Opinion
No. 50819/13.
12-31-2014
H. T., Plaintiff, v. A. E., Defendant.
Michael Kuharski, Esquire, Kuharski, Levitz, Giovinazzo, Staten Island, for Plaintiff Husband. Catherine Bridge, Esquire, Law offices of Catherine Bridge, Staten Island, for Defendant.
Michael Kuharski, Esquire, Kuharski, Levitz, Giovinazzo, Staten Island, for Plaintiff Husband.
Catherine Bridge, Esquire, Law offices of Catherine Bridge, Staten Island, for Defendant.
Opinion
CATHERINE M. DiDOMENICO, J.
By motion dated January 8, 2014, Defendant Wife, A.E. (hereinafter “Wife”) seeks an Order setting aside and declaring as invalid the parties' prenuptial agreement dated April 15, 2007 on the grounds of unconsionablity, overreaching, fraud, and duress. By motion dated January 27, 2014 Plaintiff Husband H.T. (hereinafter “Husband”) opposed Wife's application and seeks affirmative relief in the form of an Order declaring the validity of the Prenuptial Agreement and granting him summary judgment on its terms. By motion dated November 22, 2013, Defendant Wife seeks pendente lite relief including an award of counsel fees in the amount of $10,000. As Wife's request for pendente lite relief required a determination of the validity of the prenuptial agreement, the motions were submitted jointly for decision.
A hearing was held on motion sequences 003 and 004 on May 30, 2014 and June 2, 2014. Wife testified on her own behalf and called her Husband and her brother, Al. E. as witnesses at trial. Wife also introduced documents into evidence (Defendant's A–C). Plaintiff testified on his own behalf and called the parties' spiritual leader, Imam A.K. E., who presided over their marriage. Plaintiff entered one document into evidence (Plaintiff's 1).
At the conclusion of the hearing Wife made an application for Husband's bank records, as they existed at the time of the parties' marriage, to be introduced into evidence. Wife proffered that the records would be necessary to prove that the pre-nuptial agreement was unconscionable when it was entered into, and that Wife would not have signed it had she been aware of Husband's financial situation. After oral argument, Husband consented by So Ordered Stipulation dated August 4, 2014 to have the records entered into evidence without further testimony regarding the same.
Factual Background
The parties were married on May 7, 2007 in a religious ceremony presided over by Imam A.K.E. At this ceremony, Husband, Wife, and Wife's brother Al. E. (hereinafter “Wife's brother”) were present along with other members of their extended family. At the time the parties were married certain religious and cultural obligations were explained to the parties including the requirement that a dowry would be paid in the amount of $5,000 and that a $20,000 deferred dowry would be required as a sum payable to Wife in the event of divorce. These terms were set forth in an Islamic marriage certificate signed by the parties in the presence of the Imam and the wedding guests. This $20,000 deferred dowry was also codified in the prenuptial agreement now at issue as a resolution of the issue of spousal maintenance.
The amount of the initial dowry, and the deferred dowry, were disclosed before the religious marriage with the clerk of the Mosque. Wife's brother, who was her guardian for religious purposes, reviewed and approved the pair of dowries. Wife's brother, who testified at trial, indicated that he had an American education and had earned a Ph.D. as a marine surveyor. In the presence of the Imam, Husband, Wife and her brother, as guardian, jointly signed the marriage certificate. Imam E. credibly testified that he fully explained the terms to the parties and that they acknowledged their understanding of the religious agreement. Imam E. did not testify as to any behavior on Husband's part that could be considered coercive in nature or intended to pressure Wife into getting married. As Husband's witness, the Court found the Imam's testimony to be credible and unbiased, particularly since he admitted to the Court that members of Wife's family had reached out to him prior to his testimony in an effort to get him to sympathize with Wife's position in this litigation.
With respect to the civil prenuptial agreement prepared by Husband, the parties agree on many of the circumstances surrounding the circumstances leading up to the preparation of the agreement and its presentation to Wife. In the early months of 2007 Husband took out an ad in an Egyptian newspaper seeking a spouse. Husband describes the newspaper as an Egyptian dating service which assists in arranging marriages. Wife responded to the advertisement. After meeting several times the parties agreed to marry. Before finalizing their marriage plans Husband sought the approval of Wife's brother, as Wife's guardian, which is customary in the Islamic culture. At the time they married Husband was 49 years old and Wife was 35 years old. Wife's brother testified that he did some background research on Husband and enlisted the help of his sister, who practices as an attorney in Egypt. Wife's brother had an opportunity to review the prenuptial agreement and was aware that Husband was a financially successful physician, though it was not his primary concern.
