COURT OF APPEALS OF VIRGINIA
Present: Judges Coleman, Willis and Senior Judge Hodges
Argued at Norfolk, Virginia
MICHAEL L. PELFREY
OPINION BY
v. Record No. 2585-96-1 JUDGE JERE M. H. WILLIS, JR.
JULY 15, 1997
LINDA M. PELFREY
FROM THE CIRCUIT COURT OF YORK COUNTY
N. Prentis Smiley, Jr., Judge
Paul M. Lipkin (Goldblatt, Lipkin & Cohen,
P.C., on brief), for appellant.
Vicki Beard for appellee.
Michael L. Pelfrey contends that the property settlement
agreement (agreement) he entered into with his former wife, Linda
M. Pelfrey, was unconscionable and that its execution was the
product of duress. We disagree and affirm the decree of the
trial court.
I.
Michael L. Pelfrey and Linda M. Pelfrey were married on
August 3, 1973, and were divorced on December 8, 1988. Prior to
their 1988 divorce, the parties, represented by counsel,
negotiated and executed a property settlement agreement. They
remarried on September 12, 1991, and separated in the fall of
1992.
In February, 1992, Mr. and Mrs. Pelfrey began discussing a
second property settlement agreement. Mr. Pelfrey presented Mrs.
Pelfrey with an agreement prepared by his attorney. Mrs. Pelfrey
"tore it up," because it provided only one year of spousal
support. In October, 1992, Mrs. Pelfrey retained an attorney to
draft an agreement. On November 18, 1992, Mr. Pelfrey signed the
agreement drafted by Mrs. Pelfrey's attorney. Mrs. Pelfrey
signed it the following day.
Mr. Pelfrey testified that he did not consult an attorney
concerning the terms of the agreement. However, prior to signing
the agreement, he reviewed it and commented upon several drafts
prepared by Mrs. Pelfrey's attorney. Mrs. Pelfrey's attorney
presented Mr. Pelfrey with a cover letter to the agreement
advising him of the importance of the document and the need to
have it reviewed by an attorney.
On July 13, 1993, Mr. Pelfrey sued for divorce, alleging
that the agreement was unenforceable. The trial court referred
the question of the validity of the agreement to a commissioner
in chancery. Following submission of written briefs and an ore
tenus hearing, the commissioner recommended that the agreement be
declared valid and enforceable, finding that "[t]here is no
evidence of [a] gross disparity of assets being given to Wife
versus the Husband." The trial court accepted the commissioner's
findings and incorporated the terms of the agreement into the
final decree of divorce.
II.
The agreement contains separate paragraphs that inform the
parties of the binding nature of the document. It states that
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each party has had adequate opportunity to consult with legal
counsel and that each had signed the agreement freely,
voluntarily and without coercion or compulsion.
The agreement provides that Mr. Pelfrey shall pay child
support of $600 per month and spousal support of $1,100 per
month. Upon the cessation of child support, Mr. Pelfrey must pay
$1,700 per month spousal support to Mrs. Pelfrey. While Mrs.
Pelfrey's remarriage would suspend spousal support, support would
be reinstated upon the death of any subsequent husband or a
marital separation for seven consecutive days. Mr. Pelfrey also
agreed to pay for Mrs. Pelfrey's medical and telephone bills.
The agreement stipulates that support payments made by Mr.
Pelfrey are not tax deductible. See I.R.C. §§ 71, 215.
Furthermore, should the support payments be deemed "income" to
Mrs. Pelfrey for tax purposes, the payments shall be modified so
as to provide Mrs. Pelfrey with an after-tax income equal to the
amount specified in the agreement.
In return, Mrs. Pelfrey relinquished any interest in Mr.
Pelfrey's pension, profit-sharing or deferred compensation plans,
of which none existed, and any interest in his two corporations,
TEI, Inc. (TEI) and Tidewater Express, Inc. (Tidewater).
In 1991, Tidewater had gross receipts of $438,140, income of
$111,973 and a tax loss of $924. In 1992, Tidewater had gross
receipts of $533,168, income of $338,071 and a tax loss of
$5,812. In 1991, TEI had gross receipts of $218,222 and a tax
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loss of $48,936. In 1992, TEI had gross receipts of $336,621 and
a tax loss of $58,441. Mr. Pelfrey has undertaken extensive
expansion of his businesses.
III.
On appeal, we review the evidence in the light most
favorable to the party prevailing below. Derby v. Derby, 8 Va.
App. 19, 26, 378 S.E.2d 74, 77 (1989). Furthermore, we are bound
to affirm the trial court's approval of the commissioner's report
unless that approval is plainly wrong or without evidence to
support it. See Scinaldi v. Scinaldi, 2 Va. App. 571, 573, 347
S.E.2d 149, 150 (1986).
Public policy seeks prompt resolution of issues concerning
marital property rights. Westbrook v. Westbrook, 5 Va. App. 446,
452, 364 S.E.2d 523, 527 (1988). When the parties have entered
into a valid agreement, the trial court may incorporate that
agreement by reference into its final decree of divorce. Code
§ 20-109.1; Drewry v. Drewry, 8 Va. App. 460, 466, 383 S.E.2d 12,
14 (1989).
