Rubio v. Rubio

COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Fitzpatrick, Judges Benton, Willis, Elder,
Bray, Annunziata, Bumgardner, Frank, Humphreys, Clements
and Agee
Argued at Richmond, Virginia

SUZANNE M. K. RUBIO
OPINION BY
v. Record No. 2596-99-1 JUDGE JERE M. H. WILLIS, JR.
JULY 24, 2001
ERNESTO G. RUBIO

UPON A REHEARING EN BANC

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
Thomas S. Shadrick, Judge

Barry Randolph Koch (Inman & Strickler,
P.L.C., on brief), for appellant.

Barry Kantor (Christie & Kantor, P.C., on
brief), for appellee.

Amicus Curiae: The Virginia Bar Association
Coalition on Family Law Legislation
(Richard J. Byrd; Byrd Mische, P.C., on
brief), for appellee.

By opinion dated August 1, 2000, a panel of this Court

reversed the judgment of the trial court and ordered the

petition herein dismissed. See Rubio v. Rubio, 33 Va. App. 74,

531 S.E.2d 612 (2000). We stayed the mandate of that decision

and granted rehearing en banc. Upon rehearing en banc, we

vacate the mandate of the panel decision and withdraw that

opinion, but reverse the judgment of the trial court and remand

the case for further proceedings.
 I. BACKGROUND

Ernesto and Suzanne Rubio were married May 15, 1982. They

separated and on June 18, 1993, entered into a Stipulation

Agreement, modified on August 23, 1994, providing that Mr. Rubio

would pay to Ms. Rubio as spousal support $600 per month until

such time as she should remarry or either party should die. The

agreement provided:

Q. INCORPORATION AND NON-MERGER

If a temporary, interlocutory or final
judgment, order or decree of divorce is
rendered in any proceeding between the
parties hereto, this Agreement shall be
affirmed, ratified and incorporated in such
judgment, order or decree, and be
enforceable under the general equity powers
of the Court. But notwithstanding such
incorporation, this Agreement shall not be
merged into such decree, but shall in all
respects survive the same and be forever
binding and conclusive upon the parties and
their heirs, executors, administrators, and
assigns. Nothing herein shall be construed
to prevent the decree or judgment in any
such action from incorporation in full.

The parties were divorced by decree entered November 2, 1994,

which provided, in pertinent part:

It is further ADJUDGED, ORDERED and
DECREED that the Stipulation Agreement
between the parties signed June 18, 1993 and
the Modification dated August 23, 1994 be,
and hereby are, found to be valid
agreements, and are hereby ratified,
affirmed and incorporated into and made a
part of this Decree, and both parties shall
comply with all terms and provisions of that
Agreement and Modification.

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The decree did not state whether the Stipulation Agreement was

merged.

On August 23, 1999, Mr. Rubio sought termination or

modification of his spousal support obligation on the ground

that Ms. Rubio had "been habitually cohabiting with another

person in a relationship analogous to marriage for one year or

more, commencing on or after July 1, 1997." See Code

§ 20-109(A). Ms. Rubio acknowledged that she had been

cohabiting in such a relationship since January 1997.

Code § 20-109(A) provides, in pertinent part:

Upon petition of either party the court may
increase, decrease, or terminate the amount
or duration of any spousal support and
maintenance that may thereafter accrue,
whether previously or hereafter awarded, as
the circumstances may make proper. Upon
order of the court based upon clear and
convincing evidence that the spouse
receiving support has been habitually
cohabiting with another person in a
relationship analogous to a marriage for one
year or more commencing on or after July 1,
1997, the court may decrease or terminate
spousal support and maintenance unless (i)
otherwise provided by stipulation or
contract or (ii) the spouse receiving
support proves by a preponderance of the
evidence that termination of such support
would constitute a manifest injustice. 1

In 1997, the legislature rewrote Code § 20-109(A) to insert the

second sentence. See 1997 Va. Acts, ch. 241.

1
In 2000, the legislature substituted "shall" for "may
decrease or" and substituted "be unconscionable" for "constitute
a manifest injustice" in subsection (A) of Code § 20-109. See
2000 Va. Acts, ch. 218.

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 In 1998, the legislature "amended and reenacted" Code

§ 20-109(A), adding the words "the amount or duration of any" to

the first sentence. See 1998 Va. Acts, ch. 604. The Act

specifically provided "[t]hat Section 20-109 of the Code of

Virginia [is] . . . reenacted as follows." Id. It further

provided "[t]hat the provisions of this Act shall apply only to

suits for initial spousal support orders filed on or after July

1, 1998, and suits for modification of spousal support orders

arising from suits for initial support orders filed on or after

July 1, 1998." Id.

