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Y.G., Plaintiff, v. T.K., Defendant.
The following papers numbered 1 to 9 read on the motions herein:
Upon the foregoing papers in this matrimonial action, defendant-wife moves by order to show cause for an order: (1) setting aside the parties' Stipulation of Settlement dated January 1, 2016 (the postnuptial agreement or agreement) on the grounds that it was procured by fraud and overreaching, and is patently unfair, invalid and unconscionable; (2) staying the signing and entering of the proposed Judgment of Divorce until a full hearing and determination of all the ancillary issues has taken place; (3) pursuant to CPLR 204, permitting defendant to file a verified answer; (4) pursuant to Domestic Relations Law § 240, granting defendant pendente lite legal and physical custody of the parties' two infant children; (5) directing that plaintiff-husband's parenting time take place away from the defendant's residence, that it take place on alternate weekends and every Sunday, and that the plaintiff be responsible for picking up and returning the children from the defendant's residence for all of his parenting time; (6) pursuant to Domestic Relations Law §§ 236 (B) (7) (a) and 240, directing plaintiff to pay defendant pendente lite child support in the sum of $922 in accordance with the Child Support Standards Act; (7) pursuant to Domestic Relations Law § 240, directing the plaintiff to pay his pro-rata share of the children's health insurance, unreimbursed medical and dental expenses, child care, educational expenses and summer camp expenses during the pendency of this action; and (8) awarding defendant interim counsel fees in the sum of $10,000 with leave to apply for further sums as may be warranted.
Plaintiff cross-moves for an order: (1) enforcing the settlement agreement and directing that defendant comply with the terms therein, including a direction that defendant be responsible for the pick up and drop off of the children at plaintiff's residence; (2) directing that, in the event defendant does not arrange to have the children delivered to plaintiff for his parenting time and he must make his own arrangements at his own expense, then defendant pay him $150 per trip arranged by him no later than ten days following each infraction; (3) directing that defendant pay $2,400 owed in connection with plaintiff's transportation of the children for his parenting time, presently outstanding; and (4) an award of counsel fees to plaintiff in connection with the defense of defendant's pending application and plaintiff's cross motion.
Background and Procedural History
Plaintiff and defendant were married on March 9, 2009. At the time of the wedding, plaintiff was 22 years old and defendant was 19 years old. Two children were born of the marriage: S.G., born in March 2010, and J.G. born in January 2013. During the marriage, the parties resided in an apartment in Brooklyn owned by plaintiff's parents. In February, 2014, defendant moved out of the marital residence with the two children.
On August 6, 2015, the parties entered into a written agreement wherein they agreed to attend eight sessions with a marriage counselor. The agreement further provided that “[a]fter these specific 8 sessions, [defendant] can decide whether or not to continue with therapy ․ However, if [defendant] concludes that she wants to end her marriage to [plaintiff] ․ [plaintiff] will end all options of continuing marriage counseling/therapy and will make no demands that would delay the dissolution of their marriage” (Defendant's Exhibit B). The agreement also stated that, in the event defendant elected to discontinue therapy, “both parties will return to Bais Din to finalize the divorce agreement after which the ‘Get’—Jewish Divorce Document—will be willingly given by [plaintiff] to [defendant] in Bais din ․ the final divorce agreement will include the particulars about monthly child support, visitation schedule, Yeshiva tuition, summer camps, etc ․” (id.). Ultimately, the parties failed to reconcile after undergoing marriage counseling.
On January 1, 2016, the parties entered into the post-nuptial “Stipulation of Settlement” in which they agreed that plaintiff would commence an uncontested matrimonial action in Kings County and that neither party would seek relief in that action which was inconsistent with the terms of the settlement agreement. In this regard, the agreement provides that defendant shall be responsible for plaintiff's attorney's fees and costs relating to the filing and submission of the uncontested divorce documents. Under the terms of the agreement, defendant was given physical custody of the children with plaintiff having visitation rights on alternate Sabbaths from Friday before sundown to Saturday evenings. The settlement agreement further provided that, “[i]n consideration for [defendant's] unilateral relocation, the [defendant] shall be responsible for all pickup and drop-offs to the [plaintiff's] residence (so long as [plaintiff] resides in Brooklyn, Queens, or Long Island)” (Defendant's Exhibit A at 20). Finally, the settlement agreement states that, in the event the defendant fails to arrange for the children's transportation to or from the plaintiff's residence, she must pay him $150 per trip arranged by plaintiff.
