Williams v. Williams, Record No. 1176-08-2 (Va. App. 7/21/2009), Record No. 1176-08-2.
| Citation | Record No. 1176-08-2. |
| Case Date | July 21, 2009 |
| Court | Court of Appeals of Virginia |
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v.
LINDA LOU WILLIAMS
Appeal from the Circuit Court of Spotsylvania County, Harrison H. Braxton, Jr., Judge Designate.
Lawrence D. Diehl (Brandy M. Poss; Barnes & Diehl, P. C., on brief), for appellant.
Joseph A. Vance, IV, for appellee.
Present: Chief Judge Felton, Judges Frank and McClanahan.
JUDGE ROBERT P. FRANK.
Dennis F. Williams (husband) appeals from an order denying his motion to reduce his spousal support payments to Linda Lou Williams (wife) under the terms of the parties' property settlement agreement (PSA), and awarding wife attorney's fees. Husband contends the trial court erred in (i) failing to find that "substantial change[s] of circumstances" occurred in wife's financial status warranting a reduction in spousal support under the terms of the PSA; (ii) failing to include wife's investment income; (iii) failing to impute investment income to wife based on gifts to her adult children of income-producing assets; (iv) excluding certain documentary evidence pertaining to wife's financial needs; and (v) awarding wife attorney's fees in violation of the PSA. Husband also seeks an award of attorney's fees incurred in this appeal. Concluding that husband established substantial changes in wife's financial needs, we reverse the trial court's denial of his motion to reduce spousal support, and remand for consideration of whether those
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changes warrant a modification of support. We also reverse the court's award of attorney's fees to wife, as contrary to the terms of the PSA. We further deny husband's request for appellate attorney's fees.
In reviewing the trial court's decision on appeal, we view the evidence in the light most favorable to wife, the prevailing party below, granting her the benefit of any reasonable inferences. Congdon v. Congdon, 40 Va. App. 255, 258, 578 S.E.2d 833, 835 (2003). "That principle requires us to discard the evidence of [husband] which conflicts, either directly or inferentially, with the evidence presented by [wife] at trial." Id. (citations and internal quotation marks omitted).
After twenty-seven years of marriage, the parties separated in 2002 and executed the PSA on May 1, 2003. Under the PSA, husband was obligated to pay wife $3,500 per month in spousal support. The parties also expressly agreed that "this amount of support may be changed based upon a substantial change of circumstances not otherwise set out herein." The PSA further provided that, as part of wife's marital property distribution, husband was obligated to make a deferred payment of $550,000 to wife, which would be evidenced by a promissory note, payable as follows: "principal payment of $50,000.00 on or before November 1, 2003, and $25,000.00 on or before May 1, 2004, and $25,000 on each succeeding May 1, with the entire balance, if not sooner paid, due and payable on May 1, 2023."
The parties' PSA was "affirmed, ratified and incorporated" into their final decree of divorce, entered in February 2004. In November 2006, husband filed a motion in the juvenile and domestic relations district court in Spotsylvania County to reduce his spousal support payment obligation under the PSA. Husband's motion was based on allegations that wife's income had increased, her expenses had decreased, and his income had decreased — all
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constituting "a substantial change of circumstances not otherwise set out [in the PSA]." Following an evidentiary hearing, the court denied husband's motion. Husband appealed this ruling to the circuit court.
After an evidentiary hearing in circuit court, in January 2008, the circuit court likewise denied husband's motion. As to the evidence regarding wife's income, it was undisputed that at the time the PSA was incorporated into the final divorce decree in 2004 wife was working part-time at a Hallmark card shop earning $5,184 a year. She also earned $924 in interest income. At the time of the 2008 hearing, wife was working full-time selling apparel at Gander Mountain, earning $27,704 a year.
It was also undisputed that in early 2007 husband sold the former marital residence, which secured his above-referenced promissory note to wife under the PSA. That sale "triggered" husband's lump sum payment of the remaining balance owed to wife on the note, in the sum of $425,000. Largely as a result of this final payment, wife was earning approximately $18,000 a year in interest income at the time of the hearing. In the prior period between the execution of the PSA and the final payment, wife had earned no more than $2,500 in interest income in any one year. Also, after receiving the final payment from husband, wife gave the parties' two adult daughters a total of $114,0001 to financially assist them and their respective families.
In a letter opinion, the circuit court found that husband failed to establish any "significant or substantial change in circumstances not envisioned in the [PSA]," and thus denied husband's motion to reduce his spousal support payments to wife. The court also awarded wife $5,813.40 in attorney's fees.
