Howe v. Howe

• Decision Date: 06 July 1999
• Docket Number: Record No. 2968-97-2.
• Citation: Howe v. Howe, 516 S.E.2d 240, 30 Va.App. 207 (Va. App. 1999)
• Parties: William F. HOWE, III v. Susan B. HOWE.
• Court: Virginia Court of Appeals

516 S.E.2d 240

30 Va. App. 207

William F. HOWE, III v. Susan B. HOWE.

Record No. 2968-97-2.

Court of Appeals of Virginia, Richmond.

July 6, 1999.

Ralph E. Main, Jr., Charlottesville, for appellant.

John K. Taggart, III, Charlottesville (Patricia D. McGraw, Denver, CO; Rachel L. Rust; Tremblay & Smith, LLP, Charlottesville, on brief), for appellee.

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

COLE, Senior Judge.

William F. Howe, III (father) appeals the trial judge's determination of his monthly child support obligation. Father contends the trial judge erred by: (1) granting Susan B. Howe's (mother's) motion to reconsider the October 6, 1997 decree; (2) denying father's motion to reconsider the November 12, 1997 decree; (3) including in father's income, for child support calculation purposes, a $10,000 gift received by father from his mother, which father used to discharge financial obligations under the divorce decree; and (4) including in father's income, for child support calculation purposes, the proceeds of father's conversion of a life insurance policy. For the reasons that follow, we affirm in part, reverse in part, and remand.

Facts

Father and mother were divorced by decree of the Albemarle County Circuit Court entered on November 22, 1996. The decree provided in pertinent part: (1) Father and mother were given joint legal custody of their two children; (2) father was to pay child support based upon the guidelines set forth in Code § 20-108.2; (3) father's support obligation was to be modified each year in accord with the guidelines; and (4) father was to own a Northwest Mutual Life Insurance policy "as his sole and separate estate subject to the provisions of paragraph 2(C) of this decree."

The final divorce decree, under the heading of "Child Support," paragraph 2(C), entitled "Life Insurance," further provided that father was to maintain for the benefit of the children the life insurance policy through Northwest Mutual Life, which had a death benefit of $124,401. Father also agreed "to take no action that would result in less than the face value being payable at the time of his death...."

I. and II.

Mother's Motion to Reconsider the October 6, 1997 Decree; Father's Motion to Reconsider the November 12, 1997 Decree

On March 1, 1997, father notified mother that he had recalculated his child support obligation and that he was decreasing child support payments by $307 per month. Mother disputed the recalculation, and she filed a show cause order with the court on May 5, 1997. Father then filed a motion requesting modification of his child support obligation, contending that his income had changed and that mother had been receiving income which she had not disclosed to father. Father also asserted that the final divorce decree did not reflect the final agreement of the parties concerning the applicability of the term "earned income." He also argued that his child support obligation should be recalculated in accordance with the child support guidelines as interpreted by Frazer v. Frazer, 23 Va.App. 358, 477 S.E.2d 290 (1996), a case which was decided after the initial agreement between the parties had been reached. Under this interpretation, father's spousal support payments to mother would be added to mother's income and deducted from father's income.

Mother argued that no triggering event had occurred which required a recalculation of child support, but, if such an event had occurred, the recalculation should not include the addition of spousal support in mother's gross income, thereby keeping her income at zero, as provided in the final divorce decree.

The trial judge held an ore tenus hearing on August 26, 1997. At that hearing, father testified that he had cashed in the Northwest Mutual Life Insurance policy and had replaced it with a policy of equal death benefit for the children. Father testified that he received $25,564 for the conversion, which he used to purchase a house with his second wife.

Father also stated that, on December 20, 1996, he received a $10,000 Christmas gift from his mother. He testified that he used this money to pay marital debts and attorneys' fees as directed by the trial judge in the divorce decree. Father stated that, on April 4, 1997, he received a $10,000 loan from his mother, which he used to finance his new house and which he intended to repay.

