Andrew Anthony Ott v. Susan Ann Gelber Ott ( 2001 )


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  •                      COURT OF APPEALS OF VIRGINIA
    Present: Chief Judge Fitzpatrick, Judges Benton and Clements
    Argued at Chesapeake, Virginia
    ANDREW ANTHONY OTT
    MEMORANDUM OPINION * BY
    v.   Record No. 0614-00-1         CHIEF JUDGE JOHANNA L. FITZPATRICK
    JANUARY 16, 2001
    SUSAN ANN GELBER OTT
    FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
    Frederick B. Lowe, Judge
    Jack E. Ferrebee for appellant.
    Henry M. Schwan for appellee.
    In this domestic appeal, Andrew A. Ott (husband) appeals from
    a final divorce and equitable distribution decree.   Husband argues
    the trial court erred in:   (1) granting Susan A.G. Ott (wife) a
    divorce based upon a one-year separation; (2) fixing the date of
    separation as August 30, 1997; (3) awarding wife spousal
    support; (4) awarding the child dependency exemption to wife;
    (5) the valuation of stock and its classification as marital
    property; (6) failing to credit husband for taxes paid in the
    exercise of stock options; (7) its classification of a portion
    of an antique car collection as marital property and its
    division of the antique car collection; (8) granting a monetary
    * Pursuant to Code § 17.1-413, this opinion is not
    designated for publication.
    award to wife; and (9) failing to credit husband for $10,000
    given to wife.   Finding no error, we affirm.
    I.   BACKGROUND
    Under familiar principles of appellate review, we examine
    the evidence in the light most favorable to wife, the prevailing
    party below, granting to her evidence all reasonable inferences
    fairly deducible therefrom.      See Juares v. Commonwealth, 
    26 Va. App. 154
    , 156, 
    493 S.E.2d 677
    , 678 (1997).       So viewed the
    evidence established that Susan and Andrew Ott were married on
    August 8, 1978 and had 3 children.        In December 1996 or January
    1997, husband moved out of the marital home and began living
    above the garage.   On August 30, 1997, husband left the garage
    apartment and moved to an apartment owned by the couple, the
    Burlington Road property.    On September 4, 1997, wife filed for
    divorce on grounds of desertion.     Husband filed a cross-bill
    alleging constructive desertion by wife.
    The case was tried before a commissioner in chancery on
    January 4 and 5, 1999.   The commissioner filed his initial
    report, both parties filed objections and the commissioner later
    filed an amended report.    Both parties again filed exceptions.
    On March 13, 2000, the trial court issued a final divorce decree
    confirming and approving the commissioner's report with some
    modifications.   Husband appeals from numerous of the trial
    court's rulings.    We address them seriatim.
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    II.    GROUNDS FOR DIVORCE
    Husband first contends the trial court erred by granting a
    divorce based on separation for more than one year rather than
    his ground of desertion.      Assuming, without deciding, that the
    evidence was sufficient to establish desertion, the trial court
    was not required to "'"give precedence to one proven ground of
    divorce over another."'"      Sargent v. Sargent, 
    20 Va. App. 694
    ,
    707, 
    460 S.E.2d 596
    , 602 (1995) (quoting Williams v. Williams,
    
    14 Va. App. 217
    , 220, 
    415 S.E.2d 252
    , 253-54 (1992) (quoting
    Robertson v. Robertson, 
    215 Va. 425
    , 426, 
    211 S.E.2d 41
    , 43
    (1975))).    If multiple grounds for divorce exist, "'the trial
    judge can use . . . sound discretion to select the grounds upon
    which . . . to grant the divorce.'"       Sargent, 
    20 Va. App. at 707
    , 
    460 S.E.2d at 602
     (quoting Lassen v. Lassen, 
    8 Va. App. 502
    , 505, 
    383 S.E.2d 471
    , 473 (1989)).      In the instant case, the
    evidence established that the parties had been living separate
    and apart for more than one year.      Therefore, the trial court
    did not err in awarding wife a divorce on the ground of the
    parties having lived separate and apart without any cohabitation
    and without interruption for more than one year.
    III.   DATE OF SEPARATION
    Husband next argues that the trial court erred in fixing
    August 30, 1997 as the date of separation rather than January
    1997.    Resolution of disputed facts is within the purview of the
    fact finder.     Howell v. Howell, 
    31 Va. App. 332
    , 341, 523 S.E.2d
    - 3 -
    514, 519 (2000).    When the trial court accepts the
    commissioner's findings of fact, this Court will presume those
    findings are correct and the trial court's decision will not be
    disturbed on appeal unless plainly wrong or without evidence to
    support it.   
