Diane P. Howard v. Rickard K. Howard ( 2010 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Alston and Senior Judge Clements
Argued at Richmond, Virginia
DIANE P. HOWARD
v. Record No. 2987-08-2
RICHARD K. HOWARD MEMORANDUM OPINION * BY
JUDGE ROSSIE D. ALSTON, JR.
DIANE P. HOWARD JANUARY 26, 2010
v. Record No. 0409-09-2
RICHARD K. HOWARD
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
Frederick G. Rockwell, III, Judge
Mollie C. Barton (Andrea R. Stiles; Batzli Wood & Stiles, P.C., on
briefs), for appellant.
Brian H. Jones (Barnes & Diehl, P.C., on brief), for appellee.
Diane P. Howard (wife) appeals from a final decree of divorce (final decree), which
incorporated marital agreements entered into by Richard K. Howard (husband) and wife prior to the
parties’ separation. Additionally, wife appeals an order issued by the trial court clarifying the final
decree’s spousal support provision. On appeal, wife argues the trial court erred by (1) ruling that
husband’s financial obligations to wife, the parties’ children, and third parties enumerated in the
marital agreements were included in the spousal support award; (2) including in the final decree a
provision that there was no order for health care coverage for wife; and (3) imputing income to wife
for the purposes of spousal support. We hold that the trial court erred in finding that wife’s spousal
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
support award encompassed a number of other obligations to which husband had previously
contracted to pay separate from spousal support. Further, the trial court erred by including a
provision in the final decree stating that neither party was under a current order for health care
coverage for a former spouse. Finally, the trial court did not err in imputing income to wife for
spousal support purposes. For the reasons that follow, we reverse and remand in part and affirm in
part.
I. BACKGROUND1
“When reviewing a trial court’s decision on appeal, we view the evidence in the light
most favorable to the prevailing party, granting it the benefit of any reasonable inferences.”
Congdon v. Congdon, 40 Va. App. 255, 258, 578 S.E.2d 833, 835 (2003). Thus, a trial court’s
judgment will not be disturbed on appeal unless plainly wrong or without evidence to support it.
Jennings v. Jennings, 12 Va. App. 1187, 1189, 409 S.E.2d 8, 10 (1991).
So viewed, the evidence established that husband and wife were married in 1972, and had
three children during their marriage. At the time of the parties’ separation in 2005, the couple’s
two oldest children had reached the age of majority, and the youngest child (child) turned
eighteen in 2006.
Early in the marriage, wife supported the family while husband was in medical school,
and later, husband supported the family while wife pursued a Masters degree. At some point, the
couple agreed that husband would be the primary monetary contributor, and wife would serve as
a stay-at-home parent to the parties’ children.
In June 2003, wife learned that husband had participated in at least fourteen extramarital
affairs. After the affairs were disclosed, the parties entered into two post-nuptial agreements in
1
As the parties are fully conversant with the record in this case, and because this
memorandum opinion carries no precedential value, this opinion recites only those facts and
incidents of the proceedings as are necessary to the parties’ understanding of this appeal.
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an effort to rebuild their marriage and solidify wife’s trust in husband. In October 2003, husband
and wife entered into a post-nuptial agreement (October 2003 Agreement), in which husband
acknowledged his affairs and stated that wife was not at fault for his actions. Further, the
agreement stated that wife had an ongoing medical condition that made it difficult for her to
work full-time, as the medical issues limited wife’s ability to perform both “domestic and
professional tasks.” The parties agreed that wife would have physical custody of their minor
child, and husband agreed to “provide permanent alimony and child support sufficient to
maintain a lifestyle comparable to [wife’s] current status.”
Additionally, husband agreed to “provide health insurance coverage of [wife] and their
dependent children. Furthermore, any uninsured medical, dental, orthodontic, optometric and
other health care expenses reasonably incurred for [wife] or the benefit of the parties’ dependent
children or [wife], not otherwise covered by said insurance, will be paid for by husband.”
