Saundra L Ash v. Raymond D Ash

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Bumgardner and Clements
Argued at Richmond, Virginia
SAUNDRA L. ASH
v. Record No. 3043-01-2
RAYMOND D. ASH MEMORANDUM OPINION * BY
JUDGE LARRY G. ELDER
JULY 23, 2002
RAYMOND D. ASH
v. RECORD No. 3072-01-2
SAUNDRA L. ASH
FROM THE CIRCUIT COURT OF HANOVER COUNTY
John Richard Alderman, Judge
C. A. Barranger for Saundra L. Ash.
Jennifer E. Crossland (William H.
Parcell, III; Parcell, Webb & Wallerstein,
P.C., on briefs), for Raymond D. Ash.
Saundra L. Ash (wife) and Raymond D. Ash (husband) appeal
from a final decree effecting the equitable distribution of
their property following referral of the matter to a
commissioner in chancery. On appeal, husband contends the trial
court erred in considering wife's late-filed exceptions to the
commissioner's report because the court made no finding of good
cause for the late filing and, thus, lacked jurisdiction. Wife
* Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
contends the trial court erroneously denied her motion to compel
husband to provide information she requested in interrogatories
regarding the severance package husband would receive following
termination by his employer. She also contends the court
erroneously classified the severance package as husband's
separate property and various credit card debts as marital
property. 1
We hold a finding of good cause was implicit in the trial
court's consideration of wife's late-filed exceptions to the
commissioner's report and that its consideration of the
exceptions was not error. We also find that the trial court's
classification of the challenged credit card debts as marital
was not error. However, we hold that the court's failure to
grant wife's motion to compel discovery deprived wife of the
opportunity to obtain evidence relevant to whether any portion
of husband's severance package was marital property. Thus, we
reverse the trial court's equitable distribution award and
remand for further proceedings consistent with this opinion.
1
Wife's assignments of error complain of the trial court's
decision that the credit card debts "were marital debts to be
divided equally by the parties." However, wife's analysis
addresses only the classification of the property as marital,
not the trial court's decision to divide it equally. Thus, on
appeal, we do not consider the trial court's decision concerning
the division of those debts.
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I.
FILING OF WIFE'S EXCEPTIONS TO COMMISSIONER'S REPORT
Code § 8.01-615 provides that when a cause is referred to a
commissioner in chancery and the commissioner issues a report,
"[e]xceptions to the commissioner's report shall be filed within
ten days after the report has been filed with the court, or for
good cause shown, at a later time specified by the court."
Although that code section uses the word "shall," it also
expressly provides that the court may allow the filing of
exceptions "at a later time" "for good cause shown." Id. The
statute does not require a court to extend the time for filing
exceptions before the ten-day deadline has expired, and Rule 1:9
expressly provides that a court may extend "[t]he time allowed
for filing pleadings . . . although the time fixed already has
expired." Finally, the Supreme Court has held that a trial
court abused its discretion in denying a motion of a party
presenting good cause to extend the time for filing of
exceptions to a commissioner's report, even though the extension
request was made after the ten-day time for filing already had
expired. Lannon v. Lee Connor Realty Corp., 238 Va. 590,
592-94, 385 S.E.2d 380, 381-82 (1989).
Further, we hold that a finding of good cause was implicit
in the trial court's ruling to permit the late filing of wife's
exceptions. Cf., e.g., Harris v. Commonwealth, 258 Va. 576,
582-84, 520 S.E.2d 825, 828-29 (1999) (holding that evidence
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supported trial court's granting of nolle prosequi motion under
Code § 19.2-265.3, which required finding of good cause).
Wife's counsel represented her "belie[f] [that] the Court had
been closed because of bad weather at that time." Although the
clerk of court reported that the court was open on the day the
exceptions were due but closed for two days following that date,
the trial court expressly ruled at the hearing on July 10, 2000,
that it would "allow [the exceptions] to be filed" "under the
circumstances . . . given the snow days." Under the facts of
this case, which include the absence of a showing of any
prejudice to husband from the late filing, we perceive no abuse
of the trial court's discretion in allowing wife's late filing
and considering her exceptions. See Lannon, 238 Va. at 594, 385
S.E.2d at 382.
II.
