Month: May 2017

Can a husband trade a house in return for wife’s promise not to seek child support in Virginia?

No.   In Azhandeh v. Azhandeh, Record No. 1064-10-4 (Va. Ct. App. 2010), the Court of Appeals of Virginia determined that the husband’s appeal was without merit, because the parties’ previous settlement agreement (and corresponding limitations on child support) was null and void..  While the case does not directly concern bankruptcy law in Virginia, the issue has bearing on what financial obligations of the party can be bargained away, and what cannot.  In bankruptcy, domestic support obligations have a special status which renders them nondischargeable priority claims under 11 U.S.C. 507 and 11 U.S.C. 523, the determination and enforcement of which are not stayed by the automatic stay under 11 U.S.C. 362.

In Azandeh, the parties had been married for seven years prior to separation.  The husband and wife recited an oral agreement in open court which, under Virginia Code Section 20-155 , is enforceable when recorded and transcribed by a court reporter (in effect creating a written agreement).  Under the terms of the parties’ recited and transcribed agreement, the mother would have sole legal and physical custody of the child and the father would have visitation rights.  The husband agreed to give up his share of marital property to wife in exchange for her promise not to seek child support from him for a period of ten years.   Counsel advised the court that the parties had been counseled about the enforceability of such an agreement to waive child support.

Shortly after entry of the final divorce decree, the mother filed a motion for child support in violation of the agreement. The father objected, arguing that the mother violated the mutual agreement.  After hearing the arguments of both parties, the Virginia Circuit Court judge entered an order stating that the agreement “relative to child support is null and void because it is violative of clearly established law” and ordered the father to pay monthly child support according to the statutory guidelines.

In his appeal to the Virginia Court of Appeals, the father asserted the trial judge’s decision regarding the provision in the agreement being null and void was incorrect.  In response, the mother argued that the Virginia Supreme Court’s decision in Kelley v. Kelley, 248 Va. 95, 449 S.E.2d 55 (1994), applied..  In Kelley, the husband and wife established that the husband would transfer all of the equity in the marital home to the wife in exchange for the husband’s not being responsible for child support, and should a court order child support, the wife would provide reimbursement. The Supreme Court of Virginia held that the agreement was null and void because it violated clearly established law, and it stated, “parents cannot contract away their children’s rights to support nor can a court be precluded by agreement from exercising its power to decree child support.”

Here, although the father argued the facts differed from Kelley because he was only eliminating his child support obligation for a fixed period of 10 years rather than eliminating it completely, the Court of Appeals disagreed and affirmed the divorce court judge’s decision that the parties’ agreement violated the law, specifically Virginia Code §20-109.1, by not allowing the court to exercise its power to determine child support..  Moreover, the Virginia Court of Appeals pointed out that the father had mistakenly combined notions of equitable distribution and child support by arguing that he should be relieved from his obligation because the wife had received all of the equity in the martial residence.  In fact, child support was a right of the child, not a right of the mother that she could bargain away.  The Court recognized that child support is separate from equitable distribution.  The mother did not receive a “huge windfall” of property because the Circuit Court ordered child support; rather, the child obtained her right to receive the support that was legally owed to her. Thus, the Court of Appeals held that the Virginia trial court judge’s determination that the parties’ agreement was null and void was correct and affirmed the husband’s monthly child support payments.

While not discussed in the court’s opinion, an interesting question remains about whether a party to a well-drafted written separation agreement might be entitled to damages from the breaching party for not honoring the agreement.

You should consult with your Virginia divorce lawyer or Richmond divorce lawyer James H. Wilson, Jr., to discuss how to best structure your separation agreement or property settlement agreement.

Will a wife’s use of her pension fund after she moves out from the marital residence then returns to live in a separate bedroom constitute marital waste?

Yes. In Wynn v. Wynn, Record No. 2400-09-1 (Va. Ct. App. 2010), another case illustrating the marital troubles caused by financial difficulties, the Virginia Court of Appeals affirmed the Virginia Circuit Court’s findings that the wife had committed marital waste and held that the divorce judge’s rulings on the husband’s pension funds, business, and spousal support questions were correct.

On appeal, the wife alleged five counts in which the trial court erred: 1) by determining that she committed marital waste by spending her pension, 2) by not valuing the husband’s business in the equitable distribution, 3) by awarding the husband a portion of his incurred attorney’s fees, 4) by awarding her only 35% of the husband’s pension fund, and 5) by not appropriately considering the statutory factors before denying spousal support.

The parties married on March 1, 1985. Two years later, as the result of the wife’s mishandling of their finances, the parties stopped having joint financial accounts. By 1994, the parties stopped wearing their wedding rings. Although they separated and occasionally cohabitated during the next few years, the husband testified that as of November 2000, they had no intention of living together or resuming the marital relationship. The wife, however, alleged that the final date of separation was in November 2006. At the trial court hearings, the Court found that the wife cashed in her $32,000 pension during this time, and while the wife claimed that she used the funds for living expenses, the evidence established that in fact the husband primarily covered her expenses. In addition, the Court held that the husband’s business only made a profit during 2008 and even though the wife had contributed somewhat during earlier years, her efforts were too remote to include her in the profit sharing. Because the evidence was too insubstantial on the issue, the Court chose not to include the business in calculations for equitable distribution. Instead, the Court awarded the wife 35% of her husband’s pension funds. The Court, however, denied her claim for spousal support based on the evidence of the wife’s Bachelor’s degree and real estate license, claiming that she had the capacity to earn as much as her husband.

