E.C.-P. v P.P.

[*1] E.C.-P. v P.P. 2011 NY Slip Op 52221(U) Decided on December 12, 2011 Supreme Court, Nassau County Falanga, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 12, 2011
Supreme Court, Nassau County

E.C.-P., Plaintiff,

against

P.P., Defendant.



08-008252



Attorney for the Plaintiff wife- Dennis T. D'Antonio, 52 Duane Street, New York, NY, 212-227-4210.

Attorneys for the Defendant husband- Stephen Gassman and Cheryl Mallis, 666 Old Country Road, Suite 801,Garden City, NY, 516-745-6712.

Anthony J. Falanga, J.

The above captioned plenary action was commenced by the plaintiff wife (hereinafter referred to as the "wife'), on May 5, 2008, by the filing of a summons and verified complaint setting forth eleven (11) causes of action, as follows: (1) the first cause of action sought to set aside a prenuptial agreement, dated June 24, 1998, on the ground that the defendant husband (hereinafter referred to as the "husband") fraudulently induced the wife into executing the prenuptial agreement by promising to destroy same upon the birth of the parties' first child and promising that assets acquired during the marriage would be placed in joint names; (2) the second cause of action, sounding in promissory estoppel in order to bar the husband from raising the statute of frauds as a defense to his oral promises, sought to set aside the prenuptial agreement on the ground that the wife was fraudulently induced into executing the prenuptial agreement on the same grounds as [*2]asserted in the first cause of action and additionally alleged that the wife discovered that the husband had hundreds of thousands of dollars in undisclosed cash at the time the parties executed the prenuptial agreement; (3) the third cause of action sought to set aside the prenuptial agreement on the grounds of duress and coercion and alleged that the wife was forced into executing the prenuptial agreement by the husband's threat to call off the wedding after she had spent $75,000.00 toward same; (4) the fourth cause of action sought to set aside the prenuptial agreement on the grounds of fraud and deceit and contained the same allegations as the first and second causes of action; (5) the fifth cause of action sought to set aside the prenuptial agreement on the ground that the husband failed to fully disclose his assets, as set forth in the second cause of action regarding undisclosed cash; ( 6) the sixth cause of action sought to set aside the prenuptial agreement on the ground of unconscionability; (7) the seventh cause of action sought to set aside the prenuptial agreement on the grounds of conversion and unjust enrichment and alleged that the husband converted income of not less than $15,000.00 generated by two (2) corporations in which both parties had titled ownership interests; (8) the eighth cause of action sought damages for the husband's alleged breach of his fiduciary duty in inducing the wife to execute the prenuptial agreement through coercion, fraud, and misrepresentation; 9) the ninth cause of action sought damages for the husband's alleged negligent misrepresentation in inducing the wife the execute the prenuptial agreement; (10) the tenth cause of action sought to impose a constructive trust on the marital residence and on funds allegedly converted by the husband from business entities jointly owned by the parties: and 11) the eleventh cause of action sought a judgment declaring that negotiations between the parties and counsel in 2001 rendered the prenuptial agreement null and void.

By notice of motion, dated May 30, 2008, the husband moved for summary judgment dismissing the complaint in its entirety. In a Decision and Order, dated August 1, 2008, the court partially granted the husband's motion for summary judgment but did not dismiss the first cause of action for fraudulent inducement nor that portion of the eighth cause of action that sought to impose a constructive trust on the marital residence, but stated that said cause of action remained viable only in the event the prenuptial agreement was set aside.

As directed, the wife filed an Amended Verified Complaint, dated August 20, 2008, containing five (5) causes of action, as follows: (1): the first cause of action sought damages and rescission of the prenuptial agreement on the ground of fraudulent inducement; (2) the second cause of action sought damages for fraud and deceit; (3) the third cause of action sought damages for breach of fiduciary duty; (4) the fourth cause of action sought damages for negligent misrepresentation; and (5) the fifth cause of action sought damages for unjust enrichment and the imposition of a constructive trust on the marital residence. Thereafter, the husband again moved for summary judgment and dismissal of the amended pleading by Notice of Motion, dated January 6, 2009.

In a Decision and Order, dated March 9, 2009, the court partially granted the [*3]husband's motion as to the causes of action sounding in fraud and deceit, breach of fiduciary duty, negligent misrepresentation, unjust enrichment and fraudulent inducement as it related to tort and pecuniary damages. The only viable causes of action remaining were for fraudulent inducement to the extent that it sought rescission of the prenuptial agreement and the imposition of a constructive trust on the marital residence in the event the prenuptial agreement was rescinded.

In a May 12, 2009 Short Form Order, the court set forth the parameters of the wife's burden as follows, denoted in bold print:

In order to prove her cause of action, the wife bears the burden of demonstrating that the husband made a promise to confer a future benefit on her, with the intent of inducing her to sign the prenuptial agreement; that he had no intention, at the time he made the promise, to fulfil same; and that the wife justifiably relied on his promise to her detriment (see, Tribune Print Co.v 263 Ninth Ave. Realty, 57 NY2d 1038; Lanzi v Brooks, 54 AD2d 1057, aff'd 43 NY2d 778; Braddock v Braddock, 60 AD3d 84; Eastman Kodak Co. v Roopak Enters., 202 AD2d 220; Chrys. v D.C.G. Development Co., 187 AD2d 923). Proof of both intent and justifiable reliance, generally are questions of fact, that may be inferred from surrounding circumstances ( see, Braddock v Bradock, supra ). The wife is entitled to present proof at trial of the influence the husband had over her; the ways in which he may have acquired her confidence, reliance and trust, and the events that preceded the execution of the prenuptial agreement that influenced each party's state of mind on the date the agreement was executed.

Further, in the case at bar, certain acts by the husband, subsequent to the execution of the prenuptial agreement, may be material and relevant to the wife's cause of action for rescission.

