Virginia Family Law Appeals

Modest-income mom of 5 must pay ex's costs for her dishonest appeal; current actual earnings averaged to get presumptive support income

The Court of Appeals rejected an appeal as totally baseless and thus awarded the Appellee father his fees and costs in the appeal in Ranghelli v. Ranghelli (5/7/19). The mother’s commission-based earnings varied greatly, and she had been unemployed or on unpaid leave for parts of the past two years. The trial court used a monthly average of her earnings during her current period of continuous employment, based on her pay stubs, as her income for support purposes. The mother argued on appeal that the trial court had averaged her earnings while working over the past three years, not counting periods when she was not working, and that it thus imputed income to her, which deviated from the “presumptive amount” without making the required written findings to justify that. But the numbers showed that “the court did precisely what is required under the case law and based its presumptive child support” on her “most recent actual income.” And because she based her appeal on alternative facts of the case and “failed to address what the trial court actually did, her arguments are not fairly debatable” and the husband is entitled to his fees and costs for the appeal.

Court could decide not to incorporate part of the child support provisions of a separation agreement; it didn't change the substance of it.

Kumar v. Kumar, 2016 Va. App. LEXIS 301 (November 8, 2016)

A trial court declined to incorporate a portion of the parties' PSA related to child support, which imposed an obligation of support on husband prior to the entry of the final order, because the husband had fully complied with the pendente lite order, which required significant financial expenditure from husband for benefit of wife and children. The Court of Appeals upheld the decision of trial court and found that trial court did not change any substantive provisions of the PSA and held § 20-109.1 provides a trial court with discretion to incorporate a PSA or "provisions thereof'.

When imputing income, hypothetical child care costs counteracted by other parent's availability to be with kids

Wife argued that when the trial court imputed income to her, it needed to deduct the child care costs she would have if she worked. The Court of Appeals points out that “[w]here appropriate,” the court calculating child support “shall consider the willingness and availability of the noncustodial parent to provide child care personally in determining whether child-care costs are necessary or excessive.” Code § 20-108.2(F). If a court can do this with actual child care costs, it can also do so with hypothetical ones in this situation, the Court says.

If the court determines that the husband is willing and able to provide necessary childcare, the court does not abuse its discretion in considering this fact in weighing the “obligations, needs and financial resources of the parties” for purposes of spousal support. See Code § 20-107.1(E)(1)

The Court approvingly lists several specific facts which the trial court considered relevant to this:

The evidence established that at the time of the evidentiary hearing, the wife’s part-time job provided her with the flexibility both to work from home and to take her younger child to the office with her on occasion as needed. Further, the evidence established that although the parties’ daughter was ten years old, their son was fourteen at the time of the evidentiary hearing and almost fifteen at the time of the hearing on the motions to reconsider and rehear. Additionally, the husband testified that he had “complete control” of his schedule. He said that he could turn down promotional work in order to care for the children and would be available any evenings necessary if the wife obtained the job identified by the vocational expert. The circuit court found simply that “[t]here are no work-related childcare costs due to [the wife’s] control over her current and anticipated work schedule” and “the nature of [the husband’s] . . . career” moving forward.

Henderson v. Henderson, 5/15/2018, Record No. 1402-17-2. (A separate opinion issued the same day, with a different case number, addressed husband's appeal of various rulings.) The opinion in "1407" addressed so many different issues that I am describing them in separate posts.

 

Divorce court must account for income effects of property division when setting support; value assets net of secured debt; require strict tracing

Income calculation must include effects of ED award

The Court of Appeals agrees with a husband who says the trial court's income calculation for child and spousal support needed to account for income from accounts that were transferred from him to the wife, and reverses, in Henderson v. Henderson, 5/15/2018, Record No. 1364-17-2. (A separate opinion issued the same day, with a different case number, addressed wife's appeal of various rulings.)

Valuation: Secured Debt

The Court also reverses a valuation that did not subtract the amount of debt secured by the asset. An account had a lien against it for an equity line of credit in the husband's name. The trial court valued the account at its full value, not counting the lien, and divided it equally, then left the debt entirely to the husband. That sounds wrong, but what makes it absolutely wrong under the ED Statute?