In reviewing the issue of marital waste, the Circuit Court noted the definition of waste: “Waste occurs ‘where one spouse uses marital property for his own benefit and for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.’” Smith v. Smith, 18 Va. App. 427, 444 S.E.2d 269 (1994). 02.  Moreover, the Court established that according to Clements v. Clements, 10 Va. App. 580, 397 S.E.2d 257 (1990), the party charged with dissipation bears the burden of showing that the funds were used for a proper purpose. The wife contends that her use of the funds did not constitute waste because of the date of separation. Under her theory, the date of separation did not occur until 2006; therefore, the marriage could not have been “undergoing an irreconcilable breakdown” when she cashed in her pension. The trial court, however, believed the husband’s testimony that the separation occurred in November 2000, when the wife moved out. Even though she moved back in 2003, it was a temporary situation that the husband allowed because the wife had been living in her car.  The parties lived in separate bedrooms in the marital residence and wife paid rent to the husband.  Moreover, since the wife failed to produce any evidence that she used the funds for a proper purpose, the Court held that the trial court correctly awarded a credit of $15,000 of the wife’s pension to the husband.

On the issue of the valuation of the husband’s business, the Court of Appeals affirmed the divorce court judge’s holding. The wife argued that the court failed to consider the assets of the business as statutorily required for valuation of all marital property. Specially, she alleged that the business was valued at $24,328.75, of which she should have received a percentage. According to Virginia Code §20-107.3, a trial court must value the parties’ separate and marital property before making a monetary award. As the Court noted, however, “Virginia’s trial courts may, without doing violence to the statute make a monetary award without giving consideration to the classification or valuation of every item of property, where the parties have been given a reasonable opportunity to provide the necessary evidence to prove classification or valuation but through their lack of diligence have failed to do so.” Bowers v. Bowers, 4 Va. App. 610, 359 S.E.2d 546 (1987).  In this situation, the trial court determined that due to the sparse evidence on the issue and the fact that the business only started to make a profit after the parties separated, it was acceptable to not consider the business in making the calculation of the monetary award, and the Court of Appeals agreed.

Although the wife also argued that the trial court erred by only awarding her only 35% of the husband’s pension, the Circuit Court denied her appeal, citing Ranney v. Ranney, 45 Va. App. 17, 608 S.E.2d 485 (2005), which held that the Court should not reverse the trial court’s ruling unless it is clear that the lower court abused its discretion. See also Bosserman v. Bosserman, 9 Va. App. 1, 384 S.E.2d 104 (1989).  As Matthews v. Matthews, 26 Va. App. 638, 496 S.E.2d 615 (2006) established, Virginia law does not create the presumption of equal distribution for equitable distribution.. Thus, because the trial court considered the statutory factors in Virginia Code §20-107.3, the trial court’s decision was correct.

The Virginia Court of Appeals ruled that the Virginia Circuit Court judge’s decision to award attorney fees to the husband was not an abuse of the trial court’s discretion because the wife had re-opened the case and proceeded pro se, resulting in additional expenses to the husband.  Finally, the Court would not consider wife’s claim that the trial court failed to consider the statutory factors in denying her spousal support, as she had failed to properly preserve the issue for appeal by specifying her objection.

You should consult with your Virginia divorce lawyer concerning marital waste and equitable distribution in Virginia.

Can a Virginia divorce judge allocate the entirety of a bankruptcy debt to the husband in equitable distribution when the parties’ separation agreement does not mention the chapter 13 bankruptcy proceeding, but provides that each party would be responsible for debts incurred by the parties prior to their separation?

No, according to the unpublished opinion of Strickland v. Strickland, record No. 0314-07-2 (Va. Ct. App. 2007), where the Virginia Court of Appeals reversed the Chesterfield County Circuit Court judge’s ruling found that the chapter 13 bankruptcy debt was solely husband’s responsibility.

The parties married on May 12, 1990, and in 1996, they had a child.  Throughout the time of the marriage both parties worked, but the husband brought in a more substantial income. In 2002, the parties filed a joint petition for a Chapter 13 bankruptcy. Under the plan, the parties’ joint federal taxes, utilities bills, home mortgage, credit cards and other debts were consolidated, and the schedule set the repayment amount at $500 per month (taken directly from the husband’s paycheck) until the $25,000 had been repaid. The husband had continued to make payments toward the debt.

On November 11, 2003, the husband, anticipating separation with the wife, committed in writing that he would put their home in the wife’s name, pay $1,000 per month for the wife and daughter, remove the wife’s name from the car loan, give his wife full custody of their daughter, and “pay all bankruptcy.”  A month later, the parties separated, and they entered in an “agreement and stipulation in accordance with section 20-109 and 20-109.1 of the Code of Virginia” (the Agreement), which the wife’s attorney had prepared.  The terms of the Agreement included provisions for child and spousal support at $500 per month for each. Furthermore, the parties agreed they would be “fully and individually responsible for…any debts incurred by the parties prior to their separation,” but it also provided that the husband would assume sole possession of their jointly owned 2002 Kia Sportage and assume its lien while the wife would be removed from both the title and the lien. The Agreement, however, remained silent on the issue of the parties’ joint bankruptcy debt.

