Virginia Family Law Appeals

Third party's mortgage payments were marital; sole custody justified, GAL report evidence; sole-named debt can be weighed AND ordered paid -- Harrop II v. Harrop

THIRD-PARTY MORTGAGE PAYMENTS WERE MARITAL:

A church's payment's of a divorcing couple's joint mortgage obligations were marital-property contributions to the home's equity, even though the husband was the sole occupant and solicited the church's assistance, the Virginia Court of Appeals ruled in Harrop II v. Harrop, unpublished, March 7, 2023. He presented no  evidence of what the church's intent was, so he did not overcome the presumption that paying a jointly-titled debt was a gift to both spouses, not just him.

That's all straightforward and sounds right. What's troubling is the court's footnote to this, which seems to mean that its holding is not really going to be the rule in similar future cases where such payments are made post-separation:

We recognize that because the property at issue was acquired after the date of the parties’ last separation, husband would have been entitled to a presumption that the property was separate property. See Luczkovich v. Luczkovich, 26 Va. App. 702, 708 (1998) (“Property acquired after the last separation is presumed to be separate unless the party claiming otherwise proves that the property ‘was acquired while some vestige of the marital partnership continued or was acquired with marital assets.’” (quoting Dietz v. Dietz, 17 Va. App. 203, 211-12 (1993))). However, because husband did not make this argument to the trial court or to this Court on appeal, we treat it as waived. Coward v. Wellmont Health Sys., 295 Va. 351, 367 (2018) (“[I]t is not the role of the courts, trial or appellate, to research or construct a litigant’s case or arguments for him or her, and where a party fails to develop an argument in support of his or her contention or merely constructs a skeletal argument, the issue is waived.” (quoting Bartley v. Commonwealth, 67 Va. App. 740, 746 (2017) (applying Rule 5A:20(e)))).

Does "the property at issue was acquired after the date of the parties’ last separation" mean that the home -- the property being divided -- was acquired post-separation, or that the church's contributions to the mortgage were "property" the husband "acquired"? The latter, apparently, because the husband was already making mortgage payments on the home for the same month when the parties separated. So the footnote strongly implies that the payments were property, and were acquired by the husband, even though they were third-party payments of a debt that was in both spouses' names. And that if only he had made that argument, he would have won that point, unless the wife could present proof that the church intended a gift to both spouses.

SOLELY-TITLED DEBTS:

The court also reconciled two things the equitable distribution statute says about debts that are in only one party's name: Code § 20-107.3(C) says “the court shall have no authority to order the division or transfer of . . . marital debt, which is not jointly owned or owed.” It also says the court "shall also have the authority to apportion and order the payment of the debts of the parties, or either of them, that are incurred prior to the dissolution of the marriage, based upon the [equitable distribution] factors listed in subsection E.” 

Therefore, "the court could account for the debts in the course of equitably distributing the property under Code § 20-107.3(E)."

But not only that, "Code § 20-107.3(C) ... still gives courts the option to account for those debts by ordering one spouse to pay debts in the other spouse’s name."  However, that was not actually an issue in the case. The court was simply upholding the trial court's allocation to each party of that party's own debts that were already in that party's sole name.

That apportionment, which left the husband with debts elevenfold greater than the wife's, was not a blind refusal to consider such debts: it was correctly done by considering the equitable distribution factors, e.g., "the cumulative effect of the extra-marital conduct ... was devastating and ... a significant negative nonmonetary contribution," and "wife’s positive contributions to the family, including raising the parties’ children and spending substantial time educating herself on how best to care and advocate for the child with autism."

The trial court also properly considered the “debts and liabilities of each spouse” as a factor, and  "accounted for holding husband responsible for most of the marital debts by awarding wife less of the marital property than she had sought." 

CUSTODY:

The court also approved of the trial court's reasons for awarding sole legal custody: The father was "'mostly resistant and uninvolved'", "'quick-to-anger'", “'resistant to engage in a dialogue with [wife] about child-related decisions' and lacked 'willingness to collaborate with her over the past three years'  ... 'even if an agreement is reached in the moment, [husband] takes steps afterwards to frustrate the process and recharacterize the outcome.'”  These observations in the Guardian ad Litem's report also "'coincide closely with'" the trial judge's firsthand observations.

Why was the Guardian ad Litem's report admissible evidence? The Court emphatically rejected the father's argument that "a guardian ad litem report is entitled to no more weight than a closing argument. See Wiencko v. Takayama, 62 Va. App. 217, 233 (2013) (finding that the abuse of discretion standard 'affords the trial court appropriate flexibility in determining to what extent it should rely on the recommendation of the guardian ad litem'); Bottoms v. Bottoms, 249 Va. 410, 420 (1995) (reversing trial court’s custody determination for failing to consider guardian ad litem report)."

