Guan v. Ran
| Decision Date | 07 February 2017 |
| Docket Number | Record No. 0968-16-4 |
| Court | Virginia Court of Appeals |
| Parties | ALICE JIN-YUE GUAN v. BING RAN |
UNPUBLISHED
Present: Judges Alston, Chafin and Senior Judge Annunziata
Argued at Alexandria, Virginia
FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA
Norman A. Thomas (Norman A. Thomas, PLLC, on briefs), for appellant.
Christopher W. Schinstock (Christopher W. Schinstock, PLLC, on brief), for appellee.
In this domestic relations case, Alice Jin-Yue Guan and Bing Ran appeal an order entered by the Circuit Court of the City of Alexandria on May 13, 2016. Guan challenges the circuit court's decision in three assignments of error. Specifically, she contends that the circuit court erred by: (1) failing to order Ran to pay $250,000 in delinquent spousal support, (2) finding that she breached the parties' October 15, 2008 post-divorce agreement, and (3) refusing to award her attorney's fees and costs as the prevailing party in the litigation.
Ran challenges the circuit court's decision in three cross-assignments of error. He contends that the circuit court erred by: (1) ordering him to pay $50,000 in spousal support contrary to the express wording of the parties' October 15, 2008 post-divorce agreement, (2) refusing to award him attorney's fees and costs as the prevailing party in the litigation, and (3) "finding and ruling that the alleged overpayments . . . of $2,462,083.00 taken by [Guan]constituted her separate property and [were] not offset against amounts subsequently accruing to her under the [agreements of the parties]."
For the reasons that follow, we conclude that the parties' October 15, 2008 post-divorce agreement did not effectively waive or modify the circuit court's prior spousal support award. Subsequently, we conclude that Guan did not breach the October 15, 2008 agreement by petitioning the circuit court to collect the $250,000 spousal support award at issue. Additionally, we conclude that the terms of the October 15, 2008 agreement did not entitle Ran to an offsetting distribution of $2,462,083 based on the payments that Guan received from the parties' business in 2008. In light of these decisions, we conclude that it will be necessary for the circuit court to reconsider its decision pertaining to the award of attorney's fees and costs pursuant to the agreement originally incorporated into the parties' final decree of divorce. Accordingly, we affirm the circuit court's decision in part, reverse its decision in part, and remand this case for further consideration.
As the parties are fully conversant with the record in this case and this memorandum opinion carries no precedential value, we recite only those facts and incidents of the proceedings as are necessary to the parties' understanding of the disposition of this appeal. Under settled principles of appellate review, we view the evidence in the light most favorable to the prevailing party in the circuit court, and we grant that party the benefit of any reasonable inferences flowing from the evidence presented. Congdon v. Congdon, 40 Va. App. 255, 258, 578 S.E.2d 833, 835 (2003). Thus, in the context of this appeal, we view the evidence pertaining to the issues raised in Guan's assignments of error in the light most favorable to Ran and the evidence pertaining to the issues raised in Ran's assignments of error in the light most favorable to Guan. So viewed, the evidence is as follows.
Guan and Ran married in China in 1985. In that same year, they migrated to the United States and pursued educational opportunities.1 In 1996, the parties founded Advanced Systems Technology and Management, Inc. ("AdSTM"), a science and technology consulting firm that developed advanced applications for computer modelling and simulation. Although Ran managed many aspects of the business, Guan was the sole shareholder of AdSTM.
As Guan was classified as an individual with a "social disadvantage" because she was an Asian-Pacific American, AdSTM was eligible to enroll in the Small Business Administration's Section 8(a) program. This program provided AdSTM with an advantageous position when bidding for federal contracts. Over time, AdSTM grew into a very successful business that earned millions of dollars each year.
When Guan and Ran separated in 2006, they began arguing about their respective roles in AdSTM. They disagreed about their respective stock ownership percentages in the company, and their rights to manage the company and control its finances. In order to resolve these disputes, the parties entered into a series of agreements addressing their rights concerning AdSTM and other issues.2
On December 15, 2006, the parties executed an agreement entitled "Parenting, Support and Property Settlement Final Agreement" ("PSA"). The parties' PSA addressed issues related to their children, their rights to spousal support, and their marital property and interests inAdSTM. The circuit court affirmed, ratified, and incorporated this agreement into the parties' final divorce decree entered on November 30, 2007.
