Williams v. Patton

¶1OPINION

¶2This case presents the question whether section 14.41(a) of the Texas Family Code prohibits parents from settling claims for child support arrearages before the unpaid amount has been reduced to a final judgment. We hold that section 14.41(a) does prohibit such settlements. Therefore, we affirm the judgment of the court of appeals. 796 S.W.2d 526 (1990).

¶3Houson D. Williams and Sherry Yvonne Patton were divorced in 1974. Patton was named managing conservator of their only child, Amy Diane Williams, and Williams was ordered to pay $121 per month in child *142support. Williams failed to make his support payments between August 1977 and October 1985.

¶4On October 15, 1985, when Williams was $9,885 in arrears, Patton filed a motion for contempt for failure to pay child support, and a motion to modify child support. While these motions were pending, Williams and Patton entered into a settlement agreement in which Williams promised to pay Patton $2,850 upon execution of the agreement and agreed to a modification of the divorce decree increasing the amount of his child support payments to $325 for the next 18 months and to $350 thereafter until the child reached the age of 18 years or was emancipated. In return, Patton agreed to release Williams from his obligation for the arrearages and also authorized and directed her attorney to obtain a dismissal of her contempt action with prejudice.1

¶5On May 13, 1986, the trial court signed an “Agreed Order Modifying Prior Order” and an order dismissing Patton’s contempt motion.2 The agreed order increased the monthly child support payments as provided in the settlement agreement but did not release Williams from his obligation for the child support arrearages. Neither of the court’s orders referred to the settlement agreement or acknowledged its existence in any way.

¶6Williams paid Patton $2,850 and complied with the terms of the agreed order for about a year and a half. When Amy moved to Williams's home in November 1987, however, he discontinued all payments, in violation of the agreed order. In August 1988, Patton brought a second motion for contempt, citing Williams’s nonpayment of child support since November 1987 as well as his nonpayment of support from 1977 to 1985. Williams asserted the settlement agreement as a defense to the contempt action for the 1977-1985 arrearages and also filed an original petition alleging that Patton had breached the agreement by seeking to hold him in contempt for the 1977-1985 arrearages.3 Patton cross-claimed for breach of the agreement, citing Williams’s failure to pay child support after November 1987.

¶7After a nonjury trial, the trial court held that the settlement agreement was void and rendered a take-nothing judgment on both parties’ breach of contract actions. The court also adjudged Williams to be in contempt and sentenced him to fifteen days in jail, but suspended imposition of the sentence.

¶8Williams appealed to the court of appeals, asserting that the agreement was enforceable and that he was entitled to specific performance of the agreement.4*143He conceded that, under the Family Code, parents cannot prospectively modify the amount of court-ordered child support payments without the approval of the trial court. See Tex.Fam.Code § 14.08(a) (modification of child support in a decree can only be accomplished by filing a motion in the court having jurisdiction of the suit affecting the parent-child relationship); see also Ex parte Colley, 621 S.W.2d 649, 651 (Tex.App.—Austin 1981, orig. proceeding); In re McLemore, 515 S.W.2d 356, 357 (Tex.Civ.App.—Dallas 1974, orig. proceeding). However, he argued that parents may nevertheless legally agree to settle a claim for past unpaid child support. The court of appeals disagreed, holding that, under Texas Family Code section 14.41, child support arrearages also remain under the supervision of the trial court and may not be modified by the parties without court approval until the court either (1) reduces the unpaid child support to written judgment or (2) loses jurisdiction.5796 S.W.2d at 530. Because neither of these conditions was met in this case, the court concluded that the settlement agreement was void and unenforceable and affirmed the judgment of the trial court.

¶9Section 14.41(a) of the Texas Family Code provides:

Judgment for Past-Due Child Support Payments

(a) Judgment for Arrearages. A periodic child support payment not timely made shall constitute a final judgment for the amount due and owing. On the motion of an obligee or obligor, after notice and hearing, the court shall confirm the amount of child support in arrears and shall render judgment against an obligor for any amount of child support unpaid and owing. The judgment rendered by the court may be subject to a counterclaim or offset as provided by Subsection (c) of this section. The judgment may be enforced by any means available for the enforcement of judgments for debts.

