Say What You Mean and Mean What You Say
January 4, 2016 § 2 Comments
Lee and Leslie Voulters were divorced from each other in 2004 on the sole ground of irreconcilable differences. The divorce judgment incorporated their PSA, which provided that Lee would pay Leslie lump-sum alimony in the sum of $1.08 million at the rate of $10,000 a month until paid in full. He also agreed to maintain a policy of life insurance on his life with a benefit of $1.08 million, with Leslie as beneficiary.
When Leslie filed a contempt action in 2013 charging Lee with missing some lump-sum payments and with failing to provide proof of life insurance, Lee counterclaimed, asking the court to interpret the PSA that the purpose of the life insurance was to protect Lee’s payment of lump-sum alimony, and that the obligation would terminate when the lump-sum alimony was paid in full.
Spoiler alert: There is no provision in the PSA that links the life insurance requirement to the lump-sum-alimony requirement.
Here are the pertinent parts of the agreement:
LUMP SUM ALIMONY/SPOUSAL SUPPORT
Lee shall pay spousal support to Leslie, in the form of lump sum alimony, the total sum of $1,080,000.00, payable in monthly installments of $10,000.00 each for a period of nine years. Such payments for support shall be due and payable by automatic bank transfer from Lee’s checking or other account directly into Leslie’s checking account, commencing on the fifth day of April, 2004, and shall so continue for one hundred and seven consecutive months thereafter. Lee’s obligation to pay such support to Leslie shall be fully vested upon the entry of a Final Judgment of Divorce in this cause, and shall not be modifiable. Lee’s obligation to pay such support shall not terminate upon Leslie’s death or remarriage, nor shall it terminate upon Lee’s death. However, despite the conventional definition of lump sum alimony[,] . . . these payments by Lee to Leslie under this Agreement shall be taxable to Leslie, and deductible by Lee, for state and federal income tax purposes.
LIFE INSURANCE
Lee agrees to maintain life insurance on his own life in an amount not less than one million, eighty thousand dollars ($1,080,000.00), naming Leslie as primary beneficiary thereon. Proof of such insurance coverage shall be furnished to Leslie within fifteen (15) days following the date of execution of this Agreement. Furthermore, Lee shall direct his insurance carrier to provide coverage information to Leslie at least twice a year if requested by Leslie.
. . . .
EFFECT OF AGREEMENT
. . . .
The respective rights and obligations of the parties hereunder are deemed independent and may be enforced independently irrespective of any of the other rights and obligations set forth herein. This Agreement contains the entire understanding of the parties, who hereby acknowledge that there have been and are no representations, warranties, covenants, or understandings other than those expressly set forth herein.
RELEASE AND WAIVER
Subject to the provisions of this Agreement, each party has released and forever discharged . . . his or her heirs, legal representatives, Executors, Administrators, and assigns . . . from all causes of action, claims, right or demands . . . in law or in equity . . . except . . . causes of action for divorce or separation action now pending . . . . Each party releases, waives, and relinquishes any and all rights . . . to share in the estate of the other party upon the latter’s death . . . . (Emphasis added.)
Both parties offered testimony about their intent in negotiating the language into the agreement. Lee argued that the agreement was ambiguous because it had no termination date. Leslie argued that she negotiated it for support, which she needed because her estate was meager in comparison to Lee’s.
One question before I tell you how the chancellor ruled: do you see anywhere in that language quoted above any link between the life insurance obligation and the lump-sum alimony?
The chancellor ruled that the agreement was unambiguous, and that it did require Lee to maintain the life insurance regardless of the status of the lump-sum payments. Lee appealed.
On December 8, 2015, the COA affirmed in Voulters v. Voulters. The opinion by Judge Barnes includes a nice recitation of the law of contract interpretation, life insurance and insurable interests, and even attorneys fees in contempt actions and on appeal. I definitely commend it to your reading.
What I want to focus on here is this: If you want your agreement to mean a particular thing, then make sure there is language in it that says that particular thing. Remember that when the judge is called on to interpret a contract, she is bound by the language within the four corners of the document, and she may not accept parol evidence to vary or “explain what the parties meant” by those terms unless she first finds the agreement to be ambiguous. Just because Lee did not include a termination date for his life insurance obligation, that did not render the agreement ambiguous. It rendered instead the meaning that it had no termination date. In other words, it meant exactly what it did and did not say.
