Lead Opinion
Husband appeals from a judgment that modified his monthly spousal support obligation to wife by reducing it from $6,000 to $3,000. Husband contends that the trial court should have reduced the support award to $250 per month and that, because he is unemployed and has no immediate prospects of finding employment, the court erred in attributing to him potential income of $120,000 per year. Husband also assigns error to the court’s decision to make the modification retroactive to April 1,2001, the due date of the support installment accruing in the month after he filed his motion for modification, rather than ordering wife to execute a satisfaction of any support arrearages that had accrued since December 1, 2000, pursuant to terms specified in the parties’ marital settlement agreement (MSA). On de novo review, we reduce husband’s spousal support obligation to $1,500 per month, effective April 1, 2001.
The parties were married in 1967, and they separated in 1999. They have two adult children. In July 2000, when their marriage was dissolved, husband was 58 years old and wife was 54 years old. Husband had a college degree and, for many years, had been а successful marketing executive for major hotel enterprises. Beginning in 1979, the parties resided in Asia so that husband could pursue his career. In March 2000, husband was terminated from his employment with a Hong Kong-based hotel business. At that time, husband was earning an annual salary of $240,000. Husband then worked as a consultant for several hotel clients until June 2000, earning approximately $48,000 for that work. Husband was unemployed in July 2000, when the dissolution judgment was entered.
Wife earned a bachelor’s degree in 1969. She was employed as an elementary school teacher for two years early in the marriage. However, wife worked as a homemaker throughout the remainder of the marriage. After the parties moved to Asia, wife wrote travel articles as a hobby, but she did not receive any income from that activity. Wife moved to Oregon when the parties separated in 1999.
The MSA also contained the following provision:
“Husband is currently unemployed. Husband shall make good faith efforts to obtain employment. If Husband obtains employment hereafter defined as being an employee, owner, operator, or CEO of a business or acting as an independent contractor, less reasonable business expenses * * * within six months of May 1, 2000, the parties shall re-evaluate the support at that time without the need to show an unanticipated substantial economic change in circumstances. The parties acknowledge that Husband had a brief contract which has been completed where he received income during the finalization of this case that shall not be considered a basis fоr re-evaluation or modification of support. Any increase or decrease in support that results from any evaluation or modification proceedings filed, shall be effective the month in which Husband begins employment. If Husband fails to obtain employment within six months of May 1, 2000, he shall have the right to seek modification, without the need to show an unanticipated substantial economic change in circumstances with any such modification taking effect the seventh month from May 1, 2000. If Husband fails to obtain a modification, support shall continue at $6,000 per month until an agreement is reached by the parties or further order of the Court. If Husband’s salary * * * should exceed $250,000, * * * Wife shall be able to during the next 36 months from May 1, 2000, seek a modification to increase spousal support without the need to prove an unanticipated substantial economic change of circumstance. The court shall consider evidence of the parties’ life style during the marriage in that hearing. If during the 36*737 months from May 1, 2000, Husband’s salary * * * falls below $250,000 * * * despite his good faith efforts, Husband has the right to seek modification without the need to show an unanticipated substantial change in circumstances.”
The MSA did not expressly specify the purpose of the spousal support award.
Husband did not secure employment after the dissolution. On March 28, 2001, he moved to modify his support obligation to $1,500 per month for a period of three years. In June 2001, husband moved back to the United States to live with his parents in order to “live much more cheaply [.]” In September, he amended his motion to request termination of spousal support or, in the alternative, a permanent reduction to an amount “to be determined at trial.” Also in September, husband received a tax refund of more than $33,000.
The case was tried in October 2001. At trial, husband requested a reduction in spousal support to $250 per month. He testified that he had used his share of the property division and a portion of the tax refund to pay his living expenses, legal fees, and spousal support. Husband’s uniform support affidavit showed monthly income of $413 per month, based on annualizing a one-time gift from his mother plus interest income of $80, to offset monthly expenses of approximately $2,550, excluding spousal support. At the time of trial, husband still had $21,700 of the refund proceeds.
