Katie Lyn Gray, Plaintiff, v. Justin Richard Gray, Defendant. (2026)

The Court is presented with a collision between traditional principles of contract law and a martial Stipulation of Settlement.

The New York Court of Appeals in the 1977 seminal case of Christian v Christian, held that "[a]greements between spouses, unlike ordinary business contracts, involve a fiduciary relationship requiring the utmost of good faith" (Christian v Christian, 42 NY2d 63, 72 [1977). The Court further opined that the "courts have thrown their cloak of protection about separation agreements and made it their business, when confronted, to see to it that they are arrived at fairly and equitably, in a manner so as to be free from the taint of fraud and duress, and to set aside or refuse to enforce those born of and subsisting in inequity" (id.).

PROCEDURAL HISTORY

The parties married in a civil ceremony in Brooklyn, New York on June 12, 2014. The plaintiff-wife commenced this matrimonial action, through counsel, with the filing of the Summons and Verified Complaint on December 12, 2024 [NYSCEF #1]. Defendant-husband, through counsel, filed a Verified Answer with Counterclaim on February 10, 2025 [NYSCEF #2]. A request for judicial intervention and a preliminary conference was filed on April 11, 2025. This Court set this matter down for a preliminary conference on May 15, 2025 [NYSCEF #8]. The preliminary conference was adjourned on consent to June 18, 2025 [NYSCEF #10]. A preliminary conference was held on June 18, 2025 [NYSCEF #15].

Counsel for the parties represented, at the time, to the Court that they were working together in mediation and working towards a global settlement. The parties were scheduled to appear before the Court for a pre-trial conference on January 29, 2026. On January 27, 2026, the parties emailed a fully executed global stipulation for the Court's review and approval prior to the January 29th appearance.

On January 29, 2026 at 9:47 a.m., plaintiff-wife filed an Emergency Order to Show Cause seeking the following relief [NYSCEF #25]:

A. Ordering that Plaintiff, [K.L.G.] may accept a bona fide offer and sign a contract for the sale of [ADDRESS REDACTED], in her sole capacity, pursuant to page 16, paragraph 1, section "e" of the parties' Stipulation of Settlement dated January 27, 2026;

B. Ordering that plaintiff-wife shall immediately, upon selecting a closing attorney, notify defendant-husband of the attorney's complete contact information, and said closing attorney shall keep both Husband and Wife apprised of all matters regarding the sale;

C. Ordering that both Parties cooperate with said transaction, and sign any and all documents requested by the relator(s) and or the real estate attorney for the closing transaction;

D. Ordering that the closing attorney/closing agent be directed to distribute the net proceeds, pursuant to the Parties' Stipulation of Settlement, and provide each party with his/her own 1099 allocating 50% of taxable net proceeds to each party.

E. Signing the Proposed Order which directs compliance with the Parties' Stipulation of Settlement, namely page 16, so that said Order can be given to the broker(s).

F. Any other relief that the court deems appropriate and just.

On March 30, 2026, plaintiff-wife's counsel filed a notice of withdrawal, withdrawing without prejudice the Emergency Order to Show Cause filed on January 29, 2026 [NYSCEF #35].

On March 30, 2026, defendant-husband filed an Order to Show Cause seeking the following relief [NYSCEF #36]:

1. Declaring that the parties entered into a valid and enforceable stipulation of settlement on or about January 27, 2026;

2. Striking the clause unilaterally added by Plaintiff's counsel to the stipulation without prior disclosure to or consent of Defendant's counsel, which states "wife may accept any bona fide offer at any time",

3. Directing that the parties be allocated on the stipulation of settlement with the stricken provision removed;

4. Directing entry of judgment pursuant to the stipulation of settlement as modified by this Court;

5. Sanctioning Plaintiff and Plaintiff's counsel with total sanctions not to exceed $10,000.00 pursuant to 22 NYCRR Section 130-1.1 for engaging in frivolous conduct by:

i. Unilaterally inserting unauthorized language into the executed stipulation of settlement stating, "wife may accept any bona fide offer at any time," which was never discussed or agreed upon during negotiations;

j. Filing an Order to Show Cause to enforce the stipulation on January 27, 2026, at 7:11 PM, requiring Defendant to appear in court on January 29, 2026, and causing Defendant to incur legal fees of $9,207.25, only to withdraw the Order to Show Cause on March 4, 2026;

k.Representing on February 6, 2026, that Plaintiff would not withdraw the Order to Show Cause, causing Defendant to incur additional legal fees, and then withdrawing the Order to Show Cause at the March 4, 2026, court appearance;

l. Failing to prepare, sign and deliver to defendant's attorney a deed and all documents necessary to effectuate the assumption or refinance of mortgage by husband, pursuant to the Parties' executed stipulation of settlement.