With respect to the division of marital property, the settlement agreement states that all tangible property in plaintiff's possession as of the date of the agreement is to remain his sole property, and all tangible property in defendant's possession as of the date of the agreement was to remain her sole property. In addition, under the agreement, the defendant agreed that “simultaneous with the execution of this agreement, but only after [plaintiff] removes her barriers to remarriage, [defendant] shall deliver to [plaintiff] $15,000 ․ in consideration and satisfaction of monies given by [plaintiff] to [defendant's] family during the marriage for investment purposes” (id. at 6). The settlement agreement also required that defendant return to plaintiff a pair of diamond earnings which he gave her during the marriage.
With respect to the child support provisions, the postnuptial agreement initially states that plaintiff's annual income is $0 per year and defendant's gross annual income is $50,000. The agreement provides that plaintiff is required to pay defendant a total of $200 per month in child support for both children. In addition, the settlement agreement states that, inasmuch as the plaintiff is currently in medical school, “in the event [plaintiff] becomes gainfully employed, after completing residency as a medical doctor, the child support obligation herein shall increase to $800 per month” (id. at 11). Further, the agreement provides that, in the event that plaintiff becomes gainfully employed in a different profession, the child support obligation will increase to $400 per month. With respect to educational expenses, the agreement states that defendant is solely responsible for the children's yeshiva tuition except that plaintiff agrees to contribute $1,000 a year per child, to be increased to $2,500 per child in the event he becomes gainfully employed as a medical doctor. The agreement also provides that defendant is solely responsible for all medical and unreimbursed medical expenses for the children. As a final matter, the agreement contains a provision whereby both parties agreed to waive and opt out of any right either of them has to seek any review and cost of living adjustments of the child support provisions in the agreement.
In addition to the support provisions, the agreement contains a binding arbitration clause which states that, “[i]n the event of any disagreement, concern, or controversy between the parties relating to the terms of this agreement ․ or the enforcement of its terms, the parties agree to and appoint Rabbi [S. H.] as a single Rabbinical judge and arbitrator, so that ․ they will be bound to arbitrate said issues” (id. at 27). The arbitration clause also states that “[t]he parties obligate themselves to adhere to the Arbitrator's ruling” (id. at 28). Further, the parties signed a hand-written addendum to the stipulation of settlement stating that, “[i]n the event that either party goes to court without written permission from [Rabbi H.] the appointed Arbitrator in the agreement, that party will pay all legal fees of the other or his/her attorney at a rate of $1,300 per hour” (Defendant's Exhibit D).
Immediately after signing the settlement agreement, plaintiff granted defendant a Jewish religious divorce before a Beth Din. Four days later, on January 5, 2016, plaintiff commenced this action for divorce by filing a summons with verified complaint. On February 10, 2016, plaintiff filed a request for judicial intervention for an uncontested matrimonial action, a copy of the agreement, and the proposed judgment of divorce materials. The court rejected his papers and no judgment has been entered. On May 17, 2017, defendant filed a request for judicial intervention in a contested matrimonial action and the instant order to show cause, which was initially made returnable on July 20, 2017. On the return date, plaintiff indicated to the court that he needed additional time to oppose the motion. The court ordered a briefing schedule and adjourned the matter to October 19, 2017. Oral argument on both motions was held on October 19, 2017 and the parties were directed to submit the transcript of oral argument. Thereafter, the motions were submitted for written decision.
Defendant's Motion to Set Aside the Settlement Agreement
In moving to set aside the stipulation of settlement, defendant argues that the manner in which the agreement was procured provides conclusive proof of both overreaching and unconscionability. Defendant contends that plaintiff used his ability to deny her a religious divorce as leverage, which forced her to enter into an unfair and unconscionable settlement agreement in a rushed manner, without the benefit of counsel, and without having any input into the terms of the agreement. Defendant claims that the parties were scheduled to appear before a Beth Din on January 1, 2016, where plaintiff would grant her a religious divorce. Defendant further states that, during the last week of December, she was suddenly and unexpectedly presented with a copy of the agreement, which was drafted by plaintiff's attorney, J. Y., Esq. Defendant contends that plaintiff e-mailed her a copy of the proposed settlement agreement on December 31, 2015 and informed her that he was not willing to make any changes to or negotiate any provisions in the agreement. Defendant further contends that plaintiff told her to come alone to the Beth Din the next day in order to sign the agreement and threatened that he would not appear if she brought anyone with her. According to defendant, plaintiff also directed her to bring $15,000 in cash with her, which represented money they had invested, the pair of diamond earrings mentioned in the settlement agreement, $2,500 as a payment for plaintiff's lawyer, as well as $900 in Beth Din fees.
