Opinion ID: 1865975
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Heading: whether the terms of the stipulation violate public policy

Text: The court of appeals held that Mitzi was not equitably estopped under Rintelman from seeking an increase in maintenance because the stipulation violated public policy for three reasons. [9] First, it is the policy of the state of Wisconsin that maintenance is always subject to modification unless it is waived. Second, acceptance of James's equitable estoppel argument could preclude review of maintenance in every stipulated divorce. Third, the maintenance provided by the stipulation is grossly inadequate given changes in Mitzi's income and health since the divorce. The court of appeals then concluded that the inadequacy of the maintenance distinguishes the case at bar from Rintelman where the payor spouse agreed to pay maintenance longer than he was required to do so under sec. 767.32(3), Stats. Nichols, 156 Wis. 2d at 507-09. We disagree. The court of appeals cited Dixon, Fobes, and secs. 767.32(1) and 767.08(2)(b), Stats., to support its conclusion that a stipulation which provides that maintenance is not subject to modification violates public policy. We have already rejected this position, supra at 103-107, 469 N.W.2d at 623. We also reject the court of appeals' assertion that acceptance of James's equitable estoppel argument could preclude modification of maintenance in every stipulated divorce. James's equitable estoppel argument does not rely solely on the fact that the divorce judgment incorporated his and Mitzi's stipulation. Rather, James argues that all the elements of estoppel set forth in Rintelman are present in this case, including the element that the party seeking relief from the stipulation does so on the grounds that the court could not have entered the judgment incorporating the terms of the stipulation without the consent of the parties. Mitzi challenges the judgment on the grounds that the court which entered the divorce judgment did not have the authority to order that the maintenance is not subject to modification. However, not all stipulated divorces include terms the court could not include without the consent of the parties, such as a provision that maintenance is not subject to modification. For example, if the parties stipulate to a maintenance amount, but do not stipulate that maintenance is nonmodifiable, maintenance is still subject to modification. See, e.g., the cases cited in n.8. [10] Accordingly, the court of appeals' assertion is incorrect. Furthermore, we do not find persuasive the court of appeals' attempt to distinguish Rintelman. While there are some factual differences between Rintelman and the case at bar, the principle involved in both cases is the same: under certain conditions, a party may be estopped from seeking a modification of maintenance. In Rintelman, the payor spouse agreed to pay maintenance for the lifetime of his ex-spouse even though he had no legal obligation to do so under sec. 767.32(3), Stats., if his wife remarried. This court affirmed a denial of the payor spouse's motion to terminate maintenance because his ex-wife, the payee spouse, had remarried. We reached this conclusion because the payor spouse was estopped from seeking a modification in maintenance. In other words, we concluded that `a person who agrees that something be included in a family court order, especially where he receives a benefit for so agreeing, is in a poor position to subsequently object to the court's doing what he requested the court to do.' Rintelman, 118 Wis. 2d at 595 (quoting Bliwas v. Bliwas, 47 Wis. 2d 635, 639-40, 178 N.W.2d 35 (1970)). In the case at bar, the payor spouse agreed to permanent and nonmodifiable maintenance of $250.00 per month. The stipulation of the parties provides that the maintenance payments and property settlement were given in lieu of any further or additional maintenance payments. The property division was equal, except that James was made responsible for all of the couple's debt. On the face of the stipulation, Mitzi received a benefit one-half of the couple's assets, James's assumption of all of the couple's debt, and maintenance paymentsin exchange for agreeing that maintenance would not be modifiable. Therefore, we conclude that Mitzi, like the payor spouse in Rintelman, is in a poor position to object to the court's including a provision in the divorce judgment that maintenance is not subject to modification. However, we note that a quid pro quo such as the one in the case at bar need not be shown in order for a stipulation to fulfill the requirements of Rintelman. Id. at 596. [7] We are not persuaded by the court of appeals' conclusion that the case at bar is distinguishable from Rintelman because the maintenance provided by the stipulation is grossly inadequate. In determining whether a stipulation is fair, equitable, and not against public policy, we examine the settlement as a whole. Id. The stipulation, as a whole, was fair, equitable, and not against public policy at the time the divorce judgment was