I heard recently, perhaps in court or on one of the family law listserves, that “Harrington is dead.”  What is Harrington you ask?  As I previously blogged, Harrington is a case that stands for the proposition that if parties come to an agreement, that agreement can be enforced, even if there is no final written Marital Settlement Agreement.  Those who opined that “Harrington is dead” based this on the Supreme Court’s decision in the Willingboro Mall case that I blogged on last year.  In that case, the Supreme Court held that going forward, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable.  But what happens when the settlement was not reached at mediation, but as commonly happens, was reached at the courthouse on the eve of trial?

Meet Me Half-Way Arrows Compromise Settlement Stock Image - 25400931Photo courtesy of stockfreeimages.com

That was the subject of the Appellate Division’s unreported (non-precedential) opinion released today in the case if Nakashian v. Nakashian.  The parties were in court for a peremptory trial date almost two years after the Complaint for Divorce was filed and, wouldn’t you know it, settlement discussions broke out.  At about 3 p.m., counsel reported to the judge that the case was settled.  The judge offered the parties the ability to put the settlement on the record, but as is often done, if not the better practice in most (but not all) cases, counsel asked for time to memoralize the agreement in writing and return in a few weeks to put it on the record.

After that, things started unraveling – defendant’s counsel prepared and sent a property settlement agreement to the plaintiff’s counsel, and followed up several times, but plaintiff would not sign the agreement.  Despite prior representations made on the day of trial, in a letter to the judge, plaintiff’s counsel then denied that there was a settlement and claimed “only certain issues were discussed and consented to by the parties.”  The judge then hauled everyone into court at which time plaintiff’s denied having represented to the judge that the matter was settled; rather, they said there was only “an agreement in fact.”  The judge then scheduled the famous “Harrington hearing” and enforced the settlement reached at the courthouse after hearing 2 days of testimony.  The court also awarded defendant in excess of $12,000 in counsel fees.  The Appellate Division affirmed this decision.

Interstingly, the trial judge held:

The evidence shows clearly and compellingly that the parties reached an agreement as to all major issues, advised the court of such, and asked to return once a signed settlement agreement was executed. That agreement included all issues of equitable distribution, alimony, and an agreement that child support would be subject to the child support guidelines. The agreement, as is often the case, was subject to the parties ‘running’ the child support guidelines numbers based on the settled alimony number, as well as the fact that defendant would be paying health insurance. Once the health insurance was factored in, as well as the social security benefit being paid for the children, the guidelines indicated there would be no further child support benefit. The court is convinced that this fact caused the plaintiff to ‘balk’ and renege on the settlement reached on September 5th.

In support of the award of counsel fees, the trial judge wrote:

there was overwhelming bad faith on the part of plaintiff and her counsel in reneging on the agreement reached in court. But for their incredible assertions that no agreement had been reached, the Harrington hearing would not have been necessary. Accordingly, the court grants the application for counsel fees incurred by defendant from the date of October 5, 2012 going forward. . . . In making this award, the court is aware that there is an economic disparity between the parties in terms of income but that they have each received their respective share of the equitable distribution of the marital home. The bad faith of plaintiff overrides an economic disparity.

Needless to say, this happens all of the time.  On one hand, it is the better practice to go back and draft a full and complete agreement containing all of the required language.  On the other hand, sometimes you may put a settlement on the record to prevent the other party from reneging and forcing you to go through with a Harrington application and hearing.  The takeaway from this case, however, is that Harrington is alive and well – just not in mediation so renege at your peril.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.