Code § 20-107.3 requires a court effecting an equitable distribution to proceed in an orderly fashion: Specifically, it must (1) “classify the property,” (2) “assign a value” to the property, and (3) “distribute the property to the parties, taking into consideration the factors listed in Code § 20-107.3(E).” Theismann v. Theismann, 22 Va. App. 557, 564, 471 S.E.2d 809, 812, adopted upon reh’g en banc, 23 Va. App. 697, 479 S.E.2d 534 (1996). Code § 20-107.3(E) requires the circuit court, when distributing the marital property during the final phase of the process, to consider the “debts and liabilities of each spouse, the basis for such debts and liabilities, and the property which may serve as security for such debts and liabilities.” Code § 20-107.3(E)(7). “However, to the extent that a valid indebtedness which is secured creates an encumbrance on the legal title” of marital property, we have held that this “indebtedness must be considered” by the circuit court at an earlier stage in the process, when “determining the value of the marital property.” Trivett v. Trivett, 7 Va. App. 148, 151, 371 S.E.2d 560, 562 (1988)

However, "On remand, the court should once again apply the subsection (E) factors to determine the distribution of the account." So the trial court might do something on remand that arrives at the same result.

Tracing

Husband had two accounts created during the marriage, which he and bank employees testified were funded solely from a pre-marriage account that contained 100% pre-marriage funds. But there were three years during the marriage, about 15 years ago, for which no statements from that old were available. Thus he failed to meet his burden of proof that the new account, created during the marriage, was separate property. The trial court had the discretion not to believe husband's testimony that no marital funds had been added to the old account, so its classification of the accounts as marital is upheld. 

But the husband was able to show that what was already in the account at the time of marriage was sufficient to account for what was put into the new accounts. That doesn't matter: "The mere fact that the husband was able to prove that he had pre-1999 earnings and bonuses in an amount sufficient to fund account #0410, the amount he claims to have traced, was insufficient to meet his burden of proof." 

Disability Retirement

Husband was a retired professional athlete and was receiving disability pension payments under a retirement plan. But there was no evidence that the payments were analogous to a "pain and suffering" personal injury award: they replaced wages and regular retirement benefits, and so they were marital. The timing of husband's employment should have made them hybrid, so it is possible, though not spelled out, that the trial court found the disability portion of already-received payments to be entirely marital because they were considered "wage replacement", not "deferred compensation."

 

Late-filed appeal of support order makes timely appeal of arrears case moot

Marriott v. Anderson, 2017 Va. App. LEXIS 43 (February 21, 2017)

When a party appeals a case from the juvenile and domestic relations court, he or she must file the appeal within ten days or the appeal will be dismissed.The Court of Appeals reversed the circuit court after it had accepted several de novo appeals from the juvenile and domestic relations court, one of which was filed after the ten-day appeal period. On May 14, 2015, the JDR court had entered two separate orders. One resolved the father's arrearages to the mother ("arrearages order"). The other required the mother to pay child support ("child support order"). The mother appealed the arrearages order on May 21, 2015, which was filed timely. However, she appealed the child support order on May 27, 2015, which was filed late. The father moved to dismiss the child support case because of the late appeal. He also moved to dismiss the arrearages case on the basis that it was moot without the child support appeal. The circuit court denied his motions to dismiss. The court of appeals agreed with the father and reversed the circuit court on both matters.

 

 

What looks like "imputing" income can actually be determining probable actual income, though undocumented; fee award for "chutzpah" in post-divorce litigation

One useful legal holding from Wilson v. Slivka, Va. Ct. App. unpub. 4/3/18, an opinion that mostly just illustrates how miserable, solitary, poor, nasty, brutish and long divorce can be. The opinion also uses the word "chutzpah" as a routine term, without making a big deal of it, putting it in quotes, giving a definition or an example, etc.