Husband acknowledged that he had rejected a job offer, in late 2000, for $120,000 per year and that he recently had applied for a job that would have paid an annual salary of $150,000. He testified that he had attempted to find work by networking with colleagues and employment agencies and looking through the newspaper classifieds. He stated that his search had been impeded by several factors, including his
At the time of modification, wife was working 30 to 40 hours per week at an hourly rate of $9, without benefits, in a “paint-your-own-pottery” business. She had no plans tо return to teaching. She testified that, even if she renewed her teaching certification — a two-year process — her prospects for finding work in her teaching field, art, were poor. Wife had invested the liquid assets that she received in the property division in several investment accounts, one of which had lost value. Wife testified that, in order to make ends meet, she had been forced to dip into assets that she had hoped to preserve for her retirement.
Wife called as a witness a career and placement consultant, who identified job categories as well as actual openings for which husband was qualified, including a position in the $120,000 to $150,000 range. He stated that “in the 50, $60,000 range represents the type of job in this occupation that I would think [husband] would have no trouble getting at all” but that jobs in a rаnge exceeding $120,000 per year are ‘less plentiful and more difficult to get.” The witness concluded that, although he “could be way off,” husband could find work in the lower salary range by January 2002, and in the higher range by the next summer.
The trial court determined that husband had an earning capacity of $120,000 per year, and it modified the
In his first assignment of error, husband argues that the trial court erred in attributing to him a potential annual income of $120,000 because he had been unemployed since mid-2000, and he had no immediate prospects of finding employment at that salary level. In response, wife reminds us that husband turned down a job offer for $120,000 per year and that he had interviewed for a job paying $150,000 per year shortly before the modification trial. Wife also asserts that husband failed to rebut her evidence that husband was qualified for employment at an annual salary in the range of $120,000 to $150,000.
An award of spousal support may be modified based on a findirig that there has been a substantial, unanticipated change in circumstances since the time of the earlier award. Tomos and Tomos,
Our goal on modification is not to reconsider the validity of the initial award but to fulfill its purpose. Bates and Bates,
ORS 107.135(3) provides, in part:
“In considering under this section whether a change in circumstances exists sufficient for the court to reconsider spousal or child support provisions of a decree, the following provisions apply:
“(a) The court * * * shall consider income opportunities and benefits of the respective parties from all sources, including but not limited to:
“(A) The reasonable opportunity of each party, the obligor and obligee respectively, to acquire future income and assets.”
In Albrich,
“[ORS 107.135(3)(a)] compels an expansive review of a party’s ability to pay and of a party’s need. Significantly, [paragraph] (3)(a) does not restrict the court’s consideration to income that either party is presently receiving * * *. Put simply, under [paragraph (3)(a)], the breadth of the court’s consideration of the parties’ income is without limits.”
(Emphasis in original.) Thus, in determining an appropriate spousal support level, we consider the parties’ earning capacities and, as pertinent here, husband’s potential future income.
According to husband, the trial court’s decision is flawed because it set support at a level that he cannot afford to pay, given that he remains unemployed. Husband relies on the principle that, “although spousal support may be fixed based on forecast income, the forecast must be predicated on facts existing at the time the award is made.” Weber and Weber,
Although the principle upon which husband relies is sound, it advances his position only a limited distance. We have repeatedly rejected the notion that a spousal support award must be based solely on a party’s actual income. See Wilson and Wilson,
The trial court concluded that it was “completely reasonable” and “a very fair estimate to anticipate that [husband] can have potential income in the ra[n]ge of $120,000” and that a lower figure “would be a fairly significant undervaluation of [husband’s] talent and abilities [.]” However, the only evidence upon which that determination could have been made was the single job offer that husband turned down. Husband testified that he rejected that offer because he was simultaneously negotiating for a better, higher-paying position and that the terms and circumstances of the offer suggested that it might not be reliable or long term.
Wife does not suggest that husband’s explanation is disingenuous. In fact, wife’s expert witness testified that jobs in husband’s field in the $120,000 salary range are “less plentiful and more difficult to get” and that, although he could be “way off,” he estimated that it would take husband until the following summer to obtain employment at that income level. Further, the witness identified only one job opening in husband’s field that, at the time of trial, offered an annual salary in the range between $120,000 and $150,000.