Be careful in your draftsmanship. Take time to make sure it says exactly what your client needs it to say. I think I was saved a hundred times or more by the simple practice of drafting the agreement and setting it aside for at least a day. I would then pick it up and read it afresh, often catching something that could be read two ways, or was simply not clear enough to do the job. Sometimes I would imagine myself to be another person altogether, looking at it as an outside observer. Anything to get an objective perspective.
Remember that some day someone entirely unconnected with the negotiations and the emotion of the divorce case is going to be reading your work with absolutely none of the knowledge that you had when you drafted it. It may be a judge, or it may be another lawyer having to represent your client, or — heaven forbid — a lawyer looking for a cause of action against you. That’s why it’s critical when you draft an agreement to give some thought and care to the words, phrases, and language construction that you use. That’s what your client is paying you for: to have absolutely no more trouble out of this matter after the final judgment is entered.
SOL and the PSA
September 2, 2015 § 7 Comments
We visited the COA decision in Moseley v. Smith here before. It’s the 2014 case in which the importance of a hold-harmless agreement in a PSA was underscored when the COA held that, although the husband’s underlying debt obligation may have been discharged in bankruptcy, his obligation to his ex-wife based on a hold-harmless clause was not.
There’s another aspect of that case that merits your attention.
On appeal the ex-husband argued that his ex-wife’s claim against him was barred by the three-year statute of limitations (SOL) applicable to contract claims. His position was supported by the case of D’Avignon v. D’Avignon, 945 So.2d 401 (Miss. App. 2006), which held that property division matters in a property settlement agreement (PSA) are governed by the three-year SOL that applies to contracts.
In Moseley, however, the COA changed its position and held that all PSA provisions are incorporated into the court’s final judgment of divorce and, therefore, the seven-year SOL governing enforcement of judgments applies.
Two thoughts:
- Remember that SOL is an affirmative defense that must be asserted by the party who claims it. It is not an automatic bar to the action, but rather a defense that must be affirmatively pled. In a recent case in my court the parties litigated the issue whether the ex-husband was in contempt for non-payment of installment lump-sum alimony. Some of the early payments were due more than seven years before suit was brought. No one raised a SOL issue; therefore there was no bar to obtaining a judgment on those unpaid amounts.
- Before a judgment expires, you can renew the judgment per MCA 15-1-43. The extension is for a period of seven additional years. Most property provisions of PSA’s are resolved before that initial seven-year period expires, but some do not.
A Few More Suggested PSA Provisions
November 26, 2013 § Leave a comment
Here are a few more suggested PSA provisions you may find helpful, courtesy of David Rogers, Esq., of Pascagoula.
As with the previous post where I offered some suggestions for PSA provisions, there is no guarantee that any of these will be effective in any given court. They are suggestions for points you might want to cover in your own PSA’s. You may have better or other ways to state the same points.
Dealing with electronic contact in the digital age …
Telephonic/Digital Visitation – The parties agree and understand that should such means be available, during such times as the minor children is in the physical custody of the other party, the noncustodial party shall be allowed Telephonic and/or digital visitation with the minor children via telephone, electronic mail, instant messaging, video conferencing, social media, and other electronic means each and every even numbered day for a period of not more than 30 minutes total to begin no later than 7:30 p.m. in the time zone in which the minor children is/are located. Neither party shall be required to maintain electronic equipment and/or accounts necessary for said telephonic and/or digital visitation. Should the custodial parent incur and additional cellular fees as a result of the noncustodial parent’s telephonic/digital visitation, the non custodial parent shall reimburse the custodial parent for said fees within ten (10) days of receipt of the original bill from the custodial parent.
Responsibility for transportation within mileage limits …
Should the parties live within one-hundred (100) miles of each other, then Husband/Wife shall provide transportation for the minor children to and from each and every visitation.
Should the parties live apart by a distance greater than one-hundred (100) miles of each other, then the parties shall meet at a half-way point for all visitation exchanges and be responsible for their own transportation cost.
Should the parties live apart by a distance greater than (distance varies/check with client) two-hundred (200) miles of each other, then Husband/Wife’s every other weekend visitation shall be suspended until such time as the parties reside within two-hundred (200) miles of each other again.
In the event of military deployment per MCA 93-5-34 …
(a) The term “deployment” means the temporary transfer of a service member serving in an active-duty status to another location in support of combat or some other military operation.
(b) The term “mobilization” means the call-up of a National Guard or Reserve service member to extended active duty status. For purposes of this definition, “mobilization” does not include National Guard or Reserve annual training.
