Court Opinion

ID: 1078108
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:25:48.533665+00
Date Added: 2024-06-11T12:17:46.268466
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present:   Chief Judge Moon, Judges Coleman and Fitzpatrick

VICKIE LYNN FIELDS

v.       Record No. 0239-95-3             MEMORANDUM OPINION * BY
                                      JUDGE JOHANNA L. FITZPATRICK
DAVID CARL FIELDS                            FEBRUARY 27, 1996

           FROM THE CIRCUIT COURT OF THE CITY OF BRISTOL
                  Charles B. Flannagan, II, Judge

           Frederick W. Adkins (Cline, Adkins, Cline &
           Rogers, on brief), for appellant.
           Dennis E. Jones, for appellee.

     In this domestic appeal, the sole issue is whether the trial

court erred in finding the parties' property settlement agreement

to be valid.   We hold that wife failed to prove fraud by clear

and convincing evidence and affirm the trial court.

     Vickie Lynn Fields (wife) and David Carl Fields (husband)

were married on June 6, 1980 and had one child born of the

marriage, Justin Heath.    Each had been divorced before and had

children from their previous marriages.     At the time of the

marriage, both parties worked at Pittston Coal Group (Pittston)

in Lebanon, Virginia, wife as a keypunch operator and husband as

an accountant.   At the time of the hearing, husband was an

assistant vice-president and comptroller of Pittston, and had

also held the position of financial analyst during his tenure

with the company.    Wife left Pittston when the parties' son was
     *
      Pursuant to Code § 17.116.010 this opinion is not
designated for publication.
born and works at Teague Associates as an executive secretary.

During the marriage, husband handled the parties' financial

affairs, but wife had access to their financial documents, which

were kept at the marital residence.

     The parties began having marital difficulties during

December 1992.   In the spring of 1993, the parties discussed

entering into a property settlement agreement and agreed that

husband would prepare a draft agreement.   Husband compiled the

agreement using Pittston's law library and blank forms obtained

from an attorney.   Neither party received legal advice.   On
May 8, 1993, husband brought the draft agreement home and asked

wife to sign it.    Wife testified that she did not understand some

of the clauses and specifically asked husband about the child

support provisions, but did not ask him about other parts of the

agreement.   The evidence established that husband would have told

wife the value of individual assets or any other information if

she had asked.   Husband answered her questions about child

support, but did not give her legal advice nor discourage her

from seeking advice from an attorney.   Wife signed the agreement

that night without consulting an attorney.

     Paragraph 11(i) of the agreement provides as follows:
          All funds of the husband in the savings
          investment plan which the husband presently
          has with his employer and all the husband's
          right, title and interest in and to any
          vested retirement plans of the husband with
          his employer shall remain the sole and
          separate property of the husband and the wife
          hereby agrees to relinquish all right, title
          and interest which she may have in and to any

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          of the said funds.

Similarly, under the agreement, husband agrees to relinquish any

rights in wife's pension:
          All funds of the wife in the savings
          investment plan which the wife presently has
          with her employer and all the wife's right,
          title and interest in and to any vested
          retirement plans of the wife with her
          employer shall remain the sole and separate
          property of the wife and the husband hereby
          agrees to relinquish all right, title and
          interest which he may have in and to any of
          the said funds.

Paragraph 11(i) does not disclose the specific value of either

party's pension assets.   The only asset of the parties not

addressed in this agreement is $13,049 of United States savings

bonds that husband purchased during the marriage.   Husband's

proposed findings of fact indicated that the bonds were worth

$13,049; that the marital portion of his savings investment plan

was $59,357 after taxes and penalty for early withdrawal; and

that the present value of the marital portion of his retirement

plan was $25,382.

     After the parties signed the agreement, husband continued to

live at the marital residence until August 1, 1993.   The parties

separated on that date, and wife filed a bill of complaint for

divorce on November 17, 1993, moving to set aside the agreement

of May 8, 1993 as having been "procured by fraud, intimidation

and deceit."   The trial court held a hearing on wife's motion to

set aside the agreement on December 15, 1993.    In the January 13,

1995 final decree, the court found as follows:

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               UPON FURTHER CONSIDERATION of the
          physical and mental condition of the parties
          at the date and time of the entry of the
          Agreement of May 8, 1993, evidence and
          arguments of counsel; that there exists no
          gross disparity in the economic value of the
          portion of the marital estate that each party
          is to receive that shocks the [conscience] of
          the Court; it is therefore

               ADJUDGED, ORDERED and DECREED that the
          Agreement between the parties dated May 8,
          1993 . . . is a valid and binding contract
          between the parties, however, the Court
          declines to ratify, confirm and incorporate
          into this Decree by reference the Agreement
          between the parties dated May 8, 1993.

(Emphasis added.)   Although the court made no specific findings

as to the value of the parties' property, it found that the terms

of the agreement were not unconscionable.

     Wife argues on appeal that the trial court erred in

validating the agreement because husband acted fraudulently by

failing to disclose the value of his pension assets, and the

existence and value of the savings bonds.   We disagree.

