Waterman v. Armstrong

• Decision Date: 09 September 1981
• Parties: Sumiko M. WATERMAN and Max O. Armstrong, Petitioners, v. Robert G. ARMSTRONG, Respondent. CA 18224; SC 27691.
• Court: Oregon Supreme Court

Page 774

633 P.2d 774

291 Or. 551

Sumiko M. WATERMAN and Max O. Armstrong, Petitioners, v. Robert G. ARMSTRONG, Respondent.

CA 18224; SC 27691.

Supreme Court of Oregon, In Banc.

Argued and Submitted June 3, 1981.

Decided Sept. 9, 1981.

Robert L. Engle, of Eichsteadt, Bolland, Engle, Schmidtman & Rohrer, Woodburn, argued the cause and filed briefs for petitioners.

Richard C. King, of Mercer, MacLaren, Talney, King & Crew, Portland, argued the cause and filed briefs for respondent.

CAMPBELL, Justice.

One of the plaintiffs, Sumiko M. Waterman, is the former wife of the defendant, Robert G. Armstrong. Their marriage was dissolved by court decree in September, 1975. The other plaintiff Max O. Armstrong, is the son of Sumiko M. Waterman and Robert C. Armstrong. At the time of the dissolution Max O. Armstrong was 14 years of age and was suffering from a terminal illness.

In September, 1979, when the son was 18 years of age, the mother and son filed their amended complaint in this case against the father seeking specific performance of the following paragraph of the property settlement agreement

"7. (Father) further agrees to pay any additional medical expenses over and above that paid by his accident and health insurance for treatment of Max Oka Armstrong, it being understood that (father) has 80% coverage and that (father) will pay the additional 20% and hold (mother) harmless therefrom."

The mother also sought a judgment in the amount of $2,509.71 for the son's medical expenses which had been paid by her. The son claims to be a third party beneficiary under the property settlement agreement. The decree of dissolution "approved and ratified" the property settlement agreement and recited "the terms thereof are hereby incorporated herein as a part hereof."

Did the above quoted paragraph of the property settlement agreement merge into the decree as a support provision? That is the basic issue framed by the parties in this case. The parties agree that if it is a support provision which merges into the decree, then the father's obligation to pay the son's medical expenses terminated when the son reached the age of 18 years. ¹ ORS 107.105(1). Jackman v. Short, 165 Or. 626, 109 P.2d 860 (1941); Mack v. Mack, 91 Or. 514, 179 P. 557 (1919). See also Langnese and Langnese, 13 Or.App. 88, 508 P.2d 831 (1973). The mother and son contend that if the above quoted paragraph 7 did not merge into the decree as a support provision, then it can be enforced as an independent covenant separate and apart from the dissolution decree. Finlay-Wheeler v. Rofinot, 276 Or. 865, 556 P.2d 952 (1976); Carothers v. Carothers, 260 Or. 99, 488 P.2d 1185 (1971).

The trial court held that the paragraph in question merged into the dissolution decree as a provision for support and that it did not "have jurisdiction of the matter." ² The mother's and son's amended complaint was dismissed. They appealed to the Court of Appeals, which affirmed without opinion. 50 Or.App. 611, 625 P.2d 1390. We accepted review. We reverse.

The mother contends that the property settlement agreement was negotiated and executed upon the understanding that the father would pay the son's medical expenses for the son's lifetime. It is the father's position that under the agreement his obligation to pay the medical expenses terminated when the son reached the age of 18 years.

Evidently the trial court and the parties agreed that the above quoted paragraph 7 of the property settlement agreement was ambiguous, because the evidence introduced at the trial without material objection not only shows the circumstances under which the agreement was made but also explains each party's position as to the length of time the father was obligated to pay the son's medical expenses. ORS 42.220 and 41.740.

We agree that the paragraph in question is ambiguous. We did not limit our review in this case to questions of law, and the questions of fact were argued in detail before this court; therefore we try the matter de novo. ORS 19.125(4).

The mother and father were married in Tokyo, Japan, in June, 1959, while the father was in the Navy. They came to the United States in October, 1959. The son, Max Oka Armstrong, who is a party plaintiff here, is the oldest son; he was born in September, 1960. There are two younger sons who were born in 1962 and 1964.