The panel opinion held that by reenacting the statute, the

Act embraced the statute in its entirety and that the quoted

limitation upon the application of the Act was a limitation upon

the application of the statute. See Rubio, 33 Va. App. at

76-77, 531 S.E.2d at 613-14. Recognizing that the legislature

did not intend that result, 2 we vacate that holding.

II. THE STIPULATION AGREEMENT

In Hering v. Hering, 33 Va. App. 368, 373, 533 S.E.2d 631,

633-34 (2000), we said that

[i]f the court accepts the agreement, its
decree may merely approve, ratify or affirm
the agreement, in whole or in part, without
incorporating its provisions into the decree
or ordering payment or compliance with its
terms. In that situation, the decree merely
constitutes judicial approval of a private
bilateral contract, and the provisions of
the support agreement do not have the full

2
See 2001 Va. Acts, ch. 720.

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 force and effect of a court's decree and are
not enforceable by the court's contempt
powers. . . .

Id. (citations omitted). Under those circumstances, the support

obligation is enforceable as a contract.

"'Where . . . the circumstances are such
that the incorporation of a property
settlement in a decree, with directions that
the parties perform all its obligations,
merges the contract in the decree, the party
who desires enforcement must enforce the
decree and not the agreement itself.'"

Id. at 373, 533 S.E.2d at 634 (citations omitted). Under those

circumstances, the support obligation is enforceable only as a

term of the decree.

On the other hand,

"'[w]here the circumstances are such that
the agreement, although incorporated or
approved in the decree, is not merged
therein, the parties may enforce it by suing
on the agreement rather than on the
judgment.'" Where . . . the agreement was
"incorporated but not merged" into the final
decree, the agreement remained enforceable
under either contract law or through the
court's contempt power.

Id. at 373-74, 533 S.E.2d at 634 (citations omitted).

In Hering, the parties entered into a marital settlement

agreement dated February 28, 1995, requiring Mr. Hering to pay

spousal support to Ms. Hering. The agreement provided that a

court might "affirm, ratify and incorporate" it into a divorce

decree but provided further "that this agreement shall survive

such incorporation and shall not be merged into any such

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decree." The divorce decree, entered March 3, 1995, provided

"that the Property Settlement Agreement . . . is [] ratified,

affirmed and incorporated, but not merged, into and made a part

of this Final Decree of Divorce . . . ." Mr. Hering proved that

Ms. Hering had entered into a relationship of cohabitation

analogous to marriage for more than one year commencing on or

after July 1, 1997. He sought termination of his spousal

support obligation pursuant to Code § 20-109(A). Noting that

the provision of Code § 20-109(A) upon which Mr. Hering relied

became effective July 1, 1997, we approved his concession that

if his support obligation to Ms. Hering remained a vested

contractual obligation, that obligation could not be impaired by

subsequent legislation. Holding that Mr. Hering was not

entitled to relief, we said:

[T]he parties' contract remained
enforceable. The parties expressly provided
that their agreement was to be
"incorporated, but not merged" into any
final decree. While ordering the parties to
comply with the provision of the agreement,
the final decree also expressly provided
that the agreement was not merged. [Mr.
Hering's] argument glosses over the effect
of the parties' express provision that the
agreement not be merged into the final
decree. We are not at liberty to ignore a
contractual provision specifically included
by the parties.

Our previous decisions and those of the
Supreme Court of Virginia draw a distinction
among those situations where an agreement is
affirmed, where it is incorporated into a
decree, or where, as here, the agreement is

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 "affirmed, ratified, incorporated, but not
merged" into the final decree.

Id. at 372-73, 533 S.E.2d at 633.

Citing Doherty v. Doherty, 9 Va. App. 97, 383 S.E.2d 759

(1989), Mr. Rubio argues that because the decree of divorce

provided that the parties' agreements "are hereby ratified,

affirmed and incorporated into and made a part of this Decree,

and both parties shall comply [therewith]," the agreements

merged into the decree and his support obligation is enforceable

only as a provision of the decree. Such an obligation, he

argues, is an ongoing matter of judicial determination, which

does not enjoy immunity from abridgment of contract and is

subject to subsequent legislation governing the determination of

spousal support, specifically the 1997 amendment to Code

§ 20-109(A). This argument is refuted by the parties' express

agreement and by the terms of the 1994 divorce decree.

