Terry M. Tate v. Sharon E. Tate ( 2009 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Humphreys and Alston
Argued at Richmond, Virginia
TERRY M. TATE
MEMORANDUM OPINION * BY
v. Record No. 2700-08-2 JUDGE LARRY G. ELDER
SEPTEMBER 29, 2009
SHARON E. TATE
FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY
Paul M. Peatross, Jr., Judge Designate
Francis L. Buck (Buck, Toscano & Tereskerz, Ltd., on briefs), for
appellant.
Christopher J. Smith (Christopher Schroeck; Law Offices of
Christopher J. Smith, PLC, on brief), for appellee.
Terry M. Tate (husband) appeals from a final decree granting a divorce to his former wife
Sharon E. Tate (wife). He contends the trial court erred when it imputed income to him in its
award of spousal support to wife. Because the evidence supports the trial court’s finding that
husband’s familial relationship with his employer, his mother, unduly influenced her decision to
sell the salvage yard where he worked, we affirm the ruling of the trial court.
I.
BACKGROUND
On appeal, we view the evidence and all reasonable inferences therefrom in the light
most favorable to the prevailing party below. Alphin v. Alphin, 15 Va. App. 395, 399, 424
S.E.2d 572, 574 (1992). 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,
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
409 S.E.2d 8, 10 (1991). So viewed, the evidence establishes the parties were married in 1976.
In 1992, husband began working full-time at S.L. Tate Sales and Service, a salvage yard owned
by his parents, Sidney and Augusta Tate (Ms. Tate). The salvage yard acquired wrecked and
abandoned automobiles, which were cannibalized for parts that they sold to their customers.
Periodically, they sold the inventory of automobiles for scrap metal. The salvage yard was
incorporated in Virginia, and husband’s parents were its owners. Husband worked at the salvage
yard as a treasurer where he handled the company’s financial matters. Upon Sidney Tate’s
death, Ms. Tate took the property as sole owner and did not convey any interest to husband.
As part of his responsibilities, husband “took care of the whole yard,” whereas Ms. Tate
“didn’t have much involvement in the day-to-day [operations]” of the business. Despite
Ms. Tate’s status as sole owner of the salvage yard, her responsibilities with the salvage yard
were limited to answering the phone. Husband did not receive a fixed salary for his work.
Instead, he would write checks as needed to cover his living expenses and deposited them into a
personal checking account. Husband did not consistently record these withdrawals. Ms. Tate
also gave him proceeds from car crushing operations totaling $10,000 to $15,000. Wife was
employed as an animal control officer for Albemarle County where she earned an annual income
of approximately $40,000.
The parties began experiencing marital difficulties in 2001, and husband moved out of
the marital residence. The parties reconciled two months later and resumed cohabitation, but the
relationship remained strained. Husband permanently left the marital residence in July 2005
after his youngest son’s high school graduation. He moved to a trailer on property within the
salvage yard, where he currently resides.
In 2005, Ms. Tate began the process of closing down the salvage yard. Husband testified
that he initiated the discussion of whether to sell the salvage yard with his mother because he
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was tired of working at the salvage yard due to the long hours and low pay. Ms. Tate agreed to
sell the salvage yard because it reminded her of her late husband, Sidney. Husband further
acknowledged that prior to 2005, his mother was “[n]ever really serious about [selling] until a
few weeks until we actually sold [the property].” Husband assumed responsibility for winding
up the business by cleaning the property and selling the remaining inventory. Ms. Tate did not
participate in the winding up.
On May 12, 2006, Ms. Tate closed on the sale of the land where the salvage yard was
located for approximately $1.5 million. After paying off debts and capital gains taxes, she gifted
approximately $264,000 of the proceeds to husband in the form of two separate gifts of $140,000
in 2006 and $124,000 in 2007. Husband testified that he used this money to pay off existing
debts and make personal expenditures so that none of the money remained by the time of the
divorce proceedings.
At the time of the divorce proceedings, husband was employed as a school bus driver for
Albemarle County and received an annual salary of $16,356 plus health benefits. He testified
that he did not actively seek higher-paying employment because his health plan with the school
district helped pay his mounting medical bills associated with the treatment of his diabetes.
Ms. Tate confirmed that she did not plan to give husband further monetary gifts from the
proceeds of the sale of the salvage yard.
Husband further testified that it was nearly impossible to open a salvage yard similar to
the one he operated with his mother because recent zoning ordinances and federal restrictions
limited the operation of new salvage yards that did not qualify under the grandfather clause. He
testified that in order to obtain employment in an existing salvage yard, he would have to accept
a wage of $10 an hour as a laborer. However, husband admitted that he never actually inquired
into obtaining employment.
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On October 17, 2006, wife filed for divorce on the grounds of desertion and requested
spousal support. In his answer, husband denied wife’s allegations and sought a divorce on the
grounds of separation exceeding one year. In hearings regarding the parties’ finances, wife
argued that income should be imputed to husband based on his voluntary departure from his
work at the salvage yard and the monetary gifts he received from Ms. Tate.
