Present: Carrico, C.J., Compton, Stephenson, Lacy, Keenan, and 

Koontz, JJ., and Poff, Senior Justice 

SANDRA T. PARRISH 

v. Record No. 950044 

OPINION BY JUSTICE LAWRENCE L. KOONTZ, JR. 

 NOVEMBER 3, 1995 

E. ANN JESSEE, ETC. 

FROM THE CIRCUIT COURT OF GOOCHLAND COUNTY 

F. Ward Harkrader, Jr., Judge 

 This appeal arises out of an action filed by the present 

guardian of a person under a disability challenging a prior 

court-approved settlement agreement entered into on behalf of 

that person by a former guardian. The present guardian sought to 

void the settlement in part in the circuit court with supervisory 

jurisdiction over her guardianship more than a year after the 

settlement had been approved by another circuit court which had 

jurisdiction over the underlying tort claim. 

 On August 9, 1985, Douglas Parrish (Douglas) was 

catastrophically injured and rendered incompetent in an 

automobile accident. For purposes of this appeal, it is conceded 

that the driver of the other vehicle, a cement truck owned by 

Mega Contractors, Inc. (Mega Contractors) was at fault. Sandra 

T. Parrish (Parrish), Douglas' wife, was at the time pregnant 

with the couple's only child, Alicia, who was born less than a 

month after her father's accident. 

 On October 18, 1985, the Circuit Court of Goochland County 

(the Goochland court) appointed Parrish as guardian for Douglas. 

 In May of the following year, Parrish, in her capacity as 

guardian for Douglas, filed suit for damages resulting from his 
injuries against Mega Contractors in the Circuit Court of the 

City of Richmond (the Richmond court). The parties reached a 

compromise and submitted a settlement agreement to the Richmond 

court for approval pursuant to Code § 8.01-424. Incorporated 

into the motion for approval were exhibits detailing the proposed 

settlement, an agreement of assignment between Mega Contractors' 

liability insurance carrier and a long-term annuity assurer to 

fund the settlement, schedules of eleven deferred benefit funds, 

and a professionally prepared distribution plan on which the 

schedules had been based. 

 The Richmond court initially approved the agreement 

following an ore tenus hearing on July 28, 1987. At that 

hearing, the Richmond court had questioned whether it had the 

power to approve portions of the settlement which designated 

funds to be directed to payees for their sole benefit rather than 

to the guardian for the benefit of the disabled person. After 

considering argument of counsel, the Richmond court found that 

the settlement could include payment of funds to third parties, 

or jointly to the guardian of the person under a disability and a 

third party, in satisfaction of the obligations of the person 

under a disability to the third parties. 

 Although the Richmond court approved the payment of benefits 

to third parties as contemplated in the agreement, the benefit 

schedule attached to the agreement failed to designate payees. 

On August 24, 1987, the Richmond court, in order to "clarify" the 

July 28, 1987 order, entered an order which designated the 

classes of payees with respect to each category of benefits and 
directed the parties to enter into an addendum in accord with the 

order.* The August 24, 1987 order and resulting addendum to the 

agreement specified payees and contingent payees for the various 

funds. The funds and their designated payees were as follows: 

 Fund 

 (effective 8/15/87 

 except as noted) 

 Payments/Total Value Payee(s)/ 

 Contingent Payee 

A. Personal 

maintenance for 

Douglas A. Parrish 

$2,500 monthly 

increasing at 3% 

compounded annually 

during his life/ 

Estimated value: 

$3,132,252 

Douglas A. Parrish's 

guardian/(no contingent 

payee) 

B. Transportation 

 (effective 

8/15/89) 

$500 monthly increasing 

at 3% compounded 

annually during his 

life/Estimated value: 

$579,008.69 

Douglas A. Parrish's 

guardian/(no contingent 

payee) 

C. Support, care and 

medical 

maintenance for 

Douglas A. Parrish 

 (effective 

8/15/89) 

$9,042 monthly 

increasing at 4% 

compounded annually 

during his 

life/Estimated value: 

$13,765,964Douglas A. 

Parrish's guardian/(no 

contingent payee) 

D. Intensive 

Rehabilitation 

$15,000 monthly for two 

years/$360,000 

Douglas A. Parrish's 

guardian/Sandra T. 

Parrish 

E. Housing 

Acquisition 

$2,202 monthly for 20 

years/$528,480 

Douglas A. Parrish's 

guardian and Sandra T. 

