ATTORNEYS FOR APPELLANT			ATTORNEYS FOR APPELLEE

Brian J. T’Kindt					Paul B. McNellis

Robert L. Nicholson					Linda Peters Chrzan

BECKMAN, LAWSON, SANDLER,		WYSS, McNELLIS, 

  SNYDER & FEDEROFF, L.L.P.			   RIEBENACK & MYERS

Fort Wayne, Indiana					Fort Wayne, Indiana

In The

INDIANA SUPREME COURT

												            IN RE: THE MARRIAGE OF:			)

							)

WILLIAM W. POND,				)

		Petitioner				)			

		(Appellant below)			)

							)	

		v.					)	02S03-9707-CV-418

							)					 BRENDA A. POND,				)

		Respondent				)

		(Appellee below)			)

                          ________________________________________________  

APPEAL FROM ALLEN CIRCUIT COURT

The Honorable Roger W. Hultquist, Special Judge

Cause No. 02C01-9303-DR-405

                        _________________________________________________

On Petition To Transfer

OctoberOctober 26, 1998

DICKSON, J.

	Following the dissolution of the marriage of petitioner-appellant, William W. Pond

(“husband”), and respondent-appellee, Brenda A. Pond (“wife”), the husband appealed,

raising issues concerning construction of the agreement between the spouses, spousal maintenance, and child support.  The Court of Appeals affirmed in part and reversed in

part.  In re Marriage of Pond, 676 N.E.2d 401 (Ind.Ct.App. 1997).  Seeking transfer, the husband contends that the trial court erred in construing and applying the parties’

settlement agreement, which the parties entered into during their marriage after the

husband had filed for legal separation but before the wife filed her petition for dissolution

of marriage.1  The trial court selectively incorporated most, but not all, of the terms of the parties’ agreement in the dissolution decree. 

	The husband argues that the parties’ agreement is a reconciliation agreement and

should be strictly enforced in the same manner as an antenuptial agreement.  The wife

counters that the agreement should instead be construed as a dissolution settlement

agreement subject to partial enforcement or modification under Indiana Code § 31-1-

11.5-10.2  The husband also contends that, even if the statute is applicable, the trial court erred in refusing to enforce one provision of the agreement, finding it unconscionable. 

We granted transfer to address these issues.

Dissolution Settlement or Reconciliation Agreement

	As a general rule, valid agreements entered into in contemplation of marriage (often referred to as prenuptial, premarital, or antenuptial agreements) must be enforced

as written,3 but the approval of settlement agreements entered into as a consequence of dissolution proceedings (post-nuptial agreements) is governed by the Indiana Dissolution

of Marriage Act and is subject to the trial court’s discretion.  Meehan v. Meehan, 425 N.E.2d 157, 159 (Ind. 1981);  Flansburg v. Flansburg, 581 N.E.2d 430, 433 (Ind.Ct.App. 1991).4  The Act provides that the parties to a marriage may agree in writing to settle existing or potential disputes attendant upon the dissolution of their marriage.  Ind. Code § 31-1-11.5-10 (1988).5  In Meehan, we emphasized that the “trial court, when presented with a [dissolution] settlement agreement for its consideration, should carefully delineate

in express and unequivocal terms those portions which it is incorporating and merging

into its order.”  425 N.E.2d at 159. 

	The husband contends that the parties’ agreement, although entered into by the

parties during their marriage, was an agreement to foster reconciliation and should be

construed as an antenuptial agreement for the reason that no petition for dissolution had

been filed when the agreement was signed.  Although this Court has never directly

addressed the question, the Court of Appeals has done so.  In Flansburg, the parties attempted reconciliation after the wife filed a petition for dissolution.  581 N.E.2d 430. 

The parties then signed a post-nuptial agreement, and she dismissed the petition.  The

marriage continued for three more years, and she again filed a petition for dissolution.  Finding the “reconciliation” agreement to be something of a hybrid between an

antenuptial agreement and a dissolution settlement agreement, the Court of Appeals

noted: 

	While the property settlement labeled a “Post Nuptial Agreement” was negotiated

by the parties well into their marriage, it primarily concerned the distribution of

property interests acquired prior to the marriage.  Just as marriage is, in and of

itself, valued and respected by the law as adequate consideration to support an

antenuptial agreement, the extension of a marriage that would have otherwise been dissolved but for the execution of an agreement to reconcile has been deemed

adequate consideration.

