The Official Publicationof The Virginia Bar Association

Volume XXIX, Number 7October/November 2003

VBA

News J

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News JournalTHE VIRGINIA BAR ASSOCIATIONVOLUME XXIX, ISSUE 7 • OCTOBER/NOVEMBER 20034 • President’s Page:

Unique Opportunities, Special ObligationsFrank A. Thomas III

5 • Young Lawyers Division:The Bar’s Response to Hurricane IsabelStephen D. Otero

7 • Legal Focus/Domestic Relations:Shoup, Riggins and the New § 20-109.1:What It All MeansRichard J. Byrd

10 • Legal Focus/Domestic Relations:What, Who, Where, When, How: Personal Jurisdictionin Domestic Relations Cases in VirginiaFrances W. Russell

13 • Legal Focus/Domestic Relations:Valuing Closely-Held Businesses for Virginia EquitableDistribution: Five Tips for Divorce AttorneysRobert R. Raymond

16 • Legal Focus/Domestic Relations:Summary of Post-1998 Rehabilitative Alimony CasesCheryl Watson Smith and Kimberlee Harris Ramsey

20 • Across the CommonwealthVBA opposes proposed sales tax on professional services • JohnGrisham addresses Boyd-Graves Conference • Deadlinesannounced for VBA letters of intent to Virginia Law Foundation •Ellett participates in ABA forum on death penalty • GeneralAssembly on horizon • Kelley, Urbanski tapped for federal bench

22 • News in Brief22 • Classifieds/Professional Announcements24 • Calendar

VBA• •

VBA NEWS JOURNAL, the official publication of The Virginia Bar Association (ISSN 1522-0974,USPS 093-110), is published eight times per year (in the months of January, March, April, June,July, September, October and December). Membership dues include the cost of one subscriptionto each member of the Association. Subscription price to others, $30 per year. Statementsor expressions of opinion appearing herein are those of the authors and not necessarily thoseof the Association, and likewise the publication of any advertisement is not to be construed asan endorsement of the product or service unless specifically stated in the advertisement thatthere is such approval or endorsement. Periodicals postage paid at Richmond, VA 23232.POSTMASTER: Send address changes to The Virginia Bar Association, 701 East FranklinStreet, Suite 1120, Richmond, VA 23219.

Suite 1120701 East Franklin Street

Richmond, VA 23219(804) 644-0041

FAX (804) 644-0052E-mail: thevba@vba.org

Web: http://www.vba.org

OUR MISSIONThe Virginia Bar Association is a voluntaryorganization of Virginia lawyerscommitted to serving the public and thelegal profession by promoting the higheststandards of integrity, professionalism,and excellence in the legal profession;working to improve the law and theadministration of justice; and advancingcollegial relations among lawyers.

PresidentFrank A. Thomas III, Orange

President -electE. Tazewell Ellett, Alexandria

Immediate Past PresidentJ. Edward Betts, Richmond

Young Lawyers Division ChairStephen D. Otero, Richmond

Young Lawyers Division Chair-electStacy M. Colvin, Richmond

Law Practice Management Division ChairHeman A. Marshall III, Roanoke

Chair, Board of GovernorsJames V. Meath, Richmond

Board of GovernorsThe Officers andHon. William G. Broaddus, RichmondAnn T. Burks, RichmondMarilynn C. Goss, RichmondProf. Roger D. Groot, LexingtonGlenn C. Lewis, FairfaxHon. William C. Mims, LeesburgFrank West Morrison, LynchburgD. Alan Rudlin, RichmondGregory T. St. Ours, HarrisonburgHarriette H. Shivers, RoanokeHon. Diane M. Strickland, RoanokeWilliam R. Van Buren III, NorfolkHon. John E. Wetsel Jr., Winchester

Member of ABA House of DelegatesHon. R. Terrence Ney, Fairfax

Legislative CounselAnthony F. Troy, RichmondRobert B. Jones Jr., RichmondAnne Leigh Kerr, Richmond

Executive Vice PresidentCharles Breckenridge Arrington Jr.

Director of ProgramsBrenda J. Dillard

VBA News Journal EditorCaroline Bolte Cardwell

On the Cover: The Shenandoah County Courthouse (1795). One hundred fortyphotographs of Virginia courthouses are contained in Virginia’s Historic Courthouses,written by John O. and Margaret T. Peters with a foreword by the late Justice Lewis F.Powell Jr.; photographs by John O. Peters; published by University Press ofCharlottesville; and sponsored by The Virginia Bar Association. To order the book, callthe VBA at (804) 644-0041 or 1-800-644-0987.

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Unique Opportunities, Special Obligationsby Frank A. Thomas III

4/THE VIRGINIA BAR ASSOCIATION NEWS JOURNAL OCTOBER/NOVEMBER 2003

PRESIDENT’S PAGE

Shortly before the onslaught ofHurricane Isabel, I had theopportunity to participate in theactivation of the Disaster LegalAssistance Program. This program,which is jointly sponsored by TheVirginia Bar Association and theVirginia State Bar, consists of a well-organized network of 300 attorneyswho have volunteered to give legalassistance that might be needed aftera disaster.

While it might appear thatservicing legal needs of disastervictims would be a relatively minorconcern when they are facing largerissues of loss of power or findingshelter, the lawyers who areproviding this assistance areperforming a valuable publicservice. I had occasion to participatein the program when there wasflooding in my locality several yearsago and witnessed the genuineappreciation and gratitude of theflooding victims that were able tofind a sympathetic ear to help themthrough the problems they werefacing.

While we can be justifiably proudof the involvement of the VBA in theDisaster Legal Assistance Program,it is only one of many public serviceprograms in which we participate.

The Commission on the Needs ofChildren has been a tirelessadvocate for the rights of childrensponsoring most recently significantreforms concerning the duties andtraining of guardians ad litem inproceedings regarding juveniles.

The Capital Defense Workshopprovides education and support forthose representing defendants facingthe ultimate penalty.

In addition to sponsoringlegislation of interest to our varioussubstantive law sections, we have

also sponsored legislation addressingthe rights of adults in guardianshipproceedings and the insanity defensefor juveniles in criminalproceedings.

The work of our young lawyerscovers a wide range of publicinterest programs, includingprograms on domestic violence,child abuse, educational rights ofspecial-needs children, the Pro BonoHotlines and rights and interest ofworking parents, to name just a few.Many of their efforts have beenrecognized with state and nationalawards.

Our Committee on Issues of Stateand National Importance hassponsored programs which haveaddressed issues in the forefront ofthe public mind such as terrorism,biotechnology, the transportationcrisis in Virginia, and the issues ofgrowth, development and sprawlfaced by Virginia.

Our substantive law sections areresponsible for the VirginiaHomebuyers Manual, A Guide toAdministration of Decedents’ Estatesin Virginia, and other publicationsfor the benefit of the public.

We sponsor or facilitateeducational programs of The JohnMarshall Foundation and jointprograms on alternative dispute

resolution and domestic relationsissues.

While there is no shortage oforganizations involved in examiningand promoting the public interest,lawyers and associations of lawyersseem to have a particularrelationship to these issues. Whilethere are several possibleexplanations, the most fundamentalreason is that at heart, these issuesrelate to the relationships amongmembers of society and sooner orlater involve the relationship ofgovernment and the legal system tomembers of society. It is at that pointthat public interest issues becomelegal issues and of particularconcern to lawyers.

Public service is not without itsbenefits. The personal satisfaction alawyer obtains from doing good worksimply because it needs to be donereminds us that nonmaterial rewardscan be as gratifying as material ones.For many of us, it also providesexperiences that we would nototherwise get in the routine practiceof law and through the rounding outof our experience makes us betterpersons and better lawyers.

As long as the practice of law isregulated and limited to those whohave a license to do so, lawyers havean opportunity to affect the public

What is it that makes the VBAdifferent from the myriad of otherorganizations that devote time, talentand treasure to public interest?Unlike many other organizations, it isour members who are actually doingthe public interest work in which weare engaged.

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OCTOBER/NOVEMBER 2003 THE VIRGINIA BAR ASSOCIATION NEWS JOURNAL/5

interest in ways that otherindividuals cannot. Their trainingand critical analysis make themeffective advocates. By advocatingthe interest of particular members ofsociety before courts, legislaturesand agencies, they have the ability todefine the public interest and furtherthe public interest in ways that arenot available to nonlawyers.

Because of their knowledge andtraining, they also have the ability toexplain legal rights andresponsibilities more effectively thanmany lay persons. The samecommunication skills and trainingwhich makes them good advocatesalso makes them goodcommunicators.

Many lawyers acknowledge thisunique position imposes on them aspecial obligation to offer their timeand talent in supporting publicinterest projects. For those for whomthe relationship may be less thanclear, the rules of professionalconduct and their admonition withrespect to pro bono legal servicesserves as a reminder of the specialposition lawyers serve in society.

While we may not have theinclination or the ability to practicewith a public interest law firm andthe specialized form of advocacy thatit represents, we as lawyers arepresented with numerousopportunities to further the interestof the public at large. There aremany opportunities in ourcommunities through various formsof service to both public and privateinstitutions. There are also largerstages and more significant areas inwhich we can act.

What is it that makes The VirginiaBar Association different from themyriad of other organizations thatdevote time, talent and treasure topublic interest? As an organizationof lawyers, it provides a uniqueopportunity to channel and focus thespecial abilities of lawyers intopublic interest programs. Unlikemany other organizations, it is ourmembers who are actually doing thepublic interest work in which we areengaged. For those who are not

YOUNG LAWYERS DIVISION

The Bar’s Responseto Hurricane IsabelVolunteers needed to provide pro bono legalassistance to storm victimsby Stephen D. Otero

As many of us know from our ownpersonal experience, HurricaneIsabel wroughtwidespread havocthroughout much of theCommonwealth onSeptember 18. TheVirginia Department ofEmergency Management(VDEM) reports thatIsabel delivered to theCommonwealth sustainedwinds nearing 100 mphand tropical storm windsfor 29 hours, as well asrainfall totals between two and 11inches and a storm surge of five toeight feet along the ChesapeakeBay. Compounding the situation, aseries of thunderstorms andtornadoes rolled through manyalready damaged areas inSoutheast Virginia on September23, 2003. VDEM reports that Isabeland the ensuing storms areresponsible for more than twodozen fatalities, the destruction ofalmost 600 homes, and majordamage to more than 6,500additional homes. In addition, wellover a million Virginians throughoutan area stretching from Tidewaterthrough Southside to Roanoke andthrough the Valley to Northern

Virginia were without power andwater for several days, and in some

cases, for over a week. Ithas been estimated thatIsabel will be the mostexpensive naturaldisaster ever to hit theCommonwealth, withdamages in the tens tohundreds of millions ofdollars. Both PresidentBush and GovernorWarner have declaredthe Commonwealth to bein a state of disaster.

Needless to say, the citizens ofthe Commonwealth could use a littlehelp in the wake of Hurricane Isabel.As members of the bar, we have theunique opportunity to assist many ofour fellow citizens who findthemselves facing significant legalquestions, such as: Do I have to paymy mortgage or my rent if a tree hasdestroyed my home? What do I do ifmy insurance company denies myclaim for repairs to my car or home?What can I do about seeminglyexorbitant prices for goods andservices in the wake of thehurricane? What do I do if myfamily’s vital records were lost ordestroyed in the storm?

actively involved in the programsthemselves, membership providesthe opportunity to provide direct andtangible support in the form ofmembership and patron dues whichdirectly support the actions ofothers.

For those members who want adirect, hands-on experience,membership provides them a unique

venue in which to use their legalskills in a variety of public interestprograms.

