Horacio Morales Gallardo v. Rosa Marina Carranza ( 2024 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Friedman, Frucci and Senior Judge Humphreys
UNPUBLISHED
Argued at Fredericksburg, Virginia
HORACIO MORALES GALLARDO
MEMORANDUM OPINION* BY
v. Record No. 1040-23-4 JUDGE FRANK K. FRIEDMAN
OCTOBER 1, 2024
ROSA MARINA CARRANZA
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
David S. Schell, Judge Designate
William F. Mason (Mason & Black, LLP, on briefs), for appellant.
M. Pilar Falo (Erin Bayles; Violet Soliz; Salvado, Salvado &
Salvado, P.C., on brief), for appellee.
Horacio Morales Gallardo (husband) appeals a final decree of divorce from Rosa Marina
Carranza (wife). The case raises questions involving how a trial court should handle fact-finding
when one spouse controls much of the couple’s money—and that party is not particularly
loquacious in detailing financial transactions. On appeal, husband argues that the circuit court
erred by awarding wife a portion of the equity of the former marital residence without first valuing
the property. Husband also argues the circuit court erred in splitting the couple’s bank accounts
equally as of the date of the separation, without making appropriate findings required by Code
§ 20-107.3(E). Husband also challenges the circuit court’s refusal to admit his pre-marital financial
documents and the circuit court’s classification of certain debt. Finally, husband challenges the
spousal support award to wife. For the following reasons, we affirm the circuit court’s judgment.
*
This opinion is not designated for publication. See Code § 17.1-413(A).
BACKGROUND
“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.”
Starr v. Starr, 70 Va. App. 486, 488 (2019) (quoting Congdon v. Congdon, 40 Va. App. 255, 258
(2003)). Before husband and wife married in 2012, wife sponsored husband’s application for
permanent residency in the United States. After they married, wife lived in her own home located
on Radford Street in Alexandria, Virginia (Radford property), with her adult children. Husband
lived in an apartment with his parents until 2014, when he and his brother purchased a home
together on Valley View Drive in Alexandria, Virginia (Valley View property).
After husband moved into the Valley View property with his parents and brother, wife lived
there approximately three or four days a week. When she was there, wife cleaned, cooked, and
helped care for husband’s parents. Wife kept the Radford property because her adult children
continued to live there. The Valley View property was “very small,” but husband and wife planned
to expand it so her children could eventually move there as well. Husband paid the mortgage
payments on the Valley View property until 2019, at which time his brother split the monthly
mortgage obligation with husband. The record indicates the Valley View property’s “acquisition
cost” was $359,000 in 2014. The original mortgage balance was listed as $287,989.
In 2014, wife opened a house cleaning business and husband managed the business’s
finances. Husband and wife worked together cleaning houses. During the marriage, husband also
maintained their personal finances. The parties shared bank accounts; husband also had a bank
account solely in his name, which he owned before the marriage and deposited funds into during the
marriage. Husband stopped working with the cleaning business around 2018.
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The parties separated in 2020, and husband filed a complaint for divorce in November 2021.
Wife responded with an answer and counterclaim for divorce; she requested spousal support and
equitable distribution.
At the time of the final hearing, wife was 59 years old and testified that she had pain in her
back and legs that hindered her work as a house cleaner. Wife testified that her weekly income was
approximately $400 and she required financial assistance from her children to pay her household
bills. Wife had no savings or retirement accounts. Wife claimed an interest in the Valley View
property because even though husband did not add her name to the title, he purchased it during the
marriage and they intended to live there together.
Husband was 37 years old at the time of trial. He claimed that he had “no idea” what the
value of the Valley View property was.1 Husband worked primarily as a subcontractor, earning an
average of $3,000 per month; husband also earned income from delivering food and other
construction work. Husband testified that his total annual income for the year before the trial was
approximately $106,000.
Husband contended that he was “financially stable” when he entered the marriage. In
support of this assertion, husband sought to introduce financial records from 2008 and 2010 to trace
his separate funds that were in his bank account before the marriage. Wife’s counsel objected
because the statements were too old and not from the years immediately before the 2012 marriage.
