Garnett v. Garnett

• Decision Date: 30 July 1974
• Citation: 17 Or.App. 307,521 P.2d 1054,98 Adv.Sh. 2017
• Parties: Bonnie D. GARNETT, Appellant, v. Paul D. GARNETT, Respondent.
• Court: Oregon Court of Appeals

Page 1054

521 P.2d 1054

17 Or.App. 307

Bonnie D. GARNETT, Appellant, v. Paul D. GARNETT, Respondent.

Court of Appeals of Oregon.

Argued and Submitted March 29, 1974.

Decided May 6, 1974.

Rehearing Denied June 12, 1974.

Review Granted July 30, 1974.

Gerald H. Robinson, Portland, argued the cause for appellant. With him on the brief were King & Merry, Portland.

George C. Reinmiller, Portland, argued the cause for respondent. With him on the brief were Cake, Hardy, Buttler, McEwen & Weiss, Portland.

Before SCHWAB, C.J., and LANGTRY and FOLEY, JJ.

LANGTRY, Judge.

Plaintiff-wife was divorced from defendant-husband in a decree dated January 29, 1969 which, among other things, approved their property settlement agreement which had been received in evidence and it was made a part of the decree. In pronouncing its decree the court stated that the property settlement agreement was 'given the force and effects of the decree.'

Wife appeals in this motion proceeding by the husband for modification of the decree and property settlement agreement. Part of the motion was granted on September 12, 1973. Wife contends that the trial court erred in its order by modifying the property settlement agreement and decree in two respects: (1) by changing the requirements that husband pay for certain of wife's household expenses, and (2) by relieving him of the cost of automobile and its expenses, both subsequent to her remarriage.

Husband's motion requested elimination of 'all future obligation' (I) 'to the support * * *'; (II) 'to pay * * * towards the purchase of (wife's) home * * *'; and (III) 'to pay * * * household expenses (and) * * * automobile expenses * * *.'

The trial court's formal order simply eliminated the household expenses of 'Paragraph I' of the agreement and the automobile expenses of 'Paragraph IV' of the agreement and stated that 'all other terms and conditions of said Decree shall continue * * *.' Thus, it appears that no action was taken on Requests (I) and (II) above unless it could be termed denial thereof. Husband did not cross-appeal.

Evidence was that the property settlement agreement was negotiated over a period starting before October 1968 and lasting until January 1969, which was a period in which husband was seeking freedom from his long-time marriage so that he could remarry. The parties had one grown, married child. Wife was represented by counsel but husband, who was an optometrist and a high school mathematics teacher, was unrepresented, a matter of his own choice. At least two drafts of the settlement agreement were prepared and executed, the second replacing the first. No allegations of fraud or duress in the making of the contract have been asserted. We find that the parties were dealing at arms' length and knew what they were doing when the final agreement was entered into. The agreement provided for the division of several parcels of real property, a private school, personal property, etc. After sales of property were completed after the decree was entered, the values of all the property divided under the terms of the agreement proved to be relatively equal, although the parties are not now in agreement that this was so. The controversy in this motion revolves around four provisions of the property settlement agreement:

'I

'Husband will execute a deed conveying to wife his interest in the premises located at 2210 S.W. Dewitt Street, Portland, Oregon. Husband will pay off and discharge the balance due on the purchase price of this property and it will become the sole property of the wife, free and clear. In the event that the wife wishes to continue residing at said premises, husband will continue to pay the insurance, taxes and all household utilities such as heat, light, water, garbage collection and telephone, and maintain said premises in a livable condition so long as the wife occupies same. (This was for a $20,000 residence the wife received.)

'* * *

'IV

'Husband agrees to provide the wife with the use of an automobile for such period and at such times as the wife may require its use and husband further agrees to pay for the insurance, licensing, maintenance and upkeep on said automobile.

'* * *

'VII

'It is the present intention of the wife to continue to be gainfully employed. However, in the event that she should be forced to discontinue her employment either temporarily or permanent(ly) due to illness or injury, husband agrees to pay to the wife each month by way of alimony such an amount as would make up the difference between whatever disability compensation she might receive from her employer during the period of disability and the total amount of $350 per month.

