Court Opinion

ID: 5123710
Source: CourtListenerOpinion
Date Created: 2021-11-05 15:06:39.321507+00
Date Added: 2024-06-11T08:22:35.602150
License: Public Domain

NOT DESIGNATED FOR PUBLICATION

                                             No. 123,508

               IN THE COURT OF APPEALS OF THE STATE OF KANSAS

                                  In the Matter of the Marriage of

                                             TENILLE LEE,
                                               Appellee,

                                                   and

                                            BRANDON LEE,
                                              Appellant.

                                   MEMORANDUM OPINION

        Appeal from Cheyenne District Court, SCOTT SHOWALTER, judge. Opinion filed November 5,
2021. Affirmed in part, reversed in part, and remanded with directions.

        Carol M. Park, of Schwartz & Park, L.L.P., of Hays, for appellant.

        Robert A. Martin, of Norton, Wasserman, Jones & Kelly, L.L.C., of Salina, and Ronald S. Shalz,
of Colby, for appellee.

Before MALONE, P.J., POWELL and CLINE, JJ.

        POWELL, J.: During the pendency of their divorce proceedings, Tenille Lee and
Brandon Lee reached a mediated separation agreement. Both parties agreed to have it
incorporated into the divorce decree, so Tenille subsequently asked the district court to do
so, but Brandon objected, arguing there had been no meeting of the minds because
essential terms had been omitted. The district court disagreed and incorporated the
separation agreement into the divorce decree; found the agreement to be valid, just, and
equitable; and entered the decree of divorce.

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         Brandon now appeals, arguing the separation agreement is invalid and
unenforceable as it lacks essential terms. He also argues insufficient evidence supports
the district court's finding that the separation agreement is fair, just, and equitable. For
reasons we more fully explain below, we disagree with Brandon's assertion that the
separation agreement is not a valid contract. However, we do agree that insufficient
evidence supports the district court's finding that the separation agreement is just and
equitable as the agreement failed to list the value of significant assets, and there is
nothing in the record to show the district court considered the parties' domestic relations
affidavits or their financial situations before approving the agreement. Thus, we affirm in
part, reverse in part, and remand for further proceedings.

                         FACTUAL AND PROCEDURAL BACKGROUND

         Tenille and Brandon married in 1998, and two children were born of the marriage.
On September 24, 2019, Tenille petitioned for divorce in the Cheyenne County District
Court.

         Tenille and Brandon participated in voluntary mediation and were represented by
their own counsel. The mediation, which occurred at Brandon's then-attorney's office,
lasted for approximately 10 hours. The parties reached a separation agreement that the
mediator memorialized in a document titled "Mediated Agreement." The parties and their
counsel, along with the mediator, signed the separation agreement, and the mediator filed
it with the district court the same day.

         In the separation agreement, the parties agreed to, among other things, the division
of real and personal property. At contention here, the parties agreed that Tenille would
receive the Fidelity Rollover Individual Retirement Account (IRA), which was in her
name, less $32,500, which would become Brandon's. In the list of Tenille's awarded
property, the agreement read: "Fidelity Rollover IRA less $32,500.00 to be set aside to

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Brandon as hereinafter provided." In the list of Brandon's awarded property, the
agreement read:

               "The sum of $32,500.00 to be set apart to him from the Fidelity [Rollover] IRA
       subject of paragraph 9.[A.b.] The transfer shall be done via a [Qualified Domestic
       Relations Order (QDRO)], or a simpler means if possible, without incurring fees or taxes.
       The transfer shall be made as soon as is reasonably possible after it is determined with
       certainty, with written verification from each creditor, that Tenille is not liable for any of
       the credit card [indebtednesses] being assumed by Brandon."

       The agreement included several provisions expressing the parties' intent for the
agreement to be incorporated into the divorce decree. For example:

       "Tenille and Brandon, by this Mediated Agreement, intend to reach the following
       understanding regarding all of their respective rights in and to any and all property, real
       or personal, owned by the parties jointly, or in their individual names, and to further fix
       and determine any and all other rights and obligations of Tenille and Brandon by reason
       of the marriage, including maintenance, attorney fees, court costs, and divisions of
       property and indebtedness. Tenille and Brandon agree that in the event either of the
       parties secures a Decree of Divorce from the other, both parties agree to request the
       Court to incorporate the terms and provisions of this Mediated Agreement into the
       Decree of Divorce, requesting the Court to find the same as being a valid, just and
       equitable division of their property." (Emphasis added.)

