Shiembob v. Shiembob

• Decision Date: 24 November 2009
• Docket Number: Record No. 0135-09-1.
• Parties: Matthew J. SHIEMBOB v. Susan Wren SHIEMBOB.
• Court: Virginia Court of Appeals

685 S.E.2d 192

55 Va. App. 234

Matthew J. SHIEMBOB v. Susan Wren SHIEMBOB.

Record No. 0135-09-1.

Court of Appeals of Virginia.

November 24, 2009.

J. Roger Griffin, Jr. (Christie, Kantor, Griffin, Smith & Shepherd, P.C., on brief), Virginia Beach, for appellant.

Diane Pomeroy Griffin (Diane Pomeroy Griffin, P.C., on brief), Portsmouth, for appellee.

Present: FELTON, C.J., FRANK and POWELL, JJ.

WALTER S. FELTON, JR., Chief Judge.

Matthew J. Shiembob ("husband") appeals from a judgment of the Portsmouth Circuit Court ("trial court"). He contends the trial court erred in ruling that the funds he deposited during the marriage into Susan Wren Shiembob's ("wife") investment account to replace funds he removed without her permission or knowledge, was a gift between spouses and wife's separate property; erred in ruling restricted stock shares received by husband in 2008 and 2009 pursuant to the Restricted Stock Award Agreement with husband's employer were marital property; erred in vacating a protective order against disclosure by either party of documents acquired during the divorce; erred in vacating its prior order sealing the court file; and erred in awarding wife $10,000 toward attorney's fees and costs at trial. Wife also seeks an award of her attorney's fees and costs on appeal. For the following reasons, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

BACKGROUND

On appeal, "[w]e review the evidence in the light most favorable to wife, the party prevailing below and grant all reasonable inferences fairly deducible therefrom." Anderson v. Anderson, 29 Va.App. 673, 678, 514 S.E.2d 369, 372 (1999). The evidence established that the parties married on June 10, 1995 and separated on January 20, 2007. Three children were born of the marriage, ages nine, five, and one at the time the parties separated. The parties agreed that wife would be the children's primary caregiver while husband supported the family financially.

Wife's father and brother were financial advisors employed by Scott and Stringfellow. In 1999, husband joined wife's father and brother at Scott and Stringfellow as a financial advisor. Husband became a licensed financial advisor in February 2000.

In February 2000, husband, unbeknown to wife or her father, named himself manager of wife's personal investment account ("Raymond James account").¹ At that time, wife's account had a value of $61,807.11. In 2001, when wife learned of the change in the management of her account, husband had depleted that fund to $1,495.89 as a result of his unsuccessful stock trading.

In 2004, Towne Bank negotiated a contract with wife's father, brother, and husband to purchase their partnership. As a result of this purchase and pursuant to an employment contract with Towne Bank, they each received $450,000. For tax reasons, wife's brother and husband negotiated with Towne Bank to receive their respective shares of the purchase price in a partial cash payment with payment of the balance in Towne Bank stock pursuant to the Restricted Stock Award Agreement. Under that agreement, husband received 12,264 shares of restricted stock in Towne Bank. The agreement provided that 2,452 shares would vest to husband on January 30, 2005, and for the next 4 years, 2,453 shares would vest on each January 30th until the final vesting date of January 30, 2009. After the first shares vested, husband sold all 2,452 shares for approximately $75,000.

In March 2006, wife discovered that husband held an undisclosed credit card. She also discovered he carried undisclosed charges on an additional credit card. He had a total balance due of approximately $34,000 on the two cards. Thereafter, wife, husband, and wife's brother met to assess the parties' finances and to create a plan to pay down his credit card debt. During that meeting, wife learned that husband had lost approximately $50,000 received from his sale of the 2005 vesting of his Towne Bank stock "in the market." Husband then informed her, for the first time, that he had joined a country club, which had an initiation fee of $5,000, and a $334 monthly membership fee. Husband also told wife that he had $25,000 in a previously undisclosed personal checking account. The record does not reveal the source of the funds in that account.

As a result of that meeting, husband agreed to take a leave of absence from the country club. The parties agreed to use the proceeds of the sale from the 2006 vesting of Towne Bank stock to pay off his credit card debts. Husband also agreed to put

$25,000 back into [wife's] account as a way to kind of safeguard so he wouldn't feel tempted to trade that money in the stock market or shuffle it around to pay credit card bills that [she] didn't know about. So it was put away for safekeeping in an effort [for husband] to rebuild trust with [wife].