Mr. Pelfrey contends that the terms of the agreement are
unconscionable. He bore the burden of proving that allegation by
clear and convincing evidence. Derby, 8 Va. App. at 26, 378
S.E.2d at 77. "Historically, a bargain was unconscionable in an
action at law if it was '"such as no man in his senses and not
under delusion would make on the one hand and as no honest and
fair man would accept on the other."'" Id. at 28, 378 S.E.2d at
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78-79 (citations omitted).
To determine whether an agreement is unconscionable, a court
must examine the "adequacy of price" or "quality of value."
Drewry, 8 Va. App. at 472, 383 S.E.2d at 18. "If inadequacy of
price or inequality of value are the only indicia of
unconscionability, the case must be extreme to justify equitable
relief." Derby, 8 Va. App. at 28, 378 S.E.2d at 79 (citation
omitted). However, "[i]f a 'gross disparity in value exchanged'
exists then the court should consider 'whether oppressive
influences affected the agreement to the extent that the process
was unfair and the terms of the resulting agreement
unconscionable.'" Drewry, 8 Va. App. at 472-73, 383 S.E.2d at 18
(citation omitted).
Mr. Pelfrey has undertaken substantial, and possibly
continuing, financial obligations under the terms of the
agreement. However, he maintains sole ownership and control of
two expanding corporations. While he received income from
Tidewater of only $26,700 in 1991 and $29,174 in 1992, he
testified that Tidewater owed him money with which he planned to
pay support to Mrs. Pelfrey.
"'Courts cannot relieve one of the consequences of a
contract merely because it was unwise' . . . [or] 'rewrite a
contract simply because the contract may appear to reach an
unfair result.'" Rogers v. Yourshaw, 18 Va. App. 816, 823, 448
S.E.2d 884, 888 (1994) (citations omitted). Settlement
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provisions concerning payment of medical and telephone bills,
conditioned increases of spousal support, and attorney's fees do
not shock the conscience. Rather, such clauses provide a
realistic framework in which the parties may appraise each
other's needs in resolving marital property issues. Instead of
providing larger support payments or health insurance, a party
may opt to pay medical bills directly. A party receiving spousal
support is under no obligation to remarry. In order to encourage
remarriage, and a negotiated cessation to support payments, the
payor spouse may agree to reinitiate support payments to the
payee spouse if a future marriage ends. Notwithstanding the
disintegration of the marriage, the parties may have a continuing
concern for each other's well being.
Because he did not prove by clear and convincing evidence a
great disparity in value, Mr. Pelfrey failed to satisfy the
initial threshold required for further judicial scrutiny. Thus,
we need not examine the circumstances surrounding the adoption of
the agreement to determine whether there existed "oppressive
influences." The evidence sufficiently supports the finding that
the agreement is not unconscionable.
IV.
Mr. Pelfrey contends that the agreement was the product of
duress, and, therefore, is invalid and unenforceable. He argues
that Mrs. Pelfrey's conduct compelled him to sign the agreement.
We find no merit in this contention.
"Duress may exist whether or not the
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threat is sufficient to overcome the mind of
a man of ordinary courage, it being
sufficient to constitute duress that one
party to the transaction is prevented from
exercising his free will by reason of threats
made by the other and that the contract is
obtained by reason of such fact. Unless
these elements are present, however, duress
does not exist. . . . Authorities are in
accord that the threatened act must be
wrongful to constitute duress."
Division of Social Services v. Unknown Father, 2 Va. App. 420,
435, 345 S.E.2d 533, 541 (1986) (quoting 6B Michie's
Jurisprudence Duress and Undue Influence §§ 2-3 (Repl. Vol.
1985)). "[D]uress is not readily accepted as an excuse," and
must be proven by clear and convincing evidence. Id. at 434, 345
S.E.2d at 541 (citations omitted).
A wide range of emotions is an expected and not uncommon
byproduct of the dissolution of a marriage. However, when
spouses commence divorce proceedings and "propose to divide or
sell all their property interests, they have assumed adversarial
roles and no longer occupy a position of trust." Drewry, 8 Va.
App. at 470, 383 S.E.2d at 17.
The facts and circumstances of this case support the trial
court's determination that duress did not excuse enforcement of
the agreement. Mr. Pelfrey testified that Mrs. Pelfrey had
threatened to kill herself on more than one occasion if he did
not sign an agreement. He noted that she tried repeatedly to
convince him to sign an agreement. Mrs. Pelfrey admitted to
threatening to kill herself twice in February, 1992, when Mr.
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Pelfrey told her that he did not love her. However, when the
agreement was signed nine months later, Mr. Pelfrey was living
with another woman. He was not under a doctor's care. The
commissioner found that: "It is clear from the evidence that
[Mr. Pelfrey] 'wanted his freedom' and the signing of the
Property Settlement Agreement was another step toward freedom.
There is no evidence of oppressive conduct or overreaching on
behalf of [Mrs. Pelfrey]." The evidence supports the trial
court's approval of this conclusion.
The decree of the trial court is affirmed.
Affirmed.
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