Holcomb v. Holcomb

HORTON, Judge.

The trial court was called upon to determine whether the monthly $500.00 payments to defendant, which were designated as alimony in the Agreement, were in fact “true” alimony payments and thus modifiable, or were reciprocal consideration for property settlement provisions in the Agreement, and thus not modifiable. In order to rule upon plaintiff’s assignments of error, we must determine whether the trial court applied the correct legal principles in concluding that the Agreement was an integrated agreement and denying plaintiff’s motion to reduce or terminate his monthly “alimony” obligation to defendant.

Justice (later, Chief Justice) Sharp explained the reciprocal consideration principle of integrated agreements in Bunn v. Bunn, 262 N.C. 67, 136 S.E.2d 240 (1964):

[A]n agreement for the division of property rights and an order for the payment of alimony may be included as separable provisions in a consent judgment. In such event the division of property would be beyond the power of the court to change, but the order for future installments of alimony would be subject to modification in a proper case. However, if the support provision and the division of property constitute a reciprocal consideration so that the entire agreement would be destroyed by a modification of the support provision, they are not separable and may not be changed without the consent of both parties.

Id. at 70, 136 S.E.2d at 243 (citations omitted) (emphasis added).

In White v. White, 296 N.C. 661, 252 S.E.2d 698 (1979), our Supreme Court quoted the above language from Bunn with approval and then proceeded to consider whether the periodic payments ordered to be made to Mrs. White were actually “alimony,” or were non-modifiable portions of an integrated property settlement agreement.

The question, [before us] then, is whether the provision for support payments and the provision for property division in the 17 November 1969 consent judgment are independent and separable. The answer depends on the construction of the consent judgment as a contract between the parties. “The heart of a contract is the intention of the parties. The intention of the parties must be determined from the language of the contract, the purposes of the contract, the subject matter and the situation of the parties at the time the contract is executed.”

The parties here have not indicated their intent regarding separability of the two provisions by the language of the contract itself.

Id. at 667-68, 252 S.E.2d at 702 (citations omitted). Because the parties had not clearly indicated their intention by the language of their agreement, the White Court then held that the trial court would have to conduct an evidentiary hearing to determine their intent at the time of their agreement. Id. at 670, 252 S.E.2d at 703. Further, the White Court established a presumption that the provisions in a separation agreement or consent judgment are separable, so that the burden of proof is upon the party contending that the support and property settlement provisions are not separable to rebut the presumption by the greater weight of the evidence. Id. at 672, 252 S.E.2d at 704.

The Supreme Court reaffirmed the White approach and presumption of separability in Marks v. Marks, 316 N.C. 447, 342 S.E.2d 859 (1986). Because there was no language in the Marks agreement relative to the separability of its provisions, the Supreme Court held that the White presumption arose. Id. at 456, 342 S.E.2d at 864. The wife, however, presented no evidence to rebut the non-integration presumption, therefore, the trial court correctly held the support provisions to be separate and modifiable. Id. at 458, 342 S.E.2d at 866.

In the case before us, the periodic payments to the wife are set out in a section of the Agreement labeled “ALIMONY.” The payments are specifically referred to as “alimony,” but such a characterization is not conclusive. White, 296 N.C. at 667, 252 S.E.2d at 702. Indeed, other language in the Agreement tends to indicate that the payments may not be “true” alimony. The Agreement provides that the monthly payments are not to be “increase[d] or decrease[d].” Further, there are no recitations in the Agreement that defendant was a dependent spouse, nor were there recitations as to fault grounds, need, ability to pay, or reasonableness of amount. While those factors may be considered by the trial court on the question of whether an agreement is integrated, they are not conclusive. See id. at 669, 252 S.E.2d at 702.

