Jeffrey Warren Ainslie v. Cynthia G.M. Ainslie ( 2000 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Coleman, Bray and Bumgardner
Argued at Chesapeake, Virginia
JEFFREY WARREN AINSLIE
MEMORANDUM OPINION * BY
v. Record No. 2030-99-1 JUDGE SAM W. COLEMAN III
JUNE 6, 2000
CYNTHIA GAYE MORRIS AINSLIE
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
Frederick B. Lowe, Judge
James R. McKenry (J. Andrew Basham; Heilig,
McKenry, Fraim & Lollar, P.C., on brief), for
appellant.
Henry E. Howell, III (Richard H. Doummar;
Doummar & Howell, on brief), for appellee.
Jeffrey Ainslie appeals the trial court's order
interpreting and enforcing the parties' oral property settlement
agreement which was incorporated by reference in the final
divorce decree. He argues that the court erred in declining to
enforce the portion of the property settlement agreement that
provides he is to receive a credit for the value of all property
taken by Cynthia Ainslie from the itemized list of assets,
including the value of property that had previously been
designated as Cynthia Ainslie's separate property. We agree and
* Pursuant to Code § 17.1-413, recodifying Code
§ 17-116.010, this opinion is not designated for publication.
reverse and remand the case with direction that the court
enforce the terms of the agreement as hereinafter set forth.
BACKGROUND
On July 26, 1986, the parties were married, and on July 9,
1998, a final decree of divorce was entered. An initial hearing
was held in November 1997 before a Commissioner in Chancery to
resolve issues concerning the division of marital property. At
the request of the Commissioner, the parties produced an
itemized list of all of their real and personal property to aid
in the division of the assets. In addition to listing the
estimated value of each item, the list also designated whether
the party preparing it considered the item to be separate or
marital property. After preparing the list, the parties
tentatively agreed on a settlement. However, a dispute arose
regarding the interpretation of the settlement agreement and a
series of hearings were held in order to equitably distribute
the property.
At one of those hearings in the circuit court on May 19,
1998, the parties again reached a settlement agreement. The
parties agreed that Jeffrey Ainslie would give Cynthia Ainslie
$450,000, less $20,000 that he had previously paid to her and
that Cynthia Ainslie, as a credit against the $450,000, could
take whatever property she desired at its itemized value from
the list. The final decree affirmed, ratified, and incorporated
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the settlement agreement between the parties "set forth in the
hearing on May 19, 1998." The court ordered that:
[Cynthia Ainslie] shall receive a
combination of lump sum spousal support and
as equitable distribution of assets. The
total amount that [Cynthia Ainslie] is to
receive is $450,000.00 subject to a credit
of $20,000.00 which was previously paid by
[Jeffrey Ainslie]. [Cynthia Ainslie] may
then choose from the list referenced and
utilized at the Court's hearing on May 19,
1998. [Cynthia Ainslie] may select assets
by giving written notice to [Jeffrey
Ainslie] from the list above referenced and
shall be deducted from the remaining
$430,000.00. [Cynthia Ainslie] shall
receive the sum of $180,000.00, which shall
be a combination of cash and assets selected
by [Jeffrey Ainslie] from the asset list
pursuant to the settlement agreement, on or
about June 30, 1998.
A dispute again arose regarding the interpretation of the
settlement agreement. The disagreement concerned, in part,
Cynthia Ainslie's refusal to credit Jeffrey Ainslie the designated
value of some items from the list that were retained by her and
also concerned damage to the marital residence Jeffrey Ainslie
alleged occurred while Cynthia Ainslie occupied the residence. In
December 1998, the trial court held another hearing at which
Cynthia Ainslie testified that she had a "side agreement" with
Jeffrey Ainslie, the terms of which were that she would be
entitled to take all items on the list designated as her
separate property in addition to other items on the list. Under
these terms, Jeffrey Ainslie would receive credit against the
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$430,000 for only those items that Cynthia Ainslie retained that
were designated as marital property. Items on the list that were
designated as Cynthia's Ainslie's separate property, included
furs, jewelry, linens, oriental rugs, and porcelain collectibles.
