Dietz v. Dietz

• Court: Virginia Court of Appeals
• Writing for the Court: COLEMAN; BENTON; BARROW
• Citation: Dietz v. Dietz, 436 S.E.2d 463, 17 Va.App. 203 (Va. App. 1993)
• Decision Date: 19 October 1993
• Docket Number: No. 0109-92-4,0109-92-4
• Parties: Philip J. DIETZ, Jr. v. Sallie B. DIETZ. Record

Page 463

436 S.E.2d 463

17 Va.App. 203

Philip J. DIETZ, Jr. v. Sallie B. DIETZ.

Record No. 0109-92-4.

Court of Appeals of Virginia.

Oct. 19, 1993.

[17 Va.App. 206] James A. Watson, II, Fairfax (Richard J. Colten, Surovell, Jackson, Colten & Dugan, P.C., on briefs), for appellant.

Joseph A. Condo, Vienna (Beth A. Bittel, Rees, Broome & Diaz, P.C., on brief), for appellee.

Present: BARROW, BENTON and COLEMAN, JJ.

COLEMAN, Judge.

This appeal is from a final decree of divorce providing for custody of the parties' children, child and spousal support, the distribution of the parties' jointly owned property, monetary awards and other relief. We hold that (1) a trial court has no authority to order a custodial parent to sign a declaration that he or she will not claim the children as dependents for income tax purposes, (2) property acquired by one spouse after the last separation with wages earned after the last separation is separate property, (3) deferred compensation in the form of stock options should be considered under the provisions of Code § 20-107.3(G) regarding "pension, profit-sharing or deferred compensation plan[s]," and (4) a trial court has authority to award jointly owned marital property to one party who refuses to accept an offer for the purchase of the property, so long as an appropriate monetary award is made compensating the other party. Thus, we affirm the divorce decree in part, but reverse and remand the distribution of the stock options.

INCOME TAX EXEMPTION

The trial court ordered the husband to pay child support for the three minor children born of the marriage, but refused to order the wife to release her claim for an income tax exemption for each of the children. Although the trial judge observed that it makes "perfect sense" for the husband to have the exemptions, he concluded that he lacked authority to order the wife to surrender them to the husband.

A non-custodial parent may claim a child as a dependent on an income tax return by attaching to it a written declaration signed by the custodial parent declaring that he or she will not claim the child as a dependent. 26 U.S.C. § 152(e). Courts in some jurisdictions have interpreted their divorce statutes broadly to grant authority to order a parent to execute such a declaration. See Monterey County v. Cornejo, 53 Cal.3d 1271, 283 Cal.Rptr. 405, 812 P.2d 586 (1991); Ritchey v. Ritchey, 556 N.E.2d 1376, 1378 (Ind.App.1990); Wassif v. Wassif, 77 Md.App. 750, 551 A.2d 935, cert. denied, 315 Md. 692, 556 A.2d 674 (1989); Singer v. Dickinson, 63 Ohio St.3d 408, 588 N.E.2d 806 (1992); Cross v. Cross, 178 W.Va. 563, 570, 363 S.E.2d 449, 456 (1987).

However, the Virginia statutes governing child support do not authorize a court to order a custodial parent to sign a declaration stating that he or she will not claim the child as a dependent. See Code §§ 20-107.2, 20-108.1, 20-108.2; see also Lapidus v. Lapidus, 226 Va. 575, 579, 311 S.E.2d 786, 788 (1984) ("A decree is void ... if the mode of procedure employed by the court was such as it might not lawfully adopt"); Stroop v. Stroop, 10 Va.App. 611, 616, 394 S.E.2d 861, 864 (1990) ("A divorce court[ ] ... may [not] claim inherent power to employ a mode or procedure which is not clearly provided by law"). Instead, a trial court is permitted to consider the "[t]ax consequences to the parties regarding claims for dependent children and child care expenses" when determining whether to deviate from a presumptive amount of support provided for by statute. Code § 20-108.1(B)(15). Thus, the legislature has provided that, although a trial court may not order a custodial parent to surrender his or her income tax exemption, the amount of child support awarded may be based upon consideration of the tax consequences of a claim for a tax exemption for a dependent child.

Admittedly, a court "may make such further decree as it shall deem expedient concerning the custody, visitation and support" of a minor child. Code § 20-107.2. However, the divorce statutes do not convey broad equitable powers onto the trial court. See Reid v. Reid, 245 Va. 409, ----, 429 S.E.2d 208, ---- (1993); Ring v. Ring, 185 Va. 269, 277, 38 S.E.2d 471, 475 (1946). In view of the legislature's express direction concerning the manner in which a trial court is to treat the tax consequences of "claims for dependent children and child care expenses," a trial court is not free to fashion other remedies. See Ernsberger v. Ernsberger, 224 Va. 1, 2, 294 S.E.2d 794, 795 (1982). Thus, the trial court did not err in refusing to order the wife to sign a declaration that she would not claim the children as dependents on her income tax returns.