Husband also agreed to “provide ongoing dental coverage for both [wife] for life and for the
parties’ children while full-time students through age 25.” The agreement further stated, “Due to
the serious impact of [husband’s] infidelity on the family unit, [husband] agree[d] to pay any
out-of-pocket costs for mental health care or counseling incurred by [wife or the parties’
children] throughout the lifetime of each of the members of the family.” Moreover, husband
agreed to “make all premium payments and keep in force all life insurance and disability
insurance presently carried for [both parties] until the age of 65, at which point coverage may be
reduced but only if agreed to by the parties as a joint decision.”
Finally, the parties agreed that they were bound by the foregoing provisions, subject only
to the acceptance and approval of a court of competent jurisdiction in the event of a divorce.
In May 2004, the parties entered into a “Post-Nuptial Agreement and Stipulation” (May
2004 Agreement), which acknowledged and incorporated the October 2003 Agreement. The
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parties expressly stated that they freely entered the May 2004 Agreement, and they were not
under “duress, fraud, or undue influence.” The agreement further stated,
Should the parties ever separate and/or divorce, upon presentation
to the Court of a final decree of divorce, husband and wife agree to
request the Court to affirm, ratify, and incorporate, but not merge,
this Agreement, as well as the [October 2003 Agreement], into said
decree. Failure of the Court to find that this Agreement or [the
October 2003 Agreement] is fair and equitable to both husband and
wife shall in no manner affect the validity of this [agreement,] and,
in such a case, the same shall remain enforceable by either against
the other. The validity [of the agreements] does not depend upon a
Court finding that [they are] fair and equitable. Husband and wife
agree to be bound hereby in any event.
In a number of provisions, the parties made statements alluding to husband’s extramarital
affairs, and husband essentially agreed to take responsibility for the majority of the parties’
financial obligations. The agreement stated, “Husband shall be solely responsible for paying the
mortgage payments on this new residence, and shall defend, indemnify and hold wife harmless
from making payments on this mortgage until the loan balance is paid in full.” Regarding the
parties’ debts, the agreement stated, “Should the parties ever separate and/or divorce, husband
shall be solely responsible for paying in full, and on a timely basis, all debt in either or both
parties’ names.” Both the May 2004 Agreement and the October 2003 Agreement stated that the
parties’ marital residence was wife’s separate property.
The parties also agreed to numerous provisions regarding spousal and child support:
A. Should the parties ever separate and/or divorce, husband
shall provide temporary . . . and permanent . . . spousal
support to wife on a monthly basis, the after-tax amount of
which shall be sufficient for wife to maintain a life style
comparable to wife’s and the children’s current status. The
spousal support shall be included as income to wife and
deductible to husband.
B. In addition, should the parties ever separate and/or divorce,
husband shall provide child support to wife on behalf of
[their youngest child] in an amount based upon the child
support guidelines and utilizing husband’s income, without
regard to wife’s income or any amount of spousal support
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received by wife. Such child support shall continue until
the earliest of [child’s] college graduation or attaining the
age of twenty-three.
Moreover, the parties agreed that husband was to maintain the current medical and dental
insurance policy for wife and the children, or, if he ceased to carry that policy, he agreed to
obtain comparable coverage for wife, and the children, “so long as the children were eligible to
be covered under [the] family policy.” Additionally, the agreement stated that after the entry of
the final decree of divorce, wife agreed to obtain medical insurance, and “[h]usband shall be
solely responsible for making any and all payments toward these monthly premiums on wife’s
insurance policy.” The parties also agreed,
C. All uninsured medical, dental, orthodontic, optometric,
counseling, and other health care expenses incurred by
wife, or incurred for the benefit of wife, not otherwise
covered by insurance, will be paid by husband. All
uninsured medical, dental, orthodontic, optometric,
counseling, and other health care expenses incurred by [the
children], or incurred for their benefit, not otherwise
covered by insurance, will be paid by husband until that
child attains the age of twenty-five.
D. Due to the serious impact of husband’s infidelity on the
family unit, husband agrees to pay any out-of-pocket
expenses and costs for mental health care or counseling
incurred by wife, [and/or the children] throughout the
lifetime of each of the members of the family.
Finally, the parties included a number of provisions regarding life insurance policies, and
the most pertinent provision stated, “Husband shall make all premium payments and maintain in
force all current life insurance policies presently carried for both husband and wife until wife
reaches the age of sixty-five . . . . Upon wife reaching the age of sixty-five . . . , certain coverage
may be reduced but only if agreed to the parties as a joint decision and in writing.”
