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Enforcement of Settlement Agreements
What is the legal standard to change the terms of a PSA?

In New Jersey a "change in circumstances" can constitute grounds to try to increase, decrease, or terminate a child support or alimony award. Moreover, a "change of circumstances" can also constitute grounds to change the terms of a parenting plan or any other custody terms. In the world of family law, there are endless types of family related agreements that are executed on a daily basis. In our current family law jurisprudence, any spouse can attempt to change the terms of any settlement agreement as long as he can prove that there is a change of circumstances. Any change of circumstances must be substantial in nature.

What is a post-judgment motion and what does filing one entail?

A post-judgment motion is filed in the family court that requests a modification/change of the terms an existing judgment of divorce, a property settlement agreement, or any other support order. A post-judgment motion can be filed when one or both ex-spouses experience a change of circumstances that now renders their prior settlement agreement unfair or inequitable. A post-judgment motion to modify can be filed to request a modification of almost any type of settlement agreement, parenting plan, premarital agreement, or support award. The most commonly cited change of circumstances is a loss of job, a severe illness, a failed business, a relocation, or the emancipation of a child.

What type of marital contracts are dealt with in the family courts?

Any contracts between the spouses that were entered into before the marriage, during the marriage, or during the separation process are called marital agreements. These contracts can be further classified into three different types of agreements. One type is called an ante-nuptial or a prenuptial agreement. These type of agreements are entered into before the marriage. The second classification of agreements are called post-nuptial agreements. These type of agreements are signed after the marriage but before any complaint for a divorce is filed. The final type of agreement is referred to as a separation agreement. This type of agreement is signed after the spouses separate, and it is entered into with the intention that the parties will eventually pursue a divorce. All of these type of agreements try to settle marital disputes that concern the equitable distribution of the marital assets, the fair apportionment of credit card debt, the determination of alimony and child support, health and life insurance for the children, legal and physical custody, parenting time issues, providing medical insurance and the payment of college expenses.

The family courts are fully cognizant that these agreements are negotiated under extreme circumstances that often make them much different than a typical commercial contract. In many scenarios, the husband often has extreme coercive power of the wife because he frequently controls the couple's finances. In many bad marriages, desperate wives will often sign oppressive settlement agreements in a last ditch hope of trying to save the marriage. In these type of circumstances, a family court will not hesitate to void any type of settlement agreement that is executed under this type of duress.

What are the possible defenses to the enforcement of a settlement agreement?

It must be emphasized that the family court's function is not to make marital contracts, but rather to enforce them. Consensual agreements "should not be unnecessarily or lightly disturbed." Edgerton v. Edgerton, 203 N.J. Super. 160 (App. Div. 1985). Moreover, simply because a marital agreement may appear to be unfair to one of the spouses, it is generally not sufficient for the court to render it voidable. Finally, before a family court can vacate a settlement agreement, there must be clear proof of fraud, or any other compelling circumstances that is demonstrated by clear and convincing evidence.

Nonetheless, there are many defenses that can be raised to try to void a settlement agreement. Some of the possible defenses are as follows:

  • Inadequate Consideration

    In some cases, a settlement agreement can be voided if there is inadequate consideration. In some settlement agreements, the terms of the settlement are so unfair, that a strong argument can be made that there is no adequate consideration and the agreement must be voided. See, Ireland v. Ireland, 43 N.J. Eq. 311 (Ch. 1888).
  • The Settlement Agreement is Unconscionable

    A settlement agreement is not enforceable if it is unconscionable. The term unconscionable is a rather nebulous term and it is hard to define exactly is unconscionable. However, the basic definition of unconscionable is when the agreement upon terms of a marital/settlement agreement are manifestly unfair and are dictated by the dominant spouse. An unconscionable settlement agreement is one that makes no sense and which no fair and honest person would accept.

    A spouse who seeks to set aside a settlement agreement on the grounds of unconscionability must prove that there was overreaching that resulted from an unequal bargaining disparity between the spouses. Moreover, the settlement agreement must also be so unfair that no reasonable person not acting under a compulsion would accept it terms. A court will evaluate the totality of the circumstances to assess whether a settlement agreement is unconscionable. The court will also evaluate the setting wherein the settlement contract was executed, the purpose of the settlement agreement, and the effects of the agreement. Finally, the family court will also consider the relations of the spouses and all of the surrounding circumstances.
  • Duress/Coercion

    In some cases, a spouse may attempt to void a settlement agreement on the grounds of duress. Basically, the defense of duress consists of claims that a spouse was forced by improper threats to execute the settlement agreement, and that there was no other reasonable alternative but to execute the contract.

