A court’s reduction of a divorce judgment’s child support obligations, incorporated from a settlement agreement that survived the entry of that judgment, does not result in a modification of the agreement. The shortfall may still be collected through a separate action to enforce the contract.
As Nassau County Supreme Court Justice Leonard D. Steinman noted in his July 1, 2013 decision in N.S. v. A.S., N.Y.L.J. July 22, 2013, such has been the law of this State for over 70 years:
A modification of a divorce judgment or decree providing that a party is to pay a sum less than he agreed to pay does not relieve such party of any contractual obligation.
In this case, the parties entered a Stipulation of Settlement in January, 2003,resolving all issues stemming from their divorce proceedings. The parties agreed that the agreement would be incorporated but not merged into their judgment of divorce.
Among the issues resolved were custody and child support for their son, then 2½ years old. It was agreed that the wife would receive child support from the husband in the amount of $34,000 per year ($2,833.33 per month) for 48 months and thereafter the sum of $39,146 per year ($3,262.16 per month) The increased amount coinciding with the cessation of four years of maintenance payments to the wife at $3,833.33 per month.
The agreement reflected the ex-husband’s 2001 income was $312,121. The agreement, itself, provided that if the ex-husband’s income were to dip below $250,000, the parties would attempt to renegotiate the maintenance amount. If unsuccessful, the ex-husband could seek a downward modification of his maintenance obligation from the court. The agreement did not provide to the ex-husband with a concomitant right to seek a downward modification of his child support obligations in the event of a reduction in his income.
In April 2004, ex-husband became unemployed and subsequently took a position at the reduced salary of $150,000. In March 2006, the ex-husband moved for a downward modification of his child support and maintenance obligations (by that time, the ex-husband’s maintenance obligations had expired, but he claimed that there were arrears owed to his ex-wife based which he looked to cancel).
Justice Randy Sue Marber granted the ex-husband’s application, erasing the outstanding maintenance arrears and reducing the ex-husband’s child support obligations to $2,296 per month and retroactively (to the date of the application) granted a reduction of such support to $1,969 per month through the end of the durational maintenance period.
In August, 2012, the ex-wife instituted this separate plenary contract-enforcement action. She ought almost $60,000 in arrears due under the parties’ 2003 Stipulation of Settlement as a result of the ex-husband’s failure to pay the full contract child support from March 1, 2006 through the filing of the complaint.
The ex-husband moved for summary judgment seeking dismissal of his ex-wife’s claims. The ex-wife cross-moved for summary judgment in her favor.
Granting the ex-wife’s motion, Justice Steinman noted that a separation agreement that is incorporated but not merged with a divorce decree is an independent contract binding on all the parties.
When parts of a separation agreement are incorporated into but not merged within a divorce decree, the separation agreement continues in effect as a separate and independent contractual arrangement between the parties.
Although Justice Marber found that the ex-husband was entitled to a reduction of his child support obligations under the parties’ divorce judgment, it did not, and could not find that he was relieved from his contractual obligations.
Moreover, Justice Steinman rejected the ex-husband’s argument that the parties intended that a modification of the judgment would effectuate a similar amendment of their agreement, or that the agreement can fairly be interpreted to relieve him of his obligations thereunder in the face of a change in the decree. The language 0f the agreement, itself, precluded such a finding.
Moreover, the Court rejected the argument that the ex-wife’s acceptance of the reduced court-ordered child support amounts should be deemed a waiver of her right to sue for the balance owed under the parties’ agreement. Mere acceptance of payments under the order of modification does not spell out an abandonment of rights under a contract. The doctrine of estoppel had no application. There was no evidence that the ex-wife intended to waive her rights. Furthermore, the parties’ agreement required a writing, signed and acknowledged by the parties, before the agreement may be deemed modified, discharged, revoked or terminated.
Justice Steinman acknowledged the apparent harshness of the rule that dictated judgment in the ex-wife’s favor. However, the Court noted, when the legislature passed the current equitable distribution statute in 1980, it changed the common law rule concerning court-ordered modifications of maintenance obligations that are the subject of a contractual commitment. DRL §236(9)(b) was amended to provide that a modification (up or down) of a judgment or order pertaining to maintenance shall supercede the terms of an agreement for such period of time and under such circumstances as the court directs. That provision related only to modifications of maintenance and not child support provisions.
This rule of law only works one way, however. Courts will not enforce the contract provisions of an agreement to award a return of child support paid pursuant to a judgment or order that has been modified upward. Such suits are barred by New York’s public policy to ensure adequate support for a child.
Despite dicta in other cases that might call into question whether remedies would be available to collect the amount unpaid under the contract, Justice Steinman recognized that the ex-wife would have those remedies applicable to ordinary contract enforcement.
The ex-wife was represented by Douglas Rothkopf, Esq., of Garden City. The ex-husband was represented by Jaclene Agazarian, Esq., of Garden City.