COURT OF APPEALS OF VIRGINIA
UNPUBLISHED
Present: Chief Judge Decker, Judges Humphreys and O’Brien
Argued by videoconference
DIANA M. LYON
MEMORANDUM OPINION* BY
v. Record No. 0304-21-2 JUDGE MARY GRACE O’BRIEN
DECEMBER 7, 2021
JOHN RICHARD LYON
FROM THE CIRCUIT COURT OF HANOVER COUNTY
J. Overton Harris, Judge
Michael S. Ewing (Jessica C. Boutwell; Stiles Ewing Powers, on
briefs), for appellant.
Shannon S. Otto (Richard L. Locke; Locke & Quinn, on brief), for
appellee.
Diana M. Lyon (“wife”) and John Richard Lyon (“husband”) each filed a “Motion to
Enforce” a property settlement agreement incorporated into their divorce decree. Both parties
assign error to the court’s rulings.
BACKGROUND
Husband and wife married July 8, 1989, and wife filed for divorce on December 14, 2016.
However, the parties did not separate until August 1, 2018. On June 13, 2018, the parties executed
a written “agreement and stipulation” (“PSA”) that addressed equitable distribution of property,
including the division of debt, and husband’s obligation to pay spousal and child support.1
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
1
Husband was required to pay child support of $950 per month and spousal support of
$2,000 for thirty months, effective immediately. After thirty months, husband’s spousal support
obligation was reduced to $1,700 per month for forty-eight months.
The PSA specified that it “contain[ed] the entire understanding between the parties” and
there were “no representations, warranties, covenants[,] or undertakings other than those expressly
set forth in this document.”
Under the PSA, the parties agreed that the costs of enforcement, including attorneys’ fees,
“shall be borne by the defaulting party,” and costs incurred “in the successful defense” to an
enforcement action “shall be borne by the party seeking to enforce compliance.”
The PSA addressed the division of “subsequent” debt, stating that each party “shall be solely
responsible for any and all debts . . . incur[red] subsequent to the date of this [PSA].”
The PSA also required all modifications to be “in writing and executed with the same
formality as this [PSA].” Further, it stated that a party’s failure “to insist upon strict performance
. . . shall not be construed as a waiver of any subsequent default.”
On July 14, 2018, the parties signed an addendum to the PSA, memorializing how and when
wife would receive her half of the marital share of husband’s retirement. The addendum reiterated
the PSA provision requiring that all modifications be in writing.
During the parties’ marriage, dividends from husband’s Deferred Profit-Sharing Plan (“the
Plan”) were deposited monthly into a joint account used to pay household bills. The PSA specified
that future dividend payments would be divided equally between the parties. The PSA also
provided for the equal division of their joint checking and savings accounts.
On March 20, 2019, the court entered a final divorce decree that affirmed, ratified, and
incorporated the PSA and its addendum. Husband filed a “Motion to Enforce [the PSA]” on April
3, 2019, alleging that wife took “far in excess of her [fifty-percent] share” from a joint account. On
August 3, 2019, wife also filed a “Motion to Enforce,” claiming that husband had not met his
financial obligations under the PSA.
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At a hearing on their respective motions, the parties presented evidence that, after executing
the PSA, they sold the marital residence in July 2018 and moved into a rental home with their two
children, one of whom was a minor. Husband and wife orally agreed that they would reside
together and divide expenses. They maintained the joint account into which husband’s Plan
dividends continued to be deposited. Pursuant to their oral agreement, husband also deposited his
paychecks into that joint account to pay the rent and family expenses in lieu of paying spousal and
child support. Wife, who managed the parties’ financial obligations throughout the marriage,
deposited her paychecks into a separate account.
According to wife, husband advised her in October 2018 that he wanted to move out of the
rental home, so she removed $214,500 in a series of withdrawals from the joint account — an
amount she had calculated as her share under the PSA. Husband disputed that he told wife that he
wanted to leave; however, in February 2019, he was barred from the rental home after wife obtained
a protective order. Husband resumed paying child and spousal support in March 2019. Wife paid
the rent until the lease expired in July 2019.
The parties stipulated that $55,138 in Plan dividends were deposited into the joint account
between the August 2018 separation date and June 2019, when they divided the account. Husband
contended that after execution of the PSA and its addendum, while the parties were residing in the
rental home, wife improperly removed $10,593 from the joint account for her personal expenses.
