Matter of Griffin
Annotate this CaseDecided on September 29, 2011
Sur Ct, Monroe County
Probate Proceeding, Last Will and Testament of David Lee Griffin, Deceased
2010-676/C
Anjan K. Ganguly, Esq., attorney for Rongqing Kou and widow of David Lee Griffin, deceased and Petitioner herein. Kaman, Berlove, Marafioti, Jacobstein & Goldman, LLP (Stephen M. Jacobstein, Esq., of Counsel) attorney for Deidra G. Baldwin, Executrix of the Estate of David Lee Griffin and Respondent herein.
Edmund A. Calvaruso, J.
The decedent, David Lee Griffin, died on January 5, 2010. Deidre G. Baldwin was granted letters testamentary for decedent's Estate on July 19, 2010. Prior to his death, the decedent entered into a separation agreement with the Petitioner in this matter, his wife, Rongqing Kou. He signed the agreement on August 25, 2009 and Ms. Kou signed it on September 9, 2009. At the time of the decedent's death, he and Ms. Kou, as tenants by the entirety, owned real property located at 11 Sotherly Place, in the Town of Chili, New York. Pursuant to the terms of the separation agreement, the above referenced marital residence was to be sold and the proceeds divided equally between the parties. The Executrix entered into an agreement with Ms. Kou on April 20, 2010, in which the parties agreed that the proceeds from the sale of the former marital residence would be held in the trust account of Ms. Baldwin's attorney, Robert Schwartz, Esq. The closing for the real property occurred on April 25, 2010. The agreement further provided that one-half of the proceeds would be disbursed to Ms. Kou, and the other one-half would remain in Attorney Schwartz's trust account until the parties agreed on how to disburse those proceeds or until a Court order was issued determining how those proceeds were to be disbursed.
On April 30, 2010, Ms. Baldwin, as Executrix of the Decedent's estate brought a discovery proceeding in this Court, by Order to Show Cause. Her attorney, Stephen M. Jacobstein, also filed an Affidavit with that proceeding. The Executrix alleged that certain valuables belonging to the decedent, including but not limited to a watch collection and jewelry, were taken from the marital residence by Ms. Kou. The Estate sought an order from this Court which mandated that the net closing proceeds from the sale of the marital residence remain in Mr. Schwartz's trust account and he be enjoined from distributing any of the proceeds until further court order. The Court signed the Order to Show Cause on May 3, 2010 and granted the temporary relief requested. [*2]
Ms. Kou filed a petition on July 1, 2010 for certain relief. In this petition, Ms. Kou, alleged that the Decedent did not disclose certain marital assets of significant value to her during the time that the parties negotiated the separation agreement. Also, she alleged that the separation agreement was not freely and voluntarily entered into by her and was not a responsible act on her part, because of coercion and duress of the decedent and her poor health caused by the stress of living with the decedent. She also alleged that the agreement was unconscionable.
The Estate filed a Cross-Petition and Answer on July 8, 2010. A supplemental petition and a Memorandum of Law were filed by the Estate on December 7, 2010. A second supplemental petition was filed by the Estate on March 15, 2011. Ms. Kou filed an Answer and Cross-Petition on August 4, 2011, in which she seeks the following relief: dismissal of the Estate's Petitions and cross-petitions, nullification of the Separation Agreement restoring herself to the position of surviving spouse of the decedent and entitling her to a right of election against the Estate, and/or in the alternative, that she be awarded a fair and equitable share of the alleged non-disclosed marital assets, attorney fees, expert fees, costs and disbursements and that the Court determine that the marital residence vested in her solely upon the Decedent's death and that the net proceeds of the sale of that residence should be awarded to her. She also requested that the Decedent's alleged non-disclosed property, including his watch collection, be appraised.It is the Court's understanding that the parties have asked that the Court issue a decision based on the papers that they have submitted. The parties have waived oral argument on their respective pleadings. The parties have not requested a hearing on this matter. This case presents several issues for the Court to determine. First, whether the separation agreement should be set aside due to the alleged non-disclosure by the decedent of certain marital assets. These alleged assets include: the decedent's watch collection, the value of which is undetermined, an IRA account at M & T Securities, Inc., with an alleged value as of November 1, 2009, of $17,978.19 and a joint bank account held at Southern Bancorp with his sister, Deidre G. Baldwin, with an unknown amount of money. Second, if the agreement is not set aside, whether Ms. Kou is entitled to a fair and equitable share of the alleged non-disclosed assets. Third, whether the decedent's Estate has a valid legal claim to one-half of the proceeds from the sale of the marital residence located at 11 Sotherly Place, Rochester, New York, or whether title to the residence vested with Ms. Kou upon the death of the Decedent.
