Allen v. Allen
Annotate this Case
ALLEN_V_ALLEN.92-220; 161 Vt. 526; 641 A.2d 1332
[Filed 15-Apr-1994]
NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal 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. 92-220
Millicent Allen Supreme Court
On Appeal from
v. Windsor Family Court
Neil T. Allen September Term, 1993
Amy M. Davenport, J.
Gregory Judd Vitt of Brooks, McNally, Whittington, Platto & Vitt, Norwich,
for plaintiff-appellant
Ernest P. Sachs, Norwich, for defendant-appellee
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
ALLEN, C.J. The issue on appeal is whether the family court erred in
ruling that the postnuptial agreement bars the plaintiff from collecting
interest on the note. That is the only issue briefed and argued by the
parties and the resolution in this Court should be confined to an answer to
that question. Because I agree with my associates that the trial court's
conclusion was erroneous in that respect, I would reverse and remand the
matter for such further proceedings as the parties and court deem
appropriate.
Reversed and remanded.
_____________________________
Chief Justice
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Concurring and Dissenting
NOTICE: This opinion is subject to motions for reargument under V.R.A.P.
40 as well as formal 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. 92-220
Millicent Allen Supreme Court
On Appeal from
v. Windsor Family Court
Neil T. Allen September Term, 1993
Amy M. Davenport, J.
Gregory Judd Vitt of Brooks, McNally, Whittington, Platto & Vitt, Norwich,
for plaintiff-appellant
Ernest P. Sachs, Norwich, for defendant-appellee
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
DOOLEY, J., concurring and dissenting. Plaintiff wife appeals from a
decision of the Windsor Family Court granting plaintiff a divorce and
construing a postnuptial agreement to deny her claim of interest on a loan
she had made to defendant husband. As this appeal stands, all five justices
join in Part I of this opinion and agree that the family court's ruling
construing the postnuptial agreement must be reversed. We disagree,
however, on how the case should proceed. Four members of the Court are
evenly divided on the question of which court has jurisdiction over further
proceedings occasioned by our reversal, while the Chief Justice expresses no
opinion on that question. I would affirm the judgment of divorce, but not
the ruling on plaintiff's claim of interest on the loan. I am authorized to
state that I am joined by Justice Gibson in Parts II and III of this
opinion.
The parties were married in 1973 and separated in 1989. Both parties
are over 70, and defendant currently resides in a nursing home. During
their marriage, the parties kept their individual finances separate and all
assets, including their real and personal property, quite separate except
for the income that was used to meet their household expenses, reflecting an
apparent desire to have their assets pass to their children from former
marriages. Plaintiff never transferred her home into her and her husband's
names jointly, and throughout the marriage, defendant referred to it as her
house. Similarly, defendant never transferred any of his properties into
plaintiff's name. The parties filed joint income tax returns, but each
contributed from separate funds to pay the tax allocable to their respective
incomes.
During the marriage, the parties made various loans to one another. In
the early 1970s, the wife borrowed $16,000 from the husband to build a
garage. She repaid the loan in full in 1976. In December 1982, husband
borrowed $22,350.75 from wife, giving her a promissory note bearing annual
interest at twelve percent. The note also provided for payment of the note
in case of death or disability of the husband. Husband borrowed an
additional $500 in 1983, payable on demand, also with twelve percent annual
interest.
In March 1987, the parties entered into a postnuptial agreement
prepared by the wife's attorney at her insistence. The agreement provided
for husband to release his right of curtesy and for wife to release her
right of dower. The initial issue in the present case concerns Section 3 of
the agreement, entitled "Intent of Parties," which states:
It is the intention of the parties to mutually release
and waive all benefits of the laws of the State of
Vermont relating to husband and wife, dower, curtesy,
homestead, and the like, and forever bar each other
from any action to recover any interest that may now or
shall hereafter during the lifetime or at the death of
either of the parties hereto be acquired by the other in
the property, both real and personal, of the other.
In 1983, husband acknowledged that as of May 12, 1983, he owed his wife
$24,000 in principal. During the summer of 1987, several months after
execution of the postnuptial agreement, husband repaid this principal
amount, but failed to repay any of the interest due. At that time,
plaintiff estimated the interest due at $11,000. Plaintiff subsequently
filed for divorce, and at the final hearing testified that accrued and
unpaid simple interest on the note at the rate of twelve percent then
totalled $20,333.
I.
The family court determined that the sole issue in the divorce
proceeding was the equitable distribution of the parties' marital property.
