A.N. v E.N.

[*1] A.N. v E.N. 2012 NY Slip Op 51839(U) Decided on September 18, 2012 Supreme Court, Rockland County Alfieri, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 18, 2012
Supreme Court, Rockland County

A.N., Plaintiff,

against

E.N., Defendant.



E.N., Plaintiff,

against

A.N. , Defendant.



XXXX



Johnson & Cohen, LLP

One Blue Hill Plaza, 11th Floor, Pearl River, NY 10965

McCormack & Phillips, Esqs.

51 North Broadway, Suite 2, Nyack, NY 10960

Victor J. Alfieri, J.

Pursuant to this Court's Short Form Order dated May 11, 2012, a hearing was held on July 31, 2012, and continued on August 30th and 31st, 2012 to determine whether the parties' prenuptial [*2]agreement is valid and enforceable.[FN1] E. N. (hereinafter "Plaintiff" or "the Wife") testified in support of her contention that the prenuptial agreement is void on its face on the grounds of fraud, duress, overreaching and unconscionability. A. N. (hereinafter "Defendant" or "the Husband") and Bruce Goldberg, Esq. testified on behalf of the Husband.

The Court makes the following findings of fact and conclusions of law as are relevant to the Court's decision:

I. Findings of Fact

Sometime in late 1994, the parties met and soon thereafter began dating each other. Plaintiff was 27 years old and working for Marrs Sales, a lighting company, as a sales representative.[FN2] Defendant was 30 years old and employed by the New York City Police Department and had been so employed since 1993. The parties continued to date and in December 1996, they became engaged. Thereafter, in November 1997, Defendant bought a house in Garnerville, New York.

Due to his own misgivings, and as the relationship intensified, Defendant made clear that if the parties were going to get married, Defendant wanted Plaintiff to sign a prenuptial agreement. However, since Defendant was not all too keen on the idea of getting married, Defendant researched another option through the NYPD which would provide insurance benefits for Plaintiff, i.e., a Domestic Partnership Agreement, as an alternative to marriage. Since Plaintiff was "old fashioned" and intent on getting married, she told Defendant she had no problem with signing a prenuptial agreement. The parties had a few discussions over the course of their courtship regarding such an agreement and pursuant to those discussions, Plaintiff understood that she would be giving up her right to Defendant's two bank accounts (i.e., an individual bank account and a jointly-held bank account Defendant had with his mother). During one of the conversations about the prenuptial agreement, Plaintiff told Defendant that he could probably find an attorney to prepare the prenuptial agreement on 149th Street in the Bronx. Plaintiff did not specify the name of any one particular attorney for Defendant [*3]to contact.

In or about January or February 1998, Defendant contacted the law firm of Marvin Goldberg, a firm located on 149th Street in the Bronx to prepare a prenuptial agreement.[FN3] Defendant met with the attorney one time and provided him with some of his financial records. In early June 1998, after Defendant made many telephone calls to the attorney's office to check on the status of the agreement, Defendant was finally advised that the prenuptial agreement was ready to be signed. Although Defendant may have seen a draft of the agreement prior to signing it, there is no dispute that Plaintiff never saw a copy of the agreement prior to signing it.

With their wedding date set for June 20, 1998, on June 6, 1998, Defendant contacted Plaintiff at work and told her that the prenuptial agreement was ready to be signed. Defendant arranged to pick Plaintiff up at work so that they could drive to the attorney's office in the Bronx to sign the agreement.[FN4] At approximately 3:15 p.m., Defendant picked Plaintiff up and they drove to the attorney's office in the Bronx. On their way into the office, Defendant asked Plaintiff, "Are you sure about this?" and thinking he was asking her about getting married, Plaintiff answered in the affirmative. Defendant then clarified that he was talking about signing prenuptial agreement. Plaintiff indicated she was fine with it after Defendant reiterated to her that he would not marry her if she did not sign it.

