When you are working your way through your divorce, you might come to a settlement with your spouse and sign a marital dissolution agreement (as well as a parenting plan if you have children). Once the parties sign the marital dissolution agreement (or “MDA”), you’ve finished the hardest part of your divorce. However, the case isn’t really over until the judge signs your final decree and formally declares that your marriage is over.
Sometimes before the divorce is really final, one of the parties will decide that the MDA they signed isn’t really such a good deal after all and they’ll want to back out of it. The question is this: Before the divorce is final, how do you get out of a marital dissolution agreement that’s been signed?
An MDA is a contract, and will be interpreted and enforced like any other contract. Normally all parties are expected to comply with the agreements they’ve made, but there are ways to get out of a contract.
A recent appellate case, Richards v. Richards, illustrates some of these principles and the difficulty in withdrawing an executed MDA. This divorce went on for almost two years, and the wife went through at least seven attorneys (which is always a big red flag). Eventually the parties participated in mediation which resulted in a settlement, which was expressed in a marital dissolution agreement that both parties signed. The marital dissolution agreement provided that husband would receive martial assets valued at $550,091.27, and the wife would receive about $507,983.21. In addition, the husband would pay alimony to wife in the amount of $1,000 per month for 48 months.
About two months later and before the divorce was final, the wife sent a letter to the judge in which she listed numerous grievances with the litigation, and specifically said “my attorney . . . prepared NO documents on my behalf prior to mediation and the[n] FORCED ME TO SIGN an untenable agreement blocking my path when I asked to be excused from the mediation session.” Later, she claimed she should be relieved from the agreement for the following reasons:
- Wife signed the contract under duress
- Wife did not have sufficient mental capacity to enter a contract
- The marital dissolution agreement did not adequately settle all of the property rights between the parties
If proven sufficiently, any of these would be reason to void the MDA and force the parties to try to come up with a new agreement to divide their assets. The appellate court examined the evidence the wife submitted toward each of these claims.
First of all, EVERYBODY involved in a divorce is under a certain amount of duress. The entire process is stressful, and you’ll always be under the threat of losing a bunch of money, or having to spend a lot of additional time in court, or losing your job because your mind is somewhere else, or you might be forced to sell your house, etc. This is NOT the kind of duress that will make the marital dissolution agreement a faulty contract.
The Court noted that in an earlier case they had written:
“Duress” is an unlawful restraint, intimidation or compulsion of another to such an extent and degree as to induce such other person to do or perform some act which he is not legally bound to do, contrary to his will and inclination. The alleged coercive event must be of such severity, either threatened, impending or actually inflicted, so as to overcome the mind and will of a person of ordinary firmness. To constitute duress, the danger must not only exist, but must be shown to have actually operated upon the mind, and to have constituted the controlling motive for the performance of the act sought to be avoided.
During her testimony before the trial court, the wife claimed as follows: “My husband told me that he had information regarding pornographic materials that he was going to use and post against me that he had received from individuals outside of our circle of friends, in addition to the already numerous pictures and things that had been posted of me on the Internet already.”
In addition, she also claimed that she had asked to leave the mediation, but her lawyer blocked the doorway, refused to let her leave, then forced her to sign the agreement before she could exit the room. However, in court both the husband and the mediator testified that nobody had prevented wife from leaving the room, and nobody had pressured her into signing the marital dissolution agreement.
Both the trial court and the appellate court found that the wife’s testimony was simply not credible, and that she had not signed the agreement under duress.
It is true that a contract with someone who is mentally deficient is probably not enforceable. However, In another case, the court wrote the following:
[P]ersons seeking to show incapacity must prove either ‘(1) they are unable to understand in a reasonable manner the nature and consequences of the transaction or (2) they are unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of their condition. … It is not enough to prove that a person was depressed or had senile dementia; [rather], to prove mental incapacity, the person with the burden of proof must establish, in light of all the surrounding facts and circumstances, that the cognitive impairment or disease rendered the contracting party incompetent.
When testifying about her lack of mental capacity, the Wife offered this:
A. At that particular point in time I was suffering from a lack of being able to make clear judgment calls.
Q. How so?
A. I was suffering from ‒ I had not been able to sleep, I had been traumatized, and I was not having the ability to make clear decisions at that point.
That’s it. That’s the extent of proof of the wife’s diminished capacity that rendered her unable to enter into a contract. On the other hand, when asked if she considered herself to be intelligent, she answered: “as intelligent as you, sir.” The trial court noted that she was “lucid, intelligent, responsive, and that ‘she knew what she was doing, that she was working with her lawyer.'” The trial court ruled that the wife had sufficient mental capacity to enter the MDA.
The appellate court agreed and found that she had not proven she was suffering from diminished capacity.
The Agreement is Inequitable
As a general principle, courts LOVE it when people settle cases. Nobody knows your situation better than you and the court will give the parties a huge amount of latitude when it comes to creating a settlement that is in the best interests of the parties. For that reason, the trial court will most likely approve a marital dissolution agreement that the parties have entered into on their own. It’s got to be pretty seriously flawed in order for a court to reject it.
In this case, as mentioned before the MDA provides for $550.091.27 in marital assets to the husband, and $507,983.21 to the wife, plus $1,000 per month in alimony for the wife. It’s true that some small accounts were missed, but the trial court later split those accounts equally between the parties. In fact, a failure to disclose important facts (like assets) would also be a reason to void the marital dissolution agreement, but the wife didn’t directly raise that issue.
The trial court noted that both parties were intelligent, had held good jobs, were represented by counsel, and entered into the agreement freely. In Tennessee, the settlement doesn’t have to be equal, it just needs to be equitable. The appellate court rejected this claim. In the end, the marital dissolution agreement was enforced by the court.
Can you get out of an MDA? Maybe yes, maybe no. You really need to think about what you’re doing when you sign one, because you are settling your marital estate once and for all. If you and your spouse have significant assets, you need to have a lawyer with you to help you weigh the advantages, disadvantages, and long term effects of the contract. Lawyers are expensive, but not nearly as expensive as a bad agreement, or trying to fix a bad agreement.
Need help with your divorce? Call me and lets talk about how I can help you through this.