Barrs v. Barrs
| Decision Date | 03 May 2005 |
| Docket Number | Record No. 1939-04-1. |
| Citation | 612 S.E.2d 227,45 Va. App. 500 |
| Parties | Alice C. BARRS v. Carl A. BARRS. |
| Court | Virginia Supreme Court |
E. Thomas Cox, Yorktown, for appellant.
Kenneth B. Murov, Newport News, for appellee.
Present: BENTON, FRANK and FELTON, JJ.
Alice C. Barrs, wife, appeals a decision of the trial court reducing her spousal support from $8,000 per month to $6,000 per month. On appeal, she contends the trial court erred (1) in not granting her Motion for Summary Judgment; (2) in finding there has been a material change in circumstances; and (3) in denying her request for attorney's fees. For the reasons stated, we reverse in part and affirm in part.
The facts are essentially uncontroverted.
Husband and wife were divorced in 1995. The final decree, entered August 25, 1995, awarded wife $1,248,870 as the marital award, with $248,870 payable on or before December 31, 1995, and thereafter $100,000 per year for ten years with interest at 9%. In addition to the annual installments of $100,000, wife received the following interest payments: 1996, $90,000; 1997, $81,000; 1998, $63,000; 1999, $54,000; 2000, $45,000; 2001, $36,000; 2002, $72,000; 2003, $27,000. The total principal and interest paid under the marital award was $1,516,870. The final decree also awarded wife $8,000 per month as spousal support.
Wife has suffered from multiple sclerosis since 1974. The disease is marked by balance and coordination problems, fatigue, seizures, and progressive diminution of intellectual capacity. As the illness progresses, she will need "assisted living."
During the marriage, the parties enjoyed quite a high standard of living, extensive vacations, a large waterfront house, a boat, and other indicia of financial success. At the time of the divorce, husband earned $250,000 per year. Wife was unemployed.
In 2003, husband filed a "Notice and Motion to Terminate or Amend Spousal Support." Wife filed an answer alleging, inter alia, that she continued to need spousal support "as her financial requirements have changed dramatically." After extensive discovery, wife filed a motion for summary judgment. The trial court conducted a number of hearings on the various motions, and denied the motion for summary judgment on February 19, 2004, implicitly ruling there were genuine issues of fact in dispute.
Husband conceded at the April 1, 2004 hearing that he has the ability to pay the current award of spousal support.
Wife testified she had diminished her standard of living. She sold her large waterfront home in favor of a smaller apartment. She reduced her travel, partially because of her illness. Wife further testified the progressive and debilitating nature of her illness would ultimately require her to live in an assisted living facility. However, she had no immediate plans to do so. The trial court opined that wife is not "living beyond the standard of living established during the marriage."
At the hearing, husband argued the material change in circumstances was that wife now has $60,000 annual passive income and her net worth exceeds $1.6 million that she did not have in 1995. Wife responded by asserting that when the original marital award was made in 1995, the trial court, at that time, knew the $1,248,870 award would generate passive income. Interest the first year was $90,000.
Wife also asked for attorney's fees, which the trial court denied. Wife proffered the fees would be $13,658.66.
For the purposes of appeal, wife concedes in her brief that her current monthly expenses are $9,752. Her passive income is $5,203 per month. Husband's expert witness, Michael Mares, CPA, testified wife would only need $6,000 spousal support per month to pay her current monthly expenses, without requiring her to invade the principal of her investments.
The trial court found a material change in circumstances and, following Mr. Mares' testimony, reduced spousal support to $6,000 per month, concluding:
So I do find there is a material change in circumstances. I believe that one thing, we have Mrs. Barrs' passive income, unearned income I should say of $5,200 a month. That's a differen[ce] since the last support order. And I have considered the factors listed in 20-107.1, I'm obligated to consider those, which in Factor No. 1, the obligations, needs and financial resources of the parties, including but not limited to the income from pension, profit sharing or retirement plans, of whatever nature; No. 2, the standard of living established during the marriage, and No. 8, the provisions made with regard to the marital property under 20-107.3.
Wife contends the trial court erred by finding there has been a material change in circumstances since the final decree of 1995. More narrowly, the issue is whether wife's receipt of $5,203 per month as passive income from the principal of the equitable distribution award is such a change in circumstances.
