Spreadbury v. Spreadbury, Record No. 1053-09-4 (Va. App. 4/20/2010)
| Decision Date | 20 April 2010 |
| Docket Number | Record No. 1053-09-4. |
| Court | Virginia Court of Appeals |
| Parties | DIANE SPREADBURY v. PETER E. SPREADBURY |
Appeal from the Circuit Court of Fauquier County, Jeffrey W. Parker, Judge.
James Ray Cottrell (John K. Cottrell; Kyle F. Bartol; Cottrell, Fletcher, Schinstock, Bartol & Cottrell, P.C., on briefs), for appellant.
Julia S. Savage (Walker Jones, PC, on brief), for appellee.
Present: Judges Beales, Alston and Senior Judge Annunziata.
Diane Spreadbury (wife) appeals from a final decree of divorce (final decree), terminating the marriage between wife and Peter E. Spreadbury (husband). Wife argues the trial court erred in several respects. First, wife contends the trial court erred in granting and refusing to lift or modify a sanctions order that prohibited wife from presenting evidence at trial. Second, wife contends the trial court erred in adjudicating the parties' real property, which wife argues is subject to unresolved third-party ownership claims. Third, wife contends the trial court erred in granting husband half of the rental income received by wife during the parties' separation. Fourth, wife contends the trial court erred in classifying and awarding to husband certain property as his separate property. Fifth, wife contends the trial court erred in granting husband's motion in limine, which barred wife from presenting evidence of her separate property at trial. Sixth, wife contends the trial court erred in refusing to award spousal support. Seventh, wife contends the trial court erred in awarding husband $75,000 in attorney's fees. Eighth, wife contends the trial court erred by making an unequal distribution of the marital estate. Finally, wife seeks recovery of her attorney's fees on appeal. For the reasons that follow, we affirm the trial court's decision as to each of the above issues and deny wife's request for attorney's fees.
"When 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." Congdon v. Congdon, 40 Va. App. 255, 258, 578 S.E.2d 833, 835 (2003) (citations omitted). "That principle requires us to `discard the evidence' of the appellant which conflicts . . . with the evidence presented by the [prevailing party] at trial." Id. (quoting Wactor v. Commonwealth, 38 Va. App. 375, 380, 564 S.E.2d 160, 162 (2002)). Thus, a trial court's judgment will not be disturbed on appeal unless plainly wrong or without evidence to support it. Jennings v. Jennings, 12 Va. App. 1187, 1189, 409 S.E.2d 8, 10 (1991).
So viewed, the evidence established that the parties married in Connecticut in 1985, it being each party's second marriage. During the marriage, the parties established several trusts. In 1986, the parties established the Peter E. Spreadbury and Diane C. Spreadbury trust (Spreadbury I Trust), a revocable trust, of which the beneficiaries are the parties themselves. In 1990, the parties established an irrevocable family trust (Spreadbury II Trust), the beneficiaries of which are the parties and their children from previous marriages. When the parties created the Spreadbury II Trust, they also established the Spreadbury Realty Trust (Spreadbury Realty Trust), the beneficiary of which is the Spreadbury II Trust.
In 1990, the Spreadbury II Trust purchased property (Westbury Farm) in Fauquier County, Virginia. Husband and wife contributed $1,260,688, representing 88.16% of the purchase price. The parties' children contributed $169,312, representing the remaining 11.84% of the purchase price. Westbury Farm was titled to the Spreadbury Realty Trust. Soon thereafter, the parties renovated Westbury Farm, using the proceeds, at least in part, from the sale of husband's Smith Barney stock worth $1,875,866. In 1999, the Spreadbury II Trust conveyed Westbury Farm to the Spreadbury I Trust in exchange for a $340,000 promissory note. The deed conveying the property to the Spreadbury I Trust was executed in 2003.
In 1999, the parties built a house on Westbury Farm (the marital home) using the proceeds from the sale of their Connecticut home. In 2003, the parties refinanced Westbury Farm in order to purchase two adjacent rental homes (Goose Creek Properties). In 2004, husband created Westbury Group, LLC, (Westbury Group) using $100,000 from the refinancing. At the time of the parties' separation, Westbury Group was not licensed to do business.