For those of you who are activelyinvolved in the public interest workof our Association, you have thethanks and admiration of your fellowmembers. For those of you who arenot, try it. You will find it rewardingin ways you did not expect. VBA

Continued on next page

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6/THE VIRGINIA BAR ASSOCIATION NEWS JOURNAL OCTOBER/NOVEMBER 2003

The Emergency Legal Services(ELS) program, a joint effort of theyoung lawyers of The Virginia BarAssociation and the Virginia StateBar, was developed years ago toprovide citizens of theCommonwealth rendered needy bya natural disaster or otheremergency with pro bono legalassistance as they struggle throughlegal issues such as these. Overthe years, the ELS program hasprovided much needed legalassistance to victims of a host ofdisasters and emergencies, mostrecently the extensive flooding inthe western parts of the state in2002, the September 11, 2001,terrorist attack on the Pentagon,and the widespread flooding in theFranklin area following HurricaneFloyd in 1999. In response toHurricane Isabel, the leaders of theVBA and the VSB have againactivated the ELS program.Moreover, because of theunprecedented levels of damage inthe Commonwealth, the need forvolunteer attorneys to participate inthe ELS program is particularlyacute in the wake of HurricaneIsabel.

Participation in the ELS program istypically a two-step process. First,volunteer attorneys are required toattend a training session thatprovides two hours of CLE credit atno charge. During the trainingsession, young lawyers from the VBAand the VSB explain the history andstructure of the ELS program andprovide an overview of several areasof law that frequently arise indisaster and emergency situations(e.g., housing law, landlord-tenant,insurance law, consumer law,probate, lost documents). The VBAand VSB young lawyers also providevolunteer attorneys with a copy of atraining manual they have developedwhich contains summaries ofrelevant legal authorities, as well ascontact and reference numbers for ahost of state and federal agencies.

Once trained, volunteer attorneys areable to provide pro bono legalservices to victims, either bytelephone or in person at specifiedDisaster Recovery Centers (DRCs)established by VDEM and the FederalEmergency Management Agency(FEMA).

Historically, ELS has been able toservice the needs of qualified victimsby making trained volunteerattorneys available through an 800number routed through the VirginiaLawyer Referral Service. This modelhas been successful largely becauseeven the worst disasters to strike theCommonwealth in recent years haveonly required the establishment of ahandful of DRCs to assist victims in alimited geographic area. In contrast,the damage caused by HurricaneIsabel has required FEMA and VDEMto establish an unprecedentednumber of DRCs in almost two dozenlocations. As of the second week inOctober, FEMA and VDEM hadalready established DRCs in 16locations (Poquoson, Norfolk,Hampton, Gloucester, Virginia Beach,Yorktown, Portsmouth, Chesapeake,Suffolk, Chesterfield, Henrico,Montross, Richmond, Surry, Isle ofWight, and Alexandria), and theyexpected to open an additional sevenDRCs by the middle of October(Lancaster, Page, Franklin, Emporia,Petersburg, Middlesex, and Tangier).

In short, Hurricane Isabel hascaused extensive and widespreaddamage throughout the Common-wealth. Consequently, the ELSprogram is in dire need of volunteerlawyers in virtually all regions of thestate. Young lawyers from the VBAand the VSB will be conducting ELStraining sessions as needed through-out October, and videotapes of earliertraining programs are available forthose who cannot attend the trainingprograms in person. I stronglyencourage each of you to attend oneof these training programs and assistour fellow citizens in this time ofneed. VBA

Interested in volunteering your services with the ELS program? A link toa volunteer sign-up form is available in PDF format on the VBA website homepageat www.vba.org. (To download and print the form, you must have Adobe AcrobatReader installed on your computer; the free program is available at www.adobe.com.)You may also contact Richard Ottinger at (757) 446-8673, rottinger@vanblk.com,or Valerie Long at (434) 977-2545, vlong@mcguirewoods.com, for more information.

Service projectswelcome lawyersof all ages andpractice levels

Listed below is a samplingof various public serviceprograms of the VBA YoungLawyers Division, whichwelcome volunteer lawyers ofall ages and levels of practice.For more details, visit the VBA/YLD page at www.vba.org.

Child Support EnforcementProject

Collegiate Athletics AdvisoryCommittee

Community Law Weekand Law Day

Disaster Legal AssistanceDMV Project

Domestic Violence ProjectHealth Law Project

Immigrant AssistanceLawyers for the Arts/Nonprofits

Legal Servicesfor the Mentally IllMentor Programs

Minority RecruitmentModel Judiciary ProgramNonprofit Legal Support

ProgramPro Bono Hotlines

Project FocusTown Hall Meetings

Video SeriesWills for Heroes

Watch for more informationabout the VBA CommunityService Council, which will belaunched at the AnnualMeeting in January. This newventure, co-chaired by Hon.Harry L. Carrico and Alfred M.Randolph Jr., is a top priority ofPresident-elect Ted Ellett.

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Are parents in Virginia able to settleand agree as to the support of theirminor children? Our courts, includingour Supreme Court, have consistentlyencouraged us to help litigants settletheir child support disputes byagreement, not litigation. However, ourappellate courts over the past two yearshave demonstrated much confusion anda striking disregard of the wishes ofparties expressed in their agreed ordersthat we have helped our clientsnegotiate. New legislation, effectiveJuly 1, 2003, will hopefully put to restsome of the conflicts our appellatecourts have created regarding self-modifying child support orders. We willhere discuss the major steps along thistortuous path: Shoup I, Shoup II,Riggins, and the new 2003 provisionsof §20-109.1.

The Shoup caseIn June 1994, the Shoups entered

into a Property Settlement Agreement(PSA) that included child support fortheir three children. The keyprovision stated:

d. The Husband shall makeconsecutive monthly installmentsof the child support on the first dayof each month untiluntiluntiluntiluntil each child dies,marries,… or otherwise becomesemancipated, whichever event firstoccurs,…..[emphasis added]e. If there is any change incircumstances, the parties shallfollow the child support guidelinescontained in § 20-108.2 of the Codeof Virginia or its successor statuteand any other relevant Virginiastatutes and case law fordetermination of child support.When the eldest child turned age 18,

Mr. Shoup reduced the support he waspaying by one-third. Two years later, hereduced the support by another third

when the second child turned 18. Oneyear after that, the mother filed acontempt motion to seek arrearagesbased upon the original support for thethree children.

The father contended that the termsof the PSA required the original supportto be only payable until each childreached age 18. Then the support wasto be recalculated per the Virginiaguideline.1 He argued that he had theright under the PSA and decree to actupon each emancipation event and toapply the Virginia guideline andrecalculate the support.

The mother contended that only by anew court order could the child supportbe changed. The only right the fatherhad by the PSA was the right to come tocourt and seek relief. This the fatherdid not do, hence he owed the supportbased on the original three-childrenrate. Judge Kathleen MacKay, the trialjudge in the case, basically agreed withthe mother.

Shoup I - Shoup v. Shoup, 34 Va. App.347 (2001)

In February 2001, a three-judgepanel of the Court of Appeals issued itsopinion supporting Judge MacKay’sview of Mr. Shoup’s unilateral changesin child support.2 However, JudgeRosemarie Annunziata went muchfurther than was needed to resolve thecase, and stated in her opinion:

However, a decree thatincorporates an agreementpermitting automatic, unilateral, oragreed upon modification of supportwithout prior court approval is alegal nullity and void.34 Va. App. 347, 354.This language is bizarre, and was

unnecessary to decide the case. Why isthe Shoup divorce decree a legal nullityand void. Are the Shoups still married

to each other? How can Mr. Shoup oweany arrearage at all if the decree onwhich it is based is a legal nullity andvoid?

Shoup II - Shoup v. Shoup, 37 Va.App. 240 (2001)

The en banc Court of Appealsreconsidered the panel’s opinion andreversed it in an amazing demonstrationof fortitude and humility by JudgeAnnunziata. She wrote the opinionoverruling her own previous opinion!Truly the mark of a great justice. Theen banc opinion is very analytical andreasonable and directly addresses thevalue to society in allowing parents thefreedom to agree as to how the supportof their children is to be handled. Onremand, the trial court was ordered tofollow the Shoup agreement anddetermine the actual guideline supportat the time of each emancipating event,and calculate the arrearage on thatbasis.

Riggins v. O’Brien, 263 Va. 444(2002)

We bathed in the luxury of thereasonable opinion in Shoup II forexactly 64 days. Then the SupremeCourt decided the Riggins case and wewere thrust again into chaos. TheRiggins PSA had an emancipation-modification clause that stated:

…the amount payable hereundershall be renegotiated or submittedto a court for adjudication on thefirst event of emancipation, as setforth above, as to each child.”263 Va. 444, 446.Mr. Riggins made unilateral

reductions in the support as each childreached majority, similar to the actionsof Mr. Shoup. However, there aresignificant differences in the PSAprovisions in the two cases. The Shoup

Shoup, Riggins & The New §20-109.1:What It All Meansby Richard J. Byrd

LEGAL FOCUS/DOMESTIC RELATIONS

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8/THE VIRGINIA BAR ASSOCIATION NEWS JOURNAL OCTOBER/NOVEMBER 2003

Richard J. Byrd obtained abachelor’s degree in electronicsengineering from George Washington

University and had a career as an electronics engineer in communications and computerdesign for eight years before entering law school. He attended the GWU National LawCenter and earned his J.D. degree in 1972, graduating magna cum laude, and first in hisgraduating class. He has practiced law in Fairfax since 1972 and is presently a principal inByrd, Mische, P.C. Mr. Byrd, a member of the VBA Coalition for Family Law Legislation, hasbeen very active in family law legislation and has been associated with every change to thechild support guidelines and the statutory changes to spousal support in the past 10 years.He served as the principal drafter of the following Virginia legislation: rehabilitative spousalsupport; shared custody child support guidelines; spousal support “cohabitation”provisions; child support “Colorado Method” legislation, and the 2003 legislation overrulingthe Riggins and the Flanary cases. In 2003, he drafted House Bill 2386, modifying §20-109.1, which is the major subject of this article. Among other professional activities, hechairs the Family Law Section of the Fairfax Bar Association and received the 2002Lifetime Achievement Award from the Virginia State Bar.

decree provided that the originalsupport was payable only until anemancipation event, and it set forth thestandard to use in re-calculatingsupport – the Virginia guideline. TheRiggins decree contained no suchtermination language or standard to beapplied.

Instead of rejecting the father’sunilateral support modifications on theappropriately narrow grounds that theRiggins’ PSA modification provisionwas simply not self-enforcing,3 theSupreme Court instead made a broaddeclaration that outlawed many supportdecrees in the Commonwealth. Themajority said:

With the exception of terminatinga non-unitary support award uponachieving majority, specifyingfuture changes in the amount ofchild support is inappropriatebecause it does not allow thedivorce court to determine childsupport based on contemporarycircumstances. 263 Va. 444, 448.[Emphasis added]Mull over this pronouncement for a

moment. A child support decreecontaining any automatic future changein support is inappropriate andunenforceable. The application of theCourt’s opinion in Riggins would givethe following conclusions to some veryordinary and common provisions insupport orders:

a. Child support of $1,200 for thetwo children until Jill graduates fromhigh school in June 2003. The supportshall be $900 starting with the July2003 payment. The father follows thecourt order, and lowers the supportamount from $1,200 to $900 in July.Under Riggins, he is falling in arrearsevery month that he follows the courtorder, because he did not go back tocourt to “to determine child supportbased on contemporary circumstances.”

b. Child support shall increase by 10percent each year. The father neverpays these cost-of-living increases for10 years. Does he have any arrears?Not under Riggins! The court did notapprove the 10 percent increase eachyear. Hence, this father who violatedthe court order did the proper thing.

c. Child support is to be $800 permonth, plus $65 towards the child’sorthodontia. The orthodontia is

completed and paid, so the fatherstopped paying the additional $65.According to Riggins, he isaccumulating an arrearage because thecourt did not consider and approve the$65 reduction in child support whenorthodontia ended.