However, rather than applying the statutory factors governing division under
15 V.S.A. { 751(b), the court applied the parties' postnuptial agreement
after first determining that the agreement met the standards set forth in
Bassler v. Bassler, 156 Vt. 353, 361, 593 A.2d 82, 87 (1991) governing
enforceability.(FN1) The court ruled that the wife's claim on the debt contract
was barred by the postnuptial agreement and thus declined to award the
interest due under the promissory notes, explaining:
Since a divorce proceeding occurs by virtue of a
marriage, the Court concludes that the Agreement serves
as a bar against Plaintiff's right to collect through a
divorce proceeding whatever interest she may have in
Defendant's assets or property as a result of an
obligation which existed prior to the Agreement itself.
(Emphasis added.)
Since the interest on the loan to husband was, in the court's view, an
"interest she may have in Defendant's assets," the court concluded that she
had waived her right to collect by executing the postnuptial agreement.
We disagree. First, it is clear that the manifest purpose of Section 3
of the postnuptial agreement was to clarify the parties' intention to waive
dower and curtesy; this context demonstrates that the provision was not
intended to forgive specific obligations arising out of contracts between
the parties. See Howard Bank v. Lotus-Duvet Co., 158 Vt. 393, 396, 610 A.2d 562, 564 (1992) (contract should be construed to further parties'
intentions).
Second, even apart from the context of the language, the court's
reading of Section 3 is incorrect. At best, Section 3 deals with the
ability of one spouse to reach the property of the other, not with whether
one spouse owes the other money under a contract. However the provision is
interpreted, the court went too far in extinguishing the underlying debt.
In effect, it transferred plaintiff's property, the debt owed her by
defendant, to defendant by extinguishing it, exactly the kind of
interspousal transfer the provision prohibits.
Even if the court's action had been to recognize the existence of the
debt, but to refuse to enforce it to the extent it would be collected from
defendant's separate property, this Court could not affirm it. To affirm,
we would have to find that each spouse intended that a judgment he or she
might have or obtain against the other spouse would be uncollectible,
whether based on tort, contract or some other theory. The statement of
intent found in Section 3 shows instead that the parties wanted to forego
any rights they had against each other because of their marital status. We
cannot conclude it was intended to cover rights to which marital status is
irrelevant. Had they wanted to enter an agreement that dealt with
forgiveness of indebtedness, it is clear from their extensive arm's length
dealings that they knew how to do so. They did not do so here.
II.
Because the parties' antenuptial agreement does not bar the wife's debt
collection claim, a holding upon which the Court is unanimous, I now turn to
whether the claim was properly before the family court for resolution.(FN2) The
Legislature has designated fifteen specific types of proceedings which may
be brought in that court. 4 V.S.A. { 454. It has not given the family
court, like the superior court, general jurisdiction over other civil
matters. Compare 4 V.S.A. { 113 (superior courts "shall have original and
exclusive jurisdiction of all original civil actions" except those granted
to the jurisdiction of district courts, environmental law division, family
court and supreme court) with 4 V.S.A. { 454 ("family court shall have
exclusive jurisdiction to hear and dispose of the following [specified]
proceedings"). Thus, the family court is a court of limited jurisdiction,
and other types of proceedings may not be brought in that court. Cf. In re
M.C.P., 153 Vt. 275, 302, 571 A.2d 627, 642 (1989) ("When the district court
is acting as a juvenile court, it is exercising special and very limited
statutory powers. Generally, unless there is statutory authority for a
particular procedure, the court does not have the power to employ it.")
(citation omitted); Heacock v. Heacock, 520 N.E.2d 151, 153 (Mass. 1988)
(refusing to allow joinder of tort claim with divorce action on ground that
"plaintiff could not have recovered damages for the tort in the divorce
action, as the Probate Court does not have jurisdiction to hear tort actions
and award damages"); Kleila v. Kleila, 406 N.E.2d 753, 756, 757, 428 N.Y.S.2d 896, 899, 900 (N.Y. 1980) ("Family Court is a court of limited
jurisdiction" having power to modify divorce decrees, but lacking power to
modify separation agreements as latter are "separate and independent
contractual arrangement between the parties"); Concannon v. Concannon, 356 A.2d 487, 492 (R.I. 1976) ("The Family Court is a statutory tribunal whose
jurisdiction is limited to that expressly stated in the statute or
transferred to it from other tribunals."). Further, "[w]hen a statute
limits the jurisdiction of a court, it must be strictly interpreted."
Sanders v. Sanders, 570 A.2d 1189, 1192 (Del. 1990).