On October 20, 2008, the trial court entered a final decree of divorce on the ground of
separation exceeding one year and equitably distributed the marital assets and debts of the parties
pursuant to Code § 20-107.3. The trial court further awarded wife spousal support, finding that
“she [was] free from legal fault and has demonstrated a need for support.” In regard to
husband’s ability to pay support, the trial court imputed a gross annual salary of $66,000 to
husband, finding that “he walked away [from his employment] voluntarily and did not work after
closing the business when he was receiving the monetary gifts from his mother.” The trial court
based this amount on deposits husband made to his account in 2004, reasoning that the deposits
in 2005 reflected proceeds from winding up the sale of the salvage yard and did not give an
accurate measure of husband’s yearly earnings. In addition, the trial court explicitly held that the
imputation was not based on gifts received from his mother as a result of the sale of the salvage
yard. Upon these findings, the trial court required husband to pay wife $1,200 per month in
spousal support.
II.
ANALYSIS
A.
IMPUTATION OF INCOME
On appeal, husband contends that the trial court incorrectly imputed to him income
derived from his past employment at Ms. Tate’s salvage yard because he was involuntarily
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underemployed. The proper measure for imputing income, husband avers, is whether the
evidence adequately substantiates the existence of current employment opportunities that the
spouse is forgoing. Husband argues that it is improper to impute $66,000 to him under this test
because his prior employment was the result of a favored position with his mother that no longer
exists and cannot be replicated. Because he cannot open a comparable salvage yard that will
generate similar income, husband asserts that his good faith decision to retain his employment as
a school bus driver bars imputation to him of his 2004 earnings.
In opposition, wife argues the obligee spouse need not prove better-paying positions are
currently available to the obligor spouse if the spouse seeking imputation proves the obligor
voluntarily left his previous employment. Wife contends that husband voluntarily left his
employment by convincing his mother to sell the salvage yard and, thus, that she was not
required to prove husband was capable of finding higher-paying work elsewhere or operating his
own salvage yard.
When calculating the amount of spousal support to be awarded, the court may “impute
income to a party” who “choose[s] a low paying position that penalizes the other spouse.”
Srinivasan v. Srinivasan, 10 Va. App. 728, 734, 396 S.E.2d 675, 679 (1990); see Code
§ 20-107.1(E)(9) (requiring the court to consider the “earning capacity, including the skills,
education and training of the parties and the present employment opportunities for persons
possessing such earning capacity” in computing the amount of spousal support); Stubblebine v.
Stubblebine, 22 Va. App. 703, 708, 473 S.E.2d 72, 74 (1996) (en banc) (“A reduction in income
resulting from a voluntary employment decision does not require a corresponding reduction in
the payor spouse’s support obligations, even if the decision was reasonable and made in good
faith.”). “The burden is on the party seeking the imputation to prove that the other [party] was
voluntarily foregoing more gainful employment, either by producing evidence of a higher-paying
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former job or by showing that more lucrative work was currently unavailable.” Niemiec v.
Commonwealth ex rel. Niemiec, 27 Va. App. 446, 451, 499 S.E.2d 576, 579 (1998). “Whether a
person is voluntarily unemployed or underemployed is a factual determination.” Blackburn v.
Michael, 30 Va. App. 95, 102, 515 S.E.2d 780, 784 (1999). We therefore will not reverse a trial
court’s decision regarding spousal support unless it abuses its discretion. See Miller v. Cox, 44
Va. App. 674, 679, 607 S.E.2d 126, 128 (2005).
When a complaining spouse asks for income to be imputed to the other party, the first
inquiry the trial court must make is whether the obligor spouse has voluntarily left his or her
employment. See Reece v. Reece, 22 Va. App. 368, 375-76, 470 S.E.2d 148, 152 (1996)
(distinguishing the imputation analysis where the “supporting spouse voluntarily chose to leave
his existing job to pursue other employment” from the situation where the spouse, “through no
fault of his own, became involuntarily unemployed when his employer eliminated his position”
(citing Antonelli v. Antonelli, 242 Va. 152, 156, 409 S.E.2d 117, 119-20 (1991))); see also
Niemiec, 27 Va. App. at 452, 499 S.E.2d at 579-80 (inquiring into the mother’s decision to leave
her previous job before looking into her current earning potential). If so, the inquiry ends and
the “trial court may impute income based on evidence of recent past earnings.” Brody v. Brody,
16 Va. App. 647, 651, 432 S.E.2d 20, 22 (1993) (requiring the father to “produce evidence that
was sufficient to ‘enable the trial judge reasonably to project what amount could be anticipated’
had the mother continued in her employment” (quoting Hur v. Dep’t of Soc. Servs., 13 Va. App.
54, 61, 409 S.E.2d 454, 459 (1991))). If, however, the obligor spouse’s employment ended
involuntarily or with the complaining party’s consent prior to the divorce, the spouse seeking
imputation must offer evidence of current employment opportunities that the other party is
forgoing. See McKee v. McKee, 52 Va. App. 482, 491-92, 664 S.E.2d 505, 510 (2008) (en
banc) (refusing to hold a stay-at-home spouse voluntarily unemployed immediately following a
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divorce proceeding so that the complaining party must prove imputation through current
employment opportunities); Payne v. Payne, 5 Va. App. 359, 364, 363 S.E.2d 428, 431 (1987)
(noting that the wife approved and supported the husband’s decision to leave his job to start his
own business three years prior to the dissolution of the marriage). The issue we must first
address is whether the trial court erred in finding that husband voluntarily ended his employment
by convincing Ms. Tate to sell the salvage yard.