And:

               "It is the intent of Tenille and Brandon that this Mediated Agreement be
       incorporated into the terms of any Decree of Divorce entered in the above referenced case
       now pending in the District Court of Cheyenne County, Kansas, and each of the parties
       agree they will request the Court enter its decree in accordance with the terms of this
       Mediated Agreement. The contractual obligations of this Mediated Agreement shall
       continue after its incorporation into any decree."

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        The parties also stipulated that the agreement was entered into voluntarily and the
division of the property in the mediated agreement was valid, just, and equitable.

                 "Tenille and Brandon acknowledge that each has received independent legal
        advice from their respective attorneys prior to signing this Mediated Agreement and that
        they knowingly and intentionally enter into this Mediated Agreement satisfied that it is
        fair, just and equitable; that each has made a full and complete disclosure of their
        respective property; liabilities and assets; and that neither of them has acted under duress,
        compulsion or mistake in executing this Mediated Agreement."

And:

                 "Tenille and Brandon acknowledge that this Mediated Agreement has been
        entered freely and voluntarily, with full disclosure of any and all of his or her assets and
        liabilities. Each party believes this Mediated Agreement to be fair, just and equitable to
        both parties. Each party has had the opportunity to consult with his or her attorney
        concerning the provisions of this Mediated Agreement prior to executing the Agreement.
        Tenille and Brandon acknowledge that the Mediator, Glenn D. Schiffner, is the scrivener
        of this document and has not purported to represent either party in any way. Each party
        agrees that they have entered into this Mediated Agreement upon full and mature
        consideration; that consent to this Agreement has not been obtained by fraud, duress, or
        undue influence of any person; that they have fully disclosed all assets and all debts, that
        they have read this Agreement in its entirety; and that they understand this Agreement in
        its entirety."

        After the separation agreement was filed with the district court, no further action
was taken in the divorce proceeding until the district court requested an update in July
2020.

        Thereafter, on August 27, 2020, Tenille filed a motion to incorporate the terms and
provisions of the parties' separation agreement into the court's decree of divorce. In that
motion, Tenille asked the district court to reduce Brandon's share of the IRA by

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$1,358.19 because, when she paid off the credit cards that she agreed to pay under the
agreement, the Cabela's credit card account balance was $1,358.19 more than what was
represented at mediation. She also asked the district court to order Brandon to be
responsible for the preparation of the QDRO needed to transfer the funds from her IRA to
Brandon.

       Attached to Tenille's motion were notes taken by Brandon's former counsel during
mediation and an email message from the mediator to Brandon's former counsel stating:
"[W]e left a couple of things undone." The mediator indicated that there had not been an
explicit understanding as to who would be responsible for obtaining "written
verifications" confirming Tenille was not on any of Brandon's credit card accounts nor an
indication as to which party was responsible for producing the QDRO. The mediator also
acknowledged that there was a discrepancy in the balance of the Cabela's credit card.

       Brandon obtained new counsel, and a hearing on Tenille's motion was held. At the
hearing, Brandon objected to the incorporation of the separation agreement into the
district court's divorce decree and asked that it be set aside as it was invalid,
unenforceable, and failed to make an equitable distribution of property. Specifically,
Brandon argued the separation agreement was unenforceable because there had not been
a meeting of the minds regarding the IRA and the Cabela's credit card. Brandon further
argued there was nothing in the agreement that made either party responsible for
obtaining "written verifications" needed to trigger the transfer of the IRA funds to
Brandon, nor was there a delegation of the responsibility for arranging the transfer of the
funds via a QDRO or other means. Additionally, Brandon argued there had been no
agreement about who would be responsible for the gains and losses that the account may
experience during the time between the execution of the agreement and the transfer of the
funds. At the time of the hearing in October 2020, the transfer had not yet occurred. The
district court inquired further into Brandon's argument at the hearing:

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               "THE COURT: And so what you are saying is, although there was initially an
       agreement or a possibility of a meeting of the minds, that since it wasn't agreed upon the
       timeframe, now that the account has gone up, you feel as though your client should be
       partially benefitted by that increase in value.

               [BRANDON'S COUNSEL]: Correct, Your Honor, if the agreement had been
       carried out [finally] with, you know, in February or the beginning of March, my client
       would have had that $32,500.00 into an account in his own name, and he could have
       experienced the losses and gains on that amount, and had the benefit of those gains since
       then. That did not happen, and, so, over time that account has gained we think
       significantly, and he has had no benefit from that because of the timing of this."