In those states that have adopted family court systems,(FN3) the courts
have held that general civil claims, even between spouses, cannot be
litigated in the family court. For example, the South Carolina Supreme
Court has consistently held that matters sounding in contract are not to be
contested in family courts. See Sims v. Sims, 348 S.E.2d 835, 835-36 (S.C.
1986) ("family court lacks jurisdiction because this is an action at law on
a contract or trust theory" and "is not incorporated in the divorce
decree[;] therefore, [husband] may only seek enforcement in the Court of
Common Pleas"). Other courts have reached similar conclusions. See, e.g.,
Sanders, 570 A.2d at 1191 (rejecting wife's petition to rescind parties'
separation agreement not merged with final uncontested divorce decree
because "the Family Court has no statutory jurisdiction to entertain
petitions to rescind contractual agreements outside the scope of divorce or
annulment proceedings").
I understand Justice Morse's position to be that these cases all
involve independent proceedings in family court, and, once the family court
obtained jurisdiction over the divorce, it had ancillary jurisdiction to
resolve contract claims. First, not all the cases from other states involve
independent proceedings in which the family court did not have proper
claims before it. See, e.g., McGrew v. McGrew, 257 S.E.2d 743, 744 (S.C.
1979) (although family court had jurisdiction to determine custody of
children of separated parents, it does not have jurisdiction to determine
support owed under separation agreement because agreement involves
contractual rights).(FN4) In any event, I can find no support, either in our
precedents or those from other states, for the proposition that a state
court of limited subject matter jurisdiction may resolve claims outside its
jurisdiction because they are appended to claims that are within its
jurisdiction. In In re M.C.P., a termination of parental rights case
decided before the creation of the family court, we considered the
propriety of the juvenile court asserting ancillary jurisdiction over a
sibling's dispute with the Department of Social and Rehabilitation Services
concerning its methods of investigating the termination case. 153 Vt. at
301-03, 571 A.2d at 641-42. We reversed the assumption of jurisdiction and
held: "The court has no jurisdiction to consider side issues that do not
concern the status of the juvenile." Id. at 303, 571 A.2d at 642. In the
one family case in which we have held ancillary jurisdiction is appropriate,
the ancillary issues were otherwise within the jurisdiction of the family
court. Thus, in Poston v. Poston, ___ Vt. ___, ___, 624 A.2d 853, 857
(1993), we held that a Vermont family court might have "ancillary
jurisdiction to decide issues of property division, maintenance, and child
support even though a foreign divorce judgment may be entitled to full faith
and credit."
There are two other statutory indications that the Legislature did not
intend that the family court exercise ancillary jurisdiction. An
examination of the statutes of other states shows that many of those having
family courts have specifically provided for ancillary jurisdiction. See,
e.g., La. Rev. Stat. Ann. { 13:1401(7) (West 1983) (in addition to list of
proceedings, court has jurisdiction over "matters incidental to any of the
foregoing proceedings"). Indeed, some states have specifically provided for
family court jurisdiction over contract disputes between spouses. See,
e.g., R.I. Gen. Laws { 8-10-3 (Supp. 1993) (family court is given
jurisdiction over "all other contracts between persons, who at the time of
execution of said contracts, were husband and wife or planned to enter into
that relationship"). The Vermont Legislature provided no such authorization
in establishing our family court.
Second, authorizing the family court to resolve contract disputes would
create concurrent jurisdiction over such matters between the family court
and the superior court. A number of states have specifically provided for
concurrent jurisdiction. See, e.g., Kagen v. Kagen, 236 N.E.2d 475, 480,
289 N.Y.S.2d 195, 199 (N.Y. 1968); Lubecki v. Ashcroft, 557 A.2d 1208, 1213
(R.I. 1989). I agree that concurrent jurisdiction is often desirable,
although it can sometimes lead to "duplication of effort, forum shopping,
and delay." N.Y. Family Ct. Act { 114 practice commentary (McKinney 1983).
Whatever our view of its desirability, it is clear that the Legislature did
not authorize concurrent jurisdiction. At the same time it created the
family court, the Legislature amended the statute describing the
jurisdiction of the superior court to deny it jurisdiction over actions
"made cognizable by . . . the family court." 4 V.S.A. { 113. Although this
language is not irreconcilable with ancillary jurisdiction, it is a
statement that concurrent jurisdiction was not intended.
I cannot agree that the Legislature in effect gave the family court
jurisdiction to resolve contract disputes by the language that the family
court "has all of the equitable and other powers of the superior court as
to civil matters within its jurisdiction." 4 V.S.A. { 453(a). The statute
plainly does not expand the jurisdiction of the family court. Indeed, as we
have held with respect to the equivalent statute governing the district and
probate court, 4 V.S.A. { 219, the statute "speaks only to the powers that
court may properly exercise once its jurisdiction has been established." In
re Estate of Leonard, 132 Vt. 348, 350, 318 A.2d 179, 180 (1974).