On March 28, 2004, the parties separated. Wife continued to live in and maintain the marital home and Westbury Farm. She also collected rental income from the Goose Creek Properties during the time of separation. On May 21, 2004, wife filed for divorce. On February 16, 2005, husband filed a cross-bill for divorce.
On December 8, 2005, the trial court, determining pendente lite spousal support, entered an award, imputing income of $8,400 per month to wife based solely on rental income she received from the Goose Creek Properties. Ultimately, the trial court ordered husband to pay $3,000 per month toward the mortgage on the marital home and $350 per month in spousal support for wife.
On September 4, 2007, husband propounded requests for discovery on wife, to which wife failed to respond. On October 26, 2007, husband filed a motion to compel wife's responses to discovery. The trial court orally ruled that wife was compelled to respond by November 20, 2007; however, no order reflecting the trial court's oral ruling was ever entered. Instead, on November 29, 2007, the parties notified the trial court that they had reached a settlement and the case should be removed from the trial court's docket. However, on January 15, 2008, husband filed several motions in the trial court, asking the court to compel settlement, or in the alternative, to schedule a trial date, compel discovery responses, and award his attorney's fees.
On April 15, 2008, the trial court ordered wife to respond to husband's interrogatory requests. However, wife did not respond to any of husband's discovery requests. On May 8, 2008, the trial court awarded husband sanctions against wife, barring her from: (1) opposing the claims or defenses of husband; (2) introducing any evidence to support any claims she made or intended to make against husband which were the subject of discovery requests; or (3) introducing any matters into evidence which were the subject of discovery requests. The trial court subsequently denied wife's motion to modify or lift the sanctions order. The court also continued the trial date set for June 18, 2008 to July 24, 2008.
On June 23, 2008, the parties' children filed a motion to intervene in the divorce action, arguing they held equitable title to Westbury Farm.2 The trial court denied the motion to intervene, noting that because the children were not parties to the divorce action, any issues regarding the trusts could be taken up in separate litigation and would not be precluded by equitable distribution made during the divorce.
On July 21, 2008, before trial, wife filed for bankruptcy, thus automatically staying the divorce proceedings. The bankruptcy court awarded husband a modification of the automatic stay, allowing the divorce and equitable distribution to proceed, subject to the following provision:
The order of May 8, 2008, imposing discovery sanctions shall not be construed or enforced so as to bar the debtor, in her capacity as debtor in possession, from asserting claims and defenses that a chapter 11 trustee could assert on behalf of the bankruptcy estate, including, but not limited to, claims under 11 U.S.C. § 544(a).
In response to the bankruptcy court's order, husband filed a motion in limine, requesting the trial court find that the bankruptcy court's order did not lift the sanctions order in its entirety. Instead, husband argued, wife should be awarded at least $690,939.58, an amount sufficient to pay her unsecured creditors, as listed on her bankruptcy schedules. Further, husband argued, wife's evidence of separate personal property should be limited to that which she included on her bankruptcy schedules. The trial court granted husband's motion in limine, barring wife from presenting evidence of her separate property other than $3,750 in assets listed on her bankruptcy schedules. Further, the trial court prohibited wife from arguing or introducing any evidence that property belonged to third parties, consistent with the information she provided to the bankruptcy court.
At trial, the court asked wife if she could present any evidence that fell outside the scope of the sanctions order. However, wife's counsel noted that the sanctions order and the motion in limine foreclosed any relevant evidence she would otherwise present. Thus, wife cross-examined husband's witnesses but presented little evidence of her own.
On February 20, 2009, the trial court issued a letter opinion (letter opinion), copiously outlining its equitable distribution award. The trial court found Westbury Farm was placed into a revocable, inter vivos trust, and therefore the property was subject to equitable distribution. The court then classified Westbury Farm as marital property and after considering the statutory factors provided in Code § 20-107.3(E), the court awarded 65% of the interest in Westbury Farm to husband and 35% to wife. Specifically, the court noted that husband made a significant contribution toward the purchase of the marital home, he was the sole income producer during the marriage, and "no evidence was submitted by the [w]ife regarding any monetary or non-monetary contribution on her behalf." The trial court also noted that while husband may have contributed a substantial sum to purchase Westbury Farm, he did not satisfy his burden of proof in tracing the assets from the sale of his Smith Barney stock to the purchase of Westbury Farm.
The trial court further...
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