Treadaway v. Smith, 2600

• Decision Date: 09 October 1996
• Docket Number: No. 2600,2600
• Parties: Nancy D. TREADAWAY, Respondent, v. Julian H. SMITH, Appellant. . Heard
• Court: South Carolina Court of Appeals

Page 849

479 S.E.2d 849

325 S.C. 367

Nancy D. TREADAWAY, Respondent, v. Julian H. SMITH, Appellant.

No. 2600.

Court of Appeals of South Carolina.

Heard Oct. 9, 1996.

Decided Dec. 9, 1996.

Rehearing Denied Jan. 23, 1997.

Certiorari Denied Sept. 19, 1997.

James H. Moss, of Moss & Kuhn, Beaufort, for appellant.

Harold A. Boney, Beaufort, for respondent.

HOWARD, Judge:

This is a breach of contract action in which Nancy D. Treadaway (Treadaway) sued her former husband, Julian H. Smith (Smith), for breaching a 1974 separation agreement in which Smith agreed to pay the college expenses of their two children. A jury awarded Treadaway $41,000 in damages. On appeal, Smith asserts the circuit court lacked subject matter jurisdiction. He also contends Treadaway lacked standing and was barred by the statute of limitations, laches and res judicata. We affirm.

FACTS

The parties married in 1959. They entered into an agreement on August 26, 1974, in which they purported to settle all property and support issues. At the time, the parties had two sons, ages fifteen and seven. The agreement stated in pertinent part:

7. [Smith] is responsible and shall pay one-half (1/2) the expenses incurred by the two minor children for private education both on the grammar school level and the high school level, and shall also be responsible for paying all expenses of both children on the college level.

* * * * * *

16. The covenants and performances required of the parties in this Agreement are intended to be interdependent, and if either party fails to duly perform any of her or his obligations as set forth herein, the other party shall have the right at her or his election, to sue for damages for breach hereof, or to rescind this Agreement in whole or in part, or to sue for specific performance, or to seek such other legal remedies as may be available. Nothing herein contained shall be construed to restrict or impair either party's right to exercise this election.

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18. As stated above, this final Property Settlement is entered into in contemplation of the termination of the marital relationship between [Smith] and [Treadaway], and in that regard this Agreement shall not be merged into any judgment or decree granted to either party, but shall survive the same, and shall be forever binding and conclusive on the parties.

A few weeks after signing the Agreement, on September 11, 1974, the parties obtained a Haitian divorce. The divorce decree stated in pertinent part: "[T]he Separation Agreement executed between the parties on August 26, 1974, at Hilton Head Island, South Carolina, U.S.A., is incorporated in the present judgement [sic] with the same force and effect as if it was reproduced in its entirety, without being destroyed by the fact of its incorporation,...."

Treadaway subsequently petitioned the Beaufort County family court on numerous occasions to enforce the child support provisions of the parties' agreement. By orders entered in 1975, 1976, and 1977, the family court ordered Smith to pay various amounts of child support arrearages. The family court also modified the Agreement in its 1975 order to relieve Smith of any further obligation to pay one-half of the private school tuition of the children after the 1975-76 school year.

The parties' oldest son attended the University of South Carolina from 1977 to 1979. The younger son enrolled in the Savannah College of Art and Design in the fall of 1987. Treadaway testified she and Smith discussed the oldest son's college plans and Smith approved of the decision to attend USC. Treadaway stated she sent tuition bills for the oldest son's college expenses to Smith, but received no response. After 1984, Smith moved and Treadaway was unable to locate him. As a result, she paid all of the expenses while the children attended college.

In July 1993, Treadaway filed a breach of contract action in the court of common pleas for reimbursement of the children's college education expenses pursuant to the parties' 1974 agreement. ¹ Smith filed an answer in which he asserted the court of common pleas lacked subject matter jurisdiction over Treadaway's claims; Treadaway lacked standing; and the action was barred by res judicata, the applicable statute of limitations, and laches. The circuit court held it had jurisdiction over the action because the agreement was an independent contract. It also held the issue of college expenses had not been addressed by the family court; the agreement was a "sealed instrument," thus invoking a twenty year statute of limitations; and the doctrine of laches was inapplicable. A jury subsequently returned a verdict in favor of Treadaway for $41,000. Smith appeals.

LAW/ANALYSIS

I. SUBJECT MATTER JURISDICTION

Smith contends the court of common pleas lacked subject matter jurisdiction over Treadaway's claims because college expenses are a form of child support and the family court has exclusive and continuing jurisdiction over all child support matters. Treadaway argues the agreement was not merged into the divorce decree and remained a separate contract. We agree with Treadaway.

