How Important Is The Memorandum of Understanding After Divorce Mediation?
Under New Jersey law this document can be of the utmost importance in a situation in which the parties resolve issues pertaining to their divorce during mediation. This results in your divorce mediator generating a Memorandum of Understanding (“MOU”) for each spouse to take to their own divorce attorney of their choosing in order to review the documents to ensure that a seasoned divorce lawyer explains all aspects of the MOU and whether or not it is a fair and equitable one. Upon moving forward your attorney shall then draft what becomes your official divorce decree (Matrimonial Settlement Agreement (as it is known here in New Jersey as an MSA). So what happens if the MOU is not consistent with the MSA?
Let’s just say the following case is a classic example of why you should hire an attorney who only handles divorce matters.
In M.M. v. J.M., the parties were married in 1983 and had three children to the marriage. After prolonged marital difficulties, the parties began participating in mediation. In September of 2010, the parties wrote up a Memorandum of Understanding (“MOU”) that contained certain agreements they had reached during mediation. A month later, they executed a Property Settlement Agreement (“PSA”) which attached the MOU as an exhibit. The parties proceeded with the divorce without representation by counsel, and a final judgment of divorce was entered in January of 2011.
The MOU stated that the terms described within it would not be binding on the parties until it was incorporated into a settlement agreement prepared by attorneys and signed by both parties. In regard to alimony, the MOU stated that J.M. would pay M.M. permanent alimony in the amount of $100 per week. It further provided that the alimony would terminate upon either party’s death or M.M.’s remarriage. The PSA stated that future relations between the parties would be governed by “the terms of this Settlement Agreement and Memorandum of Understanding.” The PSA also contained a section on alimony which stated that one of their children reaching the age of 18 and subsequently being emancipated would trigger the termination of alimony. This condition was not provided or mentioned in the MOU.
In February of 2016, the Husband sought to emancipate their youngest daughter and subsequently terminate child support. The judge granted the Husband’s request to emancipate the parties’ daughter but denied his request to terminate alimony. In his reasoning, the trial judge stated only that the PSA and MOU revealed the parties’ intent that the alimony was to be permanent.
In his appeal, the Husband argued that the trial court erred in denying his motion to terminate alimony because the PSA lists the emancipation of one of their children as a trigger event in terminating alimony. Although the Husband recognized that the MOU did not include the qualifying event and stated only that alimony would be paid permanently, he argued that “the PSA, a subsequent and more comprehensive document than the MOU does NOT state that alimony is permanent and added alimony termination language, that alimony would terminate upon emancipation of the child.” He, therefore, states that this language takes precedence over the MOU.
The Wife responded by stating that the MOU was incorporated into the PSA and that the PSA should not be regarded as a stand-alone, separate document. She argued that she specifically requested permanent alimony in her divorce complaint and the subsequent MOU reflected that intention. Despite this, neither party produced any evidence that further negotiations regarding the content of the PSA took place, or provided documentation of who prepared the PSA.
In its review of the trial judge’s decision not to grant the Husband’s motion to terminate alimony, the Appellate Division looked to basic principles of contract law. The anchor of contract interpretation is the intention of each of the parties “as revealed by the language used, taken as an entirety.” A contract is therefore ambiguous if there is more than one way for it to be reasonably interpreted. Looking to the PSA and MOU at issue here, the Appellate Division disagreed with the trial court’s holding that the two documents “clearly indicate that the parties agree that alimony was intended to be permanent.” Because the PSA and MOU contained conflicting statements regarding the length of the alimony payments, it was necessary to determine the parties’ intent. The MOU stated only that the alimony would terminate at the death of either party or at the Wife’s remarriage. The PSA, however, added an additional specified event that would trigger the termination of alimony. Because of the two different interpretations, simply examining the language of the two documents would not reveal the intent of the parties.
The Appellate Division held that it was necessary to examine whether additional negotiations took place after the mediation that may have led to an agreement for the termination of alimony. Without this, it was incorrect to hold that the parties intended the alimony to be permanent. The court, therefore, held that it was not able to determine the intent of the parties at this time, and remanded the case for further proceedings focused on whether the parties in fact engaged in additional alimony negotiations after the initial mediation.