6. Directing Plaintiff and Plaintiff's counsel to pay attorney's fees in the amount of:

i. $9,207.25 for fees in connection with the withdrawn Order to Show Cause, and;

ii. $10,000.00 for bringing this motion.

7. Directing Plaintiff to prepare, sign, and deliver to defendant's attorney a deed and all documents necessary to effectuate the assumption or refinance of mortgage by husband; and

8. Granting such other and further relief as this Court deems just and proper.

Plaintiff-wife filed opposition papers on April 30, 2026. Defendant-husband filed reply papers on May 14, 2026. The Court heard oral argument on May 15, 2026.

The Court notes that at the appearance on May 15, 2026, plaintiff's counsel, who is the attorney of record and represented her during the negotiations and execution of the Stipulation of Settlement, averred, on the record, that she does not support the contested Stipulation of Settlement. She argues that "[t]here was no collaboration on this document because the document was so outrageous and this document if the Court reads this document it is one-sided" [T. 5/15/2026, p.12, l. 22-24]. Plaintiff's counsel asserts that she sent her client an e-mail "completely disavowing this whole settlement agreement deeming it one-sided. I said it's one-sided, I don't want my name in the settlement agreement, I advise [plaintiff] not to sign it, but I made that representation to the Court."

The Court further notes that there is no filed application, by either party, before this Court to vacate the Stipulation of Settlement in its entirety.

Defendant's contentions

Defendant-husband is seeking the Court's enforcement of the Stipulation of Settlement dated January 27, 2026, while requesting that the Court strike the provision stating that the "wife may accept any bona fide offer at any time," which he alleges was unilaterally inserted by the plaintiff-wife.

It is conceded that the parties jointly own real property which will be referred to herein as the Gates Ave Condo. In relation to the parties' Gates Ave Condo, page 14, section 1, paragraph (a) of the January 27, 2026 Stipulation of Settlement [NYSCEF #44], provides that "in consideration for the equitable distribution set forth herein, the parties agree that the Husband shall assume or refinance the mortgage to remove the Wife from the deed and mortgage and transfer title to his name, and thereafter Husband shall have rights, title and interest in 100% of the Gates Avenue Condo."

The gravamen of this present dispute centers around Article Nine of the January 27, 2026 Stipulation of Settlement [NYSCEF #44], entitled "Marital Property Distribution", section 1, paragraphs (d) and (e) on pages 15-16 provides, in pertinent part:

d. Until the assumption or refinance by Husband of the mortgage on the Gates Avenue Condo or sale of the same, Wife shall be responsible for paying all carrying charges associated with same, including, but not limited to mortgage, maintenance, taxes, insurance, utilities, and repairs. Wife does hereby agree to pay all carrying charges until such time as her name is removed from the mortgage with Cenlar. Wife hereby indemnifies and holds harmless Husband with respect to same. To the extent Wife fails to pay for any or half of the aforementioned carrying charges, and Husband pays the same, Husband shall receive a dollar-for-dollar credit to be deducted from his obligation to Wife.

e. Notwithstanding Husband's right to pursue refinancing pursuant to this Agreement, the Gates Avenue Condo may remain actively listed for sale during the refinancing period, and wife may accept any bona fide offer at any time [emphasis added].

Defendant-husband contends that a comparison between the proposed Stipulation of Settlement dated January 19, 2026 [NYSCEF #39], and the fully executed Stipulation of Settlement dated January 27, 2026 [NYSCEF #44], together with the e-mail communications exchanged between the parties, would reveal that plaintiff-wife's counsel unilaterally inserted the provision at issue into the January 27, 2026, Stipulation of Settlement without notice to defendant's counsel.

