Divorce spouses may make changes to settlement by agreement

In the case of Rickenbach v. Rickenbach, 32 So.3d 732 (Fla. 5th DCA 2010), the trial court failed to follow a written stipulation in the parties divorce case.  The Appellate Court reversed.

In 2003 the former trial judge ordered the Husband to pay rehabilitative alimony to the Wife for 36 months during which time she was to enter into and complete a dental hygienist program. The original judge also specifically denied permanent alimony because he considered the parties' ten year marriage to have been short-term. The Wife enrolled in the program and was advancing until the Husband undertook a series of actions specifically designed to undermine her progress (which were never explained in the opinion), which forced her to drop out of the program. The Wife then sought to have the rehabilitative alimony either extended or converted into an award of permanent alimony. Before the matter came to trial however, the parties stipulated that the Wife would not seek the extension; instead she would seek only the conversion to permanent alimony. Neither party, however, told the trial judge about their stipulation. At the conclusion of the trial, the successor judge awarded an extension of rehabilitative alimony and specifically denied a conversion to permanent based on res judicata (i.e., the original trial judge had denied the award). Both parties then moved for rehearing and explained that neither wanted the extension. The judge denied rehearing and the District Court held:

1. "This is a troubling case. It is troubling because the trial judge fashioned a fair and equitable result after carefully considering the evidence presented to him. Unfortunately, it appears that the relief fashioned was not what either party wanted, and neither seems to have told the court during the course of the trial that the request for the relief that was granted had been withdrawn by stipulation. Thus, we are compelled to reverse."

2. "We begin by noting that in every case the issues in a cause are made solely by the pleadings…. [T]he parties here had a clear procedural foundation allowing them to amend the former wife's claim by a written stipulation, even without leave of court."

3. "Furthermore, stipulations narrowing the issues, or as in this case, modifying the former wife's supplemental counter-petition so as to drop her alternative request to extend her rehabilitative alimony plan, are of value to the legal system as they simplify the issues, limit or shorten litigation, save costs to the parties, and preserve judicial economy and resources."

Does a claim of mistake invalidate a divorce agreement?

In the case of Rachid v. Perez, 26 So.3d 70 (Fla. 3rd DCA 2010), the court ruled a claim of mistake in a settlement agreement is invalid unless conclusively proven.

The husband and wife were married in 1978 and entered into a prenuptial agreement which provided that the past, present and future property of each spouse would remain the separate property of the respective spouse. In 2006 the husband died while divorce proceedings were pending. The wife sought an elective share of the estate along with other property. The trial court ordered mediation, the parties settled the case and the trial court approved the agreement. When the wife later failed to comply with the terms of the agreement, the personal representative of the estate moved to enforce the settlement. The wife appeared at the hearing and testified that she wanted more time to consult with an attorney and to investigate the settlement and the prenuptial agreement. The court granted the motion to enforce. The wife did not appeal. Instead, she retained new counsel who filed an emergency motion to stay the proceedings, a motion for rehearing and a motion to set aside the order of enforcement. The motions were denied and the wife appeal, seeking rescission of the settlement agreement. The District Court held:

1. "[The wife's] argument is without merit as the record does not support the legal remedy of rescission on the basis that the settlement agreement was the product of unilateral mistake."

2. "Under Florida law, the party seeking rescission based on unilateral mistake must establish that: (1) the mistake was induced by the party seeking to benefit from the mistake, (2) there is no negligence or want of due care on the part of the party seeking a return to the status quo; (3) denial of release from the agreement would be inequitable; and (4) the position of the opposing party has not so changed that granting the relief would be unjust."

3. "Here, [the wife] does not claim that any party misled or induced her to enter into the settlement agreement. Rather, she contends that her attorney misled or induced her.

Is pre-nuptial valid if not all the assets are disclosed?

In the case of Foster v. Estate of Edward Gomes, 27 So.3d 145 (Fla. 5th DCA 2010), the court stated that if the major assets were disclosed, but minor ones were not, the pre-nup is valid.  Prior to the marriage, the parties entered into an antenuptial agreement in which the Wife waived all her right to the Husband's property, including her right to an elective share. Following the Husband's death in 2006, his will was admitted into probate and all the property not devised to his wife was left to his lineal descendants. The Wife filed a notice of her election to take her elective share pursuant to section 732.702(1), Florida Statute (2006.  The trial court found that the Agreement was valid and enforceable, that the Wife had waived her right to an elective share of the estate and that the Husband's failure to disclose a minor asset did not affect the enforceability of the agreement. The District Court held that Florida law does not require prior disclosure of assets for an antenuptial agreement under the probate rules:

          1. "Florida law does not require prior disclosure of assets for an antenuptial agreement. § 732.702(2). Recognizing this, Appellant argues that a disclosure, once made, albeit voluntarily, if inaccurate or fraudulent, invalidates the antenuptial agreement, citing [the dissenting opinion in an earlier Supreme Court decision]."

