By Elliott L. Epstein, Esquire

The vast majority of all divorce, post-divorce and child custody proceedings in Maine are resolved by agreement and proceed to judgment on an uncontested basis. Indeed, the system is geared towards settlement, with statutory provisions requiring the mediation of all contested cases where minor children are involved.[1] Generally a judge will adopt a settlement agreement and incorporate it by reference into the judgment, decree or order. However, there are certain agreements whose status is doubtful — those which purport to impose requirements that exceed or limit the statutory authority of the divorce court and those which are repudiated by one of the parties prior to judgment. It is the position of this article that policy considerations and drafting mechanics will determine the enforceability of such agreements.
AGREEMENTS WHICH EXCEED THE DIVORCE COURT’S STATUTORY POWERS

It has been repeatedly held that a divorce court’s power derives exclusively from statute.[2] To be sure, Title 19 often gives broad discretion and implied authority to a divorce court in carrying out its express powers.[3] The marital property statute, for instance, has led to numerous creative judicial solutions which have been upheld on appeal.[4] However, those divorce judgments which have attempted to go beyond express or implied statutory powers or which have imposed limitations on the statutory authority of the court have been vacated.[5]

In contrast to divorce judgments crafted by judges, there is a dearth of reported decisions about those crafted by the parties themselves. Only a handful of cases in Maine have discussed the viability of judicially approved settlement agreements with provisions contravening the statutory authority of the divorce court,[6] and only two have squarely addressed the issue. Hale v. Hale,[7] decided on February 26, 1992, and Peterson v. Leonard,[8] decided March 15, 1993, provide the first clear indication of the Law Court’s attitude towards the enforceability of extra-statutory settlement agreements.

In Hale, the parties had entered into a signed, written agreement, subsequently incorporated into the divorce judgment, which prohibited the termination, increase or decrease of alimony payments upon the remarriage or death of either party or “for any reason including subsequent events or conditions.”[9]

The Court interpreted the alimony statute as permitting a divorce court, by virtue of agreement of the parties or otherwise, to order the alimony could not be increased due to subsequent events or conditions.[10] However, as a matter of statutory interpretation, it held that an agreement could not divest the divorce court of authority to decrease alimony in the face of a substantial change in the ability of the payor spouse’s ability to pay or the payee spouse’s need for support.

The Court went on to state, nonetheless, that the existence of an “anti-modification provision should be considered by the divorce court as an extraordinary circumstance, imposing a greater evidentiary burden on the payor spouse who seeks to modify a decree that would be encountered where no such agreement exists, . . . .”[11] Thus, Hale suggests that judicially adopted settlement agreements, while they cannot deprive the divorce court of its statutory authority to reduce alimony, can increase the evidentiary burden of proving a substantial change in circumstances on the party seeking to defeat the agreement.

In Peterson v. Leonard, the Court ruled that a father’s agreement, incorporated into a divorce decree, to support his children beyond the age of majority could not be collaterally attacked in an enforcement action and could be the subject of a contempt order for willful noncompliance. The Court stated:

The divorce court commits an error of law when it imposes a post-majority support obligation on a parent in a divorce judgment in the absence of an agreement. An aggrieved party’s failure to take a direct appeal from such a judgment, however, renders that judgment immune from collateral attack.[12]

Moreover, a party “‘who has expressly agreed to include such a provision in the judgment is in a poor position to subsequently object to the court’s doing what he requested the court to do.’”[13]

Hale and Peterson provide clues as to the enforceability of but two of a variety of incorporated, extra-statutory settlement provisions. An examination of others will help to shed more light upon the issue.
POLICY CONSIDERATIONS PERTAINING TO VARIOUS EXTRA-STATUTORY SETTLEMENT AGREEMENTS

The following scenarios will illustrate some of the policy considerations which attach to extra-statutory settlement agreements:

1. Parties, who were neither married nor divorced in Maine and who have never resided but have occasionally vacationed here, agree at the time of their divorce to have all post-divorce disputes regarding parental rights and responsibilities decided by the Maine courts.

2. Parties agree that the divorce court may hear and decide all post-divorce disputes pertaining to the division of marital property.