CLASSIFICATION ISSUES
"[A] commissioner in chancery . . . [is] 'an officer
appointed by the chancellor to aid him [or her] in the proper
and expeditious performance of his [or her] duties.' When a
trial court refers a cause to a commissioner in chancery, it
does not delegate its judicial function to the commissioner
. . . ." Kelker v. Schmidt, 34 Va. App. 129, 136-37, 538 S.E.2d
342, 346 (2000) (quoting Raiford v. Raiford, 193 Va. 221, 226,
68 S.E.2d 888, 891 (1952)) (citations omitted).
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"[W]hen the commissioner's finding[s] [are] specifically
based on what the commissioner saw and heard," i.e., credibility
determinations based on "demeanor and appearance," and "the
commissioner [makes clear this reliance by] describ[ing] such
observations in his or her report," "the commissioner is in a
better position than the trial judge to make factual findings on
that basis," and the chancellor must "give 'due regards' to the
commissioner's factual findings." Id. at 139-40, 538 S.E.2d at
347-48. Conversely, "if the commissioner's determination is
based on the substance of the testimony and not upon the
witness' demeanor and appearance, such a finding is as
determinable by the trial judge as by the commissioner." Id. at
139, 538 S.E.2d at 347. Under these circumstances, the
chancellor's review of the commissioner's determination is akin
to review of a conclusion of law. Thus, absent a clearly
articulated credibility determination by the commissioner, the
chancellor is free to reach a conclusion contrary to that of the
commissioner, see id., and on appeal, we affirm the chancellor's
determination unless it is plainly wrong, see, e.g., Snyder
Plaza Props., Inc. v. Adams Outdoor Advertising, Inc., 259 Va.
635, 641, 528 S.E.2d 452, 456 (2000) (noting that chancellor
owes no deference to "pure conclusions of law contained in
[commissioner's] report").
Pursuant to Code § 20-107.3, a court dissolving a marriage,
"upon request of either party, shall determine the legal title
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as between the parties, and the ownership and value of all
property" and classify that property as separate property,
marital property, or part separate and part marital property.
Code § 20-107.3(A). "The court shall also have the authority to
apportion and order the payment of the debts of the parties, or
either of them, that are incurred prior to the dissolution of
the marriage, based upon the factors listed in subsection E."
Code § 20-107.3(C).
Marital property is all property titled in the names of
both parties and all other property acquired by each party
during the marriage which is not separate property, i.e.,
property received during the marriage by bequest, devise,
descent, survivorship or gift from someone other than the
spouse. See Code § 20-107.2(A). "All property . . . acquired
by either spouse during the marriage . . . is presumed to be
marital property in the absence of satisfactory evidence that it
is separate property." Id. This presumption applies to the
parties' assets as well as their debts. Cf. Stumbo v. Stumbo,
20 Va. App. 685, 692-93, 460 S.E.2d 591, 595 (1995) (referring
to "marital property" as defined in Code § 20-107.3 as including
both assets and debts).
A.
CREDIT CARD DEBT
Wife contends the trial court erred in affirming the
commissioner's conclusion that the balances owed on the MBNA,
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First Union and Discover credit cards should be classified as
marital property and in concluding sua sponte, contrary to the
commissioner's report, that the balance owed on husband's GM
credit card should also be classified as marital.
We disagree. Because the commissioner's conclusion
regarding the GM credit card was not based on specifically
articulated credibility determinations, the trial court owed no
deference to the commissioner's classification of the GM debt as
separate. Further, the trial court had a duty to "reject [the
commissioner's] report in whole or in part" if it was contrary
to "the law and the evidence," Code § 8.01-610, and we are aware
of no principle in the relevant statutes or case law which would
prevent the court from doing so sua sponte, see, e.g., Cloutier
v. Queen, 35 Va. App. 413, 420-21, 545 S.E.2d 574, 577-78 (2001)
(holding in child custody dispute that court had authority under
Rule 1:1 to modify its decree sua sponte where "chancellor,
after reflection, determined that his initial decision was
erroneous and timely corrected it in the same proceeding").
Finally, the evidence, viewed in the light most favorable
to husband, the prevailing party below, supported the trial
court's conclusion that the balances on all four cards should be
classified as marital debt rather than as husband's separate
debt. As set out above, the debts acquired by the parties
during their marriage are presumed to be marital debts. Code
§ 20-107.3; Stumbo, 20 Va. App. at 692-93, 460 S.E.2d at 595.
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Wife bore the burden of proving that the disputed credit card
debts were husband's separate property, and the evidence, viewed
in the light most favorable to husband, proved those debts were
marital. Although husband testified that he and wife made few
directly marital purchases using those cards, his evidence
established that the debts on those cards nevertheless were
marital debts. Husband paid business expenses with those credit
cards, received reimbursements from his company for those
business expenses and, instead of applying all reimbursements to
the balances on those credit cards, made the minimum payments
and used the remaining expense money "just trying to keep the
family going." Whether or not wife approved of this method of
managing the family's finances, the trial court concluded the
reimbursement funds became part of "the family budget," such
that the credit card debt was marital. The evidence, viewed in
the light most favorable to husband, supports this conclusion.
