Court Opinion

ID: 1067695
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:27:18.867715+00
Date Added: 2024-06-11T13:17:18.461330
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Moon, Judges Benton and Elder
Argued at Richmond, Virginia

FERN MAE ALLOCCA
                                               OPINION BY
v.   Record No. 0185-96-2              JUDGE JAMES W. BENTON, JR.
                                           DECEMBER 10, 1996
FRANCIS ANTHONY ALLOCCA

             FROM THE CIRCUIT COURT OF SPOTSYLVANIA COUNTY
                        J. Peyton Farmer, Judge
             Robert B. Machen for appellant.

             R. Scott Pugh for appellee.

      This is an appeal from a final divorce decree that affirmed,

ratified, and incorporated by reference a Property Settlement

Agreement.    Fern M. Allocca seeks to set aside the Agreement and

argues that: (1) her husband repudiated the Agreement by

obtaining discharge in bankruptcy; (2) the Agreement is

unconscionable; and (3) the trial judge erred by admitting into

the evidence, over a best evidence rule objection, a photocopy of

the Agreement.    For the reasons that follow, we affirm the decree

incorporating the Agreement.

                                  I.

      After this divorce action was filed by the wife on December

19, 1994, she presented the husband with a proposal to settle

their property rights.    The husband refused that proposal and

asserted that all marital property rights had been decided in

1989 when the parties entered into a Property Settlement

Agreement.    The husband filed a crossbill for divorce and
requested that the 1989 Agreement be affirmed, ratified, and

incorporated into the final decree.

     At a hearing to determine the validity of the 1989

Agreement, the evidence proved that the parties signed the

Agreement on December 18, 1989.   The circumstances of signing the

Agreement were disputed.   The wife testified that she had never

seen the Agreement before signing, that the husband came to her

place of employment with the Agreement, and that she signed the

Agreement in the parking lot moments later.    The husband

testified that the parties discussed the Agreement thoroughly,

caused the Agreement to be modified, and signed the Agreement at

a local bank in the presence of a notary public.    The notary

public testified at the hearing and corroborated the husband's

testimony regarding the signing of the Agreement.
     The evidence also proved that after the husband and wife

separated and signed the Agreement, they sold their marital

residence.   As required by the agreement, they distributed the

proceeds of the sale between them.     Because they had performed

all other agreed obligations, nothing remained to be done under

the Agreement.

     During a brief reconciliation, the husband and wife

purchased a residence in 1991 and signed a deed of trust note.

When they again separated, the husband made the monthly payments

on the deed of trust note.

     Several days after the wife filed this divorce action, the

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husband filed for bankruptcy.    The husband listed the wife on the

bankruptcy schedules as a co-debtor on the deed of trust note.

She received notice of the bankruptcy filing with other

creditors.   The husband was discharged in bankruptcy on April 19,

1995 while the divorce action was pending.

      Following the ore tenus hearing, the trial judge ruled in

the divorce proceeding that the Agreement was not unconscionable

and was valid.   In the final decree of divorce, entered on

December 22, 1995, the trial judge awarded the husband a divorce

and incorporated the Agreement into the final decree.
                                  II.

      The wife argues that the husband's discharge in bankruptcy

constituted a repudiation of the Agreement, giving her a right to

rescind the Agreement.    In support of her position, the wife

relies upon Carter v. Carter, 18 Va. App. 787, 447 S.E.2d 522

(1994).

      In Carter, the husband filed for bankruptcy after he

separated from the wife.     See id. at 788, 447 S.E.2d at 523.    He

listed the wife as a creditor and identified his obligation to

the wife under the parties' property settlement agreement.        See

id.   At the time he sought discharge, the husband had not fully

performed his obligations under the agreement and owed money to

the wife.    See id.   Although the wife objected to the discharge,

the bankruptcy judge ruled that the obligation was not in the

nature of support and discharged the husband's debt to the wife

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under the agreement.   See id.

     While the bankruptcy was pending, the wife filed the Carter

divorce action in the circuit court.       See id.   Upon the wife's

motion, the judge in the divorce proceeding ordered rescission of

the parties' agreement and ordered the husband to pay the wife

additional sums of money.   See id.      On appeal from the final

decree in Carter, this Court affirmed the decree and stated that

"[b]y seeking and accepting discharge from his obligation under

the agreement, [the husband] repudiated the agreement.        He

thereby failed in the due performance of his obligation

thereunder, giving [the wife] the right to seek rescission

pursuant to paragraph 22(a) [of the agreement]."        Id.

     This case is distinguishable.       Here, the husband did not

seek discharge from his obligations under the Agreement.       He

sought discharge in bankruptcy from the deed of trust note for

which he and the wife were jointly and severally liable.       The

Agreement did not assign to the husband the specific obligation

to pay the deed of trust note, which was executed more than a

year after the Agreement was signed.      Moreover, unlike in Carter,
when the husband in this case filed for bankruptcy, he had

performed all obligations that he owed to the wife under the

Agreement.   He owed no debt to the wife that could be attributed

to the Agreement.

