Justice Hope Schwartz Zimmerman

It may be difficult to reconcile two recent decisions of the Appellate Division, Second Department, as they relate to awards of interest on delayed equitable distribution payments due under a divorce stipulation of settlement. The first raises questions as to the impact of failing to expressly include the payment obligations in the judgment of divorce as opposed to merely incorporating the stipulation by reference. The second decision raises questions as to the date from which interest should run.

In O’Donnell v. O’Donnell, the parties had entered into a stipulation of settlement of their divorce action in March, 2014. Among other terms, the stipulation obligated the husband to “pay the Wife a lump sum of $1,000,000 on or before September 30, 2014.”

The judgment of divorce, entered in March, 2015, incorporated, but did not merge the stipulation. At the time the judgment was entered, the husband had not paid the $1,000,000 distributive award.

After the entry of the divorce judgment, and by order to show cause issued June 5, 2015, the ex-wife moved, inter alia, to compel the ex-husband to execute a confession of judgment, or in the alternative, for leave to enter a money judgment against him in the principal sum of $1,000,000 plus interest at the statutory rate of 9% per annum.

In opposition to the motion, the husband produced the confession of judgment he signed in March, 2014, which rendered academic the branch of the motion which was to compel him to execute a confession of judgment. The confession of judgment made no provision for interest.

The husband stated that he paid the $1,000,000 in full on June 19, 2015 (two weeks after the order to show cause was issued). He claimed that he had been unable to pay the $1,000,000 until that time because he had to secure those funds by mortgaging the real properties which remained in his name.

Nassau County Supreme Court Justice Jeffrey A. Goodstein denied the wife’s motion for an award of statutory interest on the $1,000,000, because the stipulation of settlement did not provide for such interest. The wife appealed.


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