SMITH v. SMITH




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SMITH

v.

SMITH


COURT OF APPEALS OF VIRGINIA

Present: Judges Annunziata, Bumgardner and Frank

Argued at Chesapeake, Virginia

Record No. 0161-03-1

SHARON A. SMITH

v.

HAROLD E. SMITH, JR.

 

OPINION BY JUDGE RUDOLPH BUMGARDNER, III

DECEMBER 9, 2003

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH

A. Joseph Canada, Jr., Judge

Barry Randolph Koch (Inman & Strickler, P.L.C., on briefs),
for

appellant.

Megan E. Burns (Stephen G. Test; Williams Mullen, on brief), for

appellee.

Harold E. Smith, Jr. petitioned to terminate his support
obligation because his former

wife was cohabiting with another person. The trial court
terminated support because the parties

merged their support contract into the final decree. It
concluded, "the agreement ceased to exist

as a separate contract immune from court interference." The
wife contends merger did not

nullify the contractual nature of her rights arising from the
agreement and the trial court could

not eliminate her contracted right to spousal support.[1]
We reverse because merger did not make

the contract subject to judicial modification.

The parties were divorced January 4, 1990. Their property
settlement agreement, dated

August 25, 1989, stated that spousal support would
"terminate only in the events of Wife’s

death, Husband’s death or Wife’s remarriage." The final
decree "affirmed, ratified, and

incorporated" the agreement and ordered compliance with its
terms.[2] The husband filed the

petition to terminate support in 2001 after statutory amendments
authorized termination of

support upon cohabitation. The wife conceded she cohabited with
another and the agreement

merged into the final decree.

Code ? 20-109(A) mandates termination of spousal support upon
proof of habitual

cohabitation unless a stipulation or contract provides
otherwise. Rubio v. Rubio, 36 Va. App.

248, 549 S.E.2d 610 (2001), held the statute did not apply
retroactively to a contract that was

incorporated, but not merged, into the final decree. The holding
specifically deferred ruling on

the effect merger may have had; "no merger occurred, and we
do not address what effect, if any,

merger would have imposed upon Mr. Rubio’s support
obligation." Id. at 255, 549 S.E.2d at

613.

To determine whether merger extinguished the agreement’s
limitation on judicial

modification of the contracted support, we review the
development of the trial court’s authority

to establish and modify spousal support. Initially, support
arising from contract and that arising

from court decree were distinct and mutually exclusive
entitlements arising from unrelated legal

remedies.

Section 5111 of the Code of 1919 was the predecessor of Code ?
20-109. It was the

source of the trial court’s authority to decree alimony.[3]
Alimony, decreed by court, was distinct

from support and maintenance, created by contract. Alimony
stemmed from the common-law

right of the wife to support by her husband. It was not a
property settlement upon dissolution of

the marriage and was "‘not a judgment for the enforcement
of any contract, express or implied,

existing between the parties thereto, but for the enforcement of
a duty . . . .’" Eaton v. Davis,

176 Va. 330, 338, 10 S.E.2d 893, 897 (1940) (citation omitted).
Support was in lieu of alimony

and arose as a contracted remedy negotiated by the husband and
wife. It was enforced by an

action of assumpsit like any other contract. Newman v. McComb,
112 Va. 408, 409-10, 71 S.E.

624, 625 (1911). A court had no authority to modify the contract
or to enforce it by its contempt

power.

Until 1934, trial courts had no authority to modify alimony
decreed in a vinculo divorces

unless the power was specifically reserved in the final decree.
The General Assembly amended

Code ? 5111 to give the trial court authority to modify any
existing decree of alimony upon

proof a change was reasonable and fair. 1934 Va. Acts ch. 329.
Eaton ruled the authority to

modify alimony applied retroactively because alimony was not a
property right. 176 Va. at 340,

10 S.E.2d at 898. The decision emphasized the distinctive
features of court ordered alimony and

contractual support that made them mutually exclusive remedies.

In 1944, the General Assembly amended Code ? 5111 and
restricted a trial court’s

authority to decree alimony when the parties had entered a
contract for support.[4] The
effect of

this amendment was later summarized in Harris v. Harris, 217 Va.
680, 681, 232 S.E.2d 739,

740-41 (1977):

Under the proviso contained in Code ? 20-109, if a stipulation
or

contract between spouses is filed with the pleadings or
depositions

in a divorce case, then no decree or order directing the payment
of

alimony (now support and maintenance) for a spouse, suit money,

or counsel fees shall be entered except in accordance with that

stipulation or contract unless a party raise objection thereto
prior to

entry of the decree. As we pointed out in McLoughlin v.

