Facts: Husband and Wife divorced after 23 years of marriage.

Both parties signed a marital dissolution agreement (MDA) that divided their personal property, debts, and real estate.

It also provided that “each party waives all right, title, and interest they may have in the other party’s retirement.” The final judgment of divorce contained the same recitation.

Despite Husband’s 25 years of military service, neither the MDA nor the final judgment referred to his entitlement to military retirement benefits.

Within 30 days of the entry of the final judgment, Wife moved to alter or amend it. She requested that the MDA be set aside or modified to award her an equitable portion of Husband’s military retirement benefits.

Wife stated that she was not represented by counsel even though the MDA said she was. She claimed she felt pressured by Husband to sign the MDA and he told her their respective government retirement benefits “canceled each other out.” She later learned that Husband’s military retirement benefits were vested and payable while the retirement benefits accrued through her government employment would not begin paying for another 12 years.

After a hearing where both parties testified to contradictory accounts of what representations were made, the trial court found the MDA was not fair and Husband exerted “improper pressure” on Wife to sign the MDA. Specifically, the trial court found that “although Husband told Wife that the two sets of retirements equal out, there is actually a significant monetary difference between the two retirements,” the values of which were “incorrectly conveyed” by Husband.

Husband appealed.

On Appeal: The Court of Appeals affirmed the trial court.

A Rule 59.04 motion to alter or amend allows a trial court to correct errors before its judgment becomes final. Such a motion may be granted:

• when the controlling law changes before a judgment becomes final,
• when previously unavailable evidence becomes available, or
• when, for unique reasons, a judgment should be amended to correct a clear error of law or to prevent injustice.

A written and signed marital dissolution agreement is a contract. Unless there is a legal defense, it must be enforced as a contract.

The Court of Appeals found the trial court acted appropriately to correct a clear error of law that created an injustice:

Although finding that [Husband] “exerted improper pressure” on [Wife] and misrepresented the respective values of their retirement accounts to her, the court did not find duress such that the MDA was unenforceable. The court also did not find undue influence or fraud. Still, we discern no abuse of discretion in the grant of [Wife’s] motion to alter or amend.

In divorces filed on the grounds of irreconcilable differences, before granting the divorce, the court has a statutory obligation [per Tennessee Code Annotated § 36-4-103(b)] to find that the parties have made adequate and sufficient provision by written agreement for the equitable settlement of any property rights between the parties. In granting the motion to alter or amend, the court conceded that it had failed to fulfill this mandate.

*     *     *     *     *

[T]he trial court acknowledged its lack of compliance with [the] statute. This constituted a clear error of law justifying relief from the final decree. And an injustice resulted from the oversight. The court found that the differences in the values of the retirements resulted in “an inequitable property division.” [Wife] agreed to this inequitable arrangement, but the court approved it on the representation contained in the MDA that both parties were represented by counsel. Representation by counsel permits inferences that the client is fully advised of the agreement’s terms and that there is no fraud or undue influence. Although the court found there was no intent on the part of [Husband] or his counsel to mislead, [Wife] was not represented by counsel.

Finding no abuse of discretion in granting the motion to alter or amend, the Court of Appeals affirmed the trial court’s judgment.

Shannon v. Shannon (Tennessee Court of Appeals, Middle Section, April 23, 2021).

I hope you found this helpful. If you think others could find it useful, share it using the buttons below.