Virginia Family Law Appeals

CHILD SUPPORT ARREARAGES – COMMENCEMENT DATE – MOOTNESS - Va.Ct.App.

The judge hit the wife for arrearages in child support, but she argued that she should have got arrearage awarded for the two years she had custody of the child. On transferring custody to the father, the trial judge had said that her liability for support should be determined retroactively from the date that the present action was filed. To award husband child support for a period of time when he did not have custody of the child gave him an unjustified windfall, the wife argued. The way the statute is worded, the Court of Appeals said, “There is no latitude under this statute (Code Section 20 – 108.1 (B)).” The wife responded that Code Section 20 – 108.1 says child support shall commence on the date the proceeding commences, and despite husband’s custody related filing, he did not file a pleading seeking child support until June 1, 2009, so that is the “proceeding” relating to child support started. But since wife had paid that child support judgment, the issue was dismissed as moot. Canedo v. Canedo, unpublished, R. No. 0851-12-4 (2/26/13).

Judge's isolated discretionary remarks insufficient to overturn ruling - Va.Ct.App.

PROPERTY DIVISION – PERCENTAGES – CON¬TRIBUTION BY ONE SPOUSE'S FAMILY TO MARITAL ESTATE — FACTORS IN DISTRIBU¬TION — ORDER AND METHOD OF CONSULT¬ING DISCRETIONARY FACTORS — ALTER¬NATIVE VALUATION DATE — APPEALS — SIGNIFICANCE OF ISOLATED REMARKS OF TRIAL JUDGE. A case from Colo¬nial Heights makes a number of important points touching upon property division, and demystifies to some extent how the appellate court looks at the rec¬ord on appeal. In Hamad v. Hamad, 61 Va. App. 593, 739 S.E. 2d 232 (2013), the Court of Appeals first reiterated that making general objections at the trial, and then mak¬ing them a lot more specific as assign¬ments of error on appeal, will not work. Rule 5A:18’s strictness ap¬plies to this too. Wife on appeal objected to husband getting 60% of the marital property, after the evi¬dence at trial showed numerous very large gifts of money and property, during the marriage, to the cou¬ple by his parents. The property was still mar¬ital of course, but there's nothing wrong with the trial judge taking such contributions into account during the distribution phase. And while the judge’s opinion from the bench and opinion letter were not models of clarity on some points, the Court of Appeals said, “we are particularly skeptical of appellate efforts to piece together such a conclusion from fragmented remarks from the bench." The Court adds that “we decline invitations to fix upon isolated statements of the trial judge taken out of the full context in which they were made, and use them as a predicate for holding that the law has been misapplied.” The occa¬sion for this was apparently rooted in the judge’s be¬ginning his decision by noting that the husband ar¬gued that the wife’s admitted adultery caused the marriage to dissolve, and wife’s excuse that she was lonely. This in no way meant, the Court of Appeals observes, that the trial judge seized upon her adultery and was improperly influenced by it to arrive at a 60-40 distribution. The appellate court also emphasizes that it is proper for a judge to take contributions by the party’s family into account not only in the classi¬fication phase, but also in the distribution phase. But wife’s claims of her relatives’ contributions, though the trial judge may well have believed them, were regretfully disregarded by him because they were not traced clearly enough to satisfy the requirements of the statutory and case law. Indeed, some of the hus­band’s’ similar claims failed for similar reasons, but the fact of large contributions by his parents was ba­sically undeniable, and taking them into account in the division phase was proper. The Court also em­phasized, as it has in past cases, that trial judges need not start at the 50 yard line and use particular discre­tionary factors from the statute to move the percent­ages off that mark. The judge doesn’t have to go by a precise mathematical formula (Judge Kelsey says “al­gorithm,” but let’s keep this simple) to make these delicate discretionary decisions. Much was made, on appeal, of the judge’s decision to use a valuation date other than the trial date. He used the date of a prior deposition, because the parties there put on evidence of valuations. There would not necessarily be any­thing wrong with the judge doing that, but in addi­tion, the fact was that this was the only valuation evi­dence for these assets that the judge could find in the evidence of record. The parties both had ample op­portunity to adduce more current evidence, but did not.

 

Separate vs. Marital Property; South Carolina real estate - Va.Ct.App.

