Author Archives: Rebecca Bricken Kinsel

1. Avoiding Premarital Pitfalls – Remillard v. Remillard

   April 19, 2023 2:45 pm Leave a Comment

   Prior to saying, “I do,” some couples make the additional decision to enter into a premarital or prenuptial agreement. These agreements are contracts that allow couples to define their respective financial rights and interests after they become married. Without a premarital agreement, Virginia laws relating to how each person’s individually owned property can become marital property will govern. Premarital agreements can also spell out how newly acquired property and monies will be treated, rather than letting the default Virginia laws apply. In general, Virginia law will treat property and money acquired after the parties get married as marital property, absent a premarital agreement.

   Virginia’s Premarital Agreement Act specifies that a premarital agreement must be in writing and signed by both parties. Va. Code § 20-149. And while these requirements are seemingly straightforward, especially when compared to other pre-wedding tasks, a 2022 opinion from the Virginia Court of Appeals serves as a cautionary lesson for couples who delay drafting a premarital agreement until shortly before the wedding because their agreement may not be upheld. Remillard v. Remillard, Va. Ct. App. No. 1063-21-2, 2022 WL 4073320 (Sep. 6, 2022) (unpublished).

   In Remillard v. Remillard, the fiancé presented his soon-to-be wife with a premarital agreement on the afternoon before their 2014 wedding. Due to the timing and his insistence that the agreement had to be signed if their wedding was to be held the next day, she signed it without consulting a lawyer.

   Per the terms of the Remillard’s premarital agreement, the husband and wife’s individual property, including any assets and earnings attained during their marriage, would remain his or her separate property; modifications of the agreement in the event of a change in circumstances were not allowed, and both parties waived their rights to the other spouse’s assets in the event of death or a divorce.  The premarital agreement also specified that both parties “made a full and complete disclosure to the other of the property owned by him or her” at the time of signing.

   During their marriage, the wife worked for her husband at his company, which, in the ensuing years, expanded and prospered.  When the wife subsequently filed for divorce in 2019, she sought to have the premarital agreement set aside.

   Premarital agreements are subject to the traditional analysis and rules of construction applied when interpreting any other type of contract.  The Virginia Premarital Agreement Act, § 20-151(A) of the Code of Virginia, further provides that an agreement is “not enforceable if the person against whom enforcement is sought proves that: (1) That person did not execute the agreement voluntarily; or (2) The agreement was unconscionable when it was executed and, before execution of the agreement, that person (i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; and (ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided.” Va. Code § 20-151(A).

   In the matter at hand, the Court of Appeals affirmed the trial court’s determination that the Remillard’s premarital agreement was unenforceable.

   First, both courts noted that if the Remillard agreement was, in fact, enforced, the wife would have received nothing – not even the benefits “attributable to her efforts working for husband’s business.”  Moreover, prior to their wedding, the wife had already quit her prior job, sold her house, and moved from out-of-state to Virginia in anticipation of their future life together.  Indeed, such gross disparity in the division of property made the Remillard’s agreement unconscionable.  Thus, premarital agreements drafted with overtly or broadly one-sided and restrictive provisions are wholly counterproductive in Virginia.

   Similarly, the “overreaching or oppressive influences” surrounding the wife’s execution of the premarital agreement, such as the last-minute presentation of the agreement and the husband’s assertions that their wedding the next day would not happen unless she signed it, also rendered the agreement unconscionable.  Both parties should be afforded ample time to read and carefully review the agreement, as well as an opportunity to consult with an attorney, before signing.

   And despite the Remillard’s premarital agreement’s assertion to the contrary, no such “full and complete” financial disclosures were ever actually made.  Indeed, the accompanying exhibits to the agreement, which were purportedly his and her respective financial disclosures, remained entirely blank.  While he admitted to the trial court that he had never discussed his finances with her before their wedding, the husband argued that his wife should have known, or at least been able to estimate, his wealth due to her employment at his company.

   However, “fair and reasonable” disclosure of one’s financial obligations is the minimum threshold of disclosure prescribed by § 20-151(A); accordingly, general awareness, or rough estimations of the other party’s assets, is inadequate to satisfy the standard of disclosure in Virginia.