And the trial court had authority to order sole legal custody even though the mother's pleadings did not expressly request it: "a court may award relief it deems appropriate, even if that form of relief was not specifically requested by that party. ... D’Ambrosio v. D’Ambrosio, 45 Va. App. 323, 336 (2005) ... Cloutier v. Queen, 35 Va. App. 413, 424 (2001)." And the father comprehensively  "put the question of custody before the court in his counterclaim for divorce when he asked the court to 'adjudicate issues of child custody, visitation and support of the parties’ minor children.'”

Courts don't have to give spouse any survivor benefit, nor half the marital share of retirement

The Court of Appeals upholds a divorce order that let a severely disabled military retiree keep 55% of the marital share of his retirement. Pederson v. Pederson, Va. Ct. App. Unpub. 8/2/16 His incapacity alone would justify that, the Court says, and the wife was able to earn $100,000 per year while the husband was unemployable. It also cited evidence of the wife contacting his superiors, which judges around here don't like, these days:

Evidence related to wife’s inappropriate e-mail exchanges with husband’s superior officer, her reports to authorities of alleged professional misconduct by her husband (reports that ultimately were deemed unsubstantiated by those authorities), and the circumstances surrounding husband’s decision not to accept the promotion to Wing Commander provided a sufficient basis for a reasonable factfinder to conclude that wife was less than supportive of husband’s career.

The Court also upheld the refusal to include in the retirement-division order a requirement to indemnify the wife for reducing disposable retired pay by electing disability.  Though that was considered legal at that time, nothing required the trial court to do so. 

Survivor benefits: Code § 20-107.3(G)(2) gives the court discretion to award any survivor benefit, or not to.

The opinion includes many other points about appellate procedure, life insurance beneficiary designations, and conservatorship, but I don't believe they break any new ground.

Divorce court cannot order transfer of any solely-titled property; must consider but needn't discuss every ED factor; can't award what counsel conceded wasn't sought.

The Court of Appeals in Ozfidan v. Ozfidan, Va. Ct. App. unpub. 5/5/15 ("Ozfidan I")  overturned an order for "rollover" of an IRA from husband to wife in a divorce, because §20-107.3(C) says in part, "Except as provided in subsection G, the court shall have no authority to order the division or transfer of separate property or marital property, or separate or marital debt, which is not jointly owned or owed." [Except that it may order transfer of one party's separate property in the other party's sole possession or control]

Subsection G is about dividing retirement assets. It says in part:

 The court may direct payment of a percentage of the marital share of any pension, profit-sharing or deferred compensation plan or retirement benefits, whether vested or nonvested, which constitutes marital property and whether payable in a lump sum or over a period of time. The court may order direct payment of such percentage of the marital share by direct assignment to a party from the employer trustee, plan administrator or other holder of the benefits. However, the court shall only direct that payment be made as such benefits are payable.

But the Court cites Broom v. Broom, 15 Va. App. 497, 505, 425 S.E.2d 90, 94 (1992) as "holding that an IRA is not a pension, profit-sharing or deferred compensation within the meaning of Code § 20-107.3(G)(1)". 

Unequal division of marital property: The Court says it was not error for the trial court to say it had considered all the §20-107.3(E) factors, but only to discuss some of them in its ruling.

Although the trial court must consider all factors set out in Code § 20-107.3(E), it “need not quantify or elaborate exactly what weight was given to each of the factors” as long as its findings are “based upon credible evidence.” Taylor v. Taylor, 5 Va. App. 436, 444, 364 S.E.2d 244, 249 (1988); see also, e.g., Judd v. Judd, 53 Va. App. 578, 592-93, 673 S.E.2d 913, 919 (2009). “Virginia law does not establish a presumption of equal distribution of marital assets. It is within the discretion of the court to make an equal division or to make a substantially disparate division of assets as the factors outlined in Code § 20-107.3(E) require.” Matthews v. Matthews, 26 Va. App. 638, 645, 496 S.E.2d 126, 129 (1998). “A circuit court, therefore, need not start off at the 50-yard line and then look to the discretionary factors of Code § 20-107.3(E) to move the ball marker up or down the sidelines.” Robbins v. Robbins, 48 Va. App. 466, 480, 632 S.E.2d 615, 622 (2006).

It was also appropriate to consider, and give great weight to, bad behavior that did not have any effect on the marital property. It was enough that "husband’s cruelty to wife caused the dissolution of the marriage and obviously detracted from the overall marital partnership."

But in the apportionment of debts, the trial court erred when it chose not to give the husband a $9,000 credit for his payment of marital debt, which the wife's closing argument had said was "fair" and "should" be done. It had also been on her ED forms. This specific limitation on what she was asking for was not negated by her original Complaint's general request for “all rights and remedies afforded by Section 20-107.3 of the Virginia Code” and “such other and further relief as the nature of this case may require.” A court cannot award a party more than she asked for, the Court says.