The parties wedding was scheduled for May of 2007. In fact, there were two wedding celebrations. The first ceremony was an “Egyptian style” wedding held in New Jersey and the second was an “American style” wedding held at Wife's families residence. Wife took care of all the preparations for both weddings and her family members were present at the receptions.
About two months prior to the parties marriage, in or around March of 2007, Husband presented Wife with the Prenuptial Agreement currently at issue. Husband drafted this agreement himself, without the assistance of counsel, from information obtained from a “do it yourself” book. It is not contested that Wife had an opportunity to review the agreement before signing and that it was presented to Wife's brother as her cultural guardian. In the clear terms of the agreement Wife was advised of her right to seek counsel, which she chose not to do. Wife credibly testified that she reviewed the entire agreement before she signed it. The agreement was properly acknowledged before a notary public on April 15, 2007. Wife is not contesting the agreement on procedural grounds. Following the execution of the nuptial agreement the parties were married on May 7, 2007. The parties separated approximately six years later.
Wife, now seeks the recession of the prenuptial agreement arguing that it is unconscionable, the product of overreaching, and that it was fraudulently entered into while Wife was under duress. Husband seeks to enforce the agreement and ultimately to proceed to a divorce on its terms.
The Applicable Law
Under Domestic Relations Law '236(B)(3) “an agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in a manner required to entitle a deed to be recorded.”See Rio v. Rio, 110 AD3d 1051 (2d Dept.2013). An agreement between spouses or prospective spouses which is fair on its face will be enforced according to its terms unless there is proof of fraud, duress, overreaching, or unconscionability. See Cioffi–Petrakis v. Petrakis, 72 AD3d 868 (2d Dept.2010) ; See also, Cohen v. Cohen, 93 AD3d 506 (1st Dept.2012). An agreement will not be overturned “merely because, in retrospect, some of its provisions were improvident or one sided”. Label v. Label, 70 AD3d 899 (2d Dept.2010). Moreover, New York has established a “strong public policy” of allowing individuals to decide their own interests through contractual arrangements rather than through litigation. See Katsaros v. Katsaros, 80 AD3d 666 (2d Dept.2011). “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.” Anonymous v. Anonymous, 2014 N.Y. Slip Op 08766 (1st Dept.2014).
Decision
Wife first argues that the agreement should be set aside as it was intended to be temporary in nature. Wife testified that Husband assured her and her brother that the agreement was temporary, and would be rescinded after the parties remained married for two years and Wife gave birth to children. However, the Court finds the testimony of Wife, and her brother to be not credible on the subject. Moreover, there is no indication in the four corners of the agreement that it was intended to be temporary, any mention of a two year term, or a provision allowing it to expire upon the birth of children. It is well settled that when a contract is “clear and unambiguous on its face, the intent of the parties must be gleaned from the four corners of the instrument, and not from extrinsic evidence”. Hanau v. Cohen, 2014 N.Y. Slip Op 07122 (2d Dept.2014) ; See also, Meccico v. Meccico, 76 N.Y.2d 822 (1990). Moreover, as the contract at issue contains a “full integration clause” any oral discussions regarding the contract that occurred before its signature and contradict it's terms would be prohibited under the parol evidence rule. See Willsey v. Gjuraj, 65 AD3d 1228 (2d Dept.2009) ; See also, ABS P'ship v. AirTran Airways, Inc., 1 AD3d 24 (1st Dept.2003) ; Grossberg v. Grossberg, 104 A.D.2d 439 (2d Dept.1984) ; Lazansky v. Lazansky, 148 A.D.2d 501 (2d Dept.1989).
