By John P. Paone, Jr., Esq. and John P. Paone, III, Esq.*
When attempting to settle issues in a divorce case, parties frequently employ the services of a mediator. In many cases, mediation works as a successful alternate dispute resolution tool allowing parties to settle their matters without the necessity and costs of a trial. However, often times parties attend mediation without having independent counsel. This is usually a mistake, as the mediator (even if he or she is an attorney) does not and cannot represent either party. It is important therefore that parties understand the consequences of their actions when going into mediation without an attorney.
If the parties come to an understanding in mediation, the mediator will usually draft a document known as a “Memorandum of Understanding” or otherwise called a “MOU.” While a MOU lacks the detail and specificity of a full-blown, formal settlement agreement, it is recognized as a binding agreement if and only if it is signed by the parties. If parties want the benefit of independent advice of counsel before entering a binding and enforceable agreement, they must be careful not to sign a MOU.
Recently, the New Jersey Appellate Division weighed in on this very subject in the case of Mathurin v. Mathurin. In Mathurin, the parties attempted to resolve amongst themselves issues related to the former marital home. After direct negotiations failed, the parties thereafter attended mediation whereby a MOU was prepared and signed only by the mediator. Although the Wife believed that the matter was resolved, the Husband did not. As a result, the Wife filed an application with the trial court to enforce the terms of the MOU.
The trial court found that the MOU which was not signed by the parties was not a binding settlement agreement. The trial court deemed the MOU a product of mediation and was therefore a privileged and non-binding document. The matter was taken up on appeal where the New Jersey Appellate Division responded by affirming the ruling of the trial court which declined enforcement of the MOU as a binding contract without the signatures of the parties. In reaching this decision, the Appellate Division relied on controlling New Jersey case law which established that in order for an agreement at mediation to be binding, the agreement must be reduced to writing and signed by each party or their counsel before the mediation concludes.
The lesson to be learned from Mathurin is that once a MOU is signed by the parties, the document becomes a binding agreement regardless of whether an attorney has reviewed the document.
It goes without saying that negotiating a divorce settlement can be a difficult, stressful, and tedious process. Each party must make compromises and concessions on issues that may be extremely emotional and personal to them. There are also many relevant issues which arise in the course of divorce litigation which could be swept under the rug if spouses sign a hastily drafted agreement without taking the time to contemplate all potential issues. Or, as the adage goes, settle in haste – repent in leisure. If you are attempting to negotiate a settlement agreement at mediation as part of a divorce action, remember the lesson from Mathurin: “don’t sign anything” without first consulting an experienced family law practitioner who can review your agreement to ensure that it is fair and complete.
*John P. Paone, Jr., Esq. and John P. Paone, III, Esq. are divorce and family law attorneys with the Law Offices of Paone, Zaleski & Murphy, with offices in Red Bank and Woodbridge.
