New Jersey Appeals Court Recognizes That Some Divorce Agreements Are Not Readily Open to Modification

GBM- NJ 0020 MoneyAn “ANTI-LEPIS” clause in a parties divorce settlement agreement was recently held to be valid and enforceable.

In a recent New Jersey appellate court decision,  a special type of clause that severely limits a person’s ability to later modify certain divorce agreements was, under the specific facts and circumstances in that case, held to be valid. This case involved a litigant who signed such an agreement but still sought a modification. A divorce agreement, commonly known and referred to as a “property settlement agreement” (a “PSA”) or a “marital settlement agreement” (an “MSA”)  can affect your finances and your rights for years after it is signed, so you should always discuss your case with a qualified New Jersey family law attorney.

J.H. and R.J.H. were married in 1998 and divorced in 2012. The wife (J.H.) had graduated high school but never worked during the marriage. The couple had three children together, and disagreements about custody and support created a contentious divorce process. The husband (R.J.H.) filed several Domestic Violence complaints  against his wife (J.H.), eventually resulting in a final restraining order (FRO) against her. When the divorce was settled, R.J.H. obtained primary custody of the kids.

The couple entered into a Property Settlement Agreement (PSA). R.J.H. would pay alimony to J.H., and that alimony would decrease over time until it would eventually end entirely. This appears to have been done in order to give J.H. a chance to transition into the workplace. Since R.J.H. was raising the three children on his own, J.H. would pay child support payments and contribute to the children’s needs. Since J.H. did not have a job at the time, the alimony from R.J.H. and the child support from J.H. were calculated using an imputed income of $15,600 per year for J.H.

The PSA contained an “anti-Lepis” clause. This clause refers to the pivotal New Jersey rulings in the cases of Lepis v. Lepis and Crews v. Crews. Lepis and Crews are cases that address the ability to later modify a divorce settlement agreement or a judgement of divorce entered after a trial, when financial conditions thereafter change. This “anti-Lepis” clause is designed to avoid and,  in fact, to prevent future modification that might otherwise have been permitted if the necessary criteria under these two cases was satisfied.

The clause mentioned the Lepis and Crews cases and specifically forbade J.H. and R.J.H. from modifying their PSA. It went on to address various types of circumstances, such as changes in income, changes in expenses, sudden medical needs, and other factors that affect a person’s financial situation that might otherwise have permitted a modification of the support provisions if one or more of those events was established. The “anti-Lepis” clause disallowed modification based on any of those types of events. Both parties signed the PSA, and in doing so, they agreed that the terms of the PSA were not to be modified.

When J.H. entered the work force, she obtained a part-time job that paid just $10,640 per year, rather than the estimated $15,600 that was imputed to her at the time of the settlement which was referenced and contained in their PSA. She complained that her income was not as great as the PSA had planned for, and she filed a motion for a post-divorce modification of the PSA in 2013.  As a result, she requested a decrease in her child support obligation and an increase in R.J.H.’s alimony payments.

The court denied her modification request, citing the “anti-Lepis” wording in the PSA. J.H. disagreed with the trial court’s decision and took her case to the Appellate Division of the Superior Court of New Jersey. She claimed that the lower court had abused its discretion in deciding against her, and that her “changed circumstances” allowed for a modification of the alimony and child support amounts.

The appellate court disagreed with J.H., noting that J.H. was working part time, and she could try to obtain more hours from her employer or get a second part-time job in order to raise her work hours to 40 hours a week. The appellate court saw that R.J.H. was working full-time while raising all three of the children, and also noted that J.H. was living with her parents, presumably saving money on rent and other expenses.

J.H. also argued that, if she were not allowed a modification to the agreement, she would suffer a gross inequity, and that the agreement did not adequately predict and account for her low level of income. Again, the appellate court noted that the PSA signed by both J.H. and R.J.H. had predicted various changes in financial circumstances and barred either party from seeking a modification under most circumstances.

The appellate court sided with the lower court, upholding the “anti-Lepis” wording of the PSA. This case illustrates the binding nature of a well-written PSA and the importance of a knowledgeable divorce attorney who can help you understand agreements before you sign.

When you are facing a divorce or seeking modification of a post-settlement agreement, you should consult a New Jersey family law attorney with experience in negotiating fair agreements between parties. When you face a family law problem, talk to the knowledgeable divorce attorneys at Goldstein Law Group. Call 732-967-6777, or request a consultation by clicking the contact link on this page.

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