When your lawyer tells you that you are about to make a really bad deal, you disregard that advice at your peril.

That is one lesson to be learned from a split-decision of the Appellate Division First Department in its April 17, 2012 decision in Barocas v. Barocas. The court affirmed a decision of Supreme Court New York County Justice Ellen Gesmer which for the most part denied a wife’s attack on the prenuptial agreement she signed with her future husband in 1995.

Their marriage two weeks after the agreement was signed is now ending in divorce. Under the parties’ agreement, Deborah Barocas will not receive any maintenance (personal support). (The agreement contained no provision regarding the support for the parties’ two children.) Moreover, under the agreement, Deborah will also not share in any property accumulated by Victor during the marriage. Indeed, the agreement provided that Deborah would forfeit any gifts or jewelry she had been given by Victor before and during the marriage. Over their 15 years of marriage, Victor accumulated some $4,600,000 in assets, while Deborah had only $30,550 in an I.R.A.

Deborah was born in Guyana, the second of seven children. She arrived in the United States in 1981, at the age of twenty-one. She obtained a GED in 1982, and worked menial jobs. In 1989, she worked part-time as a receptionist for Victor’s family business. While working there, the parties began to date. In 1993, she moved into Victor’s Sutton Place apartment. Other than sporadic attempts at small business ventures, Deborah did not work outside the home for the duration of the marriage. She has no further education and no special skills.

Now attacking that agreement, Deborah noted that she has no other assets or sources of income. She alleged that she can no longer work, as she is now 50 years old and that her husband had thwarted her efforts to get a college education and pursue a career during the marriage.

The three-judge majority of this five-judge appellate court upheld Justice Gesmer’s decision to uphold the property division provisions of the prenuptial agreement. With regard to those provisions, Deborah Barocas failed to establish that her execution of the agreement was the result of inequitable conduct on her husband’s part. Rather, the parties fully disclosed their respective assets and net worth.

Moreover, the agreement was reviewed by independent counsel. Indeed, Deborah’s own lawyer admittedly had told her that the agreement was “completely unfair” and advised against signing it. The fact that the husband’s attorney recommended the wife’s attorney, and that the husband paid Deborah’s counsel’s fees, was insufficient to demonstrate duress or overreaching sufficient to base an attack upon the agreement.  Still further, the claim that Deborah believed that there would be no wedding if she did not sign the agreement, that the wedding was only two weeks away and that wedding plans had been made, was an insufficient basis to attack the agreement on the grounds of duress.

Although application of the provisions would result in plaintiff [husband] retaining essentially all the property, courts will not set aside an agreement on the ground of unconscionability where inequitable conduct was lacking and simply because, in retrospect, the agreement proves to be improvident or one-sided . . . . The circumstances surrounding the execution of the agreement disclose no issue of fact as to whether there was overreaching. We therefore adhere to the general rule that “‘[i]f the execution of the agreement . . . be fair, no further inquiry will be made’. . . .

The majority believed there was no issue of fact as to whether the property division provisions of the agreement were unconscionable. An unconscionable contract is one “which is so grossly unreasonable as to be unenforceable because of an absence of meaningful choice on part of one of the parties together with contract terms which are unreasonably favorable to the other party.” Here, meaningful choice was “not an issue inasmuch as defendant knowingly entered into the agreement against the advice of her counsel.”

The majority also noted that Deborah’s waiver of spousal support was not unfair or unreasonable at the time she signed the agreement, given her knowing and voluntary execution with benefit of counsel.  However, the court noted that it was unclear whether waiver of all spousal support would result in inequality so strong and manifest as to shock the conscience and confound the judgment of any person of common sense. Moreover, it was unclear whether Ms. Barocas would become a public charge without spousal support. (General Obligations Law § 5–311 prohibits waivers of maintenance where the spouse is in danger of becoming a public charge.) Accordingly, the court upheld the denial of summary judgment in light of the factual issue to whether the maintenance waiver would be unconscionable as applied to the current circumstances.

Appellate Justice Sallie Manzanet-Daniels dissented, believing that an issue of fact existed as to whether the property waiver contained in the agreement was unconscionable.  Justice Manzanet-Daniels stated that given the disparity of the property distribution division, it would be difficult to conceive of an instance in which the unconscionability standard has any real purpose, if not applied to this agreement. There are instances in which an agreement is so one-sided that, in the words of the Court of Appeals in Christian v. Christian, 42 N.Y.2d 63 (1977), “no [person] in his [or her] senses and not under delusion would make on the one hand, and [ ] no honest and [fair] person would accept on the other.”  According to Justice Manzanet-Daniels, equitable principles must be taken into account in deciding whether to vacate property settlement agreements between spouses on grounds that might otherwise be insufficient to nullify an ordinary contract.

Appellate Justice David Friedmanwould have modified the decision below, opining that the conscionability of the property division or equitable distribution waiver, as well as that of the maintenance waiver, should be explored at a hearing. Although Deborah’s lawyer told her that the agreement was “completely unfair” and advised against signing it, Justice Friedman believed the court should still look at the impact of the agreement at the time of its implementation. As application of the provision results in the husband retaining essentially all the property acquired before and during the marriage and thus appears “manifestly unfair to a spouse because of the other’s overreaching,” the court should make sure it does not contain an unconscionable bargain that no one in his or her senses and not under delusion would make.

The client does and should have the final word. The client may or may not follow his or her lawyer’s advice. Certainly, a lawyer may believe that a proposed agreement is so offensive that the lawyer will not participate in its execution. More often, the lawyer will ask the client to sign a cover-your-back letter that acknowledges the contrary advice given. Either way, the client disregards the attorney’s advice at his or her peril.