Enforcing an Unsigned Divorce Settlement Agreement in Arizona

When spouses decide to divorce, they can ask a court to divide their property or they can negotiate an agreement themselves. Divorces are usually faster, cheaper and less hostile when a couple comes to agreement between themselves, and Arizona courts accept negotiated settlement agreements if it appears that neither spouse was pushed into signing. If couples reconcile after they reach a property settlement agreement, some parts of the earlier divorce agreement may still be valid.

In the case of Muchesko v. Muchesko, 191 Ariz. 265, 955 P.2d 21 (Ariz. Ct. App. 1997),the Arizona Court of Appeals had to determine the impact of a divorce settlement agreement between Louise and Samuel Muchesko. The couple lived in Pennsylvania. They separated in 1990 and began discussing how to divide their property. Samuel proposed an agreement that Louise rejected. She had her attorney prepare another agreement more favorable to herself that Samuel signed and returned to her in 1991. Louise filed for divorce in Pennsylvania.

In June, 1994, the couple dismissed the Pennsylvania divorce action and moved to Arizona where they lived as man and wife. However, this only lasted until November, 1994, when they again separated and Louise filed for divorce. She argued that the 1991 divorce agreement was not a binding agreement because she never signed it, and that their property should be divided according to Arizona law. The Superior Court agreed and divided the property. Louise received much more than she would have under the 1991 agreement.

The Court of Appeals reversed. It ruled that the 1991 divorce agreement was a valid agreement and that the fact that the couple got back together would not impact those parts of the agreement that had already been performed.

A Divorce Settlement Agreement May Be Binding Without Signature

Under Arizona law, a settlement agreement is valid if there is an offer that is accepted, benefits received on both sides, a clear statement of the obligations of each spouse, and agreement by both of them. The fact that one person does not sign the agreement doesn’t decide the issue. Arizona courts look at all the surrounding circumstances to decide whether the two had reached a settlement agreement they both considered binding.

The Court of Appeals noted that Louise’s attorney wrote up the agreement at her request. It said that when she sent it to Samuel, the writing was an offer to settle the property issues. When he signed and returned it to her, it was an acceptance of the offer.

The Appellate Court next looked at whether the couple acted consistently with the agreement. The agreement required Samuel to pay Louise $1000 in reimbursement for earnest money she lost on a house in Hartford and that, after signing the agreement, Samuel sent her a check for that amount. The agreement required Samuel to pay Louise $50,000.00 for her interest in another property called the Hermitage house, and that after signing the agreement, he paid her a total of $50,000.00, writing “divorce settlement paid in full” on the final check. The Court also noted that Louise had signed over the deed to the Hermitage house and the couple’s joint Schwab account to Samuel. These were also terms of the settlement agreement.

Since both Louise and Samuel fulfilled the important terms of the settlement agreement, the Court of Appeals found that a binding settlement agreement existed.

Arizona Courts Enforce Settlement Agreement Performed Even If Couple Reconciles

If a couple gets back together, it can impact any divorce settlement agreement they made. This depends on the couple’s intentions and actions.

The Court of Appeals found that when Samuel and Louise dismissed their divorce action and moved as man and wife to Arizona, it suggested a reconciliation. However, the reconciliation occurred some years after they agreed to the settlement. The Court said that any terms of the settlement agreement that the couple performed before the reconciliation should be enforced.

The Court listed the exchanges made between the spouses under the settlement agreement. Louise accepted $51,000.00 from Samuel, took $38,000.00 from their joint stock account, and kept $45,000.00 worth of antiques as her own. Both spouses kept separate houses and finances until the reconciliation. Samuel did not share in the rent Louise received from the rental property she purchased, nor did he share in the money she received when she sold the antiques or boat.

The Court of Appeals ruled that the couple’s reconciliation did not annul the terms of the settlement agreement between Louise and Samuel that they already performed. It sent the case back to the Superior Court to reconsider how Samuel’s retirement benefits should be divided and the issue of attorney fees.