Opinion
xxxx
07-21-2015
H.S., Plaintiff, v. M.S., Defendant.
Norman B. Naishtut, Esq. Attorney for Plaintiff 211 S Ridge St #2 Rye Brook, New York 10573 Robert G. Smith, Esq. Attorney for Defendant 950 Third Avenue, 11th Floor New York, New York 10022 Joy Joseph, Esq. Attorney for the Children 399 Knollwood Road, Suite 301 White Plains, New York 10603
Norman B. Naishtut, Esq.
Attorney for Plaintiff
211 S Ridge St #2
Rye Brook, New York 10573
Robert G. Smith, Esq.
Attorney for Defendant
950 Third Avenue, 11th Floor
New York, New York 10022
Joy Joseph, Esq.
Attorney for the Children
399 Knollwood Road, Suite 301
White Plains, New York 10603
Lawrence H. Ecker, J.
In response to plaintiff's motion, by Order to Show Cause, for various relief, including fees and discovery, defendant moves by Notice of Cross-Motion for, inter alia, an order granting summary judgment declaring that the parties' written prenuptial agreement dated April 23, 1998 is enforceable according to its terms, pursuant to CPLR Rule 3212 [b].
The following papers numbered 1 through 54 were considered on the motions:
PAPERSNUMBERED
Order to Show Cause, Attorney's Affirmation,1 - 23
Affidavit of Plaintiff, Exhibits A - U,
First Memorandum of Law
Notice of Cross-Motion, Attorney's Affirmation,24 - 42
Affidavit of Defendant, Exhibits 1 - 16
Affirmation in Opposition, Affidavit in Opposition,43 - 47
Exhibit A - B, Second Memorandum of Law
Attorney's Reply Affirmation, Exhibit 17,48 - 50
Supplemental Memorandum of Law51
Supplemental Attorney's Affirmation, Exhibit 1851 - 52
Original Apostille (and translation)53
Certificate of Conformity54
Upon the foregoing, the decision and order of the court is as follows:
On April 10, 2015, the parties appeared before the court at which time the parties' respective demands for relief were ruled upon, with the exception of defendant's motion for summary judgment to enforce the prenuptial agreement executed by the parties in Germany in 1998 ("the Agreement"). As to this motion, the court reserved decision. The court is now prepared to make its rulings on defendant's summary judgment motion, predicated upon the parties' submissions as above-enumerated, including the documents now produced by defendant that were generated in Germany, and translated and certified in the United States.
Background
Plaintiff and defendant were married on May 7, 1998. There are three children of the marriage. Plaintiff is a United States citizen and defendant was born and raised in Germany. At the time of the marriage, plaintiff worked as an art director in Pennsylvania and defendant worked as a dentist in Germany.
The court does not know whether defendant is a United States citizen.
On April 23, 1998, two weeks before the marriage, the parties executed the Agreement [Ex. 1], written in the German language. As confirmed by the certified translation [Ex. 18] , the Agreement provides, inter alia, as herein pertinent, that they intend to marry in accordance with German law, subject to the statutory property regime of the community of accrued gains. Neither party has provided the court with a definition of this term. Notwithstanding, the Agreement provides:
Plaintiff has not objected to the translation performed and certified by Claudia Teich Lepore, Esq. [Ex. 18].
The parties were first married in Denmark, followed by a church wedding in Germany.
See Deft's Affid., ¶2, fn. 1.
"In the event of termination of the equalization of accrued gains inter vivos, the value of any potentially existing dental office or any undertaking run by the spouse shall only be taken into account without goodwill, therefore only the tangible assets will be considered property assets, in order to secure the continued existence of such businesses."
Agreement, page 2, section 3.
The Agreement was executed before a notar (notary public). To confirm that the Agreement conforms to the formalities for the enforcement of prenuptial agreements pursuant to German law, defendant has filed an apostille and a certificate of conformity [RPL §301-a]. An apostille is an authentication of a public document issued pursuant to the 1961 Hague Convention, whose signatory countries have agreed to recognize public documents when the apostille is attached to the document. Germany and the United States are signatories to the Hague Convention. The Certificate of Conformity was executed by Dr. jur. Moritz F. Scharpenseel, L.L.M., Esq., who is licensed to practice law in Germany and New York. The Certificate states that Mr. Scharpenseel has reviewed the Agreement and that it was executed and filed in accordance with German law.
