Newman v. Newman

593 S.E.2d 533

42 Va. App. 557

Paul David NEWMAN v. Ellen Renee NEWMAN.

Record No. 2728-02-2.

Court of Appeals of Virginia, Richmond.

March 2, 2004.

Brian H. Jones (Harris W. Leiner; Barnes & Batzli, P.C., on brief), Chesterfield, for appellant.

No brief or argument for appellee Ellen Renee Newman.

Present: FITZPATRICK, C.J., BENTON, ELDER, ANNUNZIATA, BUMGARDNER, FRANK, HUMPHREYS, CLEMENTS, FELTON, KELSEY and McCLANAHAN, JJ.

UPON REHEARING EN BANC.¹

KELSEY, Judge.

On two grounds, Paul David Newman appeals the trial court's denial of his "Motion to Eliminate and/or Reduce" his contractual obligation to pay his former wife spousal support pursuant to an agreed support award. First, he contends we should draw a distinction between consent decrees signed by counsel and those signed by their clients. Only the latter type, he argues, should be immune from judicial modification and termination under Code § 20-409(C). Second, he asserts that, whether properly signed or not, the consent decree in this case included language authorizing modification or termination by the courts. Disagreeing with both propositions, we affirm.

I.

This proceeding began when Paul David Newman filed a bill of complaint seeking to divorce his wife, Ellen Renee Newman. The bill of complaint also requested rulings regarding child support, custody and visitation of their children, and distribution of marital property. Wife filed a cross-bill seeking spousal support and other relief. While the suit was pending, the parties entered into a written agreement settling all equitable distribution issues and requested that the trial court incorporate that settlement into its final order.

The trial court took evidence on the remaining issues in the case and entered a final decree nunc pro tune on May 25, 2001. The decree awarded custody of the children to wife and granted her child support. The court also awarded $1,200 per month in "Permanent Spousal Support" to wife. Husband's counsel objected to the final decree, contesting the "amount of spousal support and the determination of the [husband's] gross income." Neither party appealed the final decree.

In July 2001, husband filed a "Motion to Amend Spousal Support and Child Support." He argued that a "material change in financial circumstances" made a "decrease in spousal support appropriate." Child support, he further contended, "should be recalculated after an award of spousal support is established." The wife contested the putative change in circumstances and asked that the support remain at the amount previously ordered by the court.

On August 31, 2001, husband and wife advised the trial court that they had settled their spousal support dispute. The parties presented to the trial judge an agreed order stating, in its first sentence, that they appeared "by counsel" and that "all matters in dispute are settled and agreed." The consent decree reduced the permanent spousal support award to $1,000 per month and likewise adjusted the child support obligation. Both obligations, they agreed, would be "continuing as provided in Virginia Code §§ 16.1-278.15 and 20-109." The decree also provided for a lump sum payment, on February 15 of each year, in additional spousal and child support in the event husband's gross yearly earnings exceeded $65,000. Husband's counsel signed the order under the legend "I ask for this." The signature of wife's counsel appeared below the notation "Seen and Agreed." Counsel for both parties signed the agreed award on behalf of their respective clients. The trial court entered the consent order on September 12, 2001.

Less than five months later, on February 5, 2002, husband filed a "Motion to Eliminate and/or Reduce Spousal Support." He conceded that the earlier consent decree represented a negotiated settlement of the dispute over permanent spousal support. Even so, he argued, the agreement could be judicially terminated or modified because (i) it was signed by counsel on behalf of their clients, rather than by the clients themselves and (ii) it included an express provision contractually authorizing judicial termination or modification. Wife disputed both claims, contending the consent decree was an "agreement" in the nature of a "stipulation signed by counsel" in compliance with Code § 20-109(C) and "clearly not modifiable under the terms contained therein."

The trial judge rejected husband's motion, finding that the consent decree was "a stipulation that was entered into and reduced to the form of an order by the parties." The attorneys signed the decree on their clients' behalf. "This is not the court's order," the judge explained, "this is the parties' order." And because it was an "agreement between the parties," the judge held, it could not be terminated or modified except pursuant to its contractual terms. Nothing in the consent decree provided either party with such a right. For these reasons, the trial court denied husband's "Motion to Eliminate and/or Reduce Spousal Support."

II.

