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- Court Cannot Contradict Property Settlement Agreement As To Spousal Support Terms
- Court Cannot Order Life Insurance
- Unconscionable Premarital Agreement
- Court May Examine Future Needs in Equitable Distribution
- Court examines equitable division of tax refunds
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Divorce
Court Cannot Contradict Property Settlement Agreement As To Spousal Support Terms
A court cannot deviate from the terms of a property settlement agreement when evaluating spousal support unless expressly given the power to do so under the agreement.Court Cannot Order Life Insurance
Divorce, Property Settlement, Equitable Distribution, Life InsuranceCourt May Examine Future Needs in Equitable Distribution
The Virginia Court of Appeals recently confirmed a trial court's approach to equitable distribution after divorce. In White v. White, husband, 75, sought divorce from wife, 50. Husband's attorney argued successfully that his future needs should be considered by the court in light of his age and poor health. Indeed, Va. Code 20-107.3(E) requires courts to consider the relative age and health of the parties when distributing a marital estate. The Court of Appeals made clear the trial court did not err by contemplating husband's future needs upon considering these requisite factors.Labels: divorce equitable distribution
Unconscionable Premarital Agreement
In Chaplain v. Chaplain, the Virginia Court of Appeals recently reversed a trial court's holding that a premarital agreement was enforceable. Husband, a Virginia native with a twenty million dollar fortune, married Wife, a Moroccan immigrant of limited means. Prior to marriage, Husband arranged for Wife to endorse a premarital agreement, telling Wife, whose literacy was described as "able to read English on a Chinese menu," that she was signing marriage papers. The agreement waived equitable distribution in the event of a divorce and awarded wife only $100,000, if she was still married and living with Husband at the time of this death. Husband made no disclosures about his wealth, telling Wife only that he was "not a wealthy man." While the trial court did not observe any unconscionable aspects to the agreement, the Virginia Court of Appeals disagreed noting the gross disparity in the distribution and the circumstances under which Wife signed the agreement. The trial court will now have a second chance to determine how to properly distribute the marital estate.Court examines equitable division of tax refunds
Virginia Court of Appeals affirms trial court's distribution of tax refunds from loss on beach home.Labels: divorce equitable distribution
Court Invalidates Property Settlement Agreement Due to Mental Incapacity
Court Invalidates Property Settlement Agreement Due in Divorce due to Mental IncapacityCourt of Appeals: Personal Injury Settlement was Marital Property
In Chretien v. Chretian, the Virginia Court of Appeals recently considered the issue of personal injury settlements and their place in equitable distribution schemes. The case was heard in Richmond on appeal from the Circuit Court of Orange.In Chretien, Ms. Chretian was injured while riding as a passenger on her husband's motorcycle. Mr. Chretian's motorcycle crossed the double-yellow line, ultimately causing an accident. Ms. Chretian reached a settlement with various insurance companies for her injuries in the amount of almost $150,000. Three years after the settlement, the Chretians separated and ultimately divorced.
While the trial court ultimately ruled Mr. Chretian should not benefit from the settlement because of his negligence in causing the accident which injured his wife (a line of reasoning for which the Court of Appeals expressed approval), the Courts did make clear the rule for considering whether personal injury settlements are marital or separate:
Code § 20-107.3 provides: “In the case of any personal injury or workers’ compensation recovery of either party, the marital share as defined in subsection H of this section shall be marital property.” Code § 20-107.3(H) defines “marital share” as that part of the total personal injury or workers’ compensation recovery attributable to lost wages or medical expenses to the extent not covered by health insurance accruing during the marriage and before the last separation of the parties, if at such time or thereafter at least one of the parties intended that the separation be permanent.
In Chretian, the Court ultimately determined there was no evidence Ms. Chretian's settlement compensated her for anything other than lost wages or unreimbursed medical expenses. Accordingly, the settlement was marital property. Unfortunatly for Mr. Chretian, however, the Court of Appeals upheld the trial court's finding that equity would not be served by affording Mr. Chretian any of the settlement due to his negligent operation of the motorcycle in the accident.
Labels: divorce equitable distribution
Tardiness Not Tolerated In Divorce Cases
In Bennett v. Bennett, the Virginia Court of Appeals held that challenges to a divorce decree filed after 21 days had passed were unacceptable.In June 2008, husband filed for divorce in Newport News Circuit Court. Depositions were taken to establish relevant information in anticipation of the divorce, and the court granted husband's final decree of divorce shortly thereafter. A week after the court issued the divorce, wife filed an answer. Three weeks later wife argued that the initial divorce decree was in violation of court rules, and asked the circuit court to vacate the divorce decree.
