Friday, January 27, 2006

Case Law Development: Transfer of Property to Second Husband Requires Forfeiting $75,000 to First Husband

Wife's divorce decree contained a settlement agreement providing her ex-husband with an additional $75,000 judgment if, during his lifetime, she voluntarily or involuntarily sold, transferred, gifted, conveyed, or foreclosed upon the marital property granted to her. After wife remarried, she conveyed the property to herself and her new husband in joint tenancy.  Ex-husband then borught this action to collect the $ 75,000 due under the divorce decree. 

The district court held that the provision was a valid condition precedent in a contract, and not a void conditional judgment, and that the condition had been satisfied by the warranty deed. It therefore overruled Wife's motion to quash the garnishment, determined that $ 75,000 plus accrued interest from the time of the conveyance was due and owing in full, and directed the garnishee to pay into the court. 

The Nebraska Supreme Court affirmed. While noting that ordinarily conditional judgments are void, the court stated that this rule does not extend to equity or to equitable relief. "Rather, where it is necessary and equitable to do so, a court of equitable jurisdiction may enter a conditional judgment and such judgment will not be deemed void simply by virtue of its conditional nature."  Finding that the "$ 75,000 provision at issue in the instant case was the product of negotiations and agreement by the parties, and was found by the court to be part of a fair and reasonable settlement agreement" the court concluded that there was no basis for finding the judgment based on that agreement void.  Further the court found the agreement unambiguous and that the transfer fulfilled the condition in the agreement. 

Strunk v. Chromy-Strunk, 270 Neb. 917, 2006 Neb. LEXIS 11 (January 20, 2006)
Opinion available on the web (last visited January 25, 2006 bgf)

http://lawprofessors.typepad.com/family_law/2006/01/case_law_develo_31.html

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