The parties separated in July 2005, and in January 2006, husband filed a complaint for
divorce. In October 2006, husband filed an amended complaint for divorce, which asked the trial
court to set aside both the October 2003 and May 2004 agreements. He averred that they were
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unconscionable, and “procured by undue influence, coercion, and fraud.” Wife filed an answer
and counterclaim, in which she asked the trial court to incorporate the marital agreements into
the final decree.
After hearing evidence on the matter, the trial court ruled in an April 2008 pendente lite
order that the October 2003 Agreement and the May 2004 Agreement were valid. The trial court
later issued a letter opinion regarding permanent spousal support and child support, relying on
the marital agreements to resolve the issue of spousal support.
Because the marital agreements did not specify a defined amount of spousal support, the
trial court relied on the spousal support factors articulated in Code § 20-107.1 to determine the
award. The trial court discussed each of the Code § 20-107.1 factors in detail. Most relevant to
our instant analysis are the trial court’s findings that husband had a monthly gross income of
$16,667 and that pursuant to the marital agreements, he was liable for all of the parties’ debts,
which exceeded $700,000. The trial court further found that wife began working for the Virginia
state government shortly before January 2006, and that her employment ended in August 2007.
The trial court found that at her previous employment, wife earned $40,000 per year and that the
Virginia Unemployment Commission was issuing her $1,573 per month.
Wife submitted an expense statement claiming expenses of $6,000 per month, and the
trial court noted that this figure did not include the amount of wife’s mortgage payment of
$2,490, which husband was obligated to pay under the marital agreements. Nor did it include
wife’s health care costs, which totaled more than $1,000 per month.
In making the spousal support award, the trial court found that wife was voluntarily
unemployed, as she had recently lost her job due to unsatisfactory performance. The trial court
found that wife was seeking employment, and had submitted evidence of an extensive job search.
Wife indicated a desire to re-enter the workforce, but acknowledged that her health issues were
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an obstacle. The court imputed income in the amount of $40,000 per year to wife. The trial
court found that wife inflated her expenses in the expense statement, and awarded wife $3,575
per month in spousal support. The trial court concluded that this amount was sufficient for wife
to maintain a lifestyle comparable to the one she enjoyed in May 2004. The trial court noted that
husband was also obligated to pay the mortgage on the marital home and wife’s health care
costs. Further, the trial court awarded wife child support in the amount of $735 per month until
child reached the age of twenty-three, pursuant to the parties’ marital agreements.
In September 2008, a decree incorporating the October 2003 Agreement and May 2004
Agreement was entered pursuant to Code § 20-109.1. On November 13, 2008, the trial court
entered an order incorporating its April 2008 letter opinion into an order of the trial court. 2 The
order also stated that husband
shall maintain health care coverage for [child] pursuant to the
parties’ Agreement dated May 11, 2004. [Husband] is further
responsible for maintaining [wife] on his health insurance coverage
or paying to [wife] the cost for her to maintain her own health care
coverage; and . . . [t]hat pursuant to the parties’ Agreement dated
May 11, 2004, in addition to the spousal support obligation,
[husband] shall pay all uninsured health, dental and other specified
medical expenses for [wife] and the child as specified in the
Agreement.
Husband objected to the above provisions, stating that these provisions were not part of the April
2008 letter opinion. Husband further objected on the grounds that the order did not reflect that
the marital agreements were modified by the April 2008 letter opinion.
Also on November 13, 2008, the trial court entered the final decree. The final decree
incorporated the marital agreements by reference, “except to the extent that the Court’s rulings
may conflict with the provisions of the agreements, and that the opinions of the Court as
2
Judge Cleo Powell presided over the pendente lite hearing in this matter and issued the
court’s letter opinion in April 2008. Judge Frederick Rockwell, III, presided over the remaining
trial proceedings.
