## Facts

- Steven Douglas Nack (husband) and Debra Dickerson Edwards Nack (wife) executed a prenuptial agreement before marriage.
- The agreement identified husband’s stock in White City Electric (WCE) and two automobiles—a 1987 Mercedes-Benz and a 1993 Lexus—as husband’s separate property.
- After the marriage, husband received a distribution of nearly $300,000 connected to his WCE stock ownership.
- Husband deposited the distribution check into a joint checking account held in both spouses’ names.
- The joint account received many other deposits and was used for many withdrawals during the marriage.
- Money from the joint checking account was used to fund an investment account with Cornerstone Capital Management, and that investment account later funded a Legg Mason account.
- During the marriage, wife drove the Mercedes as her primary vehicle for a period of time, and maintenance expenses were paid using joint funds.
- Title to both the Mercedes and the Lexus remained in husband’s name throughout the marriage.
- In the divorce proceedings, husband failed to provide key documentation about the joint checking account, including account balances and deposit slips, that could show what portion of the investment funding came from the claimed separate WCE distribution.
- The circuit court classified the Legg Mason account and the two automobiles as marital property; it also classified certain buffalo and farm equipment as marital property.
- The circuit court enforced the prenuptial agreement to deny wife an award of attorney’s fees.
- Husband appealed the classifications (including the investment account and various items of property), and wife cross-appealed the denial of attorney’s fees.

## Issues

1. Whether the trial court erred in classifying the Legg Mason investment account as marital property when husband claimed a separate interest based on proceeds from his premarital WCE stock.
2. Whether the trial court erred in classifying the 1987 Mercedes-Benz and 1993 Lexus as marital property despite the prenuptial agreement identifying them as husband’s separate property and title remaining in his name.
3. Whether the trial court erred in classifying the buffalo and assorted farm equipment as marital property.
4. Whether the prenuptial agreement barred an award of attorney’s fees to wife in the divorce litigation.

## Decision

- Affirmed the classification of the Legg Mason investment account as marital property because husband deposited the WCE distribution into a joint checking account, the funds were commingled, and husband did not produce records sufficient to trace a separate component into the investment account.
- Reversed the classification of the 1987 Mercedes-Benz and 1993 Lexus as marital property because the prenuptial agreement expressly listed them as husband’s separate property and they remained titled in his name.
- Affirmed the classification of the buffalo and farm equipment as marital property.
- Affirmed the ruling that the prenuptial agreement barred wife from receiving attorney’s fees.

## Legal Principles

- Equitable distribution classifications are reviewed with deference to the trial court; reversal is warranted only for abuse of discretion, misapplication of statutory requirements, or findings unsupported by the evidence.
- The spouse claiming that an asset (or part of it) is separate property bears the burden to prove that classification, including tracing any separate contribution through transactions and accounts.
- When separate funds are placed into a joint account and mixed with other deposits and withdrawals, the resulting commingling can defeat a separate-property claim if the proponent cannot trace the separate funds with adequate financial records.
- A valid prenuptial agreement that clearly identifies specific assets as separate property is enforced according to its terms.
- Marital use of an asset and payment of maintenance from joint funds do not, by themselves, change classification of an asset that a prenuptial agreement designates as separate, particularly when title remains consistent with the agreement.
- A prenuptial agreement may waive or bar attorney’s fees, and a court may enforce that contractual provision in divorce litigation.

## Conclusion

The Virginia Court of Appeals held that the Legg Mason investment account was marital because husband’s claimed separate WCE distribution was deposited into a joint account and could not be traced into the investment account due to commingling and missing records, but it enforced the prenuptial agreement to treat the Mercedes and Lexus as husband’s separate property and to bar wife’s request for attorney’s fees, while affirming the marital classification of the buffalo and farm equipment.


Nack v. Edwards Nack, 2007 WL 2592902 (2007)