Opinion
XXXXX/XXXX
03-18-2016
Shaw X., Plaintiff, v. Jingdong X., Defendant.
DECISION & ORDER Mot. Seq. No.1 Recitation, as required by CPLR §2219(a), of the papers considered in the review of this motion. The following papers numbered 1 to 4 read herein: Papers / Numbered Notice of Motion/Order to Show Cause/Petitio Cross Motion and Affidavits (Affirmations) Annexed 1 Answering/Opposing Affidavits (Affirmations) 2 Reply Affidavits (Affirmations) 3 Other papers Transcript dated April 10, 2014 4
Upon the foregoing cited papers in this matrimonial action, the decision and order on this motion is as follows:
Defendant moves by order to show cause for an order: (1) setting aside the judgment of divorce and (2) equitably distributing the marital assets, including several real properties in the United States and China, approximately $200,000 cash in U.S. bank accounts and approximately $600,000 in U.S. stocks and bonds. Plaintiff, opposes the motion in its entirety.
BACKGROUND
The parties were married on July 28, 1990 in Forest Hills, Queens, New York. There is one child of the marriage. Prior to the marriage, Plaintiff obtained a master's degree in chemistry from the University of Missouri-Rolla in 1988. Defendant obtained an engineering degree from same. In 1993, Plaintiff enrolled at Rutgers Law School in Camden, New Jersey. Plaintiff lived in student housing during law school while Defendant resided in the marital home in Staten Island. The parties took turns commuting to see each other on weekends. In 1996, Plaintiff passed both the New Jersey and New York State bar exams and was admitted to practice in both jurisdictions. Plaintiff worked for various firms before opening her own practice in Edison, New Jersey in 1999. On February 18, 1999, the parties purchased a residence located at 25 Overhill Drive, North Brunswick, NJ 08902 and relocated from Staten Island.
In 2005, the Plaintiff learned of certain IRS liens placed on Defendant's accounts arising out of financial difficulties in his business affairs. On October 1, 2005, prior to the commencement of this divorce action, the parties entered into an agreement regarding the distribution of several real properties. The agreement states, in sum, that Defendant is relinquishing his interest in any and all properties acquired during the marriage to Plaintiff.
On November 20, 2006, Plaintiff filed a summons with notice for an uncontested divorce. Defendant was served on November 27, 2006. Defendant signed the Affidavit of Defendant on November 27, 2006. The pleadings and filings indicate that Plaintiff lived at 5719 Hamilton Parkway, 2nd Floor, Brooklyn, NY 11219, and Defendant lived at 5719 Hamilton Parkway, 1st Floor, Brooklyn, NY 11219. A judgment of divorce on the grounds of constructive abandonment was entered on December 18, 2006, granting custody of the parties' son to Plaintiff and ordering Defendant to pay child support in the sum of $25.00 a month. According to Defendant, six years later, Plaintiff informed him that she wanted to end their relationship and ceased paying Defendant his share of the income from their properties. Defendant then filed the instant order to show cause.
DEFENDANT'S CONTENTIONS
Defendant seeks to vacate the judgment of divorce pursuant to CPLR 5015(a). Defendant claims Plaintiff misrepresented herself by stating that the sole reason for the parties obtaining a divorce was to protect the parties' assets from debts and liens arising out of Defendant's business dealings. Defendant states Plaintiff assured him that they would continue to live as a married couple after the judgment of divorce was entered. Defendant also states Plaintiff forced him to transfer title to all jointly owned or otherwise marital properties to Plaintiff prior to commencing the divorce proceeding. Although Defendant transferred title to the properties to Plaintiff, he claims that he continued to live in and maintain the properties for the economic benefit of the couple.
In reliance upon Plaintiff's representations regarding the divorce, Defendant relinquished ownership of all jointly and separately owned property, and agreed to the divorce, proceeding without the benefit of counsel and forgoing any claims for equitable distribution. Although Defendant was unrepresented in the uncontested divorce proceedings, Plaintiff, an attorney herself, was represented by counsel.
Defendant further contends that this court lacked jurisdiction to enter a judgment of divorce in this case because neither party met the residency requirement pursuant to D. R. L. §230. Defendant now seeks 1) vacatur of the judgment of divorce, as he claims he only agreed to the divorce because Plaintiff convinced him that it would be in the couple's best interest, and 2) equitable distribution of approximately twelve (12) real properties allegedly acquired during the marriage.
