Incorporation and Merger of Your Separation Agreement
In many Virginia divorce cases, the parties resolve outstanding issues between them by use of a separation agreement, also frequently referred to as a “marital settlement agreement” or “property settlement agreement.” Often, parties are advised by their counsel that such an agreement will be “incorporated” into their final order of divorce, and most parties don’t even bother to question that advice, and even more are not even aware that the court has broad discretion to incorporate all, some or none of the provisions of their separation agreement.
So, what does it mean to incorporate an agreement (in whole or in part) into a final order of divorce, and what happens if the court does not incorporate the agreement into its final order of divorce?
Contract vs. Court Order
To begin answering those questions, let’s step back and ask: what is the difference between a private contract and a court order? A court order permits the trial court to enforce the order via the contempt powers of the court. A contract, on the other hand, can merely be enforced as a private agreement between two parties. Common remedies for breach of contract are relief in the form of monetary payment, relief in the form of specific performance, or relief in the form of having something returned, having something taken, or preventing something from happening. Common remedies for violation of a court order (i.e. contempt) are imposition of fines, attorney’s fees, ordering of payments or other curative actions, revocation of licenses, or even imprisonment.
By incorporating a separation agreement into a final order of divorce, the agreement becomes, effectively, part of the court’s order. Meaning it may now be enforced using the court’s contempt powers.
To Incorporate or Not to Incorporate?
So, when would a court not incorporate an agreement or provision(s) of an agreement into a court order? Well, that is a very fact-specific question, and the case law is pretty thin on the topic. Naturally, the typical arguments for setting aside a separation agreement (i.e. no meeting of the minds, duress, coercion, unconscionability, incapacity, etc.) may persuade a court not to incorporate. However, the invalidation of an agreement or provision(s) thereof is not a necessary prerequisite for a court’s decision not to incorporate. For instance, a court could simply choose not to incorporate an agreement or a provision therein because the circumstances have changed so materially from the time the agreement was originally executed to the time the request is made for incorporation.
For example, suppose a married couple, John and Suzy, enter into an agreement in 2015 wherein John agrees to pay Suzy the sum of $2,000 per month in spousal support, subject to modification. In 2016, John is in a car accident which leaves him paralyzed and unable to work. Suzy then files for a divorce in 2017 and requests that the agreement be incorporated into a final order of divorce. In this situation, the court could find it inequitable to incorporate the spousal support provision into an order of the court.
Also, it should be noted that the court’s failure to incorporate an agreement by reference into a final order of divorce does not otherwise affect the binding nature of the agreement as a private contract (most of the time—see the following paragraphs below). Incorporation merely facilitates enforcement of the agreement via the contempt powers of the court, and further saves the aggrieved party the hassle of having to file a separate court action which seeks contract remedies.
To Merge or Not to Merge?
In most divorce cases where the parties entered into a separation agreement, the final order of divorce will state that the agreement is “incorporated, but not merged” (emphasis added) into the order.
So, what does it mean to incorporate, but not merge? As explained above, incorporation allows for the agreement to be enforced as a court order using the court’s contempt powers. Not merging the agreement allows for the agreement to survive and be enforced as a private contract using standard remedies for breach of contract. Why is this important? What would happen if the agreement were incorporated and merged into the order instead?
It’s easiest to answer that question by way of an example. Suppose another married couple, Jack and Jane, enter into a settlement agreement that is later incorporated and merged into their final order of divorce. Under the terms of the agreement, (1) Suzy is to pay John $500 per month in child support until their child reaches the age of majority, and then (2) Suzy is to pay $5,000 per semester towards the child’s college tuition. In the event Suzy violates the agreement by not paying child support until the child reaches the age of majority, John has the ability to seek enforcement by the court using the court’s contempt powers. However, in the event Suzy does not pay the college tuition costs as agreed to, and which goes beyond the age of majority, John has absolutely no recourse. Why? Because the agreement was merged into the final order of divorce. The merger of the agreement made it so the agreement no longer exists as a private contract; it now only exists as an order of the court. The court cannot enforce the tuition payment terms using its contempt powers, because the obligation to pay college tuition exceeds the benefits that a trial court can statutorily award. (Virginia courts cannot order someone to pay college tuition costs for a child who is emancipated, though people can agree to that on their own via a contract).
Had John and Suzy’s agreement been incorporated but not merged into their final order of divorce, John could have sued Suzy in contract for the tuition payments.
If you have any questions about the incorporation and merger of your separation agreement into a divorce decree, be sure to consult with an experienced divorce attorney. From offices in Manassas, Fairfax, Leesburg and Fredericksburg, the divorce attorneys at Livesay & Myers, P.C. represent clients throughout Northern Virginia. Contact us to schedule a consultation today.