       Tenille countered that the separation agreement did not call for a percentage
division of the IRA; rather, it was an "absolute dollar fixed amount." She argued the
amount was agreed to regardless of when the QDRO was filed. Further, she argued any
delay in the transfer of funds was not attributable to her. Tenille asserted the triggering
mechanism for the transfer of the funds—that written verification be received from
Brandon's credit card accounts stating that Tenille was not liable for the debts—was
never performed, and even if the language was not specific as to who was to receive that
verification, the accounts in question were Brandon's accounts; so if someone other than
the account holder were to call, the credit card company would not speak with that
person. Tenille also referenced the mediator's email which suggested the mediator
adopted the same view: "I would suggest that since Tenille is not on those accounts, it is
most likely the credit card companies will not be willing to communicate with her. If that
is the case, it would appear to me that [Brandon is] going to have to assume responsibility
for that."

       After considering the parties' arguments, the district court held that the separation
agreement was fair and equitable and would be incorporated into the divorce decree. The
district judge stated, "[I]t does not surprise me that based upon the way in which the

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market has reacted over the course of the last seven months that arguments are being
made now that what was initially agreed upon or believed to be agreed upon was fair and
equitable, but now that is no longer fair and equitable." However, the district court
returned to the question of if there had been a meeting of the minds in February 2020 and
concluded there was. In doing so, the district court gave "great credence to the fact that
both counsel or both individuals had counsel" and considered that "by having counsel
that they have and presumably have spoken with their counsel and they are fully advised
as to what their legal rights, duties, and responsibilities would be."

       Subsequently, the district court entered a journal entry and decree of divorce that
incorporated the separation agreement in its entirety into the divorce decree; found the
agreement to be valid, just, and equitable; and left the parties' share of credit card
balances and the terms of the IRA allocation unchanged.

       Brandon timely appeals.

                                           ANALYSIS

       On appeal, Brandon argues that the separation agreement is invalid and
unenforceable and that the district court lacked sufficient evidence to determine the
agreement was fair, just, and equitable.

I.     IS THE SEPARATION AGREEMENT INVALID AND UNENFORCEABLE?

       Brandon advances a two-part argument that the separation agreement is invalid
and unenforceable. First, he argues there had not been a meeting of the minds concerning
the agreement because it was worded in a way to "make it impossible to trigger the
transfer" of the IRA. Second, he argues that because there was a delay in the transfer of
the funds, the agreement was not just or equitable. Notably, Brandon fails to include an

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argument in his brief concerning which party was to prepare the QRDO. Thus, we
consider that issue abandoned. See In re Marriage of Williams, 307 Kan. 960, 977, 417
P.3d 1033 (2018).

       Contract law governs mediated agreements. See James Colborn Revocable Trust
v. Hummon Corporation, 55 Kan. App. 2d 120, 124, 408 P.3d 987 (2017). We exercise
unlimited review over the interpretation and legal effect of written instruments and are
not bound by the district court's interpretation of the separation agreement. Born v. Born,
304 Kan. 542, 554, 374 P.3d 624 (2016). Yet, "[t]he determination of the existence of a
sufficient meeting of the minds to form the basis for a binding contract is one of fact to be
determined by the trier of the facts." Care Display, Inc. v. Didde-Glaser, Inc., 225 Kan.
232, Syl. ¶ 3, 589 P.2d 599 (1979).

       An agreement to form a contract in the future is generally not binding unless all
essential terms are agreed upon and nothing essential is left to future negotiations. Mohr
v. State Bank of Stanley, 244 Kan. 555, 572, 770 P.2d 466 (1989). Essential terms
include:

       "'identification of the subject matter, the price to be paid, the time of performance, or the
       work to be done. Missing terms such as price, or the time of delivery or completion, will
       be supplied where possible by an inference that a reasonable price, or delivery at a
       reasonable time was intended. However, such an inference is not possible where the offer
       or agreement attempts to cover these terms and fails to achieve intelligible certainty.'"
       PIK Civ. 4th 124.04 (2020 Supp.) Comment (quoting Simpson, Handbook on the Law of
       Contracts [2d ed.] p. 19).

       Importantly, "[t]he law favors the compromise and settlement of disputes and
when parties enter into an agreement settling and adjusting a dispute neither party is
permitted to repudiate it in the absence of fraud, bad faith or mutual mistake of fact.
[Citations omitted.]" Rymph v. Derby Oil Co., 211 Kan. 414, 418, 507 P.2d 308 (1973).

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       To refresh, the language of the separation agreement in dispute states:

               "The sum of $32,500.00 to be set apart to him from the Fidelity [Rollover] IRA
       subject of paragraph 9[A.b.] The transfer shall be done via a [Qualified Domestic
       Relations Order (QDRO)], or a simpler means if possible, without incurring fees or taxes.
       The transfer shall be made as soon as is reasonably possible after it is determined with
       certainty, with written verification from each creditor, that Tenille is not liable for any of
       the credit card indebtedness's being assumed by Brandon."

