Kinsman v. Kinsman

748 P.2d 210, 73 Utah Adv. Rep. 110, 1988 Utah App. LEXIS 5, 1988 WL 1651

• Court: Court of Appeals of Utah
• Decided: January 12, 1988
• Docket: 860051-CA
• Status: Published

Opinions

OPINION

DAVIDSON, Judge:

Defendant appeals from the order and judgment modifying a decree of divorce. The modification was based on a significant change in circumstances and awarded alimony to plaintiff for a period of five years. The decree of divorce, however, provided that neither party was entitled to alimony.

The parties were married for approximately three years with no children born to the union. Both parties brought substantial assets into the marriage. The provisions of the decree of divorce were largely adopted from a settlement agreement executed on July 13,1982, in which the parties stipulated to waive alimony.¹

The decree of divorce divided the marital property and adjusted the financial burdens pursuant to the terms of the stipulation. Defendant was ordered to assume certain payments which relieved plaintiff of specific debts and obligations apparently with the intent of restoring plaintiff to her earlier financial position. Within nine months after the divorce, defendant had filed for business and personal bankruptcy and ceased making payments for the benefit of plaintiff thus causing her to assume those financial responsibilities.

The trial judge .found a significant change of circumstances caused by the bankruptcy of defendant and on that basis awarded alimony to plaintiff. Defendant filed this appeal questioning the award after an express waiver of the right to receive alimony.

In her brief, plaintiff seeks further modification of the order to delete the durational limitation on the alimony award. Plaintiff also requests that she be awarded costs and attorney fees in accordance with the settlement agreement of July 13, 1982. Because plaintiff did not file a timely and proper cross appeal, we will not now address these issues raised for the first time in her appellate brief. Matter of Estate of Lewis, 738 P.2d 617 (Utah 1987).

At the time the decree was modified, Utah Code Ann. § 30-3-5(1) (1984) provided that: “The court shall have continuing jurisdiction to make such subsequent changes or new orders with respect to the support and maintenance of the parties_” However, a party who brings an action to modify a divorce decree “must initially show that a substantial change in the circumstances of at least one of the parties has occurred.” Jeppson v. Jeppson, 684 P.2d 69, 70 (Utah 1984), and cases cited therein. The court found such a change and based its decision on that change. But, to base the award of alimony on changed circumstances ignores the finality of the terms of the stipulation which should only be overturned “with great reluctance and for compelling reasons.” Land v. Land, 605 P.2d 1248, 1251 (Utah 1980).

We decline to hold that a change of circumstances can overcome a knowing and specific waiver in a stipulation.² When the facts of this.case are examined, however, two alternate theories for relief are presented. Neither of these theories was presented to the trial court. However, “we may affirm a trial court’s decision on proper grounds even though different than those relied upon by the trial court.” Branch v. Western Petroleum Inc., 657 P.2d 267, 276 (Utah 1982).

In Beckmann v. Beckmann, 685 P.2d 1045 (Utah 1984), the Utah Supreme Court examined a situation very similar to this case. Defendant was discharged in bankruptcy subsequent to a divorce decree in which he was ordered to make payments on debts and to hold his wife harmless from them as described in a settlement agreement adopted by the court. At the hearing on his order to show cause, defendant argued that he had been discharged from liability. The trial court found the debts were in the nature of alimony, maintenance and support and, as such, were not dischargeable in bankruptcy. The Utah Supreme Court affirmed. In the instant case, the trial court was not asked to address the issue of whether or not the obligations were in the nature of alimony, maintenance and support. It is probable that such an examination would place at least some of defendant’s obligations to plaintiff in the above category.³

Affirmance is based on a contract theory. These parties negotiated and agreed upon terms to settle their divorce action and entered into a stipulation incorporating those terms. A stipulation is an enforceable agreement if it meets the requirements of formality outlined in Brown v. Brown, 744 P.2d 333 (Utah App.1987). Among other terms, defendant specifically agreed to assume and pay certain debts for the benefit of plaintiff. Plaintiff agreed to waive any right to receive alimony “now and forever.” Plaintiff’s promise, however, was conditioned on the performance by defendant of paying the agreed bills. His performance was required as a condition precedent to plaintiff’s waiver of alimony in the future. When defendant willfully avoided his required performance through bankruptcy, he failed to perform the condition precedent. See Stewart v. Underwood, 704 P.2d 275, 278 (Ariz.App.1985) (discharge in bankruptcy does not constitute payment of the debt.) Having failed to perform, he now seeks to enforce the agreement against plaintiff. Such a result will not be tolerated. Failure of a material condition precedent relieves the other party of any obligation to perform. Fischer v. Johnson, 525 P.2d 45 (Utah 1974). The stipulated agreement is no longer enforceable against plaintiff. The court is placed in the position as if there had been no agreement and no distribution of property. The court should look to the present condition and needs of the parties and enter judgment accordingly. This is exactly what the trial court did in making the award of alimony.

This Court will not disturb the trial court’s award of alimony unless a clear and prejudicial abuse of discretion has been shown which is not the case herein. Eames v. Eames, 735 P.2d 395, 397 (Utah App.1987); Petersen v. Petersen, 737 P.2d 237 (Utah App.1987).

The order and judgment modifying decree of divorce is affirmed. Costs on appeal against defendant.

BENCH, J., concurs.

1 . Paragraph 19 of the parties’ stipulation and settlement agreement reads as follows:

“The parties hereby stipulate and agree that each party is a fit and employable person capable of supporting himself and herself respectively and that neither party is entitled to alimony and both parties hereby waive the same now and forever."

2 . To hold that a change of circumstances can overcome a stipulation in all cases, as the concurrence suggests, opens the door to abuse. Nothing would prevent a party from negotiating a favorable settlement in exchange for a waiver of alimony and sometime later, having enjoyed the benefit of the agreement and having dissipated the assets awarded, coming back to court to obtain alimony on a change of circumstances. Such a rule would encourage fraud and deception and would eliminate the efficacy of stipulated settlements. All divorces would be contested in the hope of establishing finality and preventing future litigation over those matters established in court.

3 . To determine whether a debt is in the nature of alimony, maintenance and support and therefore non-dischargeable, the court first looks to the divorce decree creatirtg the debt. From the decree and the circumstances resulting in the decree the court can determine the nature of the debt. The court then looks at the circumstances of the petitioner at the time of the petition and may then determine that those circumstances still require a finding of non-dischargeability. The test to be applied at both stages is “if without the debt assumption, the spouse would be inadequately supported, the debt assumption was meant to be support.” Holt v. Holt, 672 P.2d 738, 743 (Utah 1983) quoted in Beckmann, 685 P.2d at 1050. As is further pointed out, "To enforce the general purpose of the bankruptcy laws in providing relief for the debtor, the test announced in Holt v. Holt, supra, must be passed at the time the debt was imposed in the divorce decree and again at the time the discharge of the debt is attempted.” Id. This test could easily have been applied to the decree and the facts in this case. If the debts were found to be non-dischargeable, defendant would remain obligated for payment. The decree would be left undisturbed and either the creditors or the plaintiff could enforce defendant’s obligation to pay-