Gorman v. Gorman

883 A.2d 732, 2005 R.I. LEXIS 166, 2005 WL 2045080
CourtSupreme Court of Rhode Island
DecidedAugust 26, 2005
Docket2003-611-Appeal
StatusPublished
Cited by62 cases

This text of 883 A.2d 732 (Gorman v. Gorman) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gorman v. Gorman, 883 A.2d 732, 2005 R.I. LEXIS 166, 2005 WL 2045080 (R.I. 2005).

Opinion

OPINION

Introduction

Robinson, Justice.

The parties to this appeal are former spouses, and the issue before us involves the Property Settlement Agreement that was drafted in connection with their divorce. The dispute centers around two separate stock plans in which the defendant husband was at all relevant times a participant by virtue of his status as an employee of a company called “NY-PRO, Inc.” In addressing the contentions of the parties, it will be necessary for us to consider some fundamental principles of contract law as they relate to the responsibilities and powers of the justices of the Family Court; and, in the end, our disposition of this appeal reflects our awareness of the peculiar status of contractual property settlement agreements that are submitted for the review and approval of the Family Court.

Facts/Travel

The plaintiff, Kathleen M. Gorman, and the defendant, Daniel W. Gorman, were married on ■ July 17, 1965, and they remained married for more than thirty-five years. The parties separated on or about January 3, 2002; and on February 12, 2002 plaintiff filed for divorce, stating that irreconcilable differences had led to the irremediable breakdown of their marriage. The defendant filed a counterclaim. Both parties were at all pertinent times represented by counsel.

A hearing was held before the Family Court on January 24, 2003, at which time the court heard testimony relative to both the complaint and the counterclaim. At the close of that hearing, the attorneys for the parties advised the court of their desire to memorialize in written form their agreement about the division of property. The court reserved decision and instructed the parties to submit a written agreement to the court.

Two weeks later, on February 7, 2003, the Family Court granted plaintiffs complaint and defendant’s counterclaim, and it granted the parties an absolute divorce on the statutory grounds of irreconcilable differences. On the same date, the Family Court also approved the written Property Settlement Agreement that had been submitted to the court by counsel for the parties.

The most pertinent provision of that Property Settlement Agreement is the following: 1

“11. RETIREMENT, PENSION AND PROFIT-SHARING PLANS:
11.1 The NYPRO ESOP Employee Stock Option Plan * * * shall * * * be divided equally between the parties via a Qualified Domestic Relations Order (QDRO).” 2

*735 On April 15, 2003 (ie., more than two months after the divorce had been granted and the Property Settlement Agreement had been approved), plaintiff filed a motion seeking “clarification” of both the Property Settlement Agreement and the “intent” of the parties with respect to the Property Settlement Agreement. The defendant objected.

Subsequently, on May 2, 2008, plaintiff filed a motion for relief under Rule 60(b) of the Family Court Rules of Procedure for Domestic Relations and a motion to modify the Property Settlement Agreement. The defendant also objected to both of these motions.

In the above-referenced motions, plaintiff asserted that, in addition to being a participant in the NYPRO employee stock option plan (“NYPRO ESOP”) which was specifically mentioned in paragraph 11.1 of the Agreement, defendant was also a participant in a NYPRO stock bonus plan (“NYPRO SBP”). 3

The plaintiff then argued that the parties had intended that the NYPRO SBP would be divided equally between the parties even though it was not expressly mentioned in paragraph 11 of the Agreement. This contention was based on what plaintiff alleged was her understanding that the divorcing parties had agreed upon a “fifty-fifty” division of all of defendant’s corporate stock holdings.

The plaintiffs Rule 60(b) motion additionally asserted that the Property Settlement Agreement as executed by the parties “contains terms that were based on or mistake of fact(s), inadvertence, misrepresentation(s) and/or fraud, as it relates to the disclosure and nature of certain assets held by the Defendant through his employer, Nypro, Inc.”

In his objections to these motions, defendant argued that the Agreement should be read literally and that the specific mention of the NYPRO ESOP in paragraph 11 implicitly excludes all non-specified plans from being treated as part of the Agreement.

The Family Court conducted a hearing on July 15, 2003 to resolve the dispute relative to paragraph 11 of the Agreement.

On August 20, 2003, the Family Court issued a bench decision about this matter. It found that there was an ambiguity in the Agreement with respect to the term “NYPRO ESOP Employee Stock Option Plan.” In so ruling, the Family Court stated that “paragraph 11 of the agreement is subject to different constructions, and [the Family Court] must clarify the subject factual ambiguity regarding the intentions of the parties.”

In reaching that conclusion, the Family Court justice took into consideration all of the negotiations between the parties as *736 well as the testimony of the parties at the hearings on January 24 and July 15, 2003. He found that plaintiff and defendant had intended that all of defendant’s NYPRO stock (including the NYPRO SBP stock) would be divided equally between the parties; and he further found that the parties were actually referring to all of defendant’s NYPRO stock when they used the term “NYPRO ESOP” in paragraph 11 of the Agreement. Specifically, the court stated:

“[T]hroughout the discovery process, defendant represented that the total number of stock holdings were either held in the, quote, Employer Stock Option Plan, close quotes, or generally held as NY-PRO stock * * *. Never at any time did the defendant specifically alert plaintiff to the fact he held considerable stock in his employee stock bonus plan.
“Therefore, the plaintiff would have had no reason to believe that by simply drafting paragraph 11 to read, quote, Employee Stock Option Plan, close quote, she was foregoing a substantial portion of the NYPRO stock.”

The Family Court found that it was clear from the transcript of the January 24, 2003 hearing both that plaintiff did not know that defendant held the NYPRO SBP and that the divorcing parties “intended all NYPRO stock to be distributed under the title, quote, Employee Stock Option Plan, close quote.” The court further found that, at the July 15, 2003 hearing on the Motion for Clarification, plaintiff repeatedly testified that she believed that all of defendant’s NYPRO stocks were held within the NYPRO ESOP.

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Cite This Page — Counsel Stack

Bluebook (online)
883 A.2d 732, 2005 R.I. LEXIS 166, 2005 WL 2045080, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gorman-v-gorman-ri-2005.