Vickie Lynn Fields v. David Carl Fields ( 1996 )

COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Moon, Judges Coleman and Fitzpatrick
VICKIE LYNN FIELDS
v. Record No. 0239-95-3 MEMORANDUM OPINION * BY
JUDGE JOHANNA L. FITZPATRICK
DAVID CARL FIELDS FEBRUARY 27, 1996
FROM THE CIRCUIT COURT OF THE CITY OF BRISTOL
Charles B. Flannagan, II, Judge
Frederick W. Adkins (Cline, Adkins, Cline &
Rogers, on brief), for appellant.
Dennis E. Jones, for appellee.
In this domestic appeal, the sole issue is whether the trial
court erred in finding the parties' property settlement agreement
to be valid. We hold that wife failed to prove fraud by clear
and convincing evidence and affirm the trial court.
Vickie Lynn Fields (wife) and David Carl Fields (husband)
were married on June 6, 1980 and had one child born of the
marriage, Justin Heath. Each had been divorced before and had
children from their previous marriages. At the time of the
marriage, both parties worked at Pittston Coal Group (Pittston)
in Lebanon, Virginia, wife as a keypunch operator and husband as
an accountant. At the time of the hearing, husband was an
assistant vice-president and comptroller of Pittston, and had
also held the position of financial analyst during his tenure
with the company. Wife left Pittston when the parties' son was
*
Pursuant to Code § 17.116.010 this opinion is not
designated for publication.
born and works at Teague Associates as an executive secretary.
During the marriage, husband handled the parties' financial
affairs, but wife had access to their financial documents, which
were kept at the marital residence.
The parties began having marital difficulties during
December 1992. In the spring of 1993, the parties discussed
entering into a property settlement agreement and agreed that
husband would prepare a draft agreement. Husband compiled the
agreement using Pittston's law library and blank forms obtained
from an attorney. Neither party received legal advice. On
May 8, 1993, husband brought the draft agreement home and asked
wife to sign it. Wife testified that she did not understand some
of the clauses and specifically asked husband about the child
support provisions, but did not ask him about other parts of the
agreement. The evidence established that husband would have told
wife the value of individual assets or any other information if
she had asked. Husband answered her questions about child
support, but did not give her legal advice nor discourage her
from seeking advice from an attorney. Wife signed the agreement
that night without consulting an attorney.
Paragraph 11(i) of the agreement provides as follows:
All funds of the husband in the savings
investment plan which the husband presently
has with his employer and all the husband's
right, title and interest in and to any
vested retirement plans of the husband with
his employer shall remain the sole and
separate property of the husband and the wife
hereby agrees to relinquish all right, title
and interest which she may have in and to any
2
of the said funds.
Similarly, under the agreement, husband agrees to relinquish any
rights in wife's pension:
All funds of the wife in the savings
investment plan which the wife presently has
with her employer and all the wife's right,
title and interest in and to any vested
retirement plans of the wife with her
employer shall remain the sole and separate
property of the wife and the husband hereby
agrees to relinquish all right, title and
interest which he may have in and to any of
the said funds.
Paragraph 11(i) does not disclose the specific value of either
party's pension assets. The only asset of the parties not
addressed in this agreement is $13,049 of United States savings
bonds that husband purchased during the marriage. Husband's
proposed findings of fact indicated that the bonds were worth
$13,049; that the marital portion of his savings investment plan
was $59,357 after taxes and penalty for early withdrawal; and
that the present value of the marital portion of his retirement
plan was $25,382.
After the parties signed the agreement, husband continued to
live at the marital residence until August 1, 1993. The parties
separated on that date, and wife filed a bill of complaint for
divorce on November 17, 1993, moving to set aside the agreement
of May 8, 1993 as having been "procured by fraud, intimidation
and deceit." The trial court held a hearing on wife's motion to
set aside the agreement on December 15, 1993. In the January 13,
1995 final decree, the court found as follows:
3
UPON FURTHER CONSIDERATION of the
physical and mental condition of the parties
at the date and time of the entry of the
Agreement of May 8, 1993, evidence and
arguments of counsel; that there exists no
gross disparity in the economic value of the
portion of the marital estate that each party
is to receive that shocks the [conscience] of
the Court; it is therefore
ADJUDGED, ORDERED and DECREED that the
Agreement between the parties dated May 8,
1993 . . . is a valid and binding contract
between the parties, however, the Court
declines to ratify, confirm and incorporate
into this Decree by reference the Agreement
between the parties dated May 8, 1993.