The unique facts in this case support the trial court’s finding that husband had voluntarily
left his employment at the salvage yard. Even though husband’s employment ended as a result
of Ms. Tate’s decision to sell the salvage yard, the evidence supports the finding that husband
engineered his own job loss because responsibility for the sale fell solely on him. Ms. Tate
testified that while she retained sole ownership of the salvage yard, she participated minimally in
the day-to-day operations. Despite husband’s argument to the contrary, the evidence supports a
finding that the idea to sell the salvage yard originated with him. Indeed, the trial court asked
counsel for husband:
THE COURT: Is that how the evidence came in? The
evidence came in as [husband] got tired and didn’t want to do it
and went to his mother, and his mother agreed, right? Isn’t that the
way the evidence came in?
[HUSBAND’S COUNSEL]: Sure.
THE COURT: Okay. So it’s his election. He says, mom,
I’m tired. I don’t want to do this anymore.
The trial court thus fully considered husband’s influence as a factor in finding husband was
voluntarily unemployed. The evidence supports the trial court’s determination because the
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unique business relationship between Ms. Tate and husband allowed him to exert enough
influence on his mother to convince her to sell the salvage yard. 1
Further, the record established that the decision to sell the salvage yard occurred around
the time husband moved out of the marital residence. Husband has failed to produce evidence
that wife approved of or supported this change. Even though husband testified that it was
Ms. Tate’s idea to sell the salvage yard, the trial court was not obligated to believe husband’s
self-serving testimony. See Hatloy v. Hatloy, 41 Va. App. 667, 673, 588 S.E.2d 389, 392
(2003). Even though Ms. Tate held the sole legal right to sell the salvage yard, the record
supports the trial court’s finding that husband voluntarily ended his employment by operation of
his influence on his mother. Wife, therefore, is not required to show that husband is able to
secure higher-paying employment under present circumstances. See Brody, 16 Va. App. at
650-51, 432 S.E.2d at 22 (holding that once “the father produced evidence that the mother chose
to leave her job as a defense analyst,” he did “not have [to prove] what employment [was]
available to the mother”).
Upon finding that husband voluntarily left his employment, the trial court was required to
impute an accurate measure of income to husband based on his past earnings. See Brody, 16
Va. App. at 651, 432 S.E.2d at 22. Husband testified at trial that he made only $10,000 to
$15,000 per year while working at the salvage yard. However, he also admitted to taking money
1
We do not suggest that a spouse becomes a de facto operator of his place of
employment simply because he expresses a desire to quit his job or has a close relationship with
his supervisors. Cf. Reece, 22 Va. App. at 375, 470 S.E.2d at 152 (eschewing rigid application
of bright line rules to the imputation analysis in favor of considering the facts of each specific
case). Rather, we hold under the facts of this particular case the evidence supports a finding that
Ms. Tate’s decision to sell the salvage yard was born not of her independent judgment, but of
husband’s stated purpose to quit his job voluntarily because he was tired of it, as if he had made
the decision to sell the salvage yard himself. See Antonelli, 242 Va. at 155, 409 S.E.2d at 119
(simplifying the definition of “voluntary act” to any willful act that results in a diminution of
income, irrespective of good faith or future earning potential).
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from the salvage yard as needed and depositing it into his personal account. Husband’s
numerous deposits, his expenditures beyond his alleged means, and the less-than-meticulous
manner in which he managed the records of the salvage yard permitted the trial court to look to
husband’s bank statements to determine that husband actually earned closer to $66,000. The trial
court took further efforts to obtain an accurate picture of husband’s earnings by looking at his
2004 financial records rather than his 2005 bank statements because they contained deposits
relating to husband’s winding up business prior to closing the salvage yard.
We hold that the evidence was sufficient to support the trial court’s decision to impute
spousal support based on husband’s 2004 deposits into his personal account, his various earnings
from the salvage yard prior to receiving two one-time lump sum monetary gifts from Ms. Tate.
Accordingly, we conclude the trial court did not abuse its discretion in its award of spousal
support.
B.
ATTORNEY’S FEES
Wife seeks an award of attorney’s fees incurred on appeal.
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).
While ultimately erroneous, husband’s argument appealing the imputation of income is
“fairly debatable.” See Brandau v. Brandau, 52 Va. App. 632, 642, 666 S.E.2d 532, 538 (2008).
Wife does not contend husband’s appeal is wholly meritless. We therefore deny wife’s request
for fees.
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III.
CONCLUSION
Because the evidence was sufficient to prove that husband voluntarily left his
employment by convincing his mother to sell the salvage yard where he worked, we hold the
trial court did not err by imputing $66,000 income to him. However, because his argument on
appeal was fairly debatable, we decline to award wife attorney’s fees.
Affirmed.
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