It’s Contracts 101: in interpreting the terms of a contract, the Court will look within the four corners of the contract, not to outside, or extrinsic, evidence, to determine the intent of the parties. But what happens when the terms are ambiguous, or when they conflict with one another?
As matrimonial lawyers, we are often presented with situations in which settlement agreements, often negotiated prior to our entrance into the case, contain ambiguous terms. Under the law, these divorce related settlement agreements, whether financial or custody-related, which are incorporated but not merged into judgments of divorce, are considered contracts, subject to the rules of contract interpretation. See, e.g., Ackermann v. Ackermann, 82 A.D.3d 1020 (2d Dep’t 2011); Camaiore v. Farance, 50 A.D.3d 471 (1st Dep’t 2008). In these situations, the Court must look at extrinsic, or parol, evidence, or evidence outside the four corners of the contract, to determine what the parties intended.
The Nassau County Supreme Court (Jeffrey A. Goodstein, J.) was recently presented with an interesting issue dealing with contract interpretation and the admissibility of extrinsic evidence. See D. v. D., NY Slip Op 50247(U) (Sup. Ct. Nassau Cty., 2021)[1]. In this case, the parties had signed a stipulation of settlement that departed from the provisions of the Domestic Relations Law in providing for the former husband to pay child support to the former wife for each of the parties’ children until each child reached the age of 22 (generally, under the Domestic Relations Law, emancipation occurs at the age of 21), even if the children had completed college. Clearly, the parties did not intend for college to be considered an emancipation event under their agreement. However, the agreement also provided for a number of factors under which, if met, a child would be considered emancipated. Most importantly here, the agreement provided that a child would be considered emancipated upon “entry into the armed forces of the United States.”
[1] The parties’ names have been redacted herein.
In 2020, the parties’ son enrolled at the United States Naval Academy in Annapolis, Maryland (USNA), and automatically became a midshipman upon his enrollment, in accordance with the Uniform Code of Military Justice. The husband argued that the child’s enrollment at USNA constituted entry into the Armed Forces of the United States as per the terms of the Uniform Code of Military Justice. The relevant provision of the Uniform Code of Military Justice, 38 U.S. Code sec. 1965, defines “active duty” service as follows: “(1)(D) full-time duty as a cadet or midshipman at the United States Military Academy, United States Naval Academy, United States Air Force Academy, or the United States Coast Guard Academy.” (emphasis added).
The Wife, for her part, argued that the Court should not look to extrinsic evidence, including the Uniform Code of Military Justice, to determine the parties’ intent in providing that the husband would pay child support until the children were 22. She argued that this situation fell within the four corners of the agreement: by its own terms, USNA was a college, and the child would have the same obligations to complete homework and attend classes that he would have had at any civilian college. Ultimately, he would earn a degree akin to a degree he would earn at a civilian college. Importantly, the wife noted that although the United States government was providing him a full scholarship and a stipend during his time at the USNA, his customary expenses, for which she would need to support him, far exceeded the stipend.
In the face of these conflicting provisions, the Court looked to the public policy underpinning emancipation--- the core issue being when a child should be considered self supporting. On this note, there was clear Second Department precedent in Beekman-Ellner v. Ellner, 296 AD2d 404 (2d Dept. 2002) and Zuckerman v. Zuckerman, 154 AD2d 666 (2d Dept. 1989), which ruled that entry into a military academy renders the child self-supporting and therefore emancipated. In the absence of more defining language in the agreement which might have created an exception to the provision in the agreement that provided that entry into military service constituted emancipation, (i.e., specific language addressing entry into a military academy) the trial court was bound to rule based upon the precedent that by virtue of his entry into the military academy, the child was emancipated. For parties entering into settlement agreements going forward, the upshot of this decision is that parties should specifically carve out military academies (which are more akin to college) from military service emancipation, recognizing that the child’s expenses will not likely be fully covered by government stipends and scholarships to attend military academies. More broadly, this is just one more example of the need to reconsider and fine tune the language customarily included in settlement agreements.