Horsey v. Horsey
| Decision Date | 01 September 1990 |
| Docket Number | No. 118,118 |
| Parties | Leonilla Baginski HORSEY v. Elmer E. HORSEY. , |
| Court | Maryland Court of Appeals |
George F. Obrecht, III, Obrecht and Obrecht, Baltimore, on brief, for petitioner.
Steven M. Caplan, Nancy S. Friedman, Weinberg & Green, Baltimore, on brief, for respondent.
Argued before MURPHY, C.J., ELDRIDGE, RODOWSKY, McAULIFFE and CHASANOW, JJ., EDWARD A. DeWATERS, Jr., Administrative Judge of the Third Judicial Circuit (Specially Assigned) and WILLIAM H. McCULLOUGH, Administrative Judge of the Seventh Judicial Circuit (Specially Assigned), JJ.
The principal issue in this case is whether a trial court's order, directing the parties to submit their dispute to arbitration, is a final judgment and thus appealable. Other issues relate to waiver of arbitration and the provisions of a separation agreement concerning spousal support.
On August 16, 1973, Elmer and Leonilla Horsey separated after nineteen years of marriage. That day, they executed a separation agreement which contained provisions relating, inter alia, to the parties' voluntary separation, custody of the parties' children, child support, "alimony," child education expenses, insurance payments, the marital home, expenses for the marital home, division of other property and bank accounts, and counsel fees. The agreement stated that "[t]here can be no modification of this Agreement ... or release from any obligation imposed hereby, except by written instrument duly executed." The final provision of the agreement "stipulated that this Separation Agreement, or the essential parts thereto, shall be incorporated in a decree hereafter passed, by any Court of competent jurisdiction...."
The paragraph of the separation agreement dealing with spousal support provided that Mr. Horsey was to pay Mrs. Horsey "alimony" of $350.00 per month for the first five years following their agreement, and $300.00 per month thereafter. Mr. Horsey's obligation to make these payments was to terminate upon Mrs. Horsey's remarriage or death. The agreement, however, did not provide that the payments would terminate upon Mr. Horsey's death. The agreement recited that these amounts were "fixed in light of the fact that the Wife has no income or resources of her own," and made the following provision for modification of the payments:
Although the above-quoted language from the agreement referred to arbitration "provisions hereinafter set forth," the agreement in fact failed to set forth any such arbitration provisions.
After the parties entered into the separation agreement, but before the divorce decree, Mrs. Horsey received an employment opportunity as a secretary for the Kent County Board of Education. She discussed with Mr. Horsey her intention to accept employment with the Board of Education, and Mr. Horsey indicated "that he didn't think [Mrs. Horsey] needed to go to work." Nonetheless, Mrs. Horsey became employed on June 24, 1974, as a secretary for the Board at an annual salary of $5,100.00. After Mrs. Horsey became employed, she notified Mr. Horsey and informed him of the health insurance premium for her and the children under the Board's group health insurance plan, as Mr. Horsey was obligated to pay this under the separation agreement. Since the rates under the group health insurance plan changed every year, she contacted Mr. Horsey each year after she became employed and informed him of the new rate. Mrs. Horsey is still employed as a secretary for the Board of Education, and in 1989 her annual salary was between $20,000 and $21,000.
A divorce decree was signed and filed on September 26, 1974. The decree granted an absolute divorce, provided for the custody of the parties' minor children, set forth amounts of child support to be paid by Mr. Horsey, and provided for visitation. The decree then recited that "[Mr.] Horsey shall pay alimony to [Mrs.] Horsey, as set forth in the Separation Agreement and that the Separation Agreement be incorporated as a part of this Decree."
Mr. Horsey made monthly payments in accordance with the terms of the agreement. On July 8, 1988, Mr. Horsey, by his attorney, wrote to Mrs. Horsey requesting a reduction in alimony payments. The letter alleged that Mrs. Horsey had breached the separation agreement by failing to notify Mr. Horsey of the "change in her financial circumstances." Mr. Horsey sought a permanent reduction in the monthly payments and a retroactive adjustment of the payments made since August 1984. The letter requested that Mrs. Horsey contact Mr. Horsey's attorney within fifteen days, and it concluded that, if she did not do so, the attorney would view this as a failure to cure her breach of the agreement and would advise Mr. Horsey to exercise all legal remedies available to him.
