Bchara v. Bchara, 38 Va. App. ___ 1529014, ___ S.E.2d ___ (2002)
What does this case
say?
Wife separated under the
same roof when she found a videotape of her husband having sex with other
women.
When wife proves the
marital home was constructed with her money from before the marriage, she gets
the house. If husband has no proof on paper of what he allegedly contributed to
the joint account, he gets nothing.
When wife’s friend visited
weekly for a year and saw the separate sleeping arrangements, wife gets a
divorce based on one year’s separation even though she never left the marital
home.
Why is this case
important?
1. Equitable distribution
can result in 100% of marital assets going to one spouse and 0% to the other!
2. Divorce based upon one
year’s separation under the same roof is possible if one spouse stops
attending church and social functions, stops sharing a bedroom and ceases
sexual relations, even though that spouse continues shopping, cooking and
cleaning for the benefit of a child!
This is new in Virginia.
It appears to make it easier for spouses to divorce without one of them moving
out of the marital home. This case reaffirms the principal that
corroboration of a separation is intended to avoid collusion, and is not intended
to vest undue hardship on a party.
+++
[The opinions of Olivier
Denier Long expressed above are not necessarily those of anyone else. Moreover,
judicial decisions vary depending on the facts, the quality of advocacy and
other variables. You should consult with an attorney before reaching a
conclusion about your own individual circumstances].
+++
Bchara v. Bchara, 38 Va. App.
___ 1529014, ___ S.E.2d ___ (2002)
IN
THE COURT OF APPEALS OF VIRGINIA
ARGUED
AT ALEXANDRIA, VIRGINIA
ADNAN BCHARA
v.
MARJA KAARINA BCHARA
Record
No. 1529-01-4
Decided:
May 21, 2002
Present:
Chief Judge Fitzpatrick, Judges Frank and Clements
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY, M. Langhorne Keith,
Judge
Affirmed in part; remanded in part.
COUNSEL
Jeffrey A. Vogelman (Thomas, Ballenger, Vogelman & Turner,
on briefs), for appellant.
William B. Reichhardt (Colleen C. Sweeney, on brief), for
appellee.
OPINION
FRANK, J. — Adnan Bchara
(husband) appeals from a final decree of divorce from Marja Bchara (wife). The
circuit court granted a divorce based on the parties living separate and apart
for one year and found no marital property existed. Husband asks this Court to
reverse the trial court's grant of divorce and the accompanying property
determinations, arguing (1) he and wife were not separated as of January 2000,
(2) the trial court improperly found the home and the personal property were
the separate property of wife, (3) the trial court did not properly consider
the factors in Code § 20-107.3(E), and (4) the final decree did not address
marital debt. For the reasons stated, we affirm in part and reverse in part.
BACKGROUND
Husband and wife were married on March 31, 1991. Prior to the
marriage, wife had inherited approximately $950,000 when her father, who lived
in Finland, died. She continued to keep the balance of that inheritance, as
well as the additional inheritance received on her mother's death in 1997, in a
bank account in Finland. Husband had no access to this account.
Throughout the marriage, wife transferred funds from the
Finland account into a joint account in the United States, which both husband
and wife used. Husband alleged he also contributed money to the joint account,1
but presented only his own testimony as proof of these deposits.
Prior to their marriage, husband and wife lived together in a
home purchased by wife with money from her inheritance. She titled the home in
both their names. Eventually, this original home was sold, and the majority of
the money from that sale was deposited in wife's Finland account.
The parties purchased land to build a new home in Fairfax
County in 1993. Wife deposited money from her Finland account into their joint
checking account to pay for the land. She also made numerous large deposits
into the joint account to cover the construction expenses for the new home.
Generally, husband wrote the checks on the joint checking account that paid the
contractor and suppliers.
The trial court held all of the money in the joint account came
from wife and her inheritance in Finland. The evidence on this issue consisted
of bank records for the joint account that listed deposits as either transfers
from the Finland account or small deposits that failed to specify a source.
None of the records suggested a deposit of salary or other non-inheritance
money. Husband presented no check stubs, cancelled checks, or bank records to
support his testimony that he made deposits into the joint account from his
salary, the sale of his flower shop, income from investments, or any other source.
