663 S.E.2d 631
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2. “'That which fairly puts a party on inquiry is regarded as sufficient notice, if the means of knowledge are at hand; and a purchaser, having sufficient knowledge to put him on inquiry, or being informed of circumstances which ought to lead to such inquiry, is deemed to be sufficiently notified to deprive him of the character of an innocent purchaser.' Syl. pt. 3, Pocahontas Tanning Co. v. St. Lawrence Boom & Mfg. Co., 63 W.Va. 685, 60 S.E. 890 (1908).” Syllabus Point 3, Gullett v. Burton, 176 W.Va. 447, 345 S.E.2d 323 (1986).
3. “'In ascertaining legislative intent, effect must be given to each part of the statute and to the statute as a whole so as to accomplish the general purpose of the legislation.' Syl. Pt. 2, Smith v. State Workmen's Compensation Commissioner, 159 W.Va. 108, 219 S.E.2d 361 (1975).” Syllabus Point 3, State ex rel. Fetters v. Hott, 173 W.Va. 502, 318 S.E.2d 446 (1984).
4. “A cardinal rule of statutory construction is that significance and effect
must, if possible, be given to every section, clause, word or part of the statute.” Syllabus
Point 3, Meadows v. Wal-Mart Stores, Inc., 207 W.Va. 203, 530 S.E.2d 676 (1999).
5. “Where the language of a statute is clear and without ambiguity the plain meaning is to be accepted without resorting to the rules of interpretation.” Syllabus Point 2, State v. Elder, 152 W.Va. 571, 165 S.E.2d 108 (1968).
6. “'A party is not entitled to protection as a bona fide purchaser, without
notice, unless he looks to every part of the title he is purchasing, neglecting no source of
information respecting it which common prudence suggests.' Syl. Pt. 2, Pocahontas
Tanning Co. v. St. Lawrence Boom & Mfg. Co., 63 W.Va. 685, 60 S.E. 890 (1908).”
Syllabus Point 4, Belcher v. Powers, 212 W.Va. 418, 573 S.E.2d 12 (2002).
7. When a party to a divorce case undertakes_before the final order of
equitable distribution in the case is effective_to transfer real property to a third party having
actual knowledge of the divorce proceedings, the transfer is effective only to the extent it
does not conflict with the equitable distribution order unless the other party to the divorce
joins in the transfer. To the extent the attempted transfer conflicts with the order of equitable
distribution and there is evidence that the transfer was made to avoid application of the
equitable distribution statutes or was otherwise a fraudulent conveyance, it is void.
8. Pursuant to W.Va. Code § 48-5-611(c) (2001), a party in a divorce proceeding may be awarded reasonable attorney's fees and costs that were incurred unnecessarily because the opposing party acted in bad faith, vexatiously, wantonly, or for oppressive reasons.
Maynard, Chief Justice:
This case is before this Court upon appeal of a final order of the Circuit Court
of Kanawha County entered on December 11, 2006. In that order, the circuit court denied
the appeal filed by the appellant and petitioner below, Connie Sue Whiteside, now known
as Connie Sue Varney (hereinafter “Ms. Varney”), of a November 30, 2006, order of the
Family Court of Kanawha County entered in this divorce action against the appellee and
respondent below, Michael Brent Whiteside (hereinafter “Mr. Whiteside”). (See footnote 1) In the
November 30, 2006, order, the family court denied Ms. Varney's motion to void a deed
which conveyed Mr. Whiteside's share in certain marital property to the appellee and
intervenor below, Equity Holdings, LLC.
In this appeal, Ms. Varney contends that Equity Holdings was not a bona fide
purchaser and that the conveyance was made to avoid equitable distribution. Thus, she
argues that the family court erred by not voiding the deed pursuant to W.Va. Code § 48-7-
108 (2001). This Court has before it the petition for appeal, the entire record, and the briefs
and argument of counsel. For the reasons set forth below, the orders of the circuit court and
family court are reversed, and this case is remanded for entry of an order voiding the deed
conveying Mr. Whiteside's interest in the subject property to Equity Holdings and a
determination of whether Ms. Varney is entitled to an award of attorney's fees.
