Agreements - § 6-12 - § 6-16

    § 6-12  Arbitration

2014---Caldwell v. Caldwell, Va. Ct. of Appeals, No. 2108-13-3
The trial court did not err by awarding Wife damages for Husband’s breach of the parties’ separation agreement. The trial evidence established that Husband failed to provide Wife health insurance and to pay the premiums and unreimbursed medical as required under the agreement. Therefore, the trial court’s damages award was supported by the facts, not speculative, and resulted from Husband’s breach of the agreement.

Additionally, the trial court did not err by crediting Husband $219.95 per month for a forty-seven month period in which wife canceled an internet health insurance policy she procured after Husband failed to provide her health insurance. By canceling her internet health insurance policy, Wife failed to mitigate her damages because she accrued medical expenses that otherwise would have been covered under the policy.

1993---Bandas v. Bandas, 16 Va. App. 427
The standard of review involving agreements reached through arbitration in domestic relations matters is the same as that set forth in Va. Code §8.01-581.01 – arbitration agreements and the award embodied in them shall not be set aside on appeal unless there exists grounds to set aside a contract in equity, such as unconscionability or “as contrary to public policy.” 

    § 6-13  Rescission / Repudiation

2015---MacDougal v. Levick, 66 Va. App. 50
The trial court did not err in rescinding the parties’ marital agreement based on the parties’ mutual mistake of fact. If certain material facts are assumed by both parties as the basis of the contract, and it subsequently appears that such facts did not exist, the contract is inoperative. Generally, equity, while relieving mistakes of fact, will not give relief from a mistake of law, except in extraordinary cases. However, this rule is confined to mistakes of the general rules of law, and does not apply to the mistakes made by individuals as to their own private legal rights and interests. Those private rights are treated as matters of fact, although they result from matters of law. Here, the parties entered into the marital agreement under the belief that their marriage was valid, when, in fact, it was not. Therefore, when the parties entered into the agreement, both were ignorant or mistaken about their existing private legal rights regarding their marriage.

The trial court did not err in refusing to order restitution to Husband for sums paid pursuant to an agreement later rescinded by the court, where Husband failed to request restitution and instead requested a full refund of all sums paid. Husband paid pendente lite support pursuant to the trial court’s order. Subsequently, the trial court ordered a higher amount pursuant to the parties’ marital agreement, which the trial court ultimately rescinded on the basis that the parties were never married. Ordinarily, a contract’s rescission based on a mistake of fact allows a party restitution for any benefit that he has conferred on the other party by way of part performance or reliance. Here, the trial court’s incorporation of the parties’ marital agreement did away with the Husband’s prior pendente lite support obligation, which would have otherwise continued. Thus, restitution was Husband’s proper remedy, which would have been, at most, the difference between the amount Husband paid under the court’s pendente lite order and the amount he paid under the marital agreement. However, Husband failed to request restitution. Instead, Husband requested a full refund, to which he was not entitled.

2012---Bousman v. Lhommedieu , Va. Ct. of Appeals, Unpublished, No. 0932-11-4
The trial court did not err in refusing to allow husband to present evidence of wife’s prior breaches of their settlement agreements when defending against wife’s show cause for husband’s own breach. Though principles of contract law dictate that a material breach by one party will excuse non-performance by the other, when a court incorporates the contract into a decree pursuant to Va. Code §20-109.1, a party may not suspend his/her performance even when the other party is in breach. Instead, the non-breaching party must continue to comply with the terms of the decree until modified by the court. When a party invokes a court’s contempt authority through a show cause action seeking to bring a party in compliance with the court’s decree, it is the decree, not the contract, that is being enforced.

2011--- Makoui v. Makoui, Va. Ct. of Appeals, Unpublished, No. 0672-11-3
The trial court did not err in refusing to find that husband had rescinded the parties’ premarital agreement when he told wife he “had torn it up.” Va. Code §20-153 provides that pre-marital agreements may be amended or revoked only by a written agreement signed by the parties. Wife’s argument that husband should be estopped from relying on the agreement after telling wife he had destroyed it also failed. Wife had received a copy of the signed agreement upon execution, and when husband told her he had destroyed it, he made no representations to wife as to any legal effects of his doing so. A party signing a contract is charged with knowledge of its contents. Citing First Va. Bank-Colonial v. Masri, 245 Va. 461 (1993).

1996---Allocca v. Allocca, 23 Va. App. 571
Husband's discharge in bankruptcy of a joint debt, acquired by the parties after entering into a settlement agreement, did not constitute a repudiation of the parties' settlement agreement where Husband had fully performed all obligations owed to wife under the agreement prior to seeking the discharge. The parties acquired the debt jointly and severally during a brief period of reconciliation after having entered into the settlement agreement, and as such, the joint debt in question was never addressed in the agreement. Because husband owed no duty to wife pursuant to the agreement in relation to this debt, his discharge of the debt in bankruptcy did not constitute repudiation sufficient to allow wife to rescind the agreement.

1994---Carter v. Carter, 18 Va. App. 787
Trial court did not err in allowing wife to rescind the settlement agreement entered into by the parties, due to husband's seeking and accepting discharge in bankruptcy from his obligations to wife under the agreement. The agreement contained a clause providing either party the right to sue for breach or to rescind the agreement in the event the other party failed to perform his/her obligations under the agreement. By obtaining a discharge of debts owed to wife in bankruptcy, husband "failed to perform" his obligations under the agreement, thereby entitling wife to rescind.

