The June 19, 2012 decision of Suffolk County Supreme Court Justice Peter H. Mayer in Mehran v. Mehran (PDF) resolved a motion made in a post-divorce judgment action by an ex-wife to enforce several provisions of the parties’ 2003 post-nuptial settlement agreement. That agreement was incorporated, but not merged into their 2004 judgment of divorce.
Among other alleged defaults, the ex-wife sought to specifically enforce those provisions of the agreement which obligated her ex-husband to maintain a $1,000,000.00 life insurance policy naming as irrevocable beneficiary the ex-wife as Trustee for the benefit of their unemancipated children.
The agreement further provided that the purpose of the provision was secure the payment of obligations of the ex-husband under the agreement in the event of his death. Upon the ex-husband’s death, the ex-wife is to use the insurance proceeds to pay all of those obligations. If any proceeds are left over, the excess proceeds are to be distributed equally among the ex-husband’s surviving children (the ex-husband also had children of a prior marriage). The agreement provided:
1. The [ex-husband] agrees that he will maintain in full force and effect, and neither pledge, hypothecate nor encumber the existing policies insuring his life in the minimum face value of One Million ($1,000,000.00) Dollars naming the [ex-wife] as Trustee for the benefit of the children as irrevocable beneficiaries of said policy, with [sic] such time as the children are emancipated.
2. It is the intention of this article that the [ex-husband] maintain sufficient Life Insurance to cover all of his obligations to this agreement.
3. In the event of the [ex-husband’s] demise and the payment to the [ex-wife] of the life insurance proceeds as trustee, she shall pay the sums due from the [ex-husband] pursuant to this agreement. When all sums pursuant to this agreement have been fully paid, and if there is any balance in said account, said balance shall be distributed equally among the [ex-husband’s] children surviving him.
The ex-husband opposed his ex-wife’s motion for summary judgment specifically enforcing this provision by arguing that he and ex-wife were unable to agree to the terms of a proposed trust agreement and that he, in fact, had an insurance policy in existence with the children named as irrevocable trustees. He argued that he needed a trust agreement to “protect his other children” from his first marriage. He sought to name a son from his first marriage as “co-trustee.” Notwithstanding the fact that the ex-wife was not named as the trustee, the ex-husband contended he had substantially complied with the provision.
Justice Mayer disagreed. Naming a party as a “beneficiary” on a life insurance policy instead of an “irrevocable beneficiary” as required by the terms of a post nuptial agreement is not substantial compliance with the provision. Rather Justice Mayer held the ex-husband committed a material breach of the agreement for which a contempt finding and an award of counsel fees may be proper. When the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the parties’ reasonable expectations.
Here, the parties’ agreement is clear and unambiguous in directing that ex-husband name ex-wife “as Trustee for the benefit of the children as irrevocable beneficiaries of said policy” until such time as they are emancipated.
Declaring the ex-husband’s argument that he needed to protect his other children was “specious, at best,” the Court noted that the agreement itself provided for the distribution of any remaining funds from that policy to all of ex-husband’s children, after his obligations under the agreement were paid.
Thus, the ex-husband was directed to obtain or to amend the life insurance policy he presently maintains insuring his life in the minimum face value of one million ($1.000,000.00) dollars naming the ex-wife as Trustee for the benefit of the children as irrevocable beneficiaries of said policy, until such time as the children are emancipated.
The ex-wife was represented by Andrea Seychett Schear of Melville, NY. The ex-husband was represented by King & Streisfeld of Lake Success, NY.