Nomi Taslitt v. Craig E. O'Connor ( 1999 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Annunziata and Lemons
Argued at Alexandria, Virginia
NOMI TASLITT
MEMORANDUM OPINION * BY
v. Record No. 2724-98-4 JUDGE LARRY G. ELDER
DECEMBER 7, 1999
CRAIG E. O'CONNOR
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Kathleen H. MacKay, Judge
Stephen G. Cochran (Karen P. Power; The
Jefferson Law Firm, P.L.C., on brief), for
appellant.
Alan B. Plevy (Smolen & Plevy, P.C., on
brief), for appellee.
Nomi Taslitt (wife) appeals from the decision of the
Fairfax County Circuit Court determining the obligation of
Craig E. O'Connor (husband) for child support and his
entitlement to spousal support. On appeal, wife contends the
court erroneously failed to include in husband's gross income
various sums, including amounts received from his mother and
from the corporation of which he is the sole owner.
Specifically, she argues that the court erroneously (1)
classified certain sums as loans to the corporation rather than
as gifts to him; (2) shifted to her the burden of proving the
"reasonable business expenses" to be deducted from gross
* Pursuant to Code § 17.1-413, recodifying Code
§ 17-116.010, this opinion is not designated for publication.
corporate revenue; and (3) refused to include in husband's gross
income amounts he received from the corporation as loan
repayments and amounts he withdrew from corporate receipts to
pay his personal expenses. She also seeks an award of
attorney's fees and costs on appeal. We hold that, once wife
offered evidence of husband's gross corporate revenue, husband
bore the burden of establishing reasonable business expenses to
be deducted from that revenue. However, we hold that husband
met that burden and that the trial court did not abuse its
discretion in calculating the challenged spousal and child
support obligations. Therefore, we affirm the trial court's
decision.
"Decisions concerning both [spousal and child] support rest
within the sound discretion of the trial court and will not be
reversed on appeal unless plainly wrong or unsupported by the
evidence." Calvert v. Calvert, 18 Va. App. 781, 784, 447 S.E.2d
875, 876 (1994). "The trial court's decision, when based upon
credibility determinations made during an ore tenus hearing, is
owed great weight and will not be disturbed unless plainly wrong
or without evidence to support it." Douglas v. Hammett, 28 Va.
App. 517, 525, 507 S.E.2d 98, 102 (1998). In computing a
party's gross income from which child support obligations are
calculated, Code § 20-108.2(C) requires the inclusion of "all
income from all sources." Such income includes salaries and
gifts but "shall be subject to deduction of reasonable business
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expenses for persons with income from self-employment, a
partnership, or a closely held business." Code § 20-108.2(C).
A court determining spousal support also shall consider all
income of the parties. See Code § 20-107.1 ("If the court
determines that an award [of spousal support] should be made, it
shall, in determining the amount, consider . . . [t]he earning
capacity, obligations, needs and financial resources of the
parties, including but not limited to income from all pension,
profit sharing or retirement plans, of whatever nature
. . . .").
We conclude, based on the evidence in the record, that the
trial court did not abuse its discretion in determining
husband's gross income for purposes of calculating spousal and
child support. No evidence in the record compels a conclusion
that husband's income was higher than the $1,448 per month he
reported receiving in salary from the corporation and the
$37,093 he received from mother in 1997, which the trial court
found to be a gift properly includable in his gross income.
These sums support the $54,468 annual income figure which the
trial court calculated for husband. Rather than using wife's
figures for the total funds deposited in 1996 and 1997 into
accounts to which husband had access, figures wife agreed may
not have accurately represented his income, the trial court
expressly considered husband's corporate income and expense
statements for January through April 1998. Those statements
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reflect an average monthly sum to which husband had access of
$1,362.81, which is lower than the monthly income figure of
$1,448 that husband reported on his personal income and expense
statement.
Wife contends the trial court abused its discretion in
failing to include in husband's gross income $22,000 husband
received from accounts he held jointly with his mother, which
wife contends was given with no expectation of repayment. We
disagree. Whether the payments were loans or gifts was a
question within the discretion of the trial court to resolve
based on its perception of the credibility of the witnesses.
