COURT OF APPEALS OF VIRGINIA
Present: Judges Ke lsey, Haley and Petty Argued at Alexandria, Virginia

WILLIAM COCHRAN HARRISON MEMORANDUM OPINION * BY v. Record No. 1864-06-4 JUDGE WILLIAM G. PETTY AUGUST 28, 2007 EVELYN GREENE HARRISON

FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA Donald M. Haddock, Judge Paul W. Mengel, III (Gregory L. Murphy; Vorys Sater Seymour & Pease, on briefs), for appellant. Marcia M. Maddox (Katharine W. Maddox; Morgan A. Leyh; Law Office of Maddox, Cole & Miller, on brief), for appellee.
Appellant William Cochran Harrison (husband) cha llenges the trial court’s equitable distribution award, determination of child and spousal support, an d award of attorney’s fees to Evelyn Greene Harrison (wife). For the reasons stated below, we reve rse in part, affi rm in part, and remand this case to the trial court for further proceedings co nsistent with this opinion. I. B ACKGROUND The parties were married in 1992 , and the trial court entered a fi nal divorce decree on July 6, 2006. They have three minor chil dren. During the marriage, wife did not work outside the home, but made significant non-monetary contributions to the marriage. Husband made significant monetary contributions to the marriag e, having been very successful in his business. The trial court found that husband was a “successful entrepreneur . . . in the residential mortgage industry for a number of years, in some years making in the half million dollar range” alth ough at the time of the

* Pursuant to Code § 17.1-413, this opin ion is not designated for publication.- 2 - divorce, he “had recently had some reverses, which appear to be at least in part the result of his inability to stay in a profitable relationsh ip with his various business part ners.” As a result of these findings, the trial court imputed an annual income of $1 60,000 to husb and, based on his recent average salary. The court also imputed an annua l income of $20,000 to wife, noting her limited work experience and education. The trial cour t ordered husband to pay wife spousal support of $4,000 per month in orde r to “approximate her former stan dard of living for herself and the children.” The court also ordered husband to pay child su pport in the amount of $1,033 per month. In making its equitable distri bution determination, the trial court found that the following assets were marital property: the marital residence, title d in wife’s name and valued at $1,250,000, subject to a mortgage in wife’s name for $445,658; a condominium in Wintergreen, Virginia, 99% titled in wife’s name, and one percent titled jointly, va lued at $320,000; three notes receivable from various parties, two of wh ich were payable to husband and one to wife, worth a tota l of $109,500; a settlement paid to husband from Ameribanc, with a net value of $41,000; and two au tomobiles, both of which were titled in wife’s na me, which had a net value of $15,7 60 and $13,625, re spectively. The trial court also includ ed husband’s contin gent, unlitigated cl aim for wrongful termination against his former em ployer, Pinnacle Financial Corpor ation (the Pinnacle claim), as marital property subject to distribution even though th e trial court was unable to assign a value to it. Husband testified th at the value of the Pinnacle claim was speculative at best, and he presented testimony from an expert witne ss that came to the same conclu sion. Wife, on the other hand, argued that the trial court should “assign a value of some $2.8 million do llars to that claim.” The trial court rejected wife’s argume nt, explaining that it was “just no t satisfied that enough evidence has been presented as to the valid ity and/or quantity of that claim to consider it as an amount that the [trial court] can actually deal wi th.” However, the trial court included the claim as a marital asset and awarded it to husband. The trial court later expl ained, “If [the claim against Pinnacle] is worth- 3 - nothing in reality, and no one has represented to me that it was worth no thing, then [husband] is really taking a beating here.” On the other hand, the court co ntinued, “If Pinnacle is worth something, and it doesn’t have to be worth anything like these nu mbers you all have been casting about, then Mr. Harrison will be a ll right.” In valuing the notes r eceivable, the tria l court “adopted the numbers on the wife’s statement of property as the numbers . . . at which those notes should be valued.” The trial court also not ed that the parties had considerabledebt arising from unpaid taxes. The trial court stated that the tax debt “would be in excess of half a millio n dollars against the husband, and in excess of $200,000 against the wi fe, those claims being se parate claims.” While the tax claims against husband ha d to do with unreported income, the tax claims against wife arose from capital gains she in curred from the sale of one of the pa rties’ houses located on Rehoboth Beach. The trial court ordered that husband was to be responsible for the ta x claims resulting from his failure to report income, and wife was to be responsible for the tax claims arising from the capital gains on the sale of property. The trial court also noted that wife us ed $65,000 from the proceeds of the sale of that house to pay her lawyers. The trial court distributed the marital assets as we ll. Wife received the marital home, the Wintergreen condominium, both automo biles, and the note re ceivable payable to her. In total, wife received assets with a net value of approximately $1, 193,727. In addition to 100% of the future claim against Pi nnacle, husband recei ved the settlement from Ameriban c worth $41,000. He also received two notes receivable in the amounts of $46,000 and $23,500, re spectively; and a $300,000 lump sum payment from wife, to be paid within one year of the final divorce decree and subject to offsets for his failure to pay spousal and child support. The trial c ourt ordered the parties to resolve any remaining issues regarding the disposition of furnishings in the two homes by agreement. Husband was also ordered to pay wife $35,000 towards her attorney’s fees.- 4 - II. A NALYSIS A. Equitable Distribution Husband argues that the trial court erred in determining the va lue of the parties’ assets and in distributing the parties’ assets and liabilities. Specifically, husband argu es that the trial court erred in failing to determine th e value of the claim against Pi nnacle Corporation and in its determination of the value of the parties’ notes receivable. Because we agree with husband’s argument that the trial court erre d in failing to value the Pinnacle claim, we reverse and remand for the trial court to determin e the correct equitable distribution of the parties’ property in light of our holding. 1 The equitable distribution of marital property “rests within the sound discretion of the trial court.” Mir v. Mir , 39 Va. App. 119, 125, 57 1 S.E.2d 299, 302 (2002) (citation om itted). We will disturb the trial court’s decision only when the appellant can show that the trial c ourt abused its discretion. Id. A trial court must follow three steps in making an equitable distribution of property. First, the trial court “must classify the pr operty as either separate or marital. The court must then assign a value to the property based upon evidence presented by both parties. Finally, the court distributes the property to the parties, taking into consid eration the factors presented in Code § 20-107.3(E).” Marion v. Marion , 11 Va. App. 659, 665, 401 S.E.2d 432, 436 (1991); see also Code § 20-107.3(A). In making its valuation findings, the trial co urt “must determine from the evidence that value which represents the prope rty’s intrinsic worth to the parties upon dissolution of the marriage.” Bosserman v. Bosserman , 9 Va. App. 1, 6, 384 S.E.2d 104, 107 (1989). Because of the fact-specific nature of valuation, “we give gr eat weight to the findings of the trial court.”

