Opinion
Record No. 1435-92-3
August 3, 1993
FROM THE CIRCUIT COURT OF MONTGOMERY COUNTY KENNETH I. DEVORE, JUDGE.
Charles R. Beller, III, for appellant.
H. Gregory Campbell, Jr., for appellee.
Pursuant to Code § 17-116.010 this opinion is not designated for publication.
Joe Lay (husband) appeals a decree of the trial court that confirmed the report of the Commissioner in Chancery (commissioner) awarding Wilda Ann Albert Lay (wife) a monetary award of $77,424.50 and a portion of husband's pension benefits. Husband contends that the trial court erred in finding "no express agreement" between the parties relative to these assets. We agree and reverse the judgment of the trial court.
Because we reverse on this issue, we do not address husband's second assignment of error.
The parties are fully conversant with the record, and this memorandum opinion recites only those facts necessary to a disposition of the issue before the Court.
The record discloses that the parties married on April 16, 1960, and separated on February 14, 1983. At separation, the parties' assets consisted of the marital home and furnishings, automobiles, savings and checking accounts, life insurance policies and husband's benefits related to his employment with United Parcel Service (UPS benefits). The UPS benefits consisted of a savings thrift plan with a balance of $13,923, a pension plan and approximately 4,100 shares of UPS stock valued at $29,000.
On May 20, 1983, the parties orally agreed that wife would receive the marital home and proceeds from its sale, the household furnishings, two automobiles, and the bank accounts, and that husband would continue to support wife by sending her his paychecks. Husband testified that, "in return," wife "would make no claim" to his UPS benefits. Shortly thereafter, husband executed a power of attorney that empowered wife to sell the home and retain the proceeds, transferred ownership of the cars to wife, surrendered the joint bank accounts to her and otherwise performed under their agreement.
The parties were divorced by decree entered April 2, 1990. However, the issues of equitable distribution were reserved and referred to a commissioner, who filed his report with the trial court following two ore tenus hearings. The commissioner reported that "an executory contract" existed between the parties with respect to "the home equity, home furnishings, automobiles, bank accounts and support for [wife]," and concluded that the "concept of divisible contract should be applied . . . to give credence to the dealings of the parties as to the[se] items" (emphasis added). Inexplicably, the commissioner found that "no express agreement" existed as to the husband's UPS benefits, noting that, "if such did exist it would be unconscionable and ought not be enforced." Addressing these assets, the commissioner recommended that wife receive "a monetary award from [husband] in the sum of $77,424.50" and a "portion of the UPS pension."
The husband's exceptions to the commissioner's report were overruled by the trial court, and it was "RATIFIED and CONFIRMED with the findings and awards as set forth therein . . . incorporated by reference into the Decree."
It is well established that property settlement agreements incidental to divorce proceedings are contracts subject to the same rules of interpretation applicable to contracts generally.Fry v. Schwarting, 4 Va. App. 173, 180, 355 S.E.2d 342, 346 (1987). On appeal, the "meaning and effect" of a contract is a "question of law which can readily be ascertained by this Court, [provided] all the evidence . . . necessary to construe" the agreement is a part of the record. Id.
"Primarily the question of whether a contract is entire or severable is one of intention, and to ascertain the intention regard is to be had to the subject matter of the agreement, the situation of the parties and the object they had in view at the time and intended to accomplish." O'Quinn v. Looney, 194 Va. 548, 551, 74 S.E.2d 157, 159 (1953); Shelton v. Stewart, 193 Va. 162, 167, 67 S.E.2d 841, 843 (1951); Eschner v. Eschner, 146 Va. 417, 422, 131 S.E. 800, 802 (1926). "'As a general rule it may be said that a contract is entire when by its terms, nature, and purpose it contemplates and intends that each and all of its parts and the consideration shall be common each to the other and interdependent.'" Shelton, 193 Va. at 167, 67 S.E.2d at 843 (quoting 17 C.J.S. Contracts § 331).
In Eschner, the husband and wife entered into a property settlement agreement in which the husband agreed to assign to his wife a "certain fund," deliver to her a promissory note for $4,000 and pay her "an annuity" of $1,800 per year "in lieu of alimony." In exchange, the wife agreed "to relinquish all her rights, interest and claim, 'including dower interest,' in all the real and personal property which the husband then owned or might thereafter acquire." 146 Va. at 419-20, 131 S.E. at 801. The Court held that this contract was "entire and not severable" because "the agreement on the part of [the wife] to relinquish all her rights in [husband's] property . . . constituted the only consideration . . . for [husband's] undertakings, and was intended by them to apply to the contract as a whole." Id. at 422-23, 131 S.E. at 802.
Similarly, in this instance, wife's agreement to "make no claim" upon husband's UPS benefits "constituted the only consideration, within the contemplation of the parties, for [husband's] undertakings" with regard to "the home equity, home furnishings, automobiles, bank accounts and support for [wife]." See id. at 423, 131 S.E. at 802. This finding is implicit in the commissioner's determination that a "contract" existed between the parties that was subject to divisibility. His related report of "no express agreement" pertaining to the UPS benefits is inconsistent with the recommended remedy. Application of the concept of divisibility of contract by the commissioner acknowledged the agreement, and its conditions were "common each to the other," "interdependent" and "indivisible."Shelton, 193 Va. at 167, 67 S.E.2d at 843.
There is no support in the record for finding the agreement unconscionable, "if such did exist." "Absent evidence of 'gross disparity in value exchanged,'" there is no basis to warrant a finding of unconscionability. Drewry v. Drewry, 8 Va. App. 460, 473, 383 S.E.2d 12, 18 (1989). The record here discloses no "gross disparity in value exchanged" between the parties at the time of agreement and its terms are neither "patently unfair" nor unconscionable. Derby v. Derby, 8 Va. App. 19, 28, 378 S.E.2d 74, 78 (1989).
Accordingly, because the contract between the parties has been fully performed in accordance with its terms, see Richardson v. Richardson, 10 Va. App. 391, 395, 392 S.E.2d 688, 690 (1990), the decision of the trial court with respect to the monetary award and pension benefits is reversed but, otherwise, is affirmed. Reversed and final judgment in part, Affirmed in part.
We do not disturb the trial court's decree with respect to division of the life insurance policies, as they were not subject of agreement in issue.