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.

Continue Reading Attacking Open-Court Divorce Stipulations: Is There a Double Standard?

In his January 7, 2013 decision in Gluck v. Gluck, Nassau County Supreme Court Justice Daniel R. Palmieri, determined that the wife pay 80% of the counsel fees incurred by the husband, as such reflected the wife’s pro rata share of the parties’ total income.

Following a 13-day trial, the parties agreed that the Court would consider the legal fee applications of  both parties on submitted papers. The defendant-husband (the less-monied spouse) sought $125,000.00 in counsel fees under Domestic Relations Law §237 for services rendered by the two law firms that had represented him consecutively in this action.

Justice Palmieri noted that earlier, and after the Court issued its Decision and Order on the issues of custody and parental access, the parties had entered into a stipulation regarding child support and certain holidays. Certain child care expenses were apportioned 80% to the wife and 20% to the husband. The Court adopted those proportions as appropriately based on the incomes of the parties (approximately $360,000.00 and $90,000.00, respectively).

In opposition to the husband’s application, the wife contended that the husband’s obstructionist tactics and unreasonable demands unnecessarily prolonged and delayed the action, going to trial and unreasonably refusing to settle. This, the wife claimed, unnecessarily added to her own counsel fees which were in excess of $200,000.00.

Neither party claimed that the bills of opposing counsel were excessive or not reflective of work performed.

Mary Ann Aiello, Esq., the husband’s latter attorney, conducted the trial and negotiated stipulations in March 2012 regarding the sale of the marital residence and in August 2012 on the issues of equitable distribution and maintenance. After the trial of the remaining issues, the parties settled the issue of child support and certain holiday visitation.

Continue Reading Divorce Counsel Fee Awards: Beware Formulaic Approaches

Changes Coming.jpgYou’ve worked out your divorce settlement, executed your agreement, and had that agreement incorporated in your Judgment of Divorce. Then, the law changes. What impact does that have on your settlement? As a practical matter, none!

Most often, a change in divorce law can be the result of a judicial decision, but it can also be a result of an act of the Legislature.

A post-agreement change in law was the issue facing Kings County Supreme Court Justice Jeffrey S. Sunshine when reaching his December, 2011 decision in Russo v. Russo Willoughby. Justice Sunshine held that a decision by New York’s highest Court, the Court of Appeals, which changed controlling Appellate Division case law existing at the time the parties entered their divorce settlement agreement, did not provide the basis for an attack on that agreement.

In Russo, the parties had entered an agreement which had made no provision for the wife to share in the Variable Supplement Fund (“VSF”), a benefit the husband accrued working as a police officer. The rule of law when the parties entered into their stipulation was that the VSF was not a part of the New York Police Department pension benefit, and not a marital asset to be equitable distributed. The parties’ stipulation did provide for a division of the NYPD pension.

After signing the agreement, the Court of Appeals ruled for the first time ruled on the VSF issue, finding that a spouse’s interest in the NYPD VSF is a marital asset to be equitably divided and distributed.

Justice Sunshine ruled that that post-agreement Court of Appeals decision did not provide a basis to add a new term to the parties’ agreement or otherwise provide a basis for relief to the wife.

As was noted in Cutler v Travelers Ins. Co., 159 AD2d 1014, 552 NYS2d 998 (4th Dept. 1990):

It is well established that a party may not reopen a voluntary settlement agreement to take advantage of a subsequent change in the law.

Thus, for example, it has been held that a change in the case law governing the application of the Child Support Standards Act was not a change of circumstances warranting the modification of the parties’ child support agreement. Kneut v Kneut, 172 Misc 2d 647, 658 NYS2d 832 (Monroe Co. Fam. Ct. 1997).

The last few years have seen many changes in New York’s divorce law. No-fault divorce is here. There is a new statute concerning the award of spousal support while a divorce action is pending. Changes to post-divorce maintenance awards are expected. Rules on the appreciation in value of one spouse’s separate property are confusing and in flux. The list goes on.

New York’s public policy supports the finality of settlement agreements. While parties may want to anticipate changes in the law, at the end of the day, cases need to be resolved. Parties must be prepared to make the most prudent deal they can, now, and be grateful for being able to move on. Years, or even days in the future, parties should not look back and think, “Had I only waited . . . “

Flag and bible.jpgIn A Taboo Exchange, an article in the July/August 2010 issue of Scientific American Mind magazine, Adam Waytz reported that a few recent studies have examined how people react when their most passionately held values are challenged.  He defined a “sacred value” as more than just a strongly-held belief, but rather a moral stance on which the holder will not budge, no matter what the conditions.

Such sacred values certainly include religious beliefs, but Waytz noted that people exhibit such boundless commitment to other values as well: nationalism, loyalty to a political party, or even a sports team.  Waytz projected that merely recognizing these issues may help resolve international disputes such as the Israeli-Palestinian conflict and the growth of the Iranian nuclear program.

When offered cash to relinquish a sacred value, people tend to react irrationality.  Financial incentives backfire. People respond to such offers with moral outrage; reacting viscerally, expressing anger and disgust, becoming increasingly inflexible in negotiations.  Psychologist Philip E. Tetlock refered to such exchanges as “taboo trade-offs.”

This concept should readily apply to divorce settlement negotiations.  While easily seen in the custody and parenting-issue context, it could also appear in discussions over support entitlement, recognizing financial or other contributions to the marriage, or dealing with the favorite chair or the family pet.

When sacred values are on the negotiating table, it pays to understand the psychology of the taboo trade-off.  Waytz noted that conflicts involving sacred beliefs may be best resolved when both sides consider compromising something they hold dear. Choosing the right words may help, too.  Emphasizing the dire, necessary nature of a trade-off may facilitate conflict resolution.

Recognizing the presence of a “sacred belief” or hot-button issue may be a crucial step when beginning settlement discussions.  Counsel should be alert to validate the belief and to search for an appropriate “trade-off.”  Simply throwing more money at a sacred position may have unanticipated and significant negative consequences.