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Husband challenges the circuit court's rejection of his motion for a reduction of his spousal support payments by arguing that wife's increase in wages and interest income constituted substantial changes in circumstances under the terms of the PSA, thus warranting the reduction.2
Our review of the circuit court's decision is governed by well-settled principles. Decisions concerning spousal support "rest within the sound discretion of the trial court and will not be reversed on appeal unless plainly wrong or unsupported by the evidence." Calvert v. Calvert, 18 Va. App. 781, 784, 447 S.E.2d 875, 876 (1994). The trial court "by definition abuses its discretion when it makes an error of law." Shooltz v. Shooltz, 27 Va. App. 264, 271, 498 S.E.2d 437, 441 (1998) (citation and internal quotation marks omitted). "Code § 20-109 allows a court to [modify] a spousal support award `"[u]pon petition of either party,"' if the moving party is able to prove `"both a material change in circumstances and that this change warrants a modification of support."'" Brown v. Brown, 53 Va. App. 723, 726-27, 674 S.E.2d 597, ___ (2009) (quoting Furr v. Furr, 13 Va. App. 479, 481, 413 S.E.2d 72, 73 (1992) (quoting Schoenwetter v. Schoenwetter, 8 Va. App. 601, 605, 383 S.E.2d 28, 30 (1989))). The material change in circumstances since the previous support award "must bear upon the financial needs of the dependent spouse or the ability of the supporting spouse to pay." Hollowell v. Hollowell, 6 Va. App. 417, 419, 369 S.E.2d 451, 452 (1988). This authority of the trial court to modify spousal support, however, is subject to the Code § 20-109(C) proviso that, where a PSA has been
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incorporated into the final divorce decree, as in this case, "no decree or order directing the payment of support and maintenance for the spouse . . . shall be entered except in accordance with that . . . contract." See Brown, 53 Va. App. at 727, 674 S.E.2d at ___; Blackburn v. Michael, 30 Va. App. 95, 100, 515 S.E.2d 780, 782 (1999); Pendleton v. Pendleton, 22 Va. App. 503, 507, 471 S.E.2d 783, 785 (1996). Finally, "[i]n construing the terms of a property settlement agreement, just as in construing the terms of any contract, we are not bound by the trial court's conclusions as to the construction of the disputed provisions." Smith v. Smith, 3 Va. App. 510, 513, 351 S.E.2d 593, 595 (1986) (citation omitted).
Under the parties' PSA, husband was obligated to pay spousal support to wife in the amount of $3,500 per month. The PSA also provided, however, that "this amount of support may be changed based upon a substantial change of circumstances not otherwise set out herein." In addition, the PSA provided that husband owed wife a total of $550,000, evidenced by a promissory note (following an initial $50,000 payment) in equal annual installments of $25,000 through the year 2023, if not sooner paid.
Husband's motion for a reduction in spousal support was based on alleged substantial changes in wife's financial circumstances, particularly her wages and passive income, pursuant to the terms of the PSA. L.C.S. v. S.A.S., 19 Va. App. 709, 715, 453 S.E.2d 580, 583 (1995) ("The primary basis for calculating a support obligation is a spouse's current income or any additional income within the spouse's earning capacity."). It was undisputed that from 2004, when the parties' PSA was incorporated into their final divorce decree, to the time of the evidentiary hearing in 2008, wife's wages increased from $5,184 a year as a part-time employee to $27,704 a year as a full-time employee.
It was also undisputed that wife's interest income increased from no more than $2,500 in any one year to $18,000 a year, beginning in 2007—an increase of 720%. This was likewise a
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source of income the trial court was required to consider in assessing wife's alleged change in circumstances. Id.; Barrs v. Barrs, 45 Va. App. 500, 508, 612 S.E.2d 227, 231 (2005); Rowe v. Rowe, 24 Va. App. 123, 139, 480 S.E.2d 760, 767 (1997). Furthermore, this increase in interest income resulted from husband's lump sum payment of $425,000 to wife in 2007. Under the terms of the PSA, husband could have satisfied the note over a course of nearly twenty years, thus the receipt of the payment in 2007 was not reasonably foreseeable. Cf. Barrs, 45 Va. App. at 507-09, 612 S.E.2d at 230-31 (finding that wife's interest income was reasonably foreseeable).
Wife contends that because her increase in income by virtue of obtaining a full-time job and the additional investment income generated by the receipt of the lump sum marital award payment was foreseeable, there was no substantial change in...
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