Northcutt v. Northcutt

COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Fitzpatrick, Judges Bumgardner and Felton

Argued at Salem, Virginia

CAROL LYNN NORTHCUTT

OPINION BY

v. Record No. 3325-01-3 CHIEF JUDGE JOHANNA L. FITZPATRICK

NOVEMBER 19, 2002

JACKEY RAY NORTHCUTT

FROM THE CIRCUIT COURT OF TAZEWELL COUNTY

Charles H. Smith, Jr., Judge Designate 1

Dennis E. Jones (Dennis E. Jones &

Associates, P.C., on brief), for appellant.

Felicia H. de Courcy (James R. Henderson, IV;

Henderson and de Courcy, on brief), for

appellee.

Carol Lynn Northcutt ("wife") contends that the trial court

erred by failing to (1) award her permanent spousal support; (2)

order recoupment of marital assets Jackey Ray Northcutt

("husband") used for his sole benefit; and (3) abused its

discretion in awarding husband attorney's fees. Finding no error,

we affirm.

The parties were married on January 29, 1966 and separated on

March 27, 1998. Two children were born during the marriage, both

of whom were emancipated at the time wife filed her bill of

complaint for divorce. Wife sought permanent spousal support and

1

The trial judge was Judge Donald R. Mullins; however,

Judge Charles H. Smith entered the final decree.

equitable distribution of the marital property. Husband filed a

cross-bill of complaint for divorce, also seeking equitable

distribution of the marital property. The trial court entered a

final decree of divorce on July 30, 1999 and reserved ruling on

support and equitable distribution. By final order entered

November 5, 2001 the trial court denied both parties spousal

support, required an equal distribution of marital property and

obligations, and awarded husband $1,500 in attorney's fees. Wife

appealed.

On appeal, we construe the evidence in the light most

favorable to husband, the prevailing party below, granting to

his evidence all reasonable inferences fairly deducible

therefrom. Donnell v. Donnell, 20 Va. App. 37, 39, 455 S.E.2d

256, 257 (1995) (citing McGuire v. McGuire, 10 Va. App. 248,

250, 391 S.E.2d 344, 346 (1990)).

I. SPOUSAL SUPPORT

"Whether and how much spousal support will be awarded is a

matter of discretion for the trial court." Barker v. Barker, 27

Va. App. 519, 527, 500 S.E.2d 240, 244 (1998). "'In fixing the

amount of the spousal support award, . . . the court's ruling

will not be disturbed on appeal unless there has been a clear

abuse of discretion. We will reverse the trial court only when

its decision is plainly wrong or without evidence to support

it.'" Moreno v. Moreno, 24 Va. App. 190, 194-95, 480 S.E.2d

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792, 794 (1997) (quoting Gamble v. Gamble, 14 Va. App. 558, 574,

421 S.E.2d 635, 644 (1992)).

The trial court denied both parties spousal support "[i]n

light of the equal division of marital property and of the

equivalent assets and the earning capability of each party

. . . ." Wife argues that the trial court abused its discretion

in failing to consider all the statutory factors. Specifically,

wife maintains that her earning capacity was limited by her

failing physical and mental health while husband had unlimited

earning capacity. The record does not support such a

conclusion. At the evidentiary hearing, both parties put on

evidence encompassing the statutory factors to be considered by

the trial court. In its final decree, the trial court

specifically noted that it had considered the requisite

statutory factors.

Wife and her doctor testified that she had a thyroid

condition that required medication. However, as long as she

took the medication, there were no deleterious health

consequences. Wife was also taking Prozac for depression.

Neither wife nor her doctor testified that these conditions

prevented her from working. Viewing this evidence in the light

most favorable to husband, there was no evidence that wife's

earning capacity was significantly different from husband's.

The evidence also proved that from 1985 to 1995 wife was

employed in a clerical position. Wife voluntarily left her

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employment in October 1995 because she "couldn't deal with the

pressure that job caused" her. Wife declined subsequent job

offers because she wanted to spend time at the parties' vacation

home in Florida and did not want the pressure of a full-time

job. At the time of the hearing, wife was not employed and had

not worked since December 2000.

Husband was 55 years old and earned $250 per week working

as the manager of a convenience store. Husband also received

$400 per month in rent. Husband had managed the family trailer

park business since 1989, and his income during these years was

approximately $10,000 per annum. The family business was sold

as part of the divorce, and the net proceeds from the sale were

divided equally between husband and wife. The parties had

significant debt throughout the marriage.

The trial court concluded that wife's earning capacity was

equal to that of husband's. Credible evidence in the record

supports this finding, and the trial court did not abuse its

discretion in failing to award wife spousal support. 2

II. EQUITABLE DISTRIBUTION: WASTE

Next, wife argues that the trial court erred in failing to

allow her to recoup marital assets she alleges husband used for

his sole benefit. Again, the record does not support wife's

position.

2

Neither party requested a reservation of spousal support;

thus, that issue is not before us.

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Waste of marital assets is a matter for equitable

distribution.

[I]n order to alter the evaluation for an

equitable distribution award under Code

§ 20-107.3(E)(5), there must be a showing of

use of the marital property for the benefit

of one spouse and for purposes unrelated to

the marriage in anticipation of divorce or

separation and at a time when the marriage

is in jeopardy.

O'Loughlin v. O'Loughlin, 20 Va. App. 522, 526, 458 S.E.2d 323,

325 (1995) (emphasis added) (citing Booth v. Booth, 7 Va. App.

22, 27, 371 S.E.2d 569, 572 (1988)). "A decision regarding

equitable distribution rests within the sound discretion of the

trial court and will not be disturbed unless it is plainly wrong

or without evidence to support it." Holden v. Holden, 31

Va. App. 24, 26-27, 520 S.E.2d 842, 844 (1999) (citing McDavid

v. McDavid, 19 Va. App. 406, 407-08, 451 S.E.2d 713, 715

(1994)).

