Almost a full 99% of matrimonial cases in New Jersey settle without the necessity of a trial. The settlement can take two forms – oral or in writing — and the methods for recognizing those settlement “on the record” of the case are three – reading the settlement into the record; attaching a written settlement to the judgment of divorce; or incorporating the written agreement “by reference.”
A settlement may be oral, that is, the terms may not be reduced to writing. Usually, these types of settlements happen “on the courthouse steps,” that is, are achieved after (and in conjunction with) an appearance before an early settlement panel or other court appearance, such as an intensive settlement conference with a judge. Many times, for one reason or another, an attorney or both attorneys will want to reduce the agreement to writing. This is usually because an oral settlement is “barebones” and its coverage almost always is not as extensive as a written agreement. Too, almost always, an oral “agreement” achieved in this manner is not considered binding if and until reduced to writing, approved as to form and substance by both the attorneys and the litigants, and signed by the litigants. On the other hand, experienced attorneys know that there is a good chance that a settlement may well “fall apart” if not made binding right then and there. In the latter case, the parties will “put through” an uncontested divorce on the same day as achieving the settlement, in which case, the agreement is “spread upon the record” by one of the attorneys reading all of the provisions to the judge while a tape recording of the oral presentation is being made. One of the attorneys will thereafter order the transcript and prepare the judgment of divorce to include all of the provisions based upon the transcript. Experience also shows that notwithstanding the making of a verbatim transcript, this method may lead to disagreements as to the finer points of such an arrangement.
Written agreements generally come about in the following manner: a non-binding oral understanding is reached either in a private settlement conference or at a court appearance (as described above), and thereafter, one of the attorneys prepares a written agreement based on the structure of the settlement. In so doing, the preparer usually fills in some details which may not have been discussed. After a period of haggling and revisions, a final version is usually achieved, approved by the attorneys and the litigants, and signed by the litigants, at which time it usually becomes binding.
Then, the agreement can be incorporated into the record in one of two ways: either attaching a copy to the judgment of divorce, or incorporating it by reference. Using either method, at the final uncontested “put through” hearing, the parties testify as to the grounds for divorce as well as their voluntarily entry into the agreement. At that point, the judge makes a finding that the grounds for divorce have been satisfied under the statute and that the parties have voluntarily entered into the agreement. Note that the procedure in New Jersey does not provide for the judge to “approve” the substance of the agreement – for if he or she were to do that, it would require a timely hearing as to the merits. Now, one of two things can happen: (1) the agreement can be attached to the judgment, in which case, the agreement along with the judgment become a public record available for public inspection; or (2) it can be incorporated by reference, that is, the judgment can recite that the agreement was marked into evidence and is incorporated into the judgment and made apart thereof as if attached thereto or set forth at length therein. The obvious advantage of this latter method is that while the judgment becomes a public record, the terms of the agreement remain private.
The method to be utilized in any case is always an issue for attorney judgment based on many factors. However, as a general matter, if the case is uncomplicated and the oral agreement sufficiently comprehensive, and if there is a fear that the agreement will fall apart if not “locked in” at the time of the making, it may well be appropriate to spread the oral agreement on the record. On the other hand, in a more complex matter, it is almost always preferable to have all of the “i’s” dotted and “t’s” crossed by reducing it to a full-blown agreement, in which case, in these days of information theft, it is the more usual practice to have it incorporated by reference.