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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

Mediation.jpgThe ex-husband brought this post-divorce civil action against his ex-wife and Alan L. Finkel, the attorney who mediated the spouses’ 2007 divorce settlement agreement, seeking to set aside that agreement.

In his July 12, 2012, decision in Valkavich v. Valkavich, Suffolk County Supreme Court Justice Ralph T. Gazzillo, granted summary judgment dismissing the complaint.

The husband complained that the child support provisions did not comply with the Child Support Standards Act (C.S.S.A.), that it contained erroneous statements concerning his earnings at the time.

Justice Gazzillo found that the ex-husband had not demonstrated that the Stipulation of Settlement was unfair when made or that there was overreaching in its execution. The Court placed heavy emphasis on the waivers and disclaimers signed by the parties at the time of their mediation. It was clear from the agreement between the parties and the mediator, as well as the Stipulation of Settlement, that the parties were advised to seek guidance from an outside attorney, if they so chose. This was certainly sufficient opportunity for plaintiff to have had the proposed agreement reviewed by an attorney and to have been advised of any questions he had as to its terms. By the terms of the agreement, plaintiff acknowledged that he had the right to obtain counsel, that he knew and understood what he was signing, and that he entered into it freely and voluntarily.

Pertinent portions of the agreement between the parties and The Divorce Mediation Center stated:

At the end … of the first session, you will be asked to complete a financial disclosure package. However, you are free to waive this homework assignment, provided you both agree to do so. … We highly recommend that prior to signing the final agreement, each of you spend sufficient time in fully reviewing it (and bringing it to your attorney, accountant, guru,, parent, sibling, or other adviser or confidant) to be confident that it contains everything you need, and that the agreement is fair.Continue Reading Mediated Divorce Settlement Agreement Upheld In Light Of Waiver of Financial Disclosure

Tear up contract.jpgThe parties’ 2008 Separation Agreement which resolved their divorce provided for joint legal custody of the parties’ two children, with their primary residence being with the mother. Nine months after the divorce, the mother remarried and moved to her new husband’s residence in Florida. The children remained in New York with their father.

The parties…

As noted in the previous blog, Gazzillo Ralph.jpgagreements which resolve marital rights and obligations are encouraged. They will be enforced absent demonstrable improprieties.

In his January 23, 2011 decision in Capone v. Capone (pdf), Suffolk County Supreme Court Justice Ralph T. Gazzillo granted summary judgment dismissing a wife’s action to rescind and declare null and void a November, 2008 Separation Agreement.

In January, 2010 the husband commenced an action for divorce based on the parties living separate and apart pursuant to that agreement for a period in excess of one year (“grounds” for divorce under Domestic Relations Law §170[6]). The wife responded by bringing her own action in February, 2011 attacking the agreement on the grounds that it was the result of overreaching, coercion, and undue influence. She also alleged that it was manifestly unfair, unjust, inequitable and unconscionable.

The husband moved for summary judgment dismissing the wife’s action. Justice Gazzillo noted that summary judgment is a drastic remedy, only to be granted in the absence of any triable issues of fact. Justice Gazzillo held that the wife failed to demonstrate that the agreement was unfair when made or that there was overreaching in its execution. Quoting the 1977 decision of the Court of Appeals in Christian v.Christian, 42 NY2d 63, 396 NYS2d 817, Justice Gazzillo stated:

Judicial review of separation agreements is to be exercised circumspectly, sparingly and with a persisting view to the encouragement of parties settling their own differences in connection with the negotiation of property settlement provisions.

Here, the parties’ Separation Agreement had been entered with the assistance of Divorce Mediation Professionals (Lenard Marlow, J.D.). The parties only entered their agreement following at least 10 conferences, letters between the parties and the mediator, revisions, a written suggestion by the mediator to the wife that she consult with her own attorney to discuss changes to the agreement, and the valuation of the husband’s pension.Continue Reading Wife's Attack on 2-Year-Old Mediated Separation Agreement Summarily Dismissed

scissors contract 2.jpgWhat happens when only one provision of an agreement is invalid because it violates some statute or public policy?  The answer may depend on who the court wants to benefit, instead of consistently-applied rules of contract law.

Take, for example the April 5, 2011 decision of the Second Department in Duggan v. Duggan.  In that case, the parties had resolved their divorce by a surviving February 26, 2009 stipulation of settlement. Under that stipulation, the father, who had gross income of $475,000.00, agreed to pay a base monthly child support obligation of $8,000.00.  That amount deviated from the presumptive amount under the Child Support Standards Act (C.S.S.A.) of $11,929.54. The mother had no income.

Apparently, the stipulation also had a provision which called for the reduction in the father’s monthly obligation in the event his income was reduced.

In 2010, the mother brought a Family Court enforcement proceeding when the father ceased making the payments to which he originally agreed. The father raised the stipulation’s modification provision, arguing that his $8,243.00 annual reduction in income to $466,757.00 entitled him to a $76,800.00 annual reduction in child support (to $1,600.00 per month)!

Finding that the father’s interpretation of the stipulation modification provision was “not plausible,” Nassau County Family Court Judge Julianne S. Eisman denied the father’s objections to the Order of Support Magistrate Tejindar S. Kahlon which granted the mother’s arrears petition. Finding that the language of the Stipulation, as interpreted by the father, would violate the C.S.S.A., and was against the best interests of the children, the modification provision was ignored.

On appeal, the Second Department affirmed, holding that the Family Court had the authority to find that a provision in a stipulation of settlement violated the C.S.S.A. The appellate court found that a provision which called for a reduction in child support to 13% of the presumptive C.S.S.A. amount, merely because the father’s income dropped by 1.7% was “against the best interests of the children.”

It is noteworthy that the appellate court did not quote the startling modification provision. Equally noteworthy is that there was no discussion of any interpretation of the modification provision other than the one the Family Court considered implausible.

In order to have obtained the Judgment of Divorce, it would have been necessary to have made the recitation in the stipulation of settlement that the parties had been made aware of the C.S.S.A. and its presumptive formula in their case. D.R.L. §240(1-b)(h).  The parties would have had to have stated the reasons they agreed to deviate from the C.S.S.A guidelines. Specific Findings of Fact would have been made by the Supreme Court upholding those reasons.

It is understandable that the presumed failure of the Supreme Court to review the specific modification provision might not estop the mother from later attacking that provision when it was sought to be applied. Thus, the form language of a divorce judgment that “the parties are directed to comply with every legally enforceable term and provision” of the agreement incorporated into the judgment, does not mean that every provision is, in fact, legally enforceable.

What then is, or should be the impact of rendering unenforceable only one provision of a settlement agreement?Continue Reading Severability: When Only One Provision of a Divorce Settlement Agreement Is Invalid