Eberhart v. Eberhart

• Decision Date: 08 January 1981
• Docket Number: No. 9852,9852
• Citation: 301 N.W.2d 137
• Parties: Milt EBERHART, Plaintiff and Appellant, v. JoAnn I. EBERHART, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 137

301 N.W.2d 137

Milt EBERHART, Plaintiff and Appellant, v. JoAnn I. EBERHART, Defendant and Appellee.

Civ. No. 9852.

Supreme Court of North Dakota.

Jan. 8, 1981.

Frederick D. Kraemer, Fargo, for plaintiff and appellant.

Armond G. Erickson and Roger J. Minch, of Tenneson, Serkland, Lundberg, Erickson & Marcil, Fargo, for defendant and appellee.

VANDE WALLE, Justice.

Milt Eberhart appeals from an order of the district court of Cass County affirming a referee's conclusions denying Milt's motion for modification of a judgment and decree of divorce. We reverse and remand.

Milt Eberhart was granted an absolute decree of divorce from JoAnn I. Eberhart on March 5, 1980. The divorce judgment provided in paragraph 7 that Milt should pay to JoAnn the sum of $600 per month "as and for permanent alimony" with payments to commence on March 1, 1980. The judgment contained additional provisions concerning the distribution of property which we will refer to later herein. In early April, Milt moved the district court for an order modifying the judgment and decree of divorce by deleting therefrom a provision that Milt should continue insurance policies in which JoAnn was named as beneficiary and by modifying the paragraph relating to alimony to provide that Milt should pay JoAnn the sum of $200 per month, rather than $600 per month, as and for permanent alimony. The district court referred the matter to a referee pursuant to Rule 53, N.D.R.Civ.P. Following a hearing and the submission of briefs by the parties, the referee made proposed findings of fact and conclusions of law in which he concluded that the terms of the parties' settlement agreement in the divorce proceedings represented an integrated contract which could not be subsequently modified by the district court. Milt requested that the referee's findings of fact and conclusions of law be reviewed by the district court and, on July 31, 1980, the district court, after reviewing the referee's findings of fact and the briefs, papers, and documents contained in the file, determined that the findings of fact and conclusions of law of the referee were not clearly erroneous and affirmed those findings and conclusions. Milt has appealed to this court the order of the district court affirming the referee's findings and conclusions.

The issue before this court on appeal, as framed by Milt, is "Whether the District Court has the power to modify the terms of a divorce judgment and decree that deal with permanent alimony which have been incorporated into said judgment by the Court from the pre-divorce stipulation and agreement entered into between the parties."

The findings of fact prepared by the referee, and affirmed by the district court, indicate, in part:

"That a reading of the partial Transcript, contained in the Court file, shows that the settlement terms were read into the record, acknowledged by both parties, blessed by the Court, and incorporated into the Divorce Judgment; that the Trial Judge made no independent ruling or orders respecting any of the particulars of the parties' Agreement; the parties' Agreement related to a lump-sum payment, automobiles, monthly-payments, child-support payments, insurance policies, insurance coverage, personal property and real estate; that each of these things represented an element of the overall agreement; that the provisions calling for alimony and relating to life insurance premiums were so intertwined with the other provisions of the agreement that no single term can be severed or modified without affecting the other terms of the agreement relating to the division of the parties' property; that a further review of the partial Transcript produces no indication that the parties intended to separate any term from any other term of their agreement, and, in fact, said alimony is secured by a substantial portion of the marital property; that both parties were present and were represented by competent Counsel; that there was ample opportunity for either party to make clear that alimony or insurance premiums, or for that matter, any other item of the agreement of the parties was to be treated as an item distinct from the agreement as a whole; that clearly no such attempt was made."

On the basis of this finding the referee concluded:

"That the rule set forth in Sinkler v. Sinkler (49 N.D. 1144) 194 N.W. 817, and Kack v. Kack, 169 N.W.2d 111(,) states that if payments to be made pursuant to Divorce Decree are based entirely on parties' agreement, they are not subject to modification; that payments based exclusively upon contract are not enforceable in contempt proceedings."