Id. at 433-34 (citations omitted) (emphasis added).  The Court of Appeals upheld the trial court’s findings of fact regarding consideration, including its finding that the dissolution

action was dismissed after the signing of the agreement, and concluded that there was “no

reason to treat [a] reconciliation agreement any differently than an antenuptial

agreement.”  Id. at 434.  

	In the present case, the husband asserts that, as a reconciliation agreement, the

parties’ agreement should be treated as an antenuptial agreement, and thus should not be

subject to section 10 of the Dissolution of Marriage Act, under which a court may reject

individual terms of an agreement.  The trial court made no findings regarding this issue,

but rather referred to the agreement as a “post nuptial agreement,” which was consistent

with the denomination utilized by the parties.  Construction of this agreement, an issue of

law, necessarily requires a review of the facts underlying its formation. 

	The parties were married on June 23, 1979.  Two children were born of the

marriage.  The parties began experiencing marital difficulties in the spring of 1992.  In February of 1993, while on a family vacation, the husband gave the wife the first draft of

the agreement at issue in the present case.  This initial draft was not signed, and

negotiations ensued.  On March 31, 1993, the husband filed his Petition for Legal

Separation (“separation petition”).6   

	Negotiations regarding the terms of the agreement continued after the filing of the

separation petition.  According to the husband’s testimony, the wife had expressed

reluctance about signing any type of agreement.  Record at 926.  The parties dismissed

their attorneys by two identical letters dated August 4, 1993.  In these letters, the parties

acknowledged that both attorneys had advised them not to sign the agreement.  Record at

929.  On August 14, 1993, the parties signed the agreement.

	Although referring to counseling, the focus of the agreement is the division of

property.  The ten page agreement begins by reciting that the parties were married at the

time of signing, that the husband had filed a Petition for Legal Separation, that the

husband would attend a minimum of twenty-six individual or joint counseling sessions,

and that the parties “are in the process of making a full and complete disclosure of all of

their assets and liabilities, whether owned individually or jointly with others.”  Record at

808.  Further, the agreement provides that the husband’s failure to attend all twenty-six sessions of counseling would void the agreement.  The agreement did not specify the

purpose of the counseling sessions.  The duration of the agreement was expressly limited

to two years from March 31, 1993, the date the husband filed the separation petition. 

Record at 809.  

	The remainder of the agreement details the division of marital property in the

event of dissolution.  The parties relinquish claims for temporary or permanent spousal

support and all statutory inheritance rights.  The agreement includes a clause purporting

to allocate certain attorney fees and contains a severability clause that declares the

remainder of the agreement to be enforceable if any portion is adjudged to be invalid,

unlawful, or void.  No terms address any issues related to the children except for support

during the period prior to any dissolution. 

	In accordance with the agreement’s terms, the parties immediately began to divide

and distribute the marital property between themselves.7  Among other distributions, the wife received a cash payment for the value of life insurance policies.  Record at 355.  The

husband’s attorney began to prepare a qualified domestic relations order,8 which was intended to divide the husband’s pension and retirement benefits effective on the date of

the filing of the separation petition.  Record at 355.  The wife thereafter filed her petition

for dissolution on November 15, 1993.  The trial court eventually approved the parties’

agreement and ordered the parties to perform its terms except for Paragraph 25, which it

held to be unconscionable.  The Court of Appeals affirmed this determination, without

addressing whether it was a reconciliation agreement, but reversed and remanded on other

grounds.  Marriage of Pond, 676 N.E.2d at 408-409, 412-13.  

	Additionally, nothing in the record indicates that the signing of this agreement

altered the apparent intention to dismantle this marital relationship.  After reaching this

agreement, the husband did not dismiss the separation action.  Record at 948.  Further, in

closing argument filed in writing to the court, the husband stated: 

	The facts most clearly provided in this case establish that the marriage of the

parties was deteriorating.  In furtherance of avoiding the substantial costs and

emotional damage which would result as part of a dissolution action, Bill Pond

proposed to reach an agreement with his wife which would provide the best

agreement for both parties.

Record at 408-09.  Finally, shortly after signing the agreement and in accordance with its

terms, the parties began distributing property “awarded to each of them pursuant to

division” as set forth in the agreement.  Record at 814.  The agreement required them to do this within ten days of signing.  The agreement was essentially designed to divide the

assets in anticipation of dissolution.  The provision requiring counseling does not require

that these sessions be addressed toward resolving the marital difficulties, nor does the

agreement provide any indication that reconciliation would constitute any part of the

consideration for the agreement.9  

	We find that the parties’ agreement is not a reconciliation agreement and should

not be treated as an antenuptial agreement as in Flansburg.  To the contrary, the agreement clearly faells within the ambit of section 10 of the Dissolution of Marriage Act. 

