Brown v. Brown

• Decision Date: 27 November 2013
• Docket Number: DR11020154,A150044.
• Citation: 315 P.3d 422,259 Or.App. 618
• Parties: In the Matter of the MARRIAGE OF Kathleen Kay BROWN, nka Kathleen Kay McLaughlin, Petitioner–Appellant, and Timothy Martin Brown, Respondent–Respondent.
• Court: Oregon Court of Appeals

259 Or.App. 618

315 P.3d 422

In the Matter of the MARRIAGE OF Kathleen Kay BROWN, nka Kathleen Kay McLaughlin, Petitioner–Appellant, and Timothy Martin Brown, Respondent–Respondent.

DR11020154; A150044.

Court of Appeals of Oregon.

Argued and Submitted April 08, 2013.

Decided Nov. 27, 2013.

Philip F. Schuster, II, Portland, argued the cause and filed the briefs for petitioner.

Andrew W. Newsom argued the cause for respondent. With him on the brief was Stahancyk, Kent & Hook PC.

Before SCHUMAN, Presiding Judge, and WOLLHEIM, Judge, and DUNCAN, Judge.

DUNCAN, J.

Wife appeals from a dissolution judgment enforcing a settlement agreement. She contends that the trial court erred as a matter of law in enforcing the agreement and in adopting the agreed-upon spousal support amount, without first determining that it was “just and equitable.” Wife also asserts that the court erred in awarding husband his attorney fees and costs. We conclude that the trial court erred, and, therefore, we vacate the judgment in part and remand.

In February 2011, wife sought dissolution of the parties' eight-year marriage. At that time, wife was 45 and husband was 39. Wife had previously been employed as a realtor but at the time she filed for dissolution she was unable to work due to back injuries and had been receiving Social Security disability benefits for approximately two months. Husband was employed as an engineer; his gross income in 2010 was $86,000. There are no children of the marriage.

On May 5, 2011, the parties, represented by counsel, attended a mediation session, during which wife's attorney submitted a settlement offer. Husband accepted the offer, and wife's attorney drafted a document entitled “Memorandum of Settlement,” which both parties dated and signed that same day. The agreement divided the parties' assets, allocating to wife the long half of the marital property. It provided for spousal support to wife in the amount of “$l,300/month for three years; then $750/month for two years.”

Although the parties exchanged drafts of a stipulated judgment, the marital settlement agreement was never incorporated into a stipulated judgment. The court set a trial date for the dissolution, and husband filed a motion and order to show cause why the settlement agreement should not be “enforced.”

The court took testimony at a hearing on husband's motion and, in a general judgment of dissolution, made the following findings:

“1. On May 5, 2011, the parties participated in a mediation of their pending divorce with retired Clackamas County Circuit Court, Judge John Lowe.

“2. Both parties were represented by counsel.

“3. Wife is permanently disabled and receives Social Security Disability.

“4. Wife had been prescribed and had been taking muscle relaxants and pain medication at the time of mediation.

“5. Until Wife was disabled, she worked as a real estate broker.

“6. During the mediation, Wife's attorney [Ms. McFarland] * * * made a settlement offer to Husband with Wife's consent. Husband accepted that offer.

“7. The agreement was reduced to writing and signed by both parties on the same day as the mediation, May 5, 2011.

“8. Judge Lowe, Ms. McFarland and Husband did not believe Wife to be impaired or unable to understand the nature of the agreement that was being entered into.

“9. At no time prior to signing the agreement did Wife state that she was confused or unable to comprehend what she was agreeing to.

“10. Although Judge Lowe offered recommendations on the terms of the settlement, he did not dictate the terms of the settlement.

“11. Subsequent to the day of the mediation, Wife's attorney drafted a proposed form of Judgment. Wife's attorney reviewed the proposed Judgment with Wife and as a result of that meeting and later conversations, prepared a second and a third draft of the Judgment. That version of the Judgment was sent to Husband's attorney, who prepared suggested changes and sent those back to Wife's attorney.

“12. Wife's attorney sent the proposed changes to Wife. Thereafter, Wife retained new counsel.

“13. Both parties voluntarily and intelligently entered into the agreement with the full understanding and intent that it would control the division of their property, allocate debts, and establish the amount and duration of spousal support at dissolution.

“14. The language of the agreement is unambiguous. The agreement provides that Husband is to bear the vast majority of the marital debt. That Wife is to receive the lion share of the marital assets. Given the length of the marriage and the circumstances of the parties, the court might have made a different decision about the assets, debts and support, but the agreement entered into by the parties does not rise to the level of being inconsistent with public policy.”

