Opinion ID: 2015196
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Heading: Modification of Maintenance Agreements

Text: In determining the authority of the court to modify maintenance obligations arising under an approved settlement agreement, we begin by examining the distinction between court-imposed maintenance and maintenance agreements.
Before the adoption of the Dissolution Act, Pub.L. No. 297, 1973 Ind. Acts 1585, Indiana courts were expressly authorized to award alimony in divorce decrees, if the award would be just and proper. Ind.Code § 31-1-12-14 (1971); Burns Ind. Stat. § 3-1217 (1933); 2 Ind.Rev.Stat. pt. 2, ch. 4, § 19, at 237 (1852). The purpose of such an award was to settle property rights, not to provide for spousal support. Shula v. Shula, 235 Ind. 210, 132 N.E.2d 612 (1956); see also Dissette v. Dissette, 208 Ind. 567, 196 N.E. 684 (1935)(indicating alimony is related to wife's elective share of husband's estate upon his death); Musselman v. Musselman, 44 Ind. 106 (1873)(indicating alimony award is given in lieu of dividing husband's real and personal property). [7] The 1973 act retained the option of settling property rights with lump sum or installment payments. Ind. Code Ann. § 31-1-11.5-11(b)(2) (West Supp. 1995) (retaining just and proper standard). In the Dissolution Act of 1973, Indiana edged away from the strict policy against spousal support. For the first time courts were expressly authorized to award maintenance. [8] Nevertheless, the authorization was quite narrow. The Civil Code Study Commission, which in 1970 drafted a proposed Dissolution of Marriage Act, recommended a modest but significant provision for spousal maintenance: SEC. 210. Maintenance. (a) ... [T]he court may grant a ... maintenance order[] for either spouse only if it finds (1) that the spouse seeking maintenance lacks sufficient income and property to provide for his reasonable financial needs and (2) that the spouse seeking support is unable to support himself through employment or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home. (b) The maintenance order shall be in such amount and for such periods of time as the court may deem just.... Report of the Indiana Civil Code Study Commission: Proposed Dissolution of Marriage Act § 210 (1970) [hereinafter Proposed Dissolution Act]. The proposed section also enumerated six factors for a court to consider when setting the amount and conditions of maintenance once it had determined that a spouse met the two statutory prerequisites. Id. The proposed section was taken almost verbatim from the corresponding section of a proposed uniform act. See Uniform Marriage and Divorce Act § 308 (1970). In the General Assembly, the maintenance proposal met with strong resistance. The House of Representatives removed all references to maintenance. Stephen R. Pennell, Note, Alimony in Indiana Under No-Fault Divorce, 50 Ind. L.J. 541, 547 (1975). As finally enacted, the Dissolution Act contained only an extremely narrow provision for incapacity maintenance in § 9(c): The court may make no provision for maintenance except that when the court finds a spouse to be physically or mentally incapacitated to the extent that the ability of such incapacitated spouse to support himself or herself is materially affected, the court may make provision for the maintenance of said spouse during any such incapacity, subject to further order of the court. Dissolution Act, § 1, 1973 Ind. Acts at 1590 (codified at Ind.Code Ann. § 31-1-11.5-9(c) (West 1979) (amended 1981, 1984, 1985)). In 1984, the General Assembly revised the maintenance provision and slightly expanded the grounds upon which courts could order maintenance. P.L. 150-1984, §§ 1-2, 1984 Ind. Acts 1290, 1290-92. Section 9(c) now provides that [t]he court may order maintenance in final decrees ... after making the findings required under section 11(e). Ind. Code Ann. § 31-1-11.5-9(c) (West Supp. 1995). The original provisions for incapacity maintenance were transferred to § 11(e) and two additional grounds for maintenance were added. See Ind.Code Ann. § 31-1-11.5-11(e) (West Supp.1995). Thus, while the General Assembly began moving away from the previously strict policy against court-imposed spousal maintenance in 1973, it has not authorized as broad a grant of power to courts as the Study Commission proposed in 1970. In ordering maintenance today, an Indiana court is restricted to three, quite limited options. First, it may grant incapacity maintenance if it finds a spouse to be physically or mentally incapacitated to the extent that the ability of the incapacitated spouse to support himself is materially affected. Ind. Code Ann. § 31-1-11.5-11(e)(1). Second, a court may order caregiver maintenance if it finds that a spouse must forego employment in order to care for a child with a physical or mental incapacity. Id. § 31-1-11.5-11(e)(2). Third, a court may order rehabilitative maintenance for no more than three years if it finds that a spouse needs support while acquiring sufficient education or training to get an appropriate job. Id. § 31-1-11.5-11(e)(3). Where none of these circumstances exist, a court may not order maintenance without the agreement of the parties. In re Marriage of McManama, 272 Ind. 483, 399 N.E.2d 371 (1980); In re Marriage of Coomer, 622 N.E.2d 1315 (Ind.Ct.App.1993). This policy reflects a clear legislative intent to retain fairly strict limits on the power of courts to order maintenance without the consent of the parties. See Liszkai v. Liszkai, 168 Ind.App. 532, 343 N.E.2d 799, (1976).
