Court Opinion

ID: 6945082
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:22:04.527013+00
Date Added: 2024-06-11T16:07:52.592735
License: Public Domain

EDMONDS, J.,
concurring in part, dissenting in part.
I agree with the majority opinion in all respects except with its holding that the parties’ agreement that accrued spousal support can be retroactively modified to December 1, 2000, conflicts with ORS 107.135(6) and therefore is unenforceable.
ORS 107.135(6) provides, in pertinent part,
“[T]he court does not have the power to set aside, alter or modify such decree, or any portion thereof, that provides for any payment of money, either for minor children or the support of a party, that has accrued prior to the filing of such motion.”
The parties’ agreement provides that
“[i]f Husband fails to obtain employment within six months of May 1, 2000, he shall have the right to seek modification * * * with any such modification taking effect the seventh month from May 1, 2000.”
*751Husband filed his motion to modify his support obligation on March 28, 2001. Husband argues, based on the above provision in his agreement with wife, that he is.entitled to a retroactive modification of accrued support obligations to December 1, 2000, even though the court lacks authority under ORS 107.135(6) to make such a modification on its own.
Husband’s argument is correct. At stake in this case is the public policy that persons shall have the utmost liberty of contracting and that their contracts, when entered into freely and voluntarily, are enforceable by courts absent circumstances that make such agreements unfair or illegal. The parties’ agreement does not conflict with the court’s statutory authority, nor does it contravene some other overriding public policy, as will be amplified more fully below. Therefore, the majority errs when it holds that the parties’ agreement is unenforceable.
Some background is helpful in understanding why the parties’ agreement does not conflict with the authority of the court under ORS 107.135(6). In Feves v. Feves, 198 Or 151, 159, 254 P2d 694 (1953), the Supreme Court addressed for the first time in this state’s jurisprudence the issue of when a private agreement between parties involved in a dissolution of marriage proceeding will be deemed enforceable, even though it makes modification of a prior support award easier than the statutory authority of the court would otherwise allow. In that case, the parties’ marriage was dissolved in 1940. The judgment provided for indefinite spousal support of $35 per month to the wife. In 1948, the parties entered into a new agreement. With regard to the agreement, the court observed that
“it was entered into by parties who were dealing at arms length; both were sui juris. Each was represented by able counsel. There was not the slightest taint of fraud, misrepresentation, or unfairness on the part of either party in connection with the making of the contract. Both dealt with their eyes open.”
Feves, 198 Or at 159.
*752In their new agreement, the parties in Feves agreed that the provisions of the judgment would be modified in several particulars, including the deletion of the spousal support award in consideration of a cash settlement. The agreement was not presented to the court for approval. In 1951, the plaintiff sought a modification of the original judgment, seeking an increase in spousal support to $200 per month. The defendant husband asked that the 1948 agreement be enforced. The trial court modified the award of spousal support to $100 per month, and the defendant appealed.
The court began its analysis in Feves by applying a rule of law previously applied in cases involving contracts in restraint of trade:
“It is axiomatic that public policy requires that persons of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice; and it is only when some other overpowering rule of public policy intervenes, rendering such agreements unfair or illegal, that they will not be enforced.”
198 Or at 159. The court first observed that, in view of the public policy underlying the authority of courts to award spousal support when needed, an agreement nullifying an award of spousal support was subject to the approval of the court before it could be binding on the parties. Because the Feves’ agreement was not presented to the trial court for approval, the Supreme Court held that it did not become binding, even though it had been completely executed in 1948. It then considered what effect should be given to the agreement with regard to the plaintiff’s motion for modification of the spousal support award, and it concluded that, inasmuch as the agreement was fair, was based on consideration, and had been completely executed, it should have been approved by the trial court. The court concluded that the award of spousal support in the original judgment should have been terminated by the trial court.
