Coleman v. Coleman

1

NICOLE E. COLEMAN v. WILLIAM T. COLEMAN

No. 1146-23-2

Court of Appeals of Virginia

December 3, 2024

FROM THE CIRCUIT COURT OF HANOVER COUNTY Patricia Kelly, Judge

(Nicole E. Coleman, on brief), pro se.

No brief for appellee.

Present: Judges Causey, Friedman and Senior Judge Clements

MEMORANDUM OPINION ^[*]

PER CURIAM

Nicole E. Coleman (wife), pro se, appeals the circuit court's final decree awarding her a divorce from William T. Coleman (husband), equitably distributing their marital assets, and awarding her child support. Wife asserts that the circuit court erred by finding that: the parties agreed on the value of their marital home; husband had separate equity in the home; and a certain home equity line of credit constituted marital debt. She further contends that the circuit court erred in calculating the parties' gross incomes for 2019, 2020, and 2021 to determine child support.^[1]Considering the record and wife's brief, we affirm the circuit court's equitable distribution of the parties' marital estate and its child support award for 2019.^[2] But we reverse the circuit court's award of child support for 2020 and 2021 and remand the case for further proceedings.

BACKGROUND

"When reviewing a trial court's decision on appeal, we view the evidence in the light most favorable to the prevailing party granting [that party] the benefit of any reasonable inferences." Shah v. Shah, 70 Va.App. 588, 591 (2019) (quoting Congdon v. Congdon, 40 Va.App. 255, 258 (2003)).

The parties filed for divorce in 2019 after being married for approximately 13 years. Although each initially asserted fault grounds for the divorce, they ultimately moved for a divorce on the alternative ground that they had lived separate and apart for more than one year. Code § 20-91(A)(9)(a). The parties agreed that wife would have sole legal and physical custody of their child, each would retain their separate bank accounts, and each would be solely responsible for their individual debts. The case then proceeded to trial for child support and equitable distribution of the parties' remaining marital estate, including their home and a home equity line of credit.

I. Marital home and home equity line of credit

In 2004, while the parties were engaged, husband purchased what became the parties' marital home. Husband made a $ 19,700 down payment on the purchase of the home with a check issued from his personal bank account. In 2007, after the parties had married, husband refinanced the home and acquired a $40,000 home equity line of credit from Wells Fargo (the original HELOC), which he used to repay one of two mortgages on the home.

In 2016, husband added wife to the title of the home. The parties then jointly procured a second home equity line of credit from BB&T (the second HELOC). The parties used $39,894.92 from the second HELOC to settle the original HELOC and $21,916.89 to pay off two of husband's personal credit cards that had been used for improvements to the home's outdoor living space. According to husband, the second HELOC was used for "debt consolidation and home improvements."

On October 1, 2020, real estate appraiser Alexander Uminski estimated that the home's market value was $400,000. The week before trial, the parties filed proposed distribution schedules, each stating that the value of the home was $439,500, which was the 2022 tax assessed value of the home. Although the parties scheduled their case for a one-day trial on March 4, 2022, they were unable to present all their evidence in a single day, so the circuit court continued the trial to May 18, 2022.

On May 8, 2022, Uminski updated his appraisal, opining that the market value of the marital home was $550,000. When trial resumed, wife called Uminski to testify regarding his updated appraisal. Husband objected to Uminski's testimony arguing that the parties had agreed on the value of the home, as evidenced by their proposed distribution schedules. Wife responded that she had used the $439,500 value as a "placeholder" but had not agreed on the value of the home, which had increased due to "rising interest rates." The circuit court took husband's objection under advisement and admitted Uminski's updated appraisal.

II. Child support

The parties stipulated that husband owed wife $7,122 for child support from July 2019 to December 2019.^[3] In support of their stipulation, the parties submitted a child support guideline worksheet stating that husband's 2019 gross income was $7,345 per month, or $88,140 annually. Notwithstanding their stipulation, husband introduced bank statements showing that $59,851.34 had been deposited into his personal bank account during 2019, which he testified represented "all of the funds that [he] received" from his landscaping business that year.