A trial was held on the cause of action to rescind the prenuptial agreement on December 13, 15, 16, 2010, January 23, 24, 31, , February 9, 17, March 8, 9, April 4 and September 13 and 14, 2011, at which time decision was reserved pending receipt of post trial Summations. On September 27, 2011 both sides submitted their Summations, the wife's was marked as Court Exhibit "I" and the husband's was marked as Court Exhibit "II".

In addition to the husband and the wife, the following witnesses testified: S. Robert Kroll, Esq., Ivan W. Hametz, Esq., Melinda Cunningham, Nektarious Karagianes and John Petrakis.

TRIAL TESTIMONY AND EVIDENCE

S. ROBERT KROLL, ESQ.

Mr. Kroll testified that he represented the husband in the late 1990's, mostly with respect to commercial and real estate matters. In May 1998, the husband approached him regarding a prenuptial agreement. Mr. Kroll stated that he prepared an intake sheet and, after discussing prenuptial agreements in general and each parties assets, the husband provided him with the terms of the agreement. Thereafter, Mr. Kroll prepared a draft of an agreement, which had some provisions for alimony, equitable distribution and child support and he told the husband that he needed a list of both parties' assets. Mr. Kroll testified that the prenuptial agreement was signed on June 24, 1998. The witness stated that, prior to signing the agreement, the wife's attorney advised her that he could not recommend that she sign the agreement.

Mr. Kroll testified that, sometime after the agreement had been signed and the parties had married, the husband consulted him and Mr. Kroll generated a memorandum (Plaintiff's Exhibit "7" in evidence) regarding two (2) meetings which occurred on October 31, 2002 and November 5, 2002. The memorandum reflected that the wife was "extraordinarily upset" with respect to the prenuptial agreement. At the October 31, 2002 meeting, attended by both parties, Mr. Kroll and the wife's attorney, Ivan Hametz, Esq., the wife's position was expressed as being upset in having been forced by the husband shortly before the marriage to sign the prenuptial agreement and that it was time for the husband to throw away the agreement. The memorandum reflects that nothing was resolved at this meeting and that " Peter is apparently terribly afraid of being taken over the coals, financially, if the marriage breaks up." The memorandum also reflects the results of a discussion between Mr. Kroll and his client on November 5, 2002.

As corroborated by Mr. Kroll's time sheets (Plaintiff's Exhibit "6" in evidence), he testified that he reviewed a letter from Mr. Hametz (Plaintiff's Exhibit "8" in evidence) which "summarized the major points" that were agreed to by the parties, as he understood them, which were to be reflected in a new agreement, as it was his understanding "....that the old agreement is to be torn up and discarded in its entirety...". Mr. Kroll's time sheets list the various dates during which he spent time on the Petrakis matter, starting with his November 2002 review of the Hametz letter through December 15, 2004, and which included a notation on November 24, 2004 of "Review agreement" and on December 13, 2004 of " Review agreement prepared by Ivan Hametz, Esq."

On cross examination Mr. Kroll testified that neither prior to nor after the prenuptial agreement was signed did either the wife or her attorney ever claim that the husband promised to rip up the agreement after a child was born or that any property acquired after the marriage would be placed in joint names. Further, Mr. Kroll stated that the focal point of the discussion was for a possible revising of the agreement and that his client was willing to discuss changes to the agreement but not to rip it up and start all over again.

On re-direct, the witness acknowledged however that he had prepared a draft of an agreement Plaintiff's (Exhibit "10" in evidence) which reflected a mutual "...desire to cancel and void the pre-marital agreement previously entered into."

IVAN W. HAMETZ, ESQ.

Mr. Hametz related that he was retired from the practice of law. He stated that, in June 1998, he represented the wife in connection with a prenuptial agreement. His first meeting with the client was approximately two (2) weeks before the parties June 28, 1998 marriage. He had been recommended to the wife by Mr. Kroll who was representing the husband, her then fiancé.

Mr. Hametz testified that, after reviewing the proposed prenuptial agreement, he told the wife that the agreement was unconscionable and unfair since, among other things, there were no provisions for payment of child support and he relayed the same sentiment to Mr. Kroll. He stated that he met with the wife two (2) times prior to the prenuptial agreement being signed and , thereafter, placed his concerns into a letter. Eventually the child support issue was addressed in the agreement.

Mr. Hametz testified that, in 2002, he was retained by the wife to prepare a new agreement that would be fair to her because the old agreement had to be thrown out. At that time, the wife told him that her husband had no intention of honoring the pre-nuptial agreement and, in fact, he never wanted it but it was his father and his attorney who wanted him to have the agreement. He stated that, in furtherance thereof , he wrote a letter to Mr. Kroll, dated November 8, 2002, communicating that the parties "...apparently have reached a mutually agreeable agreement in principle." He stated that, several days later, he and Mr. Kroll spoke about the letter and Mr. Kroll told him he was in full agreement with the content of the letter. In or about November 2004, Mr. Kroll provided Mr. Hametz with a proposed agreement which he then forwarded to the wife.

Mr. Hametz testified that, during the meeting on October 31, 2002, in the presence of both attorneys and her husband, the wife stated that the husband had promised to tear up the prenuptial agreement and she accused him of never having the intention of doing so. According to Mr. Hametz, the husband didn't say a word at the meeting. At the subsequent meeting, the wife announced that she and her husband had agreed to certain changes and the husband confirmed that such changes were agreed to.

Mr. Hametz further testified that, at a meeting held on January 5, 2005, when both parties, Mr. Hametz, and each parties' fathers were present (Mr. Kroll had been present but left when everyone had not appeared on time), the wife shouted at her husband that he promised to tear up the agreement when they had children and claimed that he never in fact intended to tear it up, to which the husband responded "so what." Mr, Hametz related that, when the husband's father asked his son whether what the wife was saying was true or not, the husband told his father to "shut up."