From December 2003 through October 2004, the husband paid the wife $1,000 per month for support. After that time, however, the husband notified the wife that he would decrease his monthly payments, withholding an amount that would offset her portion of the bankruptcy debt retroactive to December 2003. In 2004, however, the husband’s Kia was repossessed for failure to repay the loan, and subsequently, the bankruptcy plan was modified to include the $5,972.38 debt from the Kia.

The wife filed a complaint seeking a divorce in July of 2006, and in her complaint, she asked the trial court to affirm, ratify, and incorporate the Agreement into the divorce decree. In addition, she filed a motion to establish child and spousal support arrearage, based on her claim that the husband had improperly reduced his payments of $1,000 per month since October 2004. In response, the husband filed a cross-complaint, arguing that the wife had violated the Agreement because she had failed to pay her portion of their joint bankruptcy debt, and he asked the court to not approve the Agreement with respect to spousal support, or in the alternative, to credit him the wife’s portion of the bankruptcy debt. The trial court granted the parties’ divorce in November 2006 and ordered that the Agreement be ratified and incorporated but not merged into the final decree; however, the Court made no reference to the bankruptcy debt, leaving the discharge entirely to the husband.  In January 2007, the Circuit Court had a hearing to address issues of the support payments since October 2004, whether the bankruptcy debt was marital, and if it were, then what offset the husband would be permitted. At the hearing, the Chesterfield County Circuit Court judge found that the bankruptcy debt was the husband’s “sole debt,” that he was not permitted an offset against his support obligations, and that the support order was retroactive to the date of the Agreement.

On appeal, the husband alleged that although the $5,972.38 from the Kia was properly allocated as separate debt, the rest of the debt was joint marital debt. Moreover, since the Agreement had provided that the each of the parties would be responsible for “debts incurred by the parties prior to their separation,” the trial court erroneously attributed all the bankruptcy debt to him.  In determining the issue, the Court of Appeals examined Virginia Code §20-109.1, which provides that the parties may affirm, ratify, and incorporate a valid agreement into the final divorce decree. In addition, the appeals court noted that once incorporated, an agreement becomes “a term of the decree … enforceable in the same manner as any provision of such decree.” Campbell v. Campbell, 32 Va. App. 351, 528 S.E.2d 145 (2000).  The husband alleged that the evidence did not support the trial court’s determination of the bankruptcy debt as his sole responsibility. See Stumbo v. Stumbo, 20 Va. App. 685, 460 S.E.2d 591 (1995) (holding that the allocation of debt as either marital or separate must have a proper foundation). Here, the Virginia Court of Appeals ruled that the agreement established that the parties would be liable for the debts incurred prior to the separation, there was no ambiguity in the language of the Agreement, the bankruptcy debt was marital debt and had been incurred prior to separation, and the Chesterfield County Circuit Court had erroneously allocated the bankruptcy debt entirely to the husband. Therefore, the Court of Appeals reversed the arrearage determination of the trial court and remanded the matter to the Circuit Court of Chesterfield County for final resolution.

You should consult with your Virginia divorce lawyer concerning the treatment of your bankruptcy debt in equitable distribution.

How will a court equitably divide marital assets when two parties have comingled their personal and business finances?

In Reynolds v. Reynolds, CH05-140 (2005), the City of Salem Circuit Court held that the husband had to pay the wife a monetary award for the inequities he had created between their assets and that the parties could decide to buy each other out on the two marital properties or sell them and divide the proceeds.

The parties were married in 1988, and following their marriage, they purchased a carpet cleaning franchise and started their own business. The husband’s role in the business included cleaning carpets, training employees, repairing equipment, soliciting business, and supervising employees on the job. The wife managed that business’s marketing, bills, and other administrative matters. Furthermore, after the parties had children, the wife also managed the house and the children. Both parties worked full time at the business; however, the parties did not separate the finances of their personal lives from the business finances. When money came in, they used it for either personal or business expenses. Both parties took cash as needed, without telling the other how much they took. They used credit cards to interchangeably buy both household goods and business supplies. Together, the parties also invested in their business, marital residence, lakefront property, rental property, a boat, and securities and retirement accounts.

After the separation, the wife continued working at the business for twenty-one months until the Court removed the wife from the business operation so it could remain a viable marital asset. At that time, the Court ordered the husband to pay child and spousal support to cover the needs that the wife had previously provided from the joint funds. The wife and the children continued to live in the marital home, and around that time, she attended and subsequently graduated college with a business degree in marketing. The husband during this period purchased a wood floor refurbishing franchise and spent a great deal of time building this business at the expense of the carpet cleaning business. Moreover, he used money from the other business to purchase the wood floor business and pay its operating costs. Although he tried to keep this operation a secret, his actions caused the carpet cleaning business to become less successful, and he simply kept the profits from the floor business without accounting for them to the wife.

To make an equitable distribution in this case, the Court weighed the parties’ testimony, the witnesses, the oral and written arguments of the parties, and the exhibits presented in evidence. Moreover, the Court applied Virginia Code §20-107.3 and the factors specifically laid out in §20-107.3(E), as well as examining the equities involved. The Court then detailed specifics for equitable distribution of each of the following disputed categories: the marital real property, the marital carpet cleaning business, marital vehicles, investment and retirement accounts, miscellaneous property, marital debt and attorney fees.