     The wife argues that she was entitled to rescind the

Agreement because the husband's bankruptcy was a breach of the

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Agreement's indemnification clause and constituted a repudiation

of the entire Agreement.   We disagree.

     Preliminarily, we note that in Carter, this Court affirmed

the rescission of the agreement because a specific provision in

the parties' contract called for rescission upon breach.    See

Carter, 18 Va. App. at 790, 447 S.E.2d at 523.    The Agreement in

this case, however, contained no provision mandating rescission

for breach or failure to perform.   Indeed, the Agreement stated

that a modification or rescission could be executed only in a

written agreement signed by both parties.
     Although the Agreement in this case contained an

indemnification clause, the evidence failed to prove a material

breach.   In the indemnification clause, the husband agreed "that

he will not hereafter contract nor incur any debts, charges or

liabilities for which his wife is, may be or may become liable,

and . . . further covenants and agrees that he shall hold the

wife free, harmless and indemnified of and from any and all

debts, charges or liabilities, past, present or future, which are

his debts, charges or liabilities."    The wife made the identical

agreement.   By subsequently signing the deed of trust note,

however, either the parties jointly violated the indemnification

clause by creating a joint and several liability, or the

indemnification clause did not apply to the deed of trust note

because the note was a joint debt and not "his debt" or "her

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debt."   We cannot conclude that the indemnification clause, as

worded in the Agreement, contemplated that the parties later

would voluntarily create a joint and several liability.

     In any event, we need not decide whether the husband

breached the indemnification clause because the evidence failed

to prove that the wife suffered any loss as a result of the

husband's bankruptcy.   No evidence proved that any money was owed

to the deed of trust creditor following the bankruptcy and

foreclosure on the property.   In addition, no evidence proved

that the wife made payments to the deed of trust creditor after

the husband ceased payments.   Moreover, the husband performed all

of his other obligations under the Agreement.   Thus, the evidence

failed to prove that the breach, if any, was material.
     In Jennings v. Jennings, 12 Va. App. 1187, 409 S.E.2d 8

(1991), we confronted a similar rescission argument.   The

agreement in Jennings included promises by the wife to seek a

no-fault divorce and to pay her own attorney's fees.     See id. at

1190-91, 409 S.E.2d at 11.   Later, the wife sought a fault-based

divorce and claimed that the husband should pay for her

attorney's fees. See id. at 1198, 409 S.E.2d at 11. We stated:
          We find no merit in the husband's argument
          that the wife breached her only executory
          obligations under the Agreement and,
          therefore, that the Agreement should be
          rescinded. The writing evidences an
          intention to effect an equal distribution of
          the parties' property instead of protracted
          equitable distribution proceedings. The
          considerations involved in a property
          distribution include the wife's contributions
          to the well-being and maintenance of the

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             marriage, the duration of the marriage, the
             circumstances surrounding the marriage
             dissolution, and sundry other factors. . . .
             The obvious reach of the Agreement recognized
             much more than the wife's executory promises.
             . . . We conclude the alleged breaches were
             immaterial and did not amount to an
             abandonment of the Agreement.

Id. at 1198-99, 409 S.E.2d at 15-16.

        Like the agreement in Jennings, the Agreement in this case

was intended to settle all marital rights between the parties.

The indemnification provision was just one of many considerations

involved.    Assuming arguendo that the husband's discharge in
bankruptcy was a breach of the indemnification clause, an issue

we need not decide today, we hold that this alleged breach did

not constitute a repudiation of the entire Agreement.    No

evidence proved that the wife suffered any loss resulting from

the alleged breach.    Furthermore, the husband otherwise fully

performed.    "'Ordinarily, rescission will not be granted for

breach of a contract which is not of such substantial character

as to defeat the object of the parties in making the contract.'"
 Neale v. Jones, 232 Va. 203, 207, 349 S.E.2d 116, 119 (1986)

(citation omitted).    Accordingly, we affirm the trial judge's

refusal to order rescission of the Agreement. 1
    1
     For the reasons stated in his dissenting opinion in Carter,
see 18 Va. App. at 790-94, 447 S.E.2d at 524-26, Judge Benton
would hold that any debt the husband owed to the wife, including
indemnification, was discharged in bankruptcy by virtue of 11
U.S.C. § 727(b). See Judd v. Wolfe, 78 F.3d 110 (3d Cir. 1996);
In re Beezley, 994 F.2d 1433, 1434-41 (9th Cir. 1993)
(O'Scannlain, J., concurring); In re Doughty, 195 B.R. 1 (Bankr.
D. Me. 1996). In this case, the evidence proved the wife received
notice of the bankruptcy proceeding and was listed as a co-debtor

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                               III.

     The wife also argues that the Agreement is unconscionable.