Finally, I think it important to emphasize that defendant has neither
admitted to owing plaintiff the interest she seeks or consented to its
payment. Indeed, one of the problems in allowing debt claims between
spouses to be adjudicated in family court is that there are no pleadings
that clearly define the positions of the parties. The difficulty is
exacerbated in this case because defendant is unable to testify because of
his physical condition. We are striking too soon to hold that the debt
claimed by plaintiff is undisputed, and the only question is to determine
the proper court to reflect this in its judgment.
I would hold that the family court does not have jurisdiction to
adjudicate contractual disputes between spouses. The contractual claim must
be brought in superior court as a normal civil action.
III.
This holding would not, however, end the matter. Under 15 V.S.A. {
751:
All property owned by either or both of the parties,
however and whenever acquired, shall be subject to the
jurisdiction of the court. Title to the property,
whether in the names of the husband, the wife, both
parties, or a nominee, shall be immaterial, except where
equitable distribution can be made without disturbing
separate property.
Pursuant to the statute, we have held "that it does not matter whether the
property is held separately, jointly, or as tenants by the entirety; all
property owned by either of the spouses is subject to distribution." Lynch
v. Lynch, 147 Vt. 574, 576, 522 A.2d 234, 235 (1987). Moreover, the family
court has broad power to distribute marital property. Milligan v.
Milligan, 158 Vt. 436, 439, 613 A.2d 1281, 1283 (1992). Assuming its
validity, the debt owed by husband to wife is a form of property subject to
distribution in the divorce proceeding. Although the family court may not
adjudicate the contract claim, it may value and distribute the property in a
way that obviates the need for adjudication. For example, if the debt were
valued and awarded to husband as part of the property distribution, it would
be extinguished. We have endorsed creative alternatives to effect an
equitable distribution of property. See Chilkott v. Chilkott, 158 Vt. 193,
196, 607 A.2d 883, 885 (1992).
I share with Justice Morse an enthusiasm for resolving all matters
connected with the marriage in one proceeding. This case is unusual,
however, because these parties, although married, never "married" their
financial affairs. Thus, the dispute before us is a debt collection action
between a creditor and debtor who happen to be married. Even before the
jurisdictional issue arose because of the creation of the family court, we
explored the concerns that arise when an independent legal claim is joined
with a divorce action under V.R.C.P. 80. See generally Ward v. Ward, 155
Vt. 242, 583 A.2d 577 (1992). Ward involved the joinder of tort claims
arising out of interspousal violence with the divorce action. We expressed
concern that such joinder would complicate the litigation and "delay
resolution of the divorce proceeding," and would make it difficult "to
protect the right to trial by jury while providing expeditious relief in the
divorce action." Id. at 247, 583 A.2d at 581. We reiterated our law that
the right to trial by jury on a legal claim is not lost because it is joined
with claims on which there is no such right. Id. at 246, 583 A.2d at 580.
We concluded that it was inappropriate to allow the tort claims to be
litigated in the divorce action. Id. at 248, 583 A.2d at 581.
Putting aside the jury trial question, which has not been raised by
either party, I agree that many of the circumstances suggest resolving the
claimed debt through a property distribution offset, assuming the court
finds the debt is valid. There are no children of this marriage. The only
issues between the parties are financial, although it is important to
recognize that the parties are older and there is a need to resolve the
divorce while they are alive. See Ladd v. Ladd, No. 92-108 (Vt. Jan. 14,
1994) (divorce abates on death of either spouse).
There is, however, one overriding factor that precludes this approach.
The postnuptial agreement is clear that the parties intended to keep their
properties separate despite their marriage. The only way the court could
reach a result similar to the award of outstanding interest on the debt
requested by plaintiff would be to award the debt to defendant, offset by an
award to plaintiff of defendant's "separate" property of equivalent value.
This transfer of property interests is exactly what the postnuptial
agreement prohibits.
I cannot agree with the position that the agreement was intended to
cover only dower and curtesy and therefore would be no bar to a property
award here. The parties may have had dower and curtesy interests in mind
but drafted a broader document to encompass other forms of property
distribution that would be similar in effect to dower and curtesy. See Hill
v. City of Burlington, 157 Vt. 241, 247, 597 A.2d 792, 795 (1991) (contracts
must be enforced "as written"). If there were no debt claim, a property
award that transferred property from one spouse to the other would have been
a clear violation of the agreement. The result in family court can be no
different because of the debt claim. That claim must be resolved by
separate action in superior court.
