Diane Harris Ragsdale v. Thomas H. Ragsdale ( 1999 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Willis, Bray and Annunziata
Argued at Norfolk, Virginia
DIANE HARRIS RAGSDALE
v. Record No. 1792-98-1
THOMAS H. RAGSDALE OPINION BY
JUDGE ROSEMARIE ANNUNZIATA
THOMAS H. RAGSDALE JULY 27, 1999
v. Record No. 1797-98-1
DIANE HARRIS RAGSDALE
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
H. Thomas Padrick, Jr., Judge
Carl W. Isbrandtsen for Diane Harris
Ragsdale.
Moody E. Stallings, Jr. (Kevin E.
Martingayle; Stallings & Richardson, on
briefs), for Thomas H. Ragsdale.
Diane Harris Ragsdale (“wife”) and Thomas H. Ragsdale
(“husband”) have separately appealed various rulings of the
trial court. Wife contends the court erred by decreeing in its
amended final decree of divorce that she is not entitled to
receive: (1) the amount by which her share of the parties’
investment accounts appreciated in value between March 31, 1997
and the date of distribution; and (2) interest on that portion
of the equitable distribution award reflecting her share of
husband’s medical practice. Husband contends the court erred
by: (1) awarding wife child support in excess of the statutory
guidelines amount; and (2) awarding wife attorney’s fees and
costs. We find no error in the trial court’s rulings and affirm
its decision.
I.
VALUATION AND DISTRIBUTION OF INVESTMENT ACCOUNTS
Husband and wife were married on June 21, 1980 in Memphis,
Tennessee. The parties had two children: Anne Lacey Ragsdale,
born December 3, 1985, and James Andrew Ragsdale, born May 24,
1987. On August 15, 1995, wife filed a bill of complaint
seeking a divorce on the ground of adultery. Husband filed his
answer to the bill of complaint on August 30, 1995. On December
8, 1995, the court entered a “Decree Pendente Lite” enjoining
each party “from transferring, encumbering or disposing of any
marital asset without the prior consent of both parties or leave
of this Court.” Notwithstanding the entry of the court’s
pendente lite decree, husband transferred marital funds in
several investment accounts to his individual retirement account
where the funds lost earnings because of a decrease in the
applicable rate of interest.
In order to arrive at an accurate valuation of the funds
which had been transferred from the marital accounts to
husband’s separate account, the parties entered a consent order
on April 21, 1997, stating that, “[f]or the purposes of
equitable distribution, the plaintiff and the defendant are each
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entitled to fifty-percent of the value of all of the marital
property.” A second consent order entered on the same day
provided as follows:
The starting valuation date in connection
with all marital investments and retirement
accounts shall be on the date of separation,
however, the parties shall submit evidence
as to the rate of appreciation of all
accounts, so that ultimately, using
financial information obtained through
March, 1997, the Commissioner shall
determine what value each account would have
as of March 31, 1997 . . . .
At a May 1, 1997 hearing before the Commissioner, wife
introduced an exhibit, prepared with the cooperation of both
parties’ accountants, showing the value of the parties’
investment accounts as of the date of separation, 1 the actual
value of the accounts on March 31, 1997, and the “pro-forma”
value of the accounts on March 31, which reflected their value
after factoring in the appreciation in value the accounts would
have generated had husband not withdrawn any funds after the
parties’ separation. The pro-forma value of the accounts was
stated to be $696,265. When wife moved to introduce Exhibit 16,
counsel for both parties had the following discourse before the
Commissioner:
[Husband’s Counsel]: Mr. Commissioner, I
think we have an agreement in theory. There
is some mechanism that my client is
concerned about how it’s going to be done.
1
The separation date is listed as August 18, 1995.
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If I understand what [wife’s counsel] is
presenting, so the Commissioner understands,
there’s a figure of six hundred and
ninety-six thousand two hundred and
sixty-five dollars. It’s my understanding
that what [wife’s counsel’s] position is,
that will be divided equally, with a
transfer going in a QUADRO to [wife], with
her receiving credit for assets that are
already in her name.
[Wife’s Counsel]: That’s exactly correct.
The last two entries [on the exhibit], which
are the HR-10 entries, are [husband’s]
retirement account. We will prepare a
QUADRO and he will transfer fifty percent of
the value, fifty percent of the value on
3-31-97, whatever that math turns out to be,
fifty percent by way of a QUADRO to [wife].
