The Virginia Court of Appeals handed down two recent decisions that have very interesting fact patterns that the appellate court could not directly address due to some unexpected screw ups.
In Barnes v. Barnes, Record No. 0205-14-4 (Va. Ct. of Appeals 2014), the parties married in 1981 and divorced in 1991. The trial court awarded her $1,200 per month in spousal support because she had an extreme need for it (she only earned $140 per month) and he had the ability to pay it (he earned $7,700 per month). The husband thereafter moved to modify his spousal support years later on the grounds that he couldn’t pay it.[1] Since the last hearing, the husband had acquired dementia. He had heart problems. He lost 30 pounds in the last 6 months. He had a live-in caretaker who took care of his needs. At the time of the hearing, he was only earning $1,242 per month from his annuities and $2,202 from social security.[2]
At trial, the husband could barely testify to anything, so his counsel put on evidence of his current financial situation through the testimony of his former business partner and the aforementioned caretaker. Unfortunately, no one testified to the husband’s financial situation way back when the divorce occurred in 1991. As such, the trial court could not determine whether there had been any change in his financial circumstances since the last spousal support order was entered, and it accordingly granted the wife’s motion to strike his evidence. Grasping at straws, the husband moved for reconsideration and asked the trial court to take judicial notice of the husband’s income from an appellate court decision that addressed the same. The trial court “declined to do so, stating that the opinion was not in evidence.”[3]
On appeal, the appellate court upheld the trial court’s decision to not take judicial notice of the fact of husband’s past income. The appellate court held that trial courts “will not take judicial notice of [their] records, judgments and orders in other and different cases or proceedings, even though such cases or proceedings may be between the same parties an in relation to the same subject matter.” (quoting Fleming v. Anderson, 187 Va. 788 (1948) (emphasis added)).
So what can we learn from this case? Always get somebody to testify as to the payor’s financial circumstances as of the date of trial or, if that’s somehow impossible, always come prepared to introduce an authenticated copy of the most recent support order reflecting the same.
In Loewinger v. Estate of Loewinger, Record No. 2383-13-4 (Va. Ct. of Appeals 2014), the parties entered into a premarital agreement on December 2, 1999, and married a few weeks later on December 18, 1999. The premarital agreement identified certain property as the owner’s separate property to be excluded from consideration upon their divorce. This separate property included husband’s equity in the marital residence at the time of the marriage, with any equity gained thereafter to be marital property subject to division between the parties upon divorce. This separate property also included husband’s money market accounts.
The marital residence had $235,000 in equity at the time of the marriage. The marital residence netted $ 458,289.20 upon its sale in 2004. The marital equity subject to division was therefore $223,289.20. Nevertheless, the parties weren’t divorced at this time. As such, they deposited these proceeds into the husband’s money market account and used them to make a substantial down payment on a new house, redecorate said house, install a deck, buy a fancy new car for the wife, and go on family vacations. In other words, they used these funds like any normal married couple would.
The parties later separated in August of 2011 and were divorced in August of 2012. At trial, the husband surely claimed that the wife was entitled to next to nothing given that his money market account only had $811 remaining from the proceeds from the sale of the marital residence by the time of trial. On the other hand, the wife surely painstakingly traced the use of the proceeds into other assets and miscellaneous expenses. In the end, the trial court awarded her the lump sum of $59,805.67, which amount it admitted would have been higher had there been anything left from the sale of the marital residence.
While the parties were still waiting to litigate the custody aspects of their divorce, the husband died in October of 2013. The trial court accordingly dismissed the case in November of 2013, and the wife appealed the divorce decree to the Virginia Court of Appeals. She argued in her brief that the trial court erred in its interpretation of the premarital agreement, including its calculation of the marital proceeds from the sale of the marital residence and not properly accounting for the same in her lump sum award.[4]
Unfortunately, the appellate court never made it to the merits of the wife’s arguments, specifically because the wife was erroneously appealing against her dead husband’s estate (which would be appropriate for actions against his property) rather than against his personal representative (which was appropriate for de facto contract actions like this one). As such, her appeal was dismissed, and we’ll never know how the appellate court would have tried to untangle the knotty issues in this case.
So what can we learn from this case? First, sue the right person or entity. Second, be aware of all of the possible unintended consequences from your endorsement of a premarital agreement, including the possible sale, transfer, or diminution in value of any particular piece of property. Surprising things can, and often do, happen.
[1] Though it might not be a proper legal argument, the husband surely also argued that it was absurd for him to continue paying spousal support for more than 24 years when the marriage only lasted 10 years.
[2] The appellate court does note that he was also bought out of his business to the tune of $500,000 in installment payments between January 2008 and December of 2011. The decision does not mention whether any of this money was left for him to pay his ongoing spousal support obligation.
[3] The husband apparently never sought to introduce an authenticated copy of the appellate court decision into evidence, which is likely all he needed to do in this case.
[4] It’s unclear from the appellate court’s opinion whether the trial court simply didn’t award her anything as her share of the proceeds from the sale of the marital residence simply because there was basically nothing left, or whether the trial court just didn’t award her as much as she thought she was entitled (e.g., half of the $223,289.20 ).