Opinion
Civil Docket No.: CL17-10791
04-19-2018
Re: Rene F. Sinn-Braswell v. Jelisa R. Sinn-Braswell
Steven P. Letourneau, Esquire
Inman & Strickler, PLC
575 Lynnhaven Parkway, Suite 200
Virginia Beach, Virginia 23452 Jennifer B. Shupert, Esquire
Shupert Chaing
1333 Laskin Road
Virginia Beach, Virginia 23451 Dear Counsel:
Today the Court rules on the Motion to Set Aside (the "Motion") filed by Defendant Jelisa R. Sinn-Braswell ("Wife"), which requests that the Court set aside a portion of a marital property and settlement agreement (the "Agreement"). Specifically, Wife seeks to set aside the portion of the Agreement that specifies that Rene Sinn-Braswell ("Husband") is to retain his entire military pension (the "Pension"), alleging that Husband fraudulently misrepresented the value of the Pension to her. Wife further alleges that the waiver of her marital share of the Pension renders the Agreement unconscionable, as she was the victim of Husband's overreaching and oppressive influences when she executed the Agreement.
The Court holds that the Agreement is neither a product of fraud nor unconscionable and is thus enforceable. The Court therefore DENIES Defendant's Motion to Set Aside.
Background
Husband and Wife married on July 17, 2009. (Compl. ¶ 1; Answer 1.) Husband enlisted in the United States Navy in 2001 and remained on active duty throughout the marriage. (Tr. 100-01.) Wife has both Bachelor's and Master's degrees, portions of which were earned during the marriage, and she was earning $42,500 per year when the parties separated. (Tr. 20, 66.) During the marriage, Husband was primarily responsible for the marital finances and, according to Wife's testimony, her only involvement consisted of occasional conversations. (Tr. 32-33.) There were no children born of the marriage or adopted by the parties. (Compl. ¶ 3; Answer 1.)
From December 2016 to February 2017, Husband and Wife attended five or six marriage counseling sessions in an effort to improve their marriage. (Tr. 24, 26, 122.) During that time, the couple discussed separating. (Tr. 25-26, 126-27, 131-32.) Also during that time, Wife purchased airline tickets to visit California, although she ultimately did not take the trip. (Tr. 127.) Husband and Wife carried out their "normal [marital] routine" until mid-January 2017, when Wife discovered that Husband was not interested in having children. (Tr. 48, 62-63.)
Prior to Husband deploying with the military in February 2017, Husband and Wife began negotiating the division of their assets. (Tr. 37-40, 127, 129-31, 144.) As part of these negotiations, the parties worked with a mediator, Dave McDonald, who drafted the Agreement. (Tr. 37-40,137-142; Pl.'s Ex. 1.) The parties subsequently reviewed the draft, negotiating and modifying some provisions outside the presence of the mediator, and then returned it to McDonald. (Tr. 53-55, 137-42.) McDonald incorporated the requested changes and sent the parties a final version, dated February 2, 2017. (Tr. 146.) Husband referred Wife to a Judge Advocate General Corps Officer ("JAG Officer")—a military attorney—who met with Wife to discuss the Agreement. (Tr. 39, 146-47.) Wife asserts that the attorney simply asked whether the Agreement represented what the parties had agreed to—to which Wife responded that it did—and the meeting lasted less than fifteen minutes. (Tr. 39) The parties ultimately signed the Agreement on February 15, 2017. (See Def.'s Ex. 2 ("Agreement"), at 6.)
The uncontested date of the parties' separation is February 16, 2017. (Compl. ¶ 5; Answer 1; Agreement 1.) The Complaint further states—and the Answer affirms—that the parties have lived separate and apart without interruption or cohabitation since that date, "with the conscious intention to end their marriage." (Compl. ¶ 5; Answer 1.)
The Agreement provides, in pertinent part, as follows:
• "The parties may at all times hereafter continue to live separate and apart, continuously and uninterrupted for the rest of their lives. Each shall be free from interference, authority, and control, direct or indirect, by the other as fully as though unmarried. . . . Each shall be at liberty to act and to do as she or he sees fit, and to conduct his or her personal and social life as freely and as fully as if he or she were sole and unmarried." (Agreement 1.)