McLoughlin, 211 Va. 365, 368, 177 S.E.2d 781, 783 (1970), this

restricts the court’s jurisdiction over awarding "alimony
[now

support and maintenance], suit money, or counsel fee" to
the terms

of the contract.

The trial court’s authority to award and modify alimony was
now constrained by any contract for

support. The distinctive qualities of alimony and support, which
had been mutually exclusive,

were beginning to intertwine.

Alimony and support began as exclusive remedies offering unique
advantages and

disadvantages. Alimony offered the great advantage of
enforcement by the contempt power of

the courts. However, it was not a property right, it terminated
at death, and it could be modified

or eliminated upon changed circumstances. Foster v. Foster, 195
Va. 102, 108, 77 S.E.2d 471,

474-75 (1953). Support was not enforceable by contempt. Moore v.
Crutchfield, 136 Va. 20,

28, 116 S.E. 482, 484 (1923). It only offered contract remedies.
Martin v. Martin, 205 Va. 181,

185, 135 S.E.2d 815, 818 (1964). However support was a property
right, it could extend beyond

death, and it was not subject to judicial modification or
elimination. Higgins v. McFarland, 196

Va. 889, 895-97, 86 S.E.2d 168, 172-73 (1955). Contractual
support offered the great advantage

of the stability and the protection against modification or
elimination, absent agreement of the

parties, afforded to property rights.

The distinctive features of alimony and support presented
difficult choices. Durrett v.

Durrett, 204 Va. 59, 129 S.E.2d 50 (1963), illustrated the
dilemma.

Mary L. Durrett was afforded two distinct methods of compelling

her husband to make provision for her support and maintenance.

With the choice of remedies before her, she elected to pursue a

remedy by way of alimony, rather than relying on the contract of

August 1, 1947. She may have been prompted to seek the alimony

allowance during her life, because of the attributes and legal
effect

of alimony hereinbefore mentioned. She was suffering from what

she thought was an incurable disease; and, perhaps, did not
expect

to survive her husband. She got what she asked for, and ought
not

now be allowed to deny the meaning and effect of the decree in

accordance therewith.

Id. at 64, 129 S.E.2d at 54. A spouse had a choice of remedies:
by decree of alimony, or by

contract in lieu of alimony. Martin, 205 Va. at 185, 135 S.E.2d
at 818. Alimony offered the

formidable compulsion of a citation for contempt, but lacked
protection against modification or

elimination. Contracted support offered stability and
predictability but lacked the threat of

incarceration to enforce compliance.

The enactment of Code ? 20-109.1 in 1970 authorized courts to
enforce support contracts

by contempt. 1970 Va. Acts ch. 501. The great advantage of
alimony became available to

contractual support and eliminated its great disadvantage.[5]The
practical distinctions between

the forms of remedy blurred, and the choice between the two
became less perilous. Indeed, the

term "alimony" discontinued, and "spousal
support" became the collective term to describe both

forms of support.

Prior to the enactment of Code ? 20-109.1, support arising from
contract could only be

enforced by contempt power if it was converted from support in
lieu of alimony into alimony.

Once both types of support were enforceable by contempt power,
the nature of the support was

no longer the determinative factor when addressing enforcement
issues. However, the nature of

the support remained determinative when analyzing whether a
support award was subject to

judicial or legislative modification. Contractual rights were
property rights that subsequent court

decree or legislative enactment could not modify.

In Shoosmith v. Scott, 217 Va. 290, 227 S.E.2d 729 (1976), the
husband defended an

action for accrued support payments claiming amendments to Code
?? 20-109 and 20-109.1

terminated his obligation. The amendments mandated that
contractual support cease on

remarriage unless specifically permitted in the contract.[6]
The Court held the wife’s right to

support did not depend alone upon the final decree, but it arose
from her property settlement

agreement. The decree was a final adjudication of her property
right and could not be abrogated

by subsequent legislative action. Id. at 292, 227 S.E.2d at 731.
Upon rehearing, the Court

distinguished the Shoosmith decree from that in Durrett.
Shoosmith v. Scott, 217 Va. 789, 232

S.E.2d 787 (1977). It held the payments decreed in Durrett were
alimony while those in

Shoosmith were contract based payments in lieu of alimony. Id.
at 793, 232 S.E.2d at 789. The

Shoosmith contract, like all private contracts, could not be
impaired by legislative action. Id.

