Pappas v. Pappas, Record No. 2351-03-4 (VA 8/17/2004)
| Decision Date | 17 August 2004 |
| Docket Number | Record No. 2351-03-4. |
| Court | Virginia Supreme Court |
| Parties | GEORGE C. PAPPAS v. CATHERINE E. PAPPAS. |
Appeal from the Circuit Court of Fairfax County, Leslie M. Alden, Judge.
Dennis M. Hottell (Christopher Malinowski; Angela M. Cross; Dennis M. Hottell & Associates, P.C., on briefs), for appellant.
Peter M. Fitzner (Matthews, Snider, Norton & Fitzner, on brief), for appellee.
Present: Judges Clements, Felton and McClanahan.
George C. Pappas (husband) appeals the judgment of the trial court modifying the amount of spousal support previously awarded to Catherine E. Pappas (wife) in the parties' property settlement agreement (PSA) which was incorporated, but not merged, into their final decree of divorce. Husband contends that the trial court erred in considering the provisions of the PSA and the parties' pre-PSA negotiations relating to spousal support in computing the modified support award; that it erred in imputing income to husband; in ordering husband to pay the modified support award retroactive to April 1, 2003 when payment of spousal support had been suspended by a prior court order; and in ruling that it lacked authority to modify the duration of wife's support award under the provisions of the PSA. Finding no error, we affirm the judgment of the trial court.
George C. Pappas (husband) and Catherine E. Pappas (wife) were married on June 18, 1989. No children were born of the marriage. On May 24, 2002, they entered into a property settlement agreement (PSA), which resolved all issues of spousal support and equitable distribution. The PSA was affirmed, ratified and incorporated, but not merged, into the final decree dissolving the parties' marriage.
Under the provisions of the PSA, husband agreed to pay wife $5,700 per month from December 2001 until June 2002, and thereafter $4,000 per month for twelve years and four months, unless terminated due to wife's remarriage, her habitual cohabitation analogous to marriage, or the death of either party. Pursuant to the PSA, husband received marital property valued at $35,000 and wife received assets, including the marital residence, valued at $397,585. The PSA also provided that "either party may hereafter petition any court of competent jurisdiction for an increase or decrease of spousal support and maintenance pursuant to § 20-109 . . . ."
At the time the parties entered into the PSA, husband was the President and CEO of Plesk, Inc., an information technology company, where he had been employed since June 2001 at an annual salary of $190,000. Both parties anticipated husband's employment would continue when they entered into the PSA. On December 16, 2002, husband's employment at Plesk was terminated as the result of financial difficulties experienced by his employer.
Immediately following his termination, husband began seeking comparable alternative employment in the information technology sector. Due to a poor market, employment opportunities consistent with his former level of employment were largely unavailable. Meanwhile wife, who had not been employed during the marriage, obtained employment earning approximately $46,000 annually.
On December 31, 2002, less than seven months after the entry of the final decree of divorce incorporating the parties' PSA, husband filed a motion to modify spousal support. He simultaneously filed a pendente lite motion to suspend the support payments, which the trial court granted on January 10, 2003.
On July 23, 2003, the trial court heard evidence ore tenus. Both parties presented expert testimony related to husband's job search following his loss of employment. The trial court admitted the parties' PSA into evidence, as well as evidence of the parties' pre-PSA negotiations regarding spousal support.
The trial court found that the PSA provided authority for it to determine modification of spousal support. It concluded that husband's termination of employment resulting from his employer's financial difficulties was a material change in circumstances not reasonably contemplated by the parties at the time they entered into the PSA. It also found that its authority to modify the spousal support was limited to modifying the amount of support, but not its duration; that the evidence supported an imputation of $100,000 annual income to husband; and that after considering all the factors of Code § 20-107.1(E), husband's monthly spousal support payments should be reduced from $4,000 a month to $2,500 a month, retroactive to April 1, 2003, and payable at that rate for the duration established by the parties' PSA. It denied wife's request for an award of attorney's fees. On August 6, 2003, the trial court entered a final order reflecting its decision of July 23, 2003. Husband's motion to reconsider was also denied on August 6, 2003.