Although I would affirm the judgment of the family court granting the
parties their divorce, I would hold that plaintiff's debt claim is not
extinguished, and plaintiff is free to pursue it by separate action in
superior court.
_____________________________
Associate Justice
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Footnotes
FN1. The trial court utilized the Bassler factors, which specifically
address the enforceability of antenuptial agreements, to the parties'
postnuptial agreement. Because all members of the Court agree that the
attempt of the court to construe the agreement was in error, we do not have
to reach whether this use of the Bassler factors was appropriate.
FN2. This case was originally heard by a three-justice Court pursuant to
V.R.A.P. 33.1, and an entry order was issued affirming the decision below.
That order relied, in part, on the question of whether the family court had
jurisdiction to adjudicate this claim and whether it should exercise such
jurisdiction. Plaintiff sought reargument to clarify the rationale, and the
three-justice Court was unable to agree. Reargument was granted before the
full Court, and the parties had the opportunity to address the
jurisdictional question. It is properly before us. See In re Williams, 154
Vt. 318, 319 n.*, 577 A.2d 686, 687 n.* (1990).
FN3. In addition to Vermont, seven states and the District of Columbia
currently have wholly separate family court systems. They are, including
the date of origination of the separate systems: Delaware (1971); District
of Columbia (1970); Hawaii (1965); Louisiana (1979); New Jersey (1984); Ohio
(1914); Rhode Island (1961); and South Carolina (1968). Page, Family
Courts: An Effective Judicial Approach to the Resolution of Family
Disputes, 44:1 Juv. & Fam. Ct. J., 3, 4-5 (1993). New York established a
family court system in 1963, but excluded divorce proceedings from the
court's jurisdiction. Id. at 8 n.45.
FN4. Justice Morse distinguishes McGrew because it involves a legal
separation and not a divorce. This is a distinction without a difference.
The court had jurisdiction to formalize the separation and award custody of
the children. This jurisdiction properly exercised by the family court did
not, however, authorize it to take jurisdiction over the contractual matter
that was otherwise outside the powers granted to it by statute. I can find
no principled basis on which the South Carolina court could have reached a
different result if the parties had been married.
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Concurring and Dissenting
NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal 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. 92-220
Millicent Allen Supreme Court
On Appeal from
v. Windsor Family Court
Neil T. Allen September Term, 1993
Amy M. Davenport, J.
Gregory Judd Vitt of Brooks, McNally, Whittington, Platto & Vitt, Norwich,
for plaintiff-appellant
Ernest P. Sachs, Norwich, for defendant-appellee
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
MORSE, J., concurring and dissenting. The opinion authored by Justice
Dooley and joined by Justice Gibson would hold that the family court does not
have jurisdiction to award relief on the promissory note husband made out to
wife and would require wife to institute a debt collection action in superior
court. My opinion, which is joined by Justice Johnson, would remand the
matter to the family court for reconsideration of the property distribution
in light of our reversal of the family court's ruling construing the
postnuptial agreement.
The Court's two-two tie appears to have left the parties with an
unenviable choice between courthouse doors, with no assurance that the door
they choose will be deemed the right one should the matter come before us
again. But in fact we do not ask the parties to guess which court is the
lady and which is the tiger. The safe choice, if a dispute develops, is the
superior court. In my view, the superior court would have concurrent
jurisdiction to decide the enforceability of the promissory note.
I write separately because, in my opinion, the family court has the
authority to determine the enforceability of contracts between divorcing
parties as part of the property settlement. I believe that requiring
parties in a divorce action to adjudicate such contracts in another forum
would impose a nonsensical burden upon them and would contradict the
underlying purpose of the legislation creating the family court -- to bring
into a single court all proceedings involving the family unit. See 4 V.S.A.
{ 454. Requiring the parties to file suits in two forums to adjudicate this
rather straightforward divorce would be an especially odd result in this case
because neither party suggested it. The only issue the parties disputed in
the family court was whether the postnuptial agreement released husband from
paying interest. Husband has never challenged the existence of the debt or
its enforceability apart from the postnuptial agreement. For that reason
alone, the family court should distribute the debt as it would any other
marital property, including marital debts owed to third parties.
Even if husband disputed owing his wife interest on the note, I believe
the family court should have ancillary jurisdiction to resolve the dispute
between the parties as incidental to its primary duty of distributing the
marital property. Ancillary jurisdiction is defined as the power of the
court "to adjudicate and determine matters incidental to the exercise of its
primary jurisdiction of an action." See Black's Law Dictionary 79 (5th ed.
