The Michigan Supreme Court vacated the court of appeals decision in Zak v. Zak (Case No. SC: 126023-4; September 24, 2004). The court determined that: (1) in settlement, the parties could treat the severance payment as income, not property; and (2) judgments must be written to conform to the actual settlement.
The court stated (excerpt):
The Court of Appeals erred in finding that defendant hid the existence of theseverance payments from plaintiff. The record demonstrates that plaintiff was aware ofthe severance payments, and that the parties treated them as defendant’s income for purposes of reaching a settlement. Moreover, neither the agreement placed on the record in open court, nor the consent judgment of divorce, can reasonably be interpreted to provide for the division of the severance payments upon defendant’s re-employment. The parties’ agreement only contemplates the reopening of the alimony provisions of the divorce judgment upon a showing by plaintiff that defendant committed fraud by representing that he was not employed, and did not have an offer of employment, at the time the settlement agreement was placed on the record. To date, no such finding has been made.