Recently, I was at a meeting, and the person across the table from me asked me a very thoughtful question: “Do you believe in settlement or is your philosophy toContinue Reading Do I believe in Settlement? Well, It’s Not Like Sasquatch…
A recent Appellate Division case reminds us of the potential pitfalls of negotiating contingent issues in property settlement agreements, specifically as it relates to contribution to future college costs of…
Continue Reading Negotiating Future College Contributions in Divorce: A Cautionary Tale
The Appellate Division’s newly published (precedential) decision in Avelino-Catabran v. Catabran provides another lesson to practitioners and litigants about the language used in settlement agreements and how such language, if…
Continue Reading APPELLATE DIVISION ADDRESSES ENFORCEABILITY OF SETTLEMENT AGREEMENT AS TO COLLEGE IN NEW PUBLISHED DECISION
When we all think of insurance, we often think of medical insurance, car insurance and homeowner’s insurance as these seem to be the necessary and everyday types of insurance. Life…
Continue Reading The Forgotten Insurance: Life Insurance to Secure Alimony & Child Support
Most, if not almost every matrimonial settlement agreement that I have seen contains language providing that modifications to the agreement must be in writing to be effective. What happens, then,…
Continue Reading Settlement Agreement Provision Mandating Modifications to be in Writing Can be Superseded by Conduct
I recently wrote a blog entitled "Sloppy Drafting of Marital Settlement Agreements Can Cause Great Harm, Usually to Only One of the Parties." I am reminded why I wrote that post because as I read the new cases decided each day, it fortifies my belief that settlements must be clearly reduced to writing and that every effort should be made so that the document can only be interpreted in one possible way. I say this because as I read these cases and see the results based upon interpretations of agreements, I think that this could not be what the parties really intended.
Specifically, two cases decided in the last two days jumped out at me and left me thinking "I see what the agreement says, but that really cannot be what the parties’ meant."
In Schaefer v. Kamery, an unreported (non-precedential) case decided on November 19, 2012, the holding of the trial court, that limited duration alimony continue even after the recipient remarried was upheld. How can that be you ask since there is a statute (N.J.S.A. 2A:34-25) that says alimony terminates on remarriage? How can that be you ask because you know that there is case law that says that rehabilitative alimony many continue after remarriage, because the rehabilitation plan is goal oriented (i.e. to get someone back in the workforce or improve their earning ability), which goal exists irrespective or remarriage.
The reason that alimony did not terminate on remarriage in this case is that the Property Settlement Agreement contained the following language:
Payment of alimony shall cease only upon the first to occur of: (1) the
expiration of the alimony term set forth above; (2) Husband’s death; or (3) Wife’s
death. The parties agree Wife’s involuntary termination from her current employer or
permanent disability preventing her continued employment shall be a changed
circumstance justifying review of Wife’s alimony obligation. No change in Husband’s
circumstances other than death shall constitute a changed circumstance affecting Husband’s right to alimony.
Part of the rationale for denying the motion was the aforementioned language and the fact that there may have been other interrelated financial terms. Not also, the payor previously sought and was denied modification based upon cohabitation. In fact, the current motion was the third motion to modify.
Having the benefit of 50-50 hindsight, unless someone was trying to pull a fast one and was planning on filing the motion because they knew that the support recipient was in a relationship, the better practice might have been to specifically say that remarriage and/or cohabitation would not impact the alimony, especially if there was not a real meeting of the minds on this issue. Doing so may have saved the legal fees for 3 motions and an appeal.…
Reading and considering Eric Solotoff’s blog from earlier this week regarding the benefits of settlement, it is also critical to know when to settle and, quite frankly, whether to settle at all. This especially applies to those current or former spouses who simply cannot afford to litigate against a financially superior former spouse. This situation is often referred to as litigating on an “uneven playing field.”
Trying to some degree to place myself in your shoes, it can only be an extremely difficult decision whether to, once again, go up against the other party with the bottomless wallet, or just settle for what they want and get it over with. These decisions may not only have an impact on your own wallet, but also on your family’s overall well being, especially if children are involved. Too often, the other party knows this to be the case, which is why they will continue to file or threaten to file motions in the hope that you will eventually “give in” under the pressure.
