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noting that trial court has discretion to reject settlement agreement before it becomes judgment of court
Summary of this case from Pouech v. PouechOpinion
S03G0915.
DECIDED MARCH 22, 2004.
Certiorari to the Court of Appeals of Georgia — 259 Ga. App. 751.
James G. Killough, for appellants.
Martin L. Fierman, for appellee.
The appellee, Sandra Guthrie, and the decedent, Dallas Guthrie, were married in February 1998. Ms. Guthrie initiated divorce proceedings in April of 2000, and the parties participated in mediation ordered by the trial court. As a result of the mediation, the Guthries executed a settlement agreement, signed by the parties and their attorneys. Before the divorce court's consideration of the agreement, Dallas obtained new counsel, renounced the agreement, and moved to set it aside. Dallas died before the divorce court had an opportunity to rule on the agreement or enter a decree of divorce. Thereafter, on motion by Dallas's attorney, the unadjudicated divorce proceeding was dismissed.
See Segars v. Brooks, 248 Ga. 427 (1) ( 284 S.E.2d 13) (1981) (an unresolved claim for divorce is purely personal and abates upon death).
The executors of Dallas's estate admitted his will to probate in Fulton County. Ms. Guthrie, in turn, brought the instant action in Fulton Superior Court to enforce the mediated settlement agreement. The executors answered, asserting that the agreement was unenforceable due to lack of consideration and thereafter filed a motion for summary judgment. In granting summary judgment to the executors, the trial court pronounced that it was acting in the nature of a divorce court in reviewing the settlement agreement and, relying upon Mathes v. Mathes and other cases, the trial court exercised its discretion to reject the agreement and to grant summary judgment to the executors. The Court of Appeals disagreed and in Guthrie v. Guthrie, reversed the trial court, finding that the court was only authorized to treat the matter before it as a contractual dispute, not a divorce case, and that it was error to summarily reject an otherwise valid contract because it arose out of a divorce proceeding. The Court of Appeals further determined that jury issues remained on the disputed issues of the decedent's mental capacity to enter into the contract and whether the contract was rescinded when appellee sought to have the settlement agreement set aside in order to obtain year's support and temporary alimony.
267 Ga. 845 ( 483 S.E.2d 573) (1997).
259 Ga. App. 751 ( 577 S.E.2d 832) (2003).
We granted the executors' petition for writ of certiorari to determine whether an agreement made between a husband and wife to settle issues in a pending divorce action can be enforced when a party to the agreement dies before the agreement has been approved by, or made a judgment of, the trial court. For the reasons that follow, we affirm.
1. The trial court erroneously determined that even though the divorce proceeding had abated, the settlement agreement was subject to the same review that applies in a pending divorce action. When a trial court is presented with a settlement agreement in a divorce proceeding, the divorce court may exercise its discretion in deciding whether to make any or part of the settlement agreement between the parties a part of the final decree. Thus, similar to any pending proceeding, a trial court involved in the resolution of a divorce case may exercise the discretion it has over its "`judgments, orders and decrees during the term at which they are rendered. . . .' [Cit.]" The question of whether a settlement agreement made between spouses in a divorce case should be approved and incorporated into the parties' decree of divorce remains within the discretion of the trial judge. This discretionary power can only be exercised at the time the divorce decree is entered or during the term of court at which the decree incorporating the agreement was rendered.
Vereen v. Vereen, 226 Ga. 500 (2) ( 175 S.E.2d 865) (1970).
Carswell v. Shannon, 209 Ga. 596, 598 (2) ( 74 S.E.2d 850) (1953). See Amos v. Amos, 212 Ga. 670 (1) ( 95 S.E.2d 5) (1956).
For example, the trial court can exercise its discretion to refuse to approve the agreement where the agreement was procured by fraud or duress. Williams v. Williams, 243 Ga. 6 (2) ( 252 S.E.2d 404) (1979).
Vereen v. Vereen, 226 Ga. at 501.
Barrett v. Manus, 219 Ga. 693 ( 135 S.E.2d 430) (1964).
