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Alimony Terminated

Do you think your spouse owes you alimony? Maybe the court will agree (or perhaps your spouse will agree if it means a clean, less-expensive breakup). As the prospective recipient of alimony, though, be mindful of your love-life once everyone has signed the dotted line on the separation agreement. When drafting a separation agreement that includes provisions for alimony, it’s important to note that “statute trumps agreement.” In other words, just because you agree to something in a separation agreement doesn’t mean it will stand under the scrutiny of the law once your love-life heats up post-split. After multiple appeals (and who knows how much attorney fees), the North Carolina Supreme Court in Underwood v. Underwood, 365 N.C. 235, 717 S.E.2d 361 (2011), clarified some possible confusion in the alimony arena.

In the story of the Underwoods, William and Theresa Underwood decided to part ways after ten years of marriage. Litigation ensued. Once it was all settled, William agreed to pay $1,000.00 per month to his former wife, Theresa, in the form of alimony. The language of the court-ordered settlement stated that alimony would continue until Theresa either died or got remarried. William paid Theresa under the agreement’s alimony provisions for seven years, at which point Theresa was now living with her boyfriend. William saw Theresa’s new living situation as the perfect opportunity to stop his monthly payments, so he filed a motion to terminate his alimony obligation.

Theresa was not happy, to say the least. She moved to dismiss William’s motion to terminate. She based her reasoning on the language of the parties’ original, court-ordered agreement (more technically, on the agreement’s “reciprocal consideration provision,” but more on that in a follow-up post). Theresa claimed that, based on the law surrounding contract formation and consideration, their agreement could not be modified with respect to the alimony award. Period. She asserted that it simply didn’t matter she was living with her boyfriend—she was still entitled to the ongoing alimony payments because, frankly, she was neither remarried nor dead.

The trial court disagreed with her and terminated her alimony based on the mandates of North Carolina’s alimony statutes, namely, N.C. Gen. Stat. § 50-16.9(b): “If a dependent spouse who is receiving post-separation support or alimony from a supporting spouse under a judgment or order of a court of this State remarries or engages in cohabitation, the post-separation support or alimony shall terminate.” (emphasis added). Round after round of appeals ensued, and, ultimately, the Supreme Court agreed with the trial court’s decision to terminate. William prevailed. Query whether the present value of the stream of monthly alimony payments would have outweighed the attorney fees he incurred!

The take-away from the Court’s decision is twofold—

(1) Statutes can (and often do) trump agreements between parties: The Underwoods' alimony contract “cannot immunize alimony payments from modification or termination. Alimony is a creature of statute, subject to both modification and termination under sections 50–16.9(a) and (b), and a reciprocal consideration provision cannot override these statutory requirements.”

(2) The wording of a separation agreement is paramount in effecting the parties’ goals: If a spouse wants to ensure an alimony award is iron-clad, the wording of the contract providing for alimony is a central part of hedging risk against a future motion to terminate. Also, make sure you really love the person you’re moving in with! It may cost you.

Charlotte Divorce Lawyer and Family Law Attorney

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