## Facts

- Joan C. Stare and Joseph Timothy Tate negotiated a marital property settlement agreement to divide community property “evenly” during divorce proceedings.
- Negotiations lasted several years; both parties were represented by counsel throughout and executed the final written agreement on February 21, 1968.
- A major dispute concerned the value of the “Holt” real property interest; Joan consistently asserted a $550,000 valuation, while Tim asserted approximately $425,000–$450,000.
- During negotiations, Joan’s attorney prepared a written proposal intended to reflect Joan’s $550,000 Holt valuation, but made a mathematical error that understated the relevant figures by about $100,000, reducing Joan’s share by about $50,000.
- Tim’s attorney and accountant discovered the error, did not disclose it, and structured their counterproposal and the final agreement to preserve the benefit of the miscalculation.
- After the divorce, Tim revealed the mistake to Joan; she sued to reform and enforce the agreement as reformed.
- The trial court denied reformation, reasoning that the overall property division was equitable when using the lower Holt valuation and other settlement components; Joan appealed.

## Issues

1. Whether a marital property settlement agreement may be reformed under California Civil Code § 3399 based on a unilateral arithmetic mistake when the other party knew of the mistake and remained silent while benefiting from it.
2. Whether a trial court may deny reformation on the ground that the agreement appears equitable overall, rather than determining whether the writing reflects the parties’ actual negotiated intent.

## Decision

- The Court of Appeal reversed the judgment for Tim.
- The court held the agreement must be reformed under Civil Code § 3399 to correct the mistaken computation and reflect Joan’s intended Holt property valuation as understood during negotiations.
- The court rejected the trial court’s fairness-based refusal to reform, concluding the relevant inquiry is whether the writing accurately expressed the parties’ intended bargain.
- The case was remanded with directions to reform the agreement accordingly and enforce it as reformed.

## Legal Principles

- Under California Civil Code § 3399, a written instrument may be reformed when, due to fraud, mutual mistake, or a mistake of one party that the other party knew or suspected at the time, the writing does not truly express the parties’ intention.
- A unilateral drafting or calculation mistake is correctable in equity when the opposing party knew of the error and used silence or concealment to obtain an unintended advantage.
- A court evaluating reformation focuses on whether the writing embodies the parties’ negotiated intent, not on an after-the-fact assessment that the resulting allocation is “equitable.”

## Conclusion

The court required reformation of a marital property settlement agreement where one spouse’s attorney made an arithmetic error that the other spouse’s counsel recognized and concealed, because the written agreement did not reflect the intended valuation-based bargain and was therefore subject to correction under Civil Code § 3399.


Stare v. Tate, 21 Cal. App. 3d 432, 98 Cal. Rptr. 264 (Ct. App. 1971)