Jamie McCourt Asks To Reopen Divorce Settlement With Former Dodgers Owner

June 05, 2013

In October 2010, Jamie McCourt received $131 million in a divorce settlement with former Dodgers owner Frank McCourt. Now, Mrs. McCourt claims the settlement was based on a fraudulent misrepresentation of Mr. McCourt's worth.

At the time of the divorce, Frank McCourt listed the worth of the Dodgers franchise at approximately $300 million when, in fact, McCourt was able to sell the Dodgers for $2 billion. Due to the misrepresentation, Jamie McCourt's attorney has asked the court to set aside her divorce settlement, noting, "Mr. McCourt got about 93 percent of the family assets, and Mrs. McCourt got about 7 percent." Even if the misrepresentation was not fraudulent, he explains, the settlement should be revised based on the mistake of fact.

Can I Modify My Financial Settlement After My Divorce?

The McCourts' case raises a number of questions. It is possible -- and common -- to modify child custody, visitation and alimony after a divorce is finalized, but what about the property settlement? When will a court throw out a divorce settlement for financial reasons? Is property division modifiable?

The answer depends on the facts surrounding the settlement. In most cases, property division agreed to in a final divorce settlement or ordered through a divorce decree is final and not modifiable.1 If, however, the asset division was based on fraud or misrepresentation, the court may set aside or reopen the settlement or decree.

Modification of final property division orders is allowed under the following circumstances:
- Substantive mistake: In some cases, if property was omitted from a divorce decree due to a substantive mistake, Texas courts have held that the judgment can be reopened. Judgments can also be reopened to correct clerical errors made by the court or the parties, or when both parties have made the same mistake (mutual mistake).
- Fraud: Most courts will allow the modification of a property division order when there is clear evidence of fraud. In fact, fraud is the most common reason courts will reopen final marital property judgments. Fraud occurs when one spouse misrepresents a material fact with the intent to mislead the other spouse. Fraud can also occur, in some circumstances, when a spouse fails to disclose a material fact. Generally, spouses are not required to disclose facts to each other except on financial statements or when they have a contract requiring full disclosure.
- Change in value: Showing that there was a significant change in the value of an asset following a divorce is generally not enough to change a property division order. In some cases, however, an order can be reopened if both parties mistook the value of an asset during the divorce or material facts regarding the asset's value were concealed.
- Duress: If one party was coerced into signing the divorce settlement, courts have wide authority to throw out that settlement.

Courts can also clarify ambiguous language in property division orders/settlements at any time. This is not considered modification of the property division judgment. Similarly, when jointly owned assets are omitted from a divorce decree, those assets can be divided in a fair and just manner by the court.

A Complex Area Of Law

The law involving modification of property division orders is complex, and the facts surrounding an order can make or break your case for modification. In the McCourt case, for example, Jamie McCourt herself valued the Dodgers at $2 billion prior to the final judgment, which might show that she knew of their value when she agreed to the divorce decree. Furthermore, Frank McCourt argues that Mrs. McCourt's attorneys did not do due diligence to discover the worth of the Dodgers. Frank McCourt's declaration that the Dodgers had a net worth less than $300 million, however, was significantly off the actual value and could have been a substantive mistake or a fraudulent misrepresentation.

If you believe your ex-spouse used fraud or duress during property division or that there is a substantive mistake in your final divorce settlement or decree, an experienced attorney can help you evaluate your case and whether it is possible to modify or throw out your divorce settlement or decree.

[1] A divorce settlement or decree is not final immediately after the order. If your property division order falls within the period of time allotted for changes, it is modifiable by the court.

Article provided by Kerr, Hendershot & Cannon, P.C.
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