The trial court concluded wife's inheritance was the sole source of funds used
to pay for building the new home and for the personal property in that home,
including all the cars and furniture.
Husband testified that he worked full time at the new home's
construction site, both supervising and engaging in physical labor. He also
testified that he traveled abroad to purchase items for the new home, which he
alleged saved hundreds of thousands of dollars in the cost of construction
materials. He designed several elements in the home, including a marble table
and medallions in the floors. He claimed his negotiation efforts reduced the
purchase price of the land and the labor costs of building.
The contract manager for the building of the home testified
that husband “did a lot of hard work” at the construction site. However, the
manager often found husband's work was incomplete or inadequate. For example,
husband installed all the sky lights; however, they leaked and damaged the
drywall in three rooms. Husband also decided to cut down a tree on the
property, which fell through the bedroom roof. Husband built several retaining
walls, but did not complete them.
Husband produced no evidence as to the monetary value of his
labors, except his testimony that he saved $29,000 by building a retaining wall
himself. Husband presented no evidence that this wall was necessary or that it
substantially increased the value of the home.
An investment account, titled solely in husband's name and
funded by wife's inheritance, was opened with Dean Witter sometime in 1994.
Additional money passed into this account through the joint checking account.
Husband was in charge of this fund. He transferred the money in the Dean Witter
account to Ameritrade sometime in 1998. Wife claimed no knowledge of the
current balance of the account. Husband claimed wife knew the investments were
performing well at one point.
Husband testified that the investments began to perform poorly
around March 2000. As a significant portion of husband's investments were
purchased “on margin,” he had to sell his stock to cover his “margin calls.”2
However, he could not raise enough money solely by liquidating his stock, so
husband covered the rest of the alleged $45,000 debt to Ameritrade with a
credit card issued solely in his name. No documents were presented to the trial
court verifying the status of the Ameritrade account or the credit card debt.
The couple had one son, born in March 1995. After the child's
birth, husband claimed he and wife stopped having sexual intercourse. Husband
admitted having affairs with numerous women both before and after the birth,
claiming his wife knew and agreed he was free to pursue such relationships.
On January 22, 2000, wife and a friend discovered a videotape
of husband having sex with another woman. Wife testified she put all of
husband's belongings in the guest bedroom on that day. Husband usually slept in
that room prior to the moving of his belongings. Wife's friend testified she
visited the home about once a week after January 2000 and saw husband and wife
living separately and apart.
The parties continued to live in the same home until April 2001
when the trial court awarded the home to wife and ordered husband to leave.
There is no allegation of sexual intercourse between them after January 2000.
The commissioner in this case was asked to decide whether a
fault basis for divorce existed. He found husband committed adultery that led
to the dissolution of the marriage,3 but recrimination by wife
prevented granting the divorce on that ground. The commissioner noted “neither
party has sought a divorce on the ground of voluntary separation at the present
time,” but recommended the trial court hear testimony on separation and grant a
divorce on that ground if supported by additional evidence.
Wife testified in deposition that she stopped depositing money
into their joint account after discovering the videotape. She also stopped
going to church with husband and stopped attending his family's functions after
the discovery.
She admitted buying groceries, doing laundry, and cooking food
that husband ate. She also accepted flowers from husband, given to her in their
son's name on Mother's Day of 2000. Wife testified she intended to remain
permanently apart from husband after January 22, 2000. She did ask him to leave
the house several times, but he refused.
The trial court granted a divorce a vinculo matrimonii,
finding the parties had lived separate and apart since January 2000, a period
of more than one year. The court also found the money used to build the new
house was traced from wife's Finland account, with no contribution from
husband; therefore, the house was deemed wife's separate property. The court
found no evidence of gift.
The court also found no evidence of the value of husband's
non-monetary contributions to the construction of the new home. The trial court
concluded husband did not substantially add to the value of the home and,
therefore, he had no interest in the property.
The trial court held all the personal property was purchased by
wife with her inheritance and classified it all as wife's separate property.
The court did not address the issue of debt.