Whereas in pending divorce cases the settlement agreement ultimately becomes the "judgment of the divorce court itself," and is thus subject to a trial court's "discretion to approve or reject the agreement, in whole or in part, [cit.]," the interpretation of a settlement agreement that a party seeks to enforce outside of the parameters of the divorce proceeding is strictly governed by the rules of contract construction. Moreover, Eickhoff v. Eickhoff and Brown v. Farkas were cases in which the parties entered into a settlement agreement during the pendency of divorce proceedings, did not present the agreement to the trial court for approval, and the agreements were not incorporated into the final judgments of divorce. Despite the lack of review and approval by the divorce court, this Court enforced the contracts, which did not conflict with the final judgments, under the ordinary rules of contract construction. In addition, we have held that the enforceability of a settlement agreement disposing of property upon marital separation does not turn on whether both parties to the contract survive or on whether a final judgment of divorce is entered.
Bridges v. Bridges, 256 Ga. 348, 350 (1) ( 349 S.E.2d 172) (1986).
See Kreimer v. Kreimer, 274 Ga. 359 (1) ( 552 S.E.2d 826) (2001); Edelkind v. Boudreaux, 271 Ga. 314 (2) ( 519 S.E.2d 442) (1999); Brown v. Farkas, 195 Ga. 653-654 (25 S.E.2d 411) (1943). See also Eickhoff v. Eickhoff, 263 Ga. 498 ( 435 S.E.2d 914) (1993), overruled on other grounds, Lee v. Green Land Co., 272 Ga. 107, 108 ( 527 S.E.2d 204) (2000) (recognizing enforceability of judicially unsupervised contracts that resolve issues arising out of the dissolution of the marriage contract).
See Eickhoff, 263 Ga. at 499-505; Brown, 195 Ga. at 653-654.
See, e.g., Simpson v. King, 259 Ga. 420 (3) ( 383 S.E.2d 120) (1989).
For the foregoing reasons, we agree with the Court of Appeals that the trial court should have evaluated the parties' agreement under the ordinary rules of contract construction and thus erred by evaluating the agreement under the rules that control when a trial court is determining whether to incorporate a settlement agreement into its final judgment of divorce.
2. The executors contend that the agreement was expressly contingent upon a decree of divorce being entered and approval by the court of the agreement. We disagree with this contention. To begin, the question whether the agreement was dependent upon the occurrence of these contingencies is controlled by the intent of the parties. In this regard, "[w]e look first to the language employed in the agreement to determine the intent of the parties. If the language is plain and unambiguous and the intent may be clearly gathered therefrom, we need look no further."
See Cousins v. Cousins, 253 Ga. 30, 31 ( 315 S.E.2d 420) (1984); Carlos v. Lane, 275 Ga. 674, 675 ( 571 S.E.2d 736) (2002). See Annotation, Separation Agreements: Enforceability of Provision Affecting Property Rights Upon Death of One Party Prior to Final Judgment of Divorce, 67 ALR4th 237 (1989).
Carlos, 275 Ga. at 675. See Annotation, 67 ALR4th 237.
Examining the language of the agreement in this case, we conclude that the parties clearly did not intend for the agreement to be contingent upon the approval of the agreement by the trial court and the granting of a final judgment of divorce. The agreement was executed on May 31, 2000, and its provisions were to begin taking effect either immediately or shortly after that date. For example, the agreement provided that on July 1, 2000, one month from the date the agreement was executed, the husband had to pay the wife $100,000; that on June 1, 2000, one day after the agreement was executed, the husband had to begin paying the wife $2,000 per month for 24 months; that these payments "[were] not subject to any contingency"; that on or before July 1, 2000, the husband had to pay the wife $5,000 for her attorney fees; and that within 30 days from the date the agreement was executed, the parties had to execute all the numerous documents that were necessary to pay loans, transfer property titles, and "effectuate this agreement." In sum, these provisions demonstrate that the parties intended for the agreement to be effective immediately and not contingent upon the granting of a divorce and the approval of the agreement by the trial court.
For the foregoing reasons, we hold that the Court of Appeals was correct in determining that the agreement could be enforced even where one of the parties died before the entry of a judgment of divorce.
Judgment affirmed. All the Justices concur.