Separation Agreement

Negotiating a separation agreement has many advantages over adversarial litigation, in which lawyers argue over the issues in court and a judge makes the final decision.

In almost all cases, negotiating an agreement is faster, cheaper, more private, and less stressful than litigation, and the results are usually better for both parties. That’s why the great majority of married couples in North Carolina come to an agreement without the need for a judge’s intervention.

One reason that results are better is that couples understand their own needs (and those of their children) better than any judge can. Another reason is that, while courts often impose “one size fits all” solutions that have worked before, couples can be more creative and flexible about working things out.

It’s not required to have an attorney involved in negotiating or drafting a separation agreement, but it’s a very good idea. And it’s an especially good idea when your spouse has an attorney involved.

No. Separation occurs on the day that a husband and wife move into separate homes with the intent to live apart permanently.

A separation agreement can be negotiated either before or during the period of separation.

A divorce can be granted after a year and a day following the date a couple separates.

A separation agreement can later become part of a divorce decree, or it can stay completely separate. Both parties must agree to bring the separation agreement to the court; if they don’t, then it remains only a contract.

As noted above, in North Carolina there’s no requirement for a judge to approve a separation agreement. However, if the parties submit the agreement to the court, then the concept of merger applies.
In this context, merger means that the agreement becomes part of the court order. That means that the agreement is no longer treated like (and enforced like) a contract. Instead, the terms are enforced like a court order.

There can also be a partial merger, where the agreement is like a contact in some ways and like a court order in other ways.

Unless the separation agreement says otherwise, the actual granting of the divorce won’t have any effect on the separation agreement. The agreement will still apply after the parties are no longer legally married.

If a party violates the separation agreement, then the other party can seek to enforce it, by bringing a lawsuit.

How a separation agreement is enforced depends on whether the agreement is “just” a contract or whether it has become part of a court order.

A separation agreement that isn’t part of a court order is just a contract, like any other contract. The parties can enforce it in the same ways that other contracts are enforced.

For example, a party (the plaintiff) can sue for breach of contract and seek money damages. The court can enforce an award of money damages by imposing a levy on the property of the other party (the defendant). The court can even order the defendant’s property sold to pay the damages.

If one party breaches, the plaintiff can also sue for “specific performance” – a court order for the defendant to do what the separation agreement requires (such as make support payments). Specific performance can be ordered even before trial, to preserve the status quo (i.e., keep things the way they are).

If one party sues to enforce the separation agreement, the court may order the parties to attend settlement conferences or engage in settlement negotiations. If a party refuses to attend such settlement meetings, the court can impose monetary sanctions (fines) on that party.

If the separation agreement bars support and alimony and the party relieved of alimony payments commits a material breach of the agreement, the plaintiff can “rescind” the separation agreement and seek support or alimony.

In awarding damages, the court’s goal is to put the plaintiff in the same position she or he would have been in if the defendant hadn’t breached the contract.

If the breach involves failure to make periodic payments (for example, child or spousal support payments), the plaintiff can get a judgment for all of the overdue payments, plus interest running from the date each payment was due.

No. No separation agreement can prevent the state from acting in the best interests of a child.

Thus, the courts will refuse to enforce clauses in separation agreements in which one parent is relieved of the obligation to provide child support, or the other parent agrees not to seek child support.

Even an agreement in which one parent agrees to accept a lump sum of money to cover future child support will not be enforced if the child turns out to have greater needs.

The parents may agree about the amount of child support, and if the court agrees that the amount is in the best interest of the child, the law will enforce that agreement – even if the amount is more than the court would have ordered.

However, a support agreement must be reasonably definite to be enforceable. In a case where a father agreed to pay for his children’s post-high school expenses, “limited to those expenses reasonably incurred in the obtaining of an undergraduate degree or the completion of a course in a specific vocation,” the North Carolina courts held that the lack of a specific amount or percentage of total costs made the agreement unenforceable.

In most cases, a party can’t recover for emotional damages or mental anguish caused by a breach of contract.

The North Carolina Supreme Court has held that a plaintiff must prove three things in order to recover damages to compensate for mental suffering due to breach of contract:

Most separation agreements don’t satisfy the second and third elements. However, damages for emotional injury might be available when a defendant has breached a non-molestation clause in a separation agreement, for example.

