Virginia Family Law Appeals

Two wildly different property-tracing methods can be used in the same case

The Virginia Court of Appeals reiterates that courts are free to use the Brandenburg and the Keeling methods of measuring separate-property shares of a home – upholding a trial court that apparently used both methods in successive stages of the same tracing analysis, in a case that illustrates what a huge difference the choice of formula makes. (Scott v. Scott, unpublished 11/5/19)

The trial court used the Brandenburg formula, which looks at the proportions of contributions to net equity, to measure the separate-property share of the proceeds of the couple’s first house that were rolled into the second house:

Dividing his contribution ($192,651) by the parties’ total contribution ($207,914) equals approximately 92.6%. … Multiplying this percentage by the parties’ total equity in the Abingdon house at the time of sale ($306,818) finds the husband’s share of the Abingdon house proceeds ($284,294). The circuit court could reasonably have concluded that the $214,492 down payment on the Taylor Street house, paid with unsegregated proceeds from the Abingdon house, was consequently also … 92.6% [from] the husband’s separate funds, or $198,619.

But when tracing the resulting separate-property contribution through the parties’ next home, it used the Keeling formula, which looks at the ratio of contributions to total purchase price, and treats the borrowing of mortgage debt as a marital contribution, but then applies the resulting ratio not to the total value, but to the net equity:

Here, the circuit court did not expressly describe the method by which it determined the parties’ respective shares in the Taylor Street home. However, the husband’s traceable separate share of the $628,000 purchase price of the Taylor Street house was $208,319 [the number above plus an additional contribution from a purely separate-property source] … one third of the total purchase price. The logical resulting conclusion … is that marital funds comprised the source of the remaining two-thirds of the purchase price.

We can infer, then, that the circuit court likewise determined that the marital share of the equity in the Taylor Street house was two thirds and consequently the husband’s separate share of the equity in the home was the remaining one third. … The circuit court found that the parties’ equity in the Taylor Street house was $529,876. The court awarded the wife $175,000, which equals approximately half of the parties’ two-thirds marital share of the equity in that home.

… As in Rinaldi [53 Va. App. 61, 72 (2008)], application of this classification method achieved an equitable result in light of the facts of this case.

So the Brandenburg analysis only looks at contributions that actually pay money in, and increase the parties’ net equity in the property. Regardless of what mortgage debt the couple may have taken on when they bought the house, they only get credit for the small amount of mortage principal they paid off during the marriage. But in the Keeling analysis, the high purchase price automatically and hugely increased the marital share and immediately diluted the separate share down to one-third. Thus the separate-property share in that home started out as $208,319 and ended up as $176,625. The opinion does not indicate whether the property’s value went up or down, only that the whole down payment was $214,492 (i.e., 97% separate) and the equity at the time of the divorce was $529,876 -- no indication how much of that is from mortgage payments and how much is from the value going up or down.

It would be more consistent to see the mortgage itself as a marital contribution if the court had ended up dividing the remaining mortgage debt equally, but it does not, and that probably never happens except in cases where a house cannot be refinanced and has to be sold or remain “under water” and co-owned in limbo.

Fees

The Court also finds a moderate award of attorneys’ fees to the wife to be reasonable for the usual reasons, and because of “the history of the case, the husband’s arguments regarding the difficulties that the wife caused during litigation, and the fact that the wife was denied spousal support. [And] that the husband had more control over the length of the litigation.”

Joint legal custody proper despite protective order, parents' inability to communicate

A court can award joint legal custody even if there is also a protective order against the mother’s directly communicating with the father, based on his claims of domestic violence and threats, the Virginia Court of Appeals said in Armstrong v. Armstrong (published, 11/12/19). Although most domestic violence protective orders are enforced to punish not only direct, but indirect, communication, the trial judge had specifically directed the parties to communicate through third parties when needed for co-parenting and allowing other narrow exceptions (explaining that their their “red-hot hatred has cooled to a slightly lower-grade, weary hatred.”)

Some details from the trial court’s opinion form a striking illustration of common patterns in custody fights:

In its opinion, the court found that both parties enjoyed a close relationship with A.A., and although the parent-child bond was equally strong for father and mother, each parent had deficits. The court had concerns that mother was “highly erratic” and verbally and physically abusive toward father. The court found that father “offers a more stable living situation than [mother]” and “provided certainty and stability to the child during the parties’ separation.” However, the court described father as “calculating” and found that he “pushes [mother’s] buttons, then decries her erratic response.” It determined that father “has clearly cut [mother] out of his life” and is “attempting to strategically take [her] out of [A.A.’s] life as well.” The court concluded, however, that mother’s erratic and abusive behavior toward father was “so extreme that the stability [father] provides outweighs his negatives.”

The father had no case law to support his argument against joint custody. He argued that for the trial court to ignore “the acrimony” was “a clear error of judgment” – one of the few kinds of abuse of discretion identified in Lambert v. Sea Oats Condo. Ass’n, Inc., 293 Va. 245, 252-53 (2017) (quoting Manchester Oaks Homeowners Ass’n v. Batt, 284 Va. 409, 429 (2012)). But the Court of Appeals points out that the trial court deeply and fully considered the acrimony and had explicitly based its ruling on the child’s best interests.

Here, the court expressly found that “[b]oth parents are unable to cooperate in resolving disputes,” and it declined to award sole legal custody to either parent. It did not single out either mother or father for obstructionist conduct but did note that father is “attempting to strategically take [mother] out of child’s life.” The court’s award of joint legal custody was a reasonable measure to prevent father from using primary physical custody to curtail mother’s relationship with A.A.

The mother appealed separately and the Court dealt with her appeal in a separate, unpublished opinion.