Robert E. Young, Jr. v. Mary Patricia Young ( 2000 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Annunziata and Frank
Argued at Alexandria, Virginia
ROBERT E. YOUNG, JR.
MEMORANDUM OPINION * BY
v. Record No. 2380-99-4 JUDGE LARRY G. ELDER
APRIL 4, 2000
MARY PATRICIA YOUNG
FROM THE CIRCUIT COURT OF FAUQUIER COUNTY
Carleton Penn, Judge Designate
Julia S. Savage (Walker, Jones, Lawrence,
Duggan & Savage, P.C., on briefs), for
appellant.
Robin C. Gulick (Robin C. Gulick, P.C., on
brief), for appellee.
Robert E. Young, Jr., (husband) appeals from a decision of
the Fauquier County Circuit Court (trial court) denying his
request for a reduction in spousal support payments to Mary
Patricia Young (wife), his former wife. On appeal, husband
contends the trial court erroneously (1) excluded his testimony
about wife's education, employment history and marketable
skills; (2) granted wife's motion to strike at the conclusion of
husband's evidence; and (3) awarded wife attorney's fees. We
hold the trial court erroneously excluded husband's testimony
and applied the improper standard in ruling on the motion to
* Pursuant to Code § 17.1-413, recodifying Code
§ 17-116.010, this opinion is not designated for publication.
strike. Therefore, we reverse and vacate the ruling of the
trial court on all issues and remand for further proceedings
consistent with this opinion.
The parties separated after twenty years of marriage and
entered into a spousal support and property settlement agreement
on July 24, 1996. The final decree of divorce, entered August
12, 1996, affirmed, ratified and incorporated the parties'
agreement and paraphrased the terms relating to spousal support,
providing as follows:
[Husband] shall pay to [wife], as
maintenance and support, the sum of
$5,875.00 per month . . . . Said
maintenance and support payments shall
terminate upon the death of either party or
Wife's remarriage, whichever event occurs
first. Wife and Husband reserve the right
to petition a court of competent
jurisdiction to modify the amount of
maintenance and support based upon a
significant change of financial
circumstances of either party.
At the hearing on husband's request for a modification of
support, husband testified and offered evidence from a
vocational expert about husband's decrease in earning capacity
and wife's increase in earning capacity. On wife's motion to
strike husband's evidence, the trial court ruled husband "failed
to meet the burden of showing a material change in circumstances
by a preponderance of the evidence" because he bore the risk of
income reduction that came with his job change. The trial court
expressly did not reach the issue of wife's employability,
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holding that husband was obliged to pay support under the terms
of the parties' agreement and "there's no condition set out in
[the relevant portion of the agreement] that would require her
to seek employment if he voluntarily reduced his income." The
court then granted wife's request to require husband to pay her
attorney's fees.
In ruling on a motion to strike at the end of a plaintiff's
evidence,
the trial court [must] accept as true all
the evidence favorable to the plaintiff as
well as any reasonable inference a jury
might draw therefrom which would sustain the
plaintiff's cause of action. The trial
court is not to judge the weight and
credibility of the evidence, and may not
reject any inference from the evidence
favorable to the plaintiff unless it would
defy logic and common sense.
Austin v. Shoney's, Inc., 254 Va. 134, 138, 486 S.E.2d 285, 287
(1997). This same standard applies to an appellate court's
review of a trial court's decision to strike the evidence in a
bench trial. See Claycomb v. Didawick, 256 Va. 332, 335, 505
S.E.2d 202, 204 (1998).
When a trial court determines the amount of spousal support
to be paid pursuant to Code § 20-107.1, the court retains the
power to modify the award of support. See Code § 20-109. A
party requesting modification must prove a material change in
circumstances that warrants modification of support. See Furr
v. Furr, 13 Va. App. 479, 481, 413 S.E.2d 72, 73 (1992). The
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material change "must bear upon the financial needs of the
dependent spouse or the ability of the supporting spouse to
pay." Hollowell v. Hollowell, 6 Va. App. 417, 419, 369 S.E.2d
451, 452 (1988). "Spouses deemed entitled to support have the
right to be maintained in the manner to which they were
accustomed during the marriage, but their needs must be balanced
against the other spouse's ability to pay." Floyd v. Floyd, 1
Va. App. 42, 45, 333 S.E.2d 364, 366 (1985). A spouse seeking
support "is obligated to earn as much as he or she reasonably
can to reduce the amount of the support needed." Srinivasan v.
Srinivasan, 10 Va. App. 728, 734, 396 S.E.2d 675, 679 (1990).
This requirement flows from the language of Code § 20-107.1,
which "directs the trial court to consider . . . the earning
capacity of the 'parties.'" Srinivasan, 10 Va. App. at 734, 396
S.E.2d at 679.
Here, the parties agreed on the amount of spousal support
and did not ask the trial court to make a determination pursuant
to Code § 20-107.1. Although any modifications to the spousal
support upon which the parties agreed must be made in compliance
with the agreement, see Code § 20-109, the relevant terms of the
parties' agreement here are in keeping with the law which
applies in the absence of an agreement. Both permit
modification on a "significant" or "material" change in the
financial circumstances of either party.