• "[Husband] and [Wife] have each made a full disclosure to the other concerning the nature and extent of their individual and joint marital assets and liabilities." (Id.)
• "[Husband] has approximately $58,013 in a Thrift Savings Plan and $31,459 in a Roth IRA, and [Wife] has approximately $4,000 in a TIAA CREF account. It was determined that [Wife's] marital share of the TSP is $23,735.90. The Roth IRA was all accumulated during the marriage. [Wife] shall receive her marital share of the TSP and Roth IRA (which has been determined to be
$31,428.90, which will be transferred from [Husband's] Roth IRA). The marital share takes into account [Wife's] share of the marital debt (6,036.55[)], and [Husband's] marital share of [Wife's] TIAA account. [Wife's] marital share shall be transferred into a similar tax-deferred retirement account for [Wife]." (Id. at 3.)At trial, the parties agreed that Wife's marital share of the Pension would be worth approximately $300,000 if and when Husband becomes eligible to receive the Pension. (See Def.'s Exs. 1, 4.)
• "[Husband] shall retain his military pension." (Id.)
• "The parties agree that by virtue of the parties having entered into this Agreement, if a party decides to file for divorce, any divorce shall be obtained on the grounds of no-fault, which shall bar a divorce on any fault grounds. The parties agree that they shall be bound by all the terms of this agreement, and they agree that the Agreement shall be submitted to the court to be affirmed, ratified, and incorporated into such judgement or decree, unless modified or revoked as provided herein." (Id. at 4.)
• "The parties . . . agree that this Agreement shall continue in force and effect unless expressly revoked in writing by the parties, irrespective of any reconciliation or temporary cohabitation of the parties." (Id.)
• "Neither party requests spousal support from the other. This decision by the parties is irrevocable. Note: [Husband] is providing funds to [Wife] for moving (not to exceed $6,500.) [sic]" (Id. at 5.)
• "If any of this Agreement is found to be illegal or unenforceable by any Court, that portion alone shall be severed from the Agreement and the rest of the Agreement shall stand, as if that portion had never been a part of the Agreement." (Id.)
Husband and Wife continued to live in the same house and interact with one another, including attending church together, until Husband deployed in February 2017. (Tr. 42, 143-44.) In the summer of 2017, Wife contacted McDonald to question the waiver of her interest in the Pension after she apparently discovered its potential value. (Tr. 51.) Husband and Wife also corresponded with each other via email regarding Wife's desire to reconsider certain other provisions of the Agreement. (Tr. 51, 154-56; Pl.'s Ex. 2.) Husband ultimately did not agree to amend the Agreement. (Tr. 51, 155-56; Pl.'s Ex. 2.)
On September 21, 2017, Husband filed a complaint for divorce on the grounds that the parties have no children, have been separated for more than six months, and had entered into a "Stipulation and Property Settlement Agreement." (Compl. ¶¶ 3, 5, 7.) Husband requested that the Court "approve, ratify, confirm, and incorporate" the Agreement into the final divorce decree. (Id. at 2.) Wife filed an Answer and Counterclaim on November 20, 2017, alleging abandonment and desertion and requesting that the Agreement be set aside and deemed invalid due to fraud and unconscionability. (Answer 1-3.) Wife subsequently filed the Motion on February 12, 2018, and the Court heard argument on March 12, 2018 (the "Hearing"). At the conclusion of the Hearing, the Court took the matter under advisement and now rules.
Positions of the Parties
Wife's Argument
Wife's argument is twofold. She first argues that provisions of the Agreement were based upon Husband's fraudulent statements and misrepresentations. (Tr. 7-8.) Second, she alleges that the Agreement is unconscionable. (Tr. 8.)
In support of her fraud allegation, Wife asserts that there was a marital fiduciary relationship when the parties negotiated and entered into the Agreement, as they were living in the same home and acting as husband and wife. (Tr. 10-11, 27, 174-75.) She further alleges that, based on the same facts, she believed the separation was only temporary. (Tr. 31-32.) Wife argues that despite the fiduciary relationship, Husband told her that a lawyer advised him that Wife's share of the Pension would only be $86.00 per month and Husband asked her if this small amount was worth the ongoing reminder of their failed marriage, to which Wife responded that it was not. (Tr. 33-34.)
