A divorce settlement agreement requires clear language. It must also anticipate the thousands of details needed to complete the financial disentanglement and establish post-divorce rights and obligations. The parties must unceasingly ask their counsel “what if? Before signing their agreement, parties must envision how each type of transaction will actually be accomplished.
That need is made clear in the June 29, 2016 decision of the Appellate Division, Second Department, in Frances v. Frances.
The parties entered their divorce stipulation of settlement on January 19, 2010. On this post-judgment application, the ex-husband asked to enforce the stipulation by directing his former wife to pay him 50% of the refund received from the parties’ 2009 joint tax return, 50% of the school tuition and camp expenses for the parties’ youngest child, and 50% of the cost of certain repairs to the marital residence. Rockland County Supreme Court Justice William A. Kelly granted that relief and the wife appealed.
The Second Department noted that a stipulation of settlement is a contract subject to principles of contract construction and interpretation. It should be interpreted in accordance with its plain and ordinary meaning. A court may not write into a contract conditions the parties did not insert or, under the guise of construction, add or excise terms. It may not construe the language in such a way as would distort the apparent meaning.
Here, the stipulation provided that, except for its specific provisions, the parties had divided their respective property to their mutual satisfaction. Each party waived any rights to a distributive award “with respect to any property acquired by the other or acquired jointly either before or during the marriage, or by either individually after the effective date of [the stipulation] and each agree[d] never to seek through judicial proceedings or otherwise . . . a distributive award or equitable distribution with respect to any property acquired by the other or acquired jointly either before or during the marriage.”
In the stipulation, the parties agreed that the wife would prepare the parties’ 2009 joint tax return. However, the stipulation was silent as to how any refund from the 2009 joint tax return would be distributed. The Second Department noted that the husband ordinarily would have a right to 50% of the marital portion of the 2009 tax refund. However, “here, the husband waived any right to the distribution of such tax refund in the stipulation, which did not specifically provide for the distribution of any refund in connection with the 2009 joint tax return.” The appellate court held that Justice Kelly should have denied the husband’s request for 50% of the refund received from the parties’ 2009 joint tax return.
What the Second Department does not discuss is that presumably the refunds from joint returns were presumably joint assets, regardless of their stipulation. Presumably, the 2009 tax returns were filed after the January 19, 2010 stipulation was signed. If not applied to the 2010 taxes for the parties, jointly, a check to the parties jointly should have been issued. Nothing about the agreement for the wife to prepare the returns represented an agreement for her to retain the joint refunds. The wife had no more right to endorse or deposit the refunds into her own account than did the husband. Absent additional information, the joint refunds should have been divided equally.
The Second Department upheld Justice Kelly’s direction that the wife to pay the husband 50% of the school tuition expenses for the parties’ youngest child. The stipulation provided that the wife and the husband “shall equally share . . . school tuition.” The stipulation did not require the parties to consult and agree with each other as to the specific school that the child would attend.
As the stipulation did not contain any provision directing the wife to contribute to the child’s camp expenses, Justice Kelly should have denied the husband’s motion for the wife to pay 50% of those camp expenses. Where parties provide for child support within a separation agreement, it is to be assumed that they have anticipated and adequately provided for the child’s future needs and the terms of the agreement should not be freely disregarded. If the parties had intended for the wife to contribute to the child’s camp expenses, they should have expressed so in the stipulation.
Finally, pursuant to the stipulation, all major repairs to the marital residence that were necessary and cost more than $1,000 were to be shared equally by the parties, provided that the cause for the major repairs was not the husband’s willful neglect, and provided that the husband advised the wife of the repairs, that he provided her a written estimate, and that the repairs were agreed to. However, here, the husband failed to demonstrate that the repairs to the marital residence were necessary, that the cause of the repairs was not his willful neglect, that he advised the wife of the repairs and provided her with a written estimate, and that the repairs were agreed to. Under these circumstances, Justice Kelly should not have awarded the husband any reimbursement for repairs to the marital residence.