In Doherty v. Doherty, 9 Va. App. 97, 383 S.E.2d 759 (1989), the
husband asserted the

contract defenses of laches, estoppel, and the statute of
limitations as a bar to a claim for support

arrearages that accrued prior to the final decree. The final
decree had incorporated a contract,

which characterized the payments as "monthly alimony
payments," and ordered compliance with

the decree. Id. at 99, 383 S.E.2d at 760. The decision relied on
Durrett, 204 Va. at 62, 129

S.E.2d at 52, to distinguish decrees for alimony from those
based on contract. Doherty held the

payments were alimony and enforcement of the arrearages was not
subject to the husband’s

contract defenses. "We do not determine here whether
husband’s pleas in bar would be available

in an action brought solely to enforce the contract. In the case
before us the contract was merged

into the final decree. It is not the contract but rather the
decree that is being enforced." 9

Va. App. at 99, 383 S.E.2d at 760. In explaining its
characterization that the contract merged

into the decree, the opinion quoted from 24 Am. Jur. 2d Divorce
and Separation ? 841 (1983):

"The prevailing view is that where the underlying
obligation created by the marital agreement is

a promise to pay money, the obligation is merged into the
decree."

Doherty used the word "merge" to describe the process
by which a contract for "alimony

payments" became a decree of alimony not subject to
contract defenses. The excerpt from

American Jurisprudence Second indicated that a majority of
states held the contract ceased to

exist when it "merged." Doherty gave no suggestion it
adopted such a view, or that it reflected

Virginia law. The residual legal effect of the contract was not
an issue in the case. Doherty dealt

with enforcement, and in that context, it distinguished for the
first time between contracts

affirmed, ratified, and incorporated, but not merged, from those
affirmed, ratified, and

incorporated and also merged.

Hering v. Hering, 33 Va. App. 368, 373, 533 S.E.2d 631, 633
(2000), noted this

distinction: "Our previous decisions and those of the
Supreme Court of Virginia draw a

distinction among situations where an agreement is affirmed,
where it is incorporated into a

decree, or where, as here, the agreement is ‘affirmed,
ratified, incorporated, but not merged’ into

the final decree." Relying on Doherty, this Court held:
"Where, as here, the agreement was

‘incorporated but not merged’ into the final decree, the
agreement remained enforceable under

either contract law or through the court’s contempt
power." Id. at 373-74, 533 S.E.2d at 634. If

a contract was not merged, either the contract or the decree
could be enforced. The Hering

contract was still enforceable as a contract because it did not
merge into the decree. Subsequent

amendments to Code ? 20-109(A) could not apply retroactively
because they would be

unconstitutional impairments of contract. Id. at 375, 533 S.E.2d
at 634-35.

Rubio, 36 Va. App. at 254, 549 S.E.2d at 613, repeated the
discussion in Hering about

incorporating and merging contracts into decrees. It concluded
Rubios’ agreement excluded

merger, even though no provision addressed the topic. Because
the contract did not merge,

Hering controlled: the contract rights remained enforceable and
subsequent statutory changes

could not impair them. Id. at 255, 549 S.E.2d at 613.

The cases that employ the term "merge" addressed
issues of enforceability. For example,

Rubio concluded: "That obligation remains an enforceable
contract, excluded from the operation

of Code ? 20-109(A) and insulated by Code ? 20-190(C) from
judicial alteration." Id.

Those cases did not suggest that "merger" vaporized
all rights arising from the contract. They

did not address whether the advantages of stability and
protection from outside modification

vanished, supplanted by a decree subject to the modification the
parties contracted to avoid.

Merger only addressed enforcement not modification.

Code ? 20-109 limits the authority of a trial court to make or
modify spousal support

awards when an agreement exists. "In such cases, the intent
of the parties as expressed in the

agreement controls, and the agreement is treated as a contract
and construed in the same manner

as all contracts." White v. White, 257 Va. 139, 144, 509
S.E.2d 323, 325 (1999). The statute

was enacted to require that decrees for support honor agreements
made by the parties; it prevents

a court from rewriting the parties’ contract. It stands as a
clarion pronouncement of the policy

encouraging settlement by agreement. The statute does not employ
the word "merge." It applies

to "any valid agreement" once the court affirms the
agreement. See id.; Rubio, 36 Va. App. at

253, 549 S.E.2d at 612-13; Hering, 33 Va. App. at 373, 533
S.E.2d at 634.