The Court determined that all of the parties’ real estate constituted marital assets; only the husband’s purchase of a residence after the separation differed—the Court considered this property as a hybrid, because he made the $14,000 down payment with marital funds. The other two properties were the marital residence valued at $270,000.00 and the lakefront property valued at $489,000.00,which the Court determined should be divided equally between the parties, with both assuming one-half of any remaining debts on the properties. Moreover, the Court noted that the wife could buy out her husband’s interest in the marital home. Because she wanted to continuing to live in the marital home, the Court determined that she could buy the husband’s interest by paying one-half of the difference between its appraised value and the current payoff of its note. Likewise, if the husband wanted to keep the lakefront property, he could perform the same valuation and pay off the wife’s interest. If he chose not to do so, the property would be sold, and the result would be equitably divided between the parties.

In regards to the marital carpet cleaning business, the Court accepted the husband’s expert valuation of the business, placing its worth at $185,000.00.  Although the Court permitted the husband to purchase his wife’s share for $92,500.00 within 90 days, it held that a failure to buy out the wife’s half would force the parties to sell the business and split the proceeds equally. In addition, the Court examined the evidence on the parties’ marital vehicles and determined that the husband had a separate vehicle purchase after the separation. The other vehicles, however, included a 2001 Tahoe, a 2001 Stingray 22 foot boat, and a boat trailer. Due the difficulty in separating these assets, the Court determined that the parties would simply keep the vehicles in their possession and the total value of the marital assets would be divided equally.

After hearing evidence on the accounts, miscellaneous property, and marital debts, the Court determined that each party would keep his or her own IRA account and a joint share of the joint account. Moreover, the stimulus money received by the husband was to be divided equally, because the husband provided the sole support for the children. Finally, the Court held that all debts acquired during the marriage were to be considered joint and should be divided equally. Therefore, the Court gave the parties discretion whether to buy out the other’s share in the marital real estate or business and later report for a final division of the assets.

You should consult with your Virginia divorce lawyer regarding the equitable distribution of your personal and business property.

Does lack of co-parenting justify a modification of child custody in Virginia?

Not necessarily according to Piccirillo v. Atkins, Record No. 2064-09-4 (Va. Ct. App. 2010), an unpublished case in which the Virginia Court of Appeals summarily affirmed the Virginia Circuit Court’s ruling granting physical custody of the parties’ child to the father.  Although the Virginia courts generally encourage co-parenting between parents and would like a child to have a close and continuing relationship with two fit parents, a lack of communication and co-parenting on the part of one parent will not necessarily result in a change of custody from that parent to the cooperative parent, if the best interests of the child are served by being in the custody of the non-cooperative parent.

The mother alleged four counts in which the trial court erred: (1) awarding custody to the father in light of the evidence and Virginia Code §20-124.3 factors; (2) not considering the father’s unilateral and deceptive relocation to Maryland as a “material change of circumstances”; (3) awarding custody to father even after establishing that the father did not want to co-parent with the mother or respect her wishes; and (4) awarding custody to the father when that decision had the effect of relocating the child to Maryland. Upon review, the Fairfax County Circuit Court affirmed the trial’s court’s decision and dismissed the appeal.

The parties were married one year when their only child together was born. Three years later, the parties separated, and they divorced two years after their separation.  Just prior to the divorce, the trial court entered a custody consent decree, awarding the parties shared joint legal and physical custody over the child, with custody rotating on a weekly basis. Both parties subsequently remarried.  The father filed a motion for a protective order against the mother and her new husband, after the child told the father that his stepfather had been abusing him without any intervention from the mother.  The Juvenile and Domestic Relations District Court issued a preliminary protective order and appointed a guardian ad litem for the child.  Although, the JDR court denied the motion for a protective order a month later, the mother was not able to see her child until the final custody hearing four months later.  Nevertheless, the guardian ad litem recommended counseling for the child.

Both parents filed motions for a change of custody in the Virginia Circuit Court. In addition, the father filed motion requesting that the court name a particular licensed clinical social worker for the child over the mother’s objections of bias, and that a custody evaluation be made, and the court granted the father’s motions. The trial judge the custody issues in January 2009, and after a review of Virginia Code §20-124.3, the court granted temporary physical custody to the father, giving the mother a transitional visitation schedule.  On June 25, 2009, the trial court reviewed what happened in the case since January and held that the parties would have joint legal custody with the father having physical custody in Maryland.

According to the mother, the Virginia Circuit Court judge erred because of the evidence at trial, the custody factors in the Virginia Code, and the father’s refusal to co-parent with the mother. As the trial judge established, however, the child’s best interests always play the most important role in consideration. See Farley v. Farley, 9 Va. App. 326, 387 S.E.2d 794 (1990). Moreover, unless the trial court abused its discretion or the evidence contradicts the court’s ruling, the appeal must affirm the lower court’s order. See Brown v. Brown, 30 Va. App. 532, 518 S.E.2d 336 (1999).

In addressing the mother’s argument that the trial court did not consider the factors in Virginia Code Section §20-124.3, the Court noted that the trial court had discussed them at length both in the January hearing and in the review at the June 2009 hearing. The mother alleged that the court should have taken the father’s e-mails, refusals to consider her requests, and his “deceptive” move to Maryland to be with his pregnant wife (rather than commuting between the Maryland home and the home in McLean, Virginia) into account before ruling. The Fairfax Court, however, found that it had been and continued to remain in the father’s custody, because he was comfortable there, and he was not comfortable in his mother’s home because of his stepfather.

