Lead Opinion
[¶ 1] Sheila A. Toni appealed from an order denying her motion to modify a divorce decree under N.D.C.C. § 14-05-24. In the motion Sheila Toni asked the trial court to modify a spousal support award granted in a divorce judgment which incorporated her agreement with Conrad R. Toni to divest the court of jurisdiction to modify the amount and term of spousal support set forth in the agreement. We conclude the parties’ agreement, which was found by the court in the divorce action to be “fair, just and equitable,” is enforceable under North Dakota law and divested the court of jurisdiction to modify the spousal support award. We therefore affirm.
I
[¶ 2] Conrad and Sheila Toni were married from July 9, 1971, until May 10, 1999. The couple had three children during the marriage, and one of them was a minor at the time of the divorce. Both parties are employed in Fargo: Conrad as a urologist, and Sheila as a clerk at Barnes & Noble Bookstore.
[¶ 3] Before their divorce was granted, the parties entered into a “Custody and Property Settlement Agreement” which comprehensively addressed all divorce issues. The agreement stated that, although Conrad had been represented by counsel, Sheila “has not been represented by counsel and has been informed that Maureen Holman does not represent her interests in this matter but has not sought such independent counsel and enters into this custody and property settlement agreement of her. own free will.” The agreement also stated, “[bjoth parties agree that each has made a full disclosure to the other of all assets and liabilities and is satisfied that this custody and property settlement agreement is fair and equitable,” and “[e]ach party has entered into this custody and property settlement agreement intending it to be a full and final settlement of all claims of every kind, nature, and description which either party may have or claim to have, now or in the future, against the other and, except as is expressly provided herein to the contrary, each is released from all further liability of any kind, nature or description whatsoever to the other.”
[¶ 4] The agreement provided for “joint physical custody” of the couple’s minor daughter, who was expected to graduate from high school in May 1999. The agreement divided the parties’ real property, stocks and retirement accounts, but did not disclose the value of those assets. The agreement also contained the following provision on spousal support:
Commencing May 1, 1999, Conrad shall pay to Sheila the sum of $5,000 per month as and for spousal support. Said payments will continue on the first day of each month thereafter until the death of either party, Sheila’s remarriage, or until the payment due on April 1, 2002 has been made. It is intended that the spousal support payable to Sheila shall be included in Sheila’s gross income for income tax purposes and shall be deductible by Conrad. The court shall be divested of jurisdiction to modify in any manner whatsoever the amount and term of the spousal support awarded to Sheila immediately upon entry of the judgment and decree herein. The court shall retain jurisdiction to enforce Con*398 rad’s obligation to pay spousal support to Sheila.
[¶ 5] At the divorce hearing, Conrad appeared with his attorney, but Sheila, who had admitted service of the summons and complaint, did not personally appear. The trial court granted the divorce and, finding the parties’ agreement to be “a fair, just and equitable settlement,” incorporated its provisions into the divorce decree.
[¶ 6] In November 2000, Sheila moved under N.D.C.C. § 14-05-24 to modify the spousal support award. Sheila claimed in an affidavit that Conrad earned $14,000 per month in “take-home pay” when they married and she believed he continued to earn a “similar” amount per month, while she earns $1,000 per month working full-time as a clerk at Barnes & Noble Bookstore. Sheila further alleged, although income from assets she received in the divorce had paid her about $2,700 per month, the “return on those assets this year has been almost nothing.” Sheila estimated her monthly expenses to be $5,340, and said her accountant informed her she could convert a retirement account into an annuity producing $2,000 per month in additional income, but she is “afraid to convert this to an annuity because I believe I need it for my retirement.” Sheila claimed she has a “neurological condition” that causes her trouble sleeping, and she stayed home with the children during her marriage to Conrad rather than pursuing her own career. Sheila also stated:
I met Bob Boman after I separated from my husband. I had agreed to a reduced three-year term for spousal support because Dr. Boman was in his residency following medical school. Once he finished, we had agreed that he would pay the family expenses. Conrad and I had decided to divorce in August and I met Bob in October. Bob and I planned to marry after the divorce. Bob and I are no longer together and I do not receive any money from him.
