Case Brief Assignment
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Liberty University *
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Law
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Feb 20, 2024
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1. Derby v. Derby, 378 S.E.2d 74 (Va. Ct. App. 1989). 2. Facts:
Mr. and Mrs. Derby were married for 22 years before Mrs. Derby filed for divorce, alleging cruelty. Mr. Derby filed a counter claim alleging adultery by Mrs. Derby. Mrs. Derby persuaded Mr. Derby to amend their property settlement agreement, removing the equal property division and substituting language stating Mrs. Derby would receive the entire value of essentially all of the valuable real estate that the parties owned. The discussion and signing took place in a parking lot and without consultation with counsel. Mr. Derby claimed that he signed the agreement because he believed Mrs. Derby would return to the family home if he did so. 3. Procedural History: Mrs. Derby filed for divorce, alleging cruelty in 1983. Mr. Derby filed a counter suit alleging adultery in 1985. Mr. Derby was granted a divorce on the grounds of adultery by Mrs. Derby. The trial court also held the separation agreement invalid on the grounds of unconscionability and constructive fraud or duress. The appeal court affirmed the order granting the divorce and invalidating the separation agreement. 4. Issue(s):
Did the court err in finding the separation agreement invalid because it was unconscionable and obtained by constructive fraud or duress?
5. Rule(s) of Law: 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. For an agreement to be deemed invalid, the person contesting its validity must prove so by clear and convincing evidence. Constructive fraud is a breach of legal or equitable duty which, irrespective of moral guilt, is declared by law to be fraudulent because of its tendency to deceive others or violate confidence. 6. Holding(s):
The agreement between the husband and wife is not valid, as evidence shows it was signed under constructive fraud. The evidence is not sufficient to prove fraud, however. 7. The Court
’s Order:
Trial court
’
s decision is affirmed. The property agreement is not valid and is not incorporated in the decree. 8. Reasoning:
Unconscionability focuses on the intrinsic fairness of the terms of an agreement in relation to all attendant circumstances, including the relationship and duties between the parties. The court supported the finding of unconscionability due to evidence of concealment, misrepresentation, and undue advantage on the part of Mrs. Derby. The court also found there to be emotional weakness on the part of Mr. Derby. Mrs. Derby
’s denial of infidelity as well as her claim of just needing space is found to be a form of misrepresentation, as it lead Mr. Derby to consider reconciliation was possible, thus encouraged him to sign an agreement he felt would not be followed through on. Mr. Derby expressed God was working a miracle and he felt he and Mrs. Derby would reconcile. Mrs. Derby took advantage of his emotional state when presenting him with the agreement. Additionally, Mrs. Derby chose to present the agreement outside of the presence of either party
’s attorney, and before business hours. She al
so was haste in having Mr. Derby sign the property deed to her.
1. Galloway v. Galloway, 622 S.E.2d 267 (Va. Ct. App. 2005). 2. Facts:
Mr., and Mrs. Galloway were married for 17 years. Mr. Galloway presented his wife with a property agreement during the divorce process that awarded him with roughly 94% of marital assets. Prior to having the agreement drafted, Mr. and Mrs. Galloway discussed the terms of the agreement. Mr. Galloway brought the agreement to Mrs. Galloway's apartment the night before it was executed, offering for her to consult with an attorney before signing. Mrs. Galloway signed the agreement at the bank the next day. In court, Mrs. Galloway argued the agreement was unconscionable since there was a gross disparity in the division of marital assets. 3. Procedural History:
Commissioner in Chancery ruled Agreement was unconscionable. Mr. Galloway appealed to the Circuit Court of Mathews County, which reversed the ruling. Mrs. Galloway filed an appeal to the Court of Appeals of Virginia, which affirmed the judgement of the trial court. 4. Issue(s):
Did the court err in finding the separation agreement valid although there was a disparity in the division of marital assets? 5. Rule(s) of Law:
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. For an agreement to be deemed invalid, the person contesting its validity must prove so by clear and convincing evidence. Any issue of unconscionability of a marital agreement shall be decided by the court as a matter of law. Recitations in the agreement shall create a prima facie presumption that they are factually correct. To determine whether an agreement is unconscionable, a court must examine the adequacy of price or quality of value. If a gross disparity in the 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. Thus, a party challenging an agreement on the ground that it is unconscionable must prove both 1) a gross disparity existed in the division of assets and 2) overreaching or oppressive influences. While the question of unconscionability is a matter of law, the underlying facts must be determined by the fact finder, and on appeal the reviewing court determines whether there is sufficient evidence to support the factual findings. 6. Holding(s):
The agreement between Mr. and Mrs. Galloway is valid. Although there is disparity in the division of assets, no oppressive influences were found to be present at the time the agreement was presented and signed. 7. The Court
’s Order:
The decision of the trial court is affirmed. 8. Reasoning:
Mrs. Galloway argued “
gross disparity
”
alone, should make the agreement unconscionable. The court finds this is not the correct legal standard. There is a two-step test that much be applied in order to determine if an agreement is unconscionable. Although unconscionability is a matter of law, the underlying facts are determined by the court, through evidence. Mr. Galloway did receive 94% of the marital assets, however there is no evidence of
overreaching or oppressive behavior by Mr. Galloway. Mr. and Mrs. Galloway discussed the agreement before it was drafted and Mr. Galloway suggested the agreement be reviewed by an attorney before Mrs. Galloway signed it. Additionally, Mrs. Galloway testified she was not forced to sign the agreement. This shows that although the first test shows disparity, the second test fails to show behavior that would make this agreement invalid. Further, Mrs. Galloway argued her waiver of spousal support “
represents an additional attendant circumstance
”
that warrants the agreement be unconscionable. Mrs. Galloway had additional assets that showed she was not in need of support. The court found no “
accompanying circumstances indicative of bad faith or inequity under the law.
