COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Moon, Judge Fitzpatrick and
Senior Judge Hodges
Argued at Alexandria, Virginia
CHARLES MICHAEL GUFFEY
v. Record No. 2574-94-4 MEMORANDUM OPINION * BY
JUDGE JOHANNA L. FITZPATRICK
MARY E. GUFFEY, N/K/A NOVEMBER 7, 1995
MARY E. ROKO
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Stanley P. Klein, Judge
James R. Hart (Dixon, Smith & Stahl, on briefs), for
appellant.
Sammy S. Knight (Knight & Associates, on brief), for
appellee.
In this domestic appeal, Charles Michael Guffey (husband)
argues that the trial court erred in: (1) enforcing an
indemnification provision of the parties' Property Settlement
Agreement that ordered him to reimburse Mary E. Guffey (wife) for
paying his separate debt that had attached as a lien against the
marital residence, and (2) awarding wife monetary relief when she
did not specifically request such relief. For the reasons that
follow, we affirm the trial court.
BACKGROUND
The parties married on November 14, 1981. Wife filed a bill
of complaint for divorce on March 16, 1988. On June 21, 1988,
husband pled guilty to the larceny of $130,000 from his employer,
Kildahl's Jewelry (employer). As restitution, on October 1,
*
Pursuant to Code § 17.116.010 this opinion is not
designated for publication.
1988, husband executed: (1) a confessed judgment note for
$45,000 plus interest, and (2) a deed of trust pledging the
marital residence as security for the note. Employer attempted
to intervene in the divorce action, and on June 16, 1989,
employer recorded the deed of trust in the land records of
Fairfax County. The evidence established that wife was aware of
employer's deed of trust on the marital residence.
The trial court granted wife a divorce on July 31, 1989 but
retained jurisdiction over custody, spousal and child support,
and equitable distribution. Upon the divorce, the parties became
tenants in common of the marital residence, and employer's lien
attached to husband's interest in the property. On September 28,
1989, the parties entered into a Property Settlement Agreement
(Agreement). The Agreement provided, in pertinent part, as
follows:
6. Real Estate. The parties are joint
owners of real estate located at 8218 Running
Creek Court, Springfield, Virginia. Within
seven (7) days of signing this Agreement,
Husband shall, by appropriate deed, convey to
Wife all of his right, title and interest in
and to the aforesaid real estate. Upon
conveyance, Wife shall assume all taxes,
utilities, insurance and mortgage obligations
on such property and hold Husband harmless
thereon.
7. Debts. Each party agrees to assume
and pay all outstanding debts individually
incurred by him or her whether such debt was
incurred before the marriage, during the
marriage or during any period of separation,
and each agrees to indemnify, defend and hold
the other absolutely harmless from any
expense, loss, claim or liability whatsoever
arising from, or in any way connected with,
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such outstanding debts, except herein
otherwise agreed. In connection therewith,
Husband agrees that the Sears Charge Card
debt and the Equitable Master Charge debt are
his sole responsibility and that he shall
hold Wife harmless thereon. Husband agrees
that his obligations to Wife under this
paragraph are in the nature of spousal
support obligation and as such are not
dischargeable in bankruptcy as to Wife.
(Emphasis added). The trial court entered the final divorce
decree on July 31, 1990, incorporating the provisions of the
Agreement.
Husband deeded his interest in the marital home to wife on
October 4, 1989. When wife remarried, employer asked wife to pay
the note and stated it would enforce the lien and force a sale of
the house if necessary. Wife and her new husband refinanced the
house and paid employer $63,368.59 ($45,000 plus unpaid interest
on the judgment).
Wife petitioned for a Rule to Show Cause on July 7, 1994,
requesting that the court hold husband in contempt for failing to
pay his separate debt to employer under Paragraph 7. The trial
court held a hearing on October 6, 1994. At that hearing, wife
testified that: (1) she agreed to forego child support if
husband gave her the house; (2) she knew about the deed of trust
to employer at the time she signed the Agreement; (3) husband
told her that employer could not seek reimbursement from her; and
(4) she believed that husband was responsible for his separate
debt under Paragraph 7 of the Agreement. Husband testified that:
(1) he knew that wife was not willing to sell the house; (2) he
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wanted the house to pay off his obligation; and (3) he never told
wife that she would be responsible for the debt.
In a November 22, 1994 order, the trial court ordered
husband to pay wife $63,368.59 plus interest on $45,000. The
trial court found that: (1) wife was more credible than husband;
(2) the Agreement was unambiguous; (3) even if the Agreement were
ambiguous, the parties intended for husband to be responsible for
his separate debt to employer; and (4) wife's remarriage did not
terminate husband's indemnification obligation under paragraph 7
because the obligation pre-existed the divorce and wife's
remarriage.
INDEMNIFICATION PROVISION
Husband argues that Paragraph 6 of the Agreement did not
require him to convey his interest in the marital residence free
and clear of the lien. Additionally, he argues that wife had
notice of the lien before signing the Agreement and therefore is
liable.
