Gae Susan Anderson-Miller v. Walter Thomas Golembiewski

COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Fitzpatrick, Judges Felton and Kelsey
Argued at Chesapeake, Virginia
WALTER THOMAS GOLEMBIEWSKI
v. Record No. 2446-04-1
GAE SUSAN ANDERSON-MILLER MEMORANDUM OPINION* BY
JUDGE WALTER S. FELTON, JR.
GAE SUSAN ANDERSON-MILLER JUNE 14, 2005
v. Record No. 2468-04-1
WALTER THOMAS GOLEMBIEWSKI
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
Frederick B. Lowe, Judge
Lawrence D. Diehl for Walter Thomas Golembiewski.
Michael C. Miller (Marcia M. Maddox; Katharine W. McGregor;
Maddox, Cole & Miller, P.C., on briefs), for Gae Susan
Anderson-Miller.
Walter Thomas Golembiewski (husband) appeals the trial court’s equitable distribution of
the parties’ marital estate. Husband contends that the trial court erred in (1) awarding the
Individual Retirement Account (IRA) titled in wife’s name to her; (2) refusing to award to him the
rental value for wife’s occupancy of the marital residence following the parties’ separation, and
(3) awarding wife the larger share of the marital equity in the marital residence. Gae Susan
Anderson-Miller (wife) cross-appeals, contending that the trial court erred in (1) awarding to
husband a disproportionate share of the equity in the marital residence as his separate property
based on his tracing evidence; (2) classifying property acquired during the marriage from
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
unidentified sources as husband’s separate property; and (3) failing to classify the note proceeds,
payable to both husband and wife, from the sale of husband’s separate real estate as marital
property. For the reasons that follow, we reverse the trial court’s award to wife of the IRA titled in
her name and remand for classification and distribution pursuant to Code § 20-107.3, but otherwise
affirm the judgment of the trial court.
BACKGROUND
Husband and wife were married in 1984 in Pennsylvania. In October 2002, the trial court
awarded wife a divorce on the grounds that the parties had lived separate and apart for more than
one year. Code § 20-91(9)(a). It declined to make an equitable distribution determination,
finding that the parties had waived equitable distribution in their pre-marital agreement.
Husband appealed the judgment of the trial court declining to order equitable distribution. See
Golembiewski v. Golembiewski, No. 2993-02-1, 2003 Va. App. LEXIS 507 (Oct. 7, 2003)
(Golembiewski I). In Golembiewski I, a panel of this Court held that the terms of the parties’
pre-marital agreement did not exclude the equitable distribution of “any joint property or
property voluntarily placed in joint title or [separate] property voluntarily placed in the name of
the other.” Id. slip op. at 9, 2003 Va. App. LEXIS 507, at *15-16. This Court instructed the trial
court to apply the provisions of Code § 20-107.3 to the property of the parties falling into these
designated categories. Id.
On remand, the trial court heard evidence ore tenus related to the equitable distribution of
the parties’ property, including evidence related to the purchase of the marital residence, the
proceeds of a jointly payable note arising from the sale of husband’s separate property,1 and all
1
In 1997, husband sold a parcel of his separate real estate, with a portion of the purchase
price payable over time pursuant to the terms of a mortgage note payable to husband and wife.
The purchaser subsequently entered bankruptcy, and the proceeds of the note were distributed as
a part of the bankrupt’s estate.
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separate “property voluntarily placed in the name of the other.” The trial court entered a final
equitable distribution order in September 2004, awarding each party the IRA then titled in his or
her name. It found husband had shown that the IRAs were funded with contributions exclusively
from his separate funds and that he did not gift to wife his separate property in the IRA titled in
her name. It found that wife’s IRA “constitutes separate property voluntarily placed in the name
of another.” Finding that “[s]ince § 20-107.3 does not directly address non-gift separate property
voluntarily placed in the name of another,” the trial court awarded wife the IRA titled in her
name “by virtue of the Court’s inherent general equitable powers.” It also awarded the proceeds
of the note from the sale of husband’s separate property to husband as his separate property,
finding that no gift of that property was made to wife, even though the note was made payable to
both husband and wife. It declined to award husband any rental value for wife’s post-separation
occupation of the marital residence.