Parrish joint 

payees/Alicia K. Parrish 

 

 *Although the Richmond court failed to so designate the 

order, it would appear that the intent was to correct its prior 

order nunc pro tunc. Moreover, because the parties do not 

contest the validity of the order on jurisdictional grounds as 

having been entered more than 21 days after the Richmond court 

entered its final order, we accept the validity of that order for 

purposes of this appeal. 
F. Emergency 

 (effective 

7/15/88) 

$40,000 annually for 

five years/$200,000 

Douglas A. Parrish's 

guardian and Sandra T. 

Parrish joint 

payees/Alicia K. Parrish 

G. Discretionary 

 (effective 

7/15/88) 

$50,000 annually for 

five years (1988-1992), 

$50,000 (7/15/97), 

$100,000 (7/15/2002), 

$100,000 (7/15/2007), 

$200,000 (7/15/2012), 

$200,000 (7/15/2017)/ 

$900,000 

Douglas A. Parrish's 

guardian and Sandra T. 

Parrish joint 

payees/Alicia K. Parrish 

H. Personal 

maintenance for 

Sandra T. Parrish 

$2,000 monthly for five 

years/$120,000 

Sandra T. Parrish/Alicia 

K. Parrish 

I. Medical costs for 

Alicia K. Parrish 

 (effective 

7/15/88) 

$2,000 annually for 10 

years/$20,000 

Alicia K. Parrish/Sandra 

T. Parrish 

J. Educational costs 

for Alicia K. 

Parrish 

 (effective 

7/15/2003) 

$25,000 annually for 

four years/$100,000 

Alicia K. Parrish/Sandra 

T. Parrish 

An additional fund, established for the payment of legal fees, is 

not relevant to this appeal. 

 When Parrish received distributions from the "joint" funds, 

she was advised by counsel that one-half of the funds belonged to 

her individually and that one-half of the funds were to be 

administered by her as guardian for Douglas. During the period 

of her guardianship, Parrish received a total of $90,000 in 

disbursements from these funds, $45,000 of which she deposited 

into a guardianship account. The remaining $45,000 Parrish used 

or retained for her own benefit, including paying off the loan on 

her personal automobile, acquiring a housing lot, purchasing a 

certificate of deposit, and paying for the repair of her mother's 
automobile. 

 On January 14, 1989, Parrish arranged to move Douglas into 

the home of his sister, E. Ann Jessee (Jessee). On March 17, 

1989, the Goochland court entered an order granting Parrish's 

motion to substitute Jessee as guardian for Douglas. In the same 

order, the court directed that the payees of certain funds 

created by the settlement agreement were to be changed. The 

order permitted Parrish to continue receiving payments from the 

fund designated for her personal maintenance, but required that 

those payments which were jointly payable to Parrish and Douglas' 

guardian or to Parrish as Alicia's natural guardian would 

thereafter be paid to the court for administration. The order 

also directed that the court would become the contingent payee 

for all the funds except the fund for Parrish's personal 

maintenance. Jessee, as guardian, became the payee on those 

funds designated for Douglas' sole benefit. 

 On July 17, 1990, Parrish filed a motion in the Goochland 

court to vacate those portions of the March 17, 1989 order which 

modified the settlement agreement approved by the Richmond court. 

On July 25, 1990, Jessee filed a motion in the Goochland court to 

vacate as void certain portions of the approved settlement 

agreement. Jessee asserted that "[s]o much of the [Richmond 

court's] Order of July 28, 1987 as effected a diversion of the 

settlement proceeds . . . to persons other than Douglas A. 

Parrish [was] void as a matter of law." In support of this 

assertion, she cited Code § 8.01-424(D)(4) for the principle that 

where the settlement agreement "provides for payments to be made 
over a period of time in the future . . . the court shall approve 

the settlement only if it finds that all payments which are due 

to be made are" properly secured by bond or are to be made by an 

insurance company and will be paid to the court in accord with 

Code § 8.01-606 or to a duly qualified fiduciary. 

 After extensive proceedings, the Goochland court entered a 

final order on October 11, 1994, in which it found that, since 

the benefits of the settlement agreement should have been vested 

in Douglas alone, the designation of payees other than Douglas' 

guardian was improper under Code § 8.01-424, and that all monies 

due under the agreement were to be delivered to Jessee as 

guardian or to the court. The Goochland court further ordered 

that Jessee was to pay child support to Parrish, pursuant to a 

motion filed by Parrish during the proceedings, with an offset of 

$45,000 for funds previously disbursed by Parrish for her 

personal use from payments made pursuant to the joint schedules. 