(c) The term “temporary duty” means the transfer of a service member from one military base to a different location, usually another base, for a limited period of time to accomplish training or to assist in the performance of a noncombat mission.
(d) The term “family member” means a person related by blood or marriage and may include, for purposes of this statute, a step-parent, grandparent, aunt, uncle, adult sibling or other person related by blood or marriage.
(e) When the custodial parent, receives temporary duty, deployment or mobilization orders from the military that involve moving a substantial distance from the custodial parent’s residence having a material effect on the non-custodial parent’s ability to exercise custody responsibilities:
(f) The non-deployed parent shall make the child or children reasonably available to the deployed parent when the latter parent has leave;
(g) The non-deployed parent shall facilitate opportunities for telephonic, “webcam,” and electronic mail contact between the deployed parent and the child or children during deployment; and
(h) The deployed parent shall provide timely information regarding the parent’s leave schedule to the non-deployed parent.
(i) If the parent with visitation rights receives military temporary duty, deployment or mobilization orders that involve moving a substantial distance from the parent’s residence or otherwise have a material effect on the parent’s ability to exercise rights, the non custodial parent’s visitation rights shall be exercised by a family member of the noncustodial parent for the duration of the parent’s absence, if delegating visitation rights is in the child’s best interest.
THE ZWEBER ZIG-ZAG ON COLLEGE SUPPORT
January 3, 2013 § 3 Comments
You may recall my post back in February, 2012, about the COA decision in Zweber v. Zweber, in which that court adopted what I described as a rather expansive definition of college education support. This is the case, you may remember, where the daughter took flying lessons toward an aviation degree, and the mother balked at paying her part of the rather pricy tab. The chancellor ruled that she must, and the COA agreed, holding in essence that any expense in furtherance of the college degree is included.
Well, the MSSC reversed that COA decision on December 13, 2012. The MSSC decision in Zweber v. Zweber is one that all of you who prepare property settlement agreements (PSA) should study and take to heart.
The parties in Zweber had entered into a PSA that included the following language for college education support:
“The Husband and Wife shall each be required to pay for the cost of the minor children, with Husband paying two-thirds (2/3) of the expense and Wife paying one-third (1/3) of the expense, based on the cost of the child attending college at a four[-]year state[-]supported institution in such state as the child is a resident of. All costs are to be based on the average costs of meals, tuition, books and room, published in a state[-]supported catalog and not to exceed the cost of a four[-]year state[-]supported institution. This obligation shall continue even if the child is over twenty-one (21) years of age prior to the completion of college.” [Emphasis added]
At ¶ 15, Justice Dickinson’s opinion states: ” … the Court of Appeals correctly concluded that … in certain situations, parents may be required to pay for their children’s college educations and the extent of that obligation may go beyond payment for “meals, tuition, books, and room. But because the divorce decree in this case includes a specific provision addressing specific college expenses, it is distinguished” [from the cases cited by the COA].
This case highlights the critical importance of making sure that the PSA you offer for a particular client specifically meets the needs of that particular client. Don’t assume just because a provision got the desired results in one case that it will do the job an another case. One size does not fit all. In Zweber, if the provision had been drawn with less specificity, and possibly even made reference to the flying lessons, the result would likely have been different. Instead, the Supreme Court held that the unambiguous language of the parties’ contract governed. The specific, narrowly drafted language of the agreement saved Mrs. Zweber and cost Mr. Zweber.
As the MSSC said, in some cases, the covered costs may well go beyond, meals, tuition, books and room, but that depends on how the PSA is drafted.
SOME SUGGESTED PROVISIONS FOR PSA’S
January 18, 2012 § 3 Comments
Every lawyer has his or her own idea about what needs to be included or not included in a property settlement agreement (PSA) for an irreconcilable differences (ID) divorce. Here are some provisions I have seen in PSA’s through the years that you might find helpful in specific instances.
Protection from debts incurred by the other party:
Debts. If either party has made any debt in the name of or against the credit of the other, the party making such debt shall be solely responsible to pay it promptly and in due course, and to indemnify the other. There are no other joint debts of the parties. Each party shall be solely responsible to pay the debts incurred by him or her in their own name. From and after the date of this agreement, neither will incur any debt in the name of or against the credit of the other, and neither will do any act or thing to impair the credit of the other. Each will indemnify and hold the other harmless for his or her obligation to pay any debt provided for in this Agreement.
