The Missouri Court of Appeals, Eastern District’s,
decision in McHugh v. Slomka is the
first case in Missouri to address a contractual provision in a Marital Separation
Agreement about the modification of spousal maintenance in a post-dissolution
proceeding. This decision follows other states in allowing the enforcement of
specific bargained-for terms in a Marital Separation Agreement, contrary to the
general rule that a spouse’s post-dissolution increase in income does not, on
its own, establish a basis for an upward modification in the maintenance
amount.
I.
Facts and Holding
Elizabeth Slomka (“Wife”) and Daniel McHugh (“Husband”)
were married in 1989 and had three children together who were ages thirteen, fifteen,
and fifteen at the time of the Modification Judgment entry.[1] Throughout the parties’ marriage, Wife did
not hold employment and cared for the parties’ children while Husband, for
twenty years of their marriage, was employed by a large corporation in various positions,
eventually earning a base salary of $250,000 per year plus bonuses up to
$62,500 annually.[2] Husband was terminated in 2009 due to an
affair with a coworker (“Paramour”).[3]
Husband filed his Petition for Dissolution of Marriage in
May 2010, and the parties entered into a settlement agreement in February 2011,
which dissolved their marriage and incorporated a Marital Separation Agreement
(“MSA”) and a Parenting Plan.[4] Husband was ordered to pay
Wife $1300 per month in child support and $2000 per month for modifiable
maintenance.[5]
These figures were calculated by imputing no income to Wife and $103,800
annually to Husband.[6] The MSA provided in part
that “[t]he parties understand that they are unable to maintain the standard of
living during the marriage because [Husband] is unemployed. The parties
understand that this amount is modifiable once [Husband] becomes employed.”[7]
By March 2012, Husband was employed by a company in
California earning $307,000 per year, and his household income along with
Paramour, to whom he is now married, was approximately $550,000 per year.[8] Wife moved with the three children to Indiana
to reside with her parents, stating that it was temporary and out of necessity.[9] Wife testified that she had been able to
secure a part-time position for eight months earning thirteen dollars per hour.[10]
Wife filed a Motion to Modify the Dissolution Judgment in
October 2012 seeking, among other things, an increase in maintenance and child
support.[11] Husband filed a counter-motion to modify and
sought, among other things, a reduction in maintenance.[12] On June 2, 2015, the City of St. Louis
Circuit Court entered a Modification Judgment and decreased Husband’s
maintenance obligation to $1000 per month and increased child support to $3169
per month.[13] Wife appealed on the grounds that the trial
court erred in decreasing the maintenance award, and she argued the award
should have been increased..[14]
II. Legal
Background
Missouri law establishes that maintenance in a separation
agreement is “agreed to by the parties and incorporated into the dissolution
decree.”[15] Any terms agreed to and incorporated into the
separation agreement, with the exception of child-related support and custody
issues, are binding unless the court finds the separation agreement unconscionable.[16] The normal rules of contracts are applicable
to interpreting the terms within a marital separation agreement.[17]
Missouri law regarding maintenance is governed by statute,
and modification is permissible only by showing a substantial change in
circumstance.[18] There are a slew of Missouri cases establishing
that a spouse’s increase in income post-dissolution is not a per se basis for
modification.[19] Despite this standard, contractual rules
still apply, and while Missouri courts have not opined on a contractual
provision, such as that found in McHugh
v. Slomka, there exists case law in other jurisdictions establishing that
maintenance should be increased “under appropriate circumstances.”[20]
States such as Maryland, Florida, and Kentucky have
established guidelines that allow a recipient spouse to move the court for a
modification of maintenance where the paying spouse was unable to pay enough at
the time of judgment but now has the ability to pay.[21] The various cases hinged on the premise that
the receiving spouse was entitled to the increase to maintain the standard of
living at the time of the original divorce judgment.[22]
III.
