Sometimes a case is in progress during or shortly after a change in the law, when its application and interpretation are still uncertain. In such cases, the parties may prefer to settle rather than risk an unpredictable result. In the recent case of Demarco v. Demarco, the parties chose to reach a settlement related to spousal support rather than complete the trial. The record suggests that the judge encouraged settlement based upon an assumption about how the Alimony Reform Act of 2011 would apply to the case, but a subsequent opinion by the Supreme Judicial Court made that assumption erroneous.
The parties in this case had an alimony provision in their separation agreement that ultimately merged into their judgment of divorce. The agreement provided that the husband would pay alimony until either the death of one of the parties, the wife’s remarriage, or when the husband had no gross earned income after reaching age 68. The legislature subsequently changed the law to provide that general term alimony orders terminate when the payor reaches full retirement age. After the husband stopped paying alimony, the wife filed a complaint for contempt, and the husband then filed an amended complaint for modification based on his reaching retirement age.
It appeared that the attorneys and judge all believed that the retirement age provision of the act would apply retroactively. If so, the husband would no longer be required to make the alimony payments. With the consent of the parties’ counsel, the judge discussed the benefits of settling the case, noting that the interpretation of the act was unsettled and that the result of proceeding to trial could be very harsh for the wife.
On the first day of trial, the parties reached an agreement that provided for a lump sum payment to the wife and the termination of any further obligation to pay alimony. The judge incorporated the agreement into the judgment for both complaints.
Less than a year later, the Supreme Judicial Court issued opinions in three cases, holding that the retirement provision did not apply to cases in which alimony was established before the effective date of the act. The wife then moved for relief from the judgment, arguing that the parties and the judge had made a mistake of law. The trial judge granted the wife’s motion, finding the reliance on the court’s incorrect interpretation of the act was an extraordinary circumstance that allowed her relief under Rule 60(b)(6) of the Massachusetts Rules of Domestic Relations Procedure. He also found that she was entitled to relief under the court’s equitable powers “to correct what has been wrongfully done.” The husband was granted leave to appeal.
The appeals court noted that Rule 60(b)(6) has a very narrow scope. It requires extraordinary circumstances, such as evidence of actual fraud, a lack of consent, or a new material issue. A judge’s 60(b)(6) ruling should not be reversed unless there was an abuse of discretion.
The husband argued that a “subsequent clarification of the law” does not constitute an extraordinary circumstance under the rule. The court pointed out that it is a well-settled principle that “changes in decisional law” are not extraordinary circumstances and are not a reason to reopen a final judgment. The court stated that the parties chose to settle the case, rather than choose any of a number of other options, including asking the judge to reserve and report the question to the Appeals Court. The Appeals Court found that the wife’s motion should have been denied. The court noted that it cannot know all of the considerations that go into a party’s decision to settle a case, and it found that allowing the wife to unwind an agreement based on a later determination that she would have fared better if she had tried the case would deprive the husband “of the certainty and finality for which he bargained.”
Settlement is sometimes the best option in cases in which there are unsettled principles of law, but this case shows that settlements should be considered final. Before settling, the parties should be aware that courts are reluctant to disturb the finality of a case, even if a subsequent court decision suggests that the interpretation on which the parties based their settlement was incorrect. If you are facing divorce or have a legal issue involving alimony, an experienced and skilled Massachusetts family law attorney can help. Call the Law Offices of Richard Mucci at (781) 729-3999.