SO v WO

[*1] SO v WO 2007 NY Slip Op 52248(U) [17 Misc 3d 1133(A)] Decided on October 30, 2007 Supreme Court, Nassau County Marber, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 30, 2007
Supreme Court, Nassau County

SO, Plaintiff,

against

WO, Defendant.



XXXXX/07



Plaintiff: Sari M. Friedman, PC

666 Old Country Road, Suite 704

Garden City, New York 11530

(516) 222-1030

Defendant: Weinstein, Kaplan & Cohen, PC

1325 Franklin Ave., Suite 210

Garden City, New York 11530

(516) 877-2525

Randy Sue Marber, J.

The Defendant, by Order to Show Cause, moves for an order dismissing, with prejudice, the plaintiff's instant action, which seeks to rescind the parties' Separation Agreement dated September 19, 2006 in its entirety or, alternatively, to set aside all provisions in said Agreement concerning the distribution of marital property and maintenance. The Plaintiff opposes this motion.

The parties were married on June 1, 1985. There is one child of the marriage, to wit: K O, born on September 20, 1989. On September 19, 2006 the parties entered into a Marital Separation and Property Settlement Agreement (hereinafter referred to as "Separation Agreement"), drafted by the parties' mutual attorney, JR, Esq., permitting the parties to live separate and dividing marital assets. On January 19, 2007 the Plaintiff moved to set aside the Separation Agreement based upon the grounds of fraud, duress, unconscionability and overreaching. On March 16, 2007, the [*2]Defendant, represented by JR, Esq., submitted a Motion to dismiss the action pursuant to CPLR § 3211(a)(1), (5) and (7), which motion was subsequently withdrawn. On June 6, 2007, the Defendant, no longer represented by Mr. R, submitted the instant Order to Show Cause to dismiss the Plaintiff's action to rescind the Separation Agreement.

In support of the motion, the Defendant alleges that the Plaintiff's action to rescind the parties' Separation Agreement should be dismissed as the Defendant has a defense based on documentary evidence, pursuant to CPLR § 3211(a)(1), which includes: (1) a merger clause in the Separation Agreement itself, and (2) a fax which documents certain changes to the Agreement made by the Plaintiff after reviewing the first draft. The Defendant alleges that this documentary evidence provides a defense which is conclusive as to the matter of fraud, duress, unconscionability and overreaching. As such, theDefendant argues, the action should be dismissed pursuant to CPLR § 3211(a)(7) for failure to state a cause of action and/or that summary judgment should be granted as there are no triable issues of fact and the matter can be decided as a matter of law pursuant to CPLR § 3212. Furthermore, the Defendant alleges that the Plaintiff's action should be dismissed pursuant to CPLR § 3211(a)(5) because the action is barred due to a general release signed by the parties.

In opposition, the Plaintiff contends that the Defendant does not have a documentary evidence defense to bar rescission of the Agreement because courts have set aside such Separation Agreements despite the existence of merger clauses and general releases contained therein. The Plaintiff contends that there is conflicting evidence about the nature and extent of the negotiations between the parties and the drafting attorney's role, which defeats the documentary evidence defense. The Plaintiff contends that she has set forth sufficient allegations in the complaint to survive dismissal for failure to state a cause of action and argues that summary judgment should not lie because the Defendant never "joined" the issue when he failed to answer the complaint.

As a preliminary matter, there being no indication in any papers submitted with this motion that an Answer has been served and issue joined, this Court is powerless to grant summary judgment. See CPLR § 3212(a), Union Turnpike Associates, LLC v. Getty Realty Corp., 27 AD3d 725, 812 NYS2d 628 (2nd Dept. 2006); Chakir v. Dime Savings Bank of New York, FSB, 234 AD2d 577, 651 NYS2d 622 (2nd Dept. 1996); Holyoke Mutual Insurance Company v. Jason B., 184 AD2d 550, 585 NYS2d 61 (2nd Dept. 1992).

With respect to the branch of the Defendant's motion to dismiss the plaintiff's action pursuant to CPLR § 3211(a)(1) on the grounds that he has a defense based on documentary evidence, the application is denied. Generally, dismissal pursuant to CPLR § 3211(a)(1) based upon documentary evidence is warranted "only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law." See Leibowitz v. Impressive Homes, Inc., 2007 WL 2729660, 2007 NY Slip Op. 06837 (N.Y.A.D. 2nd Dept); See also Leon v. Martinez, 84 NY2d 83, 88, 614 NYS2d 972 (1994).

In addition, "judicial review of separation agreements is to be exercised sparingly, with the goal of encouraging parties to settle their differences by themselves. See Abillama v. Carroll, 13 Misc 3d 1235(A), 831 NYS2d 351, (2nd Dept. 2006); Christian v. Christian, 42 NY2d 63, 396 NYS2d 817 (2nd Dept. 1977); Korngold v. Korngold, 6 AD3d 358, 810 NYS2d 206 (2nd Dept. 2003). Thus, "[a] party seeking to set aside a separation agreement that is fair on its face has the burden to prove fraud, duress, or overreaching, or that the agreement or stipulation is nonetheless [*3]unconscionable." Abillama, 13 Misc 3d at *3. "Unsupported and conclusory allegations are insufficient as a matter of law to create an inference of fraud, duress, overreaching, or unconscionability." Korngold, 6 AD3d at 358-359.