In his report filed on September 3, 1997, the Commissioner
recommended that each party be awarded fifty percent of the
value of the investment accounts as of March 31, 1997, which
equaled $348,132.50. The Commissioner did not recommend an
award providing for the equitable distribution of any
appreciation in the investment accounts accruing after the March
31 valuation date.
Wife filed an exception to the Commissioner’s failure to
recommend that she be awarded appreciation in the value of her
half of the accounts accruing between March 31, 1997 and the
date husband transferred the award. Wife asserted that the
failure to make such an award violated the parties’ April 21,
1997 consent order, which provided that each party is entitled
to fifty percent of the value of all marital property.
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In its final decree of divorce entered March 13, 1998, the
trial court sustained wife’s exception to the Commissioner’s
report and agreed that wife was entitled to any appreciation in
the accounts accruing between March 31, 1997 and the date of the
transfer. Both parties sought reconsideration of the court’s
ruling, after which the court modified the final decree by
letter. Citing Code § 20-107.3(A) and Fahey v. Fahey, 24 Va.
App. 254, 481 S.E.2d 496 (1997) (en banc), the court reversed
itself on the issue of appreciation, according the investment
accounts the value which was established at the Commissioner’s
hearing and ruling that any appreciation enjoyed by the accounts
after the valuation date would be awarded to husband as the
holder of the accounts. 2
2
The court’s amended final decree of divorce, subsequently
entered on July 8, 1998, reads in pertinent part:
The value of [the] investment accounts
as of March 31, 1997, $696,265.00, was
agreed upon. Each party is entitled to 50%
of the value of the investment accounts, or
$348,132.50 . . . .
The parties have agreed, pursuant to
the Consent Order of this Court dated April
21, 1997, paragraph 7, that the plaintiff
and the defendant are each entitled to 50%
of the value of all marital property, and
said investment accounts are marital
property.
The plaintiff is not entitled to
appreciation on said investment accounts
from March 31, 1997 until the date of
transfer or payment of the equitable
distribution award. Any appreciation or
depreciation of the investment accounts
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We find no error in the decision of the court to exclude
from wife’s award any appreciation of the investment accounts.
Wife’s reliance on Wagner v. Wagner, 16 Va. App. 529, 431 S.E.2d
77 (1993) (en banc), and Mitchell v. Mitchell, 4 Va. App. 113,
355 S.E.2d 18 (1987), is misplaced. 3 In neither of these cases
had the parties agreed to the date upon which the assets in
question were to be valued. Indeed, as we noted in Mitchell,
the trial court’s authority to select a valuation date arises in
the absence of an agreement between the parties. See id. at
118, 355 S.E.2d at 21. Here, by consent order, both husband and
wife agreed to the date to be used for valuating the investment
funds, stating that evidence of their value as of March 31, 1997
was to be presented for the Commissioner’s consideration.
Moreover, both parties represented before the Commissioner that
they had agreed to equally divide the investment accounts by
their pro-forma value as of March 31, 1997. The parties are
shall inure to the benefit (or detriment) of
the party holding that asset, for the
reasons stated in the Court’s letter opinion
dated May 18, 1998 . . . .
3
In Mitchell, we held that, in the absence of an agreement
between the parties as to the valuation date of marital
property, the trial court must value the property in a manner
that will provide the most current and accurate information
available and that avoids inequitable results. See Mitchell, 4
Va. App. at 118, 355 S.E.2d at 21. In Wagner, we affirmed the
trial court’s decision to re-value marital property upon remand
of the case because such re-valuation enabled the court to
obtain the most accurate valuation and equitable distribution.
See Wagner, 16 Va. App. at 531-32, 431 S.E.2d at 78-79.
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bound by that agreement. See Lockhart v. Baxter, 12 Va. App.
600, 605, 405 S.E.2d 434, 437-38 (1991) (finding no abuse of
discretion in the trial court’s award of attorney’s fees to wife
when evidence demonstrated that husband voluntarily signed a
consent order and property settlement agreement providing for
the payment of such fees).
Although the trial court erroneously relied on Fahey in
denying wife’s motion for an award reflecting appreciation in
the investment accounts, we will not disturb the trial court’s
decision because it reached the correct result. 4 See Dziarnowski
v. Dziarnowski, 14 Va. App. 758, 762, 418 S.E.2d 724, 726 (1992)
(“When a trial court reaches the correct result for the wrong
reason, its judgment will be upheld on appeal.”).
II.
