Opinion
xx/10.
Decided July 16, 2010.
The former wife was represented by Howard Jurist.
The former husband was represented by Stanley Hirsch.
This is a motion by the plaintiff (hereinafter wife) for an order directing the defendant (hereinafter husband) to name the wife as beneficiary of any and all pre-retirement death benefits in the XYZ Inc. Employees' Pension Plan and Trust and restraining the husband from taking any action affecting the wife's rights in said pension plan during the pendency of the above captioned action. The husband cross moves for an order granting summary judgment pursuant to CPLR 3212 dismissing the action and awarding him counsel fees in the sum of $5000.00.
The parties were divorced pursuant to a judgment dated December 14, 2007. The parties' stipulation of settlement dated August 1, 2007 was incorporated and not merged in said judgment. The wife commenced the above captioned action on March 19, 2010 seeking a judgment modifying/reforming the parties' judgment of divorce.
In support of the within motion, the wife alleges the following: during the marriage, the husband worked for XYZ, a business owned by her family; XYZ went out of business prior to the commencement of the parties' action for divorce; the parties' stipulation of settlement was based upon a mutual mistake of fact in that both parties believed that the husband's XYZ pension benefits had been extinguished when XYZ went out of business; the husband's affidavit of net worth sworn to on January 11, 2007 stated that his XYZ pension benefits had been "stolen by the wife's father;" subsequent to the date of the judgment of divorce, the wife learned that the US Government Pension Benefit Guarantee Corporation (PBGC) had stepped in and that the husband is entitled to pension benefits, including benefits payable to a surviving spouse; the parties' only other asset of value, the marital residence, was sold and the proceeds divided equally pursuant to the parties' stipulation of settlement; the parties were married for 27 years.
In opposition to the wife's motion and in support of his motion for summary judgment, the husband alleges the following: the wife listed the XYZ pension on her affidavit of net worth in the parties' divorce action; the husband's affidavit of net worth also listed the pension stating the value was "unknown;" the XYZ pension was known to both parties; the wife was obligated under the terms of the parties' stipulation of settlement to make "independent inquiry and investigation" with respect to the XYZ pension; the wife was represented by counsel prior to and at the time of the execution of the stipulation of settlement; the parties' stipulation of settlement afforded the wife substantial benefits in addition to 50% of the equity in the former marital residence (7 years of maintenance, child support until the parties' youngest was 23 years old, the husband is obligated to provide a car for the child, provide health insurance for the child until age 26, pay 80% of uncovered health related expenses and college, there is no reduction in child support when the child goes away to college); the wife was in a better position than the husband to ascertain whether the XYZ pension had value as the business was owned by her father; the wife's father received a letter dated August 16, 2006, from PBGC advising that said entity intended to be appointed trustee of the XYZ pension plan; on or about March 20, 2007, PBGC commenced an action in federal court seeking to be appointed trustee; the complaint in the federal action alleged that pension had liabilities to plan participants exceeding $1,000,000.00 and only $10,000.00 in assets; the wife's brother-in-law received a letter dated December 10, 2007 advising that PBGC was responsible for the XYZ pension and that he was entitled to benefits; said letter directed the wife's brother to a website for additional information.
In opposition to the husband's motion and in reply on her application, the wife alleges the following: the husband's attorney stated on the record on January 25, 2007 that the husband had a pension, but it is was no longer available; the wife did not learn that PBGC had stepped in until September 2009; if the wife waits ten years, she will collect $12,000.00 a year from the pension in issue.
The husband replies as follows: at the time of the execution of the stipulation of settlement, the parties were uncertain of the amount of a certain debt and said stipulation provides certain contingencies at page 7 depending on the amount; the wife could have required a similar provision in the stipulation with regard to the XYZ pension; as litigation was commenced against the wife's father in April 2007, the wife's statement that she was unaware that PBGC had stepped in until September 2009 is "unconvincing;" the wife was a shareholder in XYZ, Inc.; the wife is asking the Court to revisit the distribution of marital asset, not on the ground, that there was an asset owned by the parties' unbeknownst to them, but on the ground that the parties were unaware of the value of the asset; the wife was obligated to determine whether the asset had value.