ARGUMENT
The issues on appeal all involve questions of sufficiency of
the evidence to support the final decree. As the trial court heard evidence ore
tenus, these factual findings will not be disturbed unless plainly wrong or
without evidential support. See Williams v. Williams, 14 Va. App. 217, 219,
415 S.E.2d 252, 253 (1992). We review the evidence and the inferences derived
from that evidence in the light most favorable to wife, the party prevailing
below. See id. at 220, 415 S.E.2d at 253.
1.
Separate and Apart
Husband argues the parties did not separate in January 2000,
the corroborating evidence of separation was insufficient, and the trial court
should not have granted a divorce on this ground. Examining the evidence in the
light most favorable to wife, we find the trial court's determination is
supported by the record. See id. at 219-20, 415 S.E.2d at 253.
Under Code § 20-91(A)(9)(a), a divorce may be granted “[o]n the
application of either party if and when the husband and wife have lived
separate and apart without any cohabitation and without interruption for one
year.” This statute requires “proof of an intention on the part of at least one
of the parties to discontinue permanently the marital cohabitation, followed by
physical separation for the statutory period.” Hooker v. Hooker, 215 Va.
415, 417, 211 S.E.2d 34, 36 (1975). Determination of whether and when the
parties have “lived separate and apart without cohabitation” is a fact-based
inquiry, requiring examination of all the circumstances before the court. Cf.
Rickman v. Commonwealth, 33 Va. App. 550, 557-58, 535 S.E.2d 187, 191
(2000) (discussing the factors a court should consider to determine whether two
people are cohabiting for purposes of Code § 18.2-57.2).
Husband argues the parties did not live separate and apart
until May 2000, when wife served husband with divorce papers. He argues the
parties lived as they normally did until that time. As the divorce order found
the parties had separated in January 2000, husband claims no evidence proved
the parties had lived separate and apart for a year.4
In January 2000, wife found a videotape showing husband
involved in an adulterous affair. She immediately took all of husband's
possessions out of the master bedroom and put them in a guest bedroom, where
husband usually slept. A friend of wife was in the house when the tape was
discovered. Husband does not deny that wife found the tape or that she moved
all his belongings into the guest bedroom, although he claims none of this
changed their marital relationship.5
Wife testified she took several actions to live separate and
apart from husband starting in January 2000. She stopped attending family
functions with husband and his family. She would not attend church with him.
She stopped depositing money into their joint checking account. However, she
continued to buy groceries, cook, do laundry, and clean house.6 Wife
asked husband several times to leave the house, but he refused.
A friend of wife testified she visited the house once a week
and observed the parties living in separate bedrooms. Wife told this friend
that she and husband were no longer “a couple.” Wife testified that she
intended to live separate and apart from husband as of January 2000.
This evidence is sufficient for a trial court to find the parties
were living separate and apart without cohabitation. The parties no longer
engaged in sexual intercourse. Husband openly continued a sexual relationship
with another woman. Wife stopped attending functions with husband. Continuing
to share food and keep a clean house are not behaviors that, as a matter of
law, require a finding that the parties were living together. See Chandler
v. Chandler, 132 Va. 418, 428-31, 112 S.E. 856, 860-61 (1922) (finding
desertion does not require neglect of all aspects of the marital relationship).
Wife intended to permanently discontinue the marital relationship when she
moved husband into the guest bedroom. See Hooker, 215 Va. at 416-17, 211
S.E.2d at 36. The only attempt husband made to change the situation involved
putting his personal items back into the master bedroom and throwing wife's
possessions into the guest bedroom.
Husband argues wife did not appropriately corroborate her
allegations that they separated in January 2000. We disagree. “Every element or
essential charge need not be corroborated, nor must the corroborating evidence,
standing alone, prove the grounds for divorce, but corroboration must give
sufficient strength to the complainant's testimony to be clearly worthy of
belief.” Emrich v. Emrich, 9 Va. App. 288, 296, 387 S.E.2d 274, 278
(1989).
Wife's testimony was corroborated by her friend, who was
present when wife found the videotape and moved husband's possessions into the
guest room. This friend testified she visited the house once a week and
observed the parties living separate and apart. The videotape of husband's
infidelity also corroborated wife's allegations. This evidence provided
sufficient corroboration.