2. "Unfortunately for Appellant, that dissenting opinion has not generated a consensus either within the Florida Legislature or Florida Courts. We prefer, instead, to rely upon the binding majority opinion."

3. "[T]he law continues to accommodate the desires of older Florida residents to marry again without risking an unwanted disposition of a lifetime's assets due to a partial disclosure."

 

Is pre-nuptial valid if signed 10 days before the marriage?

In the case of Gordon v. Gordon, 25 So.3d 615 (Fla. 4th DCA 2009), the upheld the parties' pre-nuptial agreement.

The parties entered into a prenuptial agreement ten days prior to their marriage. Neither party had legal counsel but had discussed the agreement for several months. The wife was "an individual with a high level of education and business acumen who, having twice married, understood the significance of the document she was about to sign and chose not to seek the advice of a lawyer." The agreement essentially provided that each party's property at the time of the marriage would remain his or her separate property. The agreement included a section entitled "Pension Benefits" in which each waived his or her right to the other's such benefits. In his financial disclosure, the husband listed various pension accounts but did not specify the pension he would receive from his employer. The trial court found that there was sufficient mention of pension benefits to avoid a finding of fraud, duress or coercion and the District Court affirmed:

1. "We first address whether the agreement was reached under duress, coercion or overreaching. The record before us presents the former wife as an individual with a high level of education and business acumen who, having twice married, understood the significance of the document she was about to sign and chose not to seek the advice of a lawyer. And, while the parties disagreed over the amount of time the former wife had to contemplate the agreement, we hold that a trial court does not abuse its discretion by declaring that a period of ten days prior to the marriage is sufficient time for one to exercise the opportunity to review the agreement, and, if one so chooses, to seek the advice of legal counsel."

2. "We next address whether the former husband's failure to specifically disclose his airline pension plan constitutes fraud, deceit, or misrepresentation. The agreement specifically provided that each party shall retain as separate property all retirement accounts and property listed on the attached schedules."

3. "Additionally, the agreement included a provision specifically addressing pension benefits under its own section heading. The former husband's schedule of property referenced "Retirement Plans (Keogh, 401(k), etc)" and specifically listed the former husband's 401(k) plan through his employer; however, no mention was made of the airline pension plan of which the former husband was a beneficiary."  When considering the value of the employer pension in light of the other substantial assets that the former husband fully disclosed, the prominent mention of pension benefits in the body of the agreement is sufficient to provide the former wife with a general and approximate knowledge of the husband's resources."

Is the Court required to follow a settlement agreement if it is unfair?

In the case of Rocha v. Mendonca, 35 So.3d 973 (Fla. 3rd DCA 2010), the court held it was

ERROR FOR LOWER COURT TO REWRITE PARTIES' SETTLEMENT AGREEMENT IN RULING THAT WIFE WAS ENTITLED TO IMMEDIATE ACCESS TO THE FUNDS OF FORMER HUSBAND'S RETIREMENT PLAN WHERE AGREEMENT ONLY REQUIRED TRANSFER BY QDRO AND THE RULES OF THE PLAN DID NOT PROVIDE FOR IMMEDIATE ACCESS TO THE FUNDS. 

The parties entered into a Settlement Agreement pursuant to which the Wife was entitled to $270,000 by way of Qualified Domestic Relations Order ("QDRO") from the Husband's retirement plan. The Wife was also entitled to $140,000 by way of QDRO from Husband's 401(k). The agreement further stated that the marital house was to be sold but up until such time as the Wife received "the first funds" from either of the retirement plans, the Husband would pay the utilities on the home. Thereafter, once the Wife received "the first funds," she would be responsible for the utilities until the house was sold. The exact language of the Agreement was: "Upon transfer to the Wife of the first funds in either paragraph a [the retirement plan] or b [the 401(k)], the Wife shall be responsible for the payment of all utilities…." Some months later, the Wife petitioned the court after learning that access to the retirement plan was contingent upon a triggering event (retirement, disability, and separation from service). Although she had received full payment from the 401(k), she was not allowed to access the $270,000 because of the plan's rules. The Wife argued that the parties intended for her to receive all of the funds immediately. The Husband explained that per the rules of the Retirement Plan, the Wife would not be able to access the money until the triggering event and a portion of the plan was not even transferable through a QDRO. The trial court relied heavily on the above quoted language regarding the payment of utilities to find that the parties expected the Wife to receive all of the funds immediately. The court granted the Wife, among other things, the remaining balance of the 401(k), to satisfy the remaining debt. The District Court reversed: 

"Although a trial court may be motivated to do what it considers to be fair and equitable, it retains no jurisdiction to rewrite the terms of a marital settlement agreement. Under the guise of enforcing the agreement, the trial court here impermissibly modified it."

