VR v MR

[*1] VR v MR 2006 NY Slip Op 50109(U) [10 Misc 3d 1077(A)] Decided on January 30, 2006 Supreme Court, Suffolk County Pastoressa, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 30, 2006
Supreme Court, Suffolk County

VR, Plaintiff,

against

MR, Defendant.



2005-XX32

Joseph C. Pastoressa, J.

In this matrimonial action, the defendant moves for an order, inter alia, setting aside the parties post-nuptial agreement as void ab initio on the grounds that the agreement is manifestly unfair, and the product of fraud, duress, coercion, mistake, undue influence, and overreaching on the part of the plaintiff.

The parties were married on May 14, 1999. There are no children born of the marriage. On April 20, 2001 the plaintiff husband and defendant wife executed a post-nuptial agreement. Under the applicable terms of the agreement, in the event of the commencement of an action for divorce, the defendant would receive a non-taxable lump sum payment with the amount thereof dependent upon the number of years that the parties remained married. The agreement further provided that any property acquired during the marriage and held in joint names would be divided equally, after reimbursement of each parties initial investment, if any, and that any separately titled property would remain separate. The parties were each represented by their own counsel during the preparation, negotiation, and execution of said agreement.

The defendant contends that the parties marriage began deteriorating from its inception, with the plaintiff exhibiting controlling and manipulative behavior against her, and subjugating her to him by means of financial duress and emotional abuse. The defendant alleges that in or about March 2001, as the parties relationship grew worse, the plaintiff presented her with a document entitled "Post-Nuptial Agreement",and gave her an ultimatum to "sign or I'll divorce you", and then added, "and if you sign I'll be good to you". The defendant claims that she was coerced and signed the document under duress because she felt that she had no choice, and because she was in fear of losing her husband, and their marriage. The defendant claims that the plaintiff asked the defendant to sign over her interest in the parties marital residence in return for the financial benefits contained in the agreement, which would act as an "insurance policy" if they divorced , and further added , according to the defendant, that if she signed he would stop all of his bad behavior including his silent treatments, threats, and angry outbursts. The defendant alleges that prior to signing she informed the plaintiff that she wanted to retain her own attorney [*2]to negotiate the parties agreement, and he agreed , but then reneged when she made her selection of counsel known to him, stating that he would only pay for an attorney that he selected. The very next day, according to the defendant, the plaintiff told her the name of counsel who would be representing her, and after two meetings over the course of a month, including one four-way meeting between the parties and their counsel, she executed the agreement. The defendant counters that the plaintiff told her the name of counsel who would be representing her, and after two meetings over the course of a month, including one four-way meeting between the parties and their counsel, she executed the agreement. The defendant alleges that the attorney provided by the plaintiff told her that she had no choice but to sign the agreement if she wanted to stay married. The defendant further alleges that she did not fully understand all that the document contained, but signed anyway because she "wanted to stay married", and thought the plaintiff would treat her better if she did so. As part of her application, the defendant includes submissions from her treating therapist, that at the time of the execution of the disputed agreement, the defendant was suffering from obsessive-compulsive disorder with phobic episodes rendering her particularly susceptible to manipulation.

The plaintiff disputes most, if not all, of the defendant's factual allegations. The parties are in agreement on one fact- that their marriage began to falter from the outset. The plaintiff alleges that after approximately one year of marriage he told the defendant that he wanted a divorce, and that the defendant responded, "I'm taking half of everything you have, including your house". The plaintiff claims that he proposed the idea of a post-nuptial agreement so that in the event that their efforts at reconciliation did not succeed, they could part amicably and the defendant would receive a significant financial settlement to start over. As to the rejection of the defendant's first choice of counsel to represent her for the post-nuptial agreement, the plaintiff alleges that he was not seeking to choose the defendant's counsel for her, but simply could not afford that attorney's retainer. The plaintiff alleges that, as an alternative, he contacted an attorney who had represented the couple in their purchase of the marital residence, to seek a referral for the defendant. According to the plaintiff, the defendant herself contacted the recommended attorney and retained him to represent her in all phases of the negotiation, preparation, and execution of the post-nuptial agreement. The plaintiff alleges that there were not one, but two four-way conferences between the parties and their respective counsel, and that there were several exchanges of draft agreements during a negotiation period that spanned six months. The plaintiff contends that the subject agreement was fully negotiated, and voluntarily, and duly executed by the parties in the presence of their counsel, and as such, should be not be modified , vacated or set aside.