This blog should not be taken as a sign of encouragement to litigate a case, but rather as a cautionary note for what you, as a litigant, may be sacrificing with your decision. Ultimately, it is you who has to wake up in the morning and be comfortable with your decision, which is why having all information at your disposal is, perhaps, the most important part of the decision-making process.…
When settling a case, the parties and their lawyers can be far more creative in settlement then a judge can be if the case is tried. While family judges have wide discretion in their decision making, creativity is crafting the most beneficial result for both parties is rarely something they can do. In fact, in many ways, they are constrained from the type of creativity that we see every day in divorce agreements.
What if you are a high earner, but your income fluctuates greatly from year to year? While a judge will likely have no choice but to determine your average income over 3 to 5 years and base support upon that as well as the rest of the statutory factors, you may want to agree on some kind of formula so that there is fairness year over year, i.e. you pay more in a better year and less in a down year. For example, if your average income is $2,500,000 but your income fluctuates between $1 million and $4 million per year. You would really hate paying alimony in those years you only make $1 million. If a judge decided this case using averages, you might be forced to pay your entire net income, or more, to you ex spouse in the down year. Similarly, a judge could never say that support "automatically" is reduced or even reviewed if your income is less than $X in the future.
This concept was reiterated again by the Appellate Division on October 29, 2012 in an unreported (non-precedential) decision in the case of Means v. Snipes. In this case, after a trial, the judge decided that in the event that defendant’s annual income fell below $2 million, he would receive a reduction in alimony. This is the one thing that both parties agreed was in error – a rare agreement in a very contentious case.…
In a perfect world, marital settlement agreements (MSAs a/k/a Property Settlement Agreements) are crystal clear and cover every possible contingency under the sun (I say this as when first drafting this post, I was being contacted frantically by a client regarding custody provisions in the event of school closure because of hurricane.) That perfect world rarely exists for many reasons, including the main reason that most cases would never settle and/or the cost would be outlandish if every possible contingency is contemplated and negotiated. That said, we do our best to address to the most germane and likely issues.
If the document cannot cover every possible thing under the sun, at least the final document should be clear and include the parties’ actual meeting of the minds on the included issues. Sadly, this does not always happen either. Sometimes, the parties meeting of the minds is really not a meeting of the minds – that is, they each believe that the settlement is something else but the language of the agreement is vague or imprecise enough where they both think that they are right. Some people actually do this on purpose to keep an argument on a "hot button" issue alive for the future. Other times, it is simply inartful, to put it kindly, or down right bad drafting that causes future problems.
If a party can convince a court that the terms of the agreement represent a mutual mistake, perhaps there is some relief and the agreement can be re-formed. That said, more often then not, one of the parties gets really hurt by virtue of the poor drafting.
This appears to be what happened in the case of Rozier v. Byrd, an unreported (non-precedential) opinion released by the Appellate Division on October 26, 2012. In this case, either someone was trying to be cute and the law of unintended consequences jumped up to bite him, or he was the apparent victim of a poorly drafted agreement.…
For whatever reason, it is not unusual for a Marital Settlement Agreement and/or Custody Agreement to have a mediation clause in it which requires parties to go to mediation before bringing an issue to the Court by way or motion. For some issues, like enforcement, one questions the obligation to go to mediation. Either someone violated the agreement or they didn’t. Other issues require a more swift decision and mediation could only slow the resolution down, especially for the party who might benefit from the delay. And while we see these clauses all of the time, I have also seen many judges ignore the clause and adjudicate the dispute.
This, however, is not what happened in the Decilveo n/k/a Woolf v. Decilveo case decided today by the Appellate Division in an unreported (non-precedential) opinion. In this case, the parties divorce agreement stated:
In the event that any differences arise out of the interpretation, construction or
operation of this Agreement, the parties further specifically agree as follows:
(a) They shall first attempt in good faith to resolve such differences amicably and directly with each other, retaining the right to seek advice of counsel;
(b) If they are unable to resolve any dispute between themselves or with the assistance of counsel, or through mediation, either side may submit same to a Court of competent jurisdiction for resolution.
Arguably, this provision does not appear to specifically apply to enforcement or modification, two major parts of this litigation but the trial judge interpreted the agreement broadly, forcing the parties to mediation to address their numerous disputes. …