John R. Edwards v. Maryann Edwards ( 2014 )

Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case. Jul 08 2014, 9:58 am
ATTORNEY FOR APPELLANT:
DAVID P. MATSEY
Osan & Patton, LLP
Valparaiso, Indiana
IN THE
COURT OF APPEALS OF INDIANA
JOHN R. EDWARDS, )
)
Appellant, )
)
vs. ) No. 64A03-1310-DR-423
)
MARYANN EDWARDS, )
)
Appellee. )
APPEAL FROM THE PORTER SUPERIOR COURT TWO
The Honorable William E. Alexa, Judge
Cause No. 64D02-0708-DR-007342
July 8, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
FRIEDLANDER, Judge
John R. Edwards (Father) appeals the denial of his Petition to Emancipate and
Modification of Custody and Support, challenging that ruling as the sole issue on appeal.
We affirm.
Father and Maryann Edwards (Mother) were married on April 24, 1987. Four
children were born of the marriage, including R.E., born October 8, 1988, S.E., born March
6, 1991, M.E., born September 19, 1993, and A.E., born September 20, 1995. On August
9, 2007, Mother filed a petition for dissolution. On June 19, 2009, the court approved an
agreement (the settlement agreement) submitted by the parties “on all outstanding issues
before the Court” and entered a decree of dissolution consistent with those terms.
Appellant’s Appendix at 19. The parties agreed that Mother would have primary physical
custody of the four children, although they also agreed that R.E was by then “able to make
decisions on his own and be responsible for the care and maintenance of himself without
the need for support of either parent.” Id. at 20. Mother would have sole legal custody of
the three younger children. Because of the issue appealed herein, we reproduce the portion
of the decree pertaining to child support, as follows:
17. For the purposes of child support computation, the parties stipulated
as follows:
a. That Husband is employed with a gross weekly income
of Nine Hundred Sixty-Eight Dollars ($968.00) per
week.
b. That Wife is employed with a gross weekly income of
Two Hundred Sixty Eight ($268.00) per week.
c. That there are currently no work-related child care
expenses.
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d. That Husband shall continue to provide health insurance
for the children through his employment.
18. That by agreement of the parties, Husband shall pay support in the
amount of Two Hundred Fifty Dollars ($250.00) per week. Said
support should be paid directly to Maryann Edwards every Friday by
5:00 p.m. The parties recognize that this is a non-separable order of
support. Unless otherwise emancipated or modified by order of this
Court, this support order shall remain in effect, in full, until the
youngest child reaches the age of twenty-one. This support provision
is made, in part, in lieu of consideration that Wife is waiving her
interests in husband’s pension.
Id. at 22-23.
On November 13, 2012, Father filed a petition to emancipate M.E. and to modify
support. At that time, M.E. had turned eighteen years of age, which was the basis upon
which Father sought emancipation. Also, A.E. had been living with her boyfriend since
May or June 2012, but expressed a desire to move into Father’s home, which she eventually
did in December 2012. This and the emancipation of M.E. were the bases for his petition
to modify support. With respect to child support, Father sought a retroactive abatement of
support from the date that M.E. turned nineteen years old, and he sought to impose a
support obligation upon Mother, retroactive to the date the petition for modification was
filed, which was several weeks before A.E. moved back into his home.
On April 2, 2013, the trial court conducted a hearing on Father’s motion. Father,
Mother, Mother’s attorney during the divorce proceedings (Father was not represented by
counsel at that time), and Robert Jones, the father of A.E.’s boyfriend, testified at the
hearing. On June 7, 2013, the court entered an order denying Father’s petition upon its
finding that the settlement agreement “was a binding contract and not subject to being
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modified. To do otherwise, would result in an unjust result.” Appellant’s Appendix at 8-
9. Father thereafter filed a motion to correct error, arguing that the court erred in finding
that the support provision in the decree was part of a contract and not subject to
modification. The trial court denied the motion to correct error. Father appeals the denial
of his petition to modify support.
We note that Mother did not file an appellee’s brief. When an appellee fails to
submit a brief, we apply a less stringent standard of review with respect to the showing
necessary to establish reversible error. State v. Akins, 824 N.E.2d 676 (Ind. 2005). In the
absence of an answer brief from an appellee, we will not undertake the burden of
developing legal arguments on the appellee’s behalf and may reverse if the appellant
establishes prima facie error, which is “error at first sight, on first appearance, or on the
face of it.” Front Row Motors, LLC v. Jones, 5 N.E.3d 753, 758 (Ind. 2014) (quoting
Santana v. Santana, 708 N.E.2d 886, 887 (Ind. Ct. App. 1999)).
Although presented in the form of a motion to emancipate and modify support, the
issue before us involves exclusively the interpretation of a settlement agreement. Father
contends the trial court erred in interpreting the settlement agreement in such a way as to
foreclose the possibility of modifying his support obligation without Mother’s consent. On
the other hand, Mother contended below, and the trial court held, that the settlement
agreement constituted a binding contract with respect to the amount of child support Father
was obligated to pay.
