ESTATE OF THEODORE R. MORTNER & a.
Bianco Professional Association, of Concord (Jason B. Dennis on the brief and orally), for the plaintiffs.
Coughlin, Rainboth, Murphy & Lown, P.A., of Portsmouth (Timothy C. Coughlin on the memorandum of law and orally), for the defendant.
This appeal arises in the wake of our decision in In the Matter of Mortner & Mortner, 168 N.H. 424, 429 (2015), in which we held that the death of Theodore Mortner (Husband) prior to issuance of a divorce decree abated the divorce action instituted by his then-wife, defendant Lindsay Thompson (Wife). We declined on preservation grounds in that case to address whether a property settlement agreement entered into by Husband and Wife during the divorce action's pendency survived the action's abatement as an independently enforceable contract. See Mortner, 168 N.H. at 429-30. Following our decision, the plaintiffs, Husband's estate (the "Estate") and his daughter, Judith Mortner ("Judith"), filed this action against Wife, alleging breach of the property settlement agreement and unjust enrichment. The Estate and Judith now appeal an order of the Superior Court (Howard, J.) dismissing both claims. We affirm.
The pertinent factual and procedural background is set forth in our opinion in Mortner and need not be recapitulated here. See id. at 426-27. Subsequent to our decision in that case, the Estate and Judith instituted this action claiming that Wife remained contractually bound to the "Memorandum of Understanding" - a settlement agreement reached by Husband and Wife during the divorce action's pendency concerning division of the marital assets and debts. We shall refer to this agreement as the "property settlement agreement" for purposes of this appeal. The Estate and Judith also asserted an alternative claim against Wife for unjust enrichment, alleging that, as a result of Husband's death, Wife "wrongly secured" or unjustly retained certain assets that she had agreed to part with under the property settlement agreement.
Wife subsequently moved to dismiss the contract claim, arguing that the property settlement agreement's enforceability was contingent upon the issuance of a divorce decree and, because one never issued, the agreement was unenforceable. At a hearing held on her motion, Wife also orally moved to dismiss the unjust enrichment claim, contending that the Estate and Judith had alleged insufficient facts to establish that she had received anything of value from Husband or Judith, or that it would be unconscionable for Wife to retain the disputed assets. The Estate and Judith objected.
Following the hearing, the trial court issued an order agreeing with Wife on both fronts. With regard to the contract claim, the trial court found that the plain language of the property settlement agreement, read in light of the agreement's purpose and the context in which it was negotiated, demonstrated that a divorce decree was an "implied condition precedent" to its contractual enforceability. As to the unjust enrichment claim, the trial court concluded that the facts set forth in the Estate's and Judith's complaint were insufficient to allege that Wife engaged in any wrongdoing, or that her retention of the disputed assets rose to "the requisite level of indecency necessary to establish unconscionability." The Estate and Judith filed a motion for reconsideration and partial clarification, which was denied. This appeal followed.
The Estate and Judith first challenge the trial court's dismissal of their contract claim against Wife, contending that the property settlement agreement does not contain any of the signal words generally recognized to create conditions precedent in a contractual agreement. See Holden Eng'g and Surveying v. Pembroke Rd. Realty Trust, 137 N.H. 393, 396 (1993). Thus, according to the Estate and Judith, the trial court should have concluded that Husband and Wife intended the agreement to be an enforceable contract upon execution, not upon issuance of a divorce decree.
An essential premise of the Estate's and Judith's claim, however, is that in this State, as in some other jurisdictions, a property settlement agreement between parties in a divorce proceeding constitutes an independently enforceable contract. See generally Annotation, Separation Agreements: Enforceability of Provision Affecting Property Rights upon Death of One Party Prior to Final Judgment of Divorce, 67 A.L.R.4th 237 (1989). This premise is incorrect. It has long been common practice in New Hampshire for parties in a divorce proceeding to reach a stipulated agreement, like Husband's and Wife's property settlement agreement, regarding matters arising out of dissolution of the marital relationship. See, e.g., Miller v. Miller, 133 N.H. 587, 590 (1990); Narins v. Narins, 116 N.H. 200, 202 (1976); Pindar v. Pindar, 109 N.H. 76, 76 (1968). And we have long held that such agreements are binding upon the parties. See Bossi v. Bossi, 131 N.H. 262, 265 (1988); Leighton v. Leighton, 122 N.H. 721, 723 (1982). Yet, it must be recognized that, although parties in a divorce proceeding are free to negotiate and bind themselves to such an agreement, the agreement itself is not self-executing in this State, but rather becomes enforceable only through the action of the court. Compare Bossi, 131 N.H. at 265 (explaining that a master in a divorce proceeding has the discretion "to accept or reject a settlement agreement based on its terms") with Estate of Ladd v. Estate of Ladd, 640 A.2d 29, 32 (Vt. 1994) ("[A] pretrial agreement [between spouses] to distribute property is a contract, which the court can set aside only for grounds sufficient to set aside a contract." (quotation omitted)), overruled by Pouech v. Pouech, 904 A.2d 70, 77 (Vt. 2006), and Surabian v. Surabian, 285 N.E.2d 909, 911 (Mass. 1972) ("Because the separation agreement [between husband and wife] exists independently of the divorce decree, the [wife] could seek to have the support provision enforced in a contract action.").