Anonymous v. Anonymous

Order, Supreme Court, New York County (Ellen Gesmer, J.), entered on or about May 10, 2013, which, to the extent appealed from as limited by the briefs, denied plaintiffs request for an extension of time to challenge the parties’ prenuptial agreement, limited plaintiffs award of counsel fees in accordance with the prenuptial agreement, limited defendant’s obligation regarding payment of the costs of a car and driver used by plaintiff and the parties’ children, and denied plaintiffs request for an order directing defendant to pay the expenses on the parties’ Michigan house, modified, on the law and the facts, to the extent of vacating the limitation on plaintiffs award of counsel fees, and directing the court to determine at trial whether the counsel fee provision in the prenuptial agreement is unenforceable, and otherwise affirmed, without costs. Order, same court and Justice, entered on or about November 21, 2013, which, to the extent appealed from as limited by the briefs, denied plaintiffs motion to renew her request that defendant make all payments necessary for the use and upkeep of the car and driver, and granted plaintiff’s motion for interim counsel fees to the extent of awarding her $300,000 in interim fees for the preparation of the custody trial subject to recoupment, unanimously affirmed, without costs. Order, same court and Justice, entered December 18, 2013, which, to the extent appealable, denied plaintiffs motion for a pendente lite order directing defendant to pay for the car and driver, unanimously affirmed, without costs.

In this matrimonial action plaintiff wife seeks, among other things, to set aside the parties’ prenuptial agreement. The parties entered into a so-ordered stipulation on July 12, 2012, agreeing that any challenge to the prenuptial agreement would be made by August 31, 2012. Plaintiff seeks an extension of time to challenge the agreement. She alleges that the agreement as a whole should be invalidated because she was pressured into signing it just hours before the rehearsal dinner on the night before the wedding. She also claims that defendant husband told her that he would rip up the agreement after they were married for 10 years. Plaintiff further alleges that her attorneys need to conduct discovery regarding the agreement in order for her to prove the allegations that provisions of the agreement are unconscionable, and that defendant should be directed to pay expert and attorneys fees necessary to conduct such discovery.

While a court has the authority to extend the time limits set forth in a so-ordered stipulation, here the motion court providently exercised its discretion in denying plaintiffs request for an extension of time to challenge the prenuptial agreement, especially since she failed to demonstrate good cause for a further extension (see CPLR 2004). Additionally, as discussed below, plaintiff’s arguments regarding the validity of the agreement lack merit.

New York has a long-standing “strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements” (Matter of Greiff, 92 NY2d 341, 344 [1998]). It is axiomatic that a duly executed prenuptial agreement is presumed to be valid and controlling unless and until the party challenging it meets his or her very high burden to set it aside (see Bloomfield v Bloomfield, 97 NY2d 188, 193 [2001]). However, in many instances, “agreements addressing matrimonial issues have been subjected to limitations and scrutiny beyond that afforded contracts in general” (Kessler v Kessler, 33 AD3d 42, 46 [2d Dept 2006], lv dismissed 8 NY3d 968 [2007]). Although “there is a heavy presumption that a deliberately prepared and executed written instrument manifests the true intention of the parties” (Brassey v Brassey, 154 AD2d 293, 295 [1st Dept 1989]), an agreement between prospective spouses may be invalidated if the party challenging the agreement demonstrates that it was the product of fraud, duress, or other inequitable conduct (see Christian v Christian, 42 NY2d 63, 72 [1977]). Nevertheless, such results remain the exception rather than the rule. The burden of producing evidence of such fraud, duress or overreaching is on the party asserting the invalidity of the agreement (Matter of Greiff, 92 NY2d at 344; Cohen v Cohen, 93 AD3d 506 [1st Dept 2012]).

Here, the court correctly determined that plaintiff did not meet her burden of establishing grounds to set aside the agreement as a whole. Contrary to her claim that she was pressured into signing the agreement, the record is clear that this agreement was negotiated over approximately four weeks. Plaintiff was represented throughout that time by highly competent and experienced matrimonial counsel. The agreement went through six drafts before a final copy was signed and changes in the terms of the agreement requested by plaintiffs counsel were incorporated into the final document. The agreement expressly disclaims any reliance on representations other than those set forth in the agreement, and extrinsic evidence regarding the parties’ intent may not be considered unless a court first finds that the agreement is ambiguous, which in this case it is not (see Van Kipnis v Van Kipnis, 11 NY3d 573, 577 [2008]).

