Opinion
Decided May 10, 2005.
The defendant wife in the above captioned matrimonial action moves pursuant to Civil Practice Law and Rules § 2214 and Domestic Relations Law § 236 for an order enforcing the terms of an agreement entered into between the parties on October 11, 2002, which defendant states constitutes a written and notarized separation agreement, or in the alternative, an award of temporary maintenance based upon the parties' agreement, taking into account the agreed upon needs and the lack of meaningful substantial income.
The parties herein meet in 1982 and resided together in Queens, New York, in 1989. On August 6, 1993, they were married in a civil ceremony in Westchester County, New York. Earlier that year, on May 30, 1993, they were married in New Jersey in an Islamic religious ceremony. Wife contends that both parties were employees of a brokerage house; husband was an investment banker, becoming the head trader and a managing director at said firm. By 2002, according to wife, husband was earning over One Million ($1,000,00.00) Dollars in total from salary, bonuses, grants and options. On June 30, 1997, wife alleges that, with the husband's consent and knowledge, she ceased working for said firm because of husband's desire for wife to attend to the household and the parties' non-working needs. Wife alleges that she gave up her professional career, became responsible for household guests, family, friends and attending numerous social events and parties, as well as overseeing the purchase and furnishing of a new apartment, all at the husband's request.
In 2000, wife contends that she first learned that the husband engaged in several extramarital affairs; husband moved in and out of the marital residence. In the summer of 2002, the husband repeatedly told the wife that "he would always take care of me".
A written agreement was entered into by the parties on October 11, 2002. Wife asserts that, "the agreement was the result of numerous discussions, proposals and counter-proposals." Additionally, the wife alleges that her husband typed the agreement on their home computer and asked her to locate a notary public; they drove together to the notary public and executed the agreement before him. Wife avers that she suggested that a lawyer prepare a formal written agreement but the husband told her that lawyers were an unnecessary expense and promised to enter into a written and signed agreement.
Thereafter, wife states that many of the assets were divided after the agreement was executed except the real property, the retirement account and stock options. Wife explains that the real property was not divided because the husband personally wanted to resolve issues related to the co-op and he avered he could only do that while he maintained an ownership interest in the apartment. Additionally, the retirement assets and stock options were not divided because the husband feared incurring substantial penalties.
Wife now claims that she is 55 years old, has not worked in eight (8) years and relied upon her agreement with her husband and that in the 27 months since the agreement had been signed the husband failed to provide any support. Specifically, wife believed that the husband would use his bonus, that was expected in January 2004, for support payments. Instead, she claims she was served with a summons with notice by plaintiff's lawyer. Wife avers that since she has not been provided any support since leaving the marital residence, has been forced to use and diminish portions of assets that were distributed pursuant to the agreement and that a substantial portion of the past year was devoted to trying to resolve the issues without litigation, that she presently requires maintenance or enforcement of the agreement.
Attached to the moving papers at "Exhibit A" is a document dated October 11, 2002, which is in reference to the separation agreement, outlining what each party would receive and is signed by both parties, notarized with the following statement "sworn to and subscribed before me on October 11, 2002", with the stamp and signature of a notary public in the County of Queens, State of New York. Also attached as wife's "Exhibit B" is the worksheet with numbers and changes which were referred to in wife's moving affidavit together with "Exhibit C" which is an e-mail concerning payments of money. Additionally, wife attaches an affidavit of net worth and a copy of her tax return for the year 2003 which shows gross income of $11,037.00 per annum.
