Posted by Nydia Streets of Streets Law in Florida Divorce

When a marital settlement agreement is entered, parties usually rely on the financial affidavits and other documents provided to determine if they want to enter the agreement. When there is an accusation that someone hid assets or was not honest on a financial affidavit in a Florida divorce, a motion can be filed to challenge the agreement. This was an issue in the case Duke v. Duke, 4D23-165 (Fla. 4th DCA May 17, 2023).

The parties entered a martial settlement agreement (MSA) in their divorce case in which, according to the appellate opinion, “[E]ach party acknowledged legal representation, the ‘unfettered’ opportunity to conduct discovery of each other’s financial circumstances, receipt of discovery, and that each ‘affirmatively waives the right to engage in any additional discovery.’ The parties also expressly waived their right to receive any additional financial information from the other party prior to entry of the MSA, and each party represented they were satisfied that he or she had sufficient approximate knowledge of the other party’s financial circumstances before executing the MSA.”

Eight months after the final judgment was entered, the former wife filed a motion to set aside the MSA, alleging the former husband committed fraud by omitting bank accounts from his financial affidavit. She filed notices of intent to subpoena information from the bank accounts, and the former husband objected. Without holding an evidentiary hearing, the trial court overruled the objection. The former husband filed an appeal which was treated as a petition for writ of certiorari by the appellate court.

The appellate court first noted “We recognize that ‘Florida has a well-recognized policy favoring the finality of judgments, especially in family law contexts.’ Corrigan v. Vargas, 277 So. 3d 642, 645 (Fla. 5th DCA 2019) (quoting Romero v. Romero, 959 So. 2d 333, 336 (Fla. 3d DCA 2007)). However, Florida Family Law Rule of Procedure 12.540 ‘allows a court to set aside a final order, including one ratifying and incorporating an agreement, on the basis of fraud, misrepresentation, or other misconduct of an adverse party.’ Corrigan, 277 So. 3d at 645 (citing Fla. Fam. L. R. P. 12.540(b)(3)).”

The court held “As in Carter, despite Former Wife’s claim that the MSA ‘was procured by fraud or misrepresentation,’ the record here did not demonstrate she pleaded either fraud or misrepresentation with specificity. See Carter, 3 So. 3d at 398. The Third District has also applied Carter to quash a discovery order where the former wife’s pleading was conclusory and lacked specificity. Parra de Rey v. Rey, 114 So. 3d 371, 384–85 (Fla. 3d DCA 2013). The district court affirmed the trial court’s order, noting ‘the trial court was duty-bound to determine the validity of the marital settlement agreement prior to granting the Wife’s discovery requests.’ Id. at 385. Even though Former Wife’s motion included specifics about the assets which she claims Former Husband failed to disclose, the trial court should consider whether these allegations are sufficient for establishing fraud or misrepresentation, and if so, conduct an evidentiary hearing before permitting discovery on whether Former Wife could or should have discovered this information before signing the MSA.”

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