THERESA M. SCHULTE v. JOHN M. SCHULTE
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RENDERED: JUNE 11, 2004; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-000987-MR
THERESA M. SCHULTE
v.
APPELLANT
APPEAL FROM KENTON CIRCUIT COURT
HONORABLE PATRICIA M. SUMME, JUDGE
ACTION NOS. 98-CI-00316 & 02-CI-00252
JOHN M. SCHULTE
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUIDUGLI, JOHNSON AND MINTON, JUDGES.
JOHNSON, JUDGE:
Theresa M. Schulte has appealed from an order
of the Kenton Circuit Court entered on July 9, 2002, which
dismissed her complaint against John M. Schulte, Theresa’s
former husband and the appellee herein.
Having concluded that
there was no genuine issue as to any material fact and that John
was entitled to judgment as a matter of law, we affirm.
John and Theresa were married on January 2, 1971, in
Fort Mitchell, Kentucky, when both were approximately 21 years
of age.
On February 23, 1998, Theresa filed a petition for
dissolution of marriage in the Kenton Circuit Court.
In her
petition for dissolution, Theresa asked, inter alia, for the
division of the couple’s marital property, to be awarded the
care, custody and control of the couple’s minor child, and for
an award of spousal maintenance.
Theresa claims that on March 26, 1998, she and John
entered into a written agreement which was allegedly signed by
both parties and which had the appearance of having been
notarized.1
In this alleged agreement, John purportedly promised
to pay Theresa $5,000.00 per month “instead of paying alimony.”
Payments were to begin when the couple’s pending divorce became
final and continue until Theresa reached age 65.
John denies
that he ever entered into such an agreement.
On May 28, 1998, a proposed property settlement
agreement was filed with the trial court.
Approximately three
months later, on August 24, 1998, the parties filed a revised
property settlement agreement.
These agreements filed with the
trial court covered various issues related to the couple’s
marriage and pending divorce, including the division of real and
personal property, and child support and child custody
1
During the proceedings below, the trial court found that “the notary’s
signature did not contain any indication that the notary had utilized a seal
during the notarization.” In addition, the notary public who purportedly
notarized the alleged March 26, 1998, agreement testified that she had no
recollection of signing such a document, that she did not recognize John, and
that it was her practice to use the notary seal when notarizing documents.
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arrangements.
However, the property settlement agreement made
no mention of spousal maintenance, nor did it make any reference
to John’s alleged agreement to pay Theresa $5,000.00 per month
until she turned 65.
On August 27, 1998, the trial court
entered a decree dissolving the marriage between John and
Theresa, and incorporated by reference the couple’s property
settlement agreement.
Approximately three and one-half years later, on
January 30, 2002, Theresa filed a complaint in the Kenton
Circuit Court claiming that John had breached the alleged March
26, 1998, agreement.
Theresa claimed that John had failed to
make any of the $5,000.00 monthly payments after the couple’s
divorce became final in August 1998.
In addition, Theresa
alleged (1) that John “falsely represented to [Theresa] that he
would pay her $5,000.00 per month;” (2) that John knew his
statement was false; (3) that John “intended to deceive”
Theresa; and (4) that Theresa “relied justifiably on [John’s]
representations by failing to pursue alimony” against John as a
part of the couple’s divorce proceedings.
Theresa asked for
$210,000.00 in back payments, plus $5,000.00 per month beginning
in late January 2002.
Finally, Theresa asked for punitive
damages “in an amount to be determined at trial” for John’s
alleged false representations.
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On April 29, 2002, John filed a motion to dismiss.
Among other things, John argued that the parol evidence rule
and/or the merger doctrine precluded Theresa from enforcing the
alleged March 26, 1998, agreement.
John claimed that the
couple’s property settlement agreement resolved all of the
issues related to the dissolution of their marriage, and that
the alleged March 26, 1998, agreement could not be used to
“modify” the terms of that property settlement agreement.
On July 9, 2002, the trial court granted John’s motion
to dismiss.2
On July 18, 2002, Theresa filed a motion to vacate
the trial court’s previous order granting John’s motion to
dismiss.
Approximately nine months later, on April 24, 2003,
after a hearing had been conducted on the matter, the trial
court determined that the parties’ property settlement
agreement, which was incorporated into the decree of
dissolution, “effectively merged all prior agreements of the
parties related to issues arising in their dissolution
proceedings. . .” and it denied Theresa’s motion to vacate.
This appeal followed.
2
The trial court determined that John and Theresa “did not have the right to
form a separate contract regarding alimony” which was never seen by the trial
court deciding all of the other issues related to John and Theresa’s
dissolution. The trial court also found that Theresa “knew or had reason to
know [that] the separation agreement represented the final settlement of all
issues arising out of the marriage,” and that “any failure [on Theresa’s
part] to litigate alimony was not a result of a misrepresentation by [John].”
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In ruling upon John’s motion to dismiss, the trial
court apparently considered matters that were outside the
pleadings, which had the effect of converting John’s motion to
dismiss into a motion for summary judgment.3
Therefore, on
appeal, we must apply the standard of review for a summary
judgment.
Summary judgment is appropriately granted “if the
pleadings, depositions, answers to interrogatories,
stipulations, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law.”4
In Paintsville Hospital Co. v.
Rose,5 our Supreme Court held that when considering a motion for
summary judgment, the movant has the burden of showing that the
nonmoving party cannot prevail under any circumstances.
