5.4 Incorporation, Merger, and Other Miscellaneous Provisions

• Library: Negotiating and Drafting Marital Agreements (Virginia CLE) (2023 Ed.)

5.4 INCORPORATION, MERGER, AND OTHER MISCELLANEOUS PROVISIONS

5.401 Incorporation and Merger.

A. Enforcement.

In order to ensure that the court will enforce the agreement with its contempt powers, the agreement must contain language incorporating it into the decree, such as "affirm, ratify, and incorporate." The court may refuse to incorporate all or any part of an agreement when language such as "approved, ratified, and confirmed" is used. If the court approves an agreement but does not incorporate its provisions into the decree, the decree merely constitutes judicial approval of a private contract. The agreement will still bind the parties, but it is crucial to include a mandatory incorporation provision so that the agreement can be enforced through the court's contempt powers. ⁹¹⁷

B. Survival (Nonmerger).

If an agreement is not presented to the court, it survives the decree. Section 20-109 of the Virginia Code applies, but section 20-109.1 does not. ⁹¹⁸

C. Merger.

Incorporation of an agreement without a prohibition against merger would probably cause a merger, and the agreement would not survive the decree. This means that the agreement would become a part of the decree and neither party would be able to enforce the agreement as a separate contract but instead would have to enforce it as an order through the contempt powers of the court. This is generally not desirable because the parties lose the ability to enforce the agreement as a contract in addition to enforcing it through the contempt powers of the court.

In Hering v. Hering, ⁹¹⁹ the Virginia Court of Appeals found that an agreement calling for incorporation into the final decree of divorce but also stating that "this agreement shall survive such incorporation and shall not be merged into any such decree" remained enforceable as a contract. The agreement provided for monthly support and maintenance payments to the wife and did not call for the cessation of those payments upon proof of cohabitation pursuant to section 20-109(A). ⁹²⁰ The husband petitioned for retroactive relief on the grounds of the wife's cohabitation under section 20-109(A), arguing that the wife could only enforce the order through the court's contempt powers, and that the terms of the agreement relating to her support and maintenance were converted to a court order of spousal support and thus were subject to section 20-109(A). The court rejected his argument, finding that the agreement remained enforceable as a contract and that the trial court could not enter an order that changed its terms.

In Rubio v. Rubio, ⁹²¹ the parties entered into a separation agreement that granted spousal support to the wife until she remarried or either party died. The agreement specifically provided that it would be affirmed, ratified, and incorporated into the decree of divorce but would not be merged into the decree. The decree itself did not state whether the agreement was merged into it but simply declared that the agreement was ratified, affirmed, and incorporated into and made a part of the decree.

After the Rubios' separation agreement was implemented, section 20-109 was amended to add habitual cohabitation as a ground for termination of support payments. Mr. Rubio petitioned the court to terminate or modify his spousal support obligation based on Ms. Rubio's cohabitation, which she acknowledged. Mr. Rubio argued that, because the parties' agreement had been merged into the decree, his support obligation was subject to the amendment to section 20-109, which applies to "all orders and decrees for spousal support." The Court of Appeals disagreed, finding that the parties' agreement specifically stated that it would not be merged into the decree and that the decree itself, which was silent on the issue, did not order merger. Therefore, the parties' agreement, rather than the decree, governed.

In Rubio, the court stated "we do not address what effect, if any, merger would have imposed upon Mr. Rubio's support obligation." Mr. Rubio had argued that merger of the agreement into the decree subjected the agreement to modification by the General Assembly, but the court's comment suggested that merger could also empower a court to modify an agreement just as it might one of its own orders.