 Parrish was further ordered to submit a final accounting of her 

guardianship to the Commissioner of Accounts. The Goochland 

court dismissed as "moot" Parrish's challenge to its original 

reformation of the agreement in its March 17, 1989 order. 

 On appeal, Parrish assigns error to the legal and factual 

determinations of the Goochland court and raises a challenge to 

its jurisdiction to set aside the provisions of the settlement 

agreement approved by the Richmond court. Jurisdiction is always 

a threshold issue. Where the lower court lacked jurisdiction to 

act, its actions are a nullity and not subject to substantive 

review. Accordingly, we first address Parrish's challenge to the 
jurisdiction of the Goochland court with regard to the settlement 

agreement, which we find dispositive of the principal issues of 

this appeal. 

 Jessee's motion in the Goochland court sought relief on the 

ground that the Richmond court's order was, at least in part, 

void as a matter of law because the trial judge had not properly 

applied Code § 8.01-424. The motion further asserted that the 

Goochland court had jurisdiction to consider the matter because 

of its supervision of Douglas' estate by appointment of the 

guardian and by the inherent power of any court to address the 

validity of a void judgment. Assuming, without deciding, that 

the assertions of Jessee's motions are correct with respect to 

the application of Code § 8.01-424, we hold that the alleged 

errors would render the Richmond court's order merely voidable, 

and not void ab initio. 

 Under settled legal principles, a judgment is void ab initio

only if it "has been procured by extrinsic or collateral fraud, 

or entered by a court that did not have jurisdiction over the 

subject matter or the parties." Rook v. Rook, 233 Va. 92, 95, 

353 S.E.2d 756, 758 (1987). Otherwise a judgment is merely 

voidable and may be set aside only (1) by motion to the trial 

court filed within twenty-one days of its entry, Rule 1:1, (2) on 

direct appeal, Rook, 233 Va. at 95, 353 S.E.2d at 758, or (3) by 

bill of review, Code § 8.01-623, Blunt v. Lentz, 241 Va. 547, 

550, 404 S.E.2d 62, 64 (1991). "Judgments that are void [ab

initio], however, may be attacked in any court at any time, 

directly or collaterally." Rook, 233 Va. at 95, 353 S.E.2d at 
758. 

 The validity of a judgment based upon a challenge to the 

application of a statute raises a question of trial error, and 

not a question of jurisdiction. Pflaster v. Town of Berryville, 

157 Va. 859, 864, 161 S.E. 58, 60 (1931). See generally, M. L. 

Cross, Annotation, Validity and Effect of Judgment Based upon 

Erroneous View as to Constitutionality or Validity of a Statute 

or Ordinance Going to the Merits, 167 A.L.R. 517 (1947). "[I]f 

the inferior court has jurisdiction of the subject matter of the 

controversy, and the parties are before it, . . . a mistaken 

exercise of that jurisdiction does not render its judgment void." 

County School Bd. v. Snead, 198 Va. 100, 107, 92 S.E.2d 497, 503 

(1956). "[T]he court has jurisdiction to err, as well as to 

correctly adjudicate the questions before it for decision, and 

the remedy to correct the errors of the court is solely by 

appeal." Farant Investment Corp. v. Francis, 138 Va. 417, 436, 

122 S.E. 141, 147 (1924); see also Kiser v. W. M. Ritter Lumber 

Co., 179 Va. 128, 136, 18 S.E.2d 319, 322 (1942). 

 Jessee did not, and could not, allege a lack of jurisdiction 

in the Richmond court over the action brought by Parrish as 

guardian to recover for Douglas' injuries. Nor did she allege 

that the Richmond court's approval of the agreement resulting 

from that action was procured by collateral or extrinsic fraud. 

Rather, she challenged the Richmond court's application of Code 

§ 8.01-424, pursuant to which it exercised its jurisdiction. 

Thus, Jessee's allegations submit an issue not of a void 

judgment, but of one merely voidable. The judgment of the 
Richmond court was not subject to collateral attack in the 

Goochland court; thus, Jessee's motion was improvidently 

considered therein and the judgment on the merits in the 

Goochland court thus rendered is null and void. Morrison v. 

