COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Coleman and Lemons ∗ Argued at Richmond, Virginia
SHARON LUANNE WALKER MEMORANDUM OPINION ∗∗ BY v. Record No. 1872-99-2 JUDGE SAM W. COLEMAN III JULY 11, 2000 CHARLES R. PFEIFFER
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND Theodore J. Markow, Judge
Lori A. Rinaldi (Bruce E. Arkema; Cantor, Arkema & Edmonds, P.C., on briefs), for appellant.
S. Keith Barker (S. Keith Barker, P.C., on brief), for appellee.
This appeal involves the construction and enforcement of a
covenant in the parties' Separation and Property Settlement
Agreement dealing with their jointly-owned time share. The
covenant concerned how the parties would pay and be responsible
for the mortgage on the time share and how they would ultimately
liquidate the property and distribute the assets. The pertinent
provision of the Agreement provided as follows:
∗ Justice Lemons participated in the hearing and decision of this case prior to his investiture as a Justice of the Supreme Court of Virginia. ∗∗ Pursuant to Code § 17.1-413, recodifying Code § 17-116.010, this opinion is not designated for publication. The parties agree that the Voyager Beach Club time share financed by loan account no. 2500202-0070 will be listed and sold by them for $9,000.00, and any net proceeds or shortfall will be income or funded by wife solely, and she agrees to save and hold harmless husband for any liability on any loan or advance of monies for the purchase or financing of the payment of the time share. Husband will make the monthly payments on the time share and any annual assessments, from the date of this agreement; the parties agree that while the time share is being marketed it shall be rented by the Voyager Beach Club management and the proceeds shall be applied by them toward the monthly payments which accrue after this agreement or shall be the property of husband in an amount not to exceed the monthly payments on the time share he has paid, and the balance of any excess beyond what husband has so paid, if any, shall be the property of the wife.
The trial court construed the covenant to require that
Sharon Luanne Walker, the former wife, reimburse Charles R.
Pfeiffer, her former husband, $4,872.58 for mortgage payments he
made on the time share plus interest at the statutory rate from
January 2, 1996, plus costs. The court further ordered that the
parties list the time share for sale for $9,000, "or for such
other amount as they may agree." The court denied Pfeiffer's
request for reimbursement of the payment for the annual
assessments on the time share and denied both parties' requests
for attorney's fees.
On appeal, Walker argues that the trial court erred in:
(1) determining that it had jurisdiction; (2) ordering her to
- 2 - reimburse Pfeiffer $4,872.58 for mortgage payments he made;
(3) ordering her to pay interest on the sum from January 2, 1996,
and costs; and (4) ordering the parties to sell the time share for
$9,000 or "for such other amount as they may agree." Pfeiffer
cross-appeals, arguing that the court erred by failing to order
Walker to reimburse him for the annual assessments paid on the
time share and by failing to order Walker to pay attorney's fees.
We find that the trial court retained jurisdiction and that
the "save and hold harmless" clause is unambiguous and requires
Walker to reimburse Pfeiffer for mortgage payments made on the
time share. We further find that the "save and hold harmless"
clause does not require Walker to reimburse Pfeiffer for the
annual assessments he made. We also find that the award of
prejudgment interest and costs and the denial of attorney's fees
was not an abuse of discretion. Accordingly, we affirm the
foregoing rulings of the trial court construing the separation
agreement. However, we find that the trial court erred by
construing the covenant to require that the parties list the time
share for sale "for such other amount as they may agree," and we
reverse and vacate that portion of the order.
I. BACKGROUND
The parties were divorced by decree dated October 17, 1990,
that affirmed, ratified, and incorporated the Separation and
- 3 - Property Settlement Agreement which included the foregoing
covenant concerning the Voyager Beach Club time share.
From 1990 through 1999, the time share was never listed for
sale. In 1999, Pfeiffer filed a motion to hold Walker in contempt
of court for failure to comply with the provision in the
separation agreement to "save and hold harmless [Pfeiffer] for any
liability on any loan or advance of monies for the purchase or
financing of the payment of the time share" and the provision that
purportedly required her to market and sell the time share.
Walker responded, asserting that the court lacked jurisdiction
because the divorce decree was final and any further construction
or enforcement of the Separation Agreement was not a part of the
divorce action.