Wife asserted that husband owed her $5,305 for charges he made on her credit card while they were
living together in the rental home.
At issue were the rent payments between March and July 2019, husband’s $5,305 charges
on wife’s credit card, wife’s withdrawal of $10,593 from the joint account for personal expenses,
and division of the $55,138 dividends paid into the joint account after separation. The parties also
disputed the disposition of other personal property, which is not before this Court. Finally, both
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parties asserted that the PSA entitled them to attorneys’ fees for their respective enforcement
actions.
In a letter opinion, the court found that the parties orally agreed husband would “pay the
bills associated with the rental home” in lieu of paying support under the PSA. The court ordered
husband to pay $6,395 for half of the household bills, including rental payments between March
2019, after he was barred from the home, and July 2019, when the lease expired.
The court ordered wife to reimburse husband for half of the Plan dividends deposited into
the parties’ joint account between the August 2018 separation date and June 2019, when they
divided the account. That amount was $27,569 — half of the $55,138 that the court found was
included in the $214,500, which wife withdrew from the account in late 2018.
The court found that husband charged $5,305 on wife’s credit card in violation of the
parties’ PSA and wife improperly removed $10,593 from the joint checking account for personal
expenses. The court ordered husband and wife to reimburse each other for the credit card charges
and the personal expenses.
Finally, the court declined to award attorneys’ fees to either party. The court reasoned that
pursuant to the PSA, “enforcement of the [PSA] should be borne by the defaulting party” and
because “[b]oth parties chose to disregard the [PSA,] neither party was entitled to repayment of their
attorneys’ fees.”
On appeal, wife contends that the court erred by requiring her to reimburse husband for half
of the dividend payments and for the $10,593 taken from the joint account. Husband assigns error
to the court’s ruling requiring him to reimburse wife for payment of rent and household expenses
between March and July 2019, and the court’s failure to award him attorneys’ fees.
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ANALYSIS
When we review a court’s decision on appeal, “we view the evidence in the light most
favorable to the prevailing party, granting it the benefit of any reasonable inferences.” Congdon v.
Congdon, 40 Va. App. 255, 258 (2003). The issues before us require review of the parties’ PSA.
“We review a court’s interpretation of the parties’ agreement de novo.” Jones v. Gates, 68 Va. App.
100, 105 (2017).
“Property settlement agreements are contracts and are subject to the same rules of
construction that apply to the interpretation of contracts generally.” Id. (quoting Southerland v.
Estate of Southerland, 249 Va. 584, 588 (1995)). An appellate court is “not bound by the trial
court’s conclusions as to the construction of the disputed provisions.” Id. (quoting Smith v. Smith,
3 Va. App. 510, 513 (1986)).
A. Wife’s assignments of error: dividends and personal expenses
Wife first contends that the court improperly required her to return $27,569 from the
$214,500 that she withdrew from the joint account in late 2018. That amount represents half of the
Plan dividends deposited between the separation date and the division of the joint account in June
2019. The court ruled that the parties’ decision to continue their practice of depositing the entire
amount into a joint account did not modify the PSA, and based on the PSA, husband and wife were
each entitled to half of the dividends deposited during that time frame. Wife argues that under the
PSA, the dividends were her separate property.
The court determined that by continuing to deposit the Plan dividends into the joint account,
husband and wife were combining their separate funds. However, the court found that wife’s
withdrawal of $214,500 from that account included the entirety of the dividends paid between the
time of separation and the time the account was divided, not merely her share. Based on the terms
of the PSA, she was only entitled to half of the amount of the dividends. The court’s factual finding
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that wife removed more than her share of the dividends is supported by the record, and we will not
disturb it on appeal, absent an abuse of discretion. See Stroud v. Stroud, 54 Va. App. 231, 236
(2009) (stating that, upon review of an action to enforce a PSA, “the trial court’s findings of fact are
accorded great deference and its judgment will not be set aside unless plainly wrong or without
evidence to support it”); see also Code § 8.01-680. Accordingly, we affirm the decision of the trial
court.
Wife also argues that the court erred by finding she was not entitled to pay her personal
expenses from the joint account following the parties’ separation and by ordering her to reimburse
husband for those withdrawals. Wife does not contest that she removed the $10,593 from the joint
account for personal expenses. Although the PSA provides that each party is responsible for his or
her own subsequent debts, she contends that after execution of the PSA and the addendum, the
parties entered into an oral agreement that husband would pay the rent and household expenses in
lieu of spousal and child support, and wife would deposit her paychecks into a separate account.
