                     COURT OF APPEALS OF VIRGINIA


Present: Judge Humphreys, Senior Judges Hodges and Overton
Argued at Chesapeake, Virginia


MICHAEL RAY WIESE

v.   Record No. 2512-99-1

BELINDA LEE WIESE                   MEMORANDUM OPINION * BY
                                   JUDGE WILLIAM H. HODGES
BELINDA LEE WIESE                        JUNE 20, 2000

v.   Record No. 2621-99-1

MICHAEL RAY WIESE


         FROM THE CIRCUIT COURT OF THE CITY OF PORTSMOUTH
                    Dean W. Sword, Jr., Judge

          David W. Bouchard (David W. Bouchard, P.C.,
          on briefs), for Michael Ray Wiese.

          David N. Montague for Belinda Lee Wiese.


     Michael Ray Wiese (husband) and Belinda Lee Wiese (wife)

appeal the equitable distribution decision of the circuit court.

In his appeal, husband contends that the trial court erred in

making a lump sum equitable distribution award of $70,000 to wife,

rather than awarding wife a percentage of the marital assets.

Husband also contends that the circuit court erred by requiring

him to transfer all his interest in marital personal property and

in separate property to wife and by awarding wife an equal share


     * Pursuant to Code § 17.1-413, recodifying Code
§ 17-116.010, this opinion is not designated for publication.
of his separate property.   In her appeal, wife contends that the

trial court erred by accepting the finding of the commissioner in

chancery that husband had any interest in the marital home.   We

find that the trial court erred in ordering husband to pay wife an

equitable distribution monetary award of $70,000.   Therefore, we

reverse and remand the trial court's decision as to this equitable

distribution award.    We find no evidence to support husband's

claims concerning the award to wife of certain items of personal

property.   Because the trial court's review of the monetary award

may affect the issue raised by wife in her appeal, we also remand

this issue for further consideration.

     The evidence was heard by the commissioner in chancery, whose

report was accepted by the trial court with a minor correction.

            The commissioner's report is deemed to be
            prima facie correct. The commissioner has
            the authority to resolve conflicts in the
            evidence and to make factual findings. When
            the commissioner's findings are based upon
            ore tenus evidence, "due regard [must be
            given] to the commissioner's ability . . .
            to see, hear and evaluate the witness at
            first hand." Because of the presumption of
            correctness, the trial judge ordinarily must
            sustain the commissioner's report unless the
            trial judge concludes that it is not
            supported by the evidence.

Brown v. Brown, 11 Va. App. 231, 236, 397 S.E.2d 545, 548 (1990)

(citations omitted).    "The decree confirming the commissioner's

report is presumed to be correct and will not be disturbed if it

is reasonably supported by substantial, competent, and credible



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evidence."    Brawand v. Brawand, 1 Va. App. 305, 308, 338 S.E.2d

651, 652 (1986).

                                 Background

        The parties were married in May 1992 and separated in July

1997.    They had no children.    Husband was the primary wage earner

during the marriage, earning $50,000 annually that was deposited

in the parties' joint accounts.      Wife did not work during much of

the marriage, but she inherited funds from her grandmother in

1996.    These inherited funds were deposited into the joint

accounts.    Using these funds to make a down payment of $50,224.74,

the parties purchased a residence for $140,900 in November 1996.

At the time of separation in 1997, husband used $15,000 from the

joint account to prepay the mortgage on the marital residence

until October 1999.    The commissioner also found that the parties

agreed to use the inherited funds to pay off approximately $35,000

in husband's separate debt.

        In his report, the commissioner found that the outstanding

debt on the marital home was $71,119.60 as of October 1999.     The

commissioner did not specifically classify or value the marital

home.    Nonetheless, the commissioner recommended that husband pay

wife $70,000 as an equitable distribution monetary award pursuant

to Code § 20-107.3.    Although the commissioner did not value the

parties' respective interests in the marital residence, the

commissioner recommended that husband transfer to wife his



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interest in the marital residence as a means of satisfying the

monetary award.