The Virginia Court of Appeals held that, even if there was a violation of the rules of court, the circuit court no longer had jurisdiction to vacate the divorce decree. Essentially, once three weeks pass, trial courts in Virginia are without power to modify or nullify their orders.
Because divorce and other orders are only subject to modification for a short period of time, it is essential to retain counsel that will be attentive to the deadlines in your case. It is similarly important that your attorney be conversant with you regarding the disposition of your case in the trial court and your options for appealing the decision if desired. This case also reiterates a little-known fact: that procedural rules of court can be as crippling to your case as the substantive law.
Burden On Spouse To Prove That Assets And Debts Are Not Joint Property
Under Virginia law, half of a couple's assets are presumed joint property of the marriage, and each party is entitled to one-half of the value unless challenged. In Layne v. Layne, the Virginia Court of Appeals ruled that a rental property which husband owned prior to the marriage was marital property, and wife was entitled to one-half of its value. Applying Virginia law, the court held that over the course of the marriage, wife made significant contributions to the upkeep, daily maintenance, tenant-seeking efforts, and leasing duties. Because the wife's efforts had contributed to the increase in value of the rental property, and because the proceeds from the renting were deposited into a joint bank account, the court held that the asset was to be divided 50/50.In addition to presuming that assets of either husband or wife are jointly owned, Virginia law likewise presumes that the debts of either husband or wife are jointly owned. In Layne v. Layne, wife accrued $44,000 in debt from student loans over the course of the marriage. Husband argued that because he was not going to benefit from the increased earning capacity that wife's education would produce, he should not have to pay for one-half of the loans. The court disagreed with that argument. Instead, it noted that the loans were not used to pay for tuition or for books, but instead went entirely to family expenses.
While the outcome of this case may seem unfair, it is probably an even-handed and logical application of sound family law policy. The principle of this case is easy: assets and debts of one party are the assets and debts of the marriage. Absent proof that an asset or debt was kept entirely separate from one's spouse, it will be divvied up on divorce, and each party will shoulder an even burden or reward.
Divorce Appeal Dismissed For Inadequate Pleading
In Kablach v. Kablach, the Virginia Court of Appeals affirmed the trial court's holdings, all of which were in wife's favor. In this case, husband and wife married in 1983. In 1999, wife had brain surgery and suffered decreased mental capacity as a result. In 2002, husband moved from the marital residence and began using joint assets for business transactions in his name only. In late 2002, husband had a separation agreement drawn up and executed by his diminished wife. The agreement provided for a limited amount of spousal support for a defined duration and a limited equitable distribution award.After consulting an attorney, wife filed suit in circuit court, seeking to set aside the separation agreement. The trial court found the wife did not have the mental capacity to enter into the separation agreement, and it amended the divorce decree to provide extended monetary benefits to the wife.
Husband appealed the trial court's revision of the divorce decree. However, in the appeal he submitted to the Court of Appeals, husband failed to a transcript of the relevant proceedings from trial court for the appellate court to review. Failing to include the trial transcript violates Supreme Court of Virginia Rule 5A:27 and precluded the court of appeals from finding for the husband. In addition, husband failed include the principles of law to guide the court in his arguments and did not cite to any legal authorities. Both of these failures violate Supreme Court Rule 5A:20. On these grounds, the court of appeals summarily affirmed the trial court and upheld its revised divorce decree in favor of the wife.
There are two lessons to be learned from this case. First, take care to review the rules of court in whatever venue your lawsuit is being filed. The rules of court are often as important as the substantive law; both can preclude a ruling in your favor. Second, it is good practice to seek a local attorney who is familiar with the local rules of court as well as trial and appeal procedures.
Failure To Attend Divorce Hearing Costs Husband Thousands
In Darley v. Darley, the Virginia Court of Appeals summarily affirmed the Prince William County Circuit Court’s award of spousal support to Ms. Darley.The Darleys were married in 1971. During their marriage, Mr. Darley was in the military. In 1999, husband and wife separated and husband moved to Panama. Since 2001, husband paid $500 per month in spousal support according to a spousal support order in Virginia Juvenile and Domestic Relations Court. Sometime in 2007, husband obtained a divorce in Panama, and in 2008 he asked the Prince William County court to acknowledge to foreign divorce. Because he still lived in Panama, the husband did not attend the divorce hearing. The wife testified that she was unemployed and unable to find work. She was also on Social Security and relied on her children and credit cards to meet her living expenses. Without testimony from the husband, the court awarded wife 50% of the husband’s military retirement pay, $600 per month in spousal support (rather than $500), and $1,500 in attorney’s fees.