The trial court found that the marital residence, titled in the parties’ joint names as tenants
by the entirety, had a value of $565,000, with an outstanding mortgage balance of $40,511,
resulting in an equity valued at $524,489. Applying the Brandenburg formula, approved by this
Court in Hart v. Hart, 27 Va. App. 46, 497 S.E.2d 496 (1998), the trial court concluded that
husband paid $177,693 from his separate property toward the purchase of the residence. That
amount included $73,372 of his separate funds paid at closing and $104,321 of his separate funds
applied to reduce the mortgage principal. After deducting the $177,693 traced to husband’s
separate property from the total equity, the trial court awarded wife eighty-five percent of the
remaining marital equity in the residence, concluding that she was the primary wage earner
during the marriage2 and that she made greater non-monetary contributions to the well-being of
the family. Wife subsequently remarried and eventually returned to Pennsylvania. Thereafter,
2
Husband had considerable passive income from his separate property.
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husband was awarded custody of the parties’ daughter who remained with him in Virginia. The
trial court awarded husband the marital residence, provided that he purchase wife’s interest in the
property. Both husband and wife appeal the equitable distribution order.
HUSBAND’S APPEAL
On appeal, we view “the evidence in the light most favorable to . . . the party prevailing
below and grant all reasonable inferences fairly deducible therefrom.” Anderson v. Anderson,
29 Va. App. 673, 678, 514 S.E.2d 369, 372 (1999). “Fashioning an equitable distribution award
lies within the sound discretion of the trial judge,” Srinivasan v. Srinivasan, 10 Va. App. 728,
732, 396 S.E.2d 675, 678 (1990), and “[w]here, as here, the court hears the evidence ore tenus,
its findings are entitled to great weight and will not be disturbed on appeal unless plainly wrong
or without evidence to support it,” Alphin v. Alphin, 15 Va. App. 395, 399, 424 S.E.2d 572, 574
(1992).
I.
Husband contends that the trial court erred in awarding to wife the IRA titled in her name
but funded from husband’s separate funds, when it also concluded that no gift had been made by
him of the property to her. In its equitable distribution award, the trial court stated:
Since the Court accepts [husband’s] argument that no gift was
proven and that the IRAs were funded with contributions
exclusively from his separate funds, [wife’s] IRA constitutes
separate property voluntarily placed in the name of another. Since
§ 20-107.3 does not directly address non-gift separate property
voluntarily placed in the name of another, the Court awards the
IRA in [wife’s] name to her by virtue of the Court’s inherent
general equitable powers.
The record reflects that soon after the parties married, husband opened two separate IRA
accounts, one titled in wife’s name and one titled in his name. The trial court found that husband
made all the contributions to these two accounts from his separate property. Wife did not
contribute funds to either account. Husband testified that wife had not opened an IRA, was not
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interested in doing so, and that it was understood that he would fund an IRA in her name, but
that it would remain his property. He explained that he funded the IRA titled in wife’s name
solely for its tax benefit to the parties and that it was never intended to be a gift to wife. Wife
testified that she did not object to the opening of the IRA in her name for tax purposes.
The parties’ pre-marital agreement specified that property separately owned by the
parties would not be subject to equitable distribution if the parties divorced. It also
unambiguously provided that a party’s separate property voluntarily placed in the name of the
other was not governed by the pre-marital agreement and thereby subject to equitable
distribution. Golembiewski I., slip op. at 9, 2003 Va. App. LEXIS 507, at *16. Under these
circumstances, the classification, valuation, and distribution of the IRA titled in wife’s name is
governed by Code § 20-107.3.
Virginia’s equitable distribution law provides that property, including retirement
accounts, acquired by either party during marriage, and before the last separation of the parties,
is presumed to be marital in the absence of satisfactory evidence that it is separate property.