The husband opposes said application and states that his career advancement was rapid prior to the marriage and that at the time of the marriage he was already a director at said firm and was never involved in investment banking. Husband avers that it was his wife who began to complain about her employment and her inability to get along with co-workers and that she wanted to quit her job. Husband asserts that although his compensation can fluctuate greatly year to year, he agreed to his wife not working. Husband contends that after his wife ceased employment, she spent at least three (3) months a year traveling and visiting friends and relatives in Canada, India and England while he was left alone for weeks at a time. He openly admits that he had an extramarital affair and upon learning of such, his wife began to "make my life a living nightmare". Husband alleges that the wife publicly and privately screamed at him, shouting obscenities at him, held a knife to her chest and said she was going to commit suicide and "she would also shove the knife towards my hands and demand that I kill her". Husband claims that his wife called him at work, knowing that he did not have privacy for personal calls and she would scream and shout at him. Husband claims that he fled the marital residence to escape unbearable abuse and harassment but that the defendant continued to call and harass him, demanding that she be given one half of the liquid assets, transfer all jointly held real estate to her and give her all household belonging. According to the husband, the wife insisted that the agreement, which he refers to as the "void agreement", was prepared by the wife, that she drafted the agreement and that after one and one half years of relentless abuse he signed the agreement ". . . in the hopes that she would finally leave me alone". The husband alleges that prior to the signing of the "void agreement", wife forged husbands name to checks drawn on his personal account and drawn on the joint checking account and, in fact, wrote a check on August 1, 2002, on his personal account made payable to herself in the amount of $50,000.00. She also wrote checks from his personal account payable to herself; on August 5, 2002, a check in the amount of $30,000.00; on September 4, 2002, a check in the amount of $10,000.00; and on September 27, 2002, a check in the amount of $115,957.00. The husband states his wife also wrote a check to herself from their joint account on September 27, 2002, for $375,853.00 and that all of these checks were signed prior to the execution of the agreement on October 11, 2002. Husband alleges that after the agreement was signed, on December 20, 2002, the wife wrote a check from the joint account to herself in the amount of $10,000.00 and in January of 2003 she wrote a check for herself on his personal account in the amount of $193,768.00 and she wrote additional checks made payable to herself on the joint account on May 19, 2003, in the amount of $25,205.00, and on May 20, 2003, in the amount of $3,470.00. Thus, the husband alleges "the defendant stole in excess of $814,253.00 and that she received an additional $108,270.00 between August 2002 and August 2003, thus receiving a total of $922,530.00 in cash from marital funds. According to the husband, wife accounts for $280,274.00 on her statement of net worth and as such, husband claims $642,256.00 remains unaccounted for and not disclosed.
The husband also indicates that in addition to the $922,530.00 in cash "that the defendant stole or received I also transferred $786,412.00 worth of stock holdings to the defendant in January 2003". The husband further indicates that the wife is also in possession of two (2) properties purchased during the marriage, a co-operative apartment in Forest Hills, Queens where she lives currently rent and mortgage free and a house located in Canada where the defendant's brother lives rent free. The husband claims that the combined cost of the properties in 2001 was $660,000.00 and the wife noted on her statement of net worth that the furnishings are $150,000.00. As such, the husband argues that the value of the marital property already received by the wife between cash, stocks, furnishings and real property totals $2,518,942.00, not counting any appreciation in the real property.
Husband also concludes that the wife is clearly not in need of monthly expenses of $23,946.00. He challenges an automobile cost of $1,546.00 as she does not own a car, automobile insurance of $531.00 per month, medical costs of $700.00 and dental costs of $330.00 because she is provided with full health and dental insurance through the husband's employment, nor does the wife have educational costs of $1,546.00. Husband also claims that the listing of $34,428.00 annually for health club membership, $20,400.00 for charitable contributions and $7,224.00 in unreimbursed medical expenses when wife lists her health as good on the statement of net worth, are clearly excessive costs or costs that do not exist. Additionally, husband challenged wife's alleged annual costs for clothing and jewelry for the amount of $20,820.00 for a person who does not work, $30,000.00 in vacation costs when she stays with friends and/or family, nor $9,000.00 for repairs and painting and $150,000.00 for kitchen remodeling. Additionally, the husband questions that portion of the affidavit of net worth which the wife is paying $3,600.00 annually pursuant to a separation agreement. Additionally, husband argues that the wife had been out of the work force for only four (4) years at the time the parties separated and that she had previously been earning $70,000.00 annually plus bonuses as a vice president at the brokerage firm.
In reply the wife states there is a written and "acknowledged" agreement and that the husband was not forced into entering into the agreement nor does he deny that this was a negotiated agreement where he initially typed the draft of the agreement and that there was an exchange of written thoughts. Wife further states that the parties sat down in front of the computer and made respective revisions. Additionally, the wife argues that this was an agreement which includes provisions that are only beneficial to husband. For example, if wife has a common law partner the maintenance would terminate. Maintenance would also terminate upon husband's death, not becoming an obligation of his estate. Wife argues that the ten-year period which husband agreed to pay one half of compensation was to be reduced to six (6) years upon remarriage of the wife and that maintenance between the years 2008 and 2012 are subject to renegotiation. Additionally, wife avers that they agreed to $100,000.00 in annual maintenance after 2012 which could never be more than twice the husband's compensation. Furthermore, wife avers that her husband caused the securities to be divided, not the wife, and the husband participated in the transfer of the Canadian property and attaches documentary proof of the co-operative transfer. Wife also submits written statement wherein when asked to transfer one half of husband's compensation, the husband replied with an e-mail which states "will do".
