In a recent Rule 23 decision, a panel of the Massachusetts Appeals Court reversed the lower court and held that G. L. c. 208, section 53 (i.e., section 53 of the Alimony Reform Act) does not restrict parties’ ability to negotiate and agree upon how alimony is calculated when entering into a separation agreement. (See Pedro v. Pedro).
The parties in Pedro v. Pedro were divorced with the entry of a separation agreement that, in relevant part, obligated the husband to pay alimony to the wife in the amount of $1,009.00/week, which amount was “calculated at 30% of $175,000 in gross taxable income.” In addition, husband was obligated to pay additional alimony to the wife in the “sum of 30% of his total gross income as it may exceeds [sic] $175,000.00 per year.”
The wife in Pedro initiated a Complaint for Contempt against the husband, alleging that the husband failed to meet his obligation to pay her 30% of his income over $175,000 as alimony. In response, husband relied upon Mass. Gen. Law. c. 208, §53(c)(1) and argued that “rent generated by a rental property that was allocated to him as part of the division of marital property should be excluded in calculating “total gross income” for purposes of calculating his alimony obligation.” Alternatively, the husband argued that “total gross income” as set forth in the parties’ separation agreement was not intended to include rental income. The wife argued the opposite.
In support of its ruling, the Court explained that, while M.G.L. c. 208, §53 includes “references to what a court may and may not include in a court’s calculation of alimony,” the statute “makes no reference to how alimony is to be calculated when negotiated among the parties.” The court expressly stated that, “[n]othing in the statute explicitly or impliedly restricts parties’ ability to negotiate and agree on their own calculation of alimony — even one that may be inconsistent with § 53’s restrictions on judicial awards.” Recognizing the ambiguity in the separation agreement (i.e., what was intended to be included in “income” for the purposes calculating alimony,) the court did not find the husband in contempt and remanded the matter back to the lower court for further determination on the meaning of the agreement.
The Pedro ruling advances the Court’s “long-standing preference that divorcing couples resolve their marital disputes by agreement rather than through litigation.”