Bucci & Dix

Despite wife’s claim of husband’s fraud, court dismisses wife’s appeal because of provision in the property settlement agreement (PSA) precluding appellate review

The Virginia Court of Appeals, an appellate court whose jurisdiction includes appeals of the decisions of trial courts involving issues of divorce, custody, visitation, spousal support, child support, property settlement agreements and other family law issues, dismissed an appeal from a Virginia Circuit Court because of a provision in the property settlement agreement (PSA) which precluded appellate review. 

In Burke v. Burke, the wife separated from her husband who had served in the military for over twenty two years and with whom she had been married for seventeen years.  After they separated and before the wife filed for divorce, the parties discussed proposed terms for the PSA, including the wife continuing to receive coverage under the husband's military health insurance plan.   The PSA was later drafted by the wife's attorney and signed by the husband who was an attorney. 

The PSA contained a provision allowing the wife to continue to receive the military health insurance coverage as they had discussed, but also stated that the coverage would be "as provided by law".  Because federal law does not allow military health insurance coverage to continue after divorce decrees are entered, her military health insurance coverage ended when the divorce decree was entered. 

The PSA also contained a provision that all Circuit Court decisions relating to the PSA would be final and not subject to appeal.

After the divorce decree was entered and the wife learned that her military health insurance coverage ended, she filed a Circuit Court lawsuit claiming that she was the victim of fraud by her then ex-husband regarding her health insurance coverage. 

The trial court found that her ex-husband "deliberately misled" the wife and concealed "material facts" about her future health care coverage when signing the PSA, vacated the health care benefits provision in the PSA and reformed it.  However, the wife was still dissatisfied with the trial court's decision and appealed.

The Virginia Court of Appeals dismissed her appeal.  Despite the wife's claims of fraud and dissatisfaction with the trial court's decision about health insurance coverage, the Court of Appeals upheld the PSA provision declaring that all decisions by the trial court relating to the PSA would be final and not subject to appeal.  In reaching its decision, the Court of Appeals rejected the wife's arguments that the PSA appeal provision was void as against public policy.  It reaffirmed established Virginia law which allows parties considerable freedom in negotiating contracts and agreements, like PSAs, even those that include the waiver of significant rights, like health insurance coverage.