Consent judgments are interpreted like contracts between the parties

I recall a question raised not too long ago on the State Bar's Family Law Listserv about whether judgments and orders can be interpreted according to contract law. In Slota v Slota [Docket No. 269640] decided on September 13, 2007, the COA held that the parties' consent judgment would be interpreted in the same manner in which the court interprets contracts since it essentially constituted an agreement or contract between the parties.

The husband was aggrieved because the lifetime alimony award was secured by a lien against the real estate he was awarded. By the parties' agreement, this lien was to be superior to all other liens or mortgages. Of course, when Husband went to the bank for a loan against the real estate to pay off a lump sum due to his ex-wife, the bank refused to loan him money if their secured position was secondary rather than primary. He asked the trial court to amend the judgment to make the ex-wife's lien secondary. When the T/C did so, the ex-wife appealed and the COA reversed.

The COA was unsympathetic and said that a motion for amendment of a consent judgment should be treated the same way as one to reform a contract. The COA noted that Husband's unilateral mistake in not recognizing that the priority of the lien would make financing impossible for him could not be grounds for reformation of the parties' contract.

You may read Slota v Slota here.

Technorati tags: alimony, spousal support

Comments

[sbassett]

I represented the wife on appeal. One interesting aspect of this case was that the trial court in proceedings by the wife to enforce the lien provisions of the judgment via a judical sale, sua sponte invalidated the priority status of the lien and thereby rewrote the parties' agreement.

The trial judge was trying to solve what he viewed as a practical impediment to the husband's ability to pay his obligations. But he did so without properly considering that the parties negotiated the agreement with full knowledge that the priority status of the lien could impair the husband's ability to get a traditional loan using the liened property as collateral.

The lesson here is that a deal is a deal, whether or not the deal imposes practical impediments for one party or the other.

[Jeanne M Hannah]

On September 14th, Diana Skaggs' Divorce Law Journal blogged a Kentucky case in which a similar result on appeal was reached.

In Bailey v Bailey, ___S.W. 3d ___(Ky. App. 2007)the COA held that the trial court erred in not enforcing the parties' separation agreement according to its express terms, and in applying equitable principles in reaching its decision.

The digest of Bailey v Bailey may be read here. http://louisvilledivorce.typepad.com/info/2007/09/bailey-v-bailey.html