Very often, when parties settle their cases, in their Marital Settlement Agreement (a/k/a Property Settlement Agreement), there is a provision to the effect that if a party does not comply with the Agreement, they will be liable for the other party’s fees if the Agreement has to be enforced in Court.  That said, court’s more often than not disregard that paragraph (as well as the Rule 1:10-3 which suggests an award of counsel fees when a party fails to comply with an Order), and apply the typical matrimonial case law and court rules regarding fee shifting in a matrimonial matter, if the court gives any real consideration to the issue, at all.  The aggrieved litigant is often frustrated by the fact that they had to incur fees to get something that they were already entitled to.  The offending party is sometimes empowered because he or she has suffered no negative result from the failure to comply.

However, in a refreshing unreported (non-precedential) opinion in the case of Ullmann v. Ullmann decided on March 23,2011, the Appellate Division held that it was improper for the trial court to ignore that provision in the parties’ agreement.

In this case, the parties agreement provided as follows:

Should either party willfully fail to abide by the terms of this Agreement, the
defaulting party will indemnify the other for all reasonable expenses and costs,
including attorneys’ fees incurred in successfully enforcing this Agreement. This
provision is intended to be enforced as a freely bargained for contractual agreement, and a counsel fee claim for reimbursement pursuant to this provision is not intended to and shall not be subject to the Court’s discretion under R. 4:42-9(a).

Notwithstanding, in this case, the trial court first granted a fee, then on reconsideration, changed its mind based upon the wife’s alleged financial circumstances and inability to pay. 

The Appellate Division disagreed and said that pursuant to the Agreement, the wife’s finances were not relevant.  In this case, the Court should have determined:

  1. Was the agreement fair and just in this regard and thus, enforceable:
  2. Did the wife willfully violate the Agreement

Since that did not occur, this issue was reversed.

In addition, the Agreement also had a provision in it that the Husband could reduce the alimony that he was obligated to pay if the Wife did not make her payments due to him (until such time that the arrears were satisfied).  The trial court denied the Husband’s request to offset arrears in accordance with the Agreement in the amount of $75 per week, rather, reducing the arrears to Judgment.  The Appellate Division reversed this too since the agreement clearly allowed for such an offset.  In fact, the Court said, "We can find no just reason that husband should be required to pay the full amount of his alimony obligation to wife each week but she should not be required to reduce the amount she owes for the children’s expenses through weekly installment deductions."

In this case, the Appellate Division did what should have been done, which is enforce the clear and unambiguous terms of an Agreement.  Agreements and Orders should mean something, shouldn’t they?

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