Voigt v. Voigt, 79S02-9505-CV-501

Docket NºNo. 79S02-9505-CV-501
Citation670 N.E.2d 1271
Case DateAugust 05, 1996
CourtSupreme Court of Indiana

Page 1271

670 N.E.2d 1271
Ronald VOIGT, Appellant (Petitioner Below),
Sharon J. VOIGT, Appellee (Respondent Below).
No. 79S02-9505-CV-501.
Supreme Court of Indiana.
Aug. 5, 1996.

Page 1272

John H. Meyers, Lafayette, for Appellant.

Carolyn S. Holder, Lafayette, for Appellant.

SHEPARD, Chief Justice.

Ronald Voigt appealed the trial court's dismissal of his petition to modify the spousal maintenance provisions of a settlement agreement he entered with his former wife, Sharon, upon the dissolution of their marriage. The Court of Appeals reversed the dismissal. We granted transfer and now affirm the judgment of the trial court.

I. Background

Married since 1964, Ronald and Sharon Voigt separated in 1989. Two years later, Ronald filed a dissolution action. Sharon countersued, seeking, among other things, spousal maintenance.

The parties negotiated a comprehensive settlement agreement. It was a six-page, notarized document that contained twenty-two provisions to which the parties consented "in consideration of" the document's "promises and mutual covenants." (R. 33.) The agreement addressed matters of child custody and support, property disposition, and spousal maintenance. 1 In paragraph 10, Ronald agreed to pay Sharon, "as maintenance, the sum of $400.00 per week," until she died, remarried, or reached age 65. (R. 35.) "In consideration of all the promises" in the agreement, they released any other marital claims against each other. (R. 35-36 (emphasis added).) Finally, paragraph 20 provided that "[a] modification ... of any of the provisions of this Agreement shall be effective only if made in writing and executed with the same formality as this Agreement." (R. 37.)

Page 1273

Ronald and Sharon waived a final hearing under § 8(d) of the Dissolution of Marriage Act, Ind.Code Ann. § 31-1-11.5-8(d) (West Supp.1995), and Judge Melichar of the Tippecanoe Circuit Court entered a dissolution decree on July 20, 1992. Finding that the settlement agreement "was entered into fairly, without fraud, duress or undue influence," he incorporated it into the decree and ordered Ronald and Sharon to carry out its provisions. (R. 32.) See Ind.Code Ann. § 31-1-11.5-10(b) (West 1979) (providing that court must incorporate terms of approved settlement agreement into dissolution decree and order parties to perform them).

Within a month, Ronald simply stopped paying the spousal maintenance. By early 1993, he owed $10,800 in accumulated payments. Sharon sought unsuccessfully to have him held in contempt but managed to secure a lien on his portion of the proceeds from the anticipated sale of one of the couple's properties.

A few months later, Ronald petitioned for a modification of the maintenance provision citing an alleged "material change" in his "financial circumstances" which made it "impossible and unreasonable" for him to make the promised payments. (R. 58.) 2 Sharon filed a motion to dismiss, 3 which the trial court granted, (R. 96).

At issue was whether paragraph 20's express modification procedure, which required the consent of both Ronald and Sharon, prevented the trial court from unilaterally modifying Ronald's maintenance obligation. This question involved the application of two conflicting Court of Appeals precedents, Pfenninger v. Pfenninger, 463 N.E.2d 1115 (Ind.Ct.App.1984), and Bowman v. Bowman, 567 N.E.2d 828 (Ind.Ct.App.1991).

In Pfenninger, the Court of Appeals held that an obligation to provide spousal maintenance, even one originating in a settlement agreement, was subject to judicial modification. 463 N.E.2d at 1121. Moreover, although the agreement in Pfenninger was silent regarding modification, the court's reasoning would allow judicial modification even if the agreement expressly prohibited all modification. Id. 4

Conversely, in Bowman, the Court of Appeals held that a maintenance obligation that originated in a settlement agreement could be immunized from judicial modification by an express provision in the settlement agreement prohibiting modification. 567 N.E.2d at 830. The Bowman court challenged the very underpinnings of Pfenninger, and its reasoning could logically extend to preclude judicial modification of any maintenance obligation that arose under a settlement agreement. Id. Without going that far, the court held that the specific "non-modifiable agreement" was binding. It affirmed the trial court's dismissal of the petition to modify.

Throughout this litigation, Sharon has argued that paragraph 20 expressly foreclosed judicial modification of the maintenance obligation. Relying on Bowman, she has contended that courts should respect this non-modification provision and dismiss Ronald's petition.

