Background
Nancy and Stephen Fuller jointly operated a construction company, Fuller Dirt Worx, during their marriage. In their 2021 mediated divorce settlement, Father agreed to transfer his full interest in the company to Mother, while the company would pay him $1,500 weekly for 50 months. Father also agreed to sign a broad non-compete covenant.
The superior court found the agreement fair and incorporated its business-division terms into the 2022 dissolution decree. In later enforcement proceedings, Mother alleged Father took about $30,000 from the company and started a competing business; Father alleged Mother stopped making the weekly payments shortly after they began.
The Court’s Holding
After an evidentiary hearing, the superior court found both parties had breached the mediated agreement and denied both enforcement petitions. Father appealed the denial of his request to enforce the agreement.
The Court of Appeals vacated that portion of the order and remanded. Although the record supported the trial court’s finding that both parties breached the agreement, the trial court did not explain the legal basis for refusing enforcement. Because the agreement had been incorporated by reference rather than merged into the decree, it retained independent contractual status and was subject to contract-law principles.
Key Takeaways
- A fair divorce settlement incorporated by reference into a decree remains an independent contract.
- Findings that both parties breached an agreement do not alone explain why enforcement is unavailable.
- A trial court must state the legal basis for declining to enforce such an agreement.
Why It Matters
The decision underscores that enforcement disputes over incorporated divorce agreements require contract-law analysis, not simply a finding of mutual breach. Trial courts must articulate the doctrine or legal rationale supporting a refusal to enforce the agreement so appellate review is possible.