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Wife’s appeal dismissed after husband’s death

Court-of-Appeals crA wife who was unhappy with a lump sum settlement under a premarital agreement lost her appeal because she substituted her husband’s estate, not his personal representative, as the party in interest when the husband died after the divorce.

Under the Court of Appeals’ analysis, the wife was not pursuing a claim against the property of the estate, but an action against the husband personally, based on the terms of the premarital agreement. That meant she should have named the personal representative of the estate in her appeal.

The parties signed a premarital agreement in 1999 two weeks before they married. At the time of their marriage, the husband owned a house in Bethesda, Maryland, that became the marital home after the wedding.

Under the agreement, the husband would keep a separate interest in the Bethesda house “in an amount equal to the net asset value of the property” as of the date of the marriage. Any appreciation beyond that valuation would be treated as marital property, to be shared equally by the parties in the event of divorce.

The agreement also provided that each party would keep his or her separate property as identified in attachments incorporated by reference into the agreement. A listing of the husband’s property included multiple retirement and money market accounts.

In 1999, when the parties made their agreement, the Bethesda house was valued at $500,000, with a mortgage debt of $265,000. The couple sold the house in 2004 for $810,000. After subtracting closing costs and an increased mortgage cost of $311,898.55, the couple cleared $458,298.20 from the sale, all of which was deposited into the husband’s money market account.

In 2011, the husband left the marital home and started divorce proceedings against the wife. By the time the couple divorced in 2012, the money market account had a balance of $811. The trial court found that the husband had used the Bethesda home sale proceeds to make a substantial down payment on a house in Leesburg, Virginia, buy a $38,000 Lexus for the wife, redecorate their house, install a deck and go on family vacations.

The divorce decree awarded the wife $59,805.67 as a lump sum award under the premarital agreement. The Loudoun County Circuit Court said that had there been more money left from the sale of the Bethesda home, the wife would have received “a more significant sum,” according to the appellate opinion in Loewinger v. Estate of Loewinger (VLW 014-7-309).

Husband died before final decree

When the husband died on Oct. 6, 2013, the parties were still litigating custody and visitation issues, and the trial court entered a final order dismissing the case on Nov. 1, 2013. The wife noted her appeal on Dec. 12, 2013, but later obtained leave from the trial court to substitute the husband’s estate as the party in interest.

On appeal, the wife challenged the trial court’s interpretation of the premarital agreement and calculation of the marital share of the proceeds from the sale of the Bethesda home.

But the appeals court first had to take up the appellee’s claim that the wife’s appeal was a nullity. In an opinion by Judge Glenn A. Huff, the panel agreed that the estate was not a proper party.

In Virginia, Huff wrote, all “suits and actions must be prosecuted by and against living parties, in either an individual or representative capacity.”

A Virginia statute, Code § 8.01-229(B), allows claims to be filed against the property of the estate, but says actions may only be filed against a decedent’s personal representative.

In her appeal, the wife was not asserting a claim against the property of the husband’s estate, she was asserting an action against the husband personally, based on the terms of their premarital agreement, the panel said.

Because the wife was asserting a contract action against the husband personally, Code § 8.01-229(B)(2) required her to name the personal representative.

Another statute, Code § 8.01-20, provides that the Court of Appeals or Supreme Court may retain jurisdiction in a case in which a party has died, but that statute only applies when the death occurs after the appeal or writ of error is awarded, the panel said.

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