Case Watch: For Mediators
Clear and Complete Agreements Can Save Parties Years of Headaches
following case analysis is part of a regular series we publish to help you
broaden your knowledge of rulings of Georgia’s appellate courts that may
affect your practice. Remember: mediators should not give legal advice
One of the main reasons parties return to court over a dispute is their failure to comply with the terms of their settlement agreements. The majority of the time the problem is money – and who didn’t pay it.
In Baker, the Husband was required to refinance or assume the first and second mortgages into his own name and refinance or assume the automobile note in his own name, both within 60 days of the agreement. The agreement also included a hold-harmless clause and indemnification for the Wife by the Husband of any indebtedness.
In family-law matters, nothing is ever straightforward, and Baker is no exception. The Bakers entered into their agreement in November 1998. Yet the Wife failed to file a contempt action against her ex-Husband until March 2009.
What is your knee-jerk reaction based on what you know thus far? Probably the same one her husband had – she waited too long.
Husband’s first defense: O.C.G.A. § 9-12-60 states that a judgment shall become dormant and shall not be enforced when seven years elapses. The Husband filed a motion to dismiss the Wife’s claim based on this law. So, does A + B = C? BeNeutral readers know by now that it’s the interpretation by the courts that controls the printed words. Kind of a “not so fast.”
So how did
the trial court and Supreme Court rule on the Husband’s first defense?
The Supreme Court said:
“The dormancy statute does not apply to a judgment that requires the performance of an act or duty. Here, the divorce decree required Husband to perform specific acts and did not involve the payment of a sum of money. Therefore, the dormancy statute is inapplicable to this case.”
First defense failed. The Supreme Court upheld the trial court’s order for the Husband to pay $37,506.28, which was the total amount of indebtedness for the second mortgage ($25,177.44) and the vehicle ($12,328.84).
second defense: As to the vehicle, the Husband contended that he was not
obligated to pay his Wife the full amount, because he complied with the
agreement, which stated:
“Should husband fail to refinance or assume the automobile note for the 1998 Ford Explorer in his own name within sixty (60) days from the date of the execution of this agreement, then Husband shall grant and convey all of his right, title, and interest in said 1998 Ford Explorer to Wife.”
returned possession of the vehicle to the Wife as set forth in their
agreement. However, both the trial court and Supreme Court interpreted
the agreement as a whole to mean:
“Husband had the obligation to pay the indebtedness on the vehicle and hold Wife harmless regardless of whether he returned the vehicle to her possession.”
Second defense failed. If it was the intent of the parties for the Husband to have no financial obligation once he returned the car to the Wife, it would have helped if the agreement included a statement that released him from further financial liability as soon as he turned over the car.
I think we all know the answer to the obvious question, had it been asked: “Once you give your wife the car, are you going to continue to pay for it?” If he could have paid for it, why would he have not kept it?
There were some other parts of the agreement concerning the primary duties of the Husband that I thought were ambiguous. For example, as to the mortgages, the Husband “agreed” to refinance “no later than sixty days.”
Q: Was refinancing within 60 days an absolute duty of the Husband? Or was it a conditional duty dependent on the Husband’s ability to refinance? It’s not clear, because in the same paragraph, the parties agreed that the Husband could vacate the residence prior to refinancing and then the parties would list the residence for sale.
I had the same question about the automobile. The Husband was “required” to refinance or assume the automobile note in his own name “no later than sixty days.” Yet if he failed to do so, the same paragraph granted all rights, title and interest to the Wife.
Q: So the Husband is required to refinance or assume the car note within a time certain, but then he doesn’t have to? Which is it?
I think we can agree that the divorce settlement agreement in Baker should have been written less ambiguously. It doesn’t help anyone if the parties knew what they meant to say but they didn’t say it clearly enough. Adding to the confusion in this case was the fact that the parties and the courts were attempting to interpret a “meeting of the minds” some 10 years after the parties signed their agreement.
As mediators, we always strive to determine and record the intent of the parties. Remember, you are hired to help the parties to understand their points of agreement and to document their agreement accurately, completely and clearly. If you feel the need to record the parties’ duties and obligations in a manner that reminds you of an elementary school textbook, do so, even if it seems ridiculous to everyone else at the time. Your extra efforts at clarity and completeness will save the parties uncounted headaches even years down the line.