Virginia Family Law Appeals

PROPERTY DIVISION – MARITAL–SEPARATE DEBT – POST-SEPARATION PAYMENT – CONTRIBUTION CREDIT

An unpublished case that sounds a note of caution for lawyers taking clients into equitable distribution is Harrison v. Allegretto, 21 VLW 1070 (1/30/07), from Chesapeake. The husband claimed he should get credit for having paid off, after separation, $21,439 in marital debt, but the circuit court refused because he had “failed to establish the source of the debts,” and the Court of Appeals affirmed. When the trial court divided marital debt, in other words, it gave husband no special consideration for this payment. What did the husband get into evidence as backup? Cancelled checks paying the bills, and cover letters to the creditors. He should also have shown, the Court of Appeals says, statements of account (presumably bills) from the creditors, andreceipts for purchases. Nor had there been any testimony at trial about the purposes of the charges on the charge accounts, and this left the Commissioner in Chancery unable to identify the source or the nature of the debts so as to see if they were indeed marital. Apparently the issue was not that they were non-existent fabricated debts, but that they could have been for his separate enjoyment after (or before) separation.

PROPERTY DIVISION – MARRIAGE/SEPARATE – GIFT BY RETITLING REAL ESTATE – DISPUTED INTENT – ALIMONY – PAYEE IMPUTATION – CHILD SUPPORT – PRIVATE SCHOOL COST.

When the Court of Appeals used an unpublished opinion to reverse the Fairfax Circuit Court in Lesesne v. Zablocki, 21 VLW 968 (1/9/07) the main issue was whether one-third of the real estate value was marital or separate. When the married couple bought the marital home it was as tenants in common, with the husband, Zablocki, owning a 5/6ths interest and the wife owning 1/6th. But when they refinanced the property in 1997 it was retitled as tenants by the entirety. The whole question concerning it at the time of divorce was whether this retitling was meant to cut down husband’s disproportional share and give the wife an equal legal and equitable interest by gift.

SEPARATION AGREEMENTS – INTERPRETATION – CONTRACTUAL ALIMONY – COHABITATION CLAUSES – HOMOSEXUAL COHABITATION.

A Fairfax judge’s refusal to apply the cohabitation-cutoff clause of an agreement to end an ex-wife’s contractual alimony on grounds of her homosexual cohabitation was reversed by the Court of Appeals in Stroud v. Stroud, ___ Va. App. ___, ___ S.E.2d ___, (2/27/07). The case turned on disputes over whether the evidence showed a situation analogous to marriage, and whether, by law, a homosexual cohabitation can ever be analogous to marriage. The case was somewhat unusual in that extensive testimony and other evidence showed clearly that the homosexual couple did everything that married people do, and in addition were deeply and loudly in love and proud of it – but freely admitted that they were denying their relationship in the litigation in order to avoid alimony cutoff, and perhaps job discrimination. (One was a school teacher).

INCOME TAX — INCOME INCLUDES FEE AWARD IN DIVORCE.

A fee award is "expenses paid by another," so it is gross income for federal taxation purposes, the U.S. Tax Court says in Young v. Commissioner, T.C. Nos. 20435-97 & 21489-97, 25 Fam. L. Rep. (BNA) 1506 (8/20/99).

MILITARY -- SSCRA.

A useful ruling on when military service does and does not prejudice the serviceperson's ability to defend the case is Flynn v. Great Atlantic Management Co., ___ Va. ___, ___ S.E.2d ___, 8 VLW 40 (6/11/93). The holding is that "I was on leave outside the area" just won't do it.

PROCEDURE – LOCAL RULES – COMMISSIONER’S FINDINGS – PROPERTY DIVISION – SECTION 20-107.3E(5) FACTORS AND CIRCUMSTANCES.

Violation by a Fairfax trial judge of his court’s local rules and the Judge’s insufficient respect for his own Commissioner’s ruling, together with differing degrees of familiarity with, attachment to, and concern for those local rules, seems to confound the Court of Appeals and causes it to divide sharply in Morrill v. Morrill, ___ Va. App. ___, ___ S.E.2d ___, 19 VLW 306 (8/17/04). The majority reverses the trial judge, finding an abuse of discretion because he listened to a husband’s protestations that he left the marriage because of the wife’s $86,000 credit card fraud involving forgery. The judge committed the unpardonable sin of letting this person present this evidence at the ED trial after the Commissioner’s Hearing Report, and he went on to order the wife to indemnify the husband for the debt she created.

PROPERTY DIVISION -- "DISSIPATION."

Some important distinctions regarding what is and is not remediable "dissipation" of marital assets were reiterated by the Court of Appeals in Smith v. Smith, ___ Va. App. ___, 444 S.E. 2d 269, 8 VLW 1331 (VCA 5/24/94). It has to be wasteful action that took place when the marriage was falling apart, the Court explains, and that does not include expenditures on an adulterous relationship for 15 years while the marriage remained (because of the wife's blissful ignorance) stable. This is not a strategic wasting of assets in preparation for divorce. Actions that take place while the marriage is still stable and not dissolving simply are not what we mean when we speak of divorce-related dissipation.

DEBTS -- BANKRUPTCY.

The Virginia Court of Appeals in Douglas v. Douglas, ___ Va. App. ___, 437 S.E.2d 444, 8 VLW 673 (11/23/93), stopped a husband from using bankruptcy to escape the debt-apportionment obligations of a separation agreement.

PROPERTY DIVISION — REAL ESTATE — MARITAL/SEPARATE — REFINANCING.

Refinancing, even multiple refinancings, will not necessarily preclude tracing money from a present asset back through previous house purchases to an original separate-property contribution several houses back, the Court of Appeals explained in Wiese v. Wiese, ___ Va. App. ___, ___ S.E.2d ___, 20 VLW 376 (8/23/05).

PROPERTY DIVISION -- SOURCE OF FUNDS -- HYBRID PROPERTY --TRACING -- APPRECIATION OF SEPARATE PROPERTY -- EXPERT TESTIMONY -- DEBT.

An important case in the increasingly complex history of source-of-funds tracing in Virginia is Moran v. Moran, ___ Va. App. ___, ___ S.E.2d ___, 13 VLW 1267, decided 3/30/99. The Court had the familiar situation of a house owned by one party (wife) before marriage, which became the marital home, and was improved by the parties' expenditures after marriage and had its mortgage paid down with marital money. The Court of Appeals continued to stick to its impossible standard for showing "addition to value" by the expenditure of money from one "estate" on the other's property, and once again, as in Martin v. Martin, 27 Va. App. 745, 753-58; 501 S.E.2d 450, 454-56 (1998) this was a case of marital poured into separate property.