The mother graduated from high school in Japan. She studied English in a school in Japan for about three months and then took a short course in the same subject when she arrived in this country. It is apparent from the transcript of the testimony that she has some difficulty with the English language. The mother did not work outside of the home on a steady basis during the marriage. She did have some short-term employment as a motel maid, a waitress, and a cannery worker. The record is silent as to the background of the father.

The mother testified at the trial that the son, Max Oka Armstrong, was suffering from "lupus" and that it was a blood disease. The mother found out about the disease when the son was 12 or 13 years of age, and it was the mother's understanding that the son's life expectancy was from one to ten years as of the time of the diagnosis. ³

In May, 1975, the mother and father employed an attorney ⁴ to file a co-petition for dissolution of marriage and to prepare a property settlement agreement. The mother argues that the attorney was the husband's attorney. The record does not support this argument. Although the husband first contacted the attorney, who had been previously recommended by the husband's employer, there is no direct evidence that he represented the husband exclusively. However, it is clear that the wife did not have independent legal advice.

The mother and father met in the attorney's office on two separate occasions in connection with the preparation and execution of the property settlement agreement. The mother testified as follows:

"Q. Now I am talking about when you were in (the attorney's) office, when you were talking about this. Did you know then whether or not the insurance company paid all of the medical bills, did you know?

"A. No.

"Q. You just knew there was insurance?

"A. (Witness nods head in the affirmative.)

" * * *.

"Q. Were you in a position to pay that yourself?

"A. No. He (father) told me, he said he going to pay, so whenever after the insurance take care of the bills, then whatever balance he going to pay it off, keep paying to take care of it.

"Q. You said somebody asked you if that was all right, if that was agreeable. Who asked you that?

"A. Mr. Armstrong.

"Q. He said I will pay your medical bills, is that okay, and what did you say?

"A. No. He told me he would take care of Max's medical bills as long as he lived so he asked me that fair enough and I told him yes.

"Q. What did (the attorney) say to you about that provision?

"A. He asked me okay, and I said yes. ⁵ )

" * * *.

"Q. You understood he (father) would pay those (medical expenses) for the rest of Max's life?

"A. Yes.

" * * *.

"Q. Would you have signed it if that's what it would have said, that (father) only pays until Max reaches eighteen?

"A. No, I wouldn't sign.

"Q. Why not?

"A. Because I couldn't afford to pay the doctor bill for Max. Even I working, I couldn't pay."

At the trial the father acknowledged that at the time he signed the property settlement agreement he knew that the son had the blood disease and that the son's life expectancy had been reduced. Through his employment the father had a health and accident policy which provided 80% coverage for his children. ⁶ The father testified that he understood that his obligation to pay the medical expenses would terminate when the son reached his 18th birthday and that there were no discussions about payment beyond that time. On cross examination the father contended that the son's medical expenses after age 18 should be paid by the Social Security Administration. This appears to be an afterthought because he admitted that he did not know about that possibility in 1975 when the property settlement agreement was executed.

The attorney who prepared the property settlement agreement testified that "Mrs. Waterman knew exactly what she was getting." The balance of his testimony does not support this conclusion. He had no independent recollection of the meetings or conversations with the mother and father and was testifying strictly from the notes that he had made at those previous times. The notes are not in evidence, but apparently from references made to them during the testimony they did not completely coincide with the above quoted provisions of paragraph 7.

The property settlement agreement contained a general support provision as to all three sons:

"8. (Father) agrees to pay to (mother) the sum of $66.66 per month per child for each of the three minor children of the parties hereto, to-wit: MAX OKA ARMSTRONG, KENT LEE ARMSTRONG, and WAYNE REX ARMSTRONG, for their support, nurture and maintenance, and that said payments shall continue until such time as each of said minor children shall attain the age of eighteen (18) years or are emancipated, whichever occurs first; it is further agreed that said monthly payments shall be paid through the County Clerk of Marion County, Oregon." (Emphasis added).

The mother argues that because paragraph 8 provides that the monthly child support payments shall cease when the minor children reach the age of 18, then it follows that the medical expenses for Max Oka Armstrong under paragraph 7 are to be paid for his lifetime. The mother reaches this conclusion because there is no age limit in paragraph 7.

To construe paragraph 7 of the property settlement agreement and determine the intent of the parties, this court must take into consideration the circumstances under which it was made, the testimony of the draftsman and the parties, and the entire instrument. ORS 42.220 and 41.740. Brown, Adm'r v....