COURT OF APPEALS OF VIRGINIA
Present: Judges Bray, Annunziata and Overton
DONALD RAY SCROGGINS
MEMORANDUM OPINION *
v. Record No. 1861-95-4 PER CURIAM
MARCH 26, 1996
CATHERINE M. SCROGGINS
FROM THE CIRCUIT COURT OF
FAIRFAX COUNTY
J. Howe Brown, Jr., Judge
(William B. Reichhardt; Elizabeth D. Teare;
Surovell, Jackson, Colten & Dugan, on
briefs), for appellant.
(Joyce M. Henry-Schargorodski; Gaughan &
Schargorodski, on brief), for appellee.
Donald Ray Scroggins (husband) appeals the decision of the
circuit court which, among other things, set aside a Property
Settlement Agreement (Agreement) entered into with Catherine M.
Scroggins (wife). Specifically, husband raises the following
issues on appeal:
(1) whether the trial court erred in
setting aside the parties'
Agreement;
(2) whether the trial court erred in finding
that the waiver of spousal support was
not severable from the remainder of the
Agreement;
(3) whether the trial court erred in
awarding wife survivor benefits
despite her waiver of those
benefits under the terms of a
separate contract;
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
(4) whether the trial court erred in
treating as marital property funds
received after separation by
husband as part of an employment
severance settlement; and
(5) whether the trial court erred in
refusing to order the sale of the
marital residence.
Upon reviewing the record and briefs of the parties, we conclude
that this appeal is without merit. Accordingly, we summarily
affirm the decision of the trial court. Rule 5A:27.
The parties presented their evidence in a series of
hearings. "The judgment of a trial court sitting in equity, when
based upon an ore tenus hearing, will not be disturbed on appeal
unless plainly wrong or without evidence to support it." Box v.
Talley, 1 Va. App. 289, 293, 338 S.E.2d 349, 351 (1986).
Enforceability of the Agreement
"Marital 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). A party contesting a settlement agreement
on the grounds of unconscionability must provide clear and
convincing evidence to support his or her allegations. Derby v.
Derby, 8 Va. App. 19, 26-27, 378 S.E.2d 74, 77 (1989). While
"[c]onsideration adequate to support a contract does not have to
be full consideration," id. at 29, 378 S.E.2d at 79, "[i]f a
'gross disparity in the value exchanged' exists then the court
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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 v. Drewry, 8
Va. App. 460, 472, 383 S.E.2d 12, 18 (1989) (citing Derby, 8 Va.
App. at 28, 378 S.E.2d at 79). Moreover, "[w]hen the
accompanying incidents are inequitable and show bad faith, such
as concealments, misrepresentations, undue advantage, oppression
on the part of the one who obtains the benefit, or ignorance,
weakness of mind, sickness, old age, incapacity, pecuniary
necessities, and the like, on the part of the other, these
circumstances, combined with inadequacy of price, may easily
induce a court to grant relief . . . ."
Derby, 8 Va. App. at 28-29, 378 S.E.2d at 79 (citation omitted).
In ruling on wife's motion to set aside the Agreement on the
grounds of unconscionability, the trial judge noted that he
"generally found the testimony of [wife] to be credible." The
judge found husband's testimony "at times to be embellished and
unreliable," noting particularly that husband gave "evasive
testimony with respect to the value of consideration exchanged by
the parties pursuant to the property settlement agreement."
"'The credibility of witnesses was crucial to the determination
of the facts, and the findings of the trial court based upon the
judge's evaluation of the testimony of witnesses heard ore tenus
are entitled to great weight.'" Gottlieb v. Gottlieb, 19 Va.
App. 77, 83-84, 448 S.E.2d 666, 670 (1994) (citation omitted).
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In the course of the parties' property settlement
discussions, husband supplied wife with a list of marital assets
to be divided, of which wife was to receive assets worth $119,500
and husband was to receive assets worth $92,500. However,
husband failed to disclose the value of his pension, his
retirement incentive payment from IBM, and his medical benefits
at the time the parties were purported equally dividing the
marital assets. The value of these assets exceeded $400,000.
