Court Opinion

ID: 1069185
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:33:12.017986+00
Date Added: 2024-06-11T08:09:45.831467
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present:  Chief Judge Fitzpatrick, Judge Annunziata and
          Senior Judge Coleman
Argued at Richmond, Virginia

FRANK EDWARD BIVIANO
                                           MEMORANDUM OPINION * BY
v.   Record No. 1882-01-2                JUDGE ROSEMARIE ANNUNZIATA
                                                MARCH 12, 2002
FAITH V. KENNY, F/K/A
 FAITH V. BIVIANO

           FROM THE CIRCUIT COURT OF PRINCE GEORGE COUNTY
                        James A. Luke, Judge

           Robert B. Hill (Hill, Rainey & Eliades, on
           briefs), for appellant.

           Lawrence D. Diehl for appellee.

     The trial court entered an equitable distribution order in

this divorce matter on March 20, 2001.   On appeal, Frank Edward

Biviano challenges the trial court's decision to: (1) overrule his

exceptions to the commissioner's report; (2) deny his motion to

re-value the North Carolina property; and (3) reverse the

commissioner's finding that three trailers were marital property.

In addition, Faith V. Kenny requests appellate attorney's fees.

For the reasons that follow, we affirm in part, reverse in part,

and award Kenny appellate attorney's fees.

     * Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
                                  I.

                             Background

     Biviano and Kenny were married on November 8, 1989,

separated on May 1, 1996, and divorced by a final decree entered

on June 19, 1998.   The trial court referred all equitable

distribution matters between the parties to a commissioner in

chancery.

     Biviano filed exceptions to the commissioner's report,

contending that the commissioner erred by: (1) classifying Kenny's

two IRA accounts as separate property; (2) classifying trailers

6259 and 6260 as separate property; (3) declining to account for

Biviano's separate interest in the parties' North Carolina lake

house; (4) determining that Biviano had possession of $38,429 in

proceeds from the parties' stock; (5) awarding Biviano only $7,350

of the $36,750 in funds that Kenny had misappropriated during the

parties' separation; and (6) giving his debts little

consideration.   The trial court overruled each of these

exceptions.   The court also denied Biviano's motion to re-open the

hearing in order to re-value the North Carolina lake house.

     Kenny filed an exception to the commissioner's finding that

trailers 6212, 6231 and 6261 were marital.   The trial court

reversed that finding and accordingly deducted $33,500 from the

total value of marital assets.

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                                II.

                        Facts and Analysis

     It is well settled that a trial court's "decision regarding

equitable distribution . . . will not be reversed unless it is

plainly wrong or without evidence to support it."     Gilman v.

Gilman, 32 Va. App. 104, 115, 526 S.E.2d 763, 768 (2000)

(internal citations and quotations omitted).    In reviewing such

awards, "we have recognized that the trial court's job is a

difficult one, and we rely heavily on the discretion of the

trial judge in weighing the many considerations and

circumstances that are presented in each case."     Id.   Because a

commissioner in chancery faces similar responsibilities, when

his or her findings are based upon ore tenus evidence, the

commissioner's report is presumed correct.     See Brown v. Brown,

11 Va. App. 231, 236, 397 S.E.2d 545, 548 (1990) (noting that

the commissioner has the "authority to resolve conflicts in the

evidence and to make factual findings").     Consequently, "the

trial judge ordinarily must sustain the commissioner's report

unless the trial judge concludes that it is not supported by the

evidence."   Id. (citing Morris v. United Virginia Bank, 237 Va.
331, 337-38, 377 S.E.2d 611, 614-15 (1989)).    An appellate

court, therefore, should sustain the commissioner's report,

"unless it plainly appears, upon a fair and full review, that

the weight of the evidence is contrary to his findings."

                               - 3 -
Thrasher v. Thrasher, 202 Va. 594, 604, 118 S.E.2d 820, 826

(1961) (internal quotation omitted).