Any divorce practitioner will easilyconclude that all of the abovedecisions, although in conformancewith Riggins, are incorrect,inappropriate and just plain stupid.Similar provisions to these are found inthousands of agreed orders filed in ourcourts. Do we now advise a client todisobey a court order so as to complywith Riggins? This is a scary question!4

The New Additions to §20-109.1:A. Changes to §20-1-09.1:

We overruled the Supreme Court’sRiggins decision in House Bill 2386 inthe 2003 session of the GeneralAssembly. This new legislation modifies§20-109.1:

Any court may affirm, ratify andincorporate by reference in itsdecree dissolving a marriage …..any valid agreement between theparties, …. Concerning….custodyand maintenance of their minorchildren, …. Provisions in suchagreements for the modification ofchild support shall be valid andenforceable. Unless otherwiseprovided for in such agreement ordecree incorporating suchagreement, such futuremodifications shall not require asubsequent court decree. Thissection shall be subject to theprovisions of § 20-108. [Addedprovision italicized]

B. Legislative History:The bill was drafted by your author

and sponsored by the VBA Coalition onFamily Law Legislation. This was notan easy bill to pass, as a look at thelegislative history reveals.5 The originalbill submitted was more complex andattempted also to fix other problems inthe Support Guideline, along with theproposal to repair Riggins case damage.Opposition from the Department ofChild Support Enforcement (DCSE)and eventually the Office of theAttorney General (OAG) made passageof all parts of our original billimpossible. It was vital that we pass theprovisions to overrule Riggins in the2003 session. Hence, we proceededwith only the modifications to §20-109.1.

What the New Statute Allows– And What it Does Not Allow:

The new code provision states thatchild support clauses which provide forfuture modifications in support are validand enforceable withoutcontemporaneous court approval. Thenew statutory language is the exactopposite of the offending Rigginslanguage. The new addition to §20-109.1 clearly allows implementation ofall of the child support provisions in thehypotheticals in Section II above. Butbeware, this new statute solves someproblems, but it may create others andit has traps for the unwary.

Does the new statute reverse theRiggins judgment? Surprisingly, Ibelieve Mr. Riggins would still lose!The Riggins PSA did not provide amodification method that could bedetermined by any standard internal or

ABOUT THE AUTHOR

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external to the PSA.6 They merelyagreed to renegotiate or go to court. Anagreement to agree is not an agreement!In contrast, the Shoup PSA had thestated support amount only payableuntil a child was emancipated, and itset forth the Virginia guideline to beapplied to re-calculate support.

How should we better draft suchemancipation modification clauses? Trythis provision:

Emancipation of Children: As eachchild reaches emancipation, per §20-124.2, the support shall be recalculatedpursuant to the Virginia Child SupportGuideline. The parties shall exchangeall income information, daycare costs,extraordinary medical expenses andhealth insurance costs upon request bythe either party within 60 days of anemancipation event. The father shallsubmit his calculation of the newsupport to the mother. If the motherdoes not agree with his calculation, sheshall submit her calculation to himwithin 30 days. If the parties do notagree, then either may seekadjudication by the court. The newsupport shall be effective from the laterof: (i) The first of the month followingthe month that the child reaches anemancipation event, or (ii) The first ofthe month after the father submits hiscalculation of the new support to themother.

This provision gives the partiesguidance as to a rational procedure tofollow in handling the recalculationupon a child’s emancipation. Statingthe new starting date is very importantin the event of litigation, since itrequires the new support to relate backto the specified date.

Another warning. This new §20-109.1 does not in any way eliminate thefamous Fearon Rule, Fearon v. Fearon,207 Va. 927 (1967) most recently re-affirmed in Gallagher v. Gallagher, 35Va. App. 470 (2001). As always — Acourt order wins over an agreement.Hence, you must be careful inimplementing these futuremodifications in support orders. Forexample, suppose we have anemancipation clause like the one above.The parties exchange e-mailsrecalculating the support and quicklyagree to the new amount.

Case 1: They enter a new order

based upon their agreement.Case 2: They rely on their “e-mail

agreement” as evidence of the newsupport.

Three years later, the motherdiscovers that she could have used theColorado method for the two childrenshe has with her new husband, and shecould have deducted one-half of hersubstantial self-employment tax. Theactual guideline support she shouldhave been receiving was $300 higherthan the amount she had agreed to withthe father. She complains to the fatherand demands her $10,800 “loss” insupport. In Case 1, the new ordergoverns per Rule 1:1, and she cannotgo back and change the support. UnderCase 2, the original order still governs,and it trumps the email agreement. Themother can now have the courtcalculate the “new” support she shouldhave been receiving, and the father willhave a $10,800 arrearage. Obviously,the new code provisions do noteliminate the necessity of entering anew order if the parties want certaintyin implementing these futuremodification provisions. The newstatute overrules Riggins, but it doesnot overrule Fearon and Gallagher.

In the situation where the futuremodification in support is a fixed dollaror percentage amount set forth in theagreement, there is no need for asubsequent court order. Thehypothetical provisions in Section IIabove should not require a new courtorder. But when the modificationprovision sets forth merely a method fora recalculation of support, the bestadvice is still to enter a new ordercontaining the new amount.

If possible when drafting amodification clause, put in the futuresupport amount, or a way to calculate it.For example, if there are two children,ages 17 and 14, do the re-calculation inadvance: “Child support of $1,200 forthe two children until Jill graduatesfrom high school in June 2004, andthen to be $900 starting with the July

2004 payment.” If a material andunexpected change in a party’s incomemakes this new support inappropriate,the aggrieved party can always have thesupport reviewed, but at least you canbe assured that you have drafted anautomatic, self-enforcing, futuremodification provision.

ConclusionsThe Supreme Court’s Riggins

opinion would nullify thousands ofprovisions in existing child supportorders and decrees. The opinion inRiggins and the Court of Appeals’opinion in ShoupII are irreconcilable.However, the judgments of thosedisparate opinions may be reconciledby the subtle, but significant,differences in the PSA provisions in thetwo cases.

The new addition to §20-109.1overrules the offending language in theRiggins opinion. Parties may now planahead and agree as to how their childsupport will vary in the future. Suchmodification clauses are enforceablewithout court approval at the time of thechange in support.

In drafting these agreements, wemust be careful to provide that futuremodifications be determined andimplemented by the parties with asmuch certainty as possible. Aagreement to agree is still not anagreement under the new provisions ofthe Code. A future modificationprovision in a support order should beself-enforcing if at all possible, in thatthe information needed to implementthe change should be well-defined andeasily ascertainable, and it should havea clear starting date, or condition uponwhich that date can be determined.

The new statutory provisions do noteliminate the advisability of entering anew order whenever the parties agree toa change in support, even though thatchange is pursuant to a modificationprovision of the existing court order.This is especially true when the partiesneed to calculate the new support

The VBA Law Practice Management Division invites you to participate in thework of the VBA/LPMD as a member of one or more of our committees,and welcome your ideas for future programs and projects. Getting involvedis easy; just visit our page on the VBA website at www.vba.org and indicate yourinterest with an e-mail message, or call the VBA office at (804) 644-0041 formore information.We welcome and encourage your participation!

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amount to implement the modificationprovision. A court order still trumps anagreement, and having to sort out whatparties intended years ago is never apleasant experience.

Ever since the original adoption ofthe child support guidelines in 1987,this area of domestic relations law hasbeen in a state of instability andchange. We have modified our childsupport guideline every year since itsadoption. The appellate courts areconstantly changing the law with newstatutory interpretations. In general,they do an admirable job of sorting outdifficult precedent and adjudicatingfact patterns which often cry for anequitable solution. Yet it seems asthough we must call upon the GeneralAssembly every January to repair thedamage. Perhaps this ever-changingstate of the law is to be expected when alaw touches so many people in so manydisparate ways. We will continue ourjob of regularly adjusting our guidelinestatutes to maintain them as fair andneutral as possible, while serving thebest interests of the children ofVirginia. VBA

NOTES1. Note that the father’s reducing the supportby 33 percent was definitely not a reductionper the Guideline. A guideline reduction fromthree children to two children would have beencloser to only 20 percent.2. This article will not discuss in detail theissue in the Shoup case of the reduction insupport due to the termination of daycare.3. For example, a child support provision whichstates that “Support shall be increased by $100per month for June, July and August each year.”is a self-enforcing clause, and the mother neednot return to court to receive the extra $100for the summer months. However, a clausewhich states “This support shall be increase asthe costs of the child increase.” is not self-enforcing. If the parties cannot agree, then acourt must determine if the child’s costs haveincreased, and how this should affect the childsupport.4. A Petition for a Rehearing was filed in theRiggins case at the Supreme Court. The authorfiled a brief amicus curiae on behalf of theVirginia Mediation Network setting forth thearguments used in this article, among others.However, the rehearing was denied.5. You can view the history of HB 2386 at:http://leg1.state.va.us/cgi-bin/legp504.exe?031+sum+HB2386.6. For example, an internal standard might be“…support to be increased by five percent eachyear.” An external standard might be “…supportto be increased by the CPI each year.” Bothshould qualify as self-enforcing agreements.

What, Who, Where,When, How:Personal Jurisdiction in DomesticRelations Cases in Virginiaby Frances W. Russell

As an attorney, you have aresponsibility to every potential client,to determine whether his1 case can beheard in Virginia, and whether aVirginia court can establish or enforcehis rights or responsibilities withrespect to an opposing party. No matterhow compelling your client’s story maybe, nor how persuasive you are in thecourtroom, your time and effort on hisbehalf will be wasted if the court doesnot have the authority to grant him therelief he seeks.

Jurisdiction in all domestic relationsmatters in Virginia is governed bystatute.2 Once you’ve confirmed that aVirginia court will have jurisdictionover the subject matter – that is, yourclient’s circumstances meet the basicstatutory prerequisites for the court togrant him a divorce or make adetermination of custody or supportissues – then you must determinewhether the court can exercise personaljurisdiction over all of the necessaryparties. If the court doesn’t havejurisdiction over the opposing party, noorder can be entered affecting herpersonal rights or responsibilities.3

The prospective client tells you hewants a divorce. You confirm that hehas lived here for at least six monthsand considers Virginia his home,4 andthat he and his wife have been livingapart for more than a year.5 So far, sogood. You can file the bill of complaint,and the court can dissolve his marriage.Now it’s time for the “where,” “when”and “how” questions that willdetermine whether the court can do

anything else.Where is the spouse? If she is a

Virginia resident, Code §§ 20-99 (3)and 20-99.2 allow you to have herserved with the divorce papers by asheriff or private process server6 either(i) personally; (ii) by posted service onthe front door or other “main entrance”to her home; or (iii) by delivery to amember of her family, 16 years old orolder, who resides in her home with her,and giving that family member“purport” of the papers.7 If the serviceis made on a Virginia resident in one ofthose three ways, the court will havepersonal jurisdiction over her.8 Shemay also agree to the personaljurisdiction of the court by executing anotarized statement, waiving oraccepting service.9

Even if the defendant is anonresident, personal service on her inVirginia will usually be sufficient forpersonal jurisdiction.10 Furthermore, ifshe files an answer to the bill ofcomplaint or otherwise enters a generalappearance, the court will havepersonal jurisdiction over her, whetheror not she resides here, and whether ornot you have had her properly served.11

Note that almost any pleading, even amotion for a continuance, mayconstitute a general appearance underVirginia law.12 However, the merepresence of a party or her attorney atdepositions will not amount to a generalappearance.13

If your client’s spouse does not livein Virginia, and it does not appear thatyou will be able to have her served

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here, you must ask where the partieslast lived together as husband and wife.Under our “long-arm” statute, aVirginia court may exercise personaljurisdiction over a nonresidentdefendant in divorce proceedings onlyif she “maintained within thisCommonwealth a matrimonial domicileat the time of separation of the partiesupon which grounds for divorce … isbased, or at the time a cause of actionarose for divorce … or at the time ofcommencement of [the divorceproceedings],”14 and the plaintiffspouse is residing here. If the partieslast lived together in some other state,and the defendant is a nonresident, theVirginia court will have only in remjurisdiction.

