Court Opinion

ID: 9950387
Source: CourtListenerOpinion
Date Created: 2024-03-13 19:26:40.986839+00
Date Added: 2024-06-11T14:36:42.830175
License: Public Domain

IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA
                                                                                 FILED
ARTHUR R. POFF,
                                                                             March 13, 2024
                                                                              C. CASEY FORBES, CLERK
Petitioner Below, Petitioner                                               INTERMEDIATE COURT OF APPEALS
                                                                                 OF WEST VIRGINIA

v.) No. 23-ICA-165 (Fam. Ct. of Nicholas Cnty. Case No. FC-34-2021-D-65)

PAMELA A. POFF,
Respondent Below, Respondent

                              MEMORANDUM DECISION

       Petitioner Arthur Poff (“Husband”) appeals the March 29, 2023, order of the Family
Court of Nicholas County, which found that the former marital residence was the separate
property of Respondent Pamela Poff (“Wife”).1 The issue on appeal is whether the family
court erred by finding that the home was a gift to Wife and not subject to equitable
distribution.

       This Court has jurisdiction over this appeal pursuant to West Virginia Code § 51-
11-4 (2022). After considering the parties’ arguments, the record on appeal, and the
applicable law, this Court finds that the family court erred in failing to set forth findings of
fact and conclusions of law sufficient to allow meaningful appellate review. Therefore, this
case satisfies the “limited circumstances” requirement of Rule 21(d) of the West Virginia
Rules of Appellate Procedure, and a memorandum decision is appropriate to reverse the
family court’s order and remand the case to family court with instructions to draft a new
order setting forth findings of fact and conclusions of law sufficient for meaningful
appellate review.

        Husband and Wife were married for twenty-nine years and divorced by Bifurcated
Divorce Order entered on March 22, 2022. During the marriage, the parties built a home
in Summersville,2 and a deed was placed in both parties’ names with rights of survivorship
at the time of its purchase in 1997.

       1
         Husband is represented by Christine B. Stump, Esq., and Wife is represented by
Jared S. Frame, Esq.

       The parties operated a successful construction business for decades prior to 2020
       2

where Husband was the contractor and Wife handled the paperwork as Secretary and office
manager.

                                               1
        In 2020, Husband became severely ill. According to their testimony, Husband and
Husband’s daughter believed he would not survive.3 He contacted and hired an attorney to
draft a quitclaim deed to convey his interest in the marital home to Wife in case something
happened to him.4 On July 1, 2020, Husband executed the quitclaim deed to Wife and
recorded it at the courthouse on the same day. Approximately nine months later, Husband
filed for divorce.

       Wife continued to live in the house after Husband filed for divorce and sought to
purchase Husband’s interest in the home. However, since the home was never appraised,
Husband filed a Motion to Compel the Sale of the Marital Residence which was scheduled
to be heard before the family court on November 9, 2022.

       During the November 9 hearing, Wife asserted that the home may be her separate
property due to the quitclaim deed executed by Husband. On November 18, 2022, the
family court entered a temporary order requiring a market analysis of the home to
determine its fair market value. The order further mentioned a hearing would need to be
scheduled on whether the home was Wife’s separate property. If the home were deemed
separate property, the marital estate would have had no significant assets.

       On November 22, 2022, Wife filed a motion to classify the home as her separate
property due to the quitclaim deed. The family court held final hearings on Husband’s
motion to compel the sale of the home and Wife’s motion to classify the home as her
separate property on December 22, 2022, and January 26, 2023. The court heard testimony
from Husband, Wife, and one of Husband’s daughters.5 Husband testified that he was of
sound mind when he (1) employed counsel to prepare the quitclaim deed; (2) executed the
deed; and (3) personally delivered the deed to be recorded.

        However, he further testified that he did not intend for the conveyance to be a “gift”
to Wife. Rather, he wanted Wife to solely own the home to prevent his daughters from his
previous marriage from obtaining an interest in it. He testified that due to his sickness and
Wife pressuring him to execute a quitclaim deed, he was under duress. Conversely, Wife
testified that they had never discussed a quitclaim deed, but Husband told her that he
wanted to make sure she solely owned the home so she and their daughter would inherit it.