Instant Decision
The Missouri Court of Appeals,
Eastern District, reversed the circuit court’s decision to reduce Wife’s
maintenance and rejected Husband’s argument that since Wife was now living with
her parents, her expenses had decreased.[23] The court of appeals remanded and instructed
the circuit court to “increase Wife’s maintenance award based upon the standard
of living the parties enjoyed during the course of the marriage.”[24]
In reversing and remanding, the court
of appeals indicated that Missouri Revised Statutes section 452.370 still
applied, and the trial court could look at Wife’s “duty or failure to become self-supporting”
and impute income as a result of this duty.[25] The court of appeals
further indicated that the circuit court could consider any economic
implications as a result of Husband cohabitating with his new wife.[26] The court of appeals
focused on the enforcement of the agreement between the parties and thus that
it was imperative Wife receive an increase in her maintenance award.[27] The court stressed that since Husband had
been reemployed at a greater salary than he had enjoyed during the marriage, an
award was required so Wife may return to the standard of living she had enjoyed
throughout the parties’ marriage.[28]
IV.
Comment
The court
of appeals was correct in reversing of the trial court and following the
precedent established by other states with similar issues and facts. It is the just decision because the provision
allowing the maintenance to be modified was bargained for in the parties’
divorce settlement and to hold otherwise would, as the court of appeals stated,
penalize Wife for the agreement she had reached with Husband during the
dissolution proceedings.[29] To affirm the circuit court’s decision would
also open the floodgates for any paying party to voluntarily decrease his or
her income immediately before or during a divorce proceeding in an attempt to
decrease the maintenance obligation to his or her spouse.
As
the court of appeals noted, it was unsurprising that Wife’s expenses had
decreased since the dissolution, as the MSA was explicit in that “the initial
maintenance award was inadequate for the parties to maintain the standard of
living during the marriage.”[30] It would be unjust to allow Husband to keep an
“artificially low” maintenance award, which was calculated at a time during which
he was unemployed, and allow him to further reduce that award when his income
had increased substantially.[31]
A key
factor for the court of appeals’ decision was that the parties had bargained to
include in their MSA language allowing for maintenance to be modified.[32] They had bargained for a lesser amount than
what may have been appropriate but established a means for either party to
initiate a modification proceeding to increase, or even decrease, the
maintenance amount, depending on the circumstances of Husband’s future salary.[33] Without the contractual provision, the court
of appeals would have been looking at the remaining language in the MSA which,
when compared to the statute regarding maintenance, may not have been enough to
allow Wife to increase her maintenance award.
It is important to stress that
modification language must be incorporated into a divorce decree in order for
this result to be reapplied in subsequent Missouri cases. In situations where a paying spouse is not
receiving the same compensation as received previously during the parties’
marriage, this provision is critical in assuring that the receiving spouse can modify
the maintenance award to an amount commensurate with the standard of living
enjoyed by the parties before the dissolution proceeding.
- Alyssa D. Smith
[1] McHugh v. Slomka, No. ED 103543, 2017
WL 3388979, at *1 (Mo. Ct. App.), transfer denied (Mo. Sept. 25, 2017).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id. (second and third alterations in original).
[9] Id. at *2.
[11] Id.
[12] Id.
[13] Id.
[14] Id.
[15] Barbeau v. Barbeau, 72 S.W.3d 227,
229 (Mo. Ct. App. 2002) (citing Peaslee v. Peaslee, 844 S.W.2d 569, 572 (Mo.
Ct. App. 1992)).
[16] Mo.
Rev. Stat. § 452.325(2) (2016).
[17] Daily v. Daily, 912 S.W.2d 110,
114 (Mo. Ct. App. 1995).
[18] Mo.
Rev. Stat. § 452.370(1) (2016).
[19] See Zalar v. Harrington, 786 S.W.2d 883, 885 (Mo. Ct. App. 1990); see also McKown v. McKown, 280 S.W.3d
169, 173 (Mo. Ct. App. 2009).
[20] McHugh v. Slomka, No. ED 103543,
2017 WL 3388979, at *4 (Mo. Ct. App.), transfer
denied (Mo. Sept. 25, 2017).
[21] See Cole v. Cole, 409 A.2d 734, 740 (Md. 1979); see also Santiesteban v. Santiesteban,
579 So. 2d 891, 892 (Fla. Dist. Ct. App. 1991); see also Roberts v. Roberts, 744 S.W.2d 433, 436 (Ky. Ct. App.
1988).
[22] McHugh v. Slomka, No. ED 103543, 2017
WL 3388979, at *5 (Mo. Ct. App.), transfer
denied (Mo. Sept. 25, 2017).
[23] Id. at *6.
[24] Id.
[25] Id.
[26] Id.
[27] Id.
[28] Id.
[29] Id.
[30] Id.
[31] Id.
[32] Id.
