Court Opinion

ID: 1077592
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:23:43.174871+00
Date Added: 2024-06-11T15:39:40.298854
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Judges Benton, Coleman and Willis
Argued at Alexandria, Virginia

ROBERT H. DEWITT
                                          MEMORANDUM OPINION * BY
v.   Record No. 1636-95-4               JUDGE JAMES W. BENTON, JR.
                                              AUGUST 6, 1996
DONNA D. DEWITT

             FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
                     Quinlan H. Hancock, Judge
           Kathleen O'Brien (Lorraine Nordlund; Margaret
           B. Craig; Fite, O'Brien, & Byrum, LTD., on
           briefs), for appellant.

           Brian D. West (Erika B. Schiller; Sandground,
           Barondess & West, P.C., on brief), for
           appellee.

      Robert H. DeWitt appeals the equitable distribution portion

of a final decree of divorce.   He contends that the trial judge

committed ten errors in decreeing as to the property he and his

wife, Donna D. DeWitt, owned.   We affirm the decree, in part,

reverse, in part, and remand the case to the trial judge.
                                Facts

      Robert H. DeWitt and Donna D. DeWitt married in 1973 shortly

after he was discharged from the U.S. Army.    During the early

years of the marriage the husband enrolled at a university and

obtained undergraduate and dental degrees.    The wife, who was a

recent university graduate, was employed by a federal government

agency, where she continues to work.    Although both parties
      *
      Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
contributed to the family finances, the wife was the major

contributor while the husband attended school.

     After graduation from dental school in 1980, the husband

began his practice with another dentist.     The husband opened his

own dental practice in 1985.    He financed the construction and

equipping of his new office with inherited funds, a bank loan,

and a loan from his wife's father.      The parties separated in 1992

and were divorced by a final decree entered June 23, 1995.
     The record contains numerous transcripts and a large number

of exhibits.   Therefore, we will discuss other facts only as they

are pertinent to the issues raised by the husband's appeal.

                               Analysis

     "'Under familiar principles, we view [the] evidence and all

reasonable inferences in the light most favorable to the

prevailing party below.'"   Pommerenke v. Pommerenke, 7 Va. App.
241, 244, 372 S.E.2d 630, 631 (1988)(citation omitted).     We are

also guided by the following principle:
          "In reviewing an equitable distribution award
          on appeal, we recognize that the trial
          court's job is a difficult one. Accordingly,
          we rely heavily on the discretion of the
          trial judge in weighing the many
          considerations and circumstances that are
          presented in each case."

Artis v. Artis, 4 Va. App. 132, 137, 354 S.E.2d 812, 815 (1987).

"Unless it appears from the record that the [trial judge] has

abused his discretion, that he has not considered or has

misapplied one of the statutory mandates, or that the evidence

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fails to support the findings of fact underlying his resolution

of the conflict in the equities, the . . . equitable distribution

award will not be reversed on appeal."    Brown v. Brown, 5 Va.

App. 238, 244-45, 361 S.E.2d 364, 368 (1987)(citation omitted).

Applying these principles, we examine the ten rulings by the

trial judge which the husband contests.
1.   Money inherited by the husband from his father's estate

      The husband contends that the trial judge erred in finding

that the wife was entitled to half of the husband's inheritance

from his father.   He denies that he gifted the money to her and

argues that his inheritance is separate property pursuant to Code

§ 20-107.3(A)(1)(ii).   Citing 20-107.3(A)(3)(d-f), the husband

also claims that he retraced his inheritance into the different

marital assets and was entitled to recover his separate property.
      The evidence proved that after the husband's father died in

1981, the husband received an inheritance of approximately

$320,000 over a five year period.   The husband deposited all of

his inheritance into the couple's various, existing joint

accounts.   His income and the wife's income were also deposited

into those joint accounts.   Over the years, the husband used the

money in the couple's joint accounts to establish his private

dentistry practice and to purchase various retirement accounts.

Using funds from joint accounts and other marital funds, they

built a new house (the Beresford Court property) in 1982.

      In his finding that the husband gifted his inheritance to

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the marital estate, the trial judge cited McClanahan v.

McClanahan, 19 Va. App. 399, 451 S.E.2d 691 (1994), and wrote:
          It is undisputed that [the husband] (with one
          exception) deposited all of these funds into
          joint accounts with [the wife] and commingled
          them with marital funds. She had access to
          them and could have used them at any time.
          Most of this hearing was consumed by [the
          husband's] attempt to prove that his
          inheritance was separate property, but at
          . . . his deposition . . . he testified
          . . . "The reason for that deposit and not
          keeping the money separate is because I had
          trust in the marital relationship. I thought
          until death do you part. I had no idea that
          she would leave." And also . . . "Well, you
          put it into the account and it was an act of
          the heart?" - Answer: "Yes." There is no
          evidence that there was any agreement between
          the parties or even an understanding that if
          [the wife] left the marriage that the funds
          were not a gift and were to be reclassified.
           The Court finds that the words "as an act of
          the heart are comparable to the legal
          consideration of 'love and affection,'" and
          acknowledge an irrevocable gift.