       3
         According to Husband, Wife also believed that he was going to die, but her
testimony was that although Husband had been in the hospital with flu, that he was feeling
better. She did not recall him losing one hundred pounds as he claimed.
       4
           The home was free and clear of any lien or mortgage.

       The parties have one daughter together; however, the daughter who testified is
       5

from Husband’s previous marriage.

                                              2
His daughters from his first marriage had never lived in the home and he wanted to be sure
that they would have no interest in it.

       All testimony revealed that Husband’s illness was severe. However, there was no
testimony from anyone, including Husband, that suggested he was prevented from
exercising his free will, was threatened, or unaware of what he was doing when he executed
the deed on July 1, 2020. In fact, Husband’s testimony was that he was of sound mind when
he executed the deed, but obviously very ill.

        Both parties initially identified the marital residence as marital property when they
filed their financial statements during the divorce, but Wife later amended her statement to
describe the marital residence as her separate property. Husband notes that Wife never
questioned the nature of the marital residence as marital property until after he filed his
Motion to Compel Sale of the Marital Residence. Wife argues that she amended her
financial statement when she realized that the marital residence was actually her separate
property.

       At the end of the hearing on January 26, 2023, the Family Court directed the parties
to submit memoranda in support of their respective positions. Both parties submitted their
memoranda on February 27, 2023. In his memorandum, Husband argued that his interest
in the marital residence was held by Wife as a constructive trust pursuant to Patterson v.
Patterson, 167 W. Va. 1, 277 S.E.2d 709 (1981), overruled on other grounds, LaRue v.
LaRue, 172 W. Va. 158, 304 S.E.2d 312 (1983), because of duress and unjust enrichment.
In her memorandum, Wife argued that she had met her burden under Roig v. Roig, 178 W.
Va. 781, 364 S.E.2d 794 (1987) to establish that Husband’s interest in the marital residence
had been transferred to Wife as an irrevocable gift.

        By final order entered on March 29, 2023, the family court found the current value
of the home to be between $500,000 and $600,000 and that the quitclaim deed was intended
as a gift from Husband to Wife, thus deeming the home as Wife’s separate property and not
subject to equitable distribution. This appeal followed.

              In reviewing a final order of a family court judge that is
              appealed directly to this Court, we review findings of fact by a
              family court judge under the clearly erroneous standard, and
              the application of law to the facts under an abuse of discretion
              standard. We review questions of law de novo.

Syl. Pt. 1, May v. May, 214 W. Va. 394, 589 S.E.2d 536 (2003); accord W. Va. Code § 51-
2A-14 (c) (2005) (specifying standards for appellate court review of family court orders).

                                             3
       On appeal, Husband raises three assignments of error: (1) that the Family Court
erred in finding that Husband gifted his interest in the marital residence to Wife; (2) that
the Family Court erred in failing to find that the former marital residence was held as a
constructive trust as marital property under Patterson v. Patterson, 167 W. Va. 1, 277
S.E.2d 709 (1981) on the grounds of duress and unjust enrichment; and (3) that the Family
Court erred in allegedly holding that Husband had to prove that he was not of sound mind
in order to prevail on his argument that the former marital residence had not been gifted to
Wife. We will consider the first and third assignments of error together because they are
related. Because we are reversing and remanding for further development on the question
of intent, we do not reach the question of constructive trust, which Wife contends was not
timely raised in the lower court.6

       The primary issue on appeal is whether the marital residence should be treated as
marital or separate property. Wife contends that Husband validly gifted his interest in the
marital residence, thereby converting it from marital to separate property which would not
be subject to equitable division. For purposes of marital distribution, the spouse claiming
that property has been gifted to him or her by the other spouse during their marriage has
the burden of proving a valid gift. Roig v. Roig, 178 W. Va. 781, 785, 364 S.E.2d 794, 798
(1987). W. Va. Code § 48-29-201 (2001) provides:

              The burden of proof in any proceeding questioning the validity
              or lawfulness of any conveyance or transfer of property or any
              interest in property from one spouse to the other spouse by the
              spouse making the conveyance or transfer, or his or her heir,
              devisee or creditor is on the spouse in whose favor the
              conveyance or transfer was made.

