Supreme Court holds Rule 60(a), SCRCP, motion is proper procedure to correct potential scrivener’s error in court-approved equitable distribution agreement

Posted Thursday, May 14th, 2020 by Gregory Forman
Filed under Equitable Distribution/Property Division, Family Court Procedure, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

The May 13, 2020, Supreme Court opinion in Landry v. Landry addresses the proper procedure to correct a potential scrivener’s error in a court-approved equitable distribution agreement, In Landry, on the morning of their contested divorce trial, the parties reached an agreement resolving all issues but the divorce (which, under South Carolina law, cannot be resolved by agreement). That agreement was handwritten and signed by the parties. At the final hearing, this handwritten agreement was submitted to the court for approval. Husband’s attorney later drafted the formal order to approve the agreement. In drafting the order, Husband’s attorney attempted to incorporate the handwritten agreement by typing its terms into the final order. After the draft order was approved by Wife’s attorney, it was submitted to the court, signed by the judge, and filed.

Nine weeks later Husband noticed the order required him to pay Wife one-half of his military retirement benefits. This was much broader than the language in paragraph six of the handwritten agreement, which only required that “½ of military retirement for December 2016 shall be paid by husband to wife once the TSP is divided by QDRO. The amount is $2,923.00.” Believing the provision requiring him to pay Wife one-half of his military retirement benefits to be a mistake–albeit one made by his own attorney in drafting the order–Husband moved for relief under Rule 60(a), SCRCP, based upon a clerical mistake “arising from oversight or omission.”

The family court denied this motion, finding it was untimely because Husband should have sought relief within ten days of the order pursuant to Rule 59(e), SCRCP. The family court further found the parties had agreed that one-half of Husband’s military retirement benefits would be paid to Wife. Husband appealed to the Court of Appeals which affirmed the family court in an unpublished opinion. Husband petitioned for a writ of certiorari, which the Supreme Court granted.

The Supreme Court reversed the Court of Appeals. It found that Rule 60(a) was a proper method for Husband to seek relief from an order he believes was erroneously drafted. Noting the general rule that final orders of equitable distribution are not subject to modification, the Supreme Court cited prior case law finding an exception when such modification was “to correct clerical errors.”

Determining that the motion was properly brought pursuant to Rule 60(a), the Supreme Court next addressed the merits of Husband’s motion. While in both in its ruling from the bench and its findings in the written order, the family court indicated Husband agreed to pay one-half of his military retirement benefits to Wife, the Supreme Court noted no evidence in the record actually supported this finding. It held that absent a hearing with testimony from the parties to determine whether they agreed to the provision at issue, it could not infer findings of fact which do not appear in the record. It explained:

Although parties are typically bound by the terms set forth in their agreement, we believe the agreement at issue is ambiguous such that parol evidence of the parties’ intent must be considered to determine what the parties agreed to with respect to this fairly substantial marital asset. …

The procedure utilized by the parties and the court in approving the handwritten agreement reached immediately before the hearing has hampered our ability to resolve this case. Normally, we are not inclined to provide litigants with another “bite at the apple” in presenting their case. Moreover, a party whose conduct induces error is generally not in a position to complain on appeal. However, without any testimony as to what the parties intended in paragraph 6 of the handwritten agreement, even our de novo standard of review does not enable us to find the parties agreed to share Husband’s military retirement benefits.

Because the parties’ agreement in this case was ambiguous, the family court was required to determine the parties’ intent and resolve the ambiguities as part of its obligation to review whether the agreement was fair and reasonable. Based on the record presented to us, neither at the initial hearing approving the parties’ agreement nor the subsequent hearing on Husband’s Rule 60(a) motion was any evidence received by the family court as to what the parties intended by paragraph 6 in the handwritten agreement regarding Husband’s military retirement benefits. Therefore, we cannot discern from the record before us any evidence supporting the family court’s finding that the final order incorporated the parties’ intent with respect to this significant marital asset. Accordingly, we remand to the family court to make this determination.

Citations omitted.

The Supreme Court uses Landry as an:

opportunity to remind the bench and the bar of the proper procedure for approving family court agreements….

When parties choose to resolve their disputes through settlement rather than participate in a contested hearing, the better practice is for counsel to reduce the agreement to writing in a formal, typed document duly initialed and signed by the parties. Indeed, this Court has noted that “out of court agreements should be reduced to writing and submitted to the court for approval.” At the approval hearing, the agreement or a copy of it should be marked as an exhibit, and the parties should be examined under oath concerning their understanding of the agreement, its voluntary nature, their satisfaction with counsel, and whether there has been a full disclosure of all marital assets and debts. Thereafter, counsel should request the court admit the agreement into evidence.

While having a formal, typed document introduced into evidence and ultimately attached to the family court’s final order is preferred, we recognize that sometimes, as here, an agreement is reached immediately before a scheduled contested hearing and is not reduced to a formal typed document. In that case, the terms of the agreement should be carefully stated upon the record, and thereafter, the parties should be thoroughly questioned under oath concerning their understanding of the terms of the agreement, the voluntariness with which the agreement was entered, their satisfaction with counsel, and whether there has been a full financial disclosure. Moreover, because family courts are courts of equity, their primary focus is whether the parties’ agreement is fair and reasonable. Naturally, this inquiry begins with determining whether the agreement was voluntarily given. In deciding whether an agreement is fair, it is not the court’s task to decide the parties’ rights but rather to determine whether the agreement is within the bounds of reasonableness from both a procedural and substantive perspective. In the context of property settlement, the court is required to consider the parties’ financial declarations. The family court’s obligation to review the fairness of an agreement includes a duty to examine plain, unambiguous agreements. Ambiguous agreements, however, require the family court to determine the intent of the parties before making a ruling as to fairness and to consider several factors as enumerated in our family court jurisprudence.

Citations omitted.

Basically, this is the Supreme Court’s way of encouraging family law attorneys to reduce agreements to a formal, typed, writing prior to the hearing to approve them. It is also a reminder to family court judges to review such agreements for ambiguities at the hearing to approve them, and to resolve such ambiguities by questioning the parties as to their intent at those hearings. Practically every family court agreement I have encountered (or written) is rife with ambiguity. Most of the time, these ambiguities never become an issue. Much of the time, the parties are able to resolve the ambiguity themselves. Some of the time, they need their attorneys to later help them resolve it. And, rarely, it requires supplemental proceedings to resolve the ambiguity. Often the ambiguity isn’t even recognized until a party defending a contempt proceeding points it out.

Expecting family court attorneys to draft a completely unambiguous agreement is ambitious. In my experience, many attempts to resolve ambiguities through additional verbiage simply creates more ambiguities. Expecting family court judges to spot the myriad ambiguities contained in each family court agreement in the context of a fifteen minute hearing is to expect more from these judges than I am willing to do.

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