In Drewry v. Drewry, 8 Va. App. 460, 383 S.E.2d 12 (1989), this

Court stated the following:

             When a court considers whether a contract

          is unconscionable, adequacy of price or

          quality of value transferred in the contract

          is of initial concern.   If a "gross disparity

          in the value exchanged" exists then the court

          should consider "whether oppressive

          influences affected the agreement to the

          extent that the process was unfair and the

          terms of the resulting agreement

          unconscionable."
Id. at 472-73, 383 S.E.2d at 18 (citation omitted).    As the party

seeking to have the Agreement voided as unconscionable, the wife

bore the burden of "prov[ing] the allegations by clear and

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

     On appeal, this Court must review the evidence in the light

on the bankruptcy schedules. Furthermore, no evidence proved that
the wife filed a timely complaint in bankruptcy to contest the
dischargeability of the debt or the indemnification obligation.
See 11 U.S.C. § 523; Fed. Rule Bankr. P. 4007. Therefore, the
bankruptcy order was final. An order by the trial judge
rescinding the Agreement would have violated the bankruptcy stay.
 Thus, for this additional reason, Judge Benton would affirm the
trial judge's refusal to order rescission of the Agreement.

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most favorable to the husband because he was the prevailing party

below.   See id.   So viewed, the Agreement provided that all

property the husband or wife obtained before the marriage, or

during the marriage by gift or bequest, was to remain separate.

They waived all rights to marital property, including their

rights to each other's profit sharing, pension, and retirement

plans.   The marital home was to be sold and the proceeds used to

satisfy all debts owed by the parties, except a debt on one

automobile, which was to remain the husband's sole

responsibility.    The remaining proceeds from the sale of the home

and the remaining balance in the parties' joint bank account were

to be divided evenly between the parties.    Finally, they both

waived rights to spousal support.
     The evidence further proved that when the parties signed the

Agreement in 1989, the husband had completed approximately

eighteen years of service toward his pension.   His pension would

vest after two more years of service.   The wife had completed

five to seven years of service under her pension plan.   Each

agreed to waive marital rights in the other's pension, and they

evenly divided the other marital property.

     Although the husband's pension was probably worth more than

the wife's, no evidence proved the difference in values.

Moreover, no evidence proved that the differences in the pensions

"represent[ed] such a disparity in values to indicate that no

reasonable person would have so contracted."    Jennings, 12 Va.

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App. at 1196, 409 S.E.2d at 14.    The wife's evidence of a

probable disparity in the values of the parties' pension plans

was insufficient to prove by clear and convincing evidence a

"gross disparity" in the entire values exchanged under the

Agreement.    See Drewry, 8 Va. App. at 473, 383 S.E.2d at 18;

Jennings, 12 Va. App. at 1196, 409 S.E.2d at 14.

     Because the evidence failed to prove a gross disparity in

the values exchanged, we need not decide whether the process of

forming the Agreement was unfair.       See Drewry, 8 Va. App. at 473,

383 S.E.2d at 18.   Accordingly, we hold that the evidence was

sufficient to support the trial judge's finding that the

Agreement was not unconscionable.

                                  IV.

     The wife argues that the best evidence rule barred the

admission into the evidence of a photocopy of the Agreement.      We

disagree.

     "[T]he best evidence rule requires that, to prove the

contents of a document, the 'original must be produced unless it

be shown that the original is unavailable, in which case

secondary evidence may be introduced.'"       Mostyn v. Commonwealth,

14 Va. App. 920, 923, 420 S.E.2d 519, 521 (1992) (quoting Myrick

v. Commonwealth, 13 Va. App. 333, 339, 412 S.E.2d 176, 179

(1991)).    However, if a copy can properly be treated as a

"duplicate original," the copy is admissible without regard to

the availability of the original.       See Frere v. Commonwealth, 19

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Va. App. 460, 466-67, 452 S.E.2d 682, 686-87 (1995) (treating a

photocopy as a duplicate original and admitting it into evidence

without requiring proof that the original was unavailable); 4

John H. Wigmore, Wigmore on Evidence 548 (1972) ("[A] duplicate

. . . may be used without accounting for the nonproduction of

[the original].") (emphasis omitted).   This Court has noted that

proper circumstances exist to treat a photocopy as a duplicate

original when the accuracy of the photocopy is not disputed.     See
Frere, 19 Va. App. at 466, 452 S.E.2d at 686-87 (emphasizing that

the appellant never asserted that the photocopy was inaccurate);

Myrick, 13 Va. App. at 339, 412 S.E.2d at 179; Wigmore on

Evidence at 434 ("Production of the original may be dispensed

with, in the trial court's discretion, whenever in the case in

hand the opponent does not bona fide dispute the contents of the

document and no other useful purpose will be served by requiring

production.") (emphasis omitted).

     In this case, proper circumstances existed to treat the

photocopy as an original.   The wife's counsel never asserted that

the photocopy was inaccurate; counsel merely stated that "if [the

husband] has the original, I'd like for him to put it in."   The

husband's counsel acknowledged that the original Agreement was

extant but argued that a copy should nevertheless be admitted

because, in her response to a request for admissions, the wife

admitted that the photocopy was a true copy of the Agreement.

     Based on these arguments and circumstances, the trial judge

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admitted a copy of the Agreement.    We hold that the photocopy

could be treated as a duplicate original and that the trial judge

did not err in considering the wife's response to the request for

admissions to establish that fact.    Therefore, the copy was

admissible without regard to the availability of the original.

     For these reasons, we affirm the final decree.
                                                  Affirmed.

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