George P. Barrett, Sr. v. Henrietta A. Gibbs-Barrett

COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Felton, Judges Elder and Kelsey
Argued at Chesapeake, Virginia
GEORGE P. BARRETT, SR.
MEMORANDUM OPINION* BY
v. Record No. 0889-07-1 JUDGE LARRY G. ELDER
FEBRUARY 26, 2008
HENRIETTA A. GIBBS-BARRETT
FROM THE CIRCUIT COURT OF THE CITY OF HAMPTON
Christopher W. Hutton, Judge
Lawrence D. Diehl (Ann Brakke Campfield; Barnes & Diehl, P.C.,
on briefs), for appellant.
Paul H. Wilson (Wilson & Wilson, P.C., on brief), for appellee.
George P. Barrett Sr. (husband) appeals from an order awarding his former wife,
Henrietta A. Gibbs-Barrett (wife), sole possession and ownership of the marital residence in an
equitable distribution proceeding conducted pursuant to Code § 20-107.3. On appeal, husband
contends the circuit court erred in failing to classify as his separate property the equity
attributable to his fifteen years of post-separation mortgage payments. We hold the trial court
did not err in classifying this equity as wife’s, based on husband’s fully performed agreement to
pay the mortgage in lieu of support, and that the evidence supported the court’s award of the
marital portion of the residence to wife. Thus, we affirm the award. We deny the parties’
competing requests for attorneys fees.
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
I.
A. EQUITABLE DISTRIBUTION
On appeal, we consider the evidence in the light most favorable to wife, the party who
prevailed in the trial court. E.g. Wilson v. Wilson, 12 Va. App. 1251, 1254, 408 S.E.2d 576, 578
(1991). When a court formulates an equitable distribution award, “the court must first classify
and value the parties’ marital and separate property.” Stumbo v. Stumbo, 20 Va. App. 685, 693,
460 S.E.2d 591, 595 (1995); see Code § 20-107.3(A) (noting property may be classified as
separate, marital, or “part separate and part marital,” referred to as hybrid). When separate and
marital interests have been commingled in a single piece of property, if the parties so request and
present sufficient evidence to permit a court to do so, the court must trace and value the marital
and separate interests and any appreciation thereon. Code § 20-107.3(A)(1), (3); see Bowers v.
Bowers, 4 Va. App. 610, 616-18, 359 S.E.2d 546, 550-51 (1987) (holding parties have duty to
present sufficient evidence to allow the court to classify and value disputed property). After
classifying and valuing the property, the court must divide the marital portion pursuant to the
factors in Code § 20-107.3(E).
“Fashioning an equitable distribution award lies within the sound
discretion of the trial judge . . . .” Unless it appears from the
record that the chancellor 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 chancellor’s equitable
distribution award will not be reversed on appeal.
Smoot v. Smoot, 233 Va. 435, 443, 357 S.E.2d 728, 732 (1987) (quoting Srinivasan v.
Srinivasan, 10 Va. App. 728, 732, 396 S.E.2d 675, 678 (1990)).
In the course of an equitable distribution proceeding, a party may seek credit for
post-separation mortgage payments on a jointly owned residence in at least two ways. First, he
may seek to retrace those payments to separate property in order to claim entitlement to the
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portion of the hybrid asset attributable to those payments, including both the dollar amount by
which those payments reduced the principal balance of the loan, Code § 20-107.3(A)(3)(d) to
(g); see, e.g., Moran v. Moran, 29 Va. App. 408, 413-14, 512 S.E.2d 834, 836 (1999) (explaining
that property is acquired “to the extent [payments] reduce the principal of the mortgage”), and
the amount of any appreciation in value attributable to that principal reduction, Code
§ 20-107.3(A)(1) (defining separate property to include “[t]he increase in value of separate
property during the marriage” absent proof that increase resulted from significant personal effort
of either party); see, e.g., Martin v. Martin, 27 Va. App. 745, 751-53, 501 S.E.2d 450, 453-54
(1998). See generally 2 Brett R. Turner, Equitable Distribution of Property §§ 5:23, 6:86 (3d ed.
2005). Second, under Code § 20-107.3(E)(2), he may request consideration for those mortgage
payments as monetary contributions to “the acquisition and care and maintenance of such marital
property of the parties” as they pertain to the division of the marital property. See von Raab v.
von Raab, 26 Va. App. 239, 249-50, 494 S.E.2d 156, 161 (1997) (noting that dollar-for-dollar
credit is not required in this context).