Once in the attorney's office and after the attorney introduced himself to the parties and handed a copy of the prenuptial agreement to each of them, the parties' signed the prenuptial agreement. According to Plaintiff, they were in the attorney's office for a total of "maybe 15 minutes." In addition, Plaintiff testified that at no time did the attorney discuss the specific contents of the agreement with them nor did the attorney discuss with her that she should have an attorney review it. Plaintiff did not read the agreement before signing it. After the parties' signed the prenuptial agreement, they were each given a copy of the agreement in a manilla envelope. However, after that date, Plaintiff never saw her copy of the agreement until she [*4]requested it from Defendant in 2010.[FN5]

II. Conclusions of Law

"[D]uly executed prenuptial agreements are generally valid and enforceable given the strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements.'" Van Kipnis v. Van Kipnis, 11 NY3d 573 (2008), quoting, Bloomfield v. Bloomfield, 97 NY2d 188, 193 (2001). Thus, "[a]n agreement between spouses which is fair on its face will be enforced according to its terms. . . ." Rabinovich v. Shevchenko, 93 AD3d 774 (2d Dept. 2012), citing, Christian v. Christian, 42 NY2d 63, 72-73 (1977). However, where the party challenging the validity of the prenuptial agreement establishes the existence of fraud, duress, overreaching, or unconscionability, the prenuptial agreement may be set aside. See, id. Case law on this issue further establishes that the issue of whether fraud, duress, overreaching or unconsionability exists must be determined on a case-by-case basis. Although the case law seems to hold that no one factor, by itself, will warrant the setting aside of a prenuptial agreement, the existence of many factors may establish the invalidity of a prenuptial agreement.

For example, where the plaintiff/wife challenged the validity of a prenuptial agreement on the ground of unconscionablity, the Appellate Division, Second Department held that the agreement was valid. See, Cioffi-Petrakis v. Petrakis, 72 AD3d 868, 868-869(2d Dept. 2010). " An unconscionable bargain is one which no person in his or her senses and not under delusion would make on the one hand, and 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.'" Id., quoting, Morad v. Morad, 27 AD3d 626, 627 (2d Dept. 2006). In Cioffi-Petrakis, the plaintiff/wife was represented by counsel during negotiations of the terms of the prenuptial agreement and plaintiff's counsel signed the agreement as a witness. More significantly, however, the plaintiff/wife was provided meaningful bargained-for benefits, i.e., in the event of a divorce, plaintiff/wife would receive equitable distribution of the marital assets in an amount no greater than the sum of $25,000 per year for each full year the parties had been married as well as a one-third interest in one of the defendant's businesses.

Similarly, where defendant/wife was to receive a $750,000 tax-free payment pursuant to the terms of the prenuptial agreement, the agreement was not unconscionable. See, Smith v. Walsh-Smith, 66 [*5]AD3d 534 (1st Dept. 2009). The court, in Barocas v. Barocas, 94 AD3d 551 (1st Dept. 2012), held that unconsionability was not an issue where the wife knowingly signed the agreement against the advice of counsel.

On the contrary, where a prenuptial agreement is not negotiated at arms length and is facially unfair, it has been found to be unconscionable. In Scilari v. Scilari, 291 AD2d 392 (2d Dept. 2002), the appellate court set aside the provision of a prenuptial agreement whereby the wife waived her right to maintenance. Since the agreement was drafted by the husband's lawyer and forced upon the young wife, who was not represented by counsel, by the husband and his father the night before their wedding, the court found that the agreement was unconscionable as it had not been negotiated at arm's length and was facially unfair. Thus, the substance of the agreement itself in view of the circumstances under which it was signed rendered the agreement invalid. Likewise, in Clermont v. Clermont, 198 AD2d 631 (3d Dept. 1993), a provision of a prenuptial agreement - whereby all property belonging to the wife, including property acquired by the wife with the wife's separate income, became the husband's - was found to be unconscionable.

Turning to a challenge of a prenuptial agreement on the ground of duress, "duress" is defined as "[a]ny unlawful threat or coercion used by a person to induce another to act (or to refrain from acting) in a manner he or she otherwise would not (or would). Subjecting person to improper pressure which overcomes his will and coerces him to comply with demand to which he would not yield if acting as free agent." Black's Law Dictionary 504 (6th ed. 1990). It is well-settled that a threat to cancel a wedding does not arise to duress. See, Cohen v. Cohen, 93 AD3d 506 (1st Dept. 2012); Ramunno v. Ramunno, 91 AD3d 1355 (4th Dept. 2012); Weinstein v. Weinstein, 36 AD3d 797 (2d Dept. 2007). On the other hand, the appellate court found that a wife had been coerced into signing a prenuptial agreement where the agreement was given to her just before the ceremony, it was drafted in English which she did not understand and she did not have an opportunity to have it reviewed by an attorney or translated into her native language. See, Rabinovich v. Shevehenko, 93 AD3d 774 (2d Dept. 2012).