3. Parties agree that the non-primary residential parent shall be relieved of any obligation to pay child support or that his support level will remain fixed at a current level regardless of any change in the financial circumstances of either party that would otherwise warrant an increase.

4. Parties agree that child support will be payable in accordance with a pre-determined formula, geared to the income of each party and adjustable annually, at a level which is more generous than would be required under the child support guidelines.

5. Parties agree that all post-divorce issues regarding parental rights and responsibilities will be resolved by binding arbitration.

The first three examples are situations in which a court, in a post-divorce proceeding, would probably refuse to defer to the parties’ agreement, even if it had already been adopted by the divorce court and incorporated into the original divorce decree. This is because there are countervailing policy reasons which make such provisions undesirable even in the face of an agreement.

In the first scenario, the Maine courts would be opening their doors to those who have no connections to the State. Maine’s statutes usually require a six-month residency by the child in dispute and at least one of the child’s parents prior to the initiation of a custody proceeding.[14] Dispensing with a residency requirement would be undesirable both because it would encourage forum shopping by those anxious to evade the restrictions imposed by the divorce laws in their state of residence and because Maine would not be a forum conveniens since the relevant evidence pertaining to the case would most likely be more readily available in another state. Moreover, it would be fiscally and administratively undesirable. Maine’s court dockets are crowded enough; they should not be overburdened by visitors deciding to litigate post-divorce custody cases while in this state visiting Bar Harbor or shopping at L.L. Bean’s.

The second and third scenarios likewise would run afoul of countervailing policies. While parental rights and child support are subject to a court’s continuing power to modify, marital property division, except in certain limited instances, is not.[15] This is probably based, at least in part, on a policy of affording predictability and stability of title to property in the hands of a party, or the party’s estate or transferees.[16] The policy regarding child support is even more firmly entrenched. Under Maine law, each parent is responsible for the support of his or her child,[17] and the court retains the right to adjust that support if there is a substantial change in the economic circumstances of the parties and it is in the best interests of the child, notwithstanding any agreement of the parties.[18] Under Congressional mandates tied to federal funding for AFDC, the State has established child support guidelines, the application of which are rebuttably presumed to establish the correct amount of child support.[19] To insure that minor children receive adequate financial support, that the State is repaid for its assistance and that continued federal AFDC funding to Maine is not jeopardized, it is likely that a divorce court would reject a no-child-support provision or a provision purporting to freeze child support at a particular level below the guidelines.

The fourth scenario – an agreement to adjust child support in accordance with a pre-set formula more generous than the guidelines – is more likely to receive favorable judicial consideration. Although it purports to circumvent the child support guidelines and deprive the court of its continuing authority to set appropriate support levels,[20] it would not offend public policy.[21] It involves a concession by the payor spouse which is more generous than that provided by statute and would enhance the best interests of the child without impairing the parent-child relationship.

If, as in this last scenario, a party to a divorce has been willing to pay more than he is required to, why should he later be allowed to avoid the obligation he has thereby voluntarily assumed? The answer is: He probably should not be allowed to renege, except in those unusual instances where enforcement of the agreement would be unconscionable or demonstrably unjust.[22] As an example of an unjust or unconscionable result, consider the father who agrees to pay child support of $20,000 per year at a time when he is earning $100,000 a year, but is, through legitimate loss of lucrative employment or business, deprived of that income-earning capacity and reduced to making $25,000 annually. It would seem unduly burdensome to require this parent to pay almost all of his income for support. At the other extreme, consider the $100,000-a-year father who wins a lottery after his divorce that pays him $1,000,000 annually. It would seem ridiculous to compel him to pay half that sum every year according to a pre-determined support formula, where the child’s legitimate needs are only a fraction of that amount.