According to wife, the oral agreement did not preclude her from using the joint account to pay her
personal expenses.
The PSA is clear. The parties are each “solely responsible for any and all debts . . .
incur[red] subsequent to the date of this [PSA],” June 13, 2018. See Smith, 3 Va. App. at 514
(“Where there is no ambiguity in the terms of a contract, we must construe it as written.”). Any oral
agreement violates the PSA’s requirement that all modifications be in writing and “executed with
the same formality” as the PSA. Although wife seeks to defend her conduct by claiming that she
complied with the parties’ oral agreement, the PSA controls, and we must “construe it as written.”
See id.
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Because the PSA required the parties to be individually responsible for their subsequent
debts, we hold that the court did not err in requiring wife to reimburse husband for her personal
expenses that were paid from the parties’ joint account after they executed the PSA.
B. Husband’s assignments of error: rental payments and attorneys’ fees
Husband argues that the court erred by requiring him to pay rent and household expenses
between March and July 2019 when he no longer resided in the rental home and had resumed
payment of his support obligations. For the following reasons, we agree and reverse the court’s
ruling.
The PSA required husband to pay spousal and child support. As noted above, the PSA also
required that any changes or amendments to the PSA be made in writing and executed by the parties
with the same formality as the original document.
Nonetheless, the court found that the parties entered into an oral agreement for husband to
pay rent and household expenses in lieu of paying spousal and child support. Because the court
found that under the terms of the oral agreement, husband’s obligation for the rent and household
expenses remained, regardless of whether he was living at the residence, it ordered husband to
reimburse wife for half of the household expenses.
However, once again, this arrangement to pay rent and expenses in lieu of support was a
wholesale modification of the PSA. The modification was not executed in writing or with the
formality required by the PSA. Wife may not compel compliance with an oral contract by a motion
to enforce a PSA that forbids oral modifications. Therefore, we find that the court erred in requiring
husband to pay half of the rent and household expenses between March and July 2019, when he was
paying spousal and child support in accordance with the PSA.
Husband also contends that the court erred by not awarding him attorneys’ fees because the
PSA provided that in an action for enforcement, fees and costs “shall be borne by the defaulting
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party.” Parties may “adopt contractual provisions shifting the responsibility for attorneys’ fees to
the losing party in a contract dispute.” Ulloa v. QSP, Inc., 271 Va. 72, 81 (2006). Code
§ 20-109(C) addresses such provisions in a divorce action:
In suits for divorce, . . . if a . . . contract signed by the party to whom
such relief might otherwise be awarded is filed before entry of a final
decree, no decree or order directing the payment of . . . counsel
fee . . . shall be entered except in accordance with that . . . contract.
“Therefore, if a property settlement agreement contains a provision awarding attorney’s fees, the
court must follow the terms of that agreement, to the extent allowable by law.” Jones, 68 Va. App.
at 106.
Husband argues that because the court’s various rulings on the issues resulted in an offset
that provided him with a cash award, under the terms of the PSA, he was entitled to be reimbursed
for his attorneys’ fees. However, in declining to award attorneys’ fees to either husband or wife, the
court found that “both parties chose to disregard the [PSA],” and the record supports this
determination. Accordingly, the court did not in err in declining to award husband his attorneys’
fees.
C. Appellate attorneys’ fees
Both parties request an award of attorneys’ fees on appeal. Rule 5A:30(b)(2) requires us to
look to the “terms of a contract or stipulation” between the parties to determine whether to award
fees. See Allen v. Allen, 66 Va. App. 586, 603 (2016) (considering the parties’ post-nuptial
agreement to determine whether to award appellate attorneys’ fees). The PSA provided that in an
enforcement action, attorneys’ fees “shall be borne by the defaulting party.” Here, both husband
and wife were found to have disregarded the PSA. Accordingly, based on the record before us, we
decline to award appellate attorneys’ fees to either party.
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CONCLUSION
We affirm the court’s ruling requiring wife to pay husband half of the Plan dividends and
reimburse him for the $10,593 that she removed from the joint account. We reverse the court’s
decision requiring husband to pay wife $6,395 for half of the rent and household expenses between
March and July 2019, affirm the court’s ruling denying husband an award of attorneys’ fees, and
deny both parties’ requests for appellate attorneys’ fees.
Affirmed in part, and reversed in part.
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