After a hearing, the trial judge found that the court
retained jurisdiction to enforce the order by a contempt
proceeding, which required the court to construe the separation
agreement. The court ruled, however, that Walker was not in
contempt of the court's order. The trial judge found that
although the terms of the agreement required that the time share
be listed and sold, Walker did not bear sole responsibility for
the default in having the property sold. The court further held
that the provision in the separation agreement was unambiguous and
obligated Walker to reimburse Pfeiffer for the mortgage payments
he had made on the time share after the divorce decree was
- 4 - entered. Walker argued that the covenant only required her to pay
or be responsible for any outstanding mortgage payments or balance
owing when the time share was sold, which was when she would be
entitled to "the balance of any excess beyond what husband has so
paid." The trial judge found that, under the terms of the
agreement, Pfeiffer was not entitled to reimbursement of the
annual fees paid by him for the time share. The trial judge
ordered that the parties list the time share for sale for $9,000,
or "for such other amount as they may agree which is reasonably
calculated to produce a sale." The trial court denied both
parties' requests for attorney's fees.
II. ANALYSIS
A. Jurisdiction
Walker asserts that although the court retains jurisdiction
to enforce its decrees, the court lacked jurisdiction to interpret
and amend the separation agreement. Walker argues that Rule 1:1
bars the trial court from amending or modifying the separation
agreement because more than twenty-one days have elapsed after the
final divorce decree was entered.
It is well settled that court orders become final twenty-one
days after entry. See Rule 1:1. However, a trial court retains
jurisdiction to construe and enforce a final divorce decree that
has incorporated a property settlement and separation agreement.
See Gloth v. Gloth, 154 Va. 511, 548-51, 153 S.E. 879, 891-92
- 5 - (1930) (stating that a trial court has jurisdiction in a divorce
suit to enforce the terms of a settlement agreement when it
incorporates them in its decree); see also McLoughlin v.
McLoughlin, 211 Va. 365, 368, 177 S.E.2d 781, 783 (1970) (stating
that prior to the enactment of Code § 20-109.1, the incorporation
of a settlement agreement "meant the court could use its contempt
power to enforce the agreement"); Casilear v. Casilear, 168 Va.
46, 55, 190 S.E. 314, 316-17 (1937) (stating that a trial court
retains jurisdiction after a final decree of divorce to enforce
agreements between the parties). The Supreme Court stated in
McLoughlin, 211 Va. at 368 n.1, 177 S.E.2d at 783 n.1, that a
divorce court may incorporate a property settlement agreement in a
final divorce decree and may thereafter construe and enforce the
decree through its contempt power and the enactment of Code
§ 20-109.1 merely facilitated the existing power of a court to
enforce an incorporated agreement. Accordingly, we find that the
trial court had jurisdiction to enforce the separation agreement.
B. Separation Agreement
1. Reimbursement for Mortgage Payments
We next consider whether the trial court erred by requiring
Walker to reimburse Pfeiffer for the mortgage payments he had made
on the time share. Walker argues that the provision that she
"agrees to save and hold harmless husband for any liability on
any loan or advance of monies for the purchase or financing of
- 6 - the payment of the time share" does not require that she
reimburse Pfeiffer for the mortgage payments he had made on the
time share. Rather, she contends that the provision requires
only that she hold Pfeiffer harmless for any liability remaining
on the loan when the time share is sold. We disagree.
"Property settlement agreements are contracts; therefore, we
must apply the same rules of interpretation applicable to
contracts generally." Tiffany v. Tiffany, 1 Va. App. 11, 15, 332
S.E.2d 796, 799 (1985). "Where the agreement is plain and
unambiguous in its terms, the rights of the parties are to be
determined from the terms of the agreement and the court may not
impose an obligation not found in the agreement itself." Jones v.
Jones, 19 Va. App. 265, 268-69, 450 S.E.2d 762, 764 (1994)
(citation omitted). "A contract term is not ambiguous merely
because the parties disagree as to the term's meaning." Bergman
v. Bergman, 25 Va. App. 204, 211, 487 S.E.2d 264, 267 (1997).
"The question of whether a writing is ambiguous is not one of fact
but of law." Langman v. Alumni Ass'n of the Univ. of Virginia,
247 Va. 491, 498, 442 S.E.2d 669, 674 (1994) (citation omitted).
"Thus, we are not bound by the trial court's conclusions on this
issue, and we are permitted the same opportunity as the trial
court to consider the contract provisions." Tuomala v. Regent
University, 252 Va. 368, 374, 477 S.E.2d 501, 505 (1996)
(citations omitted).
- 7 - We hold that the phrase, "and [Walker] agrees to save and
hold harmless [Pfeiffer] for any liability on any loan or advance
of monies for the purchase or financing of the payment of the time
share[,]" is not ambiguous. Because no ambiguity in the terms of
the agreement exists, "we are not at liberty to search for the
meaning of the provisions beyond the pertinent instrument itself."