The issue of when a private agreement will usurp the statutory authority of the court arose next in McDonnal and McDonnal, 293 Or 772, 652 P2d 1247 (1982). In that *753case, the parties entered into a marital settlement agreement at the time of dissolution that provided for three years of spousal support and that the award “may be reviewed by the court at the expiration of three years.” McDonnal, 293 Or at 775. At the end of the three years, the wife filed a motion to continue and to increase spousal support. The Supreme Court acknowledged that there was not sufficient evidence of a substantial change of circumstances as required by statute to authorize a court to extend the duration of support. However, it held the parties’ agreement enforceable. It explained,
“The parties’ own resolution of their dispute should be accorded great weight. In all cases of dissolution the court exercises fall equity powers. ORS 107.405. Where parties have foregone their opportunity to litigate disputes and have chosen instead to enter into an agreement their reliance on the ágreement can be presumed. Inequity may result if this court adopts a policy of less than full enforcement of mutually agreed upon property and support agreements.”
Id. at 779 (emphasis added). It also cautioned,
“We do not suggest that a property settlement providing for spousal support may go so far as to preclude the court’s statutory power to modify support even where changed circumstances exist. * * * However, short of conflict with the statutory powers of the court we recognize the court’s responsibility to discover and give effect to the intent of the parties as reflected in the incorporated settlement agreement.”

Id.

In a series of cases following McDonnal, we have applied the above principles to varying circumstances. In Pope and Pope, 73 Or App 242, 698 P2d 518 (1985), aff'd, 301 Or 42, 718 P2d 735 (1986), we upheld an agreement by the husband to pay spousal support under circumstances in which it could not have been ordered under ORS 107.135. We stated that the statutory authority of the court to terminate spousal support upon remarriage “must be balanced against the strong public policy of enforcing such agreements [.]” Id. at 248. In Porter and Porter, 100 Or App 401, 786 P2d 740, rev den, 310 Or 281 (1990), we upheld the validity of an *754agreement, even though the agreement was in contravention of ORS 107.135, that the husband would pay a nominal amount of spousal support indefinitely and that the amount and duration of support would remain subject to the further order of the court. A trial court would have had no authority to make such an award. Nonetheless, we explained, “Courts should enforce, not disturb, negotiated, settlement agreements, unless there is an overriding public policy reason for not doing so.” Porter, 100 Or App at 404.
In Hearn and Hearn, 128 Or App 259, 875 P2d 508 (1994), the parties, in a stipulated judgment of dissolution, provided that the court would retain jurisdiction over an award of spousal support for at least 45 months, at which point it could consider the amount and duration of support anew, based on the circumstances existing at the time. Again, no authority existed for a trial court to make such an award on its own. After referring to McDonnal, Pope, and Porter, we concluded,
“We find no principled basis on which to distinguish the foregoing authorities. They instruct that negotiated agreements as to the amount and duration of spousal support should be enforced, unless they deprive the court of its statutory authority or contravene some other overriding public policy. In this case, the parties unambiguously intended that the trial court retain the authority to modify spousal support without either of the parties being required to demonstrate a substantial change in circumstances. That bargained-for stipulation does not deprive the court of any statutory authority; nor does it contravene any overriding public policy of which we are aware. Accordingly, we find the parties’ agreement enforceable.”
Hearn, 128 Or App at 265-66.