¶10Tex.Fam.Code § 14.41(a).

¶11In its opinion the court of appeals pointed out that the trial court is required to confirm the amount of arrearages before rendering judgment and, in doing so, must consider offsets as provided in section 14.-41(c), although it cannot reduce or modify the amount of arrearages. 796 S.W.2d at 530. In addition, the court of appeals emphasized that 14.41(b) set a time limit on the trial court’s jurisdiction to “enter judgment for past-due child support obligations.” Id.From a consideration of these provisions, the court concluded that the legislature intended for arrearages to remain under the supervision of the trial court until the court reduces the unpaid amount to written judgment or until the court loses jurisdiction. Thus, the court held that section 14.41(a) prohibits parents from contracting for payment of the ar-rearages without court approval until after the occurrence of either of those two events. We agree.

¶12The legislature intended that courts exercise independent judgment in matters affecting children, including the support obligation. In addition to denying the district court the authority to forgive child support arrearages under section 14.41(d), the legislature has also prohibited self-help by the obligor and obligee in prospectively modifying court-ordered child support without court approval. Tex.Fam.Code § 14.-08(a). Furthermore, the legislature has expressly required that parental agreements concerning child support be approved by *144the court, which can accept or reject the agreement depending on whether or not it is in the child’s best interest. Tex.Fam. Code § 14.06(aHd). These provisions of the Texas Family Code indicate that the legislature intended that the court closely supervise child support proceedings to guarantee that the best interest of the child is always considered.

¶13In addition to guaranteeing that the court closely supervise child support determinations, insisting that the arrearages be reduced to final judgment before the parties enter a settlement and release agreement accomplishes the primary purpose of section 14.41(a). The purpose of section 14.41(a) is to provide a custodial parent with remedies for nonpayment of child support in addition to contempt. Once the custodial parent obtains a money judgment for the amount of arrearages, this judgment may be enforced by any means normally available to a judgment creditor. Requiring that the trial court reduce arrear-ages to a final judgment before the parties can enter into a settlement and release agreement shields the custodial parent from the financial pressures which frequently result when child support goes unpaid. It is well documented that the years following divorce are generally very difficult financially for the custodial parent. See L. Weitzman, The Divorce Revolution 232 (1985); Cox, Economic Support of Children by Fathers Following Divorce, in The Parental Child-Support Obligation 157-58 (J. Cassetty ed. 1983). The economic hardships faced by the custodial parent can be attributed to numerous factors, including insufficient child care facilities, inflation and inadequate child support awards aggravated by frequent defaults.

¶14Due to the financial hardships so frequently encountered by the custodial parent following divorce, the failure of the former spouse to pay court-ordered child support puts the custodial parent in a very difficult position. If the non-custodial parent offers to pay a portion of child support arrearages in settlement of the entire amount due, the custodial parent may be persuaded to accept the offer due to present financial difficulties and the possibility of further delay and expense in collecting the unpaid amount.

¶15The dissent concludes, however, that the Family Code does not restrict the ability of parents to settle claims for arrearages. Noting that the trial court has no authority itself to reduce or modify the amount of child support arrearages, the dissenting opinion states that forcing parents to reduce arrearages to judgment before they can modify the amount imposes an “unnecessary, time-consuming, and expensive procedure on parents reasonably desiring to compromise a debt for child support arrear-ages.”

¶16In characterizing this procedure as “unnecessary,” the dissenting opinion ignores the fact that requiring the reduction of arrearages to judgment helps ensure the payment of child support. If non-custodial parents know that, at some future time, they can pressure the custodial parent into a settlement agreement releasing them from the obligation to pay arrearages, noncustodial parents will be tempted to forego the payment of child support until it becomes an unmanageable sum. The noncustodial parent can then take advantage of the financial pressures resulting from such arrearages to persuade the custodial parent to accept an offer of partial payment in settlement of the entire amount owed. In doing so, non-custodial parents not only escape their duty to pay child support but profit from their own wrongdoing. By giving the non-custodial parent the opportunity to negotiate such agreements, the dissenting opinion would actually encourage the non-payment of child support.

