Drazal v. Drazal , 505 N.Y.S.2d 703 ( 1986 )

— In an action for a divorce and ancillary relief, the defendant husband appeals from an order of the Supreme Court, Queens County (Glass, J.), dated March 4, 1985, which granted the plaintiff wife’s motion to enjoin him from transferring certain assets identified in the plaintiffs motion papers, except in the ordinary course of business or personal affairs, without prior leave of the court.

Order affirmed, with costs.

The plaintiff and the defendant were married in December 1972 in New York County. Two children were born of this marriage. The parties resided in New York for several years following their marriage. At some point thereafter, the defendant, an engineer, accepted a position with ARAMCO Services Company in Saudi Arabia and the parties and their children moved to that country. In or about 1982, the parties’ relationship apparently became stormy and the plaintiff left Saudi Arabia with the two children and returned to New York.

On January 13, 1984, the parties executed a written separation agreement which provided, inter alia, for the issues of custody, maintenance and child support. The agreement also stated that the parties had "made a division settlement of their property to their mutual agreement and satisfaction”.

The plaintiff subsequently instituted the instant action for divorce in October 1984. Simultaneously thereto, the plaintiff also commenced a separate action against the defendant seeking to set aside the parties’ separation agreement on the basis that it was "unfair, unjust, inequitable, and unconscionable”. The plaintiff alleged that she was in a highly nervous and hysterical state at the time the agreement was executed and that, as a result, she surrendered valuable property rights without frank disclosure on the part of the defendant. The plaintiff also joined her former attorneys, who represented her at the time the separation agreement was executed, as defendants in said action, claiming that they acted negligently in protecting her property interests.

In November 1984 the plaintiff moved by order to show cause in the instant action for an order preliminarily enjoining the defendant from disposing of or transferring any accounts maintained by him at Deak-Perrera International Banking Corp., ARAMCO Services Company and Arabian American Oil Company and their subsidiaries. In support of her motion, the plaintiff asserted that the assets sought to be restrained constituted major marital assets which were not disclosed at the time the parties executed their separation agreement. Moreover, the plaintiff stated that the defendant, who resides in Saudi Arabia and maintains no assets within the State of New York, had threatened to secrete or dispose of the assets sought to be restrained if she commenced a divorce action.

In response to the plaintiff’s motion, the defendant asserted that since he had complied with his obligations under the parties’ agreement which provided for the equitable distribution of the parties’ marital property, the plaintiff has no legal or equitable ground to demand the instant injunctive relief.

Special Term granted the plaintiff’s motion stating, "in order to maintain the financial status quo, as it existed at the time of the commencement of the action, defendant is restrained from disposing of, hypothecating or transferring the assets specified in plaintiff’s moving papers, except in the ordinary course of business or personal affairs, without prior leave of the court”. We agree and accordingly affirm.

In a matrimonial action, Special Term, under the proper circumstances, has the authority to issue preliminary injunctions aimed at the preservation of the marital assets pending equitable distribution (see, Monroe v Monroe, 108 AD2d 793; Carella v Carella, 106 AD2d 601, 603; Leibowits v Leibowits, 93 AD2d 535; Domestic Relations Law § 234). This authority derives from a recognition that with the emergence of the equitable distribution law, the financial status quo of the parties, as it existed at the time of the commencement of the action, "should be maintained until and unless a court has had a proper and fair opportunity to appraise the evidence presented” (Froelich-Switzer v Switzer, 107 Misc 2d 814, 815). Admittedly, in the case at bar, the parties have already executed a separation agreement which purportedly provides for the equitable distribution of the property. Moreover, as a general rule, separation agreements which are regular on their face are binding on the parties unless and until they are set aside (see, Christian v Christian, 42 NY2d 63, 71; 2 Foster & Freed, Law and the Family, at 476). However, given the circumstances of this case, Special Term acted properly in issuing the preliminary injunction. The defendant resides in Saudi Arabia and maintains no assets within the State. Moreover, the defendant has allegedly threatened to secrete or dispose of the instant assets. These factors, coupled with the plaintiff’s allegations of fraud and misrepresentation on the part of the defendant at the time the separation agreement was executed, indicate that the preliminary injunction was a proper exercise of discretion in order to preserve the financial status quo of the parties until a determination on the merits of the plaintiff’s case can be made. Notably, the preliminary injunction order permits the disposal or transferring of the restrained assets by the defendant in the ordinary course of business or personal affairs. Thus, the defendant’s access to said assets is not totally restricted. Mollen, P. J., Niehoff and Rubin, JJ., concur.