Terry v. Terry

Wilner, J., delivered the opinion of the Court. Appellant complains here of an order of the Circuit Court for Montgomery County that, to her dismay, reduced the amount of alimony and child support that she was theretofore entitled to receive. The circumstances were as follows. The parties were married in 1961.

They lived together until May, 1974, producing in the interim two children — Susan, born in February, 1967, and Gregory, born in November, 1969. In September, 1974, they entered into a property settlement agreement which, among other things, provided for appellant to have custody of the two children, required appellee to pay alimony and child support, and directed him to provide certain medical and life insurance coverage for the children. The alimony was to be at the rate of $650 per month for the first six months, $550 per month for the following six months, and thereafter, until appellant’s death or remarriage, $425 per month. Child support was set at $200 a month per child through August 31, 1975, and thereafter $250 a month, subject to biannual escalations in proportion to increases in the Bureau of Labor Statistics Consumer Price Index.

On October 24, 1975, the parties entered into an "Agreement of Modification,” under which appellee assumed ⁵⁵ the additional obligation of paying all necessary dental bills for the children, but which provided that "[i]n every other respect, the Agreement of the parties dated September 25th, 1974, is hereby continued without alteration as to each and every paragraph and tenet contained therein.” On January 28, 1976, the Circuit Court for Prince George’s County entered a decree of divorce. The decree approved and incorporated by reference all the terms in both the initial property settlement agreement and the October, 1975 agreement of modification. All went reasonably well until February, 1979. Appellee, it appears, was about to lose his $36,000 a year-plus-company-car job, and thus decided, unilaterally, to reduce his alimony and child support payments by $400 a month.

At the time, his alimony was to be $425 a month and his child support, by reason of index escalations, was set at $285 per month per child. Concerned about her loss of support and complaining further that appellee was about to allow the required medical and life insurance coverage to terminate and that he was refusing to pay for Susan’s orthodontic therapy, appellant filed in the Circuit Court for Montgomery County 1 a petition (1) to specifically enforce the terms of the agreements, as incorporated in the divorce decree, (2) for a judgment equal to all sums due under the decree (support arrearages, amounts necessary to replace the insurance coverage, and the cost of the orthodontic treatment), (3) to find appellee in contempt, and (4) for miscellaneous relief. Appellee responded with a cross-petition contending that he was then unemployed, that appellant (who had been unemployed at the time of divorce) had become employed full time, and that the combination of those events constituted a change of circumstances. He asked that (1) his child support be reduced to $200 a month per child and (2) alimony be ⁵⁶ reduced or eliminated, or, in the alternative, suspended until he regained his former earnings level.

On May 15, 1979, while this bill and cross-bill were pending, the parties entered into a "Stipulation.” This written document, signed by the parties, acknowledged the 1974 agreement, the 1975 modification, the divorce decree, and the pending litigation, and stated that "[i]n the interest of amicably working out the differences between the parties as to the application of the aforesaid Agreements and Decree, the parties hereby agree to the following terms, pending further hearing in this cause.” (Emphasis supplied.) The stipulation then recited that (1) appellee agreed to comply with the agreements and decree "in all respects, except that his obligation to pay alimony thereunder is hereby reduced to $200.00 per month. Said payments of alimony shall remain fixed at $200.00 per month, pending further hearing in the cause.” (emphasis supplied); (2) appellee and appellant would exchange notarized statements pertaining to their respective employments, income, and insurance policies; and (3) appellee consented to a judgment of $1,200 for current alimony arrearage, to be paid within three weeks. The next day — May 16, 1979 — the court entered a "consent order” ratifying, confirming, and incorporating "the terms of the attached Stipulation.” On May 29, 1980, appellee inaugurated the instant controversy with a petition, in the same proceeding, to reduce the amount of child support and for such other and further relief as the court may find just and proper. Though claiming reemployment and an income of $37,000 a year, he averred an inability to continue the child support payments at the decretal level.