At issue are the proceeds from a business loan of

approximately $60,000 and the sale of unimproved property in

Florida. 3 Wife contends that the trial court's order that

required an equal division of the liabilities caused a

diminution in her share of the marital assets because she did

not realize any benefit from the business loan. Additionally,

3

Husband conceded that the Florida property was marital

property.

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she argues she should have been allocated one-half of the

proceeds from the sale of the Florida property.

The trial court heard extensive evidence regarding the

business, business loans and tax liabilities. Husband

originally sought the trial court's permission to sell the

family business in July 1999 because it was losing money. At

the time of separation, there was a loan of approximately

$30,000, as well as other liabilities. Husband testified that

he borrowed an additional $30,000 and rolled the existing loan

into the new loan. Thus, there was $30,000 in new debt.

Husband used the loan proceeds to pay regular business operating

expenses. Additionally, husband provided the trial court with

an accounting of the business expenses. The record supports

husband's contention that he attempted to preserve the marital

estate.

In contrast, the evidence showed that wife's actions

exacerbated the parties' financial problems. Wife delayed the

sale of the family business for more than nine months, and it

took a court order to finally effectuate the sale. 4 In the

interim, interest on the business debts continued to accrue.

4

Husband requested court approval for the sale of the

business in July 1999 and had identified a buyer willing to pay

$600,000 for the business. Wife, however, insisted that the

business should be sold at auction. The court ordered a sale by

auction as she requested. However, wife never completed the

procedures necessary for this type of sale. Instead, she

eventually agreed to the private sale in February 2000 but did

not complete the necessary paperwork until April 2000.

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Similarly, wife refused to return a leased vehicle timely,

thereby causing husband to incur penalties. Wife also conceded

that she had contributed nothing to running the family business

post-separation and that husband did all the work. Finally,

wife admitted that she did not make all the marital property

available for auction, notwithstanding a court order requiring

her to do so. Husband valued the wrongfully retained property

at $5,895.

Wife also complains that there was no accounting of the

proceeds of the sale of the Florida property. Husband prepared

and submitted an accounting to the trial court and to wife.

Wife argues that husband's expenditures from the proceeds of the

sale were for his sole benefit, including payments of temporary

spousal support, and that she is therefore entitled to a credit.

The trial court examined the evidence presented, including

the testimony of two accountants, and declined to make a finding

of waste. "We have held that the use of funds for living

expenses, medical bills and other necessities of life while the

parties are separated does not constitute dissipation." Alphin

v. Alphin, 15 Va. App. 395, 403, 424 S.E.2d 572, 576 (1992).

Here, the evidence showed that husband used the funds to pay

spousal support, the lease on wife's car, medical insurance for

the parties, personal property taxes on marital property and the

daughter's college tuition. Credible evidence supports the

trial court's finding that husband did not commit waste.

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III. ATTORNEY'S FEE AWARD

"An award of attorney's fees is a matter submitted to the

sound discretion of the trial court and is reviewable on appeal

only for an abuse of discretion." Graves v. Graves, 4 Va. App.

326, 333, 357 S.E.2d 554, 558 (1987). "The key to a proper

award of counsel fees is reasonableness under all the

circumstances." Joynes v. Payne, 36 Va. App. 401, 429, 551

S.E.2d 10, 24 (2001) (citing McGinnis v. McGinnis, 1 Va. App.

272, 277, 338 S.E.2d 159, 162 (1985)). Wife contends that the

trial court abused its discretion in awarding husband $1,500 in

attorney's fees because wife caused "unnecessary litigation."

The parties were before the trial court on July 30, 1999

for a full hearing on the merits. At that hearing, wife

requested additional time to prepare appraisals of the family

business and present them to the court. The trial court awarded

the divorce and rescheduled the support and equitable

distribution hearing for August 24, 1999 to allow wife time for

her appraisals. When the parties reconvened on August 24, 1999,

wife insisted that the business be auctioned rather than sold at

private sale because she felt an auction would secure a higher

sales price. Although it required wife to assume the risk of

any price below $600,000, the trial court allowed wife to

proceed as she requested and ordered sale by auction no later

than October 1999. Wife did not complete the auction

procedures.

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Husband then scheduled a final hearing for January 5, 2000.

At wife's request, this hearing was rescheduled to February 23,

2000. Finally, on February 23, 2000 wife agreed to the private

sale for a purchase price of $600,000. The trial court approved

the sale and ordered that the parties "execute promptly all such

documentation such that this sale may be completed as soon as

possible." Nevertheless, wife did not execute the deed until

compelled to do so at a subsequent court appearance on April 11,

2000.

There were similar delays in proceeding to final

distribution because wife did not promptly pursue discovery.

The trial court granted several continuances at wife's request,

and she still failed to produce an accounting. As the trial

court stated at the end of the equitable distribution and

support hearing, "I'm fed up with this case and the delays that

have been occasioned so unnecessarily, and some of the delays

. . . have created a decrease in [the] value of the property of

the marriage. This has been horrible." Under these

circumstances, the award of a part of husband's attorney's fees

was reasonable. Thus, the trial court did not abuse its

discretion in awarding husband attorney's fees.

IV. AWARD OF ATTORNEY'S FEES FOR APPEAL

Husband requested costs and an additional sum of attorney's

fees for matters relating to this appeal. Upon consideration of

the entire record in this case, we hold that husband is entitled

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to a reasonable amount of attorney's fees incurred in this

appeal. Accordingly, we remand for an award of attorney's fees

incurred in this appeal, which should also include any

additional attorney's fees and costs incurred at the remand

hearing.

Affirmed and remanded.

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