¶17Encouraging the non-payment of child support would only exacerbate the problem of enforcing court-ordered child support which has been, and continues to be, a very significant problem. In 1985, the total amount of child support payments due nationwide was $10.9 billion, but payments actually received only totalled $7.2 billion. 1 U.S. Dep’t of Health & Human Services, Office of Child Support Enforcement, Twelfth Annual Report to Congress for the Period Ending September SO, 1987 5 *145(1988). These figures just begin to show the magnitude of the problem.

¶18The procedure of reducing child support arrearages to final judgment is certainly not an unnecessary procedure and an expensive waste of time. Once the court confirms the amount in arrears and renders judgment for the amount owing, the obli-gee can enforce that judgment by any of the means available for the enforcement of judgments for debts, such as garnishment or attachment. If the custodial parent then wishes to enter into a contract regarding the amount and method of payment by the obligor, the custodial parent does so having all of these additional remedies available. This places the custodial parent on more equal footing with the obligor when negotiating such an agreement and diminishes the likelihood that the parent will be wrongfully pressured into accepting partial payment of the full amount due.

¶19In determining that public policy considerations do not require such settlement agreements to be invalidated, the dissenting opinion also distinguishes between future child support payments, which are obligations owed to the child, and past due child support payments, which are owed to the custodial parent. The dissent characterizes past due child support as an obligation belonging solely to the custodial parent, viewing the payment of past due support as nothing more than a reimbursement for amounts already expended for the support of the child.

¶20The characterization of past due child support as a mere reimbursement for amounts already expended oversimplifies the true situation. The function of child support is to help a custodial parent maintain an adequate standard of living for the child. When child support payments are not made, the result is a loss of funds available for the child’s food, clothing, education, and home environment. It is a strong, long-standing policy of this state to protect the interests of its children, and this is the policy underlying the enforcement of child support obligations. Characterizing arrearages as nothing more than a “debt” owed to the custodial parent ignores the reality that the child is frequently the one who has been harmed by nonpayment and it is the child’s interests which are ultimately sought to be protected. The payment of arrearages compensates for the wrong to the child at least as much as it reimburses the custodial parent for monies spent on the child. Although the extent to which a child presently benefits from the payment of arrearages varies from case to case, past due child support is still more properly characterized as an unfulfilled duty to the child than a “debt” to the custodial parent. See Adair v. Martin, 595 S.W.2d 513 (Tex.1980) (stating that unpaid child support is not characterized as a debt, even though it can be reduced to judgment and enforced in the same manner as a debt).

¶21The dissenting opinion cites several decisions from other jurisdictions which distinguish between agreements regarding future child support payments and those regarding arrearages. However, some recent decisions do not allow parents to contractually modify the amount of arrearages without court approval. See, e.g., McCool v. State ex. rel. State of Tenn., 560 So.2d 772, 774 (Ala.Civ.App.1990) (holding that agreements to waive child support arrear-ages are a “nullity,” noting that it is “well settled” in Alabama that parents cannot nullify a child support court order by mutual agreement); Goodpasture v. Goodpasture, 7 Va.App. 55, 371 S.E.2d 845, 847 (1988) (holding that past due support installments become vested as they accrue and are immune from change, and parties cannot by contract, acquiescence, or waiver modify the terms of a support order without court approval).

¶22The dissenting opinion incorporates the remarks of one commentator who, when reporting on the court of appeals decision, refers to this case as “silly.” This court does not view any case involving the protection of a child’s best interest as “silly.” Considering the comprehensive provisions of the Family Code intended to protect the children of this state, the legislature did not take this matter lightly. The dissent implies that a situation in which a non*146custodial parent has failed to pay child support for over eight years should be treated with levity. The best interest of the children of Texas is now and always will be treated by the courts of this state as a matter of the greatest importance.

¶23Requiring that the trial court reduce arrearages to a final judgment before such agreements can be entered into protects the interests of the child by encouraging the payment of child support and protects the interests of the custodial parent by equalizing the bargaining positions of the parties. For these reasons, we affirm the judgment of the court of appeals.

¶29concurring.

¶30I concur in the court’s judgment and opinion, but write separately because of a dual concern — the need for greater clarity in the underlying rationale for the court’s action and the unnecessary reference in Justice Comyn’s opinion to a troubling doctrine that could inspire considerable future mischief.

