Opinion
Record No. 0803-94-4
Decided: April 18, 1995
FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA, Donald H. Kent, Judge
George W. Campbell, Jr. (George W. Campbell, Jr. Associates, on briefs), for appellant.
Susan Massie Hicks (Thomas P. Sotelo; Leiner Hicks, on brief), for appellee.
Present: Judges Barrow, Koontz and Senior Judge Duff
Pursuant to Code Sec. 17-116.010 this opinion is not designated for publication.
In this appeal, we hold that the provision in the separation agreement of the parties concerning the wife's deferred compensation was descriptive and did not contain a guarantee by the husband that the compensation would be paid by him if he did nothing to affect its payment.
The final decree of divorce incorporated the terms of a property settlement agreement between the parties. The agreement included the following provision, at issue in this appeal:
Husband agrees that Wife has a Deferred Compensation Annuity Plan (Salary Continuation Agreement dated May 16, 1985) through Technology Applications, Inc., which shall begin to render an annuity in the amount of TWENTY FIVE THOUSAND and NO/100 DOLLARS ($25,000.00) per year upon Wife reaching the age of sixty-five (65) years and continuing for ten (10) years thereafter. Husband agrees that such plan shall remain in full force and effect and that Wife shall continue to have said rights in such plan. Husband shall take no steps or permit any steps to be taken by Technology Applications, Inc. or any successor company which will nullify or void or in any way change Wife's right to said annuity or the amounts to which Wife is entitled. If at any time Wife's rights to said plan are changed, Husband agrees to save Wife harmless from said actions and indemnify her in any amount to which she would be entitled had the plan not been changed.
When the wife reached sixty-five years old, Technology Applications, Inc., of which the husband is Chairman of the Board of Directors, Chief Executive Officer, President, and an eighty-six percent owner, began to pay her at the rate of $12,500 per year rather than $25,000. This payment was the amount to which she was entitled under the benefit plan, based on the length of her employment with the corporation. The trial court found "that the '$25,000.00' figure used in the first paragraph is descriptive language that identifies the agreement and is not a guarantee"; therefore, the court did not require the husband to pay the remainder of the sum himself.
Property settlement agreements incidental to divorce proceedings are subject to "the same rules of interpretation applicable to contracts generally." Tiffany v. Tiffany, 1 Va. App. 11, 15, 332 S.E.2d 796, 799 (1985). The parties agree that paragraph 4(e) (ii) of the PSA is "clear and unambiguous" thus, the meaning and effect of the provision is a question of law for this court. Id. We must determine, from the four corners of the agreement and its language, the intent of the parties. Pettibone Wood Manufacturing Co. v. Pioneer Construction Co., Inc., 203 Va. 152, 157, 122 S.E.2d 885, 889 (1961). In doing so, we endeavor to give meaning to all the words. Paramount Termite Control Co., Inc. v. Rector, 238 Va. 171, 174, 380 S.E.2d 922, 925 (1989). We must consider the parties' situation and the subject matter and purpose of the agreement. High Knob, Inc. v. Allen, 205 Va. 503, 508, 138 S.E.2d 49, 53 (1964). However, we are not free to look beyond the contract itself. Ross v. Craw, 231 Va. 206, 212, 343 S.E.2d 312, 316 (1986).
In this case, the husband agreed that the deferred compensation plan provided the wife with certain benefits. He agreed that he would not act to change those benefits and that he would prevent others from changing them. Further, he agreed that, if the wife's benefits were ever changed, he would indemnify her for any loss from such change.
The terms of the husband's agreement do not include a guarantee of the wife's benefits unless the benefits should be changed. The benefits were not changed. Either both parties were mistaken when they executed the agreement or one of them knew the correct amount of the benefits and misrepresented that knowledge when they signed the agreement.
The wife does not assert a mutual mistake of fact, nor does she assert that the husband misrepresented the amount of her benefits. Therefore, the trial court limited its concern, and so must we, to whether the agreement required the husband to pay the benefits if the plan did not. Thus limited, we conclude that, because the husband's agreement did not guarantee the wife's benefits under the plan, except if changed, the trial court correctly held that the husband is not required to pay the wife the difference between the amount of the benefits described in the agreement and the amount actually paid. We, therefore, affirm the decree of the trial court.
Affirmed.
I would hold that the language of the Property Settlement Agreement, quoted by the majority, evinced an intent on the part of the husband to see that the wife received $25,000 per year from the annuity plan.
In determining the intent of the agreement we must consider the situation of the parties at the time the agreement was executed. In my view this becomes highly relevant in the present case. While the wife was the beneficiary of an annuity plan through the Corporation, the undisputed facts were that the husband was the president, chairman of the board, chief executive officer, and an eighty-six percent stockholder of the Corporation. That was the "situation of the parties" at the time of the agreement. For all practical purposes the husband was the Corporation.
When viewed in that light the language of the agreement evidences an undertaking on the husband's part which might not be present were he a stranger to the Corporation.
For these reasons, I respectfully dissent.