PLAINTIFF'S CONTENTIONS
Plaintiff opposes Defendant's motion in its entirety. Plaintiff contends that she obtained the divorce because she was unhappy with the marriage. She retained an attorney for the uncontested divorce proceedings and completed the process without fraud or misrepresentation. Plaintiff did not intend to reside with Defendant after the judgment of divorce was entered nor did she wish to remain a couple. Plaintiff also claims that Defendant waived his right to equitable distribution and she assumed responsibility for the costs and expenses associated with the properties. Plaintiff paid off the debts and liens associated with the properties and Defendant was fully aware of this.
In support of her contentions, Plaintiff provides a sworn affidavit of her then-divorce attorney, Fengli Guo, Esq., who states that he explained to Defendant his right to counsel in the divorce proceedings. He also affirms that Defendant communicated to him that he had read and understood all documents associated with the uncontested divorce, including the Affidavit of Defendant that contained the waiver of equitable distribution provision.
Plaintiff further argues: 1) Defendant's fraud claim is barred by the statute of limitations; 2) Defendant fails to meet his burden of proof and fails to prove "fraud" in the procurement of the parties' judgment of divorce; 3) Defendant is estopped from challenging the validity of the judgment of divorce; 4) Defendant waived equitable distribution and ratified the parties' agreement; 5) Defendant's claim should be dismissed based upon the doctrine of "unclean hands," 6) Defendant is barred from challenging the validity of the judgment of divorce and the issue of equitable distribution based upon the doctrine of res judicata; 7) Defendant is barred from moving to vacate parties' judgment of divorce based upon laches; 8) Defendant's motion violates the strong public policy favoring the finality of divorce decrees; and 9) Defendant fails to cite any legal authority to support his claim.
DISCUSSION
Lack of Jurisdiction
Defendant, in his moving papers, raises a jurisdictional issue, which Defendant develops more completely in his reply. At oral argument, Plaintiff objected to the consideration of this issue because Defendant raised the argument for the first time in his reply brief. First, this court finds that, although not clearly identified with a separate heading, Defendant did allege a lack of jurisdiction in his moving papers (see Defendant's Attorney's Affirmation at ¶¶9, 12). Second, it is within the court's discretion to determine if it will consider an argument raised for the first time in reply (see Penavic v Penavic, 88 AD3d 671 [2d Dept 2011] citing Matter of Allstate Insurance Co. v Dawkins, 52AD3d 826 [2d Dept 2008]). The court gave Plaintiff an opportunity to address the jurisdictional issue at oral argument. As this court finds lack of jurisdiction to be a serious issue, it will be considered below.
CPLR 5015(a)(4) provides that this court may vacate the judgment of divorce if it lacked subject matter jurisdiction to render the judgment. D.R.L. §230 provides that an action for divorce or separation may be maintained only when: 1) the parties were married in the state and either party is a resident thereof when the action is commenced and has been a resident for a continuous period of one year immediately preceding; 2) the parties have resided in this state as husband and wife and either party is a resident thereof when the action is commenced and has been a resident for a continuous period of one year immediately preceding; 3) the cause occurred in the state and either party has been a resident thereof for a continuous period of at least one year immediately preceding the commencement of the action; 4) the cause occurred in the state and both parties are residents thereof at the time of the commencement of the action; or 5) either party has been a resident of the state for a continuous period of at least two years immediately preceding the commencement of the action. The residency requirement in the state of New York is based on domicile. (Caldwell v Caldwell, 298 NY 146 [1948]).
Although the parties were married in New York in 1990, Defendant claims that the parties did not reside in New York prior to commencement of this action in 2006, and rather have lived in New Jersey since 1999. The parties purchased their first home in Staten Island, New York in 1993. In 1999, after Plaintiff obtained her law degree and started practicing in Edison, NJ, the parties purchased a home in North Brunswick, NJ and rented out the Staten Island property until they sold it in 2003. Plaintiff does not dispute the purchase of the North Brunswick property. Plaintiff admits that the Staten Island property was sold in October 2003, and that in March 2004, she used the proceeds to purchase a condo in Edison, NJ. Based on the parties own representations, it is clear that the parties changed their domicile from New York to New Jersey in 1999.
