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TURNER v. TURNER
Turner v. Turner, Docket No. 109883 (Mich. Ct. App. Sept. 6, 1989)
Factual and Procedural Background
The 1980 judgment of divorce awarded the defendant (wife), Marlene J. Turner, an award described in the judgment as "alimony in gross" in the amount of $44,770.00, payable in 121 monthly installments of $370.00 commencing February 1, 1980. The judgment included contingencies: if the defendant remarried or died within five years of the judgment, the plaintiff's (Alfred A. Turner, Jr.) total obligation would be reduced to $22,385.00; if the defendant remarries or dies after five years, the plaintiff's obligation for alimony would terminate as of that date.
The defendant moved in circuit court for modification of the alimony award. The trial court denied the motion, ruling the alimony provision was alimony in gross and therefore nonmodifiable. The defendant appealed, arguing that the contingencies in the provision converted the award into periodic alimony. The Court of Appeals affirmed the trial court's denial of modification.
Legal Issues Presented
- Whether the alimony provision in the 1980 divorce judgment constituted alimony in gross (nonmodifiable absent fraud) or periodic alimony subject to modification because it contained contingencies (remarriage or death of the payee).
Arguments of the Parties
Defendant's Arguments
- The defendant argued that because the alimony provision contained contingencies (specifically, survivorship and remarriage contingencies), the award should be characterized as periodic alimony subject to modification rather than alimony in gross.
Plaintiff's Position (as reflected in the record)
- The record shows the parties negotiated and agreed to a property settlement including language specifying "alimony in gross," and both parties understood before court approval that the settlement and "gross alimony pay out" would not be subject to later modification. The Court relied on this to treat the award as alimony in gross.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hall v Hall, 157 Mich. App. 239, 241; 403 N.W.2d 530 (1987) | Alimony in gross is nonmodifiable absent fraud; contingency can transform alimony in gross into periodic alimony (bright-line approach). | Recognized as authority for the bright-line rule but noted the Court departs from several panels' decisions in this case; the opinion discusses both the majority rule and Judge Harrison's concurrence emphasizing intent. |
| Oknaian v Oknaian, 90 Mich. App. 28, 37; 282 N.W.2d 230 (1979) | Alimony in gross is nonmodifiable absent fraud. | Used with Hall to state the exception to statutory modification authority for alimony in gross. |
| Van Houten v Van Houten, 159 Mich. App. 713, 716-717; 407 N.W.2d 69 (1987) | Definition: alimony in gross is a sum certain payable either in one lump sum or by periodic payments of a definite amount over a specific period. | Cited for the definition of alimony in gross and as an example of panels adopting the bright-line contingency test. |
| Goldberg v Goldberg, 171 Mich. App. 643, 646; 430 N.W.2d 926 (1988) | In determining whether alimony is in gross or periodic, courts generally construe the agreement to give effect to the parties' intent. | Cited to support the proposition that party intent governs characterization of the award. |
| Pierce v Pierce, 166 Mich. App. 579, 580-581; 420 N.W.2d 855 (1988) | Court should focus on intent behind alimony provision regardless of a survivorship contingency. | Referenced as part of a line of cases endorsing an intent-focused approach rather than a bright-line contingency rule. |
| Couzens v Couzens, 140 Mich. App. 423, 428; 364 N.W.2d 340 (1985) | Panels that adopt the bright-line approach treating contingencies as evidence of periodic alimony. | Listed among cases supporting the contingency => periodic alimony rule. |
| Welch v Welch, 112 Mich. App. 524, 526; 316 N.W.2d 258 (1982) | Contingencies indicate intent to create periodic alimony (bright-line approach). | Included in the list of decisions adopting the bright-line contingency approach. |
| Firnschild v Firnschild, 67 Mich. App. 327, 329; 240 N.W.2d 790 (1976), lv den 397 Mich. 863 (1976) | If continuation of monthly payments is subject to a contingency, the actual amount of obligation is not ascertainable and thus cannot be alimony in gross. | Cited to explain the reasoning behind the bright-line rule concerning ascertainability of the obligation. |
| Macoit v Macoit, 165 Mich. App. 390, 392-393; 418 N.W.2d 476 (1988) | Endorses focusing on the parties' intent behind the alimony provision regardless of a survivorship contingency; number and type of contingencies are relevant. | Cited as authority for the intent-focused approach that the Court relied upon in assessing the negotiated settlement here. |
Court's Reasoning and Analysis
The Court began by recognizing the statutory authority allowing modification of alimony upon a change in circumstances (MCL 552.28; MSA 25.106), but noted the established exception that alimony in gross is nonmodifiable absent fraud. The Court reviewed two lines of authority: (1) panels adopting a bright-line rule holding that any contingency (e.g., survivorship or remarriage) transforms an otherwise gross alimony award into periodic alimony because the total obligation is not ascertainable, and (2) panels and a concurrence that emphasize discerning the parties' intent in characterizing an award, with survivorship alone not necessarily transformative.