     McClanahan was decided under the statute in existence prior

to 1990. 1   The amended statute, as now written and applicable to

this case, states that "[w]hen separate property is retitled in

the joint names of the parties, the retitled property shall be

deemed transmuted to marital property . . . [unless] the property

is retraceable by a preponderance of the evidence and was not a

gift. . . ."    Code § 20-107.3(A)(3)(f).   In addition, the statute

states that "[n]o presumption of gift shall arise . . . where

     1
      In 1990 the General Assembly added subsection 3 to Code
§ 20-107.3(A) and made the provisions effective for all divorces
filed after July 1, 1990. The wife filed for divorce in 1994.

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. . . newly acquired property is conveyed into joint ownership."

 Code § 20-107.3(A)(3)(g).    In explaining these provisions, this

Court stated:
          Virginia does not presume a gift simply by
          virtue of jointly titling or retitling
          property. A party claiming entitlement to
          rights and equities in marital property by
          virtue of an interspousal gift must prove the
          donative intent of the donor spouse and the
          nature and extent of the donor's intention.

Lightburn v. Lightburn, 22 Va. App. 612, ___, ___ S.E.2d ___, ___

(1996) (citations omitted).     See also Theismann v. Theismann, 22
Va. App. 557, ___, 471 S.E.2d 809, ___ (1996).    Thus, the wife

must bear the burden of proving "every fact and circumstance

necessary to constitute a valid gift by clear and convincing

evidence."     Rust v. Phillips, 208 Va. 573, 578, 159 S.E.2d 628,

631 (1968).

     The trial judge found persuasive the following portion of

the husband's deposition testimony:
          Q    Where did you put those funds?

             A    I deposited them into similar accounts
             that I have established previously that [the
             wife] and I both used.

                  The reason for that deposit and not
             keeping the money separate is because I had
             trust in the marital relationship. I thought
             until death do you part. I had no idea that
             she would leave.

             Q    At the time that you put those funds
             into these joint accounts, was it an act of
             the heart, because you believed that's as it
             should be, right?

             A    Yes. Subject to that premise, clearly
             if a person leaves, that would violate the

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          trust, and then I think it should be
          retracted.

          Q     So it is, in effect, a revoked gift,
          then?

          A    It was not a gift.

          Q    Well, you put it into the accounts and
          it was an act of the heart?

          A    Yes.

          Q    But it was contingent upon her
          continuing to be with you or in the marriage,
          is that right?
          A    Yes.   I was advised to do that.

          Q    By whom?

          A    By an investment counselor who knew
          nothing about taxes and marital
          relationships.

          Q    When you put these funds into these
          various accounts as an act of the heart, did
          you ever in any writing indicate that the
          titling of the property was contingent upon
          your continuing in the marital relationship?

          A    No. Actually, I am having a problem
          with the word "act of the heart," because it
          has a certain feeling to me, but it may not
          have the same feeling in the context of law,
          so I am having a problem with that phrase
          now.

          Q    Okay. Did you make any writings
          indicating that the titling of these accounts
          was contingent upon her continuing in her
          married relationship?

          A    No.

     The wife never presented any evidence of the husband's

intent other than this testimony.   Although the husband initially

agreed with wife's counsel that he placed the money in the joint

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account "as an act of the heart," he also disavowed that phrase

because it may have had a legal context that did not describe his

motives.   He further testified that an investment counsellor

advised him to deposit the funds into the joint account.     This

testimony falls short of clear and convincing evidence of a gift.

The husband's testimony that he trusted the relationship would

last does not prove a gift occurred when the money was jointly

titled.
     Prima facie evidence of a gift is not established under this

new statute when separate property is jointly titled in both

spouses' names.    Code § 20-107.3(A)(3)(g).   Furthermore, the

trial judge improperly placed the burden on the husband to prove

the absence of a gift.   The lack of any evidence concerning an

agreement or understanding does not indicate that the husband

intended a gift.   Based on the evidence below, we find that the

wife did not meet her burden of proving by clear and convincing

evidence that the inherited property was a gift.