Bestler, 239 Va. 166, 170, 387 S.E.2d 753, 755-56 (1990); Rook, 

233 Va. at 95, 353 S.E.2d at 758. 

 Whatever remedy Jessee, in her capacity as guardian, might 

pursue in law or equity against Parrish, the proper course was 

not to challenge, in a court of equal dignity, a judgment of a 

court of competent jurisdiction on the ground that it had 

unsatisfactorily discharged its judicial duty. Accordingly, we 

will vacate the Goochland court's October 11, 1994 order with 

respect to Jessee's challenge to the Richmond court's approval of 

the settlement agreement. 

 We turn now to Parrish's further assertions that the 

Goochland court erred in mooting her challenge to its reformation 

of the agreement in the March 17, 1989 order appointing Jessee as 

Douglas' guardian. Parrish asserts that those schedules which 

designated payment jointly to Douglas' guardian and to Parrish 

individually, were intended for their individual support and 

maintenance and that she is entitled to continue receiving direct 

payment of a portion of those payments despite being displaced as 

guardian and relinquishing physical custody of Douglas. We 

disagree. 

 The Goochland court's control over Douglas' estate derives 

from its power to appoint and supervise guardians for a person 

under a disability within its jurisdiction. See Code § 37.1-132 
(authorizing appointment of guardians for persons under mental or 

physical disability and requiring them to serve under control of 

the court in accord with rules for trustees found in Title 26 of 

the Code of Virginia). Funds payable under the agreement for the 

benefit of Douglas, whether individually or jointly, are part of 

his estate and, thus, properly within the Goochland court's 

control as they become due and payable. 

 Contrary to the advice Parrish received from legal counsel, 

joint payees are not automatically entitled to an equal division 

of payments made to them. Their rights are determined by the 

instrument which created the obligation to them. Here, the 

settlement agreement clearly designated the nature of the joint 

funds as being for "housing acquisition," "emergency" needs, and 

"discretionary" spending for the common benefit of Douglas, his 

wife and, ultimately, his child. The separate needs of each of 

these parties were addressed by other funds. Accordingly, while 

Parrish may have a continuing interest in the joint funds with 

respect to their intended uses, she has no automatic right to 

receive a set percentage thereof for her general support and 

maintenance. 

 Moreover, a party to a joint payment has a duty to preserve 

for joint benefit any payment entrusted to him or her 

individually. See Cooper v. Cooper, 249 Va. 511, 517, 457 S.E.2d 

88, 91-92 (1995) (where one party acquires adverse interest in 

joint property, constructive trust for benefit of other party 

results in order to avoid unjust enrichment); see also Leonard v. 

Counts, 221 Va. 582, 589-90, 272 S.E.2d 190, 195-96 (1980); Horne 
v. Holley, 167 Va. 234, 240, 188 S.E. 169, 172 (1936). We hold 

that the Goochland court properly exercised its power to protect 

Douglas' estate and to assure that the joint funds were not 

dissipated or used for purposes other than those intended by the 

agreement. By directing that these particular funds be paid to 

the court, the court did not terminate Parrish's interest in the 

funds. Rather, these funds remain available both to Parrish and 

to Douglas' guardian according to their future needs as 

determined by the court, or a trustee designated by the court, 

consistent with the designated purposes for the funds as 

contemplated by the settlement agreement. Under the regrettable 

circumstances of this case, this action was necessary in order to 

assure that Douglas' estate was adequately preserved for the 

mutual benefit of himself, his wife, and his child. 

 We do find fault with one component of the March 17, 1989 

order. The payments specifically designated in the settlement 

agreement for the benefit of Alicia with payment to her mother as 

natural guardian are not properly part of the estate of the 

person under a disability. Accordingly, absent some showing, in 

this or another proceeding, that Parrish has been divested of or 

has abused her statutory capacity as natural guardian, Code 

§ 31-1, she remains the proper person to receive these payments 

and to be the contingent payee for those funds. 

 In summary, we hold that the Goochland court lacked 

jurisdiction to void any portion of the approved settlement 

agreement through its October 11, 1994 order; insofar as it 

attempted to do so, that order is a nullity and will be vacated. 
 Other issues addressed in the October 11, 1994 order were 

properly before the Goochland court in its role as overseer of 

Douglas' estate. Specifically, the award of child-support 

payments to Parrish and the finding of an offset to that support 

for her diversion of monies from the joint funds for her 

exclusive benefit was proper. Finally, the Goochland court's 

order directing payment of the joint funds to the court for 

supervision was a proper exercise of its chancery power under the 

circumstances of this case, although it was not proper to direct 

payment of the funds intended for Alicia's exclusive benefit 

other than to her natural guardian. 