Applying these principles to the present record, the Court found that the parties negotiated and agreed to the property settlement and expressly labeled the award "alimony in gross." The record showed both parties understood, prior to court approval, that the settlement and the "gross alimony pay out" would not be subject to modification. The Court also observed that the award's amount ($44,770) was ascertainable despite the contingencies. To give effect to the parties' expressed intent, the Court concluded the provision constituted alimony in gross and thus was nonmodifiable, even though doing so departed from several prior panel decisions that used the bright-line contingency test.
The opinion acknowledges differing approaches in prior panels and explicitly notes the Court's choice to follow an intent-centered assessment in this case, rather than treating all contingent installments as necessarily periodic alimony.
Holding and Implications
Holding: AFFIRMED — the Court affirmed the trial court's order denying the defendant's motion to modify the alimony award.
Implications:
- The direct effect is that the alimony provision in the 1980 judgment was held to be alimony in gross and therefore nonmodifiable on the facts of this case.
- The Court expressly notes it departs from the decisions of several prior panels that applied a bright-line contingency rule; the Court thereby applied an analysis that gives effect to the parties' expressed intent in a negotiated settlement and considered the ascertainability of the award despite contingencies.
- The opinion does not announce a categorical overruling of prior decisions in the text; instead, it affirms the trial court on the basis of the parties' negotiated intent and the ascertainable amount in this case.
PER CURIAM.
Defendant wife appeals as of right from a circuit court order denying her motion for modification of an award of alimony contained in a 1980 judgment of divorce. In denying defendant's motion, the trial court ruled that the judgment's alimony provision provided for alimony in gross and, therefore, was nonmodifiable. Defendant now challenges that ruling on appeal, claiming that, because of the contingencies contained in the alimony provision, periodic alimony was created. We disagree with defendant's argument and, thus, affirm the trial court.
The divorce judgment in this case provided:
ALIMONY
IT IS FURTHER ORDERED AND ADJUDGED that the Plaintiff, Alfred A. Turner, Jr., shall pay to the Defendant, Marlene J. Turner, as alimony in gross the sum of Forty-Four Thousand Seven Hundred Seventy Dollars ($44,770.00) payable in 121 monthly installments of Three Hundred Seventy Dollars ($370.00) per month, commencing February 1, 1980.
IT IS FURTHER ORDERED AND ADJUDGED that in the event of the remarriage or death of the Defendant within five (5) years from the date of this Judgment of Divorce, Plaintiff[']s total obligation for Alimony shall be Twenty Two Thousand Three Hundred Eighty-Five Dollars ($22,385.00). If the Defendant shall die or remarry after five (5) years from the date of Judgment of Divorce the Plaintiff[']s obligation for Alimony shall terminate as of the date of death or remarriage of the Defendant and Plaintiff shall be free from any further liability for Alimony payments provided for in this paragraph. There shall be no alimony for plaintiff.
