| Santini v Robinson |
| 2008 NY Slip Op 10151 [57 AD3d 877] |
| December 23, 2008 |
| Appellate Division, Second Department |
| Joseph G. Santini, Respondent, v Donna L. Robinson,Appellant. |
—[*1] John P. DiMascio & Associates, LLP, Garden City, N.Y. (Jeffrey S. Chang of counsel), forrespondent.
In an action to set aside the financial provisions of the parties' stipulation of settlement datedJanuary 9, 1992, which was incorporated but not merged into a judgment of divorce, the defendantappeals from a judgment of the Supreme Court, Nassau County (Spinola, J.), entered March 29, 2007,which, inter alia, after a nonjury trial, set aside the provisions of the stipulation of settlement (1)awarding her 100% of the plaintiff's deferred compensation benefits, (2) directing the plaintiff to pay herinterest at an annual rate of 9% on a $19,000 promissory note, (3) awarding her 100% of the parties'Individual Retirement Accounts, (4) awarding her exclusive possession of the marital home, (5)directing the plaintiff to pay 100% of the college expenses for the parties' three children, and (6)directing the plaintiff to pay her lifetime maintenance.
Ordered that the judgment is modified, on the law, (1) by deleting (a) the second decretalparagraph thereof setting aside the entire stipulation of settlement dated January 9, 1992, (b) the thirddecretal paragraph thereof setting aside articles 3 and 4 of the stipulation and the promissory notesexecuted by the plaintiff in conjunction therewith, (c) the fourth decretal paragraph thereof directing herto disgorge one half of the plaintiff's deferred compensation benefits, (d) the sixth decretal paragraphthereof awarding the plaintiff the sum of $6,402.21 from the plaintiff's IRA accounts, (d) the seventhdecretal paragraph thereof awarding the plaintiff a sum equal to one half of the equity in the maritalresidence minus the sum of $24,000, (f) the eighth decretal paragraph thereof setting aside article 6,paragraph C of the stipulation relating to college expenses, (g) the ninth decretal paragraph thereofsetting aside paragraphs A, B, and C of the stipulation awarding the defendant lifetime maintenance, (h)the tenth decretal paragraph thereof awarding the plaintiff the sum of[*2]$33,488, and (i) the eleventh decretal paragraph thereof valuing themarital portion of the plaintiff's pension at $106,957.98, and (2) by deleting from the fifth decretalparagraph thereof the words "is awarded a judgment against the Defendant, Donna Robinson, in a sumequal to any 'unused sick time funds' paid to the Defendant" and substituting therefor the words "shallnot be liable for any sum"; as so modified, the judgment is affirmed, without costs or disbursements.
The parties to the underlying matrimonial action were married on February 19, 1973 and havethree children. The principal assets acquired by the parties during their marriage included theirapproximately $100,000 equity interest in the marital residence, their Individual Retirement Account(hereinafter IRA) and joint bank accounts, the plaintiff's deferred compensation plan, and his futureretirement pension, valued at more than $242,000.
The plaintiff left the marital residence in July 1991 after more than 18 years of marriage. InNovember 1991 the defendant commenced the underlying action, inter alia, for a divorce. The partiesentered into a separation agreement entitled a "stipulation of settlement," dated January 9, 1992. Thedefendant was represented by an attorney in connection with the negotiation of the separationagreement, while the plaintiff represented himself. At that time, the plaintiff was 42 years old andemployed by the Nassau County Sheriff's Department, while the defendant was 41 years old,unemployed, and legally blind, albeit able to work part-time and receiving Social Security disabilitybenefits.
The parties visited the defendant's attorney twice in connection with the separation agreement, andthe attorney advised the plaintiff repeatedly, both in writing and orally, that he should retain separatecounsel. The plaintiff testified that he voluntarily signed the agreement on January 9, 1992, although hemerely "scanned" the agreement and had not understood the provisions that he read. It is undisputed,however, that the agreement prepared by counsel contained the general terms previously agreed uponbetween the parties during their own negotiations.
In relevant part, the separation agreement provided that the marital residence subject to themortgage, the IRAs and joint bank accounts, and the plaintiff's deferred compensation plan in the formof promissory notes would be distributed to the defendant and that she would receive child support andlifetime maintenance even upon remarriage. Further, the agreement provided that the maintenancepayment would be increased by a percentage each time one of the children was emancipated and by anadditional 4% per annum. For his part, the plaintiff retained his pension, his automobile, some bankaccounts, and certain furniture. The agreement was subsequently incorporated, but not merged, into thejudgment of divorce dated April 17, 1992.
In 1998 the defendant remarried. On March 24, 2000 the plaintiff commenced this action to setaside the separation agreement as unfair, inequitable, and unconscionable. The defendant moved forsummary judgment dismissing the complaint, which motion was granted. By decision and order datedJune 2, 2003, this Court reversed the order granting the defendant's motion for summary judgmentdismissing the complaint, reinstated the complaint, and directed a hearing on the issues ofunconscionability and ratification (see Santini v Robinson, 306 AD2d 266 [2003]).