On the other hand, there is no evidence that husband is unemployable. It is undisputed that he is a talented professional who enjoys good health. Wife’s expert witness testified that “the 50, $60,000 range represents the type of job in this occupation that I would think [husband] would have no trouble getting at all” and that husband could probably get a job in that lower salary range right away. He also identified numerous current job openings in husband’s field that fell into that salary range. Husband presented no evidence to the contrary. On de novo review, we determine that, at the time of trial, husband’s earning capacity was $60,000 per year.
Based on that earning capacity, we conclude that husband’s spousal support obligation should be set at $1,500 per month. Although the correlation is not talismanic, that amount, as did the initial support award, stands at 30 percent of husband’s pretax earning capacity. It will provide
In his second assignment of error, husband asserts that the “trial court erred in failing to make the reduction in Husband’s support obligation retroactive to December of 2000, as agreed to by the parties in their [MSA].” He relies on the following provision of the MSA:
“If Husband fails to obtain employment within six months of May 1, 2000, he shall have the right to seek modification * * * with any such modification taking effect the seventh month from May 1, 2000. If Husband fails to obtain a modification, support shall continue.at $6,000 per month until an agreement is reached by the parties or further order of the Court.”
However, notwithstanding his reliance on that provision, husband also acknowledges that “the court may not make a modified support order retroactive to a date before [his] motion was filed.” That concession appears to be based on ORS 107.135, which provides, in part:
“(5) Any modification of spousal support granted because of a change of circumstances may be ordered effective retroactive to the date the motion for modification was filed or to any date thereafter.
“(6) The decree is a final judgment as to any installment or payment of money that has accrued up to the time either party makes a motion to set aside, alter or modify the decree, and the court does not have the power to set aside,*744 alter or modify such decree, or any portion thereof, that provides for any payment of money, either for minor children or the support of a party, that has accrued prior to the filing of such motion. However:
“(a) The court may allow a credit against child support arrearages for periods of time, excluding reasonable parenting time unless otherwise provided by order or decree, during which the obligated parent has physical custody of the child with the knowledge and consent of the custodial parent; and
“(b) The court or the administrator, as defined in ORS 25.010, may allow, as provided in the rules of the Child Sup: port Program, a credit against child support arrearages for any Social Security or Veterans’ benefits paid retroactively to the child, or to a representative payee administering the funds for the child’s use and benefit, as a result of a parent’s disability or retirement.”
(Emphasis added.)
Thus, apparently recognizing that, by their terms, the quoted provisions of ORS 107.135 are inconsistent with his assignment of error as initially framed, husband ultimately, and without explanation, asserts only that the court “can and should order that Wife satisfy any support judgment in excess of the modified amоunt for that period of time,” that is, between December 2000 and the filing of his motion to modify in March 2001. For the reasons that follow, we reject husband’s assignment of error both as initially framed and as presented in his later, undeveloped argument.
As to husband’s argument, as initially framed in his assignment of error, that the trial court erred in failing to order a retroactive modification to a date before the filing date of husband’s motion, we conclude that, to the contrary, ORS 107.135(6) expressly withholds that power from the court. The statute provides that a court does not have the “power” to modify any portion of a judgment that provides for payment of support that has accrued before the filing of a motion for modification. We interpret that statute in accordance with the methodology prescribed by PGE v. Bureau of Labor and Industries,
“Power” is defined as “legal authority * * * specifically] : the ability to change legal relations * * *,” Webster’s Third New Int’l Dictionary 1779 (unabridged ed 1993), and as “[t]he ability to act or not act” and “[t]he legal right or authorization to act or not act,” Black’s Law Dictionary 1189 (7th ed 1999). In turn, “authority’is defined as “ [g] overnmental power or jurisdiction <within the court’s authority).” Id. at 128. Consistently with that ordinary meaning, and subject to exceptions that are inapplicable here, ORS 107.135(6) deprives a trial court of authority to make a support obligation retroactive to a date before the filing date of a motion to modify that obligation. See Thomsen and Thomsen,
We have recognized in other contexts that parties may not confer, by agreement, authority that a court does not have. Cf. Taylor v. McCollom,
In rejecting our conclusion, the dissent urges that, “[a]t stake in this case is the public policy that persons shall have the utmost liberty of contracting and that their contracts, when entered into freely and voluntarily, are enforceable by courts absent circumstances that make such agreements unfair or illegal.”