Defendant-husband contends that on January 19, 2026, in response to a draft of the Stipulation of Settlement prepared by plaintiff-wife's counsel, his attorney informed plaintiff-wife's counsel that defendant-husband required two hundred and forty (240) days to assume or refinance the mortgages on the parties' marital properties. After extensive negotiations, defendant-husband asserts that the parties reached a compromise whereby defendant-husband would be provided with one hundred and fifty (150) days to assume or refinance the mortgages on the parties' marital properties. The agreed-upon provision can be found under "Refinancing", on page 17, paragraph (a) of the fully executed Stipulation of Settlement dated January 27, 2026 [NYSCEF #44]:

a) No later than 150 days after the signing of this Agreement, Husband shall secure financing to purchase Wife's interest in the Properties. Any costs associated with assuming or refinancing the mortgages shall be the sole responsibility of Husband, including any closing costs, attorney fees mortgages shall be the sole responsibility of Husband, including any closing costs, attorney fees, taxes, etc. Wife shall cooperate in the process for Husband to assume or refinance the mortgages and shall sign any deed, transfer documents, applications, etc., within 48 hours of being presented with same.

Defendant's counsel asserts in her affirmation that on January 20, 2026, after extensive negotiations, a paralegal from plaintiff-wife counsel's office sent an email allegedly stating that "she would make the limited agreed-upon edits to the Stipulation of Settlement and send us the document the next day" [NYSCEF #37, p. 3].

Defendant-husband's counsel alleges that although plaintiff-wife's counsel's office represented that defendant-husband would receive the revised Stipulation of Settlement the following day, the revised stipulation was not provided to defendant-husband until six days later, January 26, 2026 at 11:41 a.m. Defendant's counsel avers that a paralegal from plaintiff-wife's counsel's office emailed the revised Stipulation of Settlement, which was labeled "Final Global Stipulation- COUNSEL FEES." In the email received at 11:42 a.m. on January 26, 2026, the paralegal stated, "[a]ttached is the updated Stipulation of Settlement- please know our client has the document for signature. Once I receive her signed copy, I'll forward it to you. In the meantime, if you're able to get your client's signature first, as always, these documents can be signed as counterparts" [NYSCEF # 40].

That same day, on January 26, 2026, at 4:59 p.m., plaintiff-wife's counsel's office sent another email stating "[p]lease see the attached Stipulation of Settlement, signed by our client. Please see let us know when [defendant] will sign the same. Again, Hon. Sunshine wants the documents two days before the allocution" and attached the Stipulation of Settlement executed by plaintiff-wife labeled "SIGNEDFINALGlobalStipulation- COUNSEL FEES" [NYSCEF #42]. Defendant-husband asserts that he reviewed the unsigned version of the stipulation sent by plaintiff-wife's counsel on January 26, 2026 at 11:41 a.m. "in full since plaintiff's counsel represented that plaintiff had that specific document for signature." However, defendant-husband concedes that he did not review the stipulation signed by the plaintiff-wife and sent to his attorney on January 26, 2026 at 4:59 p.m. "line by line" because plaintiff-wife's counsel did not indicate "any changes to the agreement since earlier in the day." Defendant-husband further avers that the stipulation was thirty-nine (39) pages long and was sent shortly before the parties' approaching court's scheduled appearance on January 29, 2026.

Defendant-husband argues that the provision at issue which permits plaintiff-wife to accept a sale offer on the Gates Ave Condo at any time during the refinancing period was never discussed between the parties during their extensive negotiations. He maintains that the provision is directly at odds with his negotiated right to assume or pursue refinancing of the Gates Ave Condo.

In further support of his claim that plaintiff-wife is attempting to unilaterally usurp his right to refinance or assume the Gates Ave Condo, defendant-husband contends that the provision under the subsection entitled "SALE IN THE EVENT THERE IS NO REFINANCING" which states that "[t]he parties agree to accept the first bona fide offer on either of the Properties where the purchaser offers within 2% of the asking price and to split the net proceeds of the sale equally," [Article Nine, page 18, paragraph (c)] directly contradicts the provision that states the "wife may accept any bona fide offer at any time" [Article Nine, page 16, paragraph (e)]. Defendant argues that the provision on page 18, paragraph (c) provides that both parties must accept the offer, whereas the contested provision on page 16, paragraph (e) grants the wife alone "unilateral decision-making authority with respect to the Gates Ave condo" [NYSCEF #38, pg. 5]. Defendant further asserts that it is his belief that the plaintiff is attempting to grant herself unilateral decision-making authority with respect to the Gate Ave condo, because there was allegedly an offer on the table well below the 2% window that would compel the parties to accept the offer.

Sanctions

Defendant-husband contends that sanctions are warranted to compensate him for the plaintiff-wife and her counsel's alleged frivolous conduct.

