In the case of Peabody v. Dimeglio (decided 12 August 2014), the Michigan Court of Appeals held that because the parties’ separation agreement was only incorporated by reference into, and not merged with, the final judgment of divorce, the applicable statute of limitations was 10 years pursuant to MCL 600.5809(3) for non-contractual money obligations. The trial court had erred by applying the 6-year statute of limitations for breach of contract claims pursuant to MCL 600.5807(8).

Under certain circumstances, a settlement agreement can be reached by the parties. This agreement is separate from the judgment of divorce (even a consent judgment) and contains many of the provisions that would otherwise be part of the judgment. The key element of a settlement agreement is that it remains a private contract between the parties, while the judgment of divorce is a public record.

Each case is different, so knowing the best route to the best outcome is crucial. In the above case, there is over $100,000 at stake, which would not even be an issue had the settlement agreement been merged with, and not just incorporated into, the judgment of divorce.