PROPERTY DIVISION – SOUTH CAROLINA REAL ESTATE – ARLINGTON REAL ESTATE. Equitable distribution decisions, too, are within the trial court’s sound discretion. But the trial court had awarded the entire South Carolina to the husband, even after acknowledging that it was jointly owned, and that husband did not dispute wife’s down payment from her separate property. The court’s award of the entire property to the husband despite her traced separate contribution was reversed. When there is commingling of separate with marital, it is transmuted, but the re-traced part retains (or gets back, one could say) its original classification. (This Court has at times been more precise, distinguishing between co-mingled and hopelessly co-mingled.) Thus the case has to be remanded for determination of the value of the wife’s interest, and then a proper proportional division. Given the remand, the court did not have to address some of wife’s other arguments relating to that property. ARLINGTON REAL ESTATE. The trial court held that some real estate titled in the husband’s name and owned by him five years before marriage was not transmuted into hybrid. After they married the parties paid off its mortgage by renting it out, using the rentals for the South Carolina mortgage as well. The wife contended that its value increased substantially during the marriage because of her personal efforts. She testified she paid for various remodeling and addition jobs on it, and was the primary property manager for it. She too owned the house before marriage and after they married used its rental income for the South Carolina mortgage and her own Arlington mortgage. Now husband’s Arlington property, owned before marriage, was thus presumed separate, by statute. Wife failed to prove the value increase that she argued, because she never proved its dollar value at the moment the marriage ceremony took place. That left the trial court unable to determine the amount of any increase, no matter how much detail about the improvements was shown him. The Court of Appeals won’t reverse that. Canedo v. Canedo, unpublished, R. No. 0851-12-4 (2/26/13).

 

PROPERTY DIVISION – PERCENTAGES – ALI¬MONY – CHILD SUPPORT. - Va.Ct.App.

Nor was there an­y­thing wrong in the Patel case with giving wife 40% of the marital property. The parties had a 27-year marriage, and husband was found to have an income of $32,888 per month. Wife‘s alimony of $7,000 per month with $1,245 monthly child support was also approved. Patel v Patel, 61 Va. App. 714, 740 S.E.2d 35 (4/9/13).

Unasked-for supervised visitation relief; challenged - Va.Ct.App.

CUSTODY – ALIENATION OF CHILD FROM PARENT – ORDER OF SUPERVISED VISITATION TO ALIENATING PARENT – ORDERING UNASKED-FOR RELIEF – PROPERTY DIVISION – IMPROPER DIVISION OF SEPARATE-PROPERTY INTEREST IN REAL ESTATE- OBJECTIONS TO COURTROOM CONDUCT OF OPPOSING COUNSEL – APPEALS. In an unpublished 14-page opinion, the Court of Appeals reversed on the main equitable distribution point, the division of marital real estate with a separate-property component, and affirmed the trial court’s grant of custody to a formerly non-custodial father. It is workable only to take these matters in the order in which the appellate court went through them. Custody first. The divorcing parents had been married less than four years when they separated in January of 2008. Their one child, we must wait until almost the end of the opinion to find out, was a girl. The appellant wife contended that it was error to award custody of the child to the father because she said he had sexually abused child and she provided excellent child care, and because it disregarded her three experts' testimony about abuse: that the child was credible, had not been coached, and had made spontaneous allegations of a sexual nature, as well as their diagnosis of sexual abuse, and by the husband. She also challenged the judge ‘s giving her supervised visitation, rather than full custody, when none of the experts had recommended that result and husband had not sought it. She challenged the ruling that there was no history of family abuse in the husband’s background and ignoring expert testimony that husband was a risk to the child She challenged. giving child support arrearages to husband for a time when he did not have custody and a time when he “not before the court,” and failing to give the wife such arrearages for her period of custody. The Court of Appeals goes through its usual litany of the many elements of the standard of review and the many points upon which it has no power to second-guess the trial judge. This trial took four days in 2011. On the abuse allegations, it struck the trial judge that this mother took the child to several counselors who later testified on her behalf, and that the child had undergone at least six interviews and forensic evaluations during that process, and had been subjected to a SANE examination at the age of 3 ½. The judge at trial made the interesting ruling that her experts had “made their various diagnoses… within a context established by [ wife’s] false allegations, misrepresentations, and calculated strategy of misinformation,” and he accepted husband’s evidence that one of those child interviews was “conducted in such a poor way, and under circumstances such that the statements made by [the child] were unreliable on their face.” It found wife and a indoctrinated the child, and had planted lies in the child’s mind, and found that none of the child’s statements about it was impromptu or spontaneous, and that the wife had planted the statements in the child’s mind and manipulated the child so that the disclosures could be used at a custody and divorce trial. It found that the wife had misrepresented facts to the court on even the most basic matters and that she had been dishonest with her husband, the child’s regular caregivers, her professional witnesses, and the court. These are all findings that an appellate court can’t overturn when there’s evidence to support them, which the Court of Appeals found there was. Whatever the “ inappropriate incident” when husband was a juvenile may have been, is certainly did not show “family abuse,” and the Court of Appeals cannot say that this is plainly wrong. The trial court had carefully reviewed and recited all of the Code §20 – 124.3 factors and its letter opinion discussed each in detail. It found that the child’s best interests required she be in the husband’s custody because the wife would not allow a proper father daughter relationship to develop. He also found that themother had engaged in “an active campaign to alienate the father from the child.” These findings were all supported by the Record and thus there was no abuse of discretion. It is true that the husband had not asked that there be supervised visitation, but in a child custody case such as this, the court does not exceed its authority by safeguarding the best interest of the child with such an order. Wife argued on appeal that it was wrong to deny her access to the child’s medical and academic records because this would act as a permanent bar to her future suits for modification, since she could not “demonstrate that extreme infrequency of visitation, with the unreasonable restriction of supervision,” would have a bad impact on the child. But these arguments had not been raised in the trial court. And while she also argued that it was wrong to order supervised visitation because none of the experts had recommended it, judges have wide discretion to disregard expert testimony – especially what they did not say. And the Court of Appeals found that in fact the evidence did support supervised visitation. The trial court had found wife is not a credible witness and that her child sexual abuse allegations were unfounded, that she had not kept husband informed about the child, and had made all decisions unilaterally, had manipulated the child to believe she had been molested, and to believe the father was a danger to her. Also significant were wife’s “punishment and reward tactics through sleep deprivation and food” to manipulate the child. It also found  that she had embarked on a campaign of denigration of the husband in the child’s mind and had been trying to poison the child’s mind regarding him. The trial court’s finding was  ultimately that this mother could not involve herself helpfully in this child’s life, and had shown no ability to assess and meet the child’s emotional and intellectual needs, and that her ability to support a child-father relationship was not just poor, but nonexistent. Canedo v. Canedo, unpublished, R. No. 0851-12-4 (2/26/13).