New York State Department of State, Division of Licensing Services, Authentication of Public Documents: http://www.dos.ny.gov/corps/apostille.html.
Following their marriage, the parties moved to New York, where they have since resided. Defendant studied for two years at a University in New York in order to be licensed to practice dentistry in New York. He then studied for two additional years in the specialty discipline of orthodontia. In 2003, defendant purchased his current practice, (name), located in ????, New York, from ???? [Ex. F]. The purchase price was $ ????, paid by defendant to the seller, partly by cash, and partly by promissory note in the amount of $ ????, payable monthly over 10 years with interest added at 2% over prime rate. The promissory note was paid in full on November 5, 2013 [Ex. D]. Plaintiff, until 2002, had been employed as an art director in New York. Thereafter, she continued working as a freelance graphic designer. She alleges that throughout the marriage she has served as the primary caretaker of the three children.
On June 5, 2014, plaintiff commenced this action for divorce and ancillary relief. The parties have engaged in pre-trial disclosure proceedings and the court has ordered the valuation of the dental practice and defendant's enhanced earning capacity. Now before the court is the question of whether the Agreement, supra, (1) conforms with the formalities required pursuant to New York law, and if it does, whether (2) plaintiff has validly waived an equitable distribution of the goodwill of defendant's "potentially existing dental office", i.e. the office where he now practices as an orthodontist.
Plaintiff argues that the agreement is unenforceable, because it was not properly acknowledged in accordance with DRL § 236 [B] [3], which states that "(a)n 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 the manner required to entitle a deed to be recorded." Defendant counters that the Agreement was executed and acknowledged in Germany in such manner and form to comport with the laws of Germany, and in accordance with New York law, specifically RPL §301 and RPL §301-a. The resolution of this issue is necessary in order to resolve whether plaintiff's waiver of her interest in the goodwill of the orthodontic practice is valid.
Analysis
Enforcement of the Agreement as to Form
New York has a strong public policy favoring individuals ordering and deciding their own interests through contractual agreements. Bloomfield v. Bloomfield, 97 NY2d 188 [2011]; Matter of Greiff, 92 NY2d 341 [1998]. Consistent with the public policy of this state, a duly executed prenuptial agreement executed in a foreign nation in accordance with that nation's laws may be found to be valid and enforceable in New York. DRL § 236 [B] [3]; Matisoff v. Dobi, 90 NY2d 127 [1997]; Greschler v. Greschler, 51 NY2d 368 [1980]. To qualify for enforcement in New York, the foreign prenuptial agreement signed in the foreign nation must be acknowledged in conformity with New York law, or with that of the foreign country. See RPL § 301-a. When the acknowledgment of the parties' signatures is obtained in the foreign nation in the manner prescribed by that nation's laws, to qualify that agreement for enforcement in New York, it must be accompanied by a certificate of conformity certifying that the acknowledgment conforms with the laws of that country. Cohen v. Cohen, 93 AD3d 506 [2d Dept 2012]. Here, the Agreement is in German, and subscribed by the parties before a notary public in Germany. Thus, the court must determine whether the Agreement meets the mandate of New York law to ascertain whether it is enforceable in New York.
The Agreement recites that plaintiff declared to the notary that she understands the German language and that (she) is able to follow the execution of this certificate, which the court takes to mean the Agreement. Plaintiff does not dispute this fact.
RPL §301 lays out the requirements for the proof required for the conveyance of real property bearing a foreign acknowledgment, and provides in subdivision [4] that it may be made by a notary public in the foreign country. The certified English translation of the Agreement [Ex. 18] confirms that the individual who acknowledged the parties' signatures was a notary public. The apostille confirms that Rudolph H.E. Dorsch, the individual who took the parties' acknowledgment, was at the time of its execution a notary public in Germany. That the Agreement comports with German law is confirmed by Mr. Scharpenseel, as set forth in the certificate of conformity.
Pursuant to RPL §301-a, Mr. Scharpenseel has affirmed under the penalty of perjury that he is an attorney duly admitted to practice law in Germany and New York. Subdivision [1] of RPL §301-a provides that the certificate of conformity may be furnished by "an attorney-at-law admitted to practice in New York, resident in such foreign country." Mr. Scharpenseel does not say that he is a resident of Germany, but does say that he is admitted to practice law in Germany. Although this representation does not strictly comply with subdivision [1][a], supra, subsection [1][d] provides that the certificate of conformity may be furnished by "(a)ny other person deemed qualified by any court of the state of New York...or by the supreme court of the state of New York, on application for such determination." The court finds that Mr. Scharpenseel's credentials meet the statutory criteria of RPL §301-a.
