Law BRIEF: ROUGH DRAFT ASSIGNMENT INSTRUCTIONS

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To: Susan K. Patrick, Esq. From: Froydan Deleon Torres Date: February 11, 2024 RE: Predictive Office Memo

Question Presented How does the Virginia courts apply the two-part test to determine if an agreement is unconscionable?

Brief Answer Virginia courts examine the presence of gross disparity in the division of assets and whether an overreaching or oppressive influence forced one of the parties to sign the agreement against their will. Under the two-part test, a gross disparity happens when the division of assets depicts extreme inequality between the parties involved. Overreaching or oppressive influences describe one party's ability to inflict coercion on the other party, forcing the second party to sign the agreement, in which the oppressor gains more upon settlement.

Discussion The two-prong test in Virginia courts involves establishing if the agreement depicts gross disparity, in which the courts determine if there were extreme inequalities during asset sharing. The second part of the two-prong test involves determining if overreaching or oppressive influence was induced on one of the parties by the other. In this test, the court examines the ability of the parties to coerce the other into making or signing the agreement for their benefit or to give them an advantage upon settlement. The two-part test is essential, and the two tests should be performed; however, in most cases, especially during extreme cases, the courts can determine there is unconscionability based on gross disparity. This happens when there is extreme inequality regarding the shared assets between the parties, depicting a significantly large proportion of the shared assets on one party compared to a reasonably smaller proportion on the second party.

Section 1: Gross Disparity

In case of an inequality in the division of marital assets, then the court considers this a gross disparity. The Galloways had considerable marriage issues that led to a divorce, and a divorce agreement was drafted. According to the divorce agreement, Mr. Galloway would reap about 94% of marital assets. Mrs. Galloway would receive a Chevy pickup truck, the value of which was $11,000. Other assets that Mrs. Galloway would receive included her personal property. In addition, Mr. Galloway was required to pay Mrs. Galloway $400 weekly if she continued to be an employee at the business. The agreement for this payment also stated that the payment remained if Mr. and Mrs. Galloway remained married. Mrs. Galloway was also entitled to inheritance from her father. Mrs. Galloway argued that the agreement involved gross disparity, citing extreme inequality in the shared marital assets between her and her husband. However,

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according to the court, the agreement did not depict any involvement of gross disparity even after the agreement showed uneven division of their marital assets. The court cited that Mrs. Golloway received an inheritance from her father. Galloway v. Galloway, 622 S.E.2d 267 (Va. Ct. App. 2005).

According to Virginia courts, gross disparity entails a situation when there is unequal sharing or division of marital assets. In the case of Sims v. Sims, Mrs. Sims sought an easy and quick approach to divorce. The quick and easy approach to the divorce was attributed to Mrs. Sims's medical condition. According to the case, Mrs. Sims was managing medical issues during the case, which called for a fast and easier approach to settling the divorce. Upon divorcing, Mr. Sims received almost all their marital assets. The only assets that Mr. Sims did not receive included an automobile and all personal possessions that belonged to Mrs. Sims. The matter was taken to a trial court, which held that the agreement was unconscionable. This meant the agreement was to be set aside, calling for reversing the agreement and remanding further proceedings. Sims v. Sims, 55 Va. App. 340 (2009).

Section 2: Overreaching or Oppressive Influences Overreaching or oppressive influences occur when one party can coerce the second party into signing an agreement to gain an advantage upon settlement. In the case of Mr. and Mrs. Derby, the parties separated in June 1984. However, Mr. Derby fought to get his wife and family back. Mr. and Mrs. Derby agreed to hold a meeting in which they would sign the property separation agreement. The meeting was held in June 1984, and Mr. Derby agreed to sign the agreement. Mr. Derby signed the agreement, hoping he and his wife would reconcile and mend their marriage. The court held that the agreement was unconscionable, citing that Mrs. Derbe obtained the signature from Mr. Derby fraudulently and under duress. According to the court, Mrs. Derby knew that Mr. Derby was emotionally involved, using Mr. Derby's emotional aspect to make him sign the agreement. Based on these conditions, the court asserted that the agreement was unconscionable, citing overreaching influence from Mrs. Derby. Derby v. Derby, 378 S.E.2d 74 (Va. Ct. App. 1989).

Overreaching or oppressive influences occur when one party can coerce the second party into signing an agreement to gain an advantage upon settlement. Mr. Chaplain, a devoted and wealthy businessman, was a self-made millionaire even before he met with his wife, Mrs. Chaplain. Mrs. Chaplain could not read, write, or speak in English correctly. After the engagement, Mr. Chaplain, knowing that his spouse had little understanding of English, created a premarital agreement. Mr. Chaplain knew that Mr. Chaplain could not understand the legal aspects of the premarital agreement because she did not understand English. The trial courts ruled that the premarital agreement was enforceable. However, the court of appeal discovered that the trial court erred, citing that Mrs. Chaplain had not established prima facie. The premarital agreement

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was reversed and termed unenforceable. The case was returned to the trial court for further proceedings. Chaplain v. Chaplain, 682 S.E. 2d 108 (Va. Ct. App. 2009).

Conclusion The two-part test is essential, as it helps courts have solid verdicts regarding marital agreements. The test involves determining that there was no overreach or undue influence to force one party into signing an agreement. The test also establishes that the agreement is made without the disclosure that the outcome of the agreement creates extreme imbalances in the shared assets. According to the courts, an agreement is unenforceable if it is unconscionable. The test involves establishing if the agreement depicts gross disparity or if overreaching or oppressive influence was induced on one of the parties by the other.

References:

Derby v. Derby, 378 S.E.2d 74 (Va. Ct. App. 1989) Galloway v. Galloway, 622 S.E.2d 267 (Va. Ct. App. 2005) Sims v. Sims, 55 Va. App. 340 (2009). Chaplain v. Chaplain, 682 S.E. 2d 108 (Va. Ct. App. 2009).