The circuit court sustained wife’s objections, finding the documents to be irrelevant.
At the time of the trial, husband had outstanding credit card debt, but conceded that the
balances on the credit cards had “nothing to do” with wife. Rather, husband testified that he and
1
During discovery, husband reported the fair market value of the Valley View property
as “unknown.”
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wife used cash to pay for their marital expenses. Wife confirmed that she did not accrue credit card
debt during the marriage.
At the conclusion of the testimony and presentation of evidence, the circuit court issued its
ruling from the bench. Before awarding equitable distribution, the circuit court expressly
considered the Code § 20-107.3(E) factors. The circuit court noted that the parties were married for
8 years, and husband was 37, while wife was 59.
After considering the statutory definitions of marital property and separate property, the
circuit court determined that even though husband purchased the Valley View property with his
brother, it was marital property because husband bought it during the marriage and did not receive it
through inheritance or gift. The circuit court further held that under Code § 20-107.3(C), it did not
have the authority to order the sale of the property because the Valley View property was not titled
jointly in husband’s and wife’s names. Because husband claimed not to know the value of the
Valley View property and there was little evidence of its value, the circuit court valued the property
by considering “the sales price, the mortgage, the amount of money put into the property.” The
circuit court determined that husband used between $120,000 and $126,000 of marital funds to pay
the mortgage. Based on this calculation, the circuit court awarded wife $60,000, which totaled “a
little less than half” of the marital funds invested in the property.
In addition to the Valley View property, the circuit court considered the parties’ other assets
and debts. The circuit court classified three of the parties’ bank accounts as marital property. At the
time of the trial, the three bank accounts were valued at $43, $58, and $500, respectively. The
circuit court determined that, at the time of the parties’ separation, the three bank accounts were
valued at $11.64, $670.91, and $12,541.45 and ordered the parties to divide equally the balance of
the three accounts as of the date of their separation.
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The circuit court found that husband had incurred the majority of the debts and liabilities.
Based on husband’s testimony that the debt belonged solely to him, the circuit court found that
husband agreed to assume all of the credit card debt.
After the circuit court made its equitable distribution award, it considered wife’s request for
spousal support. The circuit court awarded wife $1,000 per month in spousal support for four years.
The circuit court found the evidence of husband’s income to be “very unclear,” noting that it ranged
“anywhere from” $4,000 monthly to $106,000 yearly. The circuit court found that husband’s
income was actually “somewhere in between.” On the other hand, the circuit court found that the
testimony regarding wife’s income was “fairly accurate,” and she earned between $400 and $500
weekly. In determining whether to award wife spousal support, the circuit court considered that
wife sponsored husband’s application for permanent residency, helped care for his parents, and
assisted with the maintenance of the Valley View property. The circuit court also noted wife had
health conditions that made it “difficult for her to work more than she [was] already.” The circuit
court further considered that husband “managed the finances during the marriage, and he managed
those to his benefit,” as evidenced by his use of marital funds to pay the mortgage of the Valley
View property. After considering all the evidence, the circuit court found that husband had the
ability to pay support and wife was in need of spousal support.
Both parties requested an award of attorney fees. The circuit court declined to award
attorney fees to either party. On May 15, 2023, the circuit court entered a final decree of divorce
incorporating its findings. Husband appeals.
ANALYSIS
I. Equitable Distribution
“[I]n reviewing an equitable distribution award on appeal, we have recognized that the
trial court’s job is a difficult one, and we rely heavily on the discretion of the trial judge in
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weighing the many considerations and circumstances that are presented in each case.” Payne v.
