Kristian Petri Talvitie v. Barbara Talvitie.

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

23-P-917

KRISTIAN PETRI TALVITIE

vs.

BARBARA TALVITIE. 1

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

Kristian P. Talvitie (husband), the former spouse of

Barbara Clark (wife), appeals from a judgment entered by a judge

of the Probate and Family Court on the wife's complaint for

contempt. Although the husband was not found in contempt, he

was ordered to pay the wife $573,052 in alimony. The husband

claims that the judgment is based on an improper and incorrect

interpretation of the terms of the parties' separation

agreement. We disagree and, accordingly, we affirm.

Background. We summarize the relevant facts found by the

judge after trial, supplementing them with undisputed facts in

1As is our custom, we set forth the parties' names as they
appear in the complaint.
the record, and reserving other facts for later discussion. See

Pierce v. Pierce, 455 Mass. 286, 288 (2009).

The parties were married in 2002. 2 In December 2018, they

filed a joint petition for divorce. At that time, they signed a

separation agreement (agreement). The agreement provided, in

relevant part, that the husband would pay a percentage of his

"earned income" to the wife as alimony, according to a self-

executing formula with a sliding percentage scale based on the

amount of the husband's "earned income" in a given year. In

addition, income earned by the wife would result in a dollar-

for-dollar reduction in the husband's earned income for purposes

of calculating alimony. The agreement defined the term "earned

income" as follows.

"gross (i.e., pre-tax) income from . . . equity based
compensation (when income is actually realized or deferred
on a cash basis as opposed to merely a taxable event),
including gross pre-tax proceeds as a result of the release
of restricted stock (but only when cash is realized from
the event), the gross pre-tax proceeds from the exercise of
stock options which shall be assumed to take place upon the
vesting of same and following sales of resulting stock
shares, and the gross pre-tax proceeds of all other forms
of company ownership-based incentives from the employer,
exercised qualified and non-qualified stock options and
stock grants in the year income is recognized, deferred
compensation (qualified or non-qualified) when said income
is deferred." (emphasis added). 3

2 The parties had four children over the course of their
marriage.

3 The agreement's provisions pertaining to alimony merged
with the divorce judgment, rather than survived with independent
legal significance.

2
At the time of the divorce, the husband worked for a

privately held company that granted him restricted stock units

(RSUs) having no market value (unless a liquidity event occurred

that allowed him to exchange the shares for cash). In 2019, the

husband began working for a publicly traded company and

forfeited the RSUs granted by his prior employer. The equity

component of the husband's compensation package with his new

employer included RSUs and performance-based stock units (PSUs).

The husband's new employer routinely granted him bonuses in the

form of stock that instantly vested: the vested RSUs and PSUs,

which were released to the husband as common stock and deposited

in his E*TRADE account, 4 were reported on his W-2 as taxable

income. The husband's ability to sell this stock was limited by

both a holdback requirement (requiring him to maintain a balance

of shares equal to three times his base salary) and blackout

periods during which stock could not be sold (there were

approximately sixty to eighty days per year not subject to

blackout periods).

In February 2022, the wife filed a complaint for contempt

alleging that the husband owed her approximately $600,000 in

4 A portion was withheld and liquidated by the husband's
employer to cover the taxes on the vested stock.

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alimony based on the husband's receipt of vested RSUs and PSUs

in 2019, 2020, and 2021. Following a three-day trial, the judge

found the husband not in contempt because, the judge reasoned,

the agreement's definition of earned income was ambiguous as

applied to the husband's RSUs and PSUs granted by his new

employer. As the judge explained, given the existence of a

genuine dispute regarding the definition of earned income, the

husband did not violate a clear and unequivocal order and,

accordingly, there was no basis for a judgment of contempt.

Jones v. Jones, 101 Mass. App. Ct. 673, 687 (2022). Applying

basic rules of construction, the judge then found that the

husband's vested RSUs and PSUs constituted earned income when

their release resulted in a taxable event (as reported on the

husband's W-2). The judge noted that the agreement made no

mention of holdback requirements or blackout dates and concluded

that such limitations placed on the husband's common stock did

not affect the calculation of the husband's earned income. The

judge concluded that the husband owed the wife $573,052 in

unpaid alimony (the majority of which was attributable to the

husband's receipt of over $6 million in vested RSUs in 2021).

This appeal followed.

Discussion. The interpretation of an agreement is a

question of law we review de novo. Colorio v. Marx, 72 Mass.

