DiPaola v. DiPaola
16 A.3d 571
R.I.2011Background
- Divorced parties executed a marital settlement agreement on Aug. 11, 2004, incorporated by reference but not merged into the final divorce judgment (Nov. 18, 2004).
- Paragraph 7.D governs the division of the husband’s Ionics stock options; several grants list vesting percentages as of Aug. 11, 2004.
- Ionics merged with General Electric on Nov. 24, 2004, triggering vesting of unvested options and later exercising by the husband for a net $854,000.
- Plaintiff received a check for $61,780.73 in spring 2005 representing half of the net proceeds allegedly from options vested at the Aug. 11, 2004 date, not including post-Aug. 2004 vesting.
- General Magistrate found paragraph 7.D ambiguous and proposed vacating the agreement or awarding plaintiff one-half of the $854,000.
- Chief Judge reversed, finding 7.D unambiguous and limiting plaintiff’s share to options vested as of Aug. 11, 2004; plaintiff sought amendment/remand to consider vacatur or equitable relief; Court vacates and remands to award one-half of net proceeds, including after-merger vesting.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 7.D unambiguously limits to vested options as of Aug. 11, 2004 | DiPaola argues 7.D entitles half of all options, vested or not, as of the agreement. | DiPaola contends 7.D covers only vested options at execution; wife waived non-vested rights. | Ambiguity found; not unambiguous. |
| How to construe an ambiguous contract under the circumstances | Equitable construction favors including post-augmentation vesting. | Construction should reflect vesting as of Aug. 11, 2004 per language. | Court adopts equitable interpretation in favor of plaintiff, including post-agreement vesting. |
| Whether fraud grounds should be addressed or vacatur granted | Claims of nondisclosure and post-judgment misrepresentation justified vacating the agreement. | No basis shown to conclude fraud; no vacatur necessity. | Court remands to address equitable vacatur/remand? (vacatur based on equity) |
| Whether the case should be remanded to the general magistrate for vacatur or other relief | Remand is needed to decide if vacatur is warranted. | Remand unnecessary given unambiguous interpretation. | Remanded to Family Court for proper order consistent with equitable interpretation. |
Key Cases Cited
- Ruffel v. Ruffel, 900 A.2d 1178 (R.I. 2006) (terminal date for equitable division absent contrary agreement)
- Janson v. Janson, 773 A.2d 901 (R.I. 2001) (divorce asset division timing guidance)
- Antone v. Vickers, 610 A.2d 120 (R.I. 1992) (principle of adopting equitable construction when contract ambiguous)
- Flynn v. Flynn, 615 A.2d 119 (R.I. 1992) (interpret ambiguous terms by surrounding circumstances and intent)
- A.F. Lusi Construction, Inc. v. Peerless Insurance Co., 847 A.2d 254 (R.I. 2004) (interpret contract language with plain meaning absent ambiguity)
- Massasoit Housing Corp. v. Town of North Kingstown, 65 A.2d 38 (1949) (guide for equitable interpretation in contract disputes)