Ryan v. Ryan
|01 December 2006
|640 S.E.2d 64
|Martha F. RYAN, Appellant, v. Charles E. RYAN Appellee.
|West Virginia Supreme Court
Syllabus by the Court
2. "A mutual mistake is one which is common to all parties, wherein each labors under the same misconception respecting a material fact or provision within the agreement." Syl. Pt. 4, Smith v. Smith, ___ W.Va. ___, 639 S.E.2d 711 (2006) (No. 33063).
3. A contract may not be reformed or rescinded based upon a mutual mistake of fact if the mistake relates to a mistaken belief, judgment, or expectation as to future, rather than past or present, facts, occurrences or events.
4. Syllabus point 3, Chafin v. Wellman, 156 W.Va. 236, 192 S.E.2d 490 (1972).
James Wilson Douglas, Sutton, Counsel for Martha F. Ryan.
Mark A. Swartz, Allyson H. Griffith, Charleston, Counsel for Charles E. Ryan.
The Appellant herein and plaintiff below, Martha F. Ryan, appeals from an order of the Circuit Court of Kanawha County, wherein the court refused Mrs. Ryan's appeal from an order of the Family Court of Kanawha County and thereby affirmed it. The family court had denied Mrs. Ryan's petition for modification, and subsequent prayer for voidance, of a property settlement agreement and an amendment thereof between herself and her former husband, Appellee Charles E. Ryan. By her filings in the family court, Mrs. Ryan sought to extend Mr. Ryan's contractual obligation to provide alimony support to her beyond February 2004. After a careful review of the record and briefs, and having heard the arguments of the parties, we affirm.
The Ryans were divorced by bifurcated order of the Circuit Court of Kanawha County, dated December 27, 1993. They subsequently entered into a Property Settlement Agreement on March 1, 1994 (hereinafter "Property Agreement" or "Agreement"), which was approved, confirmed and ratified by a final order of the circuit court entered on May 2, 1994.
The Property Agreement required Mr. Ryan, commencing March 1, 1994, to pay Mrs. Ryan $6,000 per month, as alimony, for a period of twelve years ending with Mr. Ryan's February 2006 payment. The Agreement also provided, however, that if Mrs. Ryan sold her stock in R-M, Inc. for $80,000 or more within ten years of the Agreement, then Mr. Ryan's alimony obligation was to be ten years instead of twelve years. Therefore, if Mrs. Ryan received the said payment for her stock, the alimony obligation of Mr. Ryan would end after the February 2004 payment. A further provision of the Agreement barred Mrs. Ryan from "petition[ing] the Court for an increase in the monthly alimony for said twelve(12) year period."
Mr. Ryan timely made his alimony payments to Mrs. Ryan pursuant to the Agreement. In a May 28, 1999, Amendment to their Agreement (hereinafter "Amendment"), the parties acknowledged that Mrs. Ryan had so-elected to sell her stock and had received the necessary sum thereby reducing Mr. Ryan's alimony-payment obligation from twelve to ten years, ending with the February 2004 payment.1
On or about January 12, 2004, less than a month before Mr. Ryan's last obligated alimony payment was due, Mrs. Ryan filed a petition in the Family Court of Kanawha County requesting modification of the Property Agreement and of the Amendment to extend Mr. Ryan's alimony payments to her beyond the February 2004 payment. In support of her Petition seeking modification of the Agreement and Amendment, Mrs. Ryan claimed that both she and Mr. Ryan had labored under a mutual mistake of fact at the time of the Agreement and Amendment. Specifically, she contended that both she and Mr. Ryan mistakenly believed at the time of the Agreement and Amendment that the investment of the assets allotted to her therein would generate sufficient income to support her and thus make unnecessary continued payments of alimony after February 2004. Mrs. Ryan complained that her investment income had, in actuality, fallen short of what she contends that she and Mr. Ryan had expected.2
The 1999 Amendment was a mutually negotiated agreement and anything related to the 1997 tax issues of the Ryans were clearly in the contemplation of the parties in 1999. In addition to dealing with the tax consequences of the surrender and redemption of Mrs. Ryan's stock in Charles Ryan Associates, Inc., the Amendment amended the Property Agreement to "RELEASE ... each other ... from any and all claims, demands ...of whatsoever kind or character, past, present or future, known or unknown, ... arising out of the underlying divorce." It twice states that the parties thereto had agreed and that it was their intention that no court "shall have authority to change, amend, modify or entertain litigation or lawsuit between the parties hereto concerning the issues set forth in this Amendment."3 It also states "that under no circumstances shall either [of the parties thereto] be able to change, amend, modify or entertain litigation or lawsuit between the parties hereto concerning the issues set forth in this Amendment for the purpose of changing, amending and/or modifying such agreement as to the parties hereto." The parties appear to have accepted the fact that both the Property Agreement and the Amendment precluded Mrs. Ryan from ever seeking additional alimony from Mr. Ryan after the last payment of alimony under the provisions of the Property Agreement.4 That possibly explains why Mrs. Ryan herein sought court reformation or rescission of that Agreement and of the Amendment because of a mutual mistake rather than seeking additional alimony under the terms of the Agreement and the Amendment.
In its order of April 1, 2005, the family court denied Mrs. Ryan's Petition for Modification and subsequent prayer to void the Property Agreement and Amendment. The denial was based upon a legal conclusion and an alternative determination, namely, "Mistakes that make contracts voidable or reformable must be about existing facts (past or present) when the contract was made and not be simply poor predictions of future events," and Mrs. Ryan "has failed to prove by a preponderance of the evidence that there was a mutual mistake, i.e., one shared by [Mr. Ryan] in the formation of the contract."
Mrs. Ryan appealed the family court order to the circuit court, which in an order entered on July 12, 2005, refused the appeal and affirmed the family court order. The circuit court concluded as a matter of law "that the contract [between Mrs. Ryan and Mr. Ryan] was not voidable due to a mistake of fact" after having earlier concluded that Subsequently, Mrs. Ryan appealed to this Court asking for a reversal of the circuit court and family court orders, or in the alternative, that the case be remanded with instructions.
On appeal, Mrs. Ryan contends that the alimony provisions of her Agreement and Amendment with Mr. Ryan should be modified or voided based upon the doctrine of "mutual mistake." In that regard, she further asserts that the family court erred in failing to consider certain evidence which she contends is favorable to her position. Finally, Mrs. Ryan contends that the Agreement at issue provided for "rehabilitative alimony" which was subject to modification due to a change in circumstances. We disagree, concluding as a matter of law that neither Mrs. Ryan's petition for modification nor her affidavit allege the kind of "mutual mistake" that is cognizable as the type of mistake of fact for which a contract or agreement may be reformed or voided under West Virginia law.
Mrs. Ryan contends on appeal that the Agreement and Amendment which she entered into with her ex-husband should be reformed or voided because she and Mr. Ryan were mistaken in their mutual belief that the asset provisions of the said agreements would result in investments which would generate sufficient income to support her and thus make continued alimony payments after February 2004 unnecessary. While Mrs. Ryan is correct that a mutual mistake of fact may, under certain circumstances, justify the reformation or rescission of a contract, that statement does not answer the question of whether a mutually mistaken belief or expectation involving future facts, occurrences or events, as alleged herein, is a "mistake" for purposes of the invoked legal...
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