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Monday, June 27, 2016

Demarco v. Demarco - Surviving the Times

The Alimony Reform Act has led many to seek changes to their alimony orders and agreements.  The change from "lifetime alimony" was a driving force behind the Act, after all.  However, that doesn't mean that everyone is entitled to a change under the Act.

In Demarco v. Demarco, the Appeals Court looks at a case where two parties reached an Agreement based on an assumption that the husband was entitled to a change under the Act.  That assumption was incorrect according to the Supreme Judicial Court's ruling in Chin v. Merriot (and its two companion cases, Rodman & Doktor).   The recipient spouse in Demarco believed that this mistake required her case to be reopened, and the trial judge agreed.  Below is a recap of the timeline in this case:

May, 2010 - The Demarco's get divorced, with an agreement that includes an alimony payment (merged order).

Mar, 2012 - The Alimony Reform Act takes effect, and it includes a provision that alimony presumptively ends at full social security retirement age.

Dec. 2012 - Husband (payor) in Demarco reaches full social security retirement age and stops paying alimony.

Feb, 2013 - Wife files a Complaint for Contempt and husband files a Complaint for Modification.

Feb, 2014 - At trial on consolidated complaints, the parties reach a full agreement which survived.

Jan, 2015 - SJC rules in Chin v. Merriot (and its two companion cases, Rodman & Doktor).

Aug, 2015 - Wife filed a Motion for relief from the judgment under Mass.R.Dom.Rel.P. 60(b) and a Complaint in Equity asking to reinstate alimony.

Nov, 2015 - Judge allows Wife's Motion which Husband then appealed.

June, 2016 - On expedited appeal, the appeals court overturns the lower court.  The survived agreement stays.

The appeals court notes that relief under a 60(b) motion for "extraordinary circumstance" has a very narrow scope, and they disagreed with the trial court that these circumstances fell within that scope.  The appeals court quoting Freitas v. Freitas states that because of the importance of finality, "the rule should not be used as an instrument for relief from deliberate choices which did not work out".  While it may appear to some that the agreement obtained by the Husband, in light of the Chin case, is unfair to the Wife, there are no guarantees that the law will remain the way it is now anyway.  There is a bill pending in the Massachusetts Senate that would override the ruling in Chin.  For more on the status of that bill read Alimony Re-Reform Passes Massachusetts House in Unanimous (156-0) Vote.

Since the lower judge ruled on the 60(b) issue the appeals court wasn't required to speak to the issue of the Agreement having a survival clause, but in order to prevent others from trying the same thing, the appeals court did expound on this issue as well:
"While Probate and Family Court judges enjoy considerable discretion, that discretion does not extend to vitiating a contract that was negotiated at arm's length and entered into freely and voluntarily. In the absence of fraud, coercion, or  countervailing equities, a signatory to an agreement is bound by its terms. Knox v. Remick, 371 Mass. 433, 436-437 (1976)."
This reiterates the importance of survival clauses in Agreements.  They are powerful and potentially beneficial for both sides because they create finality.  However, that finality is almost absolute and parties should take their time before reaching these types of agreements.  One of the benefits of dispute resolution processes outside the court (like mediation and collaborative law) is that they provide you with the necessary time and space to make informed and thoughtful decisions, instead of rushing those decisions on the courthouse steps.  



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