     The trial judge also found that the husband "failed to prove

by a preponderance of the evidence that the contributed property

is retraceable and was not a gift."      The letter opinion does not

provide any explanation for the finding that the husband failed

to trace his inheritance.   The husband's testimony and exhibits

prove that the husband invested a total of $61,000 of his

inheritance into the purchase, construction and improvement of

the Beresford Court residence.    Accounting for appreciation, the

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husband claimed that $112,700 of the house's $490,000 current

value was his separate property.    He also testified that he put

$6,000 and $8,000 from his inheritance into two individual

retirement accounts.     At trial, he valued these contributions at

$10,000 and $13,000, respectively.       The husband testified that he

invested $21,435 of his separate property into his Keogh pension

and $23,691 into his dental practice.      The wife's evidence did

not contradict any of these financial figures.
      In view of the husband's testimony and the exhibits, the

record does not reveal the deficiency the trial judge found in

retracing the husband's separate property.      Therefore, because

the wife failed to prove the jointly titled property was a gift,

we reverse that decision and we remand the case to the trial

court.   After further factual findings, the trial judge shall

determine to what extent the husband can retrace his inheritance

by a preponderance of the evidence.
2.   Fidelity accounts

      The trial judge identified three Fidelity Accounts (Contra,

Spartan, and Puritan) and classified all three as marital

property.   The husband testified that he inherited $8,084.78 in

Fidelity Puritan stock from his grandmother, and therefore, a

part of the Puritan account represented separate property.      The

wife admitted that the husband had inherited Fidelity Puritan

stock but testified that the account was closed in 1991.      She

also testified that three years later the husband opened a second

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Fidelity Puritan account with a different account number.     The

exhibits confirm that the accounts were closed and opened.     The

husband offered no evidence to explain what happened to the money

inherited from his grandmother once he closed the first Puritan

Account.

        Therefore, the husband did not trace by a preponderance of

the evidence the separate funds withdrawn from the account in

1991.    Thus, the trial judge properly found the second Puritan

account contained marital property only.    The account was opened

during the marriage using income that was not shown to be

separate property.     Code § 20-107.3(A)(2)(iii).   The evidence

also failed to prove that the Spartan and Contra funds were the

husband's separate property.
3.   Rosecroft Place

        The wife testified that she borrowed $45,000 to make the

downpayment on her post-marital residence, Rosecroft Place, and

made all of the mortgage payments with her separate earnings.

Only the $3,000 earnest money deposit represented marital

property.    Although the husband contested the wife's claims, "in

reviewing an equitable distribution award, we rely heavily on the

trial judge's discretion in weighing the particular circumstances

of each case."     Aster v. Gross, 7 Va. App. 1, 8, 371 S.E.2d 833,

837 (1988).    No evidence supports the husband's contention that

the trial judge abused his discretion in designating the

property, except for the $3,000 earnest money deposit, as the

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wife's separate property.
4.   Credit union accounts, Shearson-Lehman accounts,
     and bank accounts.

      (a) The husband contends on appeal that the trial judge

erred in finding that three of the four Northwest Federal Credit

Union accounts are the separate property of the wife.   During his

testimony at trial, however, the husband conceded that, "I think

after three years of separation, you have to draw a line

somewhere.   I think at this point [the credit union accounts] are

all hers."   We will not entertain an appeal of an issue conceded

by the party during trial.    Kelly v. Commonwealth, 8 Va. App.
359, 367, 382 S.E.2d 270, 274 (1989).

      (b) At trial the husband explained the two different

Shearson Lehman investment accounts.    The first account, known as

the "12" account, was titled jointly and was marital property.

The husband opened the second account, known as the "10" account,

in his name only after the couple's separation.   He argues that

the "10" account is his separate property.

      Although the husband argues that the wife and the trial

judge confused the two accounts, the trial judge recognized that

two Shearson Lehman accounts existed.   The evidence at trial,

including the wife's testimony, proved that the husband opened

the "10" account immediately after closing a number of joint

accounts.    The wife's testimony, the husband's testimony, and the

documents provide a sufficient basis upon which to prove that the

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husband opened the "10" account with funds from other joint

accounts.   The trial judge did not err in finding that the "10"

account was funded from marital property and, thus, was marital

property.

     (c) We next address three bank checking accounts in the

husband's name, identified as the personal, household and office

accounts.   Both parties agree that the office account constitutes

the separate property of the husband.   The husband contends that

the trial judge erred in classifying his personal and household

accounts, opened after the separation, as marital property.
     Even though the husband deposited $99,000 of marital funds

into the household account, the record supports his testimony

that he spent $105,548 on marital or joint expenses.    The wife's

claim apparently rests solely on the fact that the husband

deposited marital assets into the fund.   The record proved that

any remaining funds in the account were deposited by the husband

from his post-separation income.   Accordingly, the trial judge

erred in classifying the account as marital property.