This agreement was formed between the parties to a marriage, and its substance was

directed at the amicable settlement of “disputes that have arisen or may arise . . .

attendant upon the dissolution of their marriage.”  Ind. Code § 31-1-11.5-10.  The agreement was signed after the husband had commenced proceedings pursuant to the Act. 

The trial court did not err in construing the parties’ agreement in accordance with the Act.

	The husband also contends that, because the trial court had expressly approved the

full agreement in an earlier ruling, it lacked jurisdiction to reconsider and modify its

initial determination.  After the wife filed her petition for dissolution, the husband filed a

petition for declaratory judgment on April 15, 1994, seeking to establish that the

agreement was valid and enforceable.  Following the receipt of evidence and testimony,  the trial court entered “Findings of Fact, Conclusions of Law and Decree” which

concluded:

		17.  Accordingly, the terms of the post nuptial agreement and the agreement

itself is deemed valid for all intents and purposes.  The substantial steps already

taken by the parties in furtherance of the agreement shall be completed forthwith

by the parties.  

		18.  The parties are thereby ordered to specifically perform under the

agreement.  

		19.  The Court retains jurisdiction of this matter for purposes of any

supplemental and additional orders necessary in the performance of the agreement

of the parties.

		SO ORDERED this 13 day of January, 1995.

Record at 365.  Within ten days thereafter, the wife filed a motion to reconsider which

the trial court took under advisement and ultimately adjudicated in its decree of

dissolution entered September 8, 1995.  Granting the motion to reconsider, the court

found Paragraph 25 of the agreement to be unconscionable.  Record at 243.  

	The husband contends that the trial court’s earlier determination on the petition for

declaratory judgment was a final and appealable order, and, because the wife did not

timely appeal that initial finding, the trial court lost jurisdiction to reconsider its initial

determination.  The wife contends that the trial court retained inherent power to

reconsider its ruling because it was an incomplete ruling until the final decree was

entered.  

	Declaratory judgments are reviewable in the same manner as other orders,

judgments, or decrees.  Ind. Code § 34-4-10-7.  A trial court may reconsider an order or ruling if the action remains in fieri, or pending resolution.  Biggs v. Marsh, 446 N.E.2d 977, 981 (Ind.Ct.App. 1983).  Here, the relevant action was the dissolution proceeding,

under which the husband filed his petition for declaratory judgment.  Because the

dissolution action was pending until the trial court’s final decree, the trial court had the

power to reconsider its original order on the petition for declaratory judgment.  We find

no error in the trial court’s exercise of jurisdiction to reconsider its ruling.

Enforceability of Provision Shifting Attorney Fees 

	In its decree of dissolution, the trial court approved the parties’ agreement with the

exception of Paragraph 25, which provides:

	In the event an attack by one party as to the validity of this agreement is

unsuccessful, the party initiating such action shall be responsible for all

attorney’s fees and costs incurred by both parties in the prosecution or

defense of such action. 

Record at 817.  After rejecting Paragraph 25, the trial court ordered the husband to pay a

substantial portion of the wife’s attorney fees.10  The husband argues that general principles of contract law require enforcement of Paragraph 25 “unless the contract is

contrary to law or public policy.”  Brief of Appellant at 29.  

	Dissolution settlement agreements are encouraged under the Indiana Dissolution of

Marriage Act.  Ind.Code § 31-1-11.5-10(a); Voigt v. Voigt, 670 N.E.2d 1271, 1277 (Ind. 1996).  Parties are expressly authorized to “agree in writing to provisions for the

maintenance of either of them, the disposition of any property owned by either or both of

them and the custody and support of their children.”  Voigt, 670 N.E.2d at 1277 (quoting Ind. Code § 31-1-11.5-10(a)).  While this provision does not make express reference to the allocation of attorney fees, we decline to construe narrowly the statutory language to

exclude attorney fees from among those matters that may be resolved by settlement

agreement.  We recently emphasized that parties drafting dissolution settlement

agreements are free to make such continuing financial arrangements as they wish.  Voigt, 670 N.E.2d at 1277.  As a general rule, a contract for attorney fees is enforceable

according to its terms unless contrary to law or public policy.  Hacienda Mexican Restaurant of Kalamazoo Corp. v. Hacienda Franchise Group, Inc., 641 N.E.2d 1036, 1042 (Ind.Ct.App. 1994).  

