Early Texas jurisprudence held that alimony (periodic payments from a spouse’s future income to an ex-spouse after divorce), including alimony agreements, were against public policy. Then in 1967, the Texas Supreme Court determined in Francis v. Francis that if a divorce agreement included provisions for contractual alimony, such an agreement was enforceable under contract law and would not violate Texas public policy since the alimony was not court-ordered. The Court stated: “[A]pproval of the agreement by the court should not be held to invalidate it as alimony. Amicable settlement by the parties of their property rights should be encouraged, not discouraged.” The court further stated that “such agreements have whatever legal force the law of contracts will give them.”
Contractual alimony is often used in the settlement of divorce cases in which substantial assets cannot be liquidated without significant loss of value and there are insufficient liquid assets to equitably divide the community estate. The down side of using contractual alimony in this manner is that should the obligor default in the payment of the contractual alimony, the obligee does not receive the benefit of his or her bargain. While the obligee may be awarded a judgment from the court for the unpaid alimony, there may be insufficient assets remaining from which the obligee may collect. Past case law has consistently held that because contractual alimony was not court-ordered, it was not enforceable via contempt of court. This was true even when the trial court approved and adopted the parties’ agreements for contractual alimony in the final decree of divorce.
In 1995, the Texas Legislature amended the Texas Family Code to add provisions for court-ordered spousal maintenance (periodic payments from a spouse’s future income to an ex-spouse after divorce) in certain limited situations. The provisions for spousal maintenance included the enforcement by contempt for the non-payment of court-ordered spousal maintenance and “any payment of maintenance voluntarily entered into between the parties and approved by the court.” Texas Family Code §3.9609(a) (amended in 1995 — currently §8.059(a)). It appeared that this provision would allow enforcement of contractual alimony because contractual alimony is an agreement for support of a spouse entered into between the parties and approved by the court. However, subsequent court rulings revealed that contractual alimony was still considered a breed apart from spousal maintenance. In the 2001 case Woolan v. Tussing, the court, relying on Francis, explained that contractual alimony is an “assumed obligation for spousal support [and] is properly characterized as a contractual duty” in denying an enforcement action for contempt for contractual alimony under the spousal maintenance provisions of the Family Code.
In 1998, the Texas Legislature again amended the Texas Family Code spousal maintenance provisions to include the remedy of wage withholding for court-ordered and agreed spousal maintenance and contractual alimony, subject to passage of an amendment to the Texas Constitution. Upon the passage of the constitutional amendment, courts could order spousal maintenance withheld from an obligor’s earnings. The amendment also allowed spousal maintenance agreements and contractual alimony payments to be withheld from an obligor’s earnings if the parties’ agreement for maintenance or alimony expressly provided for withholding. Again it appeared as though the Texas Legislature was beginning to embrace contractual alimony; however, a closer analysis reveals that the inclusion of alimony payments in this amendment only provides a statutory basis to allow withholding of alimony if the agreement is properly drafted to include such relief.
The current Texas Legislature has again amended the spousal maintenance provisions of the Texas Family Code to include enforcement of spousal maintenance agreements by contempt. However, in order to obtain contempt relief, the spousal maintenance agreement cannot exceed the amount of periodic payments the court could have ordered (currently $5,000 per month). This recent limitation must be considered in conjunction with the limitations also set forth in §8.059(a) which requires that spousal maintenance agreements must comply with the provisions of Chapter 8 of the Texas Family Code. The Texas Supreme Court, in the 2007 case In re Green, has made it clear that to enforce any spousal maintenance agreement by contempt, it must comply with the eligibility requirements for spousal maintenance, the restriction on the monthly amounts, and the length of time maintenance can be paid, as listed in Chapter 8.
Likewise, the current amendments to §8.101 provide that any withholding order for agreed spousal maintenance must not exceed the amount of periodic payments or the duration of payments that are provided in Chapter 8. Presumably, since §8.101(b)(1) specifies that contractual alimony may be withheld from the obligor’s earnings if the agreement provides for withholding, it seems possible that a withholding order for contractual alimony payments could withhold an amount which exceeds the maximum limitations for periodic spousal maintenance or at least allow withholding up to the statutory limit. But, it should be noted that one court has interpreted §8.101(b) to mean that the contractual alimony provision for wage-withholding can only be enforced if it meets all of the criteria for spousal maintenance. See Pappolla v. Simovich, (Tex. 2013). This opinion would be inapposite with other court rulings on this issue.
The amendments of this act take effect September 1, 2013, and apply to the enforcement of contractual provisions of a divorce approved by the court regardless of whether the agreement was approved by the decree of the divorce and rendered before, on, or after the effective date.