The existence of other factors surrounding the signing of a prenuptial agreement, by themselves, also will not require the agreement to be set aside. For example, the failure to provide full financial disclosure, by itself, is not sufficient to constitute fraud or otherwise make a prenuptial agreement invalid. See, Smith v. Walsh-Smith, 66 AD3d 534 (1st Dept. 2009).

Similarly, the absence of legal representation, without more, does not establish overreaching or require the automatic nullification of the agreement. See, e.g., Cohen v. Cohen, 93 AD3d 506 (1st Dept. 2012); Forsberg v. Frosberg, 219 AD2d 615 (2d Dept. [*6]1995); Panossian v. Panossian, 172 AD2d 811 (2d Dept. 1991). However, in each of these cases, there were other facts, in addition to the lack of legal representation, that established that there was no overreaching. In Cohen, although the wife was not represented by counsel, the prenuptial agreement was prepared by an independent public official not aligned with either party. In Forsberg, the appellate court upheld the trial court's decision granting partial summary judgment to the husband finding that the prenuptial agreement was valid. In that case, the wife, in challenging the agreement's validity, never alleged that she did not understand the agreement or that the husband concealed or misrepresented his assets. Thus, there were no issues of fact to be determined. And, in Panossian, although the wife lacked legal representation, both parties received a copy of the document and each provision was read to them aloud prior to its execution. In addition, plaintiff/wife was educated, willingly signed the agreement in consideration of the husband's wishes and understood the portent of the agreement.

On the other hand, where the validity of a separation agreement was at issue, the separation agreement was held to be invalid where the wife was not represented by counsel and the agreement was prepared by the husband's attorney, who also acted as the husband's attorney. See, Bartlett v. Bartlett, 84 AD2d 800 (2d Dept. 1981). In finding overreaching on the part of the husband, the appellate court recognized that where one attorney represents both parties in the preparation of a separation agreement, "an inference of overreaching on the part of the party who is the prime beneficiary of the assistance of the attorney may be drawn." Id. See also, Pippis v. Pippis, 69 AD3d 824 (2d Dept. 2010)(Stipulation of settlement was the product of overreaching where the attorney for plaintiff/husband drafted the stipulation of settlement, defendant/wife was not represented by counsel, and the terms of the stipulation were inequitable); Tuccillo v. Tuccillo, 8 AD3d 659 (2d Dept. 2004)(Trial court properly rescinded stipulation of settlement as it was "manifestly unfair and one-sided due to a spouse's overreaching.") The inference is "rebuttable if it appears that the separation agreement is fair and equitable, or if both parties freely agreed to its terms with a thorough understanding thereof." Bartlett v. Barlett, 84 AD2d (Internal citations omitted).

This Court finds that the same inference and rebuttable presumption applicable to separation agreements should also apply to prenuptial agreements. Despite the difference in the time that such agreements are made, the content of both agreements is essentially the same — both types of agreements provide for the equitable distribution of property upon the dissolution of the marriage.

In an attempt to find some common ground among all of these [*7]decisions, it is abundantly clear that the determination of whether a prenuptial agreement is valid depends on the specific circumstances surrounding the execution of the challenged agreement. While no one factor alone will warrant the setting aside of such an agreement, the existence of numerous factors may tip the scale in favor of its rescission.

Applied here, numerous factors are present that weigh heavily in favor of setting aside the prenuptial agreement. Specifically, the evidence established that elements of overreaching, unconsionability and duress all surrounded the execution of the subject prenuptial agreement. To begin, Plaintiff had no input in negotiating the terms of the agreement or in its preparation. Rather, the agreement itself was prepared by an attorney that Defendant hired and paid for based on one, maybe two conversations between them.[FN6] Nor was Plaintiff represented by counsel at any time during the drafting of the agreement or at the time of its execution. The result was a prenuptial agreement that left Plaintiff with absolutely nothing. There was no bargained-for benefit. The prenuptial agreement was completely one-sided in favor of Defendant, "the party who [was] the prime beneficiary of the assistance of the attorney."

