By Mark I. Plaine, Esq.
“You shall do what is fair and good in the eyes of Hashem, so that it will be good for you…”
– D’varim (Deuteronomy) 6:18
I cannot count the number of times someone has come into my office after they have signed an agreement, and then proclaimed, “I want to get out of it.” At that point, I usually grimace and wonder why this potential client did not come to me before signing. This recurrent problem requires an analysis of the manner in which the courts treat attempts to void matrimonial agreements.
General Rule of Law
New York has a long-standing policy favoring individuals resolving their own marital disputes through written agreement. However, an agreement made between spouses, or potential spouses, where the terms are manifestly unfair to one of the parties, may be vacated. Most of the law in this area derives from the decision of the New York Court Appeals (the highest court in our state) in a case known as Christian v. Christian. In Christian, the high court indicated a willingness to void marital agreements that resulted from fraud, duress, or other types of unfairness. We must therefore scrutinize such agreements to ensure that they meet legal standards of fairness.
Prenuptial agreements are made prior to entering into marriage, and usually for the purpose of protecting one’s income and assets. With the stress of a wedding day on the horizon, it is often the case that parties hurry into entering into these agreements. This is no doubt with the mindset that they will never be involved in divorce proceedings.
In C.S. v. L.S., a Nassau County case of recent vintage, the parties had signed a prenuptial agreement prior to marriage. Here, the husband was both older and wealthier than the wife. By way of example, the husband, a successful businessman, earned about $1 million per year, while the wife, a part-time teacher’s assistant, earned $5,000 per year. In anticipation of the marriage, the husband had his attorney working on the agreement well in advance of the wedding. The agreement that was presented to the wife was one-sided in the husband’s favor. When the wife could not afford an attorney, the husband’s counsel selected an attorney friend of his to briefly review the proposed document with her. The attorney selected for the wife believed the agreement was inequitable but was instructed by the husband’s attorney that it could not be negotiated. Eventually, a divorce ensued, at which time the wife challenged the agreement as being unfair. In reviewing the agreement, the court found that the document was so one-sided that to uphold it would result in the wife being relegated to a state of poverty. Based upon its analysis, the court voided the agreement.
Karg v. Kern is the name of a 2015 case out of New York County, wherein the wife challenged a prenuptial agreement she had signed. In this matter, the wife was given a proposed prenuptial agreement written in a foreign language she was not proficient in. She apparently had no time to speak to an attorney, or even a translator, before signing. By signing the agreement, she had waived any claim to the vast wealth of her husband and his family. Based upon the totality of circumstances, the agreement was deemed unfair and invalid.
In Taha v. Elzemity, the husband was a wealthy physician who entered into a prenuptial agreement wherein his wife waived claims to the majority of marital assets. The agreement provided that, in the event of a divorce, the wife would be limited to receiving a one-time payment of $20,000. During the marriage, the wife made very little money, while acting primarily as a housewife and mother to the parties’ children. A review of the document led the court to believe that, if enforced according to its terms, the agreement would result in the wife becoming a public charge. The agreement was deemed unconscionable and thereby invalid.
A case where a party was not successful in challenging a prenuptial agreement can be found in a 2014 New York County decision entitled Anonymous v. Anonymous. Here, the wife claimed, among other things, that she was pressured into signing the agreement shortly before the wedding, during a rehearsal dinner. However, upon careful review of the facts, the court concluded that no such pressure tactics were used. The parties had been negotiating the agreement for four weeks before it was signed. The agreement went through six different drafts, and the husband’s attorney incorporated changes requested by the wife. No undue influence was found, and the wife’s challenge to the agreement was not successful.
The term “postnuptial agreement” generally refers to an agreement made after marriage, where the parties presently have no intention to divorce.
In Barclay v. Barclay, a Nassau County divorce, the issue concerned the validity of a postnuptial agreement. Here, the wife relinquished virtually all of her property claims and inheritance rights through the agreement. The court determined that the wife received virtually no benefit from the agreement and invalidated the agreement as part of the divorce proceedings.
Another significant postnuptial agreement case is entitled Petracca v. Petracca . In this marriage, the husband had a net worth of $22 million. He induced the wife into signing a postnuptial agreement through which she waived most of her claims to property and spousal support. The wife did not consult with an attorney before signing the agreement. In fact, she signed the agreement shortly after suffering a miscarriage. Under these circumstances, the agreement was found to be unconscionable.
Settlement Agreements are used to resolve the parties’ claims in a divorce proceeding. They too must be scrutinized for fairness.
In Blackstock v. Price, the litigation concerned custody. After the mother agreed to a settlement in court, she tried to void the agreement by asserting that she felt pressured by the court to settle. This overly general complaint was not backed by the facts, and the mother’s challenge to the settlement failed.
In Tirrito v. Tirrito, the husband tried to void an agreement he had entered into to resolve the parties’ financial claims. The basis of his challenge was that he did not have an attorney at the time that he signed the agreement. In rejecting the husband’s claim, the court noted that failure to retain counsel alone is not a sufficient basis for voiding an agreement. Here the husband was given ample time to review the agreement, there was no undue influence, and the terms of the agreement were not unfair.
A review of the decision in Tuzzolino v. Tuzzolino indicates that the wife was not candid with the husband with regard to her finances. The parties settled their marital issues by agreement. The wife had an attorney, and the husband did not. The wife’s retirement funds were never valued, such that the husband was not fully informed of her financial position. Upon division of property, pursuant to the agreement, the wife received assets worth $740,000, while the husband walked away with about $77,000 in assets. This one-sided deal was too much for the court to condone and was voided by the court.
The best advice I can offer is not to enter into these agreements until you have had an ample opportunity to review them with an experienced attorney. Nevertheless, people get themselves into situations where they have made a bad deal. There is always hope that the right attorney may be able to get you out of it.