Rowe v. Rowe

280 S.E.2d 182 (1981)

Henry B. ROWE v. Mary W. ROWE.

No. 8017DC904.

Court of Appeals of North Carolina.

July 7, 1981.

*186 Smith, Moore, Smith, Schell & Hunter by Jack W. Floyd and Jeri C. Whitfield, Greensboro, for plaintiff-appellant.

Tuggle, Duggins, Meschan, Thornton & Elrod by David F. Meschan, Greensboro, for defendant-appellant.

CLARK, Judge.

Plaintiff's assignments of error may be lumped together and treated as one. He excepts to the conclusion of the trial court that there had not been "a change in the circumstances of the parties which would warrant or justify a modification in the Plaintiff's favor of the December 6, 1976 Consent Order, and argues that the evidence required findings of fact which would have mandated the conclusion that defendant was no longer in need of his maintenance and support. We will address first this crucial issue.

The evidence at the hearing on plaintiff's motion in the cause supported the following material findings of fact: (1) In 1976 defendant's expenses exceeded $11,000.00 and her income from sources other than alimony was less than $9,000.00. (2) In 1979 defendant's expenses were $21,000.00 and her income from sources other than alimony exceeded $54,000.00. (3) In 1980 defendant's anticipated expenses were $33,000.00 and her anticipated income from sources other than alimony exceeded $51,000.00. Defendant herself admitted in her testimony that "my separate income is well over what I spend for living expenses. No, that was not true on December 6, 1976." The General Statutes provide:

"50-16.9. Modification of order. (a) An order of a court of this State for *187 alimony or alimony pendente lite, whether contested or entered by consent, may be modified or vacated at any time, upon motion in the cause and a showing of changed circumstances by either party or anyone interested."

We fail to see how a change of circumstances could be more clearly established. The few cases which comment on such an eventuality agree that an increase in the dependent spouse's income would entitle the supporting spouse to petition for modification of the alimony order under G.S. 50-16.9. Williams v. Williams, 299 N.C. 174, 261 S.E.2d 849 (1980); Sayland v. Sayland, 267 N.C. 378, 148 S.E.2d 218 (1966).

Defendant in her argument seeks to draw a distinction between cases decided under G.S. 50-16.5 and G.S. 50-16.9. We realize that these statutes are concerned with separate matters the first with the initial determination of alimony, the second with the modification of a prior alimony order; nonetheless, we fail to see how a change of circumstances under G.S. 50-16.9 can be determined without resort to the test outlined in G.S. 50-16.5. G.S. 50-16.9 allows modification for change of circumstance, but lists no circumstances. G.S. 50-16.5 provides a list of circumstances to be regarded in the initial determination of alimony. We believe the only logical construction of G.S. 50-16.9 is that it requires application of the G.S. 50-16.5 standards again at the time of the modification hearing. If the relevant circumstances in G.S. 50-16.5 list differ materially at that time from the circumstances which obtained at the time the initial order was entered, G.S. 50-16.9 authorizes the judge to modify the order to more fairly accommodate the present circumstances of the parties. This construction adheres to the sound rationale of Williams v. Williams, supra, that statutes such as G.S. 50-16.1 through 16.10, since they deal with the same subject matter (alimony), must be construed in pari materia. We hold that the "change of circumstances" in G.S. 50-16.9 refers to those circumstances listed in G.S. 50-16.5. "For us to hold otherwise would be to completely ignore the plain language of G.S. 50-16.5 and the need to construe our alimony statutes in pari materia. This we are unwilling to do." Williams v. Williams, Id. at 181, 261 S.E.2d at 855.

The findings of fact in the order denying plaintiff's motion in the cause concentrate primarily on defendant's net worth, yet our case law makes clear "that the trial court consideration of the `estates' of the parties is intended primarily for the purpose of providing it with another guide in evaluating the earnings and earning capacity of the parties ...." Williams v. Williams, 299 N.C. at 184, 261 S.E.2d at 856. (Emphasis added). Of course, it would similarly be error for the court to order a modification based solely on a change in the earnings of the parties. Britt v. Britt, 49 N.C.App. 463, 271 S.E.2d 921 (1980). A modification should be founded upon a change in the overall circumstances of the parties. A change in income alone says nothing about the total circumstances of a party. The significant inquiry is how that change in income affects a supporting spouse's ability to pay or a dependent spouse's need for support. The trial court should have considered the ratio of defendant's earnings to the funds necessary to maintain her accustomed standard of living. See Williams v. Williams, supra. If, as all the evidence at the hearing tends to show, defendant's needs exceeded her earnings at the time of the initial order, but defendant's earnings exceeded her needs at the time of the hearing, it becomes an irresistible conclusion that the material circumstances of the defendant have changed. The court's failure to consider, or to make findings of fact on, the ratio of defendant's earnings to her needs constitutes error. The court should have found as a fact that defendant's earnings now exceed her needs, and concluded therefrom that there has been a change in circumstances.