On appeal, we review the evidence, and all reasonable inferences fairly deducible from it, in the light most favorable to the prevailing party below. Alphin v. Alphin, 15 Va. App. 395, 399, 424 S.E.2d 572, 574 (1992). When a trial court hears the evidence ore tenus, its findings are entitled to great weight and will not be disturbed on appeal unless "plainly wrong or without evidence to support it." Pommerenke v. Pommerenke, 7 Va. App. 241, 244, 372 S.E.2d 630, 631 (1988). "The determination whether a spouse is entitled to [a reduction or increase in spousal] support, and if so how much, is a matter within the discretion of the [trial] court and will not be disturbed on appeal unless it is clear that some injustice has been done." Dukelow v. Dukelow, 2 Va. App. 21, 27, 341 S.E.2d 208, 211 (1986).
Husband contends that the trial court erred in considering the provisions of the PSA and the parties' pre-PSA negotiations related to spousal support in modifying the spousal support award. He argues that the trial court erred because this evidence relates to past financial circumstances of the parties rather than their current financial circumstances.
Code § 20-109(B) provides in pertinent part that:
Upon consideration of the factors set forth in subsection E of § 20-107.1, the court may increase, decrease or terminate the amount or duration of the award upon finding that (i) there has been a material change in the circumstances of the parties, not reasonably in the contemplation of the parties when the award was made . . . .
"The moving party in a petition for modification of support is required to prove both a material change in circumstances and that this change warrants a modification of support." Schoenwetter v. Schoenwetter, 8 Va. App. 601, 605, 383 S.E.2d 28, 30 (1989). "The material change in circumstances must have occurred after the most recent judicial review of the award, and `must bear upon the financial needs of the dependent spouse or the ability of the supporting spouse to pay.'" Moreno v. Moreno, 24 Va. App. 190, 195, 480 S.E.2d 792, 795 (1997) (quoting Hollowell v. Hollowell, 6 Va. App. 417, 419, 369 S.E.2d 451, 452 (1988)). Collier v. Collier, 2 Va. App. 125, 129, 341 S.E.2d 827, 829 (1986).
The trial court concluded that husband's loss of employment resulting from his employer's financial difficulties was a material change in circumstances not reasonably anticipated by the parties when they entered into the PSA setting spousal support. It noted that both the PSA and the parties' pre-PSA negotiations demonstrated the parties' expectations that husband would continue to be employed at a substantial annual income. Husband conceded in his reply brief that a proper consideration of Code § 20-109(B) requires the trial court to consider this evidence in determining whether a material change in circumstances not contemplated by the parties had occurred.
Once a material change in circumstances warranting modification has been established, Code § 20-109(B) requires the trial court to consider the factors set forth in Code § 20-107.1(E) to determine the amount of the award. In reducing the amount of husband's monthly spousal support obligation, the trial court stated that it based its decision on the evidence presented, including the property and support provisions contained in the PSA, the argument of counsel, and all the factors enumerated in Code §§ 20-107.1(E) and 20-109.
Husband argues that the trial court erred in considering the PSA property and support provisions, as well as the parties' pre-PSA negotiations regarding support, in determining the amount of the modified support payments, because those matters related to the parties' past financial circumstances rather then their current financial circumstances. The trial court ruled that Code § 20-107.1(E)(7) and (13) permitted it to "consider the agreement that the parties made and the property interests that resulted from that." Code § 20-107.1(E)(7) requires the court to consider "the property interests of the parties, both real and personal, tangible and intangible." Code § 20-107.1(E)(13), the "catch-all" provision, requires it to consider "[s]uch other factors, . . . as are necessary to consider the equities between the parties."
The PSA contained the agreed distribution of the parties' personal property, retirement accounts, marital home, provisions for life and health insurance, as well as their agreement on spousal support. The trial court considered the provisions of the PSA relevant to the original division of the parties' property in determining whether, and to what degree, modification of the existing spousal support award might be appropriate. It ruled that Code § 20-107.1(E)(13) permitted it to...
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