Wife next argues that the agreement, as written and executed, is unconscionable and the product of overreaching. An unconscionable agreement is generally one “such as no person in her or her senses, and not under delusion, would make on the one hand, and as no honest and fair person would accept on the other”. Christain v. Christain, 42 N.Y.2d 63 (1977). Wife argues that the contractual maintenance limit of $20,000 is manifestly unfair considering the current financial circumstances of the parties. Wife further argues that the agreement is unconscionable as it allows each party to keep, as separate property, all items titled in their name. Under the terms of the agreement the only property subject to equitable distribution would be property held in joint title or “property acquired [during the marriage] that does not normally have a title”. (See Defendant's A, Paragraphs 6–12). Finally, Wife argues that the agreement is the product of overreaching, as she was not fully informed of Husband's financial situation at the time of signing. Husband argues, in opposition, that the agreement is valid and fair on its face, that the terms were agreed to between the parties, and that Wife and her brother were well aware of his financial status as a physician at the time the agreement was entered into.
Although the application of the parties' prenuptial agreement would arguably result in Husband retaining most of the property at issue, it is well settled that “courts will not set aside an agreement on the ground of unconscionability simply because, in retrospect, the agreement proves to be improvident or one-sided.” See Christian v. Christian, 42 N.Y.2d 63 [1977] ; See also, O'Hanlon v. O'Hanlon, 114 AD3d 915 (2d Dept.2014). Here the agreement, while arguably favorable to Husband, is not so one sided as to appear manifestly unfair such that it shocks the conscious of the Court. See McKenna v. McKenna, 994 N.Y.S.2d 381 (2d Dept.2014). The Court notes that Wife is entitled to a payment of $20,000 under the agreement's terms, and is entitled to keep all property titled in her name, together with a distribution of property held in joint title, and untitled marital property. While the present application of the parties' agreement will likely lead to an unequal distribution of property, Husband correctly argues that both parties were entitled to the same rights to accumulate separate property under the agreement at the time it was entered into.
Wife further argues that the agreement should be set aside on the ground that she was not represented by counsel at the time it was entered into. Wife's current counsel bolsters Wife's argument stating that no reasonable attorney would have let her sign the agreement as it was drafted. While it is undisputed that Wife did not seek the assistance of counsel when reviewing the document, the Court notes that the contract is mostly drafted in layman's terms and was prepared by Husband, who also lacked the assistance of counsel. While Husband is admittedly a highly educated physician, Wife is also sophisticated, having graduated from an American University with a medical assistant certification. Moreover, Husband obtained his knowledge regarding the preparation of the agreement from reading a “do it yourself” book. This same book was presented to Wife to read before the contract was signed. Finally Wife had the agreement in her possession for a considerable amount of time before she signed it, and under its clear terms she was advised of her right to seek out the assistance of counsel. (See Defendant's A, Para. 4). Wife's failure to seek the assistance of counsel, without more, is not grounds to set aside the agreement, especially under the circumstances presented. See Matter of Barabash, 84 AD3d 1363 (2d Dept.2011).
Wife's argument that she never would have signed the agreement had she been aware of Husband's financial situation is equally unpersuasive. Generally, the failure of a spouse to fully disclose his or her financial situation is insufficient to vitiate a prenuptial agreement absent active concealment or misrepresentation sufficient to constitute fraud. See Strong v. Dubin, 48 AD3d 232 (1st Dept.2008) ; See also, Panossian v. Panossian, 172 A.D.2d 811 (2d Dept.1991) ; Eckstein v. Eckstein, 129 A.D.2d 552 (2d Dept.1987). Wife has offered no evidence that Husband intentionally concealed or misrepresented any financial information. Moreover, the Court notes that the agreement itself includes a clause entitled “Financial Disclosure” which clearly indicates that Wife had an opportunity to inquire as to Husband's finances, and is aware that in the event of a divorce she may receive “less than she would otherwise be entitled to under the law in the event of a divorce”. (See Defendant's A, paragraph 3). Under the circumstances presented, Wife has failed to meet her burden of showing that the contract is unconscionable or the product of overreaching. See Levine v. Levine, 56 N.Y.2d 42 (1982) ; See also, Ofer v. Sirota, 116 AD3d 509 (1st Dept.2014). For the same reasons as set forth above there is no evidence in the record to vacate the agreement on the ground of fraud. See Weinstein v. Weinstein, 36 AD3d 797 (2d Dept.2007). Likewise, while raised as a boilerplate allegation by Wife, the hearing record contains no evidence of duress at the time the agreement was entered into. See Barocas v. Barocas, 94 AD3d 551 (1st Dept.2012).