On cross-examination, Mr. Hametz testified that he reviewed the prenuptial agreement with the wife before she signed it. He stated that ¶15 on page 9 and ¶22 on page 11 of the prenuptial agreement (Plaintiff's Exhibit "3" in evidence) were not accurate in that, prior to his client signing same, she told him, without elaborating, that under certain circumstances her husband had promised that the agreement would be vitiated. Mr. Hametz stated that he advised his client, based on what she was telling him, that he would not place his acknowledgment on the agreement but would continue to represent her. He further stated that, on the morning of the day the agreement was to be signed, Mr. Hametz called Mr. Kroll and requested that certain provisions be added to the agreement or that a side letter be executed stating, among other things, that it wasn't the husband who wanted the agreement but rather his father and brother.

Mr. Hametz reported that the wife told him there wasn't going to be a wedding unless she signed the prenuptial agreement and commented that her father was spending $40,000 on the wedding reception. He stated that he informed his client that, if she was his daughter, he would tie her up to stop her from signing the prenuptial agreement and, in fact, sent her a "CYA" letter which she never signed.

Mr. Hametz testified that, the first time the wife imparted to him the substance of the claimed promise the husband made, that he would tear up the prenuptial agreement if certain things occurred, was on October 31, 2002. Furthermore, in reflecting on the January 5, 2005 meeting, Mr. Hametz confirmed that, at times, the wife conversed in the Greek language when accusing her husband of breaking his promise to tear up the prenuptial agreement. Mr. Hametz explained that he understood the language and [*4]added that her remarks included a claim that the husband had promised to put the house in both names, that it was the husband's father and brother who wanted the prenuptial agreement and that his attorney also thought it would be good that there be a prenuptial agreement.

In response to questions concerning a January 2005 meeting and what was said by his client at such time, Mr. Hametz stated that she used the word "said", not "promised" as he had earlier testified, in referring to what her then fiancé had told her regarding what he intended to do with respect to the agreement when they had children.

P.P.

The husband was the next witness. He testified he first met his wife in 1992 when he was 21 and she was 18. He stated that, when they first met, he owned several tobacco stores but he did not discuss his assets with his future wife, explaining that he didn't want her to date him or even possibly marry him because of his money. They stopped dating for about a year and, in the summer of 1993, renewed their relationship and began to see each other again.

The husband testified that, before his future wife was due to return to college in Florida, he expressed his preference that she, instead, attend school locally. That fall she enrolled at Hofstra and they became more serious and started dating steadily. The husband stated that he believes he may have told her he would not marry her unless she was Greek Orthodox and, when they discussed having a family, he told her he would want to raise their children in the tradition of the Greek Orthodox religion. Based on such discussions, the wife began to study to become Greek Orthodox and also began studying the Greek language to the point where she became proficient in speaking the language and also was able to read and write Greek to some extent. He stated that his wife also attended Greek services with him, however, in response to whether he had any influence on her, he denied that he did. Prior to their engagement they spent almost everyday together.

The husband testified that marriage became a topic of discussion sometime in 1994/1995. He acknowledged that, in an affidavit he signed on May 30, 2008, he claimed that his wife was consistently pushing the issue of marriage which led to many heated discussions as he felt he was too young and not yet prepared to be married.

It was in May/June 1996 when he decided he would propose. He purchased a ring in July or August and formally proposed in August 1996. [*5]

The husband recounted how he had looked at a model home in a residential development in April/May 1996 consisting of a model home in a residential building development and that he and his future wife saw the property together. He stated that approximately one (1) or two (2) months thereafter, and one (1) month before their engagement, he returned to the property and purchased a building lot in the development they had seen. The husband testified that he purchased the property for investment and to eventually possibly build his dream home.

On August 4, 1996, the husband proposed to the wife in the trailer located at the building development site. Therein there was a table containing a map of various building plots and the husband related how he had placed the engagement ring under a miniature model house located on the building lot he had recently purchased. The husband stated that the wife picked up the miniature house and saw the ring. He explained that he proposed in such a way because he wanted to do something different.

The husband testified that, when he proposed, he told the wife that he hoped to build a house for them on the building lot. At trial, he conceded that he did not give a truthful answer at his disposition when he answered in the negative when asked as to whether or not he told the wife that he was building a house for "us and our family". Three (3) months after the engagement he hired an architect and then secured a building permit.

The husband testified that he closed title on the property on July 29, 1996 and the parties were engaged several days later. He acknowledged that, at a gathering at the wife's parents home after the engagement, he heard the wife tell her family that he was building a home for them to live in after they were married and he did not respond or say anything to suggest that this wasn't true. He stated that sometime after their engagement they opened a joint bank account.

The husband claimed that, in or about March 1995, he told the wife, for the first time, that in order for them to be married they would have to have a prenuptial agreement. He stated that the parties were already engaged when any substantive discussions regarding the subject took place, some three (3) years later in 1998, while they were dining at a local restaurant. He testified that he asked her to sign a prenuptial and told her that he needed it before they married, which was scheduled to take place some three (3) months later.

He testified that his then fiancée told him she wasn't marrying him for his money and commented that her father had plenty of money. He further testified that, at some point, perhaps one (1) or two (2) months later, he told her he wouldn't marry her unless she signed a prenuptial agreement. He stated that he made such statement to her after they had each met with their attorneys and engaged in negotiations. A prenuptial agreement was prepared and reviewed by him sometime in May 1998. He testified that, a few days later, he gave his fiancée a copy of the agreement but never discussed the [*6]content of same with her. He stated that a revised agreement was eventually signed at a meeting on June 24, 1998, just a few days before they married. The husband denied having made any promise to his fiancée which may have caused her to sign the prenuptial agreement.

The husband recalled that, in 2001 or 2002, several years after they married, he and his wife pursued discussions regarding the prenuptial agreement and that his wife told him she wanted the agreement torn up because they didn't need it now that they had two (2) sons. The husband testified that he told his wife "no", but that he would consider possible changes which would result in "giving her more". He stated that, a few months later, he went to see Mr. Kroll about the possibility of doing a modification to the prenuptial agreement.