     In applying these principles of law to the factual issues in

this appeal, we note the commissioner did not place great weight

on Biviano's testimony because he found that Biviano "engaged in a

course of conduct involving dishonesty, fraud, and

misrepresentation . . . ."     Specifically, the commissioner noted

that Biviano

          misrepresented himself to the Wife and her
          family, as, among other things, a Vietnam
          veteran jet pilot, a Certified Financial
          Planner, the owner of substantial assets, and
          a man who had been married only twice in the
          past . . . forged his Wife's signature on a
          Power of Attorney, and used the altered
          document without her knowledge or consent[,]
          . . . stole money from friends of the Wife
          and attempted to obtain a credit card in her
          name without her knowledge . . . .

               A.   Classification of Kenny's IRA accounts

                             Relevant Facts

     Kenny owned three IRA accounts totaling $48,000, which were

funded completely during the marriage.     Kenny and her parents,

Willard and Ethel Vejnar, testified that the checks which funded

Kenny's IRAs were written from an account owned by "Oak Shades

Mobile Home Park," and were gifts from her parents.     The checks

were deposited into the parties' joint account.     Immediately

thereafter, funds from the joint account were used to purchase

IRAs equaling the exact amounts of the gift checks.     No other

source for the purchase of the IRA accounts was proved.

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     The commissioner found that the funds used to purchase these

IRA accounts were gifts from a third party and that the accounts

were Kenny's separate property.   Biviano filed an exception to

that finding, which the trial court overruled.

                               Analysis

     Biviano contends that the IRA accounts were marital

property because the funds were not gifts from Kenny's parents,

claiming that the evidence showed that Kenny was the proprietor of

Oak Shades Mobile Home Park.   We disagree.

     Biviano bases his claim on evidence that Kenny's tax returns

for 1989, 1990, and 1991 listed her as the proprietor of the

mobile home park and on her accountant's testimony that he

understood that to be her position.     The commissioner found,

however, that the "[t]ax returns designating the Wife as the owner

of the property were clearly in error."    The evidence supports

this finding.   Alan Ross Connelly, the accountant who prepared the

Bivianos' tax returns for 1990 and 1991, testified that Kenny was

the manager, and not the owner, of the mobile home park. 1   In

addition, Kenny and her parents testified that her parents owned

the mobile home park and Kenny did not.    The record thus contains

sufficient evidence that Kenny's parents owned the business and

     1
       Biviano mischaracterizes a statement by Connelly, one of
Kenny's accountants. While Connelly agreed that he completed the
tax returns in a manner consistent with his understanding of
Kenny's status at the park, on redirect, he clarified that "in no
way was any ownership of anything transferred to [Kenny]."

                                - 5 -
that the funds from the mobile home park were deposited in Kenny's

IRA accounts as third party gifts.        Accordingly, we affirm the

trial court's decision to classify the IRAs as Kenny's separate

property.    Code § 20-107.3(A)(1)(ii); see Holden v. Holden, 31 Va.

App. 24, 520 S.E.2d 842 (1999) (reversing court's classification

of real estate as marital where the evidence showed husband's

income from his separate comic book sales had been deposited into

the parties' joint account and used as a down payment on the

land).

              B.   Classification of Trailers 6259 and 6260

     The commissioner recommended that these trailers be

classified as Kenny's separate property.       Biviano excepted to that

finding on the ground that his personal efforts and marital

monetary contributions transmuted the property into marital

property.    The trial court overruled this exception and classified

the property as separate.     We find that the evidence supports the

trial court's classification.

     Kenny owned these trailers prior to the marriage.

Therefore, they are presumed to be separate property.         To

overcome that presumption, Biviano must demonstrate that the

trailers increased in value due to his personal efforts or to

marital monetary contributions.      See Code § 20-107.3(A)(3)(a);

Martin v. Martin, 27 Va. App. 745, 751, 501 S.E.2d 450, 453

(1998).     "For personal labor contributed to property to be

'significant' and to cause or result in a substantial increase in

                                  - 6 -
value, without proof to the contrary, the personal labor must

amount to more than customary care, maintenance, and upkeep."     Id.

at 757, 501 S.E.2d at 456.

