Where the results of a 2007 prenuptial agreement waiver of maintenance would be a risk that a mother of three children would become a public charge, the agreement would be set aside for being unconscionable at the time of divorce. So held the Appellate Division, Second Department, in its January 10, 2018 decision in Taha
In its November 23, 2016 decision in Gardella v. Remizov, the Second Department upheld an improperly-executed 2002 postnuptial agreement on the basis of ratification, and a 2006 postnuptial agreement alleged to be unconscionable, but sent the matter back to the trial court for financial disclosure and an inquiry to consider the parties’ 2010 separation agreement.
The parties to this matrimonial action were married in 2000. In October 2002, the parties entered into a postnuptial agreement which provided, among other things, that the marital residence and the wife’s private medical practice were the wife’s separate property. In 2006, the parties entered into a second postnuptial agreement which provided that four parcels of real property in Florida acquired by the parties during the marriage had been purchased with the wife’s separate property, and further addressed the distribution of those four parcels in the event of a divorce.
In 2010, the parties entered into a separation agreement, which addressed, inter alia, issues of maintenance and equitable distribution of the parties’ respective assets. At the time, the wife, a neurologist, was earning approximately $600,000 per year, and the husband, a wine salesman, was earning approximately $40,000. The separation agreement provided, among other things, that the husband would have no interest in any of the assets acquired during the parties’ marriage, including six parcels of real property, the wife’s partnership interest in a neurological practice, and the wife’s bank and brokerage accounts. The husband also waived his right to spousal maintenance. The husband was not represented by counsel when he executed the separation agreement.Continue Reading Upholding Marital Agreements: 2+ out of 3
In its August 24, 2016 decision in Maddaloni v. Maddaloni, the Appellate Division, Second Department, upheld the rulings of Supreme Court Suffolk County Justice Justice Carol Mackenzie that invalidated the all-but-complete maintenance waiver contained in a 23-year-old postnuptial agreement, awarding the wife maintenance for 10 years. The appellate court also upheld Justice Mackenzie’s award to the wife of 25% of the $2,000,000 appreciation during the marriage in the value of the husband’s pre-marital business, Maddaloni Jewelers of Huntington.
The Maddalonis were married in January, 1988. At the time of the marriage, the husband owned several cars, a house, and a jewelry business, and he was in contract to buy a shopping center. On August 22, 1988, less than eight months after the parties were married, they experienced marital difficulties and entered into a postnuptial agreement. Among other things, this agreement provided that, in the event that the parties divorced after the first five years of marriage, the wife agreed to accept the sum of $50,000, payable in five equal annual installments of $10,000, “in full satisfaction of any and all claims of whatsoever kind and nature she may have at that time for past or future support or for distribution of assets.”Continue Reading Maintenance Provision of Postnuptial Agreement Voided; Wife Awarded 25% of Appreciation of Husband’s Premarital Business
In its August 19, 2015 decision in Hof v. Hof, the Second Department, almost matter-of-factly, addressed a number of pendente lite and pre-nuptial agreement issues.
To begin, the Court affirmed the determination of Suffolk County Supreme Court Justice John B. Collins, that after a hearing upheld the parties’ prenuptial agreement. By that agreement,…
Particularly in the Second Department, the last few years have brought a host of cases threatening the enforceability of prenuptial agreements. To review a few just type “prenup” in the keyword search at right. It’s going to get worse.
New York’s Domestic Relations Law §236(B)(3) provides that prenuptial and other marital agreements executed with proper formalities are valid and may include
(1) a contract to make a testamentary provision of any kind, or a waiver of any right to elect against the provisions of a will;
(2) provision for the ownership, division or distribution of separate and marital property;
(3) provision for the amount and duration of maintenance or other terms and conditions of the marriage relationship, subject to the provisions of section 5-311 of the general obligations law, and provided that such terms were fair and reasonable at the time of the making of the agreement and are not unconscionable at the time of entry of final judgment;
and (4) provision for the custody, care, education and maintenance of any child of the parties, subject to the provisions of section two hundred forty of this article.
The December 24, 2014 decision of the First Department in Anonymous v. Anonymous, is a case in point.
In this matrimonial action the wife had sought, among other things, to set aside the parties’ prenuptial agreement.Ruling on several motions, Supreme Court, New York County Justice Ellen Gesmer upheld the validity generally of the the prenuptial agreement, but held the issue of the current unconscionability of the spousal support provision would be resolved at trial.Continue Reading Litigating Prenuptial Agreements Is Going To Get Messier
The November 12, 2014 decision of the Appellate Division, Second Department, in Bibeau v. Sudick reversed the granting of summary judgment upholding the validity a 2000 prenuptial agreement, remanding the matter for a hearing on that issue.
