Utsch v. Utsch

• Decision Date: 02 July 2002
• Docket Number: Record No. 1583-01-2.
• Parties: Francis Vincent UTSCH v. Julie Andrews UTSCH.
• Court: Virginia Court of Appeals

565 S.E.2d 345

38 Va. App. 450

Francis Vincent UTSCH v. Julie Andrews UTSCH.

Record No. 1583-01-2.

Court of Appeals of Virginia, Richmond.

July 2, 2002.

Charles E. Powers, Chesterfield (Christine M. Schiller; Barnes & Batzli, P.C., on brief), for appellant.

Donald K. Butler, Richmond (Mary Beth Joachim; Morano, Colan, Cook & Butler, on brief), for appellee.

Present: BENTON, WILLIS and CLEMENTS, JJ.

CLEMENTS, Judge.

Francis Vincent Utsch (husband)¹ appeals the equitable distribution decision of the trial court awarding Julie Andrews Utsch (wife) one-half of the value of the marital residence. On appeal, husband contends the trial court erred (1) in classifying the marital residence, which he conveyed during the marriage by deed of gift to wife and himself as tenants by the entirety, as wholly marital property and (2) in dividing the value of that property equally. For the reasons that follow, we reverse the trial court's decision and remand for further proceedings.

I. BACKGROUND

The parties married on August 23, 1987. On September 13, 1988, husband executed a deed of gift conveying the marital residence, which husband had obtained prior to the marriage, to himself and wife as tenants by the entirety with the common law right of survivorship. The deed of gift provided that the conveyance was made "for and in consideration of the love and affection of [husband] for [wife]" and that the "conveyance [was] exempt from recordation taxes pursuant to [Code] § 58.1-811(D)."² The parties separated on June 28, 1998.

Husband argued at the equitable distribution hearing on December 7, 2000, that the marital residence was not transmuted into marital property under Code § 20-107.3(A)(3)(d) because his separate portion of the property was retraceable and was not a gift. The transfer by deed of gift, he argued, was a mere conveyance of title necessary to obtain refinancing on the property. He proffered deposition testimony regarding the circumstances surrounding the execution of the deed of gift to show that he did not intend to make a gift of his separate interest in the property to wife. Wife, who argued the deed of gift was sufficient by itself to prove husband's donative intent, renewed the objection she had raised at the deposition to husband's testimony, asserting that, under the parol evidence rule, husband could not introduce parol evidence to refute the donative intent clearly and unambiguously expressed in the deed of gift. The trial court agreed with wife.

By letter opinion dated January 26, 2001, the trial court ruled that, in conveying the marital residence by deed of gift to himself and wife as tenants by the entirety, husband made a gift of an interest in the marital residence to wife. Finding the deed of gift "clear and unambiguous on its face," the trial court excluded husband's evidence regarding the circumstances surrounding the execution of the deed of gift. Such parol evidence, the trial court held, was inadmissible under the parol evidence rule to "rebut the intent expressed within the four corners of the deed." Finding the deed sufficient on its face to establish husband's donative intent, the trial court concluded that the marital residence was transmuted wholly into marital property under Code § 20-103.7(A)(f). The trial court then, "[a]fter fully considering the evidence, the arguments of counsel, and the factors in [Code § 20-107.3(E) ]," awarded each of the parties half of the value of the marital residence.

On May 22, 2001, the trial court entered a final decree of divorce incorporating the equitable distribution award. This appeal followed.

II. ANALYSIS

"In making an equitable distribution, the court must classify the property, assign a value, and then distribute the property to the parties, taking into consideration the factors listed in Code § 20-107.3(E)." Theismann v. Theismann, 22 Va.App. 557, 564, 471 S.E.2d 809, 812, aff'd en banc, 23 Va.App. 697, 479 S.E.2d 534 (1996)

. "Fashioning an equitable distribution award lies within the sound discretion of the trial judge ...." Srinivasan v. Srinivasan, 10 Va. App. 728, 732, 396 S.E.2d 675, 678 (1990).

Unless it appears from the record that the chancellor has abused his discretion, that he has not considered or has misapplied one of the statutory mandates, or that the evidence fails to support the findings of fact underlying his resolution of the conflict in the equities, the chancellor's equitable distribution award will not be reversed on appeal.

Smoot v. Smoot, 233 Va. 435, 443, 357 S.E.2d 728, 732 (1987).