entered. The modest maintenance award is reasonable in light of the fact that it is permanent and that the property division was unequalJames assumed all of the couple's debt and received only one-half of the couple's assets. Mitzi does not argue that the terms of the stipulation violated public policy at the time the judgment was entered. Instead, she argues that the stipulation violated public policy because, without an increase in maintenance, she would be forced into seeking public assistance. At the outset, we note that the record contains no evidence to support her assertion that she will be forced onto public assistance without an increase in maintenance. The record does not even contain a self-serving affidavit from Mitzi to support her assertion. Even the affidavits filed in support of her motion aver only that her needs have changed substantially since the divorce in 1978. However, even if we assume that her claim is true, we must reject her argument that the terms of the stipulation violate public policy. [8, 9] As discussed previously, the terms of the stipulation were fair, equitable, and not against public policy at the time it was incorporated into the divorce judgment. Therefore, the only way we can conclude that the stipulation violates public policy is to hold that whether a stipulation is fair, equitable, and not against public policy must be reevaluated every time a party seeks relief from a nonmodifiable provision of a stipulation. We determine whether a stipulation is fair, equitable, and not against public policy by taking into account the circumstances which existed at the time the stipulation was incorporated into the divorce judgment. [10] We refuse to reevaluate whether a stipulation is fair, equitable, and not against public policy 13 years after a divorce due to subsequent changes in the parties' circumstances for two reasons. First, modification is unfair to the payor spouse because he or she may not seek modification of maintenance under similar conditions. Second, modification will discourage the settlement of divorce cases. [11] Allowing Mitzi, the payee spouse, to seek relief from the stipulation would not be fair because a payor spouse cannot seek relief from nonmodifiable maintenance on the grounds of financial hardship which arises after the divorce under the court of appeals' holding in Ross. [11] In Ross, the divorce judgment incorporated a stipulation of the parties which provided for maintenance of $733.00 per month for 63 months. The stipulation as incorporated into the judgment also provided that maintenance was not subject to modification. After the divorce, the payor spouse suffered a significant decrease in income, while the payee spouse's income increased. Ross, 149 Wis. 2d at 714-15. The payor spouse sought a decrease in maintenance based upon the changes in the parties' income since the divorce. The court of appeals affirmed the circuit court's denial of the payor spouse's motion. In so ruling, the court of appeals rejected the payor spouse's argument that enforcing the stipulation was unconscionable given the financial setbacks he had suffered since the divorce. Id. at 720. To support its conclusion, the court of appeals quoted with approval the opinion of the circuit court which, in dicta, rejected Mitzi's position in the case at bar. `It's [entering into a stipulation with a nonmodifiable maintenance provision] a calculated risk, it's a gamble that each party [takes]. Unfortunately for Mr. Ross [the payor spouse] the gamble has not worked . . . to his advantage . . .. That's true in business as well as in family matters and the dice [have not] roll[ed] his way in this situation . . .. [But it] could cut . . . the other way. It could be that Ms. Ross [the payee spouse] is in desperate need of help and Mr. Ross is making a fortune and she would not . . . be able to come back to this Court and ask . . . me to continue the payments or increase [them] . . ..' Id. The court of appeals decision in the case at bar directly contradicts the reasoning, if not the holding, of the court of appeals decision in Ross. Under Ross, James could not seek a reduction in maintenance if he lost all of his money in a bad investment and Mitzi won the lottery. [12] Similarly, Mitzi should not be allowed to seek an increase in maintenance because, as the trial judge stated in Ross, the gamble of entering into the stipulation has not worked to her advantage. However, under the court of appeals decision in this case, Mitzi may seek an increase in maintenance if she shows financial need, and James must pay the maintenance set by the stipulation regardless of his financial condition. [12] The doctrine of estoppel set forth in Rintelman is equitable only if it applies to both payors and payees of maintenance. If payees may seek modification of nonmodifiable maintenance due to financial setbacks suffered since the divorce, but payors of maintenance may not do the same, the payor is denied the benefit of his or her bargain, while the payee receives the benefit of his or her bargain without risking the effects