    It must be emphasized that improper threats do not have to be violent or unlawful. Moral compulsion or psychological pressure may also constitute duress if the spouse is subject of the pressure and is overborne and deprived the exercise of her free will. Thus, the conduct of the conduct of the dominant spouse must have been such as to actually override the will of the dependent spouse. In determining whether the consent of the dependent spouse was coerced, the controlling factor is her mental state.
  • Undue Influence

    A settlement agreement may be voidable under the grounds of undue influence. Basically, this defense entails when the dominant spouse uses unfair persuasion of the dependent spouse, who is under his domination. Basically, the dependent's spouse free will is destroyed.
  • Fraud

    A settlement agreement may be side aside on the grounds that one spouse has committed fraud upon the other. Basically, the most frequent ground raised to try to void a settlement agreement is on the grounds of fraud. In the marital context fraud frequently occurs when a spouse must hides marital assets or hides his income to obtain a lower alimony award.
  • Mistake

    A settlement agreement can also be set aside on the grounds of a mutual mistake. In order to demonstrate a mistake of fact, the spouse seeking relief must prove that;
    • The mistake was significant.
    • The mistake relates to the settlement agreement.
    • The canceling of the settlement agreement must not cause serious prejudice to the other spouse.
  • Lack of Mental Capacity

    A settlement agreement can also be voided on the grounds that one spouse lacked the mental capacity to enter into the agreement. The most common grounds to substantiate a claim of mental capacity is when a client alleges that he was on prescription medication when he executed the settlement agreement.

Who has the burden of proof when trying to set aside a settlement agreement?

The spouse who is seeking to set aside the agreement has the burden of proof. If a spouse seeks to set aside a settlement agreement on the grounds of undue influence, then she has the burden of showing improper influence.

What are the legal remedies if a spouse is successful in voiding a settlement agreement?

If a spouse is successful in voiding a settlement agreement then she has equitable remedies. These remedies include reforming the settlement agreement, or rescinding (canceling) the agreement. If the settlement agreement is reformed, the the court will try to improve it by changing the terms. Meanwhile, if the settlement agreement is rescinded the the settlement agreement will be canceled, and they spouses will then be forced to try to negotiate a more fair agreement.

Can a marital/settlement agreement be modified?

For many divorced spouses once their divorce settlement is finalized they will never see or speak to their ex-spouse again. In many cases, there are no legal obligations that tie the ex-spouses together. Quite often, there are no alimony obligations, there are no children, and also no co-parenting issues. For these clients, once their case is over and it will never be reopened. However, for the majority of divorced couples they will be forced to engage in endless post-judgment litigation. In most cases, the divorced couples will spend more effort, time, and money on post-judgment litigation than they will spend on their original divorce case. The amount of post-judgment litigation that a divorced couple can engage in can be endless. There can be Lepis litigation to try to terminate alimony. A motion to emancipate the children could be dragged out and bitterly contested. A post-judgment motion could also be filed to enforce the equitable distribution of any marital pension.

There are almost an unlimited number of circumstances wherein a party can make an application to modify the terms of the judgment of divorce. These changes include:

  • You lost your well-paying job and had to find another one at a lower salary.
  • Your spouse has a better job than you now, and she earns $20,000 more than you, and she still receives alimony.
  • Your ex-spouse says that your teenage son is too difficult to handle and she wants him to come and live with you.
  • You are remarried and your new husband just got a fabulous new job in North Carolina. You now want to move there with the children.

For any of the above scenarios, there is a specific procedure to try to modify/change the terms of your judgment of divorce. In any post-judgment application you are usually only dealing with a single issue. However, you still must file a comprehensive motion, and you must serve a copy of this motion on your ex-spouse. After the motion hearing, many judges will schedule a plenary hearing to try resolve these issues. Thereafter, most judges will also issue a discovery schedule in a form called a case management order. Thereafter, the parties will engage in the discovery process, and any documents and information are exchanged.

How can the terms of a property settlement agreement be enforced?

Your judgment of divorce will always have the legal effect of being an fully enforceable court order. Even after you are are divorced, the family courts will still retain the ability to enforce their judgment(s) of divorce for as long as required. In any divorce case there is always the strong possibility that your former spouse will not comply with the terms of your settlement agreement. It is cold hard reality that divorced spouses don't always pay their child support or alimony on a timely basis if at all. In many cases the parties don't execute the deeds to transfer the title of the martial home, the vacation house at the shore, or any other investment property. Time shares are not sold or transferred. Parenting schedules are not adhered to. In short, there are an endless scenarios wherein a divorced spouse might very well be forced to file a post-judgment motion to try enforce the terms of the PSA.

An enforcement hearing is generally a much more streamlined legal proceeding than your divorce case is. A motion to enforce must be filed with the family court. This type of motion is are also commonly referred to as a Motion to Enforce Litigant Rights. This motion must carefully explain to the court what specific terms of the PSA, or what prior court order was not complied with. You are also required to attach the PSA and the previous court orders to your motion papers. After your motion is filed, the court will then set the matter down for a motion hearing date. If the motion raises disputed issues of material fact, then the judge will schedule a plenary hearing. Thereafter, the judge then set a hearing date.

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