The maintenance provision is as follows: III: Future Obligations of R: R agrees to pay the following to Z. R's obligation as set forth below will be terminated upon either of the following conditions: 1 — Z remarries or has a common law partner 2 — Upon the death of R or Z 1) One-half of R's compensation (salary + bonus) through January 2012, payable as R earns his income from his employer (i.e. R pays Z as he receives it from his employer, subject to reasonable payment lags), subject to the restrictions of the next sentence. If R remarries at any time, he is obligated to pay Z half of his compensation through January 2008. The payments between January 2008 and January 2012 will be re-negotiated and agreed upon by both parties. The above bonus is defined as cash plus stocks and stock options. R to provide a copy of the statement outlining an annual salary and bonus until the year 2012. 2) Following January 2012, R is obligated to maintain Z's current (as of September 2002) standard of living as long as his compensation exceeds at least twice that amount. Z's current standard of living is defined to require $100,000 of income per year. R's obligation in 2012 will be this amount adjusted for inflation. Following January 2012, R is obligated to pay Z no more than 50% of his compensation, subject to the dollar amount defined in the previous sentence.
The wife rebuffs husband's arguments that she has otherwise stole or surreptitiously forged the husband's signature and indicates e-mails from the husband in which he stated "I do appreciate all you have done for me. You are a very beautiful person, and I will never forget that. I think about you a lot and hope you are happy."
Wife avers that husband did not call her a liar or a thief at the time of the transfers and that he would have taken some steps to stop her or hold her accountable if he disagreed with her taking the monies out of the accounts. Wife states "he had agreed that the cash in this account would be evenly divided and I told him I would write a check for my share". Wife further states and details each of the transactions and indicates that all of the assets transferred where made with husband's consent and that she was dividing one-half of the interests pursuant to the stipulation. Wife also notes that she would also sign her husband's name to estimated quarterly tax checks and her husband does not complain that she forged his name to deposit those refund checks.
As to the expenses, the wife indicates that the husband knew that the wife would be leasing an Audi and he agreed to lease the Audi for her and that she is actively looking for an automobile. Additionally, she uses a personal trainer, utilizes the Ultimate Body Pilate Method five (5) days a week and has healthcare club costs together with necessary medical costs because of pre-existing conditions. Additionally, the wife indicates that her husband knew that her oversees trips were primarily for charitable purposes, having visited "leper colonies and orphanages in India and poor communities in Iraq, Syria, Africa (Tanzania), and the Philippines, among other things, where I distributed cash to those in need and Plaintiff not only knew about it, but was supportive."
Finally, wife claims that she does not understand how her husband calculates $660,000.00 in real estate in that the home in Queens is in joint names even though the husband agreed to transfer it and claims that the unaccounted for cash includes two (2) years of expenses, including help for her family members, a $200,000.00 transfer to a nationwide annuity which was previously disclosed to husband's counsel and that she has $165,000.00 in cash and $750,000.00 in stocks. Additionally, she also has $275,000.00 in retirement accounts plus the nationwide annuity. Wife also states that the Canadian property is where her brother's family resides.
Discussion
The Unacknowledged Agreement
The Court herein is presented with an application by the wife to declare the agreement which the parties jointly executed before a notary public to be a valid matrimonial agreement in conformity with the Domestic Relatons Law § 236 (B) (3). In doing so, the wife argues that the fact that the agreement has been ratified by the husband in that substantial sums of money have been exchanged between the parties would warrant the Court to validate the underlying agreement as a nuptial agreement in accordance with the Court of Appeals holding in Matisoff v. Dobi ( 90 NY2d 127, 659 N.Y.S.2d 209). The wife, while stating that the agreement was acknowledged, concedes that the agreement was not acknowledged in the form of a deed pursuant to the Court of Appeals' direction in Matisoff (Real Property Law §§ 291 and 309). In fact, it is clear that the parties drew this agreement and signed it before a notary public and it was sworn to before the notary public but not acknowledged in the form of a deed. The wife also avers that even if the agreement is not valid because of the nature of the incorrect form of notary being utilized, that the ratification of the agreement would warrant this Court finding it to be a valid agreement.
The husband argues that a strict interpretation of Matisoff would require that the agreement in and of itself, even though partially ratified, be declared null and void and that the Court of Appeals' holding in Matisoff is absolute requiring this Court to reject the contention that the agreement is a valid one.
