Opinion ID: 1145441
Heading Depth: 2
Heading Rank: 4

Heading: the ruggles' marital settlement agreement

Text: We deal only briefly with the Ruggles' MSA, which involves an issue that did not precipitate our grant of certiorari and that is adequately covered by existing New Mexico case law. The issue is whether, as the trial court concluded, Mr. and Mrs. Ruggles agreed in their MSA that Joseph would immediately commence paying Nancy her community share of his retirement benefit even though he had not retired, or whether they agreed that Nancy would not receive any portion of Joseph's retirement until he actually retired and began receiving benefits. The Court of Appeals reversed and held that the agreement embodied the latter understanding. Both the trial court and the Court of Appeals characterized the agreement as unambiguous. The trial court based its conclusion on a provision in the MSA that Nancy would receive as her separate property [o]ne-half of the community retirement benefits earned by Joseph from the date of marriage to February 1, 1988. The agreement did not specify when or how or in what amount this share would be paid. The Court of Appeals relied on other provisions of the agreement to hold that the parties contemplated Joseph's continued employment and that therefore, since the agreement was to be governed by New Mexico law (which included, the Court of Appeals held, Schweitzer v. Burch ), the parties must have intended that Joseph would not make payments to Nancy of portions of his retirement benefits until, and as, he received them. Ruggles, 114 N.M. at 65-66, 834 P.2d at 942-43. The Court pointed to provisions in the agreement obligating Joseph to make varying child support payments depending on whether or not the parties' unemancipated child was living with him, which could only have occurred after he had retired; to provisions requiring him to maintain medical and dental insurance coverage for the child for as long as he could keep the child as a dependent on his employer's group insurance; and to other provisions that satisfied the Court that the parties expected that Joseph would continue working after the date he was eligible to retire. Id. at 66-67, 834 P.2d at 943-44. We agree with the Court of Appeals that the MSA, fairly construed, reflects the parties' understanding that Joseph would continue working until well after the divorce. We further agree that the parties did not provide in their MSA, expressly or by implication, that Joseph would pay Nancy $753.94 per month from and after the dissolution of their marriage. However, we do not agree that the absence of such a provision from their written agreement necessarily means that the parties agreed that Nancy would not begin to receive any portion of her community share of Joseph's retirement plan until he actually retired. Unlike both the trial court and the Court of Appeals, we believe the MSA is ambiguous on this point and that further proceedings are necessary to resolve the ambiguity. If it cannot be resolved as an evidentiary or factual matter, then it follows that the parties made no agreement on the issue  their agreement simply failed to cover the point, and Nancy's entitlement to her share of Joseph's retirement benefits must be decided under the principles outlined previously in this opinion. Although [t]he mere fact that the parties are in disagreement on construction to be given to the contract does not necessarily establish an ambiguity[,] Levenson v. Mobley, 106 N.M. 399, 401, 744 P.2d 174, 176 (1987), when a district court and an appellate court both agree that a contract is unambiguous but reach diametrically opposite conclusions as to its meaning, the claimed lack of ambiguity is highly suspect, to say the least. But we need not rely on these differing interpretations of the Ruggles' MSA to conclude that the agreement is ambiguous; that conclusion fairly leaps from the terms of the agreement itself. A contract is ambiguous if it is reasonably and fairly susceptible of different constructions. Id. In addition to the provision relied on by the trial court  that Nancy would receive as her separate property one-half of the community retirement benefits in Joseph's plan with Sandia  Nancy emphasizes another provision stating that [e]ach party shall immediately allow the other to take possession of the property transferred to that party by this Agreement. Joseph, on the other hand, stresses those parts of the agreement relating to child support, provision of insurance, and the other matters on which the Court of Appeals focused in determining that the agreement did not contemplate Joseph's imminent retirement. As we have said, we believe the Court of Appeals correctly construed the agreement as reflecting the assumption that Joseph would continue working, but this does not mean that the parties did not agree that Joseph would immediately take steps to implement the provision calling for