Meredith Graves FOREMAN, Plaintiff and Appellant, v. Jack Preston FOREMAN, Defendant and Respondent.
Appellant (Wife) appeals from an order terminating spousal support and contributions by respondent (Husband) to a trust fund for the benefit of the parties' daughter, Christin. The court order also computed arrearages for additional alimony.
Husband and Wife were married on November 17, 1956. One child, Christin, was born on August 25, 1959. The parties separated on February 27, 1961. The interlocutory judgment of divorce was granted on September 13, 1963, incorporating the terms of the property settlement agreement executed by the parties on June 5, 1963.
The community property was divided in the agreement as follows: To Wife, $11,865 (leasehold interest in apartment, furniture, United States war bonds, savings account at Home Savings and Loan, 1960 Chevrolet and $3,000 cash); to Husband, $4,190 (shares of stock and cash remaining in other accounts after deduction of the $3,000).
The terms of the agreement called for Husband to pay Wife $833.33 per month “until Wife dies or Wife remarries, whichever occurs first.” In addition, “… Husband shall pay to Wife, as additional alimony, one-third of all salary, bonus and income in excess of $50,000.00 earned and/or received by him in each calendar year during the lifetime of his mother, and upon the death of his mother, Husband shall pay one-third of all salary, bonus and income in excess of $45,000.00 earned and/or received by him in each calendar year thereafter, provided that in no event shall Wife be paid alimony in excess of $20,000.00 for any calendar year.”
Wife was granted custody of the child and Husband was to pay child support of $300 per month until Christin becomes 21 or marries, whichever occurs first. Husband was also “to pay for music, dancing, swimming, riding, drama, and such other lessons and training as Wife may deem appropriate,” and to pay for Christin's college education in California. Furthermore, on the death of Husband's mother, Husband agreed to pay $2,000 per year into a trust fund for Christin until Christin reaches the age of 21, dies or marries, whichever occurs first.
Husband's salary at the time of the agreement was $31,200. His earnings in 1976 were approximately $112,000 per year. Husband was at all times an employee of Samuel Goldwyn Studios.
On November 12, 1976, Husband filed a petition for order to show cause for modification of the judgment as follows: (1) to pay Christin's child support of $300 per month directly to her on her attaining 18 years of age (Christin was 17 at the time of the hearing); (2) to terminate payments into a trust fund for the benefit of Christin; (3) to terminate payments for Christin's extracurricular activities, but providing for payment of her college education expenses in excess of $300 per month; (4) to terminate spousal support; and (5) to determine arrearages in spousal support.
After a hearing concluded on December 22, 1976, the court modified the judgment as follows: Spousal support was reduced to $800 per month from December 1, 1976, to August 1, 1977, and thereafter terminated. In addition, it was determined that Husband owed Wife $36,099 in arrearages for alimony plus $15,545 in interest. Husband was to pay this at $20,000 per calendar year commencing in the calendar year 1977.
Child support of $300 per month was made payable directly to Christin when she turned 18. The contributions to the trust fund were terminated and the $8,000 presently held in trust was to be distributed to Christin upon her reaching 18. Husband was to pay for Christin's college expenses.
Wife appeals, contending (1) spousal support was not modifiable; (2) if spousal support was modifiable, the court abused its discretion because there were insufficient changed circumstances justifying modification; (3) the court abused its discretion in terminating payments into the trust fund because there was insufficient evidence of changed circumstances; and (4) the court erred in its computation of arrearages.
MODIFIABILITY OF THE AGREEMENT
The property settlement agreement includes the following provisions:
“The parties hereto desire, by this agreement, to settle and adjust as between themselves their respective property rights, rights to alimony, care and support of Wife, and rights to custody, support, care and control of said CHRISTIN, the consideration for each of which are and shall be integrated and reciprocal.
Except as in this agreement otherwise provided, each party to this Agreement does hereby release the other from any and all liabilities, debts, or obligations of every kind or character, heretofore or hereafter incurred, and from any and all claims and demands, including all claims of either party upon the other for support and maintenance as Wife or as Husband, it being understood that this present agreement is intended to settle the rights of the parties hereto in all respects.