There exists one piece of real estate subject to equitable
distribution, that being lots 62, 63, 64, 95 and 96 located in
Wildwood Addition, Charleston, Kanawha County, West
Virginia, which property has been valued by the Bankruptcy
Court at $15,000. Both parties have stipulated that the value of
this property is $15,000. The wife seeks an offset against the
husband's interest in this property of $844.24 for one-half (½)
of her redemption of said property for non-payment of taxes,
$2,306.50 in attorney's fees for Attorney Steve Thomas who
represented her in protecting her interest in this property before
the Bankruptcy Court and $4,000 for one-half (½) the value of
the Baldwin grand piano listed by the husband as an asset in
Bankruptcy Court then sold by him. The Court finds that the
wife is entitled to these off-sets against the husband's interests
in said property. In the interest of settling this litigation, the
husband has stated on the record that he has no objection to
executing a deed conveying his interest in this property to his
ex-wife. Robert Fletcher, an attorney practicing before the Bar
of this Court, is hereby appointed special commissioner to
execute the transfer of said property should the husband fail to
do so.
Unbeknownst to the family court and Ms. Varney, Mr. Whiteside had already conveyed his
one-half undivided interest in the five Wildwood Addition lots to Equity Holdings for
$6,000.00 by deed dated July 23, 2004. Mr. Whiteside never advised the family court that
he had already conveyed his interest in the property to Equity Holdings.
After Ms. Varney learned that Mr. Whiteside had conveyed his interest in the
property to Equity Holdings, she filed a motion with the family court seeking to void the deed
and enforce the February 1, 2005, order. Equity Holdings then filed a motion to intervene
in the divorce case (See footnote 4) and also filed a motion to dismiss Ms. Varney's motion. On November
30, 2006, the family court denied Ms. Varney's motion and granted Equity Holdings' motion
to dismiss. The family court found that Equity Holdings was a bona fide purchaser without
notice of any fact or condition that would support setting aside the deed it received from Mr.
Whiteside. Ms. Varney then filed an appeal with the circuit court. By order entered
December 11, 2006, the circuit court denied the appeal. (See footnote 5)
This Court's standard of review for an appeal from a
circuit court that reviewed a family court's final order, or
refused to consider a petition for appeal to review a family
court's final order, is the same. In reviewing a final order
entered by a circuit court judge upon a review of, or upon a
refusal to review, a final order of a family court judge, we
review the findings of fact made by the family court judge under
the clearly erroneous standard, and the application of law to the
facts under an abuse of discretion standard. We review
questions of law de novo.
See W.Va.Code § 51-2A-15(b) (2001). Accordingly, with these standards in mind, we now
consider the parties' arguments.
A husband or wife may alienate property at any time prior to the
entry of an order under the provisions of this article or prior to
the recordation of a notice of lis pendens in accordance with the
provisions of part 7-401, et seq. [§§ 48-7-401 through 48-7-
402], and at anytime and in any manner not otherwise prohibited
by an order under this chapter, in like manner and with like
effect as if this article and the doctrine of equitable distribution
had not been adopted: Provided, That as to any transfer prior to
the entry of an order under the provisions of this article, a
transfer other than to a bona fide purchaser for value shall be
voidable if the court finds such transfer to have been effected to
avoid the application of the provisions of this article or to
otherwise be a fraudulent conveyance.
Ms. Varney contends that Equity Holdings was not a bona fide purchaser of
Mr. Whiteside's share of the Wildwood Addition property. She points out that counsel for
Equity Holdings and its principal were present at the bankruptcy hearing on January 7, 2004,
and that the Whiteside divorce was mentioned many times. Furthermore, counsel for Equity
Holdings specifically acknowledged to the bankruptcy court that Equity Holdings was aware
of the divorce. Ms. Varney also notes that her counsel advised during that hearing that she
intended to request that any monies owed to her by Mr. Whiteside be offset against his share
of the property. Thus, Ms. Varney maintains that since Equity Holdings knew about the
divorce action, knew of her claims against Mr. Whiteside, and knew that she was going to
request that her claims be offset against Mr. Whiteside's share of the property, it was not a
bona fide purchaser.
