Henderson v. Henderson
| Decision Date | 15 May 2018 |
| Docket Number | Record No. 1364-17-2 |
| Court | Virginia Court of Appeals |
| Parties | WILLIAM TERRELLE HENDERSON v. BRIGITTA HENDERSON |
UNPUBLISHED
Present: Judges Chafin, Decker and AtLee
Argued at Richmond, Virginia
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
Lawrence D. Diehl (Barnes & Diehl, P.C., on brief), for appellant.
James M. Goff, II (James M. Goff II, P.C., on brief), for appellee.
William Terrelle Henderson (the husband) appeals a final order of the circuit court resolving equitable distribution and support issues in the course of his divorce from Brigitta Henderson (the wife).1 He contends that the equitable distribution award was flawed based on the court's improper treatment of various assets and debts. The husband also challenges the child and spousal support awards, suggesting that the court erroneously calculated the parties' incomes. Finally, he contends that the court abused its discretion in awarding attorney's fees and costs to the wife. For the reasons that follow, we affirm the circuit court's decision in part, reverse in part, and remand for furtherproceedings consistent with this opinion.2 Additionally, we deny the parties' respective requests for attorney's fees and costs incurred on appeal.
The parties were married in 1999. They had two children, who were born in 2002 and 2006. The husband was a professional athlete before and during the marriage but retired shortly after their second child was born in 2006. The couple accumulated substantial assets, as well as some debts, before separating in 2014.
The wife filed a bill of complaint seeking a divorce, child and spousal support, equitable distribution, and attorney's fees and costs. Following two evidentiary hearings, the court entered a final decree granting the divorce, distributing the marital property, and awarding child and spousal support. The court also ordered the husband to pay the attorney's fees and costs incurred by the wife in the circuit court.
This appeal addresses certain aspects of the circuit court's equitable distribution, child and spousal support awards, and attorney's fees and costs award. Additionally, each party seeks an award of attorney's fees and costs incurred as a result of this appeal.
The husband challenges the court's classification of two investment accounts as marital, as well as the valuation of one of those accounts. He also contends that the court improperly classifiedas marital property the "line-of-duty" benefits he received based on his work as a professional athlete.
Code § 20-107.3 requires the circuit court, at the request of divorcing parties, to classify property owned by the parties separately or jointly as separate, marital, or part separate and part marital for purposes of equitable distribution. It further requires the court to value the property and distribute the value of property that it classifies as marital. Code § 20-107.3; see Stumbo v. Stumbo, 20 Va. App. 685, 692-93, 460 S.E.2d 591, 595 (1995).
On appellate review, a circuit 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)). "It is well established that [the circuit court as] the trier of fact ascertains a witness' credibility, determines the weight to be given to [his or her] testimony, and has discretion to accept or reject any of the witness' testimony." Layman v. Layman, 62 Va. App. 134, 137, 742 S.E.2d 890, 891 (2013) (quoting Street v. Street, 25 Va. App. 380, 387, 488 S.E.2d 665, 668 (1997) (en banc)).
The husband disputes the court's rejection of his evidence purporting to trace the funds in two Wells Fargo accounts to his separate property. He also contests the court's failure to deduct the amount of a lien as part of the process of valuing one of the accounts.
We first address the classification of the accounts for purposes of equitable distribution. The circuit court must classify property as separate or marital, or part separate and part marital, before valuing and dividing it in equitable distribution. See Code § 20-107.3(A).
Settled principles provide that all property "acquired by each party during the marriage which is not separate property as defined [in subdivision (A)(1) of Code § 20-107.3]" is presumed marital. Code § 20-107.3(A)(2)(iii). Subdivision (A)(1) defines separate property to include "all property acquired during the marriage in exchange for or from the proceeds of sale of separate property, provided that such property acquired during the marriage is maintained as separate property." Code § 20-107.3(A)(1)(iii). Once the presumption that property acquired during the marriage is marital property comes into play, "[t]he party claiming that property should be classified as separate has the burden to produce satisfactory evidence to rebut this presumption." Joynes v. Payne, 36 Va. App. 401, 428, 551 S.E.2d 10, 23 (2001) (quoting Stroop v. Stroop, 10 Va. App. 611, 615, 394 S.E.2d 861, 863 (1990)). A party's ability to do so may rest on the credibility of his evidence. See Anderson v. Anderson, 29 Va. App. 673, 685-87, 514 S.E.2d 369, 375-76 (1999). Classification of property, including whether a party has successfully proved that property presumed to be marital "was acquired 'for or from the proceeds of the sale of separate property,'" is a question of fact and will not be reversed unless "plainly wrong or without evidence to support it." See Ranney v. Ranney, 45 Va. App. 17, 31-32, 608 S.E.2d 485, 492 (2005) (quoting Code § 20-107.3(A)(1)).
The dispute involves whether the funds in Wells Fargo accounts #5889 and #7913, titled only in the husband's name, were marital or separate property for purposes of equitable distribution. The accounts came into existence in 2004, significantly after the parties married in1999. Consequently, the accounts are presumed to be marital. See McIlwain, 52 Va. App. at 656-58, 666 S.E.2d at 544-45; Lambert v. Lambert, 6 Va. App. 94, 99, 367 S.E.2d 184, 187 (1988). The husband claims that the accounts were funded with sums that were his separate property and remained his separate property. Accordingly, he bore the burden of tracing those funds to his wholly separate property, with evidence found credible by the trier of fact. See Anderson, 29 Va. App. at 685-87, 514 S.E.2d at 375-76.
The husband's evidence was that he had a separate premarital brokerage account, First Union/Wachovia account #0410. He claimed that this account, even after the marriage, contained only his separate funds earned prior to the marriage. He also testified and offered evidence from various bank employees that this account was the source of all of the funds that he deposited into Wells Fargo accounts #5889 and #7913. However, it is undisputed that the husband was unable to produce any records for the First Union/Wachovia account #0410 for the years 2001 to 2004. The stipulated testimony of a Wells Fargo employee confirmed the unavailability of these records. In the absence of these records, the circuit court held that the husband had not borne his burden of proving that the funds in accounts #5889 and #7913 were his separate funds. The court, as the finder of fact, concluded that the husband's testimony about the source of the funds in First Union/Wachovia account #0410 provided insufficient evidence to meet his burden of tracing the funds to his separate property.4 See Anderson, 29 Va. App. at 685-87, 514 S.E.2d at 375-76 (). Counsel for the husband conceded at the evidentiary hearing that "[y]es, it comes down to [the husband's] credibility," but counsel argued that "the math works." (Emphasis added). The mere fact that the husband was able to prove that he had pre-1999 earnings and bonuses in an amount sufficient to fund account #0410, the amount he claims to have traced, was insufficient to meet his burden of proof. See Lee v. Lee, 13 Va. App. 118, 121-22, 408 S.E.2d 769, 770-71 (1991) ().
Consequently, the record supports the circuit court's classification of Wells Fargo accounts #5889 and #7913 as marital.
We next turn to the circuit court's classification of the lien on Wells Fargo account #5889 and the impact of that classification on its valuation of the account.
The parties stipulated to the account balance and the amount of the lien against it, which was in the form of a secured equity line. The husband's financial consultant at Wells Fargo testified that the note securing the lien was in the husband's name.
The circuit court addressed the outstanding equity line balance separately from its valuation and distribution of the account. It valued the account in accordance with the parties' stipulation concerning the account balance, without considering the amount of the lien, and ordered the account divided equally, awarding each party half the value of the balance. Although it accepted the parties' stipulation regarding the amount of the secured debt andclassified the debt as marital, the court found that the parties had...
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