Jennifer Johnson v. Gregory Johnson ( 2015 )

Note: Decisions of a three-justice panel are not to be considered as precedent before any tribunal.
ENTRY ORDER
SUPREME COURT DOCKET NO. 2014-479
JUNE TERM, 2015
Jennifer T. Johnson } APPEALED FROM:
}
} Superior Court, Chittenden Unit,
v. } Family Division
}
}
Gregory B. Johnson } DOCKET NO. 393-5-10 Cndm
Trial Judge: Samuel Hoar, Jr.
In the above-entitled cause, the Clerk will enter:
Husband appeals from the trial court’s order granting wife’s motion to enforce the
parties’ final divorce order. We affirm.
The parties divorced in June 2011 after a nineteen-year marriage. They entered into a
marital settlement agreement, which was incorporated into the final divorce order. Under a
section entitled “maintenance,” the agreement provided: “A savings account in [wife’s] name
will be created and funded to the amount of $10,000. The total sum will be accumulated as
rapidly as cash flow allows with an initial payment of a minimum of $2500 by July 1, 2011 and
full funding of this by December 31, 2011.” Husband did not fund the savings account, and in
May 2014, wife moved to enforce this provision as well as other provisions in the final divorce
order. Husband opposed the motion, asserting that he had experienced a significant downturn in
his business income and therefore had been unable to fund the account. Husband subsequently
moved to modify his spousal-maintenance obligation. He asserted that his obligation to fund the
savings account was part of his maintenance obligation and he asked the court to eliminate this
obligation given his financial hardship. Wife then moved to enforce husband’s maintenance
obligation. Various other motions followed.
Following a November 2014 hearing, the court granted wife’s motion to enforce, finding
as a matter of law that husband was obligated to fund the savings account, including interest that
had accrued since December 2011. The court explained that while the phrase “as rapidly as cash
flow allows” left some flexibility in the timing of contributions to the account, the requirement
that the account be fully funded by December 31, 2011 was unequivocal. Thus, it ordered
husband to make this payment, plus interest at the judgment rate, on or before December 31,
2014. Following the court’s ruling, husband moved for findings under Vermont Rule of Civil
Procedure 52(a)(1). The court denied his request, explaining that the rule did not apply as there
had been no trial and the question presented was a pure question of law. It was undisputed that
husband had not funded the savings account and the court found no other disputes of fact. This
appeal followed.
On appeal, husband reiterates his contention that the savings account was part of the
maintenance provision of the parties’ marital settlement agreement and that he therefore was
entitled to modify this obligation as his financial circumstances had changed. According to
husband, the court should have held an evidentiary hearing and decided whether a real,
substantial, and unanticipated change of circumstances existed. Husband also asserts that he
should not have to pay interest on the unfunded savings account because wife did not request
interest and she did not challenge husband’s failure to fund the account until 2014.
We review de novo the court’s interpretation of the parties’ agreement. See Sumner v.
Sumner, 2004 VT 45, ¶ 9, 176 Vt. 452 (“We have used contract principles to construe divorce
decrees based on stipulations.”); John A. Russell Corp. v. Bohlig, 170 Vt. 12, 16 (1999)
(question of whether contract is ambiguous presents question of law, as does interpretation of
unambiguous contract). “Where the language of the decree is unambiguous, we apply it
according to its terms.” Sumner, 2004 VT 45, ¶ 9; see also Duke v. Duke, 140 Vt. 543, 546
(1982) (“Where the language is clear, the parties to a contract are bound by the common
meaning of the words . . . .”). If the meaning of the contract is ambiguous, however, the issue
then becomes a mixed question of law and fact. Cate v. City of Burlington, 2013 VT 64, ¶ 15,
194 Vt. 265. “Ambiguity will be found where a writing in and of itself supports a different
interpretation from that which appears when it is read in light of the surrounding circumstances,
and both interpretations are reasonable.” Isbrandtsen v. N. Branch Corp., 150 Vt. 575, 579
(1988).
We agree with the trial court that the provision at issue is clear and unambiguous. While
the language is contained within Article 10 of the agreement, entitled “Maintenance,” it is
evident that husband’s obligation to fund the savings account is not an ongoing maintenance
obligation. Indeed, Article 10 begins by stating that the “total amount of maintenance is
$920,000,” to be paid out over time based on a schedule attached as Exhibit 1. Exhibit 1
provides for monthly payments, beginning at $4000 per month in June 2011 and increasing to
payments of $6000 per month by July 2012, continuing at this level through 2024. The total
amount of these monthly payments is $920,000. The savings account is outside of this
obligation. Unlike the monthly maintenance payments, the funding of the savings account was a
fixed obligation with a set date for compliance, and the date for compliance has long passed.
