Miller v. Cox

• Decision Date: 11 January 2005
• Docket Number: Record No. 1160-04-4.
• Citation: Miller v. Cox, 44 Va. App. 674, 607 S.E.2d 126 (Va. App. 2005)
• Parties: Girard C. MILLER v. Lynn E. COX, f/k/a Lynn E. Miller.
• Court: Virginia Court of Appeals

607 S.E.2d 126

44 Va. App. 674

Girard C. MILLER v. Lynn E. COX, f/k/a Lynn E. Miller.

Record No. 1160-04-4.

Court of Appeals of Virginia, Alexandria.

January 11, 2005.

Michael A. Ward, Fairfax, for appellant.

David D. Masterman, McLean (Jeffrey S. Thiebert; Masterman & Graham, P.C., on brief), for appellee.

Present: HUMPHREYS and FELTON, JJ., and ANNUNZIATA,¹ S.J ANNUNZIATA, Judge.

This appeal concerns the propriety of the trial court's August 28, 2002 decree of divorce² equitably dividing the marital estate and ordering Girard Miller (husband) to pay Lynn Cox (wife) $9,000 per month in spousal support. The order of spousal support was raised in a prior appeal, but we declined to address it, deciding, instead, to remand the issue to the trial court for reconsideration in light of our reversal of certain portions of the equitable distribution award. See Miller v. Miller, No. 2261-02-4, 2003 WL 21649457, 2003 Va.App. LEXIS 401 (Va.Ct.App. July 15, 2003). Husband renews his challenge to the 2002 spousal support award and the trial court's exercise of discretion in its reconsideration of that award on remand from this Court as reflected in an April 29, 2004 order. Finding that the trial court did not abuse its discretion, we affirm.

Husband raises four issues on appeal. He contends that the trial court erred in: 1) ascribing a 5% rate of return to wife's investments; 2) finding wife is entitled to a spousal support award and in the amount stated in light of her needs; 3) failing to limit the duration of the spousal support award; and 4) failing to consider changes to wife's income as a result of this Court's prior reversal of the equitable distribution award. In addition to husband's claims on appeal, wife seeks an award of attorney's fees to compensate her for the expense incurred in defending against those claims. We address each contention in turn.

The following legal principles are relevant to our analysis of all issues. As an appellate court, we view the evidence, and all reasonable inferences flowing from the evidence, in a light most favorable to wife as the party prevailing below. Congdon v. Congdon, 40 Va.App. 255, 258, 578 S.E.2d 833, 835 2003). "That principle requires us to `discard the evidence' of the appellant which conflicts, either directly or inferentially, with the evidence presented by the appellee at trial." Id. (quoting Wactor v. Commonwealth, 38 Va.App. 375, 380, 564 S.E.2d 160, 162 (2002)).

In reviewing a spousal support award, we are mindful that the trial court has broad discretion in awarding and fixing the amount of spousal support. Brooks v. Brooks, 27 Va.App. 314, 317, 498 S.E.2d 461, 463 (1998). Accordingly, our review is limited to determining whether the trial court clearly abused its discretion. Gamble v. Gamble, 14 Va.App. 558, 574, 421 S.E.2d 635, 644 (1992). In exercising its discretion, the trial court must consider all the factors enumerated in Code § 20-107.1(E) when fashioning its award, but it is not "required to quantify or elaborate exactly what weight or consideration it has given to each of the statutory factors." Woolley v. Woolley, 3 Va.App. 337, 345, 349 S.E.2d 422, 426 (1986). That being said, the trial court's findings "must have some foundation based on the evidence presented." Id. Where that evidentiary foundation exists and the record discloses that the trial court "has given due consideration to each of [the statutory] factors," we will not disturb its determination as to spousal support on appeal. See Thomasson v. Thomasson, 225 Va. 394, 398, 302 S.E.2d 63, 66 (1983); see also Gamble, 14 Va.App. at 574, 421 S.E.2d at 644.

I. The Trial Court Did Not Err in Finding 5% To Be a Reasonable Rate of Return on Wife's Investments

Husband contends that the trial court erred in finding that wife could expect a 5% pretax return on the assets she received in equitable distribution. He argues that the evidence fails to support that determination. We find husband's contention to be wholly without merit.