   The Remillard opinion is a reminder that Virginia courts will render premarital agreements unconscionable, and therefore unenforceable, when there is gross disparity in the division of property between the parties, and oppressive or overreaching influences are present.

   It is thus important to consult with an attorney and propose any premarital agreement in sufficient time and in the proper manner to maximize the chance of a court enforcing it.

2. Court Opinion Offers Lesson — Why Fully Anticipating What Can Happen in the Future is Key to Drafting Successful Spousal Support Agreements

   June 30, 2020 4:52 pm Leave a Comment

   A recent court opinion denied a husband’s request to reduce his spousal support, finding his written agreement with his former wife demonstrated that they anticipated she may start working after their divorce. It is thus important when drafting a Spousal Support provision to think about the potential earning capacity changes of the receiving spouse.

   A Property Settlement Agreement (or “PSA”) is an agreement that divides a married couple’s property between the husband and wife when they get divorced. A PSA frequently includes a Spousal Support provision, which sets the amount one spouse agrees to pay to the other, usually for a defined period of time.

   But future changes can happen to either party’s circumstances that may warrant a court modifying the Spousal Support payments up or down. In order to do so, there usually must be a “material change in circumstances.” The Virginia Code does not define the phrase “material change in circumstances.” Courts often analyze numerous factors to determine whether there has been a material change in circumstances, including whether the change relates directly to the support award and whether it was foreseeable by the parties.

   The Virginia Court of Appeals recently interpreted a Spousal Support in O’Connor v. Shea. There, the court upheld the trial court’s decision not to reduce support. The court also reversed the trial court’s $55,000 attorneys’ fee award to the former wife for incurred fees for opposing the former husband’s motion because the court did not weigh the statutory factors in determining the fee award. Nonetheless, the prospect of losing a motion to lower Spousal Support and potentially paying tens of thousands of fees urges paying close attention to how the spousal support provision is drafted in the first place.

   In O’Connor v. Shea, the husband, a lawyer making over a million dollars a year, filed a motion asking to reduce his $18,500 per month spousal support to $10,000 because his wife, who had previously not worked at all, started a job earning approximately $67,000 a year. His motion argued the ex-wife’s new well-paying job – by itself – was a “material change in circumstances” that justified a reduction in his monthly payments. The trial judge not only found no material change in circumstances existed to warrant a reduction in monthly spousal support, but also awarded wife nearly $55,000 in attorneys’ fees.

   In evaluating whether there had been a material change in circumstances, the trial judge considered the circumstances at the time the parties signed the PSA. The judge noted the parties utilized vocational experts, and that the PSA specifically stated that the parties considered “earning capacity, obligations, needs and financial recourses of each other[.]” The court found the parties contemplated the wife working in the future and had considered the wife’s earning capacity at the time they entered the PSA. The trial court noted “the parties considered many factors in arriving at a support agreement” and it did not “think anyone entered into this agreement thinking she would never work again[.]”. As such, the trial court ruled that the additional income to the wife did not represent a material change in circumstances.

   Regarding the award of attorneys’ fees in Virginia, courts apply the “American Rule” that each party must bear his or her own attorney’s fees absent a statutory or contractual provision. In this case, the basis for awarding attorney’s fees was Virginia Code § 20-99(6), which allows for such an award “as equity and justice may require.” Since the trial court did not make any reference to specific equities in this case, the Court of Appeals remanded the attorneys’ fees award to the trial court, but offered “no opinion” on whether a balance of the equities might support such an attorneys’ fees award.

   This case also shows why it is important to consider including an attorneys’ fees provision in a PSA. In this case, if the parties had included a provision in the PSA that each party would bear his or her own attorneys’ fees, the trial court would likely have been precluded from awarding attorneys’ fees because Virginia Code § 20–109(C) limits the court’s authority to the terms of a stipulation or contract signed by the parties.

   While it is difficult at the negotiation phase to have complete information about the future earning capacity of your former spouse, along with other future changes, it is important to factor in potential increases in income when agreeing upon any amount of Spousal Support to be paid, and also to consider an attorneys’ fees provision.