If the nonresident spouse last livedwith your client in Virginia, the nextquestion you must ask is: where canshe be found now? Personal service ona nonresident defendant is an absoluteprerequisite to personal jurisdictionover her in divorce proceedings.15

Anything less is equivalent to serviceby publication.16 Also note that if theaffidavit of service 17 does not indicatethat the person who served thenonresident party met the requirementsof Code § 8.01-320, the Virginia courtwill not have jurisdiction over thatparty, 18 and any order purporting toaffect her rights or obligations will beinvalid.19

This situation is likely to beespecially frustrating for the clientwhose spouse has executed a separationagreement. After all, the Virginia long-arm statute provides that our courts willhave personal jurisdiction over anonresident who has “executed anagreement in this Commonwealth whichobligates [her] to pay spousal support orchild support to a domiciliary of thisCommonwealth ….”20 Furthermore,Code § 20-109.1 specifically statesthat, “[i]n any case where jurisdictionis obtained over a nonresidentdefendant by order of publication …,

any properly acknowledged andotherwise valid agreement entered intobetween the parties may be affirmed,ratified and incorporated” in thedecree. That is, personal service is nota prerequisite to incorporation of anagreement in a divorce decree.Unfortunately for the client, thesestatutory provisions are meaningless inthe absence of personal service on thenonresident spouse. The incorporatedagreement will not be enforceable bythe court.21

Incidentally, if your client is in themilitary, he may not want to makehimself a party to divorce proceedingshere. Under federal law,22 the Virginiacourt may award a share of your client’smilitary pension to his spouse asmarital property in divorce proceedings,but only if his rights under the Soldiers’and Sailors’ Civil Relief Act of 194023

have been observed, and the court hadjurisdiction over him by reason of (i) hisresidence within the court’s territorialjurisdiction (other than by reason of hismilitary assignment here); (ii) hisdomicile within the court’s territorialjurisdiction; or (iii) his consent to thejurisdiction of the court, by taking someaffirmative action in the proceedings.24

If your client is the plaintiff, he hastaken the “affirmative action”necessary to give the court jurisdictionto award his spouse a share of hisretired pay. The same outcome willresult if he is the defendant, and youfile a cross-bill on his behalf,requesting equitable distribution of themarital property.25

Even if your client’s spouse is anonresident, and you can obtain only anin rem divorce for him, that does notmean he cannot be awarded custody ofhis children or support for them. Youmay file a bill of complaint in thecircuit court, asking for a divorce inrem, and file separate petitions fordetermination of custody and support inthe juvenile and domestic relationsdistrict court.26

Jurisdiction in custody cases isgoverned by the provisions of theUniform Child Custody Jurisdiction andEnforcement Act, Code §§ 20-146.1 etseq. (UCCJEA). The purpose of theUCCJEA is to resolve uncertainties ordisputes over subject matterjurisdiction. Once you have establishedthat the Virginia court has jurisdictionto decide what arrangements forcustody and visitation will be in thebest interests of the children (in remjurisdiction), that power isindistinguishable from its authority todetermine the parties’ rights andobligations (in personam jurisdiction)with respect to custody and visitation.

Furthermore, unlike divorceproceedings in Virginia, the mode ofservice on the other party will not affectthe court’s ability to hear and decidethe issues. Unless your client is seekingcustody in the context of divorceproceedings, notice to nonresidents in acustody case need not be given bypersonal service. Notice may be givenby certified or registered mail, returnreceipt requested, to the last knownaddress of the other party,27 or even bypublication if the party’s whereaboutsare unknown.28 All that is required isthat “notice must be given in a mannerreasonably calculated to give actualnotice and an opportunity to beheard.”29 Under Code § 20-146.5,anyone who has been given notice inaccordance with these requirements isbound by the court’s decision.

Your client may also file a petitionfor spousal and/or child support in thejuvenile court, pursuant to theprovisions of the Uniform InterstateFamily Support Act (UIFSA).30 Code§ 20-88.35 lists the bases for personaljurisdiction over nonresidents insupport matters. Specifically, a Virginiacourt may “establish, enforce ormodify”31 support if the nonresidentrespondent: (1) is personally servedwith process in Virginia; (2) submits tothe jurisdiction of the Virginia court byconsent, by entering a generalappearance, or by filing a responsivedocument having the effect of waivingany contest to personal jurisdiction; (3)resided with the child in Virginia; or (4)resided in Virginia and paid prenatalexpenses or provided support for thechild; or (5) if the child is residing in

ABOUT THE AUTHOR Fran Russell is a partner in theVirginia Beach office of WilliamsMullen. She has been a member of

the Virginia State Bar since 1992. She is also a Certified Financial Planner. She wasfor many years the legal columnist for Soundings, a weekly newspaper for the militarycommunity in the Hampton Roads area, and is also the author of "ERISA and Divisionof Employee Benefits in Matrimonial Cases," published in the Winter 2001 issue of theAmerican Journal of Family Law.

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Virginia as a result of the acts ordirectives of the nonresident; (6) theexercise of personal jurisdiction isauthorized under our long-armstatute32 ; or (7) there is any other basisfor personal jurisdiction consistent withthe United States and Virginiaconstitutions.

The “acts or directives” clause hasbeen construed to mean almost anyaction on the part of the respondent thatresulted in the child’s presence inVirginia. For example, in Franklin v.Commonwealth, 27 Va. App. 136, 497S.E.2d 881 (1998), the parties andtheir children had been living in Africapursuant to the husband’s employment.After several incidents of domesticviolence, the husband ordered the wifeand children out of their home. Withemergency assistance from thehusband’s employer and the Americanembassy, she and the children returnedto the United States. She establishedresidence in Virginia, where the partieshad lived before moving to Africa. Inproceedings for support, the husbandargued that the wife and children werenot living here as the result of anyspecific direction from him, and thattherefore, the Virginia court did nothave personal jurisdiction over himunder the “acts or directives” provision.The juvenile and circuit courts held,and the Court of Appeals agreed, thatthis was too narrow an interpretation ofthe law. UIFSA is “remedial in natureand should be liberally construed sothat its purpose is achieved.”33

Aside from the specific requirementfor personal service in cases wherejurisdiction arises under the long-armstatute, UIFSA does not mandate anyparticular form of service. Assuming theVirginia court has grounds for theexercise of personal jurisdiction, thecourt may enter a support order as longas the respondent has been given“notice and opportunity to be heard.”34

This does not mean your client can getaway with dropping a postcard in themail to the other party, telling her thathe has a support petition pendingagainst her. Code § 8.01-296, supra,specifies what forms of service areacceptable, in proceedings “for whichno particular mode of service isprescribed.”

Ultimately, your client’s case

depends upon the answer to just onequestion: How much do you know? Themore you know about jurisdiction – whois subject to the authority of the court,where that party is, and what noticemust be given to that party to enable thecourt to exercise its authority – themore you can do for your client. VBA

NOTES1. Of course, every family law attorney is wellaware of – in fact, dependent upon – the factthat there are two genders. However, constantreferences to “he or she,” and “her or him” arecumbersome and potentially confusing.Therefore, this writer will generally refer to theclient in this article as “he.” She apologizes toany of her colleagues who find this usageoffensive.2. Specifically, Title 20, Domestic Relations;Chapter 11 of Title 16.1, Juvenile and DomesticRelations District Courts; and Chapters 8 and 9of Title 8.01, pertaining to process and personaljurisdiction.3. Gibson v. Gibson, 5 Va. App. 426, 364 S.E.2d518 (1988), citing Pennoyer v. Neff, 95 U.S. 714(1877).4. Code § 20-97.5. Code § 20-91 (A) (1) (a).6. Code § 8.01-293.7. Code § 8.01-296.8. Although a witness may be served with asummons by delivery of the summons to hismanager or supervisor at his place ofemployment, Code § 8.01-298 (1), this is not avalid method of service on a defendant in divorceproceedings. Lee v. Lee, 02 Vap UNP 2195012(2002).9 Code § 20-99.1:1.10 Ragouzis v. Ragouzis, 10 Va. App. 312, 391

S.E.2d 607 (1990). If the defendant’s presencein the state is induced by deception or contrivance,the service may be invalid. See Cannington v.Cannington, 19 Cir. 158636, 50 Va. Cir. 165(Fairfax Co. 1999), citing Tickle v. Barton, 142W. Va. 188, 95 S.E.2d 427 (1956) and Shaw v.Hughes, 303 S.C. 337, 400 S.E.2d 501 (1991).But a husband who returned to Virginia after hiswife told him she was filing for divorce and custodyof their children was unsuccessful in persuadingthe court that she had used the children has“bait” to “drag” him back here in order to obtainpersonal service. Blackson v. Blackson, 40 Va.App. 507, 579 S.E.2d 704 (2003).11. Code §§ 20-99 and 20-99.1:1.12. See, e.g., Kiser v. Amal. Clothing Workers,169 Va. 574, 591, 194 S.E. 727 (1938) (motionfor continuance or motion to quash, other thanfor defects in process or return, amount to generalappearance); Brown v. Burch, 30 Va. App. 670,677, 519 S.E.2d 403 (1999).13. Minton v. First National Exchange Bank, 206Va. 589, 594, 145 S.E.2d 139 (1965).14. Code § 8.01-328.1 (A) (9). In a case wherethe husband was employed by the U.S. StateDepartment, so that the parties traveled andresided temporarily in various foreign countries,but their last fixed residence was in Virginia; andthe husband attempted, by registering to vote,obtaining a driver’s license and a library card,etc., in another state, but never resided there;the husband’s matrimonial domicile necessarilyremained in Virginia. “Domicile” is established by

“1) personal presence in [the] state and 2) theintention to make that … place a home.” Oliver v.Oliver, 19 Cir. C178681 (Fairfax Co. 2003).15. See Code §§ 8.01-328.1; 8.01-320; and8.01-296. These three sections must be readtogether.16. Code § 8.01-320 (A).17. Code § 8.01-325.18. See Harrel v. Preston, 15 Va. App. 202, 421S.E.2d 676 (1992). Note that in that case, theparties had been divorced in Virginia, so onemight think that the Virginia courts would havehad continuing jurisdiction over them to enforcethe terms of their decree. Not so. The formerhusband no longer resided here, so the provisionsof § 8.01-320 applied.19. But see Code § 8.01-322, which providesthat if a judgment, decree or order is enteredagainst a party pursuant to an order of publication,she has only two years in which to petition theVirginia court to have the decree set aside. Thedeadline is one year for a party served (otherthan by publication) with a copy of the decree.20. Code § 8.01-328.1 (A) (8).21. See Morris v. Morris, 4 Va. App. 539, 359S.E.2d 104 (1987).22. Uniformed Services Former Spouses’Protection Act, 10 U.S.C. § 1408 (“USFSPA”).23. 50 U.S.C. Appx. §§ 501 et seq.24. USFSPA, 10 U.S.C. § 1408 (c) (4). Note thatunder the USFSPA, even if a Virginia courtacquired personal jurisdiction over a nonresidentmilitary defendant in accordance with thestatutory provisions for service described morefully elsewhere in this article, the plaintiff spousemay find it difficult or impossible to enforce adivorce decree awarding her a share of thedefendant’s pension. If the defendant did not filepleadings or otherwise come within the court’sjurisdiction in accordance with the terms of theUSFSPA, the Defense Finance and AccountingService (“DFAS”) will not honor the decree. Thatis, the plaintiff will be unable to obtain directpayment from DFAS. Instead, she will have tolocate the defendant and take whatever action isavailable through the courts of the jurisdictionwhere he is then residing and/or domiciled, toenforce the Virginia decree against the defendantdirectly.25. Blackson v. Blackson, 40 Va. App. 507, 579S.E.2d 704 (2003).26. See Code §§ 16.1-241, 16.1-244, and 20-79(a).27. The persons who may be entitled to notice ina custody matter include not only your client’sspouse or the other parent, as the case may be,but also “any person having physical custody ofthe child.” Code § 20-146.16.28. Note that Code § 8.01-316 requires thepetitioner seeking an order of publication to filean affidavit stating the last known post officeaddress of the respondent, and that Code §8.01-317 requires the clerk of the court to mail acopy of the order of publication, including a briefstatement of the object of the suit, to therespondent at the address provided by thepetitioner. When publication is completed, theclerk must file a certificate of compliance. If therecord indicates that these requirements werenot met, any order entered in the case may beinvalid. See Carlton v. Paxton, 14 Va. App. 105,415 S.E.2d 600 (1992).29. Code § 20-146.7.30. Code §§ 20-88.32 et seq.31. Jurisdiction to modify an out-of-statesupport order is subject to the limitations setforth in Code §§ 20-88.76 and 20-88.77:1.