	It is well established that the public policy of this state generally favors the

freedom of contract between private parties.  There is a “very strong presumption of

enforceability of contracts that represent the freely bargained agreement of the parties.”

Continental Basketball Ass’n, Inc. v. Ellenstein Enter., Inc., 669 N.E.2d 134, 139 (Ind. 1996).  Indiana courts have “not hesitated to enforce a divorce settlement agreement

which would have been in excess of the divorce court’s authority had it been crafted by

the divorce court and which was shown to be, over time, grossly inequitable.”  Bowman v. Bowman, 567 N.E.2d 828, 831 (Ind.Ct.App. 1991) (citing Smith v. Smith, 547 N.E.2d 297 (Ind.Ct.App. 1989)). 

	However, a court is not bound to accept every proffered settlement.  Voigt, 670 N.E.2d at 1277.   “In reviewing a settlement agreement, a court should concern itself only

with fraud, duress, and other imperfections of consent, or with manifest inequities,

particularly those deriving from great disparities in bargaining power.”  Id. at 1278.  However, “the power to disapprove a settlement agreement must be exercised with great

restraint.  A trial judge should not reject such agreements just because she believes she

could draft a better one.”  Id. at 1277. 

	In the present case, the trial court did not find the agreement to have been entered

as a result of fraud, duress, or misrepresentation.  Rather, the court found the agreement

valid, Record at 365, and expressly found that “[a]lthough [the wife] contended that the

agreement was invalid based upon unconscionability, lack of consideration, undue

influence and coercion in its execution, and fraud based upon misrepresentations of [the

husband], [the wife] has failed to present any substantive evidence in support of her

contentions,” Record at 364.  The trial court only declined to enforce Paragraph 25, the

attorney fee provision, stating the following reasons:  

	[T]he Court has determined that paragraph 25 of the Postnuptial Agreement

as written would cause an economic impossibility to anyone but Petitioner

Husband to challenge the agreement, but that the agreement as written was

decidedly in favor of Petitioner Husband even though the Court has found

that the agreement was valid.  The division of marital assets as provided in

the agreement, for instance, would most decidedly not be the division if the

division of assets was presented to the Court absent such an agreement.  There is no attempt in this order to rewrite the contract between the parties,

but to give them a parity in determining the validity of an agreement which

required many hours of preparation and in the presentation of evidence by

both parties.  Principally, the Court is concerned with the huge disparity of

income between the parties and that by a ruling of this Court to require

Respondent Wife to pay for the challenge which she made against the

agreement would otherwise act as a deterrent only to her.  

Record at 243-44.  	

	We observe that Paragraph 25 does not purport to make the wife responsible for all

of the husband’s attorney fees.  It does not apply to attorney fees relating to the resolution

of property division, maintenance, custody, visitation, support, or other issues often

incidental to dissolution proceedings.  Rather, Paragraph 25 has a limited, narrow scope. 

It refers only to fees and costs incurred in the prosecution or defense of “an attack by one

party as to the validity of this agreement,” and only imposes such fees if such challenge is

unsuccessful.  Record at 817.  Paragraph 25 does not impair the wife’s right to seek

attorney fees pursuant to Indiana Code section 31-1-11.5-1611 for her fees related to the litigation of all issues other than the validity of the agreement.  

	We find, in accordance with Voigt, that the trial court’s findings with respect to Paragraph 25 are insufficient to establish fraud, duress, other imperfections of consent, or

manifest inequities.  To the extent that the judgment of dissolution rejects and refuses to

enforce Paragraph 25, we reverse.  As previously noted, the trial court, intentionally

disregarding Paragraph 25, determined that the husband should pay $69,000.00 of the

$89,262.25 attorney fees claimed by the wife.12  On remand, the trial court shall give full force and effect to this provision by determining the amount of reasonable attorney fees

and costs that the parties incurred directly from the challenge to the validity of the

parties’ settlement agreement, and shall reduce its prior award of attorney fees

accordingly.   

Conclusion

	Except as otherwise provided above, we summarily affirm the opinion of the Court

of Appeals as to its determination of those issues not presented in the husband’s petition

to transfer.  The judgment of the trial court is affirmed in part and reversed in part, and

this cause is remanded to the trial court for proceedings consistent with this opinion and

that of the Court of Appeals to the extent summarily affirmed.

	SHEPARD, C.J., and SULLIVAN, SELBY, and BOEHM, JJ., concur.