Virginia Lawyers Weekly VA Lawyers Weekly
Where the marital home became wife’s sole and separate property after the parties amended their property settlement agreement (PSA), the trial court had the authority to enforce the amendment and correctly did so with a declaratory judgment.
PSA amendment
“At the time of the divorce, the PSA stated: ‘[U]nless the parties agree otherwise in writing, the Wife may continue to reside in and have exclusive use and possession of the marital residence until the youngest child begins attending college at which time the parties will decide the disposition of the property.’
“It also specifically allowed for modifications to the PSA, provided the modifications were in writing and executed with the same formality as the PSA.
“Under those terms, husband and wife executed a formal modification agreement that transferred ownership rights to wife exclusively and that entitled wife to 100% of the net proceeds from the sale of the marital residence.
“Code § 20-109.1 provides that ‘Where the court affirms, ratifies and incorporates by reference in its decree [a PSA], it shall be deemed for all purposes to be a term of the decree, and enforceable in the same manner as any provision of such decree.’
“Husband contends that this statutory provision only gives a trial court the ability to enforce the terms of the PSA as written at the time of the divorce, not future modifications. He argues that wife needed to bring a separate contract suit if she wanted to enforce the terms of the modification. But his argument ignores the fact that the terms of the original PSA allowed for modifications.
“If the trial court could not enforce the modification to the PSA, then the modification terms in the PSA would be meaningless. …
“A modification made pursuant to an express modification provision within an agreement is a change to the ultimate requirements of the original agreement, brought about through the operation of the agreement itself.
“A modification is not a separate contract, though it may support a separate contract liability. Because a modification makes a change to the terms of the original agreement, properly enacted modifications to a PSA are enforceable in the same manner as the terms of the original PSA.”
The trial court correctly enforced the modification. …
Declaratory judgment
“At the time of wife’s motion for declaratory judgment, the property had been sold and the proceeds were held in escrow in wife’s counsel’s trust account.
“Wife’s motion for declaratory judgment asked the court to determine each party’s rights in the marital home, but that question was moot at the time she submitted the motion because the marital residence had already been sold.
“Instead, the court needed to determine which party had the right to the proceeds from the sale under the modification to the PSA. …
“Rather than allowing the special commissioners to disburse the proceeds from the sale of the marital residence and waiting until one party sued the other, the trial court preemptively reviewed the documents and determined who should receive the proceeds from the sale. The court did not err in doing so.
“Husband also argues that the procedure used here deprived him of rights available in a contract case. First, we note that declaratory judgment is a remedy, not a cause of action. A contract issue may be decided in a declaratory judgment.”
Reimbursement
“Wife … argues that the trial court erred by failing to require husband to reimburse her for her costs associated with the sale by the special commissioners and by failing to award the statutorily authorized commission to the special commissioners.
“The May 30 order [appointing the parties’ counsels as special commissioners] stated that the non-prevailing party would pay the costs unless ‘otherwise allocated by the court upon consideration of the equities of the case at such final disposition.’
“The order determining that wife was the prevailing party did not award the costs of the special commissioners, nor did the next order awarding attorney fees.
“[W]e do not read the trial court’s orders in isolation. … Because the trial court failed to ‘otherwise allocate’ the costs of the special commissioners, the non-prevailing party, husband, must pay those costs.”
The trial court, on remand, must “determine the amount that husband must reimburse wife.
“Wife next argues that the trial court needed to award a commission to the special commissioners for their work selling the marital residence and collecting the proceeds. The May 30 order stated that the costs would include ‘any commission authorized by statute.’
“Code § 8.01-109 … states that ‘If the sale is made by one commissioner or officer and the proceeds collected by another, the court under whose decree they acted shall apportion the commission between them as may be just.’ …
“We may fairly conclude that by including ‘any commission authorized by statute,’ the trial court intended that the special commissioners would receive their commission. …
“But even if we reach that conclusion, the orders do not explain how that commission should be divided. And because the order directed both commissioners to sell the property but directed only one commissioner to collect the proceeds, the trial court needed to divide the commission ‘as may be just.’ …
“On remand, the trial court must determine the amount due to the commissioners.”
Attorney fees
“[T]he parties agreed that if a party was compelled to enforce the agreement, the other party must pay for ‘any and all expenses incurred, including but not limited to, attorney’s fees and costs[.]’… [W]e follow the Supreme Court’s guidance and find that the PSA, like any contract, implicitly required that the attorney fees awarded be reasonable. …
“When the trial court fashioned the fee award, it granted wife all fees incurred by enforcing the PSA, minus certain fees it identified as excepted.” Although husband argues that the fee award was unreasonable, ‘a trial court is presumed to apply the law correctly,’ and we find no basis to disturb the trial court’s fee award. …
“The trial court granted husband an attorney fee award for expenses incurred defending against wife’s unsuccessful appeal to the Supreme Court of Virginia. … [T]the Supreme Court order denying the petition was [final] judgment because it disposed of the entire matter. …
“Within 30 days of that judgment, husband applied for a fee award for his brief in opposition to wife’s petition. … [T]he trial court did not err by granting that petition and awarding husband attorney fees in connection with wife’s appeal to the Supreme Court of Virginia. …
“[W]ife requests ‘any and all attorney[] fees and costs incurred in bringing this appeal and in defending against appellee’s additional assignments of error.’ …
“Wife’s appeal was necessary to enforce the part of the PSA granting her ‘any and all’ attorney fees for enforcing the PSA, and we must grant her reasonable attorney fees incurred in connection with that assignment of error.”
The trial court, on remand, must determine a reasonable fee.
Affirmed in part, reversed in part and remanded,
Mills v. Mills, Record No. 1043-20-2, May 9, 2023. CAV (published opinion) (Callins) From the Circuit Court of the City of Richmond (Hairston) Eileen McNeil Newkirk for appellant. Benjamin R. Rand for appellee. VLW 023-7-162, 20 pp.