   A link to the full opinion of the Court of Appeals can be found here: O’Connor v. Shea, Va. Ct. App. No. 1157-19-4, 2020 WL 1262655, at *8 (Va. Ct. App. Mar. 17, 2020)

3. Precision Matters in Property Settlement Agreements

   June 22, 2020 4:14 pm Leave a Comment

   Imagine paying Spousal Support for years, and when you reach the finish line of spousal support at your year of retirement, you try to get ahead by working a few extra years instead of retiring. Sounds reasonable, right? That’s exactly what happened in the case of Woloshin v. Woloshin, Record No. 1147-19-4, March 31, 2020. CAV (Beales) from Arlington Cir. Ct. (DiMatteo). In that case, the husband, a law firm partner, had a Property Settlement Agreement (PSA) with his ex-wife. The PSA called for splitting his retirement account and defined his retirement date as “the last day of the fiscal year of the firm in which Husband reaches age 66.” The husband decided to work a few extra years, thinking he would only have to split the retirement he would have received up to his “retirement date.” He was wrong.

   Because the Settlement Agreement did not specifically call for a contingency plan if the husband chose to work beyond the agreed-upon “retirement date,” the Court of Appeals upheld the Circuit Court’s decision that the Husband had to pay one-half of the marital share of his full retirement benefits earned, not just her share up to the retirement date.

   Experienced domestic attorneys understand the importance of precision when drafting PSAs, and the value of considering as many potential contingencies as possible during  the drafting stage to avoid costly oversights at the expense of their client.

4. Katie Couric Sued: Can the Omission of Statements be Defamation?

   October 14, 2016 4:24 pm Leave a Comment

   Earlier this month, the Virginia Citizens Defense League (VCDL) sued Katie Couric and others involved in the making of a gun control advocacy film, Under the Gun, a film which Couric narrated and produced.

   According to the complaint filed in the United States District Court for the Eastern District of Virginia, the film “contains false footage purporting to show members of the [VCDL] sitting silently, stumped and avoiding eye contact for nearly nine seconds after Couric asked ‘if there are no background checks for gun purchasers, how do you prevent felons or terrorists from purchasing a gun?’” The plaintiffs contend that, in actuality, the film was edited to remove the answers provided.

   In Virginia, in order to be successful on a claim for defamation, a plaintiff must show (1) publication of (2) an actionable statement with (3) the requisite intent. To be actionable, the statement must be both false and defamatory.

   This case is different from typical defamation cases because, here, plaintiffs are complaining about the omission of statements, which they claim provided an intentional false impression to the viewers. Unlike typical defamation cases that deal with proving whether certain statements are false and defamatory – such as gossip magazines claiming a celebrity has a drug addiction – here the plaintiffs must show that the omission of statements, through the splicing, amounted to defamation.

   Plaintiffs claim the editing of the video by Couric and others amounted to defamation because the edited video misrepresented the exchange, including splicing in nine seconds of silent footage following the question, and inserting images of a gun cylinder being closed. The claim that the “manipulated footage falsely informed viewers that the [plaintiffs] had been stumped and had no basis for their position on background checks.”

   Can the insertion of silence be defamation? On the one hand, there is no statement at all, much less a false and defamatory statement. But at the same time, the insertion of silence and removal of the answer given may have provided a false impression to the viewers, damaging the defendants. Because the plaintiffs are not claiming that Couric or others made false and defamatory statements, but instead omitted statements and inserted silence, it will be interesting to see if the Eastern District of Virginia finds that defamation exists here.

5. Settlement Strategy: What Can Companies Learn From Target’s $4.6 Million Verdict?

   October 5, 2016 10:51 am Leave a Comment

   Earlier this month, a jury in South Carolina awarded a Target shopper $4.6 million after she was stuck with a hypodermic needle in a Target parking lot. Prior to trial, Target rejected the plaintiff’s proposal to settle the case for $12,000. Target’s counter-offer was only $750.

   Statistics show that the vast majority of cases settle. The decision to settle a case or not is a difficult one for individuals and companies. Large companies, like Target, have to consider the ramifications of settling lawsuits. On the one hand, in the wake of large verdicts like this one, it may seem advisable to have settled for the amount offered. But on the other hand, companies have to consider the effects of a settlement on all of the other potential plaintiffs out there.