The outcome of the fifth scenario, an agreement to arbitrate, is the hardest to predict, since it involves two conflicting policies of almost equal dignity. On the one hand, the Law Court has jealously guarded the divorce court’s “sole and continuing authority to determine parental rights and responsibilities with respect to a minor child.”[23] On the other hand, the Uniform Arbitration Act makes enforceable a “written agreement to submit any existing controversy to arbitration,”[24] and the Law Court has been warmly hospitable to the use of arbitration as a device for achieving the “prompt solution of . . . controversy without undue interference by the courts.”[25] While it is likely that the Law Court would welcome the practice of submitting disagreements regarding minor children to arbitration, as a means of alternative dispute resolution, it is equally probable that it would insist the divorce court retain final authority to approve or disapprove the arbitration award based upon its own independent determination of the “best interests” of the minor children rather than solely upon the narrow grounds available for vacating an arbitrator’s award under the Uniform Arbitration Act.[26]
THE RATIONALE FOR MAKING EXTRA-STATUTORY PROVISIONS ENFORCEABLE

Where it is desirable, or at least not undesirable, from a policy point of view, to enforce an extra-statutory provision in a settlement agreement, how can the court do so in a way which is justifiable? Hale suggests one method: an increase in the burden of proving a substantial change in circumstances on the person seeking to enforce the agreement. While Hale does not specify the degree to which the moving party’s burden of proof is increased, it must certainly be to a higher level than a preponderance of the evidence, the normal standard in a civil case. The only other civil standard enunciated by the Law Court has been the “clear and convincing” or highly probable, evidentiary standard, such as is imposed in fraud cases.[27] This would appear to be the standard alluded to in Hale.

In Hale, the parties unsuccessfully attempted to deprive the divorce court of the statutory powers which it possessed. Through an augmentation of the evidentiary burden on the moving party, the court was still able to exercise its proper authority while giving appropriate weight to the will of the parties as expressed in the settlement agreement.

This approach would not work, however, in a situation in which the parties attempted to bestow upon the divorce court powers which it did not possess or was prohibited from exercising, such as an order of support for an adult child. Instead, other rationale could be employed to enforce such a provision. One would be to invoke estoppel to prevent the moving party from asserting the unenforceability of the provision.[28] An essential element of estoppel is the detrimental reliance of the party seeking enforcement.[29] A second approach, one suggested by Peterson, would be to insulate the judicially adopted agreement from collateral attack. A third would be to enforce the provision contractually outside the ambit of the divorce statutes.[30]

Although the divorce court is conceptually distinguishable from a civil court which enforces contracts, the two courts are, in fact the same.[31] Maine does not yet have a separate family court (outside of Cumberland County), and all civil cases are processed through the same judges. Even if the settlement agreement needed to be enforced in a different forum, however, the party seeking enforcement could bring a separate action for breach of contract.

In order for an extra-statutory agreement to stand a chance of becoming contractually binding, it should, at a minimum, be reduced to writing, be signed and contain language to the effect that it will survive the divorce judgment and be separately enforceable – an anti-merger clause. It has been held that an agreement generally does not survive the divorce judgment, but, rather, is incorporated into it and becomes an expression of the will of the court, rather than the parties.[32] Therefore, where there is no separate document evidencing the parties’ agreement with respect to an extra-statutory order and expressing their intent to have the agreement survive the judgment as an independently enforceable contract, the court’s adoption of the agreement makes it unenforceable contractually in a post-divorce proceeding.[33]
REPUDIATED AGREEMENTS

A somewhat different problem is presented by the existence of an agreement, either oral or written, which is repudiated by a party before its incorporation into a divorce order.

It there is a written, signed agreement, particularly one which purports to be contractually binding, the proponent of the repudiated agreement can either argue that it is specifically enforceable[34] or that the opponent of the agreement should be estopped from denying it.[35] Alternatively, it may be admissible as evidence of what the parties considered “reasonable” or “just” at the time of the agreement (although this alternative may run afoul of the evidentiary rule forbidding the admission of settlement agreements to prove liability).[36]

It is even more difficult to enforce oral agreements that have not yet been incorporated into a judgment. Proving the terms of such an agreement might not only run into the evidentiary bar against evidence of negotiated agreements but, if it were negotiated in mediation (the major forum for settlement of divorce matters), would violate a separate evidentiary rule barring testimony as to statements made in mediation.[37] Thus, there may exist no mechanism for bringing the terms of the agreement before the divorce court.

