Is Anything Left of Integrated Bargain in Alabama?

The doctrine of integrated bargain for alimony in Alabama has always been a curious thing, a principle that, in a sense, seeks to have it both ways. Now the Alabama Court of Civil Appeals seems to have decided to torpedo it, sort of.

Ala. Code § 30-2-55 provides that alimony ceases on the recipient’s remarriage or living openly or cohabitation with a member of the opposite sex. One of these days we may have a nice conversation about whether there is a difference between “living openly” and “cohabitating,” but that’s not what this note is about. What this note is about is whether a divorcing couple can comply with that statute and still take advantage of the concept of an “integrated bargain” when it comes to alimony.

Alimony is normally subject to later modification by the court on a showing of a material change in circumstances, and no agreement of the parties can remove the court’s power to modify the judgment. Block v. Block, 201 So. 2d 51 (Ala. 1967). So far so good.

Now layer onto this clear principle the doctrine of “integrated bargain,” which says that when the parties establish the amount of alimony by taking into account the property settlement features of the agreement such that the entire provision for one spouse is in consideration of the entire provision of the other and the support and property terms are inseparable, the alimony payments they establish may not be modified later without the consent of both parties. The cases most often cited concerning an integrated bargain in Alabama are DuValle v. Duvalle, 348 So. 2d 1067 (Ala. Civ. App. 1977) and Gignilliat v. Gignilliat, 723 So. 2d 90 (Ala. Civ. App. 1998). DuValle contains a comprehensive examination of the doctrine and states the principle clearly.

So now we have two seemingly inconsistent principles: (a) that alimony is always modifiable, and (b) that, uh, well, sometimes alimony is not modifiable. Can they ever both be true?

The reason this note is about integrated bargain is because the Alabama Court of Civil Appeals has waded into the integrated bargaining swamp again with the case of Holmes v. Holmes, Case No. 2070623 (Ala. Civ. App. February 27, 2009). As I describe the facts of Holmes, I will leave out those that do not directly impact the integrated bargaining issue. The parties divorced using a settlement agreement. 15 months later the wife filed a petition for rule nisi (enforcement) seeking to have the husband held in contempt for failure to pay court-ordered child support, alimony, and other obligations. The husband counterclaimed that he was unable to pay and sought a reduction of his alimony.

The trial court denied the husband’s counterclaim and held the husband in contempt for failure to pay, finding that the alimony provision in the parties’ agreement constituted a non-modifiable integrated bargain. When the trial court denied the husband’s postjudgment motions, the husband appealed.

The appeals court quoted at length from the DuValle case as it worked to describe the difference between modifiable periodic alimony and a nonmodifiable integrated bargain:

Agreements by which both property rights and rights of support and maintenance are settled consist of two categories. In the ‘severable combination’, although both types of rights are fixed, the provisions as to each are severable and distinct so that the amount of alimony initially agreed upon by the parties may thereafter be modified by the trial court.

In the ‘integrated bargain’ category of agreement, the amount of alimony to be paid for support and maintenance has been established by the parties by taking into account the property settlement features of the agreement. In other words, ‘”integrated bargain” agreements [provide] for both support and division of property, but with the entire provision for one spouse being in consideration for the entire provision for the other, so that the support and property terms are inseparable.’ 61 A.L.R.3d 520, 529. Alimony payments thus established may not thereafter be modified by the court without the consent of both parties.

The rationale for the latter principle is clear. The parties have agreed that the support payments and the provisions relating to the division of property are reciprocal consideration. To modify the alimony provision might drastically alter the entire character of the property settlement agreement to the detriment of one of the parties. Hence, the trial court may not modify the alimony provision of the ‘integrated bargain’ without the consent of both parties. See Plumer v. Plumer, 48 Cal. 2d 820, 313 P.2d 549 (1957); Fox v. Fox, 42 Cal. 2d 49, 265 P.2d 881 (1954); Movius v. Movius, 163 Mont. 463, 517 P.2d 884 (1974).”

DuValle v. DuValle, 348 So. 2d at 1069.

