Watkins v. Watkins, 780674

• Decision Date: 18 April 1980
• Docket Number: No. 780674,780674
• Citation: 220 Va. 1051,265 S.E.2d 750
• Parties: Richard E. WATKINS v. Carol A. WATKINS. Record
• Court: Virginia Supreme Court

Page 750

265 S.E.2d 750

220 Va. 1051

Richard E. WATKINS v. Carol A. WATKINS.

Record No. 780674.

Supreme Court of Virginia.

April 18, 1980.

Fred A. Talbot, Richmond (James A. Baber, III, Bremner, Baber & Janus, Richmond, on brief), for appellant.

Evelyn G. Skaltsounis, Richmond (Robert E. Eicher, Julious P. Smith, Jr., Williams, Mullen & Christian, Richmond, on brief), for appellee.

Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, POFF, COMPTON and THOMPSON, JJ.

COMPTON, Justice.

In this divorce suit, we limited the appeal to consideration of the issue: Did the trial court, as a part of the maintenance and support provisions of the final decree, have jurisdiction to enjoin the husband from disposing of his shares of stock in two family-owned corporations? We answer that question in the negative and reverse.

Defendant-appellant Richard E. Watkins and plaintiff-appellee Carol A. Watkins were married in 1961. In 1976, she sued him for divorce. In the course of the proceedings, she sought a lump-sum award plus monthly amounts for maintenance and support of herself and the three infant children born of the marriage. In 1978, the trial court awarded the wife an absolute divorce and custody of the children, but denied her request for payment of a lump sum. Instead, the chancellor carefully fashioned in the final decree a detailed set of provisions for maintenance and support to meet the rather unusual financial circumstances disclosed by the evidence. This appeal focuses on the validity of only one paragraph of that decree.

During most of the marriage, the parties lived on Curles Neck Farm, located in Henrico County, where the defendant is farm manager. He owns approximately 24 percent of the stock in two family-owned corporations, Curles Neck Farm, Inc., and F. E. Watkins Motor Co., Inc., South Hill, Virginia. The defendant's father is the majority stockholder and president of each corporation. These corporations in turn own about 93 percent of the stock in Curles Neck Dairy, Inc.

An accountant's statement showed the defendant's "partial net worth" as of December 31, 1975 to be approximately $1.5 million. This was based on his stockholders' equity in the corporations plus his share in approximately 5,500 acres of land owned by the Farm.

During the last years of the marriage, the parties and their children lived in a home on the Farm. As long as defendant is an employee of the Farm he is entitled to the house, along with utilities, without cost. Since the separation of the parties in 1974, the wife and the children have remained in that home. She is provided by the Farm, without cost, milk, meat, utilities, trash collection, hospital insurance, and fire insurance on household goods. She is also provided with a motor vehicle, free of charge, by Watkins Motor Co., which pays for the automobile insurance.

During the latter years of the marriage, the defendant was paid a salary as farm manager ($2000 per month in 1977) which was allocated among the three corporations. In addition, he received substantial amounts in non-interest-bearing loans from the corporations, none of which has been repaid. Also, Watkins received large amounts from a partnership which owned gravel-producing land.

The evidence showed that none of the three corporations paid dividends in recent years, although each had liquid assets exceeding "liquid liabilities." Testimony indicated that defendant could "spend his net worth" by borrowing from lending institutions, using his stock as security, or he could sell his stock should a market for it develop. But the chancellor noted "that the key to defendant's ready access to the substantial sums involved in a lump-sum award seems to be held by his father."

In the final decree, the chancellor ordered the husband to comply with an agreement made during the ore tenus hearing to provide medical care and special schooling for one of the children who was physically and mentally disabled; ordered him to pay monthly amounts as support for the other two children; ordered him to "take no action to deny" the wife benefits she was receiving from the corporations relating to the house, utilities, home maintenance, insurance and the automobile; ordered him to pay monthly amounts for the wife's support; and ordered payment by him of attorney's fees and costs.

In addition, the trial court included in the order the following directive that is the subject of this appeal:

It is further ADJUDGED and ORDERED that, to assure as much as possible that the plaintiff and the infant children will continue to receive the aforesaid benefits, the Defendant is now enjoined and restrained from disposing of his shares of stock in Curles Neck Farm, Inc., and F. E. Watkins Motor Company, Inc., by sale, redemption, gift, pledge, or otherwise, subject to the further order of this Court and that a copy of this Order be served upon the Registered...