1979). The adjudication of divorces, of course, is one of the civil matters
within the family court's jurisdiction, 4 V.S.A. { 454(4), and the
distribution of the parties' property, including any debts, is a primary part
of the court's jurisdictional duty in divorce proceedings. 15 V.S.A. {
751(a) (family court must "settle the rights of the parties to their
property" by "equitably" dividing it; all property owned by either or both
parties, "however and whenever acquired, shall be subject to the
jurisdiction of the court"). For the family court to fulfill its statutory
duty to distribute marital property, it would necessarily have to adjudicate
any contracts between the parties that directly affect the property. See
Bereman v. Bereman, 645 P.2d 1155, 1161 (Wyo. 1982) (cancellation of debt
owed by one spouse to another in property-settlement order was not abuse of
discretion). Determining the existence and value of marital property,
including any debts owed between the parties, is an indispensable
prerequisite to applying the criteria under 15 V.S.A. 751(b).
Not only is the family court's jurisdiction broad regarding divorce
matters, but it also "has all of the equitable and other powers of the
superior court as to civil matters within its jurisdiction, except as
specifically limited by statute." 4 V.S.A. { 453(a) (emphasis added).(FN1) No
statute limits the family court's power to construe contracts in furtherance
of its authority to distribute property. In short, the statutory provisions,
and the case law interpreting them, give the family court the authority in a
divorce action, as the superior court once had, to distribute marital debts
owed by the parties to third persons or to each other. Further, when the
contract is between the divorcing parties, the court has ancillary
jurisdiction to construe the terms and enforceability of the contract in
furtherance of its duty to distribute marital property.
Handling such contracts within divorce proceedings is the most practical
way to proceed in the course of dividing the property of divorcing parties.
It would not make sense for us to prevent the family court, which was
specifically created to adjudicate divorces, from construing agreements
concerning marital property and from distributing that property based on
those agreements and the relevant statutory criteria. The two-forum shopping
suggested by my colleagues would hamper judicial economy, greatly increase
the expense and delay of divorce litigation, and provide one warring party
more ammunition to harass the other. And all of this for no good reason. A
family court judge is just as competent as a superior court judge to
adjudicate such matters. Magee v. Magee, 519 A.2d 994, 996 (Pa. Super. Ct.
1987) ("Obviously, the Family Division judge is equally competent to decide
the action in assumpsit . . . relating to support, medical expenses and
education, founded on contract law under a separation agreement, as he is to
determine the same matters under statutory and common law, pursuant to a
complaint in support.").
My colleagues agree that some contracts are subject to the jurisdiction
of the family court. See Lewis v. Lewis, 149 Vt. 19, 22, 538 A.2d 170, 172
(1987) (the trial court must give great weight to any agreements between the
parties dividing property); Bassler v. Bassler, 156 Vt. 353, 361, 593 A.2d 82, 87 (1991) (antenuptial agreement is enforceable if it is fair and spouses
entered into it voluntarily and with full knowledge of each other's financial
status). Indeed, in this case we presume that the family court was
authorized to construe the postnuptial agreement. I fail to grasp why the
family court would be empowered to construe the postnuptial agreement but
would not be permitted to determine the enforceability of the parties'
promissory note. Like most postnuptial or antenuptial agreements, the
promissory note affects the equitable distribution of the parties' marital
property and therefore should be handled by the family court.
At one point, my colleagues suggest that the family court could bypass
the jurisdictional barrier by awarding the interest debt to husband, but
later reject this alternative because the postnuptial agreement prevents that
result. They view this case as "unusual," because it is "a debt collection
action between a creditor and debtor who happen to be married." In their
words, these married people "never 'married' their financial affairs." This
view, I suspect, may surprise some. Most marriages that end in divorce
could be characterized in analogous ways. At any rate, such a view begs the
question of what issues are properly decided in family court and whether, and
to what degree, the parties' contractual agreement should be enforced.
My colleagues rely heavily on two Vermont cases in support of their view
of the family court's limited jurisdiction. In one of those cases, Ward v.