     Although Biviano managed these trailers and made repairs to

them, spending more than $16,000 of marital funds to keep them

"rentable," there was no evidence of a substantial increase in

value of the trailers.   Accordingly, the commissioner properly

found that "there were no significant improvements or monetary or

non-monetary contributions" to transmute the trailers into marital

property, and, at most, "[Biviano] did repairs and maintenance,

not capital improvements, and the same were not sufficient to

change the character of the assets," and we affirm its decision.

         C.   Classification of North Carolina Lake House

     Biviano contends that the trial court erred in overruling

his exception to the commissioner's finding that he did not have

a separate property interest in the North Carolina lake house

because he made thirty-three mortgage payments during the parties'

separation.   Because the trial court affirmed the commissioner's

finding that the equity in the lake house was entirely marital, we

will sustain that finding if there is evidence in the record to

support it.   See Gilman, 32 Va. App. at 115, 526 S.E.2d at 768.

We find that there is.

     Code § 20-107.3(A)(3)(d) provides, in pertinent part, that

where separate property is contributed to marital property, "to

the extent that the [separate] property is retraceable by a

                               - 7 -
preponderance of the evidence and was not a gift, the [separate]

property shall retain its original classification."    The party

contending that a portion of marital property should be

classified as separate bears the burden of proof.     See Barker v.

Barker, 27 Va. App. 519, 500 S.E.2d 240 (1998); von Raab v. von

Raab, 26 Va. App. 239, 248, 494 S.E.2d 156, 160 (1997).

"Whether a transmuted asset can be traced back to a separate

property interest is determined by the circumstances of each

case, including the value and identity of the separate

interest."   See id.

     In this case, Biviano presented certain personal records and

his own testimony that he reduced the principal on the lake

house mortgage during the parties' separation.    However, the

commissioner and the trial court did not credit this evidence,

see Brown, 11 Va. App. at 236, 397 S.E.2d at 548, and there is no

other evidence in the record to support his contention that he

made these post-separation payments.     Furthermore, Biviano's

proof did not establish the source of the funds used to make the

mortgage payments.     Accordingly, he has failed in his burden of

proving retraceablity, and we must affirm the trial court's

determination that he does not have a separate property interest

in the lake house.     See von Raab, 26 Va. App. at 248, 494 S.E.2d

at 160.

                                 - 8 -
             D.   Possession of Proceeds From Marital Stock

     The commissioner found that Biviano possessed the proceeds

from the sale of the parties' P&G and Texaco stock, Biviano

excepted to that finding, and the trial court overruled the

exception.     Because the evidence supports the trial court's

decision, we affirm it.

     Biviano liquidated the Texaco stock on March 22, 1996, and

the P&G stock on March 27, 1996.      The funds totaled $28,429.96.

Kenny testified that she never received any portion of these

funds.     Biviano claims that these funds were deposited into an

account with James River Bank, controlled by both Biviano and

Kenny, on April 4, 1996 and that Kenny then deposited those funds

into her separate account.     Indeed, Kenny wrote a check to her

separate Benham Group account for $25,429 from the James River

account.    However, she testified, and Biviano did not contest,

that these funds represented Biviano's reimbursement to her for

the sales proceeds from her Arabian horses.     In addition, Kenny's

counsel wrote to Biviano's counsel requesting that "$23,000 be

returned to [Kenny] which is her separate assets resulting from

the sale of her premarital horses."      Biviano's counsel responded

that same day, agreeing to "waive argument" on the issue, i.e.

"she can keep [it]."     Because this correspondence and Kenny's

testimony support the commissioner's finding that Biviano

possessed the proceeds from the sale of the stock, we will not

disturb that finding.     See Brown, 11 Va. App. at 236, 397 S.E.2d

                                 - 9 -
at 548; see also Amburn v. Amburn, 13 Va. App. 661, 666, 414
S.E.2d 847, 850 (1992) (holding that party with dominion and

control over proceeds at the time of the parties' separation has

the burden of accounting for their use).

