Let’s stay you’re comfortable settling (rather, you think) your case with a clean split – you keep your retirement, your spouse keeps his, and you don’t have to get tied up in those mysterious orders s lawyers call QDROs that take several months to process. KISS, keep it simple, stupid, you think. You find out later – even a day later – that he has twice as much set aside for retirement as you.
So, if you settled your case without finding out how much of your spouse’s retirement you walked away from, can you get out of it later?
Probably not.
Family courts generally approve negotiated property settlement agreements, even when those are not equitable.[1] The family court is bound by property settlements reached through negotiation absent fraud, duress, or mutual mistake.[2] In Lentz, for example, the court stated, “we will not rewrite or abrogate an unambiguous agreement negotiated and signed by consenting adults by imposing a ‘reasonable’ or ‘equitable’ inquiry on the enforceability of such agreements.”[3] Rather, in reviewing a property settlement agreement, the family court must consider whether the agreement was entered into and signed freely, voluntarily, and understandingly, not whether the settlement is equitable.[4] This standard applies whether the settlement agreement is in writing or placed orally on the record in open court.[5]
Settlement agreements that occur while a case is pending are generally enforced, absent fraud, duress, coercion or an agreement contrary to public policy, meaning not one the family court would not accept but one that shocks the conscience.
Pursuant to Michigan Court Rule 2.507, settlement agreements are binding and enforceable when they are subscribed in writing by the party (or agent) against whom enforcement is sought or recited in open court, on the record. The court rule broadly states, moreover, that we need only produce “evidence of that agreement” the parties reached. The rule provides, in pertinent part:
MCR 2.507 Conduct of Trials . . .(G) Agreements to Be in Writing. An agreement or consent between the parties or their attorneys respecting the proceedings in an action is not binding unless it was made in open court, or unless evidence of the agreement is in writing, subscribed by the party against whom the agreement is offered or by that party’s attorney.[6]
Importantly, as here, if a party alleges that his or her consent was influenced by severe stress, the settlement will nonetheless be upheld unless the circumstances were so severe that he or she actually lacked legal capacity to contract -- that is, he or she had no reasonable perception of the nature or terms of the agreement.[7] Furthermore, whereas here, the party alleges mistake, the mistake must be mutual.[8] When parties enter into settlement agreements, they give up the right to further investigation on those issues to which they settled, and making a mistake in doing so, nor having a change of heart at having done so, is not a basis to set aside the agreement.[9]
Unless your spouse committed fraud or you both did not know how much retirement he had set aside, you’re stuck with the settlement you struck.
The KISS principle – keep it simple, stupid – can really make you stupid if you settle your case without knowing all of the details.
[1] Buzynski v Buzynski, 369 Mich 129; 119 NW2d 591 (1963).
[2] Lentz v Lentz, 271 Mich App 465; 721 Nw2e861 (2006).
[3] Id.
[4] Id.
[5] Howard v Howard, 134 Mich App 391; 352 NW2d 280 (1984).
[6] MCR 2.506(G). This rule is applicable to trials, hearings and settlements.
[7] VanWagoner v VanWagoner, 131 Mich App 204; 346 NW2d 77 (1983).
[8] Villadsen v Villadsen, 123 Mich App 472; 333 NW2d 311 (1983).
[9] Id.