May v. May

Court of Appeals of Ohio, Fifth Appellate District, Stark County · 2022 · Family Law

Family LawDivorceSeparation AgreementsProperty DivisionPost-decree Enforcementseparation agreementbinding contractplain meaning

Facts

The divorce decree incorporated the parties' in-court agreement awarding Wife all right, title, and interest in the marital residence as her sole property, free and clear of any claim by Husband, while requiring Wife to remove Husband from mortgage liability within six months. Husband executed a quitclaim deed, vacated the home, made no post-divorce mortgage payments, contributed nothing to the property afterward, and admitted it was no longer his house. Wife later sold the property, and on August 30, 2021 the sale closed, the mortgage was paid off, and net proceeds were generated. After learning the house would sell at a profit, Husband moved to invoke the court's continuing jurisdiction and sought a division of sale proceeds.

Issue

When a divorce decree awards the marital residence to Wife as her sole property free of any claim by Husband, but reserves continuing jurisdiction over the property's ultimate disposition if Wife does not refinance within six months, may the trial court later award Husband part of the sale proceeds after the property has been sold to a third party and Husband's mortgage liability has been extinguished?

Rule

A separation agreement entered in court is a binding contract, and absent fraud, duress, overreaching, undue influence, or a factual dispute over its terms, courts enforce it according to its plain language. Where the agreement clearly gives one spouse sole ownership of real property and the other spouse's bargained-for benefit is release from mortgage liability, retained jurisdiction over the property's ultimate disposition does not authorize a court to award the non-owning spouse a share of later sale profits when the agreement contains no such provision and the mortgage has already been satisfied.

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In a divorce decree entered in Columbus, Nora Bennett received the marital townhouse as her "sole property, free and clear of any claim" by Ethan Bennett. The decree required Nora to remove Ethan from the mortgage within six months and stated the court retained jurisdiction over the townhouse's ultimate disposition if she failed to do so. Seven months later, Nora sold the townhouse, paid the mortgage in full at closing, and netted a profit.

If Ethan then asks the domestic relations court to award him half the sale proceeds, how should the court rule?

Explanation. An in-court separation agreement is a binding contract enforced according to its plain language absent fraud, duress, overreaching, undue influence, or a factual dispute over terms. Where one spouse received the home as sole property free of any claim by the other, and the other spouse's bargained-for benefit was removal from mortgage liability, retained jurisdiction over the property's ultimate disposition does not authorize the court to rewrite the deal and award sale profits once the mortgage has been paid off. The non-owning spouse received the benefit of the bargain when liability was extinguished.