Ron Fabian, of Jackson, Michigan, calls our attention to a divorce litigant's efforts to have a "do-over" of his divorce settlement. Of interest is the fact that both litigants are highly-qualified lawyers: Plaintiff Husband Simkin ["H" or "Ex-Husband"] is a partner and chairman of the real estate department at a large and prestigious New York law firm; Defendant Ms. Blank ["W" or "Ex-Wife"] is the deputy senior university director of labor relations at a university in New York. They were married in 1973, separated in 2001, and divorced during the summer of 2006.They negotiated a settlement arriving at September 1, 2004 as the date for division.
On June 27, 2006, they entered into a formal, written, properly acknowledged and executed agreement to divide their property (the "agreement"). They agreed to an approximately equal division of marital property acquired during this long-term marriage. H was to get one residence and W the other, each received his/her retirement accounts, significant personalty was divided between them, H received his partnership interest in the law firm and his interest in Bernhard L. Madoff Investment Securities, an asset in his name only. H was to pay certain marital debts, and H was to pay Wife $6.6 million to equalize the settlement.
The usual boilerplate was included in the agreement, including an acknowledgment that the property distribution represented a fair and reasonable division of their assets, a release of claims provision, and a merger clause (meaning that the terms of the settlement were to be merged in the judgment of divorce). Simkin liquidated some of the Madoff Securities, to make the payment to Ex-W. Imagine how stunned Ex-Wife was when Ex-Husband sought two years later to reform the judgment.
Ex-Husband's claim is certainly novel. In an attempt to avoid the standard defenses to a suit to amend a judgment, (e.g., the judgment / settlement agreement is a contract and the court will not re-write a contract that is not ambiguous, but will enforce it or uphold the terms if they are clear and unambiguous, and absent fraud, duress, unconsionability, etc.), Ex-Husband alleges that the parties were "mutually mistaken" about their assets when they
negotiated their settlement. In Ex-Husband's view of the world, the parties only thought they owned $5.4 million in Bernhard L. Madoff Investment Securities. In fact, says Ex-Husband, since Bernie Madoff was running a Ponzi scheme, they owned nothing. Ex-Husband did not discover this right away because he elected to leave his Madoff monies "fully invested" and thus, when that ship was sunk two years following the agreement and divorce judgment, he got nothing. Ex-Husband claims that Ex-Wife benefited when Madoff acknowledged the fraudulent scheme, and Ex-Husband was left holding a large empty bag. [Oh, it's the old Pie in the Sky problem.]