The husband reported that, among other things, the wife wanted joint ownership of the marital residence and added that the wife was aware that he purchased the house before their marriage. When questioned as to whether he believed their marriage was "good" at the time they were having discussion regarding ownership of the marital residence and modification of the prenuptial agreement, the husband answered in the affirmative. He testified that, in August 2003, the parties had their third child and,during the pregnancy and after giving birth, the wife pressed him to tear up the prenuptial agreement and to put the marital residence in their joint names. The husband tesstified that the parties' relationship at this time was tense. He acknowledged that his wife was angry with him because he hadn't yet torn up the agreement.

The husband denied that a deed had ever been prepared that would place title of the marital residence into joint names. He recalled that he and his wife went to Astoria Bank in 2007 for the purpose of signing some documents before a notary, however, he was not able to identify what kind of documents were to be signed nor whether or not the documents were in fact signed on such occasion.

MELINDA CUNNINGHAM

Ms. Melinda Cunningham (Silverman), who identified herself as a senior personal banker at Astoria Savings, was called by the wife as the next witness. She testified that she knew the husband as a customer of her bank and recalled having met with the wife three (3) times. She stated that the first time was in 2007 when the wife and the husband came in to have some papers notarized. To the best of her recollection, the second time was in May 2008, when the wife told her that a deed the witness had notarized was missing and the wife inquired if Ms. Cunningham knew [*7]whether the husband had taken the deed. At the time, the wife also asked the witness to sign a letter confirming that she had signed as a notary. The third time she met with the wife was when the wife brought a letter for the witness to sign acknowledging her signature.

E.C.-P.

The wife testified that she first met the husband in June 1992, that they started to date in May 1993 and were married on June 28, 1998. She stated that the husband proposed at a residential construction site. She recalled that she and her future husband had seen an advertisement in a newspaper about new homes and went to visit the development and saw a lot that they liked. The wife testified that,on August 4, 1996, the parties had been discussing getting married and they went to the building site to gather details, including pricing. She described how they entered the sales trailer, walked over to a table with all the numbered lots and, on lot No. 1034, there was a miniature house. When she lifted the model she found an engagement ring and the husband asked her to marry him. He then said he had another surprise and told her he had bought the lot for them and their family. She stated that they then went back to her house where there was a celebration, during which the husband announced that he had bought a house for them and showed her parents building plans.

The wife testified that she was involved in the house construction every step of the way that she met with the architect and the decorator, selected the brick and grout color, the hardware and tile, the paint and wallpaper and a myriad of other items and was present almost every day during construction. According to the wife, construction of the home was completed in June 1998 and the wife, the husband and the wife's father all contributed funds toward the construction. She stated that her and the husband's funds came from their joint checking account, established days after their engagement party where they deposited engagement and wedding gifts, and that her father gave cash when it was needed.

Regarding the prenuptial agreement, the wife testified as follows: that the husband first mentioned it at the end of May or early June 1998. She stated that they were in her fiancé's car in his parents driveway when he informed her he needed her to sign a prenuptial agreement. She replied by asking if it was because he didn't trust her. After a 40-45 minute discussion, the dialogue became heated and the wife became emotionally upset and began to cry. Her fiancé told her his lawyer said it wasn't a "big deal" and that he had a list from which she could select an attorney to represent her. He also added that it would be best if they kept the subject of the prenuptial agreement to themselves lest her family became angry with him. After being pressed, she agreed to call an attorney and met with Ivan Hametz, Esq the second week in June. Mr. Hametz [*8]gave her a copy of the proposed agreement to read. When she finished reading it, she became distraught and called the husband. She told him the agreement was all one sided and that it was more than just about his smoke shops which was what she had understood from him was all that it was suppose to deal with. They later met at a restaurant where she repeated that she was upset with the prenuptial agreement because it provided that everything, both before and after their marriage, was his and she informed him she wasn't going to sign. He responded by telling her not to worry and that they would work everything out but made it clear that, if she didn't sign, they wouldn't be able to get married. The wife testified that the husband assured her that everything they acquired after they married would be theirs and after they had a family he would tear up the agreement. She stated that, based on such promises, she agreed to call her attorney and arrange to sign the agreement, which she did on June 24, 1998, a few days before their wedding day. The wife testified that she never would have signed the prenuptial agreement had she not been told by her then fiancé that he would tear it up when they had a family.

The wife stated that she and the husband moved into the martial residence on the date of their marriage. She confirmed that she converted to the Greek Orthodox religion and that her fiancé had informed her that, if they were to marry, she would need to be Greek Orthodox and to be able to speak, read and write the Greek language fluently.

The wife further testified that, n addition to promising her he would tear up the prenuptial agreement after they had children, he also promised that, within two (2) weeks after the prenuptial agreement was signed, he would transfer a 1/3 interest to her in a company known as YIFTO. He also told her that any property he acquired after the marriage would be "ours".

The wife related how the parties' relationship started to deteriorate about a year after the twins were born. She testified that she started to lose trust in her husband due in part to a conversation they had about his friend "Nick" , who her husband referred to as a "fool" to believe that he was going to open a business for him. She also testified that she was upset and concerned about her husband's alleged withholding of cigarette rebates from his partner, David, particularly when he told her his dealing with David were "none of her business." The wife explained how her husband's treatment of Nick and David heightened her concerns about the promises the husband had made to her and she expressed that fear to him. She stated that the husband again assured her that he would attend to delivering on his promises, however, subsequent discussions with the husband always resulted in excuses. She claimed that, eventually a discussion in early or mid 2002 led to their agreeing to see an attorney, whereupon the wife called Mr. Hametz to set up an appointment for the wife, the husband and their respective attorneys.