The
Supreme Court has also stated that “the proper function of
summary judgment is to terminate litigation when, as a matter of
law, it appears that it would be impossible for the respondent
to produce evidence at the trial warranting a judgment in his
3
Pearce v. Courier-Journal, Ky.App., 683 S.W.2d 633, 635 (1985)(stating that
“exhibits and affidavits were filed by the parties and were apparently
considered by the court in reaching its conclusion. Although there is
nothing in the record to indicate that the court formally converted the
motion to dismiss into one for summary judgment, that is the procedural
effect of what it did”).
4
Kentucky Rules of Civil Procedure (CR) 56.03.
5
Ky., 683 S.W.2d 255, 256 (1985).
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favor.”6
There is no requirement that we defer to the trial
court, since factual findings are not at issue.7
“The record
must be viewed in a light most favorable to the party opposing
the motion for summary judgment and all doubts are to be
resolved in his favor” [citation omitted].8
Theresa’s sole argument on appeal is that the trial
court erred by granting John’s motion to dismiss.
Specifically,
Theresa claims that the couple’s alleged agreement wherein John
purportedly promised to pay Theresa $5,000.00 per month was a
separate and “independent” contract from the couple’s property
settlement agreement.
Theresa therefore contends that she
should be allowed to prove that John breached the alleged
contract by failing to pay her $5,000.00 per month.
We
disagree.
In Combs v. Morgan,9 the former Court of Appeals
discussed the related doctrines of merger and novation:
“If a new agreement be made, which is
inconsistent with the former agreement, so
that they cannot subsist together, the old
one is impliedly discharged by the new one.”
Am. & Eng. Ency. of Law, 1st Ed., Vol. 3, p.
6
Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476, 480
(1991).
7
Goldsmith v. Allied Building Components, Inc., Ky., 833 S.W.2d 378, 381
(1992).
8
Steelvest, 807 S.W.2d at 480.
9
307 Ky. 711, 717, 211 S.W.2d 821, 825 (1948).
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891. In Warvelle on Vendors, Vol. 2, p.
970, it is said:
“One of the most common forms of
rescission by mutual agreement
consists of what is termed
novation; that is the entering
into a new contract which takes
the place of the original one and
in which it is merged and
extinguished. If the new contract
in express terms rescinds the old
one, no question can be asked; yet
the same result follows, as a
necessary implication, and takes
place by operation of law, without
any express agreement to that
effect, whenever the new contract
is manifestly in place of or
inconsistent with a former one, or
which renders a former contract
impossible of performance.”10
Assuming, arguendo, that John did promise to pay
Theresa $5,000.00 per month in the alleged March 26, 1998,
agreement, this contract was clearly merged into and/or was
substituted by the couple’s property settlement agreement which
was incorporated into the divorce decree.
The couple’s property
settlement agreement reads in pertinent part as follows:
12. MUTUAL RELEASE: Except as otherwise
provided, each party hereby releases and
discharges completely and forever the other
from . . . any [ ] property rights, benefits
or privileges accruing to either party by
virtue of the marriage relationship or
10
See also William S. Haynes, Kentucky Jurisprudence, Contracts § 24-8 p. 363
(1986)(noting that “[i]t is well established that a contract may be
superseded or modified by novation or a subsequent contract wherein the
obligations under the prior contract are discharged and the obligations under
the new contract are substituted”); and 17A Am.Jur.2d Contracts § 527
(2004)(stating that “upon the execution of a valid substituted agreement, the
original agreement becomes merged into it and is extinguished”).
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otherwise, whether the same are conferred by
the statutory or common law of Kentucky or
any other state of the United States. It is
the understanding between the parties that
this Agreement, except as otherwise provided
by law, forever and completely adjusts,
settles, disposes of and completely
terminates any and all rights, claims,
privileges and benefits that each now has or
may have reason to believe each has against
the other, arising out of the marriage
relationship, and whether that same are
conferred by the laws of the Commonwealth of
Kentucky or of any other state, and which
are now or may hereafter be in force and
effect [emphases added].
13. UNDERSTANDING: The parties acknowledge
that they have read all the terms and
conditions of the Agreement. They
acknowledge that they have fully understood
all the terms and conditions, and agree that
this Agreement represents and constitutes
the entire understanding between them; that
this Agreement is entered into freely and
voluntarily without any coercion or duress
by the others, and the arrangements herein
are both fair and equitable [emphasis
added].
Hence, even if John had at one point agreed to pay
Theresa $5,000.00 per month “instead of alimony,” the subsequent
property settlement agreement superseded this alleged prior
agreement.
The property settlement agreement clearly states
that it constituted the “entire understanding between them,” and
that it “completely terminate[d] any and all rights, claims,
privileges and benefits that each now has or may have reason to
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believe each has against the other, arising out of the marriage
relationship.”
Thus, since the property settlement agreement made no
provision for spousal maintenance, it was entirely inconsistent
with the alleged March 26, 1998, agreement.
Therefore, the
alleged prior agreement merged with or was extinguished by the
express terms of the property settlement agreement.
Accordingly, John was under no obligation to pay Theresa
$5,000.00 per month and was entitled to judgment as a matter of
law with respect to Theresa’s breach of contract claims.
As a final matter, we note that Theresa has not argued
that the trial court erred by dismissing her claims related to
John’s alleged false misrepresentations.
Accordingly, we will
not address that issue on appeal.
Based on the foregoing, the order of the Kenton
Circuit Court is affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Thomas W. Amann
Covington, Kentucky
David B. Sloan
Suzanne Cassidy
Covington, Kentucky
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