Equitable Enforcement of Frustrated Property Settlements: In re Morse

Introduction

In the Matter of Anne Morse and Frank Morse (Supreme Court of New Hampshire, April 8, 2025) addresses the remedies available when a party to a divorce decree fails to perform a stipulated property settlement due to the impossibility of obtaining financing. After a 34-year marriage, Anne and Frank Morse entered into a final divorce decree in April 2022 that awarded real property in New Hampshire to Anne, real property in Massachusetts to Frank, and required Frank to pay Anne a total of $850,000 in staged payments, secured by liens where appropriate. When Frank defaulted on the bulk of those payments—allegedly because a co-signer withdrew and financing fell through—Anne filed four motions for contempt. The trial court ultimately found Frank in contempt, concluded the settlement had been frustrated, and ordered an equitable distribution of real estate to effectuate the original settlement. Frank appealed, challenging (1) the award of alimony, (2) the purported modification of the property settlement, and (3) the fairness of the division of marital assets. The Supreme Court of New Hampshire affirmed.

Summary of the Judgment

The Supreme Court affirmed the trial court’s order. It held that:

• The alimony issue was unpreserved because Frank never challenged it below.
• The trial court did not “modify” the settlement but rather implemented it equitably after the parties’ agreement became incapable of performance (frustration of the contract).
• The ultimate distribution—Anne receiving the New Hampshire property, Frank the Massachusetts property, with attendant liens, interest, and continuing monthly payments—did not constitute an inequitable “windfall.” The trial court acted within its discretion, guided by precedent, to carry out the original equitable mandate.

Analysis

Precedents Cited

• Spellman v. Spellman, 136 N.H. 235 (1992): Established that when a property settlement cannot be effectuated as originally drafted and requires further order, the court may take “a second equitable look” to implement the decree rather than modify it.
• Bean v. Red Oak Prop. Mgmt., 151 N.H. 248 (2004): Reaffirmed the preservation rule—issues not raised at trial or in reconsideration motions are not subject to appellate review.
• N.H. Dep’t of Corrections v. Butland, 147 N.H. 676 (2002): Clarified that when a party cannot be expected to raise an issue until after a court’s ruling, a motion for reconsideration is required to preserve the issue for appeal.
• Davis v. American Plastics, 108 N.H. 454 (1968): Confirmed that where findings on valuation are neither requested nor made, the appellate court will not overturn the trial court’s exercise of discretion absent unsustainable error.

Legal Reasoning

The Court’s reasoning unfolds in three steps:

1. Preservation of the Alimony Issue. Frank never contested the alimony award of $1,500 per month for three years below, nor did he raise it in his motion for reconsideration. Under New Hampshire’s preservation rule, that issue is forfeited on appeal.
2. Distinction Between Modification and Implementation. Frank argued that granting Anne the New Hampshire property amounted to a modification of the April 14, 2022 decree. The Court rejected this, explaining that under Spellman, when performance is rendered impossible (“frustrated”) by external events—in this case, the failure of the loan process—the court may enforce the original equitable bargain by distributing the real estate rather than rewriting the settlement.
3. Reasonableness of the Distribution. Frank claimed that Anne received a disproportionate share of the assets. He submitted a Comparative Market Analysis (CMA) based on an assumed subdivision of the New Hampshire land. The trial court discredited that valuation because subdivision was no longer feasible. Moreover, neither party requested detailed findings of property value. Under Davis, the court’s broad equitable discretion stands unless the record shows unsustainable error. The Court found none.

Impact

This decision clarifies and reinforces several important principles in New Hampshire family law:

• When a stipulated property settlement becomes incapable of performance, a court may “take a second equitable look” and effectuate the original settlement by distributing real property rather than modifying contract terms.
• Parties must challenge alimony awards and other equitable orders at trial or in a timely reconsideration motion or risk forfeiture on appeal.
• Valuations tied to contingent development plans (e.g., subdivision) will not be credited if those contingencies are no longer realistic.
• The ruling underscores the continuing vitality of Spellman in guiding courts when property settlements founder on external events beyond the parties’ control.

Complex Concepts Simplified

• Contempt Motion: A request for the court to punish or coerce compliance when one party disobeys a court order (here, the payment schedule).
• Frustration of Contract: A doctrine that excuses performance when an unforeseen event makes contractual obligations impossible or radically different from what the parties contemplated.
• Modification vs. Implementation: Modification rewrites the parties’ agreed terms; implementation uses the court’s equitable power to enforce the original bargain when performance fails.
• Preservation Rule: A party must timely object or seek reconsideration to preserve an issue for appeal.
• Equitable Mandate: The court’s duty to carry out the fair and intended result of a settlement, even if it requires a supplemental order.

Conclusion

The Supreme Court’s decision in In the Matter of Anne Morse and Frank Morse affirms that New Hampshire courts possess broad equitable authority to implement, rather than modify, property settlements when performance is frustrated. By enforcing the parties’ original bargain through a second equitable review—transferring real property, imposing liens, and ordering interest and mortgage payments—the court honored the equitable mandate of the decree. The case serves as a clarion call for careful drafting of performance contingencies in divorce settlements and underscores the imperative of timely preserving issues for appellate review.