In Matisoff, the Court of Appeals ruled that the legislature "had clearly prescribed acknowledgment as a condition for validity with no exception and an unacknowledged agreement is invalid and unenforceable in a matrimonial action" ( 90 NY2d 127, 659 N.Y.S.2d 209 at 338). If the Court were to adopt the position proffered by the wife, that the ratification of the agreement would be a bar to this Court holding the agreement nonenforceable, this Court would be, in effect, agreeing with the Appellate Division, First Department's ruling in Matisoff ( 228 AD2d 200, 202, 644 N.Y.S.2d 13 [1st Dept.]). Clearly, the Court of Appeals considered the Appellate Division, First Department's decision and clearly rejected the notion that ratification would be a basis to declare an unacknowledged agreement as valid. The Court of Appeals, in reversing the Appellate Division, First Department, stated:
"[W]e disagree. Under the Appellate Division analysis, the enforceability of an unacknowledged nuptial agreement would vary with the original motivation of the party challenging the agreement and whether the couple's behavior during the marriage was consistent with the terms of the agreement. Such uncertainty is contrary to the plain language of Domestic Relations Law § 236 (B) (3), which recognizes no exception of the requirement of formal acknowledgment. We therefore reverse, holding that the requisite formality explicitly specified in Domestic Relations Law § 236 (B) (3) is essential."
The Court of Appeals was clear in establishing a bright line rule based upon the legislation which requirement that the agreement be "acknowledged or proven in the manner required to entitle a deed to be recorded (emphasis added)". The Court in Matisoff further noted that "primarily a bright line rule requiring an acknowledgment in every case is easy to apply and places couples and their legal advisors on clear notice of the requisites to a valid nuptial agreement". As such, this Court must also adhere to the bright line rule established by the Court of Appeals of this State and find that the agreement is not a nuptial agreement in accordance with the Domestic Relations Law § 236 (B) (3). The statutory language for the finding of an acknowledgment in the form of a deed can be found in Real Property Law §§ 291 "Recording of conveyances" and 309 "Uniform forms of Certificates of acknowledgment or proof within this state". Domestic Relations Law § 236 (B) 3 clearly 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." The form of notary used in this case is not in compliance with Real Property Law and the Domestic Relations Law. According, this Court finds that this agreement is invalid.
The Appellate Division, Second Department in D'Elia v. D'Elia, 14 AD3d 477, 788 N.Y.S.2d 156 (2nd Dept. 2005) recently held that a party's post-nuptial agreement, not properly acknowledged at the time it was executed, did not serve as a basis for determination regarding the transfer of marital property.
The Court herein agrees with the husband's position that wife's reliance on Brennan v. Brennan, 305 AD2d 524, 759 N.Y.S.2d 744 (2nd Dept. 2003) that an agreement which has been ratified is valid, is incorrect. In Brennan the agreement was acknowledged in a proper form. Nor is the wife's reliance on Friedman v. Carey, 8 AD3d 129, 779 N.Y.S.2d 44 (1st Dept. 2004) correct. In Friedman, the settlement agreement was dictated in open court and thereafter was ratified by accepting substantial sums of money and as such was a valid agreement.
The legislature and the Court of Appeals have been clear in the bright line requirement of an agreement to be notarized in the form acknowledged of a deed unless the legislature acts to change Domestic Relations Law § 236 (B) (3), this Court is bound by Matisoff ( see Florescue, "'Kudrov' "Matisoff': How Marital Agreements Are Enforceable", New York Law Journal, March 16, 2005). Accordingly, the agreement is unenforceable as a matrimonial agreement pursuant to Domestic Relation Law § 236 (B) (3).
In Matisoff, the Court of Appeals did note that: "(f)urthermore, many of the equitable factors highlighted by defendant and the Appellate Division will continue to be relevant to the trial court's award of property, maintenance and the like, as well as to appellate review of such award." As such, the parties will be able to litigate at trial all issues that are the subject of the Court's jurisdiction in law and equity, as well as any defenses that they wish to assert.
Pendente lite Relief
The wife also moves for pendente lite relief if this Court does not uphold the validity of the agreement. The standard for an order of pendente lite support is an "accommodation between the reasonable needs of the moving spouse and the financial ability of the other spouse, with due regard for the pre-separation standard of living ( see Pezza v. Pezza, 300 AD2d 555, 752 N.Y.S.2d 550 [2nd Dept. 2002] citing Kesten v. Kesten, 234 AD2d 427, 650 N.Y.S.2d 807 [2nd Dept. 1996]. An award of pendente lite maintenance is intended to "tide over the more needy party, not to determine the correct ultimate distribution" ( see Valente v. Valente, 269 AD2d 389, 703 N.Y.S.2d 206 [2nd Dept. 2000]; Jordan v. Jordan, 2 AD3d 687, 770 N.Y.S.2d 86 [2nd Dept. 2003]).