INTEREST ON THE AWARD OF HUSBAND’S MEDICAL PRACTICE
In the final decree of divorce entered March 13, 1998, the
trial court valued husband’s medical practice at $70,000 and,
pursuant to the parties’ agreement to divide all marital
property equally, ordered husband to pay wife $35,000. Upon
4
Fahey is inapposite. In that case, we found that a
modification of a qualified domestic relations order was
precluded solely by the dictates of Code § 20-107.3(K)(4), the
statutory provision which limits a court’s authority to modify
any order affecting any pension plan or retirement benefits.
See Fahey, 24 Va. App. at 256-57, 481 S.E.2d at 497. The sole
issue addressed in Fahey is not presented here.
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wife’s motion for reconsideration of the final decree, the court
set aside the final decree on April 3, 1998, “in order to give
the parties and the [c]ourt time to resolve certain issues.”
At a hearing on May 15, 1998, the court heard argument as
to whether wife was entitled to receive the appreciation in
value of her share of the accounts. On July 8, 1998, the court
entered the amended final decree of divorce, modifying its
position as to the distribution of the parties’ investment
accounts but leaving unchanged the court’s original award of
$35,000 to wife as her share of husband’s medical practice.
On appeal, wife does not dispute the court’s valuation of
the practice. Rather, wife asks that she be awarded pre-decree
and post-decree interest on her share of the medical practice
from March 31, 1997, the date of valuation, until the date that
husband actually paid her share of the award after the entrance
of the amended final decree of divorce, some sixteen months
later.
Code § 8.01-382 provides in relevant part as follows:
In any action at law or suit in equity, the
verdict of the jury, or if no jury the
judgment or decree of the court, may provide
for interest on any principal sum awarded,
or any part thereof, and fix the period at
which the interest shall commence. The
judgment or decree entered shall provide for
such interest until such principal sum be
paid. If a judgment or decree be rendered
which does not provide for interest, the
judgment or decree awarded shall bear
interest from its date of entry, at the rate
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as provided in § 6.1-330.54, and judgment or
decree entered accordingly . . . .
As established by the Supreme Court of Virginia in Dairyland
Ins. Co. v. Douthat, Code § 8.01-382 “draws an important
distinction between prejudgment and postjudgment interest.” 248
Va. 627, 631, 449 S.E.2d 799, 801 (1994).
The award of prejudgment interest is discretionary, a
matter committed to the trier of fact, “who ‘may provide for’
such interest and fix the time of its commencement.” Id. See
Marks v. Sanzo, 231 Va. 350, 356, 345 S.E.2d 263, 267 (1986)
(stating that “whether interest should have been awarded and, if
so, from what date interest should run, were matters within the
sound discretion of the chancellor”). “‘[P]rejudgment interest
is normally designed to make the plaintiff whole and is part of
the actual damages sought to be recovered.’” Dairyland, 248 Va.
at 631, 449 S.E.2d at 801 (quoting Monessen Southwestern Ry. v.
Morgan, 486 U.S. 330, 335 (1988)).
The award of prejudgment interest is to
compensate Plaintiff for the loss sustained
by not receiving the amount to which he was
entitled at the time he was entitled to
receive it, and such award is considered
necessary to place the [plaintiff] in the
position he would have occupied if the party
in default had fulfilled his obligated duty.
Marks, 231 Va. at 356, 345 S.E.2d at 267 (quoting
Employer-Teamsters, Etc. v. Weatherall Concrete, 468 F. Supp.
1167, 1171 (1979)).
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In this case, we find no abuse of discretion in the trial
court’s failure to award interest to wife on her share of
husband’s medical practice before the entry of the court’s
amended final decree of divorce. Husband had no obligation to
pay wife her share of the practice until the court made its
equitable distribution award and ordered him to make payment in
accordance with it. See Decker v. Decker, 22 Va. App. 486, 493,
471 S.E.2d 775, 778 (1996) (stating that a court may speak only
through its written orders). Although the court originally
awarded wife $35,000 for the practice by its final decree of
March 13, 1998, the court set aside that decree. Thus, wife was
not entitled to her share of husband’s practice until the court
reinstated wife’s award by the amended final decree of divorce
of July 8, 1998. See Marks, 231 Va. at 356, 345 S.E.2d at 267
(stating that prejudgment interest is intended to compensate a
plaintiff for losses “‘sustained by not receiving the amount to
which he was entitled at the time he was entitled to receive it
. . . .’” (quoting Employer-Teamsters, 468 F. Supp. at 1171)).
