Error to Use Parol Evidence to Interpret Marital Dissolution Agreement in Blountville, Tennessee: In re Conservatorship of Ress

January 19, 2022 K.O. Herston 0 Comments

Facts: Wife filed a complaint for divorce, and Husband answered and filed a counter-complaint.

Two years later, the trial court concluded that Husband could not make important decisions because of mental and physical health issues.

Husband’s sister (“Conservator”) was appointed as Husband’s conservator and substituted for Husband in the divorce action.

At mediation, Conservator and Wife signed a mediated agreement that awarded a piece of real property, vehicles, a boat, motorcycle, and other personal property to Husband. The mediated agreement also provided:

Wife shall pay to Conservator for the use and benefit of Husband $250,000 from her 401(k) by way of Qualified Domestic Relations Order.

At Husband’s death, should Wife survive him, Husband or his Conservator shall transfer all Husband’s assets as set forth in the QDRO and shall constitute a claim against his estate.

Thereafter, Wife and Conservator entered into a Marital Dissolution Agreement (“MDA”) that said:

At Husband’s death, should Wife survive him, his Conservator shall transfer all of Husband’s remaining assets to Wife, including, but not limited to, the funds received by QDRO…. This Agreement constitutes the entire understanding of the parties, and it supersedes any and all prior agreements between them.

Note that the word “remaining” was handwritten by Conservator’s counsel into the MDA and initialed by the signatories. He is deceased.

The trial court entered a final judgment of divorce that incorporated the MDA.

About 15 months later, Husband passed away. Wife was named the beneficiary of the account holding the retirement funds Husband received by QDRO.

Four months later, Wife petitioned to hold Conservator in civil contempt for not transferring the entirety of Husband’s remaining assets to Wife per the MDA.

Conservator argued the MDA was ambiguous and submitted the handwritten mediation agreement to show it was parol evidence that contradicted the plain meaning of the MDA.

The trial court found that a “latent ambiguity exists” between the mediation agreement and the MDA, and that Wife’s interpretation of those documents “would yield an inequitable result.” Wife’s petition was denied.

Wife appealed.

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

Wife argued it was error for the trial court to use parol evidence to interpret the MDA.

Conservator argued that her lawyer’s interlineation of the word “remaining” in the MDA indicates the parties’ intent “for Husband to only return the remaining QDRO funds to Wife at his death, not his entire estate.”

Marital dissolution agreements are contracts. Therefore, Tennessee courts must ascertain the parties’ intention based upon the usual, natural, and ordinary meaning of the contract language.

The central tenet of contract construction is that the contracting parties’ intent at the time of executing the agreement should govern. The parties’ intent is presumed to be that specifically expressed in the body of the contract.

Tennessee courts will not look beyond the four corners of the document to determine the parties’ intent when the contract is unambiguous.

An ambiguity does not arise in a contract merely because the parties may differ in interpreting certain of its provisions. A contract is ambiguous only when it is of uncertain meaning and may reasonably be understood in more ways than one. A strange construction may not be placed on the language used to find ambiguity where none exists.

The Court found it was error to consider parol evidence here:

A plain reading of the contract does not yield an ambiguity requiring clarification.

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[W]e hold that the trial court erred in its consideration of parol evidence and refusal to enforce the MDA as written.

The trial court’s judgment was reversed, and the case was remanded to the trial court to enforce the MDA.

In re Conservatorship of Ress (Tennessee Court of Appeals, Eastern Section, January 10, 2022).

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Error to Use Parol Evidence to Interpret Marital Dissolution Agreement in Blountville, Tennessee: In re Conservatorship of Ress was last modified: January 15th, 2022 by K.O. Herston

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