Payne, 77 Va. App. 570, 596 (2023) (quoting Stark v. Dinarany, 73 Va. App. 733, 749-50
(2021)). “Accordingly, ‘decisions concerning equitable distribution rest within the sound
discretion of the trial court.’” Id. (quoting Stark, 73 Va. App. at 750). “The [trial] court’s
‘discretion is limited only in that the [trial] court must consider all of the factors in Code
§ 20-107.3(E).’” Id. (alterations in original) (quoting Stark, 73 Va. App. at 750). We will not
overturn a circuit court’s equitable distribution award absent “an abuse of discretion,
misapplication or wrongful application of the equitable distribution statute, or lack of evidence to
support the award.” Dixon v. Dixon, 71 Va. App. 709, 717-18 (2020) (quoting Anthony v.
Skolnick-Lozano, 63 Va. App. 76, 83 (2014)).
A. Valuation of Valley View Property
Husband first challenges the circuit court’s valuation of the Valley View property. In
rendering its equitable distribution ruling, a circuit court must (1) “classify the property,” (2) “assign
a value to the property,” and (3) “distribute[ ] the property to the parties, taking into consideration
the factors presented in Code § 20-107.3(E).” Sobol v. Sobol, 74 Va. App. 252, 273 (2022) (quoting
Fox v. Fox, 61 Va. App. 185, 193 (2012)).
Husband acknowledges that the Valley View property is not separate property, as defined by
Code § 20‑107.3(A)(1). Husband argues, however, that the circuit court failed to make a finding as
to the value of the property, as Code § 20-107.3(A) requires. Husband claims that the circuit court
had to value the property before it could make an equitable distribution award. Husband further
contends that if the court cannot make a valuation—no award can be made and wife cannot
receive a remand calling for a “do-over” to attempt to prove what she failed to prove the first
time. See Bowers v. Bowers, 4 Va. App. 610 (1987).
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“A trial court has broad discretion to determine the value of assets.” Hoebelheinrich v.
Hoebelheinrich, 43 Va. App. 543, 556 (2004). “[T]he particular method of valuing and the precise
application of that method to the singular facts of the case must vary with the myriad situations that
exist among married couples.” Howell v. Howell, 31 Va. App. 332, 339 (2000). Because valuation
is heavily fact-dependent, “we give great weight to the findings of the trial court.” Id. “In sum, ‘the
value of property is an issue of fact, not law.’” Hoebelheinrich, 43 Va. App. at 557 (quoting
Howell, 31 Va. App. at 340); see also Patel v. Patel, 61 Va. App. 714, 722 (2013) (same).
In awarding wife a monetary award for equity in the Valley View property, the circuit court
received evidence that husband had invested over $120,000 worth of marital funds into the property.
The home had a value of $359,000 in 2014. Husband stated he did not know the value of the Valley
View Property at the time of trial. The circuit court found this testimony regarding finances “less
credible.” The circuit court further explained, in granting wife a monetary award, as follows:
And so we have a situation where the property is bought, not put in
[wife’s] name and is clearly marital property and he takes marital
property, which is his income and pays a mortgage. So he takes
marital property and pays the mortgage on marital property, but he
doesn’t want her to have any interest in the property. And I don’t
think that . . . is equitable.
See Trivett v. Trivett, 7 Va. App. 148, 151 (1988) (providing “[o]nce the property of the parties is
properly classified as marital, the determination to grant a monetary award and the amount of the
award is controlled by the equities and rights and interests of the parties in the marital property and
not by legal title”). Husband argues that wife had the burden of proving the value of the house—
and her failure to do so requires that she be denied any recovery on the property. See Bowers, 4
Va. App. at 619-20.
We have stated that “‘Value’ is a mercurial term.” Howell, 31 Va. App. at 338. “Trial
courts valuing marital property for the purpose of making a monetary award must determine from
the evidence that value which represents the property’s intrinsic worth to the parties . . . .”
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Bosserman v. Bosserman, 9 Va. App. 1, 6 (1989). “The value of an item of marital property is its
intrinsic worth to the parties: the worth to the husband and wife, the parties; the value to the marital
partnership that the court is dissolving.” Howell, 31 Va. App. at 338-39.