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expressed ore tenus and in its letter opinion dated April 1, 2008[,] are also affirmed, ratified and
incorporated, but not merged into [the] Decree.” The final decree’s spousal support award of
$3,575 per month and child support award of $735 per month mirrored the award provided in the
April 2008 letter opinion; however, the final decree did not specifically identify all of the
obligations that husband was responsible for under the marital agreements and the April 2008
letter opinion, which stated that husband was responsible for the marital residence’s mortgage,
wife’s health insurance, and the couple’s joint debts, separate from husband’s spousal support
obligation. The decree also contained a provision stating, “Upon entry of this Decree, neither
party is under a current order for health care coverage for a spouse or former spouse.” Both
parties noted objections.
On November 26, 2008, wife moved for clarification of the final decree and for the entry
of a revised final decree. Wife requested
clarification in the Final Decree of Divorce to reflect the Court’s
rulings which require [h]usband to pay the mortgage, health
insurance, unreimbursed medical expenses, life insurance
premiums, payments on behalf of the children, and other
obligations in addition to child support and spousal support. . . .
The written agreements clearly state, testimony and argument at
prior hearings in this matter establish, and Judge Powell’s rulings
reference, that [h]usband has obligations to pay debts and
payments in addition to child support and spousal support. The
Final Decree of Divorce should accurately reflect these obligations
and protect [w]ife’s interests.
On December 2, 2008, husband moved the court to clarify whether the spousal support payment
of $3,575 per month was intended to encompass all of husband’s obligations to wife.
On December 16, 2008, the trial court issued a letter opinion stating that the $3,575
monthly spousal support award was “inclusive of the sums that [husband] was required to pay
under the terms of the settlement agreements and that this sum represents his total spousal
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support payment to [wife].” An order (hereafter “clarification order”) reflecting the December
16, 2008 letter opinion was entered on January 29, 2009.
Wife timely noted her appeal to both the final decree and the clarification order. The two
appeals were consolidated by an order of this Court on March 25, 2009.
II. ANALYSIS
1. The trial court erred in holding the spousal support award of $3,575 was inclusive of
husband’s other enumerated financial obligations.
On appeal, wife argues the trial court erred in ruling that husband’s financial obligations
under the marital agreements to wife, the parties’ children, and third parties were included in the
spousal support award. She argues that although the agreements do not explicitly state that
husband’s financial obligations (i.e., the mortgage payments, wife’s health insurance premiums,
wife’s unreimbursed medical expenses, life insurance premiums, and debts) are separate from his
spousal support obligations, the non-spousal support obligations are listed individually under
separate headings. Wife asserts that the individual provisions indicate an intention to treat the
obligations separately. She further argues that the April 2008 letter opinion considers the
obligations to be separate. Finally, she argues that the marital agreements should control, to the
extent that their provisions are not impossible and do not conflict with the law of Virginia. We
agree with wife and conclude that the trial court erred in its ruling that the spousal support was
inclusive of all of husband’s other financial obligations to wife.
Pursuant to Code § 20-109(C), 3 the final decree may not contain any condition that is not in
accord with the marital agreements. Stacy v. Stacy, 53 Va. App. 38, 43, 669 S.E.2d 348, 350
3
Code § 20-109(C) provides in pertinent part:
In suits for divorce, . . . if a stipulation or contract signed by the
party to whom such relief might otherwise be awarded is filed
before entry of a final decree, no decree or order directing the
payment of support and maintenance for the spouse, suit money, or
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(2008). The trial court’s interpretation of the marital agreements incorporated into the final decree
is a legal determination that we review de novo. Id. (citing Palmer & Palmer Co., L.L.C. v.
Waterfront Marine Constr., Inc., 276 Va. 285, 289, 662 S.E.2d 77, 80 (2008); Eure v. Norfolk
Shipbuilding & Drydock Corp., 263 Va. 624, 631, 561 S.E.2d 663, 667 (2002); Henderlite v.
Henderlite, 3 Va. App. 539, 541, 351 S.E.2d 913, 913-14 (1987)).
