W Douglas Drumheller v. Sandra Jean Blair Drumhellr ( 2002 )

  •                         COURT OF APPEALS OF VIRGINIA
    Present: Judges Annunziata, Bumgardner and Frank
    Argued at Salem, Virginia
                                                  MEMORANDUM OPINION * BY
    v.   Record No. 0163-02-3                      JUDGE ROBERT P. FRANK
                                                      OCTOBER 1, 2002
                             Thomas H. Wood, Judge
                 Annie Lee Jacobs (Tracey C. Hopper; Parker,
                 McElwain & Jacobs, on briefs), for appellant.
                 Thomas G. Bell, Jr. (Timberlake, Smith,
                 Thomas & Moses, on brief), for appellee.
         W. Douglas Drumheller (husband) appeals the trial court's
    ruling on the division of assets pursuant to a premarital
    agreement entered into by husband and Sandra Jean Blair Drumheller
    (wife).   Husband argues the trial court erred in considering parol
    evidence and misinterpreted the parties' agreement.       We agree the
    court misinterpreted the agreement, and we reverse the decision.
                                I.   BACKGROUND
         Husband and wife negotiated and executed a premarital
    agreement.     Husband's counsel initially drafted the agreement.
    Wife then requested "[t]hat there be a provision in there where
         * Pursuant to Code § 17.1-413, this opinion is not
    designated for publication.
    we would build a residence in Augusta County . . . [and] [t]hat
    it would be jointly titled and considered marital property."
            According to wife, this provision concerning the marital
    dwelling "was very important."        She explained, "[T]hat's why I
    signed the agreement. . . . Because it assured me that I would
    have a home and some financial security, because I was basically
    signing away everything else that I might be entitled to,
    whether we were married for two years or twenty."          Wife
    testified she would not have signed the agreement without the
    requested provision. 1
            Husband agreed to include such a provision, and the
    agreement was re-drafted.         The parties signed the agreement on
    March 17, 1994, after consulting with their individual
    attorneys.       They married on April 9, 1994.
            The agreement contained waivers of spousal support and of
    any interest in each other's separate property.          It provided, in
                   [Article I, 2.] It is the parties'
                   intention, after they have married, to build
                   a residence on approximately four acres of
                   real estate located in Augusta County,
                   Virginia; it is agreed that said real estate
                   and residence shall be jointly titled to
                   them and shall constitute marital property,
                   any other provisions of this Agreement to
                   the contrary notwithstanding.
                    *      *      *        *      *      *       *
                Husband made no objection to this testimony.
                                         - 2 -
              [Article VI, 2.] In the event of a divorce,
              annulment, or other event triggering the
              right of either party to seek a division or
              distribution of marital property, . . . the
              parties agree that their ownership interest
              in their marital property shall be divided
              equally between them.
               *       *      *      *      *       *      *
              [Article VII] 1. This Agreement contains
              the entire understanding of the parties, and
              there are no representations, warranties,
              promises, covenants or undertakings, oral or
              otherwise, other than those expressly set
              forth herein.
              [Article VII] 2. This Agreement shall not
              be modified or annulled by the parties
              hereto except by written instrument executed
              by both of the parties in the same manner
              and with the same formalities as this
              Agreement expressly modifying or revoking
              the provisions hereof by specific reference.
         Prior to the execution of the agreement, husband owned
    eight acres in New Hope, Augusta County. 2   Within the acreage,
    adjacent to a parcel with husband's existing home, was "a
    potential building lot, but not a developed lot, for another
    house" (hereinafter the New Hope property).    The parties both
    testified this adjoining parcel was the four acres referenced in
    the agreement.   Husband and wife had "walked the property and
    picked a spot on the property that [they] both liked as a
           Husband entered a continuing objection to wife's testimony
    regarding the New Hope and Fishersville properties, on the
    ground that the trial court could not consider parol evidence to
    determine "whether this intention [in the agreement] constitutes
    an enforceable contract to build a home."
                                   - 3 -
    potential house site."   However, the undeveloped, four-acre
    parcel had no "road access."
         Around the time the parties married, husband began making
    attempts "to get road access," but each of those efforts failed.
    Husband then told wife, without any detail, that he was "running
    into problems" with the new house and, according to wife,
    "eventually it just sort of went by the wayside."   The testimony
    conflicts on whether husband discussed with wife the
    practicality of acquiring access.   In any event, no house was
    built on the four-acre parcel in New Hope.
         The parties first separated on April 16, 1995.    In December
    1995, husband and wife resumed their relationship by dating.
    Wife testified, "It was on-again/off-again until we finally
    reconciled and moved in together in May of 1998."