In September 28, 2000, two days before their wedding, the 70-year old future husband and the 38-year old future wife executed a premarital agreement. It provided that in the event of a divorce, the wife would receive, in lieu of maintenance, support, and equitable distribution, the sum of $25,000 for each year of the marriage. The parties also agreed to waive their interest in the elective share of each other’s estate, and to make no claim to property titled in the other’s name.
According to financial statements attached to the premarital agreement, the future husband had assets of more than $10,000,000, while the future wife had assets of approximately $170,000. The agreement was signed in the office of the husband’s attorney, in the presence of another attorney who was purportedly representing the wife.
At the time of the marriage, the wife, who had a background in marketing works of fine art to corporations, had recently opened an art gallery in California. She closed this business and relocated to Pine Bush, New York, in order to reside with the husband in preparation for their marriage, and assist him in his business endeavors. These included real estate development, as well as breeding thoroughbred horses and managing polo ponies.
In October, 2010, within days of New York’s adoption of no-fault divorce, the husband commenced this action for divorce. There were no children of the marriage.Continue Reading Another Prenup Bites the Dust, Maybe
After surgically excising eight words, Saratoga County Supreme Court Justice Thomas D. Nolan, Jr., in his February 7, 2014 decision in Zinter v. Zinter, upheld the balance of a prenuptial agreement. Those words had given the husband the unconscionable power to control whether earnings and other after-marriage acquired property would be placed into joint or indiviual accounts, and thus marital or separate property.
In this divorce action, the parties were married on December 23, 2005. The wife was then 29 years old, a music teacher with a Master’s degree, and reported a net worth of $71,500.00. The husband was then 35 years old, a college graduate, and an officer and part owner of his family-owned and operated business, with a reported net worth of approximately $2.7 million.
The husband had retained an attorney to prepare a prenuptial agreement. In November 2005, both the prospective husband and prospective wife met with that attorney to review the proposed agreement. At the time, the wife was not represented by counsel. The husband’s attorney provided the wife with the names of three attorneys experienced in matrimonial law. Shortly thereafter, she retained one of them, with whom the wife met three times before the agreement was signed four days before the marriage.Continue Reading Court Strikes Prenup Provision Giving Husband the Power to Determine Whether After-Marriage Acquired Property was Marital or Separate
The alleged failure of the mediator and the husband’s counsel to advise the husband that a court need not apply the C.S.S.A. formula to the husband’s entire agreed-upon income of $1,200,000.00 per year income is not a basis to set aside a divorce settlement agreement, or its $29,500.00 per month child support obligation. So held Westchester County Supreme Court Justice Lawrence H. Ecker in his January 16, 2014 opinion in A.B. v. Y.B.
The couple involved separated after 12 years of marriage. Following three years of mediation, the parties entered into an agreement that resolved issues of custody and access to the parties’ three children, maintenance, child support, and equitable distribution. The husband is a 50% equity partner in a brokerage firm. The wife is owner and operator of her own business.
Upholding the agreement, Justice Ecker took pains to quote several of its provisions. One acknowledged that the parties had waived the “compulsory financial disclosure” requirements of the Domestic Relations Law and court rules, and agreed not to exchange Net Worth Statements. Nonetheless, the parties represented to each other that each made a full and complete disclosure of assets, liabilities, income and expenses, and that they relied on the information provided.
The agreement recited the husband’s disclosure, to the best of his knowledge, of his gross personal 2010 income as approximately $156,427.00. The parties agreed to use the 2010 income because their 2011 income was not yet available. The Husband disclosed that in no event was his income from any and all sources more than $156,427.00 in said year.
Nonetheless, for purposes of the agreement, the parties agreed to use an imputed income of$1,200,000 in computing the child support calculation under the Child Support Standards Act.
The parties acknowledged that they reached their agreement with the aid of the mediator, but that the mediator provided no legal representation to either of the parties. Further, although “the mediator may have provided information or opinions concerning the state of the law generally, neither party has relied upon such information or opinions in executing this Agreement.”
The parties further represented that each had ample opportunity to obtain independent legal counsel, and counsel [apparently recommended by the mediator] for each spouse was named.
As to the basic child support obligation, the agreement provided it was agreed that the the husband’s would pay $29,500 per month [$354,000 per year] for 12 years, 5 months, subject to a cost of living increase biennially. The husband was further responsible for 100% of discretionary expenses and add-on expenses, including private school tuition for all three children, private college expenses, camp and summer programs, religion education expenses, Bar and Bat Mitzvah expenses, health insurance and unreimbursed medical expenses.Continue Reading Claimed Ignorance of C.S.S.A. Treatment of Income Over Cap Not Basis to Set Aside Divorce Settlement Agreement