On May 2, 2006, husband deposited a total of $37,000 into wife's Raymond James account. The $37,000 check was drawn on a Towne Bank account in husband's name. Husband testified that $25,000 came out of a BB & T account held in his name and $12,000 from another unspecified account.

Following the parties' separation on January 20, 2007, wife learned that husband had a separate post office box that he had maintained since 2003. She also discovered that he had obtained an unsecured loan from Towne Bank for $81,000 in April 2006.

An ore tenus hearing was held on October 8-9, 2008. The trial court entered its final decree of divorce on December 12, 2008. It "awarded" the Raymond James account to wife as her separate property, finding husband's $37,000 deposit into that account consisted of marital funds and was a "gift." It also ordered husband to pay $10,000 toward wife's attorney's fees and costs incurred at trial. It found all 12,264 shares of restricted stock received as part of husband's employment with Towne Bank to be marital property.

ANALYSIS

On appeal, "[a] decision regarding equitable distribution rests within the sound discretion of the trial court and will not be disturbed unless it is plainly wrong or without evidence to support it." Holden v. Holden, 31 Va.App. 24, 26, 520 S.E.2d 842, 844 (1999). "`Unless it appears from the record that the trial judge has not considered or has misapplied one of the [equitable distribution] statutory mandates, this Court will not reverse on appeal.'" Id. at 27, 520 S.E.2d at 844 (quoting Ellington v. Ellington, 8 Va.App. 48, 56, 378 S.E.2d 626, 630 (1989)).

I. Raymond James Account

Husband contends the trial court erred "in ruling that funds [he] deposited in the Raymond James account as a gift between spouses during the marriage were [wife's] separate property." He further contends that the trial court erred in finding the $37,000 he deposited into that account was a gift because it is "contradictory to the statutory definitions of separate and marital property."

The trial court gave no basis for its determination that husband's deposit, of what it found to be marital funds, into the Raymond James account was a gift. Moreover, the record is silent as to whether husband retained any access to that account after he deposited the $37,000, or whether he intended to relinquish all title and interest to those funds, or whether the transfer of those funds was unconditional. Husband testified that he deposited the $37,000 into wife's separate pre-marital account "as a way to kind of safeguard so he wouldn't feel tempted to trade that money in the stock market or ... to pay credit card bills ... [that] it was put away for safekeeping." The record is unclear as to whether the trial court found the transfer of the $37,000 in marital funds into the Raymond James account transmuted the funds into wife's separate property pursuant to Code § 20-107.3(A)(3)(d), or found it to be marital property which it "awarded" to wife as part of its equitable distribution award.

Accordingly, we remand to the trial court for clarification of whether it found the Raymond James account to be wife's separate property, not subject to equitable distribution, or whether it classified that account as marital property which it distributed to wife. The final decree simply reflects that the trial court "awarded" that account to wife.

II. Towne Bank Stock

Husband also contends the trial court erred in finding that the 2008 and 2009 shares of Towne Bank stock were marital property. He contends those shares had not yet vested pursuant to his employment agreement at the time the parties separated and, therefore, were his separate property.

"Generally, the character of property at the date of acquisition governs its classification pursuant to Code § 20-107.3." Stratton v. Stratton, 16 Va.App. 878, 881, 433 S.E.2d 920, 922 (1993).

All property including that portion of pensions, profit-sharing or deferred compensation or retirement plans of whatever nature, acquired by either spouse during the marriage, and before the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent, is presumed to be marital property in the absence of satisfactory evidence that it is separate property.

Code § 20-107.3(A)(2).

The record shows that, as part of his agreement with Towne Bank, husband was to receive $450,000 from that financial institution. Rather than accepting the full amount in cash, he entered into a "Restricted Stock Award Agreement" with the bank. That agreement awarded husband 12,264 shares of restricted stock. It specifically provided that the "[s]hares awarded ... shall vest in annual increments beginning on January 30, 2005, in accordance with the following schedule (the first vesting date of January 30, 2005 and each subsequent January 30th up to and including January 30, 2009 shall be a Vesting Date ...)." The agreement also provided that, while husband could not transfer the shares until they "vested," he was entitled to receive...