    Id.
    Code § 20-107.3 provides that property is to be classified
    as of "the last separation of the parties, if at such time or
    thereafter at least one of the parties intends that the
    separation be permanent."    Thus, there must not only be a
    physical separation but also "proof of an intention on the part
    of at least one of the parties to discontinue permanently the
    marital cohabitation."    Hooker v. Hooker, 
    215 Va. 415
    , 417, 
    211 S.E.2d 34
    , 36 (1975); see also Luczkovich v. Luczkovich, 
    26 Va. App. 702
    , 713, 
    496 S.E.2d 157
    , 162 (1998).   Matrimonial
    cohabitation consists of more than sexual relations.   It also
    includes the performance of other marital duties and
    responsibilities.    See Petachenko v. Petachenko, 
    232 Va. 296
    ,
    299, 
    350 S.E.2d 600
    , 602 (1986); see also Dexter v. Dexter, 
    7 Va. App. 36
    , 44, 
    371 S.E.2d 816
    , 820 (1988).
    Husband testified that wife wanted the marriage to end and
    demanded that husband move into the bedroom above the garage in
    December 1996 and January 1997.   Wife denied that this was her
    intention and presented evidence that she and husband acted as
    husband and wife and that she performed marital duties until he
    moved out August 30, 1997.   Thus, credible evidence supports the
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    trial court's determination that the parties separated on August
    30, 1997 1 when husband moved into the Burlington Road apartment.
    IV.   SPOUSAL SUPPORT
    Husband asserts that the trial court erred in its award of
    spousal support.   First he argues that Code § 20-107.1(F)
    requires "[i]n contested cases in the circuit courts, any order
    granting, reserving or denying a request for spousal support
    shall be accompanied by written findings and conclusions of the
    court identifying the factors in subsection E which support the
    court's order."    However, the provision requiring written
    findings and conclusions "shall apply only to suits for initial
    spousal support orders filed on or after July 1, 1998."    1998
    Va. Acts, ch. 604, clause 2.    This case was filed September 4,
    1997, and not subject to the statutory provision requiring
    written findings and conclusions.
    Husband also argues that the amount of spousal support
    awarded, $525 per month, was an abuse of discretion.    The
    determination of whether a spouse is entitled to support and, if
    so, how much support rests within the sound discretion of the
    trial court and will be reversed on appeal only if plainly wrong
    or unsupported by the evidence.     Sargent, 
    20 Va. App. at 703
    ,
    
    460 S.E.2d at 600
    .   In reaching this decision, the trial court
    1
    Several of husband's questions presented and/or
    assignments of error involve the trial court's determination of
    the date of separation. As such, our holding on this issue is
    dispositive of those issues appealed by husband.
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    must weigh the needs and abilities of the parties and consider
    the factors set forth in Code § 20-107.1.   Dukelow v. Dukelow, 
    2 Va. App. 21
    , 26, 
    341 S.E.2d 208
    , 210 (1986).
    In the instant case the commissioner's written findings
    supporting the $525/month spousal support award provided:
    I have considered all of the statutory
    factors. I find that the parties had an
    often contentious marriage for 19 years;
    that each party will receive a substantial
    sum of money from the marital assets,
    including a monthly payment from the
    husband's military retirement. I further
    find that the parties' marital debt is not
    significant in view of their assets. I find
    that the parties have enjoyed a reasonable
    standard of living and that their ages,
    physical and mental conditions will not
    prevent either of the parties from
    maintaining current employment, nor are
    there any special conditions that will
    interfere with the parties' respective
    careers.
    (Emphasis added).   Viewed in the light most favorable to wife,
    the prevailing party, husband had an annual income of
    $108,293.90, including bonuses, plus $30,758.76 from military
    retirement benefits while the wife had an annual income of
    $45,604.80 plus $2,720 from summer employment plus $700 from
    work over Christmas break plus $4,426.32 from husband's military
    retirement benefits.   Thus, we cannot say the trial court abused
    its discretion in granting a spousal support award of
    $525/month.
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    V.   CHILD DEPENDENCY EXEMPTION
    Husband argues the trial court erred in awarding the child
    dependency exemption pursuant to Code § 20-108.1 to wife.
    Husband's argument is without merit as the trial court
    unequivocally stated "neither party shall be required to sign
    documents to grant to the other the right to take the income tax
    dependency for any child."