The parties may themselves provide for maintenance in settlement agreements where the court could not otherwise order it. Under § 10(a) of the Dissolution Act the parties may 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 children. Ind.Code Ann. § 31-1-11.5-10(a) (West 1979). The express purpose of this provision is to promote the amicable settlements of dissolution-related disputes, id., and Indiana law has long favored these agreements. While a court itself may award maintenance only under the narrow circumstances outlined in § 11(e), the parties are not so limited in drafting settlement agreements. The parties are free to make such continuing financial arrangements as, in a spirit of amicability and conciliation, they wish. Hull v. Hull, 436 N.E.2d 841, 843 (Ind.Ct. App.1982); accord Bowman, 567 N.E.2d at 830; Baker v. Baker, 552 N.E.2d 525, 527 (Ind.Ct.App.1990); Pfenninger, 463 N.E.2d at 1119. This flexibility serves at least two purposes: (1) it enables a couple to dissolve their marital relationship on mutually acceptable terms without resort to judicial impositions, and (2) it provides the only effective mechanism by which divorcing couples can structure their financial relations so as to take advantage of the Internal Revenue Code's special treatment of maintenance payments. Hicks v. Fielman, 421 N.E.2d 716, 721 (Ind.Ct.App.1981). Section 8(d) of the Dissolution Act authorizes parties to waive a final hearing and file a settlement agreement with the court. Ind. Code Ann. § 31-1-11.5-8(d) (West Supp. 1995). If the parties comply with § 8(d), the statute directs the court to enter a dissolution decree, Ind.Code Ann. § 31-1-11.5-9(a)(2) (West Supp.1995), which must incorporate the settlement agreement and include an order requiring the parties to carry out its terms, Ind.Code Ann. § 31-1-11.5-10(b) (West 1979). A court is not, however, bound to accept every proffered settlement agreement. Section 10(b) empowers a court to approve[ ] and consequently to disapprovethe terms of any settlement agreement. Ind.Code Ann. § 31-1-11.5-10(b). Both the Uniform Act and the Study Commission's proposed act recommended making settlement agreements binding on courts unless the agreements were unconscionable. See Uniform Marriage and Divorce Act § 306(b); Proposed Dissolution Act § 208(b). The legislature rejected that strict approach but substituted no express standard of review. Nevertheless, we think the power to disapprove a settlement agreement must be exercised with great restraint. A trial judge should not reject a settlement agreement just because she believes she could draft a better one. Stockton v. Stockton, 435 N.E.2d 586 (Ind.Ct.App.1982) (involving property division). Restraint is especially justified where a settlement agreement contains provisions for maintenance, for the legislature has narrowly circumscribed the power of courts to impose maintenance on unwilling parties. [9] The mere submission by the parties of a settlement agreement containing a maintenance provision should not effectively grant to the courtunder the guise of modifying a proffered agreementa general power to set whatever amount of maintenance the court may deem just and proper. In reviewing a settlement agreement, a court should concern itself only with fraud, duress, and other imperfections of consent, Stockton, 435 N.E.2d at 590, or with manifest inequities, particularly those deriving from great disparities in bargaining power. In the absence of problems such as these, it seems likely that agreements between the parties will produce the just and reasonable outcome contemplated by the Code. Ind.Code Ann. § 31-1-11.5-11(b) (West 1979). In the usual case, freedom of contract will, it is hoped, produce mutually acceptable accords, to which parties will voluntarily adhere. [10] Moreover, the actual purpose lying behind any particular provision of a settlement agreement may remain forever hidden from the trial judge. Indeed, it may be quite idiosyncratic. While it is no doubt true that the purpose of court-imposed maintenance is to continue the support of a spouse past the dissolution of the marriage, Hicks, 421 N.E.2d at 720, we cannot agree that simple support is always the sole reason for the existence of a maintenance provision in a settlement agreement. Contra Roberts, 644 N.E.2d at 177. In the present case, for instance, the settlement agreement twice referred to all the promises and mutual covenants of the agreement as consideration. We can readily imagine that a court's bearing down on a maintenance provision could produce a rupture in the delicate consent holding together another part of the agreement. [11] For these reasons, we think it best that courts tread lightly when evaluating settlement agreements.
