In contract law, text is paramount. A recent opinion from the Fifth District Court of Appeal illustrates this point. In Balazic v. Balazic, the court was asked to interpret a provision of a settlement agreement dealing with the distribution of the former husband’s retirement plan. The provision required the former husband and wife to equally divide the marital portion of the retirement plan, “which they defined as that portion of the plan acquired from the time of the marriage to the filing of the dissolution of marriage petition, ‘plus any gains or losses on that amount.’” When the couple married, the plan was worth $17,485, which was the former husband’s separate, nonmarital property. The amount grew to over $500,000 by the time dissolution proceedings began. The trial court subtracted $17,485 from the total and equally divided the balance. Good, right? Not really.
The Fifth District interpreted “plus any gains or losses on that amount” to mean only those gains accrued from the beginning of the marriage until the time of the filing for a petition for dissolution. The former wife was not entitled “to any passive appreciation in the Former Husband’s nonmarital portion of the retirement plan”—the initial $17,485. The Fifth District reversed and remanded for a new order “that subtracts Former Husband’s $17,485 premarital balance, plus that amount constituting passive appreciation on this premarital balance, from the final sum of $549,975, and then equally divides the remaining net amount between the parties.”
The court did not address the award of attorneys’ fees to the former wife because, as the former husband forthrightly noted, he had not clearly designated that as an issue on appeal.
What can we learn from this opinion? First, words matter. Here, two words, “that amount,” made a big difference in the outcome. So whether you are drafting a contract, counseling a client about the terms of a contract, or litigating a contract dispute, paying attention to every word is important. Second, always remember to brief each issue on appeal separately to avoid waiver.
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