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Keywords

contractsettlementattorneytrialdivorce

contractsettlementplaintifftrialtestimony

Related Cases

Stare v. Tate, 21 Cal.App.3d 432, 98 Cal.Rptr. 264

Facts

The parties, Joan and Tim, engaged in protracted negotiations regarding the division of community property prior to their divorce. Disputes arose over the valuation of certain properties, particularly the Holt property, which Joan believed was worth $550,000, while Tim valued it between $425,000 and $450,000. A significant error was made in calculating Joan's share of the property, leading to a counter-offer that did not accurately reflect the agreed-upon values. After the divorce was finalized, the error was discovered, prompting Joan to seek reformation of the settlement agreement.

‘The agreement in question was signed by both parties on February 21, 1968. It was the culmination of protracted negotiations which had been going on for several years…’

Issue

Did the trial court err in denying the ex-wife's request to reform the property settlement agreement based on a mutual mistake regarding the valuation of community property?

Rule

Under California Civil Code Section 3399, a written contract may be revised to express the true intention of the parties when a mistake, known or suspected by one party, prevents the contract from accurately reflecting that intention.

‘When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved, so as to express that intention…’

Analysis

The court applied the rule of reformation by examining the evidence of the mutual mistake regarding the valuation of the Holt property. It found that Tim's attorney was aware of the error and did not disclose it, leading Joan to believe that her valuation had been accepted. The court determined that the lack of affirmative assent from Tim regarding the $550,000 valuation was immaterial, as he had led Joan to believe that the settlement reflected her intent.

‘The trial court clearly went along with this approach, permitted Tim to prove the value of the Holt property by expert testimony and other means, found that the property was worth no more than $425,000…’

Conclusion

The court reversed the lower court's judgment and directed that the property settlement agreement be reformed to accurately reflect the wife's intent, as known to the husband.

‘The judgment is reversed with directions to make findings and conclusions and to enter a judgment in conformity with this opinion.’

Who won?

Joan prevailed in the case because the court found that the property settlement agreement did not express her true intent due to a known mistake by Tim's attorney.

‘The record supports nothing but a judgment for the plaintiff as prayed.’

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