The wife testified that, at a meeting on October 31, 2002, she announced that she and her husband were there for the purpose of tearing up the prenuptial agreement, at which time an argument ensued with the husband when he remarked that the meeting was not to tear up the agreement but, rather, to make changes and make the agreement more fair. According to the wife, she insisted that her husband had promised he would tear up the agreement. She also claimed that it was at this meeting that she first found out that the martial residence wasn't in joint names. The meeting failed to result in the prenuptial agreement being torn up or changed.

The wife testified that, over a year later, sometime in 2004, in the presence of her husband, she advised both her parents and his parents that the husband had refused to keep his promise to tear up the prenuptial agreement . She stated that, shortly thereafter, the parties and each of their fathers met with Mr. Hametz during which meeting the wife related how the prenuptial agreement was ruining their marriage. The wife told her father in-law that his son was a liar, causing her father in-law to ask his son, "Peter is that true", and her husband responded by saying "shut up and sit down." The wife also complained to her father in-law that her husband was buying properties and not putting them in joint names .

With reference to her meetings with Ms. Cunningham at Astoria Bank, the wife stated that she and her husband went to the bank to sign a deed giving her 50% of the marital residence. She recalled that papers were signed in the presence of Ms. Cunningham, as notary. The wife claimed that the husband retained the papers and, when at some point she requested a copy of what was signed, the husband denied that they had ever gone to the bank to transfer title by way of signing any deed.

On cross-examination, the wife testified as follows: that she was a honors college graduate and that she and her future husband did not "live together" before they married. She stated that her first meeting with Mr. Hametz was in mid June 1998, and that she spent approximately 45 minutes with the attorney and reviewed a draft of a prenuptial agreement with him. She did not recall ever meeting with Mr. Hametz between her initial meeting in mid June 1998 and the actual date the prenuptial agreement was signed. She acknowledged that the prenuptial agreement she signed had some changes from the draft she reviewed, but she did not believe she saw the revised prenuptial agreement prior to the date she signed. She alleged that the change between the draft and the signed agreement concerned a provision that now gave her an interest in YIFTO. According to the wife, she only briefly reviewed the draft prenuptial agreement and, other than seeing the change regarding YIFTO, she did recall reviewing the prenuptial agreement before signing it. She explained that her then fiancé had made certain promises to her while they were having dinner a few days earlier. She stated that, as a result of that meeting and the promises her fiancé made, [*9]she called Mr. Hametz and told him she was ready to sign.

With respect to ownership of the marital residence, the wife claimed that she saw bills relating to the house containing her name. She did not submit any evidence of her expenditure of any monies relating to either the construction or the decorating of the marital residence.

The wife conceded that, in 2004, at a time when she had lost trust in her husband, a home was purchased in Florida with title in the joint names of the parties. She testified that the house had been sold and the husband had retained the proceeds. She acknowledged that another property in Holbrook was also acquired in or about 2004 and placed in the names of both parties.

The wife also acknowledged that, contrary to her prior testimony, when she contacted Mr. Hametz to arrange to come in and sign the agreement, she never specified what promises her husband had allegedly made to her.

NEKTARIOUS KARAGIANES

The first witness called by the husband was Nektarious Karagianes (a/k/a "Nick"), who testified that he knew the husband since childhood and the wife since she and the husband began dating. He stated that he worked for the husband from 1992 to 2004, starting as a clerk and then as a manager of one of the husband's smoke shops. He described his relationship with the husband as friendly but said they were not best friends. He related how, in 1999, he and the husband had been partners in a smoke shop for approximately 2 ½ years and that he eventually sold his interest to the husband for a profit. He claimed that, although he and the husband had some disagreements from time to time, he never told anyone that the husband had "screwed him" or that he "hated" the husband.

JOHN PETRAKIS

The husband's father testified next. He recalled a January 2005 meeting at the wife's attorney's office where his son, his daughter in-law, her father and Mr Hametz were present. He stated that, during the meeting, his daughter in-law raised her voice and he said he asked her, "What do you want from my son, his blood?", which caused her to become upset. He stated that his son in turn told him to "stop". The husband's [*10]father claimed that they were speaking Greek and that his son never said "shut up" to him. According to the witness, at no time during the meeting did his daughter in-law claim that his son promised to put things in both names.

On cross-examination the witness stated that, on the occasion of an engagement celebration at the daughter in-laws parents home, his son commented to those in attendance, as they were viewing the building site plan, "We're going to build here".

.P.P.

The husband was the last witness to testify on his own behalf. He stated that he owned the marital residence and that title was in his name alone. He related that he purchased the building lot prior to his engagement to the wife and that he was the only mortgagor reflected on the mortgage. He denied that he ever told the wife that the property would be placed in their joint names. He also claimed no knowledge of the wife contributing any monies for the construction of the home. He also stated that any money they received from their engagement party, amounting to between $15,000 or $20,000, was used for travel. He contended that he was solely involved in the construction of the house, while the wife handled the decorating. The husband denied that, at the October 31, 2002 meeting, the wife said he had promised to tear up the agreement.

On cross-examination, the witness agreed that his father's testimony was not totally correct. He acknowledged that, contrary to his father's testimony, that no one told him why he was coming to court to testify, the husband had in fact told his father that the reason for his testimony was to state that the husband did not tell him to "shut up" at the October 31, 2002 meeting, as someone had testified.

FINDING OF FACTS AND CONCLUSIONS OF LAW

To sustain a claim for common-law fraudulent inducement, a plaintiff must demonstrate the misrepresentation of a material fact, which was known by the defendant to be false and intended to be relied upon when made, and that there was justifiable reliance and resulting wrong (cf., Braddock v. Braddock, 60 AD3d 84, 871 NYS2d 68 [1st Dept. 2009]).

A promise made with a preconceived and undisclosed intention of not performing it constitutes a misrepresentation of a material existing fact upon which an action for rescission may be predicated. The representations of the defendant were representations relating to the future, but are actionable because they were statements of an [*11]arrangement under which something was to be done when the party making the representation knew that no such thing would be done.

