Willey v. Willey

• Decision Date: 03 November 2006
• Docket Number: No. 05-251.,05-251.
• Citation: 912 A.2d 441,2006 VT 106
• Parties: Carol J. WILLEY v. Philip WILLEY.
• Court: Vermont Supreme Court

Page 441

912 A.2d 441

2006 VT 106

Carol J. WILLEY v. Philip WILLEY.

No. 05-251.

Supreme Court of Vermont.

November 3, 2006.

COPYRIGHT MATERIAL OMITTED

David F. Kidney of Rubin, Kidney, Myer & DeWolfe, Barre, for Plaintiff-Appellee.

Brian K. Valentine of Downs Rachlin Martin P.L.L.C., Burlington, for Defendant-Appellant.

Present: REIBER, C.J., and DOOLEY, JOHNSON and SKOGLUND, JJ., and TOOR, Supr. J., Specially Assigned.

REIBER, C.J.

¶ 1. Husband Philip Willey appeals from the family court's final divorce decree awarding wife Carol Willey $210,000 and incorporating other terms of an oral settlement agreement reached by the parties during their divorce trial. Husband also appeals from the family court's subsequent order awarding wife attorney's fees and temporary maintenance. Because the family court's finding that the parties intended to be bound by the oral settlement agreement was not clearly erroneous, and because its decision to award attorney's fees and temporary maintenance was not an abuse of discretion, we affirm.

¶ 2. The parties were married in 1989; before marrying they executed, with advice of counsel, a prenuptial agreement. That agreement recited husband's "intent and desire ... to provide adequately and fairly for [wife] and her minor children by a previous marriage," and also contained a seemingly-conflicting provision concerning "Marital Dissolution," which provided that "[i]n the event of a separation or divorce, the parties shall have no right against each other by way of claims of support, alimony, maintenance, compensation or division of any property ...."

¶ 3. Following their marriage, husband and wife built a home in Barre where they lived until separating in the summer of 2003. At all times during the marriage, husband owned a construction company from which he derived significant income; wife was employed at times in the construction company offices, and that employment was terminated when the parties separated.

¶ 4. During the subsequent divorce proceedings, husband filed a motion for specific performance of the prenuptial agreement and for partial summary judgment based on that agreement. The family court, after an evidentiary hearing in May 2004, issued a decision concluding that the most plausible reading of paragraph 2(b) (which recited husband's intent to "provide adequately" for wife and her children) was as "an expression of [husband's] agreement to `provide adequately' for [wife] during and, especially, after the marriage." The court based this interpretation on the fact that paragraph 2(b) was the only change wife proposed to the draft prenuptial agreement and further concluded that "[t]o provide adequately means to make payments of money." The court then concluded, in light of the prenuptial agreement's severability clause, that the agreement's paragraph 8 (purporting to bar any claim by wife for maintenance or support) would be set aside "in order to give meaning to [husband's] expressed intent to provide adequately for his wife" in paragraph 2(b).

¶ 5. The divorce case proceeded to a final hearing on September 22 and 23, 2004. Before the second day of the hearing, husband's attorney initiated settlement negotiations with wife's attorney, proposing to pay wife a lump sum, in exchange for which she would waive any further claim to the Barre house or to spousal maintenance. After wife's attorney consulted with wife, the parties orally agreed that husband would pay wife $210,000 and she would waive any claim to maintenance or to the house. Among other things, the parties also agreed to keep the $210,000 payment confidential, as husband was concerned about keeping his financial dealings as private as possible. The parties did not immediately reduce this agreement to a formal writing, but the meeting did result in a "term sheet" containing the basic terms of the agreement, annotated with notes made by husband's counsel. In addition, the parties prepared a list of wife's personal property left at the Barre house; each entry on the list was accompanied by "yes" or "no" in husband's handwriting to denote whether that item was to be removed by wife.

¶ 6. Following the settlement negotiations on September 23, counsel for both parties advised the family court in chambers that they had reached a settlement and the divorce trial could be terminated. The parties further advised the court that they would reduce the agreement to a writing "shortly." Before leaving the courthouse that day, husband's attorney handed wife's attorney a check for $50,000 made out to wife and signed by husband; the memorandum line on the check read "Toward Settlement." Neither husband nor his attorney stated that the check should be held in escrow pending execution of a written settlement agreement. Wife immediately deposited the check in her personal account, without objection from husband or his attorney.