Finally, in Eidlin and Eidlin, 140 Or App 479, 916 P2d 338 (1996), the parties stipulated that a change in circumstances justifying a modification of spousal support awarded to the wife would be deemed to have occurred if the husband obtained permanent employment and if the employment would have supported a different award, had the husband been so employed at the time of the dissolution. Relying on the above authorities, we said,
*755“Even assuming, that the parties’ stipulation provides a more permissive basis for seeking modification than does the statute, that alone does not require that the stipulation be disregarded. * * * [I]n the absence of adverse public policy considerations, parties can make it easier to obtain a modification by agreeing to additional grounds therefore but their stipulations cannot remove the court’s authority to modify a spousal support award on the bases that are articulated in ORS 107.135. Although a court is not required to accept parties’ stipulated agreements as to what will constitute a change of circumstances, the trial court’s decision to do so here was proper because the agreement is neither unfair nor does it ‘conflict with the statutory powers of the court.’ * * * The court did not err in giving effect to ‘the intent of the parties as reflected in [their] incorporated settlement agreement.’ ”
Id. at 483-84 (emphasis in original; citations omitted).1
Under the above authorities, the test in this case regarding the enforceability of the parties’ agreement is twofold. Does the parties’ agreement to retroactively satisfy husband’s support obligation as of December 1, 2000, conflict with the court’s statutory authority under ORS 107.135(6), or does it contravene any overriding public policy? The majority does not contend that the parties’ agreement violates any public policy. Rather, it reasons that parties may not by agreement confer authority on a court that it does not have. It follows from that premise, according to the majority, that “regardless of the parties’ agreement, it is the court that must enforce that agreement and, in doing so, it cannot exceed its statutory authority.” 187 Or App at 745 (emphasis omitted). The majority’s reasoning is wrong because it interprets the scope of ORS 107.135(6) too broadly and inconsistently with the above case law.
ORS 107.135(6) is part of a statutory scheme that, in part, authorizes trial courts to modify spousal support provisions in dissolution of marriage judgments based on a change *756of circumstances occurring after the entry of a prior judgment. Specifically, ORS 107.135(1) provides that a court “may at any time after a decree of * * * dissolution of marriage * * * (a) [s]et aside, alter or modify so much of the decree as may provide for * * * the support of a party [.]” ORS 107.135(2) and (3) specify what a change of circumstances may include that will support the modification of a prior judgment. ORS 107.135(5) and (6) refer to the scope of relief available under the grant of authority in the preceding statutes. All of the statutes must be read together to give effect to all. ORS 174.010. Subsection (5) authorizes the court to order modification of spousal support as of the date the motion for modification was filed or any date thereafter. While subsection (5) authorizes generally the retroactive modification of accrued judgments “because of a change of circumstances [,]” subsection (6) provides limitations on and exceptions to that grant of authority. The first phrase of the first sentence of the section establishes that support obligation installments that become due constitute final judgments. The second phrase of the first sentence provides that “the court does not have the power to set aside, alter or modify such decree, or any portion thereof * * * that has accrued prior to the filing of such motion.” (Emphasis added.) The language “[s]et aside, alter or modify” tracks with the language of ORS 107.135(1). The words “such motion” refer to a motion filed pursuant to subsection (1) of the statute. Paragraphs (6)(a) and (b) provide for exceptions to the prohibition that subsection (6) places on the court regarding the setting aside, altering or modifying of support judgments. In effect, when the subsections are read together, they authorize the court to set aside, alter, or modify accrued support judgments, but that authority is limited to those judgments that “accrued prior to the filing of such motion.”
Significantly, subsections (5) and (6) of ORS 107.135 do not expressly or directly address the subject of enforceability of marital settlement agreements that have the effect of modifying accrued support judgments. Rather, they speak to the court’s exercise of its statutory power to satisfy or modify a judgment of record based on the grant of authority to courts when a change of circumstances occurs after the judgment is entered. The enforcement of a marital settlement agreement *757is a conceptually different exercise of the court’s authority from the exercise of authority based on a change of circumstances. Such enforcement finds its source not in ORS 107.135, but in the statutory power of the court to “approve an agreement for the entry of an order for the support of a party” under ORS 107.105(d). See also McDonnal, 293 Or at 777-78. In light of this conceptual difference, the question then becomes whether the legislature intended ORS 107.135(6) to operate in such a way as to prevent specific performance of marital settlement agreements authorized by ORS 107.105(d).
