Carr v. Carr

1

THOMAS A. CARR v. MARIBETH C. CARR

No. 0607-22-2

Court of Appeals of Virginia

April 11, 2023

FROM THE CIRCUIT COURT OF HENRICO COUNTY RONDELLE D. HERMAN, JUDGE

Susan C. Armstrong (Armstrong Law Firm, pllc, on briefs), for appellant.

Richard L. Locke (Shannon S. Otto; Locke & Otto, on brief), for appellee.

Present: Chief Judge Decker, Judges Huff and Callins Argued by videoconference

MEMORANDUM OPINION ^[*]

GLEN A. HUFF, JUDGE

The Henrico County Circuit Court (the "trial court") awarded Maribeth C. Carr ("wife") a divorce from Thomas A. Carr ("husband"). On appeal, husband contends the trial court erred in awarding wife spousal support because she failed to prove her need for spousal support. Husband also asserts the trial court failed to sufficiently articulate its consideration of the factors set forth under Code § 20-107.1(E) in support of its award of spousal support. Finally, husband claims the trial court erred by not awarding him a divorce from wife on the basis that she deserted their marriage. For the following reasons this Court affirms the trial court's judgments.

BACKGROUND^[1]

"When reviewing a trial court's decision on appeal, [this Court] view[s] the evidence in the light most favorable to the prevailing party,"-here, wife-"granting [her] the benefit of any reasonable inferences." Nielsen v. Nielsen, 73 Va.App. 370, 377 (2021) (quoting Congdon v. Congdon, 40 Va.App. 255, 258 (2003)).

The parties married on June 24, 1989, and have three adult children. For most of the marriage, wife stayed at home to care for the children while husband worked. Beginning in 2010, wife began to work full-time as a real estate agent. In 2015, wife told husband that she felt unhappy with their marriage, and the parties participated in marriage counseling sessions. In March 2016, the parties executed a "Collaborative Participation Agreement" to use the collaborative process to dissolve their marriage without litigation. They paused the collaborative process shortly thereafter when wife was diagnosed with a medical illness requiring extensive treatment.

In January 2017, wife moved out of the marital residence. In December 2017, she asked husband to reconcile, and the parties attempted to reconcile until December 2019. Notwithstanding their attempts at reconciliation, the parties continued to live separately. At the end of 2019, they resumed the process to dissolve their marriage and engaged in that collaborative process until the end of 2020. The parties ended the collaborative process after failing to resolve all their issues.

On January 13, 2021, wife filed a complaint for divorce and requested the trial court grant her a divorce on the grounds that the parties had lived separate and apart for more than one year. She also asked the court to equitably distribute the parties' assets, award her pendente lite and permanent spousal support, and grant her attorney fees and costs. Husband filed a counterclaim requesting a divorce on the grounds of desertion, "or, in the alternative, on the ground of the parties' one-year separation." He also sought an award of equitable distribution and his attorney fees and costs. After a pendente lite hearing, the trial court ordered husband to pay wife $8,500 per month in spousal support during the pendency of the litigation

On October 25, 2021, the trial court entered an order incorporating the parties' equitable distribution agreement. In addition to other provisions in the agreement, husband agreed to pay wife $1,110,124, plus a portion of the distributions he would receive from the sale of his interest in the company "SYCOM" to his new employer, InterVision.

On November 17, 2021, the case proceeded to trial with respect to the issues of spousal support, the grounds for divorce, and life insurance.^[2] Wife testified that the parties had "built a really nice life," which included a country club membership, a vacation home, private schools for their children, multiple vacations per year, and foreign travel. As to her income as a real estate agent, wife testified that she earned $70,485.75 in 2021, "about half" of what she earned in 2020. Wife also submitted, without objection, an income and expense statement showing that her monthly expenses totaled $21,379. She testified that the expenses listed therein were "at or below the standard of living that [she] had during the marriage."

