Knowles v. Thompson

Knowles v. Thompson  (96-057); 166 Vt. 414; 697 A.2d 335

[Filed 04-Apr-1997]

[Motion for Reargument Denied 6-May-1997]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well asformal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 No. 96-057



Bethany C. Knowles                                Supreme Court

                                                  On Appeal from
     v.                                           Windham Family Court

Michael L. Thompson                               September Term, 1996



Theresa S. DiMauro, J.

David G. Reid, Brattleboro, for plaintiff-appellee

Michael J. Hertz, Brattleboro, for defendant-appellant


PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


       MORSE, J.   Husband in a divorce action appeals from a final judgment
  of the Windham Family Court challenging, among other provisions, the order
  requiring him to maintain a life insurance policy for the benefit of the
  children for as long as the child support obligation remains in effect, and
  the order requiring him to provide child support beyond the age of
  majority.  We reverse the provision requiring child support beyond the age
  of majority, and affirm in all other respects.

       The parties were married in 1988, but had lived together since 1980. 
  They have four minor children.  In March of 1994, the parties separated. 
  In May of that year they signed a Memorandum of Understanding, which
  covered a variety of subjects, including child support, child custody,
  maintenance of a life insurance policy by husband, and disposition of the
  couple's limited personal property.  The agreement was incorporated by a
  magistrate into a temporary support order.  A short time later, both
  parties became dissatisfied with different provisions of

 

  the agreement and moved to modify or rescind them.  The court's final order
  and decree departed substantially from the terms of the agreement, but
  purported to uphold a provision requiring husband to provide child support
  beyond the age of majority if the children were enrolled as full-time
  college students.

       Husband's threshold contention is that the court erred in deviating
  from the exact terms of the parties' agreement.  It is clear from the
  record, however, that both parties challenged various provisions of the
  agreement, and the court was thus entitled to depart from its terms. A
  separation agreement is not binding when both parties seek, in effect, to
  modify it.  Cf. McCrea v. McCrea, 150 Vt. 204, 206, 552 A.2d 392, 393
  (1988) (where agreement "was orally rescinded . . . the court was not bound
  by the stipulation and . . . properly exercised its discretion to order a
  new disposition"); Roberts v. Roberts, 146 Vt. 498, 500, 505 A.2d 676, 678
  (1986) (where parties do not seek to enforce prior stipulation as to
  property settlement, court is not bound to enforce it, but has discretion
  to order new disposition).  Here, the parties contested numerous provisions
  of the agreement.  The court was thus entitled to treat it as rescinded,
  and divide the property, order support, and award legal and physical
  custody of the children, in its discretion.

       Husband also contends the court erred in ordering him to maintain a
  life insurance policy with wife as beneficiary for as long as the child
  support obligation was in effect.  Although husband had allowed the policy
  to lapse prior to the final order and decree, it was in effect when,
  several months earlier, the magistrate ordered him to maintain the policy
  for as long as he was obligated to pay child support.  Thus, neither Narwid
  v. Narwid, 160 Vt. 636, 638, 641 A.2d 85, 87 (1993), holding that a court
  may not craft such an order where "there was no evidence that such a policy
  exists," nor Schwartz v. Seldin-Schwartz, ___ Vt. ___, ___, 685 A.2d 665,
  668 (1996), holding that the court may not award a money judgment where the
  evidence does not establish that the amount awarded exists, is apposite. 
  Nor, as husband contends, is the life insurance provision invalidated by
  the rule that a court may not indirectly

 

  award post-mortem spousal maintenance through a life insurance policy
  "intended to secure the maintenance provision of the decree." Narwid, 160
  Vt. at 638, 641 A.2d  at 87; see also Theise v. Theise, ___ Vt. ___, ___,
  674 A.2d 789, 791 (1996) (court may not require husband to substitute wife
  as beneficiary on "key man" policy to "secur[e] post-mortem maintenance
  payments.").  Here, the court ordered husband to maintain the policy
  specifically to "ensure continued support for the children," and to that
  end imposed the requirement only "for so long as he has a child support
  obligation."  We have limited the family court's "discretion to order a
  spouse to maintain an existing life insurance policy for the benefit of the
  other spouse," Theise, ___ Vt. at ___, 674 A.2d  at 791, only where the
  policy is intended "to assure continued maintenance payments following the
  death of the obligor spouse."  Id. (emphasis added).