  E.    Compensation for Kenny's Overcharge in Trailer Accountings

                           Relevant Facts

       The parties owned nine trailers that were situated in the

trailer park owned by Kenny's parents.   Upon separation, Kenny

managed the trailers and paid Biviano half the proceeds, as

evidenced by Kenny's accounting of trailer profits to Biviano.     In

these accountings, Kenny represented that the business paid $170

lot rent per trailer per month and noted a $300 per month

management fee.   Kenny actually paid her parents only $120 lot

rent per month. The commissioner found that Kenny overcharged

Biviano for lot rent and that a management fee for a marital asset

was inappropriate.   Because Kenny based her payments to Biviano on

these figures, he concluded that Kenny owed Biviano a portion of

the overcharged amount.

       The commissioner then considered that he had divided the

trailers sixty-six percent to Kenny and thirty-four percent to

Biviano and that Kenny had contributed one hundred percent to the

management and maintenance of the trailers since separation, and

concluded that Biviano was due a twenty percent refund for the

overcharged amounts.

                                - 10 -
                               Analysis

     Biviano contends that the parties agreed to split the profits

from the trailers equally and that by awarding Biviano only twenty

percent of what he terms "misappropriated" funds, the commissioner

improperly ignored the parties' agreement to divide the profits

equally. 2   See Richardson v. Richardson, 10 Va. App. 391, 392
S.E.2d 688 (1990).

     First, we note that the commissioner did not find, as Biviano

suggests, that Kenny "misappropriated" any funds but that she

improperly assessed lot rental charges and management fees in her

accounting statements.    Second, we hold that sufficient evidence

supported the trial court's conclusion that there was no agreement

between the parties to equally divide the proceeds from the

trailers during separation.

     The evidence demonstrated only that Kenny paid Biviano half

of the proceeds during their separation 3 ; Kenny's accounting

statements do not prove that Biviano and Kenny had agreed to

"settle property . . . claims."    See Richardson, 10 Va. App. at

     2
       In his brief, Biviano raises other issues that he did not
preserve, present as questions on appeal, or support with legal
argument. Accordingly, we will not consider them here. Rule
5A:18; Rule 5A:20; Buchanan v. Buchanan, 14 Va. App. 53, 56, 415
S.E.2d 237, 239 (1992).
     3
       Biviano also contends that an affidavit by J. Larry
Palmer, his former attorney, proves that the parties had agreed
to divide the profits equally. However, we cannot consider
Palmer's affidavit as evidence, as it was not part of the record
before the trial court. See Russell County School Bd. v.
Anderson, 238 Va. 372, 385, 384 S.E.2d 598, 605 (1989).

                                - 11 -
395, 392 S.E.2d at 690 (noting that agreements between spouses "to

settle property or support claims are contracts," to which the

general contract rules apply).     Because the evidence did not prove

that the parties had contracted to divide the profits equally, or

in any other manner, the trial court properly considered the

relative contributions of the parties to the property and the

division of the property upon divorce in determining Biviano was

entitled to twenty percent of the overcharged funds.        See Gilman,
32 Va. App. at 115, 526 S.E.2d at 768.

                F.   Finding Debts Not Significant Factor

        Biviano contends that the trial court erred by failing to

give effect to his assumption of a substantial unsecured marital

debt.    See Trivett v. Trivett, 7 Va. App. 148, 371 S.E.2d 560

(1988).    He claims that he incurred more than $35,000 in debt

during the last two months of the marriage in order to purchase a

marital truck, marital furniture, and to pay other marital debts.

        Biviano, however, failed to present any evidence establishing

the amount of any debt or substantiating his claim that the debts

he incurred during the marriage were marital.     See Bowers v.