Relying, in part, on Hearn and Eidlin and Eidlin,
Pope, on the other hand, upheld a provision that ran counter to “the principle that when the dependent spouse remarries, support will terminate unless the new spouse is unable to provide support.”
Unlike in those cases, the MSA provision at issue here conflicts with a statute that expressly limits the court’s power. More in point is Heinonen and Heinonen,
We also are troubled by the dissent’s construction of ORS 107.135(6) as “providing limitations on and exceptions to that grant of authority [to order retroactive modification].”
We turn briefly to husband’s argument that the relevant provision of the MSA provides a basis for imposing on wife an obligation to execute a satisfaction of husband’s support arrearages that accrued after December 2000 and before husband filed his motion. That argument is so undeveloped that we would hesitate to address it if it did not appear to be a cornerstone of the dissent’s analysis. See
Even assuming, though, that husband’s undeveloped argument is properly before us, it is unpersuasive. The relevant provision merely states that, if husband fails to obtain employment within six months of May 2000, he may “seek modification,” and “any such modification” will “tak[e] effect the seventh month” from May 1, 2000. It apparently contemplates that husband was required to seek employment for at least six months before requesting modification based on his failure to obtain such employment. Had husband, in fact, filed his motion to modify at the earliest time permitted under the MSA — that is, at the end of that six-month period — ORS 107.135(6) would not have prevented the trial court from modifying his obligation as of that date.
However, the quoted provision does not expressly address the consequences of husband filing his motion to modify at a later date. At best for husband, it could be read implicitly to provide that any modification, regardless of when husband filed his motion, would “take effect” in December 2000. As discussed, such a construction would run afoul of ORS 107.135(6), thereby making the provision unenforceable. But husband fails to explain how the quoted provision could be construed as an agreement between the parties that, regardless of when husband filed his motion, the court must order wife to satisfy support amounts payable after December 2000. We cannot conclude that the parties intended such an arrangement.
Reversed and remanded for entry of modified judgment reducing spousal support to $1,500 per month, effective April 1, 2001.
Notes
ORS 107.105(1)(d) provides that, “[i]n making the spousal support order, the court shall designate one or more categories of spousal support and shall make findings of the relevant factors in the decision.” (Emphasis added.) However, the 1999 version of the statute applied only to “petitions for annulment, dissolution or separation filed on or after” October 23, 1999. Or Laws 1999, ch 587, § 3. This action was commenced in August 1999.
Husband’s spousal support obligation was current until December 2000. In December, husband paid $1,000. However, he made no support payments in the next two months, and he paid only $1,500 per month from March through August 2001. Husband made no spousal support payments after August 2001.
The opening was in Boston, although the witness testified that the prospective employer would consider “telecommuting.”
Thus, we express no opinion as to the issue on which the dissent, but not husband, dwells at length: whether a trial court could, despite ORS 107.135(6), order an obligee to satisfy support arrearages that accrued before the filing of a motion to modify a support obligation where such an arrangement is provided for in an MSA.
Concurrence in Part
concurring in part, dissenting in part.
I agrеe with the majority opinion in all respects except with its holding that the parties’ agreement that accrued spousal support can be retroactively modified to December 1, 2000, conflicts with ORS 107.135(6) and therefore is unenforceable.
ORS 107.135(6) provides, in pertinent part,
“[T]he court does not have the power to set aside, alter or modify such decree, or any portion thereof, that provides for any payment of money, either for minor children or the support of a party, that has accrued prior to the filing of such motion.”
The parties’ agreement provides that
“[i]f Husband fails to obtain employment within six months of May 1, 2000, he shall have the right to seek modification * * * with any such modification taking effect the seventh month from May 1, 2000.”
Husband’s argument is correct. At stake in this case is the public policy that persons shall have the utmost liberty of contracting and that their contracts, when entered into freely and voluntarily, are enforceable by courts absent circumstances that make such agreements unfair or illegal. The parties’ agreement does not conflict with the court’s statutory authority, nor does it contravene some other overriding public policy, as will be amplified more fully below. Therefore, the majority errs when it holds that the parties’ agreement is unenforceable.