Defendant-husband argues that the filing and subsequent withdrawal of the January 29, 2026 Emergency Order to Show Cause constitutes frivolous conduct within the meaning of 22 NYCRR § 130-1.1. Defendant-husband asserts that, on February 6, 2026, his counsel emailed plaintiff-wife's counsel inquiring as to whether plaintiff-wife intended to withdraw the Order to Show Cause. Plaintiff-wife's counsel responded that they "are not withdrawing the OSC at this time" [NYSCEF #47]. Defendant-husband's counsel maintains that, in reliance upon that representation, a considerable amount of time was spent counseling defendant and strategizing a response to the emergency application, only for the plaintiff-wife to withdraw her application on March 30, 2026.¹

Defendant-husband maintains that the emergency application caused unnecessary delays and expense. Defendant contends that the January 29, 2026 appearance, which was originally scheduled for 10:30 a.m. for the parties' allocution on the Stipulation of Settlement, was prolonged for several hours because of plaintiff-wife's Emergency Order to Show Cause. As a result, defendant-husband incurred substantial legal fees.

Defendant-husband additionally contends that plaintiff-wife's Emergency Order to Show Cause was unsupported by law or fact because it sought to enforce the provision stating that "[w]ife may accept any bona fide offer at any time," which defendant-husband maintains was not negotiated by the parties. Furthermore, defendant-husband argues that plaintiff-wife's counsel failed to provide notice of any alleged breach of the Stipulation of Settlement pursuant to the terms of the parties' stipulaiton prior to seeking judicial enforcement of the provision at issue.

The Court notes that paragraph (f) on page 28 of the Stipulation of Settlement dated January 27, 2026 provides:

In the event that either party defaults with respect to any obligation set forth in this Agreement the injured party shall send written notice, by certified mail, return receipt requested, to the defaulting party, which notice shall specify the nature of the default and, if relevant, any amount due which remains unpaid. If the payment is not made, and/or the default otherwise not cured within twenty (20) days of receipt of said notice, the injured party shall be entitled to damages from the defaulting party which shall include and not be limited to attorney's fees and related expenses costs or costs in serving the default notice and in commencing and maintaining an action, or proceeding to enforce this Agreement, and costs.

Defendant-husband further argues that insofar as plaintiff-wife and her counsel asserts that the Stipulation of Settlement already granted plaintiff-wife the authority to accept a bona fide offer, the Emergency Order to Show Cause should have been unnecessary since plaintiff-wife should have been free to act without seeking the Court's intervention.

Defendant-husband further argues that he should be compensated for the plaintiff-wife's failure to comply with the Stipulation of Settlement. Specifically, he asserts that plaintiff-wife failed to simultaneously with the execution of the Stipulation of Settlement, prepare, execute, and deliver to his counsel a deed and all documents necessary to effectuate the assumption or refinance of the mortgages, despite having received written notice of such breach pursuant to the Stipulation of Settlement.

Counsel Fees

Defendant-husband requests that the Court direct the plaintiff-wife and her counsel to pay $9,207.25 in counsel fees incurred in connection with the withdrawn emergency application, as well as an additional $7,500 in counsel fees incurred for the preparation and filing of the instant Order to Show Cause.

In support of his application, defendant reiterated the significant amount of time spent by his counsel preparing their response to plaintiff-wife's emergency application, and that the delays caused by plaintiff's application at the January 29, 2026 appearance resulted in him incurring additional legal fees.

In support of her application for counsel fees, defendant-husband's counsel asserts in her affirmation that she has been admitted to practice law since 2017 and has been employed by Weisman Law Group (WLG), P.C. since 2025. Prior to joining WLG, she was employed by the NYC Administration for Children's Services. Defendant-husband's counsel avers that her rate is four hundred dollars ($400) per hour. Defendant's counsel also submitted billing records [NYSCEF #48] detailing the legal services she performed in connection with plaintiff's Emergency Order to Show Cause and the instant application for the periods of January 27, 2026 through January 30, 2026, and from February 2, 2026 through February 27, 2026.

Plaintiff's Opposition

Plaintiff-wife opposes defendant-husband's order to show cause and requests that the application be denied in its entirety. Plaintiff-wife argues that defendant-husband is attempting to rewrite or revise a fully executed agreement without citing any legal authority in support of his requested relief.

Plaintiff-wife's counsel contends that defendant-husband's counsel put forth two contradictory arguments before the Court: (1) that the Stipulation of Settlement should be set aside in its entirety; or (2) that the Stipulation should be enforced in full. Plaintiff-wife's counsel argues that an agreement can only be deemed unenforceable if it is not reasonably certain in its terms and asserts that defendant-husband's counsel fails to identify which terms are not reasonably certain in the parties' Stipulation of Settlement.

