Court Opinion

ID: 9883462
Source: CourtListenerOpinion
Date Created: 2023-10-06 01:43:11.456441+00
Date Added: 2024-06-11T07:48:23.616549
License: Public Domain

*26Moon, J.,
dissenting.
Except for being constrained to follow prior precedent of Wagner v. Wagner, 4 Va. App. 397, 358 S.E.2d 407 (1987), I would dissent from that part the majority opinion that affirms the trial court’s decision that the seventy-one shares of stock in the family corporation given to the husband by his father in 1981 should be deemed marital property. I believe the uncontradicted evidence was such that reasonable men could not disagree that the entire transaction, involving the $71,000 note and transfer of the seventy-one shares of stock to David, constituted a gift by his father to him.
The fact that the gift was accomplished in a manner designed to avoid estate and gift taxes and to get the stock released from David’s father’s pension fund without violating federal rules against prohibited transactions, does not change the fact that this was a gift. See Wagner v. Wagner, 4 Va. App. 397, 412, 358 S.E.2d 407, 415 (1987) (Baker, J., dissenting). The father never intended anything other than to make a gift of the stock to his son. The substance of the transaction is what matters, and we should not exalt form over substance. Cf. Gologanoff v. Gologanoff, 6 Va. App. 340, 369 S.E.2d 446 (1988). I would hold the word “gift” in Code § 20-107.3 includes gifts accomplished in this manner. Otherwise, for no beneficial purpose citizens with legitimate tax concerns will be unreasonably hampered in their giving. I would overrule Wagner.
For the same reasons as stated by the majority with regard to the first fifty shares, I would hold that seventy-one shares, if deemed separate property, also did not transmute to marital property.
Finally, even though the seventy-one shares are deemed to be marital property, I would hold that the evidence does not support a finding that the wife is entitled to a monetary award equal to one-half the value of the shares. There is no evidence to support a finding that the wife did anything to obtain or maintain the stock. Her husband did not use marital funds or energy for its maintenance or the corporation’s interest during the marriage. Any notion that the husband risked “marital credit” by signing the $71,000 note to obtain the gift defies credulity. The husband already owned as separate property fifty shares of the stock, now *27valued at over $1,000,000. By signing the note, he received an additional seventy-one shares of greater total value. The creditor, the husband’s father, never intended that the loan be repaid. The wife did not sign or endorse the note. The money from the note was maintained in a separate account by the husband until the stock transfer was complete. Any risk to marital assets was so negligible that it should not be given legal significance.
If the husband, with the wife’s help, pursued a lower paying art career rather than a physical education career, the wife may be entitled to a larger monetary award from other marital assets based upon the assumption that the remainder of the marital estate might have been greater had the husband pursued a more lucrative physical education career. However, there is scant, if any, evidence that shows the family fortunes would have been greater had he chosen a different career.
I believe our cases instruct that where property has transmuted by the technical application of the rule in Smoot v. Smoot, 233 Va. 435, 357 S.E.2d 728 (1987), the source of funds factor is entitled to such weight so as to fairly compensate the person whose separate property it would or should have been if not for transmutation. Lambert v. Lambert, 6 Va. App. 94, 104, 367 S.E.2d 184, 190 (1988). Giving fair consideration to the factors contained in Code § 20-107.3, the evidence does not, as a matter of law, support an equitable award to the wife of one-half the value of the stock received from the husband’s family.
Therefore, I would affirm in part, but I respectfully dissent in part.