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32. Code § 8.01-328.1 (A) (8). The referencedsubsection provides for personal jurisdiction overa nonresident who has (i) executed an agreementhere, obligating herself to pay spousal or childsupport to a Virginia domiciliary or to someonewho is in the armed forces and meets the“deemed domiciliary” requirements of Code §20-97; (ii) been ordered to pay spousal or childsupport by a Virginia court having personaljurisdiction over her; or (iii) by “personal conduct,”conceived or fathered a child here. Note that theVirginia court can exercise personal jurisdictionover a nonresident under § 8.01-328.1 (A) (8)(iii) only if the nonresident has been personallyserved as provided in Code § 8.01-320 – thesame mode of service required in divorceproceedings.

Business valuations can beconfounding to even the most seasonedof attorneys. Weighted average cost ofcapital and unlevered betas are topicsbetter suited for graduate financeclasses than the courtroom. Whileapplication of such nuances is best leftto the expert valuator, it is essential thatthe divorce attorney appreciate keyconcepts underlying the appraisal ofclosely-held business interests. Such anunderstanding is necessary to evaluatethe work products of one’s own expert,as well as that of the opposition; toconduct effective examinations; and tocommunicate opinions to the court.

As a starting point, it is important toappreciate that divorce valuations arebut a subset of the business appraisaldiscipline. Indeed, the majority ofappraisals are performed for otherpurposes including estate, gift andincome taxes, mergers and acquisitions,and damage cases. While each area issupported by a common body ofknowledge, each also exhibits uniqueconsiderations. Within the arena ofdivorce valuations, significant

Valuing Closely-HeldBusinesses for VirginiaEquitable Distribution:Five Tips for Divorce Attorneysby Robert R. Raymond

33. Franklin, 27 Va. App. at 146. See also Oliverv. Oliver, 19 Cir. C178681 (Fairfax Co. 2003)(where the husband, a U.S. State Departmentemployee, had originally requested an assignmentto Virginia when his wife became pregnant, toensure better medical care for her and theirchild; and although the parties had traveledextensively overseas after their period ofresidence in Virginia, they never established adomicile anywhere else; and the wife returned toVirginia after the parties began experiencingmarital difficulties, and filed for divorce here; thecircuit court found that the husband neverestablished a “matrimonial domicile” in any otherstate, and the child was living in Virginia as theresult of his “acts or directives.”)34. Code § 20-88.63.

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differences exist from state to state andsometimes even from locality to locality.Furthermore, these differences arecontinually reshaped by case law andstatutory modification.

Following is a non-technicalexplanation of five valuation conceptsspecific to Virginia equitable distribution.1Hopefully, the tips will serve as a usefulcompass guiding lawyers through thebusiness appraisal maze.

Tip 1: Heed the Advice of Yogi. Thestarting point in every appraisal isselecting a standard of value. Standardof value defines the type of value beingsought by addressing the question:“Value to whom?” As Yogi Berraobserved, “You’ve got to be very carefulif you don’t know where you are going,because you might not get there.”

Too many divorce businessappraisals fail because preparers relyon an incorrect standard of value. Onecause of this shortcoming is thatpractitioners in Virginia have beenprovided mixed signals as to the issue.Va. Code Ann. § 20.107.3 refers to“fair” value. Cases have relied on

“true” value, “fair market” value and“intrinsic” value, among others.

The Court of Appeals decision inHowell v. Howell III 2 appears to haveresolved these conflicts by dictating theuse of an intrinsic standard of value,explicitly rejecting use of alternatives inthe process. The explanation providedby Judge Bumgardner in the Howellcase is an instructive explanation of theintrinsic standard of value.

“Intrinsic value is a very subjectiveconcept that looks to the worth of theproperty to the parties. The methods ofvaluation must take into considerationthe parties themselves and the differentsituations in which they exist. The itemmay have no established market value,and neither party may contemplateselling the item; indeed, sale may berestricted or forbidden. Commonly, oneparty will continue to enjoy the benefitsof the property while the other mustrelinquish all future benefits. Still, itsintrinsic value must be translated into amonetary amount. The parties must relyon accepted methods of valuation, butthe particular method of valuing andthe precise application of that methodto the singular facts of the case mustvary with the myriad situations thatexist among married couples.”3

The definition of intrinsic value asadopted in the Howell case is “the value ofthe business interest to its current ownergiven the owner’s current use of theinterest, current resources, and currentcapabilities for economically exploiting thebusiness interest.”4

Alternative standards of value oftenerroneously encountered in practice arefair market value, fair value and strategicvalue. Differentiating each from intrinsicvalue is a useful legal tool.

Fair market value is widely definedas “the price at which property wouldchange hands between a willing buyerand a willing seller when the former isnot under any compulsion to buy andthe latter is not under any compulsionto sell, both parties having reasonableknowledge of the relevant facts.”5

While the IRS code dictates use of fairmarket value in estate, gift and incometax matters, the lack of relevance todivorce situations is apparent. As notedin the Howell opinion, in a divorcethere are no buyers or sellers, sale of aninterest may be prohibited by contract

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ABOUT THE AUTHOR Robert R. Raymond, CPA, ABV, MAC,is managing partner of Raymond,Satchell & Associates, LLP, in

Richmond. Mr. Raymond has performed more than 400 valuations for various purposes.He has been involved as an expert in a number of significant Virginia equitable distributioncases including Howell, Rowe and Congdon. Mr. Raymond is a frequent lecturer to bar-related groups.

(e.g., a buy/sell arrangement) or ethicalcanons (e.g., a law firm) and one sideoften has limited knowledge of relevantfactors. Some states mandate the use ofthe fair market standard of value. InVirginia, however, business appraisalsthat utilize such a standard are ofquestionable admissibility.

Fair value as used in valuationliterature is a statutory standard ofvalue applicable to cases involvingdissenting shareholder’s appraisalrights. Application of the concept is,therefore, specific to the statutes andcase law in each venue. The UniformBusiness Corporation Act provides thisdefinition: “Fair Value, with respect todissenter’s shares, means the value ofthe shares immediately before theeffectuation of the corporate action towhich the dissenter objects, excludingany appreciation or depreciation inanticipation of the corporate actionunless exclusion would beinequitable.”6 In light of Howell, it isreasonable to conclude that use of theterm “fair value” in Va. Code Ann. §20.107.3 and the Bosserman7 case isnot as a valuation term of art, but as asubstitute for the term “intrinsic value.”

Strategic or investment value is thevalue of a business interest to aparticular investor based upon discreteinvestment requirements andopportunities. This standard iscommonly encountered in mergers andacquisitions where competitors orconsolidators pay enhanced pricesjustified by economics of scale,elimination of a competitor or operatingsynergies. The problem withextrapolating a strategic standard ofvalue to divorces is that observedpremiums can only be realized upon theactual sale of the business. This eventwill usually trigger income taxes,necessitate non-competitionagreements, evoke contingentliabilities, and may involveconsideration of speculative value suchas buyers stock and earnouts. Strategicvalue is only relevant in a divorce if

facts indicate that the actual sale of abusiness is likely.8 A frequentshortcoming in divorce businessappraisals is reliance on valuesobtained from merger and acquisitiondata bases (such as the Institute ofBusiness Appraisers, MergerStat, DoneDeals, or Pratt’s Stats) withoutappropriate adjustments to reconcilethe concept of strategic value to that ofintrinsic value.

Tip 2: A Standard of Value Does Nota Premise Make. Another commonerror in divorce valuations is the failureto distinguish between a premise ofvalue and a standard of value. Apremise of value is an assumption as tothe set of actual or hypotheticaltransaction circumstances applicable tothe subject value and is defined afterselection of a standard of value.Alternate premises of value include

• Value as a going concern;• Value as an assemblage of assets;• Value in an orderly disposition;• Value in a forced liquidation;• Value as defined in a contractual

agreement.The relationship between the

concepts of standard and premise ofvalue may be conceptualized as thematrix illustrated below:

controversy. In numerous cases,including Bosserman and Howell,courts have ruled that pricesestablished by transfer agreements donot control value, but are a factor to beconsidered. Contradicting this positionis the Kaufman10 case where a buy-outagreement did control valuation.Kaufman, however, can probably bedistinguished from these other opinionsbecause the interest in question wasacquired six months after separation.This distinction notwithstanding, it isimportant to realize that the use of acontractual premise of value is notinconsistent with the intrinsic standardof value, as some have maintained. Forthis reason, in appropriate situationsreliance on restrictive agreements toestablish business values in divorcesshould not be viewed as a dead issue.

Tip 3: Don’t Get Personal. Theequity value of any enterprise may besegregated into tangible and intangible(if any) components.

In determining the value of tangibleassets, it is usually necessary to adjustbook balances, which are based onaccounting or tax conventions, torealizable amounts. For example,accounts receivable should be on acollectible basis and supplies that havebeen expensed should be capitalized.While the mechanics of this exerciseinvolve complexities, the concept isstraightforward — tangible value is thedifference between adjusted assetvalues and liabilities.

Intangible value is often broadly

Virginia courts have generally held thatthe appropriate premise of value indivorce appraisals is as a going concernin continued use unless circumstancesindicate a liquidation event is likely.9

The use of contractual agreements asa premise of value has spawned much

referred to as goodwill. Conceptually, itis represented by a stream of excessearnings. Types of commonly observedintangibles include customer lists andrelationships, trained and assembledwork force, and favorable relationships.

A tenet of valuation theory is that

Standard of Value

Prem

ise

of V

alue

Going concern

Assemblage

Orderly liquidation

Forced liquidation

Contractual

StrategicIntrinsicFMV Fair

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intangible value cannot exist in theabsence of a history or expectation ofexcess earnings.11 Implicit in thisprinciple is the fact that a majority ofbusinesses will not have intangiblevalue and, therefore, may be appraisedsolely in reference to tangibles.

In those cases where intangiblevalue exists, a unique requirement fordivorce appraisals is that such valuemust not only be quantified, it must bebifurcated into personal andcommercial (practice) components. Theimportance of this distinction isdescribed in the Howell opinion.

“The value of goodwill can have twocomponents. Professional goodwill (alsodesignated as individual, personal, orseparate goodwill) is attributable to theindividual and is categorized asseparate property in a divorce action.Practice goodwill (also designated asbusiness or commercial goodwill) isattributable to the business entity, theprofessional firm, and may be maritalproperty.”12

Determinants of personal goodwillinclude the individual’s reputation,work ethic, age, health, training,knowledge, experience and expertise.Commercial goodwill is influenced byattributes such as an investment incapital, assembled and trained workforce, facilities, size, name recognition,financial contracts, institutional referralsources, customer lists andmanagement depth.