The circuit court here granted wife a monetary award equal to approximately one-half of the
marital funds invested into the property, finding that wife was entitled to a monetary award, as
permitted under Code § 20-107.3(D), for her share of the marital funds invested in the property. We
agree that wife proved at least $126,000 of marital property was invested in the property and that
the home likely had a value significantly higher than this sum. The home had a value of $359,000
in 2014, and there was no evidence it had lost value in Alexandria. However, husband was not the
sole owner—he co-owned the property with his brother. Husband’s failure to put a value on the
property—and wife’s lack of access to such information—left the court to fashion a value based on
the available data. The court was within its discretion to fashion its award given husband’s
resistance to providing information mainly within his control—and the undisputed fact that
$126,000 in marital property had been injected into the property. Considering the unique
circumstances of this case, we hold that the circuit court did not abuse its discretion in awarding
wife $60,000 for her interest in the marital property.2
B. Financial Records
Husband next contends that the circuit court erred in refusing to admit his financial records
from 2008 and 2010, which he argued were necessary for the “tracing of separate funds” in his bank
accounts. Husband further contends that the evidence would have allowed him to trace his separate
contributions to the Valley View property.
At trial, the circuit court sustained wife’s objection to the introduction of the documents,
finding that they were not relevant. “[W]e review the circuit court’s ruling regarding the admission
2
Wife has not assigned cross-error or claimed that the valuation should be higher.
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of evidence for an abuse of discretion.” Toraish v. Lee, 293 Va. 262, 272 (2017). Husband did not
offer financial documents from 2011 or 2012. Thus, even if the decade-old records had been
introduced, there would have been a significant gap between the 2008-10 documents and the date of
the marriage and the later purchase of the Valley View property. As such, the circuit court did not
abuse its discretion in finding the financial records from 2008 and 2010 irrelevant to any argument
of retraceability.
Husband had “the burden of proving retraceability” because he was claiming a separate
interest in both the bank accounts and the Valley View Property. von Raab v. von Raab, 26
Va. App. 239, 248 (1997). Husband, however, only offered statements from 2008 and 2010, not
documents, standing alone, from the time period immediately before the marriage. We find the
circuit court did not abuse its discretion in refusing to admit the 2008 and 2010 statements.
C. Bank Accounts
The parties had three joint bank accounts. Husband argues that the circuit court erred by
awarding even splits of all bank account balances as of the date of separation without considering
the factors in Code § 20-107.3(E). We find that the circuit court explicitly considered the Code
§ 20-107.3(E) factors in making the award.
We further reject husband’s assertion that the circuit court erred in awarding “even splits of
all bank account balances as of the date of separation without . . . [making] findings with respect to
the waste of marital funds from the identified bank accounts.” He suggests any division should
have occurred as of the date of the hearing—when the accounts (which were under husband’s
control) contained much less money. While the court did not make a specific finding of waste, it is
clear that husband controlled the family banking and that certain balances dropped precipitously
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under his watch between the date of separation and the date of the hearing. Again, on this record,
we uphold the circuit court’s ruling.3
D. Credit Card Debt
Husband next contends that the circuit court erred in concluding that the credit card debt
incurred during the marriage was his separate debt. Although he noted his objection to the circuit
court’s ruling on the final decree of divorce, he admitted during the hearing that the balances on the
credit cards had “nothing to do” with wife. Husband testified that he and wife paid in cash for
marital expenses. Wife’s counsel asked husband directly several times whether wife was
“responsible” for the credit card debt, and he conceded she was not. The circuit court
determined that “[b]ased on the testimony of the [h]usband on the stand, he will assume all credit
card debt that remains.” Simply put, there was abundant evidence upon which the circuit court
could base this decision and we uphold it.
II. Spousal Support
Husband challenges the circuit court’s award of spousal support. “The trial court has
‘broad discretion in setting spousal support and its determination will not be disturbed except for
a clear abuse of discretion.’” Wyatt v. Wyatt, 70 Va. App. 716, 719 (2019) (quoting Giraldi v.
Giraldi, 64 Va. App. 676, 681-82 (2015)). “When a court awards spousal support based upon
due consideration of the factors enumerated in Code § 20-107.1, as shown by the evidence, its
determination ‘will not be disturbed except for a clear abuse of discretion.’” Chaney v.