For this it cites Rosedale v. Rosedale, (Va. Ct. App. unpub. July 22, 2008), where a wife asked for 50% of an asset at trial but was awarded more of it; Brown v. Brown, 5 Va. App. 238, 245, 361 S.E.2d 364, 368 (1987) on "not seeking spousal support"; Carter v. Lambert, 246 Va. 309, 435 S.E.2d 403 (1993), and Johnson v. Buzzard Island Shooting Club, Inc., 232 Va. 32, 36, 348 S.E.2d 220, 222 (1986).

Waste was a significant issue in the trial, but was not appealed.

On spousal support, it was error to make no decision, thus leaving a juvenile court order, when the wife had not asked the divorce court to award alimony but the husband's pleadings had asked it to deny or limit alimony. This is discussed in more detail in our posting about the later "Ozfidan II" appeal opinion, after remand.

Affair taken into consideration when determining equitable distribution.

Wiley v. Wiley, 2017 Va. App. LEXIS 33 (February 14, 2017)

In this case, the court of appeals affirmed the circuit court's holding that the husband had wasted marital funds. The husband had used marital funds for some proper purposes, such as paying the marital mortgage. However, he also used marital funds to pay off his credit card. His credit card was used to furnish a lavish apartment for himself and his girlfriend. In addition to the apartment, the pair would go on multiple vacations, and enjoy expensive. The husband failed to trace all of the marital funds to proper purposes. On the date of trial, they had only approximately $50,000.00. With this evidence, it was not an abuse of discretion to find the husband had wasted marital funds. The Court of Appeals also held that the trial court was not punishing the husband for his affair when it reviewed the economic and non-economic effects of the affair when determining equitable distribution. Regarding the non-economic effects, the parties' minor child had taken the husband's "breaking up [their] family" hard. Furthermore, the husband had testified that he missed visitation with his child to vacation with his girlfriend. This behavior may have been motivated by the fact that the girlfriend had informed the husband that his relationship with his minor child was negatively impacting his relationship with her. Considering these factors, it was not an abuse of discretion to consider the effect of the affair when considering equitable distribution.

Transferring G.I. Bill benefits, PTSD, and veterans behaving badly

In a case dealing with several military issues, the Virginia Court of Appeals reversed awards to the wife of 18 months of a husband’s GI Bill benefits, non-modifiable alimony, and the entire marital share of his military retirement.

The order on the GI Bill was reversed because the benefits legally were not transferable. 38 U.S.C. § 3319 only allows such transfers during active duty, and only to a “spouse, children, or both”. After the divorce, the wife was no longer the spouse, the Court reasons.

The husband, who served in the Marine Corps from 1998 until 2011, seems to have been behaving badly and erratically. The Court upheld imputing his former income to him because he lost his job with a defense contractor for several months of poor work performance, including not showing up for work and not communicating. In 2015 he told his wife he was having an affair with his ex-wife and was leaving the marriage, and then felt suicidal and checked himself into a hospital. A year later, he was in court for a protective order hearing the day before the divorce trial, but then did not show up for the trial. His lawyer could not contact him, a continuance was denied, and so he did not get to present evidence. He later said he was being medicated for PTSD and depression, and took too much of his medication that morning, and the next day he was hospitalized in a mental ward for eight days. The trial court did not believe him. His appeal of the denials of his motion to continue, and his motion to be allowed to present evidence later, failed for the usual reasons: procedural defaults, trial judge’s discretion, and failure to cite specific resulting rulings that harmed his interests (though those were obvious and the rest of the appeal was about them). However, the Court of Appeals ended up remanding all the economic issues for a full rehearing because of the flatly illegal rulings on alimony, retirement and the G.I. Bill, so effectively it did give him his day in court.

Garrett v. Garrett, Va. Ct. App. Unpublished 4/18/17

Adultery proof unconvincing for divorce grounds, but rightly considered for property division

 A divorce court was within bounds in concluding that a wife who shared an apartment with a friend might not be committing adultery with him, Virginia's Court of Appeals says in Kidd v. Kidd. The husband said the wife had admitted the adultery, but she denied that and the trial court apparently did not believe him. The wife claimed she lived with the friend primarily so he could care for her during her cancer treatments, which the husband refused to do. The other man's wife claimed they were committing adultery, but it was not clear that she was an authoritative witness. 

But, the Court says, evidence which is not enough, under Virginia's high standards of proving and corroborating a divorce case, can still be used under the lower, more commonsensical standard for determining the behavior-related factors in property division:

The law permits the circuit court to find that a spouse has failed to meed the higher burden of proof as to the basis for the divorce, but to consider adulterout behavior as proved insofar as it related to the equitable distribution determination.

Under this standard, though, the Court upholds the 50-50 division of property, because while it was proper to take the adultery into account, that adultery was from before the couple reconciled and the husband "condoned" the adultery, and the only sign of an affair that was after the condonation, but before the final separation, was the husband's testimony.

The Court also upheld an alimony award because the wife made $34,000 and the husband made $78,000, and the wife had some medical conditions and had trouble paying her bills. The friend and the wife's father continued to support her financially, but rather than hurting her case, that was cited as evidence of her need.