Holland v. Holland, S10A1158
*All courts mentioned are at the state level.
- The parties purchased a lake house after they married and titled it solely in Wife’s name. Wife took out a line of credit, with lake house as collateral, to use as a down payment on the marital residence. Wife subsequently extended the same line of credit, putting additional money into the couple’s business.
- The parties drew up a postnuptial agreement in 2006; were divorced in 2008.
- The postnuptial agreement awarded the lake house to Wife and also provided for its sale. After the sale, the postnup dictated that net profits were to be divided 50/50, and from husband’s 50% share of net profits, he was to reimburse Wife in the amount of $98,000 for her initial investment.
- The trial court ordered that the outstanding line of credit be deducted from the sale price before distribution of net profits to the parties, which left 34k for each. The court then ordered Husband to pay his entire 34k share to Wife, as well as an additional 64k.
- The trial court properly used the proceeds of sale to pay off the line of credit based on the document’s definition of “net profit.” Additionally, the specific provision stating the debt on lake house was to be paid off upon sale trumps the more general provision stating debt incurred by one party is that party’s separate debt.
- Reversed in part: The plain language of the postnup stated that the Wife would be reimbursed 98k solely from H’s 50% share, not from his separate assets. While the parties did not predict such low sales proceeds, the document’s language still limits Husband’s reimbursement obligation to his 50% share of the net profits.