Responding to the mother’s appeal, the Court noted Ferguson v. Stafford County Dep’t of Soc. Servs., 14 Va. App. 333, 417 S.E.2d 1 (1992), which states, “Where the record contains credible evidence in support of the finding made by that court, we may not retry the facts or substitute our view of the facts for those of the trial court.”  While the mother contended that the custody arrangement and the relocation to Maryland was not in the child’s best interests, the Court found that though the mother and stepfather’s relationship with the child had improved, it was still in the child’s best interests to live with his father and stepmother. To support this decision, the Court pointed to Sullivan v. Knick, 38 Va. App. 773, 568 S.E.2d 430 (2002) which establishes that the trial court’s decision must remain in place, unless evidence demonstrates that the decision was plainly wrong.  See also Parish v. Spaulding, 26 Va. App. 566, 496 S.E.2d 91 (1998) (holding that when deciding whether a child’s relocation is proper, the court must consider the child’s welfare as the primary concern). Therefore, the Virginia Court of Appeals summarily affirmed the Circuit Court’s ruling and held that physical custody would remain with the father.

You should consult with your Virginia child custody lawyer regarding the impact of a lack of co-parenting in your case.

Does the Virginia Juvenile and Domestic Relations District Court lose jurisdiction after a divorce is filed in Circuit Court?

It depends. In Deline v. Baker, Record No. 2801-09-1, (Va. App. 2010), the Virginia Circuit Court held that the juvenile and domestic relations district court had not lost jurisdiction to determine support because the circuit court never assumed jurisdiction over those issues.   In Virginia, both the Circuit Court, which has exclusive original jurisdiction over divorce cases, and the Juvenile and Domestic Relations District Court, which hears family law matters but not divorce, have concurrent or shared jurisdiction over child custody, child visitation, child support and spousal support or maintenance.  In certain cases, the Juvenile and Domestic Relations District Court can be divested of its jurisdiction, or power to hear a case, by the filing of a matter at the Virginia Circuit Court level.

In the Deline case, the Juvenile and Domestic Relations District Court had ordered the father to pay $233.20 per week for the support of his two minor children, and the Court, by an order in September 2002, set the arrearage at $6,455.44 to be paid in weekly installments. On October 22, 2002, the mother filed a bill of complaint with the Circuit Court of Virginia Beach requesting a divorce from the father, but nothing in the complaint addressed child or spousal support or a determination of custody or visitation.

The divorce case was referred to a commissioner in chancery, and the mother testified that she wished all outstanding orders in the juvenile case to “remain in place.” She also testified that the father owned $8,525,96 in arrearage for child support and $1,126.55 for medical expenses, yet she sought no judgment for those unpaid sums. In the final decree of divorce, the Circuit Court ordered that the mother should have custody and the father should have visitation rights, that the mother should pay the monthly medical insurance but all non-covered expenses were to be split equally, and that all further matters regarding child support, custody, and visitation should be transferred to the Virginia Beach Juvenile and Domestic Relations Court pursuant to Virginia Code §20-79(C).  The mother signed the final decree, saying “I Ask for This.” As a result of the final decree, the juvenile court on three separate occasions found the father in contempt, set arrearages, and sentenced the father to incarceration.

The mother subsequently filed a show cause motion with the juvenile court to establish the arrearages of the father. In response, the father filed a motion to dismiss and a motion to vacate, claiming that the Circuit Court retained jurisdiction over child support, and therefore, the juvenile court did not have the jurisdiction to enter contempt orders. The Virginia Juvenile and Domestic Relations District Court judge denied the father motions, found him in contempt, and established the arrearage payment at $53,021.32. Father appealed to the Circuit Court, and the mother filed a motion for summary judgment, alleging that the Circuit Court had not made any adjudication as to child support and left that jurisdiction with the Juvenile Court.

In his appeal, the father argued that in the divorce action the Circuit Court assumed jurisdiction over child support, thereby divesting the Juvenile Court of any jurisdiction.  In reviewing the evidence, the Circuit Court reviewed Virginia Code §16.1-244(A), which states, “When a suit for divorce has been filed in a circuit court, in which the custody, guardianship, visitation or support of children of the parties or spousal support is raised by the pleadings and a hearing, including a pendente lite hearing, is set by the circuit court on any such issue  . . . the juvenile and domestic relations district courts shall be divested of the right to enter any further decrees or orders to determine custody, guardianship, visitation or support when raised for such hearing and such matters shall be determined by the circuit court unless both parties agreed to a referral to the juvenile court.” In this case, the Court found that the final divorce decree addressed child support, arrearages, medical insurance and non-medical expenses, and transferred to the juvenile court all matters relating to the enforcement and/or maintenance of child support, custody, and visitation. As the Court pointed out, however, the mother never prayed for any relief on these issues.

To review the matter, the Court looked to the case law and established that according to Potts v. Mathieson Alkali Works, 165 Va. 196, 181 S.E. 521 (1935), the court cannot rule on or render judgment on any matter not in the pleadings. Furthermore, the Court established that based on Rogers v. Damron, 23 Va.App. 708, 479 S.E.2d 540 (1997), a court only has jurisdiction over the subject matter if it has jurisdiction over the cause of action and the relief sought. As the Court pointed out in Deline, it did not have subject matter jurisdiction to grant relief not sought by the mother in the divorce action. Therefore, according to Reid v. Reid, 24 Va. App. 146, 480 S.E.2d 771(1997), “The absence of a specific request for an adjudication of . . .  support precluded the court from obtaining jurisdiction over that subject matter.”