The answer to that question is found in other statutes and the case law that preceded the enactment of those statutes. The context of a statute “may include other provisions of the same statute and related statutes.” Gladhart v. Oregon Vineyard Supply Co., 332 Or 226, 230-31, 26 P3d 817 (2001). ORS 107.135(12)(a) provides, in part, that “[i]t is the policy of this state * * * [tjo encourage the settlement of cases brought under this section.” ORS 107.135(12)(a)(B) provides, pursuant to that policy, that courts are to enforce the terms of settlement agreements “to the fullest extent possible, except when to do so would violate the law or would clearly contravene public policy.” An identical mandate expressing the legislature’s intention appears in ORS 107.104(1) regarding the enforceability of marital settlement agreements. Thus, when ORS 107.135(6) is read in context with ORS 107.135(12)(a) and ORS 107.104(1), it becomes apparent that the legislature intended that courts have authority to provide specific enforcement of marital settlement agreements “to the fullest extent possible!.]” In this case, it is contrary to the legislature’s stated policy to deny specific performance of the parties’ agreement unless it can be said that the agreement violates the law or clearly contravenes public policy.
As pointed out before, there is no assertion by the majority that the parties’ agreement “clearly contravenes public policy [,]” and for good reason, as will become apparent below. Generally, when a contract will be deemed “illegal” is well-defined by this state’s case law. In Hendrix v. McKee, 281 Or 123, 128, 575 P2d 134 (1978), the court observed,
*758“It is often stated that courts will not enforce ‘illegal’ contracts. This is an oversimplification of a legal principle, the application of which often involves construction of statutes and contractual provisions, delineation and balancing of public policies, and a difficult sorting and sifting process.
“If the consideration for the contract or its agreed purpose is illegal or against public policy on its face, it will not be enforced. If the contract on its face is not illegal or against public policy, as in the present case, the defendant assumes the burden of alleging and proving its illegality.”
(Citation omitted.) Here, the parties’ agreement that accrued spousal support will be satisfied retroactively in the event of the occurrence of a condition subsequent is not illegal on its face. Its consideration, the mutual promises made by the parties, is lawful, and its purpose, the satisfaction of accrued spousal support judgments, is neither illegal nor against public policy. The state has no interest in the spousal support obligations or the manner in which the parties agree they can be satisfied. Moreover, there is no conceivable violation of public policy if the parties’ agreement is enforced. As the court pointed out in Hendrix, the counterweight to the public policy of freedom to contract is the public policy rule against enforcement of illegal contracts. Relief is denied on the basis of the public policy against enforcement of illegal contracts because a court will not aid a wrongdoer. N. W. Amusement Co. v. Aetna Co., 165 Or 284, 288-89, 107 P2d 110 (1940). Husband is not a wrongdoer; he simply seeks the benefit of the bargain that he and wife voluntarily entered into, a bargain about which it cannot be said that it “violates the law.”2
Several other comments are germane in response to the majority’s position. The majority asserts that the above-cited cases “upheld agreements that dispensed with the change of circumstances requirement, which * * * began as a *759‘rule of case law, not statutory law.’ ” 187 Or App at 747. The majority’s statement is only partially correct. The phrase “change of circumstances” first appeared in ORS 107.135 in 1983 when the legislature undertook for the first time to define what could constitute a “change of circumstances.” See Or Laws 1983, ch 728, § 3. A number of the above-cited cases were decided after that date. Moreover, the import of the majority’s proposed distinction is not readily apparent. The “change of circumstances” rule was well-established at the time and had as much force of law as a statute when the Supreme Court decided McDonnal. The McDonnal court expressly distinguished between the enforcement of provisions in agreements, which “[a] court should never on its own provide for[,]” 293 Or at 786, and unenforceable agreements that “go so far as to preclude the court’s statutory power to modify support even where changed circumstances exist [,]” id. at 779. That distinction applies here. Husband seeks enforcement of a provision that the court did not have the authority to provide for on its own, but the agreement’s terms do not preclude the court’s exercise of its own power under ORS 107.135(6).
