Barker v. Barker is a case that has significance far beyond family law.
Joseph Barker agreed to pay for his daughter’s college bills, so long as she “diligently applied” herself in school. When Joseph received Holly’s college reports, he learned that Holly (a) had finished her Fall 2011 semester with a 1.000 GPA, (b) was on academic probation for the first three semesters of school; and (c) was enrolled in 16.5 hours but earned only 7.5 hours of credit. In the Spring 2011 semester, Holly improved her GPA for a cumulative GPA of 2.000, narrowly escaping academic probation.
Not surprisingly, Joseph concluded that Holly was not “diligently applying herself.” Since Holly did not uphold her end of the bargain, her father was excused from his contractual obligation, right? Turns out, Joseph thought wrong.
Since Joseph’s contractual obligation was incorporated into his divorce order, Joseph’s wife properly proceeded by an action for contempt of court. (See Walters v. Walters, 307 N.C. 381, 298 S.E.2d 338 (1983)). The trial court found Joseph in contempt, and the Court of Appeals affirmed in a majority opinion. (Judge Dillon dissented for reasons of contempt statute interpretation, not contractual interpretation)
Joseph and his wife had never defined just how low Holly’s GPA could plummet and still be counted as ‘diligent application’ in school, but Joseph was fairly sure that it had to be somewhere above being on academic probation. On appeal, Joseph essentially argued res ipsa loquitur: one cannot be diligent and on academic probation at the same time. The courts disagreed, basing the analysis on Holly’s input, and ignoring her lack of output. The North Carolina Court of Appeals emphasized that Holly was “depressed” due to a loss of a friend, and praised her for signing up for classes (even though she did not complete them). Ultimately, the Court’s conclusion came close to saying that simply refusing to acknowledge defeat was diligence enough: “despite setbacks, Holly was persistent in continuing her studies. ” Op. at 10.
This focus on the inputs approach to defining diligence may be significant far beyond Holly’s story.
In contract law, the ‘best efforts’ standard—the standard that has diligence in its essence—is at the very core of distinguishing between the compliance and breach. Shouldn’t complete lack of success serve as strong evidence of lack of diligence? After Barker, the answer seems to be ‘no.’ Will Barker lower the plank of proving one’s best efforts? For example, as a writer, I owe my publishing house six chapters by Christmas. If I produce nothing at all and defend by being depressed, ill, distracted by a recent break-up, or just by the writer’s block, does the Barker decision make it harder for the house to kick me to the curb?
Aside from the contracts, diligence is a term with significance in just about every area of the law.
Due diligence—a securities’ term—may be the only thing that saves the license for the broker who sold you millions of dollars worth of total junk. Due diligence—civil litigation term—is what separates the successful service from lack of service (a condition, which, if ignored, leads to a void order). Due diligence—as it relates to the statute of limitations—may be the difference between a timely filed claim and the claim that will be dismissed because the would-be-plaintiff failed to pay attention. Diligence is likewise crucial for mergers & acquisitions, for transactions involving hedge funds, for business and corporate transactions, and even for avoiding the reach of Foreign Corrupt Practices Act. The UN created duties to prevent human rights violations hinge on diligence. In patent law, diligence may be the difference between making billions and being that guy who keeps telling his friends he was the one who invented velcro. Of course, concluding that a contracting party was diligent even though he met with lack of success is not novel. Barker just makes it more likely.
The Court gave no indication that Barker is inapplicable outside of domestic context. Thus, defending performance failure by subjective difficulties may have just become easier in all areas of the law.
As for the divorce practitioners, the lesson of Barker is easy and straightforward: when your client agrees to pay for college, but does not want to pay unless his kids actually study, specify the minimum GPA in the contract.