[¶ 7] The parties agreed to submit to the trial court the sole issue whether the provision of the parties’ agreement divesting the court of jurisdiction to modify spousal support was valid under North Dakota law, and to stay any proceedings on the merits of the motion to modify the spousal support award. The trial court dismissed Sheila’s motion, ruling “the parties entered into a binding contract which was incorporated into the judgment and ... the court now lacks jurisdiction to modify spousal support.”
II
[¶ 8] We assume, for purposes of argument only, that Sheila’s claims of lowered investment yields and a failed relationship are sufficient to constitute a material change of circumstances to support a motion to modify spousal support. See, e.g., Lohstreter v. Lohstreter,
[¶ 9] At the pertinent time, N.D.C.C. § 14-05-24 allowed a trial court to compel either party to a divorce to
When a divorce is granted, the court shall make such equitable distribution of the real and personal property of the parties as may seem just and proper, and may compel either of the parties to provide for the maintenance of the children of the marriage, and to make such suitable allowances to the other party for support during life or for a shorter period as to the court may seem just, having regard to the circumstances of the parties respectively. The court from time to time may modify its orders in these respects.1
Under N.D.C.C. § 14-05-24, the trial court generally retains continuing jurisdiction to modify spousal support, child support, and child custody upon a showing of changed circumstances. See Kopp v. Kopp,
[¶ 10] We encourage peaceful settlements of disputes in divorce matters. See Clooten v. Clooten,
[¶ 11] In line with these principles, this Court has held a trial court has continuing jurisdiction to modify child support notwithstanding parental divorce settlement agreements prohibiting or limiting the court’s modification powers, because the right to child support belongs to the child rather than to the parent, rendering such agreements violative of public policy and invalid. See Smith v. Smith,
[¶ 12] Jurisdictions differ over their treatment of agreements between divorcing couples seeking to limit a court’s ability to modify spousal support arrangements. See generally Annot., Divorce: Power of court to modify decree for alimony or support of spouse which was based on agreement of parties,
[¶ 13] Several jurisdictions, by judicial decision, have allowed contractual waivers of the right to seek spousal support modification. See, e.g., Beasley v. Beasley,
[¶ 14] We think the reasoning of the current trend of jurisdictions which allow divorcing couples to agree to make spousal support nonmodifiable is persuasive.
[¶ 15] This result is consistent with our prior caselaw on spousal support. In Becker,
[¶ 16] In response to the argument that contracting parties cannot divest a court of its jurisdiction under a statute similar to N.D.C.C. § 14-05-24, the court in Karon,
It is not the parties to the stipulation who have divested the court of ability to relitigate the issue of maintenance. The court had the authority to refuse to accept the terms of the stipulation in part or in toto. The trial court stands in place and on behalf of the citizens of the state as a third party to dissolution actions. It has a duty to protect the interests of both parties and all the citizens of the state to ensure that the stipulation is fair and reasonable to all. The court did so here and approved the stipulation and incorporated the terms therein in its decree. Thus, the decree is final absent fraud.
[¶ 17] Section 14-05-24, N.D.C.C., does not expressly prohibit nonmodification agreements. If the legislature intended to prevent parties from entering into non-modifiable spousal support agreements, it could have expressly prohibited them. See Nichols,
[¶ 18] Our caselaw invalidating parental divorce stipulations prohibiting or limiting a court’s modification powers over child support is governed by public policy principles entirely different from those present when reviewing an agreement concerning spousal support. While a spousal support agreement “serves primarily to determine the interests of the contracting parties themselves,” a child support agreement “directly affects the interests of the children of the marriage, who have the most at stake as a result of such an agreement but who have the least ability to
[¶ 19] Permitting parties to determine the future modifiability of their spousal support agreements maximizes the advantages of careful future planning and eliminates uncertainties based on the fear of subsequent motions to increase or decrease the obligations of the parties. See Chalkley,
The AAML comments that “[recognizing and enforcing” the parties’ waiver of modification “does no violence to public policy, and is consistent with the reasonable expectancy interests of the parties.” The AAML also offers five public policy reasons why courts should enforce duly executed nonmodifiable alimony arrangements: (1) Nonmodifiable agreements enable parties to structure package settlements, in which alimony, asset divisions, attorney fees, postsecondary tuition for children, and related matters are all coordinated in a single, mutually acceptable agreement; (2) finality of divorce provisions allows predictability for parties planning their postdivorce lives; (3) finality fosters judicial economy; (4) finality and predictability lower the cost of divorce for both parties; (5) enforcing agreed-upon provisions for alimony will encourage increased compliance with agreements by parties who know that their agreements can and will be enforced by the court.