Also, this court has previously rejected the rationale advanced by the' majority, albeit in a different factual context. In Porter, the majority held enforceable a marital settlement agreement that awarded the wife the sum of $1 per month in spousal support. Under the provisions of ORS chapter 107, the trial court had no authority to award a token amount of support for the sole purpose of reserving to the court in the future the power to modify the award under ORS 107.135. The dissent complained that “[t]he majority would allow the parties to. do by agreement what a court could not do on its own.” Potter, 100 Or App at 407 (Edmonds, J., dissenting, joined by Joseph, Richardson, and Graber, JJ.). Rejecting the dissent’s argument, the Porter majority followed the rule of Pope, which in turn had relied on McDonnal, for the proposition that the change of circumstances requirement is inapplicable when the parties specifically provide to the contrary in a negotiated settlement agreement. Porter, 100 Or App at 405.
The reason that the agreements in McDonnal, Pope, Porter, Hearn, Eidlin, and this case are enforceable is further *760illustrated by their effect in contrast to the effect of the agreement in Heinonen and Heinonen, 171 Or App 37, 14 P3d 96 (2000), relied on by the majority. In that case, the parties’ stipulation operated to take away the court’s statutory authority by delegating the authority of the court to modify parenting time to a nonjudicial designee. The effect of the agreement in Heinonen is reminiscent of the example given by the Supreme Court in McDonnal of an agreement that precludes the exercise by the court of its statutory power to modify support even where changed circumstances exist.
Here, the court is not deprived of any statutory authority by the parties’ agreement to satisfy accrued support obligations. The thrust of the majority’s argument is that the parties by their agreement may not confer authority on a court that it does not have. But that assertion misses the point. The trial court had the authority to approve the parties’ agreement under the applicable statutes and case law at the time of the stipulated judgment,3 and absent a direct “conflict” with the provisions of ORS 107.135(6), nothing prevents the subsequent enforcement of its terms. The legislature by enacting of ORS 107.104(1) and ORS 107.135(12)(a) in 2001, has made explicit what has always been implicit in all of the cases mentioned above. As we held in Hearn, short of the kind of conflict with the statutory powers of the court that detracts, deprives, or precludes the exercise of authority by the court, it is the responsibility of the court to give effect to the intent of the parties as reflected in their marital settlement agreement. Marital settlement agreements that provide for otherwise lawful terms that would exceed the court’s authority if it were to order them on its own are enforceable as between the parties unless they take away the statutory power of the court. It follows that because the parties’ agreement does not have any of those prohibited effects, it must be held enforceable in accordance with the intent of the legislature and the policy of freedom to contract.
For the above reasons, I dissent from the majority’s decision to reduce spousal support effective April 1, 2001.1 *761would give efficacy to the parties’ agreement to reduce spousal support effective December 1, 2000.
Deits, C. J., and Linder, J., join in this opinion.

 See also Barron and Barron, 85 Or App 278, 283, 736 P2d 583 (1987) (holding that a written settlement agreement incorporated into a dissolution judgment authorizing a court to modify spousal support without a demonstration of a substantial change in circumstances is enforceable).

 If the majority means to say that the parties’ marital settlement agreement ‘Violates the law” because it confers power on the court beyond that granted by ORS 107.135(6), then it is unclear why that is the case. The agreement itself is not illegal, and ORS 107.135(6) contains no prohibition against the making of a marital settlement agreement that provides for the retroactive satisfaction of accrued judgments. In fact, the power of the court under the statute to order satisfaction of accrued judgments suggests that an agreement to that effect would also be legal. Rather, the only question is whether the parties’ agreement contravenes ORS 107.135(6) to the extent that it is unenforceable as between the parties.

 Oregon Laws 2001, chapter 203, sections 1 and 4 became effective May 25, 2001. The stipulated judgment of dissolution of marriage was entered July 19, 2000, and the judgment modifying the prior judgment is dated November 29,2001.