California Court Looks to “Essence” of the Parties’ Agreement in Divorce

bank-loan-concept-1446014-1-m (1).jpgDivorce by its very nature tends to create an adversarial relationship between the once-aligned spouses. There is no doubt that the parties will seek to protect their own, now-individual, financial, practical, and emotional interests — perhaps even at the other party’s expense. But in most cases, the couple could benefit from reaching a consensus or at least some mutually agreeable middle ground when it comes to some of the more serious issues to be resolved in divorce. Accomplishing this difficult task can save the parties time, money, and heartache. An experienced San Diego family law attorney would work to foster such an agreement under the appropriate circumstances.

It is important to keep in mind that not all agreements are made in good faith, and that some parties may not comply with promises made. In a recent California case, In re Marriage of Montague and Montague, stemming from a divorce judgment entered in 1993, the ex-wife Judy filed a motion with the court to protect her interests in the former couple’s marital residence. According to the facts of the underlying case, the couple agreed to a stipulation on certain issues. Under the terms, the couple’s two children were to live with Judy in the family’s “primary residence.” The home was worth less at the time of the divorce than what they had paid for it in 1988.

The stipulation further provided in part that they would list the house on the market, and if it sold within 90 days, they would divide the proceeds evenly between them. If it did not sell, the “entirety” of the interest in the property would go to Judy. Under the latter circumstance, Judy would be required to pay the mortgage, tax, and insurance obligations. The husband remarried in 2004 but separated in 2009 and entered into a marital settlement agreement with his second wife, Lori, in 2011. Under that agreement, Lori received 50% of the house that was part of his first divorce settlement.

As a result, Lori contacted Judy, claiming that she was entitled to be bought out of the house – that is, the ex-husband’s 50% interest in the home. At this point, Judy asked the court to set aside the husband’s transfer and award the entire property to her. The trial court granted her requests. Lori appealed, arguing that a “condition precedent” (the preliminary listing of the property for sale for 90 days) was never satisfied, so the property could not be awarded to Judy.

The court of appeals disagreed with Judy’s argument, first pointing out that the trial court correctly interpreted the essence of the couple’s agreement with respect to the home. No matter what happened, the matter was supposed to be resolved within 90 days. There were two possible outcomes: either Judy would be awarded the home, or the house would be sold to a third party (and the husband would share in the proceeds). But evidence came out that he purposely preempted the possibility of the sale by failing to sign the necessary documentation. The court looked to contract law in California and concluded that a party who prevents a condition precedent by his or her own wrongdoing may not take advantage of the absence of that condition.

The court ruled that the house belonged in its entirety to Judy. While this is an unpublished decision, and parties may not rely on or cite to it in future cases, the underlying legal reasoning may serve to inform courts handling similar matters in this jurisdiction. As we can see from this decision, each divorce case is unique and fact-specific. To protect your rights in divorce, It is important to consult with an experienced family law attorney from the local area. Roy M. Doppelt has been representing parties in divorce matters for more than 20 years. His office serves clients throughout Southern California, including San Diego, Encinitas, La Jolla, and Chula Vista. For a free consultation, contact Doppelt & Forney through our website, or give us a call toll-free at (800) ROY IS IT (769-4748).

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