What Is a Divorce Settlement Agreement?
In the simplest terms, a divorce settlement agreement is a legally binding contract that formalizes the terms of a divorce agreement reached by the parties. NC divorce lawyers and judges typically refer to a couple’s divorce documents as their "marital settlement agreement."
A divorce settlement agreement is a written, legally binding document that describes how the parties will divide their joint and marital assets and obligations, as well as establish agreements about child custody, visitation, support and use of property.
A divorce settlement agreement sets forth the framework for how a couple will create two separate households after divorce. Because a marital settlement agreement is legal contract, it must comply with state requirements to be binding on the divorcing parties . This generally means that the spouses must sign the agreement voluntarily (not under force or coercion), and the written agreement must be plainly written, dated and signed by the parties.
The particular requirements for a divorce settlement agreement can vary depending on the content, the parties’ circumstances and state laws. This is one reason it’s recommended that all divorcing spouses get legal counsel because a family law attorney can help ensure that the terms of the agreement are in the best interests of all parties.
Although divorce settlement agreements are typically used in lower-conflict divorces, the divorce process should always involve a family law attorney who can help ensure that the document conforms with state laws and effectively addresses any potential issues for the future.
Common Causes of Breach
There are a number of reasons why a party to a divorce settlement agreement may breach that agreement. Failure to pay alimony, child support or divide property issues uniformly top the lists of the common reasons for breach of divorce settlement agreements. Other reasons for the breach may include a new relocation or move out of state by one of the parties or failure to reimburse party pursuant to the divorce settlement agreement. In a like manner, a failure to comply with requirements for child visitation or pick-up and drop-off may lead to a divorce settlement agreement. What is noteworthy in many of the breaches is the underlying reason as to why the agreement became necessary in the first place. For instance, while a party may suggest that there was no other choice but to move out of the state for family, employment or even voluntary accommodation reasons, the impetus for the divorce settlement agreement was often the relocation or accommodation of the party who in fact breached the agreement.
Legal Consequences of an Agreement Breach
While there may sometimes be circumstances preventing compliance, parties who violate a divorce settlement agreement can face substantial negative consequences. A Court can find a party in contempt of the divorce agreement even if it is not expressly stated that the divorce agreement is enforceable by the Court or incorporated into a divorce order, Judge Rothschild reaffirmed this principle in Dunn v. Becker-Adams.
In Dunn, the parties divorced and Michael Dunn paid Alayna Becker-Adams 50% of the net proceeds from the sale of their home. After the sale closed, however, he claimed Becker-Adams asked for the money in a manner that improperly "coerced" him into paying it. Dunn refused to pay. Becker-Adams sought to hold Dunn in contempt of the divorce agreement.
Dunn contended that he was not obligated to pay because the agreement did not clearly specify the timing of the distribution of the payment. Becker-Adams conceded that the agreement was ambiguous but asserted that an October 16, 2012 email constituted an oral modification of the agreement. Based on the email, Becker-Adams argued that the proceeds should be paid out within 60 days of receipt of the proceeds from the sale of the marital home. Becker-Adams, in her post-hearing brief, contended that she was entitled to $13,969.76 pursuant to the oral modification.
Dunn countered that the email was not an oral modification but merely requested payment of the proceeds and created no obligation to tender the proceeds to Becker-Adams. He argued that, pursuant to Black’s Law Dictionary, "pay" meant delivery of money to another to discharge a debt, provide compensation, discharge a duty or satisfy a claim and that his refusal to pay Becker-Adams was therefore not violative of any obligation to do so.
A Court may find a party in contempt of a separation agreement even if it is not merged with an order of Court. In other words, an agreement entered into between parties may still be enforceable by the Court so long as it reflects the intent of the parties and is not illegal or against public policy. Dunn involved two such agreements which governed the distribution of the sale proceeds.
Once a finding of contempt is made, Courts can impose several kinds of sanctions. Here, the Court imposed a monetary sanction in the amount of $5,500. The purpose of such monetary sanctions is to coerce parties to comply with their obligations under an order or agreement. The Court also awarded Becker-Adams counsel fees of $6,652.50. The Court characterized the fees as "a direct result of [Dunn]’s contemptuous conduct in refusing to pay the marital estate [B]ecker-Adams . . . is entitled to."
What to Do if Your Ex-Spouse Breaches the Agreement
In the unfortunate event that your former spouse breaches the divorce settlement agreement, here are some practical steps you may take:
Document the Breach
The first step is to thoroughly document the breach. These documents may include paystubs, tax returns, copies of checks, and emails. If your ex-spouse failed to pay spousal maintenance or child support, for instance, you can keep copies of all checks, bank statements, and emails that detail the situation. All of this information will be useful in pursuing further legal remedies.
Seek Legal Representation
After you’ve compiled all of this documentation, your next step should be to contact an experienced skilled lawyer with a deep understanding of family law. While you are not required to hire your own legal representation – you can also seek out a divorce settlement violation request through the court – a skilled attorney will be your best asset in seeking the compensation you deserve. Your divorce settlement violation request may be contested by your ex-spouse, so working with an experienced attorney who can help build a case against them is the best course of action.