The complete divorce businessvaluation will account separately for thetangible and intangible components ofequity and will go on to provide bothquantitative and qualitative informationsupporting the calculation of anycommercial goodwill.

Tip 4: Beware of the Cookie Cutter.While there are numerous acceptedmethods of business appraisal, eachmay be subsumed into one of threeapproaches, viz: income, asset ormarket. Standards promulgated byevery credible organization13 thataccredits business valuation expertsrequire consideration of each of thesethree approaches in every valuation or,in the alternative, justification of thedeparture from such application. Theaforementioned issues affecting theclassification of goodwill uniquelyinfluence inputs into each of these

approaches. Methodologies appropriateto other types of valuations cannot bemechanically extrapolated to divorcebusiness appraisals.

The income approach calculates thevalue of a business based on thepresent value of an expected futureincome stream. In a divorce valuation,estimation of that income stream shouldbe based on the present resources of theowning spouse and passive factors.Adjustments to eliminate the effect ofpersonal attributes such as an abnormalwork ethic or unique specialty may alsobe necessary. Absent suchadjustments, the expert will have noobjective basis to opine as to what partof intangible value (if any) calculatedunder the income approach is divisible.

Neither can the divorce businessvaluator rely on conventional measuresof computing a discount rate, which isthe quantification of the risk associatedwith realizing the selected benefitstream. If future income growth islimited because it is based on presentor historical circumstances, as opposedto prospective events, the risk ofrealization may be significantlyreduced. A danger sign arises whendivorce business appraisal reportscontain discount rate computationsutilizing conventional approaches to the“build-up method” withoutconsideration of assumptions unique tothe specific divorce case.

The asset approach is balance sheetoriented in that asset and liabilityaccounts of the subject are restated tocurrent amounts. Included in theprocess is the identification andvaluation of unrecorded intangibles aswell as the revaluation of assets andliabilities from net book (i.e.,accounting) values. While applicationof the asset method can be complicatedand often requires significantassumptions, it is useful in divorcesbecause each intangible asset is valueddiscretely, thereby facilitatingidentification of components ofcommercial (versus personal) goodwill.

The market approach is based on theassumption that the pricing relationshipof observable sales of comparablecompanies can provide relevantindications of value (the Merger andAcquisition Method) or that dataconcerning publicly traded equities can

be extrapolated to the subjectenterprise to provide indications ofvalue (the Guideline CompanyMethod). Obviously, the marketapproach does not apply to all types ofbusinesses because some, such as lawfirms, are not bought and sold. Asdiscussed, the Merger and AcquisitionMethod must be applied carefully indivorce business appraisals because itis based on a strategic, rather thanintrinsic, standard of value. Becausethe Guideline Company Method israrely applicable to smaller enterprises,it is infrequently encountered inpractice. It is, however, a validapproach to appraising larger privately-held companies.

In most divorce business appraisals,the market approach is, at best, a way tovalidate the outcomes of alternativemethodologies. It is seldom appropriateas a primary valuation approach.

Tip 5: Don’t Believe Recent CourtDecisions When It Comes to Discounts.While a full discussion of the issue ofdiscounts is beyond the scope of thisarticle, recent developments in Virginiacase law are disturbing. Businessvaluation theory holds that there arelevels of value for any business interestranging from a control, marketablebasis to a minority, non-marketablebasis. There is an abundant body ofresearch supporting the proposition thata liquid investment will trade at apremium compared to a non-liquidcounterpart and that investors will payfor control prerogatives.

Recent cases such as Ferraro,14

Howell, and Congdon,15 however,suggest to many that Virginia Courts asa matter of law will not allowmarketability or lack of controldiscounts in divorce businessvaluations. This logic originates fromthe view that under the intrinsicstandard of value there is no assumedbuyer or seller because nothing is beingsold.

Such a position, however, misses thepoint. In divorce cases, discounts maybe necessary to conform assumptions inthe utilized appraisal methodologies tothe business interest being appraised.For example, if in applying the incomeapproach the benefit base is all of thecash flow of the business and thediscount rate is calculated based on

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data from publicly traded stocks, someadjustment is necessary if the interestbeing valued is a minority one in a non-marketable business. On the otherhand, if the benefit stream is based onwhat a minority holder has actuallyrealized and the discount rate istailored to the facts, marketability andlack of control discounts may beunwarranted. While the subject ofdiscounts is a complex one, failure toconsider these material adjustments inequitable distribution will createserious inequities for owning spouses.

Expert business valuators rely on abody of technical knowledge that isboth vast and complex. Simplicity mayonly be achieved at the price ofaccuracy, usually an untenable trade-off. While most attorneys cannotrealistically expect to achieve technicalparity with appraisal experts, it isessential to develop touchstones todistinguish the accomplished valuationfrom the flawed one. Woody Hayesspoke of the “man who drowned in ariver whose average depth was onlythree feet.” Hopefully, the foregoingfive tips will help Virginia divorceattorneys stay afloat. VBA

NOTESThanks to Mary Beth Joachim of ButlerCook inRichmond, Virginia, for her assistance withlegal research for this article.1. Many of the definitions and descriptionsused in this article are adapted from the text ofValuing a Business: The Analysis and Appraisalof Closely Held Companies by Pratt, Reilly andSchweihs (4th ed 2000), McGraw-Hill.2. 31 Va. App. 332, 523 S.E. 2d 514 (2000).3. Note 2, supra.4. Note 2, supra.5. Revenue Ruling 59-60 (1959 – 1 CB 237).6. Note 1, supra, p. 32.7. 9 Va. App 1, 384 SE 2d 104 (1989).8. See for example, Stephenson v. Stephenson,2002 WL 507769 (Va Cir. Ct.) (2000).9. But see Thompson III v. Thompson 2000WL 135041 (Va. App) (2000) for an exceptionto this statement.10. 7 Va. App 489, 375 SE 2d 374 (1988).11. This is a position that the Henrico CountyCircuit Court ratified in Jiral v. Jiral (unpublished)(CH00814)(2002).12. Note 2, supra.13. Examples of organizations with suchstandards are the American Society ofAppraisers, Institute of Business Appraisers,National Association of Certified ValuationAnalysts and the American Institute of CertifiedPublic Accountants.14. 2000 Va. App. Lexis 164 (2000).15. 40 Va. App. 255, 578 S.E. 2d 833 (2002).

In 1998, the legislature amendedVirginia Code § 20-107.1 to includethe option of awarding spousal supportfor a defined duration, often referred toas rehabilitative alimony.1 Theamendments followed an extensivelegislative study, statewide discussionsand surveys. The Study Committee’sReport2 indicates the concept was thatin short marriages, five years or less,rehabilitative alimony would beappropriate; whereas, in longmarriages, 20 years or more, periodicsupport would be appropriate. However,no presumptions were included in thestatute.3 The developing case law, hasbeen in the extreme situations, i.e., longmarriage—undefined duration awards/short marriages—permanent awards.

This article summarizes the post-1998 reported and unreported caseson rehabilitative alimony. While thismay not be an exhaustive list, it is arepresentative summary.4

Published Court of AppealsCases:

1. Torian v. Torian, 38 Va. App.167, 562 S.E. 2d 355 (Apr. 23, 2002).The Court of Appeals affirmedspousal support of $1,000 a month forseven years in a 26-year marriagerejecting Wife’s argument that thelegislature had never intended fordefined duration awards to be madein cases involving long-termmarriages. The Husband was 66 yearsold and retired. The Wife was 52years old and employed part-time, asshe had been throughout themarriage. But at the seven-year point,the Wife would be able to draw uponher IRA ($300,000) without penaltywhile at the same time the Husband’sincome would be reduced. The Wiferaised the trial court’s lack of findingsof fact under § 20-107.1(F)5 for the

Summary of Post-1998Rehabilitative Alimony Casesby Cheryl Watson Smith and Kimberlee Harris Ramsey

LEGAL FOCUS/DOMESTIC RELATIONS

first time on appeal, so this argumentwas barred.

2. Joynes v. Payne, 36 Va. App.401, 551 S.E. 2d 10 (2001). The Courtof Appeals affirmed an award ofpermanent support, flatly rejectingHusband’s argument that theamendment required all periodicspousal support awards to be time-limited. This was a 20-year marriage.Both spouses were attorneys. TheHusband earned $300,000 per yearand the Wife had an earning capacityof $80,000 per year.

Unpublished Court of AppealsCases6 :

1. Baxani v. Baxani, No. 2945-02-2(Va. Ct. App. July 1, 2003). The awardof permanent spousal support of $450per month to Wife was summarilyaffirmed in this 30-year marriage.The Husband earned $36,000 peryear. Wife earned $24,000 per yearand was in poor physical health.Husband raised the trial court’sfailure to make findings of fact under§ 20-107.1(F) for the first time onappeal, so this argument was barred.

2. Shaffer v. Shaffer, No. 3329-02-4 (Va. Ct. App. June 29, 2003).Wife’s award of permanent support of$2,000 per month was upheld in amarriage of a little over 10 years.There was a disparity of incomes.Husband’s behavior was egregious.Wife had a legitimate interest in the“high standard of living” she enjoyedduring the marriage. The trial courtdid not impute income to Wife, whohad her own business. The businesshad a bright future, and “her flexibleself-employment allowed her toschedule her business appointmentsaround her children’s schedules andthus provide much needed regularityand stability to her still-emotionallyfragile children.”7

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ABOUT THE AUTHORS Cheryl Watson Smith has her ownlaw firm, Cheryl Watson Smith,P.C., in Roanoke, and practices

primarily in the area of family law, including complex property matters. She is amediator certificed by the Supreme Court of Virginia and mediates cases by privateand court referral. She was previously a partner in the law firm of Mundy, Rogers &Frith, L.L.P. Ms. Smith is a graduate of the University of Virginia and the Universityof Richmond’s T.C. Williams School of Law, where she was a member of theUniversity of Richmond Law Review and co-chaired the Client Counseling andNegotiation Board. She has been in the private practice of law since 1988. Amongher numerous professional activities, she serves on the VBA Domestic RelationsSection Council and lectures frequently on family law issues and mediation. KimRamsey is a director of Florance, Gordon & Brown, P.C., and is a graduate of theUniversity of Virginia and the University of Richmond’s T.C. Williams School of Law.She concentrates her practice in domestic relations and civil litigation, advisingclients in the preparation and negotiation of prenuptial agreements as well asproperty settlement agreements, and has extensive experience in the litigation offamily law matters. Ms. Ramsey is a member of the VBA Domestic Relations Counciland a former co-chair of the VBA/YLD Child Support Enforcement Committee,among a number of professional and civic affiliations. She was listed among the“Legal Elite” (Family Practice) for 2001 and 2002 in Virginia Business magazine

3. Whitehead v. Whitehead, No.3219-02-1 (Va. Ct. App. March 18,2003). In this 23-year marriage, theHusband’s contention that the trialcourt erred by not setting a timelimitation on the award of $725 permonth support was summarilydismissed. His income was $48,000.The Wife’s income was less than$25,000.

4. Turonis v. Turonis, No. 2110-0204(Va. Ct. App. March 11, 2003). TheWife was 46 years old with a 19-month-old child. But she had worked duringthe marriage and did well. Wife arguedthe new factors, § 20-107.1(E) (4) and(5), compelled an award of support soshe could stay home. The trial courtdisagreed, imputed income to Wife anddenied her request for spousal supportfinding that the Wife was “intelligent,”and “eminently qualified to work.” Shehad done extremely well in the workforce; this was not a case of a child withspecial needs, or a marriage involving astay-at-home mom; nor was there anagreement in this marriage that Wifewould be a stay-at-home mom. Indeed,Wife worked and brought home asubstantial amount of the incomeduring the marriage, of short duration,

seven years and eight months. “Giventhe financial stress of both parties,[wife] has no choice but to work.”8

5. Rousell v. Rousell, No. 1562-02-3(Va. Ct. App. Nov. 5, 2002). In affirminga permanent award of $2,250 permonth to the Wife, the Court held thatthe Code does not require the trial courtto specify the date of termination andpermits an award for an undefinedduration. The Husband was a doctor

with an income of $144,000 and theWife was employed with a salary of$40,000. The trial court considered theHusband’s adultery, their financialresources, their high standard of living,length of marriage, etc.