     "'[M]arital property settlements entered into by competent

parties upon valid consideration for lawful purposes are favored

in the law and such will be enforced unless their illegality is

clear and certain.'"   Webb v. Webb, 16 Va. App. 486, 491, 431
S.E.2d 55, 59 (1993) (quoting Cooley v. Cooley, 220 Va. 749, 752,

263 S.E.2d 49, 52 (1980)).   "[T]he one contesting the contract

must prove the allegations by clear and convincing evidence."

Derby v. Derby, 8 Va. App. 19, 26, 378 S.E.2d 74, 77 (1989).      "On

appeal we review the evidence in the light most favorable to the

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prevailing party and determine whether that evidence established

as a matter of law any of the grounds relied upon to vitiate the

agreement and decree."   Drewry v. Drewry, 8 Va. App. 460, 463,

383 S.E.2d 12, 12-13 (1989).

     Constructive fraud is a "'breach of legal or equitable duty

which, irrespective of moral guilt, is declared by law to be

fraudulent because of its tendency to deceive others or violate

confidence.'"   Webb, 16 Va. App. at 491, 431 S.E.2d at 59

(quoting Wells v. Weston, 229 Va. 72, 77, 326 S.E.2d 672, 675-76
(1985)).   "'[T]o establish constructive fraud one must prove the

following by clear, cogent and convincing evidence:   that there

was a material false representation, that the hearer believed it

to be true, that it was meant to be acted on, that it was acted

on, and that damage was sustained."   Webb, 16 Va. App. at 491,

431 S.E.2d at 59 (quoting Nationwide Ins. Co. v. Patterson, 229
Va. 627, 629, 331 S.E.2d 490, 492 (1985)).

     Assuming without deciding that under the facts of this case

husband had a duty to disclose, and viewing the evidence in the

light most favorable to husband, the prevailing party, we hold

that wife failed to prove fraud by clear and convincing evidence.

The agreement included a provision that dealt with each party's

savings investment and retirement plans.   Wife was fully aware

that husband had a savings investment plan and a retirement plan.

Husband's failure to list the specific values of his savings

investment and retirement plans did not amount to a material

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misrepresentation of value.   The agreement does not contain the

values of several assets, including wife's savings investment

plan and pension plan.    Moreover, the evidence established that

husband did not refuse to disclose nor misrepresented the values

and would have disclosed the value of any asset to wife had she

asked.   Furthermore, wife had access to the financial documents

of the parties.   Thus, the trial court did not err in validating

the parties' agreement.
     The instant case is clearly distinguishable from Webb.        In

Webb, the husband, who also handled the parties' financial

affairs, drafted the property settlement agreement and failed to

disclose the value of his pension.      However, we determined that

the husband was in a "special relationship" with his wife

primarily because he was an experienced attorney who gave his

wife legal advice regarding the agreement and other aspects of

the divorce and actively discouraged her from seeking legal

advice from independent counsel.       16 Va. App. at 492, 431 S.E.2d

at 60.   None of these factors exists in this case.     Although

husband was more knowledgeable about the parties' financial

affairs, unlike the husband in Webb, he was not an attorney
acting as an attorney in the negotiation and drafting of the

agreement.

     Next, wife argues that, if not fraudulently procured, the

agreement was unconscionable.   "When a court considers whether a

contract is unconscionable, adequacy of price or quality of value

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transferred in the contract is of initial concern."     Drewry, 8

Va. App. at 472, 383 S.E.2d at 18.    An agreement's terms are

unconscionable if there is "gross disparity in the value

exchanged."   Derby, 8 Va. App. at 28, 378 S.E.2d at 79.

     Under the agreement in this case, wife receives the marital

home, a car, a boat, and child support of $600 per month in

exchange for husband receiving two empty lots and two cars.      Both

parties waived spousal support.   In Paragraph 10 of the

agreement, husband agrees to pay the mortgage and other

maintenance expenses on the marital home, at least until the

parties' son becomes emancipated and subject to other

contingencies.   The agreement equally divides the parties'

personal property, a joint savings account, and an individual

retirement account.   The agreement also provides for both parties

to receive their own savings investment plans, pension plans, and

individual bank accounts.   On these facts, we cannot say that the

trial court erred in finding that "there exists no gross

disparity in the economic value of the portion of the marital

estate that each party is to receive that shocks the [conscience]

of the Court."
     Finally, we hold that husband's omission of the savings

bonds worth $13,049 from the agreement did not constitute

constructive fraud.   The record does not establish why the

savings bonds were left out of the agreement, and the trial judge

made no finding regarding this asset.   Because no evidence

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explained the absence of a provision dealing with the bonds, the

proof failed to establish that the omission was a "material false

representation."   Thus, husband's failure to disclose the bonds,

standing alone, is not sufficient to void the agreement.

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Accordingly, the decision of the trial court is affirmed.

                                   Affirmed.

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