As mentioned in the blog entitled Georgia Case Law Update – Christian v. Christian (Part 1), the wording of a settlement agreement can be of particular importance. In addition to the parties in the Christian case arguing over the valuation date of the retirement assets, there was also a dispute as to which of the listed retirement assets the Wife was actually entitled to. Christian v. Christian, S16F1160 (November 21, 2016).
To review, the Separation Agreement clause at issue in this case read: “The parties acknowledge that should they divorce, Wife shall be entitled to one-half of Husband[‘]s retirement, 401K or other employment benefits.” The Wife interpreted the clause to mean that she was entitled to one-half of the Husband’s retirement, 401K, and other employment benefits as valued on the date of the divorce. The Husband said that the Wife was improperly attempting to replace “or” with “and,” and the court held that she was “only entitled to choose one of the three benefits” described in the clause at issue. Id. The Wife appealed.
In support of her appeal, the Wife offered two interpretations. First, she claimed, since there was no comma between “401K and other,” that retirement and 401K were one category; thus, under this interpretation, she alleges she can choose between retirement and 401K together OR other employment benefits. Alternatively, Wife argued that “retirement, 401K and other” all modify the term employment benefits and, thus, under this interpretation, she is entitled to one half of all three. Husband’s competing interpretation of this clause is that the “or” separates the three categories and, thus, the Wife can only choose one.
The Supreme Court of Georgia quickly dismissed Wife’s first interpretation, but felt that Wife’s second interpretation and Husband’s interpretation were both plausible and reasonable. On this issue, the trial court held that the clause was unambiguous and, thus, did not consider other evidence in making its determination. The Supreme Court of Georgia held that its analysis was incomplete “because this aspect of Paragraph VII has two reasonable interpretations” and, as such, “[t]he court should have looked beyond Paragraph VII to determine if the ambiguity was clarified when viewed in the context of the entire Separation Agreement, and if not, should have considered parol evidence to determine the meaning of Paragraph VII.” Id. The ruling was therefore vacated and remanded for reconsideration.
This case shows that the courts strive to give the intended meaning to the agreements that they are reviewing. Sometimes that intended meaning is easy to ascertain, and other times additional evidence is needed. Parties can help the courts, and themselves, by making the language of their agreements as clear as possible, so there is little or no room for dueling, reasonable interpretations as in this case.