Smith v. Smith, 3 Va. App. 510, 514, 351 S.E.2d 593, 596 (1986)
(citations omitted). The language of the covenant requires that
Walker will reimburse Pfeiffer for payments he made on the loan
for the purchase or financing of the time share. The language
expressly provides that Walker will "save and hold harmless"
Pfeiffer for "any liability on any loan or advance of monies for
the purchase or financing of the payment of the time share." The
purpose of the provision is clear. The wife would receive the
proceeds from the sale of the time share; however, she would be
required to reimburse Pfeiffer or "save and hold [him] harmless"
for any mortgage payments that he had made on the property.
Nothing in the language of the "save and hold harmless" clause
requires that Pfeiffer wait until the property is sold to recover
or seek reimbursement for the mortgage payments. Thus, the trial
court did not err by construing the agreement to require Walker to
reimburse Pfeiffer $4,872.58, the amount Pfeiffer had expended in
mortgage payments, less the amount of rent received.
- 8 - 2. Interest and Costs
Walker argues that the trial court erred in assessing
interest on the judgment amount from January 2, 1996, and erred in
assessing court costs. She contends the separation agreement does
not provide for payment of interest or costs and that January 2,
1996 is an arbitrary date, which has no relation to the events in
this case. She argues that in the absence of a contractual
provision providing for interest, the court cannot assess
interest.
Code § 8.01-382 provides, in pertinent part, that:
[i]n any action at law or suit in equity, the verdict of the jury, or if no jury the judgment or decree of the court, may provide for interest on any principal sum awarded, or any part thereof, and fix the period at which the interest shall commence. The judgment or decree entered shall provide for such interest until such principal sum be paid. If a judgment or decree be rendered which does not provide for interest, the judgment or decree awarded shall bear interest from its date of entry . . . .
The award of prejudgment interest is a matter committed to the
sound discretion of the trier of fact. See Marks v. Sanzo, 231
Va. 350, 356, 345 S.E.2d 263, 267 (1986) (stating that "whether
interest should have been awarded and, if so, from what date
interest should run, were matters within the sound discretion of
the chancellor"); see also Ragsdale v. Ragsdale, 30 Va. App. 283,
292, 516 S.E.2d 698, 702 (1999).
- 9 - "The award of prejudgment interest is to compensate Plaintiff for the loss sustained by not receiving the amount to which he was entitled at the time he was entitled to receive it, and such award is considered necessary to place the [plaintiff] in the position he would have occupied if the party in default had fulfilled his obligated duty."
Marks, 231 Va. at 356, 345 S.E.2d at 267 (quoting
Employer-Teamsters Joint Council No. 84 v. Weatherall Concrete,
Inc., 468 F. Supp. 1167, 1171 (1979)).
Here, we find no abuse of discretion in the trial court's
award of prejudgment interest. As the trial court noted, the
separation agreement contemplated that the time share would be
marketed and sold much earlier, probably before the mortgage was
retired. However, the mortgage payments were paid in full by
Pfeiffer before the property was sold. Accordingly, because the
separation agreement provided that Walker would reimburse Pfeiffer
for the mortgage payments and Pfeiffer has satisfied the debt in
full, the award of interest was not an abuse of discretion since
it compensated Pfeiffer for the debt from the date incurred.
Moreover, the trial court did not abuse its discretion by
arbitrarily fixing the date from which the interest should run
from January 2, 1996, a date after which Pfeiffer had paid the
entire loan.
A court of equity has "discretion . . . over the subject of
costs." Code § 17.1-600. "[I]n the exercise of this discretion
- 10 - the [court] should award costs in favor of the party or parties
'substantially prevailing.'" McLean v. Hill, 185 Va. 346, 351, 38
S.E.2d 583, 586 (1946) (interpreting former Code § 14.1-177)
(citations omitted). Here, although not finding that Walker was
solely responsible for the default, the trial court found that
Pfeiffer, who instituted the show cause proceeding, was entitled
to reimbursement of the funds expended to pay the mortgage
payments. See Smith v. Woodlawn Constr. Co., 235 Va. 424, 431,
368 S.E.2d 699, 703 (1988) (holding it to be an abuse of
discretion if costs are not awarded to the party substantially
prevailing below). Accordingly, we find that the award of costs
to Pfeiffer, the party substantially prevailing below, was not an
abuse of discretion.
