Anthony v. Skolnick-Lozano

• Decision Date: 04 March 2014
• Docket Number: Record No. 1270–13–2.
• Citation: 754 S.E.2d 549,63 Va.App. 76
• Court: Virginia Court of Appeals
• Parties: Thea Rachel ANTHONY v. Paul SKOLNICK–LOZANO.

63 Va.App. 76

754 S.E.2d 549

Thea Rachel ANTHONY

v.Paul SKOLNICK–LOZANO.

Record No. 1270–13–2.

Court of Appeals of Virginia, Richmond.

March 4, 2014.

Jason P. Seiden (Michie Hamlet Lowry Rasmussen & Tweel, PLLC, on briefs), for appellant.

Steven S. Biss for appellee.

Present: HUFF, CHAFIN and DECKER, JJ.

DECKER, Judge.

Thea Rachel Anthony (the wife) appeals a final order of the circuit court awarding equitable distribution of property. On appeal, she argues that the circuit court erred by awarding Paul Skolnick–Lozano (the husband) $14,000 for reimbursement of his contribution to the purchase of the marital residence. The husband counters that the circuit court correctly applied Code § 20–107.3(A)(3)(g) in reimbursing him the amount that he contributed before the marriage to buy the marital home. The husband assigns as cross-error the circuit court's ruling that there was no resulting trust.

We hold that although the circuit court properly considered the husband's pre-marital contribution eligible for reimbursement, the husband failed to meet his burden of proof as to the value of his contribution as of the date of the evidentiary hearing. We further hold that the circuit court did not have the authority to declare a resulting trust over the wife's separate property. Finally, we deny the wife's request for costs incurred in this matter. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

I. BACKGROUND

The parties married on February 6, 2004. They separated in 2011, and the husband filed for divorce. Much of the equitable distribution hearing on divorce was devoted to determining the parties' respective interests in a six-acre piece of real property. The purchase occurred before the parties married. The property contained a main house, a workshop, and a cottage. At the time of purchase, the parties intended to occupy the main house together after their marriage. The husband contributed $14,000 to the purchase price, and the wife contributed $15,000. The property was titled in the wife's name. The mortgage also was taken in the wife's name because she had established credit, while the husband had none. The wife refinanced the property during the marriage, and that mortgage was also taken solely in her name. Although the parties used their combined incomes to pay utilities and the mortgage, the wife's mother also periodically paid the monthly mortgage. The cottage served as rental property. The husband made improvements to both the main residence and the cottage. The lease listed the husband and the wife as the landlords. On April 5, 2011, a fire destroyed the marital residence on the property. The wife collected the insurance proceeds.¹

As part of the equitable distribution proceeding, the husband asked the circuit court to impose a resulting trust over the rent received from the cottage tenant. The husband additionally asked that the rent and insurance proceeds be classified as marital property for the purposes of equitable distribution. The wife argued that the husband did not adequately plead a resulting trust and, further, that such a trust was not allowed by law. The wife asked the circuit court to find that the property was her separate property and not make any award to the husband.

The circuit court found that although the parties bought the property intending to use the house as their marital home, the property was the separate property of the wife. The court also found that the husband retraced his $14,000 contribution of his separate property to the marital home. The court noted that the parties did not offer any evidence of the contemporary value of the land. It nevertheless found that the combined property had a value of $145,000 at the time of the evidentiary hearing. This conclusion was based upon the sum that the wife paid the mortgage company to satisfy the balance of the mortgage after the fire. The circuit court ordered the wife to pay the husband $15,000.

Following the hearing, the court issued a letter opinion reversing its decision on the value of the property, because it had failed to take into consideration that the house had completely burned down. In a second letter opinion, the court reasoned that it could not determine the value of the wife's separate property and, therefore, could not make an award to the husband based on his personal contributions of time and money to the marital residence during the marriage. The court additionally ruled that no resulting trust existed because the husband did not assume “payment of all or part of the purchase money prior to or at the time of [the] purchase.”

In the final divorce decree, the circuit court found that the husband retraced his pre-marital $14,000 contribution to the marital home. As part of the equitable distribution award, the court ordered the wife to reimburse the husband the $14,000, rather than the earlier $15,000 figure.