Code § 20-107.3(A)(2)(iii); see Gilman v. Gilman, 32 Va. App. 104, 116, 526 S.E.2d 763, 769
(2000). Code § 20-107.3(A)(1)(iii) provides, among other things, that separate property is “all
property acquired during the marriage in exchange for or from the proceeds of sale of separate
property, provided that such property acquired during the marriage is maintained as separate
property.” See Courembis v. Courembis, 43 Va. App. 18, 34, 595 S.E.2d 505, 513 (2004).
Here the trial court concluded that, despite the IRA being acquired during the marriage
and presumptively marital, husband’s tracing evidence proved that wife’s IRA was funded
exclusively by his separate property. It also found that wife had failed to prove by clear and
convincing evidence that husband intended a gift of this separate property to her. However, it
then awarded the IRA in wife’s name to her pursuant to its “inherent general equitable powers,”
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holding that “[Code] § 20-107.3 does not directly address non-gift separate property voluntarily
placed in the name of another.”
We conclude that the trial court erred by failing to comply with the provisions of Code
§ 20-107.3 in awarding the IRA titled in wife’s name as separate property voluntarily placed in
her name by husband, after determining that it was funded exclusively by husband’s separate
property and that wife had failed to prove it was gifted to her by husband. See Code
§ 20-107.3(C). Accordingly, we reverse that part of the trial court’s final decree and remand for
further classification and distribution pursuant to Code § 20-107.3.
II.
Husband also contends on appeal that the trial court erred in declining to award him
rental value of the marital residence for the period wife occupied that property following the
parties’ separation. He concedes that such an award lies within the discretion of the trial court,
but argues that it abused its discretion under the evidence presented. We find no error.
Husband asserts that wife continued to occupy the marital residence after he moved out;
that she never paid him any rent; that she resided in the home with her new husband; and that her
monetary contributions toward the residence would not offset his “extensive payments” made
during her sole occupancy. The record on appeal does not support husband’s claim that he made
“extensive payments” toward the marital residence after the parties separated. Wife testified that
after husband left the marital residence she “[paid] for everything” and that she “tried really
hard” to maintain the property.
Husband’s reliance on Anderson v. Anderson, 42 Va. App. 643, 593 S.E.2d 824 (2004),
is misplaced. In Anderson, the husband remained in the marital residence after wife moved out,
and rented a portion of it to third parties. Id. at 645, 593 S.E.2d at 825. Under those
circumstances, the trial court correctly determined that wife was entitled to credit for the rents
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collected by husband from the marital property between the time of the parties’ separation and its
final equitable distribution award. Id. Here, wife remained in the marital residence with the
parties’ young daughter and, later, her new husband. She did not rent or lease any portion of the
residence to third parties. Accordingly, there were no rental payments from the marital residence
to be distributed between the parties or credited to either in the final equitable distribution award.
From the record before us, we find no abuse of discretion by the trial court in refusing to award
any rental value from the marital residence to husband.
III.
Husband also contends that the trial court erred by granting a disproportionate share of
the marital equity in the marital residence to wife. We have consistently held that “[e]quitable
distribution does not mean equal distribution. In Virginia, there is no presumption that marital
property should be equally divided.” Budnick v. Budnick, 42 Va. App. 823, 838, 595 S.E.2d 50,
57 (2004) (citations omitted).
We will not disturb the trial court’s equitable distribution award
merely because it is unequal in value between the parties, where
the record reflects that the trial court has considered each of the
factors set out in Code § 20-107.3(E), and where the evidence
supports the trial court’s conclusions.
Id. at 838, 595 S.E.2d at 58 (citations omitted).
The trial court awarded eighty-five percent of the marital equity in the marital residence
to wife after considering the factors enumerated in Code § 20-107.3. It also awarded husband a
substantial value of the total equity in the marital residence as his separate property, based on
payments of his separate funds toward its initial purchase and reduction of the mortgage
principal. The record reflects that wife was the primary wage earner during the marriage and
that she made significant monetary and non-monetary contributions to the marriage. From our
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review of the record, we conclude that the trial court did not abuse its discretion in allocating
eighty-five percent of the marital equity in the marital residence to wife.