1 Husband argues that the distribution of lia bilities was inequita ble in light of the distribution of assets. Because we reverse and remand this case for a redistribution of the marital assets, we need not address husband’s arguments regarding the distributi on of marital debts.- 5 - Howell v. Howell , 31 Va. App. 332, 339, 523 S.E.2d 514, 518 (2000). “We affirm if the evidence supports the findings and if the trial court finds a reasona ble evaluation . . . .” Russell v. Russell , 11 Va. App. 411, 415-16, 399 S.E.2d 166, 168 (1990) . The parties bear the burden to provide the trial court with sufficient evidence fr om which it can value th eir property. Taylor v. Taylor , 5 Va. App. 436, 443, 364 S.E.2d 244, 248 (1988). Notes Receivable We hold that the trial court di d not abuse its discretion in accepting wife’s evidence as to the value of the notes receivable. Both parties presented evidence as to the value of the notes, including both testimony at trial, written submissions, and copies of the notes. The point of contention here is the loan from husband to a form er employee. While the parties agreed that the note was originally for $46,000, husband stated at trial: “I think [the note] is uncollectible.” On appeal, husband argues that the trial court erred when it did not discount the value of the note based on that testimony. Wife also testified as to the value of the not e. Her uncontradicted testimony was that the loan was secured by the bo rrower’s “deceased mother’s diamond ring . . . and a painting and some other thi ngs . . . as collateral.” The trial court was not obliged to accep t husband’s somewhat speculative testimony regarding the uncollectibility of the note; rather, as the finder of fact, the trial court had the discretion to accept or reject any of his testimony. Street v. Street , 25 Va. App. 380, 387, 488 S.E.2d 665, 668 (1997) ( en banc ). Further, wife testified that the note was secured by collateral. The trial court was free to accept this testim ony and refuse to give husband a windfall by discounting the value of the note when it was secure d by collateral. We affirm the trial court’s valuation of the notes receivable.- 6 - Pinnacle Claim We must, however, reverse and remand the tr ial court’s decision to award the Pinnacle claim to husband. We reverse because the trial cour t specifically stated in its findings and in the divorce decree that it “lack[ed] sufficient eviden ce to determine [the] value” of the Pinnacle claim but then went on to include the claim w ith an unarticulated va lue in the distribution formula. Hence, the trial court erred when it di vided the asset without first assigning a value to it. In coming to this decision, we hold that a marital asset whose valu e cannot be determined by the trial court when the parties have had opportunity to present evidence as to its value cannot be divided under our equitable distribution statute. See Morris v. Morris , 3 Va. App. 303, 308, 349 S.E.2d 661, 664 (1986) (affirmin g a trial court’s refusal to consider husband’s law practice as a marital asset subject to equitable distribution when there was insufficient evidence to determine its value, because “‘[w]ithout value, there is no basis for monetary award”’ (quoting Hodges v. Hodges , 2 Va. App. 508, 515, 347 S. E.2d 134, 138 (1986))). Here, the trial court’s findings were internally inconsistent. First, the trial court expressly found that it could not value the Pinnacle claim ba sed on the evidence before it. However, the trial court also found that if the claim were worthless, husband was “taking a bea ting,” but that if the claim were “worth so mething . . . then [husband] will be all right.” Thus, the trial court indicated that while it could not actually assign a value to the Pinnacle claim, it believed that the claim had some indecipherable value that it took into account in the distribution of the parties’ marital estate. These findings are speculative, and canno t form the basis of an equitable distribution award. See Taylor , 5 Va. App. at 443, 364 S.E.2d at 248 (The “trial judge’s va luation cannot be based on mere guesswork.”). We therefore remand this issue to the trial cour t for it to value the Pinnacle claim an d make an equitable distributio n of all of the parties’ a ssets and liabilities based on its findings. Given the amount of time that will have elapsed between the original hearing and the- 7 - hearing on remand, the trial court should take evidence regarding the value of the claim at the time of the hearing on remand. See Robbins v. Robbins , 48 Va. App. 466, 47 4-75, 632 S.E.2d 615, 619-20 (2006) (reversing and remand ing a trial court’s equitable di stribution award when it refused to consider the wife’s proffered evidence indicat ing that the marital home had nearly doubled in value between the time of the ev identiary hearing on valuation a nd the final divorce decree); see also Rowe v. Rowe , 33 Va. App. 250, 263, 53 2 S.E.2d 908, 915 (2000) (The trial court should use “the most current and accurate info rmation available” when valuing marital assets, so as to “avoi[d] inequitable results.”). On the other