Wife further contends that she only agreed to waive her rights to the Pension because she understood that she and Husband would reconcile when Husband returned from deployment and that, based on the marital fiduciary relationship, the disparity in the Agreement is unconscionable. (Tr. 181-87.) Wife also argues that her waiver of spousal support should be considered by the Court in the unconscionability analysis. (Tr. 12-14.)
Husband's Argument
Husband argues that the Motion should be denied because the negotiations surrounding the Agreement were meticulous and occurred over a period of time, with the assistance of a mediator retained specifically to draft a separation agreement. (Tr. 15-17.) Husband asserts that Wife has not met her burden of proving that the Agreement was the result of actual or constructive fraud. (Tr. 188-89.) Specifically, Husband denies that he made any representation regarding the value of the Pension and argues that, even if he had, Wife admitted during her testimony that she did not rely on his alleged representation, stating that she would have entered into the Agreement regardless of its monetary value; as such, he asserts that one of the elements of fraud has not been met. (Tr. 189.) Husband further contends that he did nothing to indicate to Wife that the two of them would reconcile. (Tr. 190.)
Husband further argues that he did not engage in any oppressive or overreaching conduct, as demonstrated by the facts that the parties sought out an independent mediator to draft the Agreement; it took over a week to refine and finalize the Agreement and included input by Wife; Husband recommended that Wife seek independent legal counsel, which she did; and both parties ultimately signed the final version of the Agreement voluntarily. (Tr. 192-94.) Husband also contends that he did not seek any legal advice until after his deployment and never discussed with Wife any retirement assets, including the Pension, other than general discussions of marital retirement "hopes and dreams." (Tr. 135.)
Analysis
Legal Standard
[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." Cooley v. Cooley, 220 Va. 749, 752, 263 S.E.2d 49, 52 (1980). As such, the challenging spouse has "the burden at trial to prove by clear and convincing evidence the grounds alleged to void or rescind the agreement." Drewry v. Drewry, 8 Va. App. 460, 463, 383 S.E.2d 12, 12 (1989).
Despite this standard, courts have recognized that a contract between a husband and a wife is susceptible to "subtle overreaching and misrepresentation" typically absent from commercial arm's-length transactions. Derby v. Derby, 8 Va. App. 19, 29, 378 S.E.2d 74, 79 (1989). This unique aspect of the marital relationship nevertheless is not a license for courts to "relieve one of the consequences of a contract merely because it is unwise." Id. at 30, 378 S.E.2d at 80 (quoting Owens v. Owens, 196 Va. 966, 974, 86 S.E.2d 181, 186 (1955)).
"[I]n cases involving separation agreements, 'unlike commercial contracts, the state itself has an interest in the terms and enforceability of [the] agreement[ ]' because, '[i]f either spouse is left in necessitous circumstances by a separation agreement, that spouse . . . might become [a] public charge[ ].'" Sims v. Sims, 55 Va. App. 340, 351, 685 S.E.2d 869, 874 (2009) (quoting Derby, 8 Va. App. at 29, 378 S.E.2d at 79).
"The duty by which conduct is measured to determine fraud is established by the relationship and circumstances which exist between parties." Drewry, 8 Va. App. at 469, 383 S.E.2d at 16. "[T]he Supreme Court [of Virginia] held that a husband and wife who have separated, employed independent counsel, and are negotiating a property settlement agreement, stand at arms length [sic] to one another in their negotiations," and thus have ended their fiduciary relationship. Id. (citing Barnes v. Barnes, 231 Va. 39, 42, 340 S.E.2d 803, 804 (1986)). Therefore, as a general rule, "when spouses separate with the intention to divorce and propose to divide or settle their property interests, they have assumed adversarial roles and no longer occupy a position of trust." Id. at 470, 383 S.E.2d at 17.
To succeed on a claim of actual fraud, a litigant must prove the following elements by clear and convincing evidence: "(1) a false representation, (2) of a material fact, (3) made intentionally or knowingly, (4) with intent to mislead, (5) reliance by the party misled, and (6) resulting in damage to the party misled." Winn v. Aleda Constr. Co., 227 Va. 304, 308, 315 S.E.2d 193, 195 (1984).