         During the negotiations for reconciliation, wife indicated
    she would reconcile with husband if they purchased a jointly
    titled home and "that it would be considered marital property."
    Husband testified he had promised that the new property would be
    titled jointly and considered marital property, to be "divided
    up as marital property" if the parties divorced.    However, the
    parties did not amend the premarital agreement or memorialize
    their negotiations.
         Husband and wife found a "house under construction" in
    Fishersville, Augusta County (hereinafter the Fishersville
    property).   The parties signed a contract to purchase this
                                   - 4 -
    property, listing the purchasers as "Warren Douglas and Sandra
    Jean Drumheller."
         Shortly thereafter, husband unilaterally decided not to
    title the property jointly.   Sometime in December 1995, husband
    informed wife he had changed his mind, and he would not title
    the property jointly.   Wife was never informed of the closing
    date nor did she sign any documents waiving or assigning her
    rights under the purchase contract.     The deed, dated December
    14, 1995 and recorded January 2, 1996, conveyed the Fishersville
    property solely to husband.
         Wife reconciled with husband and moved into the
    Fishersville property in May 1998.      In September 1999, husband
    and wife moved to a farm in Augusta County.     The parties finally
    separated on January 8, 2000.   Husband sold the Fishersville
    property on January 14, 2000, for $210,000.
         On February 8, 2000, husband filed a bill of complaint,
    asking for a one year, "no fault" divorce.     Wife filed an
    answer, requesting "that the Pre-Marital Agreement be enforced
    to provide her with property sufficient to satisfy [husband's]
    obligations under the Pre-Marital Agreement or, in the
    alternative[,] be declared unenforceable because of the breach
    of this provision."   Neither party asked for an equitable
    distribution of marital assets.
                                    - 5 -
         A hearing was conducted to determine whether the divorce
    should be granted and if the agreement had been breached.    Over
    husband's objection, the trial court allowed parol evidence to
    ascertain the parties' intent when entering the agreement.   The
    trial court ultimately ruled husband had breached the premarital
    agreement by not titling the Fishersville property jointly and
    assessed wife's damages at $105,000, half of the gross sales
    price of that property.   The court explained from the bench:
              [W]hat's in this agreement supports the
              testimony of Ms. Drumheller as to how and
              what and everything that they agreed to, and
              I guess the short, simple answer to this is
              that they agreed to build a residence on
              approximately four acres of real estate in
              Augusta County, the one that they preferred
              to build on turned out to be impractical,
              although only two of the three routes were
              really impractical . . . . But that's
              beside the point, the fact is, they did
              construct a house [in Fishersville], that is
              -- says it's a contract for purchase, it is
              a contract to purchase, it's also a contract
              to construct.
               *      *       *      *      *      *      *
              And so it isn't any question in my mind of
              what [wife] was promised and there isn't any
              question in my mind that [husband] just
              simply changed his mind, and I just don't
              think he can do that, I think this contract
              is definite enough, when it's got some
              ambiguity in it, but the evidence supplies
              what the Court needs, I believe there was an
              enforceable contract, and I think [husband]
              breached the contract, and we've got a good
                                   - 6 -
               measure of damages right here, and it's half
               the value of that Fishersville property. 3
                              II.   ANALYSIS 4
         On brief, appellant contends he did not violate the
    premarital agreement because the agreement did not contractually
    obligate him to title the New Hope property jointly.   He
    maintains the word, "intention," as used in the agreement, did
    not create an enforceable provision, but simply expressed a
    desire to construct a home and title the land and improvements
    jointly.   In the alternative, he contends the trial court erred
    by reforming the premarital agreement to create a promise to
    jointly title the Fishersville property, as opposed to the New
           The final order further explained the trial court's
               After considering the evidence and the
               arguments, the Court finds that
               [husband]breached the Pre-Marital Agreement
               with respect to the provisions in Article I,
               paragraph 2, concerning the marital
               residence and that [wife] is entitled to
               payment of the sum of $105,000.00 as a
               result of that breach, for the reasons set
               forth on the record in open court.
           We do not address husband's contention that the trial
    court erred in admitting evidence of the circumstances
    contributing to the dissolution of the marriage because he did
    not specifically object to this evidence at trial. Rule 5A:18
    requires that objections be made with specificity at the time of
    the error in order to allow the trial court to correct the
    problem. See, e.g., Campbell v. Commonwealth, 
    12 Va. App. 476
    405 S.E.2d 1
    , 2 (1991) (en banc); Lee v. Lee, 
    12 Va. App. 512
    , 514, 
    404 S.E.2d 736
    , 737 (1991) (en banc).
         Additionally, resolution of this issue would not affect the
    outcome of this appeal.
