Case Name: In re the Marriage of Howard F. KARON, Petitioner, Appellant, v. Frima M. KARON, Respondent
Court: Minnesota Supreme Court
Jurisdiction: Minnesota
Decision Date: 1989-01-30
Citations: 435 N.W.2d 501
Docket Number: No. C2-87-976
Parties: In re the Marriage of Howard F. KARON, Petitioner, Appellant, v. Frima M. KARON, Respondent.
Judges: 
Reporter: North Western Reporter 2d
Volume: 435
Pages: 501–509

Head Matter:
In re the Marriage of Howard F. KARON, Petitioner, Appellant, v. Frima M. KARON, Respondent.
No. C2-87-976.
Supreme Court of Minnesota.
Jan. 30, 1989.
Robert J. Bennett, Bruce J. Schulte, Minneapolis, for appellant.
Allen H. Aaron, Mark R. Geier, Minneapolis, for respondent.
Linda M. Ojala, Minneapolis, amicus curiae, for American Ass’n of Univ. Women.
Aviva Breen, Executive Director, Comm, on the Economic Status of Women, St. Paul, Patricia A. O’Gorman, Chairperson, Joint amicus curiae Committee Family Law Section of Minn. State Bar Assoc., Cottage Grove.

Opinion:
YETKA, Justice.
This case is before the court on the appeal by the petitioner of a decision of the Hennepin County District Court, affirmed by the court of appeals, which modified an award of maintenance originally made pursuant to a stipulation of the parties in which the parties waived any right to future modification of maintenance. We reverse the trial court and reinstate the original terms of the decree of dissolution.
Frima and Howard Karon executed a stipulation in this dissolution action on June 27, 1981, and the trial court incorporated the terms of the stipulation into its judgment and decree entered August 81, 1981, nunc pro tunc to August 28, 1981. The decree awarded temporary maintenance to Frima for a 10-year period. The stipulation, as well as the judgment and decree, states that the parties waived any right to maintenance except as provided therein and that the court was divested of jurisdiction to alter the agreement or maintenance.
On February 7, 1986, the referee recommended and the court held, pursuant to Frima's motion, that it had jurisdiction to modify the dissolution decree pursuant to Minn.Stat. § 518.64 (Supp.1985). On March 11, the court affirmed the referee's recommendation. After a discovery period, the referee recommended and the court ordered that the judgment and decree be modified to increase the amount of maintenance to Frima and made the maintenance award permanent rather than temporary. On April 19, 1987, the court affirmed the referee's order. The court made the increase in maintenance retroactive to October 1, 1986, and an amended judgment and decree was entered on May 14, 1987.
Howard appealed the issue of whether the court had authority to modify the decree while Frima appealed the amount of the modification and the amount of attorney fees awarded. The court of appeals affirmed the trial court. Karon v. Karon, 417 N.W.2d 717 (Minn.App.1988). Howard appealed to this court.
Howard F. and Frima M. Karon married on December 21, 1952. Howard commenced a dissolution proceeding in 1979, and the parties executed a stipulation on June 27, 1981. The court entered its judgment and decree on August 28, 1981, incorporating the terms of the stipulation. Both documents provided that Howard would pay Frima $1,200 per month for 6 years and $600 per month for 4 years thereafter. Both documents also stated:
Except for the aforesaid maintenance, each party waives and is forever barred from receiving any spousal maintenance whatsoever from one another, and this court is divested from having any jurisdiction whatsoever to award temporary or permanent spousal maintenance to either of the parties.
Moreover, the stipulation states that the parties "hereby mutually release each other from all rights, claims and other obligations arising out of or during the course of their marriage relationship, except as specifically set forth elsewhere in this Stipulation."
Howard worked as the vice president of sales at Ed Phillips & Sons Co. before the dissolution. In January 1980, he became senior vice president of sales with a gross annual income of $79,337. In 1985, he earned $111,440 taxable income. In 1986, Howard estimated his 1986 gross salary at $126,000. In addition, Howard has been accruing interest in a deferred payment plan since 1981. The plan will be worth approximately $625,000 in 1995 if he stays with his company until that time.
Frima worked as a sales representative for women's sportswear. Beginning in the mid-1960's, she worked at various companies. In 1981, she earned $16,924; in 1984, she earned $13,956; and she estimated her 1985 income as "negligible" because her job had been eliminated. Conditions in the industry precluded her from finding similar employment, and in November 1985, she worked part time in a bakery for $5 per hour. In 1986, Frima took a real estate course and began selling real estate at Edina Realty. She earned no money during her first year of work. In September 1986, she had an IRA valued at $26,500.
In late 1985, Frima moved the court for a modification of the maintenance award, requesting permanent maintenance of $3,500 per month. Howard challenged the court's authority to modify the maintenance provision, arguing that the parties had waived any alteration of maintenance in the stipulation and that the court had divested itself of jurisdiction to alter the decree. A referee held that Minn.Stat. § 518.64 (Supp. 1985) granted it such authority and ordered that it would hear the modification motion on the merits after a discovery period. The district court affirmed this order.
After the completion of discovery, a referee heard the merits of the motion and ruled that a substantial change in circumstances had occurred, warranting a maintenance modification pursuant to section 518.64. The referee determined, however, that Frima had the capacity to earn $1,000 per month and thus increased maintenance to $1,500 per month rather than the $3,500 requested. The referee also made the award permanent because Frima had an uncertain future earning capacity. Finally, the referee awarded Frima $1,000 in attorney fees. The district court affirmed the referee's order.