Based upon the foregoing, the motions are decided as follows:
A stipulation of settlement is an independent contract which is subject to principals of contract law ( Rainbow v Swisher, 72 NY2d 106; Simmons v Simmons, 305 AD2d 661; Dreiss v Driess, 258 AD2d 499). Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation ( Hallock v State of New York, 64 NY2d 224; Hannigan v Hannigan , 50 AD3d 957 ). To "vacate [a] stipulation of settlement on the ground of mutual mistake, [a party must] demonstrate that the mistake existed at the time the stipulation was entered into and that it was so substantial that the stipulation failed to represent a true meeting of the parties' minds" ( Gro-Wit Capital, Ltd. v Obigor, LLC , 33 AD3d 859 ; Matter of Gould v Board of Educ. of Sewanhaka, 81 NY2d 446; Hannigan v Hannigan, supra; Maury v Maury, 7 AD3d 585). Mutual mistake may furnish the basis for reforming a written agreement where "the parties have reached an oral agreement and unbeknownst to either, the signed writing does not express that agreement" ( Chimart Assoc. v Paul, 66 NY2d 570; Simek v Cashin, 292 AD2d 439; Avetine Inv. Mtg. v Canadian Imperial Bank of Commerce, 265 AD2d 513). A high level of proof of mutual mistake of fact by clear and convincing evidence is required to overcome the plain unambiguous language of a stipulation of settlement ( see, True v True , 63 AD3d 1145 ; Migliore v Migliore , 28 AD3d 620 ; Phillips v Phillips, 300 AD2d 642; Vermilyea v Vermilyea, 224 AD2d 759; Dykstra v Dykstra, 211 AD2d 745).
In the case at bar, it is undisputed that both parties were aware at the time they negotiated and executed their stipulation of settlement, that the husband had earned pension benefits during the marriage by virtue of his employment with XYZ, an entity owned by the wife's father. The wife's causes of action are premised, not upon an allegation that the parties were unaware of the existence of the pension, but rather, that they lacked knowledge that the asset was insured by the PBGC, and that it had value as a result of same. Said information was, however, readily ascertainable in the public domain, had the wife chosen to make appropriate inquiry ( see, Etzion v Etzion , 62 AD3d 646 ). "[A] party may not challenge the validity of a settlement agreement based on a claim that she undervalued assets which, the record showed, were disclosed by [her] former spouse and known to [her] at the time" ( Kojovic v Goldman , 35 AD3d 65 ; see, Sweeney v Sweeney , 71 AD3d 989; Paolino v Paolino , 51 AD3d 886 ; Monahan v Monahan, 2 Misc 3d 1011[A]).
The cases relied upon by the wife are inapposite. In Viviano v Allard, 197 AD2d 210, the Court reopened an action after a 1984 judgment of divorce, to address equitable distribution, in what the court referred to as "unusual circumstances," where the husband became eligible in 1990 to share in a $415,000,000.00 class action fund. In said case, there is no indication that either party was aware, or could have ascertained, that a class action had been commenced during the pendency of the divorce action, or that the husband was a member of the class. In Kammerer v Kammerer, 278 AD2d 282, the Court equitably distributed the husband's pension pursuant to IRC 414(p)(1)(A), where the parties had entered into a separation agreement 15 years prior to the commencement of the divorce action and the wife had not waived her entitlement to said pension in said agreement pursuant to ERISA, 29 USCA 1055(c)(1)(A)(i). The parties herein executed a stipulation of settlement resolving their divorce action, not a separation agreement, and said stipulation does not provide for the distribution of the husband's pension pursuant to a domestic relations order under IRC 414. Further, applicable ERISA provisions now inure to the benefit of the husband's present wife. In addition, the wife failed to move promptly after discovering the claimed mutual mistake ( see, Thomas v Barton, 48 NY2d 193) and ratified the stipulation by accepting the benefits thereunder for a substantial period after such discovery.
The husband has met his prima facie burden of demonstrating entitlement to judgment as a matter of law, and in opposition, the wife has failed to raise a triable issue of fact ( see, Alvarez v Prospect Hosp., 68 NY2d 320). The Court notes that although issue has not been joined in this action, the parties "charted their own course and treated the summary judgment motion as if issue had been joined," permitting the Court to determine the motion on the merits rather than dismiss it as premature ( see, Becher v Feller , 64 AD3d 672 ; Klein v Town of Guilderland, 289 AD2d 741).
Based upon the foregoing, the action is dismissed. The temporary restraining order dated March 29, 2010, enjoining the husband from taking any action affecting the wife's rights in the XYZ pension shall remain in effect for fourteen days following service of a copy of this order upon the wife's attorney.
The husband is not entitled to an award of counsel fees in a plenary action to reform a stipulation of settlement ( see, Fine v Fine , 26 AD3d 406 ).
This constitutes the decision and order of the court.