Can a marital settlement agreement be enforced by a spouse's estate?

In the case of Rachid v. Perez, 26 So.3d 70 (Fla. 3rd DCA 2010) the Court enforced a settlement agreement between a wife and her dead husband's estate regarding the divorce that was pending when the husband died.

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 appealed, seeking rescission of the settlement agreement. The District Court held:

1. "Because her appeal is directed to the order denying her motion for rehearing and a denial of her motion to set aside the order granting the motion to enforce the mediated settlement, the standard of review is gross abuse of discretion."

2. "We additionally note that there is a more stringent standard of review, however, when the final judgment to be vacated follows a mediated settlement agreement."

What happens to a divorce settlement when a business fails?

In the case of Mistretta v. Mistretta, 31 So.3d 206 (Fla. 1st DCA 2010), the trial court used October 31, 2007 as the date of valuation for the final judgment which was entered on August 25, 2008. The trial court awarded of the parties' principle asset, Jerry's Cajun Café and Market, Inc., to the husband, determining the value on that date to be $845,000, and ordered the husband to make a cash equalizing payment to the wife. The husband sought rehearing, conceding that the former wife established the value of the corporate entity by competent, substantial evidence and did not request an opportunity to present additional evidence or seek a different valuation date. Before the rehearing motion was heard, the husband filed an amended rehearing motion (in March, 2009) in which he claimed that "newly discovered evidence" showed that the 2007 economic recession had caused his business to sustain a net loss, warranting a new trial. On April 6, 2009 the trial court entered an order granting husband's motion for rehearing. The District Court reversed:

1. "Rehearing or new trial based on newly discovered evidence 'is warranted only where (1) it appears that the evidence is such that it will probably change the result if a new trial is granted, (2) the evidence has been discovered since the trial, (3) the evidence could not have been discovered before the trial by the exercise of due diligence, (4) the evidence is material to the issue, and (5) the evidence is not merely cumulative or impeaching….' Importantly, the allegedly 'newly discovered evidence' cannot simply show some change in circumstances since the trial."

2. "In the present case, the alleged 'newly discovered evidence' - evidence of an economic recession that began in December of 2007, months or weeks after the valuation date, and operating results for the year 2008 - tends to prove a change in circumstances occurring after the October 31, 2007, date of valuation, and relates, at least in part, to events that transpired after the trial."

3.  Economic recessions, like other vagaries in the business cycle, are contingencies appraisers must take into account in valuing a business."

4. "The witnesses who appraised the business by assigning it a value as of October 31, 2007, made assumptions about the business's prospects then, doubtless informed by the actual experience between October 31, 2007, and mid-March of 2008, when they testified on the question. On August 25, 2008, when final judgment was entered, economic conditions had presumably changed again, and it is certainly true that the parties' experts might not have predicted the precise economic conditions on April 6, 2009, the day the order under review was entered, or, for that matter, the reported improvements in economic conditions since. But a cloudy crystal ball is no basis for a new trial."

What is required to reduce alimony?

In the case of Wilson v. Wilson, 37 So.3d 877 (Fla. 2nd DCA 2010), the

TRIAL COURT DID NOT ABUSE DISCRETION IN REDUCING ALIMONY AWARD WHERE HUSBAND'S INCOME DECREASED AND WHERE WIFE NO LONGER HAD A NEED FOR THE ORIGINAL AMOUNT OF ALIMONY AWARDED. 

The Final Judgment awarded $11,000/month in alimony to the Wife. After a series of employees quit, the Husband was left to man his business alone and shortly thereafter, the Husband sold the practice to Veterinary Clinics of America. As a result, the Husband's income was reduced as he began working on a commission-only basis. The trial court found that the Husband's decision to sell was prudent and necessary and that the Wife's need was not as high as originally calculated. As such, the trial court granted the requested downward modification and the District Court affirmed: 

1. "Generally, to justify an alimony modification, the moving party must establish: (1) a substantial change in circumstances; (2) the change was not contemplated at the time of the final judgment of dissolution; and (3) the change is sufficient, material, permanent, and involuntary."

2. "The record supports the trial court's conclusion that business exigencies prompted the sale, the consideration received was reasonable, the sale enabled the Former Husband to continue working as a veterinarian until retirement age, and the sale proceeds ensured long-term security for both the Former Wife and the Former Husband."

3. "Although the Former Husband did not retire, we observe that involuntariness of income loss may no longer be a bright-line requirement for alimony modification . . . . Here, the trial court's finding that the Former Husband's decision to sell his practice was "prudent" satisfies the "reasonable" standard of Pimm and Rahn concerning that voluntary loss of income."