In further support of her argument that the settlement agreement should be set aside based upon overreaching, defendant avers that when the parties appeared at the Beth Din to sign the agreement, plaintiff was represented by counsel while her own “toen” (i.e., rabbinical lawyer) was not permitted to enter the building. Additionally, defendant alleges that after she signed the agreement, plaintiff presented her with the aforementioned handwritten addendum which required that any party that made an application in court without the consent of a Rabbi would pay the other party's legal fees. According to defendant, she was never notified that such a document would be presented to her, but she felt that she had no choice but to sign the document inasmuch as plaintiff made it clear that he would not proceed with the religious divorce if she refused.
Defendant also argues that the settlement agreement must be set aside inasmuch as many of its provisions are unfair and unconscionable. In particular, with respect to the custody provisions, defendant contends that the clause requiring her to transport the children to and from all visits with plaintiff is draconian and plaintiff's way of exacting revenge against her for moving from Brooklyn to Queens. Defendant further maintains that the clause requiring that she pay plaintiff $150 any time he arranges for the children's transportation to or from a visit is unconscionable.
Defendant further contends that the financial provisions in the agreement are unconscionable. Specifically, defendant argues that, inasmuch as plaintiff's family subsidized their lifestyle during the marriage by paying the parties' rent and giving them money on a regular basis, income in the amount of $50,000 per year should have been imputed to plaintiff when calculating his current child support obligation. Defendant also contends that, had she been represented by counsel and had adequate time to review the settlement agreement, she would not have agreed to the provision in the settlement agreement that set plaintiff's annual income at $0. In addition, defendant argues that setting plaintiff's child support obligation at a mere $800 per month after he finishes his residency and becomes a doctor is unreasonable and unconscionable. Defendant argues that this inadequate child support amount is made worse by the fact that the agreement contains a provision whereby she waived her right to seek an upward modification under the Domestic Relations Law. Furthermore, defendant avers that it is unreasonable and unconscionable that the settlement agreement makes her solely responsible for paying all of the children's unreimbursed medical expenses as well as 90% of their Yeshiva tuition. Similarly, defendant argues that it is unreasonable and unfair that she was required to pay plaintiff's counsel fees under the agreement.
As a final matter, defendant argues that the settlement agreement must be set aside since it fails to comply with the requirements of Domestic Relations Law § 240 (1–b) (i) and the Child Support Standards Act (CSSA). In particular, defendant notes that under Domestic Relations Law § 240 (1–b) (i), when a party is unrepresented by counsel, the court may not enter an order or judgment ․ that includes a provision for child support unless the unrepresented party or parties have received a copy of the child support standards chart. Here, defendant contends that she was not represented by counsel and did not receive a copy of the CSSA chart. In addition, defendant contends that the settlement agreement fails to set forth what the correct amount of child support would be based upon the CSSA as required when the support amount in an agreement deviates from the basic child support amount calculated under the CSSA.
In opposition to defendant's motion to set aside the settlement agreement, and in support of his own motion to enforce the agreement, plaintiff submits his own affidavit in which he denies many of defendant's allegations. In particular, plaintiff avers that he and defendant negotiated the terms of the settlement agreement over the course of several months before arriving at the final agreement, and that defendant requested many changes in the draft of the agreement that were incorporated into the final document. Plaintiff further contends that defendant was represented by counsel during the negotiation process. In addition, plaintiff avers that he did not “rush” defendant into signing the settlement agreement on January 1, 2016. To the contrary, plaintiff argues that defendant insisted on executing the agreement at the earliest possible date because she planned to remarry and was anxious to enter into the settlement agreement and proceed with the religious divorce as soon as possible.