2.
Separate Property
The trial court found wife had traced all the funds used to
build the home and to purchase other personal property to her inheritance,
which was kept in her personal accounts in Finland. Husband argues this money
was deposited into a joint account and the home was titled in both their names;
therefore, he claims the home became marital property. He also alleges he
contributed funds to the joint account. Additionally, he argues his personal
efforts increased the value of the home, resulting in substantial appreciation
of the property and giving him an interest in the home.7
Marital property includes “all property titled in the names of
both parties” and property acquired by either spouse during the marriage “in
the absence of satisfactory evidence that it is separate property.” Code §
20-107.3(A)(2). Separate property is:
(i) all property,
real and personal, acquired by either party before the marriage; (ii) all
property acquired during the marriage by bequest, devise, descent, survivorship
or gift from a source other than the other party; (iii) all property acquired
during the marriage in exchange for or from the proceeds of sale of separate
property, provided that such property acquired during the marriage is
maintained as separate property; and (iv) that part of any property classified
as separate pursuant to subdivision A 3.
Code § 20-107.3(A)(1).
Subdivision (A)(3) includes provisions allowing the court to find separate
property exists, even when marital and separate property are “commingled” in
some manner, “to the extent the contributed property is retraceable by a
preponderance of the evidence and was not a gift.” See, e.g.,
Code § 20-107.3(A)(3)(d), (e), (f).
The home, built during the marriage, was jointly titled and,
therefore, presumed marital property. Hence, the burden was on wife to establish
that the property could be traced to her separate inheritance. See Rexrode
v. Rexrode, 1 Va. App. 385, 392, 339 S.E.2d 544, 548 (1986). To classify
all or a portion of such property as separate and not marital, “the
circumstances of each case” must allow the court to trace the spouse's
contribution back to separate property. von Raab v. von Raab, 26 Va.
App. 239, 248, 494 S.E.2d 156, 160 (1997).
Here, the trial court found wife presented sufficient evidence
to trace the purchase of the home to her separate funds. We will not overturn
that factual finding unless plainly wrong or without evidence to support it. See
Gilman v. Gilman, 32 Va. App. 104, 115, 526 S.E.2d 763, 768 (2000) (noting
the standard of review for equitable distribution issues in a divorce case).
The parties agree wife had separate property through an
inheritance in Finland.8 The parties also agree large portions of
this inheritance were deposited into a joint account for the purpose of
building the home. Depositing separate funds into a joint account does not
preclude tracing. See Rahbaran v. Rahbaran, 26 Va. App. 195, 207-10, 494
S.E.2d 135, 140-42 (1997).
Husband, who had no job during the building of the home, claims
he deposited money into the joint account at several points. He testified he
worked for the State Department in 1992 for nine months and for a real estate
agent sometime between 1993 and 1995. He alleges these paychecks were deposited
into the joint checking account. He also claims, when he sold the flower shop
he owned prior to the marriage, he deposited the proceeds from that sale into
the joint account. He further alleges he deposited $38,000 from his trading
account into the joint checking account sometime in 1998 or 1999.
However, husband provided no documentation of those deposits.
The records introduced into evidence show no deposits into the joint account
from husband, and wife testified he made no monetary contribution to the home.
The trial court was free to find wife's testimony and documents credible and to
disregard husband's testimony. See Brown v. Brown, 30 Va. App. 532, 539,
518 S.E.2d 336, 339 (1999).
Husband also claims, even if he made no monetary contributions
to the building of the home, he worked on its construction. He argues these
efforts transmuted the separate property into marital property as his
contribution was significant and substantially increased the value of the home.
See Code § 20-107.3(A)(1), (3).
The non-owning spouse9 has the burden of proving his
or her personal efforts were significant and resulted in substantial
appreciation of separate property. Gilman, 32 Va. App. at 120, 526
S.E.2d at 771; Martin v. Martin, 27 Va. App. 745, 751, 501 S.E.2d 450,
453 (1998). “The increase in value of separate property becomes marital if the
expenditure of marital funds or a married party's personal efforts generated
the increase in value. The significant factor, however, is not the amount of
effort or funds expended, but rather the fact that value was generated or added
by the expenditure or significant personal effort.” Gilman, 32 Va. App.
at 120, 526 S.E.2d at 771.