Wife acknowledged that her 2021 income did not account for income she would receive from investing her share of the equitable distribution settlement. She also testified that she made a $250,000 down payment on a new condominium home using money she borrowed from her father and that she repaid her father using the equitable distribution settlement. During cross-examination, however, wife admitted that her father had gifted her the $250,000 to purchase the home. At the time of trial, wife had $977,563 in her bank account and $160,000 in a separate investment account.^[3]

Husband introduced testimony from an expert financial planner who opined as to the additional annual income wife could receive if she invested her assets. The expert assumed that wife would receive an inheritance in the future, that wife's annual income was $150,000, and that wife was willing to make "substantially risky investment[s]." The expert concluded that, if wife invested between $1,100,000 and $1,300,000 in a portfolio consisting of "[a]bout 60 percent in stocks and 40 percent in bonds," she could expect a seven percent return on her investment resulting in additional annual income between $66,000 and "just over" $90,000.

During cross-examination, husband's expert financial planner admitted that if wife did not receive an inheritance in the future, she could expect only a five percent return on her investments, two percent of which would be "income." The remaining three percent of her return would be comprised of asset appreciation and require her to liquidate part of her original investment. The expert further admitted that he did not know wife's risk tolerance for investing and that, if she was risk adverse, her rate of return would be lower. The expert conceded that, if wife was "very risk adverse," he had "no ability to assume what the rate of return would be." Neither party offered any other evidence or testimony regarding wife's risk tolerance.

As to his income, husband testified that he had a base salary of $306,000 with a potential for a $120,000 bonus. He admitted that he had approximately one million dollars in cash at the time of trial and that he "should be able to get the same return" on his investments as wife. Husband also acknowledged that he and wife were "entitled to live at the same standard of living" as they did during their marriage, which he estimated at costing $22,796 per month, including retirement savings.

At the conclusion of trial, the court directed the parties to file written closing arguments. Wife requested she be awarded $10,000 per month in permanent spousal support. In opposition, husband argued that wife had deserted the marriage and that she failed to prove her need for spousal support given her "acquired wealth and her demonstrated ability to support herself." Husband further argued that wife's income and expense statement was "a sham."

Following the parties' submission of their written closing arguments, the trial court issued a thirteen-page letter opinion addressing all unresolved matters between the parties. As to the grounds for divorce, the trial court found that husband failed to prove wife deserted the marriage, noting the parties' "unsuccessful efforts to amicably divorce." The court granted wife a "no-fault" divorce based on the parties' one-year separation.

The trial court then devoted the vast majority of its letter opinion to addressing each of the statutory factors-listed in Code § 20-107.1(E)-for awarding spousal support. The court found that, at the time of the hearing, wife was earning approximately $70,485 per year but had a five-year average income of $105,408. It further found that wife could invest the funds she received from the equitable distribution settlement, which could yield "$20,000 to $90,000 in additional earnings per year depending on the amount invested and risk tolerance." The trial court noted, however, that it "cannot demand the liquidation of her assets causing a reduction in the current value of her portfolio" and that "[w]ife could invest in a way that did not reduce the current value such that she would receive about $20,000." Because it found that wife's expenses were "inflated," the court stated that it would not consider "all or part of" certain monthly expenses totaling $8,710.^[4]

Ultimately, the trial court concluded that both parties were "millionaires due to the equitable distribution and have the means to support themselves"; as a result, "[t]he main issue for contemplation is whether the [w]ife is entitled to an award of spousal support to afford her the same standard of living she enjoyed during the marriage." The court described that standard as an "affluent lifestyle." After considering all the factors under Code § 20-107.1(E), including husband's ability to pay, the trial court awarded wife $10,000 per month in spousal support.

Husband filed a motion for reconsideration, arguing that the trial court incorrectly stated the total amount of wife's expenses, incorrectly determined wife's income-including potential investment income-and failed to provide "any concrete analysis that would indicate how the [c]ourt could have arrived at the spousal support amount it awarded." The trial court denied husband's motion, and this appeal followed.

ANALYSIS

A. Spousal Support

Husband contends the trial court erred in...