                      COURT OF APPEALS OF VIRGINIA


Present: Judges Annunziata, Bumgardner and Clements
Argued at Alexandria, Virginia


HERBERT RINEHART
                                          MEMORANDUM OPINION * BY
v.   Record No. 2034-00-4             JUDGE RUDOLPH BUMGARDNER, III
                                               JULY 10, 2001
NANCY M. RINEHART


             FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
                      R. Terrence Ney, Judge

          Ann W. Mische (Paula W. Rank; Byrd Mische,
          P.C., on briefs), for appellant.

          Evelyn H. Sandground (Condo & Masterman,
          P.C., on brief), for appellee.


     Herbert Rinehart appeals the trial court's failure to

terminate or reduce substantially his spousal support payment to

Nancy M. Rinehart.   He raises six issues 1 which restate in


     * Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
     1
       The husband presented these questions: (1) whether the
trial court erred in failing to include in the wife's income,
for the purposes of determining spousal support, the potential
stream of earnings attributable to her receipt of the $468,126
in retirement funds from the husband's retirement benefits; (2)
whether it erred in failing to annuitize the principal and
potential earnings on the wife's share of the retirement
benefits and impute such figures; (3) whether it erred in
determining that the receipt of the wife's share of the pension
does not constitute income; (4) whether it erred in including in
the husband's income, for support purposes, his share of the
marital pension benefits while excluding from the wife's income
receipt of her share; (5) whether it erred when interpreting the
property settlement agreement to contemplate only the husband's
income decrease; and (6) whether its interpretation of the
various forms his objection to the decision not to treat the

wife's pension distribution as current income when modifying

spousal support.   Finding no error, we affirm.

     The parties married October 21, 1991, separated April 30,

1997, and divorced July 24, 1998.   It was the second marriage

for both and ended without children.   At the time of divorce,

the husband was 58 years old and an airline pilot earning

$180,000 annually.   The wife was 52 years old and a dog trainer

earning $20,000 annually.

     The parties executed a property settlement agreement

setting spousal support for the wife at $3,500 per month.    It

allocated the wife 50% of the marital share of the husband's

retirement and 401K plans.   The final decree incorporated the

contract provisions and appropriate Qualified Domestic Relations

Orders completed allocation of the pension benefits between the

parties.

     Medical problems ended the husband's flying career.     He

took early retirement and elected to receive his pension

benefits as a lump sum.   That election permitted the wife to

receive her share as a lump sum.    American Airlines distributed

$2,064,000 to the husband and $468,126 to the wife.   Both

parties deposited their distributions in Individual Retirement

____________________
agreement was unsupported by its language and the evidence
presented.


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Accounts, which defer income taxes on earnings until the owner

withdraws benefits.   The husband began withdrawing $10,900 per

month.   The wife continued to work and withdrew nothing from her

IRA.

       The husband petitioned to "terminate/reduce" spousal

support.   At the hearing on the petition, the husband's annual

retirement income was $156,000, but he no longer paid his first

wife $18,000 spousal support.   The reduction in that spousal

support nearly offset his $24,000 reduction in income.   The

wife's situation had not changed.   She still earned $20,000

annually working as a dog trainer and incurred expenses similar

to those incurred when the parties executed the settlement

agreement.

       While retirement had reduced his income, the husband did

not press that as the reason to decrease spousal support.

Primarily he contended the wife no longer needed spousal support

because she received a substantial cash distribution upon his

retirement.   The main thrust of his presentation was the

testimony of a financial planner about the income potential of

the wife's pension.   The husband's expert projected monthly

income of $3,500 for her life expectancy.

       The trial court found that the husband's retirement

constituted a material change in circumstances warranting

modification of support.   The reduction in his income warranted

a reduction in monthly spousal support from $3,500 to $3,010.
                              - 3 -
In recalculating spousal support, the trial court considered the

husband's monthly withdrawals from his retirement account as

income.        The trial court did not treat the wife's lump sum

payment as income and did not impute its income potential to

her. 2       The order provided that the wife's lump sum payment and

the earnings thereon "shall not be imputed as income to [the

wife] for so long as the funds remain in her IRA or other

nontaxable deferred income instrument similar in concept to an

IRA."        The husband contends this was error.

         The husband argues the wife received income when American

Airlines distributed her share of the pension benefit as a lump

sum.         Under general equitable distribution principles, that

distribution was not income but the distribution of an asset

constituting part of her equitable distribution award.         Ray v.