On October 6, 1997 the trial judge issued a letter opinion and order, deciding the issues raised at the August 26, 1997 hearing. He rejected the argument that the divorce decree did not reflect the parties' agreement but agreed that a recalculation of father's monthly child support obligation was in order based on our decision in Frazer. The trial judge, therefore, recalculated mother's income to include the amount of spousal support paid her by father.

In a footnote in his letter opinion, the trial judge stated that he did not include the gift money in father's income "since the year of receipt was not given." The footnote further stated that he did not include the amount of the insurance proceeds in father's gross income "since the amount of the [insurance] payment which is attributable to [father]'s gross income cannot be determined."

On October 20, 1997, mother filed a motion for reconsideration of the October 6, 1997 decision, again requesting that the trial judge hold that the divorce agreement governed the issues and that no circumstances had arisen requiring recalculation of the monthly child support. Mother requested, in the alternative, that the trial judge increase father's gross income by the amount of the gifts he received from his mother and the insurance proceeds. She requested that the trial judge increase father's monthly child support accordingly.

The trial judge granted the motion for reconsideration without a hearing and vacated his October 6, 1997 decree. On November 12, 1997, the trial judge issued another decree and letter opinion. The judge found that he had erred in not including the $10,000 gift from father's mother in the calculation of father's gross income. The judge concluded that he had properly excluded the $10,000 loan proceeds from father's gross income. Therefore, the trial judge included in father's gross income $10,000 of the $20,000 received by father from hi mother.

The trial judge also included the insurance proceeds of $25,554¹ in father's 1997 gross income for child support calculations to be made on March 1, 1998. The judge then recalculated father's new total monthly child support obligation based on these findings. Father filed a motion to reconsider on November 24, 1997. Apparently, the trial judge denied father's motion, although the record contains no order addressing the motion. Father appealed to this Court.

Father contends the trial judge erred in granting mother's motion to reconsider his October 6, 1997 order and in vacating that order. Rule 1:1 provides that "[a]ll final judgments, orders, and decrees, irrespective of terms of court, shall remain under the control of the trial court and subject to be modified, vacated, or suspended for twentyone days after the date of entry, and no longer." By decree dated October 27, 1997, the trial judge granted mother's motion for reconsideration and vacated the October 6, 1997 decree. Therefore, the trial judge timely vacated the decree in accordance with Rule 1:1. Further, whether to grant mother's motion lay within the sound discretion of the trial judge. See Code § 20-108; see also Morris v. Morris, 3 Va.App. 303, 307, 349 S.E.2d 661, 663 (1986). The trial judge did not abuse his discretion in considering the motion.

Father also contends the trial judge erred in failing to grant his motion to reconsider the November 12, 1997 decree. Father sought the further opportunity to introduce evidence concerning the use of the gift money and the use of the insurance payment. The record does not contain an order indicating that the trial judge ruled on father's motion to reconsider. We find, however, because of the view we take of these issues, we need not address these issues further. III. Gift Funds

The starting point for a trial court in determining the monthly child support obligation of a party is the amount as computed by the schedule found in Code § 20-108.2(B). This amount is determined according to a schedule that varies according to the combined gross income of the parties and the number of children involved.

Richardson v. Richardson, 12 Va.App. 18, 21, 401 S.E.2d 894, 896 (1991). The Code establishes a rebuttable presumption that the schedule is appropriate under the circumstances.

However, after determining the presumptive amount of support according to the schedule, the trial court may adjust the amount based on the factors found in Code §§ 20-107.2 and 20-108.1. Deviations from the presumptive support obligation must be supported by written findings which state why the application of the guidelines in the particular case would be unjust or inappropriate.

Id.

Code § 20-108.2(C) defines gross income as

income from all sources, and shall include, but not be limited to, income from salaries, wages, commission, royalties, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits except as listed [elsewhere], workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, veterans' benefits, spousal support, rental income, gifts, prizes or awards.

Clearly, the statute defines gifts as income. Father argues that, because the December 20, 1996 $10,000 gift was used to discharge financial obligations created by the divorce decree, the gift money should not be counted as part of his gross income for purposes of child support calculations.

Father also argues that three factors listed in Code § 20-108.1(8) rebut the presumption that the amount of child support is correct and support the finding that...