Ms. Varney also contends that Mr. Whiteside transferred his interest in the
property to Equity Holdings to deprive her of her right to equitable distribution. She notes
that the bankruptcy trustee expressed concern about Mr. Whiteside trying to sell the property
to Equity Holdings during the hearing on January 7, 2004. Moreover, at the January 5, 2005,
final hearing before the family court, Mr. Whiteside concealed the fact that he had already
conveyed his share of the property to Equity Holdings. He failed to amend his disclosure and
represented to the court that he still retained his interest in the property. Ms. Varney
concludes that Mr. Whiteside's actions show that he transferred the property in order to avoid
equitable distribution.
In response, Equity Holdings acknowledges that it knew about the Whiteside
divorce but claims that the deed should not be voided because there was no equitable
distribution order in place at the time of the conveyance and a notice of lis pendens had not
been recorded. Equity Holdings also argues that the claims made by Ms. Varney during the
bankruptcy hearing were contingent, unliquidated, and not apparently tied to the property.
Equity Holdings maintains that Ms. Varney's claims were only defined in vague terms, and
it can not be charged with knowledge of an equitable distribution claim that was never clearly
established.
Equity Holdings further contends that there is no evidence that Mr. Whiteside
made the transfer to avoid equitable distribution. Equity Holdings argues that in the absence
of such evidence, the deed cannot be voided. Equity Holdings says that should this Court
conclude that it was not a bona fide purchaser, then the case should be remanded for further
evidentiary development with regard to whether the transfer was a fraudulent conveyance or
was effected to avoid equitable distribution.
Upon review of the record, we find that the family court erred when it
concluded that Equity Holdings was a bona fide purchaser of Mr. Whiteside's share of the
subject property. This Court has long held that, “'A bona fide purchaser is one who actually
purchases in good faith.' Syllabus point 1, Kyger v. Depue, 6 W.Va. 288 (1873).” Syllabus
Point 4, Wolfe v. Alpizar, 219 W.Va. 525, 637 S.E.2d 623 (2006).
We have also described a bona fide purchaser of land as “'one
who purchases for a valuable consideration, paid or parted with,
without notice of any suspicious circumstances to put him upon
inquiry.'” Stickley v. Thorn, 87 W.Va. 673, 678, 106 S.E. 240,
242 (1921) (quoting Carpenter Paper Co. v. Wilcox, 50 Neb.
659, 70 N.W. 228 (1897)). See also Simpson v. Edmiston, 23
W.Va. 675, 680 (1884) (“[A] bona fide purchaser is one who
buys an apparently good title without notice of anything
calculated to impair or affect it.”); Black's Law Dictionary
1249 (7th ed.1999) (defining a bona fide purchaser as “[o]ne
who buys something for value without notice of another's claim
to the item or of any defects in the seller's title; one who has in
good faith paid valuable consideration for property without
notice of prior adverse claims.”).
Subcarrier Communications, Inc. v. Nield, 218 W.Va. 292, 300, 624 S.E.2d 729, 737 (2005).
This Court has further held,
“That which fairly puts a party on inquiry is regarded as sufficient notice, if the means of knowledge are at hand; and a purchaser, having sufficient knowledge to put him on inquiry, or being informed of circumstances which ought to lead to such inquiry, is deemed to be sufficiently notified to deprive him of the character of an innocent purchaser.” Syl. pt. 3, Pocahontas Tanning Co. v. St. Lawrence Boom & Mfg. Co., 63 W.Va. 685, 60 S.E. 890 (1908).
Syllabus Point 3, Gullett v. Burton, 176 W.Va. 447, 345 S.E.2d 323 (1986). Given the fact
that Equity Holdings had actual notice of the divorce proceedings and Mrs. Varney's
intention to make claims against Mr. Whiteside's share of the property, Equity Holdings
simply does not fit within the definition of a bona fide purchaser.
We reject Equity Holdings' argument that it need not have been a bona fide
purchaser because no equitable distribution order was in place at the time of the conveyance.
Essentially, Equity Holdings would have this Court ignore that portion of W.Va. Code § 48-
7-108 which provides, “[t]hat as to any transfer prior to the entry of an order under the
provisions of this article, a transfer other than to a bona fide purchaser for value shall be
voidable if the court finds such transfer to have been effected to avoid the application of the
provisions of this article or to otherwise be a fraudulent conveyance.” However, this Court
has long held that, “'In ascertaining legislative intent, effect must be given to each part of the
statute and to the statute as a whole so as to accomplish the general purpose of the
legislation.' Syl.Pt. 2, Smith v. State Workmen's Compensation Commissioner, 159 W.Va.