SEPARATE OR MARITAL PROPERTY

Soon after the parties separated, the husband opened a bank account into which he deposited his post-separation salary. While the divorce litigation was pending, he paid support and his share of the mortgage on the marital residence out of marital assets, rather than from his salary. The husband used more than $38,000 on a line of credit on the marital home, exercised stock options he had acquired during the marriage, and sold off or encumbered other marital assets to pay the family's expenses while the bank account containing his post-separation salary grew to as much as $90,000. Eventually, however, the husband exhausted most of the money in this bank account to pay marital expenses. However, before doing so, he purchased a new automobile and furniture using funds from the post-separation wages in the bank account. The trial court classified the automobile and furniture as separate property.

Although the trial judge described the husband's behavior as "outrageous" and expressed his intention to "take it into account as an 'other factor' necessary to consider in arriving at a fair and equitable monetary award," he did not find that the husband had wasted marital assets. Furthermore, the wife does not appeal the trial judge's finding that the husband did not waste these assets. She appeals only the trial court's classification of the car and furniture as the husband's separate property. We uphold the trial judge's ruling that the automobile and furniture purchased by the husband after the last separation, with post-separation wages, was separate property.

Marital and separate property are well defined. Property titled in the names of both a husband and a wife and all other property acquired by either of them "during the marriage which is not separate property" is marital property. Code § 20-107.3(A)(2). Property acquired by either spouse "during the marriage, and before the last separation of the parties," is presumed to be marital property. Id. ¹ Separate property is that acquired by either party (1) "before the marriage," (2) "during the marriage by bequest, devise, descent, survivorship, or gift" from someone other than the other spouse and (3) "during the marriage in exchange for or from the proceeds of sale of separate property," if maintained as separate property. Code § 20-107.3(A)(1). ²

Whether the husband's automobile and furniture are marital property depends upon the meaning of the concept "during the marriage" and the significance of the presumption that property acquired "before the last separation ... is presumed to be marital property in the absence of satisfactory evidence that it is separate property." If "acquired ... during the marriage" simply means acquired after the date a marriage is celebrated and before the date of divorce, then clearly the husband's purchases were marital property. However, as we have recognized, for purposes of equitable distribution, when a marital partnership begins and ends is a more dynamic and complex concept than the day on which marital vows are exchanged or a court finally dissolves a marriage that may have long before ended in fact. See Price v. Price, 4 Va.App. 224, 231, 355 S.E.2d 905, 909 (1987); see also Lawrence J. Golden Equitable Distribution of Property, §§ 5.12-5.14 (1983 & Cum.Supp.1993). Furthermore, by adopting the presumption that property acquired prior to the last separation shall be presumed to be marital, the legislature recognized that a marriage will be deemed to have ended for purposes of classifying property as marital on the date of the last separation, in the absence of proof to the contrary.

Code § 20-107.3, providing for equitable distribution, is based on the notion that marriage is an economic partnership in which the parties, through varying contributions, monetary and nonmonetary, to the acquisition, maintenance, and care of property and to the well-being of the family, may accumulate marital wealth. Rexrode v. Rexrode, 1 Va.App. 385, 394, 339 S.E.2d 544, 550 (1986). "Viewing the enactment of the statute as an adoption of the view that marriage is a partnership of two individuals who have joined forces to benefit the union, it is evident that when the partnership ceases to work for the common good the marriage is for all practical purposes over." Price, 4 Va.App. at 231, 355 S.E.2d at 909. Thus, "the presumption that property is marital ceases on the date of the de facto dissolution of the marital partnership." Id. at 229, 355 S.E.2d at 908.

When the defunct partnership is dissolved, the property acquired through partnership contributions must be identified and classified as marital property. Code § 20-107.3(A)(2)(i); Mitchell v. Mitchell, 4 Va.App. 113, 117, 355 S.E.2d 18, 20 (1987). The rights and equities of the parties in the marital assets are then determined and the Code § 20-107.3(E) factors are applied to determine how to apportion the partnership assets or whether to make a monetary award, and the amount thereof. Code § 20-107.3(B) and (D); Gologanoff v. Gologanoff, 6 Va.App. 340, 349, 369 S.E.2d 446, 450 (1988). Generally, property acquired by one partner after the last separation when "at least one of the parties intends that the separation be permanent" is not ...