In Smith v. Smith, ⁹²² the Virginia Court of Appeals ruled that merger of a party's separation agreement into the court's decree does not grant the court authority to modify the separation agreement. ⁹²³ The court stated that

[m]erger prescribes the methods of enforcing entitlements created by contract, and the distinction between merged and non-merged agreements is important in the context of enforcement. The situation is different when addressing the authority of a court to modify the contract under Code § 20-109. The development of the remedies available to a spouse seeking support eliminated the dilemma of choosing between mutually exclusive forms of relief. Basic property rights that limit judicial modification arise when the parties form an agreement. Those essential benefits and detriments now need not expire if the contract merges into the decree for enforcement purposes. Indeed, a party would receive no benefit if merger obliterates negotiated rights that afford stability and predictability to the parties after divorce. ⁹²⁴

D. Ideal Provision.

If the agreement is merged into the decree, it ceases to exist and no suit may be brought on it. A party who desires enforcement must enforce the decree. ⁹²⁵ On the other hand, if the agreement survives, the parties may resort to it, or the decree, or both. ⁹²⁶ For example, in the case of a nonmerged agreement, the payee could enforce collection of a reduced spousal support award under a modified decree by contempt proceedings and also sue the payor in contract for the difference between the amount of support fixed in the separation agreement and the reduced support. This, of course, could not occur if the agreement provided a mechanism for modification. Therefore, the ideal provision would state that the agreement will be "incorporated, but not merged into the decree."

E. Pendente Lite Decree.

It is not unusual for an agreement to be signed by the parties months or even a year before a final decree is entered by the court. Therefore, counsel should file the agreement together with a pendente lite decree that affirms, ratifies, and incorporates, but does not merge, the agreement into the decree. ⁹²⁷ Of course, this cannot be accomplished if there is no case pending. In that event, the agreement can be enforced as any contract can until it is incorporated once the divorce case has been filed.

In Milner v. Milner, ⁹²⁸ the court stated:

We find no specific requirement in Va. Code Ann. § 20-109.1 that separation agreements be expressly addressed in the initial pleadings. Va. Code Ann. § 20-109(C), moreover, permits litigants to file a separation agreement at any time before entry of a final decree.

In Milner, the parties' separation agreement, which had not been filed with the court or incorporated into any court order, was simply ignored by the parties when the wife filed her complaint for divorce and sought support pursuant to a pendente lite hearing. The child support enumerated in the parties' separation agreement was modified; but no other terms set forth in the parties' separation agreement were addressed. At issue was an additional monthly payment to the wife for a specified period. The husband had argued that since the complaint for divorce did not refer to the separation agreement, and since a pendente lite decree had been entered, the separation agreement was void. The court disagreed, holding that there is no specific requirement in section 20-109.1 that requires a separation agreement to be addressed in the initial pleadings. The code section permits an agreement to be filed at any time before the final decree is entered.

5.402 "Additional Instruments" Provision.

⁹²⁹ An "additional instruments" provision is helpful in having deeds executed, titles to vehicles transferred, tax returns executed, and consumer price index increases calculated. This catch-all provision requires the execution of documents that are necessary to give meaning to the agreement even though there may not be a specific reference to the necessity of executing individual documents. There are no known Virginia cases construing this type of provision, but there is no reason to believe that such a provision is not enforceable.

5.403 Modification. ⁹³⁰

A. Spousal Support.

Generally, no spousal support provision of a separation agreement incorporated in a final decree was ever modifiable except by its terms. ⁹³¹ However, recent statutory amendments require that an agreement's terms must specifically state that spousal support is nonmodifiable in order for a court to deny modification solely on the fact that the obligation was created as part of an agreement between the parties. ⁹³²

In addition, as set forth more fully in paragraph 5.303(B) above, if the spousal support language used does not specifically cite section 20-109(A) of the Virginia Code as a terminating factor but merely recites the language in the statute that a court may terminate support if the payee is cohabiting, the standard of proof changes. Citing the statute is important because it means the proof of cohabitation must be clear and convincing. Merely reciting the language from the statute without a specific reference lowers the standard of proof to a preponderance of the evidence—a much easier case to prove.

B. Court Order.

If the agreement is to be modified or amended after incorporation has taken place, a subsequent court order must also be entered incorporating but generally not merging the new provision. ⁹³³

C. Child Support.

A court has continuing jurisdiction to alter child support obligations, and an agreement between the parties cannot prevent the court from exercising its jurisdiction. In Kelley

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