The court has not been advised by either party as to whether Mr. Scharpenseel must be a resident of Germany in order to maintain his law license there.
Since defendant has raised the issue of the enforcement of the Agreement within the context of a motion for summary judgment brought pursuant to CPLR
3212 [b], it is his burden to establish, prima facie, that there are no triable issues of fact. Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851 [1985]; Andre v. Pomeroy, 35 NY2d 361 [1974]. The court finds that defendant has met his burden by virtue of the documentation he has now submitted to the court. Having done so, the burden shifts to plaintiff to produce evidentiary proof in admissible form to establish there are issues of fact sufficient to demonstrate that the issue cannot be resolved without further fact finding. Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]. Plaintiff has not met her burden of demonstrating the necessity for further fact finding.
The court finds that defendant met his prima facie burden of demonstrating his entitlement to judgment as a matter of law, as to the issue of due execution of the Agreement in conformity with New York law, by presenting the translation of the Agreement, the apostille, and the certificate of conformity, all of which, when considered together, confirm that the Agreement conformed with the laws of Germany, and satisfied the requirements of RPL §300 and RPL §301-a. Van Kipnis v. Van Kipnis, 11 NY3d 573 [2008]; Cohen v Cohen, supra. See also, Galetta v Galetta, 21 NY3d 186 [2013] (compliance with the formalities of DRL § 236 [B] [3] required of written agreements between parties made before or during marriage).
In view of the foregoing, the court hereby declares that the Agreement is enforceable, as a matter of form, in this court.
Enforcement of the Waiver Provision as to the Goodwill of the Dental Practice
In the typical setting, a party challenging the enforcement of a prenuptial agreement must show evidence of fraud, duress, overreaching, or unconscionability. Bibeau v. Sudick, 122 AD3d 652 [2d Dept 2015]; Sabowitz v. Sabowitz, 123 AD3d 794 [2d Dept 2014]; Kabir v. Kabir, 85 AD3d 1127 [2d Dept 2011]; Stawski v Stawski, 43 AD3d 776 [1st Dept 2007]; compare Karq v. Kern, 129 AD3d 620 [1st Dept 2015]. Here, plaintiff claims that she was not represented by counsel, and that the notar (notary public) was selected by defendant. However, she makes no allegations that rise to the level of fraud, duress, overreaching, or unconscionability. Rather, she argues her waiver of the goodwill of the dental office was intended to apply only to general dentistry, which apparently was what defendant practiced in 1998. She avers that, at the time of the Agreement, there was no discussion that defendant would one day practice as an orthodontist. Thus, it is wrong, she argues, that her waiver should bar her from a claim to the goodwill of the orthodontic practice, which he purchased in 2003, and that he currently operates.
Defendant argues there is no reason to value the practice because plaintiff waived her right to the goodwill of same in the Agreement. He avers that the words "potentially existing dental practice", as employed in the Agreement [Ex. 1] should be interpreted to encompass the existing or future existing dental practice that he will conduct, regardless of whether it is a general dental practice or a specialty practice. It is his position that orthodontics is a branch or subset of dentistry, that an orthodontic practice is a dental practice, and that, as a matter of law, there should be no distinction made between the two. Plaintiff counters that she intended only to waive her interest in the goodwill of a general dental practice, as that was what defendant was doing in 1998; hence, she did not waive her equitable interest in the goodwill of the present orthodontic practice, which she says was not within the contemplation of the parties in 1998.
It is the court's observation that while the paragraph in issue (page 4, supra), contemplates the possibility of any potentially existing dental office included in this paragraph, it also contemplates "any undertaking run by the spouse shall only be taken into account without goodwill...". There being no definition of the word "spouse", it is the court's determination that the word "spouse" refers to each of the parties, there being no indication to the contrary. It does not matter what type of business either party operated as her or his "undertaking", the waiver would apply to the goodwill, whether a dental practice, or a graphic design business, or any other enterprise, which either party operated at the time of the divorce, regardless of the nature of either party's employment in 1998. This is borne out by the use of the word "businesses", clearly expressed in the plural, and consistent with the recitation on page 1 of the Agreement which describes each party's business at the time, i.e. "the dentist", defendant, and plaintiff, "Art director".
