Hart v. Hart

• Decision Date: 31 March 1998
• Docket Number: 0979-97-3,Nos. 0931-97-3,s. 0931-97-3
• Citation: 27 Va.App. 46,497 S.E.2d 496
• Court: Virginia Court of Appeals
• Parties: James P. HART, III v. Marie Holt HART. Marie Holt HART v. James P. HART, III. Record

Page 496

497 S.E.2d 496

27 Va.App. 46

James P. HART, III v. Marie Holt HART.

Marie Holt HART v. James P. HART, III.

Record Nos. 0931-97-3, 0979-97-3.

Court of Appeals of Virginia Salem.

March 31, 1998.

Charles B. Phillips (Phillips & Swanson, on briefs), Salem, for James P. Hart, III.

William H. Cleaveland (Leisa Kube Ciaffone; Rider, Thomas, Cleaveland, Ferris & Eakin; Gentry, Locke, Rakes & Moore, on briefs), Roanoke, for Marie Holt Hart.

Present: COLEMAN and ELDER, JJ., and COLE, Senior Judge.

COLEMAN, Judge.

James P. Hart, III (husband) and Marie Holt Hart (wife) separately appeal the trial court's divorce decree and equitable distribution award. Husband contends the trial court erred when it: (1) divided in kind real property titled jointly to both parties; (2) designated a boundary line between two of the parcels different from the boundary recommended by the commissioner; (3) created joint easements of ingress and egress on the partitioned parcels and ruled that each party would bear the entire costs of maintaining the sections of such easements located on their respective tracts regardless of the extent of use by the other, their tenants, and licensees; and (4) classified husband's Central Fidelity account as marital property and distributed one-half of the account assets to wife. Wife contends the trial court erred when it: (1) calculated the value of husband's separate share of a certain mortgage note; (2) failed to classify as wife's separate property certain money in a USAA bond fund which she claims she traced to money she inherited; and (3) estimated husband's contributions to the USAA bond fund when it divided the fund upon consideration of the factors under Code § 20-107.3(E). For the reasons that follow, we affirm in part, reverse in part and remand to the trial court for further proceedings in accordance with this opinion.

I. BACKGROUND

The parties were married in New York in 1968 and lived in a home that husband had purchased before the marriage. In 1986, they sold the New York home, receiving $40,000 part payment and a $219,000 twenty-year promissory mortgage note. They relocated to Virginia, where they purchased a forty-two acre parcel of land adjacent to Smith Mountain Lake (Plantation Point) which they jointly titled. At Plantation Point, they built a marital home and eight rental units. Due to the parties' concerns over the health of wife's parents (the Holts), they also constructed a separate residence for the Holts on the Plantation Point property (Hillsdale). Mrs. Holt contributed approximately $48,000 to purchase the building materials for Hillsdale. The parties and the Holts established neither a repayment nor lease agreement nor did they execute a deed that conveyed any estate or interest in the property to the Holts. The parties merely acknowledged that Hillsdale was built as a residence for the Holts to live in "as long as they were able."

After selling the New York home in 1986, the parties opened a USAA Virginia Bond Fund account using the $40,000 down payment from the New York home as the initial deposit. Over the years, money from various sources was deposited into the fund, including amounts contributed by Mrs. Holt, the New York mortgage note payments, rental receipts from the lessees of the Plantation Point rental units, husband's IBM pension payments, and $20,500 that wife inherited from her great aunt.

The parties separated on February 4, 1994. They executed a separation agreement in which they agreed to temporarily "split their net income" pending a judicial determination and award of equitable distribution. Husband deposited his share of the income into a Central Fidelity bank account that he opened after the parties separated.

In October 1994, husband filed for divorce on the ground of adultery. The trial court appointed a commissioner in chancery to hear evidence, report factual findings, and make recommendations regarding, among other matters, how to equitably distribute the parties' marital property. After receiving the commissioner's report, the trial court specifically found that the wife had committed adultery but granted husband a divorce on the ground of having lived separate and apart and approved the commissioner's equitable distribution recommendations with some modifications.

II. GENERAL PRINCIPLES

Code § 20-107.3 governs how property shall be equitably distributed when a marriage is dissolved. The statute provides that the court shall determine legal title as between the parties, shall classify the parties' property as separate or marital property, shall evaluate the marital and separate property, and shall determine the rights and interests of the parties in the marital property. The court must then equitably divide the marital property in the manner authorized by the statute, taking into consideration the factors enumerated in subsection (E). See generally Code § 20-107.3.