    VI.   SAIC STOCK
    Husband next alleges that 230 shares of SAIC stock he
    received in March 1998 should not have been included in the
    trial court's calculation because they were non-vested and no
    evidence established a value of non-vested stock.    "'In
    determining whether credible evidence exists [to support the
    court's finding,] the appellate court does not retry the facts,
    reweigh the preponderance of the evidence, or make its own
    determination of the credibility of witnesses.'"     Luczkovich, 
    26 Va. App. at 712
    , 
    496 S.E.2d at 162
     (quoting Moreno v. Moreno, 
    24 Va. App. 190
    , 195, 
    480 S.E.2d 792
    , 795 (1997)).     In the instant
    case, husband testified that the 230 shares of stock were
    "non-vested stocks."   However, he also testified that this was a
    "[v]ested stock grant."   The trial court's determination that
    this stock was vested is supported by the evidence and will not
    be altered by this Court on appeal. 2
    2
    Husband also states that the trial court improperly valued
    this stock because there was no evidence as to the value of
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    Appellant contends that the award of 230 shares of stock,
    acquired in March 1998, was separate property because it was
    acquired after the date of separation.     Property acquired after
    the last separation is presumed to be separate property.        See
    Luczkovich, 
    26 Va. App. at 712
    , 
    496 S.E.2d at 162-63
    ; see also
    Price v. Price, 
    4 Va. App. 224
    , 231, 
    355 S.E.2d 905
    , 909 (1987).
    A party claiming property acquired after separation can overcome
    the presumption by establishing that the property was "acquired
    while some vestige of the marital partnership continued or was
    acquired with marital assets."     Dietz v. Dietz, 
    17 Va. App. 203
    ,
    211-12, 
    436 S.E.2d 463
    , 469 (1993).      Thus, the 230 shares
    delineated as a bonus was awarded for work done both before and
    after the date of separation.    Thus it is marital property to
    the extent that it was awarded for work done before the date of
    separation even though it was received after the date of the
    last separation.   See Howell, 31 Va. App. at 347-50, 523 S.E.2d
    at 521-23.
    In the instant case, the trial court classified the bonus
    as part marital and part separate property on a prorated basis.
    Husband testified that he was unsure whether the bonus was for
    his work on a specific project or for the entire year.     Husband
    believed it might have been a bonus primarily for his work on a
    non-vested SAIC stock. However, the trial court set the value
    of vested SAIC stock at $58.87 per share. As such, our holding
    on this issue is dispositive regarding the valuation of the
    stock, as the stock was determined to be vested.
    - 8 -
    "very successful project -- [that] contributed inordinately to
    our bottom line."   He testified that this contract was awarded
    in July of 1997, before the date of separation.   However, he
    also conceded that he was "responsible for about a third of the
    company and that includes about $20,000,000 worth of performing
    contracts."   Thus, in the instant case, wife has met her burden
    of proving that at least a portion, if not all, of the bonus was
    earned prior to the date of separation.   Under the facts of this
    case, it was not an abuse of discretion to prorate the bonus,
    8/12 as marital and 4/12 as separate property based upon the
    portion of 1997 that the parties were together.     See generally
    Howell, 31 Va. App. at 347-50, 523 S.E.2d at 521-23.
    VII.   TAXES PAID IN EXERCISE OF SAIC STOCK OPTIONS
    Husband states that the trial court failed to account for
    taxes imposed upon him in the exercise of his SAIC stock
    options.   The commissioner in chancery's report provided that
    "[i]t does not appear that the husband can simply transfer stock
    to the wife as one could transfer a listed stock.    Accordingly,
    I [sic] the following monetary award has taken into
    consideration the capital gains tax that will be assessed
    against the husband."   Although the trial court's order does not
    specifically state that it accounts for the capital gains tax,
    the award was nearly identical to the commissioner's
    recommendation; $48,500 by the commissioner compared to $51,800
    by the trial court.   Furthermore, although husband alleges the
    - 9 -
    trial court did not consider income taxes paid in exercising the
    stock options, there was no evidence presented regarding taxes
    other than the capital gains tax.    Therefore, based upon the
    record before us, we cannot say that the trial court failed to
    account for taxes assessed upon the husband in exercising his
    stock options.
    VIII.   ANTIQUE CAR COLLECTION
    Husband contends the trial court erred in the
    classification of his antique car collection as marital property
    and in granting wife fifty percent of the value of the
    collection, exclusive of his $1,500 separate interest.
