W Douglas Drumheller v. Sandra Jean Blair Drumhellr

• Court: Court of Appeals of Virginia
• Decided: October 1, 2002
• Docket: 0163023
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Annunziata, Bumgardner and Frank Argued at Salem, Virginia

W. DOUGLAS DRUMHELLER MEMORANDUM OPINION * BY v. Record No. 0163-02-3 JUDGE ROBERT P. FRANK OCTOBER 1, 2002 SANDRA JEAN BLAIR DRUMHELLER

FROM THE CIRCUIT COURT OF AUGUSTA COUNTY 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

part:

[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.

* * * * * * *

1 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

2 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

3 The final order further explained the trial court's determination:

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. 4 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, 480, 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

5 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

(1984).

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 parties.

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

6 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. 7 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.

CONCLUSION

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.

Boyle, 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 -