This result tends to undermine the viability of the mediation process, where the dynamics of mediation or the persuasive powers of the mediator often temporarily overcome the opposition of a party only to have that opposition return once the party leaves the mediation. While the mediation statutes provide for sanctions against a party failing to mediate in good faith, they are silent as to sanctions against a party who mediates in good faith but later repudiates an agreement reached in mediation.[38] In any event, without an evidentiary mechanism to prove the statements made or positions agreed to in mediation, bad faith cannot be proven.
CONCLUSION

Settlement agreements that go beyond the boundaries of Maine’s divorce statutes are probably enforceable in many instances. However, the enforceability of an extra-statutory settlements agreement likely depends both upon its formulation – whether it is in writing, signed and contains an anti-merger clause – and upon its being consistent with, or at least not offensive to, the policies of the divorce statutes. Repudiated agreements may also be enforceable or, at least, have evidentiary value, but the likelihood of their being effective likely depends upon their being a signed writing and containing a clause specifying their independent, contractually binding nature.
[1] 19 M.R.S.A. §§ 214(4), 752(4).

[2] Baker v. Baker, 444 A.2d 982, 984 (Me. 1982); Prue v. Prue, 420 A.2d 257, 259 (Me. 1980); Carter v. Carter, 410 A.2d 1018, 1021 (Me. 1980).

[3] Lord v. Lord, 454 A.2d 830, 834 (Me. 1983); Prue v. Prue, 420 A.2d 257, 259-60 (Me. 1980).

[4] 19 M.R.S.A. § 722-A; Daigle v. Daigle, Decision No. 6215, Law Docket No. AND-91-620 (June 11, 1992) (court awarded one-half of the net value of the marital home, calculated as of the date of the divorce but payable when the children reached majority, to the husband, and ordered the husband to assume and pay the second mortgage without crediting his share on account of such payments); Lord v. Lord, 454 A.2d 830, 832-4 (Me. 1983) (court awarded insurance agency to husband and ordered wife to enter into covenant not to compete); Baker v. Baker, 444 A.2d 982, 984-6 (Me. 1982) (court ordered husband to pay wife a sum certain for her share of the marital property and to give wife a mortgage on his nonmarital property to secure the obligation if it was not paid on the due date).

[5] West v. West, 55- A.2d 1132 (Me. 1988) (court erred in dividing nonmarital property); Sweeney v. Sweeney, 534 A.2d 1290 (Me. 1987) (court improperly characterized professional license as marital property); Adams v. Adams, 510 A.2d 1074 (Me. 1986) (court awarded support payments for child who had attained majority); Eich v. Gellerson, 441 A.2d 315, 317 (Me. 1982) (attempt by divorce court to control devolution of marital property to children of divorcing parties was void).

[6] In Mitchell v. Mitchell, 418 A.2d 1140, 1142 (Me. 1980), the wife contended in a post-divorce proceeding that the following provision of the divorce decree, based upon a settlement agreement, had created an exclusive, non-judicial mechanism for modification of alimony:

No modification of this Agreement shall be binding upon either of the parties unless reduced to writing and subscribed by both parties.

The Law Court rejected the wife’s contention, holding that the agreement and decree had not been intended to deprive the court of its jurisdiction to modify alimony. Instead, the Court ruled, the parties had simply intended to prevent one another from “coming into court and claiming that the other party had orally agreed to a modification . . . .” In other words, for the parties’ agreement modifying alimony to be properly before the divorce court, it would have to be in writing and signed. The Law Court’s decision did not reach the issue of whether the divorce court would have been obliged to adopt such an agreement or whether the agreement would have been binding even without a judge’s imprimatur.

In Raymond v. Raymond, 447 A.2d 70 (Me. 1982), the Law Court held that the presumption that alimony ended upon the remarriage of the obligee spouse could be overridden by a divorce settlement agreement. since the termination of alimony upon remarriage was a judicially created rule, rather than a statutory mandate, and since the alimony statute did not bar a court from ordering alimony extending beyond remarriage, the Court’s holding did not amount to a license for parties to use an agreement to either override or extend the statutory powers of the divorce court.

[7] Hale v. Hale, 604 A.2d 38 (Me. 1992).

[8] Decision No. 6454, Law Court Docket No. CUM-91-386 (March 15, 1993).

[9] Hale v. Hale, supra at 40.

[10] Hale v. Hale, supra at 40-1.

The alimony statute, 19 M.R.S.A. § 721, reads in relevant part:

The court may at any time alter, amend or suspend a decree for alimony or specific sum when it appears that justice requires it; except that a court may not increase the alimony if the original decree prohibits an increase . . .