 Affirmed in part,

reversed in part,

and final judgment. 

SENIOR JUSTICE POFF, with whom JUSTICE STEPHENSON joins, 

dissenting. 

 I dissent from the decision reached by the majority. 

 This Court has consistently held that judgments and orders 

may be valid in part and void in part. See, e.g., Barnes v. 

American Fert. Co., 144 Va. 692, 714, 130 S.E. 902, 909 (1925); 

White v. Palmer, 110 Va. 490, 496, 66 S.E. 44, 46 (1909); Wade et 

als. v. Hancock and Agee, 76 Va. 620, 625-26 (1882). In her 

Motion for Partial Vacation filed at trial, Jessee contended that 

the Richmond court's order approving the compromise settlement 

was, in part, "void as a matter of law." The majority rejects 

that contention. 

 Specifically, the majority holds that Jessee's action in the 

Goochland court was merely a challenge to the Richmond court's 
application of Code § 8.01-424; that misapplication of that 

statute "would render the Richmond court's order merely voidable, 

and not void"; that "the Goochland court lacked jurisdiction to 

void any portion of the approved settlement agreement"; and that 

"the judgment on the merits in the Goochland court . . . is null 

and void." I agree with Jessee. 

 In its enactment of Code § 8.01-424 and its statutory 

ancestors, the General Assembly conferred upon courts of this 

Commonwealth jurisdiction they had not had before, that is, 

"power to approve" or "to disapprove a compromise" settlement 

reached by a tortfeasor and a victim of the tort. Gunn v. 

Richmond Community Hospital, 235 Va. 282, 286, 367 S.E.2d 480, 

482 (1988). 

 "It seems to be settled law, that where a new jurisdiction 

is created by statute and the mode of acquiring and exercising 

that jurisdiction by the court upon which it is conferred is 

prescribed by statute, a substantial compliance therewith, at 

least, is essential, otherwise the proceeding will be a nullity." 

Cauthorn v. Cauthorn, 196 Va. 614, 621, 85 S.E.2d 256, 260 

(1955), quoting Coleman v. Virginia Stave Co., 112 Va. 61, 75, 70 

S.E. 545, 549 (1911). 

 In the exercise of the jurisdiction newly-created by Code 

§ 8.01-424, courts are explicitly required by the leglislature to 

prescribe how the "proceeds of the compromise settlement" are to 

be paid. Subsection D of the statute provides: 

 D. In any compromise action the court shall direct the 

payment of the proceeds of the compromise agreement, 

when approved, as follows: 
 . . . 

 4. Where the agreement of settlement provides for 

payments to be made over a period of time in the future 

. . . [p]ayments . . . totaling more than $4,000 in any 

calendar year while the recipient is under a 

disability, shall be paid to a duly qualified 

fiduciary. 

 The language prescribing the mode of application of this 

statute is express and mandatory. Any departure from the 

prescription is not merely a voidable "trial error" as the 

majority asserts. "Where the court, as here, is exercising 

special statutory powers, the measure of its authority is the 

statute itself; and a judgment or order in excess of the powers 

thereby conferred is null and void. In such a case, even though 

the court may have jurisdiction of the general subject matter and 

of the parties, an adjudication with reference thereto which is 

not within the powers granted to it is coram non judice." Aetna 

Casualty Co. v. Supervisors, 160 Va. 11, 45, 168 S.E. 617, 626 

(1925) (citations omitted). 

 In my view, while the Richmond court had jurisdiction to 

approve settlement of the rights and liabilities of the 

tortfeasor and the victim of the tort, it had no authority to 

"direct the payment of the proceeds of the compromise settlement" 

to anyone other than Douglas's "duly qualified fiduciary". I 

would hold, therefore, that, to the extent the Richmond court 

exceeded its statutory authority, its order was void ab initio

and, as such, was subject to attack "in any court at any time, 

directly or collaterally." Rook v. Rook, 233 Va. 92, 95, 353 

S.E.2d 756, 758 (1987). Consequently, I would affirm the 
judgment of the Goochland court, the court the majority 

recognizes as the judicial "overseer of Douglas' estate."