Plaintiff argues that defendant’s admitted failure to transfer to her one of the properties he owns in Michigan pursuant to the terms of the agreement is evidence of fraud. However, the record establishes shows that in the 12 years of the marriage, no demand was made for the transfer of this particular property. In fact, plaintiff apparently raised no objection when this property was sold during the course of the marriage. Defendant contends that the failure to effect a formal transfer of this property was an oversight and has agreed to give plaintiff the proceeds of the sale, plus interest, as part of an equitable distribution settlement. Thus, plaintiff, who never raised this issue prior to the commencement of this action, failed to demonstrate that she was fraudulently induced into signing the agreement by defendant’s promise to transfer that property to her. At best, she may have a cause of action for breach of contract and is entitled to receive the value of the property in equitable distribution, as indicated by the court (see Ungar v Savett, 84 AD3d 1460, 1461 [3d Dept 2011]).

Defendant’s failure to disclose the entirety of his financial interests is also not a reason to vitiate the contract (see Strong v Dubin, 48 AD3d 232, 233 [1st Dept 2008]; see also Smith v Walsh-Smith, 66 AD3d 534, 535 [1st Dept 2009], lv denied 14 NY3d 704 [2010]). Plaintiff was well acquainted with defendant’s assets, and she specifically acknowledged in the agreement that the amounts she would receive “are so significantly less than either [defendant’s] assets or annual income that the precise amount of [his] assets and income is irrelevant to her decision to enter into this Agreement and the enforceability of this Agreement.” Indeed, the parties anticipated at the time of the agreement that defendant’s assets would continue to rise significantly. In the face of such an acknowledgment, she cannot claim that the agreement is invalid based on a failure to disclose assets.

With respect to plaintiffs claim that the maintenance provisions are unconscionable, we note that “an agreement concerning the amount and duration of spousal maintenance must be fair and reasonable at the time it is made, and not unconscionable at the time of entry of final judgment in the divorce action” (Kessler, 33 AD3d at 46). Moreover, courts have the authority to review maintenance agreements to ensure such agreements are not unconscionable at the time of the entry of the judgment of divorce (Domestic Relations Law § 236 [B] [3] [3]; see Colello v Colello, 9 AD3d 855, 860 [4th Dept 2004]). Since the motion court has permitted plaintiff to challenge at trial whether the maintenance provision in the agreement is presently unconscionable in terms of plaintiffs current needs, expenses, and income, this issue may serve as a basis to set aside that provision of the agreement.¹

The motion court providently exercised its discretion in declining to order defendant to pay, pendente lite, the expenses of the Michigan vacation property, which, defendant contends, he has been paying. The court further properly declined to direct defendant to pay, pendente lite, the expenses of a car and driver since plaintiff has regained the ability to drive. A speedy trial is plaintiffs remedy for these perceived inequities in the pendente lite award (see Sumner v Sumner, 289 AD2d 129, 130 [1st Dept 2001]). Further, the court properly denied plaintiffs motion to renew her request regarding the car and driver, as the purported new facts regarding the parties’ daughter would not change the prior determination (see CPLR 2221 [e] [2]). To the extent plaintiff sought leave to reargue her request, the denial of that motion is not appealable (see Windham v New York City Tr. Auth., 115 AD3d 597, 599 [1st Dept 2014]).

The court also providently exercised its discretion in awarding plaintiff $300,000 in interim counsel fees for trial preparation on child-related issues on condition that she present documentation of legal work within 30 days after trial (see Domestic Relations Law § 237). However, given the unique procedural posture of this case and the great disparity between the parties’ finances both at the time of the execution of the prenuptial agreement and at the time of the commencement of this action, plaintiff’s request for counsel fees beyond those incurred for child-related issues is an issue appropriate to leave for trial (see Kessler, 33 AD3d at 47-48). As Supreme Court has ruled that plaintiff is entitled to a hearing on her challenge to the maintenance provisions of the prenuptial agreement, and, as noted, that ruling is not challenged on appeal, an award of counsel fees may be necessary despite the fee waiver, “as justice requires” (Domestic Relations Law § 237 [a]) in order to ensure a level playing field to litigate her claim.² Accordingly, we direct that the question of the validity of the counsel fee provision for non-child-related issues in the parties’ agreement should be considered at trial.

Concur — Sweeny, J.P., Renwick and Kapnick, JJ.

1 . Defendant has not appealed that portion of Supreme Court’s order setting the maintenance issue down for trial.

2 . We do not share the concern of our concurring colleague that our decision will encourage baseless fee applications which may unnecessarily be referred to trial. Our decision does nothing to alter or expand well settled precedent regarding enforcement of valid prenuptial agreements. Our trial court has the expertise and experience to reject such fee applications.