Against these facts, and after considering the testimony and evidence submitted by both parties at the hearing, and the arguments set forth in their moving papers, the Court find that there is no basis to set aside the prenuptial agreement as there is no evidence of fraud, duress, or overreaching at the time the agreement was entered into, and moreover that the agreement is not unconscionable or manifestly unfair on its face. Accordingly, Wife's motion seeking to set aside the prenuptial agreement (Seq. No 003) is hereby denied after hearing. See Lombardi v. Lombardi, 235 A.D.2d 400 (2d Dept.1997).
Summary Judgment
By Notice of Cross–Motion filed February 24, 2014 (Seq. No. 003) Husband requests an Order declaring the prenuptial agreement valid and granting summary judgment on its terms. For the reasons set forth at length above, Husband's application is hereby granted, in part. As the agreement has been determined to be valid, summary judgment is hereby granted on the issue of maintenance with a lump sum payment of $20,000 to be paid from Husband to Wife within 20 days of the date of this Decision and Order, to the extent that such payment has not already been made. This payment shall constitute a final resolution of the issue of both temporary and final maintenance. In addition, summary judgment is granted to the extent that equitable distribution is controlled by the parties prenuptial agreement. However, as the terms of that agreement do not address the distribution of property held in joint title, or the distribution of untitled property, those issues must remain open pending a showing that no such property exists. Accordingly, the parties are hereby Ordered to serve discovery demands regarding the identification of assets, if any, that are not covered by the prenuptial agreement within 20 days.
Pendente Lite Relief
By Notice of Motion filed November 27, 2014 (Seq. No 002) Wife made an application for pendente lite relief in the form of temporary maintenance, temporary child support and counsel fees. Wife also requested consolidation of all pending Family Court dockets, and an Order of temporary custody of the three subject children. By Order dated December 13, 2013 all pending Family Court matters were consolidated into this matrimonial action. While it is undisputed that the children primarily reside with their mother, the determination of physical and legal custody is hereby referred to trial as an award of custody, even on a pendente lite basis, generally requires an evidentiary hearing. See Matter of Swinson v. Brewington, 84 AD3d 1251 (2d Dept.2011). Wife's request for temporary maintenance is resolved by the parties pre-nuptial agreement, as enforced herein, with the payment of a lump sum of $20,000. By Order dated December 13, 2013 Wife was granted an award of interim emergency child support in the amount of $2,000 a month pending the determination of this motion. Husband was further Ordered to maintain the status quo by paying the mortgage and utilities for the home in which Wife currently resides. The issues of child support and counsel fees were submitted for decision in conjunction with the motions regarding the prenuptial agreement.
Child Support
Wife seeks an award of child support for the three subject children, K.T., Y. T., and Ya.T. pursuant to the CSSA guidelines. Husband opposes Wife's application arguing that the interim Order of this Court, which directed the payment of $2,000 a month together with the mortgage and utilities, is sufficient to cover the reasonable expenses of the subject children pendente lite.
Wife's counsel admitted during Oral argument of her pendente lite motion that Husband is currently paying the approximate sum of $6,000 a month under the terms of this Court's Order dated December 13, 2013. Wife now seeks a recalculation under the CSSA guidelines. While there are no Orders of custody at this time it is undisputed that Wife is the de-facto custodial parent for purposes of child support.
The Child Support Standards Act (CSSA) presumptively results in the correct amount of child support to be awarded to the custodial parent. When calculating pendente lite child support the Court may use the Child Support Standards Act as guidance in fashioning an award, though it is not required to apply those guidelines. See Eckstein v. Eckstein, 251 A.D.2d 537 (2d Dept.1998), See also George v. George, 192 A.D.2d 693 (2d Dept.1993.) However, when sufficient financial information is available to the Court, it is preferable to apply the CSSA guidelines. See Davydova v. Sasonov, 109 AD3d 955 (2d Dept.2013).
