General Principles Involving Enforcement of Marital Settlement Agreements and Defenses To Enforcement

• Jurisdiction: Maryland

V. GENERAL PRINCIPLES INVOLVING ENFORCEMENT OF MARITAL SETTLEMENT AGREEMENTS AND DEFENSES TO ENFORCEMENT

A. Agreements Generally are Presumptively Valid

So long as a marital settlement agreement does not disclose any injustice or inequity on its face, it is presumptively valid, and the burden of setting it aside rests upon the person attacking its validity.¹⁸⁶ It has been stated that

[t]he obverse [to the proposition], namely that agreements disclosing injustice on their face are presumptively invalid, has had very limited application to property settlements.¹⁸⁷

B. Effect of Finding Agreement Fair

Where a marital settlement agreement is found by the court to be fair and introduced into evidence, this precludes the introduction of evidence of facts in existence prior to the execution of the agreement to show a change in circumstances for support modification purposes.¹⁸⁸

C. Effect of a Marital Settlement Agreement Incorporated into an Enrolled Judgment

A court is powerless to set aside an agreement incorporated in an enrolled judgment when collaterally attacked under the principles of res judicata.¹⁸⁹

To set aside the enrolled judgment itself, the movant must establish the judgment was entered as a result of "fraud, mistake, or irregularity."¹⁹⁰

D. Appeals and Marital Settlement Agreements

A court is permitted to grant a party's motion to enforce a marital settlement agreement after the parties sign but one party denies the existence of such a marital settlement agreement. See Pattison v. Pattison,¹⁹¹ holding that a court's granting of a motion to enforce a marital settlement agreement was not considered a final judgment for the purposes of filing an appeal pursuant to Cts. & Jud. Proc. § 12-301. The Court in Pattison entered an interlocutory order and granted the husband's motion to enforce the marital settlement agreement. However, the trial court's rulings could not be appealed under the collateral order doctrine because there was no benefit lost. The Appellate Court of Maryland stated, "if enforcement of a settlement agreement is denied, and the party must proceed to a trial on the merits, the party loses the contractual benefit of avoiding the expense and inconvenience of a trial. Here, by contrast, where the order granted a motion to enforce a settlement agreement, there is no benefit lost."¹⁹²

E. Effect of Merger or Non-merger of an Agreement

As to the effect of merger or non-merger of an agreement incorporated into a judgment, order, or decree, initially see Johnston v. Johnston¹⁹³ and Hamilos v. Hamilos.¹⁹⁴

1. Historical approach-Mendelson v. Mendelson¹⁹⁵

a. In general

The Mendelson court pointed out that prior to the decision of Johnston and its companion, Hamilos, it was common to insert a non-merger/incorporation clause in a marital settlement agreement upon the belief incorporation would make the agreement part of the judgment while non-merger would preserve its contractual status. Thus, in the event of breach, the aggrieved party would have the choice of enforcing the judgment or suing on the contract.¹⁹⁶

b. Effect of merger and incorporation

When this occurs, the separation agreement, now the court's decree, is enforceable through contempt proceedings and may be modified by the court.¹⁹⁷

c. Effect of incorporation without merger

The Mendelson court further stated that:

[i]f . . . a separation agreement is incorporated but not merged, then the separation agreement is not superceded by the decree. In that instance, the agreement survives as a separate and independent contractual arrangement between the parties, . . . but not being part of the decree, its terms cannot be enforced by way of contempt proceedings. Whether the court can modify it is a matter left to the agreement itself.¹⁹⁸

d. Probably an incorrect rationale

Although the appellate court in Mendelson relied most heavily upon Johnston v. Johnston,¹⁹⁹ the Johnston court relied upon the fact that in two decisions, Winston v. Winston²⁰⁰ and Goldberg v. Goldberg,²⁰¹ the issue of merger never arose as none of the incorporated agreements contained a non-merger clause. That simply was not the case. The Goldberg agreement contained a non-merger provision. Further, the Mendelson court, although referring to Md. Constitution art. III, § 38, apparently disregarded the verbiage contained therein, which provides:

No person shall be imprisoned for debt, but a valid decree of divorce or agreement approved by decree of said court for the support of a wife or dependent children . . . or for alimony, shall not constitute a debt within the meaning of this section.

Finally, it should be noted the Mendelson decree did nothing more than provide (insofar as all clauses other than those related to custody and visitation rights) that the provisions of the agreement were incorporated by reference in the Court's order but shall not be merged with the order.