(Sabo v. Delman, 3 NY2d 155, 164 NYS2d 714 [C.A. 1957]) . While "mere promissory statements as to what will be done in the future are not actionable" (Adams v. Clark, 239 NY403, 410), it is settled that, if a promise was actually made with preconceived and undisclosed intention of not performing it, it constitutes a misrepresentation of "a material existing fact" upon which an action for rescission may be predicated. (See, eg. Adams v. Gillig, 199 NY314, 319, et seq, 92 NE 670, 671,672, Ritzwoller v. Lurre, 225 NY 464, 467-468; Adams v. Clark, supra, 239 NY 403, 410; Shipman v. Bennet, 2 NY2d 966; see also, Restatement Contracts, s.473, 3 Pomeroy on Equity Jurisprudence [5th Ed, 1941]vs.877 d, p.439, et seq.)" (Sabo v. Delman, supra; see also, Sanyo Electric v. Pinros & Gar Corp., 174 AD2d 452, 571 NYS2d 237 [1st Dept. 1991]; Deerfield Communications Corp. v. Cheesebough Ponds Inc., 68 NY2d 954, 510 NYS2d 88, 502 NE2d 1003[C.A. 1986]).The parol evidence rule forbids proof of extrinsic evidence to contradict or vary the terms of a written instrument and, accordingly, one who seeks, in a breach of contract action, to enforce an oral representation or promise relating to the subject matter of the contract cannot succeed. . . However, the parol evidence rule has no application in a suit brought to rescind a contract on the ground of fraud. In such a case, oral misrepresentations may be introduced to avoid the agreement.

(Sabo v. Delman, supra, citations omitted).

In determining whether the wife has sustained her burden of proof on her cause of action for rescission of the prenuptial agreement on the ground of fraudulent inducement, the court has viewed the totality of the circumstances surrounding the execution of the prenuptial agreement and assessed numerous factors, including the nature of the parties' personal relationship and their states of mind. The court has considered various affidavits submitted on pre-trial motions, the testimony and Exhibits submitted at trial, as well as the post trial submissions of the parties, including the wife's Post Trial Summation (Court Exhibit "I") and the husband's Post Trial Statement of Facts and Memorandum of Law with Exhibits (Court Exhibit "II"). After due deliberation having been had, the court makes the following findings and conclusions.

The opening scene in this story book romance, sans happy ending, finds two (2) young people who meet at a club in 1992, become attracted to one another and start dating. He's only 21 but a successful business man owning several retail tobacco stores (smoke shops). She, all of 18 and a college freshman, is attending school out of state. At his urging, she transfers to a local college so they can see more of each other and, eventually, by 1993 are dating steadily. Not too long thereafter, the young man tells his girlfriend that, if they were ever to marry, she would have to become Greek Orthodox. Indeed, she was told that, once they married and had children, they would have to be raised in the Greek Orthodox religion. Although denying he had any influence on her, his girlfriend, without hesitation, began a course of study to not only convert to the Greek Orthodox releigion but also to learn how to speak, read and write the Greek language. At this point in their relationship, the couple spent almost every day together.

They became engaged on August 4, 1996. Prior to their engagement, in the preceding spring, the husband acquired a 2.5 acre property in Old Brookville and began constructing a residence that would become the marital home. The wife contends she contributed her time, talents and efforts toward the construction of the premises. While the husband doesn't deny his wife's involvement with the project, he contends it was limited to decorating.

The parties executed the prenuptial agreement in issue on June 24, 1998 and married on June 28, 1998. Both parties were represented by counsel specializing in matrimonial law in conjunction with the execution of the prenuptial agreement. The parties' twin sons were born on August 5, 2000 and their daughter was born on August 26, 2003. At the time of the marriage, the wife was 24 years old. She had graduated from Hofstra University in 1996 with a degree in communications. Schedule "A" of the prenuptial agreement reflected that she was the beneficiary of an intervivos trust worth between $250,000.00 and $500,000.00. Her family and the husband's family were close. According to the wife, her father, a successful entrepreneur, provided the husband with investment opportunities that subsequently increased the husband's net worth by millions of dollars. At the time of the marriage the husband was 27 years old. According to Schedule "B" of the prenuptial agreement, he owned assets worth over five (5) million dollars, not including two new businesses (YIFTO Enterprises and RIXTA Enterprises) which were not valued.

On the day of their engagement, he announced to her and her family that he was going to build a home for their family on the very lot they found together, which was also the location where he proposed. Although no specific representation was made by the husband, that she and he were both owners of the million dollar home on Long Island's Gold Coast into which she concededly devoted substantial time and effort, based on his words and actions it is not unreasonable that she believed that they were to be joint owners. The origin of her erosion of trust can be traced to her understandable reliance [*12]on such words and actions on the part of the husband.

According to the wife, during the period between approximately 2001 or 2002 and 2006, the parties, through counsel, negotiated changes to the prenuptial agreement which would effectively rendered same null and void. The parties however never came to a consensus. The wife alleged and the husband denied that he signed and acknowledged a deed in April or May 2007 transferring title of the marital home in Old Brookville from the husband to the husband and wife as tenants by the entirety. Regardless, no such deed was ever delivered to the wife. While the court suspects that, based on where and the manner in which the husband proposed and his comments to his fiancée and other family members that he was building a house for the two (2) of them and their family, the wife may have been beguiled into believing that the home in Old Brookville was in their joint names, however, there is no evidence of any direct misrepresentation by the husband that the house was jointly owned. It is noteworthy though that, contrasted to the wife's testimony that they went to Astoria Bank to have a deed transferring ownership to both names notarized, the husband, an experienced and sophisticated businessman, was unable to identify the document that was notarized on the occasion of the visit to said bank. Based on the circumstances surrounding the visit to Astoria, the unequivocal testimony of the wife and the husband's patent evasiveness, the court finds the husband's credibility to be suspect. It is not unreasonable to surmise that the husband, in an attempt to mollify the wife, had a deed prepared, signed and arranged to have it notarized in the presence of the wife, and then retained it without recording same, intending therefore to never convey any proprietary interest in the property to the wife. Such conduct is consistent with, and additional corroborative evidence of the husband having made promises to the wife pertaining to the prenuptial agreement on the eve of their marriage which he never intended to keep.

