Peterson v. Peterson, 10050

• Decision Date: 22 December 1981
• Docket Number: No. 10050,10050
• Citation: 313 N.W.2d 743
• Parties: Beatrice M. PETERSON, Plaintiff, Appellee and Cross-Appellant, v. Gilman F. PETERSON, Defendant, Appellant and Cross-Appellee. Civ.
• Court: North Dakota Supreme Court

Page 743

313 N.W.2d 743

Beatrice M. PETERSON, Plaintiff, Appellee and Cross-Appellant, v. Gilman F. PETERSON, Defendant, Appellant and Cross-Appellee.

Civ. No. 10050.

Supreme Court of North Dakota.

Dec. 22, 1981.

Wheeler, Wolf, Peterson, Schmitz, McDonald & Johnson, Bismarck, for plaintiff, appellee and cross-appellant; argued by Albert A. Wolf, Bismarck.

Mackoff, Kellogg, Kirby & Kloster, Dickinson, for defendant, appellant and cross-appellee; argued by Ward M. Kirby, Dickinson.

PEDERSON, Justice.

The ultimate question presented in this case is whether or not the equitable powers of a court to make a just and proper distribution of properties during a divorce proceeding allow it to modify a separation agreement executed prior to the divorce action? We conclude that ordinarily it may not. The equitable powers of § 14-05-24, ¹ NDCC, which allow the court to make a just and proper distribution of properties is not authorization to ignore or rewrite a validly written separation agreement absent statutory grounds for rescission. See Chapter 9-09, NDCC.

In 1978 Beatrice Peterson and Gilman Peterson entered into a separation agreement. ² This agreement divided the real and personal property of the parties and provided for support for Beatrice. It was executed after 30 days of negotiations in which both parties were represented by qualified attorneys. As a consequence of these negotiations, preliminary drafts of the separation agreement were made and changed before the fifth and final agreement was executed by the parties on September 1, 1978. The final version expressly provided that the parties would be bound by all the terms of this agreement in the event of any future divorce proceedings. At the time the agreement was executed, however, the separation agreement was seen as an alternative to divorce. ³

On May 16, 1979 Beatrice sued Gilman for divorce. Beatrice requested an equitable division of all properties acquired during marriage. Gilman answered the complaint and counterclaimed for absolute divorce. Gilman alleged that the 1978 agreement constituted a full and fair settlement of all property rights between the parties. After a trial, the court granted the divorce, stating in an interlocutory order, however, that it was not bound by the 1978 agreement. ⁴ The court then modified the terms of the agreement by granting additional properties to Beatrice. Both parties appealed from the judgment. ⁵

I.

North Dakota statutory and case law recognizes the right of the wife to contract with her husband. ⁶ Riebe v. Riebe, 252 N.W.2d 175 (N.D.1977). The 1978 agreement was a contract between Beatrice and Gilman. ⁷

A property settlement agreement incorporated in a divorce decree may not be later modified by a trial court if it is intended to adjust finally all the property rights of the parties. Sinkler v. Sinkler, 49 N.D. 1144, 194 N.W. 817 (1923). ⁸ A provision of the agreement in this case expressly provides that it shall have final and binding effect in the event of divorce.

Beatrice claims that she is not bound by this contract because the agreement was not submitted to a court for judicial approval. Such an argument is without merit. It is desirable to submit the contract to the court only to relieve the parties of later proving that it was fairly executed. Sinkler v. Sinkler, supra. The absence of judicial approval of the 1978 agreement is not the overriding consideration in this case. The major consideration should be to effectuate the parties' intentions. Here, the parties employed competent attorneys, negotiated with the express intention of finally adjusting their property rights, and agreed to be bound by the terms of this agreement in the event of divorce. It is evident from the agreement that the parties intended the 1978 agreement to be a final and binding division of their properties. The peaceful settlements of disputes, including divorce actions, is to be encouraged. Galloway v. Galloway, 281 N.W.2d 804 (N.D.1979). To allow the court to modify a contract under these circumstances would serve to discredit all contracts between a husband and wife when divorce proceedings are initiated. The court's authorization under § 14-05-24, NDCC, to make a just and equitable distribution of properties does not allow it to rewrite a valid contract absent statutory grounds governing rescission. See Chapter 9-09, NDCC.

We do not intend to imply that the alimony and support provisions of a separation agreement may not be changed by a court when warranted by extraordinary circumstances. See Nugent v. Nugent, 152 N.W.2d 323, 331 (N.D.1967), where we distinguished Sinkler v. Sinkler, supra. See also, Kack v. Kack, 169 N.W.2d 111 (N.D.1969).

The judgment is reversed in part and remanded for modification consistent with the agreement and this opinion.

ERICKSTAD, C. J., and VANDE WALLE, SAND and PAULSON, JJ., concur.

1 "14-05-24. Permanent Alimony-Division of property.-When a divorce is granted, the court shall make such equitable distribution of the real and personal property of the parties as may seem just and proper, and may compel either of the parties to provide for the maintenance of the children of the marriage, and to make such suitable allowances to the other party for support during life or for a shorter period as to the court may seem just, having regard to the circumstances of the parties respectively. The court from time to time may modify its orders in these respects."

2 The pertinent parts of the 1978 agreement which conclusively show the parties' intentions to be bound by this agreement are as follows:

"(15) Nothing herein contained shall be...