I was involved with a collaborative case that by all accounts was as smooth as one could hope to have in the collaborative process. Husband and Wife set forth their interests and goals from the outset and stuck with what they stated were their mutual desires throughout the eight-month process—until they became stuck—literally. Husband and Wife’s goals and interests included an amicable process which allowed them both to move forward with a degree of financial security and preserve and maintain their family relationships. The MSA was executed. The attorneys delayed filing to allow Wife to turn 65 and qualify for Medicare.
Husband and Wife sold the marital residence to one of their adult children. The process looked like it was going to fall about when the calls to the attorneys started. The equitable distribution chart divided the equity line on the house 50/50. The settlement statement at closing divided the equity line liability 50/50. Wife wanted 100% credit for the funds and hold Husband liable for the full amount of the equity line. Her reasoning? A paragraph in the MSA which read, “14. ATTORNEY’S FEES, PROFESSIONAL FEES AND COSTS. The parties’ attorney’s fees, professional fees and costs incurred in connection with the Collaborative Process shall be paid for by the Husband.”
The problem The equity line was taken out by Husband and Wife to pay the fees and costs incurred by all professionals through the date of signing. The specific paragraph referenced was intended to cover fees and costs incurred after the signing of the MSA for which there were no additional marital funds to pay the professional and attorneys’ fees and costs.
There is a paragraph in the Collaborative Participation Agreement which reads as follows:
VIII. PARTICIPATION WITH INTEGRITY
∙ We will work to protect the privacy, respect and dignity of all involved, including the clients, attorneys and experts/consultants.
∙ We shall maintain a high standard of integrity and specifically shall not take advantage of each other or of the miscalculations or inadvertent mistakes of others but shall identify and correct them.
The professionals involved, including I, Wife’s attorney, remember the discussion exactly as stated in the bolded section above. Throughout the marriage Wife was not involved in the family’s finances, was distressed at most meetings and did not remember after the MSA was executed the purpose of the equity line. Wife also did not recall paragraph 14 was intended to cover and wanted me to argue that Husband should be liable for all attorneys’ and professional fees and costs from date of the Collaborative Participation Agreement to the end of the case. She wanted 100% of the benefit of the equity line from the closing.
I made clear to Wife that in the collaborative process I was bound to maintain the integrity of the process and not take advantage of the lack of clarity set forth in paragraph 14, given all of our understanding of the paragraph’s intent, particularly when read together with the equitable distribution chart. I was not convincing and in fact, was functioning at a disadvantage: There lurked a shadow lawyer in the background who was advising Wife to fight the issue.
Reenter the neutral professionals who worked with the couple throughout the process and were well trusted by Husband and Wife. Both attorneys implicitly trusted the financial neutral and mental health facilitator, Ed Sachs and Randy Heller, and agreed they should meet with the parties outside the presence of the attorneys. Most importantly, the attorneys also trusted one another.
Ed and Randy met with Husband and Wife in an effort to resolve their differences and work with Husband and Wife to understand that “fighting this out in court” was contrary to the interests and goals under which the parties operated leading up to the MSA. Further, Husband and Wife were helped to understand the cost of litigating if they could not resolve their differences. Because Ed and Randy are so effective in their respective professional capacities they arrived at a viable solution resulting in Husband and Wife equitably distributing the equity line and contributing the discrepant amount to one of their children’s school costs. This resulted in their leaving the meeting, going to dinner with their children, and waking up the next morning happy, ready to move forward with their collaborative dissolution of marriage, and their family intact.
Not only is this a lesson in trusting the neutrals, it is a lesson that allowing the collaborative process, and its inherent opportunity to develop creative solutions to resolve issues, works. It saves families money and emotional expense. It is also a lesson in knowing which attorneys one can work in a trusting collaborative process.