Some background is helpful in understanding why the parties’ agreement does not conflict with the authority of the court under ORS 107.135(6). In Feves v. Feves,
“it was entered into by parties who were dealing at arms length; both were sui juris. Each was represented by able counsel. There was not the slightest taint of fraud, misrepresentation, or unfairness on the part of either party in connection with the making of the contract. Both dealt with their eyes open.”
Feves,
The court began its analysis in Feves by applying a rule of law previously applied in cases involving contracts in restraint of trade:
“It is axiomatic that public policy requires that persons of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice; and it is only when some other overpowering rule of public policy intervenes, rendering such agreements unfair or illegal, that they will not be enforced.”
The issue of when a private agreement will usurp the statutory authority of the court arose next in McDonnal and McDonnal,
“The parties’ own resolution of their dispute should be accorded great weight. In all cases of dissolution the court exercises fall equity powers. ORS 107.405. Where pаrties have foregone their opportunity to litigate disputes and have chosen instead to enter into an agreement their reliance on the ágreement can be presumed. Inequity may result if this court adopts a policy of less than full enforcement of mutually agreed upon property and support agreements.”
Id. at 779 (emphasis added). It also cautioned,
“We do not suggest that a property settlement providing for spousal support may go so far as to preclude the court’s statutory power to modify support even where changed circumstances exist. * * * However, short of conflict with the statutory powers of the court we recognize the court’s responsibility to discover and give effect to the intent of the parties as reflected in the incorporated settlement agreement.”
Id.
In a series of cases following McDonnal, we have applied the above principles to varying circumstances. In Pope and Pope,
In Hearn and Hearn,
“We find no principled basis on which to distinguish the foregoing authorities. They instruct that negotiated agreements as to the amount and duration of spousal support should be enforced, unless they deprive the court of its statutory authority or contravene some other overriding public policy. In this case, the parties unambiguously intended that the trial court retain the authority to modify spousal support without either of the parties being required to demonstrate a substantial change in circumstances. That bargained-for stipulation does not deprive the court of any statutory authority; nor does it contravene any overriding public policy of which we are aware. Accordingly, we find the parties’ agreement enforceable.”
Hearn,
Finally, in Eidlin and Eidlin,
*755 “Even assuming, that the parties’ stipulation provides a more permissive basis for seeking modification than does the statute, that alone does not require that the stipulation be disregarded. * * * [I]n the absence of adverse public policy considerations, parties can make it easier to obtain a modification by agreeing to additional grounds therefore but their stipulations cannot remove the court’s authority to modify a spousal support award on the bases that are articulated in ORS 107.135. Although a court is not required to accept parties’ stipulated agreements as to what will constitute a change of circumstances, the trial court’s decision to do so here was proper because the agreement is neither unfair nor does it ‘conflict with the statutory powers of the court.’ * * * The court did not err in giving effect to ‘the intent of the parties as reflected in [their] incorporated settlement agreement.’ ”
Id. at 483-84 (emphasis in original; citations omitted).
Under the above authorities, the test in this case regarding the enforceability of the parties’ agreement is twofold. Does the parties’ agreement to retroactively satisfy husband’s support obligation as of December 1, 2000, conflict with the court’s statutory authority under ORS 107.135(6), or does it contravene any overriding public policy? The majority does not contend that the parties’ agreement violates any public policy. Rather, it reasons that parties may not by agreement confer authority on a court that it does not have. It follows from that premise, according to the majority, that “regardless of the parties’ agreement, it is the court that must enforce that agreement and, in doing so, it cannot exceed its statutory authority.”
ORS 107.135(6) is part of a statutory scheme that, in part, authorizes trial courts to modify spousal support provisions in dissolution of marriage judgments based on a change
Significantly, subsections (5) and (6) of ORS 107.135 do not expressly or directly address the subject of enforceability of marital settlement agreements that have the effect of modifying accrued support judgments. Rather, they speak to the court’s exercise of its statutory power to satisfy or modify a judgment of record based on the grant of authority to courts when a change of circumstances occurs after the judgment is entered. The enforcement of a marital settlement agreement
The answer to that question is found in other statutes and the case law that preceded the enactment of those statutes. The context of a statute “may include other provisions of the same statute and related statutes.” Gladhart v. Oregon Vineyard Supply Co.,
As pointed out before, there is no assertion by the majority that the parties’ agreement “clearly contravenes public policy [,]” and for good reason, as will become apparent below. Generally, when a contract will be deemed “illegal” is well-defined by this state’s case law. In Hendrix v. McKee,
*758 “It is often stated that courts will not enforce ‘illegal’ contracts. This is an oversimplification of a legal principle, the application of which often involves construction of statutes and contractual provisions, delineation and balancing оf public policies, and a difficult sorting and sifting process.