       Brandon complains there had been no meeting of the minds because the separation
agreement does not specify who is responsible for obtaining the verifications from
Brandon's credit card companies. Brandon argues that it was impossible for him to obtain
these written verifications and that such impossibility renders the agreement
unenforceable. See Sunflower Electric Co-op., Inc. v. Tomlinson Oil Co., 7 Kan. App. 2d
131, 138, 638 P.2d 963 (1981).

       We are unconvinced that it was impossible to verify these debts. Contracts must be
read with common sense in mind. In re Marriage of Nelson, 58 Kan. App. 2d 920, 925,
475 P.3d 1284 (2020) ("[C]ourts should not strain to find an ambiguity where in common
sense there is none."). A review of the record indicates that the relevant accounts were
only in Brandon's name. Common sense and logic dictate that a financial institution is
only going to discuss and disclose the details of an account with the account holder.
Tenille, not being on these accounts, was in no position to be able to execute this
condition of the separation agreement that triggered the transfer of the IRA funds.
Significantly, Brandon fails to cite to any evidence in the record that his creditors
"refused to provide" this documentation, as he asserts in his brief. Our review of the
record on appeal yields no evidence of any attempts by Brandon to procure this
information from his creditors, either successfully or unsuccessfully. As we "may
presume that a factual statement made without a reference to volume and page number
has no support in the record on appeal," Supreme Court Rule 6.02(a)(4) (2021 Kan. S. Ct.

                                                     9
R. 36), Brandon's arguments relating to a lack of the meeting of the minds concerning the
separation agreement as it relates to the written verifications of credit card debt are
unpersuasive.

       Second, we move to Brandon's argument that the delay of the transfer of the IRA
funds creates inequity in the separation agreement, making it unenforceable. We reject
this argument as well because—as we have already discussed—Brandon, not Tenille, was
the individual who could have obtained the required verification that only he was
responsible for the debt and there is no indication in the record on appeal that he
attempted to do so or that the credit card companies would not provide it to him. He
argues that such a verification is impossible to obtain because these verifications "would
be akin to the creditor writing to [Brandon] and stating that every other person in the
world is not liable for the debt because they had not agreed to be bound by that debt." But
the language of the separation agreement does not require such an assurance from the
credit card companies. It requires that "it [be] determined with certainty, with written
verification from each creditor, that Tenille is not liable for any of the credit card
[indebtednesses] being assumed by Brandon." A simple statement that Brandon is the
only account owner and the individual responsible for the account would suffice to
satisfy this condition precedent. Any delay in the transfer of the IRA funds and the
perceived inequities flowing from such delay is attributable to Brandon's delay and/or
inaction.

II.    DID SUFFICIENT EVIDENCE SUPPORT THE DISTRICT COURT'S FINDING THAT THE
       SEPARATION AGREEMENT WAS FAIR, JUST, AND EQUITABLE?

       Brandon also argues the district court lacked sufficient evidence to find the
separation agreement to be fair, just, and equitable. Without the testimony of either party,
without the benefit of domestic relations affidavits, and with only "the allowance of a few
minutes of argument about the fairness of the agreement from counsel," Brandon reasons

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the district court lacked sufficient evidence to determine that the agreement was fair, just,
and equitable.

               "When a separation agreement is submitted for court approval, the trial judge is
       given broad discretion to determine its fairness. Kirk, 24 Kan. App. 2d at 35-36. Thus, we
       review the fairness decision for abuse of discretion. If reasonable people could disagree
       about the appropriateness of the trial court's decision, then no abuse of discretion has
       occurred. In re Marriage of Bradley, 282 Kan. 1, 7, 137 P.3d 1030 (2006)." In re
       Marriage of Takusagawa, 38 Kan. App. 2d 401, 406, 166 P.3d 440 (2007).

       K.S.A. 2020 Supp. 23-2712(a) provides: "If the parties have entered into a
separation agreement which the court finds to be valid, just and equitable, the agreement
shall be incorporated in the decree." Given the mandate of this statute and its
predecessors, "separation agreements have always been subject to the scrutiny of the
courts to prevent fraud and oppression." Spaulding v. Spaulding, 221 Kan. 574, 577, 561
P.2d 420 (1977).

       Tenille argues that because the parties agreed to the deal and the separation
agreement contains language that the parties consider the agreement to be just and
equitable, the district court need not review more evidence than the agreement. But "mere
agreement by the parties does not vitiate the court's duty to scrutinize the settlement
agreement, and if the agreement is not valid, just and equitable, the court should reject or
alter it." Cook v. Cook, 7 Kan. App. 2d 179, 184, 638 P.2d 980, rev'd on other grounds by
231 Kan. 391, 646 P.2d 464 (1982).