Paragraph 5 of the PSA established Ran's spousal support obligation. That provision stated, in pertinent part, that "[Ran] shall pay [Guan] a lump sum of $250,000 as spousal support, payable in five consecutive years with $50,000 per year, starting July 5th, 2008." The provision also waived Ran's right to receive spousal support from Guan. When addressing the spousal support obligation established in the PSA, the parties' final decree of divorce noted that "the support obligation as it becomes due and unpaid creates a judgment by operation of law."
Paragraph 8 of the PSA addressed the division of the parties' personal property. Notably, subsection (d) of that paragraph addressed a prior $1,800,000 distribution made to Guan from AdSTM. Paragraph 8(d), entitled "Distribution of Funds," stated:
[Ran] deposited certain funds into [Guan's] bank account on November 3, 2006, and [Guan] acknowledges receipt of these funds. These funds shall be [Guan's] sole and separate property. As soon as AdSTM has enough funds after paying salaries, expenses, taxes, [and] health insurance, [Guan] or [Ran] shall deposit the same amount to [Ran] and this fund shall be [Ran's] sole and separate property. To maintain AdSTM's operating funds, [Ran] agrees to take his amount in installments.
Paragraph 9 of the PSA addressed the parties' interests in AdSTM. Among other things, Paragraph 9 established that Ran would purchase 510 shares of AdSTM from Guan on July 5, 2008, and thereby become the majority shareholder of the company.3 Paragraph 9 also stated that "[d]uring the period through July 5th, 2008, neither [Ran] nor [Guan] shall receive a higher income than the other from AdSTM, and the income of each party shall be not less than $150,000 per year." Additionally, Paragraph 9 addressed the future managerial and financial roles of Guan and Ran in the ongoing operation of AdSTM.
Paragraph 16 of the PSA addressed the settlement of any potential disputes arising under the agreement. In Paragraph 16, Guan and Ran agreed to try to resolve any future disputes involving the PSA without resorting to litigation. To that end, the parties agreed to attempt to initially resolve disputes through mediation. Paragraph 16, however, allowed either party to present a dispute arising under the PSA to a court of proper jurisdiction when mediation failed to resolve the dispute or did not "appear to be productive." Paragraph 16 then stated:
If either party files a petition charging the other with a breach of any of the provisions of this agreement and the matter is heard by a court, the prevailing party shall have the right to have all of his or her reasonable legal fees and costs in the matter reimbursed by the party who does not prevail.
Paragraph 19 of the PSA addressed the ability of the parties to modify the agreement in the future. That provision stated, "No modification or waiver of any of the terms of this agreement shall be valid unless in writing and signed by both parties and notarized at [Guan's] bank." Paragraph 19 also established that "[t]he failure of either party to insist upon the strict performance of any provision of this agreement shall not be construed as a relinquishment of such right."
Shortly before Ran was scheduled to purchase the majority of the shares of AdSTM from Guan pursuant to the PSA, Guan withdrew approximately $2,400,000 from the company's accounts through a series of distributions.4 Ran objected to the distributions, and disagreements arose concerning the parties' interests in AdSTM. The parties agreed to renegotiate their interests in the company in an effort to amicably resolve their dispute.
After several months of negotiation, the parties executed an amendment to their PSA on October 15, 2008. In the amendment, Ran agreed to allow Guan to keep the distributions shereceived from AdSTM in 2008 and Guan agreed to waive Ran's spousal support obligation. Specifically, Paragraph 2 of the amendment stated:
[Guan] is entitled to all the [AdSTM] distributions made to her and the taxes AdSTM paid to IRS and VA State for [Guan] from 1/1/2008-7/1/2008, and those payments are [Guan's] sole property. [Ran] agrees that those payments were made correctly and [Ran] shall not claim any part of it. In addition [Ran] agrees that the wording of "income" in the original agreement citing: ". . . Neither [Ran] or [Guan] shall receive a higher income than the other from AdSTM . . ." means salary and bonus only. And the spousal support in the original agreement ([signed] on Dec. 15, 2006 between [Ran] and [Guan]) is voided. [Ran] shall not pay any spousal support to [Guan]. And [Guan] shall not claim any spousal support under any circumstances.
The terms set forth in Paragraph 2 were expressly made contingent on Ran's purchase of Guan's home pursuant to another section of the amendment.
Paragraph 3 of the amendment clarified each part...
To continue reading
Request your trial