(footnote omitted). It has been noted that honoring and enforcing nonmodification agreements will “discourage former spouses from using the modification process ‘repeatedly for vexatious purposes only.’ ” Voigt,
[¶ 20] Nullifying waivers of future spousal support modifications would discourage the settlement of divorce cases, see Staple,
[¶ 21] The parties’ agreement in this case is not ambiguous, but is clear and unequivocal: “The court shall be divested of jurisdiction to modify in any manner whatsoever the amount and term of the spousal support awarded to Sheila immediately upon entry of the judgment and decree herein.” Similar stipulations have been enforced in other jurisdictions. See, e.g., Ashworth,
[¶ 22] Our holding in this case, however, is narrow. This case is not a direct appeal from the original divorce judgment challenging the terms of the parties’ agreement. See Weber v. Weber,
Ill
[¶ 23] The trial court’s order" is affirmed.
Notes
. Section 14-05-24, N.D.C.C., was amended by the Legislature in 2001. See 2001 N.D. Sess. Laws ch. 150, § 1. Spousal support is now addressed in N.D.C.C. § 14-05-24.1, which similarly provides:
Taking into consideration the circumstances of the parties, the court may require one party to pay spousal support to the other party for any period of time. The court may modify its spousal support orders.
See 2001 N.D. Sess. Laws ch. 149, § 10.
Dissenting Opinion
dissenting.
[¶ 25] I respectfully dissent. I am of the opinion the parties’ Custody and Property Settlement Agreement did not divest the trial court of jurisdiction to modify the spousal support agreement under N.D.C.C. § 14-05-24.
[¶ 26] Sheila has raised two issues on appeal. First, whether a stipulation divesting a court of its statutory power to modify a spousal support award that is incorporated into a divorce decree is enforceable under North Dakota law. Second, if such stipulations are enforceable, whether the stipulation in this case is an effective waiver of the statutory right to modification under N.D.C.C. § 14-05-24.
I
[¶ 27] In regard to the first issue, the majority correctly points out that most jurisdictions that allow parties to enter into nonmodifiable spousal support agreements have statutes that specifically permit a provision depriving a court of its power to modify. We do not have such a statute. The majority also correctly recognizes that some jurisdictions that do not have such statutes have allowed stipulated waivers of modification and some jurisdictions have disallowed them. The majority finds the former more persuasive. I find the latter more persuasive and more con
[¶ 28] Section 14-05-24 confers jurisdiction on a trial court to modify spousal support agreements independent of any language contained in the divorce judgment. See Wheeler v. Wheeler,
[¶ 29] We have consistently concluded trial courts have the power to modify spousal support awards regardless of what the parties may have agreed to in their stipulation. See, e.g., Wheeler v. Wheeler,
[¶ 30] We are not dealing with contract law in these cases; we are dealing with family law matters. When, as in this case, a trial court wholly incorporates a settlement agreement into a divorce judgment, the settlement agreement merges with the judgment and “ceases to be independently viable or enforceable.” Sullivan v. Quist,
[¶ 31] In Norberg v. Norberg,
Whether the parties expressly agreed to waive their rights to seek modification of the agreement is irrelevant. RSA 458:14 grants the court the authority to revise any order made by the court. This statute is to be liberally construed. To rule as the plaintiff suggests would allow the parties to circumvent the statute and defeat its evident purpose. We will not allow the parties to effectively divest the court of its statutory authority to modify a decree by merely agreeing that no modification of their agreement shall be sought. Thus, regardless of the language in the stipulation, the court retains the power to modify orders concerning alimony upon a proper showing of changed circumstances.
