Opinion ID: 854000
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Heading: Dissolution Settlement or Reconciliation Agreement

Text: 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 falls 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.