Johnston v. Johnston, No. 115,256.

• Court: Court of Appeals of Kansas
• Writing for the Court: Powell, J.
• Citation: 402 P.3d 570
• Parties: IN RE the MARRIAGE OF: James Leslie JOHNSTON, Appellant, and Pamela Sue Johnston, Appellee.
• Decision Date: 18 August 2017
• Docket Number: No. 115,256.

402 P.3d 570

IN RE the MARRIAGE OF: James Leslie JOHNSTON, Appellant,
and
Pamela Sue Johnston, Appellee.

No. 115,256.

Court of Appeals of Kansas.

Opinion filed August 18, 2017

Joseph W. Booth, of Lenexa, for appellant.

Joseph A. DeWoskin, of Kansas City, and Larry V. Swall, of Liberty, Missouri, for appellee.

Before Leben, P.J., Powell and Schroeder, JJ.

Powell, J.:

This case demonstrates the dangers of filing a divorce without the assistance of competent legal counsel. James Leslie Johnston (Jim) and Pamela Sue Johnston divorced in May 2011. Despite having to contend with significant assets and debts, along with highly technical military pay, they pieced together a separation agreement on their own using a form journal entry and spread sheet. Jim and Pamela then appeared before a district judge asking that the agreement be approved. After a hearing, the judge considered their agreement and signed off on it as valid, just, and equitable. However, Jim and Pamela really did not know or appreciate the differences (and similarities) between military retirement pay and spousal maintenance. This lack of awareness hit home when the district court, without any prodding from the parties, unilaterally altered their agreement 3 years later by making the spousal maintenance terminable at the end of 121 months. Pamela, realizing that the deal she thought she got—$1,000 for life unless she remarried—was upended, sought to undo or fix the agreement. This resulted in litigation before the district court and then a trip before us.

The district court's well-intentioned intervention complicated things as well. Its unilateral modification of the parties' agreement spawned this litigation in our view, and its remedy significantly altered the parties' agreement. Pamela, instead of receiving $1,000 a month for life in spousal maintenance, received half of Jim's military retirement pay, worth over $3,500 per month, and spousal maintenance of $1,000 per month. Because the law favors finality of judgments and leaving untouched separation agreements deemed valid, just, and equitable, we conclude the district court erred in reopening the property settlement agreement as Pamela brought her claim too late. We therefore reverse and vacate the district court's order modifying the agreement. Moreover, we take the unusual step of also reversing and vacating the district court's earlier unilateral order modifying the parties' spousal maintenance agreement and making it terminable after 121 months because the district court lacked the jurisdiction to do this and because the law does not prohibit Jim from agreeing to pay Pamela spousal maintenance for the rest of her life.

FACTUAL AND PROCEDURAL BACKGROUND

After 34 years of marriage, Jim and Pamela divorced in May 2011. During their marriage, Jim served 21 years in the military and then worked in the private sector; Pamela was primarily a stay-at-home mom. At the time of their divorce, Jim's yearly salary was about $105,000, and Pamela's was about $37,000. In addition, Jim was also receiving a military retirement benefit of $3,546 a month. This number appears to be a post-tax estimate of what Jim received each month; tax documents produced in the district court show that the pre-tax amount was $3,756.

Neither Jim nor Pamela was represented by counsel during their divorce proceedings. Instead, they presented the court a pro se divorce decree, apparently using a form order prepared by the Kansas Judicial Council, and attached a spreadsheet showing how they planned to divide their property. This two-page separation agreement, which Jim

402 P.3d 575

prepared and both parties signed, listed the parties' debts and assets and assigned almost all of them to Jim, except that Jim was to move $100,000 from his 401(k) into a retirement account for Pamela. Jim also agreed to pay Pamela $1,000 per month in spousal maintenance unless she remarried. The form decree characterized the $100,000 transfer and the $1,000 monthly payments as "alimony" or spousal support. The agreement mentioned that Jim was receiving $3,546 a month in military retirement pay, and in two places it indicated that Jim's $1,000 spousal maintenance payments to Pamela would come out of those military retirement benefits. The form decree also indicated that except for personal property awarded to the other party, each party would be awarded all personal property in their possession.

