The post What’s In A Word? | The Importance of Marital Settlement Agreements appeared first on Callagy Law
The following article was written by Callagy Law’s Legal Team, and will focus on many common questions and concerns surrounding new developments, legal matters, and other procedures within the practice area of Family Law. Our mission is to answer any questions and give knowledge to many different aspects of these matters.
The recent unpublished Appellate Division decision Fleming v. Fleming decided May 16, 2016 reminds us of the critical importance in careful and clear drafting of Marital Settlement Agreements. In Fleming the Appellate Court was tasked with interpreting the parties’ agreement regarding college expenses and the meaning of the term “bonuses “for alimony purposes. The parties’ agreement provided that “student loan programs” would be sought and applied to college costs before either parent was required to make an out of pocket contribution for the expenses. Mr. Fleming argued that the phrase “student loan programs” included, or should include, loans from private financial institutions. The trial court disagreed and held that “student loan programs” was limited to financial aid awarded through the Free Application for Federal Student Aid (FAFSA). The trial court reasoned that including private loans within the meaning of “student loan programs” would effectively relieve either parent of contributing to a child’s college costs contrary to their stated intent to do so in the agreement. The Appellate Court agreed.
Further, the parties agreed that Ms. Fleming would receive 30% of any gross “bonuses” received by Mr. Fleming as supplemental alimony. Mr. Fleming subsequently received a number of payments other than his salary which his former spouse claimed she was entitled to receive 30% of as supplement alimony. These payments were identified in various and separate categories (visionary award, shining performance, etc.). The Appellate Court held that the term “bonuses” was not defined in the parties’ agreement and there were questions as to why these payments were made (as bonuses or severance or part of his salary). The issue was remanded to the trial court for an evidentiary hearing to resolve the ambiguity.
While the meaning of “student loan programs” and “bonuses” may seem self-evident and certainly no fault can be placed on the drafters of the agreement, the Fleming opinion should serve as a reminder to err on the side of more specificity and detail rather than less when drafting settlement agreements. While every family law attorney, including myself, may think to themselves that statement is a “given,” the simple word “bonuses” has surely cost the Flemings significant professional fees at the trial level, appellate level and now facing an hearing for further fees and distress to define this single word. The client must have a clear understanding of the meaning of the terms of the Agreement and what is intended to avoid future litigation. Both the attorney and client have an obligation to make sure there is a complete understanding of exactly what is being agreed to before the agreement is signed. Terms of an agreement that are susceptible to at least two reasonable alternative interpretations can lead the attorney and client back into court.
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