of what he or she agreed to in the stipulation. [13] [13] Moreover, allowing the decision of the court of appeals to stand will discourage the settlement of divorce cases. The advantage of agreements providing that maintenance is not subject to modification is certainty and finality. If nonmodifiable maintenance is not really nonmodifiable, there will be no motivation for a payor spouse to enter into stipulations such as the agreements in Rintelman, Ross, and the one in the case at bar. Therefore, the decision of the court of appeals will discourage settlements, contrary to the public policy of this state. [14] We recognize that enforcing provisions which provide that maintenance is not subject to modification may result in financial hardship. However, allowing modification will, as discussed above, cause more problems than it solves. Furthermore, allowing Mitzi to seek an increase in maintenance is inconsistent when, as she concedes, she could not seek an increase if the stipulation had provided for no maintenance. Moreover, the divorce laws already provide sufficient protection against inadequate maintenance. For example, parties are free to reject nonmodifiable maintenance provisions, and parties to a stipulation providing that maintenance is not subject to modification are protected by the requirement that the circuit court approve a stipulation. Schmitz v. Schmitz, 70 Wis. 2d 882, 887, 236 N.W.2d 657 (1975); Ray v. Ray, 57 Wis. 2d 77, 84, 203 N.W.2d 724 (1973). [14] In the case at bar, it is undisputed that the circuit court properly found the stipulation to be reasonable at the time it granted the divorce. Therefore, we conclude that the stipulation in the case at bar is fair, equitable, and not against public policy. By the Court. The decision of the court of appeals is reversed. SHIRLEY S. ABRAHAMSON, J. (dissenting). I would affirm the decision of the court of appeals, which held that the parties to this divorce could not, by this agreement, prevent a circuit court from modifying maintenance payments. In their 1978 divorce agreement the parties stipulated that the husband would pay the wife $250 per month as maintenance and that the entire estate consisting of a house, two cars, and personal effects would be divided substantially equally. They further stipulated that the husband was to pay debts and obligations incurred before the commencement of the divorce proceedings; neither the stipulation nor the judgment stated the amount of debt involved. Finally the parties stipulated that maintenance and property division payments were to be permanent and in lieu of any further or additional maintenance payments, except said payments shall terminate upon remarriage of the wife. The wife now seeks modification of maintenance because of changed circumstances. The court of appeals held that the circuit court retains the power to modify maintenance in this case and gave three reasons for its decision. First, the legislature expressly allows a circuit court to modify maintenance and specifies only two circumstances under which the circuit court may not modify maintenance. Because the stipulation in this case does not fall under either of these two statutory exceptions, the stipulation cannot bind the circuit court. [1] Second, the public policy of this state, as reflected in the divorce statutes over the years, is to allow the courts to modify maintenance to protect both spouses should circumstances change after the judgment is entered. A stipulation depriving the circuit court of the power to modify maintenance that is otherwise modifiable under the statutes contravenes this public policy. Third, because the stipulation is contrary to public policy, the doctrine of equitable estoppel does not apply in this case. Rintelman v. Rintelman, 118 Wis. 2d 587, 596, 348 N.W.2d 498 (1984). The issue presented in this case is how should the courts treat the parties' stipulation (incorporated in the judgment) for payments that do not fit comfortably within the statutory categories of property division, waiver of all maintenance, indefinite term maintenance, and limited term maintenance. The court has not, in my opinion, developed a cohesive approach to the question of the parties' ability to establish their own creative resolutions to the issue of maintenance. Each of our prior cases, upon which the majority relies, turns on the terms of the parties' agreement. The terms of the agreement in this case differ from those in the prior cases. The cases upon which the majority relies are therefore distinguishable and do not provide the answer to the question raised in this case. [2] Given our prior cases and the majority decision, I believe the legislature might wish to reexamine divorcing parties' power to create their own types of maintenance payments and the court's power to modify the parties' agreements upon changes in circumstances. See secs. 13.83(1)(c)1 and 13.93(2)(d), Stats. 1989-90. For the reasons set forth more fully in the opinion of the court of appeals, In re Marriage of Nichols, 156 Wis. 2d 503, 457 N.W.2d 492 (1990), I dissent.