(Emphasis added.) Although the court made no specific findings
as to the value of the parties' property, it found that the terms
of the agreement were not unconscionable.
Wife argues on appeal that the trial court erred in
validating the agreement because husband acted fraudulently by
failing to disclose the value of his pension assets, and the
existence and value of the savings bonds. We disagree.
"'[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.'" Webb v. Webb, 16 Va. App. 486, 491, 431
S.E.2d 55, 59 (1993) (quoting Cooley v. Cooley, 220 Va. 749, 752,
263 S.E.2d 49, 52 (1980)). "[T]he one contesting the contract
must prove the allegations by clear and convincing evidence."
Derby v. Derby, 8 Va. App. 19, 26, 378 S.E.2d 74, 77 (1989). "On
appeal we review the evidence in the light most favorable to the
4
prevailing party and determine whether that evidence established
as a matter of law any of the grounds relied upon to vitiate the
agreement and decree." Drewry v. Drewry, 8 Va. App. 460, 463,
383 S.E.2d 12, 12-13 (1989).
Constructive fraud is a "'breach 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.'" Webb, 16 Va. App. at 491, 431 S.E.2d at 59
(quoting Wells v. Weston, 229 Va. 72, 77, 326 S.E.2d 672, 675-76
(1985)). "'[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." Webb, 16 Va. App. at 491,
431 S.E.2d at 59 (quoting Nationwide Ins. Co. v. Patterson, 229
Va. 627, 629, 331 S.E.2d 490, 492 (1985)).
Assuming without deciding that under the facts of this case
husband had a duty to disclose, and viewing the evidence in the
light most favorable to husband, the prevailing party, we hold
that wife failed to prove fraud by clear and convincing evidence.
The agreement included a provision that dealt with each party's
savings investment and retirement plans. Wife was fully aware
that husband had a savings investment plan and a retirement plan.
Husband's failure to list the specific values of his savings
investment and retirement plans did not amount to a material
5
misrepresentation of value. The agreement does not contain the
values of several assets, including wife's savings investment
plan and pension plan. Moreover, the evidence established that
husband did not refuse to disclose nor misrepresented the values
and would have disclosed the value of any asset to wife had she
asked. Furthermore, wife had access to the financial documents
of the parties. Thus, the trial court did not err in validating
the parties' agreement.
The instant case is clearly distinguishable from Webb. In
Webb, the husband, who also handled the parties' financial
affairs, drafted the property settlement agreement and failed to
disclose the value of his pension. However, we determined that
the husband was in a "special relationship" with his wife
primarily because he was an experienced attorney who gave his
wife legal advice regarding the agreement and other aspects of
the divorce and actively discouraged her from seeking legal
advice from independent counsel. 16 Va. App. at 492, 431 S.E.2d
at 60. None of these factors exists in this case. Although
husband was more knowledgeable about the parties' financial
affairs, unlike the husband in Webb, he was not an attorney
acting as an attorney in the negotiation and drafting of the
agreement.
Next, wife argues that, if not fraudulently procured, the
agreement was unconscionable. "When a court considers whether a
contract is unconscionable, adequacy of price or quality of value
6
transferred in the contract is of initial concern." Drewry, 8
Va. App. at 472, 383 S.E.2d at 18. An agreement's terms are
unconscionable if there is "gross disparity in the value
exchanged." Derby, 8 Va. App. at 28, 378 S.E.2d at 79.
Under the agreement in this case, wife receives the marital
home, a car, a boat, and child support of $600 per month in
exchange for husband receiving two empty lots and two cars. Both
parties waived spousal support. In Paragraph 10 of the
agreement, husband agrees to pay the mortgage and other
maintenance expenses on the marital home, at least until the
parties' son becomes emancipated and subject to other
contingencies. The agreement equally divides the parties'
personal property, a joint savings account, and an individual
retirement account. The agreement also provides for both parties
to receive their own savings investment plans, pension plans, and
individual bank accounts. On these facts, we cannot say that the
trial court erred in finding that "there exists no gross
disparity in the economic value of the portion of the marital
estate that each party is to receive that shocks the [conscience]
of the Court."
Finally, we hold that husband's omission of the savings
bonds worth $13,049 from the agreement did not constitute
constructive fraud. The record does not establish why the
savings bonds were left out of the agreement, and the trial judge
made no finding regarding this asset. Because no evidence
7
explained the absence of a provision dealing with the bonds, the
proof failed to establish that the omission was a "material false
representation." Thus, husband's failure to disclose the bonds,
standing alone, is not sufficient to void the agreement.
8
Accordingly, the decision of the trial court is affirmed.
Affirmed.
9