”
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1. Sims v. Sims, 55 Va. App. 340 (2009). 2. Facts:
Marvin and Barbara Sims were married for 40 years. Mrs. Sims expressed she only wanted a divorce and nothing more. An agreement was drafted by Mr. Sims
’
attorney. All financial information was exchanged between parties prior to the agreement being drafted and signed. Mrs. Sims received an automobile and tangible personal property, which left everything else to Mr. Sims. Mrs. Sims later argued the agreement was unconscionable on appeal. 3. Procedural History:
Circuit Court of Han Over County entered a final decree of divorce and incorporated the property agreement. Mrs. Sims filed an appeal with the Court of Appeals of Virginia. 4. Issue(s):
Did the court err in finding the separation agreement valid although there was a disparity in the division of marital assets? Did the court err in granting Mr. Sims
’
motion to reconsider the ruling that the agreement was unconscionable and ratifying the agreement? Did the court err in refusing to retain jurisdiction over property that was omitted from the agreement? 5. Rule(s) of Law:
In a typical case alleging unconscionability of a marital agreement, the court must consider (1) whether a gross disparity existed in the division of assets and (2) whether the evidence shows overreaching or oppressive influences. Gross disparity in the value exchanged is a significant factor in determining whether oppressive influences affected the agreement to the extent that the process was unfair and the terms of the resultant agreement unconscionable. Proof of the "overreaching or oppressive influences" prong may be established in either of two ways: When the accompanying incidents are inequitable and show (a) bad faith, such as concealments, misrepresentations, undue advantage, or oppression on the part of the one who obtains the benefit, or (b) ignorance, weakness of mind, sickness, old age, incapacity, pecuniary necessities, and the like, on the part of the other, these circumstances, combined with evidence of the first prong, inadequacy of price, may easily induce a court to grant relief, defensive or affirmative. 6. Holding(s):
The agreement between Mr. and Mrs. Sims is unconscionable and is not valid. 7. The Court
’s Order:
The court reversed the trial court
’s decision
and remanded the case for further proceedings consistent with the court
’s opinion without reac
hing Mrs. Galloway
’s final assignment of error. 8. Reasoning:
The first prong of the unconscionability test is shown regarding the disparity of the division of marital assets. Mr. Galloway was left with almost 100% of the assets. Evidence in this case established a matter of law both "'inadequacy of price or inequality in value'" and ""pecuniary necessities" coupled with a degree of infirmity, which applies to the second prong of the unconscionability test. Mrs. Galloway had a 3
rd
grade education and numerous health conditions which caused her to be disabled. She married Mr. Galloway when she was very young, was married to him for 38 years, and was not able to support herself at the time of the evidentiary hearing. Mrs. Galloway worked seasonally but relied on food stamps and other programs in order to live. The court felt the evidence established not only a large disparity of assets, but also infirmity and pecuniary necessities, which established unconscionability.