The parties specifically agreed and provided that their

Stipulation Agreement would not merge into a decree of divorce.

The decree, while containing no order of non-merger, does not

order merger. Furthermore, the Stipulation Agreement contains

an express provision for non-merger, a provision incorporated by

reference into the decree. Thus, no merger occurred, and we do

not address what effect, if any, merger would have imposed upon

Mr. Rubio's support obligation. That obligation remains an

enforceable contract, excluded from the operation of Code

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§ 20-109(A) and insulated by Code § 20-109(C) from judicial

alteration.

III. PUBLIC POLICY

Finally, Mr. Rubio argues that the 1997 amendment to Code

§ 20-109(A) bespeaks the public policy of the Commonwealth,

placing cohabitation analogous to marriage, for purposes of

spousal support, in the same posture as remarriage, requiring

spousal support abatement in the absence of an express

contractual provision for non-abatement. See Langley v.

Johnson, 27 Va. App. 365, 499 S.E.2d 15 (1998). This argument

depends upon giving retroactive effect to the 1997 amendment.

Such an effect would accomplish a forbidden impairment of Ms.

Rubio's contractual entitlement to support, see Hering, 33 Va.

App. at 375, 533 S.E.2d at 634-35, and would violate Code

§ 20-109(C) (inhibiting the power of the court to award or

consider modification of a decree to the extent that spousal

support and maintenance are provided for in an incorporated

agreement of the parties).

IV. CONCLUSION

The judgment of the trial court is reversed, and this case

is remanded to it for entry of a decree in accordance with the

views herein stated.

Reversed and remanded.

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Benton, J., concurring, in part, and dissenting, in part.

I concur in Part I of the opinion. For the reasons that

follow, I dissent from Parts II and III.

When the husband filed his petition to terminate or

decrease spousal support on the ground that his former wife was

cohabiting with a man, Code § 20-109(A) read, in pertinent part,

as follows:

Upon order of the Court based upon clear and
convincing evidence that the spouse
receiving support has been habitually
cohabiting with another person in a
relationship analogous to a marriage for one
year or more commencing on or after July 1,
1997, the court may decrease or terminate
spousal support and maintenance unless (1)
otherwise provided by stipulation or
contract or (ii) the spouse receiving
support proves by a preponderance of the
evidence that termination of such support
would constitute a manifest injustice.

That statute complimented the portion of Code § 20-109.1 that

provided: "Upon the death or remarriage of the spouse receiving

support, spousal support shall terminate unless otherwise

provided by stipulation or contract."

In Langley v. Johnson, 27 Va. App. 365, 499 S.E.2d 15

(1998); MacNelly v. MacNelly, 17 Va. App. 427, 437 S.E.2d 582

(1993); Radford v. Radford, 16 Va. App. 812, 433 S.E.2d 35

(1993), and Miller v. Hawkins, 14 Va. App. 192, 415 S.E.2d 861

(1992), we held that the public policy declared by Code

§§ 20-109 and 20-109.1 is that spousal support does not survive

the terminating events specified in those statutes unless the

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parties' agreement contained express language that spousal

support will continue beyond the terminating event. It is

undisputed that the agreement in this case does not expressly

provide for the continuation of spousal support to the former

wife even if she "has been habitually cohabiting with another

person in a relationship analogous to a marriage." Code

§ 20-109(A). Applying the logic of those cases, I would hold

that the trial judge did not err in ruling that spousal support

should be reduced because of the wife's cohabitation.

Citing Hering v. Hering, 33 Va. App. 368, 533 S.E.2d 631

(2000), the wife argues that applying the version of Code

§ 20-109.1, which was in effect when the husband's motion was

filed but not in effect when the contract was formed, is a

retroactive application of the statute that impairs her right to

contract. The majority so holds. I disagree.

"In Virginia, divorce is a creature of statutes enacted in

clear, detailed language." Milligan v. Milligan, 12 Va. App.

982, 987, 407 S.E.2d 702, 704 (1991). By well established case

law, the incidents related to the creation and dissolution of

marriage are "a social relation subject to the State's police

power." Loving v. Virginia, 388 U.S. 1, 7 (1967) (citing

Maynard v. Hill, 125 U.S. 190 (1888)). It is the marital

relationship that gives rise to a claim for spousal support.

Thus, to the extent the General Assembly has enacted legislation

that determines when spousal support may be terminated, see Code

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§§ 20-109 and 20-109.1, it is acting within the state's police

powers to provide for the comfort and general welfare of its

citizens.