In the case at bar, the Court must weigh the fact that wife is claiming that under the void agreement that she is entitled to $35,000.00 per month in tax free maintenance or $420,000.00 per year in maintenance. The defendant's income on his last reported tax return is $928,924.00 from wages, salaries and tips. The parties were married in May of 1993 and the action was commenced on January 9, 2004, the parties are married for approximately 11 years.
The Court is cognizant of the contents of the void agreement, but must also take into account the plaintiff's contention of duress and both of those issues can be raised at trial. The wife certainly must be reminded that maintenance is an accommodation of the reasonable needs of the parties, lifestyle established during the marriage and that which is necessary to tide over the spouse until trial. This Court cannot agree with defendant's contention that, pendente lite, she is entitled to $420,000.00 in maintenance tax free, or that husband is obligated to meet her total monthly expenses of $23,946.00, according to her affidavit of net worth.
The amount of support must be based upon the husband's earnings including his bonuses ( see Nordgren v. Nordgren, 237 AD2d 498, 655 N.Y.S.2d 585 [2nd Dept. 1990]) pendente lite. Based upon the parties' lifestyle and plaintiff's income, there is no basis to require wife to seek employment. The reason for the wife's voluntary abstention from the workforce, at this juncture, is inconsequential to a pendente lite award. The wife has chosen to dissipate assets prior to seeking judicial enforcement of the agreement for 27 months and clearly she has chosen to voluntarily dispose of assets. While those assets may not have to be invaded for purposes of support, the income they generate could or could have been a basis for support. For example, the income that could be generated from defendant's brother paying a fair market value rent for the home he occupies in Canada which is marital property. The Court cannot ignore that wife wrote to herself between $280,274.00 and $922,530.00 in checks and admits to supporting family members not related to the husband. It appears that the husband did not object to the wife writing those checks and signing his name for quite a period of time. The written documentation provided when coupled with his failure to protest those checks being signed, speaks volumes as to whether he truly objected to the disbursement of the funds. Notwithstanding same, since the agreement is void, those assets are subject to equitable distribution.
The Court must also take into account that the wife does enjoy, at this juncture, an apartment in Forest Hills, New York, where she currently lives rent and mortgage free. While the acts of charity that wife has undertaken are laudable, there is no basis to award maintenance for charitable contributions pendente lite. Similarly, there is no basis to award annually $34,428.00, or $2,833.00 per month, for health club benefits, nor is there documentation, $700.00 in dental costs which husband claims wife is fully covered under his medical and dental plan, nor a basis to consider $1,546.00 per month in educational expenses where wife does not provide any documentation or proof that she is enrolled in or seeking enrollment in an educational program. Similarly, capital improvements to marital property are also not a basis for pendente lite maintenance. However, this Court acknowledges that the wife is not required to exhaust her liquid assets for support before the Court orders pendente lite support ( see Weintraub. Weintraub, 99 AD2d 405, 470 NYS2d 7 [1st Dept. 1984]; see also Hyman v. Hyman, 56 AD2d 337, 392 NYS2d 455 [1st Dept. 1977]).
At this juncture, the husband shall pay to the wife, pendente lite, the sum of $13,750.00 per month on the 15th day of each month for maintenance. Maintenance is deductible to the husband and income to the wife. Payments are retroactive to the date of first application ( see Dooley v. Dooley, 128 AD2d 669, 513 NYS2d 167 [2nd Dept. 1987]). Any arrears are to be paid in full within 30 days of today. The husband shall continue to cover the wife on his health and dental plan and shall pay any unreimbursed medical, dental or prescription expenses so long as plan physicians are utilized.
The parties shall exchange an accounting in writing within 30 days of the date of this decision as to the disposal, whereabout or expenditure of all marital assets as of August 1, 2002.
This award is based upon the parties reasonable needs, their lifestyle during the marriage and the substantial income of the husband. The wife has not been employed, by agreement of both parties, for a substantial period of time, and there is no basis at this juncture to require her, pendente lite, to resume employment
The Court is cognizant of the fact that at the time of trial the Court, in determining maintenance, must also consider the ultimate distribution of the assets of the plaintiff and the defendant ( see Wilson v. Wilson, 308 AD2d 583, 764 N.Y.S.2d 828 [2nd Dept. 2003]).
This shall constitute the decision and order of the Court.