3. Sale of Time Share
Last, Walker argues that the trial court erred in ordering
the parties to list the time share for sale at $9,000 or "for such
other amount as they may agree which is reasonably calculated to
produce a sale." She contends that the court's order is a
modification of the terms of the separation agreement, which
unequivocally provided that the parties would list and sell the
property only if it sold for at least $9,000.
We find that the phrase "for such other amount as they may
agree which is reasonably calculated to produce a sale" contained
in the court's order is a modification of the separation
- 11 - agreement. Although the language of the agreement contemplates
that the time share may be sold for less than $9,000 by providing
that any shortfall from the sale of the property in which the
proceeds do not produce an amount sufficient to pay the mortgage
balance be funded by Walker, the trial court erred in ordering the
parties to list the property for sale for less than $9,000. But
cf. Stanley's Cafeteria, Inc. v. Abramson, 226 Va. 68, 72, 306
S.E.2d 870, 873 (1983) (stating that "[c]ontracting parties may
. . . modify the terms of their contract by express mutual
agreement"). Therefore, even though the shortfall provision and
the parties' correspondence envision that the property may sell
for less than the $9,000 listing price, unless the parties
mutually agree to modify the terms of the separation agreement
which provides that the property is to be listed for $9,000, they
cannot be otherwise compelled to do so. See Stanley's Cafeteria,
226 Va. at 73, 306 S.E.2d at 873. Accordingly, we find that the
trial court erred by construing the agreement to compel the
parties to sell the time share for less than $9,000. Thus, we
reverse and vacate that portion of the order that required the
parties to list and sell the property "for such other amount as
they may agree which is reasonably calculated to produce a sale."
4. Reimbursement For Payment of Annual Assessments
In his cross-appeal, Pfeiffer argues that the trial court
erred in finding that he was not entitled to reimbursement for the
- 12 - annual fees paid on the time share. He argues that the annual
assessments were part of the "payment of the time share" and
because the "save and hold harmless" clause required that he be
held harmless for the payments, he was entitled to reimbursement
of these expenses.
We find that the "save and hold harmless" clause does not
require Walker to reimburse Pfeiffer for the annual assessments
paid on the time share. The term "payments" is unambiguous in
this case and, according to its plain meaning, the term applies
only to the mortgage payments. "When the terms of a disputed
provision are clear and definite, it is axiomatic that they are to
be applied according to their ordinary meaning." Smith, 3 Va.
App. at 514, 351 S.E.2d at 595-96 (citation omitted). In common
usage, "payment" is "something that is given to discharge a debt
or obligation." Webster's Third New International Dictionary 1659
(1981). The annual assessments include the costs for maintenance,
upkeep and cleaning, taxes and insurance, and replacement costs.
Thus, because the "save and hold harmless" clause only requires
repayment of the advance of monies for the purchase or financing
of the time share, which does not encompass the annual
assessments, the "save and hold harmless" clause is not applicable
to annual assessments.
- 13 - 5. Attorney's Fees
Pfeiffer argues that the trial court erred in denying his
request for attorney's fees. Pfeiffer asserts that Walker's
unwillingness to market and sell the time share was willful and
unjustified.
A trial court's denial of attorney's fees is reviewed only
for abuse of discretion. See Head v. Head, 24 Va. App. 166, 181,
480 S.E.2d 780, 788 (1997). Here, the trial court found that
Walker was not solely responsible for the default and failure to
market and sell the time share. The trial court noted "[t]he
problem is that these people refuse to cooperate to accomplish a
task which is mutually beneficial." We find no abuse of
discretion in the trial court's denial of attorney's fees.
Additionally, we deny Pfeiffer's request for attorney's fees on
appeal.
III. CONCLUSION
In summary, we find the trial court retained jurisdiction to
construe and enforce the separation agreement that was ratified
and incorporated in its final divorce decree; the separation
agreement was unambiguous and obligated Walker to reimburse
Pfeiffer for the mortgage payments he made on the time share after
the divorce decree was entered; and Pfeiffer was not entitled to
reimbursement for the annual assessment fees paid by him for the
time share. Further, we find that the trial court did not err by
- 14 - denying Pfeiffer's request for attorney's fees or ordering Walker
to pay interest on the judgment and to pay costs. Accordingly, we
affirm the trial court's order with respect to those issues.
However, we find that the trial court erred by ordering the
parties to list the time share for sale "for such other amount as
they may agree which is reasonably calculated to produce a sale"
and, therefore, we reverse and vacate that portion of the trial
court's order.
Affirmed, in part; reversed and vacated, in part.
- 15 -