Marital agreements “are subject to the same rules of construction and interpretation
applicable to contracts generally.” Fry v. Schwarting, 4 Va. App. 173, 180, 355 S.E.2d 342, 346
(1987) (citing Tiffany v. Tiffany, 1 Va. App. 11, 15, 332 S.E.2d 796, 799 (1985)). Accordingly,
“[w]here the agreement is plain and unambiguous in its terms, the rights of the parties are to be
determined from the terms of the agreement,” Jones v. Jones, 19 Va. App. 265, 268-69, 450 S.E.2d
762, 764 (1994), and “courts are bound to say that the parties intended what the written instrument
plainly declares,” W. F. Magann Corp. v. Virginia-Carolina Elec. Works, Inc., 203 Va. 259, 264,
123 S.E.2d 377, 381 (1962). On appeal, this Court must construe the contract as a whole. Stacy, 53
Va. App. at 48, 669 S.E.2d at 353 (citing Quadros & Assocs., P.C. v. City of Hampton, 268 Va. 50,
55, 597 S.E.2d 90, 93 (2004)).
The May 2004 Agreement is the primary instrument establishing husband’s obligations
toward wife in the event of a divorce. In this agreement, husband’s obligations regarding the
marital residence mortgage, wife’s health insurance premiums, wife’s unreimbursed medical
expenses, life insurance premiums, and debts to third parties are listed separately from his
obligation to pay wife spousal support. It is clear from the May 2004 Agreement that the parties
intended that husband would pay spousal support sufficient to maintain wife’s standard of living,
in addition to husband’s duty to pay for the expenses previously referenced.
counsel fee or establishing or imposing any other condition or
consideration, monetary or nonmonetary, shall be entered except in
accordance with that stipulation or contract.
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The final decree incorporated the trial court’s April 2008 letter opinion, which awarded
wife $3,575 in spousal support. The letter opinion is unambiguous in its conclusion that
husband’s spousal support obligation was separate from his other obligations. In discussing
wife’s expense statement in the letter opinion’s “Award” section, the trial judge wrote, “[Wife]
expresses the need for $6000 a month in living expenses over-and-beyond those expenses in
addition to spousal support [husband] is obligated to pay under the marital agreement.” In a
footnote to this sentence, the letter opinion stated, “Dr. Howard is obligated to pay the mortgage
of $2490 on the marital home that is now [wife’s] separate property, as well as health care costs
for [wife] totaling more than $1000 a month.”
Although it is well established that courts have the authority to interpret their own orders,
the interpretation must be reasonable. Roe v. Commonwealth, 271 Va. 453, 457-58, 628 S.E.2d
526, 528 (2006) (citing Smoot v. Commonwealth, 37 Va. App. 495, 500, 559 S.E.2d 409, 412
(2002)). In the instant case, the trial court’s interpretation of the marital agreements and the
provisions of the April 2008 letter opinion, as incorporated into the final decree, cannot be
sustained. The clear intention of the parties as manifested in the marital agreements, was to
assign husband the bulk of the parties’ financial obligations. The April 2008 letter opinion
reflects this understanding of the parties’ intent. The April 2008 letter opinion discussed the
mortgage and wife’s health care costs, which nearly equal the spousal support award, and
indicated that these items were considered husband’s financial obligations independent of his
duty to pay wife’s day-to-day living expenses. Accordingly, the trial court erred in its decision
that the $3,575 spousal award was inclusive of husband’s obligations regarding wife’s mortgage,
health insurance premiums, unreimbursed health care expenses, life insurance premiums, and
third party debt.
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2. Husband was obligated to pay wife’s health care premiums.
Wife argues that the trial court erred by including in the final decree a provision stating
there was no order for health care coverage of a former spouse, because the May 2004
Agreement, which was incorporated into the final decree, provided that husband “shall be solely
responsible for making any and all payments toward [the] monthly premiums on wife’s [health]
insurance policy” subsequent to the entry of the final decree. Husband does not dispute that he is
required to pay for wife’s health insurance, but he contends that the payment for the insurance is
included in the spousal support award of $3,575.
As discussed above, the trial court erred in its conclusion that the spousal support award
of $3,575 encompassed husband’s obligation to pay wife’s health care insurance premiums. As
such, the provision in the final decree stating there was no order for health care coverage for a
former spouse was also in error.
3. The trial court did not err by imputing income to wife for computation
of the spousal support award.