Here, the Defendant claims that the Separation Agreement includes a merger clause where both parties represented that the Agreement contained their "entire understanding" and was a completely integrated document. The Defendant argues that the merger clause precludes evidence of an alleged oral promise made to the Plaintiff that she would keep her job at his company and would be entitled to run the business upon his retirement, as grounds to prove fraudulent inducement to enter into the Agreement.

However, the court will not dismiss an action to rescind an agreement simply because of the existence of a merger clause without looking at the totality of the circumstances surrounding the execution of the Separation Agreement. Here, the existence of the merger clause itself does not signify that an oral promise could not have been made, and as such, the document is not conclusive in and of itself, as is required to invoke the documentary evidence defense.

The Defendant claims that there is no fraud, duress, unconscionability or overreaching because the Plaintiff had an opportunity to negotiate and bargain for the terms contained in the Separation Agreement as evidenced by a fax containing changes to the Agreement made by the Plaintiff. The Plaintiff contends that the fax is evidence that the Defendant was the primary communicator with the drafting attorney which signifies that there was no real negotiation between the parties. The Plaintiff argues that the drafting attorney did not act as a neutral mediator between the parties because he never advised the Plaintiff of her rights with respect to the division of marital property and/or maintenance nor did he advise her of her right to counsel.

However, it is apparent that sufficient disputed facts exist about the nature and extent of the negotiation between the parties and the amount of information and/or disclosure of rights to marital property or maintenance. Thus, the fax itself is not conclusive documentary evidence of a true negotiation between the parties and this branch of the motion to dismiss the Plaintiff's complaint pursuant to CPLR § 3211(a)(1) is denied.

With regard to the branch of the Defendant's motion to dismiss the action pursuant to CPLR § 3211(a)(5), the Defendant alleges that the Plaintiff is precluded from bringing the action due to a general release within the Separation Agreement releasing either party from asserting any claim with respect to the agreement except for enforcement proceedings. The release also contains language releasing any and all legal, equitable and/or marital interest in the Defendant's air conditioning corporation and warranting that the Agreement was executed of their "own free will" and not a product of being forced or coerced.

However, the Plaintiff raises questions of fact as to whether or not she may have executed the Separation Agreement as a result of fraud, duress, unconscionability and/or overreaching. Thus, by extension, the execution of the release is also at issue. see Lopez v. 121 St. Nicholas Ave. H.D.F.C., 28 AD3d 429, 430, 814 NYS2d 174 (2nd Dept. 2006). see generally Mangini v. McClurg, 24 NY2d 556, 301 N.Y.S2d 508; Aharon v. Kwang Kim, 205 AD2d 719, 614 NYS2d 912. Therefore, where questions of fact exist as to whether the Separation Agreement and the release contained therein was a product of fraud, duress, unconsionability and/or overreaching, the Defendant's motion to dismiss the complaint on the basis of the same release, pursuant to CPLR § 3211(a)(5) must be denied. Lopez, 28 AD3d at 430. [*4]

In determining that branch of the motion which seeks to dismiss the action pursuant to CPLR § 3211(a)(7) for failure to state a cause of action, the court must accept the facts alleged in the Complaint as true and accord the Plaintiff the benefit of every possible favorable inference. Stanchic v. Lim, 20 AD3d 411, 797 NYS2d 306 (2nd Dept. 2005); Gaentner v. Benkovich, 18 AD3d 424, 795 NYS2d 246 (2nd Dept.2005). "[F]actual allegations that consist of bare legal conclusions are not entitled to such consideration." Hispanic Aids Forum v. Estate v. Estate of Bruno, 16 AD3d 294, 792 NYS2d 43 (1st Dept 2005). However, the party bringing the action is not required to prove the allegations in order to "survive" a dismissal pursuant to CPLR § 3211(a)(7), but only plead factual allegations, which from its four corners, manifest a cause of action cognizable at law. Matter of Loukoumi, Inc. 285 AD2d 595, 596 (2nd Dept. 2001).

With this in mind, the Plaintiff has met her burden of proof by pleading facts sufficient to manifest cognizable causes of action for fraud, duress, unconscionability and overreaching. Specifically, the Plaintiff alleges that the Defendant fraudulently misrepresented to her that she would continue to remain employed at his air conditioning company if she signed said agreement and that she would likely run the company with others when he retired. The Plaintiff alleges that she detrimentally relied on the promise and suffered economic harm when she was subsequently fired. The Plaintiff alleges sufficient facts that could lead a trier of fact to find duress when she states that she believed that if she did not sign the agreement, the Defendant would kill her or have her killed because he threatened to "fight her to the death," and had threatened to kill her on prior occasions.

The Plaintiff raises sufficient facts to prove unconscionability and overreaching when she states that she was not represented by independent counsel, and had no bargaining power as to the distribution of marital assets. The Plaintiff alleges that her share of marital assets would have approximately totaled $2,000,000.00, but instead she received only $890,000.00 in exchange for waiving her right to maintenance and any entitlement to marital assets which total more than $4,000,000.00. As such, the Plaintiff's pleadings are sufficient on their face and the motion to dismiss for failure to state a cause of action pursuant to CPLR § 3211(a)(7) is denied.

Accordingly it is hereby:

ORDERED, that the Defendant's motion for summary judgment is denied; and it is further

ORDERED, that the Defendant's motion to dismiss the Plaintiff's action under CPLR § 3211(a)(1),(5), and (7) is hereby denied.

The parties and their attorneys shall appear for a Conference on2007 at 9:30 a.m.

All matters not decided herein are hereby denied.

This constitutes the decision and order of this court.

DATED:Mineola, New York

October 30, 2007

________________________

Hon. Randy Sue Marber

J.S.C.