DECISION
It is well settled law that a separation agreement is valid and enforceable unless there is proof of fraud, duress, overreaching, or unconscionability. See Christian v. Christian, 42 NY2d 63, (1977). "An unconscionable bargain has been regarded as 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, the inequality being 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, (1977). It is undisputed that Ms. Kou was represented by an attorney when the separation agreement at issue was negotiated by the parties and signed by her. Discovery was apparently not an issue in the making of that agreement. Therefore, there is insufficient evidence for the Court to come to the conclusion that the agreement was the product of fraud, duress, [*3]overreaching or unconscionability.
The Separation Agreement was signed by the Decedent on August 25, 2009 and by Ms. Kou on September 9, 2009. (See Exhibit B of Attorney Stephen M. Jacobstein's Affidavit filed April 30, 2010.) Both parties were represented by counsel in their matrimonial case. The parties disagree as to whether or not Ms. Kou knew or should have known of the existence of the above alleged non-disclosed assets. Based on the papers submitted, the Court cannot make a determination as to whether the decedent hid these assets from Ms. Kou or whether she should have known of these assets' existence.
However, whether or not Ms. Kou knew or should have known about these assets is not determining factor relative to this issue. The terms of the Separation Agreement relative to disclosure are controlling in this case. Essentially, the Agreement forecloses any opportunity for Ms. Kou to make a claim against the decedent's Estate for these alleged non-disclosed assets. The relevant portions of that agreement are Article XIII and Article XXII. Article XIII is entitled "Full Disclosure" and states the following:
"(a) Each of the parties represents that both the legal and practical effect of this Agreement in each and every respect, and the financial status of each has been fully discussed by and between both of them and explained to them by their respective attorneys of their own free choosing; further, that each of the parties fully understands the facts and circumstances involved herein and has been fully informed of his and/or her respective legal rights, benefits and liabilities; each party has received advise and counsel from his or her respective attorneys, and the parties believe that this is a fair, just and reasonable agreement; the same has not been entered into as a result of any fraud, duress or undue influence exercised by either party upon the other or by any other person or persons upon either of them."
"(b) That each has had full and complete discovery as required and time and opportunity to have such disclosure as each deemed necessary, and does hereby unequivocally waive any further or other disclosure. However, in the event a sworn Statement of Net Worth is annexed hereto, the parties do hereby rely thereon. In the event it shall subsequently appear that any asset of significant value has been omitted, as to that asset, the other party may make claim to a fair and equitable share thereof, and any reasonable expenses of counsel fees, expert fees, costs or disbursements shall be paid by the party failing to disclose such asset(s)."
The Court notes that there is no Statement of Net Worth annexed to the Separation Agreement that was provided to the Court as "Exhibit B" of the Attorney Stephen Jacobstein's Affidavit. There is no indication in the agreement that the parties exchanged statements of net worth. Therefore the first sentence of paragraph "(b)" of Article XIII is controlling. It indicates that there has been full discovery by the parties and a waiver of any further disclosure. Therefore the language that follows regarding omitted assets is inapplicable because it only applies to assets that were omitted from a statement of net worth annexed to the agreement. Accordingly, Ms. Kou is not entitled to any fair or equitable share of any alleged omitted assets, since she waived same in Article XIII.See, Rubin v. Rubin, 33 AD3d 983, 2d Dept. (2006).
The Court is persuaded, however, that Ms. Kou is entitled to all of the net proceeds of the real property located at 11 Sotherly Place, Chili, New York. The Matter of Estate of Violi, 65 [*4]NY2d 392, (1985) is the controlling precedent in this matter. The Court agrees with counsel for Ms. Kou that the facts in this case closely resemble the facts in Violi, wherein the husband and wife executed a separation agreement which provided for the sale of the marital residence in the future. The residence was held by the parties as tenants by the entirety. The wife died prior to the parties' divorce and prior to the sale of the marital residence. The Court of Appeals held that title to the marital residence vested with the surviving husband. "A tenancy by the entirety is not terminated merely by a provision in a separation agreement or the sale of a marital home at a future date" Matter of Estate of Violi, 65 NY2d 392, 395-396 (1985). Similarly, the parties in this case were married. The parties' separation agreement provided that their marital residence located at 11 Sotherly Place, Chili, New York, be listed for sale. However, the marital residence was not sold until after the decedent died and at the time of his death the parties were still married. Therefore, since the property was not sold prior to the parties' divorce it passed by operation of law to the decedent's spouse upon his death.
CONCLUSION
The Court finds that there is insufficient legal basis to invalidate the parties' separation agreement. The Court also finds that Ms. Kou has no right of further disclosure of any other alleged assets that may have existed pursuant to the terms of the separation agreement. Finally, the Court finds that the entire net proceeds of the sale of the parties' real property located at 11 Sotherly Place, Chili, New York, should be awarded to Ms. Kou, as the surviving spouse of the decedent.
Enter.
Dated: September 29, 2011
Hon. Edmund A. Calvaruso, Surrogate
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