Sunday, November 11, 2012

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."

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