6. Carr v. Carr, No. 1848-01-4 (Va.Ct. App. May 7, 2002). In this 23-yearmarriage, the award of permanentsupport was affirmed, rejecting theHusband’s argument that support

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should terminate in four years when theyoungest child reached age 18. TheWife’s income was $1,936 per month,or $23,232 per year. The Husband’sincome was $1,936 per week, or$100,672 per year. The Wife’s exactneed for support in four years could notbe reasonably determined.

7. Mabie v. Mabie, No. 0729-01-4(Va. Ct. App. Mar. 19, 2002). The awardof $600 per month to the Wife for sixyears after a 28-year marriage wasupheld. The trial court considered thelength of marriage, Wife’s earningcapacity and her present needs. Detailsof the parties’ incomes and the Wife’swork history were not included.

8. Miller v. Miller, No. 1443-01-1(Va. Ct. App. Dec. 11, 2001). The Courtof Appeals summarily affirmed anaward of $500 per month for one year tothe Wife after a 12-year marriage. Thetrial court found that the Wife neededlimited support to secure the educationand training necessary for her toenhance and improve her earningability.

9. Raiello v. Raiello, No. 2444-00-4(Va. Ct. App. July 17, 2001). The Wife’saward of $1,000 per month permanentsupport was affirmed over Husband’sobjection that the undefined durationwas awarded to punish him. Husbandraised the lack of findings of fact under§ 20-107.1(F) for the first time onappealed, so this argument was barred.

10. Saleh v. Ashoor, No. 2307-00-4(Va. Ct. App. Feb. 20, 2001). The Courtof Appeals summarily affirmed anaward of 48 months’ support, plus aseparate lump-sum award, after amarriage of unstated duration. The 48months was necessary for the Wife, whohad custody of a small child, to berehabilitated. She had no work historyin this country, had a diminishedearning capacity and demonstrated animmediate need for the lump sumsupport.

Circuit Court opinions:1. Gray v. Gray, No. HQ-167-4, 2003

WL 1873097 (City of Richmond April 8,

2003). The Husband, age 61, was laidoff involuntarily and unable to get anew job. He could not afford to paypermanent support. Wife, age 60, was aretired schoolteacher. She retired withHusband’s consent. Husband causedthe marital breakdown. Wife received$500 per month in support until August2004, when she would be ready toreturn to full time employment.Findings of fact about Wife’semployment were not given in theopinion.

2. Park v. Park, No. 172986, 2002WL 31188502, 17 VLW 547 (Fairfax2002). In this 10-year marriage, Wifewas awarded $1,500 per month for fouryears, plus one more year reservation.There was no explanation for the four-year period. The Husband earned$128,300 and the Wife earned$28,600. There were a lot of maritaldebts, but a very strong disparity inincome.

3. Van Buren v. Van Buren, Ch. No.157787 (Fairfax County, Va., Cir. Ct.Mar. 20, 2001). The Wife requestedpermanent support. The Husbandrequested she be awarded no support.The trial court awarded support for fiveyears. The Husband had income of$9,600 per month, or $115,200 peryear, while the Wife earned $4,456 permonth, or $53,472 per year. The courtdid not state the duration of themarriage and gave no reason for theaward of limited-term support.

4. Bilbo v. Bilbo, Ch. No. 156461(Fairfax County, Va., Cir. Ct. Aug. 12,1999).The parties stipulated to limited-term support after a 12-year marriage,but disagreed as to the period. TheWife wanted seven years, and theHusband offered only five. TheHusband’s income was $123,914; theWife’s income was $33,213. The courtfound that an award of $1,500 permonth for five years was appropriate.

* * * * *Five years after the amendments, the

determination of spousal support issuesremain fact driven and discretionary.9There is no presumption in the statute

and no bright line test is emerging fromthe case law. But, these cases have notbeen reviewed for lack of findingsunder § 20-107.1(F). As a practicepointer for future cases, include aprocedural objection, when applicable:“The court erred by failing to makefindings on [insert subject here] asrequired by Code § 20-107.1(F).”Perhaps, then, we can glean moreguidance from the cases which in turnmay increase settlement of the supportissues. As it is, the emerging attitude isto take your chances with the judgeinstead of conceding the supportduration or lack of duration insettlement. VBA

NOTES1. See B. Turner, “Spousal Support In a Time ofTransition: Recent Changes in VirginiaSpousal Support Law,” Fourth Annual VirginiaChapter of the American Academy ofMatrimonial Lawyers CLE (October, 1998) foran outline summarizing Virginia and non-Virginia law on the issue of rehabilitativealimony.2. Rehabilitative Alimony and the Reservationof Spousal Support in Divorce Proceedings,House Doc. No. 55 (1997) [“Study CommitteeReport”]3. For a discussion of the general history of thelegislation, the jurisdiction and applicability ofthe amendments see Peter N. Swisher, et. al.,Virginia Family Law: Theory and Practice § 9-6.1 (2003 Ed.)4. If you are aware of other cases, pleaseforward a copy or a case cite to me byDecember 31, 2003, and I will send an updateto the members of the VBA Domestic RelationsSection or to non-members who provide theirnames and addresses: Cheryl Watson Smith,P.C., 5440 Peters Creek Rd, Suite 103,Roanoke, VA 24019-3863 orcwsmithpc@roava.net.5. All statutory references are to the Code ofVirginia, as amended.6. Please note that since unpublished casescarry no precedential value and only those factsnecessary to the disposition of the appeal maybe in the opinion the reader should use cautionin drawing conclusions or inferences from suchcases.7. Shaffer v. Shaffer, No. 3329-02-4 (Va. Ct.App. June 29, 2003). Rehearing en bancdenied. Appeal period for petition to SupremeCourt of Virginia had not expired as of articlesubmission date.8. Turonis v. Turonis, No. 2110-0204 (Va. Ct.App. March 11, 2003).9. Torian v. Torian, 38 Va. App. 167, 562 S.E. 2d355 (2002); Joynes v. Payne, 36 Va. App. 401,551 S.E. 2d 10 (2001).

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OCTOBER/NOVEMBER 2003 THE VIRGINIA BAR ASSOCIATION NEWS JOURNAL/19

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vnj1003.p65 10/29/03, 11:01 AM19

Legislative seasondraws nearer as VBAplans for ’04 Assembly

VBA sections and committees arefinalizing their next crop oflegislative proposals for the 2004General Assembly. Bill prefilingbegins November 14.

Association leaders and staff willgather at Richmond’s Berkeley Hotelon November 18 for the annual VBALegislative Workday, to reviewproposals and plan for the upcoming60-day “long” session, which startsJanuary 14.

Information on 2003 legislativeproposals and other bills of interestis available on the legislation page atwww.vba.org. Bill information as farback as 1994 is online atleg1.state.va.us, and GeneralAssembly information is located atlegis.state.va.us. Breaking Virginiapolitical news is now featured on theVBA legislation webpage through alink to StatePulse.

VBA leaders reach out to local bar groupsIn September, VBA Board of Governors members Greg St. Ours of

Harrisonburg and Judge Jay Wetsel of Winchester took the VBA messageon the road to their own local bar associations.

Appearing before the Winchester Bar Association on September 5 andthe Harrisonburg/Rockingham Bar Association on September 10, the barleaders addressed the issue of judicial independence and the activities ofthe VBA in the areas of public service and law reform. Both meetings werewell attended, and the Harrisonburg/Rockingham program offered onehour of CLE credit to attendees.

In preparing their presentations, St. Ours and Wetsel utilized speechesand background material prepared by the VBA Judiciary Committee andthe VBA Board of Governors Committee on Outreach.

The Judiciary Committee spent several months in 2002 developing amodel speech on judicial independence, the text of which is posted on theCommittee page at www.vba.org. It is available for use by any Virginiajudge or VBA member.

The Outreach Committee, in an effort led by former VBA presidentsJeanne Franklin and Ed Betts, developed a compendium of materialsabout the VBA’s history, activities, values and achievements in such areasas law reform and public service. The packet includes a model speech andprovides a useful resource for VBA leaders or members seeking topromote the Association in their local bar associations or other communitygroups. Again, any VBA member may use the packet and speech.

John B. Donohue Jr. of Richmond chairs the Judiciary Committee. FrankWest Morrison of Lynchburg chairs the Board Committee on Outreach.

For more information, please call the VBA office at (804) 644-0041.

VBA will oppose proposed salestax on professional services

20/THE VIRGINIA BAR ASSOCIATION NEWS JOURNAL OCTOBER/NOVEMBER 2003

ACROSS THE COMMONWEALTH

Kelley, Urbanski tappedfor federal bench

VBA members Walter D. Kelley Jr.of Norfolk and Michael F. Urbanski ofRoanoke will soon serve on the federalbench at the district level. Kelley willbe nominated by President Bush to filla vacancy on the Eastern District ofVirginia bench caused by the decisionof Hon. Henry C. Morgan Jr. to takesenior status. Urbanski was elected bythe Western District judges to be anew magistrate judge for the district,succeeding Hon. Glen Conrad, who inturn has succeeded Hon. James C.Turk, who has taken senior status.

Kelley, a partner in the firm ofTroutman Sanders LLP who wassuggested by the VBA as “highlyrecommended” for the nomination,is a member of the VBA CivilLitigation Section. He received hisundergraduate and law degrees fromWashington & Lee University.Urbanski, a partner in the firm ofWoods Rogers & Hazlegrove, hasserved on the council of the VBACivil Litigation Section. He is agraduate of the College of Williamand Mary and the University ofVirginia School of Law.

The Virginia Bar Association hasannounced that it will oppose aproposed sales tax on professionalservices, following discussion at theOctober meeting of the VBA Boardof Governors in Charlottesville.

The proposal would requirelawyers to levy and collect a 4.5percent tax for services provided totheir clients. It was included in apackage of recommendationsproduced by the Tax ReformCommission in September.

At the meeting, Board membersaddressed the policy and technical

issues which would be created byany such proposal. As a setpercentage of sales tax revenues isallocated to localities, it would bedifficult to distribute funds equitablywhen a trial, parties and lawyers allare located in different jurisdictions.

While supporters of the sales taxon legal services claim that it andother proposals in the Commission’spackage could simplify theCommonwealth’s tax code, the VBAdisagrees and has announced that itwould join with other concernedorganizations to oppose anylegislative action in the 2004General Assembly.

The VBA also announced that itwould establish a working group tostudy the issue in more depth.

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Deadline announcedfor 2004-05 letters ofintent for VLF grants

The Virginia Law Foundation, a501(c)(3) not-for-profit organization,is now accepting Letters of Intentfrom organizations wishing torequest grant support for the 2004-05 grant cycle (July 1, 2004,through June 30, 2005).

Letters of Intent to be submittedunder the VBA umbrella should beprepared in the name of TheVirginia Bar Association Foundationand must reach the VBA office at701 East Franklin Street, Suite1120, Richmond, Virginia 23219,no later than December 8, 2003.

An estimated $450,000 isexpected to be awarded to supportprograms which promote or provideimprovements in the administrationof justice, legal services to the poor,education of the public about thelaw and the legal profession, andpublic service internships forVirginia law students.

Letters of intent should be nomore than three pages and should(1) state the applicantorganization’s name, tax exemptionstatus, and FEIN; (2) briefly explainthe organization’s mission; (3)describe the proposed project; and(4) summarize expense and incomeitems for the total project, indicatingthe amount of funding to berequested from the Virginia LawFoundation.

