Interpretation of divorce settlement agreement; Smith v Smith

The court held that the parties’ divorce settlement agreement unambiguously required equal division and payment of their 2023 joint tax liability. Following entry of a judgment of divorce incorporating the parties’ settlement agreement, the parties disputed responsibility for a substantial 2023 tax liability generated in part by income from businesses awarded to defendant. The trial court concluded that certain business-related income should be excluded from the equal division of tax liability. On appeal, the court held that the agreement was unambiguous and that the paragraph requiring equal payment of 2023 taxes controlled because “courts must interpret and enforce the contract as written” when its terms are clear. The court further held that provisions assigning future tax consequences of awarded assets did not alter responsibility for tax liabilities incurred during the marriage, explaining that “just because the tax bill came after the parties entered into the settlement agreement does not mean defendant is solely liable for taxes arising before the division of assets.” The court concluded that the trial court improperly rewrote the agreement under the guise of interpretation. Reversed and remanded.