Kenneth E. Plogger v. Betty R. Plogger ( 1997 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Bray and Fitzpatrick
Argued at Salem, Virginia
KENNETH E. PLOGGER
MEMORANDUM OPINION * BY
v. Record No. 1032-96-3 JUDGE LARRY G. ELDER
APRIL 22, 1997
BETTY R. PLOGGER
FROM THE CIRCUIT COURT OF ROCKBRIDGE COUNTY
George E. Honts, III, Judge
Philip H. Miller (Rhea & Miller, P.C., on
brief), for appellant.
No brief or argument for appellee.
Kenneth E. Plogger (husband) appeals an order of the trial
court specifically enforcing a separation agreement entered into
between himself and Betty R. Plogger (wife). He contends that
the trial court erred when it rejected his argument that the
separation agreement is unconscionable. For the reasons that
follow, we reverse.
Initially we consider wife's motion to dismiss husband's
appeal. Wife contends that husband's appeal should be dismissed
because he failed to file an appeal bond and because the record
does not contain either a transcript of the proceedings below or
a written statement of facts. We disagree.
Regarding the appeal bond, we grant husband's motion for
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
leave to pursue his appeal without surety because husband has
filed an affidavit establishing his indigence. See Code
§ 8.01-676.1(K) (stating that "[n]o person who is an indigent
shall be required to post security for an appeal bond").
We also conclude that husband failed to make part of the
record either a transcript or a written statement of facts signed
by the trial judge. However, even without the written statement
of facts, the record on appeal, which includes the trial court's
detailed opinion letter, is sufficient for us to consider
husband's argument regarding the validity of the separation
agreement. See Turner v. Commonwealth, 2 Va. App. 96, 99, 341
S.E.2d 400, 402 (1986) (stating that "[i]f the record on appeal
is sufficient in the absence of the transcript [or written
statement of facts] to determine the merits of the appellant's
allegations, we are free to proceed to hear the case").
The record on appeal establishes that the parties married in
1971, separated in mid-1994, and remain married. Wife does not
work because of a disability and receives monthly government
assistance of $354. In early August, 1994, husband and wife
negotiated the terms of the separation agreement (agreement),
which provided for the division of the parties' property and
monthly support for wife. In 1995, husband fell behind on his
monthly payments to wife.
On August 22, 1995, wife filed a bill of complaint seeking
payment of husband's arrearage and specific performance of the
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agreement's other terms. After a hearing, the trial court
ordered husband to pay his support payments that were past due
and to fulfill all of the terms of the agreement. The trial
court rejected husband's argument that the agreement was
unconscionable.
"[M]arital 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." Cooley v. Cooley, 220 Va. 749, 752, 263
S.E.2d 49, 52 (1980). The doctrine of unconscionability is
concerned with "the intrinsic fairness of the terms of the
agreement in relation to all attendant circumstances, including
the relationship between the parties." Derby v. Derby, 8 Va.
App. 19, 28, 378 S.E.2d 74, 78 (1989). "Behavior that might not
constitute fraud or duress in an arm's-length context may suffice
to invalidate a grossly inequitable agreement where the
relationship is utilized to overreach or take advantage of a
situation in order to achieve an oppressive result." Id. at 29,
378 S.E.2d at 79.
Determining whether a contract is invalid on the ground of
unconscionability is a two-step process. First, a court
considers whether there is a "gross disparity in value exchanged"
under the contract. Drewry v. Drewry, 8 Va. App. 460, 473, 383
S.E.2d 12, 18 (1989) (stating that "[a]bsent evidence of 'gross
disparity in value exchanged' there exists no basis to claim
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unconscionability"). If the court finds a gross disparity in the
value exchanged under the contract, it then considers the
circumstances of the formation of the contract to determine
whether "oppressive influences" affected the fairness of the
negotiating process such that the terms of the resulting
agreement were unconscionable. See id.; Derby, 8 Va. App. at 29,
378 S.E.2d at 79. "If inadequacy of price or inequality in value
are the only indicia of unconscionability, the case must be
extreme to justify equitable relief." Derby, 8 Va. App. at 28,
378 S.E.2d at 79. But, if the record indicates that oppressive
influences affected the negotiation process, a court is more
likely to grant relief on the ground of unconscionability. Id.
When reviewing a trial court's decision regarding the
validity of a separation agreement on appeal, we view the
evidence in the light most favorable to the prevailing party
below. Pillow v. Pillow, 13 Va. App. 271, 273, 410 S.E.2d 407,
408 (1991) (citing Derby, 8 Va. App. at 26, 378 S.E.2d at 77).
We hold that the trial court erred when it concluded that
the agreement was not unconscionable. The agreement in this case
imposes a shocking monthly support obligation upon husband that
was not discussed by the parties during their brief negotiation
and that wife knew was essentially impossible for him to perform.
The separation agreement provides for a gross disparity in
value exchanged. Under the agreement, husband relinquished his
ownership rights to nearly all of the marital property, including
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the marital home and furnishings and an automobile. In addition,
the agreement imposes upon husband the onerous burden of paying
$1,200 of his $1,386 monthly income to wife for two years. The
agreement leaves husband with $2,232 a year on which to live
while wife's income from the agreement and her government
assistance is $1,554 per month.
The agreement was drafted by wife's attorney, and the trial
court found that husband signed without reading the agreement.
The trial court found that wife chose the figure of $1,200 to pay
off the parties' revolving credit account debt. Husband's
unrebutted testimony was that this figure was never discussed by
the parties. The fact that wife lived with husband prior to
their separation and signed the parties' tax returns in 1993 and
1994 indicates that she was aware of husband's modest annual
income. Husband's support obligation "shocks the conscience"
because it leaves him with just $186 to meet his monthly
expenses. In light of wife's knowledge of husband's finances,
wife was overreaching when she sought without negotiation an
amount of monthly support that would leave him virtually
penniless. See Williams v. Williams, 306 Md. 332, 341, 508 A.2d
985, 990 (1986) (holding that a separation agreement was
unconscionable when it imposed upon husband a monthly support
obligation that was impossible for him to perform and that was
not negotiated by the parties).
For the foregoing reasons, the order of the trial court
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enforcing the separation agreement is reversed.
Reversed.
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