Howard appealed the jurisdictional decision and the decision on the merits. Frima appealed the decision on the merits and the decision on attorney fees. She claimed that the court had abused its discretion by not awarding the requested amounts.
The court of appeals affirmed the trial court. Karon, 417 N.W.2d at 720. This court granted Howard's petition for further review which, like the arguments before the court of appeals, presented only jurisdictional issues. Frima never filed a petition for further review.
The parties have confused and compounded numerous issues, but we believe the question before us is whether one of the adult parties to a stipulation in a dissolution matter made in 1981, which was approved by the trial court and which settled all issues, including maintenance, and which further provided that the parties expressly waived any right to maintenance except as provided in the original agreement, may now re-open the issue of maintenance to seek an increase therein. The trial court allowed reconsideration of the maintenance issue and the court of appeals affirmed. We reverse.
Howard argues that the terms of the original judgment and decree denied the court any further jurisdiction over the issue of maintenance. We agree. The language of the judgment and decree purports to divest jurisdiction. Section 518.64, however, states that the court may modify a maintenance award upon petition of a party. Minn.Stat. § 518.64, subd. 1 (1984). The court must decide, therefore, whether the maintenance issue was res judicata or whether the court correctly modified the maintenance award under section 518.64 regardless of the original order's language.
Initially, the legal doctrines at issue need clarification. .Howard, in essence, argues that the form of res judicata known as direct estoppel precludes relitigation of the maintenance issue. Direct estoppel is issue preclusion in a second action on the same claim. Restatement (Second) of Judgment § 27 comment b (1982). The seminal issue, therefore, becomes whether the original decree constituted a final judgment in the dissolution on the maintenance issue. If so, it should have had the res judicata effect of preventing the court from hearing the modification motion. See Hentschel v. Smith, 278 Minn. 86, 92, 153 N.W.2d 199, 204 (1967) (consent judgments have estop-pel effect). Phrased in other words, we must decide whether the district court properly divested itself of jurisdiction over the issue in 1981. We hold that it did.
It is not the parties to the stipulation who have divested the court of ability to relitigate the issue of maintenance. The court had the authority to refuse to accept the terms of the stipulation in part or in toto. The trial court stands in place and on behalf of the citizens of the state as a third party to dissolution actions. It has a duty to protect the interests of both parties and all the citizens of the state to ensure that the stipulation is fair and reasonable to all. The court did so here and approved the stipulation and incorporated the terms therein in its decree. Thus, the decree is final absent fraud.
We have recognized that parties may stipulate to waive all maintenance at the time of the initial decree and that the courts are without authority to award it in the future. McCarthy v. McCarthy, 293 Minn. 61, 66, 196 N.W.2d 305, 308 (1972); Warner v. Warner, 219 Minn. 59, 68-69, 17 N.W.2d 58, 63 (1944); see also Wibbens v. Wibbens, 379 N.W.2d 225 (Minn.App.1985). Likewise, we have held that if maintenance is awarded and the term has expired, the court is equally without authority to award further maintenance. See Eckert v. Eckert, 299 Minn. 120, 124, 216 N.W.2d 837, 840 (1974).
We see no valid distinction between the two situations outlined above and the one now before us. Counsel for respondent would have us believe that waiver of a statutory right is without precedent. One can quickly see the fallacy of such an argument. In probate law, for example, heirs frequently enter into stipulations to distribute property or to waive statutory allowances. Antenuptial agreements have become quite common in the past several decades. In criminal law, we have held on numerous occasions that a defendant can waive constitutional rights.
Much of the material filed on behalf of the respondent contains language referring to the economic status of divorced women. While the arguments made in reference to that status are important and should be addressed by both the legislature and the courts, they are not applicable in this case. That is so because the decision would cut both ways if the stipulation were upheld— the husband could not decrease maintenance and would be obligated to pay it for 10 years regardless of any financial setbacks. As a matter of fact, some of the materials submitted to us at oral argument suggest that his financial situation may have already deteriorated since this action was brought.
Amicus for the Family Law Section of the Minnesota State Bar Association stated at oral argument that setting aside the stipulation and decree is insulting and demeaning to women. Counsel who argued on behalf of the association is a woman. She took that position in response to counsel for respondent's implication that women involved in divorce cannot understand or act to protect their rights even when represented by counsel; therefore, the state must protect them in the manner it protects children in the role of parens patriae. Amicus's argument is compelling.
Moreover, what effect would affirmance have on other contracts entered into by married women? Would such a decision supporting the respondent ultimately lead to turning the clock back, outlawing not only antenuptial agreements, but also allowing parties to contest the validity of all instruments and contracts entered into on behalf of married women? Would we also question the validity of deeds of conveyances and purchases of expensive personal property? Where would the protection end? In short, intelligent adult women, especially when represented by counsel, must be expected to honor their contracts the same as anyone else. Any other holding would result in chaos in the family law field and declining respect for binding agreements as well.
Normally, stipulations are carefully drawn compromises which affect property distribution, real and personal, as well as future income. One may, for example, give or take certain items in order to have another reduced or eliminated. Setting aside one portion of the stipulation may totally warp the effects of other portions of the document. It would be difficult to imagine why anyone would agree to temporary maintenance or even maintenance itself for an indefinite period if the agreement could be later nullified. Why not litigate the matter at the time of the original dissolution proceedings? In the interest of judicial economy, parties should be encouraged to compromise their differences and not to litigate them. It is in the litigation of difficult dissolution matters where much of the acrimony and long-term scars are created, leading to still more litigation.
For all of these reasons, we reverse the modification of the original dissolution decree and remand to the trial court with instructions to enforce the terms of that initial dissolution decree.