Negotiated Property Settlement Agreement in Matrimonial Case Defeats Changed Circumstances Application

Bermeo v. Bermeo, 457 N.J. Super. 77 (App. Div. 2018).  Today is the second consecutive day on which Judge Firko released a published opinion.  The essence of it is that when parties to a divorce matter negotiate and carefully draft a Property Settlement Agreement (“PSA”), that PSA will control going forward.

The plaintiff wife sought to modify the parties’ PSA to increase her alimony payments and establish the marital lifestyle.  The Family Part denied that relief.  The Appellate Division today affirmed that result.

Judge Firko observed that the use of agreements to resolve marital disputes is favored, “entitled to considerable weight,” and “not [to] be unnecessarily or lightly disturbed.”  The Family Part’s ruling here was to be reviewed under the abuse of discretion standard, and the panel found no abuse of discretion.

Plaintiff asserted that defendant was “voluntarily underemployed,” and that she reasonably expected supplemental alimony, based on the PSA.  She also complained that she could not maintain her prior lifestyle.  She demanded that the court impute additional income to defendant.  But the PSA stated that “[n]either party shall be able to maintain a similar lifestyle to that which was enjoyed during the marriage.”  Defendant made full disclosure about his employment situation, and the fact that his pay was lower than it had been at a prior job.

Judge Firko said that, in light of that, plaintiff could have gone to trial.  Instead, she agreed to the PSA.  There was no evidence of “duress, coercion, or threats” to induce her to do that, and no allegation that “she was ill, or under the influence of intoxicants during negotiation of the PSA.”  The panel quoted the motion judge’s statement that courts “cannot simply impute income based on history when that history was considered in the drafting of the [P]SA.”  The parties, Judge Firko said, again quoting the Family Part, “entered in[to] their agreement with a set base alimony figure and this court [cannot] find reason to disturb it.”  Imputing income is discretionary, and there was no basis for it here.

The PSA also justified the Family Part in declining to address marital lifestyle.  Not only did the PSA state that neither party would be able to maintain a prior lifestyle, it also said that “[t]he parties freely and voluntarily waive determination of the joint marital lifestyle at this time.”  The PSA did not contain an obligation to re-evaluate marital lifestyle post-judgment, and the Family Part thus did not abuse its discretion in declining to do that.

Property Settlement Agreements are taken seriously.  Parties who enter them, and lawyers who negotiate them, must keep that in mind.