Husband says ex-wife owes mortgage balloon payment; Court rules otherwise
Understand a divorce property settlement agreement before you sign it
This week the Mississippi Court of Appeals sided with a Madison County Chancellor who ruled a husband was responsible for paying a balloon payment on the divorced couple's mortgage. The case highlights the importance of being represented by an attorney when divorcing and also making sure you understand the documents you sign.
When the couple divorced, the husband agreed to pay alimony in the amount of the monthly mortgage payments "until such time as the mortgage on the property ... is fully satisfied." To ensure payments, he also agreed to provide a life insurance policy in the amount of $150,000. The tricky part was the mortgage contained a balloon clause. At the end of the mortgage term, a final payment of $142,268.41 payment was due. When it came due, the husband claimed he did not owe it.
A hearing was held and the Chancellor ruled in favor of the wife. The husband appealed. The Mississippi Court of Appeals sided with the chancellor. The question came down to whether the dissolution agreement was ambiguous or not. In Mississippi, as in many other states, a divorce property settlement agreement is a contract between the parties. The Court will look to the document for its intent unless the contract is ambiguous. In this case, the Court found that although one provision was ambiguous, the agreement provided the husband would pay the mortgage until it was "fully satisfied." The mortgage could not be "fully satisfied" unless the final balloon payment was made. Further, by the husband agreeing to provide a life insurance policy for the value of the house, it showed his intent to be obligated for the full amount of the mortgage. As the Court of Appeals stated, "it would be nonsensical for [the husband] to voluntarily obligate himself to obtain life insurance for the full amount due under the mortgage if he were not intending to obligate himself for this amount."
Let me repeat an important lesson. The wife was represented by an attorney who drafted the dissolution agreement, but the husband represented himself in the divorce. Too many times I receive calls from folks who did not have representation at the time of their divorce and are now calling to say there did not realize they were obligated to do certain things. At the Kisselburgh Law Firm, we represent those going through divorces. If you are contemplating a divorce, call us at 601-936-4040 or contact us online to set up a consultation to discuss your rights.