Although the father argued in his brief that the mother did ask for relief by signing the final divorce decree with “I Ask for This,” the Court dismissed his argument. As the Court noted, a court should not elevate an endorsement of an order to a prayer for relief in a pleading. See Baylor v. Commonwealth, 190 Va. 116, 56 S.E.2d 77 (1949). See also Burch v. Grace Street Bldg. Corp. 168 Va. 329, 191 S.E. 672 (1937).  In addition, the Court ruled that the father’s allegation that the mother was estopped from raising subject matter jurisdiction failed. According to Lucas v. Biller, 204 Va. 309, 130 S.E.2d 582 (1963), the court’s jurisdiction cannot be obtain by consent of the parties, waiver or estoppel. Here, the Court held that the Circuit Court had no subject matter jurisdiction to make determination concerning child support in the final divorce decree; therefore, those portions were null and void. As a result, the Juvenile Court still retained the jurisdiction to enter the contempt orders, and the support order was not terminated by operation of law. Therefore, the Circuit Court affirmed the Juvenile Court’s contempt orders were valid, and the father’s appeal failed.

You should consult with your Virginia family law lawyer concerning the appropriate court to pursue or defend your family law matters.

Is an order reinstating a Virginia divorce case after dismissal for inactivity an interlocutory order or a final order?

In the case of Bell v. Bell, CL 08-1083, the Virginia Circuit Court held that the previous order reinstating the divorce case was interlocutory and could be corrected by the trial court.

In Bell, the case began in June of 1995 when the parties filed for divorce.  In 1997, the action was referred to a commissioner in chancery, and two years later, the commissioner was made judge pro tem (a lawyer appointed by a judge to act as judge when the judge is disqualified or unable to try the case) in accordance with Virginia Code Section 17.1-110.  In 2005, the Court dismissed the action under Virginia Code §8.01-335(B) because there had not been an order or a proceeding in the past three years.

After the case was dismissed, the judge pro tem entered the wife’s ex parte order that the case be reinstated to resolve questions of equitable distribution, permanent spousal support, and attorney fees.  In April 2005, the Virginia Circuit Court judge examined the action of the judge pro tem in reopening the case and reaffirmed the appointment of the judge. For the next three years, both parties neglected to take any action in the proceeding, and the Virginia Circuit Court once again dismissed the case under Virginia Code §8.01-335(B).

In September 2008, the court reinstated the case upon the Wife’s ex parte order and reappointed the judge pro tem in order to resolve the question of contempt for failure to pay spousal support, an increase in spousal support, and equitable distribution of the martial property. The husband filed a motion to dismiss and nullify all orders of the case in October 2009, and the wife refused to respond. Upon examination, the Court found that no divorce had been granted to the parties. Pendente lite orders, however, had been entered in 1995 that enjoined the parties from disposing of any martial asset or demonstrating offensive conduct and also requiring payment of spousal support. That temporary spousal support had later been reduced in December of 1995. Furthermore, the court had entered an order enjoining the husband from making any additions to the marital home. Finally, in December 1999, the court overruled a plea of satisfaction and accord, and according to the record, that ruling was the last action taken in the case.

The husband argues that under Virginia Code §8.01-335(B), the parties must be given notice prior to the Court’s reinstatement of a case after its dismissal for inactivity.  According to his interpretation of the statute, the Court’s order reinstating the case and all subsequent orders were null and void because he did not receive any notice. Furthermore, he alleges that the appointment of the judge pro tem was null and void under Virginia Code §17.1-110 because he received no notice of that action as well.

The Court in Bell, however, rejected the Husband’s arguments. The Court affirmed that an order is void ab initio if the court did not have the jurisdiction to make that order. If the Court does have the jurisdiction to make that order, however, it is only a reversible error, and the order is voidable. See Hicks v. Mellis, 275 Va. 213, 219 (2008). Here, the Court ruled the jurisdiction to make the order was correct; therefore, the order to reinstatement the case was only a voidable error.

As the court affirmed, a voidable error can be correct in two ways: the parties can appeal to the Court of Appeals of Virginia or, if the case has not ended in a final order (but rather an interlocutory order), the trial judge can correct the error. See Freezer v. Miller, 163 Va. 180 (1934). See also Robbins v. Robbins, 48 Va. App. 466 (2006). In this case, the order reinstating the case in 2005 and reappointing the judge pro tem was an interlocutory order. The court determined that this order was improperly entered without notice to the parties, and it was vacated. Furthermore, the court ruled that all orders after the reinstatement were void ab initio because the court did not have the jurisdiction to make any orders in a discontinued case. Therefore, the court held the case had ended but stated that if the parties wished to obtain a divorce, they could file a new divorce action.

You should consult with your Virginia divorce lawyer concerning whether a given order is interlocutory or final.

Will a Virginia court reduce support obligations for a high income earner who accumulates substantial savings?

Possibly, according to an unpublished opinion by the Virginia Court of Appeals in Trump v. Trump, Record No. 2475-09-4, (Va. App. 2010)  where a reduction in husband’s income might have constituted a material change in circumstances justifying a reduction in spousal support and child support, even though the husband was able to save a substantial amount of money each year.