Norberg, at 1196 (citation omitted) (emphasis added).
[¶ 32] The majority declines to follow the reasoning of Norberg and instead abrogates the will of the Legislature and concludes a court can divest itself of the power conferred by statute to modify decrees of spousal support. However, a number of the decisions relied on by the majority are distinguishable from the case at hand and directly conflict with our statutes and prior case law.
[¶ 33] In Beasley v. Beasley,
[¶ 34] The next decision cited by the majority is Rockwell v. Rockwell,
[¶ 35] Relying on Voigt v. Voigt,
[¶ 36] Moseley v. Mosier,
[¶ 37] In Karon, the stipulation at issue expressly stated: “Except for the aforesaid maintenance, each party waives and is forever barred from receiving any spousal maintenance whatsoever from one another, and this court is divested from having any jurisdiction whatsoever to award temporary or permanent spousal maintenance to either of the parties.”
[¶38] The decision of the Supreme Court of Wisconsin in Nichols v. Nichols,
both parties entered into the stipulation freely and knowingly, ... the overall settlement is fair and equitable and not. illegal or against public policy, and ... one party subsequently seeks to be released from the terms of the court order on the grounds that the court could not have entered the order it did without the parties’ agreement.
Nichols, at 104 (quoting Rintelman v. Rintelman,
[¶ 39] The other cases cited by the majority, Kilpatrick v. McLouth,
[¶ 40] The majority contends that the reasoning of the jurisdictions which allow waiver of modification is consistent with our prior decision in Becker v. Becker,
[¶ 41] Like this Court, Oregon courts recognize that “when no spousal support was awarded in the original decree, the court cannot modify the decree to provide spousal support.” See Matter of Pope,
The right to alimony is, therefore, based upon the statute and not upon any contractual obligations. The law is designed for the protection of the parties and to promote the welfare of society. How, then, can parties, by any private agreement, oust the court of jurisdiction to regulate the payment of alimony when the status of the parties justifies a modification? Any agreement of the parties in reference to the payment of alimony was made in view of the statute authorizing the court to modify the same. The mere fact that the court incorporated in the decree the stipulation concerning alimony is immaterial. It is entirely possible that, while the court undoubtedly considered the stipulation of the parties fair and equitable at the time the decree was rendered, it might, upon a showing of subsequent changed conditions, deem it unjust. To hold otherwise would defeat the very purpose and spirit of the statute.
Prime, at 554-55 (quoting Warrington v. Warrington,
II
[¶ 42] Sheila also argues that, even if nonmodifiable spousal support agreements are enforceable, the particular spousal support agreement at issue in this case does not prevent a trial court from modifying the spousal support award under N.D.C.C. § 14-05-24.
[¶ 43] The agreement in this case provided for spousal support of $5,000 per month commencing May 1, 1999, and continuing until the death of either party, Sheila’s remarriage, or until the payment due on April 1, 2002, has been made. The agreement also stated the court was divested of jurisdiction to modify spousal support in any manner.
[¶ 45] Although we favor prompt and peaceful settlements of divorces, we must not sacrifice our responsibility to ensure they are fair and equitable. See N.D.C.C. § 14-05-24. With regard to spousal support, our statute states the court “may compel either of the parties ... to make such suitable allowances to the other party for support ... as to the court may seem just, having regard to the circumstances of the parties respectively.” Id. A husband and wife have a mutual duty to support each other out of their property and labor. N.D.C.C. § 14-07-03. “Our modern view of marriage is that it is a partnership with each making valuable contributions to the enterprise.” Wiege v. Wiege,
[¶ 46] Justice Levine, in her concurrence in Wiege, with regard to spousal support said:
[Rehabilitative support is varied in purpose. It may be used as a means to restore an economically disadvantaged spouse to independent economic status. It also may be used to equalize the burden of the divorce by increasing the earning capacity of the disadvantaged spouse.