In cases in which there is no evidence of actual fraud, constructive fraud nevertheless may exist. Constructive fraud is a "[b]reach 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." Wells v. Weston, 229 Va. 72, 77, 326 S.E.2d 672, 675-76 (1985) (quoting Black's Law Dictionary 284 (5th ed. 1979). "[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." Drewry, 8 Va. App. at 470-71, 383 S.E.2d at 17 (quoting Nationwide Ins. Co. v. Patterson, 229 Va. 627, 629, 331 S.E.2d 490, 492 (1985)). Although there is no requirement that there be an actual "intent to deceive," a constructive fraud claim does require a material misrepresentation. Id.
For claims of unconscionability in the context of premarital and marital agreements, the Code of Virginia provides as follows:
A premarital agreement is not enforceable if the person against whom enforcement is sought proves that:
Va. Code § 20-151(A) (2016 Repl. Vol.) (applied to separation and post-marital agreements via Va. Code § 20-155).1. That person did not execute the agreement voluntarily; or
2. The agreement was unconscionable when it was executed and, before execution of the agreement, that person (i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; and (ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided.
To demonstrate unconscionability of a marital agreement, a party "must prove both 1) a gross disparity existed in the division of assets and 2) overreaching or oppressive influences." Galloway v. Galloway, 47 Va. App. 83, 92, 622 S.E.2d 267, 271 (2005). "Any issue of unconscionability of a [marital] agreement shall be decided by the court as a matter of law. Recitations in the agreement shall create a prima facie presumption that they are factually correct." Va. Code § 20-151(B).
Discussion
The Court has considered the pleadings, evidence and oral argument presented at the Hearing, and applicable authorities. The Court now rules on the enforceability of the Agreement.
A. Wife Has Not Proved Fraud By Clear and Convincing Evidence.
The legal duty in the context of fraud is determined by the relationship and circumstances that exist between the parties. Drewry v. Drewry, 8 Va. App. 460, 469, 383 S.E.2d 12, 16 (1989). When spouses have "separated, employed independent counsel, and are negotiating a property settlement agreement, [they] stand at arms length [sic] to one another in their negotiations" and thus do not share a fiduciary relationship. Id. (citing Barnes v. Barnes, 231 Va. 39, 42, 340 S.E.2d 803, 804 (1986)). Consequently, "when spouses separate with the intention of divorce and propose to divide or settle their property interests, they have assumed adversarial roles and no longer occupy a position of trust." Id. at 470, 383 S.E.2d at 17.
Despite Wife's testimony that she did not believe the marriage was ending when she signed the Agreement, the Court finds the surrounding circumstances indicate otherwise—including revelations during and outside marriage counseling, Husband's recommendation that Wife meet with an attorney, and the Agreement's specific language stating that "[t]he parties may at all times hereafter continue to live separate and apart, continuously and uninterrupted for the rest of their lives" and that the parties "separated February 16, 2017." (Agreement 1.) Although neither party retained legal counsel, Wife met with a JAG Officer based on Husband's recommendation, and the parties engaged the services of an independent mediator. Notably, most of the negotiations between the parties outside the presence of the mediator were by email rather than in-person communications. These facts are more indicative of arm's-length negotiations rather than intimate negotiations within a marital fiduciary relationship. The Court notes that the Agreement was executed prior to the date the parties separated; although this fact is pertinent, it is just one of many factors to be considered and is not dispositive regarding whether Husband owed a fiduciary duty to Wife when the Agreement was executed.
Wife was able to meet with the JAG Officer free of charge as a result of Husband's active-duty military benefits. (Tr. 39.)
The Court notes that Wife's testimony also contradicts the pleadings in this case. Husband asserts in his complaint that "[t]he parties have lived separate and apart without any cohabitation and without interruption since February 16, 2017, a period in excess of six months, with the conscious intention to end their marriage." (Compl. ¶ 5 (emphasis added).) Wife in her answer "affirms" this representation. (Answer 1.)
Even if the Court were to assume, arguendo, that Husband did hold a position of marital trust with Wife—and thus owed her a fiduciary duty—the Court still finds that Wife has not sufficiently proved actual or constructive fraud.