From among letters received, theFoundation Grants Committee willselect for further considerationprojects for which a fully developedproposal will be invited.

VBA staff can be reached toassist with basic information aboutThe Virginia Bar AssociationFoundation and preparation ofLetters of Intent by calling (804)644-0041.

Author John Grisham speaksat Boyd-Graves Conference banquet

Acclaimed author John Grisham ofCharlottesville addressed the Boyd-Graves Conference banquet on Fridayevening, October 24. The banquet wasa highlight of the annual conference,held October 24-25 at TheBoar’s Head Inn inCharlottesville.

A native of Jonesboro,Ark., John Grisham as achild dreamed of being aprofessional baseball player.Realizing he didn’t have theright stuff for a pro career,he shifted gears and majoredin accounting at MississippiState University. After graduating fromlaw school in 1981, he went on topractice law, concentrating in criminaldefense and personal injury litigation.In 1983, he was elected to the statelegislature and served until 1990.

Since publishing A Time to Kill in1988, Grisham has written one novel ayear (his other books are The Firm,The Pelican Brief, The Client, TheChamber, The Rainmaker, TheRunaway Jury, The Partner, The StreetLawyer, The Testament, The Brethren,A Painted House, Skipping Christmas,The Summons, and The King of Torts)and all of them have becomebestsellers. His works have beentranslated into 29 languages. Seven ofhis novels have been turned into films(The Firm, The Pelican Brief, TheClient, A Time to Kill, TheRainmaker, The Chamber, and APainted House), as was an originalscreenplay, The Gingerbread Man. Hisnewest book, Bleachers, was publishedearlier this fall.

Grisham took a break from writingfor several months in 1996 to return tothe courtroom after a five-year hiatus,honoring a commitment made beforehis retirement from the law to becomea full-time writer: representing thefamily of a railroad brakeman killedwhen he was pinned between two cars.Grisham successfully argued hisclients’ case, earning them a juryaward of $683,500 — the biggest

verdict of his career.Grisham devotes time to charitable

causes, including taking mission tripswith his church group. He and hisfamily divide their time between

homes in Mississippi andVirginia. He also maintainshis passion for baseball asthe local Little Leaguecommissioner.

The Boyd-GravesConference was created bythe late Thomas V.Monahan, a former VBApresident, who believed thatcivil practice in Virginia

would be improved if lawyers withdifferent types of practices, from allregions of the state, would meet andattempt to reach consensus about waysto improve the law.

Beginning in 1978, Monahanbegan arranging annual meetings oflawyers at the Tides Inn in Irvington.At first a small and informalgathering known as the “Tides InnConference,” the meeting eventuallybecame a carefully planned eventfor nearly 100 lawyers, professorsand judges representing a widevariety of practices throughout theCommonwealth.

Later, the conference was renamedthe Boyd-Graves Conference in honorof the contributions of revered lawprofessors T.Munford Boyd andEdwards S. Graves to the advancementof Virginia’s civil procedure.

Items are discussed at theConference after they are studied bycommittees of Conference members.A steering committee meets twiceduring the year to plan theconference.

John Grisham

Ellett represents VBA at ABA conferenceVBA President-elect Ted Ellett represented the Association at the American

Bar Association’s “Strengthening the Guiding Hand of Counsel: ReformingCapital Defense Systems” Conference at Hofstra University in New York onOctober 24. The conference was the kickoff of a campaign to gain state-by-state adoption of the ABA’s Guidelines for the Appointment and Performanceof Counsel in Death Penalty Cases.

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The VBA News Journal offers classifiedadvertising. Categories available are asfollows: positions available, positions wanted,books and software, office equipment/furnishings, office space, experts, consultingservices, business services, vacation rentals,and educational opportunities. Rates are $1per word for VBA members and $1.50 perword for non-members, with a $35 minimum,payable at the time of submission. Ad costsmust be paid in advance. The VBA NewsJournal reserves the right to review all adcopy before publication and to reject materialdeemed unsuitable. Professionalannouncements may be printed; the cost perannouncement is $15 and text may be editedfor style and space limitations. Deadlines areone month in advance of the date ofpublication (August 1 for September, etc.).Information is available online at www.vba.org,or call for details at (804) 644-0041.

CLASSIFIEDS

YYYYYou’re invitedou’re invitedou’re invitedou’re invitedou’re invitedto become a VBA Patron

in 2003.To become a Patron, a VBA

member pays $100, in addition toregular dues, to support theAssociation’s public service and lawreform programs.

The VBA has always sought tooffer substantial value to itsmembers in return for their duesinvestment. Our substantive lawsections, which now number 18,provide the basis for quite a bit ofthat value — but there is much more.Our CLE programs are recognizedfor their quality as well as diversity;our strong law reform and legislativeprograms continue to makeconstructive contributions to goodgovernment in Virginia; our Pro BonoHotline Project has received nationalacclaim and is being emulated inother states as a significant way inwhich lawyers can assist in thedelivery of legal services to the poor;and the VBA’s continuing growth inmembership illustrates the valuewhich the Association delivers to itsmembers.

Our activities have expanded —but we continue to operate with amodest budget. That is why VBAPatron participation is so greatlyappreciated. In 2002, Patronsprovided nearly $40,000 inadditional revenue, without whichsome of our efforts would have hadto be curtailed. This support will beeven more important to our publicservice and law reform work in thefuture.

If you have not already done so,please consider becoming a VBAPatron in 2003 and join ourmembers listed on the oppositepage. (The list will be republishedwith additions in December 2003.)Many Patrons simply check theappropriate box on the duesstatement and enclose an additional$100 with their dues. You may alsosend your check for $100 (note thatit is for VBA Patron dues) to the VBAoffice or call the Association toll-free at 1-800-644-0987 and chargeyour $100 payment to MasterCard,AmEx or Visa.

NEWS IN BRIEFVBA member Philip J. Bagley III of

Richmond, a partner at TroutmanSanders LLP, has been elected chairof the American Bar AssociationSection of Real Property, Probate andTrust Law.

Best wishes to VBA member andCapital Defense Workshop Co-Chair

OFFICE SPACERetire to small-town America and run aturn-of-the-century ice cream parlor andcoffee shop in Scottsville, Va. Beautifullydecorated shop with all new equipment,full kitchen, convection oven, espressomachine, dining area, birthday party room.Complete with 1400 sq. ft., 2 bedroom, 2bath apartment above shop. Live there orrent it out. Call David at 434-286-4899or e-mail dodgenet@aol.com.

Overton P. Pollard of Richmond, whoretired as executive director of theVirginia Public Defender Commissionon September 24.

Several VBA members have beenselected for the Leadership MetroRichmond Class of 2004. They areDavid N. Anthony of Kaufman &Canoles; Thomas J. Dillon III ofHirschler Fleischer; Christopher R.Graham of Hunton & Williams;Jennifer McClellan of Verizon; andAlbert W. Thweatt II of The Law Officesof Albert W. Thweatt II, P.C.

Lawyers Helping Lawyers, whichoffers confidential, nondisciplinaryhelp for lawyers, judges, law studentsand their family members withsubstance abuse or mental healthproblems, is now located at 700 EastMain Street, Suite 1501, in downtownRichmond, phone (804) 644-3212 or1-800-838-8358, web www.valhl.org,e-mail info@valhl.org.

Does the VBA have current contactinformation for you? Please let us knowif you have moved and/or changedemployment by sending yourinformation to Judy King at the VBAoffice, jking@vba.org.

The Virginia Lawyer was firstpublished in 1966 by the VBA YoungLawyers Division. In 2000, VirginiaCLE and the VBA/YLD joined in acooperative effort to produce a newversion of the two-volume guide forpractitioners designed to assistattorneys in dealing with unfamiliarareas. Details are available on theInternet at http://www.vacle.org/wn111.htm#valawyer.

VBA/YLD sponsors candidates’ debateAs Virginians geared up for Election Day on November 4, the VBA Young

Lawyers Division’s Hampton Roads Town Hall Meeting Committee organizeda debate for State Senate candidates in the Sixth and Seventh Districts. Theevent was held October 29 at the Contemporary Art Center of Virginia inVirginia Beach and was open to the public. Mike Gooding of WVEC-TV 13served in a dual role as moderator and panelist, with Marc Davis of TheVirginian-Pilot and Andy Fox of WAVY-TV 10 as panelists.

The VBA/YLD Town Hall Meeting Committees sponsor events which focus ontopical issues of interest in a public forum, including debates between politicalcandidates. In addition to the Hampton Roads group, regional committees arelocated in Charlottesville, Northern Virginia, Richmond and Roanoke.

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Resources you can trust. Information you can use. At prices you can handle.On the Internet at www.vba.org. On the phone at (804) 644-0041.

The VBA Book ProgramSponsored by the Law Practice Management Division of The Virginia Bar Association

Today’s successful law firm has to be client-focused, organized and efficient in order to compete and be profitable.All that takes good management. The key to improving your practice and achieving your goals is to find resourcesyou can trust containing information you can use. That can sometimes be difficult, but The Virginia Bar AssociationLaw Practice Management Division is dedicated to bringing lawyers fresh ideas, new perspectives and creativeways to manage every aspect of your practice.The VBA Law Practice Management Division has established an agreement with the American Bar Associationto sell ABA books to all members of the VBA/LPMD — that is, all members of The Virginia Bar Association— at a 20 percent discount. You can visit the VBA website at www.vba.org, click on a link to the Book Program(www.vba.org/books.htm), peruse a list of available books with pricing information, and print out an order formto send to the VBA office with your payment. Other arrangements are offered to VBA members who do not haveInternet access. The Book Program will be promoted in VBA publications, our website and at our meetings.These books will provide you with everything you need to compete in today’s legal world. Whether you arelooking for information on technology, marketing or management — or books on a specific area of practice —there will be something for you. And think of the money you’ll save!

books@vba.org

Darby Printing (1/2)

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CALENDAR OF EVENTS

VBA• •

The Virginia Bar Association701 East Franklin Street, Suite 1120Richmond, Virginia 23219(804) 644-0041

November 6-7, 2003VBA Capital Defense WorkshopRichmond Marriott

November 6-8, 2003Region IV Competition, National Moot CourtUnited States Courts Building, Richmond

November 7-8, 2003VBA/YLD Executive Committee & Council MeetingWintergreen

November 18, 2003VBA Legislative WorkdayThe Berkeley Hotel, Richmond

January 15-18, 2004VBA 114th Annual MeetingColonial Williamsburg

February 4-10, 2004American Bar Association Midyear MeetingSan Antonio, Texas

March 23, 2004VBA Leadership ConferenceThe Jefferson Hotel, Richmond

April 16-18, 2004VBA Board of Governors MeetingThe Ritz-Carlton, Tysons Corner

April 23-25, 2004VBA Bankruptcy Law ConferenceThe Sanderling, Duck, North Carolina

April 30-May 2, 2004VBA/YLD Executive Committee & Council MeetingThe Sanderling

June 24-26, 2004Fourth Circuit Judicial ConferenceThe Greenbrier

For more details, please visit our website at www.vba.org or call the VBA office at (804) 644-0041.A complete calendar of events with links to additional information is posted on the website.

Make plans now to attend

The 1The 1The 1The 1The 1111114th Annual Meeting of The V4th Annual Meeting of The V4th Annual Meeting of The V4th Annual Meeting of The V4th Annual Meeting of The Virginia Bar Associationirginia Bar Associationirginia Bar Associationirginia Bar Associationirginia Bar AssociationJanuary 1January 1January 1January 1January 15-15-15-15-15-18, 2008, 2008, 2008, 2008, 2004 • Colonial W4 • Colonial W4 • Colonial W4 • Colonial W4 • Colonial Williamsburgilliamsburgilliamsburgilliamsburgilliamsburg

Watch for more information in your mailbox, at www.vba.org and in the December VBA News Journal.

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