Ralph L. Bennett v. Joyce R. Bennett

COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Annunziata and Senior Judge Duff
Argued at Alexandria, Virginia
RALPH L. BENNETT
MEMORANDUM OPINION * BY
v. Record No. 1621-96-4 JUDGE CHARLES H. DUFF
SEPTEMBER 23, 1997
JOYCE R. BENNETT
FROM THE CIRCUIT COURT OF STAFFORD COUNTY
James W. Haley, Jr., Judge
Richard E. Crouch (John Crouch; Crouch &
Crouch, on briefs), for appellant.
Timothy T. Szabo (Szabo, Zelnick & Erickson,
P.C., on brief), for appellee.
Ralph L. Bennett (husband) appeals the equitable
distribution decision of the circuit court awarding Joyce R.
Bennett (wife) a portion of his disability retirement benefits
and deciding other issues. Husband argues that the trial court
(1) erred in classifying the disability payments as marital
property; (2) erred in not classifying the disability payments as
partially separate property; (3) erred in crediting husband with
$23,000 in previously spent funds; (4) erred in denying husband
spousal support or a reservation of support; (5) abused its
discretion in awarding wife $3,000 in attorney's fees; and (6)
erred in classifying $27,000 in credit card debts as marital.
Joyce R. Bennett (wife) argues that the trial court erred in
setting the suspension bond in an amount insufficient to secure
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
recovery by her if she prevails. We affirm the decision of the
trial court.
"In reviewing an equitable distribution award on appeal, we
recognize that the trial court's job is a difficult one.
Accordingly, we rely heavily on the discretion of the trial judge
in weighing the many considerations and circumstances that are
presented in each case." Artis v. Artis, 4 Va. App. 132, 137,
354 S.E.2d 812, 815 (1987).
"Unless it appears from the record that the
[trial judge] has abused his discretion, that
he has not considered or has misapplied one
of the statutory mandates, or that the
evidence fails to support the findings of
fact underlying his resolution of the
conflict in the equities, the . . . equitable
distribution award will not be reversed on
appeal."
Brown v. Brown, 5 Va. App. 238, 244-45, 361 S.E.2d 364, 368
(1987) (citation omitted). Applying these principles, we examine
the trial court's rulings which the parties contest.
Disability Retirement
Husband contends that the trial court erred in finding his
disability retirement was wholly marital property. Husband
contends the retirement is a "stream of income" which is entirely
post-separation. Alternatively, husband argues that the
disability retirement is part marital and part separate property.
While this issue has not been directly addressed by this
Court previously, we do not come to this question without the
guidance of earlier decisions and statutory requirements. Under
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Code § 20-107.3, the rebuttable presumption is that benefits
earned during the marriage are marital property. Pensions and
retirement benefits of whatever kind are expressly included as
marital property. 1 Previous decisions have focused on the
importance of retirement benefits as "compris[ing] a 'portion of
the pool of marital assets,' . . . clearly contemplated by the
'scheme' of Code § 20-107.3, which is intended to justly
distribute the 'marital wealth of the parties.'" Banagan v.
Banagan, 17 Va. App. 321, 325, 437 S.E.2d 229, 231 (1993)
(citations omitted).
Here, husband's evidence demonstrated that the disability
benefit husband received is a form of retirement benefit to which
he was entitled through his employment; the amount of his
disability benefit was calculated using his highest salary and
years of service. It was, as wife points out, a defined benefit
plan.
The letter informing husband of his disability retirement
benefit noted that he was entitled to a disability credit of ten
years and seven months. This credit reflected the non-marital
portion of the asset. In its final order the trial court
recognized that the husband's gross disability retirement was
marital property and awarded the wife 50% thereof. However,
1
Husband cites cases from other jurisdictions treating
disability payments as separate property. In the absence of
evidence that the statutory schemes in those jurisdictions are
comparable to that of Virginia, we find those cases interesting
but inapposite.
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because the husband was entitled to the disability credit, the
actual percentage to be paid to the wife was 37.5% rather than
50%. Therefore, we find no error in the trial court's decision
finding husband's disability retirement benefit a marital asset
subject to equitable distribution or in its calculation of the
percentage to be paid.
Credited Funds
Following an evidentiary hearing, the trial court found
husband guilty of contempt for expending marital funds contrary
to the court's prohibition. The evidence indicated that at least
$23,000 of funds earned during the marriage was spent by husband
for varied purposes, including repayment of an alleged 1978 loan
by husband's mother towards the purchase of the marital
residence, payment of husband's attorney's fees, a gift to the
parties' daughter, and other purposes. Credible evidence
indicated that those funds were marital assets which husband had
improperly expended. See Clements v. Clements, 10 Va. App. 580,
585-86, 397 S.E.2d 257, 261 (1990). We find no error in the
commissioner's recommendation that the equitable distribution
award reflect husband's unilateral expenditure of those marital
assets.
