Bondy v. Levy

• Decision Date: 31 March 1992
• Docket Number: No. 18798,18798
• Citation: 121 Idaho 993,829 P.2d 1342
• Parties: Marcia Kahn BONDY, Plaintiff-Respondent, v. Paul E. LEVY, Defendant-Appellant. Boise, December 1991 Term
• Court: Idaho Supreme Court

Page 1342

829 P.2d 1342

121 Idaho 993

Marcia Kahn BONDY, Plaintiff-Respondent, v. Paul E. LEVY, Defendant-Appellant.

No. 18798.

Supreme Court of Idaho,

Boise, December 1991 Term.

March 31, 1992.

Rehearing Denied June 1, 1992.

Levy Law Offices, Boise, for defendant-appellant. Paul E. Levy, argued.

Cosho, Humphrey, Greener & Welsh, Boise, for plaintiff-respondent. Stanley W. Welsh, argued.

BOYLE, Justice.

I.

Paul E. Levy and Marcia K. Bondy were divorced on May 31, 1985. The divorce decree contained a Custody and Property Settlement Agreement which had been entered into by the parties on March 21, 1985 and which was subsequently amended in April of 1985. Although the child custody and support provisions of the agreement were merged into the judgment and decree of divorce, the remainder of the agreement survived as a binding contract. In February of 1989, Bondy brought a civil action seeking recovery of all payments due under § 9 ¹ of the agreement. In a memorandum decision, the trial court ² awarded a judgment of $18,250 which represented all monies due under the settlement agreement through February 15, 1989. Levy appealed the trial court's decision to this Court and we issued our first decision in Bondy v. Levy (Bondy I), 119 Idaho 961, 812 P.2d 268 (1991). In Bondy I, we described a portion of the agreement between these parties as follows:

This type of agreement is known as a "Lester" agreement, entitling the parties to certain tax benefits. ³ Typically, such agreements require the husband to make payments of a certain amount and allow him thereafter to obtain a deduction from taxes for the payment. Through the agreement, Levy provided Bondy with funds which she would use to provide for all the children's needs. The payments were $1,500 a month, $1,000 of which was used to cover all the children's needs, and $500 of which was allowed to cover "overhead," including Bondy's income tax costs resulting from the support arrangement.

Bondy, 119 Idaho at 963, 812 P.2d at 270.

While Bondy I was pending on appeal, and despite Levy's filing of a supersedeas bond in an appropriate amount, Bondy brought the instant action in district court to recover those payments due and owning subsequent to February 15, 1989. Levy requested a stay and filed numerous motions, including a Motion to Dismiss. The Motion to Dismiss was denied by the trial court and the motion for a stay was taken under advisement. Thereafter, the trial court granted Bondy's motion for summary judgment and denied Levy's motion for a stay of the proceedings. Levy appeals the trial court's denial of his motions and granting summary judgment in favor of Bondy.

II.

While it may have been preferable for the trial court below to have stayed the proceedings pending our decision in Bondy I, we are unable to consider the trial court's denial of Levy's motion to dismiss or request for a stay because the record before us does not contain the basis for Levy's motions. ⁴ See, Anderson v. City of Pocatello, 112 Idaho 176, 731 P.2d 171 (1987) (appellant has burden on appeal of presenting sufficient record and Supreme Court is bound by record presented on appeal); State v. Hodges, 103 Idaho 765, 653 P.2d 1177 (1982).

Therefore, our review is limited to the trial court's granting of summary judgment in this instant action. Bondy moved for summary judgment relying primarily upon the district court's conclusions in Bondy I and the provisions of the settlement agreement. Levy responded arguing that a duty to renegotiate existed under the contract due to a change in tax brackets, that the agreement provided for payments to Bondy to cease in the event of her remarriage or cohabitation, and that the underlying purpose of the contract had been frustrated by Bondy's refusal to support the children with the funds paid by him pursuant to the agreement. The trial court granted Bondy's motion for summary judgment concluding that renegotiation was not required because §§ 71 and 215 of the Internal Revenue Code had not been amended. ⁵ The trial court held that Levy's other claims were immaterial.

It is well established that a motion for summary judgment is to "be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." I.R.C.P. 56(c); McCoy v. Lyons, 120 Idaho 765, 820 P.2d 360 (1991); G & M Farms v. Funk Irrigation Co., 119 Idaho 514, 808 P.2d 851 (1991); Brown v. Matthews Mortuary, Inc., 118 Idaho 830, 801 P.2d 37 (1990). Furthermore, when determining whether a motion for summary judgment should be granted, all disputed facts are to be liberally construed in favor of the non-moving party, and all reasonable inferences which can be made from the record shall be made in favor of the party resisting the motion. McCoy v. Lyons, 120 Idaho 765, 820 P.2d 360 (1991); G & M Farms v. Funk Irrigation Co., 119 Idaho 514, 808 P.2d 851 (1991); Brown v. Matthews Mortuary, Inc., 118 Idaho 830, 801 P.2d 37 (1990).