   If Target were in the habit of settling every case brought against it for more than $10,000, the company would soon feel the effects. And if potential plaintiffs learn that Target will settle claims for large sums, it may create an incentive to sue. Companies with lots of potential plaintiffs – pharmaceutical manufacturers, large companies with high volumes of customers – need to be cautious of creating a reputation for settling cases for large sums. This is particularly true if a problem is discovered that cannot be rectified going forward, such as a product defect.

   At the same time, however, large verdicts like this one are likely to incentivize potential plaintiffs, and drive up the amounts of future settlements, because plaintiffs may believe that there could be a large verdict awaiting them. Had Target successfully defended this case, of course, the impact on potential plaintiffs would have been the opposite, possibly creating a disincentive to sue or perhaps a decrease in future settlement amounts.

   Large companies like Target also have to consider the public relations effects of a large jury trial. Even with a win, the negative publicity resulting from a trial might factor into settlement decisions. For instance, if a plaintiff appears sympathetic in the media, particularly in a personal injury case, a large company may lose in the court of public opinion, even if they are successful at trial.

   Smaller companies have different factors to consider when deciding whether to settle a dispute. While large companies like Target may be able handle the law of averages over time, smaller companies are often risking a single home run verdict that they may not be able to afford. Thus, the settlement analysis can be quite different.

   Settlement strategy in every case can be a dynamic process, with multiple factors (and personalities) to consider. After large verdicts like this one, it will be interesting to see if Target adjusts its settlement posture in future lawsuits.

6. 5 Tips for Building Effective Local Counsel Relationships

   September 27, 2013 2:05 pm Leave a Comment

   In every relationship between lead counsel and local counsel, there is a unique dynamic.  This dynamic can make or break a case.  Whether local counsel is brought on for a quick, finite matter, or utilized throughout an entire case, it is important to have a seamless relationship between co-counsel.  Here are 5 tips for building effective local counsel relationships in Virginia and elsewhere:

   1)      First and foremost is to first select local counsel that is well-suited for a particular matter.   The selection of local counsel can be based on a number of factors, including:

   • Geographic location (are there going to be numerous filings and the office is across from the courthouse?),
   • Counsel’s experience in a particular area of law or experience in front of a particular court or judge,
   • The size of the firm (can a one-man shop handle a complex litigation matter?  Do you want big firm rates for a small matter?), and
   • Personality compatibility between local counsel and lead counsel.

    

   2)      Once you’ve selected local counsel, it is important to define the relationship.  Set out in the beginning what you expect from local counsel, and what local counsel should expect from you.  Some important items to define up front include:

   • Is this a finite assignment, or an ongoing relationship (of course there are instances where this cannot be determined up front – see item 3 below)
   • Who will be the lead contacts at both the lead counsel and local counsel’s offices?
   • What is the best method for communication between counsel
     • If someone is on a different time zone, would email be preferable over phone calls?
     • Does someone have a mobile they prefer to use when out of the office?
   • Are there current deadlines pending?
   • Will local counsel be appearing in court alone, or will lead counsel be joining them?

    

   3)      As the case proceeds, both sides need to be prepared for change.

   • While it is important to define the relationship up front, both sides need to be prepared for the unexpected.
   • Deadlines can shift, responsibilities can broaden or shrink, and the case strategy may change.

    

   4)      Throughout the relationship communication is key.

   • Local counsel will need to be sure to inform lead counsel of everything happening on the case docket, to copy lead counsel on all case-related correspondence and to stay on top of all court rules and deadlines.
   • Lead counsel will need to keep local counsel informed of overall case strategies, themes and issues.

    

   5)      Whenever possible, use the person who is most well-suited for the assignment.

   • Both sides need to communicate about which counsel will be handling what throughout the case.
     • Is there an issue involving state-specific law with which local counsel is more familiar?
     • Is there a witness that would respond better to lead counsel instead of local counsel?
     • Does someone have experience dealing with a particular person, entity or matter?

   While the relationship between a local counsel and the lead counsel will have a unique dynamic, with well-suited counsel and effective communication, co-counsel can work together as a seamless, cohesive team of attorneys serving the needs of the client.

   *Protorae Law attorneys have served as local counsel in the Eastern District of Virginia and Fairfax County courts and have worked with firms throughout the country on various legal matters.