       Child support presents an altogether different situation from spousal
  maintenance.  As the Supreme Court of Kansas has cogently explained:

     In divorce actions the fundamental difference between the marital
     and the parental duty of parents is that after a divorce the relation
     of husband and wife is at an end, and all marital obligations not
     preserved by the decree are at an end, while the relation of parent
     and child continues unchanged, and a father's obligation to support
     his offspring continues to exist unless cut off by decree.

  Allison v. Allison, 363 P.2d 795, 799 (Kan. 1961).  To be sure, the common
  law traditionally held that a parent's support obligation terminated at
  death.  Hornung v. Estate of Lagerquist, 473 P.2d 541, 545 (Mont. 1970);
  Bailey v. Bailey, 471 P.2d 220, 222 (Nev. 1970).  This rule, however,
  reflected the ancient practice of always placing the children of divorced
  parents in the custody of the father; hence, there was little need to
  formally order the father to provide support, and comparatively little risk
  that the father would disinherit his children.  Note, Continuance of
  Alimony and Payments for Support of Minor Children after a Husband's Death,
  35 Va. L. Rev. 482, 490 (1949).  The modern practice, or at least
  prevalence, of placing the children with the mother "brought about a
  considerable change in this situation."  Id.
                                                                               
     When the parents obtained a divorce . . . and the children were
     placed in the custody of their mother, the likelihood [of
     disinheritance] increased, for an embittered or [un]interested father

 

     might well disinherit a child who had been placed in the custody
     of the other spouse.  For this reason a number of American
     jurisdiction[s] began to give the divorce court authority to order
     the husband to support his minor children after his death, even
     though this did, in effect, deprive the parent of his right to
     disinherit his children completely.

  Id.

       Thus, well before the development of § 316(c) of the Uniform Marriage
  and Divorce Act, which permits child support to survive a parent's death,
  see 9 U.L.A. 490 (1987), the weight of authority held that absent a
  specific statutory provision to the contrary a child support obligation
  could be made binding upon the father's estate.  See In re Moore's Estate,
  234 S.W.2d 847, 854 (Tenn. Ct. App. 1949) ("`the weight of adjudicated
  authority is . . . that the liability of the father is not necessarily
  terminated by his death'") (quoting 17 Am. Jur. Divorce § 706); Morris v.
  Henry, 70 S.E.2d 417, 420 (Va. 1952) (text writers and a decided majority
  of cases hold that under modern conditions, liability of father is not
  necessarily terminated by his death, and that there is no sound reason,
  unless prohibited by statute, why his estate should not be charged with his
  obligation to support minor children); Edelman v. Edelman, 199 P.2d 840,
  842, 848-49 (Wyo. 1948) ("the trend of modern authority" recognizes that
  child support may survive obligor's death); 2 H. Clark, The Law of Domestic
  Relations in the United States § 18.1, at 359 (2d ed. 1987) ("Even without
  a [specific statutory provision] the use of life insurance as an aspect of
  child support is appropriate where the parent is able to pay the premiums .
  . . . "); Note, supra, at 492-93 ("The majority of jurisdictions now
  recognize that an obligation to support minor children created by a divorce
  decree may be made binding on a deceased father's estate."); see generally
  Annotation, Death of Obligor Parent as Affecting Decree for Support of
  Child, 14 A.L.R.5th 557 (1993) (collecting cases).

       The principle underlying every reported decision in this regard is the
  fundamental public policy, generally expressed in broad statutory terms,
  imposing an indefeasible duty upon parents to support their minor children. 
  See Hornung, 473 P.2d  at 545 ("The underlying purpose to be subserved is to
  provide for the support of the child during minority; and the needs of the
  child

 

  for support are equally as great in the case of the child whose divorced
  father dies as in the case where the divorced father survives."); Moore's
  Estate, 234 S.W.2d  at 885 (child support statute "is broad and
  comprehensive in terms . . . . [and] confers upon the court the authority .
  . . to charge the husband in a manner that will survive his death.");
  Morris, 70 S.E.2d  at 422 (statute authorizing award of child support as
  court deems expedient permits court to decree that support of minor
  children shall survive death of obligor parent); Edelman, 199 P.2d  at 844,
  848 (statute authorizing award of child support as court sees fit evinces
  "solemn duty of every father to support his children during their minority,
  and if he fails to do so, every principle of justice demands that they be
  thus supported out of his estate").