The record lacks sufficient evidence to show that the parties changed their domicile back to New York, or even maintained a residence in New York, after they sold the Staten Island property. Fengli Guo, Plaintiff's attorney for the uncontested divorce, admits that he prepared all documents for the uncontested divorce, including the summons with notice, the verified complaint, affidavits of the parties, the findings of fact and conclusions of law and the judgment of divorce. All documents state that the parties resided at 5719 Fort Hamilton Parkway, Brooklyn at the time of commencement, and indicate that this was the parties' address for the jurisdictional period of one year prior to commencement. However, the divorce documents are the only record of the parties maintaining a residence in Brooklyn. In fact, the property division agreement, dated October 1, 2005 and signed by both the parties, acknowledged that the parties' "principal residence" was located at 25 Overhill Drive, North Brunswick, 08902. Aside from the pleadings filed in the uncontested divorce action, neither party has claimed to reside in New York after February 1999. Considering both parties classify the property in North Brunswick to be the principal residence, and neither party has brought forth proof of residency in New York, it is clear that the parties did not meet the statutory residency requirement to obtain a divorce in New York State.
While it is evident that the parties may not have met the residency requirements pursuant to D.R.L. §230, this defect alone is not sufficient to warrant vacatur under CPLR 5015(a)(4). As the Court of Appeals held in Lacks v. Lacks, "[t]he requirements of section 230, however, go only to the substance of the divorce cause of action, not to the competence of the court to adjudicate the cause. Hence, a divorce judgment granted in the absence of one of the specified connections with the State, even if erroneously determined as a matter of law or fact, is not subject to vacatur under CPLR 5015(a)(4)" (41 NY2d 71,73 [1976]). As such, the branch of Defendant's motion set aside the judgment of divorce on the grounds of lack of jurisdiction is denied. Fraud , Misrepresentation , or Other Misconduct
CPLR 5015(a)(3) provides that the court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of fraud, misrepresentation, or other misconduct of an adverse party. Defendant avers that he is entitled to vacatur of the judgment of divorce because Plaintiff obtained the divorce and ancillary relief by misrepresenting her true motives and the nature of the parties' divorce arrangement. Defendant alleges that Plaintiff's representations regarding the purpose of the divorce, to protect their assets, was part of a scheme to deprive him of equitable distribution to which he would have been entitled had he had a fair opportunity to contest the divorce. First, Plaintiff urged him to sign over his interests in their marital property to protect it from his business creditors. Then, Plaintiff, together with her attorney, prepared the divorce documents, making Defendant waive equitable distribution, all while assuring Defendant that the divorce would be in name alone and not affect their joint ownership. Defendant agreed to the waiver, in reliance on the advice of his wife, who is an attorney, and the divorce attorney who drafted the papers. In support of his belief that his property interests were not affected by the divorce and that the parties continued to consider themselves married after the divorce judgment, Defendant provides a copy of the property description for 22 Maple Avenue, Plainsboro, NJ, which lists both parties as buyers in 2007, after entry of the divorce judgment (Defendant's Ex. J); the mortgage for 22 Maple Avenue, Plainsboro, NJ executed on July 19, 2007 listing Plaintiff as married and Defendant as her husband (Defendant's Reply Ex. A); and various bills in Defendant's or both parties' names for the parties' Bridge Street and Overhill Drive properties (Defendant's Reply Ex. C). Defendant also insists that the parties continued to hold themselves out to family and friends at husband and wife.
Defendant argues that the statements made and documents submitted in the uncontested divorce are untrue. The parties did not live at the Fort Hamilton Parkway address, and Defendant did not constructively abandon Plaintiff there. Defendant alleges that he never signed an agreement regarding equitable distribution, and that Plaintiff advised him that it would be unnecessary as they were going to continue to jointly own and manage their marital properties. Additionally, Defendant claims that the parties did not abide by the child support stipulation executed on November 27, 2006. The stipulation states that Plaintiff has custody of the child, Defendant has reasonable rights of visitation, Defendant will pay $25 per month in child support, and that his income represents 10.36% of the combined parental income. However, Defendant avers that after the divorce he continued to be the primary caregiver for their child, moving with the child around New Jersey to take advantage of the best educational opportunities, and reuniting with the Plaintiff on the weekends in the primary residence in North Brunswick, NJ.