II. ANALYSIS

On appeal of the circuit court's final decree, the wife asks this Court to reverse the portion of the divorce decree awarding the husband $14,000. She argues that the commingling occurred before the parties married and the husband failed to prove the value of the marital residence at the time of the evidentiary hearing. The wife additionally requests that we award her costs incurred in this matter. The husband contends that the circuit court erred by holding that a resulting trust did not exist and, alternatively, that he sufficiently retraced his contribution to the property and was thus entitled to the $14,000 awarded by the circuit court.

A. Commingling Before Marriage

The circuit court awarded the husband $14,000 as reimbursement for his contribution to the purchase of the marital home. The wife argues that the court erred by reimbursing the husband for separate assets commingled before the marriage, because Code § 20–107.3(A) encompasses only commingling of separate property that occurs during the marriage.

“On appeal, a trial court's equitable distribution award will not be overturned unless the Court finds ‘an abuse of discretion, misapplication or wrongful application of the equitable distribution statute, or lack of evidence to support the award.’ ” Wiencko v. Takayama, 62 Va.App. 217, 229–30, 745 S.E.2d 168, 174 (2013) (quoting McIlwain v. McIlwain, 52 Va.App. 644, 661, 666 S.E.2d 538, 547 (2008)). We review “pure questions of law concerning statutory interpretation ... de novo.” Gilliam v. McGrady, 279 Va. 703, 708, 691 S.E.2d 797, 799 (2010).

It is well settled that:

When the language of a statute is unambiguous, we are bound by the plain meaning of that language. Furthermore, we must give effect to the legislature's intention as expressed by the language used unless a literal interpretation of the language would result in a manifest absurdity. If a statute is subject to more than one interpretation, we must apply the interpretation that will carry out the legislative intent behind the statute.

Conyers v. Martial Arts World of Richmond, Inc., 273 Va. 96, 104, 639 S.E.2d 174, 178 (2007) (citations omitted). Consistent with this standard, “ ‘[t]he plain, obvious, and rational meaning of a statute is to be preferred over any curious, narrow, or strained construction.’ ” Meeks v. Commonwealth, 274 Va. 798, 802, 651 S.E.2d 637, 639 (2007) (alteration in original) (quoting Commonwealth v. Zamani, 256 Va. 391, 395, 507 S.E.2d 608, 609 (1998)). In other words, “[t]his Court must determine the General Assembly's intent from the words contained in the statutes.” Tharrington v. Commonwealth, 58 Va.App. 704, 710, 715 S.E.2d 388, 390 (2011).

Code § 20–107.3(A) provides, in pertinent part, that “upon decreeing a divorce ... the court ... shall determine the legal title as between the parties, and the ownership and value of all property ... of the parties and shall consider which of such property is separate property, which is marital property, and which is part separate and part marital property.” The statute defines “all property ... acquired by either party before the marriage” as separate property. Code § 20–107.3(A)(1). Further, the statute explains:

When the separate property of one party is commingled into the separate property of the other party, or the separate property of each party is commingled into newly acquired property, to the extent the contributed property is retraceable by a preponderance of the evidence and was not a gift, each party shall be reimbursed the value of the contributed property in any award made pursuant to this section.

Code § 20–107.3(A)(3)(g) (emphasis added).

Code § 20–107.3(A)(3)(g) does not provide a time-frame limiting the instances of commingling that are entitled to reimbursement. In contrast, the General Assembly delineated time-frames of “before the marriage” and “during the marriage” in Code § 20–107.3(A)(1) and (A)(2), which define separate property and marital property. Likewise, Code § 20–107.3(A)(3)(a), governs income received from separate property or an increase in value of separate property occurring “during the marriage.” Additionally, subsections (4) and (5) of Code § 20–107.3(A), which encompass separate and marital debt, specify “before the marriage,” “after the date of the last separation of the parties,” and “after the date of the marriage and before the date of the last separation of the parties.”

Clearly, throughout this section of the Code, the General Assembly provides limiting language regarding specific time-frames that are applicable to different aspects of equitable distribution of property. Thus, had the legislature intended to limit Code § 20–107.3(A)(3)(g) to commingling of separate property occurring “during the marriage,” it would have done so. See Wiencko, 62 Va.App. at 231, 745 S.E.2d at 175 (limiting interpretation of Code § 20–107.3(E) to its actual text). Pursuant to the plain language of the statute, under Code § 20–107.3(A)(3)(g), we hold that circuit courts may consider...