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Bean, Kinney & Korman Represents Winning Defendant DeMayo in a Case Involving A Complicated Property Settlement Agreement

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April 4, 2011

Arlington, VA - Raighne Delaney and James Korman represented defendant Melanie DeMayo in the Alexandria Circuit Court, in a recent dispute over a property settlement agreement and its enforceability after one spouse’s death. At stake in the case were two pieces of real estate. The judge ruled in favor of the defendant, allowing her to retain ownership of the $2 million properties. The plaintiffs appealed the trial court’s decision, and the Virginia Supreme Court denied the estate’s petition for appeal for lack of any “reversible error.”

Rear Admiral Peter DeMayo, U.S. Navy (Ret.) and his second wife Melanie DeMayo, had entered into a property settlement agreement (PSA) in May 2007, under which the parties were entitled to keep their separate property and to divide their marital property with specified procedures. Two real properties mentioned above were not defined in the PSA as marital property. The PSA was unusual in that it stated the two parties had “no aspiration or anticipation for divorce,” they still intended to “spend time together” and hoped to “restore their marital relationship.”

In regards to the two properties in question, the PSA specified that: “The parties agree that they shall make the house ready for sale and place it on the market for sale at the earliest mutually convenient time. [T]he parties shall divide the net proceeds from the sale equally…"

The PSA was incorporated into a decree of separate maintenance (the “Decree”). When Admiral DeMayo died in December 2009, the couple had never divorced. However, Admiral DeMayo’s two children from his first marriage, also his personal representatives, Mandy and Pamela DeMayo, filed a complaint against Melanie DeMayo requesting that the court:

  1. hold Mrs. DeMayo in contempt of the Decree of Separate Maintenance and order her to comply with its terms; 
  2. declare that Peter DeMayo’s estate (the “estate”) held the two properties as tenants in common with Mrs. DeMayo and to impose a constructive trust on the properties; 
  3. partition the real property; and finally, 
  4. partition certain personal property located in the marital residence.

Bean, Kinney & Korman’s prevailing argument was that a property settlement doesn’t sever tenancy by the entireties if it merely provides for future sale of the property at the parties’ discretion.

Upon defendant’s demurrer, the Alexandria Circuit Court dismissed the complaint. The estate appealed. After the writ panel hearing, the Virginia Supreme Court unusually requested additional briefs regarding which appellate court had jurisdiction over the appeal. Ultimately, the Virginia Supreme Court simply denied the petition for appeal stating that it saw “no reversible error” in the circuit court’s decision.

Raighne and Jim, shareholders with Bean, Kinney & Korman, elaborated on the complicated details of the case in their recent article “The Drafting of Property Settlement Agreements: DeMayo v. DeMayo, a Cautionary Tale.”

Raighne practices in the area of general litigation, focusing primarily on prosecuting and defending cases in the areas of real estate litigation, business litigation, government contracts, and construction litigation. Raighne is a LEED accredited professional with knowledge of the law as it relates to the construction, design and operation of green buildings.

Jim is a trial attorney with over thirty years of experience in domestic relations and personal injury matters. Jim counsels and represents clients in all aspects of family law with particular focus on complex divorces involving the division of marital assets including stock options, pension plans, investment and business interests for high net worth individuals.