This Court considered a similar situation in Hayes v. Hayes, 100 N.C. App. 138, 394 S.E.2d 675 (1990). In Hayes, the trial court held that as a matter of law certain periodic payments to the wife were not “true” alimony, although labeled as such, where (1) there was no finding that the wife was a dependent spouse, (2) there were no findings of need, ability to pay, or that the amount ordered was reasonable, (3) the wife gave up her right to ask for an increase in the amount, and (4) payments were to be made for a definite term of five years. Id. at 143-44, 394 S.E.2d at 678. This Court reversed, holding that it was error for the trial court to refuse to hold an evidentiary hearing where there were no “explicit, unequivocal provisions on integration or non-integration.” Id. at 148, 394 S.E.2d at 680.

In this case, the Agreement contained the following merger clause:

ENTIRE AGREEMENT. This agreement contains the entire understanding of the parties, and there are no representations, warranties, covenants, or undertakings other than those expressed and set forth herein.

At the urging of counsel for defendant, the trial court considered this merger clause as an integration clause, and found as a fact that:

14. The Separation Agreement between the parties, dated July 17, 1990, is a fully integrated agreement as set forth in the portion of said agreement entitled, ENTIRE AGREEMENT which says, “This agreement contains the entire understanding of the parties, and there are no representations, warranties, covenants, or undertakings other than those expressed and set forth herein.”

This clause quoted by the trial court, however, is not an integration clause but instead is a standard merger clause which is often used in contracts to merge prior discussions, negotiations, and representations into the written document and avoid litigation over the question of whether there were oral representations made outside the written agreement. See Zinn v. Walker, 87 N.C. App. 325, 333, 361 S.E.2d 314, 318 (1987), disc. review denied, 321 N.C. 747, 366 S.E.2d 871 (1988). An integration clause, on the other hand, is designed to express the intent of the parties as to whether the provisions of an agreement were reciprocal consideration for each other so that the agreement is an integrated agreement. See Bunn, 262 N.C. at 70, 136 S.E.2d at 243. For example, in Britt v. Britt, 36 N.C. App. 705, 245 S.E.2d 381 (1978), the parties included the following language in their agreement:

The provisions for the support, maintenance and alimony of wife are independent of any division or agreement for division of property between the parties, and shall not for any purpose be deemed to be a part of or merged in or integrated with a property settlement of the parties.

Id. at 711, 245 S.E.2d at 385. Likewise, in Acosta v. Clark, 70 N.C. App. 111, 318 S.E.2d 551 (1984), the parties’ separation agreement provided that

[t]he provisions of alimony to the Wife are independent of any division or agreement for division of property between the parties, and shall not for any purpose be deemed to be a part of or merged in or integrated with a property settlement of the parties.

Id. at 112, 318 S.E.2d at 552.

No such clause or language was present in the Agreement before us in this case and the trial court erred in treating the merger clause as an integration clause. Although the trial court heard other evidence and made other findings which support its conclusion that the Agreement was integrated, we cannot say what weight it gave to the erroneous consideration of the merger clause as evidence that the Agreement was integrated. Moreover, even though there are many indications on the face of the instrument that it was an integrated agreement, we cannot say as a matter of law that the provisions were intended as reciprocal consideration for one another. Such a determination of the intent of the parties is for the trial court. Therefore, this matter must be remanded for reconsideration and entry of a new judgment by the trial court.

On remand, the trial court is to weigh the credible evidence and determine whether defendant has met her burden of showing that the “alimony” provisions and the “property settlement” provisions were intended to be reciprocal consideration for each other, so that the Agreement is an integrated agreement, and thus the “alimony” payments are non-modifiable. The trial court may make its new order based on the existing record, unless in its discretion it chooses to open the record to take additional evidence.

Plaintiff did not appeal from the trial court’s findings that he had failed to make the ordered monthly payments or the conclusion that he was in contempt. He also did not appeal the order to confine him based on his contemptuous failure to make the payments, and setting out the manner in which he might purge himself. Because there was no appeal from or error assigned to those portions of the trial court’s order, such provisions are affirmed.

Affirmed in part; vacated and remanded in part.

Judges GREENE and LEWIS concur.