Reservation of Support
Husband contends that he filed a "Notice and Motion for
Pendente Lite Relief" in August 1994 in which he sought pendente
lite spousal support. Wife conceded in her Final Reply
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Memorandum to the commissioner that husband filed a motion
seeking pendente lite support. Husband first specifically
requested a reservation of permanent spousal support in his
Memorandum of Argument with Supporting Authority and Exhibits
submitted after the commissioner had issued an "interlocutory
ruling that Boyd v. Boyd [, 2 Va. App. 16, 340 S.E.2d 578
(1986),] . . . denies Husband's request for spousal support
because of his failure to raise the issue in the initial
pleading." On appeal, husband also contends that the request for
general relief in his Bill of Complaint for Divorce was
sufficient to preserve his right to permanent spousal support.
The action commenced by husband, Chancery 94-375, was
consolidated with wife's action under Chancery 94-363. We have
no copies of husband's initial pleadings in the record before us.
However, as the parties agree that husband later sought pendente
lite support by motion, we accept that representation for
purposes of this appeal.
As noted in Boyd, 2 Va. App. at 19, 340 S.E.2d at 580,
"[t]he office of pleadings is to give notice to the opposing
party of the nature and character of the claim, without which the
most rudimentary due process safeguards would be denied."
Husband's request for general relief in his bill of complaint
failed to alert wife that husband was seeking permanent spousal
support. See id. at 19, 340 S.E.2d at 579 (wife's general prayer
"'for such other and further relief as to equity may seem meet
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and the nature of her case may require'" was insufficient notice
of request for spousal support). Similarly, husband's request
for a reservation of permanent support, first made after the
completion of the commissioner's hearing, failed to provide wife
with timely and sufficient notice of his claim for a reservation
of support. We find no indication that husband ever sought leave
to amend his pleadings.
We also find that husband's request for pendente lite
support was not sufficient to preserve his right to a reservation
of permanent support. Permanent support is separate and distinct
from pendente lite support. See Weizenbaum v. Weizenbaum, 12 Va.
App. 899, 903-04, 407 S.E.2d 37, 39-40 (1991). Factors which the
court must consider prior to an award of permanent support are
not required to be considered before an award of pendente lite
support. Cf. Code §§ 20-107.1 and 20-103. A pendente lite order
"shall have no presumptive effect and shall not be determinative
when adjudicating the underlying cause." Code § 20-103(E).
Therefore, we find that husband's request for pendente lite
support was not sufficient to raise before the court a
reservation of his right to permanent spousal support. The trial
court did not abuse its discretion by accepting the
commissioner's recommendation not to reserve spousal support for
husband.
Attorney's Fees
An award of attorney's fees is a matter submitted to the
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sound discretion of the trial court and is reviewable on appeal
only for an abuse of discretion. See Graves v. Graves, 4 Va.
App. 326, 333, 357 S.E.2d 554, 558 (1987). The key to a proper
award of counsel fees is reasonableness under all the
circumstances. See McGinnis v. McGinnis, 1 Va. App. 272, 277,
338 S.E.2d 159, 162 (1985).
While husband alleges that wife extended the course of
litigation, the record does not so indicate. Moreover, while
husband indicates that he is not as well situated financially as
wife, the evidence indicated that he had annual income of
approximately $34,000. Based on the number of issues involved
and the respective abilities of the parties to pay, we cannot say
that the award was unreasonable or that the trial judge abused
his discretion in accepting the commissioner's recommended award.
Credit Card Debts
Credible evidence indicated that approximately $27,000 in
debts were incurred during the marriage. Approximately $8,000 of
these debts were costs for the wedding of the parties' daughter.
An additional amount was for the parties' truck. Pursuant to a
credit workout, wife was obligated to pay $650 a month on these
debts.
We find no error in the classification of the debts as
marital. Clearly they were incurred during the marriage, and
husband has not presented any evidence supporting his allegation
that they were solely for wife's benefit. Moreover, the
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commissioner assigned all the outstanding debts to wife,
diminishing the value of her equitable distribution award. We
find no abuse of discretion.
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Suspension Bond
Wife contends that the trial court erred by setting a
suspension bond that was insufficient to ensure wife's recovery.
Neither wife nor husband conveyed the jointly-held property
awarded pursuant to the final decree. Wife's monthly debt
obligation existed prior to the entry of the decree and is
unaffected by the amount of the bond. Wife received no current
spousal support. Thus, wife's current financial obligations are
substantially unchanged by the suspension of the court's decree
pending resolution on appeal. We find unpersuasive wife's
assertion that her inability to benefit from the equity in the
marital residence requires that the suspension bond be set in an
amount equal to that equity.
For the reasons stated, we affirm the decision of the trial
court.
Affirmed.
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Benton, J., dissenting.