       Courts and commentators have acknowledged that limiting the
  testamentary discretion of divorced parents places their children in a
  marginally better position than the children of non-divorced parents, but
  have found the disparity to be amply justified for reasons of public
  policy. As explained in Hornung, "There are sound reasons grounded in human
  experience for affording additional legal protection to the child of
  divorced parents."  473 P.2d  at 545.  Because it is not uncommon for
  divorced parents to provide no support in their estate for the children of
  their former marriage, "any preferential position of the child of divorced
  parents is predicated on sound public policy."  Id.; see also Franklin Life
  Ins. Co. v. Kitchens, 57 Cal. Rptr. 652, 657 (Ct. App. 1967) ("Children of
  divorced parents, often excessively vulnerable to an uncertain future, may
  need greater protection from the law than children of a united
  household."); Moore's Estate, 234 S.W.2d  at 855 ("the rule recognizes that
  however regrettable it may be, human nature being what it is, a father in
  some cases is not kindly disposed toward the children of whose custody he
  has been deprived . . . and moreover that he sometimes manifests this
  attitude when he comes to dispose of his property.").

       Consistent with this view, a majority of jurisdictions additionally
  permit the court to secure child support payments by ordering the obligor
  parent to maintain some form of trust fund or life insurance for as long as
  the support obligation remains in effect, generally until the

 

  children reach the age of majority.  See Stackhouse v. Russell, 447 N.W.2d 124, 125 (Iowa 1989) ("Although not universal, [this] view seems consistent
  with that prevailing in a majority of jurisdictions."); see generally
  Annotation, Divorce: Provision in Decree That One Party Obtain or Maintain
  Life Insurance for Benefit of Other Party or Child, 59 A.L.R.3d 9 (1974)
  (collecting cases).  The decision of the New Jersey Supreme Court in
  Grotsky v. Grotsky, 277 A.2d 535 (N.J. 1971), is illustrative.  The issue
  there, as here, concerned the propriety of a divorce judgment directing the
  husband to keep in force and pay the premiums on all of his existing life
  insurance policies for the benefit of his three minor children.  The
  husband claimed that the chancery court was devoid of power to bind his
  estate for the support of his minor children, or to direct the dedication
  of his life insurance to secure such support.  The New Jersey child support
  statute broadly provided that upon judgment of divorce the court may make
  such order for "`the care, custody, education and maintenance of the
  children . . . as the circumstances of the parties and the nature of the
  case shall render fit, reasonable and just.'" Id. at 537 (quoting N.J.S.A.
  2A: 34-23).  Noting the extensive and persuasive out-of-state authority
  approving such provisions, the court held

     that the comprehensive terms of [the child support statute] are not
     to be narrowed but are to be applied liberally to the end that,
     where the circumstances equitably call for such action, the court
     may enter a support order for minor children to survive their
     father's death and may direct the father to maintain his insurance
     . . . for the purpose of securing due fulfillment of the support
     order during their minority.

  Id. at 540; see also Franklin Life, 57 Cal. Rptr.  at 657 (under statute
  broadly authorizing such child support as court deems suitable, divorce
  judgment requiring husband to maintain life insurance for benefit of minor
  children was "an appropriate means to secure fulfillment of the obligation
  of the parent to provide the support, maintenance, and education for his
  children required by [statute]").

       Looking to our own statutes, we find no express or implied inhibition
  against a divorce judgment requiring a parent to maintain life insurance to
  secure child support.  Indeed, the

 

  breadth and underlying purposes of our child support statute provide, if
  anything, stronger support for such requirements than many of the cases
  cited above.  Vermont's child support statute is premised "on the concept
  that children should receive the same proportion of parental income after
  separation or divorce of their parents as they would receive if their
  parents were living together in one household."  15 V.S.A. § 654.  The
  Legislature has expressly declared "as public policy that parents have the
  responsibility to provide child support and that child support orders
  should reflect the true costs of raising children and approximate insofar
  as possible the standard of living the child would have enjoyed had the
  marriage not been dissolved."  15 V.S.A. § 650.  Thus, the provisions of a
  child support order should "be based on the policy of meeting the needs of
  the children."  C.D. v. N.M., 160 Vt. 495, 500, 631 A.2d 848, 851 (1993). 
  We have declared in this regard that § 650 "requires a liberal construction
  so as to give full force and effect to the intentions of the Legislature." 
  Viskup v. Viskup, 150 Vt. 208, 211, 552 A.2d 400, 402 (1988).

