Vacating a settlement agreement in a divorce in California is the topic of this blog post.
Vacating a settlement agreement in a divorce in California can be requested for various settlement agreements including a property settlement agreement or marital settlement agreement, even a legal separation agreement in a legal separation proceeding in California.
This post will focus mostly on vacating a settlement agreement based on one party having an undue influence on the other party because of undue influence such as taking advantage of another due to distress or weakness of mind.
I worked on a case over 10 years ago in which the wife had signed a property settlement agreement in which she agreed to accept just over $5,000.00 as full and complete reimbursement for her share of the community property. At the time that the wife signed the agreement she was not represented by counsel, and she did not consult with any attorney prior to signing the agreement. She was also late on her rent and did not have any money to pay her rent as she was not working at the time she signed the agreement.
The husband had a large amount of property, much more than the wife, and the wife may have had a community property share. And the agreement was signed before any petition for (divorce) had even been filed so the required declarations of disclosure had not been exchanged.
A California Court of Appeal has held that the least overreaching or misrepresentation allowing one spouse to gain the property of the other is fraudulent, and will justify an action to avoid the agreement.
In the case that I worked on, the wife signed the agreement to not go after anything of her husband's if he gave her just over $5,000.00. She only signed the agreement because her rent was 3 days late and she had no money and no job and would be evicted otherwise. Clearly this was a case of not only one spouse taking unfair advantage of the other spouse, but overreaching of the highest degree as someone who is flat broke and about to be evicted is obviously under extreme stress, and therefore highly vulnerable.
An exchange of prescribed "preliminary" disclosure declarations is mandatory and nonwaivable in California pursuant to Family Code § 2104.
The law in California states that in dissolution proceedings commenced after 1992, no agreement is enforceable with respect to the parties property rights unless both spouses have executed and served on the opposition the final declaration of disclosure required by Family Code § 2105 unless both parties have signed a voluntary waiver of those requirements. Family Code § 2106.
That fact alone required the Court to vacate the agreement. And now we come to the issues of duress, undue influence and gross inadequacy of the consideration received.
If they are not merged into a judgment, marital settlement agreements are voidable under general contract principles where a party lacked contractual capacity, or consented due to fraud, duress, undue influence or mistake.
A marital settlement agreement that is not part of the judgment may be set aside if the court finds it to be inequitable, even in the absence of fraud or compulsion. And both the California Supreme Court and California Courts of Appeal have ruled that the courts will carefully scrutinize agreements made by a party without the advice of legal counsel.
An agreement lacks valid consent where one party takes unfair advantage of the other party’s weakness of mind or distress. The exertion of the "undue influence" deprives the other party of the ability to exercise "free will". Civil Code § 1575.
By statute, spouses stand in a confidential relationship in transactions between themselves and in that context, are subject to the general rules governing fiduciary relationships. Family Code §§ 721(b), 1100(e).
The California Supreme Court has stated that undue influence can be shown by the physical or mental weakness of the party claiming undue influence due to economic distress.
And undue influence can also be shown by gross inadequacy of the consideration received by the party claiming undue influence as stated by a California Court of Appeal.
However I want to stress that once a marital settlement agreement or property settlement agreement has been merged into a judgment that it will not be voidable under general contract principles.
It may be possible to vacate the judgment if one party did not fully comply with the California Family Code relating to declarations of disclosure.
Those provisions of the marital settlement agreement that are merged in the judgment become an order of the court; the "merged" agreement is superseded by the judgment and ceases to be of independent legal significance. As a result, the agreement can then be enforced only as a judgment (by contempt, execution, etc.) it is no longer enforceable by contract remedies and, unless otherwise provided by the judgment, any warranties are extinguished by the judgment.
Attorneys or parties in California who would like to view a portion of a memorandum of points and authorities in support of a motion or request for order to vacate a property settlement agreement sold by the author can use the link shown below.
Sample Motion to Vacate Property Settlement Agreement for California by Stan Burman on Scribd
Attorneys or parties in California that would like more information on a California divorce document collection containing over 45 sample documents including a points and authorities in support of a motion or request for order to vacate a property settlement agreement can use the link shown below.
The author of this blog post, Stan Burman, is a freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for sale.
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DISCLAIMER:
Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.
The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.