Attorney’s fees:
Attorney’s Fees and Costs. Husband and Wife each agree to pay his or her own separate attorney’s fees incurred in obtaining a divorce on the sole ground of irreconcilable differences.
Where other documents will be necessary to finalize the entire settlement:
Execution of Documents. Husband and Wife each agree to execute and deliver promptly any and all documents, papers, agreements, assignments, titles, bills of sale, contracts, deeds, Qualified Domestic Relations Orders (QDRO’s), and other papers of every kind and nature whatsoever deemed necessary by the other to effect the spirit and intent of this Agreement.
To confirm and ensure that there are no unwritten or side agreements:
Entire Agreement. This Agreement constitutes the entire agreement between the parties, and each acknowledges that there are no other or further agreements not expressly included herein. This Agreement is contractual, and not merely a recital. The parties agree that no part of the consideration for this Agreement is any promise, inducement, representation, or agreement to obtain or maintain any divorce action in any Court. Each party acknowledges that this Agreement is entered into freely and voluntarily, without force, duress or influence by any person.
Release of all claims:
Final Settlement and Release of all Claims. Husband and Wife acknowledge that they have read this Agreement and carefully considered the same, and do further acknowledge that this Agreement permanently and finally resolves all marital and personal disputes between them, including, but not limited to, any and all claims for alimony, personal injury, defamation, invasion of privacy, torts of every kind and nature, and division of property rights between the parties hereto, and they do hereby mutually release each other from all claims that each has against the other, other than as specifically set forth in this Agreement, .
Where the parties want the agreement to be enforceable whether or not approved by the court*:
Approval by Court. The parties agree and stipulate that their Agreement shall be made a part of, and shall be incorporated into the Court’s Judgment of Divorce on the ground of irreconcilable differences. The parties understand and acknowledge that, although this Agreement is subject to approval by a court of competent jurisdiction in order for it to be incorporated into and made a part of any Judgment of Divorce between them, it shall nonetheless be a binding and lawful contract between them, and that its enforceability shall not be affected in any way by its approval or non-approval by any court in connection with any divorce action between them. If either party files any contest to a divorce between them, this Agreement shall nonetheless be enforced in all of its terms.
A useful provision to ensure that there are no open-ended obligations:
Date of the Agreement and Time to Perform. The date of this agreement shall be the date when it has been executed by both parties. If no specific time limit is stated for taking any action prescribed in this agreement, then the parties agree that all such actions will be accomplished in a reasonable time, but not later than thirty (30) days from the date of entry of any judgment of divorce between the parties on the sole ground of irreconcilable differences.
Where one party is not represented:
Representation. Husband is represented by [attorney]. Wife is not represented by an attorney, and she is representing herself, in connection with the execution of this agreement and in connection with any divorce proceeding between the parties. Wife is fully competent to do so, and she is under no legal or other disability. Wife understands that the law firm of [attorney] represents Husband alone, and Wife further acknowledges that she has relied on her own best judgment in connection with the execution of this agreement and in connection with any divorce proceeding between the parties, and that she has neither received, nor expects to receive, any counsel or advice from Husband’s attorney. Wife understands that she is and has been free to consult with any attorney at any time in connection with the execution of this agreement and in connection with any divorce proceeding between the parties. Wife understands that she should not sign this Agreement unless and until she understands all of its provisions in full.
Clarification that tax advice has not been rendered:
Tax Advice. The parties acknowledge and understand that there may be certain tax consequences pertaining to this Agreement, and that each of them should obtain independent tax advice from qualified tax accountants or tax counsel prior to signing. Husband acknowledges that he has not received tax advice from his attorney in connection with this Agreement and a divorce.
Closing the door on a party claiming later that the property should have been appraised:
Fair Division. The parties agree that this Agreement is a fair division of their assets and a fair allocation of debt between them. They acknowledge that the most accurate method of determining values of assets would be to have them appraised, but they agree to save time and money as to values by relying on their own best judgment.
If a former name is to be restored, it is a good idea to include that agreement in the PSA:
Name Change. Wife may, at her sole election, have her name changed to a name of her choosing in any final Judgment of Divorce between the parties.
There is no guarantee that any of these provisions will be effective in any given court. I am offering them as a suggestion for points you might want to cover in your own PSA’s. There are certainly better or other ways to state the same points.