Viewed in a light most favorable to wife, the evidence establishes that the trial court heard expert evidence on a range of possible rates of return. Wife's expert, David Twenhafel, testified that he would advise wife to diversify her assets by investing in money market funds, bonds, and stocks. He said she could expect a rate of return of 3.75% from money market funds, 6.75% from bonds, and 11.00% from stocks. Proceeding from the assumption that wife could invest approximately $1,364,000 in capital as a result of the equitable distribution award, Twenhafel said he would advise wife to invest 22% of the capital in money market funds, 31% in bonds, and 47% in stocks. According to Twenhafel, the assets so invested would produce approximately $110,000 per year before taxes or $77,000 after taxes. These figures represent an 8% return pretax and a 5.6% return after taxes. However, Twenhafel cautioned that his analysis "assumed rates of return for the next 10 years that are close to long-run historical averages — which means that there is about a 50% chance that my assumptions [regarding rate of return] are too high."

Husband's expert, Robert Anderson, testified that wife could expect a 7% return on her assets after taxes if she invested 60% in stocks and 40% in bonds. If wife invested all of her money in safer, tax-free bonds, she could expect a 4.5% return.

Based on the evidence presented to the trial court establishing the range of possible rates of return on wife's investments, we hold that it did not erroneously impute a 5% pretax return to the assets wife received in equitable distribution. Under settled legal principles, the trial court may accept or reject an expert's opinion in whole or in part. See Street v. Street, 25 Va.App. 380, 387, 488 S.E.2d 665, 668-69 (1997) (en banc); Rollston v. Commonwealth, 11 Va.App. 535, 547, 399 S.E.2d 823, 830 (1991). Here, the trial court heard testimony from wife's expert that he would advise wife to diversify her assets by investing a small portion of her money in safer vehicles yielding lower returns, such as money market funds, and a larger portion of her money in riskier assets yielding higher returns, such as stocks. From Twenhafel's and Anderson's testimony, the trial court learned that, depending on the risk of the investment, wife's rate of return could average anywhere from 3.75% to 11.00% pretax. Although Twenhafel suggested that wife should invest 22% of her total assets in lower-yielding money market funds, the trial court was not required to accept Twenhafel's suggested allocation; rather, the trial court could act within its broad discretion to assign a lower risk profile to wife's investments than Twenhafel suggested. Furthermore, the trial court was not required to accept Twenhafel's testimony establishing higher rates of return, especially in light of Twenhafel's warning that there was a 50% chance his predictions were too high and in light of evidence that the parties had historically engaged in less aggressive investment practices during the marriage.³ Based on the evidence before the trial court, we hold that the trial court did not err in determining that wife's investments could reasonably return 5% pretax.

II. The Trial Court Did Not Err in Awarding Spousal Support to Wife, Nor Did It Err in the Amount Awarded

Husband contends that the trial court erred in awarding $9,000 in spousal support to wife. Specifically, he argues wife's income from her employment and the assets she received in equitable distribution exceed her demonstrated need. He reasons that an award of support that exceeds her proved needs is error as a matter of law. We find his contention to be without merit and affirm the trial court's award of spousal support in the amount of $9,000 per month.

Viewed in a light most favorable to wife, the evidence establishes that she demonstrated yearly expenses in the amount of $125,000.⁴ This figure included, but was not limited to, necessary expenditures such as food, housing, and medical expenses. The evidence also established that husband and wife lived frugally relative to husband's income during the marriage and that they did so in order to save for retirement. Wife testified that saving for retirement "was a very big point of our lives ... we were going to have a good retirement." Wife further stated that she and husband "tried to do the one-third/one-third/one-third rule, which is one-third of your money goes to taxes[,] ... one-third goes to savings, and one-third goes to expenses — and we pretty much were on target or even better ... most of the time." Husband confirmed that, as a married couple, they invested a large portion of his yearly income: "The practice of the household was that we essentially took all bonus income and invested it and systematically held money from the annual or monthly compensation.... We were living on less than the combined salary income." Husband's base salary income in 1999, 2000, and 2001 was approximately $395,000. Husband also earned substantial bonuses in those years, which increased his gross pay to approximately $573,000 in 1999 and 2000 and $872,000 in 2001. Accepting either (1) husband's statement that the parties regularly invested all of his bonus money plus one month's salary towards retirement, or (2) wife's statement that they invested one-third of their income towards retirement, the evidence establishes that they regularly invested well over $150,000 towards retirement during the last few years of their marriage. Even assuming that taxes would reduce the amount regularly saved by 40% to $90,000, the trial court could properly consider that each party regularly saved and invested approximately $40,000 per year.⁵ Adding wife's share of the parties' annual retirement savings to her established expenses, the trial court could reasonably conclude wife's needs totaled approximately $165,000.

The evidence regarding wife's ability to earn...