Actual fraud requires clear and convincing evidence of "(1) a false representation, (2) of a material fact, (3) made intentionally or knowingly, (4) with the intent to mislead, (5) reliance by the party misled, and (6) resulting damage from the party misled." Winn v. Aleda Constr. Co., 227 Va. 304, 308, 315 S.E.2d 193, 195 (1984). Here, Wife failed to prove that Husband intentionally or knowingly intended to mislead her regarding the value of the Pension. The only evidence of a false representation is Wife's contradicted testimony that Husband told her that her share of the Pension would be worth $86.00 per month. Significantly, Wife testified that had she known the actual value of the Pension, she still would have signed the Agreement, which constitutes an admission that she did not rely on the alleged misrepresentation when she executed the Agreement. The Court therefore finds that Wife failed to prove actual fraud by clear and convincing evidence.
In fact, Wife's initial monthly marital share of the Pension in 2021 after taxes—assuming Husband retired in 2021 with 20 years' service and not discounted to present value—would be approximately $378 per month ($20,150/12 x 0.5 x 9 year marriage/20 year military service = $377.81 per month). (See Def.'s Ex. 1.)
Alternatively, to prove constructive fraud, Wife must prove "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." Drewry, 8 Va. App. at 470-71, 383 S.E.2d at 17. Wife's constructive fraud claim fails for at least two reasons. First, it is disputed what representation, if any, Husband made regarding the Pension; although Wife alleges that Husband told her the Pension would be worth $86.00 a month, Husband contends that he never made such a statement. Second, even if the Court found Wife's testimony more credible than Husband's, Wife admitted that she would have waived any rights to the Pension even if she had known the actual value when she signed the Agreement. Any misrepresentation by Husband regarding this fact therefore was not material and was not detrimentally relied upon, undermining the argument that it constituted fraud.
Constructive fraud alternatively can be based on intentional concealment of marital assets. See, e.g., Webb v. Webb, 16 Va. App. 486, 494, 431 S.E.2d 55, 61 (1993). Although Husband had superior knowledge regarding the marital finances in the instant case, Wife clearly was aware of Husband's potential to receive a military pension—as the Pension is clearly referenced in the Agreement—and no evidence was presented that Husband concealed its potential value. In fact, Wife had the necessary information to go onto the internet at any point to determine Husband's anticipated Pension, as she did in the summer of 2017, as the only input parameters required are year of retirement, time of service at retirement, and rank at retirement. (See Def.'s Ex. 1.)
The Court therefore finds that Wife has failed to meet her burden of proving fraud.
B. The Agreement Is Not Unconscionable.
In contrast to the fraud analysis, unconscionability is less concerned with "reviewing the conduct of the parties in relation to their legal and equitable duties to one another" and "more concerned with the intrinsic fairness of the terms of the agreement in relation to all attendant circumstances," although it does still consider "the relationship and duties between the parties" as one of the attendant circumstances. Derby v. Derby, 8 Va. App. 19, 28, 378 S.E.2d 74, 78 (1989).
Because Wife does not dispute that she voluntarily executed the Agreement, section 20-151 of the Code of Virginia provides that the Agreement is unenforceable only if Wife proves each of the following: (1) the Agreement was unconscionable at the time it was executed, (2) Wife was not provided a fair and reasonable disclosure of Husband's property, and (3) Wife did not expressly waive in writing her right to disclosure of Husband's property beyond the disclosure provided. Va. Code Ann. § 20-151 (2016 Repl. Vol.). Wife must prove each element by clear and convincing evidence. Drewry v. Drewry, 8 Va. App. 460, 463, 383 S.E.2d 12, 12 (1989). For purposes of evaluating the Agreement, the Court must consider the facts as they existed when the Agreement was signed. Va. Code § 20-151(A)(2).
1. The Agreement Was Not Unconscionable When Executed.
To evaluate whether an agreement is unconscionable, courts use a two-step test promulgated by the Virginia Court of Appeals in Galloway v. Galloway. The disadvantaged party is required to "prove both 1) a gross disparity existed in the division of assets and 2) overreaching or oppressive influences," with courts "view[ing] the apparent inequity in light of other attendant circumstances to determine whether the agreement is unconscionable and should be declared invalid." Galloway v. Galloway, 47 Va. App. 83, 92, 622 S.E.2d 267, 271 (2005) (citing Derby v. Derby, 8 Va. App. 19, 29, 378 S.E.2d 74, 79 (1989)).