In this case, the parties agreed spousal support only terminated
on death or remarriage.

Nothing suggested an intention to terminate support upon
cohabitation. We do not infer

anything from the agreement’s failure to address cohabitation.
When the parties made their

contract, Code ? 20-109 did not terminate support upon
cohabitation.

One of the basic rules of construction of contracts is that the
law in

force at the date of making a contract determines the rights of
the

parties under the contract. The law effective when the contract
is

made is as much a part of the contract as if incorporated
therein.

Paul v. Paul, 214 Va. 651, 653, 203 S.E.2d 123, 125 (1974)
(citation omitted).

The parties’ contract was merged into the final decree, but we
discern no reason for

applying a different result from that reached in Rubio and
Hering where the contracts did not

merge. Merger prescribes the methods of enforcing entitlements
created by contract, and the

distinction between merged and non-merged agreements is
important in the context of

enforcement. The situation is different when addressing the
authority of a court to modify the

contract under Code ? 20-109. The development of the remedies
available to a spouse seeking

support eliminated the dilemma of choosing between mutually
exclusive forms of relief. Basic

property rights that limit judicial modification arise when the
parties form an agreement. Those

essential benefits and detriments now need not expire if the
contract merges into the decree for

enforcement purposes. Indeed, a party would receive no benefit
if merger obliterates negotiated

rights that afford stability and predictability to the parties
after divorce. Accordingly, the

judgment modifying the contract is reversed, and the case
remanded for reinstatement of the

support obligation.

Reversed and remanded.

 

FOOTNOTES:

[1]The wife also
maintains the trial court may not constitutionally apply the statutory

changes to Code ? 20-109(A) adopted in 1997 to a 1989 contract.
Based on our decision, we

need not address this issue. Similarly, we do not address the
husband’s objection to the date set

for terminating support.

 

[2]The parties
amended their initial 1989 agreement in 1994. The trial court affirmed,

ratified, and incorporated the amended contract in a decree
entered June 2, 1994 that in turn

amended the 1990 final decree of divorce.

 

[3]Eaton v.
Davis, 176 Va. 330, 337-38, 10 S.E.2d 893, 896-97 (1940), explained:

Alimony had its origin in the ecclesiastical courts of

England. These courts had the power of awarding a mensa

decrees, but absolute divorce was unknown to them, the

jurisdiction to grant an absolute divorce resting solely in

Parliament.

The ecclesiastical law of England became part of the

common law of Virginia, which therefore embraced a mensa

divorces and the power in the courts to grant alimony in

conjunction with such divorces. The statutes authorizing the

Virginia courts to grant a mensa divorces are thus
declaratory of

the common law. Divorces a vinculo, on the other hand,
came

much later in Virginia, and are wholly creatures of statute law.

 

[4]1944 Va. Acts
ch. 277 provided, in part:

if a stipulation or contract signed by the party to whom such
relief

might otherwise be awarded is filed with the pleadings or

depositions, then no decree or order directing the payment of

alimony, suit money, or counsel fee shall be entered except in

accordance with that stipulation or contract unless such party
raise

objection thereto prior to entry of the decree.

 

[5]Code ?
20-109.1 as first enacted provided:

Any court may affirm, ratify and incorporate in its decree

dissolving a marriage or decree of divorce whether from the bond

of matrimony or from bed and board, any valid agreement between

the parties, or provisions thereof, concerning the conditions of
the

maintenance of the parties, or either of them and the care,
custody

and maintenance of their minor children. Where the court
affirms,

ratifies and incorporates in its decree such agreement or
provision

thereof, it shall be deemed for all purposes to be a term of the

decree, and enforceable in the same manner as any provision of

such decree. The provisions of this section shall apply to any

decree hereinbefore or hereinafter entered affirming, ratifying
and

incorporating an agreement as provided herein.

1970 Va. Acts ch. 501.

 

[6]Those
amendments, effective July 1, 1972, stated:

provided that if any former spouse, for whom provisions for

alimony or support or maintenance have been made in such

stipulation or contract whether entered into heretofore or
hereafter,

shall thereafter remarry, the court shall, upon such remarriage,

order that such alimony or support or maintenance for such
former

spouse shall cease as of the date of such marriage, and upon the

death of any such former spouse, the court shall order that no

payment shall be made to the estate of such decedent on account
of

such provisions, unless such stipulation or contract otherwise

specifically provides in the event of remarriage or death.

1972 Va. Acts ch. 482.


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