A Thermos® keeps hot liquids hot and cold liquids cold. But how does it know?
When drafting a divorce settlement agreement (or any other contract), it is common to include conditions. But will the parties know when a condition has been met? How will the parties know if a promise has been kept? Sometimes it is obvious, or a party may think so. And sometimes it’s not.
Take the Second Department’s October 19th decision in Rosner v. Rosner. There the parties entered into a divorce stipulation of settlement. Pursuant to that agreement, the parties agreed that the husband would have the exclusive right to continue to reside in the former marital residence until five years from the execution of the stipulation, at which time the marital residence would be sold. The husband was required to pay all the expenses of the marital residence, except for the mortgage. The wife was required to pay the mortgage on the marital residence, as well as to pay the husband $1,500 in child support.
The stipulation also provided that if, “prior to the five years from the date of the execution” of the stipulation, the husband was “financially unable to pay for the expenses” of the marital residence, the marital residence would be sold.
In December 2013, the wife moved, among other things, to recover certain real estate taxes which the wife paid on the husband’s behalf, and to direct the sale of the former marital residence. After a hearing, Westchester County Supreme Court Justice Janet C. Malone granted those branches of the wife’s motion. The husband appealed.
A court should interpret a stipulation of settlement in accordance with its plain and ordinary meaning. Where such an agreement is clear and unambiguous on its face, the intent of the parties must be gleaned from the four corners of the instrument, and not from extrinsic evidence.
The Second Department affirmed, holding that the wife had established that the husband “failed to pay certain real estate taxes on the former marital property, as required by the stipulation. Thus, pursuant to the clear and unambiguous language of the stipulation, the Supreme Court properly directed that the former marital residence be sold.”
Comment: Here, the parties’ agreement could have said that if the husband fails to pay the required expenses, the marital residence would be sold. But it did not. Under the parties’ agreement, the sale was not triggered by a mere failure to pay, but only if the husband was “financially unable to pay for the expenses” of the marital residence. The opinion does not reveal whether the record demonstrated that inability. However, equating “failure” with “inability” as a matter of contract construction as a matter of law appears to be a stretch.
“Unable” is a loaded word. It requires that a judgment be made. Perhaps the parties would have been better served by setting out the test for inability. How will the parties know when the husband is “financially unable to pay for the expenses?”
The husband represented himself. The wife was represented by Brett Kimmel, P.C., of Manhattan.