lynn's adultery rendered the balance of wrongdoing "completely one-sided." Though the trial court did not enumerate the various aspects of fault attributable to John, Code § 20-107.1(B) does not require that this enumeration be done.- 13 - What § 20-107.1(B) does require, the trial judge did. He weighed the respective degrees of fault by considering the essential question of culpability for the marriage's demise. The ultimate issue remains, then, whether clear and convincing evidence of John's and Lynn's respective degrees of marital fault —— coupled with an examination of the economic disparities between them —— supports a finding of manifest injustice. This issue resolves itself under our appellate review standard. Under this standard, if "the record contains credible evidence in support of the findings made by that court, we may not retry the facts or substitute our view of the facts for those of the trial court." Calvin , 31 Va. App. at 183, 522 S.E.2d at 377 (quoting Ferguson v. Stafford County Dep't of Social Servs. , 14 Va. App. 333, 336, 417 S.E.2d 1, 2 (1992)). On the "respective degrees of fault" issue, the evidence before the trial judge pits Lynn's admitted adultery against John's twenty-year showing of base and profane behavior, not only with his wife, but with his children and his extended family. We believe a reasonable jurist could put John's "fault" in a league apart from the type of mere incivility or petulance of manners ordinarily alleged, and often proved, in nearly every contested divorce case. We thus dismiss as exaggerated John's argument that sustaining the trial court's finding on these facts would effectively write the "respective degrees of fault" factor out of Code § 20-107.1(B). Nor do we believe, as John- 14 - contends, that the trial court's finding essentially declares that John's behavior "amounted to a justification for adultery." The law does not excuse, condone, or justify Lynn's infidelity. But neither does the law turn a blind eye to John's behavior, which multiple witnesses described as both unrestrained and longstanding. On the second factor, the "relative economic circumstances of the parties," Code § 20-107.1(B), the trial court found "extreme disparities in their relative economic situations, both in terms of earning capacity, current incomes and other economic assets and resources." Ample evidence supports this finding. John has a secure job with a family company paying over $250,000 a year plus corporate dividends and family related gifts. John's interests in stocks, real estate, and tangible assets exceeds $6 million. On the other hand, Lynn has no separate assets of any significance and holds down a $10.00-an-hour job as a receptionist. For these reasons, the trial court was not plainly wrong in finding, by clear and convincing evidence, that denying spousal support under Code § 20-107.1(B) would constitute a "manifest injustice" based upon the respective degrees of fault attributable to John and Lynn as well as their disparate financial circumstances. Because credible evidence supports that conclusion, we affirm the trial court on this issue.- 15 - B. Lynn contends that the trial court erre d by not classifying as marital the fu ll appreciation in John's stock in his family's trucking company that occurred during the marriage. The court divided the apprec iation component of th e stock valu e into 90% separate and 10% marita l. We find no erro r in the tr ial court's factual find ings on this matter. Separate property that increases in value during the marriage "shall be marital property only to the extent that marital property or the personal efforts of either party have contributed to such increases, provided that any such personal efforts must be significant and result in substantial appreciation of the separate property." Code § 20-107.3(A)(3)(a). Separate property that has appreciated in value due to forces other than either party's efforts, such as passive appreciation or the personal efforts of others, remains separate property. See Martin v. Martin , 27 Va. App. 745, 750, 501 S.E.2d 450, 452 (1998) ( en banc ). In addition, the nonowning spouse shall bear the burden of proving that (i) contributions of marital property or personal effort were made and (ii) the separate property increased in value. Once this burden of proof is met, the owning spouse shall bear the burden of proving that the increase in value or some portion thereof was not caused by contributions of marital property or personal effort.- 16 - Code § 20-107.3(A)(3)(a); see Gilman v. Gilman , 32 Va. App. 104, 120, 526 S.E.2d 763, 771 (2000). Slight efforts are not enough; the nonowning spouse must prove that personal efforts "were significant and resulted in substantial appreciation of separate property." Bchara v. Bchara , 38 Va. App. 302, 314, 563 S.E.2d 398, 404 (2002). In this case, credible evidence supports the trial court's determination that John's stock appreciated greatly because of passive growth and the efforts of others. The court examined in detail the "extent that Mr. Congdon's efforts were an active part of the company's overall growth." Taking into account that John's father, brother, and other key officers played more active managerial roles in the family business, the trial court found John's efforts contributed to only 10% of the stock appreciation. See Rowe v. Rowe , 24 Va. App. 123, 133-34, 480 S.E.2d 760, 764-65 (1997) (recognizing that brother's efforts and growth in surrounding areas undermined the significance of husband's contributions to the stock's increase in value); Decker v. Decker , 17 Va. App. 12, 17-18, 435 S.E.2d 407, 411-12 (1993) (finding that husband's value to company illustrated his "substantial contribution" to the stock's increase in value). Lynn has not shown this factual finding to be plainly erroneous or without evidence to support it.- 17 - IV. The trial court did not err in awarding spousal support under the "manifest injustice" exception to the adultery bar of Code § 20-107.1(B). Despite articulating the legal standard incorrectly, the court's factual findings show that it applied both factors in reaching its decision. We thus reject John's challenge to the support award. We also affirm the trial court's decision to classify 90% of the stock appreciation as separate property. The court applied Code § 20-107.3(A) properly and rested its conclusion on a satisfactory factual basis. Affirmed

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