Moreover, the terms of the agreement Plaintiff actually signed were very different from the terms of the agreement she thought she was signing. Based on several conversations she had with Defendant, Plaintiff thought that the purpose of the prenuptial agreement was to protect Defendant's individual and joint bank accounts. There was never any discussion between the two of them about Plaintiff waiving her rights to maintenance, insurance benefits, his pension, or his estate should he predecease her. Plaintiff did not see a copy of the agreement prior to signing it, nor did Defendant's attorney explain the contents of it to her prior to her signing it.[FN7] Interestingly, Defendant testified that he did not entirely understand the provisions of the agreement at the time he signed it or even to this day. Defendant's testimony in this regard is significant for two reasons. First, Defendant's actions contradict the terms of the agreement. Pursuant to the agreement, Plaintiff waived her right to Defendant's insurance benefits. Yet, prior to even retaining the attorney to draft the agreement, Defendant researched ways he could provide benefits to Plaintiff without them having to get married. Clearly, Defendant [*8]wanted to provide for her. In addition, pursuant to the agreement, the parties each waived their survivorship rights and waived any rights to each other's estate. Yet, in 2001, the Plaintiff and Defendant had "mirror" wills drawn up and signed, which is contradictory to the terms of the agreement. Again, it establishes that Defendant was unaware of, or did not fully understand the terms of the prenuptial agreement. Second, several of the terms of the prenuptial agreement made reference to specific statutes in the Domestic Relations Law and General Obligations Law. Based on the testimony of both parties, it is clear that such statutory references were never explained to either party and that neither party understood their import.

Furthermore, although Defendant claims Plaintiff had "all the time in the world" to think about her decision to sign the prenuptial agreement, this is just not so. As previously mentioned, Plaintiff never received a copy of the prenuptial agreement prior to the date she arrived at the attorney's office to sign it. Plaintiff had nothing to do with the drafting of the agreement and was willing to sign it based on her trust in Defendant and her reliance on their conversations regarding its contents. Knowing that Defendant would not marry her unless she signed it, Plaintiff signed the agreement on June 8, 1998, less than two weeks before their wedding. The fact that Plaintiff worked as a receptionist for a law firm specializing in matrimonial matters at the time she signed the agreement is, in this Court's opinion, of no significance under these circumstances as Plaintiff never received a copy of the agreement prior to the date of its execution, which was just ten days before the date of their wedding. While Plaintiff's failure to sign the prenuptial agreement, which would have resulted in the cancellation of the wedding, is insufficient to set aside the agreement, this fact, in conjunction with the other facts set forth above, warrant the setting aside of the prenuptial agreement on the grounds of unconscionability, overreaching and duress.

Based on the foregoing, the papers reviewed by the Court and the evidence adduced at the hearing, it is hereby

ORDERED that the prenuptial agreement is set aside; and it is further

ORDERED that the parties shall appear for a pre-trial conference on October 2, 2012 at 9:30 a.m. A trial date shall be scheduled at that time.

E N T E R

Dated: September 18 , 2012

New City, New York

[*9]

HON. VICTOR J. ALFIERI, JR.

Acting Supreme Court Justice Footnotes

Footnote 1: As "[a]greements between [prospective] spouses involve a fiduciary relationship requiring the utmost of good faith," such agreements need to be closely scrutinized and their validity should be determined on a fully developed record. See, Rosenzweig v. Givens, 62 AD3d (1st Dept. 2009). See also, Carlin v. Carlin, 52 AD3d 559 (2d Dept. 2008).

Footnote 2: Plaintiff testified that she worked several different jobs since graduating from high school and had taken numerous courses at local community colleges but did not graduate with any degree.

Footnote 3: Defendant testified that when he contacted the office, he thought he contacted Marvin Goldberg, Esq. and that Marvin Goldberg prepared the prenuptial agreement. Defendant further testified that he did not learn until the deposition that was held regarding this matter that he, in fact, retained Bruce Goldberg, Esq., an employee and the son of Marvin Goldberg, to prepare the prenuptial agreement.

Footnote 4: In January of 1998, Plaintiff started a new job with a matrimonial law firm as a receptionist.

Footnote 5: Plaintiff testified that Defendant did not provide a copy of the prenuptial agreement to her until after she agreed to take and did take a polygraph test and a blood test due to Defendant's suspicions of her infidelity.

Footnote 6: The Court gives very little import to the testimony of Bruce Goldberg, Esq. as he had no specific recollection of the signing of this prenuptial agreement and could only testify as to what his custom and practice was.

Footnote 7: Defendant could not definitively state that he saw a copy of the agreement prior to signing it.