       These legislative purposes and principles amply support the judgment
  in this case. Certainly it is reasonable to assume that had the parties
  here not divorced, husband would have maintained the existing life
  insurance policy and, in the event of his death, the benefits would have
  been applied to the support and maintenance of the children.  Moreover, as
  the cases have observed, it is reasonable to assume that husband would have
  provided for his children in his will.  Thus, it is well within the scope
  of the child support statute and the discretion of the family court to seek
  to provide a similar financial security for the minor children following
  the parties' divorce.  In the event of husband's untimely demise and
  consequent cessation of support payments, the children would then not be
  left in a worse position than they would have been in had the marriage
  remained intact.  Requiring husband to maintain the existing life insurance
  for the benefit of the children during their minority was a sound and
  efficient means to secure this objective.

       The fundamental goal of the child support statute -- to protect and
  support the children

 

  of divorced parents to the same extent as the children of intact marriages
  -- applies with no less force where the divorced parent dies before the
  children attain their majority.   And the children in such a case should be
  afforded no less financial security.  We thus agree with the holding of the
  court in Grotsky that the terms of the support statute "are not to be
  narrowed but are to be applied liberally to the end that, where the
  circumstances equitably call for such action, the court may . . . direct
  the father to maintain his insurance . . . for the purpose of securing due
  fulfillment of the support order during [the childrens'] minority."  277 A.2d  at 540.

       We thus conclude that the family court's order directing husband to
  maintain an existing life insurance policy to secure continued child
  support in the event of his death was proper. Although husband's
  maintenance of the policy was contemplated in the parties' original
  Memorandum of Understanding, husband contends that payment of the premiums
  presents a hardship based on the fact that his income at the time of the
  child support hearing was $52,000, $8,000 less than that contemplated in
  the Memorandum.  Husband presented virtually no evidence of such hardship
  in support of his motion for reconsideration, and made no attempt to modify
  the award on the basis "of a real, substantial and unanticipated change of
  circumtances" under 15 V.S.A. § 660(a).  Nor does he argue that his total
  support obligation, including the premium payments, deviates substantially
  from the child support guidelines.  See 15 V.S.A. § 660(b), (d).  We find
  no error.

       The judgment does require modification in one respect, however.  The
  court ordered husband to provide child support beyond the age of majority
  if the children were enrolled as full-time college students.  Absent an
  agreement to the contrary, the court does not have "authority to enter a
  support order effective beyond the later of a child's majority or
  termination of secondary education."  McCormick v. McCormick, 159 Vt. 472,
  480, 621 A.2d 238, 242 (1993); see 15 V.S.A. § 658(c) ("The court may order
  support to be continued until the child attains the age of majority or
  terminates secondary education whichever is later.").  The parties'
  agreement having been rescinded in effect, there was no valid basis for
  this provision.  We

 

  therefore reverse this portion of the judgment, and order that child
  support be maintained only until the age of majority or termination of the
  childrens' secondary education, in conformity with 15 V.S.A. § 658(c). 
  This provision of the judgment does not appear from the record to have been
  so interrelated with its other terms that the modification requires the
  parties to incur the additional time, expenditure, and delay of a new
  hearing.  Cf. Semprebon v. Semprebon, 157 Vt. 209, 216, 596 A.2d 361, 365
  (1991) (remand for reconsideration of maintenance award requires
  reconsideration of "property award because of the interrelationship of
  these two parts of the financial order").

       Husband's other contentions are without merit.  He contends the court
  abused its discretion in awarding sole legal custody of the children to
  wife, ordering the payment of spousal maintenance, a maintenance
  supplement, and attorney's fees, and requiring husband to maintain medical
  and dental insurance through his employer for the four children.  We have
  reviewed the record, however, and conclude that the evidence supports the
  court's findings and conclusions with respect to each of these provisions
  of the decree.  See McCrea, 150 Vt. at 206, 552 A.2d  at 394 (if court's
  findings are supported by reasonable evidence and findings are sufficient
  to support conclusions, we will not interfere with court's wide
  discretion).

       Reversed as to that portion of the judgment requiring child support
  beyond the age of majority or termination of secondary education; otherwise
  affirmed.



                              FOR THE COURT:


                              _______________________________________
                              Associate Justice