When considering an appeal from a motion for summary judgment, our standard of review is the same as the standard used by the trial court in passing on the motion for summary judgment. McDonald v. Paine, 119 Idaho 725, 810 P.2d 259 (1991); Meridian Bowling Lanes v. Meridian Athletic, 105 Idaho 509, 670 P.2d 1294 (1983). Accordingly, our task on appeal is to apply these rules to the record before us and determine whether there exists a genuine issue of material fact and whether Bondy is entitled to judgment as a matter of law. In making this determination, we are required to review and consider the totality of the motions, affidavits, depositions, pleadings and attached exhibits contained in the record. Anderson v. City of Pocatello, 112 Idaho 176, 731 P.2d 171 (1986).

A.

In considering Levy's claim that the contract called for renegotiation, the trial court analyzed Section 9.03 of the settlement agreement which provides:

9.03 Tax Treatment: The parties enter into this agreement with the understanding that these payments will be deductible to Husband and includable in Wife's income pursuant to § 71 and § 215 of the Internal Revenue Code. If by legislation or otherwise these tax consequences are changed, this agreement shall be renegotiated for the purpose of offsetting the resulting shift in income tax burden between the parties.

In considering this provision of the settlement agreement, the trial court noted:

Section 71 of the Internal Revenue Code had not been amended since the contract was signed in 1985. It remains in force. While the Tax Reform Act of 1986 did change the tax brackets, it did not alter or amend the provisions of section 71, nor did it operate to shift the tax burden between the parties on account of section 71 payments. While I acknowledge that the change in tax brackets might have made the tax treatment less advantageous to the defendant, the amendments did not change the structure of deductibility under section 71, which was the object of the provisions of section 9.03 of the contract.

....

I think this clause is clear and unambiguous in providing that the obligation to renegotiate shall be triggered only if section 71 is amended and there is a change in the deductibility of payments. No such change in deductibility has occurred. ⁶

It is well established in Idaho that when construing a party's settlement agreement, normal rule of contract construction apply. See, Wolford v. Wolford, 117 Idaho 61, 785 P.2d 625 (1990); Spencer-Steed v. Spencer, 115 Idaho 338, 766 P.2d 1219 (1988). The primary objective in construing a contract is to discover the intent of the parties, and in order to effectuate this objective, the contract must be viewed as a whole and considered in its entirety. Luzar v. Western Surety Co., 107 Idaho 693, 692 P.2d 337 (1984); Beal v. Mars Larsen Ranch Corp., 99 Idaho 662, 586 P.2d 1378 (1978); Bennett v. Bliss, 103 Idaho 358, 647 P.2d 814 (Ct.App.1982). The primary consideration in interpreting an ambiguous contract is to determine the intent of the parties. See Luzar v. Western Surety Co., 107 Idaho 693, 692 P.2d 337 (1984). The determination of a contract's meaning and legal effect are questions of law to be decided by the court where the contract is clear and unambiguous. Galaxy Outdoor Advertising Inc. v. Idaho Transportation Department, 109 Idaho 692, 710 P.2d 602 (1985). However, where a contract is determined to be ambiguous, the interpretation of the document presents a question of fact which focuses upon the intent of the parties. See, Ramco v. H-K Contractors, Inc., 118 Idaho 108, 794 P.2d 1381 (1990); Luzar v. Western Surety Co., 107 Idaho 693, 692 P.2d 337 (1984). The determination of whether a contract is ambiguous or not is a question of law over which we may exercise free review, see Ramco v. H-K Contractors, Inc., 118 Idaho 108, 794 P.2d 1381 (1990); DeLancey v. DeLancey, 110 Idaho 63, 714 P.2d 32 (1986); Pocatello Industrial Park, Co. v. Steel West, Inc., 101 Idaho 783, 621 P.2d 399 (1980); Prouse v. Ransom, 117 Idaho 734, 791 P.2d 1313 (Ct.App.1989), and in determining whether a contract is ambiguous, our task is to ascertain whether the contract is reasonably subject to conflicting interpretation. Spencer-Steed v. Spencer, 115 Idaho 338, 766 P.2d 1219 (1988); DeLancey v. DeLancey, 110 Idaho 63, 714 P.2d 32 (1986).

After carefully reviewing the record before us, we are satisfied that a reasonable conflicting interpretation exists because the language referring to a change in tax consequences can reasonably be construed to require renegotiation in the event a shift in tax brackets occurs which affects the real cost involved in making payments pursuant to the agreement. ⁷ Because we hold this provision of the contract is ambiguous, an issue of material fact exists which would preclude entry of summary judgment. Accordingly,...