B.
HUSBAND'S SEVERANCE PACKAGE
Wife contends the trial court erroneously denied her motion
to compel husband to provide certain information about his
entitlement to a severance package following termination by his
employer. We agree and hold that the trial court's ruling on
the suppression motion was an abuse of discretion. Thus, we
vacate its ruling classifying husband's severance package, if
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one existed, as his separate property and remand for additional
discovery.
Rule 4:1(b)(1) provides that "[p]arties may obtain
discovery regarding any matter, not privileged, which is
relevant to the subject matter involved in the pending action,
whether it relates to the claim or defense of the party seeking
discovery or the claim or defense of any other party . . . ."
"[T]he granting or denying of discovery is a matter within the
discretion of the trial court," but a discovery ruling may be
reversed on appeal if "'the action taken was improvident and
affected substantial rights.'" O'Brian v. Langley Sch., 256 Va.
547, 552, 507 S.E.2d 363, 366 (1998) (quoting Rakes v. Fulcher,
210 Va. 542, 546, 172 S.E.2d 751, 755 (1970)).
Here, the commissioner's conclusion, adopted by the trial
court, was that "a severance package, if paid, would be paid
post-separation" and that wife "has duly received her share of
husband's pension and savings plan from A&P [husband's former
employer]." However, the mere fact that the severance package
would have been received after the last separation of the
parties was not dispositive of its classification. In
classifying a severance package acquired by a party after the
last separation, "the touchstone . . . is whether the severance
package was intended to compensate the employee for efforts made
during the marriage or to replace post-separation earnings."
Luczkovich v. Luczkovich, 26 Va. App. 702, 708-09, 496 S.E.2d
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157, 160 (1998). Because Code § 20-107.3 presumes that property
acquired after the parties' last separation is separate
property, a spouse claiming a severance package received after
the parties' separation is marital property bears the burden of
overcoming the presumption by showing the lump sum payment
compensated the receiving spouse for services rendered during
the marriage. 26 Va. App. at 710-11, 496 S.E.2d at 161.
In order to attempt to meet the burden of proof set out in
Luczkovich, the non-owning spouse is entitled to discover all
information bearing upon these issues, including whether or when
a severance package has been or will be received and the nature
of the severance package as described in any written or oral
communications between the receiving spouse and his employer.
Wife's interrogatory asked, "What has [husband] been told by his
employer about his job including but not limited to how long he
can expect to be employed, whether he will be able to transfer
to another location, and what his severance package will be."
This broadly worded interrogatory was likely to yield evidence
relevant to classification of the severance plan under
Luczkovich, and the court's refusal to compel the requested
discovery deprived wife of information which "substantially
affected [her] ability and right to litigate" the classification
of husband's severance package if he received one. O'Brian, 256
Va. at 552, 507 S.E.2d at 366. See id. at 551, 507 S.E.2d at
365 (holding court abused discretion in refusing to compel
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discovery about actual damages in contract dispute because party
seeking discovery needed information to litigate the validity of
contract's liquidated damages clause). Therefore, the trial
court's denial of the motion to compel was an abuse of
discretion. 2
III.
For these reasons, we hold a finding of good cause was
implicit in the trial court's consideration of wife's late-filed
exceptions to the commissioner's report and that its
consideration of the exceptions was not error. We also find
that the trial court's classification of the challenged credit
card debts as marital was not error. However, we hold that the
court's failure to grant wife's motion to compel discovery
deprived wife of the opportunity to obtain evidence relevant to
whether any portion of husband's severance package was marital
property. Thus, we reverse the trial court's equitable
2
Despite husband's argument to the contrary, wife's failure
to attempt to obtain this information by subpoena from husband's
employer is irrelevant to both (1) husband's duty to provide it
in response to wife's interrogatory and (2) the trial court's
error in refusing to compel same. Husband could have moved to
quash a subpoena directed to his employer on the same grounds he
asserted in his motion to have the severance package classified
as separate property, and we presume the trial court would
erroneously have granted the motion to quash for the same
reasons it erroneously denied the motion to compel.
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distribution award and remand for further proceedings consistent
with this opinion.
Affirmed in part,
reversed in part and remanded.
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