While we are aware of authority to the effect that "minor fluctuations in income" alone do not require modification of alimony for changed circumstances, Britt v. Britt, supra, we believe the change of *188 circumstances under the facts of this case is so extreme that we fail to see how defendant is dependent and thus entitled to any amount of alimony. Under the guidelines set out in Williams v. Williams, 299 N.C. at 182-84, 261 S.E.2d at 855-56, we see no way that defendant could reasonably be called a dependent spouse at the time of the hearing on modification. A woman who requires by her own testimony $32,647.08 annually ($2,720.59 per month) to maintain her standard of living and who receives independent annual income in excess of $50,000.00 cannot be considered "actually substantially dependent," nor can she be "substantially in need of maintenance and support." See G.S. 50-16.1(3). Defendant's argument that the court's initial determination of dependency is not subject to reconsideration on a subsequent motion under G.S. 50-16.9 is untenable. As we have explained herein, G.S. 50-16.9 calls for a completely new examination of the factors which necessitated the initial award of alimony in order to determine whether any of these circumstances have changed. When the list of circumstances enumerated in G.S. 50-16.5 is properly employed, the conclusion is inescapable that defendant, although formerly dependent, is no longer so. Certainly one of the ultimate circumstances which might change under G.S. 50-16.9, would be the defendant's condition of dependency. We hold that as a matter of law based on the undisputed fact that, as defendant herself has stated, her "separate income is well over what [she] spend[s] for living expenses," the evidence established a change of circumstances requiring modification of the consent order to reflect a finding that defendant is not a dependent spouse and to vacate the award of alimony. We leave intact that portion of the consent order wherein the court found, pursuant to the parties' agreement, that there were grounds for alimony under G.S. 50-16.2. Defendant may, therefore, still seek modification of the order under G.S. 50-16.9 should her circumstances change such that she once again is substantially in need of plaintiff's support and maintenance. She may rely on the finding of entitlement in the consent order as res judicata and need only establish her dependency.

Defendant argues that the 6 December 1976 order was not modifiable under G.S. 50-16.9 for two reasons: (1) plaintiff was estopped by his contractual agreement that the Consent Order would not be modifiable, and (2) the agreement to pay alimony was an integral part of the property settlement of the parties which could not be modified by the court.

The estoppel argument is without merit. By sustaining the argument we would elevate the agreement of the parties above the public policy of the State, as expressed by the legislature in G.S. 50-16.9, that an Order to pay alimony should be modifiable. Defendant seeks, we realize, to estop plaintiff from moving for modification rather than to enforce the alimony order as originally written; nevertheless, the result she seeks is the same a result diametrically opposed to the obvious intent of G.S. 50-16.9. We will not allow public policy to be thus circumvented. We endorse the following soundly reasoned statement of the Supreme Court of Rhode Island:

"The respondent's agreement in advance not to appeal under any circumstances to the court for the exercise of the jurisdiction conferred by said section 5 is an attempt, before any cause arises, to oust the court of the jurisdiction, which the Legislature declared shall always exist, and is void as being against the policy of the law. It is one thing for a person to agree, after the circumstances have arisen, to settle the dispute without resort to the courts. It is a different matter for him to attempt to bind himself in advance not to appeal to the courts regardless of what circumstances may arise. The right to appeal to the Superior Court for the modification of a decree for alimony was given not only for the protection of persons obligated by decrees to pay alimony but also for the well-being of society. The legislature on a change of policy may withdraw the privilege granted, but while the right exists the individual *189 cannot barter it away even with the approval of the court. .... The power of legislation resides in the legislature and not in the courts. When a decree for alimony purports to take from an individual the right given by statute to apply for modification of the decree, the court has, without authority, attempted to abrogate the will of the legislature and supersede the statutory law by decree of court. It is elementary that courts can not thus encroach on the legislative domain. There are numerous decisions which hold that a court can not, by consent decrees or otherwise, divest itself of the power conferred by statute to modify decrees for alimony, and we have been referred to no authority to the contrary. Blake v. Blake, 75 Wis. 339 [43 N.W.2d 144]; Southworth v. Treadwell, 168 Mass. 511 [47 N.E. 93]; LeBeau v. LeBeau, (N.H.) [80 N.H. 139] 114 Atl. 28; Wallace v. Wallace, 74 N.H. 256 [67 A. 580]. See also, Soule v. Soule, 4 Cal. App. 97 [87 P. 205]."