Husband contends that in the Virginia equitable distribution proceedings conducted
following the parties’ 2004 divorce in Florida, the trial court erred in failing to hold he had
acquired a separate property interest in the residence purchased in 1968 via his post-separation
reduction in the mortgage principal balance resulting from payments he made from 1972 through
1987. He also claims as his separate property the increase in value of that share. Finally, he
avers the bulk of the property interest acquired before the parties’ last separation in 1972 was
marital and that the trial court should have awarded him an equal interest in this portion. We
hold the evidence, viewed in the light most favorable to wife, supports both the trial court’s
classification of the equity at issue as wife’s separate property and its award of the entire
residence to wife.
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The trial court found wife gave up “the right to seek child and spousal support in
[exchange for husband’s] payment of the mortgage payments on the marital home” from 1972 to
1987, classified the property as hybrid, and awarded the residence to wife after considering the
Code § 20-107.3(E) factors. The fact that the court lacked authority to award wife any portion of
husband’s separate interest in the residence, see Code § 20-107.3(A)(1), -107.3(C), compels the
conclusion that the trial court rejected husband’s claim of a separate ownership interest in the
property and determined that only wife had a separate ownership interest therein. See Brown v.
Commonwealth, 8 Va. App. 126, 133, 380 S.E.2d 8, 12 (1989) (setting out principle that in the
absence of an express ruling or other clear evidence to the contrary, an appellate court must
presume the trial court properly applied the law to the facts).
We hold the trial court did not err in classifying the mortgage payments husband made
from 1972 through 1987 and the corresponding reduction in the principal balance as wife’s
separate property rather than husband’s. Nothing in Virginia jurisprudence prevents a court
proceeding under Code § 20-107.3 from classifying, as a recipient spouse’s separate property,
mortgage payments a payor spouse makes in lieu of support—whether spousal support, child
support, or both types of support— where the spouses entered into a verbal agreement to that
effect in 1972 and completed it almost entirely prior to the effective date of Virginia’s marital
agreement statute.1 See Code § 20-155 (providing marital agreements are valid on same terms as
premarital agreements, as set out in Code §§ 20-147 to -154); 1987 Va. Acts, ch. 41 (enacting
§ 20-155, extending application of Premarital Agreement Act to marital agreements, to take
1
The marital agreement statute, Code § 20-155, by incorporating the Premarital
Agreement Act, Code §§ 20-147 to -154, provides that a marital agreement “shall be in writing
and signed by both parties” and “shall be enforceable without consideration.” Code § 20-149.
No writing is required “[i]f the terms [of the agreement] . . . are (i) contained in a court order
endorsed by counsel or the parties or (ii) recorded and transcribed by a court reporter and
affirmed by the parties on the record personally.” Code § 20-155.
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effect on July 1, 1987); see also Code § 20-147 (providing Premarital Agreement Act applies to
“any premarital agreement executed on or after July 1, 1986”).
Even assuming Code § 20-155 is applicable here, an agreement or contract regarding the
payment of child support is not recognized by Code § 20-155 as one “affecting those ‘rights and
obligations’ that arise from the marital relationship.” See Black v. Edwards, 248 Va. 90, 93-94,
445 S.E.2d 107, 109-10 (1994) (evaluating agreement to make reciprocal wills involving
disposition of, inter alia, couple’s marital residence and holding “each spouse’s contractual
intent to benefit third parties after the death of both spouses did not affect the ‘rights and
obligations’ arising from the [spouses’] marital relationship” such that Code § 20-155 did not
apply to agreement); see also Code § 20-150 (detailing subjects for premarital and marital
agreements, including spousal support, but not mentioning child support). Although marriage
often results in the birth of children, a parent’s duty to support his or her children arises from the
parent-child relationship, whether or not a marital relationship between the parents ever existed.
Further, this equitable distribution action does not involve wife’s seeking to enforce husband’s
promise under the agreement to make the mortgage payments, and husband is not asserting the
fact that he made those payments as a defense to an action by wife for support. Instead, in the
instant action, the fact that such an agreement existed pertains only to the court’s classification of
husband’s mortgage payments for purposes of equitable distribution.
Further, other states have held that a court does not abuse its discretion in holding that a
spouse ordered to make post-separation mortgage payments from his separate funds in lieu of
paying support may not receive as his separate property the proportional ownership interest in
the house gained as a result of those payments. See Dodson v. Dodson, 955 P.2d 902, 912-13
(Alaska 1998) (holding court did not abuse discretion in refusing to credit the husband for
payments made to the wife because “the payments can best be characterized as an award of
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spousal support to [the wife]”); Honeycutt v. Honeycutt, 669 So. 2d 1098, 1098 (Fla. Dist. Ct.
