Monday, February 22, 2010

Indiana Agreements - Modifying Spousal Maintenance

Indiana has no alimony. What we have is spousal maintenance - and the General Assembly has limited when the courts can grant spousal maintenance (see my article here for more of an explanation). However, the parties can agree to what the courts cannot grant. What then if the parties agree to something - such as maintenance - which needs modification later, then what can the courts do?

That question gets answered by the Indiana Supreme Court in Voigt v. Voigt, 670 NE 2d 1271 (1996).

In addition to this legitimate concern for vexatious litigation, we believe modification of maintenance agreements approaches the limits of a court's statutory authority. As we have explained, the legislature intended to place severe restrictions on the power of courts to impose maintenance obligations. We have also noted that courts should exercise their authority to review settlement agreements with great restraint. Finally, it is obvious that a disgruntled former spouse should not be permitted to use the modification process to wage a collateral attack on a maintenance obligation. Farthing, 178 Ind. App. at 341-43, 382 N.E.2d at 945-46.


We think these cases, though not directly on point, establish a general principle applicable in the present case. Where a court 1280 had no authority to impose the kind of maintenance award that the parties forged in a settlement agreement, the court cannot subsequently modify the maintenance obligation without the consent of the parties. In essence, the parties must agree to amend their settlement agreement, because the sole authority for the maintenance obligation originally derived from their mutual assent.[13] In approving or rejecting any submitted modification agreement, a court should apply the same standard it would use in evaluating an initial settlement agreement.

We now hold that a court has no statutory authority to grant a contested petition to modify a maintenance obligation that arises under a previously approved settlement agreement if the court alone could not initially have imposed an identical obligation had the parties never voluntarily agreed to it. We therefore disapprove Pfenninger.

Notice the Indiana Supreme Court left open the issue of a trial court modifying a mainantence agreement that could have been imposed by the trial court. The Indiana Supreme Court tackled (kind of) that issue in Stuart v. Phillips, 734 NE 2d 1046 (2000):

The Court of Appeals reversed. Stuart v. Phillips, 723 N.E.2d 463 (Ind.Ct.App. 2000). The Court of Appeals concluded "that by expressly reserving the question of whether a court may modify a settlement agreement grounded in incapacity, 1047 caregiving, or rehabilitation," we had "created an exception to the rule that courts may not modify settlement agreements incorporated into the final decree." Stuart, 723 N.E.2d at 467. From this, the Court of Appeals held that "if the provision falls within the narrow parameters of maintenance orders that a court may impose without agreement of the parties, then the agreement may be subject to modification under the exception created by our supreme court in Voigt." Id. (footnote omitted).

However, Voigt expressly left open the question whether the court may take this action. We therefore disagree with the Court of Appeals that Voigt resolves the issue.

While this case pended on transfer, the parties filed a joint motion to dismiss the appeal, stating that their controversy had been settled and that Wife had filed a release of judgment in Bartholomew Superior Court. Because the parties have settled their dispute, it is not necessary to decide the question reserved in Voigt, and the question remains open.

More instructive may be Zan v. Zan, 820 NE 2d 1284 (2005):

Here, Joyce and Lawrence agreed that Lawrence would make rehabilitative maintenance payments to Joyce "due to the fact that [she had] not worked continuously throughout the marriage and needs assistance in obtaining an education to better employment opportunities." Appellant's App. p. 49. The trial court would have had the authority, pursuant to Indiana Code section 31-15-7-2(3), to order Lawrence to make such rehabilitative maintenance payments without the agreement of the parties.

Although our supreme court has not squarely decided the issue presented today, it is our view that the trial court may modify the Agreement under these circumstances. To hold otherwise may circumvent the parties' ability or desire to bargain independently without court intervention. Put another way, a party may be loathe to enter into an agreement such as the one here, knowing that a court could not intervene in the event of changed circumstances.

Even more compelling, when the Agreement is examined as a whole, it is apparent that the purpose of the rehabilitative maintenance provision was to enable Joyce to attend an educational or vocational training 1289 program. Specifically, the Agreement requires Lawrence to make rehabilitative maintenance payments for a full three years "so long as [he] remains employed in his current capacity with the FAA." Appellant's App. p. 49. While Joyce concludes from this clause that the only way, aside from the passage of three years, that Lawrence's obligation may be modified is if he loses his job with the FAA, our review of the Agreement leads us to disagree. A subsequent clause goes on to note that Lawrence "is agreeable to paying rehabilitative maintenance due to the fact that [Joyce] has not worked continuously throughout the marriage and needs assistance in obtaining an education to better employment opportunities." Id. It is apparent from this clause that the parties intended that the rehabilitative maintenance would assist Joyce "in obtaining an education" so that she could seek better employment opportunities. The evidence presented at the hearing showed that rather than obtaining an education, Joyce has collected over $18,000 from Lawrence and has instead apparently used it as a means of supporting herself. In our view, such was not the intent and spirit of the Agreement. Thus, under these circumstances, the trial court properly modified Lawrence's maintenance obligation


The points to take away from this:

  1. Parties can agree to a spousal maintenance that the courts could not grant.
  2. Do not expect the courts to modify an agreement that allows more than the courts could grant if circumstances change except for very narrow circumstances.
  3. Be very, very careful drafting any maintenance agreements.
  4. Because of #3, get a lawyer to draft or review any proposed maintenance agreements.

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