Will a Virginia divorce court set aside an unfair separation agreement if it leaves wife in necessitous circumstances?
Yes, when the gross disparity in the division of assets in a property settlement agreement or separation agreement is so extreme as to prove pecuniary necessities, the contract can be set aside as unconscionable because the state has an interest in preventing the wife from becoming a public charge. Sims v. Sims, 55 Va. App. 340, 685 S.E.2d 869 (Va. App. 2009). In the Sims case, the husband and wife separated after 38 years of marriage. The wife had only a third grade education and suffered from numerous health problems, including diabetes, arthritis and mood swings. The husband and wife entered into a separation agreement or property settlement agreement prepared by husband’s attorney in which wife gave up spousal support, gave up the joint marital residence with $200,000 in equity in return for husband’s promise to pay the mortgage, and gave up her interests in husband’s retirement plans in return for a pickup truck and her “yard sale” belongings. Later, in the divorce case, the wife asked the judge to set aside the agreement as unconscionable. At the time of the divorce court hearing, wife was totally disabled and receiving food stamps. The trial court found the property settlement agreement to be unconscionable on the grounds of the gross disparity in the division of marital assets. Husband filed a motion for reconsideration and the trial court reversed itself, finding the agreement valid because wife had not met her burden of proving any overreaching or oppressive behavior by husband. The property settlement agreement was incorporated into a final decree of divorce.
The Virginia Court of Appeals reversed the divorce court judge and remanded, or sent back, the case to the trial court. The appeals court first recognized that the recitations in a separation agreement create a prima facie presumption that they are factually correct. In this case, the recitations of fairness in the agreement put the burden on the wife to prove by clear and convincing evidence that the agreement was unconscionable. Next, the court recognized that the trial court must find two elements to set aside a property settlement agreement as unconscionable in Virginia, (1) a gross disparity in the division of assets and (2) overreaching or oppressive influences. The court recognized, however, that a marital contract is different from an ordinary commercial contract because the relationship between a husband and wife is particularly susceptible to overreaching and because the state has an interest in preventing a spouse from becoming a public charge. After analyzing Virginia case law, the Sims court concluded that when the gross disparity in the division of property is so extreme as to prove pecuniary necessities, it establishes both elements of the unconscionability test. In this case, the evidence established, as a matter of law, both extreme inequality in value and pecuniary necessity along with a degree of infirmity. The wife agreed to a grossly unfair division of assets, the wife was destitute and not capable of supporting herself, and the wife suffered from infirmities. In Sims, the Virginia Court of Appeals recognized that a separation agreement cannot be so unfair as to leave a destitute spouse in need of public assistance.
You should consult with your Virginia divorce lawyer regarding whether your separation agreement or property settlement agreement is so unfair as to be voidable as unconscionable.