Ward, 155 Vt. 242, 248, 583 A.2d 577, 581 (1990), we held that the divorcing
parties' tort claims and counterclaims sounding in assault and battery and
emotional distress could not be joined into a divorce action. Ward is
controlling here. Our holding in that case was based on the fact that tort
claims are distinct from the issues involved in a divorce proceeding in the
sense that joining them would implicate such procedures as discovery and
trial by jury, which are not available in a divorce proceeding and would
delay resolution of the divorce. Id. at 246-47, 583 A.2d at 580-81. In
Ward, we precluded the family court from considering the parties' tortious
conduct as a joined tort claim, but not from considering such conduct in
arriving at an equitable distribution of property. We have never ruled that
issues of spousal cruelty, for example, could not be considered in dividing
marital property. Id. at 244, 583 A.2d at 579; see 15 V.S.A. { 751(b)(12)
(court may consider respective merits of parties). Yet, taken at face value,
my colleague's narrow view of the family court's jurisdiction appears to
create some doubt even in this area.
Although our position in Ward is not universally accepted, see Simmons
v. Simmons, 773 P.2d 602, 604 (Colo. Ct. App. 1988) (there is "no clear
majority position" among other jurisdictions on whether actionable torts
between married parties can or must be litigated in divorce proceedings), I
joined in the Ward decision and still agree with its holding. But the
situation here is the reverse of Ward. Neither party sought to join a
contract action with the divorce. Nor did the parties attempt to invoke the
jurisdiction of the family court beyond that permitted by law. In order to
divide the parties' property, it was just as necessary for the court to
decide whether husband owed wife interest under the promissory note as it
would have been to decide whether he had abused her, if that had been an
issue.
Neither does the other Vermont case relied on by my colleagues, In re
M.C.P., 153 Vt. 275, 571 A.2d 627 (1989), undermine the family court's
jurisdiction here. In that case, after noting that the controlling statute
provided jurisdiction over proceedings concerning the child in need, we held
that the juvenile court had "no jurisdiction to consider side issues that do
not concern the status of the juvenile." Id. at 303, 571 A.2d at 642. As we
noted, strict adherence to the statute was necessary "to ensure a single-
minded focus on the juvenile" and to prevent the resources of the juvenile
court from being "diluted to resolve a separate dispute that had no impact on
the juvenile." Id. Here, to the contrary, the distribution of the parties'
property, including the debt husband owed wife, is at the very heart of the
divorce and the family court's jurisdiction. Thus, concerns over avoiding
potential delay and unnecessary collateral litigation, which weighed against
broader jurisdiction in Ward and M.C.P., weigh distinctly in favor of family
court jurisdiction.
My colleagues cite several other cases from other family-court
jurisdictions for the proposition that "general civil claims, even between
spouses, cannot be litigated in the family court." These cases do not stand
for such a broad proposition. Some hold merely that family courts have no
jurisdiction over post-divorce contract actions between former spouses
concerning agreements that were never incorporated into divorce judgments.
For example, Sims v. Sims, 348 S.E.2d 835 (S.C. 1986), arose from the
husband's action to set aside a conveyance brought two years after the
divorce. In a per curiam opinion, the South Carolina Supreme Court held that
the former husband had to seek enforcement of the alleged agreement in the
common pleas court because the agreement had never been incorporated into the
divorce decree, and no statute gave the husband "an independent right to
institute a separate action in the family court to determine his interest in
the property since the requested relief is not incidental to the divorce
decree." Id. at 836 (emphasis added).
Later cases from South Carolina make it clear that Sims stands merely
for the proposition that South Carolina statutes do "not give a former
spouse the right to institute a separate action in family court where the
relief requested is not incidental to the divorce decree." Eichor v.
Eichor, 351 S.E.2d 353, 354 (S.C. Ct. App. 1986) (citing Sims) (emphasis
added); see Brown v. Brown, 368 S.E.2d 475, 477 (S.C. Ct. App. 1988) (citing
Sims, court held that "family court lacks subject matter jurisdiction to
settle a dispute between spouses involving their respective interests in
property, unless the determination is incident to an action requesting an
alteration of their marital status") (emphasis added); Roberts v. Roberts,
361 S.E.2d 341, 342 (S.C. Ct. App. 1987) (because family court's decree
approving settlement agreement is "now final," subject matter jurisdiction
regarding agreement, including interpretation of its terms, rests with
circuit rather than family court).(FN2)
Cases from other family-court jurisdictions are similarly limited. For
example, Sanders v. Sanders, 570 A.2d 1189 (Del. 1990), involved a post-
divorce action in which the wife sought to rescind a property division
agreement that had not been merged in the divorce decree. The court held
that the family court did not have subject matter jurisdiction "to entertain
petitions to rescind contractual agreements outside the scope of divorce or
annulment proceedings." Id. at 1191 (emphasis added). The court, however,
specifically stated that the wife could still bring her petition for
ancillary relief in the family court by filing a Rule 60(b) motion to reopen
the divorce. Id. at 1192.