See also W. Va. Code § 48-29-202 (2001) (“in the case of an action … wherein the court is
required to determine what property of the parties constitutes marital property and
equitably divide the same, the presumption [of a gift] created by this section does not apply,
and a gift between spouses must be affirmatively proved.”); see generally Syl. Pt. 4,
Mayhew v. Mayhew, 205 W. Va. 490, 519 S.E.2d 188 (1999) (holding that the party seeking
to exclude property from the marital estate that is presumptively marital property has the
burden of persuasion on that issue for purposes of equitable distribution).

        In this case, the lower court did not discuss the Wife’s burden of proof or even cite
the statutes and cases imposing that burden of proof. Although it noted some testimony by
Wife that she was surprised when Husband “presented her with the quitclaim deed,” it did
not mention that there was conflicting testimony by the Husband that she had repeatedly

       6
        The lower court did not address in its order the issue of constructive trust based on
duress and unjust enrichment. Generally, we do not address questions which were not
decided by the lower court.

                                              4
asked him to prepare the deed in order to make sure that she would receive the property if
he predeceased her,7 or state that it found the Wife’s testimony to be more credible. Nor
did it discuss the circumstances that the marital residence was the only significant asset of
the marital estate,8 that Wife was younger, healthier, and had more formal education than
Husband, that both parties continued to live in the marital residence following the
execution and recording of the quitclaim deed, that both parties initially identified the
marital residence as marital property in their financial statements, that neither party had
reported the transfer of title as a gift, or that Husband had paid half of the taxes on the
property one year after filing for divorce.9 “[T]o show intent at the time of the transaction
in question the parties are entitled to rely on all the attendant facts and circumstances of
the transaction. Thus, intent may be shown by evidence of any relevant fact and statement
of the parties not barred by the hearsay rule.” Burnside v. Burnside, 194 W. Va. 263, 272,
460 S.E.2d 264, 273 (1995).10

       When a court determines whether property is separate or marital for purposes of
equitable division, it is required to make sufficient findings of fact and conclusions of law

       7
         According to Husband’s testimony, Wife also asked him to prepare a will leaving
everything to her, and when he went to get the will, Wife took him by the elbow and told
him where to sign. In Emma S. v. Joe W., No. 22-ICA-127, 2023 WL 2863287, at *3 (W.
Va. Ct. App. April 10, 2023) (memorandum decision), this Court found it relevant to the
question of the husband’s donative intent that the wife had asked him to prepare a deed
transferring his interest in his separate property to her, allegedly for the purpose of bundling
insurance.
       8
         See Richardson v. Richardson, No. 19-0862, 2020 WL 7222720, at *3 (W. Va. Dec.
7, 2020) (memorandum decision) (noting, among other things, that the marital residence
“was the parties’ major asset” in affirming a ruling by the lower court that the wife had
“failed to meet her burden of proof that [the husband] intended to convey all of his interest
in the marital home to her…”).
       9
        According to Husband, he was requested by Wife’s counsel to pay half the taxes
on the marital residence.
       10
          In Paragraph 11 of its order, the lower court noted “that [Husband] had acquired
the services of an attorney to prepare the quit claim deed and would have had the
opportunity to seek that attorney’s advice regarding the effect of such deed.” Although we
do not know what advice, if any, Husband may have received, we recognize that in
confidential relationships of trust, such as husband and wife, whether the party claiming to
be disadvantaged by a property transaction had independent advice “may be a significant
factor in a court’s evaluation of the overall bona fides of the transaction.” Charlton v.
Charlton, 186 W. Va. 670, 675, 413 S.E.2d 911, 916 (1991), quoting Syl. Pt. 3, Marshall v.
Marshall, 166 W. Va. 304, 273 S.E.2d 360 (1980).

