Opinion
Case No. 2:99-CV-133.
Dated: November 15, 1999.
MEMORANDUM OPINION AFFIRMING BANKRUPTCY COURT ORDER
This is an appeal from a bankruptcy court ruling interpreting a Stipulation and Order Settling Adversary Proceeding. The stipulated order was to have settled an adversary proceeding, but disagreement over the meaning of its terms necessitated the bankruptcy court's interpretation. When interpreting an order, the most important determinant is the intention of the issuing court. If an order is ambiguous, the court should adopt the meaning most reasonable in light of the facts and law of the case. Here, the judge interpreting the order is the judge who issued it and is in the best position to interpret what was intended by its language. Upon examination of the record, the Court finds the interpretation rendered by the bankruptcy court is reasonable, and the judgment of that court will therefore be affirmed.
A
The parties were divorced in 1993 and the marital settlement agreement required appellant Michael Zevitz to pay the total monthly mortgage on the former marital home, including principal, interest, taxes, and insurance, until the mortgage was paid in full. When appellant filed a Chapter 7 bankruptcy petition and attempted to discharge his obligation to pay the mortgage, appellee Linda M. Zevitz initiated an adversary proceeding. Just before trial, the parties reached a settlement agreement, resulting in the subject stipulated order ("stipulation"). Pursuant to the stipulation, the parties were ordered to apply for a new mortgage to refinance the old with the understanding that "[o]ne-half of that amount will be the responsibility of the Debtor/Defendant plus statutory interest payable to Plaintiff."
Appellant argues this obligation includes only payment of the principal and interest. He argues that the new mortgage paid off the old mortgage, for which he was fully responsible, in full, and that therefore the terms of the marital settlement obligation, requiring payment of taxes and insurance, do not apply under the stipulation. Appellee contends the stipulation should be construed to include the same terms as the marital settlement obligation principal, interest, taxes, insurance — but providing for division equally between the parties, rather than requiring payment solely by appellant.
The bankruptcy court concluded the stipulated order requires appellant "to pay one-half the new mortgage, or its replacement, on the former marital home, includ[ing] any and all requirements of the mortgage company, which requirements may include, but is [sic] not necessarily limited to, principal, interest, insurance, and taxes."
B
Appellant argues the language of the stipulation is clear and unambiguous and, as such, may not be interpreted by the Court. Interestingly, appellee also argues the language of the stipulation is clear and unambiguous, but that it requires a different result. The bankruptcy court made no finding on the record as to ambiguity of the language, but simply found for appellee.
In construing a court order, the most important factor in determining the meaning is the intention of the judge who entered the order. In re Doty, 129 B.R. 571, S88 (Bankr.N.D.Ind. 1991). Where the order which the court is interpreting is its own, that interpretation is entitled to great deference. Kendrick v. Bland, 931 F.2d 421, 423 (6th Cir. 1991); Schering Corp. v. Illinois Antibiotics Co., 62 F.3d 903, 908 (7th Cir. 1995). Such a ruling will not be reversed unless the record clearly shows an abuse of discretion, for the lower court is obviously in the best position to interpret its own order. In re Buckhead Am. Corp., 180 B.R. 83 (D.Del. 1995).
Such deference is certainly appropriate in the present case. The judge who interpreted the order is the same judge who issued it. Bankruptcy Judge Jo Ann C. Stevenson was familiar with the history of the case and with the parties' settlement. Just over six months had passed between the stipulated order and the interpretation of it. There is no support for appellant's argument that the judge's interpretation of her earlier order represents an abuse of discretion.
Moreover, "since consent decrees and orders have many of the attributes of ordinary contracts, they should be construed basically as contracts." United States v. ITT Continental Baking Co., 420 U.S. 223, 236 (1975) Under contract law, old terms that are inconsistent with a subsequent modification are deemed to be replaced while old terms that are consistent remain in effect. Johnson v. Mosley, 179 F.2d 573, 580 (8th Cir. 1950) The marital settlement agreement contained many more provisions than just the house payment, while the stipulation deals only with the house payment. It was not intended to replace the original agreement, but merely modify it. The stipulation specifically refers to the mortgage payment of the marital settlement agreement as including principal, interest, taxes, and insurance, and then goes on to require appellant to pay one-half the refinanced mortgage. It does not expressly define this amount as including only principal and interest any more than it expressly defines the amount as also including taxes and insurance. It is silent as to what is included in a mortgage payment under the new agreement.
Inasmuch as the terms of the modification relating to the mortgage obligation are not definitionally inconsistent with the terms of the parties' original agreement, the old terms are properly deemed to remain in effect.
Accordingly, the interpretation the bankruptcy judge gave the phrase "one-half of that amount" is eminently reasonable under the facts and law of this case. Nothing presented to the Court indicates an abuse of discretion. The judgment of the bankruptcy court will therefore be affirmed. A judgment consistent with this memorandum opinion shall issue forthwith.