Plaintiff-wife argues that when she received the first draft of the Stipulation of Settlement from defendant's counsel, counsel did not identify the revised terms. Plaintiff-wife asserts that she independently read the draft several times, identified the changes, noted them in the margins, and sent the draft back to her attorney's office. Plaintiff-wife maintains that defendant-husband's attorney did not highlight, underline or use track-changes when proposing edits to the draft stipulation.

Plaintiff affirms that after reviewing the draft she received from her counsel for signature on January 26, 2026, she believed that the terms were "solely in the interest of protecting [defendant-husband], leaving me vulnerable" [NYSCEF # 56, pg. 2]. As such, plaintiff-wife states that she requested that her counsel add a provision permitting her "to accept any bona fide offer on [her] apartment at any time" [NYSCEF #56, pg. 2]. Plaintiff-wife further states that after receiving the stipulation with the added provision, she re-read the entire agreement and subsequently executed it before a notary. During oral argument, the plaintiff's counsel argued that the provision inserted is "the only provision in the whole agreement that gave -- that vested [plaintiff-wife] with any power over her own destiny, every provision in this agreement was favorable to [defendant]" [T. 05/15/2026, p. 14, l. 1-5]. Notably, at no time does plaintiff or her counsel dispute that the disputed provision was unilaterally added to the signed draft of the stipulation that was forwarded to the defendant.

Plaintiff-wife's counsel argues that during the January 29, 2026 and May 15, 2026 court appearances, defendant-husband's co-counsel demonstrated grave public disrespect, coupled with an unfortunate absence of collegiality, by alleging before this Court that plaintiff-wife's counsel engaged in fraud. However, she notes that neither defendant-husband nor his counsel asserts any allegations of fraud in their affirmations.

Plaintiff-wife's counsel contends that what while defendant-husband "may have a claim for malpractice, he does not have a claim for fraud, vacatur, recission, and least of all, modification of a singular provision." Plaintiff-wife's counsel maintains that defendant-husband's application is based on defendant and his counsel's failure to read the agreement that defendant-husband's counsel mainly drafted. Plaintiff-wife's counsel argues that defendant-husband cannot now disavow a provision of the parties' Stipulation of Settlement, which he affirmed under oath, merely because he no longer agrees with it. Plaintiff highlights that defendant's allocution affidavit on page 39 of the fully executed Stipulation of Settlement provides "[t]hat he carefully read this Agreement, word for word, paragraph by paragraph," "[t]hat he fully understands its contents," and signed the agreement "voluntarily, after having thoroughly consulted with counsel reading the terms thereof."

Plaintiff's opposition to Sanctions and Counsel Fees

Plaintiff-wife argues that defendant-husband seeks sanctions based upon frivolous conduct; however, he fails to demonstrate any conduct that was without merit, undertaken solely to delay, or based upon false statements, as required under 22 NYCRR § 130-1.1.

Plaintiff-wife's counsel contends that the counsel fees sought by defendant-husband are self-generated and arise solely from his decision to pursue this instant motion. Additionally, plaintiff's counsel contends that defendant's counsel fails to cite any legal authority in support of their request for counsel fees. Plaintiff's counsel further alleges that defendant is the "monied spouse" and delayed this action for months by "pursuing a theory of a separate property credit when his attorney knew or certainly should have known that [d]efendant had [the] burden to refute the presumption of marital property of all assets acquired after the date of marriage" [NYSCEF #57, p.6].

Defendant's Reply

Defendant-husband's counsel reiterates that defendant-husband is not seeking to vacate the parties' Stipulation of Settlement but rather seeks to strike the provision stating that the "[w]ife may accept bona fide offer at any time" and enforce the balance of the stipulation.

Defendant-husband's counsel contends that plaintiff-wife's opposition is premised on the argument that defendant and his counsel should have re-read the copy executed by the plaintiff before signing the stipulation, but fails to address the central legal question of "whether a material clause that was inserted into a draft expressly represented as 'final,' and transmitted for signature without any disclosure of the change, ever became part of the parties' bargain at all."

Defendant-husband maintains that he and his counsel were entitled to rely on the express representation that the "final" draft circulated on January 26, 2026, at 11:41 a.m. was the same stipulation sent at 4:59 p.m., except that the later version had simply been executed by plaintiff-wife. Defendant argues that this is not "a case of post-hoc dissatisfaction with a known term," but rather a case in which one party inserted a material clause after the parties had been advised that the agreement was at the final execution stage. Defendant-husband further argues that the plaintiff-wife's admission that she requested that her counsel insert the contested provision after receiving the draft for her signature confirms that the clause was a unilateral, undisclosed late addition.