... A remedy for ... permanent disparity in earning capacity and the inequitable burdens the disparity breeds is permanent support.
Permanent support is a means of compensating a spouse for the permanent economic disability caused by the hus-bandAvife decision for the one to forgo career opportunities and advancement as the other enhances earning capacity.
Wiege,
[¶ 47] The majority argues a person can waive their statutory right to seek modification of spousal support. However, “[fjor a waiver to be effective, it must be a voluntary and intentional relinquishment and abandonment of a known existing right, advantage, benefit, claim or privilege which, except for such waiver, the party would have enjoyed.” Steckler v. Steckler,
[¶ 48] Citing Ashworth,
[¶ 49] The stipulation at issue in Ash-worth provided that the parties:
expressly waive any right which she or he may have to modify or revise this Agreement or to modify or revise any Judgment in any action providing for permanent alimony or to petition to modify or rescind any decree or judgment of which this Agreement is made a part. Except as specifically provided herein, no modification or waiver of any of the terms hereof shall be valid unless in writing and signed by both of the parties.
Ashworth,
Parties to an alimony agreement may obtain modification unless the agreement expressly waives the right of modification by referring specifically to that right; the right to modification will be waived by agreement of the parties only in very clear waiver language which refers to the right of modification.
Id. at 572 (quoting Vam,
[f 50] In contrast to the stipulation at issue in Ashworth, is the stipulation at issue in Brenizer v. Brenizer,
[¶ 51] The majority cites Kilpatrick,
[¶ 52] Michigan law is similar to Georgia and Florida law on nonmodifiable spousal support agreements. See Staple,
[¶ 53] The final case the majority relies on to conclude the stipulation in this case effectively divested the trial court of jurisdiction to modify spousal support is Simmons,
[¶ 54] The statute at issue in Simmons mirrored Section 306 of the Uniform Marriage and Divorce Act. Simmons, at 633. Section 306(f) provides “[e]xcept for terms concerning the support, custody, or visitation of children, the decree may expressly preclude or limit modification of terms set forth in the decree if the separation agreement so provides.” Uniform Marriage and Divorce Act § 306(f), 9A U.L.A. at 249. However, section 306(b) of the Act provides the court must only incorporate the terms of the separation agreement if it finds the agreement is not unconscionable. Id. The Comment states:
In the context of negotiations between spouses as to the financial incidents of their marriage, the standard includes protection against overreaching, concealment of assets, and sharp dealing not consistent with the obligations of marital partners to deal fairly with each other.
In order to determine whether the agreement is unconscionable, the court may look to the economic circumstances of the parties resulting from the agreement, and any other relevant evidence such as the conditions under which the agreement was made, including the knowledge of the other party.
Uniform Marriage and Divorce Act § 306, Comment, 9A U.L.A. at 250.
[¶ 55] Unfortunately, the trial court’s mere recitation that 'the agreement is “a fair, just and equitable settlement” is a far cry from the Uniform Marriage and Divorce Act’s requirement that the trial court make a finding whether the agreement is unconscionable, a standard which “includes protection against overreaching, concealment of assets, and sharp dealing” and inquiry into “the conditions under which the agreement was made, including the knowledge of the other party.” Id. The risk of overreaching in divorce stipulations where one party is unrepresented is significant, and without a requirement that the trial court actively engage in determining the conditions under which the agreement was entered, the risk increases tremendously. The decision reached by the majority today provides no protection whatsoever against these risks.
[¶ 56] I am also concerned that there is nothing in the record of this case to indicate the trial court took an active role in determining the stipulation was fair and equitable. The Minnesota Supreme Court has stated the trial court “stands in place and on behalf of the citizens of the state as a third party to dissolution actions .... to protect the interests of both parties and all the citizens of the state to ensure that the stipulation is fair and reasonable to all.” Karon,
[¶ 57] I, therefore, respectfully dissent and would reverse and remand.
[¶ 58] Mary Muehlen Maring.