On the not-actually-imputation, explaining why the trial court did not fail to calculate the presumptive support using a finding of actual income before proceeding to "impute", the Court explains:

This Court’s holding in Floyd v. Floyd, 17 Va. App. 222, 436 S.E.2d 457 (1993), is noteworthy in the calculation of actual gross income instead of imputation of income. Floyd argued that the trial court imputed income to him before calculating the presumptive amount. Id. at 224, 436 S.E.2d at 458. This Court indicated that Floyd “mischaracterized the proceedings;” what the trial court did was calculate Floyd’s actual gross income. Id. at 229, 436 S.E.2d at 461. The trial court indicated that it found his annual income to be $45,000 “based on the depositions of prior years, the statement in testimony and the statement of money taken out of the business.” Id. at 225, 436 S.E.2d at 459. The trial court first considered that Floyd engaged in a “systematic scheme to hide assets,” had cashed and spent $70,000 in checks, and then determined his child support obligation pursuant to the guidelines. Id. at 229, 436 S.E.2d at 461.

While the trial court is permitted to deviate from the presumptive amount, it did not do so here. The trial court simply calculated appellant’s gross actual income and adhered to the corresponding presumptive amount of child support. This is analogous to Floyd, 17 Va. App. at 222, 436 S.E.2d at 457. The record leaves little room for doubt that the trial court found appellant’s representations less than credible. It noted his “poor track record” and highlighted his chutzpah in asking for an outright elimination of his support obligation in light of the trial court’s extensive familiarity with this case and its facts. Based on the evidence before it, the trial court concluded that appellant’s last known salary of around $141,600 constituted an “accurate reflection of his worth.” Accordingly, the trial court did not “impute” income; rather, it weighed the evidence and credibility to determine appellant’s income. The trial court properly applied the statutory steps and did not deviate from the presumptive amount. Accordingly, no written findings were required.

On fees, "the trial court’s passing reference to appellant not being the 'prevailing party'” -- not the proper standard for a fee award in this type of case -- does not make the fee award error, because it looks from the record as if the judge must have been considering the history of the case, which she recited in other contexts, and which included many facts that properly would justify a fee award, determined "as equity and justice may require.”

It cited a case about fees in "a divorce case and its ancillary proceedings" -- which adds that “This discretionary authority also extends to related post-divorce proceedings.” but which only cited statutes about fees in divorce cases, §§ 20-79 and 20-99. Tyszcenko v. Donatelli, 53 Va. App. 209, 222, 670 S.E.2d 49, 56 (2008), cited in  Mayer v. Corso-Mayer, 62 Va. App. 713, 733, 753 S.E.2d 263, 272 (2014). The present case was a post-decree enforcement and modification case.

But as as for fees on the appeal,

We decline to award attorney’s fees on appeal as the litigation “addressed appropriate and substantial issues and that neither party generated unnecessary delay or expense in pursuit of its interests.” Hackler v. Hackler, 44 Va. App. 51, 75, 602 S.E.2d 426, 438 (2004).

Child support orders must address health insurance, non-covered medical expenses, no evidence of costs needed

A child support order must include provisions for how health insurance and non-covered medical expenses are shared between the parties, the Court of Appeals says in Elliott v. Wendell, 12/20/2016. 

An absence of evidence does not negate a court’s statutory responsibility to ensure that a dependent child’s health care needs are met by making provisions for the same in an order of support. Zubricki v. Motter, 12 Va. App. 999, 1002, 406 S.E.2d 672, 674 (1991); see also Whitney v. Whitney, No. 2192-06-2, 2007 Va. App. LEXIS 203, at *14 (Va. Ct. App. May 15, 2007) ...  In Zubricki, we found “no merit” in a father’s argument that a trial “court erred in ordering him to pay health insurance or health expenses without any evidence as to their cost.” 12 Va. App. at 1002, 406 S.E.2d at 674. Noting that a “court is not required under the statute to determine the amount of coverage that will be necessary as there is no way for the court to predict the costs,” we nonetheless recognized that “[u]nder Code § 20-60.3, a child support order must contain a provision for health care coverage.” Id.