Husband asserts that maintenance may take “any form.” The cases cited by husband in support
of this assertion are inapposite. See, e.g., Grant v. Grant, 136 Vt. 9, 12 (1978) (finding that
“[p]laintiff’s suit for an independent grant of alimony or support seeks a remedy which exists
only in equity or under statute but not at common law,” and “at least under statute and at
common law, the granting of alimony in any form is but an incident to the granting of the
divorce, and unless the divorce is granted, the court has no power to grant permanent alimony”).
These cases do not persuade us that the savings account was maintenance here.
Even assuming arguendo that this savings account could be considered a form of
maintenance, husband’s motion to modify was filed long after wife had accrued a vested right to
this money. Wife was entitled to the money as of December 31, 2011, and husband did not file
his motion until July 30, 2014. While husband might argue for a reduction in maintenance
beginning on the date his motion was filed, he would not be entitled to modify maintenance
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obligations that had accrued prior to that date. See Hausermann v. Hausermann, 2013 VT 50,
¶ 5, 194 Vt. 123 (“The court has discretion to set the effective date of a maintenance award
retroactive to the date the motion to amend was filed.”).
We also reject husband’s suggestion that he raised “impossibility of performance” as an
affirmative defense to wife’s motion to enforce. Husband asserted that he had not funded the
savings account due to a downturn in business; he did not assert that the contract was
unenforceable because his performance was impossible. Even if he had, he cites no case where a
court has credited a similar argument that notwithstanding the existence of a clear contractual
obligation to pay a debt, a debtor nonetheless is excused from compliance because he cannot
afford to pay. There is, however, authority to the contrary. See, e.g., In re Marriage of Hibbard,
151 Cal.Rptr.3d 553, 561 (Cal. App. 2013) (rejecting husband’s assertion that he should no
longer have to pay spousal support as set forth in marital settlement agreement because his
disability rendered it “impossible” for him to pay agreed-upon amount, and finding that husband
cited no cases to support his theory that, given this “impossibility,” he should be excused from
performing his contractual obligation). We are not persuaded that the affirmative defense of
impossibility of performance has any relevance here. See, e.g., Kel Kim Corp. v. Cent. Mts.,
Inc., 519 N.E.2d 295, 296 (N.Y. 1987) (recognizing that as a general rule, “once a party to a
contract has made a promise, that party must perform or respond in damages for its failure, even
when unforeseen circumstances make performance burdensome,” and while defense of
“impossibility of performance” has been recognized in the common law, it has “been applied
narrowly, due in part to judicial recognition that the purpose of contract law is to allocate the
risks that might affect performance and that performance should be excused only in extreme
circumstances”); see also Restatement (Second) of Contracts, ch. 11, introductory note (1981)
(“Contract liability is strict liability. . . . The obligor is therefore liable in damages for breach of
contract even if he is without fault and even if circumstances have made the contract more
burdensome or less desirable than he had anticipated”). Husband’s obligation to fully fund this
savings account by December 31, 2011 was not conditioned on the state of his finances. It was
an unequivocal obligation and husband was in clear breach of it. There were no factual disputes
to resolve in reaching this conclusion and the trial court had no obligation to hold an evidentiary
hearing.
We similarly find no error in the court’s decision to award wife the interest that had
accrued on this debt since December 31, 2011, the date that husband breached his obligation.
See V.R.C.P. 54(a) (“In an action where monetary relief is awarded, the amount of the judgment
shall include the principal amount found to be due, all interest accrued on that amount up to and
including the date of entry of judgment, and all costs allowed to the prevailing party.”);
Reporter’s Notes, V.R.C.P. 54 (recognizing that prejudgment interest is available as damages for
detention of money due for breach or default, and such interest is awarded as of right when
principal sum recovered is liquidated or capable of ready ascertainment; interest is calculated at
statutory legal rate in effect at time of calculation and may run from time of default). We have
recognized that “[i]nterest is a legal right of the plaintiff. When a debt becomes payable, if the
contract does not stipulate a rate of interest, the statutory or legal rate applies.” Greenmoss
Builders, Inc. v. King, 155 Vt. 1, 8 (2001) (citation omitted); see also 9 V.S.A. § 41a(a)
(providing that “the rate of interest . . . for forbearance or use of money shall be twelve percent
per annum computed by the actuarial method”). Wife was legally entitled to interest on this debt
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as of the date of husband’s default and even if wife did not specifically request interest, the court
did not err in awarding it to her.
Affirmed.
BY THE COURT:
_______________________________________
Paul L. Reiber, Chief Justice
_______________________________________
Marilyn S. Skoglund, Associate Justice
_______________________________________
Harold E. Eaton, Jr., Associate Justice
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