Finally, wife contends that the trial court erred by imputing income of $40,000 to wife
when husband failed to prove that wife was voluntarily unemployed or voluntarily
underemployed. She argues that husband did not meet his burden of proof, because he did not
show that wife was “voluntarily foregoing more gainful employment, either by producing
evidence of a higher-paying former job or by showing that more lucrative work was currently
available.” McKee v. McKee, 52 Va. App. 482, 491, 664 S.E.2d 505, 510 (2008) (citing Joynes
v. Payne, 36 Va. App. 401, 421, 551 S.E.2d 10, 19-20 (2001)).
Spousal support decisions “‘rest within the sound discretion of the trial court and will not
be reversed on appeal unless plainly wrong or unsupported by the evidence.’” Sargent v.
Sargent, 20 Va. App. 694, 703, 460 S.E.2d 596, 600 (1995) (quoting Calvert v. Calvert, 18
Va. App. 781, 784, 447 S.E.2d 875, 876 (1994)). “A trial court may impute income to the
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spouse receiving . . . spousal support under the appropriate circumstances.” Id. (citing
Srinivasan v. Srinivasan, 10 Va. App. 728, 734, 396 S.E.2d 675, 679 (1990)). The trial court
must consider the factors enumerated under Code § 20-107.1(E) when deciding whether to
impute income to a party. Brandau v. Brandau, 52 Va. App. 632, 638-39, 666 S.E.2d 532, 536
(2008). The trial court must also consider the current circumstances of the party to whom
income will be imputed, “‘and what the circumstances will be within the immediate or
reasonably foreseeable future.’” McKee, 52 Va. App. at 490, 664 S.E.2d at 509 (quoting
Srinivasan, 10 Va. App. at 735, 396 S.E.2d at 679). “The party seeking the imputation [of
income] is required to present evidence ‘sufficient to enable the trial judge reasonably to project
what amount could be anticipated.’” Id. at 491, 664 S.E.2d at 510 (quoting Joynes, 36 Va. App.
at 421, 551 S.E.2d at 20).
Husband presented evidence that wife had an advanced degree, and held several jobs
early in the marriage, but was a stay-at-home parent throughout most of the marriage. He also
showed that wife was employed from January 2006 to August 2007, and that she earned an
income of $40,000 per year. In making its determination that wife was voluntarily unemployed,
the trial court discussed the provisions of Code § 20-107.1(E) factors in detail, and specifically
noted that wife “lost her job due to unsatisfactory performance during the probationary period”
of her employment. The trial court did note that wife’s health was a “burden on both her and
potentially on any prospective employer”; however, the trial court found that wife’s “physical
condition is improving.”
Based on the evidence before the trial court, we cannot say the trial court abused its
discretion by finding that wife was voluntarily unemployed and imputing to her an income of
$40,000 per year, which is the income she earned at her most recent employment.
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4. This Court declines to award appellate attorney’s fees to either party.
Both parties have requested appellate attorney’s fees.
The rationale for the appellate court being the proper forum to
determine the propriety of an award of attorney’s fees for efforts
expended on appeal is clear. The appellate court has the
opportunity to view the record in its entirety and determine
whether the appeal is frivolous or whether other reasons exist for
requiring additional payment.
O’Loughlin v. O’Loughlin, 23 Va. App. 690, 695, 479 S.E.2d 98, 100 (1996).
Because this litigation “addressed appropriate and substantial issues,” and “neither party
generated unnecessary delay or expense in pursuit of its interests,” Estate of Hackler v. Hackler,
44 Va. App. 51, 75, 602 S.E.2d 426, 438 (2004), we deny both parties’ requests for an award of
attorney’s fees and costs incurred on appeal. See O’Loughlin, 23 Va. App. at 695, 479 S.E.2d at
100.
III. CONCLUSION
For the foregoing reasons, we reverse the trial court’s decision that the $3,575 monthly
spousal support award is inclusive of the sums husband was required to pay under the terms of the
marital agreements and that $3,575 represents husband’s total spousal support payment to wife. We
remand for reconsideration of the spousal support award and health insurance decision, consistent
with applicable law. Additionally, we affirm the trial court’s imputation of income to wife. Both
parties’ requests for attorney’s fees are denied.
Affirmed in part and reversed and remanded in part.
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