COURT OF APPEALS OF VIRGINIA 

Present: Judges Coleman, Koontz and Senior Judge Hodges 

KATHRYN S. NEWCOMB 

v. Record No. 0636-94-3 

 

PAUL W. NEWCOMB 

 MEMORANDUM OPINION*

AND BY JUDGE SAM W. COLEMAN III 

 JULY 25, 1995 

PAUL W. NEWCOMB 

v. Record No. 1195-94-3 

KATHRYN S. NEWCOMB 

FROM THE CIRCUIT COURT OF ROCKBRIDGE COUNTY 

George E. Honts, III, Judge 

 Ellen M. Arthur (McClung & Arthur, on 

briefs), for Kathryn S. Newcomb. 

 J. Lloyd Snook, III (Snook & Haughey, P.C., 

on briefs), for Paul W. Newcomb. 

 Paul Newcomb and Kathryn Newcomb appeal from an order in 

which the circuit court determined that the amount Paul Newcomb 

is to pay Kathryn Newcomb "in lieu of alimony" in accordance with 

the terms of their court approved property settlement agreement 

is $14,000. Both parties contend that the circuit court's 

computation of the amount owed, which was computed from a 

mathematical formula contained in the property settlement 

agreement, was incorrect. We hold that because the trial court 

correctly determined the "gross sale price" of Paul Newcomb's 

 

 * Pursuant to Code § 17-116.010 this opinion is not 

designated for publication. 
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interest in their bed and breakfast property, which amount is the 

contested and controlling component of the formula, the court did 

not err in computing the amount to which Kathryn Newcomb is 

entitled. Therefore, we affirm the trial court's judgment order 

awarding her $14,000 "in lieu of alimony." 

 FACTS 

 In 1991, the Circuit Court of Rockbridge County entered an 

agreed divorce decree, incorporating the Newcombs' property 

settlement agreement. The agreement and decree ordered that Paul 

Newcomb pay Kathryn Newcomb $100,000 in consideration for certain 

of her property interests and Kathryn Newcomb was ordered to 

convey "all her right, title, and interest" in their real 

property, which included a bed and breakfast inn, and listed 

personal property. The decree also specifically provided that 

Kathryn Newcomb would convey her interest in the inn "according 

to Paul Newcomb's right to "assign . . . or convey [Kathryn's] 

interest to a partner." 

 The provision of the agreement that creates the controversy 

in this case states: 

 "In lieu of alimony, [Paul] will pay to 

Kathryn according to the following schedule: 

 Should [Paul] sell, transfer or dispose of 

the one-half interest he currently holds 

. . . at any time within fifteen years of the 

date of this order he shall pay to [Kathryn] 

the amount determined as follows: 

 "If within five years hereof, 20 percent 

of the difference between the gross sale 

price of [Paul's] interest in the said 

property and $250,000.00." 

(Emphasis added). 
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 In order to obtain funds to pay Kathryn Newcomb $100,000 as 

per the agreement, Paul Newcomb borrowed $150,000 from Philip 

Clayton. Paul used the remaining $50,000 to pay debts. At Paul 

Newcomb's direction, and in accordance with the terms of their 

agreement, Kathryn conveyed her undivided one-half interest in 

the bed and breakfast property to Philip Clayton, Paul Newcomb's 

 assignee, by deed dated December 20, 1991. 

 On July 6, 1993, Paul Newcomb and Philip Clayton entered 

into a Lease Purchase Agreement in which Clayton agreed to 

purchase the bed and breakfast property for $411,900, "payable in 

cash upon closing," and the assumption of an outstanding $186,000 

indebtedness. Clayton also agreed to pay Paul Newcomb an 

additional $58,100 for the furnishings and personalty in the inn. 

 Thus, on the face of the Lease Purchase Agreement it appeared 

that Clayton was paying Paul Newcomb $470,000 in cash 

consideration for the entire property plus the assumption of 

indebtedness, even though Clayton already owned a one-half 

undivided interest in the property, which he had acquired by deed 

from Kathryn Newcomb. 