In support of her application Wife annexes three W2's indicating Husband's income in 2013. According to this documentation, Husband earned the gross sum of $67,500 from “Brookdale Hospital”, $203,077 from “Hematology and Medical Oncology” and $8,429 from “Hemant Patel MD PC” for a combined gross income of $279,006. From this amount the Court is directed to subtract statutory deductions of FICA, Medicare, and local (N.Y.C) tax that were “actually paid”. See Khaira v. Khaira, 93 AD3d 194 (1st Dept.2012). These tax deductions amount to a combined total of $11,757 in FICA, $4,073 in Medicare, and $827 in local tax for an adjusted income of $262,349 for purposes of calculating child support.
As Wife is currently unemployed, the combined parental income for purposes of calculating CSSA child support is Husband's adjusted income of $262,349. However, as of January 31, 2014 there is a statutory child support cap at a combined income of $141,000. See DRL 240(1–b) ; See also, Dochter v. Dochter, 118 AD3d 665 (2d Dept.2014). When addressing income above the cap the Court has the discretion to apply the statutory formula to that amount, utilize the factors set forth in DRL 240(1–b)(f) or a combination of these two methods. See Hymowitz v. Hymowitz, 119 AD3d 736 (2d Dept.2014) ; See also, Poli v. Poli, 286 A.D.2d 720 (2d Dept.2001). While a review of Wife's Net Worth Statement reveals claimed expenses totaling over $16,000 a month, Husband disputes many of the expenses listed. Husband argues that that the children do not attend dance lessons at a monthly cost of $600, summer camp at a monthly cost of $750, or religious instruction at a monthly cost of $1,200. Husband argues that these amounts, among others, have simply been fabricated to pad Wife's and the children's monthly expenses.
After considering Wife's arguments regarding the children's standard of living, and after considering Husband's objections thereto, the Court finds that the combined parental income for purposes of calculating child support should be set at the amount of $200,000. See DRL 240(1–b)(f) ; See also, Holterman v. Holterman, 3 NY3d 1 (2004). The Court notes that Husband is the only income producing spouse, and under the terms of the prenuptial agreement Wife will be limited to a one time maintenance award of $20,000 and limited equitable distribution. The Court further notes that the subject child Y.T. is autistic and has special needs.
As Husband is the only income earning spouse his pro rata share of the combined child support amount under the CSSA guidelines is 100%. Accordingly, the child support amount under the CSSA guidelines for three children (29%) is $58,000 a year or $4,833 a month to be paid from Husband to Wife. However, a review of Wife's Statement of Net Worth reveals that this amount is insufficient to cover the children's current living expenses as the mortgage on the former marital home alone amounts to $3,200 a month and the utilities average $1,050 a month. The Court notes that an Order directing Husband to pay full CSSA child support together with the mortgage and utilities, would violate the double shelter rule. See Bandler v. Bandler, 58 AD3d 774 (2d Dept.2009). Accordingly, Husband is hereby Ordered to continue paying the temporary interim Order of $2,000 a month together with the mortgage and utilities so long as Wife remains in the home located at F. Avenue or until further Court Order. While the December 13th Order awards less than CSSA child support it provides housing stability to the children in their present home. In making this award the Court has considered the CSSA guidelines as guidance in fashioning a reasonable award under the circumstances. See Rubin v. Della Salla, 78 AD3d 504 (1st Dept.2010). However, in the event that Wife relocates from her current residence, which is titled in Husband's name, and establishes an alternate residence at the end of this case or earlier, Husband shall be required to pay the CSSA guidelines sum of $4,833 a month as and for child support upon notice to Husband's counsel, but without further application to the Court.
Retroactivity
The child support award herein is retroactive to the service of the present motion. See Signorelli v. Signorelli, 50 AD3d 772 (2d Dept.2008). Husband is entitled to a credit for sums paid under the interim child support Order of this Court dated December 13, 2013. See McKay v. Groesbeck, 117 AD3d 810 (2d Dept.2014). As the first payment under the December 13th Order was made on January 1, 2014 and the present motion was served on November 27, 2013 the amount of retroactive arrears amounts to 34 days worth of payments. As the yearly child support award under the December 13th Order amounts to $24,000 a year, the daily child support amount is approximately $66. Accordingly, Husband is hereby directed to pay the sum of $2,244 representing the 34 days of retroactive payments from the service of the present motion to the entry of the interim Order which has been continued herein. This sum shall be paid directly to Wife within 20 days of this Decision and Order.