SEPARATION AGREEMENTS – PARENTAL RIGHTS TERMINATION. - Va.Ct.App.

Could a circuit court terminate a mother’s parental rights by incorporating a separation agreement in which she had agreed to that? Of course not. The Court of Appeals, which is perhaps more analytical than you or me, explains it two ways, really, and then ties them up together neatly. First, the trial court had no jurisdiction to do that. When parental rights are terminated, it happens only one way, which is under the applicable statute, §16.1-283, and its procedural and substantive requirements have to be met. None of that was done, so that jurisdiction was not present. Also, an agreement to that is void as against public policy, and unenforceable, so the agreement couldn’t provide a jurisdictional foundation for anything. The mother had sued for visitation, but get this: because her parental rights had been terminated, she didn’t have any legitimate interest in visitation, and thus had no standing, according to the trial court. But the circuit court couldn’t rely on the unlawful termination to make that no-legitimate-interest finding. The Court of Appeals reversed and remanded with directions in this case, Layne v. Layne, 61 Va. App. 32, 733 SE2d 139 (10/23/12), inter alia, to reinstate her visitation claim.

Debts vs. Assets when determining intrinsic value - Va.Ct.App.

PROPERTY DIVISION – VALUATION – BUSI­NESS PROPERTY – EXPERTS. It’s well-es­tab­lished that when there’s a battle of the experts, a trial judge who wants to pick his own number, and not adopt in toto the answer of either expert witness, can do so. And so a Henrico judge did not err in cherry-picking one element from one expert’s testi­mony, and another from another’s, and mixing and matching ‘em to get his own number. Put another way, the judge has broad discretion to resolve a con­flict be­tween expert witnesses on valuation issues. A recent case involved, for the most part, hotel-owning corpo­rations. The analysis is fairly abstract and alt­hough one of the experts produced from his calcula­tions a “net equity value,” before isolating the hus­band’s share from those of his partners to get a “pro rata eq­uity value,” and then gave it a discount for mi­nority-fraction ownership, it was, after all, “intrinsic value” that the judge wanted. That was not any more lucidly defined or explained here than it was in the Howell case, wherein it was hard to perceive it as an­ything but a rubber yardstick. But of course the Court of Appeals here quoted Bosserman to the effect that that means what it is worth to the owner.            
So this hotel-owner case, Patel v. Patel, 61Va. App. 714, 740 S.E.2d 35 (4/9/13), reaffirmed that “intrinsic value,” whatever that is, is the (case law) standard under Virginia law. Now Bosserman does, at least, helpfully explain that “Intrinsic value is a very sub­jective concept that looks to the worth of the property to the parties. The methods of evaluation must take into consideration the parties themselves and the dif­ferent situations in which they exist. The property may have no market value, and neither party may contemplate selling…. Commonly, one party will continue to enjoy the benefits of the property, while the other must relinquish all future benefits.” (Oh, for the days of “fair market value.”)