In 2004, the parties purchased real property in Florida in their joint names. According to the husband, the property was sold the following year. Part of the proceeds was used , in July 2007, to purchase a house in West Gilgo Beach in joint names for $450,000.00, and part of the proceeds were deposited into a trust for the children worth approximately $1,500,000.00. The wife is the trustee of the trust. In July 2006, the husband named the wife as a partner in Realty One Partners LLC and Holbrook Realty, LLC.

In May 2008, the wife commenced the above captioned action.

The court finds that the husband's state of mind at the time of the execution of the prenuptial agreement was formulated early on in the relationship with his future wife when he admittedly chose not to disclose his financial circumstances to her. In 1992, when they first met, she was young, only 18, and he wanted to make sure she wouldn't date him and, indeed, perhaps, as he confided, marry him because of his money. And so, as their relationship became more serious and they fell in love, he told the wife his requirements [*13]if they were to take the relationship to the next step and the wife complied. She switched colleges to be able to date steadily, followed by her becoming a member of the Greek Orthodox Church. They attended Greek services together, their families became close and there were even financial dealings between the two (2v)families. The credible evidence reflects that, while the wife was pressing her fiancé to get married two (2) years into their relationship, the husband was concerned that he was too young and not prepared to get married. Arguments over the husband's reluctance ensued. Pressed by the wife and realizing that they had already been a couple for almost four (4) years, he asked her to marry him in August 1996. However, the testimony reveals that the husband wanted his cake and to eat it too. He decided to go forward with the marriage but was determined to preserve the assets he had worked so hard to acquire. After a nineteen month engagement and knowing the position the wife would be placed in, the husband, for the first time other than a casual reference to prenuptial agreements several years earlier, decided just a few weeks before the scheduled wedding to spring his newest demand on his future wife that, in order for them to get married, she would have to sign a prenuptial agreement.

When his fiancée balked and became upset, the husband told her a number of things to assuage her concerns, including that his attorney said "it was no big deal" and that it wasn't he who wanted the agreement but rather it was his father's idea. As a result she reluctantly agreed to meet an attorney (Mr. Hametz), however, after her discussions with the attorney and reading the prenuptial agreement, she became upset and angry and called her fiancée to tell him how she felt.

The court need not nor will it question whether the wife would have signed the agreement without the husband's alleged promises as the credible evidence leads to the conclusion that the husband, at this point, could not be sure that she would sign. He wanted the wedding to proceed but he also wanted to preserve his assets. The court credits the wife's testimony as to the parties meeting in the days before the scheduled June 28th wedding and finds her testimony that her fiancé told her "not to worry" and "we'll work everything out" to be convincing. Similarly convincing is her testimony that she was told by her fiancé that, 1) if she didn't sign the prenuptial agreement they wouldn't be getting married in a week, 2) that "everything they get after the marriage would be theirs" and 3)"after they had a family he would tear up the agreement." The court concludes that, based on the such promises, the wife called Mr. Hametz to arrange to sign the prenuptial agreement.

The wife testified that the husband pressured her over the course of just a few weeks immediately preceding the execution of the prenuptial agreement. Indeed, the evidence suggests that the chronology of events in the weeks before their scheduled marriage was the husband's demand that the wife sign a prenuptial agreement, which was followed by her refusal, resulting in the promises being made and, in reliance thereon, the wife signed the prenuptial agreement just four (4) days before the wedding. [*14]

The timing of the declaration by the husband regarding his demand for a pre-nuptial is not surprising when considering the husband's stated feelings of being pressured into getting married and his decision, early on in their relationship, not to share with his then girlfriend the nature and extent of his finances. Moreover, the husband was well aware of the substantial sums of money the wife's father had already spent and was committed to spend for the wedding when he told his fiancée that, without a prenuptial agreement, there would be no marriage. After a six (6) year relationship, including an almost two (2) year engagement, having converted to the husband's religion and having learned how to speak, write and read his family's language, and with an imminent wedding date for which her father had already spent $40,000, the wife was clearly at a crossroad and in a disadvantaged position and her fiancé knew it and took advantage of his superior position. There is no other reasonable conclusion to explain why the husband, after a lengthy engagement, saw fit to announce that the wife had to sign a prenuptial agreement just weeks before their marriage.

While the husband no doubt loved his fiancée as she loved him, having made it clear that a prenuptial agreement had to be signed if the marriage was to go forward, he himself was confronted with the consequences of his "last minute" strategy failing and his future wife standing firm on her refusal to sign. Initially, there could be little doubt on the husband's part that his fiancée, who had consistently complied with his pre-requisites to becoming Mrs. Petrakis, would agree to sign, especially with the wedding only a few weeks away and the investment already made by her family. However, the court finds that the wife did refuse to sign and it was not until her fiancé chose to close the deal and made the promises as alleged by the wife that she, in reliance on these promises, did sign the prenuptial agreement. The court concludes that the husband faced with a dilemma he caused, made the promises to his future wife, without the intention of honoring them, so as to gain her compliance with his demand that she sign the prenuptial agreement before the wedding could proceed. Having challenged his fiancée to "a game of chicken," the husband had to know that if the wedding was to be called off, he and he alone would be blamed for what would be viewed by all as his insensitive and selfish actions. Having created the conflict by presenting his ultimatum and when faced with the wife's intransigence, the husband "blinked" and induced the wife to sign the agreement with promises he never intended to keep.