The trial court held another hearing in April 1999. As a
result of that hearing, the trial court ruled that the parties had
not entered into a second or "side agreement" modifying the
earlier agreement that had been approved and ratified in the final
divorce decree. Nevertheless, the court construed the earlier
agreement to provide that the property designated on the list as
Cynthia Ainslie's separate property was not part of the marital
estate and that she was entitled to retain the property as her
separate estate. Accordingly, the court ruled that under the
ratified agreement, Jeffery Ainslie would not receive credit for
the value of those items designated as Cynthia Ainslie's separate
property.
ANALYSIS
On appeal, Jeffrey Ainslie argues that the trial court
erred in refusing to credit him for the value of those items
retained by Cynthia Ainslie which were designated on the list as
her separate property. He asserts that the oral settlement
agreement, which was recorded at the May 1998 hearing, was a
valid and enforceable oral contract and that the settlement
agreement provided that he was to receive credit for the value
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of all property retained by Cynthia Ainslie from the list,
notwithstanding the item's classification as marital or
separate. 1 We agree.
"Property settlement agreements are contracts; therefore, we
must apply the same rules of interpretation applicable to
contracts generally." Tiffany v. Tiffany, 1 Va. App. 11, 15, 332
S.E.2d 796, 799 (1985). "[A]n oral agreement which comprises and
settles the property and equitable distribution issues in pending
divorce litigation may be a valid and binding contract without
being reduced to writing." Richardson v. Richardson, 10 Va. App.
391, 394, 392 S.E.2d 688, 689 (1990). "To be valid and
enforceable, the terms of an oral agreement must be reasonably
certain, definite, and complete to enable the parties and the
courts to give the agreement exact meaning." Id. at 395, 392
S.E.2d at 690 (citation omitted).
"When a writing is not a prerequisite to contract formation
and where the terms are exact and complete, the remaining
question is whether there was a meeting of the minds of the
parties to the terms of the oral contract." Richardson, 10 Va.
App. at 396, 392 S.E.2d at 690-91 (citation omitted). "A
1
Jeffrey Ainslie also argues that, to the extent that the
settlement agreement was a partial agreement, the court erred in
reforming the contract. He asserts that absent a showing of
fraud or mistake, a partial contract is invalid and
unenforceable. Because we find that the oral settlement
agreement was valid, we do not address this contention.
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meeting of the minds requires a manifestation of mutual assent,
and a party's mental reservation does not impair the contract he
purports to enter." Wells v. Weston, 229 Va. 72, 79, 326 S.E.2d
672, 676 (1985) (citation omitted). "The standard for
determining the intent of the parties to an oral contract is one
of reasonable expectation -- that is, the meaning which the
party using the words should reasonably have expected them to be
given by the other party." Foreign Mission Board v. Wade, 242
Va. 234, 237-38, 409 S.E.2d 144, 146 (1991) (citations omitted).
Whether the interpretation of the contract
[is a matter of law or a question of fact]
depends on whether the evidence on that
issue was clear or ambiguous. If, from the
evidence presented, reasonable people could
draw different conclusions as to reasonable
expectations of the parties, the question of
the meaning of the contract is properly
presented to a [fact finder] for resolution.
Id. at 238, 409 S.E.2d at 146 (citation omitted).
At the May 1998 hearing, counsel for Jeffrey Ainslie stated
the terms of the oral settlement agreement on the record. The
court questioned Cynthia Ainslie and heard extensive argument
from counsel regarding the agreement. In describing the list of
assets and its division, counsel for Jeffrey Ainslie stated,
"Now, the next thing speaks of what they are going to keep, and
it is clearly understood that whatever they keep comes off
-- whatever Mrs. Ainslie keeps comes off of the gross figure of
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430 with the values assigned in the net equity debt/lien
. . . ." In response, the following colloquy occurred:
THE COURT: Is that true of all of these
items?
[COUNSEL FOR JEFFREY AINSLIE]: Yes, sir.
THE COURT: Even the items that are
obviously jewelry items that belong to her?
[COUNSEL FOR JEFFREY AINSLIE]: Yes, sir.