In Sinkler this court held that the divorce decree in that instance "was in fact, and was intended by the court and understood by the parties to be, a final adjustment of their property rights to the same extent as if a gross sum or money judgment had been awarded, or a general distribution of the estate had been made, and that the court is now without power to amend the decree and to wipe out the monthly payment stipulated to the wife and substitute a gross sum therefor." 49 N.D. 1144, 194 N.W. at 821.

In Kack v. Kack, 169 N.W.2d 111 (N.D.1969), this court held that whether or not an amount to be paid under a divorce decree is subject to modification under the provisions of Section 14-05-24, N.D.C.C., depends upon whether such payment constitutes alimony or is an amount due under the property-settlement agreement of the parties. The court indicated that if the payments were based entirely upon the agreement of the parties, they are not subject to modification.

Although the order of the district court in dividing the property and awarding alimony was the same as the contractual agreement of the parties, the Kack court determined that the trial judge clearly intended that the payments which he was ordering were to be alimony and support payments:

"He did more than approve and confirm the property settlement of the parties; he specifically ordered the defendant to pay $500 every month as alimony to the plaintiff. The obligation in the decree providing for alimony was an award by the trial court for the payment of alimony and, as such, these payments are subject to modification under the provisions of Section 14-05-24, North Dakota Century Code." 169 N.W.2d at 114.

Milt argues that because of the provisions of Section 14-05-24, N.D.C.C., ¹ and more recent decisions of this court, the rationale of Sinkler and Kack is no longer applicable. Milt points to the decisions of this court in Bingert v. Bingert, 247 N.W.2d 464 (N.D.1976), in which the court decided that the authority to modify alimony decrees is found in Section 14-05-24, N.D.C.C. ² That decision did not, however, specifically discuss the provision for payment of alimony as part of the property-settlement agreement except to note that where judgments are based upon such an agreement the court is more reluctant to order a revision and modification of a decree than where such decree is based upon the finding of the court as to ability to pay. In support of that statement the court cited Bryant v. Bryant, 102 N.W.2d 800 (N.D.1960).

In Bryant the court discussed the holdings in various jurisdictions, stating:

"While some courts have held that payments based on agreement between the parties are not subject to modification by the court after lapse of a period of time, in the absence of mistake or fraud ... we believe that the better rule would be that the courts have power to revise and modify a decree founded on an agreement, on a proper showing of changed conditions. The courts which hold against modification of a decree based on stipulation of the parties do so on the ground that the arrangement is contractual instead of a judicial determination, and that a decree based on an agreement between the parties is no more subject to modification or change by the court than the terms of any other private agreement would be. While we believe the better rule to be that courts do have the power to modify a decree, even though it is founded on an agreement, such power should be exercised only on a proper showing of changed circumstances. The court should be more reluctant to order a revision and modification of a decree where such decree was based on agreement than where such decree is based on the finding of the court as to ability to pay." ³ 102 N.W.2d at 807.

Thus in Bryant the court appeared to adopt the rule that a decree based upon a property-settlement agreement between the parties is subject to modification by the court upon a showing of changed circumstances or conditions. However, in Nugent v. Nugent, 152 N.W.2d 323 (N.D.1967), this court again considered a situation in which the divorce decree included the provisions of the property-settlement agreement of the parties. In Nugent the wife cited Sinkler for the proposition that where the provisions for alimony are so intertwined with the provisions for a division of the property in the agreement entered into between the parties, which agreement was included in the judgment by the court, they intended the whole agreement as a final adjustment of their property rights and the court is without power to amend the judgment to eliminate or modify the monthly alimony payments. Without reference to the decision in Bryant, the court in Nugent distinguished Sinkler on its facts, noting that in Sinkler the wife received little or no property under the decree, except for the monthly alimony payments, whereas in Nugent the wife received considerable property in addition to the monthly alimony payments, stating:

"In this case, although the parties denominated their agreement a 'property settlement agreement,' and although they stated specifically in paragraph 1 thereof that it was understood 'that this instrument is intended to settle the property rights of the parties hereto in all respects,' we do not believe that such a denomination of the agreement...