In support of these contentions, plaintiff submits printouts of undated text messages that he allegedly exchanged with defendant which indicate that the parties discussed and negotiated various provisions in the settlement agreement, including who would be responsible for transporting the children to and from visits with plaintiff. Plaintiff further submits transcripts of telephone conversations that he had with defendant on December 24, December 30 and December 31, 2015. In these conversations, defendant makes reference to meeting with an attorney, discussing the terms of the agreement with her attorney, and asks that certain changes be made to the proposed stipulation of settlement which were ultimately incorporated into the final agreement, and says that the proposed agreement “looks good.” In addition, defendant agrees to be responsible for transporting the children for visits, but only within Brooklyn. Further, at one point, plaintiff stated that his attorney would need more time to finalize the agreement, but defendant was insistent that the parties enter into the stipulation of settlement the next day (i.e., January 1, 2016). As a final matter, plaintiff submits defendant's cell phone records which indicate that she made several calls to a law firm between December 22 and December 30, 2015. Under the circumstances, plaintiff argues that it is clear that the settlement agreement was not the product of overreaching.
In further opposition to defendant's motion to set aside the settlement agreement, and in support of his own cross motion to enforce the agreement, plaintiff argues that none of the provisions in the agreement are unreasonable or unconscionable. In particular, with respect to the requirement that defendant transport the children to and from visits, plaintiff maintains that this was a carefully negotiated provision which was necessitated by his busy medical school schedule as well as the fact that defendant made the unilateral decision to move an hour away to Queens. Plaintiff submits a transcript of a November 14, 2015 telephone conversation between the parties in which defendant states that she will not move back to Brooklyn and states, “okay. Okay. Fine. Listen, put it in the draft. I'll do both ways transportation. Just send me the draft.” Plaintiff further contends that the provision that defendant would pay him $150 if she failed to transport the children was the only way to ensure that defendant would bring the children to and from his house as required under the agreement.
With respect to the child support provision in the settlement agreement, plaintiff argues that it is not unconscionable inasmuch as he currently pays more than would be required under the CSSA given the fact that he earns no income as a medical student. Similarly, plaintiff argues the provision requiring him to only pay $1,000 per year toward the children's Yeshiva costs is not unconscionable given his lack of income. In addition, plaintiff maintains that defendant unilaterally decided to enroll the children in a very expensive Yeshiva. Further, plaintiff argues that there is no merit to defendant's argument that the settlement agreement must be set aside because she did not receive a copy of the CSSA chart. In particular, plaintiff notes that defendant acknowledged in the settlement agreement that any unrepresented party has received a copy of the CSSA chart. In any event, plaintiff maintains that defendant was represented by an attorney.
With respect to the upward modification of the child support provision, plaintiff argues that the amount of the modification is not unreasonable inasmuch as it is currently unknown how much he will earn when he becomes employed. In addition, plaintiff notes that, inasmuch as defendant earns approximately $50,000 per year and he has no income, he could have sought spousal maintenance from defendant but waived his right to do so. According to plaintiff, this is further proof that the agreement was not one-sided as claimed by defendant. Finally, plaintiff points out that defendant did not make any claim that the settlement agreement was unconscionable or the product of overreaching until 18 months after the parties entered into the agreement.
“Marital settlement agreements are judicially favored and are not to be easily set aside” (Simkin v Blank, 19 NY3d 46, 52  ). “However, because of the fiduciary relationship existing between spouses, a stipulation of settlement should be closely scrutinized and may be set aside upon a showing that it is unconscionable or the result of fraud, or where it is shown to be manifestly unjust because of the other spouse's overreaching” (Jon v Jon, 123 AD3d 979  [internal citations and quotation marks omitted] ). The party seeking to set aside the agreement has the burden of demonstrating fraud, overreach, or that the agreement is unconscionable (Gottlieb v Gottlieb, 138 AD3d 30, 36  ). “An agreement is unconscionable if it 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” (Sanfilippo v Sanfilippo, 137 AD3d 773, 774  [internal citations and quotation marks omitted] ). “However, an agreement is not unconscionable ‘merely because in retrospect, [it might have been] improvident or one-sided’ ” (id. at 774, quoting O'Lear v O'Lear, 235 AD2d 466  ). Where a party is “provided with meaningful bargained-for benefits” courts will generally uphold the validity of the agreement (Cioffi–Petrakis v Petrakis, 72 AD3d 868, 869  ). “To rescind [an] agreement on the ground of overreaching, a plaintiff must demonstrate both overreaching and unfairness” (Kerr v Kerr, 8 AD3d 626, 627  ). Further, “while evidence that one spouse was not represented by counsel is insufficient, standing alone, to find such overreaching, it is a significant consideration when determining whether the parties entered into the stipulation freely and fairly” (Kavanagh v Kavanagh, 2 AD3d 688, 689  ). Where there is conflicting evidence regarding overreaching in a marital agreement, or a movant submits sufficient evidence to create an inference that the agreement is unconscionable, the court must conduct a hearing before ruling on the validity of the agreement (Gardella v Remizov, 144 AD3d 977, 980 ; Jon, 123 AD3d at 980).
