Blau v. Blau
| Docket Number | A23A0489 |
| Decision Date | 21 June 2023 |
| Parties | EMILE BLAU v. STACIA HORN BLAU. |
| Court | United States Court of Appeals (Georgia) |
Following a 25-year marriage, Emile Blau and Stacia Horn Blau divorced. In a settlement agreement incorporated into their divorce decree, Emile agreed to maintain a life-insurance policy naming Stacia as a beneficiary. After Stacia remarried, Emile filed a petition for declaratory judgment, arguing that his obligation to maintain the policy constituted alimony and thus, terminated upon Stacia's remarriage. The trial court agreed that payment of the insurance premiums amounted to alimony, but after an evidentiary hearing, it ultimately ruled that the doctrine of promissory estoppel prevented Emile from allowing the policy to lapse. Now, in this discretionary appeal, Emile contends the trial court erred in (1) ordering him to maintain the policy despite Stacia's remarriage; (2) ruling that he was estopped from allowing the policy to lapse; and (3) finding that a mutual mistake of law required him to maintain the policy. For the following reasons, we reverse.
In reviewing a bench trial, we will not set aside the trial court's factual findings "unless they are clearly erroneous, and this Court properly gives due deference to the opportunity of the trial court to judge the credibility of the witnesses."[1] But importantly, when a question of law is at issue, we "review the trial court's decision de novo."[2]
So viewed, the record shows that Emile and Stacia married in 1990. In January 2002, when Emile was 41 years old Prudential Life Insurance Company issued him a $500,000 term-life insurance policy. The policy had a term of 54 years and the premiums remained level for the first 20 years, but were set to increase every year after that. Until January 2022, the policy premiums were $107.65 per month; but after that time, premiums increased dramatically each year. Specifically, beginning in 2022, the monthly premium of the policy increased to over $1,000 per month. And by 2043, the policy's premium will exceed $10,000 per month and rise by approximately $1,000 per month each year thereafter.
In April 2014, Emile informed Stacia that he wanted a divorce. And after months of discussions, on August 13, 2015, they executed a settlement agreement that detailed the division of marital assets. Notably, the agreement provided that each party waived their respective rights to receive alimony from the other party. The agreement also provided, in relevant part, that Emile would retain Stacia as the "irrevocable beneficiary" of the Prudential Life policy and pay all premiums "as they become due." Additionally, the agreement required Emile to "provide proof to [Stacia] on an annual basis that [the policy] is in full force and effect with her designated as the irrevocable beneficiary." The settlement agreement was then incorporated into the final judgment and decree of divorce, which was issued on December 10, 2015.
Stacia remarried in 2020. The next year (in January 2021), Emile filed a complaint for declaratory judgment, seeking a ruling that his premium payments for the policy constituted periodic alimony that terminated upon Stacia's remarriage; and thus, he was no longer obligated to pay those premiums. Stacia filed an answer and moved to dismiss the complaint, arguing that given the plain language of the parties' settlement agreement-which provided that neither was to receive alimony-Emile could not state a claim as a matter of law. Nonetheless, she subsequently amended her answer, asserting that the doctrine of promissory estoppel barred the relief Emile sought in his declaratory-judgment complaint. But not long after that, the trial court denied Stacia's motion to dismiss, finding that payment of the insurance premiums constituted periodic alimony. Additionally, in its order, the trial court noted that it was not addressing Stacia's promissory estoppel argument at that time.
Further briefing ensued, and on June 30, 2022, the trial court conducted an evidentiary hearing, during which Stacia indicated that she relied upon the policy to her detriment. Specifically, Stacia testified that she would not have remarried had she known that doing so would result in allowing Emile to let the policy lapse. At the conclusion of the hearing, the trial court reiterated its ruling that the payment of insurance premiums by Emile constituted periodic alimony but took the promissory estoppel issue under advisement. A few weeks later, the trial court entered an order denying Emile's request for a declaratory judgment, holding that-although the premiums amounted to alimony-the doctrine of promissory estoppel barred Emile from discontinuing the policy. The trial court also found that the parties "acknowledge[d] a mutual mistake of law" because they did not intend for the policy to be considered alimony. Emile subsequently filed an application for discretionary appeal, which we granted. This appeal follows.
