Keeler v. Keeler, 22964

• Decision Date: 04 May 1998
• Docket Number: No. 22964,22964
• Citation: 958 P.2d 599,131 Idaho 442
• Parties: Judith KEELER, Plaintiff-Appellant, v. Robert KEELER, Defendant-Respondent.
• Court: Idaho Court of Appeals

Page 599

958 P.2d 599

131 Idaho 442

Judith KEELER, Plaintiff-Appellant, v. Robert KEELER, Defendant-Respondent.

No. 22964.

Court of Appeals of Idaho.

May 4, 1998.

Review Denied June 25, 1998.

Rude, Jackson & Daugharty, Coeur d'Alene, for appellant. Dan J. Rude argued.

Cameron L. Phillips, Coeur d'Alene, for respondent.

LANSING, Chief Judge.

In this case we are called upon to determine whether the spousal support terms of a property settlement and spousal support agreement are judicially modifiable. This issue turns upon whether the property settlement and spousal support agreement was "integrated;" that is, whether the spousal support provisions and the provisions relating to the division of property constitute reciprocal consideration, so that the support provisions are inseparable from the property division.

FACTS AND PROCEDURAL BACKGROUND

In March 1988, Robert and Judith Keeler decided to end their twenty-three-year marriage. They entered into a property settlement and spousal support agreement which was expressly incorporated into their divorce decree. Under the terms of the agreement, Robert was required to make monthly support payments to Judith for a period of ten years. He was also required to pay Judith a total of $225,000 in bi-annual payments over a five-year period. The property division section of the agreement granted to Robert all of the community's sharehold interest in two corporations. These corporations operated ongoing business ventures in which Robert was actively employed.

Robert made all of the required payments until December of 1991. At that time, he filed a motion in the magistrate division of the district court to terminate his support obligations on the ground that his and Judith's economic situations had drastically changed. After a trial on the matter, the court determined that Judith was no longer in need of Robert's financial support. Following the divorce, she had earned a master's degree and had obtained stable employment. Additionally, she had invested her money wisely, acquiring a home, two rental properties, and other investments. In contrast, Robert's financial situation had deteriorated since the divorce. His primary business, Noroco, Inc., ceased to operate by 1991, and his net worth plummeted from $244,000 in 1988 to a negative $36,000 by October 1994. Because of this change of circumstances, the magistrate terminated Robert's obligation to pay the monthly support payments. However, the magistrate held that the bi-annual payments required by the agreement were not spousal support but a thinly disguised form of property distribution and, therefore, were not subject to modification.

Both Robert and Judith appealed from the magistrate's decision. Robert argued that the magistrate had mischaracterized the bi-annual payments and that they, like the monthly payments, were spousal support subject to modification. Judith, in contrast, argued that the magistrate correctly characterized In her opening brief before this Court, Judith once again argued that the agreement was integrated and not subject to modification. She also reiterated her claim that the bi-annual payments were intended to be a method of property distribution and therefore are not modifiable. Her position on this last point changed, however, in her reply brief and at oral argument. By that time, Judith argued that the bi-annual payments were not a form of property distribution but were additional support which, like the monthly payments, were not modifiable because the agreement was integrated. ¹ Since there is no longer any challenge to the district court's ruling that the bi-annual payments should be characterized as support payments, we are left with a single issue to resolve on this appeal: Did the magistrate err in concluding that the agreement was not integrated and, therefore, that the provisions concerning support could be modified?

the bi-annual payments as a form of property distribution, but that the magistrate erred in determining that the monthly payments were subject to modification. In making this argument, she did not challenge the magistrate's findings regarding the substantial change in the parties' financial status. Instead, she argued that the property settlement agreement was integrated and, therefore, not subject to modification by the court regardless of the change in circumstances. The district court ruled in favor of Robert. It held that the bi-annual payments were not part of a property distribution scheme but were support payments, that the property settlement agreement was not integrated so the court had authority to modify the support payments, and that the circumstances justified releasing Robert from his obligation to make any further payments under the terms of the agreement. Judith then filed this appeal.

