Rustad v. Rustad

VAUGHN, Chief Judge. I. The first question we consider on appeal is whether the trial court had jurisdiction to hear plaintiffs motion in light of the parties’ contractual agreement to submit disputes regarding spousal and child support to mediation and arbitration. For reasons set forth below, we hold that the trial court had such jurisdiction. The parties in this case entered into a separation agreement in 1979, which included therein provisions for custody and support. Said agreement also contained a provision that all future disputes arising out of or relating to the contract would be submitted to mediation and arbitration. Ordinarily, a contractual agreement to resolve disputes through arbitration is valid, enforceable, and irrevocable. G.S. 1-567.2; Adams v. Nelsen, 67 N.C. App. 284, — S.E. 2d — (1984); Sims v. Ritter Construction, Inc., 62 N.C. App. 52, 302 S.E. 2d 293 (1983). In Crutchley v. Crutchley, 306 N.C. 518, 293 S.E. 2d 793 (1982), our Supreme Court made it *61 clear, moreover, that the policy underlying the recently adopted Uniform Arbitration Act, G.S. 1-567.1, et seq., favoring arbitration as a means of dispute resolution, extends to domestic relations disputes. Although the court always retains ultimate authority to review and modify arbitration awards involving custody and child support, the parties may agree initially to submit such controversies to an arbitrator. Crutchley, supra. In 1979, the parties agreed, in their separation contract, to submit controversies, including those involving custody and support, to arbitration. When, in 1981, a controversy involving custody developed, however, the parties instead submitted themselves to the jurisdiction of the court. On 30 April 1982, after a hearing in which both parties presented evidence, the court awarded custody to plaintiff husband and retained jurisdiction for further orders as necessary in the best interests of the children. By submitting themselves initially to the jurisdiction of the court, the parties waived their rights to arbitration arising under their separation agreement and furthermore foreclosed the right to enter into a subsequent arbitration agreement. When, on 11 May 1982, the parties entered into an agreement to arbitrate disputes, including child support, such agreement was void ab initio. See Crutchley, supra. Once a civil action has been filed and is pending, it is too late to enter into an agreement to arbitrate. Id. The court, which rendered the 30 April custody order, retained sole jurisdiction over matters involving custody and child support. Defendant’s motion for arbitration in this case, was, therefore, properly denied. II. We next consider defendant’s contention that the trial court erred in allowing plaintiff to reduce his support payments by $500 per month, after finding such sum to have been intended as child support. For reasons set forth below, we find no error. The cardinal principle in construing separation agreements, as with any other contract, is to determine the intent of the parties, ascertained from the expressions used, the subject matter, the end in view, the purpose sought, and the situation of the parties at the time of the contract’s execution. Bowles v. Bowles, 237 *62 N.C. 462, 75 S.E. 2d 413 (1953). Upon review of the separation agreement involved here, we conclude that the trial court correctly ascertained the intention of the parties in construing the contract’s support provisions. Paragraph 6(a) of the agreement defeats any argument that plaintiffs obligation to pay $1,265 per month was intended solely as alimony, no part of which represented child support. Paragraph 6(a) provided: 6. Support of Wife and Children: (a) Beginning May 1, 1979, and on the first of each month thereafter until reduced, increased or terminated as hereinafter provided, the husband shall pay to the wife as alimony for her support and the support of the children the sum of one thousand two hundred sixty-five dollars ($1,265) per month as basic support and alimony. Other provisions of the parties’ contract make it clear that of plaintiffs total support obligation, $765 represented alimony and $500 represented child support. Paragraph 6(c) provided for a $200 reduction in plaintiffs support obligation when the parties’ first child enrolled in college or turned nineteen and a $300 reduction when the second child enrolled in college or turned nineteen. The total reduction in support when the children either reached majority or entered college was thus $500. The contract, furthermore, consistent with traditional characteristics of alimony, provided for a $765 reduction in payments if defendant remarried. See Falls v. Falls, 52 N.C. App. 203, 278 S.E. 2d 546, review denied, 304 N.C. 390, 285 S.E. 2d 831 (1981). Such reduction would leave defendant with $500 per month for child support. We note that although the contract oftentimes uses the term “alimony” to refer to plaintiffs support obligation, the literal wording of a separation agreement does not control its interpretation. Pruneau v. Sanders, 25 N.C. App. 510, 214 S.E. 2d 288, cert. denied, 287 N.C. 664, 216 S.E. 2d 911 (1975). For tax reasons, payments intended as child support are often designated “alimony.” Falls v. Falls, supra. When the agreement was executed in 1979, the parties agreed that defendant would have physical custody of the children. Plaintiff, thus, as the non-custodial parent, had the obliga *63 tion to provide child support. See G.S. 50-13.4. When, however, in 1982, pursuant to court order, plaintiff was given custody of the children, plaintiffs contractual and statutory obligation to provide defendant with child support abated. We note that pursuant to Paragraph 7(e) of the parties’ agreement, “alimony” would not abate unless the permanent residence of the children changed. Defendant has presented no evidence to refute a conclusion that $500 per month represented a reasonable and just child support obligation. See Fuchs v. Fuchs, 260 N.C. 635, 133 S.E. 2d 487 (1963). Finding that the court correctly determined the parties’ intentions underlying the contract’s support provisions and that plaintiff, as the custodial parent, no longer has an obligation to pay child support, we affirm the trial court order. Affirmed. Judges WHICHARD and PHILLIPS concur.