On July 26, 1988, Mrs. Horsey's attorney responded in writing to the July 8th letter, denying that Mrs. Horsey had breached the agreement. Mrs. Horsey's attorney pointed out that Mr. Horsey had known of Mrs. Horsey's employment for years, and that Mr. Horsey had called her at work on occasion. According to her attorney, Mr. Horsey had waived any right to seek modification of the support payments, and any such right was barred by laches or by limitations. The letter reviewed the relevant Maryland law, and stated that the monthly payments "do not constitute technical alimony and are therefore not modifiable except in accordance with the provisions of the Agreement." The attorney further asserted that the arbitration remedy was not available to the parties because no provisions for its implementation were set forth in the agreement. The attorney concluded that the payment amount was "fairly fixed by the provisions and omissions" of the agreement.
Mr. Horsey's attorney responded by letter on August 15, 1988, noting his disagreement with the conclusions expressed in the July 26th letter and informing Mrs. Horsey's attorney that Mr. Horsey intended to file suit against Mrs. Horsey. At this point, Mr. Horsey stopped making spousal support payments to Mrs. Horsey. On October 15, 1988, Mrs. Horsey's attorney notified Mr. Horsey's attorney of Mr. Horsey's failure to continue making payments. He also stated that Mrs. Horsey had repeatedly tried to contact Mr. Horsey and had left detailed messages with his secretary but was unable to speak to him directly. Further communications between the parties' attorneys failed to resolve the dispute.
On January 12, 1989, Mr. Horsey filed in the Circuit Court for Kent County a "Petition of Contempt" against Mrs. Horsey. In the petition, Mr. Horsey alleged that Mrs. Horsey had breached the separation agreement, stating: "After a period of eleven years after the date of the signing of the agreement, Defendant [Mrs. Horsey] did, in fact, secure employment or receive income from another source, thereby requiring that she notify Plaintiff of the same and that the parties attempt to agree upon a reduction in her alimony." The petition went on to assert that, "[i]n violation of the parties' agreement and thus in contempt of [the divorce] Decree, Defendant failed to notify Plaintiff of the change in her financial circumstances, resulting in her receiving alimony payments to which she was at least in part, not entitled." Mr. Horsey sought a judgment of contempt against Mrs. Horsey, an accounting of her income since August 17, 1984, a modification of the divorce decree as to his "alimony" obligation, a repayment of sums which were allegedly overpaid or adjustments in future payments to reflect such overpayments, and reasonable attorneys' fees.
One week later, on January 19, 1989, Mrs. Horsey filed in the Circuit Court for Kent County a "Complaint for Enforcement of Marital Separation Agreement ...," seeking specific performance of the contract. She alleged that Mr. Horsey had wrongfully terminated his support payments as of July 1988 and that neither of the terminal events provided by the agreement--her death or remarriage--had occurred. She sought a reinstatement of future payments, the arrearages plus interest, her costs, expenses and reasonable attorneys' fees. Thereafter, Mr. Horsey requested that his "Petition of Contempt" be treated as a "counterclaim" to Mrs. Horsey's complaint.
Neither party requested arbitration, or sought a stay of the judicial proceedings pending arbitration, at any point in their correspondence, in their pleadings or other documents filed in the circuit court, or at trial before the circuit court. At the trial, counsel for both parties expressly stated, inter alia, that the arbitration clause had been "waived."
In addition, Mrs. Horsey argued at trial that the spousal support was not technical alimony, was merely contractual support, and could not be modified by the court except in accordance with the terms of the parties' agreement. Her position was that, in light of the wording of the agreement, no event triggering modification of the $300.00 monthly spousal support had occurred and that, therefore, Mr. Horsey was obligated to pay $300.00 per month. Mrs. Horsey also claimed that, considering her expenses, her "over-all" financial circumstances had not changed from the time of the parties' separation. The trial judge, however, sustained Mr. Horsey's objection to evidence supporting this claim, and...
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