Court Opinion

ID: 1069692
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:35:33.373924+00
Date Added: 2024-06-11T10:52:52.158157
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Judges Bray, Bumgardner and Senior Judge Hodges
Argued at Chesapeake, Virginia

DANIEL J. HUGHES
                                         MEMORANDUM OPINION * BY
v.   Record No. 1745-00-1                JUDGE WILLIAM H. HODGES
                                              JUNE 19, 2001
MADONNA MARIE HUGHES

       FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
                  H. Thomas Padrick, Jr., Judge

          Kenneth A. Moreno (Louis W. Kershner &
          Associates, P.C., on brief), for appellant.

          Deborah C. Sagedy for appellee.

     Daniel Hughes (husband) appeals the trial court's order which

increased the amount of spousal support husband is obligated to

pay Madonna Marie Hughes (wife).   On appeal, husband contends the

trial court erred in making the following findings:   (1) there was

a mutual mistake of fact in the separation agreement (the

agreement); (2) wife's entitlement to military health benefits was

not the foundation of the agreement; (3) the remaining terms of

the agreement were valid; (4) the parties contemplated that wife

would receive military health benefits; and (5) wife's

ineligibility to health benefits was a change in circumstance

     * Pursuant to Code § 17.1-413, recodifying Code
§ 17-116.010, this opinion is not designated for publication.
warranting increased spousal support.    For the reasons that

follow, we affirm.

                            BACKGROUND

     Husband and wife were married on September 20, 1970, and

separated on October 3, 1997.

     Before entry of the final decree of divorce, the parties

negotiated and drafted a Stipulation and Agreement.   In Paragraph

12 of the early draft agreement, husband agreed "to maintain the

current medical and dental insurance for Wife through his current

employer and Champus, until entry of a final Decree of Divorce."

The draft also contained the following:

          After entry of the Final Decree, Wife shall
          be entitled to full military privileges,
          including but not limited to, medical and
          dental insurance, as the parties have been
          married more than 20 years, and the Husband
          performed at least 20 years of service
          creditable for retired pay, and there was a
          20 year overlap of the marriage and military
          service. Husband will cooperate and do
          whatever is necessary to ensure that Wife
          has medical and dental insurance through the
          military.

     In that same early version of the agreement, husband

indicated that he "was in the United States Navy for twenty (20)

years, and . . . retired from the military in November of 1990."

That date was redacted and replaced by a handwritten notation

indicating December 1989 as his date of retirement.   The final

version of the agreement included the November 1990 retirement

date and did not include the earlier avowal that "there was a 20

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year overlap of the marriage and military service" and that

"[h]usband will cooperate and do whatever is necessary to ensure

that Wife has medical and dental insurance through the military."

     The final signed agreement contained the following section

relating to Medical Insurance:

             Until entry of the Final Decree of Divorce,
             Husband shall provide medical insurance for
             Wife through the military. After entry of
             the Final Decree, Husband shall cooperate to
             do whatever is necessary to ensure that Wife
             has medical insurance and other benefits she
             may be entitled to through the military.

     In the final version of the agreement, husband agreed to pay

wife $700 per month "as spousal support and maintenance, beginning

July 1, 1998."    The trial court incorporated the final agreement

into the December 28, 1998 final decree.    In the final decree, the

trial court transferred "all matters pertaining to spousal

support" to the juvenile court "for the enforcement of this decree

or for the modification or revision thereof as the circumstances

may require."

     On March 15, 2000, wife filed a petition for an "increase in

spousal support or for [husband] to pay [her] health insurance."

     On June 12, 2000, the trial court conducted a hearing at

which husband argued there had been no material change of

circumstances warranting increased spousal support.   He also

argued that he never included the wrong retirement date, but

merely advised his attorney when he discovered that the date was

incorrect.    According to husband's attorney, wife's attorney

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prepared the final copy without including the proper retirement

date and husband signed it without being aware that it still

contained the incorrect retirement date.

     Wife's attorney argued that, as a result of the mistake in

the agreement, wife "has an additional $500 to $600 worth of

[monthly medical] expenses" that she must meet.    According to

wife's attorney, "That's a changed circumstance."

     At the June 12, 2000 hearing, husband's attorney told the

trial court, "[T]his is not . . . a change of circumstance, Your

Honor.   This is just a mistake."   (Emphasis added.)   By order

dated June 12, 2000, the trial court ruled that "husband's

retirement date of 1990 resulted from a mutual mistake of fact

assumed by both parties" and that wife's "entitlement of military

health benefits was not the foundation of the agreement."    The

trial court explained that the mistake "fail[ed] to reach the

basis of the separation agreement itself," which was "to effect a

settlement and adjustment of rights and questions arising from

their marital status and Separation."     Because wife was unable to

obtain "military health benefits as contemplated by the parties,"

the trial court found "a change in circumstances warranting

revision of spousal support paid by the husband to the wife."

