Edelkind v. Boudreaux, S99A0520.

• Decision Date: 06 July 1999
• Docket Number: No. S99A0520.,S99A0520.
• Parties: EDELKIND v. BOUDREAUX.
• Court: Georgia Supreme Court

519 S.E.2d 442

271 Ga. 314

EDELKIND v. BOUDREAUX.

No. S99A0520.

Supreme Court of Georgia.

July 6, 1999.

Christine M. Stadler, Atlanta, for appellant.

Moore, Ingram, Johnson & Steele, Stephen C. Steele, Dean C. Bucci, Marietta, for appellee.

Davis, Matthews & Quigley, Frank A DeVincent, Atlanta, amicus curiae.

HINES, Justice.

We granted discretionary appeal from the final judgment and decree entered in this divorce action, which incorporated a purported verbal settlement put on the record but not reduced to writing or executed by the parties. We did so to consider questions of the enforceability of the alleged agreement as well as the standing of former divorce counsel to seek its enforcement. Because we find that the attorney lacked such standing and that the superior court abused its discretion in enforcing the agreement, we reverse.

A divorce action between wife Boudreaux and husband Edelkind was initiated on June 2, 1997.¹ Boudreaux was represented by Stephen C. Steele and the law firm of Moore, Ingram, Johnson & Steele, LLP (MIJS). Boudreaux's attorney fees became substantial, and on or about May 20, 1998, she executed a deed to secure debt on a townhouse in favor of MIJS.² Matters in the divorce continued to be litigated, and on July 23, 1998, Edelkind and Boudreaux appeared in the superior court for a hearing on, inter alia, Boudreaux's petition for contempt against Edelkind.³ Both were represented by counsel, and at the start of the proceeding, Boudreaux's attorney, Steele, told the court that a final settlement had been reached and counsel asked that it be recited into the record. As part of this alleged agreement, Boudreaux was to be awarded the marital residence as well as the townhouse in their "entirety." Also, Edelkind was to be responsible for $25,000 of Boudreaux's attorney fees as lump sum alimony payable directly to MIJS.

On July 30, 1998, the day before Steele planned to report back to the court⁴ with a proposed written final judgment and decree and "consent order and agreement," Boudreaux sent Steele a fax terminating his employment as her attorney as of that date. Boudreaux stated that she would deal directly with Edelkind's attorney "[i]n terms of the final settlement agreement." Steele appeared before the court the morning of July 31, 1998, with a proposed order and judgment awarding attorney fees to Steele and his firm. Also, the MIJS deed to secure debt on the townhouse was filed that day. Edelkind's attorney appeared that afternoon and announced that the parties had reached an agreement that differed from what was recorded at the July 23 hearing. This agreement provided, among other things, that the townhouse was to be awarded to Edelkind instead of Boudreaux, and for a different payment of alimony. The court set a further hearing in the matter for September 15, 1998.

On August 18, 1998, MIJS moved to intervene as plaintiff in the divorce action. On September 16, 1998, the parties executed a written settlement agreement consistent with what was announced by Edelkind's attorney on July 31, 1998. Edelkind was to pay to Boudreaux $1,250 per month as alimony beginning December 15, 1998 and continuing each month thereafter until March 15, 2004; there was no provision for the direct payment of attorney fees.

At a hearing on September 18, 1998, Steele petitioned the court to make what was recited on the record on July 23, 1998, the final judgment and decree. Steele stated that if the court decided not to do so at that time, then he wanted to intervene as a party in the case in order to have the issue of payment of his attorney fees heard. ⁵ Edelkind's attorney⁶ urged the court not to enforce the alleged agreement of July 23 for several reasons, including the questionable propriety of the fee award secured by the interest in the townhouse, and the significant fact that since July 23, the marital residence had been lost to foreclosure. The court made no ruling on the motion to intervene. But over the parties' objections, the court issued a final judgment and decree incorporating the "transcript between the parties cited into the record on July 23, 1998."⁷

1. It was error to allow former divorce counsel Steele, over the parties' objection, to seek to enforce the alleged July 23 agreement for the purpose of collecting fees from his former client. Steele and MIJS claim standing to have done so on the basis that they were intended third party beneficiaries of the asserted July 23 agreement, as the $25,000 in attorney fees was to be paid directly to Steele's office and Boudreaux intended to satisfy part of the legal fees she owed through the award of the townhouse. Pretermitting threshold questions of the propriety of the conveyance of the interest in the townhouse to MIJS during the pendency of the divorce, the claim of pursuing enforcement as third party beneficiaries is unavailing.

It is true that under OCGA § 9-2-20(b), a third party beneficiary to a contract may bring suit to enforce the contract. Miree v. United States, 242 Ga. 126, 135(3), 249 S.E.2d 573 (1978); Backus v. Chilivis, 236 Ga. 500, 502(II), 224 S.E.2d 370 (1976); Page v. City of Conyers, 231 Ga.App. 264, 265(1), 499 S.E.2d 126 (1998). But accepting arguendo that the alleged oral divorce agreement conferred third party beneficiary status on the attorney and/or the firm, neither Steele nor MIJS brought suit. Nor were they granted intervention as a party in the divorce action before petitioning for enforcement of the parties' purported agreement. Under OCGA § 19-6-2, an attorney may also bring an action in the attorney's own name to enforce a grant of attorney fees made pursuant to the Code section. But, there is no claim that such an award of fees is at issue in this case.

2. Oral settlement agreements in divorce cases are contracts and may be enforced if their existence is established without dispute; but, such a contract does not exist until all essential terms have been agreed to. Reichard v. Reichard, 262 Ga. 561, 564(2), 423 S.E.2d 241 (1992). See also Bridges v. Bridges, 256 Ga. 348, 349(1), 349 S.E.2d 172 (1986); Herndon v. Herndon, 227 Ga. 781, 783, 183 S.E.2d 386 (1971). "[T]he failure to agree to even one essential term means there is `no agreement to be enforced.'" Reichard at 564(2), 423 S.E.2d 241.

Here, the transcript of the July 23 hearing makes questionable whether the parties or their respective attorneys at that point had reached agreement on all items necessary for final settlement of the marital estate. This was not a situation where counsel merely recited an agreement for the record; the case, in large measure, was still being tried by the court. There was continuing debate and argument among counsel, the parties, and the court regarding, among other things, the parties' access to the townhouse, and the whereabouts and ownership of the parties' personal property. This was significant because Edelkind's counsel made it clear that Edelkind's willingness to relinquish claims to equity in the real property was dependent, in some measure, on his award of personal property.⁸ Until it could reach a decision regarding the parties' personal property, the court restrained and enjoined Boudreaux and Edelkind from removing anything from either the marital residence or the townhouse. Consequently, even though the parties answered affirmatively when asked whether they understood the alleged agreement and that they would be bound by it, such responses would not, of themselves, transform an agreement in progress into a final settlement.

Even accepting that the recitation was sufficiently clear, definite, and certain so as to constitute a settlement agreement of the divorce, that does not end the inquiry. In a divorce action, the court has the discretion to approve or reject the agreement, in whole or in part, before it becomes the judgment of the court itself. Franz v. Franz, 268 Ga. 465, 466(3), 490 S.E.2d 377 (1997); Bridges v. Bridges, supra at 350(1), 349 S.E.2d 172. But this discretion is not absolute and can be abused. Mathes v. Mathes, 267 Ga. 845, 846, 483 S.E.2d 573 (1997).

Here, the court focused on Steele's petition aimed at procuring attorney fees, and the court refused to go beyond the fact that the July agreement was put on the...