Firstly, the court rejects the plaintiff's argument that the instant application to set aside the post-nuptial agreement must be dismissed as procedurally defective. Contrary to the plaintiff's argument, such an application need not be made by way of plenary action where, as in the case at bar, a matrimonial action is sub judice. Where there is an ongoing matrimonial, a challenge to the agreement may be made within the context of the divorce action, and need not proceed exclusively via plenary action (see, Zeppelin v. Zeppelin, 245 AD2d 504; Arguelles v. Arguelles, 251 AD2d 611; Bailey v. Assam, 269 AD2d 344; Cruciata v. Cruciata, 10 AD3d 349). All of the cases cited by the plaintiff are inapposite as they all involve matrimonial actions which had been terminated ( cf. Bergen v. Bergen, 299 AD2d 308; Carter v. Carter, 265 AD2d 520; Spataro v. Spataro, 268 AD2d 467; Riley v. Riley, 179 AD2d 750).

Turning to the merits, Domestic Relations Law § 236 (B)(3) provides that "an agreement by the parties, made...during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged." If, on its face, the agreement is signed by the parties, and bears their notarized acknowledgments, there is a presumption of due execution, rebuttable only upon clear and convincing evidence (see, Smith v. Smith, 263 AD2d 628, 629, lv dismissed 94 NY2d 797). The court rejects the defendant's contention that the parties post-nuptial agreement requiring her to effectually forego any claim to the marital residence in return for the financial inducements contained in the agreement is unconscionable as a matter of law. An agreement is unconscionable only if it is one "such as no [person] in his [or her] senses and not under delusion would make on the one hand, and as no honest and fair [person] would accept on the other" (Hume v. United States, 132 US 406, 411). The inequality must be "so strong and manifest as to shock the conscience and confound the judgment of any [person] of common sense" ( Christian v. Christian, 42 NY2d 63, 71, quoting Mandel v. Liebman, 303 NY 88, 94). Courts will scrutinize agreements between spouses more closely than general business contracts, and such agreements are "held to a higher standard of [*3]equity than other contracts, and will be set aside if manifestly unfair to one spouse because of overreaching by the other" (Vandenburgh v. Vandenburgh, 194 AD2d 957, 958). However, a court's review of such agreements should nonetheless 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"( Croote-Fluno v. Fluno, 289 AD2d 669, 670, quoting Christian v. Christian, supra at 71-72). An agreement is not unconscionable simply because marital assets are divided unequally(see, Croote-Fluno v. Fluno, supra at 670), or because one spouse " gave away more than [that spouse] might have been legally required to do" ( Schoradt v. Rivet, 186 AD2d 307), or even because the spouse's decision to enter into the agreement might, with the benefit of hindsight, be deemed unwise (see, Clermont v. Clermont, 198 AD2d 631, 632, lv dismissed 83 NY2d 953)