He made no complaint about the alimony and did not ask for any modification of it. Appellant responded, in part, with a counter-petition to increase the amount of child support and "restore or increase, according to evidence to be presented to the Court, the amount of alimony payable to her. .. .” (Emphasis supplied.) In support of ⁵⁷ her request for a restoration of or increase in alimony, she acknowledged that the earlier reduction via the consent order was "pending further hearing in the cause,” and alleged that by reason of appellee’s improved financial status and the insufficiency of her income, she was "entitled to a restoration of or increase in her alimony payments.” The show cause orders issued by the court pursuant to these pleadings reflected the specific relief prayed. Thus, the order issued pursuant to appellee’s petition directed appellant to show cause "why the child support payments in the above captioned matter should not be reduced,” (emphasis supplied) and the order attendant to appellant’s counter-petition directed appellee to show cause why child support and alimony payments should not be increased. In accordance with Sixth Circuit Rule S 74, the entire matter was referred to a domestic relations master.

After receiving and considering evidence of the parties’ respective financial circumstances, the master concluded that (1) although not prayed in the petition or recited in the court’s ensuing show cause order, reduction in alimony was an issue in the case, as was a modification of child support, and (2) based on the evidence, appellant’s alimony ought to be reduced to $66.36 a month and appellee’s contribution to child support ought to be reduced to $325 per month per child. Appellant excepted to both recommendations, but, after a hearing, the court overruled the exceptions. It is from that order overruling the exceptions that this appeal is taken. The following questions are presented: "I. Did the Chancellor err in permitting the Master to consider a reduction of alimony, where the only language in the Show Cause Order relevant to alimony directed the Appellee to show cause why Appellant’s alimony should not be 'increased’?

II

Did the Master and Chancellor err in finding that the Stipulation of the parties entered into on May 15, 1979 had the effect of modifying the ⁵⁸ Agreement of the parties dated September 25,1974, so as to convert non-technical alimony into modifiable, technical alimony?

III

Assuming the Stipulation of the parties of May 15, 1979, did modify the earlier agreement of the parties, such that the Court had power to modify alimony, did the Master and Chancellor err in not using May 15, 1979, as the base date for determining whether certain circumstances had changed since that time, for purposes of modifying alimony and child support?

IV

Should Appellant be awarded counsel fees for the prosecution of this appeal?” Though appellant states the proposition somewhat imperfectly, we think there is merit to her first complaint. We think that, in light of the pleadings, it was inappropriate for the master to recommend and for the court to order a reduction in appellant’s alimony. As a result of that conclusion, it becomes unnecessary for us to address her second question. With respect to the other two issues, we find no error in the reduction of child support and conclude, in light of her resources, as disclosed in the record, that appellant is not entitled to an additional award of counsel fees.

(1) Decrease in Alimony As we have noted, appellee made no request in his petition for a reduction in alimony. Nor did he complain, in any of his averments, that the amount of alimony payable under the consent order was excessive, that appellant was not in need of it, or that he was unable to afford to pay it. His sole complaint concerned the amount of child support which, of course, had increased significantly since the 1974 agreement. 2 That, and that alone, is what the court directed appellant to address. ⁵⁹ The first mention of a reduction in alimony was in a memorandum of law filed by appellee on October 22,1980 — the very day of the master’s hearing. The principal legal issue then (and now) was whether the amount of spousal support was subject to modification by the court.

Appellant’s position (notwithstanding her alternative prayers for restoration or increase) was that the $425 provided for in the original agreement and decree amounted to contractual support rather than modifiable alimony because there was no provision for its termination upon appellee’s death (see Simpson v. Simpson, 18 Md. App. 626 (1973) and cases cited therein), and that because the decree was entered prior to April 13, 1976, the provisions of Acts of 1976, ch. 170 were not applicable. 3 Thus, she maintained that the court’s only authority was to restore the non-modifiable amount of $425 a month — an amount that she had voluntarily (and temporarily) consented to be reduced during the period of appellee’s unemployment. Appellee, in his memorandum, conceded that, so long as the support provisions contained in the 1974 agreement remained intact, they were not subject to the 1976 Act and were thus not subject to modification by the court He contended, however, that the 1979 stipulation amounted to a novation of sorts — a permissible modification by the parties — and that served to bring the provisions within the Act and subject it to further court modification. It was in that context that, for the first time, he asked "that the alimony in this case be either reduced or terminated.” Appellant objected, both at the beginning and at the conclusion of the master’s