     After the separation the husband deposited $6,000 of his

post-separation income into the couple's joint personal account

in order to cover a number of outstanding checks.   After those

checks were paid, he closed the account and transferred the

remaining balance, $4,842 to his separate checking account.    All

other deposits were post-separation earnings.   Because the

evidence proved that this account contained only post-separation

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earnings, the trial judge erred in designating the account

marital property.
5.   1992 Mitsubishi

      The parties stipulated the then current value of the

Mitsubishi to be $20,800.   The purchase price was $32,090.    The

husband used $12,000 in marital assets (approximately

thirty-seven percent of its purchase price) when he purchased the

vehicle.   In designating $12,000 of the stipulated value as

marital property, the trial judge did not distribute pro rata the

depreciation of the vehicle.    No evidence proved that the marital

portion of the vehicle represented more than thirty-seven percent

of the current stipulated value.    Thus, we reverse the trial

judge's valuation and remand for an assessment of the wife's
one-half interest in the marital portion of the vehicle.
6.   Investment accounts

      In dividing the Janus Fund, MFS Hi-Yield Bond Fund, and

Shearson Lehman "12" account, the trial judge awarded the husband

fifty-five percent of their value and the wife forty-five

percent.   The trial judge reached this decision upon his finding

that the husband "has been the one to invest the time and effort

into the investment program."    The remaining investment accounts

were divided equally between the husband and wife.

      The husband contends that he should receive fifty-five

percent of all of the investment funds because of the time and

effort he expended in opening and maintaining the accounts.      Upon

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this record, we cannot find that the trial judge abused his

discretion in apportioning the investment accounts.   Artis, 4 Va.

App. at 137, 354 S.E.2d at 815.
7.   The husband's non-monetary and financial contributions

      The evidence proved that the husband was responsible for the

majority of the couple's income.   His private dentistry practice

and inheritances produced substantial income.   However, the

evidence also proved that the wife worked and produced

significant income.   During their marriage, the couple agreed to

invest the husband's income and to pay their living expenses,

except the mortgage, from the wife's income.
      We find no merit in the husband's contention that the trial

judge failed to consider his non-monetary contributions and his

significant financial contributions.   The trial judge found that

"[b]oth parties have made significant contributions to the

marriage both monetary and non-monetary."   The record supports

that finding.   The record does not support the husband's claim

that the trial judge abused his discretion.
8.   Credit for the pendente lite support

      The trial judge ordered the husband to pay the wife $22,000

for her support during the divorce proceedings.   The trial judge

stated that the payment "shall be without prejudice as to the

claims of either party."   The husband contends that he should

have been given credit for $11,000 in the final distribution of

property.

                              - 13 -
       Although no specific mention was made of this money in the

equitable distribution findings, the evidence proved that the

husband withdrew the money from one of the joint accounts and the

wife deposited the money into her savings account.   The funds

remaining in both accounts were treated as marital property.      We

cannot conclude solely from these facts that the trial judge

abused his discretion in not specifically making an adjustment

more favorable to the husband.
9.    Wife's pension plan

       The husband argues that the trial judge erred in not

requiring the wife to designate the husband as the irrevocable

beneficiary of the survivor benefit plan on the wife's pension.

Under Code § 20-107.3(G)(2) the trial judge may order that a

spouse be designated an irrevocable beneficiary of a survivor

benefit plan.

       In the divorce decree, the trial judge denied husband's

request by stating that the husband "is entitled to Fifty (50%)

percent of the marital share of her pension on an if[,] as[,] and

when received basis."   The trial judge has discretion in deciding

whether to order the designation of the husband as an irrevocable

beneficiary.    No evidence supports a finding that the trial judge

abused his discretion in refusing to order the wife to designate

the husband as an irrevocable beneficiary.    Id.
10.   Attorney Fees

       "[A]n award of attorney's fees is discretionary with the

                               - 14 -
[trial judge] after considering the circumstances and equities of

the entire case and is reviewable only for an abuse of

discretion."   Gamer v. Gamer, 16 Va. App. 335, 346, 429 S.E.2d
618, 626 (1993).   The trial judge awarded the wife $15,000 in

attorney's fees.   The husband urges us to award him attorney's

fees because the wife refused to stipulate and the trial judge

made numerous errors.   The trial judge made no finding that the

wife acted improperly in refusing to stipulate.   We find no basis

to conclude that the failure to stipulate was improper.

Moreover, the trial judge's decisions are not a basis to

determine an award.   Accordingly, we find no error.

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                            Conclusion

     For these reasons, we reverse the trial judge's ruling that

the husband had the burden of proving no gift and that the

evidence proved a gift.   Therefore, we remand for reconsideration

and findings whether the husband retraced his inheritance by a

preponderance of the evidence.   Upon further factual findings,

the trial court shall distribute these interests to conform with

Code § 20-107.3 and this opinion.
     We also reverse the trial judge's finding that the household

account and personal account were marital property, and we

reverse the trial judge's valuation of the wife's interest in the

1992 Mitsubishi.   The trial judge shall order the equitable

distribution of these assets to conform with this opinion.

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

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