                                    - 7 -
    Hope property, and then assessing damages based on the sale
    price of the Fishersville property.    Appellant further contends
    the trial court erred in allowing parol evidence to ascertain
    the intent of the parties.
         "Antenuptial agreements, like marital property settlements,
    are contracts subject to the rules of construction applicable to
    contracts generally, including the application of the plain
    meaning of unambiguous contractual terms."    Pysell v. Keck, 
    263 Va. 457
    , 460, 
    559 S.E.2d 677
    , 678 (2002).    Therefore, we first
    determine whether "the parties set out the terms of their
    agreement in a clear and explicit writing . . . [such that the
    writing] is the sole evidence of the agreement."    Durham v.
    Nat'l Pool Equip. Co., 
    205 Va. 441
    , 446, 
    138 S.E.2d 55
    , 59
    (1964).   As this determination addresses a legal issue, we
    conduct this review de novo.   See Tuomala v. Regent Univ., 
    252 Va. 368
    , 374, 
    477 S.E.2d 501
    , 505 (1996).
         Assuming, without deciding, that the parties formed a
    binding contract, 5 the premarital agreement still contains
    ambiguity regarding the terms of the contract.   "'An ambiguity
           Husband argues the agreement on its face is not ambiguous
    and does not create an enforceable contract. He also argues the
    trial court improperly heard parol evidence concerning the
    intention of the parties to make a binding contract. Given the
    finding of this case, infra, we assume, without deciding, the
    premarital agreement created a contract. Our conclusion in this
    case would be the same with or without the parol evidence on
    this issue.
                                   - 8 -
    exists when language admits of being understood in more than one
    way or refers to two or more things at the same time.'     Renner
    Plumbing v. Renner, 
    225 Va. 508
    , 515, 
    303 S.E.2d 894
    , 898 (1983)
    (citing Berry v. Klinger, 
    225 Va. 201
    , 207, 
    300 S.E.2d 792
    , 796
    (1983))."     Amos v. Coffey, 
    228 Va. 88
    , 92, 
    320 S.E.2d 335
    , 337
         Article I of the premarital agreement states the parties
    will "build a residence on approximately four acres of real
    estate located in Augusta County, Virginia."    No reference to
    the exact parcel intended by the parties is included, yet the
    language of the agreement suggests a particular piece of
    property was intended.    We find the language of the agreement
    ambiguous on this point.    Nothing within the four corners of the
    document indicates which particular parcel within Augusta County
    is intended.    We must go outside the agreement to determine
    which particular parcel is in fact referenced.
         While parol evidence generally is inadmissible, this rule
    "does not apply if the language of the written instrument is
    ambiguous."     Id.
                When the language of a contract is
                ambiguous, parol evidence is admissible, not
                to contradict or vary contract terms, but to
                establish the real contract between the
                parties. The construction of an ambiguous
                contract is a matter submitted to the trier
                of fact, who must examine the extrinsic
                evidence to determine the intention of the
    Tuomala, 252 Va. at 374, 477 S.E.2d at 505 (citation omitted).
                                     - 9 -
              "It is the duty of the court to construe the
              contract made between the parties, not to
              make a contract for them . . . . The facts
              and circumstances surrounding the parties
              when they made the contract, and the
              purposes for which it was made, may be taken
              into consideration as an aid to the
              interpretation of the words used, but not to
              put a construction on the words the parties
              have used which they do not properly bear."
    Flippo v. CSC Assocs. III, L.L.C., 
    262 Va. 48
    , 64, 
    547 S.E.2d 216
    , 226 (2001) (quoting Seaboard Air Line R.R. Co. v.
    Richmond-Petersburg Turnpike Auth., 
    202 Va. 1029
    , 1033, 
    121 S.E.2d 499
    , 503 (1961)).
         Wife argues husband failed to title the Fishersville
    property jointly, thereby breaching the contract.   The
    uncontested facts prove husband and wife reconciled based upon
    an unwritten agreement that he would purchase and title the
    Fishersville property jointly and that the property would become
    a marital asset.   Both husband and wife were contract purchasers
    for the Fishersville property.   Husband conceded he then changed
    his mind and purchased the property solely in his name.
         Husband later sold the Fishersville property for $210,000.
    The trial court used this sum to calculate wife's damages for
    husband's breach of the premarital agreement.   We agree with
    husband that the trial court erred.