Helping a spouse select the “best deal” generally is not
“significant personal effort.” See id. at 121, 526 S.E.2d at 771; Martin,
27 Va. App. at 754-55, 501 S.E.2d at 454-55. The record should include evidence
of the monetary value of the non-owning spouse's personal efforts as well as
evidence of a substantial increase in the value of the property resulting from
those efforts. See Rowe v. Rowe, 24 Va. App. 123, 136, 480 S.E.2d 760,
766 (1997); Hart v. Hart, 27 Va. App. 46, 66, 497 S.E.2d 496, 505 (1998)
(“It is the value that improvements add to the property, not their cost, that
is the proper consideration . . . .”).
Husband did not meet his burden of proof. He did prove he spent
a significant amount of time at the construction site and physically
contributed to the building of the home. However, the only evidence that
suggested a value for his labor was husband's testimony of a contractor's
estimate of $29,000 to build a retaining wall. As the overall value of the
house was $950,000, we agree with the trial court that this contribution was
not “significant” in the context of Code § 20-107.3(A), even if this valuation
of husband's labor was appropriate. In addition, no evidence was presented to
prove husband's efforts resulted in substantial appreciation in the property. See
id. As the trial court's opinion letter explained, “there was an almost
complete lack of proof on the value of Husband's contribution [from his work at
the site].”
In fact, the opinion letter highlighted testimony that
“Husband's work was faulty and had to be redone by others.” Based on this
evidence, the trial court could have determined that husband's efforts did not
increase the value of the home, given the testimony characterizing some of his
work as inadequate and counterproductive. See Brown, 30 Va. App. at 539,
518 S.E.2d at 339 (noting the trial court determines the weight and credibility
of witnesses).
Husband also argues his negotiations and dealings with
suppliers resulted in substantial savings during the construction of the home.
He claims his efforts reduced the price of the land for the home from $100,000
to $88,000. He also claims, by purchasing marble for the home in Syria, he
saved $375,000 in materials costs. However, the trial court was not required to
credit this testimony by husband. See id. Additionally, even if
husband's negotiations saved money, those efforts are not the type of “personal
efforts” required to transmute a portion of separate property into joint
property under Code § 20-107.3(A)(3). See Gilman, 32 Va. App. at 120-21,
526 S.E.2d at 771 (finding efforts to purchase property at a reduced price did
not constitute significant personal effort).
This analysis also
applies to the trial court's characterization of the personal property. The
court found wife proved her separate inheritance was used to purchase all of
the personal property. At this point, the burden shifted to husband to prove
his personal efforts were significant and resulted in substantial appreciation
of this separate property. He did not meet this burden.
The trial court did not evaluate each item of personal property
on the schedules submitted by the parties. For most of these items, no evidence
was introduced, except for the testimony and documents regarding tracing.
Testimony and receipts about several pieces of furniture were introduced.
Husband admitted wife paid for the furniture. However, he
contends his family connections allowed them to buy the furniture at a
discount. This evidence does not prove husband made a significant contribution
that substantially increased the value of the property. See Martin, 27
Va. App. at 754-55, 501 S.E.2d at 454-55. The value of the furniture remained
the same, only the price decreased.
A review of the record does indicate wife conceded a 1995 Izuzu
Trooper belonged to husband. The trial court did not address this concession in
determining the status of the property. On remand, husband should be awarded
this vehicle.
3.
Code § 20-107.3(E)
Code § 20-107.3(E) requires a trial court consider a list of
enumerated factors before determining “the amount of any division or transfer
of jointly owned marital property, and the amount of any monetary award, the
apportionment of marital debts, and the method of payment.” Husband argues the
trial court did not consider all these factors. However, the trial court found
no marital property existed to divide between the parties. Because all the
property in this case was separate property, the trial court did not need to
apply the provisions of Code § 20-107.3(E).10
4.
Debt
Neither the final decree nor the opinion letter mentions
husband's request that the trial court assess marital debt. We agree with
husband that the trial court should have addressed this issue.