     In addition, the commissioner computed the marital share of

husband's retirement benefits, and recommended an award to wife of

a share of those benefits.   The commissioner also recommended that

husband transfer to wife certain items of personal property

acquired by the parties during the marriage and claimed by husband

as separate property.

     The chancellor overruled the objections of the parties to the

commissioner's report and accepted the report, with only a minor

correction.   Both parties appealed.

                        Record No. 2512-99-1

               Equitable Distribution Monetary Award

     The trial court erred in accepting the recommendation of the

commissioner that husband pay wife $70,000 as an equitable

distribution monetary award.   No evidence in the record

demonstrates that there was a marital asset with sufficient value

from which the recommended monetary award could be made.

     Under Code § 20-107.3(D), a trial court may award a lump sum

equitable distribution award when circumstances so warranted.    See

Hodges v. Hodges, 2 Va. App. 508, 347 S.E.2d 134 (1986).   In

pertinent part, the statute provides:

          In addition, based upon (i) the equities and
          the rights and interests of each party in
          the marital property, and (ii) the factors
          listed in subsection E, the court has the
          power to grant a monetary award, payable

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            either in a lump sum or over a period of
            time in fixed amounts, to either party. The
            party against whom a monetary award is made
            may satisfy the award, in whole or in part,
            by conveyance of property, subject to the
            approval of the court.

Code § 20-107.3(D).   Therefore, the chancellor had authority to

award a lump sum monetary award, but only to the extent it was

payable from marital assets.   "Where the marital property is

encumbered with indebtedness which equals or exceeds its value,

then for purposes of a monetary award it is essentially of no

value.   Without value, there is no basis for a monetary award."

Hodges, 2 Va. App. at 515, 347 S.E.2d at 138 (footnote omitted).

     Here, the commissioner failed to value or classify the

marital residence, which was the only sizeable asset held by the

parties.    The parties used wife's separate property to pay the

down payment, reducing the outstanding indebtedness on the

property.    Under Code § 20-107.3(A)(3)(e), to the extent wife's

contribution of separate property was retraceable and was not a

gift, the down payment retained its classification as her separate

property.   During the marriage, the mortgage was paid with funds

from the parties' joint accounts, which included wife's

inheritance, as well as husband's earnings during the marriage.

The evidence indicated that the outstanding indebtedness on the

marital residence as of October 1999 was over $70,000.    Based upon

the evidence presented concerning the purchase price of the

residence, reduced by the outstanding indebtedness and wife's


                                - 5 -
separate property, any equity of the marital property portion of

the residence was substantially lower than the $70,000 monetary

award.   Therefore, because there was no unencumbered marital

property sufficient to support the monetary award, we find that

the trial court erred in awarding wife $70,000.

                   Determination of Personal Property

     Husband also contends that the trial court erred by accepting

the commissioner's report as to the classification of certain

property as marital rather than separate, as to the value of that

property, and as to the distribution of that property.    However,

the commissioner awarded the items based upon the evidence

presented at the hearing.    The commissioner was entitled to

resolve any conflicts between the parties' testimony.    We find no

grounds to reverse the trial court's decision to accept the

recommendation of the commissioner concerning the personal

property claimed by husband.

                         Record No. 2621-99-1

     Wife contends that the trial court erred in accepting the

commissioner's report that awarded any interest in the marital

home to husband.    The issue wife raises may be affected by the

proceedings of the trial court on remand.    Therefore, we express

no opinion on the merits of wife's appeal, but vacate the award

and remand the case for further proceedings as warranted by our

decision in Record No. 2512-99-1.



                                 - 6 -
     Accordingly, the decision of the trial court in Record No.

2512-99-1 is affirmed in part and reversed in part.    The trial

court's decision in Record No. 2621-99-1 is vacated.   These

matters are remanded for further proceedings consistent with this

opinion.

                         Record No. 2512-99-1 -- Affirmed in part,
                                    reversed and remanded in part.

                     Record No. 2621-99-1 -- Vacated and remanded.




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