Following that hearing, the Supreme Court, inter alia, (1) set aside the provisions of the parties'separation agreement awarding the defendant 100% of the plaintiff's deferred compensation and theparties' IRAs, (2) terminated the defendant's exclusive possession of the marital home, (3) limited theplaintiff's obligation for college expenses of the parties' three children to $15,000 per [*3]year, (4) terminated the defendant's lifetime maintenance as of the date ofher 1998 remarriage, (5) awarded a money judgment to the defendant for all interest payable on a$19,000 promissory note dated January 9, 1992, and (6) awarded a credit of $33,488 to the plaintifffor his maintenance payments after the defendant's remarriage. The defendant appeals, and we modify.
"A stipulation of settlement should be closely scrutinized and may be set aside upon a showing thatit is unconscionable or the result of fraud, or where it is shown to be manifestly unjust because of theother spouse's overreaching" (Cruciata vCruciata, 10 AD3d 349, 350 [2004]; see Christian v Christian, 42 NY2d 63, 72-73[1977]; Santini v Robinson, 306 AD2d 266 [2003]; Gilbert v Gilbert, 291 AD2d 479[2002]). Although stipulations of settlement are favored by the courts and will not be lightly set aside(see Curtis v Curtis, 20 AD3d 653,654 [2005]; Kavanagh v Kavanagh, 2AD3d 688, 688-689 [2003]; Gilbert v Gilbert, 291 AD2d 479, 480 [2002]; DomesticRelations Law § 236 [B] [3]), " 'courts have thrown their cloak of protection about separationagreements and made it their business, when confronted, to see to it that they are arrived at fairly andequitably, in a manner so as to be free from the taint of fraud and duress, and to set aside or refuse toenforce those born of and subsisting in inequity' " (Kessler v Kessler, 33 AD3d 42, 46 [2006], quoting Christian vChristian, 42 NY2d at 72; see Curtis v Curtis, 20 AD3d at 654). Separation agreementsor portions thereof may be set aside if their terms evidence a bargain so inequitable "that no reasonableand competent person would have consented to it" (Bright v Freeman, 24 AD3d 586, 588 [2005]; see Broer v Hellermann, 2 AD3d 1247,1248 [2003]; Tartaglia v Tartaglia, 260 AD2d 628, 629 [1999]; Yuda v Yuda, 143AD2d 657, 658 [1988]).
In applying these principles, the Supreme Court erred in setting aside the parties' entire separationagreement as unconscionable since the equitable distribution of the marital property was not manifestlyunjust (see Cruciata v Cruciata, 10 AD3d at 350; Lounsbury v Lounsbury, 300 AD2d812, 814 [2002]; Croote-Fluno v Fluno, 289 AD2d 669, 670 [2001]). Pursuant to theseparation agreement, the defendant was awarded, inter alia, the marital residence and most of itscontents, the IRAs and the payment of certain promissory notes by the plaintiff, while the plaintiffretained his pension, his car, and some furniture. The plaintiff acknowledged at trial that he was willingto give the defendant everything as long as he retained his pension. Any inequity in this property divisionis not "so strong and manifest as to shock the conscience and confound the judgment" of this Court(Christian v Christian, 42 NY2d at 71; see Lounsbury v Lounsbury, 300 AD2d at814; Croote-Fluno v Fluno, 289 AD2d at 670). Accordingly, these provisions of theseparation agreement must be reinstated, except as provided herein below.
We agree with the Supreme Court that the interest provision in the promissory note and the lifetimeescalating maintenance provisions are unconscionable (see Tartaglia v Tartaglia, 260 AD2d at629; Yuda v Yuda, 143 AD2d at 659). In particular, the plaintiff executed a promissory notefor $19,000 in the defendant's favor with an annual interest rate of 9%, which represented her one-halfportion of the plaintiff's unused vacation and sick time. Although the unused vacation and sick time werenot in "Pay Out" status until the plaintiff's future retirement, the note provided that the annual 9% interestwould accrue immediately upon execution. This interest provision was manifestly unjust.
Furthermore, the plaintiff was obligated to pay child support and all college expenditures for threechildren, as well maintenance payments which increased each year during the defendant's lifetime. Thelifetime nature of the maintenance and its 4% increase each year for the rest of the defendant's life, ontop of a percentage increase following the emancipation of each of their children, represents a sum far inexcess of the value of the plaintiff's marital distribution.[*4]
In fact, testimony elicited at trial revealed that by the time theplaintiff is 65 years of age, he will be exhausting his primary marital asset by giving the defendant almostone half of his yearly pension. This Court finds "that no reasonable and competent person would haveconsented to" this lifetime escalating maintenance provision (Bright v Freeman, 24 AD3d at588; see Christian v Christian, 42 NY2d at 71). Contrary to the Supreme Court's terminationof the defendant's maintenance upon her remarriage, a maintenance period of 16 years—fromthe 1991 commencement of the matrimonial action to the 2007 order and judgment appealedherein—is more appropriate under the extant circumstances and in accordance with DomesticRelations Law § 236 (B) (6) (a) (seeSchwalb v Schwalb, 50 AD3d 1206 [2008]; Sevdinoglou v Sevdinoglou, 40 AD3d 959, 960 [2007]). Given thisdetermination, the plaintiff is not entitled to any recoupment of maintenance he paid between 1998 and2007 as set forth in the tenth decretal paragraph (see e.g. Rader v Rader, 54 AD3d 919 [2008]).
The defendant's remaining contentions are without merit. Fisher, J.P., Balkin, McCarthy andChambers, JJ., concur.
[Recalled and vacated by 68 AD3d 745.]