The parties were married for twenty years and separated for nearly two years, before divorcing in 2007. In the final divorce decree, the Virginia Circuit Court ordered husband to pay spousal support of $4,500 per month, and his child support of $1,961 per month, based on income of $21,000per month.  A year later, the divorce court judge modified husband’s spousal support obligation to $3,670 and his child support obligation to $1,582 per month.

A year and a half later, the husband filed a motion to modify support further downward. When the trial court heard the evidence, husband testified that his income in 2007 was $21,000 per month, but by 2009 it had decreased to only $17,380 per month. After deliberation, the Virginia Circuit Court judge determined that husband had not undergone a material change in circumstances because he was still able to save almost $100,000 a year. Therefore, the court granted the wife’s motion to strike and dismissed the husband’s motion to modify support.

On appeal, the husband argued that the trial court erred by failing to grant his motion for reduction of his support payments based on his material change of circumstances.  The Court of Appeals recognized that the standard for review before a motion to strike requires viewing facts in the most favorable light for the plaintiff. According to James v. City of Falls Church, 280 Va. 31, 694 S.E.2d 568 (2010) (quoting Austin v. Shoney’s Inc., 254 Va. 134, 486 S.E.2d 285 (1997), “[A] trial court is required to accept as true all evidence favorable to a plaintiff and any reasonable inferences that may be drawn from such evidence. ‘The trial court is not to judge the weight and credibility of the evidence, and may not reject any inference from the evidence favorable to the plaintiff unless it would defy logic and common sense.” Under that standard, the court ruled that the trial court erred by concluding that the husband failed to present a prima facie case for a reduction in support based on his change in income. As Virginia Code §20-108 provides, the court may modify a decree of child or spousal support if the party seeking the modification establishes that the material change of circumstances occurred since the last hearing and justified an alteration. See Hiner v. Hadeed, 15 Va. App. 575, 425 S.E.2d 811 (1993). See also Furr v. Furr, 13 Va. App. 479, 413, S.E.2d 72 (1992).

In this case, the Virginia Circuit Court determined that the evidence established that the husband had suffered an income reduction from $21,000 per month in 2007 to $17,380 per month in 2009. Moreover, even though he had an increased income in 2008 because his businesses had conserved cash, his net income had decreased from 2007 to 2009. The appellate court held that the trial court erred by focusing on the 2008 figures and the savings deposits rather than reviewing the evidence in the most favorable light to the husband. As a result, the Court reversed the trial court’s decision and remanded the case for further proceedings.

You should consult with your Virginia divorce lawyer concerning the likely prospects for modifying a support obligation in your case.

Is a husband who unilaterally reduces his child support payments when one of two children reaches the age of majority in contempt of court in Virginia when no reduction is expressly provided for in the separation agreement?

Not necessarily, according to Hughes v. Hughes, No. 2602-09-4, where the Court of Appeals of Virginia reversed the Virginia circuit court’s finding that husband was in contempt of court, holding that while the husband owed an arrearage on child support payments, he had not willfully violated the Property Settlement and Separation Agreement (PSA).

At issue in this case was a dispute over child support owed following the divorce of the parties, who at the time of the divorce had two minor children. The Property Settlement and Separation Agreement (PSA) that had been incorporated into the divorce decree provided that the father would provide for the minor children in the amount of $1,175.00 per month until the children reached the age of 18 or up to 19, if they had remained in the mother’s home and were attending high school.  The separation agreement also included a provision for attorney’s fees to either party in the event of a successful enforcement of the agreement, or a successful defense to an action to enforce the agreement.

When the oldest child turned 18 years old, the father unilaterally cut his monthly child support payments in half.  The wife petitioned for a rule to show cause.  At the show cause hearing in the Virginia Circuit Court, the husband explained that he did not seek the court’s approval before reducing the amount of child support because he did not think it was necessary. The Circuit Court judge found that the property settlement agreement was incomplete, as it did not provide a method for calculating the amount of child support payments upon the emancipation of the first minor child, and the court would not supply the missing language for the parties.  The Virginia Circuit Court judge noted that he might not have found the husband in contempt of court if the husband had reduced child support in accordance with the Virginia child support guidelines under Virginia Code Section 20-108.2, which generate the presumptively correct amount of child support in a child support dispute.  Consequently, the Court found the husband in civil contempt, but allowed him to purge himself of contempt by paying the arrearage based on the full amount of child support.  The Virginia Circuit Court judge did note that it was a “close case” on the contempt issue because of the ambiguity of the agreement at issue.

On appeal, the husband argued that Virginia Code §20-109 permitted him to modify the child support amount without consulting the court or seeking permission. He argued that the section regarding incorporation should apply: “Unless otherwise provided for in such agreement or decree incorporating such agreement, such future modifications shall not require a subsequent court decree. The Virignia Court of Appeals rejected this argument, claiming that this provision only applies when the method of calculation is included in the agreement. See Shoup v. Shoup, 37 Va. App. 240, 556 S.E.2d 783 (2001)(en banc).  The Court of Appeals determined that because the language of the PSA was self-executing, the husband had to obtain court approval prior to modifying any support. See Goodpasture v. Goodpasture, 7 Va. App. 55, 371 S.E.2d 845 (1988) (holding that the proper remedy is to apply to the court for relief). See also Johnson v. Johnson, 1 Va. App. 330, 338 S.E.2d 353 (1986). Therefore, the Court affirmed the finding of the circuit court in holding Mr. Hughes to the payment of the arrearage.

