CL09000345.Court of Appeals of Virginia.
July 5, 2011
Burton L. Albert, Esq., Roanoke, Virginia.
Eric Roland Spencer, Esq., Roanoke, Virginia.
ROBERT P. DOHERTY, Jr.
Dear Counsel:
Husband filed suit for divorce claiming constructive desertion. Wife filed a cross complaint alleging actual desertion. The parties were married October 30, 2002 in Detroit, Michigan. They have one child. Husband attended school at the University of Michigan beginning in 2004 and graduated in 2007 with a degree in electrical engineering. In order to finance his education Husband took out a student loan solely in his name. Its current balance is $50,289.73. A portion of that loan was used by the parties to pay living expenses. Husband recently began employment with a major corporation. His annual earnings are in the $60,000.00 range. He anticipates that his income will increase throughout his career.
Wife worked part time while she and Husband lived in Detroit and Husband was attending college, but has not worked outside the home since the couple’s child was born in 2005. She has earned some money babysitting and selling items on E-bay since the parties’ separation. She does not have a college education. Wife has been attending community college since 2009 with the goal of being trained as an LPN. She has no other income producing skills. She has only completed four classes towards her LPN certification. Husband claims that Wife earns no income and has not taken a reasonable amount of training at the community college because she is lazy and does not want to work. Wife presented evidence that she is battling health problems, including anemia, which affects her ability to work and attend classes. She also points out that a great deal
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of her time as a single mother is spent caring for their child. The Court finds Wife to be voluntarily unemployed and able to work full time at minimum wage.
At the last hearing in this matter the Court granted the parties a “no fault” divorce based upon Husband and Wife living separate and apart for a period of twelve months, they having proven all of the necessary criteria. Neither party proved a fault ground for divorce. Custody was agreed, allowing the parties to share joint legal custody of their son with physical custody being granted to Wife. There was some disagreement concerning visitation but the Court resolved the major problem by giving Husband two full weeks visitation with his son during the summer months. The remainder of the visitation was agreed based on the parties’ prior practices. The details of the visitations and telephone privileges will be spelled out in the final divorce decree. Child support is set in accordance with the agreed § 20-108.2, Code of Virginia (1950), as amended, child support guideline work sheet filed in this case. Minimum wage is attributed to Wife. Husband earns $61,680.00 per year. Husband will provide health insurance for their son as part of his child support obligation and he will also pay Wife $957.00 per month as child support by payroll deduction. Wife’s share of that child support obligation is $235.00 per month plus her payments on the child’s medical costs. Wife will pay the first $250.00 annual cost of the child’s medical expenses that is not paid by health insurance, and the balance of those bills will be paid, 80% by Husband and 20% by Wife. This child support determination commences with the date of this letter opinion. Counsel can make the necessary pro rata adjustments.
The parties resolved all of the other issues in this case by agreement, except for the classification and manner of repayment of Husband’s student loan, and the question of spousal support and attorney fees. Husband argues that his student loan was obtained to provide for the family as well as pay his tuition while he was in school, and as such, should be treated as a marital debt and divided equally between the parties. He further argues that Wife is voluntarily under-employed and should not receive spousal support because she refuses to work. Wife argues that since Husband took out the student loan and she did not co-sign the promissory note, the debt should be the Husbands personal debt and not a marital debt. She also asks the Court for spousal support for a defined duration and attorney fees.
STUDENT LOAN
Husband argues that although his student loan debt is solely in his name, the loan was obtained during marriage, and a portion of the loan proceeds was used by Husband and Wife for living expenses. Wife argues that Husband was the primary beneficiary of the loan and because the debt is solely in Husband’s name it is not marital debt. Wife cites Gilliam v. McGrady, 279 Va. 703 (2010) for that proposition. The Gilliam court concluded that:
“. . .[N]o presumption exists with respect to the classification of debts incurred by spouses during marriage, individually or jointly. Instead, traditional rules concerning the
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allocation of the burden of proof apply. . . .[P]roof that a debt was incurred by a single spouse makes a prima facie showing that the debt is separate, shifting to the party contending otherwise the burden of persuading the court that it was marital.” Id at 710.
Although testimony was presented in the instant case that a portion of the student loan was used directly for family living expenses, no evidence was presented as to what portion of the loan was spent for those expenses. Husband contends that the entire loan was for marital purposes because part was used directly for living expenses and part to enable him to increase his earnings for the benefit of his family. He concludes, therefore, that it is a marital debt. Wife denies that. The Court cannot guess or speculate as to the facts of a case or the actual division or expenditure of loan proceeds. The student loan debt solely in Husband’s name was obviously used, at least in part, for the direct support of the family, and it did increase Husband’s earnings. Considering the limited evidence before the Court, the factors set forth in § 20-107.3(E), Code of Virginia (1950), as amended, especially those factors dealing with the length of this marriage, the health of the parties, the actual grounds for divorce, Husband’s stated but unproven reason for leaving the family, the disparity in education, the original purpose of the loan, the lifetime benefits to be received from that debt by Husband, the present and future earning potential of Husband and Wife and the disparity therein, the Court finds that Husband’s student loan has been proven to be marital property. For the reasons set forth herein, the Court finds that the debt should be paid in full by Husband, the same as if it were his separate debt. No portion of it will be assigned to the Wife, and neither party will be required to pay an equitable distribution award to the other.
After the presentation of evidence and written memoranda in this case, but prior to the drafting of this letter opinion, the legislature changed § 20-107.3 (A) (45) with regard to the classification and presumptions concerning marital and separate debts. After considering the arguments of counsel concerning the amended legislation, the Court finds the outcome of the classification and payment of the student loan debt results in the same finding under the facts of this case as it did prior to the legislative changes. The relevant language of that statute is as follows:
“Marital debt is . . .(ii) all debt incurred in either party’s name after the date of the marriage and before the date of the last separation of the parties, if at such time or thereafter at least one of the parties intends that the separation be permanent.”
Applying all of the factors contained in § 20-107.3 (E), and especially considering those referred to in this letter opinion, along with the new statutory presumptions, the Court finds that the student loan debt is a marital debt. For the reasons set forth above, it should be paid in full by Husband the same as if it were his separate debt, with no portion being paid by Wife.
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SPOUSAL SUPPORT
This was not a lengthy marriage, the parties having separated just short of seven years from its commencement. A no-fault divorce was granted and no statutory prohibition exists to prevent an award of spousal support to Wife. Neither party proved a fault ground for divorce. In making its determination as to whether to award spousal support the Court considered the equities as they exist between the parties and has examined all of the factors contained in § 20-107.1 (E), many of which are set forth herein, including but not limited to the health of the parties, the earning capacity, skills, education and training of the parties, and their standard of living. The Court also considered the decision of the parties during the marriage that Husband would receive a college education to better support the family, and Wife would limit or forego an advanced education so that she could be a stay-at-home wife and mother, providing the necessary home environment for their family. Finally, the Court finds that Wife has a need for support and that Husband has the present ability to pay reasonable spousal support. See Lapidus v. Lapidus, 226 Va. 575, 580 (1984). In accordance with Wife’s request, the Court awards her spousal support from Husband for a period of three years from the date of this letter opinion, in the amount of $525.00 per month. The spousal support payments will be made by payroll deduction. Husband shall pay $4,000.00 of Wife’s attorney fees, directly to Wife’s attorney, within 120 days of the entry of the final divorce decree.
Counsel for Wife should prepare an appropriate final divorce decree, incorporating this letter opinion by reference, and present it for entry after first obtaining endorsement of counsel.
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