         The uncontroverted evidence proves the premarital agreement
    referred only to the New Hope property.   Neither party
    considered any other site prior to or at the time they
                                  - 10 -
    negotiated and signed the premarital agreement.    Joint ownership
    of the Fisherville property was considered only as a condition
    of the reconciliation, not as an amendment to the original
    premarital agreement.   Parol evidence is permitted only to
    clarify the parties' intentions at the time of negotiations and
    contract formation, not after the contract is signed.     See
    Seaboard Air Line R.R. Co., 202 Va. at 1033, 121 S.E.2d at 503
    (noting courts can consider the "facts and circumstances
    surrounding the parties when they made the contract" (emphasis
    added)).   Even if the parties intended to amend their original
    contract, wife did not have the premarital agreement amended in
    writing, as required by its provisions, when she agreed to
    return to husband.
         The language of the contract, although vague, does not
    suggest that any real estate in the county will be jointly
    titled.    The reference to "four acres," especially considering
    the parol evidence that the parties had chosen the four acres in
    New Hope prior to signing the agreement, indicates the
    premarital agreement referred to a specific parcel.
         Each party was represented by counsel.    If wife wanted any
    real estate in the county jointly titled, she could have made
    that demand.   She did not do so.   Instead, she asks this Court
    to expand the original intention of the parties.   As we cannot
    use parol evidence to vary or contradict the original terms of
    the agreement, we cannot interpret the contract as wife
                                   - 11 -
    suggests.   See Tuomala, 252 Va. at 374, 477 S.E.2d at 505.    See
    also Lansdowne Dev. Co. v. Xerox Realty Corp., 
    257 Va. 392
    , 400,
    514 S.E.2d 157
    , 161 (1999) ("[W]e will not insert by
    construction, for the benefit of a party, a term not express in
    the contract.").
         The trial court erred in holding husband breached the
    premarital agreement by failing to jointly title the
    Fishersville property.    That parcel is not included in the
    premarital agreement. 6   The trial court effectively reformed the
    agreement to include a broader provision encompassing any home,
    wherever located, when only the New Hope property was the object
    of the agreement.   No evidence of mutual mistake,
    misrepresentation, or fraud exists which would allow such a
    reformation of the agreement. 7   See Ward v. Ward, 
    239 Va. 1
    , 5,
    387 S.E.2d 460
    , 462 (1990).
         Since the seller, husband, and wife agreed the Fishersville
    property would be conveyed to both husband and wife, wife may
           Wife makes no argument based on the New Hope property's
    value, and no evidence on its value, with or without a house,
    was presented at trial. The only theory of breach, and the only
    evidence for possible damages, presented by wife was the failure
    of husband to jointly title the Fishersville property.
           Wife does not contend fraud or unconscionability. She
    does not argue husband deliberately or fraudulently failed to
    build a residence on the New Hope parcel. In fact, wife does
    not dispute husband's testimony that he could not secure access
    to that parcel. At trial, she agreed with husband's proffer
    "that there was no practical roadway through that property to
    give access to the four acres."
                                   - 12 -
    have some recourse for the violation of that sales contract.
    Here, however, wife seeks relief under the premarital agreement,
    not the Fishersville property contract.   As the premarital
    agreement referred only to the New Hope property, the trial
    court erred in awarding her the requested relief of one-half of
    the Fishersville property's sale price.
         We conclude the trial court erred in concluding husband
    breached the premarital agreement when he failed to jointly
    title the Fishersville property and in awarding damages based on
    that sale.   We vacate the $105,000 judgment against husband and
    enter final judgment in favor of husband.
                                           Reversed and final judgment.
                                  - 13 -
    Bumgardner, J., dissenting.
         I respectfully dissent and would affirm the trial court.
         The contract was ambiguous.    The trial court properly
    considered the extrinsic evidence when construing the agreement
    between the parties, when determining the true intention of the
    parties at the time they entered the contract.   It heard the
    parties and assessed their credibility firsthand.
         The trial court found that the parties intended the wife to
    have an interest in the marital residence they would build after
    the marriage.   That was the true intention at the time they
    entered the contract being construed.   The parties did not
    intend to limit the wife's interest to a residence they
    contemplated building behind the house where the husband lived
    at that time.   The finding comports with the supporting evidence
    of the situation of the parties, the subject matter of their
    agreement, and the object they intended to accomplish.     Reid v.
    259 Va. 356
    , 367, 
    527 S.E.2d 137
    , 143 (2000) (citing High
    Knob, Inc. v. Allen, 
    205 Va. 503
    , 507-08, 
    138 S.E.2d 49
    , 53
    (1964)).   The finding further comports with portions of the
    husband's own testimony and with his conduct in subsequently
    executing a joint contract to purchase the residence they
    actually acquired.
         The record supports the trial court's findings.     I would
    hold the trial court granted appropriate equitable relief by
    decreeing the relief that it did.
                                  - 14 -