Scott v. Scott
| Decision Date | 13 October 2020 |
| Docket Number | Record No. 0818-19-2,Record No. 0861-19-2 |
| Court | Virginia Court of Appeals |
| Parties | MARY VIRGINIA BRUCE SCOTT v. THOMAS ALDOM SCOTT THOMAS ALDOM SCOTT v. MARY VIRGINIA BRUCE SCOTT |
UNPUBLISHED
Present: Judges Humphreys, Russell and AtLee
Argued by videoconference
FROM THE CIRCUIT COURT OF HENRICO COUNTY
1
John Stuart Bruce (Eppa Hunton; Eppa Hunton PC, on briefs), for Mary Virginia Bruce Scott.
Susan A. Kessler for Thomas Aldom Scott.
Mary Virginia Bruce Scott, wife, appeals an order of the trial court directing her to pay Thomas Aldom Scott, husband, over $49,000 to satisfy one of the equitable distribution terms of the parties' final decree of divorce. Both parties appeal the trial court's denial of their respectiverequests for attorney's fees in the trial court, and each requests an award for attorney's fees incurred in this Court. For the reasons that follow, we affirm the judgment of the trial court.
Although the underlying facts are largely undisputed, we note that, "[w]hen reviewing a trial court's decision on appeal, 'we view the evidence in the light most favorable to the prevailing party, granting it the benefit of any reasonable inferences.'" Brandau v. Brandau, 52 Va. App. 632, 635 (2008) (quoting Smith v. Smith, 43 Va. App. 279, 282 (2004)). "That principle requires us to discard the evidence . . . which conflicts, either directly or inferentially, with the evidence" that favored husband at trial. Id. (quoting Petry v. Petry, 41 Va. App. 782, 786 (2003)).
The parties were married in 1983 and separated in 2015. In anticipation of their ultimate divorce, the parties entered into a property settlement agreement, dated September 5, 2017 (PSA). Among its terms, the PSA contained provisions regarding distribution of the parties' retirement accounts, including wife's American Funds IRA account #9941 (wife's account)2 By reference to an attached Exhibit 1, the PSA allocated $544,280 of wife's account to husband. This allocation was based on an agreed valuation date of August 28, 2018. The PSA further provided that, "[i]n the event either party must hereafter enforce the provisions of this [a]greement or any [court] decree . . . relating to the matters stated herein, that party shall be entitled to recover his or her actual attorney's fees and costs."
When wife's account was valued and the PSA was executed, wife's account contained four separate fund holdings, namely Investment Fund of America, Fundamental Investors Fund, Growth Fund of America, and New Perspective Fund. The PSA does not name these fund holdings, nor does it state the number of shares wife held therein. Wife subsequently transferred all her holdingsin both the Investment Fund of America and the Fundamental Investors Fund into a different fund (money market account); she maintained her shares in Growth Fund of America and New Perspective Fund. Wife made the transfer because she was concerned that the funds in wife's account could lose value and she then would be unable to satisfy her financial obligations to husband. As a result of wife's transfer, wife's account thereafter contained three funds holdings, including the newly acquired money market account, which unlike the two holdings it replaced, typically did not yield significant gains or losses.
Prior to entry of the parties' final decree of divorce, the trial court was asked to determine whether husband was "entitled to the gains and losses thereon from the valuation date to the present from the transfer . . . from [wife's account]." The trial court conducted an ore tenus hearing on January 29, 2018, and issued a February 15, 2018 letter opinion resolving the issue. The trial court ruled that husband was entitled to any gains and losses from his portion of the marital share. Based on the evidence adduced at the hearing, the trial court reasoned:
The trial court concluded that wife "wrongly moved all the funds from [wife's account and t]his has inappropriately given her the gains and losses on [husband's] money and the use of the same funds up to and including the present date."
The parties were divorced by final decree dated March 8, 2018 (final decree). The final decree affirmed and incorporated the PSA and the trial court's February 15, 2018 letter opinion. The final decree specifically reiterated that husband "is entitled to the gains and losses on his share of [wife's account] as of September 5, 2017, from the valuation date and continuing until received . . . ." The final decree directed wife to "forthwith execute and submit the American Funds IRA Divorce Transfer Request attached hereto as Exhibit A in order to accomplish th[e] transfer to [husband]."
Exhibit A was a fill-in-the-blank transfer request form prepared by American Funds (transfer form); while unendorsed, the form's blanks had been completed. Section 2 of the transfer form asked, "What percentage, dollar amount or number of shares of this account should be transferred?" In the space allocated for a percentage, "49.19" was written; no dollar amount or share number was indicated. Section 2 also established August 28, 2017, as the valuation date and indicated that earnings and losses from that date were to be included in the transfer. Section 3 of the transfer form further instructed that the transfer be made "[p]ro-rata across all holdings in [wife's account]"; section 3 did not reference any specific holdings by name or date.
Although wife objected to the final decree's inclusion of the trial court's rulings as stated in its letter opinion, she did not note an appeal of the final decree and it became a binding final order.
Later in March 2018, wife submitted the transfer form to American Funds. Upon receipt, a representative of American Funds called wife to inquire as to "what was meant by pro rata" and how wife wanted the assets removed from wife's account and transferred to husband. The representative tried to explain to wife that the amount of the transfer would be different dependingon how it accounted for gains and losses, whether based on the "current holdings" that included the money market account or constructed from a calculation based on the "valuation date." After much discussion, wife referred to calculations she had performed, using monetary value rather than share numbers. Wife confirmed with the company that the approximate total monetary value of wife's account as of August 28, 2017 was $1,106,331 and that its gains, as based on its current holdings, had been roughly $39,366. Wife then confirmed that 49.19% of each amount was approximately $544,204 and $19,364, respectively. Wife then added those figures together, which totaled approximately $563,569, and she requested that that sum be transferred to husband, removing it pro rata from each of her "holdings as they are now." The American Funds representative responded, "That is the way we'll do it, then." The following day, wife affirmed that the transfer was to be "pro rata across all holdings" and named the current holdings; the representative agreed to process the transfer accordingly and noted that "it will get today's trade date."
On March 23, 2018, husband received, via transfer by American Funds, a multitude of shares from wife's account; the shares were transferred from holdings in the Growth Fund of America, the New Perspective Fund, and the new money market account. Because wife's account no longer contained shares of the Fundamental Investors or Investment Company of America funds, husband received no shares related to those funds. The value of the shares husband did receive totaled $559,718.65. Concerned that the transfer had not been executed properly, husband contacted American Funds to inquire as to what procedure had been followed in making the transfer; upon inquiry, the company reported to him that it had received verbal instructions from wife to value wife's account as of the date of the transfer.
Six months after the divorce and transfer, husband filed a motion to reinstate the matter on the docket in order to prosecute a motion to show cause. The motion sought relief for wife's alleged "failure to comply with the terms of the Final Decree of Divorce entered on March 8, 2018." Insupport of his allegation, husband claimed that wife had failed to comply with the final decree by disregarding the trial court's ruling that he "was entitled to the gains and losses on his share of [wife's account] as of September 5, 2017, from the valuation date and continuing until received . . . ." He specifically asserted that wife violated the final decree by not providing American Funds a copy of the February 15, 2018 letter opinion; "[b]y giving verbal instructions to American Funds . . . to value [wife's account] as a cash account, not shares contrary to [the transfer form] which specified shares and [contrary to]...
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