 On November 22, 1993, Paul Newcomb and Philip Clayton 

entered into an Amended Lease Purchase Agreement, because the 

"June, 1993 [agreement] did not clearly set forth the terms of 

the payments and the total purchase price for the property." In 

the amended agreement Clayton agreed to purchase "Paul W. 
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Newcomb's interest" in the inn for $411,900 "less the sum of 

. . . $150,000 . . . which amount has previously been paid when 

the purchaser herein purchased the undivided one-half (1/2) 

interest of Kathryn S. Newcomb." The amended agreement further 

provided that Clayton was to pay Paul Newcomb $58,100 for the 

furnishings, personalty, bank deposits in the business account, 

and the assumption of certain debt. In addition to the Lease 

Purchase and Amended Lease Purchase Agreements setting forth the 

terms of the sale, a statement submitted in support of Philip 

Clayton's application for a federal Housing and Urban Development 

(HUD) loan showed the total purchase price for the realty to be 

$411,900, and the purchase price for the personalty to be 

$58,100. The HUD draft closing statement showed $150,000 as a 

"credit" to Clayton against the total purchase price "for the 

previous purchase of one-half interest in mill." 

TRIAL COURT RULING 

 The dispositive question before the trial court, and before 

this Court, is the amount of the "gross sale price" paid by 

Philip Clayton for "Paul W. Newcomb's interest in the property." 

Kathryn Newcomb argues that according to the July, 1993 Lease 

Purchase Agreement, the gross sale price of Paul Newcomb's 

interest in the property was $461,900, and, thus, after deducting 

$250,000 according to the terms of the agreement, she was 

entitled to 20 percent of the difference, or $42,380.1

 Paul 

 

 1 In footnote 8 on p.5 of Appellant Kathryn Newcomb's brief 

she computes the amount she claims to be due at $43,820, but it 
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Newcomb argues, on the other hand, that Kathryn Newcomb is 

entitled to nothing "in lieu of alimony" because, according to 

his computation, in which he deducts the amounts owing against 

the property for deeds of trusts and other liens, the gross sale 

price of Paul Newcomb's interest in the property is $125,900. 

Therefore, after deducting $250,000, nothing remains from which 

Kathryn is to be paid 20 percent. 

 The trial judge determined, based upon the terms of the 

Amended Lease Purchase Agreement, that $470,000 was the stated 

total gross purchase price that Clayton would be paying for both 

Paul's and Kathryn's interests in the realty and the furnishings 

and personalty associated with the inn. The trial court found, 

relying upon the terms of the Amended Lease Purchase Agreement, 

that the "gross sale price" which Philip Clayton paid for "Paul 

W. Newcomb's interest in the property" was the total gross sale 

price of $470,000, less the amount of $150,000 that Clayton had 

loaned to Paul Newcomb, and which indebtedness was forgiven as 

consideration for Paul's assigning Kathryn's interest in the 

property to Clayton. Thus, by applying the formula from the 

property settlement agreement for determining the amount to be 

paid Kathryn Newcomb "in lieu of alimony" to the "gross sale 

price" for "Paul W. Newcomb's interest in the property," as 

determined from the Amended Lease Purchase Agreement, the trial 

appears that she based this computation on "a gross total sales 

price for the Inn" by transposing figures and using the figure 

$469,100, rather than $461,900. 
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court determined that the gross sale price for Paul Newcomb's 

one-half undivided interest in the inn, including furnishings and 

personalty, was $320,000, of which, after deducting $250,000, 

Kathryn Newcomb was entitled to 20 percent of the balance, or 

$14,000.2

 ANALYSIS 

PROPERTY SETTLEMENT AGREEMENTS 

 Property settlement agreements are subject to the same rules 

of interpretation as are other contracts. Smith v. Smith, 15 Va. 

App. 371, 374, 423 S.E.2d 851, 853 (1992); Tiffany v. Tiffany, 1 

Va. App. 11, 15, 332 S.E.2d 796, 799 (1985). In construing the 

terms of a property settlement agreement, just as in construing 

the terms of any contract, we are not bound by the trial court's 

conclusions as to the construction of the disputed provisions. 

Smith v. Smith, 3 Va. App. 452, 455, 350 S.E.2d 526, 528 (1986) 

(citations omitted). "If all the evidence necessary to construe 

a contract was presented to the trial court . . . the meaning and 

effect of the contract is a question of law which can be readily 

ascertained by this Court." Fay v. Schwarting, 4 Va. App. 173, 

180, 355 S.E.2d 342, 346 (1987) (citing Wilson v. Holyfield, 227 

Va. 184, 187, 313 S.E.2d 396, 398 (1984)). When examining the 

instrument, we discern the intent of the parties and the meaning 

of the language from the examination of the entire document, 

giving full effect to the words actually used. Layne v. 

 

 2 20% x (470,000 - 150,000 - 250,000) = 14,000 
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Henderson, 232 Va. 332, 337-38, 351 S.E.2d 18, 22 (1986). 