Settlement agreements are contractual in nature and binding upon the parties if
approved by the trial court. Ryan v. Ryan, 972 N.E.2d 359 (Ind. 2012). Generally, a trial
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court does not have authority to modify a property settlement agreement, although it
certainly is empowered to resolve a dispute concerning the interpretation of a settlement
agreement. Id.; see Ind. Code Ann. § 31-15-2-17 (West, Westlaw current with all
legislation of the Second Regular Session of the 118th General Assembly (2014) with
effective dates through May 1, 2014). The parties’ opening remarks at the modification
hearing confirm that they were seeking just that, i.e., clarification as to whether Paragraph
18 permitted modification of support without Mother’s consent.
Because settlement agreements are contractual in nature and binding if approved by
a trial court, when a dispute between ex-spouses stems from conflicting interpretations of
a settlement agreement, the court’s task is one of contract interpretation. See Ryan v. Ryan,
972 N.E.2d 359. Thus, a settlement agreement is “‘interpreted according to the general
rules for contract construction.’” Id. at 364 (quoting Bailey v. Mann, 895 N.E.2d 1215,
1217 (Ind. 2008)). Generally speaking, these include the following: “[U]nless the terms of
the contract are ambiguous, they will be given their plain and ordinary meaning. Clear and
unambiguous terms in the contract are deemed conclusive, and when they are present we
will not construe the contract or look to extrinsic evidence, but will merely apply the
contractual provisions.” Id. (quoting Shorter v. Shorter, 851 N.E.2d 378, 383 (Ind. Ct.
App. 2006)). Accordingly, we must first determine whether Paragraph 18 is ambiguous.
On the question of whether the settlement agreement permitted modification of
Father’s support obligation, we need consider only Paragraph 18. It provided that Father’s
obligation, as set out elsewhere in the settlement agreement, was to continue until the
youngest child’s twenty-first birthday “[u]nless otherwise emancipated or modified by
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order of this Court.” Appellant’s Appendix at 23. On the face of it, this language plausibly
appears to contemplate the possibility of modification. This is the interpretation of
Paragraph 18 that Father urges us to adopt. On the other hand, Paragraph 18 goes on to
provide that this particular support provision was made “in lieu of consideration” that
Mother was waiving her interest in Father’s pension. Id. In other words, Paragraph 18
provided that this child support arrangement constituted a bargained-for exchange.
Presumably, Father’s pension would not decrease as time passed and, therefore, an
abatement of his support obligation before the contemplated termination date would result
in a diminishment of that for which Mother had bargained, i.e., compensation for
relinquishing her interest in Father’s pension. We find each interpretation reasonable and
entirely inconsistent with the other. Because it is susceptible to more than one reasonable
interpretation, we find that Paragraph 18 is ambiguous.
“Our Supreme Court has determined that the dissolution court that enters a property
settlement agreement is in the best position to resolve questions of interpretation and
enforcement of that agreement and thus retain jurisdiction to interpret the terms of their
property settlement agreements and to enforce them.” Shorter v. Shorter, 851 N.E.2d at
383. Nevertheless, when reviewing a trial court’s interpretation of the meaning of a
settlement agreement, we apply a de novo standard of review because the construction of
the terms of a written contract is a pure question of law. Shorter v. Shorter, 851 N.E.2d
378.
It appears that at the time of dissolution, there were very few marital assets. Indeed,
the parties lost their house via foreclosure and declared bankruptcy during the pendency of
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the dissolution proceedings. At the time of dissolution, it appears that the marital property
consisted of two vehicles, items of personal property, and Father’s pension. Mother
testified at the modification hearing that it was clear that Father’s pension was very
important to him and that “he didn’t want to give it up at all.” Appellant’s Appendix at 94.
Paragraph 18 provided that Father’s support obligation was “non-separable”. Id. at
22. Father, who was not represented by counsel during the dissolution proceedings,
appeared not to know at the modification hearing precisely what that term meant in this
context. When Mother’s counsel asked the term’s meaning, Father could not provide a
definition that did not contain the root word. He could define it only as meaning
“unseparable.” Id. at 61. When pressed to define the word in a way that did not use the
root word, Father explained, “I’m not familiar with legal terms.” Id. at 62. Later, however,
he did acknowledge that he understood at the time he signed the settlement agreement that
Paragraph 18 would require him to pay the same amount of support until the youngest child
turned twenty-one even though, by that time, the other two children would have been
emancipated.