The obligations created hereunder shall be a charge and enforceable against the assets and estates of the Husband should he predecease Wife, and all of the provisions and considerations relating to division of property and those relating to alimony and support are integrated and reciprocal considerations and provisions and are part and parcel of the same transaction.
The provisions and terms of this agreement shall not be vacated, annulled, modified or supplemented in any particular except, in the event, and only during such time as, Husband because and as the result of accident or illness is disabled and on account thereof does not receive earnings or income, or benefits in lieu thereof, but during any such period the alimony provisions hereof may be submitted to the Superior Court of California having jurisdiction thereof for such modification as the Court may find necessary, justified and reasonable.” (Emphasis added.)
The property settlement agreement was clearly an integrated agreement, as described in Plumer v. Plumer, 48 Cal.2d 820, 824, 313 P.2d 549, and the trial court so held. The normal rule as to integrated property settlement agreements is that the provisions for spousal support are not modifiable unless the parties expressly so provide. (Plumer v. Plumer, supra.)
Nevertheless, the trial court found that the spousal support provisions were modifiable based upon the 1961 to 1963 version of Civil Code section 139, which provided in part: “That portion of the decree or judgment making any such allowance or allowances, and the order or orders of the court to enforce the same, including any order for support of children or order for support of the other party based on a provision for such support in an integrated property settlement agreement, may be modified or revoked at any time at the discretion of the court except as to any amount that may have accrued prior to the order of modification or revocation. This paragraph shall not be construed to render an integrated property settlement agreement modifiable when there are no minor children of the parties to the agreement.” (Stats. 1961, ch. 2098, § 1, p. 4362.)
It was said of the 1961 amendments that their effect was unclear and the legislative intent was difficult to ascertain. (Heller v. Heller, 230 Cal.App.2d 679, 685, 41 Cal.Rptr. 177; 36 State Bar J. 671; Witkin, Summary of Cal.Law (7th ed., 1969 supp. to vols. 3, 4) Husband and Wife, § 141, p. 1505.) In 1963 the Legislature repealed the 1961 amendments and restored the statute to its 1959 form. (Heller v. Heller, supra.)
In this case, however, the agreement is not merely integrated; it contains a specific provision that it “shall not be vacated, annulled, modified or supplemented in any particular” with an exception not applicable here. (Emphasis added.) There is a strong public policy in favor of permitting the parties to make their agreement nonmodifiable so that they may better plan their new lives with certainty. (In re Marriage of Hawkins, 48 Cal.App.3d 208, 212-213, 121 Cal.Rptr. 681.) We are provided with no authority or legislative history of the 1961 amendment which would convince us that the Legislature intended to deprive the spouses of the power to agree expressly that spousal support may not be modified, especially since this would be so contrary to the rules in effect before 1961 and ever since 1963. (See now Civ.Code, § 4811, subd. (b).) In other words, we hold the parties could, by express language render their spousal support agreement nonmodifiable notwithstanding the language of the 1961 to 1963 statute. (See 2 The Cal.Family Lawyer (Cont.Ed.Bar 1963) § 26.17, pp. 1178-1183.) We further hold that in this case, the provision expressly declaring that the agreement may not be modified accomplished that result.
We conclude therefore that the trial court lacked the power to modify the agreement's provisions for spousal support and that its order must be reversed.
TERMINATION OF PAYMENTS INTO TRUST FUND
The agreement required Husband to pay $2,000 per year (after the death of his mother) into a trust fund for Christin until she became 21, died or married, whichever occurred first. If she died, the fund reverted to Husband; otherwise it was to be distributed to her when she became 21.
The trial court modified this provision by ordering that Husband's payments be terminated upon Christin's 18th birthday (shortly after the hearing), and ordering that the $8,000 already accumulated in the fund be distributed to her on that date.