The agreement the Holmes parties reached said the following about alimony:

A. The Husband shall pay to the Wife, as periodic alimony, the sum of One Thousand Six Hundred Ninety one Dollars ($ 1,691) per month. Said payments shall begin on the first (1st) day of October 1, 2006, and shall continue due and payable on the first (1st) day of each month thereafter in consecutive months until such time as the Wife shall die, remarry, or it otherwise terminates as provided by law.

B. The parties acknowledge that the agreement for the payment of periodic alimony by the Husband to the Wife is an integrated bargain; and, as such is fixed and non-modifiable, with the parties intending herein to finally settle all claims of rights of spousal maintenance and support pursuant to their divorce. The parties acknowledge and signify that it is their express intent and agreement that the provision herein contained for the payment of periodic alimony by the Husband to the Wife shall not hereafter be modifiable by either party, for whatever reason or circumstance. The agreement herein reached fully and finally establishes the obligation of the Husband to the Wife to provide towards her support and maintenance.

The husband argued in his appeal that the agreement between the parties was ambiguous as to whether it constituted an integrated bargain, because it contained both a statement indicating that the agreement was an integrated bargain and a statement that alimony would stop if the wife remarried. That was enough for the appeals court. “The express declaration that the provision is an integrated bargain is in direct conflict with the statement that the award is one for periodic alimony and subject to modification under certain circumstances. We conclude that the provision at issue is susceptible to more than one interpretation and, therefore, that it is ambiguous . . . . We reverse the February 1, 2008, judgment insofar as it determined that the provision of the parties’ settlement agreement pertaining to periodic alimony was unambiguous” Holmes, supra, at 17.

Note that the language in the Holmes parties’ agreement wasn’t really complete from the standpoint of an integrated bargain. It says nothing about the parties’ having taken property division into account in setting alimony. So the appeals court could have reversed on that basis alone, simply stating that the agreement was not clear that the parties had an “integrated” bargain. But the appeals court chose to ignore this and focused instead on the fact that the agreement called for the alimony to stop when the wife remarried.

So now we have found an agreement ambiguous simply because it complies with the Alabama code. Note that Ala. Code § 30-2-55 says nothing about the parties’ being able to agree otherwise. It’s mandatory, and the parties cannot escape or change it. Or can they?

Let’s look at the exact wording of Ala. Code § 30-2-55. Here’s the text: “Any decree of divorce providing for periodic payments of alimony shall be modified by the court to provide for the termination of such alimony upon petition of a party to the decree and proof that the spouse receiving such alimony has remarried or that such spouse is living openly or cohabiting with a member of the opposite sex.” (Portion omitted dealing with effective date). We Alabama lawyers have always inserted language about alimony stopping on the remarriage or cohabitation of the recipient based on the statute, but there’s no requirement that we do so. In fact, the statute seems to contemplate that we might not do so, because it specifically requires that any decree be modified so to provide.

So here’s what I’m willing to try the next time parties want to use an integrated bargain dealing with alimony. I’m going to start with what I have been using as my standard integrated bargaining language:

The parties have taken into account the property settlement features of their agreement in setting the amount of alimony to be paid for the support and maintenance of the Wife. This agreement is an unambiguous Integrated Bargain providing for both support and division of property, with the entire provision for one spouse being in consideration for the entire provision for the other, so that the support and property terms are inseparable as described in DuValle v. Duvalle, 348 So. 2d 1067 (Ala. Civ. App. 1977). The parties have agreed that the support payments and the provisions relating to the division of property are reciprocal consideration. To modify the alimony provision might drastically alter the entire character of the property settlement to the detriment of one of the parties.

And then I’m going to do two other things. I’m going to scower the agreement to remove any hint of language that might be used to argue the alimony should be changed. And then I’m going to do something else. I’m going to remove the language referencing Ala. Code § 30-2-55. That is, there will be no statement that alimony stops when the recipient remarries or cohabitates. Yes, I know the court is specifically required to modify it later to insert this provision, but that’s the only way I know to produce an umambiguous agreement.

I honestly don’t know whether this strategy would work. I only know no other strategy seems to have worked so far.

Because this post discusses something about my legal practice, I will end with this mandatory statement: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.