Karabaic-Chaney, 71 Va. App. 431, 435 (2020) (quoting Dodge v. Dodge, 2 Va. App. 238, 246
(1986)). “In determining the appropriate amount of spousal support, the trial court must consider
3
Husband, in any event, offers no legal authority to support his argument. Rule 5A:20(e)
requires the appellant to provide “[t]he standard of review and the argument (including principles of
law and authorities) relating to each assignment of error.” “An appellant’s failure to strictly adhere
to the requirements of Rule 5A:20(e) permits this Court to treat an issue as waived.” Winters v.
Winters, 73 Va. App. 581, 597 (2021).
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the needs of the requesting party and the other spouse’s ability to pay.” Wyatt, 70 Va. App. at
719 (quoting Alphin v. Alphin, 15 Va. App. 395, 401 (1992)). In addition, Code § 20-107.1(F)
provides that “[i]f the court awards periodic support for a defined duration, such findings shall
identify the basis for the nature, amount and duration of the award and, if appropriate, a
specification of the events and circumstances reasonably contemplated by the court which
support the award.”
Husband argues that the circuit court did not identify the statutory factors upon which it
relied in making the spousal support determination. Contrary to husband’s argument, however,
in awarding spousal support, the circuit court discussed the Code § 20-107.1(E) factors.
Specifically, the circuit court highlighted the parties’ income and finances, wife’s health and
ability to work, as well as the assistance she provided while she lived in the Valley View
Property. The circuit court also noted husband’s ability to pay and wife’s need for support. The
circuit court also attached to the final decree of divorce a written explanation of why it awarded
spousal support to wife for a defined duration. The circuit court found that husband had
“abruptly removed himself from the family business,” requiring wife “to begin a rebuilding
process.” The circuit court further found that four years was “an appropriate time” for wife “to
grow her business back to its former earnings.”
Upon review of the record, we conclude the circuit court did not abuse its discretion in
awarding spousal support. Wife clearly testified about her need for support; her weekly income
was approximately $400 and she required financial assistance from her children to pay her
household bills. Husband testified to a range of income; although his evidence was “unclear,” it
supported the circuit court’s conclusion that his income far exceeded wife’s and that he had the
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ability to pay.4 The record supports the circuit court’s factual findings that wife’s back pain
hindered her ability to work and that wife contributed to the well-being of the family by caring
for husband’s parents and helping take care of the Valley View property. The circuit court
considered the statutory factors in Code § 20-107.1(E) and complied with the requirements of
Code § 20-107.1(F); the circuit court did not err by awarding $1,000 in monthly spousal support
to wife for a period of four years.
III. Attorney Fees
Wife requests an award of attorney fees and costs incurred in this appeal. “The decision of
whether to award attorney[] fees and costs incurred on appeal is discretionary.” Koons v. Crane, 72
Va. App. 720, 742 (2021) (quoting Friedman v. Smith, 68 Va. App. 529, 545 (2018)). In making
such a determination, the Court considers all the equities of the case. Rule 5A:30(b)(2)(C). While
wife has prevailed in this appeal, husband has raised legitimate and non-frivolous issues. The
positions of both parties were well-presented. After considering the record before us and all the
equities of the case, we deny wife’s request for appellate attorney fees and costs.
CONCLUSION
For the foregoing reasons, we affirm the circuit court’s judgment.
Affirmed.
4
Husband alleges for the first time on appeal that the circuit court erred in failing to
consider the parties’ income tax records in awarding spousal support. “The Court of Appeals
will not consider an argument on appeal which was not presented to the trial court.” Tackett v.
Arlington Cnty. Dep’t of Hum. Servs., 62 Va. App. 296, 315 (2013) (quoting Ohree v.
Commonwealth, 26 Va. App. 299, 308 (1998)); see Rule 5A:18 . As husband did not raise this
challenge in the circuit court, we cannot consider the argument for the first time on appeal.
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