Does a marital settlement agreement alter a prior annuity?

In the case of Stollmack v. Stollmack, 32 So.3d 756 (Fla. 2nd DCA 2010) held that nothing in the marital settlement agreement altered an annuity from a personal injury lawsuit.

During the parties' marriage, the Husband was involved in a motor vehicle accident. He filed a personal injury claim and the Wife filed a loss of consortium claim which they settled against the driver. The settlement was funded through an annuity which consisted of six scheduled lump sum payments to be paid to the parties jointly through 2010 and thereafter a minimum of 240 monthly payments commencing in 2011. The annuity provided that if the Husband died, the Wife would receive payment for her consortium settlement at a rate of fifty percent of the originally scheduled payments for the remainder of her life. If the Wife died before the Husband, however, the payment amount would remain the same and he would receive payments for the rest of his life. If both the Husband and Wife were to die before the 240 installment payments were made, the estate of the last person to die would receive the remaining payments. In 1993, the parties began dissolution proceedings. As part of their property settlement, the Husband agreed to waive his interests in the Wife's pension and stocks and the Wife agreed to give up her interest in the annuity during the Husband's lifetime. The Wife's attorney prepared an agreement stating that the Wife waived her claim to the annuity but which also stated in relevant part, "Wife shall remain the irrevocable beneficiary and shall be entitled to receive by the existing annuity contract any remaining benefits payable upon the Husband's death." The Husband's attorney struck this language and later tried to get the Wife to sign a release, giving up her right to annuity payments after the Husband's death. The Wife refused, explaining that she understood that the agreement would be read as if the stricken language never existed. The District Court held:

1. "[The Wife] testified that her intent with regard to the stricken portion of the property settlement agreement was that the document would simply be read as if that sentence did not exist. [The Husband] likewise testified that the meaning of the strikeout was that the sentence was to be deleted from the document. [The Husband] argued that by agreeing to remove that sentence, [the Wife] had waived her right to receive payments from the annuity after his death."

2. "We reverse the order requiring [the Wife] to relinquish her rights in the annuity upon [the Husband's] death as well as the order sanctioning her for refusing to do so. The parties' property settlement agreement included a provision addressing the disposition of the parties' rights under the annuity. In that provision, [the Wife] expressly waived her interest in the annuity payment during [the Husband's] lifetime, nothing more . . . ." 

3. "Absent a similar provision waiving her right to payments after [the Husband's] death, that right remained intact. When [the Wife] entered into the property settlement agreement she had a vested right to those payments by virtue of the annuity, and nothing in the property settlement agreement altered that right."

Can a marital settlement agreement be modified by a judge?

In the case of Seawell v. Hargarten, 28 So.3d 152 (Fla. 1st DCA 2010), the district court held the Final Judgment didn't contain a reservation of jurisdiction clause so the court lacked authority to change the marital settlement agreement.

The parties entered into a Consent Final Judgment which, in pertinent part, required the Husband to pay to the Wife a total of $65,470 in cash and to also transfer to the Wife 50% of the shares of an Oppenheimer Mutual Fund. The Husband was required to do so by August 1st. Prior to the deadline, the Husband sent the Wife two checks totaling $24,700 and $24,327, thus leaving a balance owed of $16,443 as to the cash payment. On July 31st, the Husband sent a letter authorizing his broker to transfer 100% of the shares in the mutual fund to the Wife. At the time, the Fund had a value of $29,477.84. In other words, the Husband was attempting to apply the cash value of his 50% of the Fund ($14,738.92) toward the outstanding balance due on the required cash payment. Before he authorized the transfer of the Fund, the Husband had advised his counsel that he did not have enough cash to pay the $16,443 owed to the Wife. An exchange of emails then took place between the parties' counsel. The Husband's attorney asked the Wife's attorney if she would accept stock from the Fund toward the outstanding balance and the Wife's attorney replied that it did not matter how the Wife got her money "as long as she got all of it." On August 1st, the Wife wrote to the broker of the Fund accepting only her 50% of the Fund. Since the two authorization letters did not match, the broker did not transfer any shares of the Fund to the Wife. The Wife then filed an enforcement motion which the trial court denied, finding that the Wife could have accepted the Husband's offer to transfer the entire Fund to her. The District Court reversed:

1. "A property settlement agreement that has been incorporated into a final judgment of dissolution of marriage is non-modifiable, regardless of either party's financial position."

2. "Here, the property settlement agreement was incorporated into the Final Judgment. Because the Final Judgment did not contain a reservation of jurisdiction, the trial court lacked authority to change the terms of contract the parties had agreed to and the court had adopted."