Defendant-husband maintains that inasmuch as the plaintiff conceded that: "(a) the challenged clause was not in the prior draft circulated as "final"; (b) the clause was added later, at her request, by her side; and (c) nowhere in her papers does she state that the clause was ever conveyed to Defendant's counsel before Defendant signed, or that the clause was the subject of any bilateral negotiation", the admission materially narrows the dispute and is fatal to plaintiff-wife's opposition.

Defendant-husband contends that a valid contract requires both parties to mutually agree to all material terms and argues that because plaintiff-wife inserted a material clause into the executed copy without notifying him or his counsel, that there was no "meeting of the minds" as to the inserted provision. Defendant-husband further argues that the "doctrine that settlement stipulations 'fair on [their] face' will be enforced absent fraud, duress, overreaching, or unconscionability presupposes that the parties reached an agreement on the term being enforced," but does not require enforcement of a provision that was never part of the actual bargain.

Defendant-husband contends that, even if the Court determined that an agreement was reached, the inserted provision is a product of a unilateral mistake by the defendant-husband that was known to the plaintiff. He argues that every element supporting recission where the mistake is material is present because: (1) the insertion of the clause materially altered defendant-husband's bargained-for rights regarding the marital property; (2) defendant's counsel relied in good faith on the express representation that the "final" draft was the version being signed; (3) plaintiff and her counsel knew the inserted provision was not included in the initial attachment labeled as the "final" version; and (4) the insertion of the provision was never communicated to defendant-husband's counsel.

Defendant-husband asserts that New York courts have relieved a party from a stipulation where "it appears that the stipulation was entered into inadvisedly or that it would be inequitable to hold the parties to it." (see In re Estate of Frutiger, 29 NY2d 143, 150 [1971]; see also Park Props. Assoc., L.P. v. Williams, 38 Misc 3d 35, 38 [App Term, 2d Dept 2012]). Defendant-husband argues that this equitable authority empowers this Court to strike the allegedly undisclosed provision and enforce the remainder of the stipulation.

Defendant-husband further argues that plaintiff-wife cited authorities that do not foreclose partial recession or excision of an undisclosed, material insertion. Defendant-husband argues that none of the cases cited by plaintiff-wife address the question of what happens when a material clause is inserted into the executed copy without disclosure after the draft has been represented as "final."

Defendant's counsel contends that plaintiff-wife's suggestion that defendant's only remedy lies in a malpractice action against his own counsel is a "non sequitur" because there was no malpractice committed. Defendant further asserts that the plaintiff-wife does not "meaningfully" rebut his request for attorney's fees. Defendant reiterated that plaintiff-wife's counsel served notice of an intended emergency order to show cause on January 27, 2026 at 7:11 p.m., only hours after the parties executed the stipulation. Defendant-husband argues that the $9,207.25 incurred were not "self-generated," but instead resulted from plaintiff-wife's initiation, maintenance, and subsequent withdrawal of the order to show cause.

DISCUSSION

First and foremost, the Court notes that inasmuch as the matrimonial action is still pending and was not terminated with entry of a judgment of divorce, in the Second Department, a plenary action is not required to hear the instant application challenging the parties' Stipulation of Settlement (see Cruciata v Cruciata, 10 AD3d 349, 350 [2d Dept 2004]; Jagassar v Deonarine, 191 AD3d 650 [2d Dept 2021]).

"A stipulation of settlement in a matrimonial action is a contract subject to the principles of contract interpretation" (see Petrovich v. Obradovic, 40 AD3d 1063, 1065 [2d Dept 2007]; Micciche v Micciche, 62 AD3d 673, 673 [2d Dept 2009]; Abramson v Hasson, 184 AD3d 768, 770 [2d Dept 2020]). "The Courts favor stipulations of settlement and do not set them aside lightly (see Gilbert v Gilbert, 291 AD2d 479, 480 [2d Dept 2002]; however, since stipulations of settlement involve fiduciary relationships and the sanctity of the marriage relationship, they are held to a higher standard of equity" (see Kavanagh v. Kavanagh, 2 AD3d 688, 688-89 [2d Dept 2003]). In light of the fiduciary relationship between the spouses, "[t]here is a strict surveillance of all transactions between married persons, especially separation agreements. Equity is so zealous in this respect that a separation agreement may be set aside on grounds that would be insufficient to vitiate an ordinary contract" (see Mizrahi v Mizrahi, 171 AD3d 1161, 1162-63 [2d Dept 2019]; Petracca v Petracca, 101 AD3d 695, 698 [2d Dept 2012]; Peters v Peters, 150 AD2d 763 [2d Dept 1989]).