In the divorce hearing, Jim testified briefly about the agreement and told the court that he was taking all of the parties "sizeable" debt and would move $100,000 from his 401(k) into a retirement account for Pamela. He also said he would pay Pamela $1,000 a month in spousal maintenance which was terminable only upon Pamela's remarriage. Pamela then testified that she agreed with Jim's statements and that she had had an opportunity to consult with a lawyer or accountant or other expert to make sure the agreement was fair. There was no specific discussion of the military retirement benefits. The district court approved the parties' separation agreement as "fair, just, reasonable, valid, and equitable," and it became part of the divorce decree.

After almost 3 years without any dispute and with Jim making the required monthly $1,000 spousal maintenance payments, in February 2014 Jim asked the court to terminate the maintenance payments to Pamela because she was living in a "marriage like relationship." After an evidentiary hearing, the district court denied Jim's motion because the parties' agreement stated that the maintenance payments would only end if Pamela got remarried, and Pamela wasn't remarried—she was just living with another man. However, the district court also discovered during this hearing that neither the decree nor the separation agreement had included an expiration date for the maintenance payments. Believing that Kansas law prohibits spousal maintenance for more than 121 months, see K.S.A. 2016 Supp. 23-2904, and without a request by either party to include an expiration date for the maintenance and over Pamela's objection, the district court unilaterally ordered that while Jim had to continue paying Pamela $1,000 a month, these maintenance payments would end after 121 months. Surprisingly, Pamela failed to appeal from this order.

Possibly prompted by the district court's unilateral order terminating maintenance payments after 121 months, on December 18, 2014, 9 months after the court had denied Jim's motion to terminate maintenance, Pamela, with the assistance of counsel, filed a motion asking the court (1) to find Jim in contempt for his failure to pay the required $1,000 maintenance payments—she alleged he had been recently only paying $640 per month leading to an arrearage of $720 as of the filing of the motion—and (2) to reopen the divorce case on the grounds that the parties' separation agreement had not divided Jim's military retirement benefits. At an initial evidentiary hearing, the district court denied Pamela's contempt motion but declared it would consider the military pension issue at a second hearing and urged Jim to obtain counsel. At the second evidentiary hearing, the district court determined that the property settlement agreement was ambiguous about the military retirement benefit because it conflated that significant asset with spousal maintenance payments. The district court heard testimony from Jim and Pamela about their agreement and from an expert witness about the present value of the military retirement benefits—$696,413.55. The district court then said that it would not have approved the separation agreement if it had known the full value of the military retirement benefits because if those benefits were taken into account and awarded entirely to Jim, then the parties' agreement was not equitable. The district court then divided Jim's military retirement benefits equally between Jim and Pamela but did not alter the requirement that Jim continue making monthly $1,000 maintenance payments.

402 P.3d 576

Jim timely appeals the district court's order.

DID THE DISTRICT COURT HAVE THE AUTHORITY TO MODIFY THE PROPERTY SETTLEMENT AGREEMENT?

Jim alleges two main points of error on the part of the district court. First, he argues the district court lacked the authority to modify the separation agreement. Second, he argues the district court lacked the jurisdiction to reexamine the separation agreement because Pamela filed her motion too long after the divorce became final.

"A ruling on a motion for relief from judgment filed pursuant to K.S.A. 60-260(b) rests within the sound discretion of the [district] court. The [district] court's ruling will not be reversed in the absence of a showing of abuse of discretion." In re Marriage of Leedy , 279 Kan. 311, 314, 109 P.3d 1130 (2005). A district court abuses its discretion if the court's action is arbitrary, fanciful, or unreasonable or if the court's decision is based upon an error of law or an error of fact. Garcia v. Ball , 303 Kan. 560, 566, 363 P.3d 399 (2015).

A. The district court erred by modifying the separation agreement.

K.S.A. 2016 Supp. 60-260(b) allows a district court to provide relief from a final judgment for any of the following reasons:

"(1) Mistake, inadvertence, surprise or excusable neglect;

"(2) newly discovered evidence that, with

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