Arrearages, Court orders, and Non-incorporated agreements

North Carolina Divorce Law Divorce and Separation Answers
1

Hello-

Prepare for a wall of text. Apologies in advance.

My SO and I have been together for the last ten months. She and her STBX have four kids. They separated last year, and have a signed separation agreement that was completed a couple of months later. In this agreement, they share custody of the kids. When calculated based on overnight stays, the split is 65/35 in her favor. The agreement also requires they split the cost of their private school 50/50 as long as it’s “mutually agreed to”. They split medical costs 50/50. They’re supposed to split the costs of extra-curricular activities 50/50 as well. The agreement also specifies that he will pay $700 per month for child support, and was calculated based on NC’s public guidelines- really nothing too fancy. Finally, he’s required to maintain medical insurance for the kids “as long as it’s available through his employer”.

About eight months ago he let her know that his job was in jeopardy and that his company was looking at lay-offs soon. He was “giving her a heads-up” and didn’t want her to be caught by surprise. Fast forward five months and he’s now out of a job with about a month of severance to go. He informed us of his intention to not pay child support (at all…) about 3 days before he filed a lawsuit for modification of the child support. He has paid zero dollars last month and will presumably paying the same amount for the foreseeable future. He has apparently interviewed for a few jobs but hasn’t managed to find anything yet. In his suit he alleges many things that are incorrect (and easily shown to be). I don’t have any doubt that he will eventually be required to pay some amount of child support in addition to some amount in arrearages. That said, I do have a few questions:

  1. As I understand it, their unincorporated separation agreement constitutes a private contract. As far as I know, inability to pay is not a defense for breach of contract, right?

  2. When the judge does/doesn’t modify the support order (or really, creates one since no such thing exists outside of their agreement) will his arrearages be calculated based on what she assigns in the order, or what was required under their contract?

  3. Their agreement includes a clause requiring a party in breach of contract to pay the attorney fees for the party forced to take action over that breach. How likely is this to be enforced?

  4. What are the chances of proving a bad-faith argument based on the fact that he took no action on his impending job loss until several months after the fact? He didn’t interview (or likely apply) until he was actually done, and into his severance.

  5. We’ve had to add the kids to her insurance through work (further decreasing our available funds). While I know that any such expense will eventually factor into the child support order, the expense came at a really terrible time. Furthermore, COBRA coverage was available, although expensive. Is there an argument to be made that his refusal to purchase COBRA coverage constitutes a further breach of contract since it was available “through his employer”?

Thanks in advance for any help.

2

Keep in mind that suing for breach and the motion to modify are two separate legal actions. But, the contract should be provided to the judge at the modification hearing so the judge can see what the parties agreed to.

  1. The unincorporated agreement is a contract, however the courts will always allow a parent to file a motion for custody or child support despite an existing (unincorporated) agreement. The court will always hear child related matters so as to act in the best interests of the children. So, her STBX has acted correctly by filing a modification reflecting his inability to pay.

  2. There is a presumption that the parents agreement on child support is just and reasonable, although her STBX will raise his unemployment as a defense. If the judge concludes that he is intentionally unemployed so as to avoid his child support obligation, then the amount owed in arrearages would be calculated using the monthly amount they agreed to.

  3. Although he is in breach, he has filed a motion to modify based on his unemployment. If the court finds that he is intentionally unemployed so as to avoid his child support obligation, then a judge may order attorney fees (by statute, not because of the agreement). Since she isn’t suing for breach of contract as there is already a proper motion to modify filed, you don’t need the breach language in the contract. Our statutes already provide for attorneys fees in child support actions.

  4. This is evidence your SO will need to share at the motion to modify. You’ll notice I keep using the same buzz words - but if he is intentionally unemployed so as to avoid child support then the court will impute income to him and he will still have a child support obligation. Keep in mind, once he does find employment, and I’m assuming he will have to at some point, your SO can file a motion to modify based on his new income.

5.This will be at the judge’s discretion.