Elizabeth Holmes v. Richard E Holmes Jr ( 2014 )

STATE OF MICHIGAN
COURT OF APPEALS
ELIZABETH HOLMES, UNPUBLISHED
December 30, 2014
Plaintiff-Appellant,
v No. 315551
Kent Circuit Court
RICHARD E. HOLMES, JR., LC No. 96-003184-DM
Defendant-Appellee.
Before: M. J. KELLY, P.J., and SAWYER and HOEKSTRA, JJ.
PER CURIAM.
In this dispute over the proper interpretation of an agreement incorporated into a
judgment of divorce, plaintiff, Elizabeth Holmes, appeals by leave granted the trial court’s order
denying her motion to enforce the judgment against defendant, Richard E. Holmes, Jr., on the
ground that the provision at issue was unenforceable as a matter of law. On appeal, we conclude
that the provision was unambiguous and enforceable. Accordingly, we reverse and remand for
further proceedings consistent with this opinion.
I. BASIC FACTS
Elizabeth and Richard Holmes were married in 1988 and had two children, Michael and
Victoria. In 1996, both Elizabeth and Richard were working as lawyers. In March 1996,
Elizabeth Holmes sued Richard Holmes for divorce. In that same month, Elizabeth and Richard
Holmes entered into an agreement to settle alimony, custody, child support, parenting time, and
the division of property. The trial court granted Elizabeth Holmes’ request for a divorce and
incorporated the parties’ agreement into the judgment of divorce, which was finalized in July
1996. After the trial court entered its judgment of divorce, the parties returned to the court for
resolution of various disputes over the years.1
1
These disputes have resulted in several prior appeals. See Holmes v Holmes, unpublished order
of the Court of Appeals, entered April 1, 2003 (Docket No. 247574); Holmes v Holmes,
unpublished order of the Court of Appeals, entered May 8, 2003 (Docket No. 246548); Holmes v
Holmes, 281 Mich. App. 575; 760 NW2d 300 (2008).
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In January 2013, Elizabeth Holmes asked the trial court to enter an order compelling
Richard Holmes to help pay for their children’s college expenses as provided in the agreement
incorporated into the judgment of divorce. She alleged that, although they had agreed to
“participate in the children’s college education, based upon their respective financial situation at
the time the children attend college,” Richard Holmes had refused to assist her with the payment
of their son’s college expenses. Elizabeth stated that she had already expended approximately
$52,000 on Michael’s college education and she anticipated that Victoria’s expenses would be
approximately $27,000 per year when she went off to college in August 2013.
In response to Elizabeth Holmes’ motion, Richard Holmes argued that the agreement did
not obligate him to participate in his children’s college education by providing financial support.
Specifically, he noted that the agreement required him to participate in his children’s college
education, which is not the same as requiring the payment of college expenses. Because he had
been mentoring his son and remained in contact with him throughout his college experience,
Richard argued that he had in fact participated in his son’s college education, as required by the
agreement. He further maintained that the reference to the Holmes family’s trust and traditions
did not have any financial implications; it simply referred to his “ideals for college attendance,
work ethic regarding the children’s assistance in paying their own way and appropriate conduct
warranting involvement.”
The trial court held a hearing on the motion in February 2013. After briefly hearing the
parties’ arguments, the trial court determined that the provision at issue was unenforceable:
In this case, I don’t find that the language is clear enough to allow the Court to
enforce anything. There is absolutely no meeting of the minds as to what it means
with regard to the clause, “husband and wife will participate in the children’s
college education”. It is unenforceable in my view. I understand that there are
other clauses within this paragraph that talk about a tradition of education, and I
understand there is a clause that their participation, whatever that means, would
be based on a respective financial situation at the time the children attend college.
But, I find the provision to be unclear, lacking specificity, and unenforceable. . . .
For the reasons stated on the record, the trial court denied Elizabeth Holmes’ motion in
an order of March 2013. Elizabeth Holmes then applied for leave to appeal in this Court, which
this Court granted.2
2
See Holmes v Holmes, unpublished order of the Court of Appeals, entered October 28, 2013
(Docket No. 315551).
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II. CONSTRUING THE AGREEMENT
A. STANDARDS OF REVIEW
This Court reviews de novo whether the trial court properly construed and applied an
agreement incorporated into a judgment of divorce. Holmes v Holmes, 281 Mich. App. 575, 587;
760 NW2d 300 (2008).
B. ANALYSIS
At the time of their divorce, more than 18 years ago, Elizabeth and Richard Holmes
entered into an agreement governing every aspect of the dissolution of their marriage; the
agreement included provisions governing alimony, custody, child support, parenting time, and
the division of property. The parties also included, as paragraph 10 of their agreement, a
provision which expressed their agreement concerning the children’s higher education:
College Education of Children: Husband and Wife will participate in the
children’s college education, based upon their respective financial situation at the
time the children attend college. Both Husband and Wife understand that the
Holmes grandparents of the children have placed substantial emphasis on their
projected education, and the parties anticipate that the children will be educated
based on the Holmes family’s trusts and traditions.