Ray, 4 Va. App. 509, 358 S.E.2d 754 (1987).         In Ray, the wife

received an equitable distribution award in five annual

installments of $29,000.        The trial court treated the payments

as income and considered them in fixing spousal support.        "The

trial court erroneously considered the monetary award as income

rather than an asset constituting a part of wife's estate."            Id.

at 513, 358 S.E.2d at 756.        Likewise, the distribution in this

case was a distribution of an asset that constituted a part of


         2
      The husband presented no evidence of the actual earnings
generated by the wife's IRA.


                                     - 4 -
the wife's estate.   As the trial court noted, the wife's receipt

of a lump sum payment "does not automatically amount to income

to her."

     After concluding established precedent did not treat a

distribution of an asset as income, the trial court decided

whether the parties had elected to treat the pension benefit as

income to the wife in the property settlement agreement.   The

trial court carefully analyzed the contract and concluded the

wife's receipt of her share of the husband's retirement benefits

in a lump sum was not receipt of income but distribution of an

asset.   The trial court found:

                At the outset, what is absolutely clear
           is that by their Property Settlement
           Agreement the husband agreed to make two
           separate provisions for his wife. First, he
           agreed to pay her spousal support at the
           rate of $3500 per month. Second, he agreed
           to give her her share of his pension. These
           were not interdependent actions. Each stood
           alone.

The trial court ruled the lump sum payment was not income under

the provisions of the contract.

     The contract was unambiguous.    Paragraph 10 addressed

spousal support.   It set the amount, provided for modification,

and specified the facts that formed the basis for the monthly

payment.   Those facts were:   the husband's annual income of

$180,000, the alimony paid to his first wife of $18,000, and the

wife's annual earnings of $20,000.   Paragraph 17 addressed the

wife's rights in the husband's retirement
                              - 5 -
"assets/accounts/benefits."   The contract did not link or

correlate the two provisions in any manner.

     The contract treated spousal support and the pension

benefits as separate, distinct matters.   Nothing suggested

allocation of the pension benefit would trigger a change in the

wife's income or suggested the parties intended that receipt of

her share of the pension would relieve the husband of the

support obligation.   Under the provisions of that particular

contract, payment of her share by American Airlines did not

change its nature as an asset.   As the trial court concluded,

"the pension benefit was plainly envisioned as a distribution of

property."

     In various ways the husband argues the potential income

streams that the pension asset could produce should be treated

as income and imputed to the wife.   His expert explained the

accepted methods for projecting streams of income and calculated

these using various assumed rates of return.   The expert opined

the wife could withdraw annually $35,000 or $42,000 for the

balance of her life expectancy of age 83.   The husband argues

such income potential supplanted the need for him to pay spousal

support.   The wife's expert disputed the propriety of the

calculations because they did not address the wife's particular

needs, anticipate any inflation, or make provision if the wife

lived past age 83.    He calculated the wife would out live the

projected payments and be destitute.
                              - 6 -
      A spouse is not required to deplete her assets to relieve

the husband of his support obligation.     Klotz v. Klotz, 203 Va.

677, 127 S.E.2d 104 (1962), held, "[w]here the wife is possessed

of a sizeable estate in her own right, the law does not require

her to invade that estate to relieve the obligation of her

former husband" to pay spousal support.     Id. at 680, 127 S.E.2d

at 106 (citation omitted).   The evidence in this case showed

that withdrawing from the pension under the plans advocated by

the husband would force the wife to deplete her primary asset.

     The trial court rejected the husband's argument that the

earnings potential of the pension benefits removed all or the

major part of the wife's need for spousal support.    It stated:

"yet the wife did not receive 'income' from the pension but

rather a lump sum payment which does not automatically amount to

income to her.   For her to convert it into income she must

invest it and hence over time deplete it."    The projections left

her with nothing if she outlived her life expectancy.    The trial

court rejected the plan that would "diminish significantly – if

not destroy – the wife's share of the marital property" and

characterized the result as "Draconian."

     Once the trial court elected not to impute income to the

wife, it calculated the support based on the husband's reduced

retirement income.   When it recalculated the support award, the

trial court carefully considered all the required factors under

Code § 20-107.1.   It specifically considered the wife's
                               - 7 -
retirement fund, which it described as her primary asset.     The

trial court considered the husband's ability to pay based on his

income from all sources and the wife's needs as well as her

earning capacity.   Given the trial court's finding that the

parties clearly contemplated two separate payments in their

contract, pension distribution and spousal support, neither of

which was conditioned upon the other, we find no error in the

trial court's ruling.

     The wife seeks an award of legal fees incurred in this

appeal.   We find the husband had a reasonable argument and,

accordingly, we deny the request for attorney's fees.   See

Gayler v. Gayler, 20 Va. App. 83, 87, 455 S.E.2d 278, 280

(1995).

     For the reasons stated, we affirm the decision of the trial

court.

                                                         Affirmed.




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