Counsel Fees: How Much Discretion can a Court Have?

May 18, 2018

Courts have traditionally favored the use of Marital Settlement Agreements in order to resolve disputes during a divorce matter. In fact, Marital Settlement Agreements are deemed contractual in nature and courts should not rewrite a parties’ Marital Settlement Agreement.

The New Jersey Appellate Division recently enforced a counsel fee provision of a Marital Settlement Agreement in the case Wines v. Wines where the Husband sought enforcement of various provisions of the parties’ Marital Settlement Agreement, including child support payment, reimbursement for the child’s activities, maintenance of life insurance, sale of the matrimonial home, and reimbursement of counsel fees pursuant to an indemnification clause. 

The husband in this case presented information to the court showing the wife willfully failed to pay child support and she willfully failed to abide by the terms of the Marital Settlement Agreement. The wife filed opposition, which did not dispute her obligation, but she claimed she did not earn sufficient income.

The trial court issued an Order enforcing the Marital Settlement Agreement on the basis that the plain language of the parties’ Marital Settlement Agreement was controlling. Despite the court enforcing the terms of the Marital Settlement Agreement and finding the Marital Settlement Agreement to be controlling as to the violated provisions, the court denied the request for counsel fees under the indemnification clause under its powers as a court of equity.

The husband appealed this aspect of the trial court’s Order arguing the court abused its discretion and argued if the court applied plain meaning for the other provisions of the Marital Settlement Agreement, then the same standard should be used to enforce the indemnification clause.  

On appeal, the Appellate Division noted that the wife agreed to the terms of the Marital Settlement Agreement and that she knowingly and voluntarily entered into it. The Appellate Division further found that there was no dispute that the Marital Settlement Agreement unambiguously required an award of counsel fees when a party showed that the other party willfully failed to abide by its terms. The Appellate Division noted that it has previously held that a failure to abide by such an indemnification clause constitutes an abuse of discretion by a trial court under basic contract principles.

As a result, the Appellate Division vacated and remanded the issue relating to counsel fees as it found the trial court did not apply the indemnification clause in consideration of the husband’s request.

If you have any questions regarding enforcement of a Marital Settlement Agreement, please contact the skilled matrimonial attorneys at Sarno da Costa D’Aniello Maceri LLC.  Call us today at (973) 274-5200