| Sorrentino v Pearlstein |
| 2008 NY Slip Op 08316 [55 AD3d 901] |
| October 28, 2008 |
| Appellate Division, Second Department |
| Glynnis Sorrentino, Respondent, v Edward Pearlstein,Appellant. |
—[*1] Maxine K. Last, Garden City, N.Y., for respondent.
In a matrimonial action in which the parties were divorced by judgment entered August 1, 2006,the defendant appeals from so much of an order of the Supreme Court, Nassau County (Ross, J.),dated September 5, 2007, as granted that branch of the plaintiff's motion which was to direct him torescind a form 1099-MISC that he directed be issued to her.
Ordered that the order is affirmed insofar as appealed from, with costs.
As part of their divorce action, the parties entered into a settlement agreement on December 21,2005, that subsequently survived the judgment of divorce. In pertinent part, the settlement agreementprovided that the defendant anticipated receiving, from the sale of a building, a real estate brokeragecommission in the sum of $990,000 (hereinafter the commission), of which the plaintiff would receiveone-half, as part of her equitable distribution award. Further, the defendant was to be solely responsiblefor the parties' 2005 tax liability. However, if the plaintiff's distributive award from the commissionequaled or exceeded the sum of $495,000, then her tax liability would be based on her 2005 income,except that "in no event" would her total tax liability exceed $15,000. The settlement agreement alsoprovided that if the plaintiff's distributive award from the commission earned by the defendant equaledor exceeded the sum of $495,000, the defendant's obligation to pay maintenance would immediatelyterminate, and his obligation to pay the plaintiff's health insurance premiums would be reduced from aperiod of five years to a period of one year.
In early 2006, the defendant remitted to the plaintiff, pursuant to the settlement agreement, the sumof $495,000, representing her one-half distributive award of the commission earned by him. [*2]The defendant thereafter directed that the plaintiff be issued a Form1099-MISC for "income" in the sum of $495,000 based on that award. The plaintiff then moved, interalia, to direct the defendant to rescind the Form 1099-MISC as being in violation of the settlementagreement. The Supreme Court granted that branch of the motion. We affirm.
Where a settlement agreement that is incorporated but not merged into a judgment of divorce is"clear and unambiguous on its face," the parties' intent will be determined "from within the four cornersof the instrument" (Matter of Meccico v Meccico, 76 NY2d 822, 824 [1990]; see Herzfeld v Herzfeld, 50 AD3d 851[2008]; Gipp v Gipp, 37 AD3d 406[2007]; Malleolo v Malleolo, 287 AD2d 603 [2001]). An ambiguity exists only if the contractis susceptible to more than one reasonable interpretation (see Nappy v Nappy, 40 AD3d 825, 826 [2007]; Pellot v Pellot,305 AD2d 478, 480 [2003]).
The Supreme Court correctly determined that article XI, ¶ 1 of the settlement agreementunambiguously provided that the plaintiff's tax liability would be limited to $15,000, if she received, asshe did, an equitable distribution award from the commission earned by the defendant equal to orexceeding the sum of $495,000. Contrary to the defendant's contention, the unambiguous language ofthe settlement agreement does not provide that the plaintiff's tax liability would exceed $15,000 if shereceived such award after 2005. Moreover, the settlement was not manifestly unfair since, inconsideration of the defendant becoming liable for all but $15,000 of the parties' tax liability in the yearhe received the commission, the defendant was immediately relieved of his obligation to pay spousalmaintenance and his obligation to pay for the plaintiff's health insurance premiums was reduced from aperiod of 5 years to a period of only 1 year. We also note that the form 1099-MISC was improperlyissued since the $495,000 the defendant remitted to the plaintiff was part of the plaintiff's equitabledistribution award, and was thus not taxable as ordinary income (see Domestic Relations Law§ 236 [B] [1] [b]).
The defendant's remaining contentions are without merit. Fisher, J.P., Balkin, McCarthy andChambers, JJ., concur.