Husband testified he actively invested in the stock market
through a personal account opened in his name at Ameritrade.11 Wife
provided $45,000 to open the initial account. At one point, the account grew to
over $400,000.
In March 2000, the stock market declined, and husband had
significant margin calls to cover. He testified he liquidated his account as
much as he could, but still had to charge approximately $45,000 to a credit
card to cover the margin debt. Husband did not present any documentation from
the investment account or the credit card company. Wife admitted husband had an
account that performed well at one point, but she did not know what happened to
the account.
The trial court did not discuss this debt or make a ruling
regarding the existence of the debt. On remand, the trial court must determine
if the debt exists and, if it does, whether it is marital or separate debt. If
it is marital debt, then the court must apply Code § 20-107.3(E) to determine
the distribution of the debt. See Holden v. Holden, 35 Va. App. 315,
325, 544 S.E.2d 884, 888 (2001) (noting that one party should not suffer a loss
because a marital asset decreases in value before division of the property
occurs); Barker, 27 Va. App. at 542-43, 500 S.E.2d at 251 (noting that
the court should examine marital debt in determining an equitable distribution
award).
Attorney's Fees
In her brief, wife asks for an award of attorney's fees and
costs associated with this appeal. Given wife substantially prevailed and
husband's arguments were largely without merit,12 we find it
appropriate to award wife attorney's fees and costs. See Marks v. Marks,
36 Va. App. 216, 218, 548 S.E.2d 919, 920 (2001). The trial court on remand
must determine the appropriate amount to award wife. In making this
determination, the trial court should consider, while husband prevailed on two
minor issues, the principal arguments he made on appeal were without merit.
Conclusion
We affirm the trial court's grant of divorce on the ground of
living separate and apart for a year. We also affirm the finding that the home
and the personal items are the separate property of wife. However, we remand
for the trial court to award the Izuzu Trooper to husband. We also remand the
issue of the credit card debt for the trial court (1) to determine whether any
credit card debt exists, (2) if such debt exists, to classify that debt as
marital or separate, and (3) to apportion any marital debt pursuant to the
Code. Finally, we remand for the trial court to determine and award reasonable
costs and attorney's fees associated with this appeal to wife, consistent with
this opinion.
Affirmed in part; remanded in part.
FOOTNOTES
1 According to his testimony, husband
had owned a flower shop, which he sold prior to the marriage for $20,000. He
claimed a substantial portion of that money was deposited into the joint
account. Husband also worked briefly during the marriage.
2 Husband did not describe the
investments he made. No evidence explained the types of stock purchases he made
using margins or the types of margins he used. No documentation of the
Ameritrade account was introduced into the record.
3 The commissioner found “the circumstances
and factors which contributed to the dissolution of the marriage” were “[t]he
continuous and substantial lack of fidelity on the part of Husband and his
crass understanding of the marital vows” and “[t]he lack of gainful employment
on the part of the Husband in the later half of the marriage.”
4 The decree was entered on May 8,
2001.
5 Husband testified that wife knew
about his infidelity and did not care. The commissioner found wife did not
condone husband's affairs, especially the last one. The parties agree they had
not had sexual intercourse for a long time, perhaps years.
6 The parties' son also lived in the
house.
7 The trial court found no evidence
the property was a gift, and husband does not argue any property was gifted to
him. See Barker v. Barker, 27 Va. App. 519, 532 n.2, 500 S.E.2d 240, 246
n.2 (1998) (noting the parties failed to raise the issue of gifting under Code
§ 20-107.3(A)(3)).
8 Appellant does not argue the Finland
account ever became marital property because the proceeds from the sale of the
first home were deposited into the separate account.
9 We use the term, “non-owning spouse”
in the context of our finding that wife has met her burden of tracing her
separate funds to the home. Therefore, the home, while jointly titled, is
considered the separate property of wife under Code § 20-107.3(A).
10 The trial court will need to apply
these factors if the court determines on remand that marital debt exists.
11 Initially, husband opened an account
at Dean Witter, but later moved it to Ameritrade.
12 Husband is entitled to one item of
personal property and correctly argued that the trial court made no ruling on
the credit card debt.
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