Wife introduced expert testimony from Desiree Lee, a certified public accountant who reviewed husband's personal and business bank account statements, credit card statements, and tax returns to determine his income in 2020 and 2021. Lee testified that husband's business had a gross revenue of $263,948.84 in 2020. According to her, husband used $171,282.04 to pay for business expenses, such as contractor payments, cost of goods, insurance, and utilities. In addition, husband paid some personal expenses "out of the business," including mortgage payments, life insurance policy premiums, hotel room rentals, home utility payments, and food purchases. After deducting the business expenses from the gross revenue, Lee opined that husband's business had a net income of $92,666.80 in 2020, which constituted husband's income for that year.

Using the same methodology, Lee opined that husband's business had a gross revenue of $311,860.08 and a net income of $102,957.70 in 2021. She conceded, however, that she had not reviewed husband's 2021 credit card statements. Lee testified that husband paid $33,853.35 from his business bank account to his credit card accounts during 2021 and assumed approximately half of that amount had been used to pay for personal expenses.

During cross-examination, Lee admitted that she had not spoken to husband about his business expenses and that she classified some of the expenses based on information she received from wife. Lee also acknowledged that it is customary for employers to "[s]ometimes" buy their employees lunch but maintained that husband purchased food with his credit cards "[m]ultiple times a day" and did not claim all the meals as business expenses on his 2020 tax return. Lee testified that she did not know if husband "cheated himself by not reporting" all his meal expenses on his tax return.

Husband presented expert testimony from John Murray, the certified public accountant who prepared his 2020 individual and business tax returns. Husband's 2020 business tax return reflected that it had a gross income of $261,102 and a gross profit of $92,726. After deducting various expenses from the business's gross profit, Murray determined that the business had a net income of $30,977 in 2020.

Husband also introduced copies of bank statements showing that $54,971.69 had been deposited into his personal bank account during 2020. Reviewing the bank statements for the first time, Murray opined that "if these deposits originated from [husband's business], [he] would have [an] income of $54,971" in 2020. Husband then introduced copies of bank statements showing that $79,833.88 had been deposited into his personal bank account during 2021. Murray testified that he could not determine husband's income from his 2021 personal bank statements nor render an opinion about the accuracy of Lee's calculation of husband's income for that year.

III. The circuit court's final decree

After considering the evidence and arguments, the circuit court awarded wife a divorce from husband on no-fault grounds. In doing so, the circuit court found that "neither party presented sufficient evidence to establish cruelty, reasonable apprehension of bodily harm, desertion, or adultery."

Before equitably distributing the parties' marital estate, the circuit court expressly addressed each factor enumerated in Code § 20-107.3(E). After addressing each factor, the circuit court found that the marital home constituted hybrid property. It concluded that the equity traceable to husband's down payment constituted his separate property and the remainder of the equity was marital property to be divided equally between the parties. The circuit court further found that the parties had stipulated that the value of the marital home was $439,500, consistent with their pre-trial distribution schedules.^[4] Finally, the circuit court found that the second HELOC constituted marital debt to be shared equally by the parties because "there was no time frame established as to when" husband acquired the original HELOC and the second HELOC paid off credit cards "used to pay for the improvements to the outdoor space at the marital home."

Addressing child support, the circuit court accepted the parties' stipulation that husband owed wife $7,122 for 2019. The circuit court found that the parties' incomes "fluctuate[d]" because each was self-employed so it was necessary to average each party's income from 2019, 2020, and 2021 to calculate husband's remaining child support obligation. In doing so, the circuit court found that both parties "use[d] their business accounts for personal expenses" and therefore "calculated the parties' gross income from their bank statements." The circuit court thus found wife's average income was $119,339.07 and husband's average income was $64,692.37. The circuit court did not make any findings of the parties' pre-averaged incomes for 2019, 2020, and 2021.

After considering health...