Plaintiff denies Defendant's characterization of the events leading up to and following their divorce and maintains that at the time she sought the divorce, she intended it to be a true and final separation from Defendant. Plaintiff opposes Defendant's motion to vacate the judgment on several grounds. First, Plaintiff argues that Defendant's motion must fail as untimely. "[A] party seeking relief from a judgment pursuant to CPLR 5013(a)(3) is required to make the motion within a reasonable time" (Sieger v Sieger, 51 AD3d 1004, 1006 [2d Dept 2008]). While it is true that a motion for relief of a judgment must be made within a reasonable time, the parties' positions present an issue of fact as to when the fraud, misrepresentation and misconduct as described by the Defendant were discovered. Here, Defendant made his motion to vacate the judgment seven years after same was entered, which, ordinarily would constitute an unreasonable delay (see Mark v Lenfest, 80 AD3d 426 [1st Dept 2011]; Marotta v Dinozzi, 287 AD2d 491 [2d Dept 2001]). However, if Defendant's allegations with respect to the manner in which the divorce was effectuated are to be accepted, he had no reason to believe Plaintiff's conduct was calculated to fraudulently deprive him of his right to defend against the divorce action until September 2012, when Plaintiff formally ended the parties' relationship and allegedly stopped making payments to him from the proceeds of their income producing property. This is particularly true where it appears the parties spent periods of their marriage as well as their post-divorce life living apart for the benefit of their son's education. On this record, it is unclear whether Defendant's motion was unreasonably delayed or instead that Defendant brought this motion as soon as practicable after his discovery of the alleged fraud.
Second, Plaintiff argues that Defendant fails to meet his burden in proving fraud in the procurement of the judgment of divorce. Plaintiff asserts that the divorce should not be vacated based solely on Defendant's claim that the property division agreement was fraudulently procured (Cofresi v Cofresi, 198 AD2d 321 [2d Dept 1993]). Contrary to Plaintiff's position, Defendant's motions does not solely rely on a claim of fraud respecting the 2005 property division agreement. Plaintiff's contentions overlook Defendant's allegations that the 2005 property division agreement was merely part of Plaintiff's fraudulent scheme to obtain a divorce and deprive Defendant of his right to defend the action. Defendant alleges that Plaintiff advised him to waive equitable distribution in his affidavit because they had already made an agreement to put the property in her name for their mutual benefit. Defendant acknowledges that there were misstatements in the uncontested divorce documents, but that he allowed Plaintiff to proceed relying on their commitment to each other and her expertise as an attorney.
The record indicates that there were misstatements made in the uncontested divorce documents, which support Defendant's characterization of the events leading to the parties' divorce. Aside from the issue of residency, the Verified Complaint for the uncontested divorce states that the "marriage was not performed by a clergyman, minister or leader of the Society for Ethical Culture" (Plaintiff's Exhibit B, emphasis added). The Findings of Fact and Conclusions of Law, prepared by Mr. Guo, state that a sworn statement as to the removal of barriers to remarriage were not required because the parties were married in a civil ceremony (Plaintiff's Exhibit D at Paragraph Ninth). However, in opposition to the instant motion, Plaintiff states in her affidavit that the parties "were married in July 1990 in a religious ceremony in Queens, New York" (Plaintiff's Affidavit in Opposition at ¶ 10).
The authority upon which Plaintiff relies to support her position are unpersuasive. In the cases cited, the movants sought to vacate the divorce judgment based on alleged fraud in the underlying stipulations of settlement incorporated in the judgment. Here, Defendant claims that he was induced by Plaintiff to waive equitable distribution pursuant to a stipulation that was not provided to the court. Both the Findings of Facts and Conclusions of Law and the Judgment refer to two stipulations purportedly entered into in 2006, which were to survive but not be merged with the judgment. However, in reviewing copies of the uncontested divorce documents provided by both parties, there is only one stipulation, dated November 27, 2006, dealing solely with the issue of child support. There is no 2006 stipulation addressing the issue of equitable distribution. Even assuming, the parties meant to refer to the 2005 property distribution agreement, that agreement is unenforceable as a nuptial agreement, as will be discussed below.
To this point, Plaintiff also argues that Defendant has failed to provide any clear, convincing and admissible evidence that the Plaintiff procured the judgment by fraud or misrepresentation (Bergen v Bergen, 299 AD2d 308, [2d Dept 2002]). In Bergen, the Appellate Division affirmed the Supreme Court's denial of wife's motion to vacate the judgment pursuant to CPLR 5015(a)(3), where "[h]er allegation that she was led to believe that the plaintiff's attorney represented both parties is refuted by the terms of the stipulation, in which she acknowledged that the attorney represented only the plaintiff and that she was advised to seek independent counsel but chose not to do so" (299 AD2d at 309). Here, however, the court documents submitted in support of Defendant's motion do not clearly indicate that Defendant was advised to seek independent counsel. The only documents that contradict Defendant's claims that Plaintiff's justification for the divorce are Plaintiff's and Mr. Guo's affidavits. Notably, Mr. Guo admits to preparing all documents for the uncontested divorce, including Defendant's Affidavit in which he waived equitable distribution.