hand, if the trial court is unable to assign a value to the Pi nnacle claim, the trial court should make its equitable distribution award usin g only the remaining a ssets and liabilities. Simply put, we hold that if a tria l court is unable to assign a valu e to a particular item of marital property such that would allow it to make a reason ably equitable distribution of the marital assets and liabilities as a whole, th at property cannot be in cluded in the equitable di stribution formula. To do so would omit a step in the equitable distribution scheme developed by the General Assembly, and constitute revers ible error. See Code § 20-107.3(A); see also Alphin v. Alphin , 15 Va. App. 395, 404, 424 S.E.2d 572, 576 (1992); Swisher, Diehl & Cottrell, Family Law: Theory, Practice & Forms § 11.25(a) (2005 ed.) (“Where . . . evid ence of value is insufficient to make a determination of value, the cour t is without authority to make an equitable di stribution award based upon said property.”). In reaching this decision, we are persuade d by the reasoning of the North Carolina Court of Appeals in Grasty v. Grasty , 482 S.E.2d 752, 754 (N.C. App. 1997). There, the North Carolina Court of Appeals reversed a trial court’s decisi on including a party’s business interest in an equitable distribution when it did not first value the business interest. The trial court determined that it could not value the business interest because it found the defendant’s ev idence as to the value- 8 - “wholly incredible and without reas onable basis,” and because plaintiff did not present any evidence of value. Id. As a part of its analysis, the Grasty court noted that “only those assets and debts that are classified as marital propert y and valued are subject to dist ribution” under the North Carolina equitable jurisdiction statute, id. at 755, a statement that accura tely describes our three-step equitable distribution scheme as well. The Nort h Carolina court reasoned that, because no value had been assigned to the business interest, the trial court erred when it incl uded the asset in the distribution. Id. We reach the same conclusion here. B. Child and Spousal Support Husband argues that the evidence in th is case does not support the trial court’s determination to impute an a nnual income of $169,000 to him fo r support purposes and that the trial court erred in imputing income to wife in the amount of $20,000 per year. We affirm the trial court’s imputation of in come to both parties. “The decision to impute income is within the sound discretion of the trial court and its [decision] will not be reversed unless plainly wrong or unsupported by the evidence.” Blackburn v. Michael , 30 Va. App. 95, 102, 515 S.E.2d 780, 784 (1999) (citation omitted). In determining whether to impute income, “the tr ial court must consider the [parties’] earning capacity, financial resources, education and training, ability to secure such educati on and training, and other factors relevant to the equities of the parents and the children.” Niemiec v. Commonwealth , 27 Va. App. 446, 451, 499 S.E.2d 576, 579 (1998) (citation om itted). The trial court’s decision is presumed correct and will not be disturbed unl ess some injustice has been done. Stubblebine v. Stubblebine , 22 Va. App. 703, 707, 473 S.E.2d 72, 74 (1996) (citing Steinberg v. Steinberg , 11 Va. App. 323, 329, 398 S.E.2d 507, 510 (1990)). Here, the trial court did not commit any injustice in its decisions concerning the imputation of income. The imputation of inco me to wife was based on husband’s expert- 9 - witness’ testimony that wife could currently make “anywhere from $19,000 to $30,000 a year even without further education.” Moreover, the trial court noted that wife had limited education and work experience. Hence, the trial court’s imputation of income to wife is adequately supported by credible evidence provided by husband’s expert witness; we will not disturb it on appeal. Further, the trial court did not err in imputing income of $169,000 to husband for support purposes. In Stubblebine , 22 Va. App. at 709, 473 S.E.2d at 75, this Court upheld a trial court’s imputation of income based on husband’s recent earn ings history. There, the evidence revealed that husband had recently been employed as a consultant making $40,000 per year, although that kind of work was no longer available to him base d on the economic market at that time. Here, the trial court heard testimony regarding husband’s earning potential fr om wife’s expert witness. The witness had analyzed husband’s employment hi story and income over several years. While husband left his most recent position, the expert ’s written opinion showed that his annualized income would have been $162,222. Moreover, husband has started a new business venture, from which husband estimates his future income will be up to $657,925 per year; the expert witness testified that husband was likely to make $372,000 from May 2006 through May 2007 in this new venture. Thus, the trial court’s imput ation of $160,000 annual income to husband was reasonable in view of husband’s prio r earnings, educati on, and experience. 2

