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Settlement Agreement Contract Disputes in California – In re Marriage of Wintemute and Soltan

Settlement agreements are often an efficient way for spouses divorcing in California to resolve some of the issues related to the split without leaving them to the whims of a local judge. These agreements are binding, legal contracts that are treated by courts as such. That’s the main takeaway from a recent decision out of California’s Fourth District Court of Appeals, in which the Court resolved a dispute over stock shares.

paperworkHusband filed for divorce from Wife in May 2010, following nearly 30 years of marriage. During a month-long trial, Husband argued that three transfers of stock from a company called AVD were gifts from his father that should be considered separate property. The trial judge appeared to be ready to side with Husband, but the parties reached a settlement agreement shortly before that ruling. Husband’s lawyer wrote out the initial agreement by hand. It stated that Wife would get 390,000 shares of AVD stock and that the remaining 884,000 shares would go to Husband.

When Wife said she couldn’t read the agreement, her lawyer wrote out a second version of the deal. The second stipulated agreement also allotted 390,000 shares to Wife but only 553,000 shares to Husband. A trial court eventually weighed in after a dispute over who would get the more than 300,000 shares unaccounted for in the second stipulation. It held that Wife was entitled to 390,000 shares and that the remaining 884,000 shares should go to Husband.

Affirming the decision on appeal, the Fourth District said the lower court’s ruling appeared to reflect Husband and Wife’s original agreement. “We interpret a stipulation, as we would any contract, to determine the parties’ objective intent when they entered into it,” the Fourth District explained. “We are bound by the trial court’s interpretation if it turned on the credibility of conflicting extrinsic evidence.”

In this case, the Court said Wife was asking it to assume that Husband waived his right to the more than 300,000 shares remaining between the time that they reached the original agreement and the time that her attorney wrote out the second version. The only problem was that there was no evidence in the record to support this conclusion, according to the Court. Instead, it found that the original agreement was intended to be global and to resolve all of the remaining issues between the former spouses. That included the division of all of the AVD stock. “[Wife]’s insistence that we send the matter back for further litigation regarding the disposition of this stock flies in the face of all the evidence regarding the finality of the settlement…” the Court observed.

If you’re considering divorce or are grappling with community property and other related issues in California, contact San Jose divorce lawyer John S. Yohanan. With more than 30 years of experience, Mr. Yohanan is an accomplished family law attorney who has helped a number of clients resolve a wide variety of marital disputes. Call our office at (408) 297-0700 or contact us online to schedule a consultation.

More blog posts:

Getting Divorced in California? Another Reason Why You Need a Lawyer – In re Marriage of Hendrix

Valuing a Spouse’s Business in California Divorce Cases – In re Marriage of Caldwell

Retirement Income and Spousal Support – In re Marriage of McKarus