App. Ct. 382, 386 (2008). "We review the judge's interpretation

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of the merged agreement under traditional principles of contract

law. Although a merged provision does not survive the judgment

as a binding contract, we nevertheless will review the [judge's]

findings [and rulings] to determine whether the judge gave

appropriate consideration to the parties' intentions as

expressed in their written agreement" (quotations omitted).

Jones, 101 Mass. App. Ct. at 681, quoting Mandel v. Mandel, 74

Mass. App. Ct. 348, 351 (2009). "Whether a separation agreement

is ambiguous is [also] a question of law. If a separation

agreement 'is susceptible of more than one meaning and

reasonably intelligent persons would differ as to which meaning

is the proper one,' the language is ambiguous, and resort may be

made to extrinsic evidence." Jones, supra, quoting Bercume v.

Bercume, 428 Mass. 635, 641 (1999).

Here, the husband principally contends that the judge (1)

erroneously determined that the agreement was ambiguous; and (2)

failed to properly consider evidence of the parties' intent when

resolving the purported ambiguity. 5 We address his arguments in

turn.

The husband also contends that the judge erred in
5

subtracting the wife's income from his total income, rather than
from the first $330,000 of his income. The agreement required
the husband to pay alimony equivalent to 32.5 percent of his
income up to $330,000, with smaller percentages assigned to
three income tiers above $330,000. The agreement provided that
"the [w]ife's earned income shall reduce, dollar for dollar, the
amount [of] the [h]usband's 'Earned Income' (as set forth above)

5
1. Ambiguity. "Contract language is ambiguous 'where the

phraseology can support a reasonable difference of opinion as to

the meaning of the words employed and the obligations

undertaken'" (citation omitted). Bank v. Thermo Elemental Inc.,

451 Mass. 638, 648 (2008). "The mere existence of the parties'

disagreement does not make the language ambiguous." Browning-

Ferris Indus., Inc. v. Casella Waste Mgt. of Mass., Inc., 79

Mass. App. Ct. 300, 307 (2011). Rather, "[a]n ambiguity arises

from language susceptible of different meanings in the eyes of

reasonably intelligent persons." Id. "To answer the ambiguity

question, the court must first examine the language of the

contract by itself, independent of extrinsic evidence concerning

the drafting history or the intention of the parties." Bank,

supra. Accordingly, we turn first to the language of the

agreement.

The alimony provision required the husband to pay the wife

a percentage of his "earned income," which included "gross

prior to the calculation of the [h]usband's alimony amount." We
are unpersuaded, as was the judge below, by the husband's
assertion that the illustrative calculation set forth in the
agreement subtracting the wife's income from the husband's base
salary of $330,000 demonstrated the parties' intent that the
wife's income must always reduce the first $330,000 of the
husband's income, even when he earns more than that. The
agreement unambiguously required the wife's income to be
subtracted from the husband's total earned income (regardless of
the amount), before calculating his alimony obligation using the
percentages and income tiers set forth in the agreement.

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(i.e., pre-tax) income from . . . equity based compensation

(when income is actually realized or deferred on a cash basis as

opposed to merely a taxable event), including gross pre-tax

proceeds as a result of the release of restricted stock (but

only when cash is realized from the event)" (emphasis added).

The parties' dispute centers on the meaning of the phrase "cash

is realized." The husband asserts that the phrase means vested

RSUs must be sold or liquidated to qualify as "earned income,"

whereas the wife asserts that the RSUs need only vest and be

released to the husband in a form that can be easily liquidated

and converted to cash to so qualify.

Neither "cash" nor "realized" are defined terms in the

agreement. Accordingly, "to ascertain possible relevant

meanings" for those terms, we look to other sources, including

"dictionary definitions." Dorchester Mut. Ins. Co. v. Krusell,

485 Mass. 431, 438 (2020). See Suffolk Constr. Co. v. Illinois

Union Ins. Co., 80 Mass. App. Ct. 90, 94 (2011) ("established

dictionaries can furnish the approved natural meaning of

disputed terms"). Black's Law Dictionary defines "cash" as

either (1) "[m]oney or its equivalent," or (2) "[c]urrency or

coins, negotiable checks, and balances in bank accounts."

Black's Law Dictionary (12th ed. 2024). The second definition

is self-explanatory; however, the first definition (i.e.,

"[m]oney or its equivalent") requires further examination.

