Sunday, July 26, 2009

Marital Settlement Agreements

The New Jersey court was recently asked to decide whether a document between a divorcing couple hand written by a mediator, initialed as to each paragraph by the couple but not signed was a valid agreement for purposes of a marital settlement agreement. The appellate court answered in the affirmative.

In the case of Hasty vs. Hasty, the couple both tenured professors at Ivy League universities voluntarily decided to attend a mediation session accompanied by their respective attorneys. At the conclusion of a four hour mediation session, the mediator who was a retired superior court judge in private practice, prepared a handwritten three page document entitled, “Hasty Agreement.” The document clearly detailed in nine paragraphs the separation and division of the couple’s assets and liabilities; the distribution of furniture and the waiver of alimony. The couple initialed each paragraph of the document.

Subsequently, one of the attorneys prepared a more detailed marital settlement agreement containing additional boilerplate clauses which wasn’t accepted by the husband. The wife thereafter filed the divorce complaint and requested the court to honor the mediation document. The husband asserted in his affidavit that he wasn’t aware that the mediation document was a valid settlement agreement and sought to have the document disregarded by the court.

However, the court rejected the husband’s assertions and found that the mediation document was a binding agreement between the couple because it was initialed by both as to each paragraph and the document was labeled an agreement. The absence of signatures was not considered a fatal flaw in the agreement. The court reasoned that even oral agreements are binding on individuals if there was intent by the individuals to be bound. The court determined that the document raised and resolved all the major issues between the couple in comprehensive terms. Furthermore, the court noted that the husband for several months after the mediation meeting complied with the terms and actions required of him by the agreement.

In divorce mediation, a couple through the assistance of a skilled divorce mediator attempts to agree on the various issues affecting them such as, alimony, allocation of assets and liabilities, child custody and visitation. At the conclusion of the mediation sessions the divorce mediator would prepare a settlement agreement, usually a Memorandum of Understanding or (some mediators will prepare) a Marital Settlement Agreement. Usually, the prepared document is presented to the divorcing couple for their and if they choose their attorney’s review. Thereafter, if no revisions are required, the divorcing couple would sign the agreement and have it filed with the court. In the Hasty’s case, it is unclear why the retired judge in private practice would have the couple initial each paragraph yet omit signatures. Nor is it clear why there wasn't additional verbiage in the agreement detailing the couple's voluntary concurrence of the terms and in the presence of their attorneys.

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