The underlying principle at issue in this appeal can be simply stated: "Code § 20-109(A) empowers trial courts to modify a spousal support award, but Code § 20-109(C) expressly limits the court's authority to modify an agreed upon spousal support award according to the terms of a stipulation or contract signed by the parties." Blackburn, v. Michael, 30 Va.App. 95, 100, 515 S.E.2d 780, 783 (1999). This case requires us to decide whether an agreement setting the amount of spousal support—embodied in a consent decree signed by counsel on behalf of their respective clients—qualifies as a stipulation or contract under Code § 20-109(C) for purposes of giving it the one critical quality that most legally binding agreements ordinarily have: They cannot be rewritten by the courts. For the following reasons, we hold that it does.

A. The Consent Decree Was A "Stipulation or Contract."

The trial judge held that the consent decree was not only an "agreement between the parties," but one that rose to the level of a "stipulation that was entered into and reduced to the form of an order by the parties." (Emphasis added). The trial judge's characterization of the consent decree rests on the widely accepted proposition that a stipulation is "an agreement between counsel respecting business before a court." Burke v. Gale, 193 Va. 130, 137, 67 S.E.2d 917, 920 (1951) (quoting Black's Law Dictionary 1660 (3d ed. 1933) ("Stipulation")); see also Lane v. Lane, 32 Va.App. 125, 129, 526 S.E.2d 773, 775 (2000); Orlandi v. Orlandi, 23 Va.App. 21, 26, 473 S.E.2d 716, 719 (1996) (recognizing that a "consent decree is a contract or agreement between the parties to the suit, entered of record in the cause with the consent of the court, and is binding"); Durrett v. Durrett, 204 Va. 59, 63, 129 S.E.2d 50, 53 (1963) (same); Barnes v. Am. Fertilizer Co., 144 Va. 692, 720, 130 S.E. 902, 911 (1925) (same); see generally Restatement (Second) of Contracts: Stipulations § 94 (1981).

It was exactly this understanding of "stipulation" that we adopted in Lane for purposes of interpreting Code § 20-109(C). Lane, 32 Va.App. at 129, 526 S.E.2d at 775. It stems from the observation that, with consent decrees, the parties obviously reach their "agreement before the decree" and thus "the decree merely formalize[s] the obligations already assumed." Schmidt v. Schmidt, 6 Va. App. 501, 505, 370 S.E.2d 311, 313 (1988). Under Code § 20-109.1, a trial court may "incorporate" by reference contractual provisions into any decree either before or after the entry of a final order. All the more, a trial court may incorporate verbatim the terms of an agreement into the very text of a consent decree. The trial court, therefore, did not err in holding that the consent decree constitutes a "stipulation or contract" under Code § 20-109(C).

B. The "Stipulation or Contract" Was Signed By The Parties Through Their Attorneys Acting With Actual Authority.

Code § 20-109(C) requires that the "party to whom such relief might otherwise be awarded" sign the stipulation or contract. In this case, husband concedes that both attorneys, acting with actual authority, signed the consent decree or their respective clients' behalf. During oral argument before us, husband's counsel made plain that he has "never contested" either attorney's authority to sign the consent decree in that representative capacity. There can be no question, therefore, that counsel signed the decree as authorized agents acting on behalf of their principals.

Husband nevertheless claims that we should make a distinction between consent decrees signed by attorneys on their clients' behalf and those signed by the clients personally. Relying on Lane, husband asserts that Code § 20-109(C) codified this distinction. See Lane, 32 Va.App. at 129, 526 S.E.2d at 775 (stating that a consent decree signed by both counsel on behalf of their clients was a decree "signed by neither party"). We disagree for two reasons. First, we view Lane's endorsement of that distinction as dicta having no stare decisis weight. Second, the Lane distinction requires an interpretation of the signature requirement in conflict with settled principles of statutory construction.

(i). Stare Decisis Does Not Apply To The Lane Dicta.

A closer look at the actual holding in Lane demonstrates that its language about who has to sign the decree is dicta. In Lane, the parties entered into a spousal support agreement memorialized in a final divorce decree entered in 1988. Counsel for the parties signed the agreed decree, but their clients did not. In 1989, the parties entered into a "subsequent agreement" and submitted a new consent order memorializing it. Lane, 32 Va.App. at 128, 526 S.E.2d at 775. This time, however, the wife personally endorsed the order. After the trial court entered the consent order, it became the "governing agreement between the parties." Id. at 130, 526 S.E.2d at 776.

Eight years later, in 1997,...