Code § 20-107.3(A)(3)(f) provides that "[w]hen separate property is retitled in the joint names of the parties, the retitled property shall be deemed transmuted to marital property, . . . [unless] it is retraceable by a preponderance of the evidence and was not a gift." Hence, an interspousal gift of jointly retitled separate property "becomes marital property subject to division pursuant to the factors listed under Code § 20-107.3(E)." Kelln v. Kelln, 30 Va.App. 113, 122, 515 S.E.2d 789, 793 (1999) (citing Theismann, 22 Va.App. at 567-69, 471 S.E.2d at 813-14). However, no presumption of gift arises from the fact that the "property is conveyed or retitled into joint ownership." Code § 20-107.3(A)(3)(g). Thus, when separate property that has been transferred into joint title is shown to be retraceable, "the party seeking to have [the] property acquired by interspousal transfer retain its classification as marital under [Code] § 20-107.3(A)(3)(g) must prove the property was a gift." Theismann, 22 Va.App. at 578, 471 S.E.2d at 819 (Annunziata, J., dissenting).

Here, the evidence is uncontroverted that husband brought the marital residence into the parties' marriage as separate property. During the marriage, however, husband executed a deed conveying the marital residence to himself and wife as tenants by the entirety. Thus, assuming husband could prove by a preponderance of the evidence that his separate portion of the marital residence was retraceable,³ the burden was on wife to prove that husband made a gift of an interest in the property to her. Only then could the marital residence be classified as marital property under subsections (f) and (g) of Code § 20-107.3(A)(3).

To establish the existence of a gift, the donee must prove by clear and convincing evidence: "(1) the intention on the part of the donor to make the gift; (2) delivery or transfer of the gift; and (3) acceptance of the gift by the donee." Id. at 566, 471 S.E.2d at 813; see also Dean v. Dean, 8 Va.App. 143, 146, 379 S.E.2d 742, 744 (1989)

(holding that one who claims ownership of property by virtue of a gift bears the burden of proving by clear and convincing evidence the donor's donative intent and delivery of the gift). In this case, the only element necessary to prove a gift that was in dispute before the trial court was husband's donative intent.

Wife argued that the terms of the deed showed husband intended to make a gift of his separate interest in the marital residence to the parties jointly. She pointed to the words "deed of gift" and "consideration of love and affection" in the deed. Husband denied he intended, in executing the deed, to make a gift of his separate property to wife. He proffered parol evidence regarding the circumstances surrounding the execution of the deed to show he intended to transfer the marital residence into joint title solely to obtain refinancing on the property. Wife objected to this testimony on the ground that it was inadmissible under the parol evidence rule.

Relying on the fact that the instrument used to convey the marital residence was termed a deed of gift and that the conveyance was expressly exempt from recordation taxes because it was without consideration, the trial court found that the deed clearly and unambiguously established husband's donative intent. The trial court refused, therefore, to consider husband's parol evidence and held that husband's conveyance of the marital property to the parties jointly constituted a gift.

On appeal, husband contends the trial court erred in finding the deed sufficient on its face to establish his donative intent under Code § 20-107.3(A)(3)(f) and in refusing to consider parol evidence regarding the circumstances surrounding the deed's execution that he proffered to show he did not intend to make a gift of his separate interest in the marital residence to wife. We agree.

To determine whether a deed "contains sufficient evidence of donative intent" to transform separate property into marital property for purposes of equitable distribution, the court charged with that determination must construe the deed in accordance with the applicable rules "governing the construction" of deeds, including, if appropriate, the parol evidence rule. Kelln, 30 Va.App. at 122,515 S.E.2d at 793; see also Longman v. Alumni Ass'n of the Univ. of Virginia, 247 Va. 491, 498, 442 S.E.2d 669, 674 (1994)

(noting that the parol evidence rule applies to deeds).

The prime consideration [in construing a deed], as with any writing, is to determine the intention of the parties executing the instrument. The intention ... should be ascertained from the language used in the deed, if possible. If the language is explicit and the intention is thereby free from doubt, such intention is controlling, if not contrary to law or to public policy, and auxiliary rules of construction should not be used.

Camp v. Camp, 220 Va. 595, 597-98, 260 S.E.2d 243 (1979) (citation omitted).

Thus, "when the language of a deed is `clear, unambiguous, and explicit,' a court interpreting it `should look no further than the four corners of the instrument under review'" to ascertain the donor's intent. Pyramid Dev., L.L.C. v. D & J Assocs., 262 Va. 750, 754, 553 S.E.2d 725, 728 (2001) (quoting Longman, 247 Va. at 498-99, 442 S.E.2d at 674). "Only when the language is ambiguous may a court look to parol evidence, or specifically,...