The separation agreement was executed in 1974, and therefore, this issue is controlled by the law in South Carolina prior to Moseley v. Mosier, 279 S.C. 348, 306 S.E.2d 624 (1983). Austelle v. Austelle, 294 S.C. 19, 21-22, 362 S.E.2d 181, 183 (Ct.App.1987). In Moseley, the supreme court decreed that thereafter "jurisdiction for all domestic matters, whether by decree or by agreement, will vest in the family court." Moseley, 279 S.C. at 353, 306 S.E.2d at 627. Under pre-Moseley law, the family court retained jurisdiction over a separation agreement only if the parties provided that the agreement had become an integral part of a court decree and had lost its character as a separate agreement. Austelle, 294 S.C. at 22, 362 S.E.2d at 183. However, "agreements which were incorporated but not merged furnished the family court no subject-matter jurisdiction over them." Id.; see Bryant v. Varat, 278 S.C. 77, 292 S.E.2d 298 (1982) (holding the family court lacked subject matter jurisdiction over a 1978 agreement incorporated but not merged into a divorce decree).

Whether an agreement retains its separate contractual character depends upon the intent of the parties. Austelle, 294 S.C. at 22, 362 S.E.2d at 183. In Kelly v. Edwards, 276 S.C. 368, 278 S.E.2d 773 (1981), our supreme court held language stating that an agreement was not merged into a decree of divorce, but survived and remained binding and conclusive despite incorporation, revealed the parties' intent that the agreement should remain contractual in nature, even though it was subsequently incorporated into a divorce decree. The court held the family court was without subject matter jurisdiction because the dispute concerned a contractual obligation. Id.

In this case, paragraph 18 of the separation agreement provided "this Agreement shall not be merged into any judgment or decree granted to either party, but shall survive the same, and shall be forever binding and conclusive on the parties." The Haitian divorce decree stated, the agreement "is incorporated in the present judgement [sic] with the same force and effect as if it was reproduced in its entirety, without being destroyed by the fact of its incorporation...." We conclude, as did the circuit court, that the parties intended the agreement to survive incorporation. Consistent with Kelly, we agree the family court did not have subject matter jurisdiction over this contractual issue.

Smith argues even if the agreement remained in tact, the family court still had subject matter jurisdiction to modify the college education expenses because such expenses are a form of child support. We disagree.

The family court retained continuing subject matter jurisdiction to enforce and modify child support, despite any provision in the parties' pre-Moseley property settlement agreement which was incorporated, but not merged into a divorce decree. Ratchford v. Ratchford, 295 S.C. 297, 368 S.E.2d 214 (Ct.App.1988). Furthermore, under certain exceptional circumstances, parents may be required to provide support for educational expenses of emancipated children. Risinger v. Risinger, 273 S.C. 36, 253 S.E.2d 652 (1979). Under such circumstances, the award of college expenses is a form of child support. Kirsch v. Kirsch, 299 S.C. 201, 383 S.E.2d 254 (Ct.App.1989); see S.C. Code Ann. § 20-7-420(17) (1985).

However, our supreme court has differentiated between the payment of college expenses ordered as an award of child support using the Risinger factors and the contractual undertaking of the payment of college expenses under a separation agreement. McDuffie v. McDuffie, 313 S.C. 397, 438 S.E.2d 239 (1993). A parent may contractually obligate himself or herself to pay educational expenses of a child beyond the age of majority. Stanaland v. Jamison, 275 S.C. 50, 268 S.E.2d 578 (1980). In Stanaland, our supreme court quoted with approval from the North Carolina case of Shaffner v. Shaffner, 36 N.C.App. 586, 244 S.E.2d 444 (1978). "[A] parent can by contract assume an obligation to his child greater than the law otherwise imposes and by contract bind himself to support his child after emancipation and past majority...." Stanaland, 275 S.C. at 54, 268 S.E.2d at 580 (quoting Shaffner); see White v. Snell, 299 S.C. 406, 413, 385 S.E.2d 211, 215 (Ct.App.1989) ("[T]o the extent that a separation agreement makes provision for the maintenance and support of a child past his majority, it is beyond the inherent power of the court to modify the agreement, ... parents can by contract assume an obligation to their child greater than the law otherwise imposes and ... parents may, by contract, bind themselves to support after emancipation and past majority.").

The White case concerned a 1976 divorce decree which approved and incorporated a separation agreement in which the father agreed to pay for...