Ronald has countered with two interrelated arguments. First, he has asserted that Bowman is inconsistent with Pfenninger and should not be followed. Further, he has contended that paragraph 20 merely regulates the form that consensual amendments to the agreement should take but that it does not preclude, or even speak to, judicial modifications. He has pointed out that the agreement in Bowman provided that its maintenance obligation "shall not in any way be

Page 1274

modified," R. at 829 (internal quotation marks omitted). He has maintained that paragraph 20 is so ambiguous that applying Bowman to the present facts would so extend that precedent that Pfenninger would essentially collapse.

Judge Melichar rejected Ronald's arguments and dismissed his petition to modify the maintenance provision. He found the agreement "unambiguous" and apparently concluded that paragraph 20 foreclosed any judicial modification of maintenance obligation without the consent of both parties.

Ronald appealed. The Court of Appeals found paragraph 20 to be ambiguous and reversed. Voigt v. Voigt, 645 N.E.2d 627 (Ind.Ct.App.1994).

II. Provisions For Maintenance

Sharon argues that paragraph 20 unambiguously precludes modification of the settlement agreement unless she and Ronald formally execute an amendment to it. She asks us to follow Bowman and hold that where a maintenance agreement expressly precludes judicial modification, courts have no authority to order a modification. Ronald, on the other hand, continues to argue that paragraph 20 is ambiguous and that applying Bowman would effectively overrule Pfenninger and its progeny.

We agree with the Court of Appeals that paragraph 20 probably is not clear enough to support the conclusion Sharon asks us to draw from it. It provides that a modification "shall be effective only if made in writing and executed with the same formality as this Agreement." (R. 37.) This language obviously could be read to preclude any modifications not formally executed by the parties themselves. However, Ronald's reading--that the paragraph regulates only the form of any consensual modification that the parties might choose to undertake--is not an unreasonable interpretation of this language. The provision is certainly not as clear as the language in Bowman. See 567 N.E.2d at 829 (" '[T]his obligation shall not in any way be modified.' ").

Nevertheless, Ronald's insightful counsel has correctly identified an underlying tension between Pfenninger and Bowman. See also Roberts v. Roberts, 644 N.E.2d 173 (Ind.Ct.App.1994) (taking "a new look" at Pfenninger in light of Bowman but deciding to adhere to Pfenninger ). In holding that a court could modify a maintenance obligation originating in a settlement agreement, the Pfenninger court relied largely on our decision in Meehan v. Meehan, 425 N.E.2d 157 (Ind.1981). 5 There, we held that a court could modify a child support order even if its terms originated in a settlement agreement that purported to be " 'full, complete and absolute' " and " 'forever ... [to] determine the rights between [the] parties.' " Id. at 158.

In Bowman, the Court of Appeals persuasively rejected the analogy between spousal maintenance and child support upon which Pfenninger depended:

The Meehan decision involving a child support order and the present case involving a spousal support order are governed by entirely different principles of public policy.... [T]he parent having custody of a child is merely the trustee of the child support payments and has no right to contract away the benefits of the trust in favor of that child....

An entirely different principle of public policy is at work in the present case, namely, the freedom to contract.

567 N.E.2d at 830-31 (citations omitted). Put simply, the parties to a maintenance agreement are both grown-ups, free to bargain with their own legal rights. The Bowman court also correctly observed that courts had no express statutory authority to modify approved maintenance agreements.

Page 1275

Id. at 830; see also Roberts, 644 N.E.2d at 176.

In the present case, the Court of Appeals made a laudable effort at harmonizing Pfenninger and Bowman. It held that Pfenninger represented a general rule that maintenance awards originating in settlement agreements are subject to judicial modification. It then read Bowman as establishing a kind of clear statement exception, barring judicial modification where a maintenance agreement "unambiguously states that it cannot be modified." Voigt, 645 N.E.2d at 630.

This textbook example of common law reasoning resolves the conflict. On the other hand, it fails to address the underlying inconsistency between the rationales of Pfenninger and Bowman. We share Judge Sharpnack's inclination to take "a new look" at Pfenninger, see Roberts, 644 N.E.2d at 176. 6

We shall consider whether a court may modify an approved maintenance agreement without the consent of both parties. Only if we find that courts possess that power must we decide whether paragraph 20 satisfies the requirements of any exception to that general power.

III. Modification of Maintenance Agreements

In determining the authority of the court to modify maintenance obligations arising under an approved settlement agreement,...

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