Bowers, 4 Va. App. 610, 359 S.E.2d 546 (1987) (noting that

litigants have the burden to present evidence sufficient for the

court to discharge its duty to equitably distribute property under

Code § 20-107.3).     Furthermore, the commissioner properly declined

to credit Biviano's testimony on this issue.     See Brown, 11 Va.

App. at 236, 397 S.E.2d at 548.      Therefore, the commissioner

                                 - 12 -
considered the debts of the parties and properly concluded that

marital debt was not a significant factor.   See Marion v. Marion,

11 Va. App. 659, 664, 401 S.E.2d 432, 436 (1991) (holding that all

the factors enumerated in Code § 20-107.3(E) must be considered in

distributing marital property, but each factor need not be

weighed equally).

       G.   Classification of Trailers 6212, 6231 and 6261

     The commissioner recommended that these three trailers be

classified as marital.   The trial court reversed that

recommendation, finding that Kenny used funds secured by her horse

farm, which was her separate real estate, to purchase trailers

6212, 6231 and 6261.   Biviano contends that the trailers are

marital property because Kenny paid the mortgage on the

farmhouse with marital funds.    We agree.

     The evidence proved that the three trailers were purchased

with marital funds.    Kenny herself testified that she paid the

mortgage on the farm with her salary during the marriage.    She

deposited the proceeds from the farm loan in a Dreyfus savings

account, transferred the funds to the parties' joint checking

account, and used these same funds to purchase the three trailers.

Therefore, Kenny did not maintain the trailers as separate

during the marriage, and Biviano has met his burden of proving

that the three trailers were marital property.    See Taylor v.

Taylor, 9 Va. App. 341, 344-45, 387 S.E.2d 797, 799 (1990)

(classifying property as marital because mortgage on property

                                - 13 -
was paid with husband's salary during the marriage and therefore

was not maintained as separate); see also Gilman, 32 Va. App. at

119, 526 S.E.2d at 770 (holding that non-owning spouse has the

burden of proving that property purchased with a loan secured by

separate property is marital).    Because there is adequate

evidence to support the commissioner's finding that the three

trailers were marital, the trial court erred in overruling it.

Consequently, we reverse the trial court's determination that

trailers 6212, 6231 and 6261 are separate property and its

deduction of $33,500 from the marital assets, and remand so that

the trial court may equitably distribute the $33,500.

     H.   Denial of Motion to Re-Value North Carolina Property

     Biviano claims that the trial court erred in denying his

motion to re-value the lake house property on the ground that

his separate non-marital share in the property had increased in

the two years since the original valuation figures were

provided.   However, because Biviano failed to file an exception

to the commissioner's valuation of the lake house, we will not

consider the issue on appeal.    See McLaughlin v. McLaughlin, 2 Va.

App. 463, 470, 346 S.E.2d 535, 539 (1986) ("The established rule

in Virginia is that parts of the commissioner's report not

excepted to are considered as admitted to be correct, as the party

excepting, must put his finger on the error that the court may see

what it has to decide." (internal citations and quotations

omitted)); see also Matthews v. Matthews, 26 Va. App. 638, 649,

                                 - 14 -
496 S.E.2d 126, 131 (1998) (finding issue barred because appellant

did not except to commissioner's report).   In any event, the issue

is mooted by our affirmance of the trial court's determination

that the lake house property was entirely marital.

                  I.    Appellate Attorney's Fees

     Kenny contends that we should direct the trial court to award

her attorney's fees and costs incurred on appeal because Biviano's

appeal lacks merit.    Under our decision in Gottlieb v. Gottlieb,

19 Va. App. 77, 448 S.E.2d 666 (1994), we find wife is entitled to

appellate attorney's fees and costs and remand the issue to the

trial court for determination of an appropriate amount.     See id.

at 95, 448 S.E.2d at 677 (awarding appellate attorney's fees where

"[m]any of husband's questions presented or assignments of error

were not supported by the law or the evidence").

                                                    Affirmed, in part,
                                                    reversed, in part,
                                                         and remanded.

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