7
Black's Law Dictionary sets forth several definitions for

"money," including (1) "[t]he medium of exchange authorized or

adopted by a government as part of its currency," and (2)

"[a]ssets that can be easily converted to cash." Black's Law

Dictionary (12th ed. 2024). 6 Like "cash," there is more than one

accepted definition for "realized": Black's Law Dictionary

defines "realization" (and the corresponding verb to "realize")

as either (1) "[c]onversion of noncash assets into cash assets,"

or (2) "[a]n event or transaction, such as the sale or exchange

of property, that substantially changes a taxpayer's economic

position so that income tax may be imposed or a tax allowance

granted." Black's Law Dictionary (12th ed. 2024).

As illustrated above, the phrase "cash is realized" is

susceptible to more than one meaning and here each party's

interpretation of that phrase is reasonable. Accordingly, the

judge correctly determined that the agreement was ambiguous with

respect to the RSU and PSU components of the husband's current

compensation package. See Browning-Ferris Indus., Inc., 79

Mass. App. Ct. at 307. The husband nevertheless asserts that

his interpretation is the only one supported by other language

in the alimony provision requiring income from equity based

6 The two other definitions for "money" are "[c]apital that
is invested or traded as a commodity," and "[f]unds; sums of
money." Black's Law Dictionary (12th ed. 2024).

8
compensation to be "actually realized . . . as opposed to merely

a taxable event" (emphasis added). He contends that this

language supports his position that the parties intended for

"cash is realized" to mean proceeds received from the sale or

liquidation of stock, rather than stock merely reported as

taxable income on a W-2.

The problem with the husband's position is that it is not

supported by other surrounding language in the agreement. See

General Convention of the New Jerusalem in the U.S. of Am., Inc.

v. MacKenzie, 449 Mass. 832, 835 (2007) ("The words of a

contract must be considered in the context of the entire

contract rather than in isolation"). The alimony provision

lists several types of "equity based compensation" that qualify

as "earned income," including RSUs and stock options. With

respect to the latter, the agreement provides that "the gross

pre-tax proceeds from the exercise of stock options" constitute

earned income "upon the vesting of same and following sales of

resulting stock shares" (emphasis added). Although the parties

specifically included language requiring the sale of exercised

stock options, they did not include similar language requiring

the sale of vested RSUs (instead they included language

requiring that "cash is realized"). Had the parties intended

for vested RSUs to qualify as "earned income" only if they are

liquidated or sold, they could have included language to that

9
effect, but they did not. Cf. Computer Sys. of Am., Inc. v.

Western Reserve Life Assur. Co. of Ohio, 19 Mass. App. Ct. 430,

437 (1985) ("if the parties had intended at-will termination,

they could have said so . . . expressly" in lease agreement).

Moreover, requiring that vested RSUs be sold before treating

them as earned income would complicate the calculation of the

husband's income, in contravention of the parties' stated intent

for the agreement's alimony provision to be self-executing,

enabling them to calculate the husband's alimony obligation

without "the necessity of ongoing litigation."

2. Evidence of intent. "[W]here the separation agreement

is ambiguous, the governing consideration is the intent of the

parties to the separation agreement as determined by objective

evidence." Jones, 101 Mass. App. Ct. at 683. "Once a

contractual ambiguity emerges, the meaning of the uncertain

provision becomes a question of fact for the trier." Browning-

Ferris Indus., Inc., 79 Mass. App. Ct. at 307. "The fact finder

may then consult extrinsic evidence including the circumstances

of the formation of the agreement and the intentions and

objectives of the parties." Id. The husband asserts that the

judge failed to consider extrinsic evidence of the parties'

intent, instead impermissibly relying on the opinion of the

wife's expert. For the reasons that follow, we are not

persuaded.

10
To begin with, both parties employed experts to complete

alimony calculations for the years in question. Those

calculations were based on the party's interpretation of "earned

income" under the agreement. The judge found that the wife's

expert appropriately relied on the Black's Law Dictionary

definition of "realized" by including in his calculation of the

husband's "earned income" the vested RSUs reported as taxable

income on his W-2 for each year. The judge did not abuse his

discretion in accepting this testimony. See Jones, 101 Mass.

App. Ct. at 683.