Paragraph 10 is poorly drafted and, when its provisions are examined in isolation and out
of context, it is plain that different persons might read it in different ways. But the “unhappy fact
is that the possibility of such an ambiguity lurks in almost every written instrument devised by
man.” Flajole v Gallaher, 354 Mich. 606, 609; 93 NW2d 249 (1958). Accordingly, the mere
possibility that a provision can be interpreted in different ways is not sufficient to conclude that it
is fatally ambiguous: the relevant question is whether the provision is equally susceptible to more
than one meaning. Lansing Mayor v Pub Serv Comm, 470 Mich. 154, 166, 680 NW2d 840
(2004). When this provision is read as a whole and in proper context, as courts must do, see
Wilkie v Auto-Owners Ins Co, 469 Mich. 41, 50 n 11; 664 NW2d 776 (2003), it is plain that the
parties obligated themselves to provide financial support for their children’s college education.
In the first sentence of this paragraph, Elizabeth and Richard Holmes agreed that they
“will participate in the children’s college education.” Read in isolation, this phrase obligates
them to participate in some way, but plainly does not obligate them to participate by paying for
the children’s college expenses. But this phrase cannot be read in isolation; it must be read as
modified by the following clause, which provides that their participation in the children’s college
education must be “based upon their respective financial situation at the time the children attend
college.” By stating that their participation must be “based upon” their “financial situation”,
Elizabeth and Richard Holmes delineated the nature of participation that they were each
obligated to provide and limited the extent of their obligation: they had to provide necessary
financial support, but only to the extent that their financial situation permitted them to do so, as
determined at the time the children actually attend college.
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This understanding is further supported by the sentence following the obligation to
participate financially. In the second sentence, the parties noted that the children’s paternal
grandparents felt strongly about college education and agreed that they anticipated that the
children would “be educated based on the Holmes family’s trusts and traditions.” Although
Richard Holmes argued before the trial court that this sentence merely expressed a hortatory goal
(that the children would follow the Holmes family’s traditions), the sentence refers to both
“trusts and traditions.” And the reference to trusts can most reasonably be understood to refer to
legal trusts (formed or to be formed, given the ages of the children at the time) that would
presumably be available once it was time for the children to attend college. Thus, giving this
sentence its most reasonable construction, it expresses the parties’ belief that the children will
have outside resources available (at least from their paternal grandparents) and, therefore, may
not require their parents to participate financially in their college education.
When read as a whole and in context, the parties expressed their hope that the children
would have outside funds to pay for their children’s college expenses, but they nevertheless
agreed that they would “participate” in the children’s college education, as needed, each
according to his or her “respective financial situation at the time the children attend college.”
Because this paragraph is not equally susceptible to any other construction, this paragraph is not
ambiguous and must be enforced as written. Rory v Continental Ins Co, 473 Mich. 457, 468; 703
NW2d 23 (2005).
We also do not agree that this paragraph is unenforceable because the parties failed to
spell out their obligations in more detail, such as by listing the types of expenses (tuition, food,
lodging, transportation, books, or any of the other myriad expenses associated with modern
colleges), or by specifying the percentage or amounts each party was obligated to pay. As our
Supreme Court has explained, that the parties have left some matters to be determined in the
future does not make the agreement unenforceable:
This approach is consistent with the general rule of contract that, where the parties
have left open some matters to be determined in the future, enforcement is not
precluded if there exists a method of determining the terms of the contract either
by examining the agreement itself or by other usage or custom that is independent
of a party’s mere “wish, will and desire.” An enforceable agreement may be
found “even though the determination is left to one of the contracting parties [as
long as] he is required to make it ‘in good faith’ in accordance with [an] existing
standard or with facts capable of objective proof.” [State Bank of Standish v
Curry, 442 Mich. 76, 89; 500 NW2d 104 (1993), quoting 1 Corbin, Contracts,
§ 95, p 402.]
Here, the parties recognized that they had no way to know what their own financial
situation would be like when the children were ready for college. Likewise, they had no way of
knowing what their children’s financial needs would be. The children might have had
scholarships or grants sufficient to pay for college and might even have been in a position to pay
for their own college education. It, therefore, was entirely reasonable for Elizabeth and Richard
Holmes to agree to provide financial support to their children, as needed, and each according to
his or her financial situation. The fact that the children’s needs and the parties’ financial
situation had to be determined at some future point did not render this provision unenforceable.
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Both the children’s needs and the parties’ ability to participate financially are outside any one
party’s mere wish or desire and can be readily ascertained using common methods. Id.
Accordingly, the parties can mutually agree on the needs and the ability of each party to
participate financially or, if the parties cannot agree, the trial court can hold a hearing to
determine the actual amount of the children’s financial needs and the amount that each parent
can reasonably provide given his or her financial situation.
III. CONCLUSION
The trial court erred when it determined that paragraph 10 of the parties’ agreement was
ambiguous and unenforceable. When given its most reasonable construction, the parties agreed
to provide their children with financial assistance, as needed, and each according to his or her
financial ability. Because these terms were unambiguous and provided a reasonable framework
for identifying and enforcing the obligation, the trial court should have enforced the agreement.
Rory, 473 Mich. at 468.
Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction. As the prevailing party, Elizabeth Holmes may tax her costs. MCR 7.219(A).
/s/ Michael J. Kelly
/s/ Joel P. Hoekstra
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