Counsel fees
Wife seeks an award of pendente lite counsel fees in the combined amount of $10,000. Husband opposes Wife's application, arguing that the language of the prenuptial agreement, which admittedly does not directly address the issue of counsel fees, precludes an award as it generally states that each party shall be responsible for their own debts.
Pursuant to DRL § 237(a), a lawyer who represents a non-monied spouse may seek attorney's fees from the monied spouse in the divorce action. See O'Connor v. O'Connor, 89 AD3d 703, 704 (2d Dept 2011). Effective October 12, 2010, DRL § 237(a)(5) creates a rebuttable presumption that counsel fees shall be awarded to the less monied spouse.
An award of attorney's fees will generally be warranted where there is a significant disparity in the financial circumstances of the parties. See Chesner v. Chesner, 95 AD3d 1252, 1253 (2d Dept 2012). The purpose of DRL § 237(a) is to redress the economic disparity between the monied spouse and the non-monied spouse. An award of interim counsel fees under DRL' 237 is intended to allow the non-monied spouse to litigate the action on an equal footing with the monied spouse. See Prichep v. Prichep, 52 AD3d 61 (2d Dept.2008).
In support of her application, Wife argues that Husband is the monied spouse and should be required to pay her attorney an award of $10,000 for legal fees relating to this action for divorce and extended litigation regarding the prenuptial agreement. Wife argues that she lacks funds sufficient to compensate her attorney without contribution from Husband. Wife claims that she paid her attorney the sum of $2,500 to date. Wife annexes a copy of her retainer agreement together with three supplemental affirmations containing updated bills for legal services. According to the most recent bill submitted, dated May 30, 2014, Wife owes her attorney the sum of $9,931. This bill notes that in or around April of 2014 Husband paid Wife's attorney an interim amount of $5,000 toward her fee. Wife's attorney charges $350 an hour for her legal services. Husband does not challenge the sufficiency of the billing documentation provided by Wife's counsel.
While Husband offers general opposition to Wife's pendente lite counsel fee request, he does not dispute that he is the monied spouse. Husband's argument is based upon the language of the prenuptial agreement that covers debts, however a review of the clause at issue reveals that it addresses “pre-existing debts” and the application of those debts against separate property. Husband's counsel admits that the prenuptial agreement does not explicitly address the issue of counsel fees. Husband's argument that the language of the prenuptial agreement implies that an award of counsel fees is precluded is unpersuasive.
Considering only the financial information available to the Court, Husband has failed to rebut the presumption in favor of an award to Wife. See Khaira v. Khaira, 93 AD3d 194 (1st Dept.2012). Under the totality of the circumstances presented, and in consideration of the parties' respective incomes, financial obligations, the amount of work already concluded, and the amount of work reasonably anticipated, Wife is hereby awarded counsel fees in the amount of $2,500 as a reimbursement of her initial retainer and $5,000 towards her current balance due. See DRL § 237 ; See also, Goldberg v. Goldberg, 98 AD3d 944 (2nd Dept 2012). The full amount owed of $9,931 is not being awarded, as the Court has considered the relative merit of the parties' positions and found Wife's challenge to the prenuptial agreement to be unwarranted. See Johnson v. Chapin, 12 NY3d 461 (2009).
The award of counsel fees herein does not preclude future applications for counsel fees, if appropriate. Husband is hereby Ordered to pay the sum of $2,500 directly to Wife's within 60 days of this Decision and Order. Husband is also directed to pay the sum of $5,000 to Wife's counsel within 60 days.
Conclusion
For the detailed reasons set forth above, Wife's application to set aside the prenuptial agreement is denied. Husband's application for summary judgment enforcing the agreement is granted to the extent that the issue of maintenance is resolved and the issue of equitable distribution is resolved in part. Wife's application for pendente lite relief is resolved as indicated above. Husband is directed to continue paying the sums Ordered in this Court's Order dated December 13, 2013 until such time that Wife relocates from her current residence, at the conclusion of this case or sooner, at which time Husband shall be obligated to pay the sum of $4,833 a month in child support pursuant to the CSSA guidelines as applied herein.
All issues raised but not decided herein are hereby referred to trial.
This constitutes the Decision and Order of the Court.