Wife contends that this obligation could not be modified by the court. We agree. Although the payments would be modifiable if considered as “child support,”1 we conclude the trust fund payments do not constitute child support within the meaning of former Civil Code section 139 authorizing modification.
The agreement states nothing about the availability of the trust fund for Christin's support during her minority. It appears the trust was merely a vehicle for setting aside a nest egg for Christin to which she was entitled upon becoming 21. Husband voluntarily contracted to set aside this money for Christin and the trial court was not authorized to change the terms of the agreement.
An analogous issue was involved in Hecht v. Hecht, 259 Cal.App.2d 1, 5-7, 67 Cal.App. 293. There it was argued that certain payments in an integrated property settlement agreement executed in April 1963, were spousal support and could be modified under the 1961 to 1963 version of former Civil Code section 139. The court found they were not spousal support and therefore not within the statute authorizing modification. The payments lacked the characteristics of spousal support since (1) the agreement was actually executed after the wife had remarried; (2) the payments were to continue until a certain amount was paid, notwithstanding her remarriage; and (3) the payments were a charge against the husband's estate in the event of his death. Therefore, said the court, the payments were not spousal support but an extended payout of the property settlement, which could not be modified. (See also Tremayne v. Striepeke, 262 Cal.App.2d 107, 117-118, 68 Cal.Rptr. 470.)
Here, too, the trust fund payments may not be characterized as child support and therefore could not be modified by the court.
CALCULATION OF ARREARAGES
The calculation of the amount of arrearages depended in part upon Husband's income since in addition to $833.33 per month Husband was required under the agreement to pay Wife as additional alimony “one-third of all salary, bonus and income in excess of $50,000.00 earned and/or received by him in each calendar year … provided that in no event shall Wife be paid alimony in excess of $20,000.00 for any calendar year.”
To Husband's earnings and bonuses from his employer, the trial court added additional income which was received by him on business investments, but the court also subtracted therefrom Husband's losses on business investments. Wife contends that this deduction of business losses was unauthorized by the language of the agreement which referred to “all salary, bonus and income.”2 We hold the trial court's interpretation of the phrase “all salary, bonus and income” was reasonable. It was appropriate and equitable to lump together the positive and negative incomes from investments to arrive at a figure for investment income. Wife's contention that only the profits but not the losses could be considered is without merit.
Finally, Wife correctly contends that the trial court erred in failing to take into account Husband's 1976 income to the date of the hearing in determining the arrearages due. The hearing was concluded December 22, 1976. Husband had as of that date earned $105,000 in 1976. It appears that the trial court concluded no “additional alimony” (i. e., that portion which exceeded the minimum alimony of $833.33 per month and which depended upon Husband's income) was due “since the year has not concluded.” Apparently the court relied upon language in the agreement referring to “one-third of all salary, bonus and income in excess of $50,000.00 earned and/or received by him in each calendar year.” (Emphasis added.)
Husband does not respond to Wife's contention that this interpretation was erroneous. We agree with Wife that the use of the expression “in each calendar year” does not reasonably imply that no obligation is owing when the hearing must be conducted prior to the end of the year.
The order modifying interlocutory judgment of divorce is reversed.
1. Unlike spousal support, child support has long been considered modifiable notwithstanding any agreement of the parents, and since 1959 the child support provisions of an integrated property settlement agreement may be reduced or revoked as well as increased. (Puckett v. Puckett, 21 Cal.2d 833, 843, 136 P.2d 1; Booker v. Booker, 214 Cal.App.2d 35, 37 & fn. 1, 29 Cal.Rptr. 258; see Garrett v. Garrett, 258 Cal.App.2d 407, 417, 65 Cal.Rptr. 580; 34 State Bar J. 591.)
2. A different provision of the agreement provided for a contingency where Husband's “gross income from all sources for any calendar year shall fall below $25,000.00 ․”This provision is inapplicable since Husband's income never fell to that point, and thus Wife's emphasis on the phrase “gross income from all sources” is misplaced.
ASHBY, Associate Justice.
KAUS, P. J., and STEPHENS, J., concur.