Norma Jean Arbuckle v Gary R. Arbuckle

COURT OF APPEALS OF VIRGINIA
Present: 	Chief Judge Fitzpatrick, Judge Benton and
Senior Judge Duff
Argued at Alexandria, Virginia
NORMA JEAN ARBUCKLE OPINION BY
v. 	Record No. 2480-97-4 	JUDGE JAMES W. BENTON, JR.
JUNE 16, 1998
GARY R. ARBUCKLE
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Thomas S. Kenny, Judge
James A. Watson II (Surovell, Jackson,
Colten & Dugan, P.C., on briefs), for
appellant.
James Ray Cottrell (Gannon, Cottrell & Ward,
P.C., on brief), for appellee.
This appeal arises from a decree granting Norma Jean
Arbuckle a monetary award as an equitable distribution of the
parties' property upon divorce. 	In a prior appeal to this Court,
we held that the trial judge erred in considering the tax
consequence of a hypothetical sale when valuing the dental
practice of Dr. Gary R. Arbuckle, the husband. 	See Arbuckle v.
Arbuckle, 22 Va. App. 362, 366, 470 S.E.2d 146, 148 (1996). 	On
this appeal, the wife contends the trial judge committed the same
error following the remand. 	We disagree and affirm the decree.
I.
A brief review of the prior proceedings will place the issue
in proper perspective. 	This matter was initially before the
trial judge in 1995 upon a bill of complaint for divorce,
equitable distribution of property, and spousal support. 	The
trial judge entered a decree granting a divorce and reserving

- 2 -
jurisdiction to enter further orders as to the parties' property.
See Code § 20-107.3(A). 	During the equitable distribution
proceeding, the trial judge was required to determine the value
of the parties' property as mandated by Code § 20-107.3(A). 	In
valuing the husband's dental practice, the trial judge found that
the practice was then worth $281,000. 	However, based upon
capital gains taxes of 33.7% that would have been imposed if the
dental practice was sold, the trial judge reduced the valuation
of the practice to a net value of $186,303. 	After determining
the value of all the property, the trial judge applied the
factors in Code § 20-107.3(E) in fixing the wife's monetary
award. 	The wife appealed from that decree.
Ruling that the trial judge erred in valuing the dental
practice when he deducted the estimated capital gains tax on the
hypothetical sale of the practice, see Arbuckle, 22 Va. App. at
366, 470 S.E.2d at 148, we reversed the decree. 	On remand, the
parties stipulated that the value of the dental practice was
$281,000. 	In view of the stipulated value of the dental
practice, the trial judge reviewed the factors contained in Code
§ 20-107.3(E) for determining a monetary award, including "[t]he
tax consequences to each party," see Code § 20-107.3(E)(9), and
made a monetary award to the wife. 	The wife appeals from that
decree.
II.
Often in our equitable distribution decisions, we have

- 3 -
discussed the procedural requirements imposed upon trial judges
by Code § 20-107.3. 	See Brinkley v. Brinkley, 5 Va. App. 132,
135-37, 361 S.E.2d 139, 140-41 (1987); see also Arbuckle, 22 Va.
App. at 365, 470 S.E.2d at 147.
There are three stages to making an equitable
distribution of property. 	The court first
must classify the property as either separate
or marital. 	The court then must assign a
value to the property based upon evidence
presented by both parties. 	Finally, the
court distributes the property to the
parties, taking into consideration the
factors presented in Code § 20-107.3(E).
Marion v. Marion, 11 Va. App. 659, 665, 401 S.E.2d 432, 436
(1991). 	The subsections of Code § 20-107.3 identify the stages
the trial judge must consider in the process.
In the prior Arbuckle appeal, the question we decided
concerned the trial judge's valuation decision under Code
§ 20-107.3(A) because "[t]he trial [judge] reduced [the]
valuation of the dental practice by the amount of capital gain
tax liability that would have accrued had the practice then been
sold." 	22 Va. App. at 364, 470 S.E.2d at 147 (emphasis added).
"Code § 20-107.3[(A)] requires a trial [judge] to value the
parties' separate and marital property before making a monetary
award." 	Bosserman v. Bosserman, 9 Va. App. 1, 5, 384 S.E.2d 104,
107 (1989). 	Thus, when the parties in an equitable distribution
proceeding request the trial judge to decree as to their
property, the trial judge must "determine the value of any such
property as of the date of the evidentiary hearing on the

- 4 -
evaluation issue." 	Code § 20-107.3(A) (emphasis added). 	We held
that "[t]he trial [judge] erred in considering the tax
consequences of a hypothetical sale when valuing the dental
practice." 	Arbuckle, 22 Va. App. at 366, 470 S.E.2d at 148
(emphasis added). 	We reasoned that "the tax consequences of a
hypothetical sale were too speculative to be considered by the
trial [judge] in determining the present value of Dr. Arbuckle's
dental practice." 	Id. (emphasis added).
The Arbuckle holding is consistent with the well established
principle that "[t]he trial judge's valuation cannot be based on
'mere guesswork.'" 	Bosserman, 9 Va. App. at 5, 384 S.E.2d at
107. 	See also Hodges v. Hodges, 2 Va. App. 508, 516, 347 S.E.2d
134, 139 (1986). 	After the valuation process is completed, the
statutory scheme recognizes, however, that a degree of
imprecision will be inevitable in applying the factors of Code
§ 20-107.3(E). 	Thus, under Code § 20-107.3(E), "[t]he 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 shall be determined by the court
after consideration of [ten specified] factors[.]" 	Those factors
specifically include "[t]he tax consequences to each party."
Code § 20-107.3(E)(9).
In Arbuckle, we noted that "[w]e perceive[d] no disagreement
between the holding in Barnes [v. Barnes, 16 Va. App. 98, 428
S.E.2d 294 (1993),] and our decision . . . [because] Code

- 5 -
§ 20-107.3(E)(9) directs consideration of the tax consequences to
each party in the fashioning of an equitable distribution scheme
and award." 	Arbuckle, 22 Va. App. at 366, 470 S.E.2d at 148.
Simply put, Barnes did not address valuation of property pursuant
to Code § 20-107.3(A); it involved the review of a trial judge's
decision that applied the factors of Code § 20-107.3(E) in making
a monetary award.
On remand from Arbuckle, the trial judge accepted the
stipulated value of the dental practice and reconsidered the
award based upon the factors specified in Code § 20-107.3(E).
The judge's consideration included "[t]he tax consequences to
each party" as proved by evidence in the record. 	Code
§ 20-107.3(E)(9). 	In accordance with our usual standard of
review, "unless it appears from the record that the trial judge
has abused his discretion, that he has not considered or has
misapplied one of the statutory mandates, or that the evidence
fails to support the findings of fact underlying his resolution
of the conflict in the equities, the equitable distribution award
will not be reversed on appeal." 	Blank v. Blank, 10 Va. App. 1,
9, 389 S.E.2d 723, 727 (1990). 	The record establishes no
reversible error. 	Accordingly, we affirm the decree.
Affirmed.