In support of her argument that the orthodontic practice should be considered a stand alone entity not to be included within the term "dental office", and thus free of her waiver to the goodwill, plaintiff argues that the German term used in the Agreement, "Zahnarztpraxis," does not translate to the German word for orthodontist, which is "Kieferorthopade." From this she claims that if it was the parties' intention for her to have waived the goodwill of an orthodontic practice, or other specialty dental practice, then the specific specialty term would have been stated. The issue for the court is whether it can be determined, as a matter of law, without considering extrinsic (parol) evidence, that the Agreement is complete and unambiguous as written, and therefore susceptible to only one meaning, namely that the goodwill waiver applies to any form of dental practice or undertaking owned, operated or conducted by either party.
When determining the intent of the parties to a prenuptial agreement, the court will apply the principles of contract interpretation (see Van Kipnis v Van Kipnis, supra, at
577; Strong v Dubin, 75 AD3d 66, 68 [1st Dept 2010] ; Clark v Clark, 33 AD3d 836, 837 [2d Dept 2006]. Where, as here, the agreement is clear and unambiguous, the intent of the parties can be gleaned from the four corners of the writing with a practical interpretation of the language employed, so that the parties' reasonable expectations are realized ( see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]; Rainbow v Swisher, 72 NY2d 106, 109 [1988]; Sunrise Mall Assoc. v Import Alley of Sunrise Mall, 211 AD2d 711 [2d Dept 1995]; Bennett v. Bennett, 103 AD3d 825 [2d Dept 2013]. Thus, the issue for the court is whether the language employed by these parties is a clear and unambiguous expression of their intentions at the time of the execution of the Agreement. If the answer is yes, then the waiver stands. If the answer is no, then the court must consider whether parol evidence shall be admitted to assist the court in ascertaining the intention of the parties. The determination of this issue is a matter of law for the court to decide. See Matter of Berns v Halberstam, 46 AD3d 808 [2d Dept 2007]; Jackson & Wheeler, Inc. v. Village of Pleasantville, 56 AD3d 723 [2d Dept 2008].
In Civil Service Employees Association, Inc. v. Patchogue-Medford School District, 2 AD3d 848 [2d Dept 2003], citing W.W.W. Associates, Inc., supra, the court stated the proper aim of the court is to arrive at a construction which will give fair meaning to all of the language employed by the parties and to reach "a practical interpretation of the expressions of the parties to the end that there be a realization of [their] reasonable expectations.'" Id at 849.Applying these legal principles to this case, the court finds that the Agreement, within the four corners of the document, without the necessity of considering extrinsic (parol) evidence, clearly and unequivocally provides that plaintiff and defendant have each waived her or his entitlement to share in the goodwill of any possibly existing dental office or undertaking, which, as expressed by the parties, "secure the continued existence of (the) businesses." As to the dental office, which defendant now operates in the specialty of orthodontics, that practice is still a dental practice. The court accepts defendant's contention that to practice orthodontia, or any other specialty of dentistry in New York, one must be a dentist licensed in New York who is certified to practice in that specialty. See 18 NYCRR §442.18[b][15]. To hold oneself out in New York as an orthodontist, or any other recognized sub-specialty of dentistry, the practitioner, a New York licensed dentist, must undertake additional training and obtain board certification in the particular specialty. Pursuant to 18 NYCRR §506.4, which deals with the subject of "orthodontic care", the Department of Education requires that orthodontia may be practiced only by "qualified practitioners as determined by the department."
In a case involving medicaid reimbursement sought by a dentist who was not board certified in orthodontics, the Court ruled that the dentist in question could not bill the government for orthodontic care absent the required certifications for that specialty. Matter of Stanley v. DeBuono, 273 AD2d 169 [1st Dept 2000]. In that case, the Court noted that although the term "qualified orthodontists" is not defined in the Department of Education regulations, the appropriate reference to determine who is a "qualified orthodontist" (for medicaid reimbursement purposes) is included in 18 NYCRR 504.3[i], which incorporates by reference the Medicaid Management Information System
Provider Manual ("MMIS"). The MMIS then refers to 18 NYCRR 506.1(c) which provides that to qualify as a dental specialist, which includes orthodontia, the individual (1) is a diplomat of the appropriate American Board; or (2) is listed as a specialist in the American Dental Directory of the American Dental Association section on "character of practice"; or (3) is listed as a specialist on the roster of approved dental specialists of the New York State Department of Health.