"A reviewing court examining a challenge to a separation agreement 'will view the agreement in its entirety and under the totality of the circumstances' (see Mizrahi v Mizrahi, 171 AD3d 1161, 1164 [2d Dept 2019]; Jon v Jon, 123 AD3d 979, 980 [2d Dept 2014]). "In determining whether a separation agreement is invalid, courts may look at the terms of the agreement to see if there is an inference, or even a negative inference, of overreaching in its execution" (see Christian v Christian, supra at 73)."Although courts may examine the terms of the agreement as well as the surrounding circumstances to ascertain whether there has been overreaching, the general rule is that if the execution of the agreement is fair, no further inquiry will be made" (Kerr v Kerr, 8 AD3d 626, 627 [2d Dept 2004]; Levine v Levine, 56 NY2d 42, 47 [1982]).

"In a matrimonial action, '[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' (see Ritornato v Ritornato, 186 AD3d 1422, 1423 [2d Dept 2020], quoting Cruciata v Cruciata, 10 AD3d 349, 350 [2d Dept 2004]; Barone v. Barone, 199 AD3d 875, 876 [2d Dept 2021]; Johnson v Ranger, 216 AD3d 925, 925 [2d Dept 2023]; Cohen v. Cohen, 170 AD3d 948, 949 [2d Dept 2019]; Heinemann v Heinemann, 189 AD3d 1553, 1554 [2d Dept 2020]; Potter v Potter, 116 AD3d 1021, 1022 [2d Dept 2014]; Kabir v Kabir, 85 AD3d 1127, 1127 [2d Dept 2011]; Cardinal v Cardinal, 275 AD2d 756, 757 [2d Dept 2000]). "To warrant equity's intervention, no actual fraud need be shown, for relief will be granted if the settlement is manifestly unfair to a spouse because of the other's overreaching" (see Zubli v Sakizadeh, 248 AD3d 1323, 1324 [2d Dept 2026], quoting O'Malley v O'Malley, 41 AD3d 449, 451 [2d Dept 2007]).

"In interpreting a marital contract, a court should construe it in accordance with its plain and ordinary meaning so as to 'give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized' " (see Cali v. Cali, 166 AD3d 610, 611 [2d Dept 2018], quoting Hyland v. Hyland, 63 AD3d 1106 [2d Dept 2009]; Anderson v Anderson, 221 AD3d 941, 942 [2d Dept 2023]). "A court may not write into a contract conditions the parties did not insert by adding or excising terms under the guise of construction, and it may not construe the language in such a way as would distort the contract's apparent meaning" (see Cohen-Davidson v. Davidson, 291 AD2d 474, 475 [2d Dept 2002]).

"Moreover, a court cannot reform an agreement to conform to what it thinks is proper if the parties have not assented to such a reformation" (id). "In making the determination, the court should examine the entire contract and consider the relation of the parties and the circumstances under which the contract was executed" (see Cardone v Cardone, 249 AD3d 994, 996 [2d Dept 2026], quoting Cohen v Cohen, 187 AD3d 707, 709 [2d Dept 2020]; Pinto v Pinto, 209 AD3d 778, 780 [2d Dept 2022]). "Particular words should be considered, not as if isolated from the context, but in the light of the obligation as a whole and the intention of the parties as manifested thereby" (see Gaudette v Gaudette, 249 AD3d 1369, 1370 [3d Dept 2026]).

Here, it is undisputed that the parties entered into a Stipulation of Settlement dated January 27, 2026. Defendant-husband now seeks to enforce the parties' Stipulation of Settlement but strike the provision which states in its entirety: "Notwithstanding Husband's right to pursue refinancing pursuant to this Agreement, the Gates Avenue Condo may remain actively listed for sale during the refinancing period, and Wife may accept any bona fide offer at any time."