Enforcing a Divorce Settlement Agreement
When a party does not abide by the terms of a divorce settlement agreement, it is then necessary to go back before the court for an enforcement action. Enforcement proceedings in divorce matters arise a number of different ways. While they often come about as a result of one party not complying with their obligation to pay support, they can also arise out of either or both parties failure to follow through on obligations under the terms of your divorce. Examples include:
As the foregoing examples illustrate, there are a number of ways in which the terms of a divorce can be violated or not completed. The first step in addressing violations of the terms of your divorce is to try and resolve the matter amicably with formal Court intervention. At times, this can be accomplished by drafting a Consent Order settling the matter. A Consent Order is an Order of the Court which memorializes the terms of the agreement of the parties. In lieu of a Consent Order, a number of Courts, including the Ocean County Superior Court Family Part, will schedule a hearing for the parties and their respective attorneys on the issue(s) of non-compliance. Often times, if a hearing has been requested, the matter is resolved outside of Court.
In the event that the matter cannot be amicably resolved in accordance with the Consent Order or during the informal hearing , the aggrieved party will need to file a Motion seeking enforcement from the Court. This is done in the same manner as a regular Motion in Part: going through the normal procedure of drafting and filing a Notice of Motion and the Certification of the aggrieved party. The difference between a Motion generally and a Motion for Enforcement is that the latter requires a certification of noncompliance wherein the violation must set forth: 1) the provision(s) of the Court Order that are being violated; and 2) the specific facts in support of the allegation of noncompliance. Similar to other Motions, the aggrieved party must also attach a copy of the Order being violated and a certification establishing good faith that an attempt was made with the other party to correct the problem without Court intervention.
While this process can seem cumbersome, the family law attorney you retain can assist you throughout this process by helping you assemble the information necessary to present your case to the Court. If needed, they can also present arguments on your behalf to the judge regarding enforcement of the Court Order. Unfortunately, in certain situations, it will be necessary for Court enforcement, through the initiation of Contempt proceedings to bring the non-compliant party into compliance. The Court takes violations of Orders very seriously and will most likely effectuate remedies which hopefully will help to avoid the necessity of a further enforcement motion.
Modifications to Divorce Settlement Agreements
The Family Law Rules provide a mechanism for parties to vary their divorce settlement agreements by way of a written agreement. However, in order for an agreement to be binding on the parties, it must have been signed by both parties after the making of an order approving the settlement agreement.
Further, a settlement agreement may only be varied by agreement once the terms of the divorce order have been carried out in full. The reason for this additional requirement is that in order to fulfill the terms of the settlement agreement, which are embodied in the divorce order, a party must have changed his or her position with regard to the content of the divorce order. Thus, if the parties agreed that one party was to receive a particular property, and that party had then complied with the terms of the divorce order, the second party could not thereafter resile from that agreement.
Pursuant to this provision, a settlement agreement that has been complied with may not be varied or rescinded by an order of court unless the variation or rescission has been granted in terms of the Rules.
A strong policy consideration underlies the rule preventing the variation of a settlement agreement once the divorce order has been implemented, which is that it is not in the public interest to allow a party to comply with an order and thereafter to seek a variation. Such a variation would apply to everyone who had carried out a duty imposed by a court.
If an order is to vary such a significant settlement agreement, leave of court must be obtained. This must be applied for at the High Court or the court that made the original order. Activities that may be carried out in a High Court action cannot be carried out in a regional magistrate’s court. The other alternative is that the parties may make an application to court on an unopposed basis. The application must be served on the (now) former spouse. If the former spouse does not oppose the application, he or she may give written consent and the applicant must file a notice of non-opposition together with the consent. As this kind of application relates to the variation of rights granted in terms of the divorce agreement, a judge is obliged to consider the public interest and whether any person was unduly prejudiced by the consent agreement.
Should it be opposed, it may then be heard on an opposed basis before a judge in chambers.
Case Studies of Breach
Our firm has handled countless cases over 30 years of serving the residents of Phoenix and the surrounding areas. Here are a few examples of cases where a former spouse breached their divorce settlement agreement. Company Stock After Divorce. Because business owners are often worried prenup, I have had many cases where the husband retained his business and his wife got her share as part of the divorce settlement. In one case, the husband sold stock in his company a few years after the divorce and moved out of the state. His former spouse heard about this and immediately filed a motion to get the money she was owed. The Court determined she should be reimbursed, but the company’s bankruptcy slowed movement on that, and the case dragged on. Retirement Account After Divorce. A husband and wife divorced after 30 years of marriage. Usually, in these situations, the wife receives half of her husband’s retirement assets. In this particular case, however, once the husband learned that he would have to divide his asset with his wife, he used illegal means to get his money out of that account. He "retired" and then accessed it . When they had first divided the asset, it had an approximate value of $600,000. After he accessed it, its value was significantly less. He made fraudulent charges on the account so that it had a negative balance. The judge ordered his wife be restored to $600,000 from her husband’s retirement account. Due to the negative balance on the account, however, the judge stated that interest should not accrue until the account was restored to the $600,000 mark. By the time the account hit that amount, several months later, the 7% interest had accrued again. Divorce Settlement Terms Not Followed. A husband had major health issues and had had surgery on his heart. He and his wife were going to get a divorce but he had requested she not file until he turns 65 because that is when he gets his social security benefits. The wife, however, filed for divorce anyway and ended up with 50% of his pension. Therefore, his former spouse ended up with most of his benefits and he was forced to pay for her attorney’s fees. This mistake cost him thousands. If your spouse requests you not to file, you should probably comply.