The most recent published Court of Appeals decision regarding unconscionability of marital agreements apparently leaves open the possibility that, in "extreme" cases, a disadvantaged party might be able to demonstrate unconscionability without affirmatively proving oppressive or overreaching conduct—essentially stating that "when gross disparity is so extreme as to prove 'pecuniary necessities,' it establishes both prongs of the unconscionability test." Sims v. Sims, 55 Va. App. 340, 350 & n.1, 685 S.E.2d 869, 873-74 (2009). Subsequent unpublished decisions, however, have continued to apply the Galloway two-step test, requiring both a gross disparity and overreaching or oppressive influences. See, e.g., Guirguis v. Salib, No. 0038-12-1, 2013 Va. App. LEXIS 12, at *25 (Jan. 15, 2013) (finding that the trial court erred in ruling that a separation agreement was unconscionable because the disadvantaged party failed to prove that the benefitting party engaged in overreaching or oppressive influences); Chaplain v. Chaplain, No. 1301-10-1, 2011 Va. App. LEXIS 15, at *14 (Jan. 18, 2011) ("Even if the evidence established a gross disparity in assets, the trial court was entitled to conclude the agreement was not unconscionable because the evidence did not establish overreaching by husband or oppressive influences on wife."). However, the Court is not aware of any Virginia appellate decisions that found a marital agreement unconscionable based solely on a gross disparity in the division of assets.
a. The Agreement's division of assets is not grossly disparate.
Cases in which courts have found a gross disparity in the division of assets in a marital settlement agreement involved situations in which nearly all of the marital assets were allotted to one spouse. See, e.g., Sims v. Sims, 55 Va. App. 340, 352-53, 685 S.E.2d 869, 874-75 (2009) (finding an agreement providing the husband with almost all of the marital estate grossly disparate); Galloway, 47 Va. App. at 92-93, 622 S.E.2d at 272 (2005) (assuming the gross disparity prong was met when an agreement distributed ninety-four percent of the marital assets to the husband).
Here, such a gross disparity does not exist. Although the Agreement provides Husband the home, it also makes him liable for its expenses, including the associated mortgage, and allows Wife to reside therein for several months while Husband deployed. The Agreement also allots one automobile to each spouse. Regarding retirement accounts, the Agreement equitably distributes Husband's Thrift Savings Plan, Husband's Roth Individual Retirement Account, and Wife's TIAA CREF account.
Wife alleges that because she waived her rights to the Pension—in which she otherwise would have had a potential marital share of $299,000—the division of assets in the Agreement is grossly disparate. Although the amount certainly is significant, there are a number of variables that affect how much, if any, of that amount would actually be realized, including whether it will in fact vest and, if it does, the length of Husband's life. In addition to the uncertainty of the Pension's value—and in conjunction with the fact that the Agreement is otherwise fair on its face—the Court can envision a number of reasons Wife might waive her interest in the Pension, including the reason acknowledged by Wife regarding the $86.00-per-month payment, i.e., that she wanted to avoid a monthly reminder of her failed marriage.
Wife also argues that her waiver of spousal support should be considered by the Court when evaluating the unconscionability of the Agreement. However, Wife admits that she voluntarily waived spousal support based on her income at the time (Tr. 48-49), and the Agreement implies that the waiver also was based on Husband agreeing to pay up to $6,500 of Wife's moving expenses (Agreement 5).
Husband is not eligible to retire until the year 2021. (Tr. 101.) Further, Husband testified at the Hearing that when the Agreement was executed, he was not sure whether he would reenlist; a decision not to reenlist would have precluded him from receiving any retirement pension. (Tr. 104, 164-65.)
Although the Court recognizes that Wife stated that she did not want a monthly reminder in the context of the payment being only $86.00 per month, it nevertheless finds this instructive in determining whether the Agreement is grossly disparate. --------
Viewed in the context of the entire separation agreement, the Court finds that the Agreement's division of marital assets is not grossly disparate.
b. Wife presented no evidence of overreaching or oppressive influences.
Even if the Court were to find the Agreement's division of marital assets grossly disparate, Wife failed to demonstrate that overreaching or oppressive influences existed when the Agreement was executed. Of course, "[i]n separation agreements particularly, unconscionability may be of heightened importance. While no fiduciary duty exists between the parties, marriage and divorce creates [sic] a relationship which is particularly susceptible to overreaching and oppression." Derby, 8 Va. App. at 29, 378 S.E.2d at 79.