In the instant matter, it cannot be said that the subject Stipulation of Settlement is fair on its face. The Court notes that the terms of the parties' Stipulation of Settlement grants the defendant-husband the option to secure refinancing and assumption of the Gates Avenue Condo within a specific time -150 days- while simultaneously permitting the plaintiff-wife to list said property for sale and sell it to any bona fide buyer at any time. Further, the Stipulation of Settlement provides on page 18, paragraph (a), that in the event the defendant-husband failed to secure financing or assumption within the proscribed time and no additional extensions are granted by the wife, the property "shall be listed for sale for the highest marketable price." Moreover, page 18, paragraph (b) of the stipulation provides that "[a]t any time before the Properties are sold to a bona fide purchaser, if Husband is able to secure the necessary financing to assume or refinance the mortgage in his own name, he shall be permitted to do so, and Husband shall be solely responsible for any costs, fees, or penalties arising from the same." The Court notes that these paragraphs contradict the inserted paragraph which then changes the meaning of the agreement and that may even be parties' intent.

This Court recognizes that "[i]t is well settled that trumping language such as a 'notwithstanding' provision 'controls over any contrary language' in a contract" (see Warberg Opportunistic Trading Fund, L.P. v GeoResources, Inc., 112 AD3d 78, 83 [1st Dept 2013]; CNH Diversified Opportunities Master Account, L.P. v Cleveland Unlimited, Inc., 36 NY3d 1, 16 [2020]; Frankenmuth Mut. Ins. Co. v Waste Mgt. of New York, LLC, 122 AD3d 674, 676 [2d Dept 2014]). Consequently, in effect, the plaintiff's interpretation of the contested provision serves to render the extensive option provisions in relation to the defendant-husband's right to pursue refinancing futile. The Court also recognizes that while it is important for a court to adhere to the plain language of an agreement in interpreting it, it is also true that "a contract should not be interpreted to produce a result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the parties" (see Keller-Goldman v Goldman, 149 AD3d 422, 426 [1st Dept 2017], affd, 31 NY3d 1123 [2018]).

Rather than resolving the above-mentioned contradiction, the submitted affirmations raised issues of the parties' intentions. The Court cannot ignore the circumstances, if true, surrounding the insertion of the contested provision in the executed Stipulation of Settlement (see Hershkowitz v Levy, 190 AD3d 835 [2d Dept 2021]). Here, it must be noted that two days after the parties executed the Stipulation of Settlement and prior to allocution of said Stipulation of Settlement dated January 27, 2026, the plaintiff-wife relying on the language on page 16, paragraph (e), "which provides that, [n]otwithstanding Husband's right to pursue refinancing pursuant to this Agreement, the Gales Avenue Condo may remain actively listed for sale during the refinancing period, and Wife may accept any bona fide offer at any time", filed an emergency application to compel the defendant-husband to accept a bona fide offer, in her sole capacity, for sale of the Gates Avenue Condo.

Defendant maintains that the disputed provision that the plaintiff attempted to rely on was not included in the unsigned Stipulation of Settlement that was sent over to defendant's counsel on January 26, 2026, at 11:41 a.m. for signature, but was included in the Stipulation of Settlement signed by the plaintiff-wife and sent over to the defendant's counsel at 4:59 p.m. Thus, defendant's counsel is seeking to have the provision stricken on the grounds that plaintiff and her counsel allegedly inserted the provision without prior consent or disclosure after allegedly representing that the stipulation that was sent over at 11:41 a.m. was the final version.

Given that the fiduciary duty between the parties, the ambiguity regarding whether the contested provision is "trumped" by the language permitting the wife to sell to a bona fide buyer at any time, and the circumstances surrounding the execution of the stipulation which raises a triable issue of fact as to whether the circumstances surrounding the execution of the agreement were manifestly unfair is sufficient to warrant a hearing. Under these circumstances, the Court finds it necessary to set this matter down for a hearing to ascertain the parties' intent regarding the contested provision and to determine whether there was a breach of fiduciary duty by the plaintiff-wife (see Mizrahi v Mizrahi, 171 AD3d 1161, 1166 [2d Dept 2019]; Gardella v Remizov, 144 AD3d 977, 980 [2d Dept 2016]).

This matter is set down for a hearing on December 2, 2026 at 10:00 a.m., in-person. At this time the Court will reserve the balance of the motion pending outcome of the hearing.

CONCLUSION

Defendant's order to show cause seq. #2 is granted to the extent.

Any issue raised and not addressed in this decision is held in abeyance.

This shall constitute the decision and order of the court.

ENTER:

Hon. Jeffrey S. Sunshine

J.S.C.

FOOTNOTES

1.   The Court notes that plaintiff-wife's counsel filed a notice of withdrawal on March 30, 2026 [NYSCEF #35].

Jeffrey S. Sunshine, J.