ANALYSIS

When the district court has acted in an appellate capacity in an appeal from the magistrate division and a further appeal is taken, the higher appellate court reviews the record of the magistrate independently of, but with attention to the district court's decision. Toyama v. Toyama, 129 Idaho 142, 144, 922 P.2d 1068, 1070 (1996); Noble v. Fisher, 126 Idaho 885, 888, 894 P.2d 118, 121 (1995); Ireland v. Ireland, 123 Idaho 955, 957-58, 855 P.2d 40, 42-43 (1993). Based on our review of the magistrate's findings and conclusions, we will affirm or reverse the district court's appellate decision accordingly. Campbell v. Campbell, 120 Idaho 394, 398, 816 P.2d 350, 354 (Ct.App.1991); Carr v. Carr, 116 Idaho 747, 750, 779 P.2d 422, 425 (Ct.App.1989). Findings of fact made by the magistrate will not be set aside on appeal unless they are clearly erroneous. I.R.C.P. 52(a); Holley v. Holley, 128 Idaho 503, 507, 915 P.2d 733, 737 (Ct.App.1996); Troche v. Gier, 118 Idaho 740, 741, 800 P.2d 136, 137 (Ct.App.1990). If the findings are supported by substantial and competent evidence, they will not be deemed clearly erroneous. Id.; Bengoechea v. Bengoechea, 106 Idaho 188, 191, 677 P.2d 501, 504 (Ct.App.1984). However, we exercise free review over questions of law. Dennett v. Kuenzli, 130 Idaho 21, 936 P.2d 219 (Ct.App.1997); Ficarro v. McCoy, 126 Idaho 122, 879 P.2d 30 (Ct.App.1994); Staggie v. Idaho Falls Consol. Hospitals, 110 Idaho 349, 351, 715 P.2d 1019, 1021 (Ct.App.1986).

An agreement providing for spousal support payments cannot ordinarily be modified by the court unless the terms of the agreement were incorporated or "merged" into the divorce decree. Sullivan v. Sullivan, 102 Idaho 737, 739 n. 6, 639 P.2d 435 n. 6 (1981); Roesbery v. Roesbery, 88 Idaho 514, 521, 401 P.2d 805, 809 (1965); Bainbridge v. Bainbridge, 75 Idaho 13, 265 P.2d 662 (1954). When the settlement agreement has been merged into the decree, support provisions in the agreement may be modified without the mutual consent of the parties because the agreement has become part of the court's judgment; absent merger, the agreement stands independent of the decree, and "the obligations imposed under the agreement are not those imposed by decree but by contract." Bainbridge, 75 Idaho at 24, 265 P.2d at 669. In this case, the magistrate found that the agreement was merged into the decree of divorce, and that finding is not contested by either party.

Even where the agreement has been merged into the decree, however, support terms cannot be judicially modified if the agreement is integrated. A property settlement and spousal support agreement is integrated "if the parties have agreed that the provisions relating to division of property and the provisions relating to support constitute reciprocal consideration [so that the] support provisions are ... necessarily part and parcel of a division of property." Kimball v. Kimball, 83 Idaho 12, 17, 356 P.2d 919, 922 (1960). See also Phillips v. Phillips, 93 Idaho 384, 385, 462 P.2d 49, 50 (1969); Gortsema v. Gortsema, 92 Idaho 684, 688, 448 P.2d 777, 781 (1968); Turner v. Turner, 90 Idaho 308, 314, 410 P.2d 648, 654 (1966); Roesbery, 88 Idaho at 519, 401 P.2d at 808.

Thus, a court which has been called upon to modify provisions regarding support must determine whether the parties reached an agreement regarding integration. This has not proven to be an easy task. In a series of decisions, the Idaho Supreme Court determined whether property settlement and support...