The trial court found that the Agreement was unambiguous and
that, even if it were ambiguous, the parties intended for husband
to repay his debt to employer. In interpreting Paragraph 6 of
the Agreement, the trial judge stated as follows:
Now, it's clear that there is only one
mortgage if that term is used in its
colloquial terms. But, the wording of that
sentence is: "upon conveyance, wife shall
assume all taxes, utilities, insurance and
mortgage obligations."
I do not read that the way that
[appellant's counsel] does nor is the plain
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meaning or the plain language used consistent
with an interpretation that it means more
than one mortgage.
* * * * * * *
Paragraph seven is absolutely clear that
each obligation that was incurred by either
one of the parties during the course of the
marriage or before the marriage remains his
or her own responsibility and is to be taken
care of by that party and that party is to
hold the other harmless from any such
liability.
We recognize that
[p]roperty settlement agreements entered
into pursuant to a divorce proceeding are
contracts; "therefore, we must apply the same
rules of interpretation applicable to
contracts generally." "In reviewing the
[property settlement] agreement, we must
gather the intent of the parties and the
meaning of the language, if we can, from an
examination of the entire instrument, giving
full effect to the words the parties actually
used."
Smith v. Smith, 15 Va. App. 371, 374, 423 S.E.2d 851, 853 (1992)
(citations omitted). "Where there is no ambiguity in the terms
of a contract, we must construe it as written, and we are not at
liberty to search for the meaning of the provisions beyond the
pertinent instrument itself." Smith v. Smith, 3 Va. App. 510,
514, 351 S.E.2d 593, 596 (1986) (citations omitted). When a
contract is ambiguous, however, a court should examine parol
evidence to determine the true intent of the parties. The Anden
Group v. Leesburg Joint Venture, 237 Va. 453, 458, 377 S.E.2d
452, 455 (1989). "Ambiguity 'exists when language admits of
being understood in more than one way or refers to two or more
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things at the same time.'" Smith, 3 Va. App. at 513, 351 S.E.2d
at 595 (quoting Renner Plumbing, Heating & Air Conditioning, Inc.
v. Renner, 225 Va. 508, 515, 303 S.E.2d 894, 898 (1983)).
"[A]n appellate court [may] affirm the judgment of a trial
court when it has reached the right result for the wrong reason
. . . if 'further factual resolution is [not] needed before the
right reason may be assigned to support the trial court's
decision.'" Twardy v. Twardy, 14 Va. App. 651, 657, 419 S.E.2d
848, 851-52 (1992) (citations omitted). When husband executed
the deed of trust pledging his interest in the residence as
security for his debt, wife did not join in the execution of the
note. Husband's separate debt in the form of the deed of trust
later attached to the property as a lien when the parties
divorced. Under Paragraph 6 of the Agreement, husband agreed to
convey "all of his right, title and interest" in the marital
residence to wife, and wife agreed to assume all mortgage
obligations on the house and to hold husband harmless for those
obligations. Thus, under Paragraph 6, wife became responsible
for paying the debt to employer.
However, separate debts are separate, and under Paragraph 7,
husband agreed to hold wife harmless for "any expense, loss,
claim or liability whatsoever arising from, or in any way
connected with, such outstanding [separate] debts." Husband's
debt to his employer was clearly separate until he transferred
the property to wife pursuant to the Agreement. Upon transfer,
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wife assumed the obligation and agreed to pay employer, but
husband also agreed to indemnify her for any separate debts.
Under the facts in this case, we hold that the Agreement is
ambiguous because of the two competing "hold harmless" clauses in
Paragraphs 6 and 7. In the Agreement, husband and wife
essentially agreed to hold each other harmless for the same debt.
The trial court reached the right result for the wrong reason,
but specifically noted that his ruling would not change if the
Agreement were found ambiguous on appeal. Therefore, we affirm
the trial court.
Additionally, husband contends that the hold harmless
provision in Paragraph 7 terminated upon wife's remarriage
because the obligation was "in the nature of spousal support."
We find this argument to be without merit. The trial court
correctly found that husband's obligation to pay wife for his
separate debt was an obligation that pre-existed wife's
remarriage and therefore was not extinguished by her remarriage.
MONETARY RELIEF
In wife's Petition for a Rule to Show Cause, she requested
that the court find husband "in contempt of this Court; and . . .
an award of attorney's fees and Court costs; and . . . such
other and further relief as . . . the Court may deem proper."
(Emphasis added). The trial judge quoted the language of wife's
petition and found as follows:
If there was a need to have a further
explanation made of what relief was being
requested, a bill of particulars could have
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been requested . . . .
* * * * * * *
I'm going to rule on the merits of all the
issues that are before the Court today
instead of ruling on simply the contempt
issue and having the parties have to come
back and continue this litigation on another
day, another time, on the same factual
circumstances with different issues.
We hold that wife's request for relief in her petition
encompassed the relief granted by the trial court. Therefore,
the trial judge did not abuse his discretion in ordering husband
to repay wife for paying his debt to employer.
Accordingly, the decision of the trial court is affirmed.
Affirmed.
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