2 Husband also received $9,000 per year from hi s family. He does not argue that the trial court erred in including this amount as income.- 10 - B. Attorney’s Fees At Trial Husband also challenges the trial court’s award of attorney’s fees to wife for the proceedings below. “An award of attorney’s fees is a ma tter submitted to the trial court’s sound discretion and is reviewable on appeal only for an abuse of discretion.” Graves v. Graves , 4 Va. App. 326, 333, 357 S.E.2d 554, 558 (1987) (citing Ingram v. Ingram , 217 Va. 27, 29, 225 S.E.2d 362, 364 (1976)). “The key to a proper award of c ounsel fees is reason ableness under all the circumstances.” Lightburn v. Lightburn , 22 Va. App. 612, 621, 472 S.E.2d 281, 285 (1996) (citing McGinnis v. McGinnis , 1 Va. App. 272, 277, 338 S.E.2d 159, 162 (1985)). The facts of this case evince no unusual circumstances that w ould warrant disturbance of the trial court’s judgment; rather the trial court clea rly stated that it was awarding at torney’s fees to wife because she had sold marital property for the purpose of paying her a ttorney’s fees below. See L.C.S. v. S.A.S

. , 19 Va. App. 709, 721, 453 S.E.2d 580, 587 (1995). We, therefore, affirm the trial court’s order awarding attorney’s fees for the proceedings below to wife. On Appeal Husband also seeks atto rney’s fees associated with this ap peal. It is clear that the “the appellate court [is] the proper fo rum to determine the propriety of an award of attorney’s fees for efforts expended on appeal . . . .” O’Loughlin v. O’Loughlin , 23 Va. App. 690, 695, 479 S.E.2d 98, 100 (1996). An appellate c ourt is in the position “to view the record in its entirety and determine whether the appeal is frivolous or wh ether other reasons exist for requiring additional payment.” Id. Reviewing the record of the proceedings as a whole, we conclude that wife should be responsible for husband’s at torney’s fees incurred on appeal because of the clear error in including an unvalued piece of property in the equitable distribution.- 11 - Accordingly, we remand this case to the tr ial court for determina tion and award of the appropriate appellate attorn ey’s fees and costs. III. C ONCLUSION For the reasons discussed above, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

Affirmed in part, reversed in part, and remanded.