* * * * * * *
THE COURT: So anything that she chooses to
decide to keep off of this list would come
off of the balance owing on the $430,000 at
the rate of whatever the figure shown in the
net equity column is?
[COUNSEL FOR JEFFREY AINSLIE]: That's
correct.
THE COURT: Is that your understanding?
[COUNSEL FOR CYNTHIA AINSLIE]: There is one
problem there having to do with the
clothing, and it just came up, if we could
have a moment to talk about it.
* * * * * * *
[COUNSEL FOR CYNTHIA AINSLIE]: I apologize,
Your Honor. The clothing issue we were
looking towards are things other than
clothing. Everything else except for the
clothing we agree to.
* * * * * * *
[COUNSEL FOR JEFFREY AINSLIE]: May I just
explain? Mr. Ainslie could care less about
clothing. His hobbies are electronics and
they are all on here, and they are his
personal things.
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THE COURT: I assume they were taken into
consideration when you came up with the
$430,000?
[COUNSEL FOR JEFFREY AINSLIE]: Yes, sir.
They are all in here. If we're going to
start doing that, then if we start pulling
out this, that, or the other, its not going
to work.
* * * * * * *
THE COURT: Is it true that was all taken
into consideration when you came up with the
450?
[COUNSEL FOR JEFFREY AINSLIE]: Yes.
THE COURT: Minus the 20?
[COUNSEL FOR CYNTHIA AINSLIE]: The 450,
yes. This list, D-1, yes.
* * * * * * *
THE COURT: I want to talk about the
clothes. From what you are telling me, is
that theoretically under this fact situation
-– and I want to make sure nobody is going
into this thing blind. Theoretically, under
this settlement, you are talking about Mrs.
Ainslie can say, "The heck with the
clothes, they are not worth $20,000 to me,
I'll take the additional $20,000 and buy
myself a whole new wardrobe?
[COUNSEL FOR JEFFREY AINSLIE]: Yes.
* * * * * * *
THE COURT: Okay. Now, Mrs. Ainslie, do you
understand clearly the terms of the
agreement that has been hammered out and
dictated into the record here this
afternoon?
MRS. AINSLIE: Yes, I believe so. Yes.
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Here, the terms of the agreement, which were stated on the
record at the May 19, 1998 hearing, were clear and definite.
During the hearing, the court questioned both counsel and
Cynthia Ainslie regarding the terms of the agreement. The court
then specifically inquired whether Cynthia Ainslie understood
that the value of any item that she retained from the list
designated as Exhibit D-1 would be credited to the balance owed
to her by Jeffrey Ainslie. Cynthia Ainslie agreed with the
court's recitation of the terms of the agreement. The court
also inquired as to whether the agreement included "items that
are obviously jewelry items that belong to [Cynthia Ainslie],"
and counsel replied, "Yes." Counsel for Jeffrey Ainslie
informed the court that in drafting the property list and in
determining the gross value of the estate, all of the parties'
assets were listed, including items that are the parties'
separate assets. Finally, the court clarified and summarized
the terms of the agreement.
We find that there is no evidence to support a finding that
the parties contemplated that Jeffrey Ainslie would not receive
a credit for the value of the items retained by Cynthia Ainslie
that were her separate property. Further, there is no evidence
to support a finding that the notations on the asset list,
designating the property as separate or marital, were considered
in determining the distribution of the assets. The wife's, as
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well as the husband's, separate property was included in the
parties' estate and in valuing their assets. No reasonable
person could conclude that, although the value of the wife's
assets was used in valuing the estate, they would not be
considered when dividing the estate.
Based on the extensive colloquy between the court, counsel,
and the parties, the terms of the oral settlement agreement, to
which both parties assented, are clear and unambiguous. The
trial court approved and ratified the agreement and the parties
have not amended it. Accordingly, under the terms of the
agreement, we find that the trial court erred in failing to
credit Jeffrey Ainslie the value of the items retained by
Cynthia Ainslie, including those items that were her separate
property in accordance with the agreement. The judgment of the
trial court is reversed and the case remanded for entry of an
order in accordance with this decision.
Reversed and remanded.
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