_______________
* “Today we hold that a property settlement agreement executed in contemplation of a divorce based upon irreconcilable differences is unenforceable when one party withdraws from the irreconcilable differences proceeding and seeks a divorce on grounds other than irreconcilable differences. Much confusion may be avoided by inserting appropriate language within the property settlement agreement which specifically addresses this contingency … the contract should specify, with particularity, within its four corners, whether it is to be limited to an irreconcilable differences divorce or whether it is intended to be binding in a divorce granted on any other grounds.” Grier v. Grier, 616 So.2d 337, 341 (Miss. 1993) [Emphasis added]. The unmodifiable (i.e. property settlement) provisions of the PSA may be enforced by the court sans a divorce, but the modifiable (i.e. child support and custody and periodic alimony) issues may not.
JUST WHOM DO YOU REPRESENT?
January 17, 2012 § Leave a comment
Consider this scenario …
You have represented Betty Sue in several matters, including a contentious divorce, contempts, and closing on her new home. Betty Sue was so satisfied that you have ended up doing legal work for many of her family and friends. She has been quite the bonanza in terms of clientelle. One day she comes into your office with her ex and asks you to do an agreed modification so that Junior can go live with his dad in Simpson County to play football. You draft a joint petition and an agreed judgment, have everyone sign off, present it to the chancellor, and Voila! Another minor miracle to impress Betty Sue and her wide circle of family and friends.
As often happens, though, things fall apart. Junior gets into trouble and is kicked off of the football team. He is not getting along with dad, and he decides he wants to return to mom. Dad refuses. Betty Sue returns once again to your office, and you take a retainer, prep pleadings, and file for modification, fully expecting another feather in your cap. So far so good. Until …
In the mail comes a motion to disqualify you in the case on the basis that you represented both parties in that joint motion and agreed judgment. You dig up the file and to your dismay you see that nowhere on the pleading or the judgment is it indicated that you represented Betty Sue alone. The chancellor sees it the other side’s way, and you are out on your ear. Betty Sue and her family, being country folk who don’t have time for subtleties and nuances, feel that you are dropping her and maybe even have gotten in league with her ex. Ouch. To try to make amends you refund Betty Sue’s retainer so she can hire another attorney. But the damage is done.
The problem could have been avoided if you had simply included a paragraph in the pleading that spelled out that you represent Betty Sue alone in the modification, that you have given no legal advice to the ex, and that he signifies by signing that he understands that he may consult with any attorney of his choice; you should also have spelled out at your signature line “Attorney for Betty Sue _____ only,” and added pro se, after the ex’s name. That would have been plenty for the chancellor to refuse to disqualify you.
The same principle applies any time the other party is unrepresented. Be especially aware when you have a joint complaint for irreconcilable differences (ID) divorce that, since it is unethical for an attorney to represent both parties in an ID divorce, your pleading must spell out which party you represent.
And always, in your property settlement agreement (PSA), add a paragraph identifying which spouse you represent, that you have provided the unrepresented party no advice, and that the unrepresented party has had the opportunity to confer with the attorney of his or her choice. That way, when the pro se party signs the PSA, future quibbling over who you represented is effectively sealed off.
Another source of confusion over who represents whom arises in minor’s settlements. Insurance companies often hire attorneys to file the petition and have it approved by the court. Too often, though, that petition does not specify whom the attorney represents. It would seem to be a simple matter for some language like that set out above to be included in the petition and even in the judgment approving the settlement. Leaving the point ambiguous would seem to be an invitation to a fly-specking attorney to try later to get the settlement set aside. If you would like to read about how and why that might happen, check out Carpenter v. Berry, et al.
Finally, confusion over who represents whom can arise when a lawyer lets his or her name slip into the court file. That happened in my court recently when a lawyer showed up in response to an MRCP 81 summons and allowed as how she “might be hired to represent the respondent,” and signed off on an agreed order resetting the hearing. She later tried to take the position that she had never been hired and so was not in the case. Sorry, but she is in the case until the judge signs an order letting her out. Another post on when appearances can lock you into a case is here.
ANOTHER OBJECT LESSON IN PSA DRAFTSMANSHIP
December 21, 2011 § 2 Comments
What does the following language in a divorce property settlement agreement (PSA) mean?