Ward v. Ward, 48 R.I. 60, 65-66, 135 A. 241, 243 (1926). Although the issue in Ward was waiver rather than estoppel, we see no reason for a different result to obtain, particularly where, as here, the true issue is not whether a party may do a certain thing, but whether the judiciary may exercise the jurisdiction with which the legislature has invested it. Surely the courts may not be estopped by the agreement of the parties from the exercise of the jurisdiction to modify an alimony order, which it retains generally upon adoption of the parties' agreement as its own order, Bunn v. Bunn, 262 N.C. 67, 136 S.E.2d 240 (1964), and which the legislature has specifically approved by its adoption of G.S. 50-16.9. Defendant's assignments of error are overruled to the extent they are based on estoppel by contract.

In support of her property settlement argument defendant correctly points out that the court would lack power to modify the consent order if it were an integral part of the parties' property settlement. Bunn v. Bunn, supra, White v. White, 296 N.C. 661, 252 S.E.2d 698 (1979); see also Note, Presumed Separability of Support and Property Provisions in Ambiguous Separation Agreements, 16 Wake Forest L.Rev. 152 (1980) [hereinafter Presumed Separability]. Alimony provisions are presumed separable from provisions for property settlement, and therefore modifiable, even when both appear in the same document. White v. White, supra; see Note, Presumed Separability, supra, at 164-68. In the face of this presumption, a party opposing modification must establish by a preponderance of the evidence that the provision for alimony contained in the order of 6 December 1976 was intended by the parties to be only a part of their overall property settlement. White v. White, 296 N.C. at 672, 252 S.E.2d at 704. This defendant has failed to do.

Defendant argues that two factors establish that the alimony provision was an inseparable portion of the property agreement. One is the fact that the parties' divorce decree was entered the day following the entry of the consent order. We fail to see how the proximity in time between entry of an order which grants alimony, making no reference to a property settlement, and a judgment which grants an absolute divorce, making no reference to a property settlement, has any tendency to prove that the order was a part of a property settlement. This so-called "factor" tends to prove nothing about the alleged property settlement. The second factor which defendant alleges supports her case for inseparability and, therefore, non-modifiability, is a letter dated 18 November 1976 from plaintiff's then attorney to defendant's then attorney. The opening paragraph of this letter recites: "I have talked with Henry Rowe again in an effort to settle all matters existing between Henry and Mary. At this time, by way of offer of compromise and settlement on Henry's behalf, I wish to advise the following: " Thereafter appears a list of 11 separately numbered items including: "3. Henry will pay to Mary alimony at the rate of $2,500.00 per month until *190 her death or remarriage. In any event, this payment would terminate at Henry's death." This letter was quite properly excluded from evidence as an offer of compromise and settlement. Mahaffey v. Sodero, 38 N.C.App. 349, 247 S.E.2d 772 (1978); Hood v. Hood, 24 N.C.App. 119, 209 S.E.2d 881 (1974). See 2 Stansbury's N.C. Evidence § 180 (Brandis rev. 1973). We uphold the trial court's exclusion from evidence of the letter of 18 November 1976 as embodying inadmissible settlement negotiations. We note further that even had the letter been admitted, its alimony provision is entirely separate from the other provisions for property division. Nothing in the letter recites, or even hints, that the alimony provision is reciprocal consideration for the support provision. The fact that the support provision appears in the same letter with the property provisions would no more rebut the presumption of separability than did the fact in White that the support provision appeared in the same consent judgment with the property provision. Therefore, even if the letter had been admitted as the full and final property settlement and support agreement, which it clearly was not, defendant would still be faced with the burden of producing a preponderance of evidence that the provisions therein were inseparable. Defendant fails to produce one scintilla of such evidence.