On appeal, the trial court's award of equitable distribution will not be reversed "unless it appears from the record that the chancellor has abused his discretion, that he has not considered or misapplied one of the statutory mandates, or that the evidence fails to support the findings of fact underlying his resolution of the conflict of the equities." Robinette v. Robinette, 10 Va.App. 480, 486, 393 S.E.2d 629, 633 (1990) (citations omitted). A decree confirming a commissioner's report is presumed correct and will not be disturbed unless plainly wrong or without evidence to support it. Pelfrey v. Pelfrey, 25 Va.App. 239, 244, 487 S.E.2d 281, 283 (1997); Gamer v. Gamer, 16 Va.App. 335, 339, 429 S.E.2d 618, 622 (1993).

III. DIVISION OF PLANTATION POINT PROPERTY

Upon consideration of the factors enumerated in Code § 20-107.3(E), the commissioner recommended that the Plantation Point property be divided into three parcels: one parcel to husband, which included the marital home and four rental units; a second parcel of equal value to wife, which included the Hillsdale home and four rental units, and a third parcel which is to remain titled to both parties as tenants in common. The commissioner recommended that the parties be given the option of purchasing the undivided interest of the other in the third tract and if they failed to agree upon such a sale, the third tract would be sold. The commissioner further recommended that easements for ingress and egress be established on the partitioned properties, which would be a joint easement along a driveway that runs through both tracts of land. The commissioner recommended that wife should be solely responsible for the cost of maintaining the portion of the easement that is solely located on and serves only her property and that both parties should be equally responsible for the cost of maintaining the easement that is located on husband's property and serves both tracts.

The trial court approved the commissioner's recommendations with two exceptions relevant to this appeal. First, the trial court referenced the lake's 800-foot contour line in designating the boundary line between the two parcels; the commissioner had generally referenced that line as the lake's "water line." Second, the trial court ruled that the cost of maintaining the joint easement "shall be the sole responsibility of the respective owners" of the tracts across which the easements run.

A. Division In Kind

We hold that the trial court did not err by dividing the Plantation Point property into separate parcels rather than allotting the whole property to James P. Hart in exchange for his agreement to purchase wife's interest at fair market value. Code § 20-107.3(C) authorizes the trial court to "order the division or transfer, or both, of jointly owned marital property ... based upon the factors listed in subsection E." Under this provision, the trial court may, in its discretion, order a division in kind of the property, permit either party to purchase the interest of the other and direct the allocation of the proceeds, or order a public or private sale of the property. See id.; Gaynor v. Hird, 11 Va.App. 588, 592, 400 S.E.2d 788, 790 (1991).

Code § 20-107.3(C), when enacted in 1982, did not authorize a trial court to divide or transfer title to property except that "in the final decree of divorce the court may partition marital property which is titled in the names of both parties." The initial equitable distribution statute permitted trial courts in their final divorce decrees to partition jointly titled property in order to effectuate a property division according to the parties' legal title rather than be required to file a separate suit for partition. Morris v. Morris, 3 Va.App. 303, 309-10, 349 S.E.2d 661, 665 (1986). Partition as authorized in the divorce case was, however, no different from partition prior to equitable distribution and was required to conform with Code § 8.01-81 et seq. Clayberg v. Clayberg, 4 Va.App. 218, 221, 355 S.E.2d 902, 904 (1987). Code § 8.01-83 required trial courts, when partitioning realty, to partition the property in kind, except when "partition cannot conveniently be made, [in which case] the entire subject may be allotted to any one or more of the parties who will accept, and pay therefor to the other parties such sums of money as their interest therein may entitle them to," or, alternatively, to sell the property and divide the proceeds. See Sensabaugh v. Sensabaugh, 232 Va. 250, 256, 349 S.E.2d 141, 144-45 (1986); Nickels v. Nickels, 197 Va. 498, 501-02, 90 S.E.2d 116, 118 (1955) (applying Code §§ 8-690 and 8-692). In a partition proceeding, the court was not authorized to order a sale or an allotment of the property to one of the owners in exchange for its value if the property could have been divided in kind. Leake v. Casati, 234 Va. 646, 649, 363 S.E.2d 924, 926 (1988). Property rights were considered "[s]o sacred ... that to take it from one man and give it to another for private use [was] beyond...