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How can the acceptance of benefits doctrine impact you?

On Behalf of | Feb 18, 2020 | Family Law

You likely will have many issues in your high-asset Florida divorce, but one of the most complicated issues may well become the provisions of your property settlement agreement. Once it becomes part of your final divorce decree, you may find it quite difficult to challenge it later due to the legal construct known as the acceptance of benefits doctrine.

This doctrine states that once you accept the benefits of a court decree, you cannot later challenge its veracity or validity. This doctrine, however, can sometimes fall by the wayside as FindLaw reports it did in the recent Texas Supreme Court case of Kramer v. Kastleman.

Initial trial court decree

During their marriage, Ms. Kramer and Mr. Kastleman accumulated upwards of $30 million in assets which they divided between themselves in their property settlement agreement when they divorced. The court approved the PSA and made it part of its verbal divorce decree. However, the court for whatever reason failed to produce a written decree until 12 months later.

Ms. Kramer sought to rescind the PSA during this period on the grounds that Mr. Kastleman had fraudulently induced her to sign it. Kastleman not only denied the fraud allegation in his counterclaim, but also claimed that Kramer could not now attack or rescind the PSA because she had already accepted significant monthly income generated by one of the properties the PSA gave her.

After considerable litigation at both the trial and appellate levels, Kastleman clearly had the upper hand since both courts agreed with him that the acceptance of benefits doctrine precluded Kramer from modifying the PSA. Refusing to accept defeat, Kramer appealed to the Texas Supreme Court.

Supreme court reversal

Ultimately the Texas Supreme Court sided with Kramer and overruled both lower courts. While it did not dispute the validity of the acceptance of benefits doctrine, it held that it failed to apply in this particular case for two reasons. First, it declared that the trial court’s verbal divorce decree did not constitute a final court decree. Second, it held that while Kramer accepted the monthly income, no evidence showed that she had had the clear intent to accept it as part of the PSA she now sought to challenge.

This is general educational information and not intended to provide legal advice.