Ordering a party to provide health insurance does not require any evidence or findings; making the exception, for when it's not available at reasonable cost, does.

The sole statutory exception to the requirement that health care coverage be addressed in a child support order is when there is a showing that coverage is not available at “reasonable cost.” Absent such a showing, the order must contain a provision for health care coverage. Here, the absence of sufficient evidence prevented the circuit court from finding that the exception applied. In the absence of such evidence, the default rule is that “a child support order must contain a provision for health care coverage.” Id. (emphasis added). Accordingly, the circuit court erred when it failed to include a provision regarding health care coverage in the order.

When a court does conclude from the evidence that no coverage at a reasonable cost is available, the court still must include a written statement to that effect in the order.

On non-reimbursed medical expenses, the trial court did not order anything, because the only evidence was about incomes, and that there was no evidence about what the medical expenses were. But

Code § 20-108.2(D) ... establishes a default method by which a minor child’s uncovered medical expenses are to be allocated between the parties. Absent “good cause shown or the agreement of the parties,” “the parents pay in proportion to their gross incomes.” The only evidence needed to determine the relative amounts each party is responsible for is the parties’ gross incomes.

The Court also reminds us why it can cite unpublished opinions, and what they're worth:

Unpublished opinions of this Court, while having no precedential value, are nevertheless persuasive authority. Otey v. Commonwealth, 61 Va. App. 346, 351 n.3, 735 S.E.2d 255, 258 n.3 (2012).

Court can require proof of income & exercise of shared-custody time, but can't pull numbers out of air.

A trial court in a support modification may use a previously-used income figure when it finds no credible evidence of changed income; and may use the sole custody guidelines when a father does not prove that he is exercising his court-ordered parenting time that would otherwise justify the shared-custody guidelines; but may not decide to use a higher income figure without citing any evidence that it was the father's income or his earning capacity, the Va. Court of Appeals rules in Hatcher v. Matthews, unpublished, 9/5/17. The father had been found non-credible in earlier child support proceedings, and did not present evidence to document his claims, and this justified deference to the trial court's discretionary decision not to simply take him at his word.

Court can order custodial father to pay net of alimony minus child support; can make decisions code requires though not discussed at trial.

A support order can offset the payments for one kind of support against payments going the opposite way for another kind of support, the Court of Appeals says in O'Reilly v. O'Reilly (5/31/16), unpublished. Thus, when ordering a father to pay alimony to the mother, and the mother to pay child support to him, a court can order him to pay the net difference rather than having money going in both directions.

Nor was it error for a judge to order children's non-covered medical expenses shared in proportion to income, even though there was no discussion of that during the trial. All support orders are required to address this by Code Section 20–108.2 D, and the order followed the by-default formula for doing so.

The mother believed, as some parents do after looking at the support guideline spreadsheets, that the father was supposed to pay her the amount listed as "father's obligation" even though he was the custodial parent. The Court disagreed, and said that that amount is what he's assumed, but not ordered, to spend on the children from his own income, in addition to the child support the mother pays him.

Agreement barring child support reductions voids all child support parts of agreement and court order.

Virginia's Court of Appeals says that the child support sections of an agreement and of the divorce decree that incorporates it, and possibly the entire agreement, are invalid because they restricted future reduction of child support. This agreement said the $2,000/month child support would continue as long as any of the three children were under 18; would not be reduced or terminated until then, even if any or all of them moved in with the payor, and "may be modified upward due to a change in circumstances but may not be reduced."

