May 20, 2018
When divorcing parties have agreed to a division of their estate, they will enter into a Marital Dissolution Agreement (MDA) that, as part of the finalization of the divorce, is submitted to the court for approval and signature. The divorcing court will then merge the MDA into the final decree of divorce issued by the court that serves to legally separate the parties and return them to the status of unmarried persons.
As all practitioners of family law know, however, it is far from uncommon for the MDA to be insufficient, for whatever reason, to end all disputes forever after between the two parties. Many times, parties will seek to modify the MDA and, if an agreement cannot be reached, they will seek a ruling from the court to determine a fair outcome to the dispute. A question then arises: Is the MDA, because it was merged into the final decree, an order of the court that is subject to the court’s authority to modify and/or hold a party in contempt for failure to comply, or is the MDA actually a contract that the binds the parties and, absent a breach, is beyond the control of the court to modify without the consent of both parties?
As an initial piece of information, pursuant to case law, MDAs are to be treated as contracts. To make a deeper inquiry into a more nuanced interpretation of this issue, one should review the case of Penland v. Penland in which the Tennessee Supreme Court determined that a father, who had agreed in the MDA to provide for the education of the minor children beyond the age of 18, had entered into a contractual arrangement to do so. This clause was “outside the scope” of his child support obligation, which was provided for by statute. Consequently, the court deemed the clause to be part of an existing and binding contractual relationship between the parties, the incorporation of the MDA into the final decree notwithstanding. The case notes that the basis for the court’s authority to require child support is statutory and, therefore, would end when the children emancipated. However, a future obligation to provide funds for education was outside of the statutory scheme for child support. The father was contractually obligated to provide funds for this purpose even beyond the ending of the court’s statutory authority over the welfare of the minor children upon the children’s emancipation.
Penland provides a good example of when a child support obligation is treated as a contractual obligation rather than a statutory one. It serves as a good illustration of how certain provisions in an MDA function as a contract and are bound by contractual law. Still, this does not fully explain the treatment of certain statutory obligations that are also specified routinely in MDA agreements. Two obvious areas where this issue of merger arise are alimony and child support. These two areas, depending on the type of alimony and the nature of the child support, are statutorily provided for in the Tennessee Code and grant the trial court jurisdiction to modify its decree as to support based on the circumstances of the parties regardless of the provisions in the original MDA. These two areas are considered to be exceptions to the general proviso that MDAs are to be treated as contracts. The issues of child support and alimony, because of the fact that they are provided for in the Code, specifically “remain modifiable by the courts” despite the language of an MDA. The court’s reasoning is that, because the statutory authority provided to the courts by statute regarding alimony and child support, an MDA that “is incorporated into a divorce judgment is stripped of its contractual nature.” Based on this analysis, “[t]he courts may exercise their continuing statutory powers to modify” the terms of the MDA as they relate to alimony or child support “when changed circumstances justify.”
Given this basis, a large question still remains. What should a court do if a situation arises where the parties agree to terms in an MDA that are contrary to statutory provisions of the Tennessee Code and courts are left with less exact guidance on whether they hold authority by virtue of statute and the MDA’s incorporation into the decree, or if the matter is simply contractual and the court’s authority is more limited?
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