App. 1996) (holding the husband was “not entitled to a credit for mortgage payments he made
during the pendency of the case since those payments were made pursuant to court order in lieu
of temporary child support”); Squires v. Squires, 631 S.E.2d 156, 161 (N.C. App. 2006) (holding
provision of “alimony” order requiring the husband “to pay the monthly service” on the marital
home until the property was sold did not “conflict” with court’s refusal “to credit him with any
principal reduction” where the husband “failed to present any evidence of principal reduction
and where the payments [were] ordered as part of [the husband’s] support of his dependent
spouse”). Whether or not a support order exists, a court, in its discretion, may conclude those
payments are the property of the recipient spouse and credit them as the recipient’s separate
property in determining the ownership of the various interests in the marital residence for
purposes of equitable distribution. See Turner, supra, § 6:86, at 454 (“Because the purpose of
the payment is to meet a nonmarital expense of the recipient, the payments should be treated as
the recipient’s separate property. This should be true even though the payments come from the
payor’s separate income, for the entire purpose of the obligation is to take value away from the
payor and give it to the payee.”).
Contrary to husband’s contention, such a holding on the facts of this case does not run
afoul of the principles set out in Kelley v. Kelley, 248 Va. 295, 298, 449 S.E.2d 55, 56 (1994), a
decision rendered after the parties’ children had reached majority. Kelley held that “parents
cannot contract away their children’s rights to support” and a court cannot “be precluded by
agreement from exercising its power to decree child support.” Id. As we have made clear,
however, “parents may and, indeed, are encouraged under Virginia public policy, to reach
agreement respecting the care and support of their minor children.” Shoup v. Shoup, 37
Va. App. 240, 248, 556 S.E.2d 783, 787 (2001) (en banc). As we explained subsequent to the
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decision in Kelley, “the parties in a divorce can reach an agreement on child support without
violating the principles in Kelley” as long as certain requirements are met. Lehman v. Lehman,
38 Va. App. 598, 605-06, 567 S.E.2d 571, 575 (2002). The “three limitations upon the parties’
right to contract regarding child support” are as follows:
[First,] [w]here an agreement has been reached and either party
requests incorporation [as a term of a final decree or other court
order], . . . the court must review the provisions of the agreement
for their consistency with the best interests of the child or children
whose welfare the agreement addresses. Second, the parties may
not, by agreement, prevent the court from exercising its power to
change, modify, or enforce its decree concerning the custody and
maintenance of minor children. The third limitation, emanating
from the first two, prohibits the parties from terminating by
contract a parent’s duty to support a child.
Shoup, 37 Va. App. at 250, 556 S.E.2d at 788 (citations and footnote omitted).
None of those limitations were violated in this case. Viewing the evidence in the light
most favorable to wife’s claim regarding the existence of such an agreement, as the trial court
clearly did, the agreement merely permitted husband to support his children by making support
payments directly to the mortgage company, and the agreement was fully executed before any
court was asked to pass on its validity. It is undisputed that no court was “precluded” from
exercising its right to decree child support based on the existence of the agreement because wife
voluntarily withdrew her judicial request for support in 1972, the children were never thereafter
alleged to be in necessitous circumstances, and the children reached the age of majority long
before husband attempted to challenge the validity of the agreement in the present proceeding.
Thus, we hold the court did not err in classifying the post-separation reduction in
mortgage principal and the earnings thereon as wife’s separate property.
The record also supports the court’s decision to award wife all of the relatively small
percentage of the property that was marital, which consisted of the equity acquired with the
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marital share of the down payment (approximately 12% of the total purchase price of the home2)
and the principal balance reduction that occurred as a result of the mortgage payments made
between the purchase of the house in November 1968 and the parties’ final separation in 1972
(approximately 6% of the total purchase price of the home3). Code § 20-107.3(E) required the
court to consider, inter alia, “[t]he contributions, monetary and nonmonetary, of each party to the
well-being of the family . . . [and] in the acquisition and care and maintenance of . . . marital
property of the parties,” “the ages and physical and mental condition of the parties,” “[h]ow and
when specific items of such marital property were acquired,” and “[t]he liquid or nonliquid
character of all marital property.” Subsection (E)(11) permitted the court, in its discretion, to
consider “[s]uch other factors as the court deems necessary or appropriate . . . in order to arrive
at a fair and equitable monetary award.”