Among the arguments proposed by the husband to support his position that the wife has failed to sustain her burden of proof is that her testimony was disingenuous and incredible. He contends that this is evident because of the conflicting testimony of the wife and her witnesses. While there are no doubt numerous instances of conflicting testimony offered by the wife and on her behalf, it is the court's view that because the events being recounted occurred either 13 years ago, with regard to execution of the prenuptial agreement, and as many as 9 years with regard to the post nuptial discussions, the inconsistencies are insignificant. The logic and substance of the testimony, not only that which was advanced by and on behalf of the wife, but the totality of the relevant facts and circumstance presented are afforded greater weight by the court than the minor inconsistencies. [*15]

The husband also argues that the court should draw a negative inference as a result of the wife's failure to call certain witnesses who presumably would have been able to corroborate segments of her testimony. In particular, reference is made to the wife's father not being called to support the wife's recitation of the events concerning the October 31, 2002 meeting. A negative inference may be drawn from a party's failure to call a person " under the [party's] control and in a position to give substantial, not merely cumulative, evidence" (Kupfer v. Dalton, 169 AD2d 819, 565 NYS2d 188 [2nd Dept. 1990]; cf. Hershowitz v. St. Michael, 143 AD2d 809, 54 NYS2d 344 [2nd Dept. 1988]). While there can be little question that the wife's father is "under her control" and thus available to testify, the court chooses not to draw any negative reference from this alleged "missing witness." It would not be unreasonable to consider the possibility that the father might not recall what occurred 9 years earlier at the October 31, 2002 meeting and, moreover, Ivan Hametz, Esq. supplied corroborative testimony.

There can be no doubt that the husband's presentation of the prenuptial agreement shortly before the wedding date was calculated, and speaks volumes as to the importance the husband attributed to being protected financially from a possible failed marriage. The totality of the testimony does not support a suggestion that the subject of the prenuptial agreement was merely an afterthought. Considering the husband's substantial net worth, the youthfulness of both he and his fiancée, it cannot be viewed as either surprising or unusual that he would want to initiate a dialogue about a prenuptial agreement as his fiancée pressed him to marry, in light of his stated concern that he might be too young and not prepared to get married. Indeed, he did broach the subject of a prenuptial some three (3) years earlier, casual though it may have been. However, whether the prenuptial agreement was presented to the wife in late May, early June or on or about June 17, 1998 as the wife variously testified, is clearly insignificant. It is noted that the husband initially testified that it was as early as March that he spoke to his fiancée about the prenuptial agreement, however, as related by Mr. Kroll, for some inexplicable reason, with the wedding scheduled for June, the husband didn't contact the attorney until sometime in early May. What is significant is that the husband knew as early as 1995 that he would require the wife to sign a prenuptial agreement when he mentioned it to his fiancée in a most casual and off handed manner. However, there is never a mention of the subject again until, at the very earliest, perhaps a month before the wedding. Similarly significant is that 19 months passed before the husband blind sided his fiancé by telling her that she needed to arrange to sign a prenuptial agreement.

Equally significant is the fact that the wife hadn't signed the agreement as of four days before the wedding. Although the husband claims that the wife had the prenuptial agreement for approximately six weeks, he offers no explanation as to why the wife did not execute it until the parties were practically on the church steps. The husband insists that they did not have any discussions about the content of the prenuptial agreement, even at the point when, with the wedding only 96 hours away, he claims not to have made any inquiry as to whether she had signed it or not. Also, the husband gives no explanation as to how a revised prenuptial agreement was signed if he and his fiancée did not discuss the contents of the original prenuptial agreement. It is not credible that the husband had no [*16]conversations with his future wife as the days dwindled down to the "big day" and the wife had not yet signed the prenuptial agreement. The court concludes that, fearful of admitting that he and his fiancée did in fact discuss the prenuptial agreement, as one would expect, the husband believed that he was better off denying that any conversations at all took place, lest he lend credence to the wife's allegations that such conversations included the "promises" being attributed to him by the wife. Moreover, the husband failed to offer any explanation as to why the subject of a prenuptial agreement wasn't brought up until a few weeks before the wedding. It was not discussed immediately prior to or at the time of or immediately after the parties' engagement nor at any time for almost the entire period of their lengthy engagement.

The court finds that the husband's words and actions are sufficiently telling to lend corroboration to much of the wife's testimony. Ivan Hametz, Esq., a respected and long standing member of the bar, provided unbiased testimony that leads to the conclusion that, at the October 31, 2002 meeting, when presented with the opportunity to deny his wife's allegations that he made promises and never intended to keep such promises, the husband's silence effectively gave credence to his wife's accusations.

It is the conclusion of the court that the wife has sustained her burden of proof that the husband fraudulently induced her to sign the prenuptial agreement with promises that the husband would, inter alia, tear up the agreement after they had a child, and that, at the time the promises were made, the husband had no intention of honoring or fulfilling the promises, and the wife, due to the nature and extent of the parties' relationship, justifiably placed her absolute trust and confidence in her future husband's representations and promises to her detriment and was damaged by being denied a share of significant marital property. Based on the foregoing, it is hereby

ORDERED, that the prenuptial agreement, dated June 24, 1998, is hereby rescinded, set aside and declared to be null and void; and it is further

ORDERED, that the wife's remaining cause of action for the imposition of a constructive trust on the marital residence is expected to be consolidated with the wife's action for divorce (Index # 10- 202768) pursuant to stipulation. The parties are urged to execute said stipulation and to submit same to the court to be so- ordered; and it is further

ORDERED, that the parties and counsel, where applicable, are directed to appear for a preliminary conference on the issues relating to the constructive trust cause of action and the matrimonial action on January 30,2012 at 9:30 a.m., before the Justice to be assigned. A copy of the Parts' Preliminary Conference form which is to be completed prior to the scheduled conference may be obtained from the Courtroom clerk (516-571-0020).

E N T E R:

___________________________

Anthony J. Falanga, Justice

Supreme Court, Nassau County

Dated: December 12, 2011

Mineola, New York