A single brief opinion from South Carolina is cited in support of my
colleagues' conclusion that "not all cases from other states involve
independent proceedings in which the family court did not have proper claims
before it." That case, McGrew v. McGrew, 257 S.E.2d 743 (S.C. 1979), does
not undermine my position because it did not involve a divorce proceeding,
and thus did not address whether the family court had authority to construe
the parties' contract in furtherance of its authority to divide marital
property. In that case, the parties were separated but not divorced. The
wife instituted an action to collect child support arrearages based on a
separation agreement that had never been incorporated into a divorce order or
approved by the court. The court held that the family court was without
jurisdiction to determine the arrearages due under the separation agreement
because "such liability was based solely upon the contract between the
parties." Id. at 744. Here, in contrast, we have a divorce proceeding in
which the family court has the power, indeed the duty, to distribute the
parties' property.
I find it ironic that my colleagues' view would preclude the family
court from allocating contractual debts between divorcing parties, when we
have accepted the practice of the divorce court determining, and allocating
between the parties, the debts one or both of them allegedly owe to third
parties. See Sullivan v. Sullivan, 137 Vt. 544, 546, 409 A.2d 561, 562
(1979) (court ordered husband to relieve wife of liability on note signed by
both parties during marriage); cf. Warren v. Warren, 800 S.W.2d 730, 731
(Ark. Ct. App. 1990) (despite lack of express statutory authority, chancellor
has power to allocate marital debts). If my colleagues' intent is to
restrict this practice as well, the family court jurisdiction is, indeed, a
dwindling resource.
This case is even less problematic than cases involving third-party
debts because the parties to the contract are before the family court as the
divorcing parties; thus, the court has even more reason to determine the
merits of the contract and to distribute the debt. See Lubecki v. Ashcroft,
557 A.2d 1208, 1213 (R.I. 1989) (both superior court and family court may
have concurrent jurisdiction to resolve contractual disputes between married
parties, "and the principles of practicality should generally be applied in
determining which court is better able to furnish complete relief")(FN3); cf.
Brooks v. Minn, 836 P.2d 1081, 1085 (Haw. 1992) (decree-judgment creditor
can enforce collection of family court-ordered property settlement payments
either through circuit or family court). As the Rhode Island Supreme Court
so aptly stated, "To resurrect the eighteenth-century Chinese wall between
different tribunals (then, law and equity) would serve neither the
principles of judicial economy nor the right of the parties litigant to a
speedy and just remedy in resolution of their disputes." Lubecki, 557 A.2d
at 1214.
In sum, I agree that the family court's interpretation of the parties'
postnuptial agreement is erroneous. I would reverse the family court order
and remand the matter for reconsideration of whether the agreement is
enforceable under the Bassler test in light of the reversal, and for
distribution of the debt. The debt in question is fairly significant and
conceivably could affect the family court's determination regarding the
fairness of the postnuptial agreement, given the circumstances of the
parties. Assuming that on remand the family court found the agreement to be
enforceable notwithstanding the existence of the debt, I would permit the
court to distribute the debt. Distribution of the debt would not violate
the postnuptial agreement. That agreement merely expresses the parties'
intent to release each other from dower and curtesy.
___________________________________________
James L. Morse, Associate Justice
-------------------------------------------------------------------------------
Footnotes
FN1. The family court has the same powers over its proceedings as that
vested in the superior court by statute or common law. 4 V.S.A. { 453(b).
FN2. In June 1986, before Sims was decided, the following South Carolina
statutory provision became effective: "The family courts of this State have
subject matter jurisdiction over all contracts relating to property which is
involved in a proceeding under this article and over the construction and
enforcement of those contracts." S.C. Code Ann. { 20-7-479 (Law. Co-op.
Supp. 1993). Apparently, this provision was part of a general clarification
of family court law. Because none of the cases cited above mention the
provision, the holdings therein do not appear to be based on it. In any
event, neither the statutory law nor the case law of South Carolina precludes
the family court from construing marital agreements within the context of a
divorce proceeding, as the dissent suggests.
FN3. My colleagues cite Lubecki v. Ashcroft, 557 A.2d 1208, 1213 (R.I.
1989) and Kagen v. Kagen, 236 N.E.2d 475, 480, 289 N.Y.S.2d 195, 199, (N.Y.
1968) for the proposition that "[a] number of states have specifically
provided for concurrent jurisdiction." In neither case, however, was
concurrent jurisdiction explicitly provided by statute. Rather, the courts
interpreted the statutes to provide concurrent jurisdiction. Similarly, I
believe that our statutes provide concurrent jurisdiction here.
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