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Under the terms of the parties' agreement, we hold the
trial court erred in granting wife's motion to strike husband's
evidence. First, the trial court erroneously determined that
wife had no duty under the parties' agreement to seek
employment. Although no express provision of the agreement
required wife to seek employment, the agreement specifically
permits modification upon a change in the financial
circumstances of either party. Evidence that wife was able to
work and earn an income and that she was unable to do so at the
time the parties executed the agreement would establish a change
in circumstances. See Pellegrin v. Pellegrin, __ Va. App. ___,
___, ___ S.E.2d ___, ___ (2000) (holding that parties' agreement
upon divorce, under which husband was obligated to pay tuition
for wife's education and was entitled to a reduction in spousal
support payments to wife if she attained a certain level of
income, contained implicit requirement that wife would make
reasonable effort to obtain employment).
On wife's motion to strike, the trial court was required to
view the evidence and all reasonable inferences therefrom in the
light most favorable to husband. 1 So viewed, the evidence
supported a finding that at the time the parties signed the
separation agreement, wife was a recovering alcoholic who was
unable to work "because of her rehabilitation program and her
1
Of course, the trial court would be free to make a
contrary finding after hearing all the evidence.
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admissions for alcoholism." Wife underwent eight
hospitalizations for her alcoholism between 1992 and 1995 and
attended up to three Alcoholics Anonymous meetings each day.
Husband's vocational expert testified that wife's history of
repeated hospitalization could have affected her employability
after only one year of sobriety. In contrast, the evidence
established that at the time of the hearing on husband's request
to reduce spousal support, wife was immediately employable in
the Warrenton area in a variety of different positions and had
an initial annual earning capacity of $15,600 to $17,690. This
evidence required the trial court to deny wife's motion to
strike.
We hold the trial court also erred in concluding husband's
evidence, viewed in the light most favorable to husband, failed
to prove a material change in circumstances as to his own
earning capacity. 2 So viewed, the evidence supported a finding
that when the parties executed the settlement agreement,
husband's last full year of income from his medical practice in
1995 was $366,000--$352,000 in earned income and the remainder
from rental of the practice's office building--and that his
income at the time of the settlement agreement in 1996 was on
track with his 1995 earnings. His job-earned income for all of
2
Again, the trial court would have been within its
authority to reach these conclusions after hearing all the
evidence.
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1996, while he was still in private practice in Warrenton, was
$265,000, a reduction of $87,000 from the previous year. This
was also a reduction of $65,000 from the 1993-to-1995 average of
$330,000. Husband testified that this decline resulted from an
increase in competition among area obstetricians, changes in
healthcare reimbursement rates and various other causes, and was
one of several factors motivating his departure from the
practice and his move to Michigan. After his arrival in
Michigan, his income decreased further due in part to changes in
federal law for medicaid reimbursement. Husband's vocational
expert testified that the average income range in Adrian,
Michigan, for obstetricians of husband's level of experience was
comparable to or greater than the average income range in
Warrenton, Virginia. By the time of the hearing on husband's
request for modification of support, husband's salary had
decreased to $200,000 per year.
In granting the motion to strike, the trial court relied on
husband's income tax returns which showed an increase rather
than a decrease in his gross income between 1996 and the time of
the hearing. However, husband testified that some of the income
reflected on his tax returns resulted from the tax consequences
to him from carrying out certain requirements of the parties'
property settlement. Wife rather than husband received a
portion of the funds on which husband was taxed, thereby
artificially inflating the annual income listed on husband's tax
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returns. Also, other non-salary portions of his income resulted
from the forced sale of assets he received in the equitable
distribution, which could not be counted in their entirety as
income to him. See Barker v. Barker, 27 Va. App. 519, 529-30,
500 S.E.2d 240, 245 (1998) (holding that earnings on assets
received in equitable distribution must be considered in
determining spousal support but that it is error to consider
assets themselves as income).
Therefore, the evidence, viewed in the light most favorable
to husband, supported a finding that wife's earning capacity had
increased materially and that husband's earning capacity had
decreased materially, through no fault of his own, since the
parties entered into the spousal support agreement. For these
reasons, we hold the trial court committed reversible error in
granting wife's motion to strike.
Husband also contends the trial court erroneously excluded
portions of his testimony on wife's employment history and
marketable skills. We agree. A trial court's refusal to admit
evidence is reversible upon a showing of an abuse of discretion.
See Blain v. Commonwealth, 7 Va. App. 10, 16, 371 S.E.2d 838,
842 (1988). As set out above, wife's ability to earn an income
was relevant to establishing whether a material change in
circumstances justifying a modification of support had occurred
since the parties executed the property settlement agreement
and, if so, in determining wife's current earning capacity. See
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Srinivasan, 10 Va. App. at 734, 396 S.E.2d at 679; Hollowell, 6
Va. App. at 419, 369 S.E.2d at 452. Any marketable skills and
abilities wife demonstrated during the marriage, absent evidence
she no longer possessed those skills or abilities, were
probative of her earning capacity at the time of the hearing.
Therefore, the trial court abused its discretion in excluding
husband's testimony on wife's ability to quilt and smock and her
successful operation of a horse training business.
Husband also challenges the trial court's award of
attorney's fees to wife. Because we reverse and vacate the
trial court's ruling on wife's motion to strike, we also vacate
the award of attorney's fees. 3
For these reasons, we hold the trial court erroneously
excluded husband's testimony and applied the improper standard
in ruling on the motion to strike. Therefore, we reverse and
vacate the ruling of the trial court on all challenged issues
and remand for further proceedings consistent with this opinion.
Reversed, vacated and remanded.
3
This ruling does not preclude the court from entertaining
another request for attorney's fees if wife prevails on remand
following a hearing on all the evidence.
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