Mother, on the other hand, had a clear conception of the meaning of the term – at
least to her. She explained that it was “like a property settlement with child support
included in it and as each child got older and either moved out, you know, one went to the
military, was married, that my support would go down and my interest in the pension would
go up.” Id. at 94. In other words, the $250-per-month payment represented a combination
of child support and payment to Mother for her portion of Father’s pension, with the portion
of the total payment allocated to paying her interest in the pension increasing as each child
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was emancipated. This is entirely consistent with her dissolution attorney’s explanation of
the circumstances and purpose of Paragraph 18, as reflected in the following:
Well it was somewhat unique. Aside from not wanting the divorce,
Mr. Edwards’ biggest priority was preserving his pension which of course
was impossible because there was nothing to offset it. Mrs. Edwards’ biggest
priority was some kind of fit [sic]. She knew she was going to struggle
financially once the divorce occurred, meaning bills were going to be
difficult, so income was important to her.
So as it worked out, there was a way to preserve Mr. Edwards’ pension
and meet Miss [sic] Edwards’ needs. We did not get the pension evaluated.
It wasn’t worth it money wise and so as an offset I believe there was [sic]
four children if I’m not mistaken. We calculated support based on the
guidelines in effect at the time for four children and then we said the amount
would stay constant until the youngest child was 21 which was the age of
emancipation at the time the decree was filed. So gradually more of that
payment would be allocated to a buyout of the pension and less to child
support as each child became emancipated.
Id. at 79. Trial counsel was asked why the language “[u]nless otherwise emancipated or
modified by order of this Court” was inserted into Paragraph 18. Id. at 23. He explained:
“that was probably a cut and paste from another decree that specified language of “‘unless
otherwise modified’”. Id. at 84. He continued that including that phrase was “not the best
draftsmanship”, and that it was the intention of the parties that support could not be
modified, notwithstanding the use of this phrase. Id. at 84-85. Trial counsel confirmed
that Father “was dead set and his biggest priority was protecting as much, if not a hundred
percent, of his pension.” Id. at 81.
Trial counsel acknowledged that the traditional way to handle a situation like this,
i.e., one involving child support and the allocation of a pension, would be to handle the two
matters separately. The trial court could order the pensioner to pay a certain amount to the
divorcing spouse to compensate the latter for his or her share of the pension, while entering
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a separate order for child support. In fact, trial counsel stated that “in hindsight that
probably would have been the better way.” Id. at 84. Nevertheless, we can appreciate trial
counsel’s effort to minimize the financial strain caused by the dissolution proceedings upon
individuals who at the time were already dealing with extremely difficult financial
circumstances. He crafted an agreement that saved the cost typically associated with
valuing Father’s pension, preserved what appears to have been Father’s highest priority at
the time, which was to preserve his pension intact, and addressed Mother’s need for income
and provided compensation for her portion of Father’s pension, which she agreed not to
pursue through more traditional means.
In the end, trial counsel testified that it was “clear at the time” that the agreement
described in Paragraph 18 was an effort to minimize legal costs associated with the
dissolution in a situation where there were not many assets. Id. at 83. There was testimony
at the hearing supporting the conclusion that the parties understood that Father’s child
support obligation represented a combination of child support and payment to Mother for
her interest in his pension. There was also evidence supporting the conclusion that
although the amount of the payment would be constant, the amount allocated for the
pension would increase as each child left the home. Finally, there was evidence to support
the conclusion that Father’s child support obligation would continue until the youngest
child turned twenty one years of age, at which time support would cease and Mother, by
then, would be fully compensated for her interest in Father’s pension.
The trial court’s denial of Father’s petition for modification was based upon its
conclusion that the support arrangement set out in the settlement agreement was not subject
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to modification. We are reluctant to be understood to imply categorically that the support
arrangement described in this settlement agreement would not have been modifiable under
any set of circumstances. For instance, the arrangement clearly contemplated that all three
children who were the subject of Father’s support obligation would survive to the age of
twenty-one. Because the portion of Father’s $250-per-month payment allocated to child
support (versus pension) was much greater at the beginning of the period during which he
was obligated to pay support, modification may have been in order if a child had died
before the age of twenty-one. The earlier in the seven-year period of support payments
that such occurred, the greater the justification for modification of support. Happily,
however, that did not occur and the future unfolded as anticipated, at least in that respect.
Under these circumstances, we agree with the trial court’s conclusion that Father’s child
support was not modifiable.
In summary, we conclude that Paragraph 18 is susceptible to more than one
interpretation and therefore is ambiguous. In construing this ambiguity, we are confronted
with the question of whether the parties intended that Father’s child support obligation was
modifiable. The best interpretation of this provision, as gleaned from the words employed
in the provision and considering the evidence presented at the modification hearing, is that
the parties intended that Father’s support payment was to continue for a specific period of
time. Moreover, these payments represented not only the payment of support, but also
compensation to Mother for her interest in Father’s pension, which she declined to pursue
through more traditional means. Therefore, Father has failed to make a prima facie case
that the trial court erred denying his petition to modify.
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Judgment affirmed.
MATHIAS, J., and PYLE, J., concur.
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