While the instant agreement effectively transfers all interest in the marital home to the plaintiff, it is uncontroverted that the entire $320,000 down payment for the marital residence was provided by the plaintiff, and that the carrying charges have been borne by the plaintiff. Moreover, the home which was purchased in 1999 for approximately $525,000 is presently encumbered with a $600,000 mortgage. Under the agreement, the defendant will receive at a minimum approximately $150,000 tax free as a lump sum payment on top of one-half of all jointly held monies and accounts, and in addition to any separately held property, which she shall retain as her own. These financial benefits must be considered in the context that this has been an extremely short term childless marriage of approximately five years duration, with still young parties before the court. Moreover, the plaintiff controverts the defendant's factual claims of financial extremis, and alleges that the defendant, who holds a college degree, owns a horse training business which was underwritten by the plaintiff, and from which the defendant draws a salary that may approach six figures. In the court's view, on the papers before it, the agreement, considered in its totality, can hardly be said to "shock the conscience" as a matter of law( see, Christian v. Christian, supra at 71). The court also rejects the defendant's claim that she has established ,as a matter of law, that the agreement should be set aside on the grounds of coercion, duress, undue influence , and overreaching. To prevail on such a claim, the defendant must prove that the plaintiff's actions deprived her of the ability to exercise her own free will (see, Lyons v. Lyons, 289 AD2d 902, 904) or "deprived her of the ability to act in furtherance of [her] own interests" (see, Mahon v. Moorman, 234 AD2d 1). The fact that the defendant allegedly felt threatened by the prospect of the commencement of a divorce action and the demise of her marriage, does not constitute the type of duress or coercion which would meet this burden ( see, Matter of Rychlick v. Coughlin, 99 AD2d 863, 864, affd 63 NY2d 643; see also, Friends Lbr. v. Cornell Dev. Corp., 243 AD2d 886, 888). The defendant's claims that her will was overbourne are controverted by the plaintiff's factual allegations that the agreement was the product of several draft agreements after more than one negotiating session, with both principals and their respective counsel. As to the defendant's claims of emotional abuse and financial duress, each have been controverted by the plaintiff's factual allegations that the defendant was subjected to no such behavior. Specifically, in response to the defendant's claims of financial duress, the plaintiff alleges that the defendant recently purchased a new Mercedes sport utility vehicle, sold one of her horses at a significant profit, and also just recently liquidated an IRA account funded by him, and spent a month in Europe, while the plaintiff's business has been failing.

Finally, with regard to the defendant's claim that she was deprived of the right to have independent counsel represent her in the negotiation, and preparation of the agreement, the plaintiff alleges that the defendant's counsel was referred to her by an attorney who defendant knew and who had, in fact, represented both the defendant and her mother in the past. There is no evidence whatsoever that the defendant's counsel violated his oath by knowingly countenancing a conflict of interest to the detriment of his client or, in any other way, failing to represent the defendant's interests to the best of his ability. An agreement is not ipso facto invalid, even if one spouse was not represented by counsel at all ( see, Croote-Fluno v. Fluno, supra at 671; Lavelle v. Lavelle, 187 AD2d912, 912-913; Zambito v. Zambito, 171 AD2d 918, 919, appeal dismissed [*4]78 NY2d 1125; Levine v. Levine, 56 NY2d 42, 49).

Clearly, the defendant has failed to meet her burden for summary relief (see, Forsberg v. Forsberg, 219 AD2d 615, 616-617). In this case, the defendant's motion seeking to set aside the parties' post-nuptial agreement on papers alone is entirely inappropriate given the squarely controverted and disparate factual allegations extant ( see, T.R.S v. P.J.S, 155 AD2d 323, lv denied 75 NY2d 938). Given these material factual disputes as well as the absence of a fully developed record regarding the parties financial circumstances, the enforceability of the post-nuptial agreement must await resolution at trial ( see, Cruciata v. Cruciata, supra; Berkman v. Berkman, 287 AD2d 426; Deckoff v. Deckoff, 284 AD2d 426; Valente v. Valente, 269 AD2d 389; Anonymous v. Anonymous, 258 AD2d 546). The movant's request for counsel fees is granted in the amount of $10,000 to be paid directly to the defendant's counsel within 30 days from the date of service of a copy of this decision with notice of entry (see, Deluca v. Deluca, 304 AD2d 610; Alvares-Correa v. Alvares- Correa, 285 AD2d 123). All other ancillary relief sought is denied (see, Fixler v. Fixler, 290 AD2d 482).[FN1]

This shall constitute the decision and order of the court.

Dated: January 30, 2006____________________________ J.S.C. Footnotes

Footnote 1: The defendant's concomitant request for injunctive relief is denied as well (see, Loderhose v. Loderhose, 216 AD2d 275; Sacks v. Sacks, 181 AD2d 727, 728; Cohen v. Cohen, 142 AD2d 543).