In its October 22, 2014 decision, the Appellate Division Second Department in Ebel v. Ebel upheld an open-court divorce settlement stipulation against the attack of the wife.
In his June, 2012 determination of the lower court, then Supreme Court Suffolk County Justice Hector D. LaSalle (now himself an Associate Justice on the Appellate Division Second Department) had rejected the argument of the wife that her emotional state prevented her from entering that May, 2011 settlement stipulation knowingly, voluntarily and intelligently.
On appeal, the Second Department first noted that the wife’s contention that the terms of the parties’ stipulation of settlement were unconscionable was not properly raised on appeal, as it was not raised at the trial level.
The wife’s additional contention on appeal that the stipulation should have been vacated because it did not address, and she did not waive her claims regarding, certain financial issues was also found to be without without merit.
The Second Department noted that stipulations of settlement are favored by the courts and are not lightly cast aside, particularly when the parties are represented by attorneys.
Where, as here, the record demonstrates that the parties validly entered into a comprehensive open-court stipulation by which the plaintiff knowingly, voluntarily, and intelligently agreed to be bound, the agreement will not be set aside.
Here, the terms of the parties’ agreement, including issues of financial support and equitable distribution of the marital residence, were placed on the record in what the Justice LaSalle characterized as a “global stipulation of settlement.” Moreover, the wife’s counsel affirmatively waived all other equitable distribution matters and withdrew all outstanding requests for relief.
The appellate court noted that after dictating the stipulation “on the record”, the Justice LaSalle had conducted a thorough allocution (a formal inquiry) of the wife. The wife indicated that she understood the terms of the stipulation, that she had had sufficient time to consult with her attorney, and that she consented to the terms of the stipulation.
Accordingly, Second Department held that Justice LaSalle properly determined that the wife knowingly, voluntarily, and intelligently accepted the terms of the stipulation, and correctly denied the wife’s motion to vacate the stipulation of settlement.
During an allocution, both parties, on the record and under oath, generally state that they have had an adequate opportunity to discuss the terms of the stipulation, that they understand its terms, and that they have no reservations regarding settling the actions according to those terms. Both parties express satisfaction with their respective attorneys and their representation. Each party acknowledges his and her entry into the agreement is on a knowing and voluntary basis and that the settlement agreement sets forth the entire agreement of the parties. (See, Rubenfeld v. Rubenfeld, 279 A.D.2d 153,720 N.Y.S.2d 29 [1st Dept. 2001]).
However, open-court stipulations often follow last-minute negotiations just before or during the trial. Placing the settlement terms on the record may be rushed. Rarely is attention paid to the detail found in a full written agreement, particularly one entered after several drafts. As a practical matter, the formal allocution is almost always the client saying “yes” to a standard series rattled off by either his or her own attorney or the judge.
Written agreements contain “boilerplate” disclaimers that make the very same representations as placed on the record during an allocution.
Personally, I strongly disfavor having clients enter open-court stipulation, preferring to address the terms reached “on the eve of trial” in a carefully drafted written agreement. However, I fully understand the value of the trial judge striking the settlement bargain while the iron is hot. Letting the parties leave the courthouse, giving them time to reflect, would often result in the loss of the deal. Indeed, asking for time to draft a more formal settlement agreement could be used as a weapon to delay.
Last week’s and other blog posts discussed the trend to set aside agreements, in particular prenuptial agreements, upon attacks from, most often, the wife. With a written out-of-court agreement, courts often have little hesitation to look behind the written disclaimers. The courts will review in depth the details of the financial disclosure, a party’s relationship with his or her attorney, the opportunity to review and discuss terms, and the agreement’s fairness.
In court, the stipulation is dictated into the record, with no opportunity to review the transcript, reflect upon it, discuss the way particular terms are stated, etc.
As a practical matter, the court system resources would be overly taxed if in-court stipulations were given the same scrutiny as currently afforded prenuptial and other out-of-court agreements. However, knowing that an issue has been finally resolved is just as important for the prenuptial agreement as it is for the open-court divorce settlement.
I certainly understand an appellate court not wanting to reverse a trial judge’s approval of the stipulation that disposed of a contested divorce action. However, a method similar in effect to the judicial allocution should also be developed to assure the parties to a written agreement, and their lawyers, that the issues have been finally resolved.
In Ebel, Attorneys for the parties: Azra Feldman, of counsel to Steven Feldman, of Uniondale, represented the wife. Arnold B. Firestone, of Firestone & Breud, PLLC, of Commack, represented the husband.