1. Chaplain v. Chaplain, 682 S.E. 2d 108 (Va. Ct. App. 2009). 2. Facts:
Mr. and Mrs. Chaplain married on September 4, 1997. Mr. Chaplain was born and lived in Virginia Beach for seventy-seven years. Mrs. Chaplain was born and lived in Morocco until the summer of 1996, when she first came to the United States to visit her brother. Within three weeks of her arrival, Mr. and Mrs. Chaplain met and, within two months, they became engaged. In June 1997 Mrs. Chaplain signed a premarital agreement that was prepared by Mr. Chaplain
’
s attorney. Mrs. Chaplain later argued the validity of the agreement, as she testified she was not given an opportunity to review the agreement prior to signing, did not receive a copy after signing, was not told what was in the agreement, did not understand English well at the time, and was not represented by an attorney when the agreement was entered into. She stated she signed it because she trusted Mr. Chaplain. 3. Procedural History:
Circuit Court of Virginia Beach ruled the agreement was not unconscionable and was enforceable. Mrs. Chaplain filed an appeal in the Court of Appeals of Virginia. 4. Issue(s): Did the trial court err in ruling that Mrs. Chaplin did not meet her burden establishing prima facie
that the agreement was unenforceable? Did the husband, when failing to disclose his net worth prior to signing the agreement, fail to follow the Virginia Premarital Act? 5. Rule(s) of Law:
In a typical case alleging unconscionability of a marital agreement, the court must consider (1) whether a gross disparity existed in the division of assets and (2) whether the evidence shows overreaching or oppressive influences. Gross disparity in the value exchanged is a significant factor in determining whether oppressive influences affected the agreement to the extent that the process was unfair and the terms of the resultant agreement unconscionable. Proof of the "overreaching or oppressive influences" prong may be established in either of two ways: When the accompanying incidents are inequitable and show (a) bad faith, such as concealments, misrepresentations, undue advantage, or oppression on the part of the one who obtains the benefit, or (b) ignorance, weakness of mind, sickness, old age, incapacity, pecuniary necessities, and the like, on the part of the other, these circumstances, combined with evidence of the first prong, inadequacy of price, may easily induce a court to grant relief, defensive or affirmative. Section 6 of the Uniform Premarital Agreement Act states: Nothing in this section makes the absence of assistance of independent legal counsel a condition for the unenforceability of a premarital agreement. However, the lack of that assistance may well be a factor in determining whether the unconscionability conditions stated in this section may have existed. Virginia adopted in large part the Uniform Premarital Agreement Act as the Virginia Premarital Agreement Act. Pursuant to the Virginia Premarital Agreement Act, a premarital agreement is not enforceable if, in addition to being found unconscionable when it was executed, the individual challenging its enforceability establishes either (1) she did not execute the agreement voluntarily, or (2) she was not provided a fair and reasonable disclosure of the property or financial obligations of the other
party; and did not voluntarily and expressly waive, in writing, any right to disclosure of the property. 6. Holding(s):
The trial court erred in granting the motion to strike because the wife made a prima facie
showing of unconscionability. 7. The Court
’s Order:
The Court finds the interlocutory order is an appealable interlocutory order. The find the trial court erred in finding Mrs. Chaplain had not established a prima facie
case that the agreement was unenforceable pursuant to the Premarital Agreement Act and granting Mr. Chaplain's motion to strike. The Court reversed and remanded the case to the trial court for further proceedings consistent with their opinion. 8. Reasoning:
The trial court rule to strike all evidence that Mrs. Chaplain had to support her argument that the premarital agreement was unconscionable. The legal standard is that the trial court is to accept as true all the evidence favorable to the plaintiff. The evidence would have shown that the first prong of the unconscionability test is shown due to the disparity of assets. Mrs. Chaplain left her job in Morocco when she married Mr. Chaplain, had remained unemployed, and had no way to support herself. This alone satisfies Mrs. Chaplain
’
s prima facie burden. Mrs. Chaplain had limited reading, writing, and speaking of the English language when she signed the agreement. Further, Mr. Chaplain dd not discuss what was in the agreement or that it was regarding the division of property if they were to divorce. Additionally, Mrs. Chaplain was not represented by an attorney prior to or during the signing of the agreement, nor did she receive a copy of the agreement after it was executed. Mr. Chaplain denies Mrs. Chaplain
’
s allegations. The second prong of the unconscionability test will need to be satisfied by the trial court upon remand. In regards to the agreement being enforceable, the fact that Mr. Chaplain did not disclose his net worth prior to Mrs. Chaplain signing the agreement, makes it unenforceable, according to the Virginia Premarital Agreement Act. In addition to disclosure, Mrs. Chaplain was required to waive further disclosure in writing before signing the agreement, which she did not do. These failures along with the agreement being unconscionable, renders the agreement between Mr. and Mrs. Chaplain unenforceable.
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