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ELLIOTT v. ELLIOTT

February 22, 1973

Jane U. ELLIOTT, Plaintiff,
v.
Robert B. ELLIOTT, Defendant


Robert J. Ward, District Judge.


The opinion of the court was delivered by: WARD

PRELIMINARY STATEMENT

This action for breach of contract was tried to the Court without a jury. The litigation stems from a Separation Agreement entered into by the parties who were subsequently divorced. The Agreement provided that the husband (defendant herein) pay to the wife (plaintiff herein) support and maintenance of $10,000 annually to be increased or decreased in light of defendant's income.

 It is undisputed that with the exception of payments totalling $3950 made in 1963, $400 in 1971 and $7150 in 1972, defendant has not made any payments to plaintiff since January, 1962. The parties disagreed over whether the $3950 paid in 1963 was for payments due before or after January, 1962. Defendant contended, however, that subsequent events discharged him from his contractual obligations under the Separation Agreement.

 Sometime prior to 1964 plaintiff became liable to the Internal Revenue Service for unpaid taxes. During 1964 the parties entered into negotiations dealing with defendant's alimony arrears and seeking a way for plaintiff to receive funds sufficient to pay the amount she owed to the Internal Revenue Service. These negotiations resulted in an Amended Agreement dated August 31, 1964 which forgave defendant's arrears in return for his making payments on an increased mortgage on plaintiff's residence. The proceeds of the mortgage were to be used by the plaintiff to pay her tax liability. However, the lender refused to grant the mortgage. Defendant has seized on this fact in an attempt to absolve himself from all past and future obligations to plaintiff. Such a complete forgiveness was clearly not the intent of the parties. Rather, the Amended Agreement was a release of the alimony arrears on condition that a mortgage would be granted which would have permitted plaintiff to pay her taxes. Since the Amended Agreement remained inoperative because of a failure of condition, the original Separation Agreement remained in force.

 In amplification of the foregoing, the findings of fact and conclusions of law which follow demonstrate that judgment must be entered for the plaintiff.

 FINDINGS OF FACT

 1. Plaintiff is a resident of Massachusetts. Defendant is a resident of New York.

 2. Plaintiff and defendant were married on May 9, 1943, and were divorced on May 28, 1954 by a Decree of Absolute Divorce made and entered in the Second Civil Court of Bravos District, State of Chihuahua, Republic of Mexico, in an action instituted by plaintiff against defendant.

 3. There were no children of said marriage. Defendant remarried immediately after the said divorce. Plaintiff has not remarried.

 4. The Divorce Decree incorporated by reference a Separation Agreement by and between plaintiff and defendant dated May 4, 1954. The terms of this Separation Agreement were arrived at after arm's length negotiations by counsel for the parties. The negotiations involved full exploration of the financial situation of the parties.

 5. Defendant agreed in said Separation Agreement to pay to plaintiff after the first year following the divorce the base sum of $10,000 annually for her support and maintenance in weekly installments of $192.31 until her death or remarriage. Separation Agreement para. 3(A).

 6. The aforesaid installment payments were a standard based upon defendant's representation in the Separation Agreement that his then net annual income was at the annual rate of $40,000 before payment of his income taxes. Separation Agreement para. 3(A).

 7. Defendant also agreed in said Separation Agreement that the base annual payment of $10,000 by defendant to plaintiff would be increased or decreased based upon annual changes in defendant's "net annual income" of $40,000 before payment of his income taxes. In the event defendant's net annual income after the first year following the execution of the Separation Agreement were to vary above or below said $40,000, the payments to plaintiff by defendant would be increased or decreased by 25% of this variation, as the case might be, but in no event would the yearly payments to plaintiff total less than $5000 nor more than $20,000. Separation Agreement para. 3(C)(I).

 8. The aforesaid standard net annual income of $40,000 was defined in the Separation Agreement and was intended by the parties to be defendant's net annual income before payment of his income taxes from the radio-television firm of Elliott-Goulding Productions, which paid defendant ...


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