The parties both agree and understand that [Stephen] will retire from Martin Marietta Manned Space Systems effective April 24, 1992. . . . The parties have agreed to accept #D-Level Income as the monthly benefit option. This will provide [Stephen] a monthly income of approximately $3[,]189.26. [He] will remit to [Gloria] one-half of this income, being the approximate amount of $1,594.63, on the first day of each month . . . commencing on January 1, 1993. These monies will be considered alimony[,] and [Gloria will be responsible for the income taxes].
That was the question squarely presented to the chancellor in litigation between former spouses Stephen and Gloria Reffalt.
Stephen and Gloria were divorced in 1993. Stephen had retired from his job with Martin Marietta (MM). Approximately two years later Stephen’s retirement benefits paid by MM were reduced when his Social Security benefits kicked in, as the plan provided. As a result of the automatic reduction, the $1,594 payments to Gloria came to represent considerably more than 1/2 of the MM benefit. Nonetheless, Stephen continued paying the $1,594 until December 2008, when he apparently decided enough was enough, and he filed a petition to modify the payments proportionally to about $1,150 a month.
Stephen took the position that the above PSA language clearly intended that Gloria receive only 1/2 of his MM retirement benefits, whatever that amount might be.
Gloria argued that the language mandated that she be paid 1/2 of Stephen’s total retirement benefits from whatever source.
The chancellor found the language to be ambiguous and accepted parol evidence of the parties’ intentions in the drafting of the contract. Placing heavy emphasis on the parties’ course of conduct over fifteen years after the reduction in MM benefits, the trial court held that the language intended that Stephen pay the higher amount, and denied his request for a downward modification.
In Reffalt v. Reffalt, decided December 13, 2011, the COA affirmed. I recommend that you read the opinion, written by Judge Ishee, for its exposition on the principles of contract interpretation and what is and is not an ambiguous contract. The opinion also touches on the question of modification of property settlement.
This case is yet another example of draftsmanship that may appear at first blush to be clear, but on further inspection is susceptible to several different interpretations. Consider the language ” … This will provide …” and ” … one half of this income …” To what do the pronouns this refer? Are their objects the same thing or different? Better to have said “… one half of the #D-Level benefit each month …” Or “Stephen will pay to Gloria the sum of $1,594 each month.” Or “The amount payable by Stephen shall be adjusted automatically to be equal to 50% of his #D-Level benefit actually received, without any voluntary action on his part to reduce the amount received.”
A few suggestions:
- As I have said here before, it’s a good idea to draft and set aside that agreement for a day or two. Then pick it up and read it through different eyes. Cast yourself in the role of the judge looking at it years later, or the plan administrator considering how to apply it, or another lawyer to whom your former client has carried it.
- Go pronoun hunting. Eliminate as many as you possibly can, replacing them with the specific term that you intend to refer to.
- Does your language say exactly what you mean to say, or is it indirect and prolix? More words are not always better. The more verbosity you use, the more likelihood that confusion, unintended meanings and ambiguity will grow and fester in that thicket like a staph infection.
- Here are five suggestions for improving your PSA’s.
- And here are five more.
- Here is a post about a nightmare scenario in draftsmanship.
- Kicking the can down the road, and why it’s not a good idea in your PSA’s.
- And here is a post on some examples of the hidden costs of divorce that you need to take into account when drafting a PSA.
Give your PSA’s some thought. That’s what you’re being paid for. Strive for your PSA’s to be better than 99% of other attorneys’. Make it your goal that no judge will ever have to find one of your PSA provisions to be ambiguous.
A COSTLY LESSON IN PSA DRAFTSMANSHIP
July 21, 2011 § 3 Comments
What does this fairly commonplace paragraph from a PSA mean:
School and Extracurricular Expenses. Husband and Wife shall each be responsible for one-half (1/2) of all school and extra-curricular expenses incurred by the minor child including but not limited to the cost of books, activity fees, lab fees, school uniforms, tuition, and sports equipment.
Does that provision refer to private elementary and/or high school? Or does it refer to college? Is the language ambiguous?
In McLeod v. McLeod, decided July 19, 2011, by the COA, those questions were presented squarely to the appellate court.
Judge Griffis wrote the opinion that held the language above to encompass all levels of education, and rejected both the arguments that the language was ambiguous and that private elementary and high school expenses are usually included in child support as the court had held in Southerland v. Southerland, 816 So.2d 1004 (Miss. 2002), and Moses v. Moses, 879 So.2d 1043 (Miss. App. 2004). The opinion distinguished the two cases from the facts in this case. The COA decision is worth a read, and I will not rehash it further here.