This section shall not limit the court, by full or partial agreement of the parties or otherwise, from awarding alimony for a limited period, from awarding alimony which may not be increased regardless of subsequent events or conditions, or otherwise limiting or conditioning the alimony award in any manner on terms that the court deems just.

[11] Hale v. Hale, supra at 41.

[12] Peterson v. Leonard, supra at 6; See also Adams v. Adams, 510 A.2d 1074 (Me. 1986).

[13] Peterson v. Leonard, supra at 6. The Court cited Stratton v. Stratton, 77 Me. 373 (1885), and Wilson v. Wilson, 140 Me. 250, 253-4 (1944), which held that extra-statutory alimony awards, created by agreement and incorporated into a divorce judgment, could not be collaterally attacked.

[14] 19 M.R.S.A. §§ 803(5), 804(1)(A).

[15] Merrill v. Merrill, 449 A.2d 1120, 1124 (Me. 1982).

[16] Strater v. Strater, 147 Me. 33, 37-8 (1951). It is also a matter of statutory interpretation. When the Legislature adopted the Uniform Marital Property Act, 19 M.R.S.A. § 722-A, effective in 1972, it did not give divorce courts continuing authority over marital property akin to that provided with respect to alimony under 19 M.R.S.A. § 721.

[17] 19 M.R.S.A. §§ 214(6)(A), 443-A, 752(6)(A).

[18] 19 M.R.S.A. §§ 214(9), 319, 752(10); Tapman v. Tapman, 544 A.2d 1265, 1267 (Me. 1988); see also “Validity and Effect, as Between Former Spouses, of Agreement Releasing Parent from Payment of Child Support Provided for in an Earlier Divorce Decree,” 100 ALR 3f 1129-61; Restatement (Second) of Contracts, § 191 and Comment.

[19] Maine’s guidelines are set forth in 19 M.R.S.A. § 311, et seq. They are federally mandated by 42 U.S.C. § 667. Federal law further requires a review every three years in accordance with the guidelines of child support orders against the responsible parents of ADC children. 42 U.S.C. § 652(4).

[20] 19 M.R.S.A. §§ 214(9), 319, 752(10).

[21] Coe v. Coe, 145 Me. 71, 74 (1950).

[22] In Re Marriage of Anderson, 638 P.2d 826 (Colo. 1981); “Premarital Agreement Terms,” 53 ALR 4th 161.

[23] Gerber v. Peters, 584 A.2d 605, 607 (Me. 1990).

[24] 14 M.R.S.A. § 5927.

[25] Cutler Associates, Inc. v. Merrill Trust Co., 395 A.2d 453, 457 (1978).

[26] 14 M.R.S.A. § 5938.

[27] Butler v. Poulin, 500 A.2d 257 260 n. 5 (Me. 1985).

[28] Chapman v. Bowman, 391 A.2d 1123 (Me. 1978); Rintelman v. Rintelman, 348 A.2d 448, 501-3 (Wis. 1984); Swint v. Swint, 395 P.2d 114 (Ore. 1964).

[29] Howard v. Brown, 161 Me. 52, 57-8 (1965).

[30] Coe v. Coe, 145 Me. 71 (1950); Keflinger v. Keflinger, 610 S.W.2d 618 (Ky. 1981); Brown v. Hall, 435 A.2d 859, 862 (Pa. 1981).

[31] 4 M.R.S.A. §§ 105, 152(2), (5)(A).

[32] Wardwell v. Wardwell, 458 A.2d 750, 752 (Me. 1983); Torrey v. Torrey, 415 A.2d 1092, 1094 (Me. 1980); Randlett v. Randlett, 401 A.2d 1008, 1010 (Me. 1979); Lindsley v. Lindsley, 374 A.2d 311, 316-7 (Me. 1977).

[33] Peterson v. Leonard, supra at 4-5.

[34] Phillips v. Fuller, 586 A.2d 1272 (Me. 1991).

[35] Chapman v. Bowman, 381 A.2d 1123 (Me. 1978).

[36] Rule 408(a), Maine Rules of Evidence.

[37] Rule 408(b), Maine Rules of Evidence.

[38] 19 M.R.S.A. §§ 214(4), 752(4).