Defendant also excepts to the sustention of plaintiff's objection to the following question about the agreement in the Consent Order that the order not be subject to modification: "Mr. Meschan: How do you recall that provision got into that order in the negotiating process?" Again defendant's question was addressed to the negotiating process, rather than to the agreement itself. "Any or all parts of a transaction prior to or contemporaneous with a writing intended to record them finally are superseded and made legally ineffective by the writing." 2 Stansbury's N.C. Evidence § 251 (Brandis rev. 1973). "`Accordingly, all prior and contemporaneous negotiations in respect to those elements [dealt with in the writing] are deemed merged in the written agreement.'" Tomlinson v. Brewer, 18 N.C.App. 696, 700, 197 S.E.2d 901, 904, cert. denied, 284 N.C. 124, 199 S.E.2d 663 (1973). Additionally, we note that this inquiry had no relevance. Defendant's burden was to show the intent of the parties concerning the alimony provision. The inquiry before us went to the intent of the parties concerning the non-modification provision and had no tendency to prove the parties' intentions in any other matter.

Defendant was free to inquire into the intention of the parties that the support provision in the Consent Order be reciprocal consideration for the provision division of the parties. This defendant failed to do. She chose rather to inquire into incidental, collateral, irrelevant, and inadmissible matters. We uphold the trial court's exclusion of these matters.

Agreements to pay alimony such as the one in the Consent Order before us may be adopted by the court as its own orders or they may simply be approved or sanctioned by the court. Bunn v. Bunn, 262 N.C. 67, 136 S.E.2d 240 (1964). There exists a very clear distinction between the incidents of the two different kinds of consent orders:

"This distinction was addressed in 1964 in the landmark case of Bunn v. Bunn. There the court held that a contract-consent judgment not adopted as an order, but merely approved or sanctioned by the court, cannot be modified or set aside except upon: (1) the consent of both parties; (2) a finding that the agreement was unfair to the dependent spouse; or (3) a finding that the dependent spouse's consent was obtained by fraud or through mutual mistake. In contrast, the alimony provision of a court-adopted consent judgment is modifiable or enforceable by the court's contempt power should the supporting spouse willfully fail to pay because the court's decree supersedes the parties' agreement."

Note, Presumed Separability, supra, at 158-59.

The parties had it in their power to enter into a Consent Order which could not be modified by the courts. Such an order, *191 however, would not have been enforceable by contempt. The order of 6 December 1976 appears to have been an attempt to create a consent order enforceable by contempt but not modifiable. "If the judgment can be enforced by contempt, it may be modified and vice versa. This is only just." Bunn v. Bunn, 262 N.C. at 70, 136 S.E.2d at 243. We refuse to enforce an effort to circumvent the justice of this rule.

Defendant's final argument, that the court erred in failing to award her attorney's fees, is meritless. The court's finding that defendant's non-alimony income in 1979 was approximately $54,000.00 established that it was possible for her to employ adequate counsel. We hold that in this case, as in the Williams case, "It is clear from the record before us that an award of counsel fees was not necessary to enable [the wife], as litigant, to meet [the husband], as litigant, on substantially even terms by making it possible for her to employ counsel." Williams v. Williams, 299 N.C. at 190, 261 S.E.2d at 860; see also Hudson v. Hudson, 299 N.C. 465, 263 S.E.2d 719 (1980).

We have examined the remainder of the assignments of error and arguments of both parties and find them either meritless or disposed of by the issues decided herein.

In summation, we find that the conclusion of the trial court that there was no change of circumstances is not supported by the evidence, and that as a matter of law there was a change of circumstances under G.S. 50-16.5. We further find that the trial court erred in not making more specific findings of fact relative to defendant's costs in maintaining her accustomed standard of living, i. e., $32,647.08 per year according to her affidavit. Such findings of fact would provide a basis for determining in the future if there were a change of circumstances after entry of such modified order should the defendant thereafter seek alimony on the grounds that changed circumstances had again made her a dependent spouse. These corrections can adequately be made by the court without further hearing, it appearing from the record on appeal that the uncontradicted evidence before the trial court is sufficient to support modification of the order. This cause is remanded for findings and entry of an order consistent with this opinion.

Affirmed in part; vacated in part and remanded.

WELLS, J., concurs.

VAUGHN, J., dissents.

VAUGHN, Judge, dissenting:

On defendant's appeal, I would sustain her assignments of error except the one relating to counsel fees which I too would reject. I would, however, hold plaintiff to his bargain and not allow him to succeed in seeking modification of the order. I do not agree that, on the facts of this case, there is any circumvention of public policy in this position. Indeed, sound public policy would seem to support defendant's position. Even if the judgment should be held to be modifiable, I would affirm that part of Judge McHugh's order wherein he declined to do so. The facts of this case do not disclose the kind of change of circumstances that require a reduction in alimony.