A recent opinion of the Georgia Court of Appeals issued a cautionary tale to spouses who enter into settlement agreements in their divorce cases. This article discusses that appellate decision and the critical lesson in draftsmanship it imparts.
In Messick v. Messick, A21A0600 (Ga. Ct. App., May 18, 2021), the Court of Appeals affirmed rulings denying a wife’s motion to enforce a previously-entered settlement agreement and granting husband’s motion to set aside the settlement agreement. Wife won a substantial amount of money in a lottery after filing for divorce and executing a settlement agreement. In moving to enforce the agreement, Wife argued that it excluded her lottery winnings from the assets the trial court could equitably divide. Husband in turn argued that the settlement agreement should be set aside because it did not address Wife’s lottery winnings. The trial court agreed with husband and set aside the settlement agreement, finding that the lottery proceeds constituted marital property subject to division and that the settlement agreement did not contemplate the acquisition of that property nor provide for how the property should be divided.(1)
In affirming the trial court, the Court of Appeals first agreed that the lottery winnings represented marital property, because Wife acquired them through her investment during the marriage. The Court applied the rule that assets obtained during a divorce action until a trial court enters a final decree remain marital property.(2)
The Court of Appeals next agreed that the settlement agreement’s terms did not contemplate the division of the lottery proceeds. The agreement’s only terms addressing the division of marital property related to the division of real property and to the division of personalty in the possession of each party as of the date of the signing of the agreement. The Court accordingly found that the plain language of the agreement did not pertain to the division of marital property acquired by a party after signing the agreement.(3)
The lesson of Messick seems obvious yet critical. When divorcing spouses draft a settlement agreement, the agreement should expressly designate the division of any assets which either party might obtain after execution of the settlement until entry of a final decree of divorce. A simple statement that all marital assets acquired by a party after execution of the settlement agreement will remain the property of that party on equitable division should suffice.
(1) Messick, supra, at (1). (2) Messick, supra, at (2). (3) Messick, supra, at (3).