The Case of the $975 Million Divorce Settlement Check: To Cash In or Not?

There’s a fascinating divorce case transpiring with some of our neighbors to the north in Oklahoma, and it’s taken an interesting turn that may set a future precedent in high-net-worth divorce cases.

 

The case involves Sue Ann Arnall, the ex-wife of oil magnate Harold Hamm. In November, a court awarded Arnall a $975 million settlement after 26 years of marriage came to an end.

 

Hamm wrote Arnall a check to cover the settlement amount, and according to this Business Insider article from last week — worth clicking on to see what a handwritten check for nearly a billion dollars looks like! – Arnall cashed the check but is still pressing forward with an appeal to the Oklahoma Supreme Court. Though $975 million seems like a lot, it’s only a fraction of the purported $18 billion estate, and Arnall (and her lawyers) feel that she’s entitled to more. 

 

This will, of course, be a matter for the Oklahoma Supreme Court to decide, but in a number of states, including Texas, there’s some precedent that once a beneficiary of a settlement deposits the award in a bank account, he or she has signaled acceptance of the settlement. Texas has an Acceptance of Benefits Doctrine that goes back to 1951, that states that a party can’t treat a judgment as both right and wrong. As my colleague Jimmy Verner wrote in his blog several years ago, this means that “an appellant can’t accept benefits under the judgment while simultaneously attacking the judgment.” If Arnall was in Texas rather than Oklahoma, her lawyers would likely advise her to refrain from cashing the check until the appeal was heard, if she really determined she wanted a larger percentage of the estate.

 

There is one exception of note to this doctrine – if a court can determine that a person’s economic circumstances made it an “economic necessity” to use the settlement, that person can still contest the settlement.

 

Of course, Texas has clear laws about assets accumulated during marriage to be considered community property, regardless of how much each spouse earns. If a Texas couple’s community estate was worth $18 billion, it’s unlikely that “only” $975 million would be awarded to one spouse, unless the vast majority of that wealth was accumulated prior to the marriage via inheritance or trust (separate property).

 

While I’m not sure what Oklahoma will ultimately decide, while I don’t feel that it will impact the rules that have long since been established in Texas, and while I’m reasonably certain that Arnall will be comfortable financially regardless of the appeal’s result, I am still curious to see what the final outcome will be.