'* * *

'XI

'It is specifically agreed between the parties hereto that the remarriage of the wife shall not in any way effect (sic) or relieve husband of any of the obligations agreed to herein.

'* * *.'

At the time the agreement was executed wife had been diagnosed as having diabetes, and the evidence fairly indicates that both parties expected that she would have health difficulties which might have impaired her future earning capacity. For many years she had been employed in a bank, and had made substantial contributions to the family finances. She continued to work through her bad health period. Sometime after the divorce wife's health difficulties cleared up and it was learned that she did not have diabetes. Husband contends that the challenged provisions of the agreement and decree were in the nature of alimony and are thus subject to change upon proof of changed circumstances, regardless of inclusion in the property settlement agreement. As a general proposition, this is correct if the provisions are alimony. Feves v. Feves, 198 Or. 151 254 P.2d 694 (1953); Prime v. Prime, 172 Or. 34, 139 P.2d 550 (1943). Wife contends that the only provision of the agreement which contemplated support dependent upon her physical condition was Paragraph VII of the contract, quoted above, and that the provisions concerning household expenses and the automobile were in the nature of a division of the property which was executory over a long period of time.

The trial court in its written order modifying the decree found only that there had been a change of circumstances warranting modification of the decree. There is nothing from the court in the record otherwise to show the basis of the trial court's finding. However, a copy of a letter opinion from the judge is included without challenge in the abstract submitted with wife's brief. It discusses Paragraphs I, IV and XI, supra, of the agreement, ignores Paragraph VII thereof and apparently also Request (I) of the motion, supra, without explanation therefor.

The evidence indicates that possibly the $20,000 home (Paragraph I, agreement) was completely paid for through the husband's transferring to wife his interest in some other property. In any event, the court's letter opinion (but not the formal order which appears to have been drawn pursuant thereto) states the decree should be amended by 'deleting * * * household expenses Other than discharging the mortgage incumbrance * * *.' (Emphasis supplied.)

With reference to Paragraph VII of the agreement, we see nothing except one statement in wife's testimony (to the effect she is no longer interested in it) to explain why the court and the parties seemed to leave its provisions in effect, or unsettled. That formed the basis for much of the evidence and husband's concern. Perhaps this was attributable to an oversight in drawing up the formal order.

The letter opinion also states:

'It is my opinion that the payments, no matter how they are labeled, are and should be considered alimony and not a division of assets. It is significant that at the time of the property settlement, the husband was not represented by counsel. He was anxious to be free of his former wife so that he could remarry * * *.

'* * *

'The provision of the decree specifying that remarriage of the wife shall not affect the husband's obligation is an unreasonable provision. To require an exhusband to support an ex-wife who has remarried is unconscionable.'

These findings must be considered the basis for the modification order, in addition to a finding that there had been a change of circumstances.

It does not appear that the exact question presented here has previously been decided in Oregon. In Prime v. Prime, supra, 172 Or. at 42--43, 139 P.2d at 554, the court said:

'* * * (T)here may be instances in which even an executory agreement for future periodical payments, when approved and incorporated in a decree, should be held invulnerable to modification, even in the event of changed conditions. For example, if husband and wife are each the owners of real property, and if they agree that in lieu of a division of their property between them the rights of the wife shall be liquidated by means of payments in the nature of an annuity, and if the agreement shows and the court finds that such provision was adopted as and constitutes a fair method of liquidating the actual property rights of the wife and approves the agreement in the decree, we suppose that such payments in the nature of an annuity would not be subject to later modification in the event of changed conditions. Parker v. Parker, 193 Cal. 478, 225 P. 447. The difficulty is in drawing the line between approved agreements in the nature of alimony which are subject to modification and approved agreements in the nature of an annuity employed as a means of adjusting the wife's property rights * * *.'

In Prime the Supreme Court was not considering a contract where the parties, dealing at arms' length, expressly provided that payments to the wife should survive a remarriage. That is the situation we have here, although the situation we have here is otherwise much like that described in the Prime quote, above. The writer in an annotation on the law applicable to situations like that at bar ¹ in Annot...