The husband challenged this decision, arguing that the trial court could not award so much to his former wife when there was no evidence that he had any income in addition to his military retirement pay. He also argued that the increase in support was unwarranted. Citing the husband’s failure to appear at the divorce hearing, the court affirmed both decisions of the trial court. Since the husband did not appear to testify about his sources of income or to refute the wife’s testimony about her costs of living, he was unable to challenge the trial court’s rulings.
Court of Appeals: Cars Are Joint Marital Property Under Virginia Law
In Lightburn v. Lightburn, husband and wife obtained a divorce. The trial court classified the couple’s vehicles as the property of the husband rather than the joint property of both husband and wife. As such, wife was not entitled to any of the cars’ value.The Court of Appeals reversed that ruling, and noted that under Virginia law, there is a presumption that all property is jointly held by a married couple. The Court stated that the husband did not present enough evidence to rebut the presumption that the cars were owned by both he and his wife. Specifically, the appeals court stated that no evidence was introduced at trial to show that the husband purchased the cars using separate funds, all of which were acquired during the eleven-year marriage. Given the lack of evidence to the contrary and the presumption of joint ownership, the Court of Appeals reversed the trial court and ruled that the wife was entitled to half of the vehicles’ value.
Despite wife’s claim of husband’s fraud, court dismisses wife’s appeal because of provision in the property settlement agreement precluding appellate review
The Virginia Court of Appeals, an appellate court whose jurisdiction includes appeals of the decisions of trial courts involving issues of divorce, custody, visitation, spousal support, child support, property settlement agreements and other family law issues, dismissed an appeal from a Virginia Circuit Court because of a provision in the property settlement agreement (PSA) which precluded appellate review.
In Burke v. Burke, the wife separated from her husband who had served in the military for over twenty two years and with whom she had been married for seventeen years. After they separated and before the wife filed for divorce, the parties discussed proposed terms for the PSA, including the wife continuing to receive coverage under the husband’s military health insurance plan. The PSA was later drafted by the wife’s attorney and signed by the husband who was an attorney.
The PSA contained a provision allowing the wife to continue to receive the military health insurance coverage as they had discussed, but also stated that the coverage would be “as provided by law”. Because federal law does not allow military health insurance coverage to continue after divorce decrees are entered, her military health insurance coverage ended when the divorce decree was entered.
The PSA also contained a provision that all Circuit Court decisions relating to the PSA would be final and not subject to appeal.
After the divorce decree was entered and the wife learned that her military health insurance coverage ended, she filed a Circuit Court lawsuit claiming that she was the victim of fraud by her then ex-husband regarding her health insurance coverage.
The trial court found that her ex-husband “deliberately misled” the wife and concealed “material facts” about her future health care coverage when signing the PSA, vacated the health care benefits provision in the PSA and reformed it. However, the wife was still dissatisfied with the trial court’s decision and appealed.
The Virginia Court of Appeals dismissed her appeal. Despite the wife’s claims of fraud and dissatisfaction with the trial court’s decision about health insurance coverage, the Court of Appeals upheld the PSA provision declaring that all decisions by the trial court relating to the PSA would be final and not subject to appeal. In reaching its decision, the Court of Appeals rejected the wife’s arguments that the PSA appeal provision was void as against public policy. It reaffirmed established Virginia law which allows parties considerable freedom in negotiating contracts and agreements, like PSAs, even those that include the waiver of significant rights, like health insurance coverage.
Trailer park cohabitation between ex-wife and man insufficient to terminate spousal support obligation
In an unpublished opinion authored by the chief judge of the Virginia Court of Appeals, a wife’s living arrangements were found to create only the “perception of cohabitation” insufficient to nullify spousal support payments pursuant to a divorce decree. The husband and wife in Tolley v. Tolley, were divorced in June 2006. The final divorce decree required husband to pay $1200 per month in spousal support, but only subject to certain limitations: the spousal support arrangement would terminate if (1) husband or wife died, (2) if wife remarried, or (3) if wife cohabitated with a member of the opposite sex in a relationship analogous to marriage. Over the next two years, wife shared a trailer home with another man and occasionally paid his bills from her bank account. Believing the two were holding themselves out as husband and wife, and thus believing that the divorce decree was violated, husband asked a Hampton trial court to terminate his obligation to pay spousal support under the decree.The trial court found that the wife’s living arrangements created only the perception of cohabitation and held that the relationship was not analogous to marriage. The Court of Appeals agreed. The Court looked at four factors to decide whether prohibited cohabitation had occurred: (1) sharing of a common residence, (2) intimate behavior or romantic involvement, (3) provision of financial support, and (4) the duration and continuity of the relationship. Weighing these factors, the Court found that simply living together was inadequate to establish a relationship analogous to marriage. The Court of Appeals affirmed the judgment of the trial court, upheld the divorce decree, and order continued payment of spousal support.