    Classification of property rests in the sound discretion of the
    trial court and will not be reversed unless it is plainly wrong
    or without evidence to support it.     See Rahbaran v. Rahbaran, 
    26 Va. App. 195
    , 205, 
    494 S.E.2d 135
    , 139 (1997).     Code
    § 20-107.3(A)(3) instructs the trial court on how property is to
    be classified:
    The court shall classify property as
    part marital property and part separate
    property as follows:
    a. In the case of income received from
    separate property during the marriage, such
    income shall be marital property only to the
    extent it is attributable to the personal
    efforts of either party. In the case of the
    increase in value of separate property
    during the marriage, such increase in value
    shall be marital property only to the extent
    that marital property or the personal
    efforts of either party have contributed to
    such increases, provided that any such
    personal efforts must be significant and
    - 10 -
    result in substantial appreciation of the
    separate property.
    For purposes of this subdivision, the
    nonowning spouse shall bear the burden of
    proving that (i) contributions of marital
    property or personal effort were made and
    (ii) the separate property increased in
    value. Once this burden of proof is met,
    the owning spouse shall bear the burden of
    proving that the increase in value or some
    portion thereof was not caused by
    contributions of marital property or
    personal effort.
    "Personal effort" of a party shall be
    deemed to be labor, effort, inventiveness,
    physical or intellectual skill, creativity,
    or managerial, promotional or marketing
    activity applied directly to the separate
    property of either party.
    *         *        *        *      *      *        *
    e. When marital property and separate
    property are commingled into newly acquired
    property resulting in the loss of identity
    of the contributing properties, the
    commingled property shall be deemed
    transmuted to marital property. However, to
    the extent the contributed property is
    retraceable by a preponderance of the
    evidence and was not a gift, the contributed
    property shall retain its original
    classification.
    (Emphasis added).       Thus, if a party "'chooses to commingle
    marital and non-marital [property] to the point that direct
    tracing is impossible,' the claimed separate property loses its
    separate status."       Rahbaran, 26 Va. App. at 208, 494 S.E.2d at
    141 (citations omitted).         The party claiming the property to be
    marital property must establish that marital funds or personal
    efforts of one party were expended and this expenditure resulted
    in an increase in value.         Code § 20-107.3(A)(3)(a).   The
    - 11 -
    personal efforts of only the owner-spouse are sufficient to
    cause the property to lose its separate status.    See Rowe v.
    Rowe, 
    24 Va. App. 123
    , 130-34, 
    480 S.E.2d 760
    , 763-65 (1997);
    Peter N. Swisher et al., Virginia Family Law Theory and Practice
    § 11-13 n.14 & Ch. 11 app. 1, at 561-64 (2d ed. 1997).    "For
    personal labor [or marital funds] contributed to property to be
    'significant' and to cause or result in a substantial increase
    in value, without proof to the contrary, the personal labor [or
    marital funds] must amount to more than customary care,
    maintenance, and upkeep."    Martin v. Martin, 
    27 Va. App. 745
    ,
    757, 
    501 S.E.2d 450
    , 456 (1998).   Once established, the party
    claiming the property to be separate must then "(1) establish
    the identity of a portion of hybrid property and (2) directly
    trace that portion to a separate asset."    Rahbaran, 26 Va. App.
    at 208, 494 S.E.2d at 141.   This tracing does not require the
    segregation of the separate portion.    Id. at 207, 494 S.E.2d at
    141.   However, "[e]ven if a party can prove that some part of
    the asset is separate, if the court cannot determine the
    separate amount, the 'unknown amount contributed from the
    separate source transmutes by commingling and becomes marital
    property.'"    Id. at 208-09, 494 S.E.2d at 141 (citations
    omitted).
    In the instant case, wife established that only four of the
    eight cars were purchased prior to marriage for approximately
    $1,260.   The remaining vehicles were purchased during the
    - 12 -
    marriage for $9,000.    At the time of the divorce, the vehicles
    were valued at $29,125.    Husband claimed to have an agreement
    with his wife that would allow him to deposit $100 into a
    separate account every two weeks (i.e. $2,600 per year).    Wife
    denied the agreement existed.    Furthermore, she established that
    expenses for the cars far exceeded the $2,600 per year;
    $3,739.71 was spent in 1995, $7,717 in 1996, and $4,070 in 1997,
    the year they separated.   Additionally, "he bought a lot of
    stuff.   There was stuff being delivered to our house by UPS
    every day practically, every other day at least.     He went -- he
    went on big buying trips."     She testified that:
    He put a lot of time into the cars. You
    have a picture of the house that shows that
    big, huge garage full of parts. We have a
    rental garage -- rental house with a big,
    huge garage behind that that he's got
    stuffed with cars. The room over the garage
    was also his -- stuffed with cars, and he
    spent the majority of his time on that
    -- every night of the week on that
    -- antique car hopping -- and most of the
    weekends. A lot of time.