Third, Plaintiff argues that a motion to vacate judgment is properly denied where the party seeking relief from the judgment has accepted the benefit of the stipulation and judgment, or otherwise complied with its provisions, over a period of years, thereby ratifying the agreement (see Marotta v Dinozzi, 287 AD2d 491 [2d Dept 2001]; Weimer v Weimer, 281 AD2d 989 [2d Dept 2001]). As will be discussed below, this argument does not apply to the 2005 property distribution agreement. There is an issue of fact as to whether the conduct of the parties after the entry of judgment support a finding that Defendant accepted the benefits of their child support stipulation, thereby ratifying its terms. Plaintiff claims that Defendant accepted the benefits of their agreement, specifically, that he has contributed no more than $25 per month in child support and that Plaintiff relieved Defendant of the financial burden of maintaining their several properties. Contrary to Plaintiff's argument and the terms of the child support stipulation, Defendant claims that he was the primary caregiver for the parties' son during the week while the child was enrolled in school and that the parties shared parental responsibilities throughout the marriage and after the divorce until the child enrolled at boarding school in the fall of 2012. Additionally, Defendant argues that since the divorce, he has maintained the parties' New Jersey properties, and has produced bills postdating the divorce indicating that he has made a financial contribution to their upkeep.
If circumstances are as proffered by Defendant and Plaintiff obtained the divorce "through some device, trick, or deceit [whereby the defendant was] led to believe that he [] need not defend the suit . . . the court will have no part in enforcing a judgment which was procured by a fraud practiced upon it" (Shaw v Shaw, 97 AD2d 403 [2d Dept 1983]; Avenoso v Avenoso, 266 AD2d 326 [2d Dept 1999]). In light of the drastic discrepancies both in the parties' positions and the papers submitted in support thereof, there are issues of fact as to whether or not the judgment of divorce was procured by means of fraud, misrepresentation or misconduct on the part of the Plaintiff, which the court declines to determine based on the papers alone. Thus, the portion of Defendant's motion seeking vacatur of the judgment of divorce based upon fraud, misrepresentation or misconduct is held in abeyance pending an evidentiary hearing on the issues presented by the parties (see Shaw v Shaw, 97 AD2d 403 [2d Dept 1983]; Thakur v Thakur, 49 AD3d 861 [2d Dept 2008]).
Equitable Distribution
Defendant argues that his waiver of equitable distribution in the uncontested divorce action should be set aside because it is unenforceable and has never been ratified as the parties did not live their post-divorce life in accordance with same (see Rio v Rio, 110 AD3d 1051 [2d Dept 2013]). Plaintiff argues that Defendant's application for the court to conduct equitable distribution almost seven years after the divorce was finalized should be denied as Defendant waived equitable distribution and ratified the parties' agreement (Bettino v Bettino, 112 AD2d 181 [2d Dept 1985]).
DRL 236B(5)(a) provides in relevant part "[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." The 2005 property distribution as the parties stipulation for equitable distribution agreement, executed prior to the divorce action, does not comport with the requirements of DRL 236B(3), as it not "acknowledged or proven in the manner required to entitle a deed to be recorded" (see Matisoff v Dobi, 90 NY2d 127 [1997]). As such, the property distribution agreement is not enforceable in this matrimonial proceeding. Additionally, it is well settled that an unacknowledged nuptial agreement cannot be cured by ratification (id. at 132). As neither party has produced a properly executed and acknowledged stipulation, there are no terms upon which this court can enforce the purported waiver of equitable distribution. Thus, the branch of Defendant's motion for the court to conduct equitable distribution is granted to the extent that the parties will appear for an evidentiary hearing on the property that may be subject to equitable distribution.
CONCLUSION
Accordingly, it is hereby ORDERED that Defendant's motion to vacate the judgment of divorce on the ground of lack of jurisdiction is denied; and it is further ORDERED that Defendant's motion to vacate the judgment of divorce on the ground of fraud, misrepresentation or other misconduct is held in abeyance pending an evidentiary hearing; and it is further ORDERED that Defendant's motion for the court to conduct equitable distribution of the parties' assets is granted to the extent that there will be an evidentiary hearing on the property subject to equitable distribution.
The parties shall appear for a status conference on Thursday, April 28, 2016 at 2:00 PM in Part 5T, Room 924.
Any issue raised and not specifically addressed by this decision/order is deemed without merit and denied.
This constitutes the decision and order of the Court. ENTER:
______________________________ _
HON. DELORES J. THOMAS, J.S.C.