Disability Retirement
I agree with the majority's holding that the trial judge did
not err in finding that the disability retirement benefit was
marital property subject to equitable distribution. See
generally Lookingbill v. Lookingbill, 483 A.2d 1, 2-4 (Md. 1984)
(discussing disability retirement benefits as marital property).
However, because the trial judge's order contains a patent
inconsistency, I would reverse and remand this issue to the trial
judge for reconsideration.
Although the parties were married during the complete term
of the husband's employment, the commissioner's report found that
only "a portion of the [disability retirement pay was] . . .
marital." 2 Apparently, the commissioner chose to allocate as
non-marital the portion of the disability pay that was defined
under the Virginia Retirement System as a "disability credit."
The Virginia Retirement System had determined that the husband's
benefits would be based on his actual years of service plus a
"disability credit" that equalled the difference between the
husband's age at the time of his retirement and the age of 60.
To allocate the credit as non-marital property, the commissioner
calculated the marital portion to be a fraction of the total
benefit, the numerator of which was the number of years of actual
2
The record proved that the parties were married when the
husband began his employment, and when the husband left his
employment on disability retirement.
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service and the denominator of which was the number of years of
actual service plus the service credit. The commissioner found
that the wife was entitled to 50% of that portion of the
disability payments. 3
The trial judge's order states, in pertinent part, the
following:
[Husband's] disability retirement pay
. . . is found to be marital property subject
to equitable distribution . . . pursuant to
§20-107.3(G) of the Code of Virginia . . . .
After analysis and consideration of all
factors contained in §20-107.3, the [wife] is
hereby awarded a 50% marital share of the
[husband's] gross disability retirement pay
. . . . [Husband] is presently receiving
disability retirement pay and is ordered to
pay [wife] 37.5% gross thereof each month
beginning February 1, 1996 and each month
thereafter until the death of either party.
The aforesaid percentage is 50% of the
fraction found by the Commissioner on page 21
of his report.
Thus, after finding the disability retirement pay to be
marital property and stating that he was granting the wife a 50%
share of that asset, the trial judge ordered the husband to pay
the wife only 37.5% of the disability payments he received. The
trial judge reached that result by using "the fraction found by
the commissioner," which was a ratio based upon the
commissioner's finding that a portion of the disability
3
It is worth noting that the commissioner committed an error
by using 24 in the numerator as the number of years of actual
service. The record reveals that the husband's length of service
was approximately 22 years. It appears that the commissioner
confused the date the husband's employment terminated, 1992, with
the date of the parties' separation, which was 1994.
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retirement pay was non-marital. This presents a patent
inconsistency on the face of the trial judge's order. Thus, I
would remand this issue for reconsideration. Furthermore, the
record does not clearly establish whether the trial judge
intended to award the wife 50% or 37.5% of the retirement
benefit.
Credited Funds
The evidence proved that the husband expended $23,000 of
marital funds to pay marital debts. The record contains a
specific accounting of the debts and the payments made by the
husband. Indeed, the wife did not dispute the debts.
Although the husband paid those debts in violation of the
trial judge's order, such a violation does not per se constitute
waste. However, the record reveals that the trial judge did not
believe the husband's explanation that he used $14,000 of the
money to repay a debt the parties owed to his mother. Thus, the
trial judge did not err in crediting the husband with $14,000.
Of the remaining $9,000, $5,000 represented legal fees and
$4,000 represented a variety of living expenses set forth in a
detailed exhibit offered by the husband. No evidence showed that
the husband's use of the remaining $9,000 constituted waste.
Moreover, the trial judge made no such finding. See Amburn v.
Amburn, 13 Va. App. 661, 666, 414 S.E.2d 847, 850 (1992) (stating
that use of marital funds to pay attorney's fees is not waste);
Clements v. Clements, 10 Va. App. 580, 587, 397 S.E.2d 257, 261
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(1990) (stating that use of marital funds for living expenses is
not waste). Accordingly, I would reverse the trial judge's order
crediting the husband with this $9,000 sum.
Attorney's Fees
The record in this case established that the trial judge
abused his discretion in requiring the husband to pay $3,000 of
the wife's attorney's fees. The wife earned approximately
$40,000 annually. The husband's total income was approximately
$45,000 per year. However, the trial judge's division of the
marital property required the husband to pay the wife 37.5% of
his disability pay, approximately $10,500 per year. Thus, the
wife's adjusted annual income was approximately $50,000 while the
husband's adjusted annual income was approximately $35,000.
The trial judge stated no reason for requiring the husband
to pay the wife's attorney's fees. Although a fee award is
justified when the payor is in an economically superior position,
see Graves v. Graves, 4 Va. App. 326, 333, 357 S.E.2d 554, 558
(1987), no reason is advanced for requiring the husband, who is
in an economically inferior position, to pay the wife's fees.
For these reasons, I would reverse the judgment and remand
with direction to the trial judge to reconsider the equitable
distribution award. I would also reverse and set aside the award
of attorney's fees.
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