 But, the explanation continues, precise adaptation of any valuation method “to the facts of the case must vary with the myriad situations ... among married couples.” Indeed. So in other words, you’re right. The rule is that it’s whatever the judge says it is. And God forbid he or she should neglect to say, “I’m using intrinsic value” before saying “it’s worth X.” Here, in the evaluation of two companies, two experts, with an income approach, determined the values of the hotels the companies operated. The third came up with full value of the companies themselves, and dis­counted the husband’s share of ownership for his fractional interest. The trial court adopted the first two experts’ appraisal for the hotels, then used the third one’s method to value the companies (which owned cash assets too), and subtracted their debts, but did not discount, as the third expert did, the value of husband’s share. This was consistent with intrinsic value (of course). (After all, what isn’t?) The non-liquid nature of husband’s interest was considered when making the ultimate equitable distribution. The two hotels had a negative value, but the judge found zero values for them. When the debts of an asset ex­ceed its value, it’s worth zero, the Court said. An off­set to the total marital estate value for the neg­ative value of one asset “is not recognized in Virginia law” for equitable distribution of marital property (except for cases of proved dissipation), the Court explained. Maybe in most cases, husband argued, but when the business owner might be personally liable for the companies’ debts, not. The Court of Appeals rejected that.            

Ultimately, having laws, and especially appellate case law, is about the precise meaning of words, isn’t it? And perhaps what is really meant by the Court of Appeals’ use of “intrinsic value” is not “its value to the owner,” but “its theoretical value to an owner sit­uated as this one is (an owner in this owner’s situa­tion).” It would, then. still seem to be a strange thing to ask of an expert witness, who after all (I mean come on, really) is supposed to give an objective an­swer, according to that scientific Daubert standard. Otherwise, if you are going to use a legal standard like “intrinsic value” for the valuation of real estate,corporations, or material goods in lawsuits, we might as well be like the unlettered peasant or the village moron scratching his head, cudgeling his brains and stammering when he is brought up before the Lord of the Manor for poaching leverets (or grousing in the goody, or whatever). This isn’t exactly like the prin­ciple of the Twelve Tables at work here. 

The Court held that the fact that the husband may possibly, at some future time, find himself personally liable is not properly a part of a marital property val­uation and division. The Court also includes a very helpful discussion articulating and explaining “going-concern value.” This was another part of the refuta­tion of husband’s argument about personal liability for defaults. The Court of Appeals cleverly recog­nizes that cases like Hodges involved an erroneous argument by one side that sought to get blood out of the other side’s non-existent turnip, which might be a remedy when dissipation is alleged and proved, but when not, not. The Court adds that “unfortunately, Hodges is silent as to the reasoning behind its hold­ing. However, the rationale of the Court’s decision in Hodges becomes clear in the context of a case such as this.” It explains that “simply because a company’s debts exceed its assets at a given point in time does not mean that the company has a negative value. Nor does it mean that the company is incapable of gener­ating profits or that the company does not have a positive cash flow capable of paying off any debt. Instead, it merely shows that at the time of valuation the company has more debt than assets.” The Court noted that at least one other jurisdiction treats in­debted marital property this way, citing Kline v. Kline, 581 A2d 1300 (Md. App., 1990). Thus, it says, the circuit court “was not plainly wrong in finding that the loans were ‘valid debts incurred by going concerns.’” Patel v Patel, 61 Va. App. 714, 740 S.E.2d 35 (4/9/13).

 

 

SEPARATION AGREEMENTS – SET-ASIDE – UNCONSCIONABILITY -- UNDUE INFLUENCE – $10,000/MONTH FROM $12,000 INCOME -- SEPARATION AGREEMENT AS “GOOD-FAITH” TOKEN ALLOWING RECONCILIATION -- ENFORCEMENT NOTWITHSTANDING REPRESENTATIONS. - Va.Ct.

A trial court’s refusal to enforce a rather dubious separation agreement was reversed because the Court of Appeals found no undue influence (and nothing unconscionable) where the trial judge had found plenty. Though  apparently it was  proved that the doctor’s monthly income was $12,066, and the contractual alimony was $10,000. Soon after the husband left home the couple had seen a priest, who told H that W was demanding a signed separation agreement as a precondition of reconciliation “as a sign of his good faith,” and that she would not enforce it, but six months after getting it ratified by a court, W brought a support enforcement Rule to Show Cause against H. The Record, the Court says, does not show that W engaged in deception. Nor was there “pecuniary necessity,” as this is a middle-aged male physician, who can always go out and make “a significant salary.” Guirguis v. Salib, unpublished, (1/15/13).

