Case Title: Quinn v. Schipper

Citation: 180 Vt. 572, 2006 VT 51, 908 A.2d 413

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2006-06-08T00:00:00Z

Document:
Schipper v. Quinn (2004-210); 180 Vt. 572; 908 A.2d 413

2006 VT 51

[Filed 08-Jun-2006]

[Motion for Reargument Denied 21-Jul-2006]


                                 ENTRY ORDER

                                 2006 VT 51

                      SUPREME COURT DOCKET NO. 2004-210

                             NOVEMBER TERM, 2005

  Suzanne T. Schipper                  }         APPEALED FROM:
                                       }
                                       }
       v.                              }         Windsor Family Court
                                       }  
  Daniel T. Quinn                      }
                                       }         DOCKET NO. F197-5-96

                                                 Trial Judge: Amy M. Davenport

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Plaintiff Daniel Quinn (FN1) appeals from a Windsor Family Court
  decision denying his motion to enforce a contractual obligation against his
  former wife, defendant Suzanne Schipper, to pay certain taxes pursuant to
  the terms of an addendum to a separation agreement. The separation
  agreement was incorporated into the divorce judgment, which was issued in
  Maryland on July 27, 1994, with no reference to the modification provision. 
  The family court determined that the modification provision was not
  actually a subsequent agreement and could not be enforced against defendant
  because she was induced to sign it by a fraudulent misrepresentation.  We
  affirm.

       ¶  2.  The parties were married in 1980 and separated in 1992; both
  lived in Maryland at the time of separation.  They were divorced on July
  28, 1994, by decree of the Frederick County Circuit Court in Maryland. 
  Prior to the final divorce decree, they signed an "Agreement of Separation
  and Property Settlement," which wife signed on February 8, 1994 and husband
  signed on February 28, 1994, and delivered on March 29, 1994.  Paragraph 11
  of the agreement provided:

      11.  The parties together own one hundred percent (100%) stock
    interest in a corporation known as Skyline Engineers of Md., Inc. 
    Wife shall transfer her stock interest to either the corporation
    or to Husband, at his option, for no consideration.  Husband shall
    indemnify and hold harmless Wife from any liability, including
    federal and state taxation, as a result of her prior stock
    ownership or participation in its management.

  On March 28, 1994, husband requested, however, that wife sign an addendum
  to the separation agreement that directly contradicted the agreement by
  stating that "any sums of money owed . . . with reference to Federal and
  State income taxes, interests and penalties over and above the amount of
  One Hundred Thousand Dollars ($100,000.00) shall be paid by the Wife and
  the Wife agrees to hold the Husband harmless and indemnify him for any
  [such] sums."   

       ¶  3.  Husband did not deliver the original signed agreement to wife
  until March 29, 1994, after she agreed to sign the tax-liability addendum. 
  The Final Decree of Divorce issued by the Maryland Circuit Court on July
  28, 1994, incorporated by reference the separation agreement and an
  addendum on child custody but did not reference or incorporate the addendum
  on tax liability. 

       ¶  4.  On January 7, 1999, husband filed an action in the Windsor
  Superior Court to enforce the addendum to the separation agreement,
  alleging that under the addendum wife owed him $115,517 plus interest for
  the tax liability he incurred over $100,000.  The superior court dismissed
  for lack of subject matter jurisdiction, holding that the dispute belonged
  in the family court.  Husband did not appeal that dismissal.

       ¶  5.  Instead, husband filed a complaint and motion to enforce
  judgment in the Windsor Family Court, again seeking to enforce the addendum
  to the separation agreement.  In April 2000, the Windsor Family Court
  granted summary judgment in favor of wife.  Applying Maryland law, the
  family court ruled that the addendum was invalid because it was not
  presented to the Maryland divorce court.  Husband appealed to this Court,
  and we reversed and remanded for further proceedings.  Schipper v. Quinn,
  No. 2000-233, slip op. at 3 (Vt. Jan. 4, 2001) (unreported mem.).  We noted
  that, under Maryland law, where the parties intend a settlement agreement
  to be incorporated into a divorce decree, but not merged into the decree, "
  'the agreement remains a separate, enforceable contract and is not
  superseded by the decree.' "   Id. at 2 (quoting Johnston v. Johnston, 465 A.2d 436, 441 (Md. 1983)).  By its terms, the settlement agreement fit this
  description.  Further paraphrasing the law from Johnston, we explained:

    If an agreement's validity is established by the court through
    incorporation, then neither party may evade their obligations
    under the agreement by claiming it was procured through fraud,
    misrepresentation or coercion.  An agreement incorporated by a
    decree cannot be thus collaterally attacked.  It is enforceable as
    a valid contract between the parties.  In contrast, a merged
    agreement does not survive the decree . . . .