Although the circuit court has the authority to modify an alimony award upon a showing of a change in circumstances, MCL 552.28; MSA 25.106, an exception exists for alimony in gross which is nonmodifiable absent a showing of fraud. Hall v Hall, 157 Mich. App. 239, 241; 403 N.W.2d 530 (1987); Oknaian v Oknaian, 90 Mich. App. 28, 37; 282 N.W.2d 230 (1979). Alimony in gross is a sum certain and is payable either in one lump sum or by periodic payments of a definite amount over a specific period of time. Van Houten v Van Houten, 159 Mich. App. 713, 716-717; 407 N.W.2d 69 (1987). In determining whether an alimony provision provides for alimony in gross or periodic alimony, this Court generally construes the agreement to give effect to the parties' intent expressed in that agreement. Goldberg v Goldberg, 171 Mich. App. 643, 646; 430 N.W.2d 926 (1988); Pierce v Pierce, 166 Mich. App. 579, 580-581; 420 N.W.2d 855 (1988), further consideration of certification of conflict declined in the absence of an application for leave to appeal, 430 Mich. 1202 (1988).
Several panels of this Court have adopted a bright-line approach to distinguish periodic alimony from alimony in gross: if the alimony provision contains a contingency, i.e., the payee spouse's survival or remaining unmarried, then the alimony is deemed to be periodic alimony. See, e.g., Van Houten, supra, p 717; Hall, supra, pp 242-243; Couzens v Couzens, 140 Mich. App. 423, 428; 364 N.W.2d 340 (1985); Welch v Welch, 112 Mich. App. 524, 526; 316 N.W.2d 258 (1982). Contingencies, according to those panels, clearly evidence either the parties' or the trial court's intent to create periodic alimony. Hall, supra, p 243; Oknaian, supra, p 38. Moreover, the reasoning behind that rule is that, if the continuation of monthly payments is subject to a contingency, the actual amount of the obligation is not ascertainable and, thus, cannot be considered alimony in gross. Hall, supra, p 242; Firnschild v Firnschild, 67 Mich. App. 327, 329; 240 N.W.2d 790 (1976), lv den 397 Mich. 863 (1976).
In Hall, supra, a panel of this Court held that the survivorship contingency included in the otherwise alimony-in-gross provision transformed the alimony to periodic alimony. However, in a separate concurrence, M.G. HARRISON, J., wrote:
The majority adopts a "bright line" test to distinguish periodic alimony from alimony in gross and focuses solely on whether any contingency, however remote, might affect the total sum paid.
Although I concur that the provisions do not lead to a conclusion that alimony in gross has been created in law, I am not persuaded that such was not intended by the parties. The alimony provision is alimony in gross in every respect except for termination in the event of plaintiff's death, something which may have been conceded in the negotiations as having no significance to her.
In negotiating the terms of a divorce judgment, a party may well bargain for a smaller amount of property in exchange for the security of a substantial sum certain, payable in installments, but not subject to later modification. Under such circumstances, it would be inappropriate to deprive that party of the benefits of a bargain both intended merely because full payment is contingent on the payee's survival for the payment period. I submit that, without looking to other factors involved, a survival contingency alone does not necessarily transform alimony in gross to periodic alimony. [ 157 Mich. App. 245-246.]
On the other hand, two panels of this Court recently have endorsed a different approach: one which focuses on the intent behind the alimony provision regardless of a survivorship contingency. See Pierce, supra, pp 580-582, and Macoit v Macoit, 165 Mich. App. 390, 392-393; 418 N.W.2d 476 (1988). The number and type of contingencies, though, should be considered in determining the intent. Hall, supra, p 246 (M.G. HARRISON, J., concurring). The panel in Macoit noted that, although Hall, supra, involved a settlement agreement between the parties, the reasoning of Judge HARRISON'S concurrence also applies to situations in which alimony was awarded by the court. Macoit, supra, p 393.
Here, the parties apparently negotiated and ultimately agreed to the property settlement, including the alimony provision which contained the language "alimony in gross." The record expressly shows that both plaintiff and defendant understood, before the trial court approved the settlement, that the court thereafter would not have authority to modify the property settlement and "gross alimony pay out." Moreover, the amount of the award, $44,770, is ascertainable despite the contingencies. We conclude that, in order to give effect to the parties' intent, we must affirm the trial court's ruling that the provision in this case provided for alimony in gross, even though in so doing we depart from prior decisions of several panels of this Court. We do not believe that the dual contingency in this case conclusively showed the parties' intent to create periodic alimony.
Although Judge SULLIVAN was a member of the majority in Hall, supra, he has reconsidered his position and now follows the reasoning of subsequent cases.
Affirmed.
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