Nancy's receipt of her portion of his retirement benefits. The agreement is fairly susceptible of the constructions that he would and that he would not take such steps; therefore, it is ambiguous. Because of this ambiguity, extrinsic evidence of the parties' intent may be considered to aid in interpreting its terms. C.R. Anthony Co. v. Loretto Mall Partners, 112 N.M. 504, 508, 817 P.2d 238, 242 (1991). This is true even though the agreement contains an integration clause, stating that there are no other agreements between the parties. While extrinsic evidence is inadmissible to contradict, and perhaps even to supplement, the terms of an integrated agreement, it is admissible to explain the terms of the agreement. See id. at 509, 817 P.2d at 243; Restatement (Second) of Contracts § 212 & cmt. c (1979) (statements of intention admissible to show meaning of integrated agreement), § 213 (parol evidence rule bars prior inconsistent statements), § 216 (consistent additional terms inadmissible to supplement completely integrated agreement); 3 Arthur L. Corbin, Corbin on Contracts § 539, at 84 (Supp. 1992) (process of interpretation is divorced from notions of integration). We therefore remand Ruggles to the trial court with directions to consider extrinsic evidence of the parties' intent as to distribution of Nancy's community share of the Sandia benefits. Any discussions between the parties on this issue are admissible to explain the terms of the agreement. Such evidence cannot be said to contradict the agreement when its meaning is not yet known. C.R. Anthony, 112 N.M. at 509, 817 P.2d at 243. The trial court might determine that the parties reached no agreement on this issue  that is, that they did not consider it and therefore did not agree on how to resolve it. A search for their intent would then be fruitless. See Restatement (Second) of Contracts § 204 cmt. b. The court should then utilize the lump sum method to the extent feasible, as previously discussed, except that the court should not apply the lump sum method arbitrarily and without regard for the equities of the situation obtaining at that time. It is the burden of the party contesting the lump sum method to adduce a sufficient basis for denying a lump sum award. In the absence of findings to justify such a denial, the denial might well constitute an abuse of the trial court's discretion. With appropriate findings, the trial court may, as we have discussed, utilize other methods, in combination with or apart from the lump sum method. Finally, we wish to comment on the Court of Appeals' statement in Ruggles that the trial court had discretion to modify the terms of the agreement to assure fairness. 114 N.M. at 67, 834 P.2d at 944. The Court cited Brister v. Brister, 92 N.M. 711, 594 P.2d 1167 (1979), and Wolcott v. Wolcott, 101 N.M. 665, 687 P.2d 100 (Ct. App. 1984), as support for this statement. Neither case supports the proposition that a court dividing community property in a dissolution proceeding has authority to modify the parties' agreed-upon division to assure fairness. Brister involved modification of an award of alimony, as expressly permitted by statute. Brister, 92 N.M. at 713-14, 594 P.2d at 1169-70 (relying on NMSA 1978, § 40-4-7(B)(2)). Wolcott perhaps does provide inferential support for the proposition, but any such support is weak because the case involved unique facts (a prior court decree that the husband apparently sought to evade by entering into a subsequent separation agreement) and cited no authority itself except Brister and Scanlon v. Scanlon, 60 N.M. 43, 287 P.2d 238 (1955), which, like Brister, involved modification of an alimony or support agreement. Id. at 46, 54, 287 P.2d at 240, 246. While this issue is not directly before us in this certiorari proceeding, we cannot let pass a remark that we believe is of questionable validity. Even Joseph Ruggles, the prevailing party in the Court of Appeals, asks us to disapprove the Court's dictum. We are inclined to agree with Joseph that a voluntary property settlement between divorcing spouses, dividing their community property as they see fit, is sacrosanct and cannot be upset by the court granting the divorce, absent fraud, duress, mistake, breach of fiduciary duty, or other similar equitable ground for invalidating an agreement. See, e.g., Miller v. Miller, 33 N.M. 132, 134, 262 P. 1007, 1007-08 (1928) (trial court that approved divorcing spouses' property settlement agreement could hardly have ruled otherwise in the face of the voluntary property settlement made by the parties themselves ... which was not attacked for fraud, duress, or mistake.). See also NMSA 1978, § 40-2-2 (Repl.Pamp. 1989) (Either spouse may enter into any transaction with the other which either might if unmarried, subject, in transactions between themselves, to the general rules of common law which control the actions of persons occupying confidential relations with each other.).