1989---Drewry v. Drewry, 8 Va. App. 460
The party seeking to set aside a marital agreement has the burden at trial to prove by clear and convincing evidence the grounds alleged to void or rescind the agreement.

    § 6-14  Statute of Frauds

1976---T. v. T, 216 Va. 867
The statute of frauds provides that, unless an agreement is in writing and signed by a party to be charged, no action shall be brought on any agreement made upon consideration of marriage. A contract within the ambit of the statute is not void ab initio, but cannot be enforced. The statute is procedural or remedial in nature, and is concerned, not with the validity of the contract but with its enforceability. The object of the statute is to prevent frauds and perjuries, and not to perpetrate them, so that the statute is not enforced when to do so would cause a fraud and a wrong to be perpetrated. Therefore, under certain conditions, where there has been part performance, a court will avoid the statute and enforce an oral agreement. In such cases the parol agreement must be certain and definite, the acts proved in part performance must refer to, result from, or be made pursuant to the agreement, and the agreement must have been so far executed that a refusal of full execution would operate as a fraud upon the party, and place him in a situation which does not lie in compensation. Moreover, the act or acts of part performance must be of such unequivocal nature as to be evidence of the existence of an agreement. The part performance must be consistent with no theory other than the existence of the alleged oral contract.

Ordinarily, marriage is not such part performance as will take a case outside of the ambit of the statute of frauds. However, where husband, prior to marriage, promised wife, who was then pregnant with another man’s child, that if she married him rather than moving and placing the child for adoption, he would care for the child “as if it were his own,” and both parties performed under the agreement for four years after the child was born, the parties’ actions constituted sufficient performance to render the oral agreement enforceable despite the statute of frauds. Moreover, husband was equitably estopped from pleading the statute of frauds where wife had acted to her detriment in reliance on husband’s promise.

§ 6-15  Specific Performance

2016---Allen v. Allen, 66 Va. App. 586
Specific performance is an equitable remedy, which may be considered by the trial court where the remedy at law is inadequate and the nature of the contract is such that specific enforcement of it will not result in great practical difficulties. The granting of specific performance is not a matter of absolute right. However, when the contract sought to be enforced has been proven by competent and satisfactory evidence, and there is nothing to indicate that specific performance would be inequitable to a defendant, but would injure the other party should it be refused, then in the absence of fraud, misapprehension, or mistake, relief will be granted by specific enforcement. Here, although Husband breached the parties’ postnuptial agreement, which provided that Husband would not seek a divorce for a period of twenty years, specific performance was not a proper remedy. The purpose of the divorce forbearance term was to ensure that Wife had access to health insurance under Husband’s employer-provided policy, not to bar Husband from obtaining a divorce. Moreover, postnuptial agreement provided further that Husband would be personally liable for Wife’s medical expenses in the event he breached the forbearance term. As such, Wife had an adequate remedy at law.

2013---Bousman v. Lhommedieu, Va. Ct. of Appeals, Unpublished No. 2289-12-4.
A court may not specifically enforce a settlement agreement unless it is complete and certain. The parties’ agreement to “try to develop new arrangements cooperatively” regarding their son’s educational expenses “in the event that this document is no longer workable” was inherently indefinite. A court should not grant specific performance “if it is impossible for the court to precisely define the specific actions to be performed.” As such, the trial court did not err when it declined to grant appellant’s request for specific performance of the parties’ settlement agreement.

1989---Shepherd v. Colton, 237 Va. 537
Generally, a court may not decree specific performance when it is impossible for a party to comply with a contractual condition. However, unless it is absolutely necessary, a contract should not be construed to contain provisions impossible of performance.

    § 6-16  Mistake/Reformation

2016---Lewis v. Lewis, Va. Ct. of Appeals, Unpublished, No. 1042-15-1
The trial did not err in finding that the parties’ settlement agreement contained a mutual mistake, and therefore did not err in reforming the agreement to correct the error. Courts have jurisdiction to reform written instruments where there has been a meeting of the minds, but the contract in its written form does not express what was really intended by the parties. Reformation for mutual mistake allows the court to change the written document to reflect the actual agreement by the parties, not to alter the agreement by changing its terms to those the court finds appropriate or that one of the parties wished it had obtained in negotiations. The party requesting reformation based on mutual mistake has the burden to establish that the mistake occurred and what correction should be made. The proof must be clear and satisfactory, leaving little, if any doubt of the mistake. Here, although the agreement expressly provided that Husband’s spousal support obligation would terminate “upon remarriage or the death of either party,” the evidence demonstrated that the parties actually intended for support payments to terminate upon Wife’s remarriage only.

1991 --- Jennings v. Jennings, 12 Va. App. 1187
The trial court did not err in denying rescission of the agreement on the ground of mutual mistake. Generally, if certain facts are assumed by both parties as the basis of the contract, and it subsequently appears that such facts did not exist, the contract is inoperative. On the other hand, relief will not be granted where the parties, operating with knowledge of all material facts, enter the agreement under a mutual mistake of law. Ignorance of law is never ground for rescission of a contract unless perhaps where the other party knowingly has taken advantage of such ignorance for fraud. There was no evidence that wife knowingly misrepresented the equitable distribution law or knowingly took advantage of the husband’s alleged misunderstanding of the same. The agreement intended for the parties to split all assets 50/50. Though the crux of the issue was whether the parties intended to split certain assets pre or post-tax, the determination of the parties’ intent on that issue did not require rescission or reformation. That husband may have possessed some human frailty or compelling personal agenda does not alone relieve him of a contract that he was perfectly capable of negotiating and entering.

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