Plaintiff does not deny that defendant has met the qualifications necessary to hold himself out as an orthodontist, and that his current dental practice does specialize in orthodontics. Rather, it is plaintiff's view that due to defendant's credentialing as an orthodontist, it cannot be said that he is operating a dental office, as contemplated in 1998 when the parties signed the Agreement. The court is cognizant that the State has implemented regulations to assure that those dentists who administer orthodontic treatment to patients are held to standards specifically applicable to specialists, and not to those who practice general dentistry. That is not to say, however, that those who are authorized by regulation to hold themselves out as orthodontists do not maintain a dental office.
The court finds that an orthodontist is a specialized type of dentist, and that plaintiff did waive her equitable interest in the goodwill of defendant's present orthodontic practice. The language the parties employed in 1998 is clear and unambiguous, and applies to the goodwill of each of the party's then, or future, business endeavors. The Agreement excludes the goodwill of any "potentially existing dental office" or any "undertaking run by the spouse". The court made its finding, supra, that spouse refers to plaintiff and defendant, and that the waiver of the goodwill in the practice or undertaking is reciprocal, thereby precluding either party from making a claim against the goodwill of any business owned or operated by the other. As relevant here, the waiver of plaintiff's interest in the goodwill of defendant's orthodontic practice is valid, and is to be enforced, notwithstanding it is a specialty dental practice. Even if it were not a dental practice of any specialty, the goodwill would be waived because it is a business undertaking of the spouse. The court finds that the Agreement is clear and unambiguous, thus precluding the necessity of employing extrinsic (parol) evidence. W.W.W. Associates, Inc. v. Giancontieri, supra; Jackson & Wheeler, Inc. v. Village of Pleasantville, supra.
Plaintiff avers that at the time the Agreement was executed, she was not represented by counsel, and that it was not within the contemplation of the parties that defendant would ever pursue a career in orthodontics. Given the court's ruling that the provision regarding the waiver of the goodwill applies to either spouse's business, whether a professional practice, or other undertaking, this is not a one-sided agreement. As observed, supra, plaintiff does not claim that the Agreement is voidable due to fraud, undue influence, duress, or similar contractual defenses customarily interposed when there is contest involving the enforcement of a prenuptial agreement. The waiver of the goodwill of the dental practice does not prevent plaintiff from demonstrating that she is entitled to equitable distribution of the other assets of the dental practice and defendant's enhanced earning capability, if any, in that his acquisition of a New York dental license and his credentialing as an orthodontist were accomplished during the marriage, which are to be separately evaluated by the court appointed neutral, as is her enhanced earning capacity that may prove to be of value to defendant. Further, if marital funds were used to finance the purchase of the orthodontic practice, then this fact must likewise be taken into consideration by the court. See Fields v. Fields, 15 NY3d 158 [2010]. Lastly, the parties' respective Statements of Net Worth [Ex. R - plaintiff and Ex. C - defendant] show there are other assets (and liabilities) subject to equitable distribution, and not subject to the Agreement, such that each party's interest remains extant, with the only limitation thereon relating to the goodwill of defendant's dental practice, and plaintiff's business attainments.
Accordingly, it is
ORDERED that defendant's motion for summary judgment, made pursuant to CPLR 3212, is granted; and it is further
ORDERED that the Prenuptial Agreement signed by the parties on April 23, 1998 is found to be enforceable as having been executed and acknowledged in compliance with DRL § 236 [B] [3]; and it is further
ORDERED that the provision of the Prenuptial Agreement signed by the parties on April 23, 1998, whereby the parties waived an interest in the goodwill of any potentially existing dental office or any undertaking, is to be enforced; and it is further
ORDERED that the parties and counsel shall appear in court for further proceedings on July 28, 2015 at 9:30 a.m.
The foregoing constitutes the decision and order of the court.
Dated: White Plains, New York
July 21, 2015
E N T E R,
______________________________
HON. LAWRENCE H. ECKER, J.S.C.