In contrast to the discretionary nature of prejudgment
interest, wife is entitled to post-decree interest on her
equitable distribution award as a matter of law. See Dairyland,
248 Va. at 631, 449 S.E.2d at 801. By statute, a judgment or
decree that does not provide for interest “shall bear interest
from its date of entry” at the rate established by Code
§ 6.1-330.54. See Code § 8.01-382. “[P]ostjudgment interest is
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not an element of damages, but is a statutory award for the
delay in the payment of money actually due.” Dairyland, 248 Va.
at 632, 449 S.E.2d at 801.
However, we find that wife is not entitled to receive
post-decree interest on her share of husband’s practice. The
amended decree instructed husband to pay wife her share within
thirty days of its entry. Wife does not allege, nor does the
record reflect, that husband failed to transfer her share within
the time allotted by the court. Thus, there has been no “delay
in the payment of money actually due” that might justify the
award of postjudgment interest in this case. See id.
III.
CHILD SUPPORT
Husband argues that the trial court erred by deviating from
the child support guidelines in consideration of the expenses
being incurred for the payment of his children’s tuition at a
private school. Husband does not dispute his ability to pay for
his children’s private education but contends the court’s
decision was erroneously based on wife’s claim that the parties
had agreed to provide private schooling for their children.
Husband argues, in the alternative, that he never agreed to
continue paying for the children’s private education after
divorce and that, even had the parties reached such an agreement
during the marriage, it could not bind either of them once the
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marriage dissolved. We find husband’s arguments unpersuasive as
he mischaracterizes the basis for the court’s award.
In his September 3, 1997 report, the Commissioner reported:
[b]ased on the financial circumstances of
the parties, $1,500 per month would be an
appropriate amount of child support,
however, so long as the children are in
Norfolk Academy, a circumstance agreed upon
by both parties, the amount of child support
should be $2,000 per month.
The trial court agreed that husband should pay child
support in excess of the guidelines set forth in Code § 20-108.2
and required him to pay $2,315.02 per month. The court’s
decision to deviate from the guidelines amount was properly
based on numerous considerations, of which the parties’
agreement was only one. The court incorporated the following
remarks at a hearing on February 6, 1998 into the amended final
decree of divorce:
[I] find[] . . . that the parties had agreed
the children should go [to Norfolk Academy],
that they have been there from the beginning
of their education. It would be disruptive
to change that procedure. The standard of
living which was created during the marriage
allowed them to go to this particular
private school and it was established that
this would be the case during the marriage.
Also, that’s included up under the thirteen
contributions, monetary, nonmonetary, of
each party to the well-being of the family,
and also other factors because, as I have
mentioned previously, the children’s routine
would be disrupted and the reason the
parties are divorcing is because of the
father’s adultery.
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“The determination of child support is a matter of
discretion for the trial court, ‘and such awards will not be
reversed on appeal unless plainly wrong or unsupported by the
evidence.’” Vissicchio v. Vissicchio, 27 Va. App. 240, 253, 498
S.E.2d 425, 432 (1998) (quoting Young v. Young, 3 Va. App. 80,
81, 348 S.E.2d 46, 47 (1986)). Although the amount of child
support called for by the guidelines set forth in Code
§ 20-108.2 is presumptively correct, this presumption may be
rebutted by evidence pertaining to, inter alia, the ability of
each party to provide child support, the best interests of the
child, the standard of living enjoyed by the family during the
marriage, and other factors “necessary to consider the equities
for the parents and children.” Code § 20-108.1(B). See Niemiec
v. Dep’t of Soc. Servs., Div. of Child Support Enforcement, 27
Va. App. 446, 450-51, 499 S.E.2d 576, 579 (1998). Moreover, in
Solomond v. Ball, we stated that a parent may be required to pay
for private educational expenses, even though such expenses
exceed the guidelines, when there is a demonstrated need for the
child to attend private school and the parent has the ability to
pay. See 22 Va. App. 385, 391, 470 S.E.2d 157, 160 (1996).
Among the factors that are relevant to determining whether there
is a need for private education, the court may consider the
child’s “attendance at private school prior to the separation
and divorce” and the family’s tradition. See id.
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We find that the court considered the relevant factors in
making its award of child support and that a deviation from the
guidelines amount was warranted. The evidence establishes the
children’s need to continue their private education at Norfolk
Academy. During the marriage, the parties sent their children
to private school. Both children attended Norfolk Academy
before the parties’ separation and continued to do so after the
separation. Based on the children’s prior and continuing
attendance at Norfolk Academy, and the disruption to the
children’s education that would necessarily accompany a transfer
to public school, we find that the evidence demonstrates the
children’s need to continue their education at Norfolk Academy.