¶31Justice Cornyn would invalidate the contract at issue in large measure because it conflicts with “a principle of natural law” and the “moral” duty of parents to support their children. Opinion at 149. He relies upon Gully v. Gully, 111 Tex. 233, 231 S.W. 97 (Tex.1921), a case which does indeed note the natural and moral responsibility of the father to support his children, due to the “natural differences between the sexes” and his legal position as “the head of his family.” 231 S.W. at 99, 98.

¶32Natural law stems not from any mandate of the citizens of this State, nor from any enacted law or ratified constitution. Instead, this set of principles for the guidance of human conduct arises from divine or natural inspiration. In recent times this doctrine has been resuscitated by those eager for judicial imposition of a national moral code. Some have unwisely suggested that natural law would justify invalidation of environmental regulation,1 while others have relied on it in an effort to infringe upon a woman’s fundamental right to privacy by wrongfully asserting that natural law prohibits abortion under all circumstances.2

¶33While agreeing fully with Justice Cornyn that parents have a natural and moral obligation to support their children, I would not embrace the archaic dicta of Gully. Generally I prefer to leave the development of moral codes to individuals and families as well as to religious and other institutions. The unnatural injection of natural law into today’s decision can only serve to encourage those who are insistent in demanding that this court force the moral values of a few upon the rest of society.

¶34The philosophy of the dissent, on the other hand, seems more consistent with the view of law and economics advocate Richard Epstein who contends that contract

rules do not refer to flesh-and-blood individuals, but to those lifeless abstractions, A and B, about whom nothing else is known or — more to the point — is relevant. … [T]he identities of the contracting parties and the terms on which they contract are of no special concern to the state.... 3

¶35*147Under this lifeless and sterile concept of contract it is also unnecessary to distinguish between human beings and commodities,4 whether grains of wheat or dollar bills. Epstein argues further that private agreements should never be set aside on the basis of public policy or unconscionability; rather, all contracts for legal activities must be enforced except those made by incompetent parties and those procured by fraud. The ultimate public policy, according to Epstein, is that “men ... shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by the Courts....” 5

¶36With a similar rigid view of contract doctrine, the dissent relies on the principle of accord and satisfaction to treat the mother and father involved as merely Creditor A versus Debtor B. To analyze the agreement concerning parental support of their daughter in this fashion disserves them as well as the larger public interest. Here we must look beyond the four comers of the contract to consider its subject matter, the identity of the parties, and the surrounding circumstances.6

¶37Contracts affecting children have long been subject to heightened judicial scrutiny and the application of public policy analysis. This is particularly true with regard to adoption agreements7 and exculpatory contracts,8 and extends to child support agreements as well.9 Because a child is not property but an individual with dignity and humanity, a court should refuse to enforce contracts that are not in the child’s best interest. See United States v. King, 840 F.2d 1276 (6th Cir.1988) (parental consent to tortious treatment of child void as against public policy).

¶38The law of Texas does not require an inflexible, impersonal view of contracts. Contract is basically a theory of human obligations that must at times be adjusted to reflect the society in which agreements are entered. From early times, courts have refused to enforce certain contracts deemed to be against public policy.10 Oliver Wendell Holmes wrote long ago that there are circumstances in the interpretation of contracts where public policy, the interests of people other than the parties to the contract, must be considered. Beasley v. Texas & Pacific Ry. Co., 191 U.S. 492, 24 S.Ct. 164, 48 L.Ed. 274 (1903). On a num*148ber of recent occasions, our Texas judiciary has refused to enforce various contractual obligations that conflicted with public policy in this state.11 Substantial societal concerns may be reflected in statutes, state and federal constitutions, judicial decisions, administrative decisions, rules and regulations, or other statements of public policy.12

¶39The Court’s holding that the contract is unenforceable need not be based on mysticism. The proper basis for today’s decision is found in the well-established law of contracts unenforceable as against public policy. The particular public policy interest is reflected in statutes and case law cited by the court, 821 S.W.2d 145, and in article 16, section 28, of our Texas Constitution, all of which emphasize the paramount concern of our citizens with promoting the best interests of the child. Unlike natural law justifications, public policy analysis reflects stated societal concerns, not individual judicial inspiration.

¶40MAUZY, J., joins in this concurring opinion.