Ambiguous Separation Agreements Lead to Extrinsic Evidence of Intent
by
Joseph C. Maya on Mar. 27, 2024
Summary: In a post-judgment divorce action regarding separation agreements, the Supreme Court of Connecticut rejected a lower court’s determination that an ambiguous term of a separation agreement was clear and unambiguous. It further found the trial court’s exclusion of extrinsic evidence that would establish party intent regarding the meaning of that term was improper.
The plaintiff, wife, and the defendant, husband, were divorced in March 1993 after twenty-nine years of marriage. At an uncontested hearing before the trial court, the wife’s counsel indicated the parties reached an agreement and requested that it be put on the record orally. The court agreed, and the wife’s counsel recited the agreement.
The Alimony Award
At issue on appeal was the language surrounding the alimony award, if there were adjustments to the husband’s salary. “In the event that the [husband’s] salary shall increase by $100,000 over the current level, then his obligation shall increase by $20,000 to the [wife] at that time.” Two additional provisions followed concerning decreases in salary and modification. However, when the court clerk asked for one of the terms again, the wife’s counsel used the word “income” rather than “salary.”
There were no definitions set forth regarding the terms used in the agreement. The court found the agreement fair and reasonable under the circumstances and both parties agreed. Neither party asked questions regarding the terms. A trial transcript was ordered and treated as the separation agreement in its entirety: there was no request that only certain portions would be designated as such.
The husband made alimony payments based on a percentage of his annual salary. However, beginning in 1996, he started to receive bonuses and stock options, but he continued to make alimony payments based on his just his salary. In December 2001, the wife filed a motion for contempt, arguing that the husband improperly based his alimony payments on his salary only, rather than his income as a whole.
Ambiguous Language in the Agreement
The trial court did not allow either party to testify regarding his or her intent or understanding of the agreement at the time they entered into it. It found that the agreement unambiguously linked alimony increases to increases in salary, which did not include bonuses, relying on dictionary definitions of the term “salary.” The court discredited the clerk’s inquiry and wife’s counsel’s response as immaterial, and denied the wife’s motion, who immediately appealed.
Separation agreements incorporated into dissolution decrees are treated as contracts. The court will look to the language of the agreement to ascertain intent of the parties, using ordinary meaning where it is sensible to do so. Ambiguity is established where its language is susceptible to more than one reasonable interpretation. In this event, the courts will allow extrinsic evidence to explain the terms in question. In the context of separation agreements, “salary” does not have a strict or narrow meaning, and courts need to consult the language of the agreement to determine which of differing definitions was intended.
The Court’s Decision
In this case, the Supreme Court noted that “salary” was not defined in the agreement, and both “salary” and “income” were used in relation to the husband’s alimony obligations. Because the agreement, as read, was incorporated into the judgment, the trial court had no authority to disregard the presence of the term “income” simply because it was prompted by an exchange with the court clerk. There were two plausible interpretations of the word “salary” – with or without bonuses.
This left the language of the separation agreement ambiguous, and the trial court erred when it determined that it was instead clear and unambiguous. Therefore, it was also improper for the trial court to exclude the testimony of both parties regarding their intent as to the meaning of “salary” and “income,” since extrinsic evidence is always admissible to explain ambiguity. The case was remanded to pursue this inquiry.
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