Moreover, given the success enjoyed by the children at Norfolk
Academy, the evidence supports the conclusion that their
continued attendance at the Academy is in their best interest
and avoids the inequitable result of penalizing them as a
consequence of their parents’ separation and divorce.
Accordingly, we affirm the trial court’s decision to deviate
from the child support guidelines in making its child support
award.
IV.
AWARD OF ATTORNEY’S FEES
Husband also contends the trial court erred in awarding
attorney’s fees and various costs to wife. In his report, the
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Commissioner addressed the issue of attorney’s fees and costs as
follows:
[W]ife has submitted a statement for
attorney’s fees in the amount of $28,427.50
and costs of $4,426.58 . . . . Having
observed the conduct of the parties and
counsel and considering the evidence,
including . . . wife’s statement for
attorney’s fees, this Commissioner is of the
opinion that much of the time spent prior to
the hearing was generated by ill feeling
between the parties resulting in extensive
efforts and procedures that would otherwise
not have been necessary. Evidence in the
record does not explain or justify the
amount of the award sought by . . . wife.
The key to a proper award of counsel fees is
reasonableness under all the circumstances.
Cooke v. Cooke, 23 Va. App. 60, 65, 66
(1996). Accordingly, your Commissioner
recommends that . . . wife be reimbursed in
the amount of $15,000 for attorney’s fees
and $3,000 for costs. In addition, . . .
wife has submitted a statement in the amount
of $11,450 . . . in accounting fees. Of
that amount, she should be reimbursed
$4,200.
After overruling both parties’ exceptions to the Commissioner’s
report, the trial court adopted the Commissioner’s
recommendations and awarded wife $15,000 for attorney’s fees,
$3,000 for costs, and $4,200 for accounting fees.
Husband argues wife “over-litigated” her case as a trial
tactic, driving up her attorney’s fees and costs unnecessarily.
Without citing any examples from the record, husband alleges
that wife caused an “absurd number” of court appearances, an
“excessive amount” of discovery, and “endless fighting over the
most infinitesimal details.” With respect to the trial court’s
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award of costs, husband contends “[t]he record is devoid of any
support for [the] bill from [wife’s] accountant, and there is no
reason why [he] should be responsible for paying . . . copying
and other litigation expenses . . . .” We find no merit in
husband’s contentions and affirm the decision of the trial
court.
The award of attorney’s fees is committed to the sound
discretion of the trial court and is reviewable on appeal only
for an abuse of discretion. See Theismann v. Theismann, 22 Va.
App. 557, 574, 471 S.E.2d 809, 817, aff’d upon reh’g en banc, 23
Va. App. 697, 479 S.E.2d 534 (1996); Poliquin v. Poliquin, 12
Va. App. 676, 681, 406 S.E.2d 401, 405 (1991). “Where the
husband is in a clearly superior financial position and his
infidelity precipitated dissolution of the marriage, the trial
court may properly award attorney’s fees to the wife.”
Theismann, 22 Va. App. at 574, 471 S.E.2d at 817. The key to a
proper award of fees is “reasonableness under all of the
circumstances revealed by the record.” Westbrook v. Westbrook,
5 Va. App. 446, 458, 364 S.E.2d 523, 530 (1988).
Here, husband’s infidelity precipitated the dissolution of
the parties’ marriage, and husband was in a clearly superior
financial position. Husband’s gross income as a physician was
determined to be $14,500 per month. In comparison, wife did not
work outside the home during much of the marriage and had only
re-entered the work force as a teacher several months prior to
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the parties’ separation. Furthermore, the record fails to
support husband’s allegation that wife unnecessarily prolonged
the litigation as a trial tactic to drive up costs, and wife
presented detailed billing statements in support of her petition
for attorney’s fees.
In short, the trial judge had sufficient evidence to
determine the reasonableness of the attorney’s fees requested by
wife and to make its award. Accordingly, we do not find any
abuse of discretion in the trial court’s decision on this issue.
See Poliquin, 12 Va. App. at 681, 406 S.E.2d at 405.
We further find that the court properly awarded $7,200 in
accountant fees and litigation costs and that its award was
based on the evidence presented.
The decision of the trial court is affirmed. 5
Affirmed.
5
Wife’s request for an award of attorney’s fees and costs
incurred on these appeals is denied.
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