Marital accounts acceptable for alimony payment - Va.Ct.App.

PROPERTY DIVISION – SUPPORT OUT OF MARITAL ACCOUNTS – ALIMONY RESERVA­TION – TIMING OF REQUEST FOR – PENSIONS, ETC. – DIVISION FORMULA – BUSINESS VAL­UATION – GOOD WILL. The “problem” of an em­ployed spouse paying alimony and child support, ei­ther voluntary or court ordered, out of marital ac­counts (joint or otherwise), rather than his ongoing salary, and the idea that he is doing something wrong because he did not take it out of separate property belonging to himself, has a certain dramatic appeal, as it fits in well with the demonizing assumption that all separated husbands must be lying, cheating, stealing and hiding money. But it often raises ques­tions such as “What were they living on before?” when the non-employed spouse seeks an order that embargoes the employee spouse’s use of all funds but his salary, from which alimony and child support payments must come. This perennial question was before the Court of Appeals again in Wright v. Wright, 737 S.E.2d 519, 61 Va. App. 432 (2/19/13), wherein the Court ruled that a husband did not have to reimburse the marital estate for what both sides agreed were expenditures for proper purposes. These expenditures (of $1.4 million) were not waste. He will, after all, be having to pay $10,000 in monthly alimony for the next four years, which is what wife got rather than the $30,000 monthly she asked for. Denial of an alternate valuation date was well within the trial judge’s discretion. The Court of Appeals will not hold as a matter of law that this is an unfair dimi­nution of marital assets after separation. Wife got a reservation of alimony, which she asked for only at the end of the case, rather than in her ini­tial plead­ings. The Court says that the latter is not required. (Nice to have that one cleared up.) The trial judge did err in granting a reservation without saying how long. The judge of course will have to deal with the statu­tory rebuttable presumption that it should be half the length of the marriage under Code §20-107.1 (D). The judge also erred in granting the wife 25% of the value of a certain retirement fund, instead of a share of the marital portion thereof. The Court also af­firmed valuation of the husband’s partnership’s good will by an excess earnings method that was ap­proved in Howell v. Howell, 31 Va. App. 332, 523 S.E.2d 514 (2000), as it better isolates institutional good will from personal good will. 

Cruelty to Husband; proven through Wife's previous charges - Va.Ct.App.

CRUELTY – SUFFICIENT FACTS. It’s not that rare for divorce a party’s claims of cruelty as a divorce ground to be accepted, but when it’s a husband’s claim, it is still newsworthy.  And of course this wasn’t one of those disgraceful  “ mental cruelty” claims that the appellate courts grudgingly accept once in a blue moon, but which shameless lawyers file all the time. No, this husband who proved his divorce ground that way was a battered one. And what kind of factual evidence did it take to bring off this highly unusual feat? Well it seems that husband married, with a prenup, a woman who had entered the US in 2003, and whom he met in 2007, while representing her in an immigration case. The romance continued in court, where she did not contest her first charge of assaulting and battering the husband (2007). She got probation on the second (2009). Wife got off when she was charged again in 2010, and the parties separated. When she was arrested for the same thing in 2011, the husband filed for divorce and the divorce court took notice of the battering, and considered it more seriously. It found husband’s grounds proved, awarding husband custody of the child they had had by that time, and enforced the antenuptial contract. A male actually got a cruelty divorce with just those facts?  (Which seems to have been the argument of the still-unrelenting wife as she challenged the sufficiency of the facts on appeal.) No, of course not: there’s more, of course, and it was significant in convincing the Court of Appeals on appeal. As the Court reads and explains the statute and its case-law interpretations in its opinion, it requires something tending to bodily harm which renders cohabitation unsafe to life, limb or health. Well? …. Husband and his mother had testified that wife’s years of physical and verbal abuse had made the husband afraid to even speak in her presence, creating an unbearable living situation in his home,and making cohabitation unsafe. The Court says the law requires “only slight” corroboration here, because no collusion was shown, and it’s furnished by the three assault and battery charges, wife’s propensity for violence, and photos husband showed of his injuries. A cop and Husband’s mother testified. Well of course wife claimed husband had threatened her (with deportation), and that that made her attacks all right. But the trial court was not required to believe that, nor to grant the divorce on no-fault grounds, as she demanded. Ibrayeva v. Kublan, R. No. 1120-12-4, unpublished (12/11/12).