Facts: When Husband and Wife divorced in 2005, they signed a marital dissolution agreement (MDA). The final judgment of divorce mentioned that an MDA had been executed, but it did not incorporate the MDA into the final judgement by reference.

The MDA required Husband to:

• maintain his existing life insurance,
• cooperate with Wife’s efforts to obtain more life insurance on him,
• revise his will to set up a testamentary trust to benefit the parties’ son, and
• supply Wife with a copy of his revised will within 30 days.

Eleven years after the divorce, Husband sent a letter to Wife explaining the efforts he made to follow the MDA and why he could not (or chose not to) do so.

Two or three years later, Wife sued Husband for breach of contract by not following the MDA.

Husband moved to dismiss Wife’s complaint because the 10-year statute of limitations on judgments had expired, but later clarified that he was relying on the six-year statute of limitations applicable to contracts.

The trial court ruled the breach occurred when Husband sent his letter to Wife, which was within the six-year statute of limitations. Husband’s motion to dismiss was denied.

Husband was ordered to take steps necessary to comply with the MDA. Wife was awarded her attorney’s fees.

Husband appealed.

On Appeal: The Court of Appeals reversed the trial court.

When an MDA is not approved by a Tennessee court and incorporated into a court order, its provisions must be enforced in a separate action applying general principles of contract law.

The statute of limitations for breach of contract is six years from the date of the breach or when one party shows a clear intention not to be bound by the contract. The statute of limitations runs when a contracting party first knows or should know that the contract will not be performed.

The Court found Wife’s complaint was barred by the six-year statute of limitations:

Taking the factual allegations contained in the complaint as true, it would appear that the earliest breach of the MDA occurred in 2005 when Husband failed and/or refused to provide Wife with a copy of his will and to establish a testamentary trust in accordance with the MDA. … The parties’ final decree of divorce was entered on September 30, 2005; therefore, the [MDA] provisions would have required Husband to provide Wife with [the] documentation no later than October 30, 2005. According to [Wife’s] allegations in the complaint, Husband failed to do so and also failed to cooperate with Wife to allow her to obtain a life insurance policy on his life.

The present action was not filed until 2019, despite [Wife’s] allegations that the earliest breach occurred in 2005.

*     *     *     *     *

As such, the breach of contract claim filed in 2019 was untimely, and the trial court erred by not granting Husband’s motion to dismiss.

The Court reversed the trial court’s judgment and dismissed Wife’s lawsuit.

K.O.’s Comment: Until last year, an MDA incorporated into a final judgment of divorce was subject to a 10-year statute of limitations that began running on the date of divorce. See, e.g., Proctor v. Proctor.

That changed on March 20, 2020, when Tennessee Code Annotated § 28-3-110(e) became effective. This law says there is no longer any time limitation on actions to enforce orders (not contracts) in family-law matters under Title 36.

This is another reason the best practice is usually to incorporate MDAs into the final judgment of divorce. Tennessee family-law attorneys should consider the risks when choosing not to incorporate an MDA into a final judgment of divorce.

Felker v. Felker (Tennessee Court of Appeals, Western Section, August 10, 2021).

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