The Virginia Court of Appeals has identified two ways in which a party can prove overreaching or oppressive influences: (1) proof of "bad faith, such as concealments, misrepresentations, undue advantage, [or] oppression on the part of the one who obtains the benefit"; or (2) proof of "ignorance, weakness of mind, sickness, old age, incapacity, pecuniary necessities, and the like, on the part of the other." Sims, 55 Va. App. at 349-50, 685 S.E.2d at 873 (quoting Derby, 8 Va. App. at 28-29, 378 S.E.2d at 79).
In Galloway, discussed supra, the court affirmed the trial court's ruling that a marital agreement was not unconscionable despite the agreement allotting the husband ninety-four percent of the marital assets, holding that "a spouse can give away his/her entire portion of the marital estate as long as there is no oppressive conduct by the other spouse." 47 Va. App. at 93, 622 S.E.2d at 272. In doing so, the court acknowledged that "[n]othing in the record, including wife's testimony, indicates husband acted in bad faith, coerced or misled wife. She had an opportunity to obtain counsel and declined to do so." Id. at 94, 622 S.E.2d at 273. This holding was despite a commissioner's finding that "husband did not disclose the value of his . . . pension and the value of the assets, and placed particular emphasis on wife's waiver of spousal support." Id. at 94, 622 S.E.2d at 272.
In the instant case, Wife has offered no evidence of overreaching or oppressive influences. Even if the Court were to rely on Wife's testimony, she did not assert that Husband withheld or misrepresented information in bad faith. Additionally, there is no evidence that Wife suffered from "ignorance, weakness of mind, sickness, old age, incapacity, [or] pecuniary necessities." Sims, 55 Va. App. at 349-50, 685 S.E.2d at 873 (quoting Derby, 8 Va. App. at 28-29, 378 S.E.2d at 79). In fact, the evidence demonstrates that Wife has two college degrees and the resources to travel to California. The parties negotiated both in and out of the presence of a mediator, took many days to review and revise the Agreement, and signed the Agreement voluntarily after Wife spoke with a JAG Officer. Despite Wife's testimony that she was unfamiliar with the couple's finances, she at least had sufficient opportunity to review and understand the Agreement and to seek legal advice, if she felt it necessary. The Court finds that the negotiations were thorough and equitable, rather than oppressive and overreaching.
In short, there is no evidence of oppressive or overreaching conduct that led Wife to execute the Agreement.
2. Wife Has Not Proved that Husband Failed to Provide a Fair and Reasonable Disclosure of His Property.
Even if the Court were to find that the Agreement is unconscionable, Wife has not provided sufficient proof that Husband failed to fairly and reasonably disclose his property. Beyond Wife's testimony that Husband told her that she would only receive $86.00 per month if she retained her marital share of the Pension, there is no evidence that Husband knew the value of the Pension or what Wife's interest in the Pension would be. Rather, the undisputed evidence demonstrates that both parties knew about the Pension and that Wife willingly waived her interest, as acknowledged in the Agreement itself. Wife also could have taken advantage of free available online resources to calculate the anticipated value of the Pension, yet apparently did not do so prior to executing the Agreement.
This evidence is insufficient to satisfy the clear and convincing standard required to prove that Husband did not fairly and reasonably disclose his property.
3. The Lack of Wife's Waiver of Disclosure Is Immaterial.
No evidence was presented that Husband concealed any marital assets. Although Wife did not waive in writing disclosure of Husband's property beyond what he actually disclosed, the Court's foregoing analysis makes this element inapplicable and immaterial.
Based on the foregoing analysis, the Court holds that the Agreement is not unconscionable.
Conclusion
The Court holds that the Agreement is neither a product of fraud nor unconscionable. The Court therefore finds the Agreement enforceable and DENIES Defendant's Motion to Set Aside the Agreement.
The Court directs counsel for Husband to prepare and circulate a Final Order consistent with the ruling in this opinion and submit it to the Court for entry within fourteen days.
Sincerely,
/s/
David W. Lannetti
Circuit Court Judge DWL/kml