4. "The trial court did not err in finding a number of the items [contained in the wife's financial affidavit] unnecessary and concluding that the former Wife did not need alimony of $11,000 per month."

What is required to modify alimony?

In the case of Castleberry v. Castleberry, 29 So.3d 1207 (Fla. 1st DCA 2010) the trial court abused was wrong when it modified alimony to award more than nominal alimony to a Former Wife who now earns more than the Former Husband.  It is important to look at the current financial condition of the parties when presenting a modification case to a judge.

    The Husband appealed from an order that reduced but did not terminate his alimony obligation even though evidence demonstrated that Wife earned more income than he. The District Court held: "Because the undisputed evidence in the record is that… former wife, now earns more income that the former husband and there is no justification in the record for a continued alimony award under the circumstances, we agree with the former husband that the trial court abused its discretion in awarding more than a nominal amount of alimony."

Castleberry v. Castleberry, 29 So.3d 1207 (Fla. 1st DCA 2010)

    The Husband appealed from an order that reduced but did not terminate his alimony obligation even though evidence demonstrated that Wife earned more income than he. The District Court held: "Because the undisputed evidence in the record is that… former wife, now earns more income that the former husband and there is no justification in the record for a continued alimony award under the circumstances, we agree with the former husband that the trial court abused its discretion in awarding more than a nominal amount of alimony."

Castleberry v. Castleberry, 29 So.3d 1207 (Fla. 1st DCA 2010)

Can Florida courts enforce a Canadian divorce decree?

Deegan v. Taylor, 28 So.3d 227 (Fla. 2nd DCA 2010), the trial court enforced the Canadian divorce degree despite subsequent litigation.

WHERE CANADIAN DIVORCE DECREE AWARDED ALIMONY TO WIFE AND PARTIES RESOLVED A SUBSEQUENT ENFORCEMENT ACTION THROUGH A SETTLEMENT AGREEMENT WHICH PROVIDED FOR PREVAILING PARTY ATTORNEY'S FEES IN ANY FUTURE ENFORCEMENT ACTION, CANADIAN COURT'S SUBSEQUENT GRANT OF ANNULMENT BUT DETERMINATION THAT BECAUSE OF THE PARTIES' SIX-YEAR PUTATIVE MARRIAGE, THE PARTIES "SHALL BENEFIT FROM THE EFFECT OF THE JUDGMENT OF DIVORCE," TRIAL COURT ERRED IN DENYING WIFE ATTORNEY'S FEES WHEN IT FOUND HUSBAND IN CONTEMPT FOR NON-PAYMENT OF ALIMONY. 

The trial court found the former husband in contempt for non-payment of alimony, set a purge amount, and entered a money judgment in the former wife's favor for the arrears. The trial court, however, denied former wife's request for prevailing party attorney's fees, reasoning the provision entitling her to prevailing party attorney's fees in the parties' 2004 settlement agreement did not apply because it had been based on the premise of a valid marriage. The District Court reversed:

1. "The request for fees does not require us to explore the equitable principles apparently at play in [an earlier case]. Rather, the real issue is the deference owed to the Canadian decree."

2. "In handling [the Wife's] motion for contempt and enforcement, the trial court was called upon to enforce a domesticated Canadian decree that specifically retained all accessory measures, despite the grant of annulment. Accordingly, [the Wife] is entitled to prevailing party attorney's fees as an accessory measure that survived the annulment of her marriage to [the Husband]."

Who pays for transfer of property in a settlement agreement?

In the case of Seawell v. Hargarten, 28 So.3d 152 (Fla. 1st DCA 2010), the court held that the spouse in possession, or control of property is responsible for any transfer required by a 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. "First, the authorization letter sent by the Husband, unlike the one sent by the Wife, did not comply with the terms of the Final Judgment. Second, the Husband made no further effort to assure the Fund assets were transferred."

2. "Clearly, to avoid responsibility, an individual must be able to demonstrate that the failure of the transfer to occur was due to factors beyond their control. In essence, the Husband would be able to show, that in spite of his efforts, it was impossible to transfer the assets. Certainly, this is not the case here."

Can a marital settlement agreement be modified?

In the case of Seawell v. Hargarten, 28 So.3d 152 (Fla. 1st DCA 2010) the trial court held that because the final judgment didn't contain a reservation of jurisdiction clause, the settlement agreement couldn't be changed.

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."