Sometimes during a divorce, the parties are able to reach a settlement. When they come to a settlement, they will draft a settlement agreement. Once the agreement is entered, the parties are contractually obligated to abide by its terms.[1]
The agreement is presented to the Court and essentially has to be signed off on by the Judge. So long as the agreement doesn’t appear to be manifestly unfair, the Court will be bound to the agreement just as the parties are.[2]
The Court will typically take the settlement agreement and enter a Decree that reflects the terms of the agreement. When the Decree references the agreement, it will usually say one of two things: (1) that the settlement agreement is “incorporated and merged” or (2) that the settlement agreement is “incorporated but not merged.”
While this language is subtly different, it can have a big impact on what will happen if you attempt to enforce the Decree. In other words, if you enter a settlement agreement and the other party fails to do what they’re supposed to, those words will determine what you need to do in order to get your former spouse to follow through with his or her obligations AND whether or not you even can force your former spouse to do what he or she promised to do.
Let’s look at an example. Imagine that John Doe and Jane Doe are in the middle of a divorce. The two sign a settlement agreement. One of the provisions of the settlement agreement says:
“If the parties’ minor child graduates from high school and elects to go to college within one year of his high school graduation, Father will pay the child’s college tuition, so long as the child is attending college full time, continuously without taking a semester off (not including summers) and maintains at least a 3.0 GPA.”
Now, let’s look at the two different possible options in this scenario.
(1) INCORPORATED AND MERGED.
The first possibility is that the Court, in its Decree, says that the settlement agreement is “incorporated and merged with the Decree.” In this case, the agreement basically turns into the Decree. The agreement itself ceases to exist, and its terms simply become a Court Order.[3]
This is important for two reasons. First, if you want to enforce a Family Court’s Order, you typically go back to the Family Court. You tell the Court that the other party has failed to follow a Court Order and that they should be held in contempt of Court. Thus, the language tells you where to go in the event that the other party isn’t playing ball. In our example above, if the parties’ child decided to go to college and met the terms of the agreement, Father would be violating a Court Order by not paying for the child’s college tuition. Thus Mother could return to the Family Court to force Father to pay the tuition.
However, it’s also important to note that the Court cannot do whatever it wants to. It only has the authority to do things that a statute or other law provides it the ability to do.[4] Thus if the settlement agreement calls for something that the Court wouldn’t otherwise have the ability to do, then the Order will be invalid.
In our example, this is important because, with certain very narrow exceptions, the Family Court doesn’t generally have the ability to Order support for a child once the child goes off to college as an adult.[5] Thus the second important reason we need to know whether the agreement is incorporated and merged or not merged is that you need to know up front whether or not the terms will be enforceable down the road. In the example, there would probably be no way to enforce the provisions calling for Father to pay for the child’s college tuition, because the settlement agreement no longer legally exists by itself. The agreement was “incorporated and merged.” The only thing that legally exists is the Court’s Order. But the Court didn’t have the authority to make such an Order. Thus the provision would be invalid. It would accordingly be unenforceable and Father could likely get away with not having to follow through with what he agreed to.
(2) INCORPORATED BUT NOT MERGED.
The second possibility is that the settlement agreement was “incorporated but not merged with the Decree.” In this scenario, the settlement agreement will continue to legally exist as a separate contract between the parties.
This is important for the same basic reasons. First the language can tell you where you need to go to enforce the agreement. Note however, that this can be a little more confusing if the settlement agreement was incorporated but not merged, because the Family Court arguably retains jurisdiction over a number of ongoing issues, particularly those related to support of children. For example, if the agreement was for a certain amount of ongoing child support, the Family Court will likely retain jurisdiction so long as the child has not emancipated.
Nonetheless, the agreement is basically a contract and can be enforced through the Civil Court through an action for breach of contract.[6] In other words, if your spouse refuses to play ball, you can sue.
Also important, is the question of whether or not the contract is enforceable. In our situation, even though the Family Court has no independent authority to order a person to pay college tuition of a child, a parent can enter into a contract in which he or she agrees to do so. Thus, Father in this example would be liable and if he failed to pay the college tuition, he could be forced to do so through the Civil Court.
It’s accordingly very important that before you submit a settlement agreement in your divorce, that you understand the implications of the language in the proposed Decree. You shouldn’t wait to understand these implications until after the Decree has been entered, because doing so can-at least in some situations-cost you the ability to enforce the agreement. Understand that this article is an over-simplification of this issue and in certain contexts, it can become a very involved analysis. Sometimes the differences between these two are pragmatically less important. Because the scenarios revolving around the merger of a settlement agreement can be very confusing, you should consult an attorney if you have any doubt about the implications of what it says. Even if you can’t afford full representation, you may be able to afford a limited-scope arrangement.
[1] Ariz. R. Family L. P. 69; Macmillan v. Schwartz, 226 Ariz. 584, 589, 250 P.3d 1213, 1218 (Ct. App. 2011).
[2] A.R.S. § 25-317(B).
[3] McNelis v. Bruce, 90 Ariz. 261, 271, 367 P.2d 625, 631 (1961); Glassford v. Glassford, 76 Ariz. 220, 226, 262 P.2d 382, 386 (1953).
[4] State ex rel. Neely v. Rodriguez, 165, Ariz. 74, 76, 796 P.2d 876, 878 (1990); Fenn v. Fenn, 174 Ariz. 84, 87, 847 P.2d 129, 132 (Ct. App. 1993) (holding that “Every power that the superior court exercises in a dissolution proceeding must find its source in the supporting statutory framework.”).
[5] Solomon v. Findley, 167 Ariz. 409, 412, 808 P.2d 294, 297 (1991).
[6] Macmillan at 1218, 250 P.3d at 1218.