With this understanding of the distinction between court-imposed maintenance and maintenance agreements, we may proceed to the issue at hand. May a court subsequently modify a maintenance agreement upon the petition of one party and over the opposition of the other? In most cases the answer is no. Where the issue involves the property disposition contained in an approved settlement agreement, the Dissolution Act is unambiguous: The disposition of property settled by such an agreement and incorporated and merged into the decree shall not be subject to subsequent modification by the court except as the agreement itself may prescribe or the parties may subsequently consent. Ind. Code Ann. § 31-1-11.5-10(c) (West 1979). The answer is also clear where the issue involves maintenance that the court has ordered under § 9(c), as further regulated by § 11(e): Provisions of ... an order for maintenance ordered under section 9(c) of this chapter may be modified or revoked. Such modification shall be made only ... upon a showing of changed circumstances so substantial and continuing as to make the terms unreasonable.... Ind.Code Ann. § 17(a) (West Supp.1995). As the Court of Appeals has pointed out, this provision refers to the modification of only court-imposed maintenance, not of approved maintenance agreements. Roberts, 644 N.E.2d at 175; Bowman, 567 N.E.2d at 830. Nevertheless, Ronald argues that this section should be so extended. His argument is not unprecedented. As originally enacted § 17(a) of the Dissolution Chapter did not authorize the modification of court-imposed maintenance obligations. See Dissolution Act, sec. 1, 1973 Ind. Acts at 1594. [12] Nevertheless, the Dissolution Act authorized courts to award incapacity maintenancethe only type then permissible subject to further order of the court. Ind. Code Ann. § 31-1-11.5-9(c)(West 1979) (amended 1984). Thus, the Court of Appeals decided to apply the changed circumstances standard of § 17(a). See Farthing, 178 Ind.App. at 341, 382 N.E.2d at 945 (1978). Moreover, in a majority of states, maintenance obligations arising under settlement agreements may be subsequently modified by a court. In these states, the maintenance obligations may be increased or reduced upon the same terms as any other [maintenance] decree. Homer H. Clark, Jr., The Law of Domestic Relations in the United States § 19.13, at 462 (2d ed.1987); see also John J. Michalik, Annotation, Divorce: Power of Court to Modify Decree for Alimony or Support of Spouse Which Was Based on Agreement of Parties, 61 A.L.R.3d 520 (1975). On the other hand, both the Uniform Act and the Study Commission's proposed act prohibited modification of maintenance obligations if the settlement agreement contained a non-modification clause and, in the absence of such a clause, permitted modification only if changed circumstances rendered them unconscionable. Uniform Marriage and Divorce Act § 316(a); Proposed Dissolution Act § 217(a). This strict standard was designed to discourage former spouses from using the modification process repeatedly for vexatious purposes only. Proposed Dissolution Act § 217 comment (a); accord Uniform Marriage and Divorce Act § 316 comment (This strict standard is intended to discourage repeated or insubstantial motions for modification.). In addition to this legitimate concern for vexatious litigation, we believe modification of maintenance agreements approaches the limits of a court's statutory authority. As we have explained, the legislature intended to place severe restrictions on the power of courts to impose maintenance obligations. We have also noted that courts should exercise their authority to review settlement agreements with great restraint. Finally, it is obvious that a disgruntled former spouse should not be permitted to use the modification process to wage a collateral attack on a maintenance obligation. Farthing, 178 Ind. App. at 341-43, 382 N.E.2d at 945-46. A few cases in somewhat analogous situations have found that courts lacked authority to modify maintenance awards. In Luques v. Luques, 127 Me. 356, 143 A. 263 (1928) (per curiam), the court reasoned that because a husband cannot be compelled without his consent to provide ... support for a wife against whom he has obtained a divorce for her fault, the court could not modify a decree for her future support based on his consent unless he consented to the subsequent modification. Id., 143 A. at 265 (emphasis added). Applying a former statute, New York's Appellate Division reached a similar result. In denying a wife's petition to increase her maintenance, the court reasoned that where the husband is entitled to a divorce based on the wife's misconduct, she has no right to support.... While the husband's agreement waived the alimony-bar provision of [the statute], it did so only to the extent agreed upon.... Greenberg v. Greenberg, 175 A.D.2d 18, 571 N.Y.S.2d 731, 732 (1991); accord Lamberti v. Lamberti, 158 A.D.2d 449, 551 N.Y.S.2d 46, 47 (1990). We think these cases, though not directly on point, establish a general principle applicable in the present case. Where a court had no authority to impose the kind of maintenance award that the parties forged in a settlement agreement, the court cannot subsequently modify the maintenance obligation without the consent of the parties. In essence, the parties must agree to amend their settlement agreement, because the sole authority for the maintenance obligation originally derived from their mutual assent. [13] In approving or rejecting any submitted modification agreement, a court should apply the same standard it would use in evaluating an initial settlement agreement. We now hold that a court has no statutory authority to grant a contested petition to modify a maintenance obligation that arises under a previously approved settlement agreement if the court alone could not initially have imposed an identical obligation had the parties never voluntarily agreed to it. We therefore disapprove Pfenninger.