       When conducting such an independent inquiry into the fairness of any separation
agreement, our court has emphasized the need for sufficient evidence in the record to
support the district court's evaluation. In re Marriage of Kirk, 24 Kan. App. 2d 31, Syl.
¶ 1, 941 P.2d 385 (1997). In Kirk, the required domestic relations affidavits, which were
purportedly filed in the district court, were not included in the record on appeal, and there

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was no evidence presented for the value of the husband's and wife's separate businesses.
Additionally, no property values were listed in the separation and property settlement
agreement. The panel discussed the importance of property values being supplied to the
district court in some manner so the district court could adequately review the settlement
for fairness:

                "The importance of property values in scrutinizing a separation agreement is
       emphasized in 1 Elrod, Kansas Family Law Handbook § 11.074D (rev. ed.1990), which
       recommends that property values be set forth in the separation agreement: 'Each major
       piece of property, i.e., realty, automobiles, etc., should be listed with its value and which
       party is to receive the property. The court reviewing the agreement cannot determine if it
       is just and equitable without knowing the value of the property.'

                "The importance of property values to the district court is also highlighted by two
       Supreme Court rules which require that the parties to a divorce action supply the district
       court with pertinent property value information. Rule 164 (1996 Kan. Ct. R. Annot. 172)
       requires that a Domestic Relations Affidavit be filed in divorce, annulment, and separate
       maintenance cases. Rule 139 (1996 Kan. Ct. R. Annot. 160) also requires the Domestic
       Relations Affidavit in the context of requests for support orders, and provides that '[n]o
       ex parte order for support will be issued without this required affidavit.' The prescribed
       form for the Domestic Relations Affidavit includes sections for detailing the parties'
       liquid assets, real property, and all other personal property with actual or estimated value
       included. See In re Estate of Loughmiller, 229 Kan. 584, 591, 629 P.2d 156 (1981)."
       Kirk, 24 Kan. App. 2d at 33.

       The panel ultimately refused to uphold the district court's approval of the parties'
separation agreement based principally on the parties' assent and held that it was an abuse
of discretion for the district court to find the separation agreement to be just and equitable
without more because there was no evidence in the record to support such a finding. 24
Kan. App. 3d at 35-36; see also Takusagawa, 38 Kan. App. 2d at 406 (parties' submission
of domestic relations affidavits containing income information and property values
sufficient for district court to conduct inquiry into fairness of agreement).

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       Here, like in Kirk, neither party submitted a domestic relations affidavit to the
district court and neither party testified before the district court regarding their assets and
liabilities. Moreover, the parties' separation agreement lacks property values for all the
major pieces of property. For example, under the property awarded to Tenille, there is no
value listed for the 2008 Hummer H3 and no total value of her retirement accounts (both
the IRA at issue herein and her "AUL Retirement Plan"). Under the property awarded to
Brandon, there is no value listed for the marital residence or for the numerous vehicles
awarded to him (1970 Chevrolet truck, 2003 Jeep Commando, 2009 Chevrolet Silverado,
1954 Chevrolet Coupe, and "[a]ll antique vehicles"). Brandon was also awarded three
boats, and no property value is listed for those. The separation agreement does, however,
provide specific values for the debts each party is to assume.

       Given the lack of evidence concerning the parties' financial situations and the
values of the property being divided, we are compelled to hold that the district court's
finding that the separation agreement was fair, just, and equitable lacked sufficient
evidence and was, therefore, an abuse of discretion. The parties' mere agreement and
assertion that the separation agreement was fair, just, and equitable, even with the
assistance of counsel, was not enough in the absence of testimony from the parties,
domestic relations affidavits, or the listing of the values of the property to be divided in
the separation agreement itself. The district court erred by incorporating the separation
agreement into the divorce decree. See K.S.A. 2020 Supp. 23-2712(a).

       However, our holding should not be construed to indicate that the parties'
separation agreement cannot be found to be fair, just, and equitable. Given that we have
upheld the district court's finding that the separation agreement is a valid contract, if the
district court is supplied with sufficient evidence on remand to allow it to properly
evaluate the fairness of the agreement, then it may be incorporated into the divorce
decree as provided by K.S.A. 2020 Supp. 23-2712(a).

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       The district court's finding that the separation agreement is a valid contract is
affirmed, but its finding that this same agreement is just and equitable is reversed for
insufficient evidence. The case is remanded so the district court may be presented with
sufficient evidence to determine the fairness of the separation agreement.

       Affirmed in part, reversed in part, and remanded with directions.

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