IV.
Finally, husband requests an award of attorney’s fees and costs expended in this appeal.
Reviewing the record of the proceedings as a whole, we decline to award husband his
attorney’s fees and costs incurred on appeal. See O’Loughlin v. O’Loughlin, 23 Va. App. 690, 695,
479 S.E.2d 98, 100 (1996).
WIFE’S CROSS-APPEAL
I.
In her cross-appeal wife contends husband’s evidence was insufficient to trace the value
of his separate property in the marital residence and that the trial court abused its discretion in
finding that husband contributed $177,693 of his separate property in the initial purchase
payment and in the reduction of the mortgage principal. She argues that husband’s testimony as
to tracing of his separate property was incredible and that his documentary tracing evidence was
inadequate and incomplete considering a ten-year gap in his records from 1984 and 1994.
The parties titled the marital residence in their joint names as tenants by the entirety.
Acquired during the marriage, it was presumptively marital property, except to the extent that
husband was able to rebut that presumption by credible tracing evidence of his separate property
in the marital residence. See Code § 20-107.3(A)(2); see also Gilman, 32 Va. App. at 116, 526
S.E.2d at 769. Here, the record reflects that husband provided most of the initial down payment
from his separate sources, including proceeds from the sale of his separately owned real estate,
the sale of his separately held stock, and funds received from his various separate investment
accounts. In addition to his testimony, he presented documents tracing the funds from his
separate property sources, including account balances and transaction records. The trial court
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found husband’s tracing evidence sufficient to rebut the marital presumption and that his proof
established a separate property value of $177,693 in the total equity in the marital residence. The
record before us supports its judgment.
Accordingly, we affirm the trial court’s finding of husband’s separate property interest in
the marital residence.
II.
Wife also contends that the trial court erred in awarding husband the $10,000 proceeds of
a note, made payable to husband and wife, derived from the sale of husband’s separate real
estate, which he acquired prior to the marriage and maintained as his separate property during the
marriage. The purchaser of husband’s property financed a portion of the purchase price by a
note payable to husband and wife. Wife argues that the note is a new asset acquired during the
marriage and presumptively marital property. She further argues that husband’s tracing evidence
failed to rebut the presumption that the note was marital property.
Husband testified that he added wife’s name as joint payee of the purchasers’ note on
advice of his attorney in Pennsylvania where the property was located and that it was never his
intention to gift any part of the note proceeds from the sale of his separate property to wife. The
trial court found that husband’s retracing evidence established that the note proceeds were
husband’s separate property and that wife failed to prove by clear and convincing evidence that
husband intended to make a gift to her of the note proceeds. See Bchara v. Bchara, 38 Va. App.
302, 312-13, 563 S.E.2d 398, 403 (2002) (jointly titled real estate and jointly titled accounts
remained the wife’s separate property upon her establishing she had acquired the property by
inheritance and evidence failed to show any gift).
From the record before us, we find no abuse of discretion in the trial court’s decision to
award husband the $10,000 note proceeds, and affirm its judgment.
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CONCLUSION
We find no abuse of discretion by the trial court in finding husband’s evidence sufficient to
trace his separate property from the jointly owned marital residence; in its classification of the
parties’ respective interests in the marital residence; and in its equitable distribution of the marital
equity in the marital residence. We also conclude that the trial court did not abuse its discretion in
its award to husband, as his separate property, of the purchase money note proceeds from the sale of
his separately owned real estate in Pennsylvania. We also conclude that the trial court did not err in
declining to award any rental value to husband for the period wife occupied the marital residence
after the parties’ separation, or in its allocation to wife of eighty-five percent of the marital equity in
the parties’ marital residence.
However, we hold that the trial court erred in awarding to wife the IRA titled in her name,
after determining that it was funded exclusively by husband’s separate property and that no gift of
that property was made by husband to wife. Accordingly, we reverse the judgment of the trial court
awarding to wife the IRA in her name, and remand for classification and distribution pursuant to
Code § 20-107.3.
Affirmed, in part,
and reversed, in part,
and remanded.
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