  Id. at 2-3 (citations omitted).  We held that the separation agreement was
  a separate enforceable agreement "and that its validity is res judicata as
  a result of its incorporation in the divorce decree."  Id. at 3.  We
  further held that the addendum was "a properly executed amendment to a
  valid contract."  Id.  We reversed the grant of summary judgment for wife
  but remanded to the family court to address wife's two additional
  arguments: (1) that she signed the addendum under duress; and (2) that she
  effectively voided the addendum by not submitting it to the divorce court. 
  Id.

       ¶  6.  On remand, the Windsor Family Court took evidence for two days
  and concluded that the addendum was invalid because it was induced by fraud
  and because the separation agreement became effective after the purported
  addendum and thus controlled. (FN2)  Specifically, the court held that
  husband induced wife to sign the addendum by misrepresenting that it
  applied only to the corporation's tax liability and liability was unlikely
  to exceed $100,000.  Husband has appealed that decision, making several
  arguments.                                     

       ¶  7.  First, husband argues that the family court was without
  subject matter jurisdiction to hear his claim.  He submits that because the
  family court is a court of limited jurisdiction under 4 V.S.A. § 454, it is
  without authority to hear a "breach of contract" claim.  The family court
  has exclusive jurisdiction to hear and dispose of divorce proceedings.  4
  V.S.A. § 454.  Although the agreement and the addendum are separate
  enforceable contracts, they were "part of the divorce proceedings, and . .
  . within the family court's jurisdiction."  Manosh v. Manosh, 160 Vt. 634,
  634, 648 A.2d 833, 835 (1993) (mem.).  The issue presented here is similar
  to that in Manosh.  There, the parties had a settlement agreement that the
  final divorce order referenced, although the parties had not submitted the
  agreement to the family court for review, and the agreement was not
  incorporated into the divorce order.  We held that the settlement agreement
  was an independent contract, but that it was part of the divorce
  proceedings and, as such, the family court had jurisdiction to determine
  its validity.  Id.  We noted that nothing in the family court's statutory
  scheme required husband to present the referenced agreement in superior
  court and, moreover, "[s]uch an interpretation would be unreasonable and a
  waste of judicial resources."  Id.  Although the addendum was not presented
  to the Maryland divorce court, it is an agreement intended to settle the
  divorce proceedings.  Thus, the family court has jurisdiction to determine
  its validity.
   
       ¶  8.  Our finding that jurisdiction in the family court was proper
  is additionally supported by the fact that husband availed himself of the
  family court's jurisdiction after the superior court denied his claim, and
  he never appealed the superior court's dismissal.  In these circumstances,
  husband is bound by the superior court decision even though the issue is
  one of subject matter jurisdiction.  See Restatement (Second) of Judgments
  § 12 (1982) (indicating a party is foreclosed from litigating subject
  matter jurisdiction in a subsequent lawsuit unless the decision on
  jurisdiction was "a manifest abuse of authority," the judgment at issue
  "would substantially infringe the authority of another tribunal," or the
  rendering court was incapable of making an adequately informed assessment
  of its own jurisdiction and procedural fairness would require the party
  seeking to avoid the judgment to have the opportunity to belatedly attack
  jurisdiction); see also Hodge v. Hodge, 621 F.2d 590, 592 (3d Cir. 1980) 
  (noting the modern trend in subject matter jurisdiction accords
  substantially great weight to finality, and stating that "even the issue of
  subject matter jurisdiction must at some point be laid to rest").  None of
  the exceptions to the general rule foreclosing husband from collaterally
  attacking the superior court's unappealed determination that it lacked
  jurisdiction apply in this case.

       ¶  9.  Next husband argues that the family court violated his
  constitutional rights.  We note at the outset that husband's briefing on
  this point is erratic, unclear, and ultimately inadequate.  See State v.
  Taylor, 145 Vt. 437, 439,