(Emphasis added.) The court ordered that “[t]he motion to enforce settlement agreement is granted.” The judgment, which essentially incorporated the terms of the settlement agreement, contained an explanation of the court's acceptance of the parties' agreement relating to spousal support:

“Based upon the parties' settlement agreement, the court finds that Husband should pay transitional spousal support to Wife. The following factors are considered by the court in accepting the parties' settlement agreement and awarding a support judgment:

“(1) The duration of the marriage is eight years[;]

“(2) Wife has not worked outside the home for some time. Her last employment was as a realtor, but her license is not current;

“(3) Wife will require surgery on her back. She currently receives disability payments which are not sufficient to support her.

“(4) Support will be taxable income to Wife and a tax deduction to Husband.”

The trial court ordered that

“[h]usband will pay transitional spousal support in the amount of $1,300 per month for a period of forty-three (43) months, followed by payments of $750 per month for an additional seventeen (17) months, for a total duration of sixty (60) months.” ¹

The trial court also awarded husband his attorney fees, explaining,

“I find [wife's] actions in refusing to abide with the settlement agreement to have been in bad faith. Even if I had not found her actions to have been in bad faith, I would have made an award of attorney fees because of ORS 20.075(1)(a), regarding ‘[t]he conduct of the parties in the transactions or occurrences that gave rise to the litigation, including any conduct of a party that was reckless, willful, malicious, in bad faith or illegal,’ and (b), regarding ‘[t]he objective reasonableness of the claims and defenses asserted by the parties.’ [Wife] voluntarily and intelligently entered into a mediated agreement, which was reduced to writing and signed. The agreement is unambiguous, and it was objectively unreasonable for her to refuse to abide by it.”

On appeal, wife contends that the trial court erred in two respects: (1) in granting husband's motion to enforce the settlement agreement and entering a judgment incorporating the spousal support terms of the agreement rather than awarding what wife considers to be a “just and equitable” amount under ORS 107.105(1)(d); and (2) in awarding husband his attorney fees.

Wife requests that we exercise our discretion to review the judgment de novo,ORS 19.415(3)(b), contending that this is an “exceptional case” justifying de novo review, because the trial court's judgment reflects an error of law and, further, does not comport with the uncontroverted evidence in the record. We agree with wife that the trial court's judgment reflects legal error that requires a reevaluation of the record. See McCarthy v. Oregon Freeze Dry, Inc., 327 Or. 185, 188, 957 P.2d 1200 (1998) (a trial court's exercise of its discretion must comport with the applicable legal framework). However, that reevaluation involves factual issues that are not developed on this record, and for that reason, we decline to exercise our discretion to review the trial court's judgment de novo.

We begin with the applicable statutes and case law. ORS 107.105(1)(d) governs spousal support. It provides, in part:

“(1) Whenever the court renders a judgment of marital annulment, dissolution or separation, the court may provide in the judgment:

“ * * * * *

“(d) For spousal support, an amount of money for a period of time as may be just and equitable for one party to contribute to the other, in gross or in installments or both. The court may approve an agreement for the entry of an order for the support of a party.”

Thus, under ORS 107.105(1)(d), in setting spousal support, the court has discretion to approve an agreement of the parties for support.

ORS 107.104 expresses a state policy favoring, inter alia, marital settlement agreements and providing for the enforcement of those agreements that have been incorporated into a judgment. It provides:

“(1) It is the policy of this state:

“(a) To encourage the settlement of suits for marital annulment, dissolution or separation; and

“(b) For courts to enforce the terms of settlements described in subsection (2) of this section to the fullest extent possible, except when to do so would violate the law or would clearly contravene public policy.

“(2) In a suit for marital annulment, dissolution or separation, the court may enforce the terms set forth in a stipulated judgment signed by the parties, a judgment resulting from a settlement on the record or a judgment incorporating a marital settlement agreement:

“(a) As contract terms using contract remedies;

“(b) By imposing any remedy available to enforce a judgment, including but not limited to contempt; or

“(c) By any combination of the provisions of paragraphs (a) and (b) of this subsection.

“(3) A party may seek to enforce an agreement and obtain remedies described in subsection (2) of this section by filing a motion, serving notice on the other party in the manner provided by ORCP 7 and, if a remedy under subsection (2)(b) of this section is sought, complying...