Opinion ID: 1910226
Heading Depth: 1
Heading Rank: 1

Heading: validity of agreement/capacity to contract

Text: The issue in the instant case is not whether the agreement of the parties could have been adopted by the court and incorporated into a new order modifying the alimony award in the divorce decree. Instead, based on the issue as submitted to the Master and decided by the circuit court, we must determine whether the consent order which was submitted by the parties in November, 1987 was properly signed by the court. We first should point out that the consent order submitted in November, 1987 was actually a proposed consent judgment. `Judgment' means any order of court final in its nature entered pursuant to these rules. Maryland Rule 1-202(m). That definition of judgment now includes equity decrees. We need not address what the court's function is in scrutinizing submitted consent judgments that terminate the case, modify an existing judgment, or maintain jurisdiction over the case and may later require the use of the court's contempt power to enforce the judgment; no such issue is raised in the instant case. See, e.g., Thomas M. Mengler, Consent Decree Paradigms: Models Without Meaning, 29 B.C.L.Rev. 291 (1988). Consent judgments or decrees are essentially agreements entered into by the parties which must be endorsed by the court. They have attributes of both contracts and judicial decrees. Local Number 93 v. City of Cleveland, 478 U.S. 501, 519, 106 S.Ct. 3063, 3073, 92 L.Ed.2d 405, 421 (1986). Ms. Chernick's first challenge to the consent judgment was that there was never a binding contract to settle the instant litigation. She makes no claim of duress, undue influence, or that there was no meeting of the minds, but contends that the agreement did not contain some of the essential elements of a contract. We agree with Ms. Chernick's underlying premise that if there was no binding contract Ms. Chernick could withdraw her consent to settle prior to the consent order being signed. In order to form a contract, both parties must have the power to enter into an agreement and must consent to the agreement being made. Ms. Chernick contends that the agreement is not valid because the parties lack the power to modify the existing divorce decree. While parties do not have the ability to independently modify an existing court decree, they do have the power to make a valid agreement to modify the decree subject to the court's approval. An agreement made subject to the court's approval is analogous to a contract subject to a condition. A condition is an event, not certain to occur, which must occur, unless its nonoccurrence is excused, before performance under a contract becomes due. Restatement (Second) Contracts § 224 (1981). Even when a condition must occur before performance is due, the contract is no less binding than one made without a condition. Consequently, if parties stipulate to terms embodied in a proposed consent order, the fact that a court must approve and sign the order does not affect the parties' ability to reach a valid agreement. In the case at bar, Mr. and Ms. Chernick agreed to modify their existing divorce decree subject to the court's approval and filed a written stipulation in the form of a proposed consent judgment. The fact that Mr. and Ms. Chernick filed the proposed consent judgment indicates that they were aware that they were settling the controversy between them, subject only to the court's approval. The proposed consent judgment embodied the terms of the agreement between the parties and was signed by the attorneys for both parties; it left a blank line for the court's signature. The parties' conduct is further evidence that they intended for the agreement to be a final settlement of their dispute in that the deposition and the hearing on Mr. Chernick's motion to terminate alimony were cancelled after the agreement was reached. It is fundamental that in order for a contract to be binding it must be supported by consideration. Beall v. Beall, 291 Md. 224, 229, 434 A.2d 1015, 1018 (1981). Ms. Chernick contends that the settlement agreement in the instant case was not a binding contract because it lacked consideration. Consideration necessitates that a performance or a return promise must be bargained for. Restatement (Second) of Contracts § 71 (1981). A performance is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. Id. Forbearance to exercise a right or pursue a claim, or an agreement to forbear, constitutes sufficient consideration to support a promise or agreement. Erie Ins. Exch. v. Calvert Fire Ins., 253 Md. 385, 389, 252 A.2d 840, 842 (1969). In the case at bar, Mr. and Ms. Chernick provided valid consideration for their agreement by bargaining for the reciprocal promises made to one another. Ms. Chernick sought a reservation of alimony and, in exchange for the reservation, she promised not to pursue her right to the alimony awarded in the divorce decree. Mr. Chernick sought a permanent termination of alimony and, in exchange for Ms. Chernick's promise to presently forego alimony, he promised to allow her to reserve an entitlement to alimony in the future should her circumstances change. A reservation of alimony is a benefit that Ms. Chernick would have had no assurance of receiving if the alimony issue were litigated. In Turrisi v. Sanzaro, 308 Md. 515, 520 A.2d 1080 (1987), we examined the circumstances in which a reservation of alimony may be appropriate. While the power to reserve alimony exists, it would not be appropriate to reserve simply because there may be some vague future expectation of circumstances that might show a basis for alimony. Id. at 528-29, 520 A.2d at 1087. Thus, the power to reserve is within the court's discretion, and it is uncertain whether Ms. Chernick would have been able to achieve her goal. Mr. Chernick also relinquished a legal right to seek counsel fees in exchange for the termination of alimony. An award of counsel fees may be authorized in a proceeding involving a modification of alimony. Maryland Code (1984, 1991 Repl. Vol.), Family Law Article, § 11-110. The court considers the financial resources of each party and whether there was a substantial justification for prosecuting or defending the proceeding. Indeed, the Master found that Mr. Chernick was entitled to a modification of the original divorce decree because he was retired and Ms. Chernick's earnings exceeded her expenses. As Mr. Chernick's financial resources were limited in comparison to Ms. Chernick's, it appears to us also that he had justification for seeking a termination of alimony and might have been awarded counsel fees. Consequently, we find that the Chernicks' agreement was supported by consideration and that they were bound by their contract unless the court decided not to approve it.