108, 219 S.E.2d 361 (1975).” Syllabus Point 3, State ex rel. Fetters v. Hott, 173 W.Va. 502,
318 S.E.2d 446 (1984). In other words, “A cardinal rule of statutory construction is that
significance and effect must, if possible, be given to every section, clause, word or part of
the statute.” Syllabus Point 3, Meadows v. Wal-Mart Stores, Inc., 207 W.Va. 203, 530
S.E.2d 676 (1999). Also, “[w]here the language of a statute is clear and without ambiguity
the plain meaning is to be accepted without resorting to the rules of interpretation.” Syllabus
Point 2, State v. Elder, 152 W.Va. 571, 165 S.E.2d 108 (1968).
Applying our rules of statutory construction, W.Va. Code § 48-7-108 clearly
provides that a transfer of property by a husband or wife prior to entry of an equitable
distribution order is voidable if the transfer is not to a bona fide purchaser and was made for
the purpose of avoiding application of the equitable distribution statutes or was otherwise a
fraudulent conveyance. As discussed above, Equity Holdings had actual knowledge of the
divorce proceedings and Ms. Varney's claims against Mr. Whiteside. Such knowledge
precludes Equity Holdings from claiming the status of a bona fide purchaser.
Having found that Equity Holdings was not a bona fide purchaser, we must
now consider whether there is sufficient evidence that Mr. Whiteside transferred his share
in the subject property to Equity Holdings in an attempt to avoid application of equitable
distribution statutes. The record shows that Mr. Whiteside conveyed his share of the property
to Equity Holdings just five days after the property was abandoned by the bankruptcy trustee.
Then, approximately seven months later, Mr. Whiteside appeared before the family court and
not only failed to disclose the transfer, but actually represented to the family court that he still
owned his share of the property and that he would deed the same to Ms. Varney to satisfy her
claims against him. Given these facts, we find that Mr. Whiteside's actions clearly establish
an intent to avoid application of the equitable distribution statutes.
Based on all the above, we now hold that when a party to a divorce case
undertakes_before the final order of equitable distribution in the case is effective_to transfer
real property to a third party having actual knowledge of the divorce proceedings, the transfer
is effective only to the extent it does not conflict with the equitable distribution order unless
the other party to the divorce joins in the transfer. To the extent the attempted transfer
conflicts with the order of equitable distribution and there is evidence that the transfer was
made to avoid application of the equitable distribution statutes or was otherwise a fraudulent
conveyance, it is void. (See footnote 6) Given our findings in this case, we conclude that the family court
erred by not voiding the deed which conveyed Mr. Whiteside's share of the property to
Equity Holdings pursuant to W.Va. Code § 48-7-108. Equity Holdings was not a bona fide
purchaser and Mr. Whiteside clearly transferred his share of the property to avoid application
of the equitable distribution statutes. Accordingly, we must reverse the order of the Circuit
Court of Kanawha County entered on December 11, 2006, and the order of the Family Court
of Kanawha County entered on November 30, 2006, and remand this case to the circuit court
with directions to remand the case to the family court for the purpose of entering an order
voiding the deed executed by Mr. Whiteside on July 23, 2004, conveying his interest in the
subject property to Equity Holdings.
We note that upon remand, the family court has the discretion to determine
whether Ms. Varney is entitled to an award of attorney's fees. In that regard, W.Va. Code
§ 48-5-611(c) (2001) provides that,
When it appears to the court that a party has incurred attorney's
fees and costs unnecessarily because the opposing party has
asserted unfounded claims or defenses for vexatious, wanton or
oppressive purposes, thereby delaying or diverting attention
from valid claims or defenses asserted in good faith, the court
may order the offending party, or his or her attorney, or both, to
pay reasonable attorney's fees and costs to the other party.
Accordingly, we now hold that pursuant to W.Va. Code § 48-5-611(c), a party in a divorce
proceeding may be awarded reasonable attorney's fees and costs that were incurred
unnecessarily because the opposing party acted in bad faith, vexatiously, wantonly, or for
oppressive reasons. Therefore, in this instance, the family court has the discretion to
determine whether Ms. Varney is entitled to an award of attorney's fees from either Mr.
Whiteside or Equity Holdings or from both jointly and severally.