    *       *      *       *      *      *     *
    [H]e had them sandblasted, made castings,
    completely redid them, painted them. He
    puts them together like models.
    Husband testified that his intent was for the car hobby to
    become a business "to sell reproduction parts for white steam
    cars."   In doing so he "bought a lot of car parts."   During
    their marriage in 1978, he spent many hours working on the
    automobiles.    Credible evidence proved that marital funds and
    - 13 -
    extensive personal efforts of one party, the husband,
    contributed to the substantial increase in value of the antique
    cars.    The personal effort and marital funds expended were more
    than simple customary care, maintenance and upkeep of the cars.
    Having met her burden of establishing that the increase in
    value resulted from marital funds and personal efforts, it was
    husband's burden to establish that the increase was not caused
    by the contributions of marital property or personal efforts.
    See Code § 20-107.3(A)(3).       Husband failed to meet this burden.
    Husband offered no evidence to prove that a portion of the
    increased value of the antique car collection was attributable
    to either passive forces or the result of separate property
    being expended.    We hold that the trial court did not err in
    finding the antique car collection, except for $1,500 of the
    collection, was marital property and that wife had an interest
    therein.
    IX.    MONETARY AWARD
    Husband next argues that the trial court's monetary award
    of $51,800 to wife was not supported by the record and
    additionally the trial court failed to explain its rationale.
    "[B]ased upon (i) the equities and the rights and interests of
    each party in the marital property, and (ii) the factors listed
    in subsection E, the court has the power to grant a monetary
    award."    Code § 20-107.3(D).    Although, the amount of a monetary
    award is within the sound discretion of the trial court, we must
    - 14 -
    be able to determine that the trial court has made a
    determination based upon the evidence as it relates to this code
    section.    See Trivett v. Trivett, 
    7 Va. App. 148
    , 153-55, 
    371 S.E.2d 560
    , 563-64 (1988).   However, this does not require the
    trial court to "'quantify or elaborate exactly what weight or
    consideration it has given to each of the statutory factors.      It
    does mean, however, that the court's findings must have some
    foundation based on the evidence presented.'"    Id. at 154, 371
    S.E.2d at 563 (quoting Wagner v. Wagner, 
    4 Va. App. 397
    , 410,
    
    358 S.E.2d 407
    , 414 (1987)).
    The commissioner's report, as adopted by the trial court,
    provides:
    It is regrettable that the husband's
    SAIC stock is restricted as to transfers and
    ownership. It does not appear that the
    husband can simply transfer stock to the
    wife as one could transfer a listed stock.
    Accordingly, I [sic] the following monetary
    award has taken into consideration the
    capital gains tax that will be assessed
    against the husband.
    As part of the wife's monetary award
    (other parts coming from the husband's
    military pension, the husband's 401K plan,
    and the sale and division of certain
    assets), recommend that the husband pay to
    wife a partial award for other assets titled
    in his name of $48,500.00.
    Furthermore, the trial court's order provides, "with this
    payment the defendant shall retain the SAIC stock, SAIC stock
    options, coin collection, and antique car collection."     This
    monetary award was to compensate wife for her interests in
    - 15 -
    non-liquid items.   Thus, we cannot say that the trial court's
    grant of a monetary award was an abuse of discretion as it was
    supported by the evidence.
    X.     $10,000 CASH
    Lastly, husband claims the trial court should have credited
    him with $10,000 he gave to wife during their separation.
    Resolution of a dispute of facts is within the discretion of the
    trial court.   Howell, 31 Va. App. at 341, 523 S.E.2d at 519.
    When the trial court accepts the commissioner's findings of
    fact, this Court will presume those finding are correct and the
    court's decision will not be disturbed on appeal unless plainly
    wrong or without evidence to support it.       Id.   In the instant
    case the husband testified that he gave his wife $10,000.       Wife
    testified, "He never gave me $10,000 to pay my bills."       The
    trial court resolved this dispute in favor of the wife.       This
    finding is supported by credible evidence and will not be
    disturbed on appeal.
    XI.    CONCLUSION
    For the reasons set forth above, we affirm the judgment of
    the trial court.
    Affirmed.
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