"Upon petition of either party, a court may ... [modify] ... spousal support ... as the circumstances may make proper." See Code § 20-109. "The moving party in a petition for modification of support is required to prove both a material change in circumstances and that this change warrants a modification of support." Schoenwetter v. Schoenwetter, 8 Va.App. 601, 605, 383 S.E.2d 28, 30 (1989); Furr v. Furr, 13 Va.App. 479, 481, 413 S.E.2d 72, 73 (1992); see also Blank v. Blank, 10 Va.App. 1, 4, 389 S.E.2d 723, 724 (1990) (). The material change in circumstances must have occurred after the most recent judicial review of the award, see Hiner v. Hadeed, 15 Va.App. 575, 577, 425 S.E.2d 811, 812 (1993), and "must bear upon the financial needs of the dependent spouse or the ability of the supporting spouse to pay." Hollowell v. Hollowell, 6 Va.App. 417, 419, 369 S.E.2d 451, 452 (1988). "The `circumstances' which make `proper' an increase, reduction or cessation of spousal support under Code § 20-109 are financial and economic ones." Id. at 419, 369 S.E.2d at 452-53.
On appeal, the trial court's findings must be accorded great deference. See Bandas v. Bandas, 16 Va.App. 427, 432, 430 S.E.2d 706, 708 (1993). "In determining whether credible evidence exists, the appellate court does not retry the facts, reweigh the preponderance of the evidence, or make its own determination of the credibility of witnesses." Wagner Enters., Inc. v. Brooks, 12 Va.App. 890, 894, 407 S.E.2d 32, 35 (1991). "We will not disturb the trial court's decision where it is based on an ore tenus hearing, unless it is `plainly wrong or without evidence in the record to support it.'" Furr, 13 Va.App. at 481, 413 S.E.2d at 73 (quoting Schoenwetter, 8 Va.App. at 605, 383 S.E.2d at 30).
Moreno v. Moreno, 24 Va.App. 190, 195, 480 S.E.2d 792, 794-95 (1997).
Thus, the moving party has to prove: (1) a material change in circumstances; and (2) the change warrants a modification.1 Our inquiry then is whether the trial court's finding that wife's receipt of the $5,203 passive income was a material change in circumstances is "plainly wrong and without evidence to support it."
Husband relies on the facts of Moreno to support his position that there is a material change in wife's circumstances. In Moreno, husband filed a motion to terminate spousal support, and argued, in part, that his retirement created a change in financial circumstances that adversely impacted his ability to meet his spousal support obligation. 24 Va.App. at 193, 480 S.E.2d at 794. The Court engaged in a lengthy discussion of the relationship between Code §§ 20-107.1 (equitable distribution) and 20-107.3 (spousal support), and determined that the trial court properly reduced the husband's spousal support obligation based upon a change in husband's financial circumstances. Id. at 205-06, 480 S.E.2d at 800. The facts in Moreno involved husband's income from a pension, his voluntary retirement to Thailand, and his prohibition from working in that country. Because Moreno did not address whether interest from a marital award was foreseeable, we find no guidance from Moreno in resolving the narrow issue presented by this appeal.
The uncontroverted evidence is that when the trial court entered the final decree, wife was awarded $1,248,870 as her share of the marital estate, to be paid in installments. The first payment of $248,870 was due and payable on or before December 31, 1995. The remainder was payable $100,000 per year for 10 years at an interest rate of 9% per year. Pursuant to Code § 20-107.3, the trial court then awarded $8,000 per month as spousal support.
The trial court, citing Rowe v. Rowe, 24 Va.App. 123, 480 S.E.2d 760 (1997), correctly stated that it "must consider the ... income generating potential of the marital award as well as the marital award as well as any other income and expenses generated by the equitable distribution award." While we agree with the trial court's analysis, the facts show that the original equitable distribution award would clearly generate a steady and foreseeable stream of income for wife. Code § 20-107.1 requires a fact finder to consider the "provisions made with regard to the marital property under Code § 20-107.3." Thus, an award of spousal support must be made in light of the financial result of the equitable distribution award. Gamble v. Gamble, 14 Va.App. 558, 577, 421 S.E.2d 635, 646 (1992).
The trial court, by virtue of its own order, knew wife would receive $248,870 within four months of the award of spousal support. The trial court also knew that in addition to the $100,000 per year principal payments, wife would receive interest payments as follows:
1996: $90,000
1997: $81,000
1998: $63,000
1999: $54,000
2000: $45,000
2001: $36,000
2002: $72,000
2003: $27,000
We therefore conclude, at the time of the 1995 award of...
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