The point I want to make is how important it is to be aware of precision in your draftsmanship. It would have been a simple matter for the husband’s attorney to clarify the language to specify that it pertained to college, if that was, in fact, the agreement.
Some PSA’s lack clarity. The meaning is hidden behind a cloud of words. That was not the problem in this COA case, but it’s a common problem nonetheless. You can read some ideas for clearer draftsmanship here.
Mostly, though, it seems that we sometimes get in too much of a hurry. The client may be pressing or you put off tending to it until you had no more time to spare. Haste is the enemy of precision.
Make time to set aside what you have drafted for at least a few hours or a couple of days. Then pick it back up and look at it through fresh eyes. Put yourself in the role of a judge who is reviewing it. You know what you meant to say, but will that judge looking through different eyes see it the same way? Are there more precise words that could be used? Is what you have written susceptible to more than one interpretation? Is there something there that can come back and bite your client?
You want your PSA’s — and everything you draft, including pleadings, contracts, briefs — to say exactly what you mean to say and to promote the best interest of your client. Take your time on draftsmanship. Haste is the enemy of precision.
FIVE MORE SUGGESTIONS FOR PROPERTY SETTLEMENT AGREEMENTS
June 21, 2011 § 3 Comments
- Sometimes the parties want the property settlement part of the PSA to be a final, binding contract regardless whether there is any contest. If you don’t include that provision unequivocally stated, the law is clear that the court can not enforce the contract piecemeal.
- If a payment is to be made, such as child support, specify the first payment date and the regular monthly date for payment.
- If something is to be done, specify the date by which it is to be done. In the alternative, include a stock provision in all your PSA’s to the effect that “If no specific date is stated by which an action in this Agreement is to be accomplished then it shall be done and completed not later than thirty days from the date of this agreement.
- If something is to be done, specify whose responsibility it is to do it. For instance, the provision that “All child support payments due hereunder shall be made pursuant to the Bank Plan,” was held by Judge Mason not to be clear enough that it was the payor’s responsibility to enroll in and make payments under the plan where he had been unrepresented in the divorce. Better to say something like “Husband shall be solely responsible to do all acts and things necessary to enroll in and make all child support payments due on and after August 11, 2011, through the Bank Payment Plan.”
- Section 71(b)(1)(B) of the Internal Revenue Code allows the parties to agree that alimony will be neither taxable nor deductible.
FIVE SUGGESTIONS FOR PROPERTY SETTLEMENT AGREEMENTS
June 15, 2011 § 5 Comments
I’ve had these suggestions on the stockpile for a little while, waiting for an opportune time to post them. Considering Randy Wallace’s post about a less-than-perfect PSA yesterday, I thought now was a good time to float these. I’ll have more later.
- If you don’t address allocation of the tax exemptions for the children as dependents, the IRS takes the position that it remains with the custodial parent. If the non-custodial parent will get the exemption, or it will be split, you should include language that the parties agree that they will promptly complete and timely execute and deliver IRS Form 8332 in order to give effect to the provision. That form is the one that the IRS requires to claim the exemption.
- Stick with the traditional terms. The IRS understands the terms periodic alimony, lump sum alimony, rehabilitative periodic alimony, and child support. If you try to disguise those terms as spousal support or family/spousal support, or family maintenance, or something similar, you are likely sending your client off onto a collision course with the IRS. William Wright, an attorney in Jackson, told of a case he had where opposing counsel insisted on applying the term family support to a substantial payment that William’s doctor-client was having to pay each month. William complied, and his client later took the position with IRS that the payments met all the requirements for alimony, so that he should be able to deduct it, and it should be alimony to the recipient. IRS agreed, costing the recipient a whopping tax bill, and no doubt improving William’s standing in his client’s estimation. Had the payments been allocated between child support, which is not taxable, and alimony, which is, the result would have been far different for the recipient spouse.
- If the other party is not represented, have you made it clear in the agreement which party you do represent, and have you added language to the effect that the other party acknowledges that you have not given him or her any legal advice?
- Name the children in the agreement. It affects them directly. I have read agreements that refer only to “the minor children,” without identifying them, or stating their ages or birthdates, or even how many there are.
- Have you bothered to read the agreement? Does it make any sense? Here’s an actual sentence from a property settlement agreement I was presented: “Husband to have his title and car, and wife hers. Each to pay and hold harmless.” I think I know what that means. But that doesn’t make it an enforceable contract.
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