¶ 7. In the next few days, wife's attorney sent two drafts of the settlement agreement to husband's attorney. Husband's counsel responded, on October 4, with a letter proposing several changes to the draft, none of which varied the terms of the draft as to the lump-sum payment, the quitclaim deed, or the need for confidentiality. On October 7, wife's attorney sent husband's attorney a new draft incorporating most of the changes proposed in the October 4 letter. Husband did not reply to this draft, and on October 22 new counsel filed her notice of appearance for husband. Since that date husband has maintained that he never intended to be bound by the September 23 negotiations.

¶ 8. After it became clear that husband did not intend to sign the settlement agreement sent on October 7, wife filed a motion to enforce the terms of the settlement agreement. After an evidentiary hearing on the motion, the family court issued findings of fact and conclusions of law on April 27, 2005. The court found, in pertinent part, that husband's assertion that he did not intend to be bound by the oral negotiations was "not credible," that he had partly performed the agreement before later "chang[ing] his mind," and that the court would therefore enforce the settlement agreement. The family court directed counsel for wife to prepare a draft final divorce decree based on the April 27 findings of fact and conclusions of law.

¶ 9. A final decree of divorce was filed on June 1, 2005. By that decree, husband was awarded—and wife was required to quitclaim any interest in—the home the parties built together in Barre. Husband also retained sole ownership of his construction company and certain real estate in Calais. The decree mandated that husband would pay wife $210,000 "in the nature of a property settlement." Further, both parties renounced any claim against the other for attorney's fees incurred prior to October 7, 2004. Husband appealed from this order.

¶ 10. The first question presented for our review is whether the parties' oral settlement agreement, coupled with the attorneys' notes, unexecuted drafts, and other surrounding circumstances, created an enforceable agreement. Husband argues, first, that the family court erred in construing the prenuptial agreement to allow wife to make any claim for maintenance. Second, husband contests the family court's finding that the parties intended to be bound by their oral agreement on September 23, 2004. Finally, husband asks us to set aside the award of attorney's fees to wife, contending that the family court failed to properly consider wife's financial resources. We consider the second argument first.

¶ 11. Whether husband and wife will be bound by their oral settlement agreement depends on their intent at the time of the oral settlement, which is a question of fact. Bixler v. Bullard, 172 Vt. 53, 58, 769 A.2d 690, 694 (2001). We view the family court's factual findings in the light most favorable to the prevailing party below, disregarding the effect of modifying evidence, and will set aside factual findings only when they are clearly erroneous. Catamount Slate Prods., Inc. v. Sheldon, 2003 VT 112, ¶ 14, 176 Vt. 158, 845 A.2d 324. The findings will stand if there is any reasonable and credible evidence to support them. Id. As discussed below, we conclude that there was ample evidence supporting the family court's findings.

¶ 12. In arriving at its findings, the family court relied on the four factors we adopted in Catamount to aid in determining whether parties intended to be bound by an oral agreement absent a fully-executed document. See id. ¶ 17 (citing four factors used in Winston v. Mediafare Entm't Corp., 777 F.2d 78, 80 (2d Cir. 1985)). First, we consider whether either party has expressly reserved the right not to be bound before the agreement is written down and executed; second, whether either party has partially performed the contract; third, whether all "substantive" terms have been agreed upon; and, fourth, whether the agreement is of a sort that is typically committed to writing. Id. Each of these factors, while not independently dispositive, provides "significant guidance." Ciaramella v. Reader's Digest Ass'n, 131 F.3d 320, 323 (2d Cir.1997).

¶ 13. As to the first factor, there is nothing in the facts before us to suggest that either husband or wife expressly reserved the right not to be bound to the oral settlement agreement. Husband argues that the mere fact that the parties (and the family court) anticipated that the agreement would ultimately be set down in writing should be considered an express reservation of the right not to be bound to the oral agreement. We rejected such a broad rule in Catamount, however, and we decline to adopt it now. See Catamount, 2003 VT 112, ¶ 26, 176 Vt. 158, 845 A.2d 324 (declining to adopt a per se rule that settlement agreements be unenforceable absent a writing, and stating that "parties to a ... settlement are free to enter into a binding oral contract without memorializing their agreement in a fully executed...