As a family law practitioner, one of the things you often counsel your clients about is their likelihood of prevailing in an attempt to modify their existing divorce decree, child support order, property settlement agreement, etc. Almost invariably, their basis for wanting to modify a previously entered court order is their desire to obtain additional money from their ex-spouse because they feel that the existing order is no longer adequate for their needs. Sometimes they feel that the order was unfair to them from its inception.

While your CFL Designation for Divorce Practitioners, gives you the requisite financial knowledge to competently advise your clients on divorce-related financial issues, case law across the country changes on an almost daily basis and you need to keep abreast of these changes.

Acceptance of Benefits Doctrine

The Texas Supreme Court recently took a new look at the acceptance of benefits doctrine in the case of Kramer v. Kastleman, noting that this was the first time in over 65 years that the Court had addressed this issue in a marital dissolution case.

The acceptance of benefits doctrine states that a litigant cannot treat a judgment as both right and wrong. Consequently (s)he cannot challenge a judgment after voluntarily accepting its benefits. However, the Court pointed out that the doctrine is an estoppel-based one that focuses on preventing the opposing party from suffering unfair prejudice. As such, an acceptance of benefits case is fact-dependent and the relief sought cannot be denied on its merits unless the opposing party can prove that granting the relief will cause him or her irremediable disadvantage.

The Kramer Case

In this particular case, the parties were married for nine years, during which they accumulated a $30 million marital estate. When they decided to divorce, they executed, among other things, a property settlement agreement which the trial court orally approved and granted the divorce. A written divorce decree was not issued until a year later. Prior to its issuance, however, Lisa Kramer revoked her property settlement consent and moved to set it aside, claiming fraud and coercion. Bryan Kastleman responded with a motion of his own, alleging that Kramer’s claims were false, she had been dilatory in challenging the agreement, and she had received substantial benefit from it prior to her challenge; specifically, $20,000 monthly rental income from property awarded to her in the agreement.

The trial court denied Kramer’s motion, sanctioned her, and awarded Kastleman over $32,000 in attorney’s fees, after which it rendered its final divorce decree. Kramer appealed, but the appellate court dismissed her appeal, ruling that she failed to establish that her claims fell within one of the exceptions to the acceptance of benefits doctrine.

Supreme Court Ruling

In reversing and remanding the appellate court decision, the Texas Supreme Court stated that “[A]cceptance-of-benefits issues are disproportionately represented in marital-dissolution cases. … Because judgments in marital-dissolution cases typically divide assets in which a party’s right to possession and control precedes the final decree, invoking estoppel based on dominion over that property while the litigation is ongoing presents a more complex scenario than other civil disputes.”

After a long discussion of developing case law, the Court concluded that under the facts of this case, the court of appeals erred in dismissing Kramer’s appeal because “prejudice is lacking and the circumstances do not reflect Kramer’s clear intent to acquiesce in the judgment’s validity.”

For more information on financial issues you need to be aware of, how gaining your CFL Designation for Divorce Practitioners will give you the financial knowledge and skills you need to attract additional high-asset clients, and the other benefits of AACFL membership, please visit this page on our site.