The evidence therefore supports the trial court's conclusion that
there was a gross disparity between the consideration received by
husband and that received by wife under the Agreement.
While the trial court found that wife was competent at the
time the Agreement was signed, the trial court also found that
the gross disparity in the assets the parties received "was the
result of over-reaching and oppressive conduct" by husband. The
court found that husband "facilitated his wife's execution of the
. . . agreement at a time when she was patently suicidal and
operating under impaired judgement." Wife had returned from a
trip in which she planned to commit suicide but instead incurred
a substantial gambling debt in her failed attempt to cope with
increasing financial losses. Husband offered to repay her
gambling loss but also again pressured her to sign the Agreement.
The Agreement itself was drafted by an attorney who
purportedly represented both parties, but who had prior dealings
with husband's girlfriend which were not disclosed to wife, who
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made changes beneficial to husband, and who subsequently filed
the divorce action for husband.
Finally, the trial court noted that wife "was not as
sophisticated as her husband[,] that she relied upon his
integrity in their dealings, rather than retaining an attorney to
obtain separate counsel as to her rights. And it is also clear
that [husband] knew of that reliance and that he encouraged it."
The trial court's decision to set aside the parties'
Agreement on the grounds of unconscionability is supported by
evidence and is not plainly wrong.
Severability of Waiver of Spousal Support
Husband argues that wife's waiver of spousal support was
severable from the portions of the Agreement found by the trial
court to be unconscionable. As the trial court found the
Agreement to be unconscionable, we find no error in the trial
court's decision to set aside the entire Agreement, including the
parties' waiver of support.
Waiver of Survivor's Benefits
Husband admitted that wife's waiver of her right to survivor
benefits under his pension was linked to the benefits she would
receive under the Agreement. He represented to wife
that she should sign this agreement [waiving
her right to survivor benefits] so that I
could release my pension, and begin to
receive it, and that in exchange for that, in
the settlement agreement there would be an
amount in there to cover her half of the
retirement eligibility as of 1988.
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However, husband failed to fully disclose to wife the assets he
had or the value of his IBM pension.
The trial court ruled that "[w]ife's purported waiver of
survivor benefits is of no effect, for the reasons stated in the
opinion letter . . . setting aside that Property Settlement
Agreement." Husband's own testimony demonstrates that wife's
waiver of survivor benefits was linked to what she would receive
under the Agreement. Therefore, as evidence supports the trial
court's decision, it will not be disturbed on appeal.
Severance Package from Employer
The trial court ruled that the early retirement incentive
received as a lump sum payment by husband in 1992 was marital
property subject to equitable distribution. Husband testified
that the payment was based on two weeks' pay for each year's
service dating back to 1964, plus accrued vacation pay. The
evidence therefore demonstrated that the amount of the payment
was determined by husband's years of employment with IBM during
the marriage.
This evidence supports the trial court's determination that
the lump sum payment was a marital asset.
Marital Residence
"Fashioning an equitable distribution award lies within the
sound discretion of the trial judge and that award will not be
set aside unless it is plainly wrong or without evidence to
support it." Srinivasan v. Srinivasan, 10 Va. App. 728, 732, 396
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S.E.2d 675, 678 (1990). Under Code § 20-107.3(C), the court may,
"based upon the factors listed in subsection E, divide or
transfer or order the division or transfer, or both, of jointly
owned marital property, or any part thereof." The court is also
authorized to "apportion and order the payment of the debts of
the parties, or either of them . . . ." Id.
The trial court was authorized to order husband to transfer
his interest in the marital residence and to order wife to hold
husband harmless for any liability in the mortgage note.
Husband's assertion that he may be forced to pay the mortgage in
the future, skewing the equitable distribution, is mere
speculation. Therefore, as the trial court's award is neither
plainly wrong nor unsupported by the evidence, it will not be
disturbed on appeal.
Accordingly, the decision of the circuit court is summarily
affirmed.
Affirmed.
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