Next, contrary to the husband's assertion, the judge did

not "fail[] to make any findings regarding the parties' intent

behind the purported ambiguities in the agreement." Rather, the

judge's findings demonstrate that he considered extrinsic

evidence consisting of the circumstances surrounding the

negotiation of the agreement and the husband's conduct following

its execution in determining the intent of the parties. The

judge found that the agreement was drafted at a time when the

husband worked for a privately held company and his compensation

package included RSUs that "had no inherent value as a liquidity

event was required prior to [the] [h]usband having the

opportunity to realize income from the grant of stock." The

judge found that "[u]nder those circumstances, it was reasonable

to include a limiting provision in the [a]greement that limited

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[the] [h]usband's obligation to pay alimony on RSUs to 'gross

pre-tax proceeds as a result of the release of restricted stock

(but only when cash is realized from the event),'" but that

"[r]eading the [a]greement as a whole, particularly in this

context, . . . the parties did not intend this limitation to

apply to [the] [h]usband's receipt of RSUs from a publicly held

company." The judge concluded that "[t]o do so would be

contrary to the provisions of the [a]greement that require

payments to be made 'in a timely manner and in good faith'" and

ensuring that the wife will "be able to rely upon a certain

level of support to meet her needs." The judge also

appropriately considered, consistent with G. L. c. 208, and the

case law interpreting that statute, that "the purpose of an

alimony obligation is for the payor spouse to provide support to

the recipient in order to enable [the recipient] to maintain the

marital lifestyle," which "purpose is thwarted if [the]

[h]usband is able to withhold payment on RSUs and PSUs for an

indefinite period." 7 See Jones, 101 Mass. App. Ct. at 683 (judge

interpreting merged agreement pertaining to alimony must

consider parties' intentions and decide case "in the context of

the governing statute, G. L. c. 208").

7 The judge found that the wife's ability to maintain the
marital lifestyle was impaired by the husband's refusal to treat
his vested RSUs as part of his earned income in 2021.

12
In addition to considering the circumstances described

above, the judge also considered the husband's performance of

his obligations under the agreement after it was signed. See

Brigade Leveraged Capital Structures Fund Ltd. v. PIMCO Income

Strategy Fund, 466 Mass. 368, 378 (2013) ("in interpreting [a]

contract, [the] conduct of the parties after the signing of the

agreements is . . . indicative of their intent," as "[t]here is

no surer way to find out what parties meant, than to see what

they have done" [quotations and citations omitted]). The judge

found that the husband calculated his alimony obligation for

2019 and 2020 using the "entirety of [his] W-2 income," which

included vested RSUs reported as taxable income on his W-2 for

each of those years. The husband testified that he treated the

vested RSUs reported on his W-2 as part of his earned income

when calculating his alimony obligation for 2019 and 2020,

despite that he was unable to immediately sell that stock

because of the holdback requirement. 8 The judge found that the

husband changed his position in 2021, by excluding from his

income the vested RSUs reported on his 2021 W-2 and instead

calculating his alimony obligation using only his base salary

8 The husband testified that, notwithstanding the holdback
requirement, he was able to pay his alimony obligation for both
years by taking out a mortgage in 2020, and by selling stock in
2021 "that had vested in the previous year."

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for that year. 9 This change coincided with the receipt of over

$6 million in vested RSUs in 2021 (which were reported as

taxable income on his W-2 for that year).

The judge ultimately concluded that treating vested RSUs as

"earned income" once they are reported on the husband's W-2 was

consistent with the parties' intentions as expressed in their

agreement, and that the holdback requirement did not affect the

calculation of the husband's alimony obligation. As we have

discussed, in reaching this conclusion the judge considered (1)

the agreement as a whole, (2) extrinsic evidence of the parties'

intent (including the circumstances at the time of drafting the

agreement and the husband's subsequent performance of his

obligations), and (3) the purpose of alimony as set forth in

G. L. c. 208, and case law interpreting that statute. We

discern no error in the judge's analysis or in his

9 The husband testified that shortly before those RSUs
vested, he filed a complaint for modification seeking to reduce
his alimony obligation.

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ultimate construction of the agreement. 10 Accordingly, we affirm

the judgment.

So ordered.

By the Court (Vuono, Rubin &
Walsh, JJ. 11),

Clerk

Entered: October 16, 2024.

10The husband contends that the judge erred in failing to
construe any ambiguities in the agreement against the wife,
because her attorney drafted the agreement. The judge rejected
this argument because although the husband was pro se during the
divorce proceedings, he had a level of financial sophistication
that "allowed him a greater understanding of the [a]greement
than [the] [w]ife" and that "giving effect to [the] [h]usband's
position would result in an unreasonable meaning." We discern
no error with respect to the judge's reasoning in this regard.

11 The panelists are listed in order of seniority.

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