                                               5
to permit effective appellate review. See Syl. Pt. 3, Stuck v. Stuck, 218 W. Va. 605, 625
S.E.2d 367 (2005) (per curiam) (absent a joint stipulation or property settlement agreement,
the family court “is required to make findings of fact and conclusions of law… which
reflect each step of the equitable distribution procedure.”); see generally W. Va. Code § 48-
7-106 (2001) (“In any order which… determines the ownership… of any property, … the
court shall set out in detail its findings of fact and conclusions of law…”). Accordingly, we
reverse and remand the final order of the lower court for further proceedings consistent
with this opinion so that it may analyze the evidence in relation to the applicable burden of
proof11 and make more detailed findings of fact and conclusions of law in order to facilitate
our review. In remanding this matter for further consideration and development, we note
some general principles concerning property transfers which the lower court should
consider and address in its analysis.

       In order “to have a valid inter vivos gift three requirements must be met: (1) there
must be an intention on the part of the donor to make a gift; (2) there must be a delivery or
transfer of the subject matter of the gift; and (3) there must be acceptance of the gift by the
donee.” Brewer v. Brewer, 175 W. Va. 750, 751-52, 338 S.E.2d 229, 231 (1985) (per
curiam). In this case, Husband argues that Wife failed to prove that he possessed the
requisite intent to make an irrevocable gift of his interest in the marital residence.

       In arguing that there was a valid gift to her, Wife relies on a quitclaim deed executed
and recorded by Husband which purported to convey all his interest in the marital residence
to Wife. Of course, the existence of such an instrument, although relevant, is not conclusive
between spouses when it comes to the ownership of property. See Richardson v.
Richardson, No. 19-0862, 2020 WL 7222720 (W. Va. Dec. 7, 2020) (memorandum
decision) (affirming decision by lower court that marital residence was marital property
despite husband’s deed purporting to convey all his interest in the jointly owned property
to wife); Burgess v. Burgess, 710 P.2d 417, 421 (Alaska 1985) (marital residence held to

       11
          We do not find Husband’s argument that the lower court changed the burden of
proof to require him to prove that he was not of sound mind when he executed his quitclaim
deed persuasive. The lower court noted in its order that there had been no evidence that the
Husband was not of sound mind when he executed and recorded his quitclaim deed. Based
on this language in the order, Husband argues that the lower court improperly required him
to prove that he lacked the mental capacity to make a valid gift. This argument misses the
mark. Although mental capacity is necessary, it is not sufficient to establish the existence
of a valid gift. Other elements are required, and gifts may be set aside for other reasons
than lack of mental capacity, such as lack of donative intent, fraud, duress, mistake and
unjust enrichment. In this case, the lower court did not require Husband to prove that he
was not of sound mind in order to prevail, and therefore did not change the usual burden
of proof in cases involving alleged spousal gifts.

                                              6
be marital property despite quitclaim deed by wife), cited with approval by Charlton v.
Charlton, 186 W. Va. 670, 675, 413 S.E.2d 911, 916 (1991).

        The mere fact that property is titled in a single spouse’s name does not necessarily
mean that it was meant to be separate, rather than marital, property. See Kapfer v. Kapfer,
187 W. Va. 396, 419 S.E.2d 464 (1992) (per curiam) (given conflicting evidence regarding
husband’s donative intent, the fact that an automobile was titled in the wife’s name did not
mean that the lower court had to conclude that it was her separate property); Loudermilk v.
Loudermilk, 183 W. Va. 616, 397 S.E.2d 905 (1990) (garage adjoining marital residence
was marital property despite deed purporting to convey wife’s interest in lot to husband);
Emma S. v. Joe W., No. 22-ICA-127, 2023 WL 2863287 (W. Va. Ct. App. April 10, 2023)
(memorandum decision) (deed conveying husband’s interest in separate real property to
wife, at wife’s request, shortly before divorce, purportedly for purpose of bundling
insurance, held invalid); see generally Fry v. Fry, No. 22-ICA-47, 2023 WL 1463353, at
*3 (W. Va. Ct. App. Feb. 2, 2023) (memorandum decision) (“ . . . titling of the property,
either sole or joint, alone is not determinative of the nature of the property.” . . .
“Classification of the marital home as marital property or separate property is determined
on a case-by-case basis . . . based on the intent and conduct of the parties.”) (citations
omitted); Koontz v. Koontz, 183 W. Va. 477, 484, 396 S.E.2d 439, 446 (1990) (Neely, J.,
dissenting) (“Bare legal title should not be determinative of what constitutes marital
property…. Our refusal to consider the title of property as conclusive proof of . . .
ownership . . . is consistent with our holdings in other areas.”); Roig v. Roig, 178 W. Va.
781, 785, 364 S.E.2d 794, 798 (1987) (“when real property… [is] at stake, it requires
considerably more than the simple fact that property was transferred from one spouse to
the other to establish a qualified… gift.”); Robin J. Davis, “Alimony and Equitable
Distribution: Are the Two Concepts Commingled in West Virginia?” 95 W. Va. L. Rev. 469,
486 (Winter 1992/1993) (“… according to the West Virginia Code, marital assets are
classified as marital property or separate property based on how and when the property was
acquired, as opposed to its title.”).

