In the case of Caldwell v. Caldwell, the Virginia Court of Appeals, in an unpublished opinion, held that the trial court did not err in its interpretation of parties’ post-separation agreement or in finding husband breached his obligations under the health insurance provisions section of the agreement.
During the marriage and at the time of separation, the parties were both employees and stockholders of Majict Corporation, which produced a local publication and operated out of the parties’ marital home. On the date of their separation, August 30, 2002, the parties entered into a “Separation Agreement and Stipulation in Accordance with [Code] §§ 20-109 and 20-109.1” (Agreement). Section 2.9 of the Agreement (the health insurance provision), which appeared under Article II titled “Ownership of and Employment of Majict Corporation” provided as follows:
Health insurance coverage for the Wife is currently provided under a policy maintained by Majict corporation. Husband shall continue to cover and pay for health insurance coverage for the Wife as the spouse of the Husband under such policy maintained by Majict Corporation. In the event of a divorce between the parties, Husband agrees to pay for health insurance coverage that is substantially identical to that provided by the policy at Majict Corporation, provided, however, the Husband shall have the right to select the least expensive policy available for such purpose which shall provide substantially the same benefits as the policy of the Majict Corporation for the Wife. Husband agrees to pay for any and all medical expenses of the Wife that the insurance does not cover.
At the hearing, the parties stipulated that wife was insured continuously on a health insurance policy provided and paid for by Majict from August 2002 through March 2007. More particularly, from 2002 through 2005, wife was covered as husband’s spouse under his policy paid for by Majict, and from 2005 through 2007, wife was insured on her own policy paid for by Majict. Wife testified that after a visit to her physician in March 2007 she learned that she no longer had health insurance. At trial, wife testified that after learning this she contacted husband and that he stated he could not afford coverage for her and that she would have to find her own policy. In December 2008, wife purchased an online health insurance policy with a monthly premium of $219.95. Wife stated that Majict Corporation did reimburse her for the monthly
premium for the online policy from December 2008 through June 2009 by sending her a check. Wife testified that the online policy did not really cover any of her medical expenses, including prescriptions, and that the reimbursement check from Majict to wife was counted as income on her W-2, which had tax consequences. Based on these circumstances, wife testified that she cancelled the internet policy in June 2009. Wife notified husband by letter dated July 6, 2009, that she had cancelled the online policy and that she would obtain a new policy soon. Wife also returned Majict’s check for the June premium payment.
Wife testified that she did not have any health insurance from July 1, 2009, until she received Medicare coverage beginning in June or July 2013. Wife’s Medicare coverage cost was $105 per month, however wife did not know how much the prescription component would cost. With respect to unreimbursed medical expenses, wife testified that she sent husband every bill she received since 2002 and that husband never paid them, with the exception of two bills, one from Dr. DiCicco, wife’s chiropractor, and the other a garnishment summons from the University of Virginia. Wife sent husband the bills quarterly in the first year after execution of the Agreement and thereafter sent the bills to husband annually. Wife said that she spoke to husband on the phone after execution of the Agreement about paying her unreimbursed medical
expenses and that husband stated that “[t]he Agreement says I have to pay but not when I have to pay . . . I need to pay, just never said when I will pay.” Wife identified bills from CVS pharmacy and a summary of medical expenses from shortly before execution of the Agreement in 2002 through January 2013, which totaled $19,822.77.
The trial court held that the health insurance provision of the Agreement was clear and unambiguous and required husband to pay for both wife’s health insurance coverage and unreimbursed medical expenses for an unlimited duration. As a result, the trial court found that husband violated the Agreement by failing to pay for wife’s health insurance coverage from April 1, 2007 to December 2008. Husband further violated the
terms of the Agreement by failing to pay wife’s medical expenses, other than Dr. DiCicco’s and UVA’s bills, from August 30, 2002 through June 15, 2013. The trial court did find that husband was entitled to a credit of $219.95 a month from July 1, 2009 through June 15, 2013, to be applied against wife’s uninsured medical expenses incurred during the same time period due to wife’s failure to mitigate her health care expenses as evidenced by her voluntary cancellation of her online health insurance policy on July 1, 2009, which resulted in her being uninsured from that date to June 15, 2013.
Accordingly, the trial court ordered husband to pay i) wife’s current health insurance premiums, including her Medicare Part B premium, and any supplemental insurance premium including prescription drug premiums; ii) any and all of wife’s uninsured medical expenses; iii) $7,736.02 to wife for uninsured medical expenses incurred from August 30, 2002 through June 15, 2013, after applying husband’s credit; and iv) $1,200 to wife for attorney’s fees related to prosecuting the rule to show cause. The trial court denied wife’s request for reimbursement of dental expenses.
By requiring husband to provide wife health insurance through Majict as his spouse during the pendency of the divorce and then providing him the option of selecting the least expensive policy with substantially similar benefits once the spousal policy was no longer viable (upon the divorce), the provision required
husband to both provide and pay for wife’s health insurance premium. The health insurance provision’s location in the Agreement also supports this conclusion. By including it in the Majict Corporation section, the parties reflected an intention for wife to remain covered through Majict’s group health insurance policy. The health insurance provision merely set out the practical aspect of attaining that goal: Once the parties divorced, wife could no longer maintain coverage as husband’s spouse on the Majict policy and she would therefore need her own policy through Majict. Moreover, this is evidenced by the parties’ actions through the pendency of the divorce and until 2007 when husband decided to look for a new insurance provider for Majict. While the parties provided conflicting testimony on the issue of whether wife completed and returned her application for a new insurance policy in 2007, the trial court made the factual finding that wife
did in fact do so and we will not overturn findings of fact unless they are plainly wrong or without evidence to support them. From that factual predicate the trial court determined that husband had the necessary tools with which to continue wife’s health insurance through Majict and that he chose not to. Therefore, he assumed the risk that wife would remain without health insurance or covered under an inferior policy, causing her unreimbursed medical expenses to increase.
The plain language of the Agreement also supports the trial court’s conclusion that husband’s obligation would be unlimited in duration or until wife’s death. The Agreement clearly omits a termination date or occurrence for husband’s obligation to provide and pay for wife’s health insurance and medical expenses. As the parties intentionally omitted a limitation on this obligation, we will not imply one.
The trial court admitted into evidence a summary of wife’s medical expenses including physician and prescription billings from 2002 through 2012 and other billing exhibits. Husband stipulated that the billing exhibits were “true and accurate copies of billing summaries [wife] received from medical service providers . . . .” Husband also stipulated that copies of CVS pharmacy billings incurred by wife since January 1, 2006, were “true and accurate cop[ies] of [wife’s] CVS bills . . . .” Furthermore, wife testified that she sent her unreimbursed bills to husband quarterly in the first year after execution of the Agreement (2002-2003) and annually after that. Wife testified that husband only paid Dr. DiCicco’s and a University of Virginia bill
out of the numerous medical bills she sent to him. The total amount of medical expenses wife paid that husband failed to reimburse was $19,822.77.
The Agreement obligated husband to provide and pay for wife’s health insurance premiums and medical expenses. Wife presented sufficient evidence of those expenses through stipulated billing exhibits and testimony. Therefore, the trial court’s damages award was supported by the facts, not speculative, and did flow from husband’s breach of the Agreement.
Rob Hagy, Charlottesville Divorce Lawyer. For help with possible breaches of your separation or property settlement agreements or with questions about divorce and health insurance, please contact me at (434)293-4562 or email me at firstname.lastname@example.org