GRAMMAR MATTERS – EVEN IN DIVORCE AGREEMENTS

The specific language of your divorce settlement agreement does matter – make sure you understand the terms before you execute it, or you might regret it. The Indiana Court of Appeals affirmed a trial court’s finding in a dispute where Husband and Wife had separate interpretations of language dividing Husband’s deferred compensation plan.

Husband, Kyle J. Bonebright, appealed an order from the Warren Circuit Court relating to the parties’ marital settlement agreement approved on November 4, 2010. As usual procedure after a dissolution, a qualified domestic relations order (QDRO) was filed to transfer a portion of Husband’s deferred compensation plan to Wife as part of the terms of their settlement agreement. However, a dispute arose over the parties’ interpretation of the specific sentence in their settlement agreement which stated: “Husband has a Deferred Compensation Account in the amount of $21,000 which will become the sole and separate property of wife.” Mr. Bonebright believed the language specified that his ex-wife was to receive the flat sum of $21,000. However, the trial court ordered that Mrs. Bonebright “is entitled to the amount in the [Account] as of November 4, 2010, together with any gains or losses to such amount on deposit on November 4, 2010, due to interest or dividend accruals, and market fluctuations.” The trial court specified that the account would be Husband’s separate property as of November 5, 2010.

Husband appealed the trial court’s order, but The Court of Appeals affirmed and gave Mr. Bonebright a grammar lesson: “The Account is the subject of the sentence and ‘in the amount of $21,000’ both follows and modifies the subject. Thus, ‘in the amount of $21,000’ does no more than describe the account at the time it was included in the Agreement. Therefore, we find that the plain language of the Agreement transfers the entire Account to [Wife].”