      As the court explained in Jonathan R. v. Katie R., No. 15-0400, 2016 WL 1735265
(W. Va. April 29, 2016) (memorandum decision),

              the intent of [the] donor ... is not unqualifiedly determined
              by the formalities which were carried out by the donor.
              Surrounding circumstances, including the conduct of the
              parties both prior and subsequent to the transaction in question,
              their testimony and the testimony of disinterested persons, the
              abilities and contributions of the parties, their relation to and
              confidence in each other, and any other factors which might
              throw light upon their true intent under the circumstances of
              the particular case must be scrutinized[.]

                                             7
Id. at *4 quoting Apt. v. Birmingham, 89 F. Supp. 361 (N.D. Iowa 1950) (emphasis added).

        In Stuck v. Stuck, 218 W. Va. 605, 625 S.E.2d 367 (2005) (per curiam), the Supreme
Court of Appeals of West Virginia recognized that the existence of a deed did not preclude
the need to consider evidence concerning the donor spouse’s intent. Stuck v. Stuck is similar
to the present case in that the husband testified that he had executed a deed to make sure
that his spouse would have a place to live in case he predeceased her, and not to make a
gift of interest in the marital residence to his wife. In that case, the husband executed a deed
placing the marital residence, which was his separate property, in both his and his wife’s
names as joint tenants with right of survivorship. The husband argued that:

              in executing the deed he did not intend to make the property a
              gift to the marital estate. Rather, the deed was only intended as
              a probate instrument in the event that he died while married to
              Ms. Duncan. He wanted her to have a place to live if he passed
              away first, and he believed Ms. Duncan would provide that
              upon her death, the property would be inherited by his
              daughters.

Id. at 608, 625 S.E.2d at 370. The family court in Stuck v. Stuck held that a valid gift had
been made without even considering any evidence concerning the husband’s intent, and the
circuit court refused to hear an appeal.

        On appeal, the Supreme Court of Appeals of West Virginia rejected the argument
that the language of the deed was controlling and remanded the case for further proceedings
concerning the issue of the husband’s intent. In its opinion, the Court reasoned that:

              The family court … concluded that even if Mr. Stuck had
              intended to only transfer the property so that Ms. Duncan
              would have a place to live should he pass away first, that absent
              some limitation to that effect in the deed, the real estate had to
              be deemed marital property. In other words, regardless of Mr.
              Stuck's intent, the property was part of the marital estate
              because the deed specified that the property was owned by the
              parties jointly with the right of survivorship. Clearly, the family
              court misapplied the law and erred by not considering Mr.
              Stuck's intent.

