Merger or Incorporation of Settlement Agreement in Arizona

Merger of Settlement Agreement in Arizona.

If you are settling your divorce, you should know about the merger or incorporation of a settlement agreement in Arizona. You may have wondered if you can change the orders in an Arizona divorce decree and, if so, how you alter the orders in an Arizona divorce decree. The answer depends upon whether the court has the authority to modify the final decree of dissolution of marriage and how you go about changing those orders if the court lacks the power to alter the decree of legal separation.

Fortunately, the Arizona Supreme Court answered these questions in the case of LaPrade v. Laprade. Sarah LaPrade and her husband, Arthur LaPrade, signed a post-nuptial agreement dividing their personal property and awarding spousal maintenance to Sarah in the event the parties were ever to divorce.

Arthur subsequently filed for divorce, and the parties presented their postnuptial agreement to the Court. The trial court found the postnuptial agreement was fair as to both the division of property and provisions about alimony and, therefore, issued a decree of dissolution of the parties’ marriage and incorporated the terms of the parties’ post-nuptial agreement as the orders of the court.

After the marriages were dissolved, Sarah and Arthur submitted two separate amended agreements to the court, which the court also adopted orders of the court. Arthur subsequently married another woman but maintained a cordial relationship with his former wife, Sarah.

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Modification of Post-Nuptial Agreements After Divorce

After Arthur’s remarriage, he and Sarah submitted two additional modifications to their prior agreements, which were both adopted as orders of the court. Arthur subsequently passed away, and the administrator of his estate argued the trial court lacked the authority to order any modifications to the divorce decree because the parties failed to reopen the divorce decree to change its provisions, as opposed to modifying the original provisions in the divorce decree by subsequent orders as was done in the case

The Arizona Supreme Court determined the issue of whether the agreements reached by the parties after their divorce decree was issued and the orders purporting to modify the divorce decree based upon those subsequent agreements were enforceable hinged on whether the agreements merged into the post-decree orders or were merely incorporated by reference.

The Arizona Supreme Court held that agreements that are merged into orders are not enforceable as separate independent contracts and the court’s orders enforcing some provisions of those agreements may have been deemed unenforceable.

Effect of Merger on Post-Nuptial Agreements

Merger of Settlement Agreement into Divorce Decree in Arizona.

The reason for such an outcome is that an agreement that merges into a decree is considered to no longer exist because the order supersedes it. Furthermore, if the court lacked jurisdiction to issue the orders outlined in the merged agreement, the decree or order may be set aside; hence, leaving the parties with no agreement or order to enforce.

However, if the agreement, order, and/or the parties actions demonstrate an intent that the agreements remain separately enforceable contracts that are merely incorporated, but not merged, into the decree, the agreements themselves may be enforced as contracts regardless if the court did or did not have jurisdiction to ratify those agreements as the orders of the court.

The Arizona Supreme Court found the trial court had jurisdiction to modify the provisions of the agreements about spousal maintenance because Arizona Revised Statute Section 25-319 specifically extends the jurisdiction of the trial court to modify spousal support after the issuance of the decree until such time the term of the award expires.

The Arizona Supreme Court, however, found that the trial court is precluded from modifying provisions in a decree about the division of the parties’ property and debts because Arizona Revised Statute Section 25-317 provides that a final division of property and debts in a divorce decree are not modifiable.

This is not to say parties cannot file a motion to reopen the divorce decree to change the terms of that decree, but they cannot simply file subsequent agreements purporting to modify the existing language in the divorce decree about the division of property or debts.

The justices rejected the argument that the language bound the court to determine if the agreements were intended to merge or, rather, only be incorporated into the orders. The justices indicated a trial court should define the intent of the parties and the court by looking at the language in the agreement, the language in the trial court’s order, and the conduct of the parties.

The Arizona Supreme Court concluded that the evidence presented established the parties did not intend to merge their agreements into the orders issued subsequently to the initial decree of dissolution of marriage. Those agreements, therefore, could be enforced as separate independent contracts despite the trial court lacking jurisdiction to modify the terms of the final decree of dissolution of marriage pertaining to the division of the parties’ personal property.

The take away from this case is that parties in an Arizona divorce should give careful consideration to the legal implications of merging their settlement agreements into their final decree of dissolution of marriage. Or, you should consider whether you should just incorporate the terms of their agreement into the final decree of dissolution of marriage.

Doing so will enable the parties to enforce that agreement as a separate contract independent of using remedies to enforce the orders issued by the court based upon that agreement; particularly if the agreement contains provisions a trial judge otherwise lacks the authority to order.

If you have questions about merger or incorporation of settlement agreement in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona divorce and family law attorneys have decades of combined experience successfully representing clients in divorce and family law cases.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your divorce or family law case around today.

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