Domestic Property Settlement

Note: This summary is not intended to be an all inclusive discussion of the law of separation agreements in Vermont, but does include basic and other provisions.

General Summary:

Separation and Property Agreements may be entered into before a divorce is filed to be effective immediately. In Vermont, there is a strong preference for an agreement to be arrived at by the parties versus a court ordered division of marital assets and liabilities. In fact, there must be a compelling reason for the court not to accept the parties pre-trial property settlement agreement.

Modification of the pre-trial property agreement may be on statutory grounds upon a showing "of a real, substantial, and unanticipated change of circumstances", or equitable grounds based on a showing of fraud, unconscionable advantage, impossibility of performance, or hampering circumstances intervening beyond the expectation of the agreeing parties.

Statutes:

Vermont Statutes

TITLE 15: Domestic Relations

CHAPTER 011: ANNULMENT AND DIVORCE

Property settlement:

(a) Upon motion of either party to a proceeding under this chapter, the court shall settle the rights of the parties to their property, by including in its judgment provisions which equitably divide and assign the property. All property owned by either or both of the parties, however and whenever acquired, shall be subject to the jurisdiction of the court. Title to the property, whether in the names of the husband, the wife, both parties, or a nominee, shall be immaterial, except where equitable distribution can be made without disturbing separate property. § 751.

Revision of judgment relating to maintenance:

On motion of either party and due notice, and upon a showing of a real, substantial, and unanticipated change of circumstances, the court may from time to time annul, vary or modify a judgment relative to maintenance, whether or not such judgment relative to maintenance is based upon a stipulation or an agreement. (Amended 1971, No. 185 (Adj. Sess.), § 181, eff. March 29, 1972; 1981, No. 247 (Adj. Sess.), § 13.) § 758. [emphasis added]

Case Law:

Over and above considerations of finality, requests for relief based on allegations the agreement is unconscionable are sparingly granted because of the court's assumption that an agreement reached by the parties is preferable to one imposed by the courts. This policy is manifest in Vermont's strict standard for setting aside "separation agreements" even before the final divorce judgment is entered. Putnam v. Putnam, 166 Vt. 108, 115, 689 A.2d 446, 450 (1996).

The critical inquiry is whether the parties intended the separation agreement to be contingent upon the entry of a judgment - either nisi or absolute - or to be effective from the date the agreement was executed. Pavluvcik v. Sullivan, 495 N.E.2d 869, 872 (Mass. App. Ct. 1986). Although the circumstances surrounding the settlement agreement may be a factor in making this determination, the language of the agreement itself must be examined first and foremost.

Absent grounds for modification, pretrial contracts may be set aside only upon a showing of fraud, unconscionable advantage, impossibility of performance, or hampering circumstances intervening beyond the expectation of the agreeing parties. Braine v. Braine, 127 Vt. 211, 214, 243 A.2d 797, 799 (1968). Indeed, the record must demonstrate a compelling reason for the court not to accept the parties' pretrial agreement. Strope v. Strope, 131 Vt. 210, 216, 303 A.2d 805, 809 (1973). The rationale for this approach is rooted in an important policy consideration. It is likely that whatever agreement a couple reaches together will be preferable to that imposed by a court, which is a stranger to the marriage. White v. White, 141 Vt. 499, 502, 450 A.2d 1108, 1109 (1982).

A "pretrial agreement" to distribute property is a contract, which the court can set aside only for ground sufficient to set aside a contract; furthermore, such an agreement is presumed to be fair, formal and binding and will not be lightly set aside. A party who seeks to overturn an agreement to distribute marital property must show fraud, unconscionable advantage, impossibility of performance, hampering circumstances beyond the expectations of the parties, collusion, or duress. Bendekgey v. Bendekgey, 154 Vt. 193(1990)576 A.2d 433.

Once the family court adopts a settlement agreement and incorporates it into the divorce order, the agreement becomes part of the judgment of the court and is assailable only through a motion to set aside the judgment. Collateral attacks on the validity of the judgment are thereafter barred under principles of res judicata. V.R.C.P. 60(b). Tudhope v. Riehle, 167 Vt. 174 (1997),704 A.2d 765

Once the family court adopts a settlement agreement and incorporates it into the divorce order, the agreement becomes part of the judgment of the court and is assailable only through a motion to set aside the judgment. Viskup v. Viskup, 149 Vt. 89, 90-91, 539 A.2d 554, 556 (1987). Collateral attacks on the validity of the judgment are thereafter barred under principles of res judicata. Hamilos v. Hamilos, 465 A.2d 445 (Md. 1983). The doctrine of res judicata protects both courts and parties from the burden of repetitive litigation, encourages reliance on judicial decisions, prevents vexatious litigation, and decreases the chances of inconsistent adjudication. Berlin Convalescent Ctr., Inc. v. Stoneman, 159 Vt. 53, 56, 615 A.2d 141, 143-44 (1992).

A family court does not have the authority to annul or modify child support payments retroactively, and a parent may not waive such payments on behalf of the dependent children. As we have explained, "such payments are made for the support, maintenance and education of the minor children," and "as such, [a parent] may not be found to have waived her child's right to receive support." Lyon v. Lyon, 143 Vt. 458, 462, 466 A.2d 1186, 1189 (1983).