1. In three separate enumerations of error, Emile contends the trial court erred in ruling that, even though the policy premiums constituted periodic alimony, the doctrine of promissory estoppel-as codified in both subsections (a) and (b) of OCGA § 13-3-44-barred him from discontinuing the policy after Stacia's remarriage. But because these issues are inextricably linked, we address them together. In doing so, we agree the trial court erred, and so we reverse its judgment.
As an initial matter, we address the trial court's ruling-in both its denial of Stacia's motion to dismiss and final order-that Emile's payment of the policy premiums constituted periodic alimony. Our analysis begins with OCGA § 19-6-1 (a), which provides that "[a]limony is an allowance out of one party's estate, made for the support of the other party when living separately," and it is "either temporary or permanent." And "periodic alimony" is characterized by "an indefinite number of payments, making the actual amount to be paid also indefinite."[3] Importantly, within this context, the Supreme Court of Georgia addressed the exact issue before us in White v. Howard[4]-a divorce case in which a wife argued that her husband's obligation to maintain term life insurance for her benefit for 12 years was a form of property division not subject to modification.[5] And in rejecting this argument, the White Court reiterated earlier holdings that "the obligation of one spouse to carry life insurance for the benefit of the other spouse is a form of periodic alimony,"[6] and that as permanent periodic alimony, "Husband's life insurance obligation terminated upon Wife's remarriage[.]"[7] So too here.
Moreover, it is of no consequence that the settlement agreement did not characterize the policy as a form of alimony or that the agreement explicitly provided neither party would receive alimony. As our Supreme Court has explained, in reviewing awards in divorce judgments, Georgia's appellate courts will "ascertain the nature of the awards as a matter of law, and on the basis of substance rather than of labels."[8] Indeed, neither the parties nor the trial court's "characterization of an award is controlling."[9] Rather, because the cost to Emile and value to Stacia of the settlement agreement's requirement for Emile to continue paying policy premiums until 2043 were indefinite at the time of the agreement-as the amount of that award depends on how long Emile will live (i.e., nothing or the designated policy amount)-the award was periodic alimony as a matter of law.[10]
Despite correctly determining that Emile's payment of the policy premiums constituted periodic alimony,[11] the trial court relied on the doctrine of promissory estoppel to find that Emile's obligation to maintain the policy survived Stacia's remarriage. In doing so, the trial court erred.
Turning to that issue, a claim for promissory estoppel "allows enforcement of promises that would otherwise be defeated by the statute of frauds."[12] In that regard, OCGA § 13-3-44 (a) provides: "A promise which the promisor should reasonably expect to induce action or forbearance on the part of a promisee or third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." Consequently, to prevail on a claim of promissory estoppel, the party asserting that claim must show:
(1) [one party] made a promise or promises; (2) the [first party] should have reasonably expected the [other party] to rely on such promise; (3) the [other party] relied on such promise to [his or her] detriment; and (4) injustice can only be avoided by the enforcement of the promise, because as a result of the reliance, [the other party] changed [his or her] position to [his or her] detriment by surrendering, forgoing, or rendering a valuable right.[13]
Furthermore, because promissory estoppel is an equitable doctrine, the third requirement is "one of reasonable reliance[.]"[14] This means the plaintiff "relied exclusively on such promise and not on his or her own preconceived intent or knowledge; that the plaintiff exercised due diligence, so as to justify such reliance as a matter of equity; and that there was nothing under the circumstances which would prevent the plaintiff from relying to his detriment."[15]
Here in its final order, the trial court found that promissory estoppel barred Emile from discontinuing the policy because Stacia relied on his promises to continue paying the premiums to her detriment. In doing so, the trial court apparently credited Stacia's testimony that she would not have remarried or agreed to waive any rights she might otherwise have to inherit from her...
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