New York marital law allows spouses to enter into agreements, before or during the marriage, with regard to issues like characterization of marital property, distribution of marital property upon separation or divorce, maintenance and child support payments, and more. A spouse or ex-spouse may ask a court to rescind all or part of an agreement in some situations, such as fraud or duress at the time of signing, or changed circumstances that would make enforcement of the agreement at the present time unconscionable. Two recent New York court decisions address possible grounds for setting aside an agreement.
In Lombardi v. Lombardi, the New York Appellate Division, Second Department considered a wife’s lawsuit, filed separately from her divorce action, against her husband to rescind a marital agreement. The Supreme Court dismissed the suit on a motion for summary judgment, but the Appellate Division partly reversed this order.
The appellate court found that summary judgment was improper on three claims, beginning with a claim for fraudulent inducement against the husband. It held that the husband’s defense relied on a general merger clause that would not preclude a claim for intentional fraud. It also held that, while the husband argued that the wife was represented by counsel, this alone would not defeat a claim of fraud. Furthermore, it found that the husband’s own submissions raised a “triable issue of fact” as to whether the wife actually was represented at the time.
The court also reversed summary judgment on the wife’s claims for rescission of the agreement on the basis of “duress, coercion, undue influence, and unconscionability.” The evidence showed “great financial disparity” between the parties. and the wife claimed that the husband threatened to kick her and her son out if she didn’t sign. The wife allegedly did not work outside the home.
The agreement was heavily weighted in the husband’s favor, stating that only property titled in both parties’ names would be considered “marital property” and that upon divorce, the distribution would be based on each spouse’s “respective financial contributions to the acquisition or maintenance of such joint property.” The parties waived maintenance, attorney’s fees, and estate rights. On the basis of these and other terms, the court found a triable issue of fact as to whether the wife had legal representation when she signed the agreement.
Meanwhile, the New York Supreme Court in Westchester County considered a wife’s claims for rescission of a separation agreement based on fraud, duress, and coercion; breach of fiduciary duty; and unconscionability in EM v. MM. The parties had entered into a separation agreement in 2012, and the wife moved to rescind the agreement when she filed for divorce in 2014.
The court found insufficient evidence of fraud or breach of fiduciary duty. The agreement was “regular on its face,” the court held, and the wife was not in a distinctly unequal position to the husband. The court dismissed the unconscionability claim as to the agreement’s provisions for equitable distribution of property. With regard to the mutual waiver of maintenance, however, the court noted that the wife stated at the time of signing that she was “currently in good health and wholly self-supporting.” Since there appeared to be an issue of fact as to whether this was still the case, the court allowed further proceedings on this claim.
A New York City divorce proceeding requires careful planning and preparation. An experienced divorce attorney with experience in the New York City court system can help you understand your rights and obligations, and protect your interests and assets. Ingrid Gherman has more than 30 years’ experience practicing family law in New York City. To schedule a confidential consultation, contact us today online or at (212) 941-0767.
More Blog Posts:
New York Courts Address Post-Divorce Motions to Rescind Settlement Agreements, New York Divorce Attorney Blog, August 20, 2015
Post-Divorce Proceeding Results in Sanctions by New York Appellate Court, New York Divorce Attorney Blog, August 12, 2015
Daughter’s On-Again-Off-Again College Attendance Not Enough to Delay Sale of New York Marital Residence, New York Divorce Attorney Blog, December 29, 2014