Id. In this case, the lower court apparently relied on the quitclaim deed executed by
Husband with little or no real analysis of the evidence concerning whether he intended to
gift his interest in the property to Wife. Accordingly, we reverse and remand for more

                                               8
detailed findings of fact and conclusions of law pertaining to the evidence adduced in this
case.12

        Upon remand, if the lower court concludes, after analysis of the evidence and
applicable law, that Husband intended to give his interest in the marital residence to Wife,
thereby converting the marital residence from marital property to her separate property, it
will need to determine whether that property retained its status as separate property or
whether it was converted back into marital property as a result of the subsequent treatment
and use of the property. See Vance v. Vance, 180 W. Va. 63, 375 S.E.2d 427 (1988) (per
curiam); Fry v. Fry, No. 22-ICA-47, 2023 WL 1463353, at *1 (W. Va. Ct. App. Feb. 2,
2023) (memorandum decision). The legal process of converting separate property into
marital property is known as “transmutation.” Miller v. Miller, 189 W. Va. 126, 130, 428
S.E.2d 547, 551 (1993) (per curiam). Most commonly, transmutation occurs when one
spouse expressly conveys some interest in the property, but property can also change its
nature because of other actions by the spouses. See id. (“This transformation may be
effected by an agreement between the parties or by the affirmative act or acts of the
parties.”); Burnside v. Burnside, 194 W. Va. 263, 266, n.3, 460 S.E.2d 264, 267, n.3(1995)
(“Transmutation is the conversion of separate property into marital property during the
marriage by express or implied acts. Courts have held that transmutation can occur by title,
by express or implied agreement, by commingling of funds, or by interspousal gift.”). In
this case, Husband and Wife continued to live in the marital residence after the alleged gift,
and Husband paid some of the taxes following separation. Living in the marital residence
is a key factor that may be considered in determining whether transmutation has occurred.
See Koontz v. Koontz, 183 W. Va. 477, 483, 396 S.E.2d 439, 445 (1990) (Neely, J.,
dissenting).

       We also note that “West Virginia case law generally indicates a marked preference
for characterizing the property of married persons as marital.” Richardson v. Richardson,
No. 19-0862, 2020 WL 7222720, at *3 (W. Va. Dec. 7, 2020) (memorandum decision). See
also Syl. Pt. 2, Kapfer v. Kapfer, 187 W. Va. 396, 419 S.E.2d 464 (1992) (per curiam) (“W.

       12
           Husband’s testimony indicated that he intended to convey his interest in the
marital residence to Wife to prevent his daughters from a previous marriage from obtaining
an interest in the property. This testimony was some evidence of an intent to make a gift to
Wife. Husband’s goal to make sure that Wife had a place to live could have existed
regardless of whether he believed that his death was imminent or not, although the mistaken
belief that he was not long for this world undoubtedly added an urgency to the conveyance
that would not have been present otherwise. It may also be relevant that if Husband did not
want to gift his interest in the marital residence to Wife, there were other ways to protect
her and achieve his goal. For example, leaving the marital residence to her in his will
(which he may have done), drawing up a deed to Wife reserving a life estate for himself,
or using a transfer on death deed. Moreover, prior to Husband’s quitclaim deed, the marital
residence was reportedly jointly owned by Husband and Wife with right of survivorship.

                                              9
Va. Code 48-2-1 (e) (1) (1986)… expresses a marked preference for characterizing the
property of the parties to a divorce action as marital property.”), quoting Syl. Pt. 3, Whiting
v. Whiting, 183 W. Va. 451, 396 S.E.2d 413 (1990).

       The record on appeal does not indicate whether the parties made any improvements
to the marital residence after it allegedly became Wife’s separate property, but if there were,
any increase in the value of separate property resulting from the expenditure of marital
funds or the labor and efforts of either spouse would be marital property. W. Va. Code §
48-1-233 (2) (2001); Miller v. Miller, 189 W. Va. 126, 129-30, 428 S.E.2d 547, 550-51
(1993) (per curiam); Syl. Pt. 2, Shank v. Shank, 182 W. Va. 271, 387 S.E.2d 325 (1989).
This may be an issue for the lower court to explore on remand depending on the evidence
presented.

       Accordingly, for the reasons set forth above, we reverse the final order of March 29,
2023, and remand this case to the Family Court of Nicholas County for further proceedings
consistent with this decision.

                                                    Reversed and remanded with directions.

ISSUED: March 13, 2024

CONCURRED IN BY:

Chief Judge Thomas E. Scarr
Judge Charles O. Lorensen
Judge Daniel W. Greear

                                              10