Michael Douglas Lawsuit Shows the Importance of Careful Wording in Divorce Settlements

When Michael Douglas and ex-wife Diandra Douglas divorced 10 years ago, they agreed that Diandra Douglas would receive half of her ex-husband's earnings from projects he worked on during their 23-year marriage. Diandra Douglas argues she is entitled to half the actor’s earnings from “Wall Street: Money Never Sleeps” because Michael Douglas developed the role of Gordon Gekko in the original “Wall Street” movie during their marriage and the sequel could never have existed but for Douglas’ original work during their marriage.

Michael Douglas’ argues that because the entirety of the work he did for “Wall Street: Money Never Sleeps” was done after the parties’ marriage, his ex-wife should not benefit from work such work. This is very different from a scenario in which the original “Wall Street” was re-released.

Regardless of whether it’s “fair” that Diandra Douglas receive a share of the proceeds of the sequel to the original movie, the issue will not come down to “fair”. The issue will come down to the precise wording of the parties’ divorce agreement. Because the parties cannot agree to the interpretation, the Court will interpret it for them. If the wording is clear, then the Court should rule based on the “four corners of the document”. If the wording is ambiguous, the Court will likely hear evidence that may give the Court clues into the parties’ intent in agreeing to share in certain earnings post divorce.

This case is an example of how important the wording of a document can be years after it is drafted. This is not a time for sloppy drafting. This is a time to think about all the possible scenarios that can occur years after a document is drafted. An ambiguous document forces parties to relitigate years later and spend more attorney fees, which is something they tried to avoid by settling their case in the first place. An experienced attorney should know how to draft a document that will endure the test of time. That is their job.

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