The evidence showed the parties acquired the property when husband, who had left wife
and the children on more than one occasion during the marriage, proposed a reconciliation and
asked the family to move from Philadelphia, where they had previously resided, to Virginia,
where husband had relocated. Wife used a combination of separate and marital funds,
withdrawn from her civil service retirement, so that they could make a down payment on the
2
The parties made a down payment of approximately $3,090 and assumed a loan with a
remaining principal balance of $16,250, for a total purchase price of $19,340. Husband’s
evidence established that the down payment was more than nine-twelfths marital, because the
parties were married for the last nine of the twelve years during which wife accrued the
retirement benefits she cashed in to make the down payment and husband’s evidence established
wife accrued a greater but unquantified benefit each year as her salary increased and she
advanced in seniority. Thus, the marital share of the down payment established by husband’s
evidence was (9/12)($3,090)/$19,340, or approximately 12% of the purchase price.
3
Husband’s amortization evidence permitted a finding that the bulk of each house
payment from 1968 until the parties’ final separation in 1972 went to pay interest rather than
principal and that the total principal reduction during this time period was approximately $1,100.
Thus, between 1968 and 1972, the parties acquired less than an additional 6% marital interest in
the home.
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residence at issue, but after they purchased the house jointly, husband resided with the family for
less than three months before again leaving wife, the children, and the house. Three years later,
he reconciled with her again, but they resided in the house as husband and wife for only two
more months before separating permanently. Thereafter, wife raised the two children, while
husband resided out-of-state and visited only occasionally. Wife, who was employed outside the
home, continued to reside in the house, maintain it, and make improvements on it over the course
of the next twenty-three years until the mortgage was paid off in 1995, and she resided in it,
maintained it, and paid the taxes on it for an additional approximately ten years until these
equitable distribution proceedings were begun.
From 1972 to 1987, husband made mortgage payments for the residence, but the trial
court found he agreed to make those payments in lieu of support and that the payments were
wife’s separate property, a finding supported by the evidence and not in contravention of
applicable law, as discussed above. When the children reached the age of majority, husband
notified wife that he was terminating those payments on what he referred to in writing as “Your
own House note[].” Wife testified that she knew the property was titled jointly to her and
husband but that she did not know he intended to assert any interest in it while she was alive and
that if she had been aware of this, she would not have made any of the repairs or improvements
she did over the years. Also, at the time of the equitable distribution proceedings, she was in her
70s and averred she lacked the financial resources to purchase a comparable house, which she
said she could have done if husband had informed her earlier of his intent to claim an interest in
the home rather than treating it as if it were hers.
The trial court found that wife “has lived at the subject property with the understanding
that the property was hers” and that husband’s “course of conduct suggested that he was
compliant with [wife’s] full ‘ownership’ of the subject property.” The court expressly
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considered this course of conduct under Code § 20-107.3(E)(11), which allows a court effecting
an equitable distribution to consider “[s]uch other factors as the court deems necessary or
appropriate . . . in order to arrive at a fair and equitable monetary award.” See also Code
§ 20-107.3(E)(2); Mir v. Mir, 39 Va. App. 119, 125-26, 571 S.E.2d 299, 302 (2002) (holding
court can consider party’s “negative contributions” to care and maintenance of marital property).
This evidence supported the trial court’s award of the 18% of marital equity and
appreciation thereon to wife.
B. ATTORNEYS’ FEES AND COSTS
The parties have made competing requests for attorney’s fees and costs incurred on
appeal. We decline those requests. We decline the request of husband, who has not prevailed,
because he has not established any basis on which wife should be required to pay his attorney’s
fees and costs. Although wife has prevailed, the record contains no indication that husband
“generated unnecessary delay or expense in pursuit of his interests.” Estate of Hackler v.
Hackler, 44 Va. App. 51, 75, 602 S.E.2d 426, 438 (2004). This appeal addressed “appropriate
and substantial issues” in a case in which the proper application of the law to the facts was
subject to reasonable dispute. Id.III.
For these reasons, we hold the trial court did not err in classifying the disputed portion of
the equity in the marital residence as wife’s, based on husband’s fully performed agreement to
pay the mortgage in lieu of support. We also hold the evidence supported the court’s award of
the marital portion of the residence to wife. Thus, we affirm the award. We deny the parties’
competing requests for attorney’s fees.
Affirmed.
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