Virginia Family Law Appeals

Doctor can reduce work hours and alimony payments at 66; complex property settlement FUBAR by unforeseen events

The Court of Appeals upholds a reduction in alimony for a 66-year-old anesthesiologist who reduced his brutal work hours and planned to fully retire, and who testified that that was consistent with other anesthesiologists his age, in Gadpaille v. Gadpaille, unpublished 7/10/2018.

The trial court in that case also dealt with marital home sales proceeds that were supposed to be offset against a retirement account division and other sums under the PSA, but which ended up being "a deficiency", apparently a negative number, after accounting for repair costs, fire damage, and reduced insurance coverage. The appeals court finds that the trial court did not rewrite the PSA, but rather, correctly "considered the totality of the parties’ agreement as expressed" in the PSA and in a later consent order, and applied that agreement to the unforeseen circumstances.

Corporate balance sheet doesn't determine business value -- Henderson v. Henderson

 The Court of Appeals upholds valuation of a business based on the net value of its assets, not the capital figure on its balance sheet, in 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.

 Husband owned a minority share of a partnership whose only asset was a piece of real estate. He testified that the loan on it exceeded its value, so the court valued it at zero. Wife argued that husband should be bound by the "Total Capital" figure on a balance sheet for the company. The Court holds that the trial court had the discretion to believe the husband, or to find that no adequate evidence of value had been presented, and that the wife had the burden of proving the asset's value because it was she who was seeking equitable distribution and valuation of the asset.

Although a court “may not arbitrarily refuse to classify or evaluate marital or separate property where sufficient evidence to do so is in the record,” it is the duty of the court in the first instance to determine whether the record contains “credible evidence of value.” See id. “[W]here the corporation is a real estate holding company,” valuation based upon the fair market value of “the corporation’s net assets has gained wide acceptance.” Bosserman v. Bosserman, 9 Va. App. 1, 8-9, 384 S.E.2d 104, 109 (1989).

Even though it found no value in the asset, the trial court still needed to classify it as harmless error, but this was harmless error since no value was proven, the Court says.

The wife's lawyer tried to get the husband to give lay testimony of the value of his own property by showing him the balance sheet and having him read it. That doesn't do the trick, the Court says. Besides, the sheet was over two years old and there was no testimony about the context in which it was created, which the Court says could make it legitimately different from an appropriate valuation for divorce purposes.

One-signature deed between "Tenants by Entirety" is valid, but exception means don't do any more of them.

Generally, a tenancy by the entireties cannot be affected or compromised by anything that only one spouse does; and it ends only when both spouses sign a deed, or upon divorce or death. But when one spouse signs a deed transferring his whole interest to the other spouse, that will generally do the job, even without the other spouse's signature, the Virginia Supreme Court says in Evans v. Evans (6/4/2015). The only exception would be if the recipient does not do anything to accept the transfer, and the transfer would be against the recipient's interest -- for example, if the transfer makes the property vulnerable to the recipient's individual creditors, the Court says.

In this case, the Court says, the signing of the deed shows the husband's intent; and the wife showed her acceptance of the transfer by signing a will, a deed and a trust which treated the property as her sole property and conveyed it. The trial court's declaratory judgment that the property did not belong to the wife's trust is reversed, and the Supreme Court issues a final judgment declaring that it is the trust's property.

Such one-party deeds to a couple's tenancy by the entireties real estate have been extremely common, especially since multi-state banks were legalized, and banks based out-of-state started demanding "quitclaim" deeds, which in Virginia are the weakest, most unreliable kind of deed. It is fortunate that the Supreme Court did not invalidate the chain of title to virtually every property that was ever transferred in a divorce.

However, because the Court noted the exceptional circumstances where the deed might be disregarded, that means that we should always have deeds in divorce cases signed by both parties. The Court's ruling is completely reasonable, but it would probably be better to be more simple and absolute, and not so reasonable. Without an absolute rule that such deeds are always valid, no title insurance company will want to see any more new deeds that are "almost certainly valid but maybe not in certain situations." The whole system of deeds and land records is designed to make public records that make the ownership of every piece of real estate absolutely clear and reliable. And most law on deeds is designed not only to do justice between the two parties, but to give everyone else certainty about who owns what. So let's pause to appreciate this finely nuanced ruling, and then proceed to never again do what it allows.

“We must discern the meaning of ‘present’.” -- Va.Sup.Ct. on @#$% drafting nightmare in shoreline case

“We must discern the meaning of ‘present’,” the Virginia Supreme Court says, construing a 1936 road easement that ran “along present mean high water” level. Did the easement in White Marsh Beach, Hampton, move as the shoreline moved, or did it stay where it was, and sink beneath the waves?

 The damnable slipperiness of the terms “current” and “present” epitomize the difficulty of legal drafting, of trying to use words to reach across time and impose a coherent will on a changing world. Do these words mean at the time the words are written, signed, ratified or legislated?  Or at the time when they are read, interpreted, applied? I and other lawyers struggle with that in family law, and so did the property lawyers, judge and justices in Marble Technologies, Inc. v. Mallon (6/4/15). 

A deed, with a map attached, reserved a road easement “Along Present Mean High Water.” It also gave precise compass points for one end of the road and a slight bend in it, and referred to a stake marking one end.

The Court resorted to Webster’s Dictionary, which defined “present” as “now existing or in progress: begun but not ended: now being in view, being dealt with, or being in consideration at this time: not past or future: contemporary.”

And especially since there were fixed “metes and bounds” and a fixed point involved, there was no ambiguity, and no indication that the easement was moveable, Justice Goodwyn wrote.

So the Court reverses the Circuit Court’s decision that the easement moved. And it finds that the easement is extinguished because it cannot be used for its original purpose, as a road, as it is now under the Chesapeake Bay.