“If the consideration for the contract or its agreed purpose is illegal or against public policy on its face, it will not be enforced. If the contract on its face is not illegal or against public policy, as in the present case, the defendant assumes the burden of alleging and proving its illegality.”
(Citation omitted.) Here, the parties’ agreement that accrued spousal support will be satisfied retroactively in the event of the occurrence of a condition subsequent is not illegal on its face. Its consideration, the mutual promises made by the parties, is lawful, and its purpose, the satisfaction of accrued spousal support judgments, is neither illegal nor against public policy. The state has no interest in the spousal support obligations or the manner in which the parties agree they can be satisfied. Moreover, there is no conceivable violation of public policy if the parties’ agreement is enforced. As the court pointed out in Hendrix, the counterweight to the public policy оf freedom to contract is the public policy rule against enforcement of illegal contracts. Relief is denied on the basis of the public policy against enforcement of illegal contracts because a court will not aid a wrongdoer. N. W. Amusement Co. v. Aetna Co.,
Several other comments are germane in response to the majority’s position. The majority asserts that the above-cited cases “upheld agreements that dispensed with the change of circumstances requirement, which * * * began as a
Also, this court has previously rejected the rationale advanced by the' majority, albeit in a different factual context. In Porter, the majority held enforceable a marital settlement agreement that awarded the wife the sum of $1 per month in spousal support. Under the provisions of ORS chapter 107, the trial court had no authority to award a token amount of support for the sole purpose оf reserving to the court in the future the power to modify the award under ORS 107.135. The dissent complained that “[t]he majority would allow the parties to. do by agreement what a court could not do on its own.” Potter,
The reason that the agreements in McDonnal, Pope, Porter, Hearn, Eidlin, and this case are enforceable is further
Here, the court is not deprived of any statutory authority by the parties’ agreement to satisfy accrued support obligations. The thrust of the majority’s argument is that the parties by their agreement may not confer authority on a court that it does not have. But that assertion misses the point. The trial court had the authority to approve the parties’ agreement under the applicable statutes and case law at the time of the stipulated judgment,
For the above reasons, I dissent from the majority’s decision to reduce spousal support effective April 1, 2001.1
Deits, C. J., and Linder, J., join in this opinion.
See also Barron and Barron,
If the majority means to say that the parties’ marital settlement agreement ‘Violates the law” because it confers power on the court beyond that granted by ORS 107.135(6), then it is unclear why that is the case. The agreement itself is not illegal, and ORS 107.135(6) contains no prohibition against the making of a marital settlement agreement that provides for the retroactive satisfaction of accrued judgments. In fact, the power of the court under the statute to order satisfaction of accrued judgments suggests that an agreement to that effect would also be legal. Rather, the only question is whether the parties’ agreement contravenes ORS 107.135(6) to the extent that it is unenforceable as between the parties.
Oregon Laws 2001, chapter 203, sections 1 and 4 became effective May 25, 2001. The stipulated judgment of dissolution of marriage was entered July 19, 2000, and the judgment modifying the prior judgment is dated November 29,2001.
Concurrence Opinion
concurring.
I agree with the majority except for its conclusion that the court lacked authority to enforce the parties’ marital settlement agreement to the extent that it authorized the court to modify a spousal support award retroactively. On that issue, I agree with Judge Edmonds’ analysis of the relevant legal principles. I am persuaded, however, that the parties’ agreement does not, in fact, authorize the court to modify wife’s spousal support award for a period earlier than the date on which husband moved to modify the award. I therefore concur in the majority’s disposition of husband’s request to make the change in wife’s award retroactive to December 1, 2000.