 The Newcombs' property settlement agreement provides that 

the amount to be paid to Kathryn Newcomb in lieu of alimony shall 

be based upon the gross sale price of Paul Newcomb's "one-half 

interest he currently holds" in the inn and furnishings when he 

sells the property. Thus, at the time the property settlement 

was executed, the determination of the amount to be paid in lieu 

of alimony was contingent upon a future event, which was the sale 

of the property. 

 While we are not bound by the trial court's construction of 

the terms of a contract, the meaning and terms of the provision 

for determining the amount in lieu of alimony are beyond dispute. 

 The meaning of the term gross sale price, despite the 

contentions on brief of Paul Newcomb to the contrary, is clear 

and unambiguous. Gross sale price means the total price paid for 

an item without reduction for indebtedness, fees, expenses, or 

costs associated with the sale. 

 The parties' dispute over the sale price of Paul Newcomb's 

interest derives not from any ambiguity in the terms of the 

contract or the meaning of the term gross sale price. Rather, 

the problem arises from the fact that under the agreement the 

determination of the amount due Kathryn Newcomb depends upon a 

future sale where the sale amount is controlled by Paul Newcomb. 

 Moreover, the sale ultimately involved a complex financial 

transaction between Paul Newcomb and Philip Clayton, where the 
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terms were defined by two lease purchase agreements which 

obscured the amount of the gross sale price that Paul Newcomb 

received. 

 The amount of the gross sale price that Paul Newcomb 

received is a fact that the trial court was required to determine 

based upon the terms of the transaction between Paul Newcomb and 

Philip Clayton. We are bound by the trial court's factual 

determination of the amount of the gross sale price if it was 

supported by credible evidence. See Ferguson v. Stafford County 

Dep't of Social Servs., 14 Va. App. 333, 336, 417 S.E.2d 1, 2 

(1992). 

 Kathryn Newcomb contends that the evidence on which the 

trial court should have based its finding of gross sale price for 

Paul Newcomb's interest was the amount of the purchase price 

stated in the first Lease Purchase Agreement or $461,900, without 

considering the terms of the Amended Lease Purchase Agreement or 

the amounts stated in the HUD applications and closing 

statements, which documents show that the amounts in the first 

agreement were erroneous and the base amount pertained to the 

total purchase price that Clayton was to pay, including the 

amount for Kathryn's interest. On the other hand, Paul Newcomb 

argues, in effect, that the trial court should have based its 

finding of the amount of the gross sale price of his interest 

upon one-half of the stated total amount that Clayton was paying 

for the property, despite the fact that Paul Newcomb was, in 
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fact, receiving considerably more than that amount from Clayton 

for his one-half undivided interest. 

 The trial court, in making a factual determination of the 

gross amount that Paul Newcomb was paid for his interest in the 

property, was required to consider all relevant and material 

evidence which showed the terms of the transaction. By accepting 

the terms of the Amended Lease Purchase Agreement and the HUD 

documents, the trial court necessarily found that the terms of 

the Lease Purchase Agreement did not accurately define the terms 

of the sale. The Amended Lease Purchase Agreement and the HUD 

application and closing statements support the trial court's 

finding that $470,000 was the total gross sale price that Philip 

Clayton was paying for the entire property. Thus, in order to 

determine the gross sale price of Paul Newcomb's undivided 

interest, the trial court had to determine the value of the other 

share. In doing so, it had before it evidence that Kathryn 

Newcomb received $100,000 for conveying her interest in the 

marital property to Paul Newcomb and evidence that Philip Clayton 

had forgiven a $150,000 loan to Paul Newcomb in order to have 

Paul assign to Clayton Kathryn Newcomb's interest in the inn. 

Kathryn Newcomb knew at the time that she entered into the 

property settlement agreement that she would be paid $100,000 for 

her interest in the marital property and the balance of $50,000 

that Paul Newcomb borrowed from Clayton would be used to defray 

their joint indebtedness. Thus, because Kathryn Newcomb was a 
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party to the transaction, and because she knew and understood 

that $100,000 of the loan was to be paid her and the $50,000 

balance was to be used partially for her benefit to pay joint 

debts, the trial court did not err in finding that $150,000 was 

the amount of the purchase price paid for the assignment of 

Kathryn Newcomb's interest in the inn and furnishings and that 

$320,000 was the gross sale price paid for Paul Newcomb's 

interest. 

 Accordingly, the evidence supports the trial court's finding 

that the gross sale price paid for Paul Newcomb's undivided onehalf interest in the property was $320,000. We, therefore, 

affirm the judgment of the trial court. 

Affirmed.