                             DISCUSSION

     "The judgment of a trial court sitting in equity, when

based upon an ore tenus hearing, will not be disturbed on appeal

unless plainly wrong or without evidence to support it."      Box v.

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Talley, 1 Va. App. 289, 293, 338 S.E.2d 349, 351 (1986).

However, "property settlement and support agreements are subject

to the same rules of construction and interpretation applicable

to contracts generally."     Fry v. Schwarting, 4 Va. App. 173,

180, 355 S.E.2d 342, 346 (1987).    "In Virginia property

settlement agreements are contracts and subject to the same

rules of formation, validity and interpretation as other

contracts."   Smith v. Smith, 3 Va. App. 510, 513, 351 S.E.2d
593, 595 (1986) (citation omitted).

     One of the tools available to a court of equity is the

equitable remedy of reformation, which "provides relief against

a [mutual] mistake of fact in a written instrument . . . where

both parties sign an instrument mistakenly believing it reflects

their antecedent bargain."     Gibbs v. Price, 207 Va. 448, 449-50,

150 S.E.2d 551, 552 (1966); see also Boone v. Scott, 166 Va.
644, 652-53, 187 S.E. 432, 436 (1936) (equity should and will

reform instrument to make it conform to real intent of the

parties at time it was executed; noting that reformation is

available when one party obtains more than he or she intended to

gain and the other party is forced to relinquish that which he

or she did not intend to relinquish); Wilkinson v. Dorsey, 112
Va. 859, 869, 72 S.E. 676, 680 (1911) (under its equitable

jurisdiction, trial court may give relief on the ground of

mistake in connection with written instrument if "there has been

an innocent omission or insertion of a material stipulation,

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contrary to the intention of both parties, and under a mutual

mistake").

       "In determining whether a mutual mistake of fact existed at

the time of the agreement, the inquiry is not, . . . who

initially made the mistake, but rather, whether each party held

the same mistaken belief with respect to a material fact at the

time the agreement was executed."       Collins v. Dept. of Alcoholic

Beverage Control, 21 Va. App. 671, 681, 467 S.E.2d 279, 283,

aff'd on reh'g en banc, 22 Va. App. 625, 472 S.E.2d 287 (1996).

When the mutual mistake constitutes "the very basis or essence"

of the contract, rescission rather than reformation is the

proper remedy.    See Seaboard Ice Company v. Lee, 199 Va. 243,

252, 99 S.E.2d 721, 727 (1957); see also Lee v. Laprade, 106 Va.
594, 597-98, 56 S.E. 719, 720 (1907) (rescinding deed in which

lot conveyed by seller was part of public street, explaining

that court of equity has jurisdiction to rescind as long as

mistake is material in its character and does not go to the very

substance of the contract).   Clear and convincing evidence is

required to support reformation of an instrument because of a

mutual mistake of fact.    See Boone, 166 Va. at 653, 187 S.E. at

436.

       The record contains clear and convincing evidence to

support the trial court's decision that inclusion of the

incorrect date of retirement was a mutual mistake of fact.

While drafting the agreement, husband and wife consistently

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referred to and relied upon the 20-year overlap of husband's

service with the marriage.   The spousal support figure that the

parties agreed upon was certainly based on the parties'

continued belief that wife was entitled to health benefits

through the Navy.   Moreover, nothing in the record suggests that

husband intended to include the wrong date of retirement and

place upon wife the burden of paying for costly private

insurance.

     Husband and wife entered into the stipulation and agreement

"in order to finally settle their property rights" and any other

issues "arising from their marital status and separation."   In

addition to spousal support, the agreement provided that wife

receive one-half of husband's military retirement, and it

attempted to settle the parties' respective rights as to real

property, personal property and debts.   Therefore, the mistake

did not go to the very foundation or essence of the agreement;

instead, the mistake only affected wife's health benefits.

     Because the record supports the trial court's decision of a

mutual mistake of fact, the chancellor properly reformed that

portion of the agreement that failed to conform to the parties'

understanding that wife was eligible to receive military health

benefits and their desire that she be able to maintain such low

cost coverage.   Accordingly, the decision of the trial court is

affirmed.

                                                          Affirmed.

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