See Douglas, 28 Va. App. at 525, 507 S.E.2d at 102. Husband
offered evidence that the payments were loans, and it was within
the discretion of the trial court to accept this testimony.
That husband was not required to pay interest on the loans, made
no repayments of principal, and had no notes memorializing the
loans is not dispositive. In wife's favor, the trial court
ruled that husband received an additional $37,093 from mother in
1997 and that this sum, part of which went directly to pay his
expenses, constituted a gift properly includable in his gross
income. We hold the trial court did not abuse its discretion in
holding that the $22,000 in payments to the corporation
constituted loans.
Wife also contends the trial court abused its discretion by
disregarding her evidence that, in both 1996 and 1997, more than
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$300,000 was deposited into bank accounts husband owned or
controlled. She argues that the trial court erred by, in
effect, placing the burden on her to prove the amount of
"reasonable business expenses" to be deducted from this figure.
We agree with wife that husband, as the sole Buggie Barn
shareholder, bore the burden of establishing reasonable business
expenses to be deducted from gross corporate income figures for
purposes of calculating his gross income. See Code
§ 20-108.2(C); see also Code § 20-107.1. However, we disagree
with wife's argument that the trial court improperly shifted
this burden to her. As set out above, the trial court expressly
considered husband's corporate income and expense statements for
January through April 1998. The trial court, in its role of
assessing witness credibility, was entitled to believe husband's
evidence of income and expenses for this period of time, despite
wife's claim of an absence of sufficient underlying
documentation, and to extrapolate from this evidence husband's
income for the years 1996 and 1997.
Extrapolation from 1998 gross corporate revenue supports
the conclusion that husband's 1996 and 1997 gross corporate
revenue yielded similar net income for husband in 1996 and 1997.
First, although wife claimed husband had access to over $300,000
deposited into his bank accounts in each of the years 1996 and
1997, the bank accounts wife examined to arrive at these figures
included accounts on which husband's mother also was a
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signatory. In holding that the sums husband received from these
accounts in 1997 were loans and gifts from mother, the trial
court implicitly found that the accounts belonged to mother and
that deposits could not properly be categorized as income to
husband. Such findings were within the court's discretion.
Wife conceded at oral argument before this Court that
subtraction of the amounts deposited into the accounts on which
husband was merely a signatory and subtraction of the amounts
classified as loans to husband or the corporation would result
in gross income to husband of approximately $150,000 in 1996 and
$200,000 in 1997. Extrapolating from gross corporate revenue of
$49,935.76 for the first four months of 1998, anticipated gross
corporate revenue for all of 1998 would be approximately
$150,000. Therefore, the evidence of corporate income for 1996,
1997 and a portion of 1998 supports the trial court's finding
that, for purposes of calculating spousal and child support,
husband's average monthly income from the corporation was
$1,448, as he represented on his income and expense statement.
Finally, wife contends the trial court erroneously failed
to include in its calculation of husband's gross income money he
received from the corporation in 1996 in the form of loan
repayments and money he withdrew from corporate receipts that
same year in order to pay personal expenses. Again, we
disagree. In calculating husband's income received from the
corporation, the trial court relied on income and expense
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figures from 1998, which purportedly showed all payments to and
withdrawals by husband during that period of time, regardless of
their characterization. Based on deficiencies in the evidence
regarding corporate expenses for previous years, the trial court
did not abuse its discretion in refusing to consider amounts
husband may have received from corporate revenues in 1996 when
it calculated his gross income for purposes of orders entered in
1998. Furthermore, as discussed above, an extrapolation from
1998 revenue indicates that gross corporate revenues for 1996
equaled those projected for 1998, when husband's net monthly
income from the corporation was actually lower than the amount
listed on his income and expense statement. Therefore, evidence
in the record concerning 1996 would not require a finding that
husband's income was higher at that time.
We hold that the trial court did not abuse its discretion
in crediting husband's personal income and expense statement and
corporate records for January through April 1998, coupled with
evidence of monetary gifts he received in 1997, in calculating
his gross income for purposes of determining spousal and child
support. For these reasons, we affirm the ruling of the trial
court and deny wife's request for attorney's fees and costs on
appeal.
Affirmed.
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