If the decree had actually set forth the other provisions of the agreement in its body, that action should have dictated a contrary result to that found by the Mendelson court. See also Shapiro v. Shapiro²⁰² for discussion of a court's ability to modify a separation agreement.

2. Statutory supersession of Mendelson

a. Contempt

(1) Provisions merged in a decree

The court may enforce by power of contempt the provisions of a deed, agreement, or settlement that are merged into a divorce decree.²⁰³

(2) Provisions not merged in decree

The court may enforce by power of contempt or as an independent contract not superseded by the divorce decree the provisions of a deed, agreement, or settlement that contain language that the deed, agreement, or settlement is incorporated but not merged into a divorce decree.²⁰⁴

(3) Effective date

[T]his Act shall be construed retroactively, and shall apply to all divorce decrees, including those divorce decrees entered before July 1, 1989.²⁰⁵

b. Modification

(1) Provisions merged or not merged in a decree

The court may modify any provision of a deed, agreement, or settlement that is: (1) incorporated, whether or not merged, into a divorce decree; and (2) subject to modification under [Fam. Law] § 8-103 of this subtitle.²⁰⁶

(2) Effective date

[T]his Act shall be construed retroactively and shall apply to all divorce decrees, including those divorce decrees entered before July 1, 1990.²⁰⁷

E. Methods of Enforcement

1. Actions at law

a. In general

A marital settlement agreement will generally support an action at law.²⁰⁸

b. Where specific performance denied

In Shacter v. Shacter,²⁰⁹ it was held that an action at law could be maintained on the support and maintenance provision of an agreement notwithstanding the fact that a court of equity had previously denied specific performance under its discretionary power, the decree of divorce being silent on the subject of maintenance and support.

2. Specific performance

a. In general

A court has the right to specifically enforce provisions of a marital settlement agreement.²¹⁰

b. Foreign decree

Our courts may enforce an agreement incorporated into a divorce decree rendered in a foreign country.²¹¹

c. No reference to support in decree

In addition, our courts may order compliance with support provisions contained in an agreement even where a subsequently rendered decree of divorce makes no reference to support.²¹²

d. Discretionary remedy

However, it must always be remembered that specific performance is not granted as a matter of right, but its grant or denial is discretionary with the chancellor.²¹³

3. Contempt

See Fam. Law § 8-105; Md. Rules 15-201-15-208.

a. In general

Where the marital settlement agreement is incorporated into a judgment, order, or decree, enforcement may be had by citation for contempt.²¹⁴

b. Default prior to incorporation

A finding of contempt is improper for violation of a marital settlement agreement incorporated into a decree where the offense took place prior to that incorporation.²¹⁵

c. Limitations

Family Law § 10-102 provides:

A contempt proceeding for failure to make payment of child or spousal support under a court order shall be brought within 3 years of the date that the payment of support became due.²¹⁶

See O'Hearn v. O'Hearn²¹⁷ for a discussion of the twelve-year statute of limitations for specialties applicable to an action for judgment.

d. Imprisonment as a sanction

(1) In general

Generally, where one willfully fails to pay child support or spousal support, the payor may be imprisoned for violation of an order, judgment, or decree incorporating the support provisions within its purview.²¹⁸

In Lynch v. Lynch,²¹⁹ Maryland's highest appellate court had restricted the use of the sanction of imprisonment in civil contempt proceedings.

Whether a defendant has failed to pay court ordered support when he or she had the ability to do so and whether that defendant has, in bad faith, caused his or her own present inability to comply, with the intent of frustrating the court order, are material and, indeed, necessary considerations bearing on whether a defendant should be punished. Those considerations do not address whether the defendant is in civil contempt, the object of which is remedial-to force compliance. Even if the present inability to comply is the product of the defendant's bad faith, compliance still cannot be coerced by civil contempt.

The Court did state, at least, that the contemnor has "the burden of proving his or her inability to comply with the purge provisions in order to avoid imprisonment."²²⁰

Subsequently, Md. Rule 15-207 modified the Lynch holding. Subsection (e)(2) provides that the court may make a finding of contempt if the petitioner proves by clear and convincing evidence that the alleged contemnor has not paid the amount owed from the effective date of the support order through the date of the contempt hearing. But, the court

may not make a finding of contempt if the alleged contemnor proves by a preponderance of the evidence that (A) from the date of the

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