A non-molestation clause is a provision in which the parties agree to leave each other alone and to not interfere with each other’s lives.

What kinds of actions violate a non-molestation clause depend on how the clause is written. Some examples of violations are:

In rare cases, a party can recover punitive damages for breach of a separation agreement.

For example, if one party breaches a separation agreement in a way that’s intended to make the other party suffer the effects of tax liens and foreclosures, that conduct could be considered “intentional infliction of emotional distress.”

Although punitive damages are not generally available for breach of contract, intentional infliction of emotional distress is a tort, and punitive damages are available in tort cases.

Punitive damages do more than just compensate one party for losses. Punitive damages are intended to punish the defendant and discourage the defendant (and others) from doing the bad acts that led to the imposition of punitive damages. Thus, punitive damages can be more than the actual damages suffered by the plaintiff.

A court can also enforce a separation agreement by issuing a decree of specific performance. This decree orders the defendant to comply with the terms of the separation agreement.

This remedy is only available to enforce a separation agreement that has not become part of a court decree.
Normally, a court may not hold a defendant in contempt (and send him or her to jail) for breaching a separation agreement. However, failure to comply with an order of specific performance can lead to a defendant being held in contempt of court and sent to jail until he or she complies with the order.

Even if a separation agreement says that the parties may enforce it by bringing an action for specific performance, the moving party is still required to show that:

In a recent case, a motion for specific performance was denied because the plaintiff failed to show that the defendant had the ability to pay. In that case, the defendant had recently declared bankruptcy.

If a separation agreement has become part of a court decree, as discussed above, the parties can’t enforce it like a normal contract. Instead, the usual process is for one party to bring a motion to hold the other party in contempt for failing to abide by the decree.

The court can even hold a party in contempt (and potentially send him or her to jail) even to enforce provisions in an agreement that the court would not have the power to order on its own.

For example, a court normally has no power to order a party to support a child past the age of majority (18) or to pay for a child’s college education. However, if the parties have agreed in a separation agreed that one party will pay for college, and that agreement has become part of a decree, and the obligated party fails to pay for college, the agreement can be enforced with a contempt order.

As an alternative to enforcing a separation agreement when the other party has breached it, under some circumstances a party can rescind a separation agreement — and start over from scratch.

This means that the law will treat the agreement as if it had never been signed. The party that rescinds can then seek a court order for spousal support, alimony and property distribution just as she or he could if there had never been a separation agreement.

The parties can also agree in the separation agreement that breach will lead to rescission of only part of the separation agreement (the part that was breached) rather than the entire agreement. This avoids “throwing out the baby with the bathwater” when there’s a problem with only one part of the agreement.

It’s a good idea to file a claim with the court for equitable distribution of property and alimony at the same time you seek rescission and before the divorce is final. That’s because if the court grants rescission of the separation agreement after the divorce was final, and there was no such pending claim, under North Carolina law divorce normally destroys the right of a spouse to seek equitable distribution of property or alimony.

The statutory rights to support, equitable distribution, and alimony may survive in only limited circumstances, based on the obligated party’s wrongful conduct.

If the court grants rescission after the parties have performed at least some of their obligations under the separation agreement, then they will be required to make restitution to each other of — i.e., pay back — the benefits they each received under the agreement. The goal is to put each party in the same position as before the agreement was signed. If this isn’t possible, then it’s up to the court to come up with a fair solution.

Possibly.

The death of a party to a separation does not automatically end that party’s (or) that party’s estate’s obligations under the agreement.

For example, a parent can bind his or her estate to support a child after the parent’s death, including after the child reaches the age of majority (18).

If the agreement doesn’t expressly state what will happen in the event of a party’s death, then the courts will look to the intent of the parties.

Generally, yes. Courts in all states are required to enforce contracts entered into in all other states as long as those contracts are valid.

Unless the parties agree otherwise, the law of the state where the parties signed the agreement will govern its validity and interpretation.

Yes, but only if the agreement includes an attorneys’ fees provision.

As with other contracts, a court may not award attorneys’ fees unless they’re specifically provided for in an agreement.

The parties may agree that the losing party will pay the attorneys’ fees of the prevailing party, no matter who sued to enforce the separation agreement.