The Court does not rely on the most extreme provisions above as grounds for its decision, but instead says any restriction on future child support changes is void. It finds Kelley v. Kelley, 248 Va. 295, 449 S.E.2d 55 (1994) dispositive, and writes:

"the provision was “null and void . . . .” Id. at 298, 449 S.E.2d at 56. ... “parents cannot contract away their children’s rights to support nor can a court be precluded by agreement from exercising its power to decree child support.” Id. ... because the final decree incorporated the void provision of the parties’ agreement, that provision of the decree was also void, and therefore, could “be attacked and vacated in any court at any time, directly or collaterally” despite the fact that the parties had agreed to the provision and it had been in place for a number of years. Id. at 299, 499 S.E.2d at 57. Applying these principles to the case at bar, it is clear that Paragraph 4 is void. Paragraph 4 provides that, regardless of circumstances, the agreed amount of child support “may not be reduced . . . .” By its express terms, it seeks to prevent a circuit court from decreeing child support based on the specific facts and circumstances. Accordingly, it runs afoul of Kelley’s direction that the parties’ agreement cannot preclude a circuit court “from exercising its power to decree child support,” id. at 298, 449 S.E.2d at 56, and therefore, is void. See also Virostko v. Virostko, 59 Va. App. 816, 824, 722 S.E.2d 678, 682 (2012) (holding that “the parties’ agreement may not prevent the court from exercising its power to change, modify or enforce its decree concerning child support” ...

Mother raises several arguments in an attempt to save Paragraph 4. First, she argues that she bargained for this arrangement, gave up valuable consideration in exchange for Paragraph 4, and is entitled to the benefit of her bargain. The husband in Kelley made similar arguments;  such arguments fail because the parties, regardless of their intentions, cannot enter into agreements that divest a court of its ability to decree child support.

Next she argues that Paragraph 4 does not deprive the circuit court of its ability to “decree” child support. She asserts that, consistent with the child support guidelines, the circuit court is free to make any determination it wishes regarding the proper amount of support under the guidelines and announce that finding; however, the agreement still would require father to pay the $2,000 a month no matter what the circuit court found. This argument fundamentally misunderstands what a “decree” of a court is; it is not an idle statement but an order directing a party to do or refrain from doing something. See Decree, Black’s Law Dictionary (10th ed. 2014) (“decree, n. (14c) 1. Traditionally, a judicial decision in a court of equity, admiralty, divorce, or probate – similar to a judgment of a court of law . . . . 2. A court’s final judgment. 3. Any court order, but esp. one in a matrimonial case.”). Because Paragraph 4 purports to prevent the court from ordering a change in child support, it seeks to prevent a court “from exercising its power to decree child support,” and therefore, is void.

... as mother has argued, she did bargain for the void provision and apparently gave up other items of value to which she may have been entitled. Because such other provisions of the parties’ agreement may be so inextricably intertwined with Paragraph 4 that they cannot be severed, a determination must be made as to what other portions of the parties’ agreement are invalidated by our finding that Paragraph 4 is void. The parties agree that, given the fact-dependent nature of some of the questions raised by Paragraph 4 being declared void, remand to the circuit court is appropriate to determine the outstanding questions. Although we are not bound by the parties’ agreement on this issue, we concur. 

... Paragraph 6 of the parties’ agreement provides that “[i]n the event that [father] defaults in his obligation to pay support pursuant to this Order, [father] shall pay all costs of enforcement of this Order including, but not limited to reasonable attorney fees . . . .” Assuming without deciding that Paragraph 6 is severable from Paragraph 4 and continues in effect, we note that, given the disposition, this appeal does not fall within the provision. Accordingly, the parties’ agreement does not entitle the mother to fees related to this appeal.

The voidness issue was not raised at all until the Court of Appeals had already announced a decision on the interpretation and enforcement of the agreement and decree, and on attorneys'-fee claims. After that, the payor raised the issue in a Motion to Reconsider. The "mandate" returning the case to the trial court had not yet been issued, and the Court says, if an order is "void ab initio", its invalidity can be raised at any time, regardless of the 21-day finality rule in Rule 1:1, the Rule 5A:18 requirement to have raised the issue in the trial court, or the appellate court rules. The Court cites as holding that "so long as a litigant has timely filed and properly perfected an appeal as to any issue, he retains the ability to raise a voidness challenge so long as the matter is pending before the appellate court." Amin v. County of Henrico, 286 Va. 231, 749 S.E.2d 169 (2013).