Sword v. Sweet
| Decision Date | 05 May 2004 |
| Docket Number | No. 28199.,28199. |
| Parties | Ralph E. SWORD, as Personal Representative of the Estate of Joyce E. Sweet, Deceased, Plaintiff-Respondent, v. Lawrence L. SWEET, Defendant-Appellant. |
| Court | Idaho Supreme Court |
Eismann Law Office, Caldwell, for appellant. Richard B. Eismann argued.
Bevis, Cameron & Johnson, Boise, for respondent. James A. Bevis argued.
Lawrence Sweet appeals the decision of the district court which affirmed the decision of the magistrate court that an alleged oral agreement regarding a property division of marital property from a November 6, 1991, Indiana court hearing was invalid. The district court denied relief on equitable theories and found that the magistrate court applied the correct asset valuation cut-off date as stipulated by the parties.
Joyce Sweet ("Joyce") and Lawrence Sweet ("Larry") were married on January 18, 1956. In 1971, after numerous moves to several cities and states, the Sweets settled in South Bend, Indiana, where Larry began work with Associates Corporation. Larry ultimately became Senior Vice President and Chief Information Officer of Associates Corporation of North America and President of Associates Bancorp. He retired from Associates in 1995, although he continued to work as an independent consultant for the company. Larry's role as an independent consultant with Associates ended in 1999.
Joyce primarily stayed home and reared the couple's five children, although she was employed briefly in the early 1970's. In 1974 she was diagnosed with cancer which required surgery followed by radiation treatment and chemotherapy. In 1980, she was again diagnosed with cancer, requiring more surgery, radiation treatment, and chemotherapy. The radiation treatments damaged her heart to such a degree that two surgeries were necessary to correct the problem. Her health continued to decline. She passed away shortly after the trial held in June, 2000.
On July 30, 1990, Joyce filed a Petition for Separation in Indiana. On May 14, 1991, she filed a Petition for Dissolution of Marriage in the same case.
On November 6, 1991, both parties appeared in court for a final hearing on Joyce's Petition for Dissolution. Joyce's motion to dismiss her Petition for Dissolution was granted. Her attorney then announced that the parties had stipulated to terms regarding temporary maintenance and a division of property. Both Larry and Joyce testified as to the terms of this stipulation. Larry claims that an agreement was formed by the parties' testimony. The parties anticipated that the stipulation would be reduced to writing and that they would return to court at some future date to obtain court approval. The Indiana court took the matter under advisement.
After the November 6, 1991, hearing, a transcript was prepared and sent to Larry's attorney who sent a draft of a written agreement, entitled "Postnuptial Agreement" to Joyce's attorney. This agreement attempted to memorialize the terms stipulated to in court. However, the draft agreement differed in several respects from the terms stated in court and was never signed by the Sweets. On February 23, 1993, the Indiana Court dismissed the case for want of prosecution.
Even though the Indiana proceeding had been dismissed, Joyce and Larry followed through with some of the terms stipulated to in court. However, many of the terms of the stipulation were not followed. On May 27, 1999, Joyce filed a Petition for Legal Separation in the Magistrate's Division of the 4th Judicial District, Ada County, Idaho and then transferred to Lincoln County. At the trial in the Idaho separation action, Joyce admitted that she had always intended to attempt, at some point in the future, to change the terms of the Indiana stipulation despite her representations at the Indiana hearing that the stipulation was fair and equitable. On November 20, 2000, the magistrate court entered Findings of Fact and Conclusions of Law and a Decree of Legal Separation granting Joyce's Petition. The magistrate held that the stipulation in Indiana was unenforceable and denied Larry equitable relief. The magistrate also utilized a valuation date contrary to that urged by Larry. Larry appealed to the district court which affirmed the magistrate court decision. He now appeals to this court. Joyce seeks attorney fees.
In Rungee v. Allied Van Lines, Inc., 92 Idaho 718, 722-23, 449 P.2d 378, 382-83 (1968), quoting from the then proposed (later officially adopted and promulgated in 1969) official draft of the Restatement Second of Conflict of Laws, Ch. 8, Contracts, the Supreme Court said:
Law Governing in Absence of Effective Parties' Choice. (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the State which, as to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6.
(2) In the absence of an effective choice of law by the parties (see § 187), the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
Indiana law regarding contracts controls.
The agreement Larry seeks to enforce was negotiated and allegedly formed while the parties lived in Indiana. A large part of the performance claimed by him took place in Indiana; much of the subject matter of the contract was located in Indiana; and, the parties were domiciled in Indiana. Therefore, under the "most significant relationship" test, Indiana law regarding contracts applies in determining whether the parties reached an enforceable agreement.
This Court exercises free review over matters of law. Bouten Constr. Co. v. H.F. Magnuson Co., 133 Idaho 756, 760, 992 P.2d 751, 755 (1999). In Indiana, the question of whether a certain or undisputed set of facts establishes a contract is one of law for the trial court. Keating v. Burton, 617 N.E.2d 588, 592 (Ind.Ct.App.1993), trans. denied. Contract formation requires mutual assent on all essential contract terms. DiMizio v. Romo, 756 N.E.2d 1018, 1022 (Ind.Ct.App.2001), trans. denied. Assent to the terms of a contract may be expressed by acts which manifest acceptance. Pinnacle Computer Servs., Inc. v. Ameritech Pub., Inc., 642 N.E.2d 1011, 1013 (Ind.Ct.App.1994). Acceptance may be expressed in writing. Young v. Bryan, 178 Ind.App. 702, 368 N.E.2d 1, 3 (1977).
"[T]here is a general consensus among the courts that separation agreements are to be construed like other contracts and require the same essential elements, and property settlements or other postnuptial agreements, whether in contemplation of divorce or otherwise, are generally held to be binding when they are shown to be fair and regular and not the product of fraud, duress, or undue influence, and certainly when they have been fully executed will they be given effect." Williston, Contracts § 11.7 (3d ed.1957) (emphasis added).
Larry argues that a "meeting of the minds" occurred during the November 6, 1991, court proceedings and that Joyce accepted the terms of the agreement, forming a binding contract. Joyce maintains that a meeting of minds did not take place. The Second Restatement of Contracts states:
Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show the agreements are preliminary negotiations.
Restatement (Second) of Contracts § 27. Although this supports Larry's contention that Joyce's testimony was sufficient to create an agreement, the Comments under this section shed additional light. Comment b. to § 27 states:
On the other hand, if either party regards the agreement as incomplete and intends that no obligation shall exist until other terms are assented to or until the whole has been reduced to another written form the preliminary negotiations and agreements do not constitute an agreement.
Restatement (Second) of Contracts § 27, Comment b. Further, Comment c. to § 27 states:
Among the circumstances which may be helpful in determining whether a contract has been concluded are the following: the extent which express agreement has been reached on all the terms to be included, whether the contract is of a type usually put in writing, whether it needs a formal writing for its full expression, whether it has few or many details, whether the amount involved is large or small, whether it is a common or unusual contract, whether a standard form of contract is widely used in similar transactions, and whether either party takes any action in preparation for performance during the negotiations. Such circumstances may be shown by oral testimony or by correspondence or other preliminary or partially complete writings.
Restatement (Second) of Contracts § 27, Comment c.
Larry acknowledged that the parties intended to reduce the agreement to writing during his testimony on November 6, 1991. Larry's attorney asked the following question:
And also that—we reduce this to writing and come back here, that she's agreed that she will sign a document that expresses the terms and conditions of which you've decided to divide your property and either side could treat that as an exhibit in any further court proceeding and also that that...
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