The case stands as a reminder that it is often difficult to establish a "relationship analogous to marriage." In this case, the standard had not been met even when the wife lived with another man and paid bills over 2 years.
Labels: divorce spousal support
Literal Terms of Settlement Agreement Enforced To Limit Attorney's Fees Claim
The Virginia Court of Appeals affirmed that the terms of a property settlement, like any other contract, must be interpreted exactly as written. In Everett v. Everett, the wife contended that the parties’ property settlement agreement required her husband to pay for all of her attorney’s fees and costs associated with the divorce proceeding. In contrast, the husband argued that the agreement only required him to cover her attorney’s fees if he sought a reduction in child support. The trial court applied principles of contract interpretation to the agreement and sided with the husband. The Court of Appeals, after an independent inquiry, agreed.The Court of Appeals especially looked to the interpretation placed on the settlement agreement by the parties themselves to determine the agreement’s meaning. The Court found the wife’s own actions especially telling: when the husband filed a motion to reduce child support, the wife sought full reimbursement of her attorney’s fees; but when the husband disputed custody of their children, the wife consented to pay her own fees. These actions, the Court said, were consistent with the trial court’s interpretation of the agreement—that the husband would pay for only those attorney’s fees associated with his attempts to reduce child support.
Finally, the husband challenged the wife’s attorney’s fees as excessive. The Court of Appeals rejected this argument, stating that the wife could recover her full attorney’s fees associated with two attempts by the husband to reduce child support, but not the additional costs associated with expedited deposition transcripts the wife requested.
Let this opinion be a warning: draft settlement agreements with the utmost care because a period in the wrong place could cost you. Although the temptation might be to adopt a 'form' settlement agreement to save expenses, one can end up penny wise and pound foolish if sufficient care is not given.
Material Change In Circumstances Does Not Lead To Reduction In Spousal Support
The Court of Appeals recently affirmed the trial court's refusal to reduce a spousal support obligation, despite a finding that there was a material change of circumstances. In Lane v. Lane, husband and wife divorced in 1997. In the separation agreement (which was incorporated into the divorce decree), husband agreed to pay wife $6,000 per month, wife agreed to try to make herself more finanically self sufficient, and the parties agreed to renegotiate if husband's income was reduced substantially. After divorcing, husband bought and sold high end real estate. Wife also entered the real estate market.Husband suffered significant business losses in the downturn in the real estate market, and sought to have his spousal support obligation reduced. The trial court held, and the Court of Appeals agreed, that the market crash led to a material change in circumstances that was not the husband's fault.
However, the Courts noted that in addition to there being a material change, that change must also warrant a modification of support. In looking at the facts of the case, the trial court observed that the wife had suffered losses in the real estate market as well; she had been diagnosed with cancer which affected her income generating ability; and the husband made "good business decisions" and therefore had a much greater earning capacity than wife.
Accordingly, the Court held that "[n]ot every material change of circumstance justifies a modification of spousal support." The Court rejected the husband's argument that the wife failed to make a good faith effort to improve her earning capacity. This case stands as a reminder that even where there is a material change in circumstances that is not the payor's fault, a reduction of support obligations is not automatic.
Premarital Agreement Possibly Void Because Unconscionable
The Virginia Court of Appeals has reversed a trial court's decision to strike a wife's evidence that a premarital agreement was void because it was unconscionable. In Chaplain v. Chaplain, the wife contended a premarital agreement was void because she did not understand the terms of the agreement. The prenuptial agreement at issue gave the wife nothing, except the right to $100,000 if she were married to husband when husband died. However, the husband was allegedly worth 20 million dollars. The wife was born in Morocco and claimed she spoke little english when she signed the premarital agreement in 1997. She further claimed that she did not understand the agreement and that she was not provided with a copy of the prenuptial agreement either before or after she signed it. Further, the husband represented that he was a "poor man."The trial court found that wife failed to make a prima facie case, but the Court of Appeals reversed and remanded the case for further evidence to be taken. The Court noted that there "ample evidence" of a gross disparity in the division of assets, and overreaching to support a finding of unconscionability.
The decision appears to be significant in 2 ways. First, perhaps arguments of unconscionability may hold sway in future cases. Generally, unconscionability arguments fail, but in this case at least, it was successful, and perhaps courts will be more willing to accept such arguments in the future. Second, it shows the appellate court's disapproval of striking evidence prematurely.
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