The husband also argued that the trial court erred by finding him in civil contempt. The Court of Appeals reviewed the standard for contempt, establishing that the court may hold an offending party in contempt for acting in bad faith or willful disobedience of its order. See Alexander v. Alexander, 12 Va. App. 691, 406 S.E.2d 666 (1991).  However, the Court also noted in Winn v. Winn, 218 Va. 8, 235 S.E.2d 307 (1977) that contempt should only be found where a party violated the express terms of a court order.  Here, the Court of Appeals held that the husband, although he had willfully violated the divorce decree, had not violated an express duty of the PSA. Accordingly, the Court reversed the trial’s court determination.

Finally, the wife argued that she should receive attorney’s fee based on the provisions of the PSA. The Court of Appeals acknowledged that once the parties enter a valid and enforceable PSA, the judge may only use the terms of the agreement to make that determination. See Rutledge v. Rutledge, 45 Va. App. 56, 608 S.E.2d 504 (2005). The Court of Appeals in Hughes v. Hughes held that since the PSA in this case provided that the wife was entitled to “any reasonable expenses,” and, consequently, the trial court erred by refused to award them to the wife.

You should consult with your Virginia child support lawyer concerning any reduction of child support upon your child reaching the age of majority.

How does a Virginia Circuit Court judge make an equitable distribution award for a couple, who do not present sufficient evidence at trial, and who are suffering economic hardships such as job losses, repossession, and a bankruptcy?

In the case of Whiteside v. Whiteside, CL09-1545, the Virginia Circuit Court judge simply declined to grant equitable distribution of the marital assets and allocation of the debts given the lack of evidence, but reserved wife’s right to receive spousal support at some point in the future, as permitted by Virginia Code Section 20-107.1(D).

Applying the dictates of Virginia Code §20-107.3, the Court considered all of the equities and made its determination regarding the assets of the parties.

First, the Virginia Circuit Court judge examined the real estate holdings the parties possessed during their marriage.  The evidence revealed that the parties had borrowed $243, 500.00 to purchase a house, which they refinanced for $283, 000.00 in 2007. However, they ceased making payments on the lien in October 200, and after missing 18 payments, the bank made a foreclosure sale in February 2010. The court noted that the deficiency could be considered a marital debt, but did not have evidence to determine whether a deficiency existed.  The wife had discharged her personal liability when she filed for chapter 7 bankruptcy.  The husband indicated that he intended to file bankruptcy and was upset that wife did not file a joint bankruptcy case with him. Moreover, while the parties owned a time-share condominium in Winter Garden, Florida, the parties did not present any evidence regarding its value. Neither party wanted the property or introduced sufficient evidence to determine its value or the debt against it.  Consequently, given the lack of evidence and the judge’s questionable conclusion that wife had “bankrupted” the debt [as contradicted by 11 U.S.C. 523(a)(16), which excepts from discharge post-petition homeowner association dues and condominium assessments for as long as the debtor or trustee has a legal, equitable, or possessory interest in the property, the court declined equitable distribution of the property and debt, and instead left the parties to their civil law remedies.

Second, the Court found that all of the credit accounts of the parties were separate. The husband testified about the balance on two credit cards, but introduced no documentary evidence in support of his testimony showing a breakdown of the debt or the balances on the date of separation.  The wife denied that the balances reflected marital debt.  The Court found that husband failed to meet his burden of persuasion, declined to determine whether the husband’s debt was marital debt and refused to allocate the debts, in accordance with the Virginia Supreme Court opinion of Gilliam v. McGrady, 279 Va. 703 (2010) .

Third, in regards to household furniture, goods, and furnishings, the wife testified that the husband had already removed personal property from the former marital residence.  Neither party introduced into evidence an inventory of the personal property with values.   The husband argued that the articles he took should not be considered an equitable distribution. The court, however, again to exercise its equitable distribution powers due to the lack of evidence.

Fourth, the couple presented evidence regarding the vehicles they owned. One of husband’s luxury vehicles had been repossessed due to a failure to make the monthly payments. Another luxury vehicle worth $3,775 was sold by husband for only $600, without any explanation from husband at trial.  The wife sold husband’s inoperable pickup truck for $150 when she was notified that the vehicle had to be moved or towed by VDOT.  Wife owned a 1997 Toyota 4Runner valued at $4,420.00. Considering the equities of the parties, the Court held that the wife would keep her vehicle and the husband was allowed to keep the proceeds from the sale of his luxury vehicle.

Finally, the court examined the bank accounts, request for attorney fees, and determination of spousal support.  The court found no evidence that the parties held any joint accounts. The wife had cashed in her profit sharing account for use for the children’s college costs, and the husband cashed in his retirement from both VDOT and Wal-Mart. And although the husband testified that the parties owed Roanoke County $328.00 in taxes and $506.00 to the IRS, the court could not find any documentation to support these figures and declined to make an equitable distribution.  In considering attorney fees, the court declined both parties’ requests for awarding costs to the other. Furthermore, while the court determined that both parties had need of spousal support, neither could support the other. The wife, after being unemployed for three months, had found a job. Yet even with her job, she had a deficiency in her budget in providing for herself and her children. The husband was not voluntarily unemployed because he made a showing that he was continually looking for a job while living on unemployment. However, because of husband’s unemployment, the court reserved wife’s right to receive support in the future.

You should consult with your Virginia divorce lawyer concerning how your economic difficulties will impact equitable distribution in your divorce case.