Here, defendant's motion papers are sufficient to raise an inference that the agreement is unfair and the product of overreaching. In particular, the provision which limits plaintiff's child support obligation to only $800 per month after he completes his residency and becomes a practicing physician raises fundamental issues regarding the fairness of the settlement agreement, particularly since the agreement contains another provision in which defendant waives her right to seek an upward modification once plaintiff completes medical school and becomes employed as a doctor. It is worth noting that the child support provisions in the agreement are somewhat in conflict in that the first paragraph states that plaintiff will pay $200 for the support of both children and then the amount decreases to $136 upon the emancipation of the oldest child. Then, in subsequent paragraphs there are provisions for upward modifications to $400 and $800 per month for the support of both children depending on plaintiff's employment without corresponding increases for the support of one child upon the emancipation of the eldest. Additionally, the provisions of the agreement which relate to the Child Support Standards Act sets forth the language, but fails to calculate the presumptive award. There is presumably a typographical error stating that the combined parental income is $46,175,987, and then the agreement calculates that the basic child support amount for two children is defendant's full CSSA income. Further, the provisions which make defendant solely responsible for the children's unreimbursed medical costs as well as the vast majority of their Yeshiva expenses even after plaintiff becomes employed as a doctor are, on their face, unfair. Moreover, the provision making defendant solely responsible for transporting the children to and from custodial visits with plaintiff and imposes a penalty for instances where plaintiff has to arrange transportation is unusual, arbitrary, and inequitable. Finally, defendant's claims in her affidavit that she was not represented by counsel when negotiating the terms of the agreement, as well as the rushed nature of the negotiations themselves, indicate that the unfair provisions in the settlement agreement were the product of overreaching.
However, in opposition to defendant's motion, plaintiff has raised issues of fact regarding defendant's claims of overreaching, which cannot be resolved solely on the parties' submissions. In particular, in his own affidavit, plaintiff maintains that defendant took an active part in the negotiations, which went on for months, and that defendant requested numerous changes to the proposed agreement which were incorporated into the final agreement. Further, plaintiff maintains that defendant did consult with an attorney during the negotiations and that it was defendant herself who insisted that the parties enter into the agreement on January 1, 2016 given her intent to remarry. Finally, plaintiff has submitted copies of text messages and transcripts of telephone conversations during the parties' purported negotiations which are not sufficiently identified or otherwise authenticated and warrant cross examination. Under the circumstances, given the factual dispute between the parties over defendant's involvement in negotiating the agreement, the extent to which she was represented by counsel during this time, whether or not she received a copy of the CSSA chart, and whether or not she had adequate time to review the agreement, a hearing is required to test the validity of the postnuptial agreement. Accordingly, the parties' motions to set aside or enforce the agreement are granted to the extent that this issue will be set down for a hearing.
With respect to the remaining relief sought by defendant in her motion, that branch of her motion which seeks to stay the signing and entering of the proposed Judgment of Divorce is granted pending the outcome of the aforementioned hearing. All other requested relief in both parties' motions are held in abeyance pending the outcome of the hearing.
In summary, it is hereby ORDERED that defendant's motion to set aside the parties' January 1, 2016 agreement and plaintiff's cross motion to enforce same are granted to the extent that the issue of the validity and enforceability of the agreement shall be set down for a hearing before a special referee; and it is further
ORDERED that the branch of defendant's motion seeking to stay the signing of a judgment of divorce is granted; and it is further
ORDERED that all other requested relief is held in abeyance pending the outcome of the hearing on the parties' agreement.
The parties shall appear on Monday, June 25, 2018 at 2:00 p.m. to schedule the hearing set forth herein and for further proceedings.
Any issue raised and not addressed in this decision and order is denied.
This constitutes the decision and order of the court.
Delores J. Thomas, J.
Response sent, thank you
Docket No: xxxxx/2016
Decided: May 30, 2018
Court: Supreme Court, Kings County, New York.
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