Addressing the interrelationships between the impairment of

contracts and the police power of a state, the Supreme Court has

ruled as follows:

"The contract clauses of the Federal
Constitution and the Virginia Bill of Rights
protect against the same fundamental
invasion of rights." 1 A. Howard,
Commentaries on the Constitution of Virginia
203 (1974). The General Assembly "shall not
pass any law impairing the obligation of
contracts." Va. Const. art. I, § 11. See
U.S. Const. art I, § 10 ("No State shall
. . . pass any . . . Law impairing the
Obligation of Contracts.") The Virginia
contract clause has been interpreted by this
Court in a manner similar to the treatment
of the federal clause by the United States
Supreme Court. A. Howard at 207.

Even though the language of the contract
clause is unambiguous and appears absolute,
it is not "the Draconian provision that its
words might seem to imply." Allied
Structural Steel Co. v. Spannaus, 438 U.S.
234, 240 (1978). The proscription against
enacting statutes that impair the obligation
of contracts does not prevent the State from
exercising power that is vested in it for
the common good, even though contracts
previously formed may be affected thereby.
"'This power, which in its various
ramifications is known as the police power,
is an exercise of the sovereign right of the
Government to protect the lives, health,
morals, comfort and general welfare of the
people, and is paramount to any rights under
contracts between individuals.'" Id. at 241
(quoting Manigault v. Springs, 199 U.S. 473,
480 (1905)). The contract clause "does not
operate to obliterate the [State's] police

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 power." 438 U.S. at 241. And, as Mr.
Justice Holmes wrote in Hudson County Water
Co. v. McCarter, 209 U.S. 349, 357 (1908):
"One whose rights . . . are subject to state
restrictions, cannot remove them from the
power of the State by making a contract
about them."

Working Waterman's Ass'n v. Seafood Harvesters, Inc., 227 Va.

101, 109-10, 314 S.E.2d 159, 163-64 (1984).

With regard to private contracts, the United States Supreme

Court has held that the contract clause only requires that

"[l]egislation adjusting the rights and responsibilities of

contracting parties must be upon reasonable conditions and of a

character appropriate to the public purpose justifying its

adoption." United States Trust Co. v. New Jersey, 431 U.S. 1,

22 (1977). Thus, when state statutes act to impair private

contracts, the Supreme Court has "repeatedly held that unless

the State is itself a contracting party, courts should

'"properly defer to legislative judgment as to the necessity and

reasonableness of a particular measure."'" Keystone Bituminous

Coal Assn. v. DeBenedictis, 480 U.S. 470, 505 (1987) (citations

omitted). I presume from the discussion in Working Waterman's

Ass'n, that the Virginia contract clause is to be interpreted

"in a manner similar to the treatment of the federal clause."

227 Va. at 109, 314 S.E.2d at 163.

I would hold, therefore, that the legislative amendment

operates to allow the termination or reduction of spousal

support in this case. When adopting Code § 20-109(A), the

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legislature clearly made a public policy choice and made it upon

a reasonable condition. In so doing, the legislature made a

concession to the contractual rights of the parties by providing

an exemption for those instances in which the parties by their

contract expressly provided otherwise. Here, we are called upon

to apply a law to a matter on which the contract is silent.

Moreover, the statute specifically addresses the applicable

date for the legislation by reference to conduct that occurs

"one year or more commencing on or after July 1, 1997." Code

§ 20-109(A). By this specific reference, the legislature

expressed its clear intention. The following language from one

of our precedents is instructive:

[It is] apparent from the language of the
statute, as well as the necessary
consequences of the act, that it applies to
cases filed after the effective date of the
statute, regardless of when the cause of
action arose. To hold otherwise would
require courts a generation from now to
apply outmoded principles of law. Indeed,
we would postpone solving for some time the
very inequity the legislature sought to
remedy. Disputes would arise over when the
grounds for divorce occurred and which
support and property laws applied. The
legislature could not have intended that
result.

Booth v. Booth, 7 Va. App. 22, 26, 371 S.E.2d 569, 572 (1988).

Because our Hering decision is contrary to the principle

decided in Working Waterman's Ass'n, and, indeed, fails to

reference that decision or to discuss that decision's ruling

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regarding the legislature's power to impair contractual

obligations, I would hold that Hering was wrongly decided.

For these reasons, I would hold that Code § 20-109(A)

applies to the contract at issue in this case and does not

impermissibly impair that contract. Accordingly, I would affirm

the judgment reducing the husband's spousal support in light of

Code § 20-109(A).

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