Opinion
Index No. 652092/2020
02-09-2022
Veronique BICH, Plaintiff, v. Bruno BICH, Defendant.
Aronson Mayefsky & Sloan, LLP, New York, NY (Heidi Harris, Lawrence B. Trachtenberg, and Patricia A. Kindregan of counsel), and Glenn Agre Bergman & Fuentes LLP, New York, NY (Michael Paul Bowen of counsel), for plaintiff. Wiggin and Dana LLP, New York, NY (Steven B. Malech and Samuel Breitbart of counsel), for defendant.
Aronson Mayefsky & Sloan, LLP, New York, NY (Heidi Harris, Lawrence B. Trachtenberg, and Patricia A. Kindregan of counsel), and Glenn Agre Bergman & Fuentes LLP, New York, NY (Michael Paul Bowen of counsel), for plaintiff.
Wiggin and Dana LLP, New York, NY (Steven B. Malech and Samuel Breitbart of counsel), for defendant.
Gerald Lebovits, J.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 25, 26, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40 were read on this motion for PRELIMINARY INJUNCTION.
The following e-filed documents, listed by NYSCEF document number (Motion 003) 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 78, 79, 80, 81, 82 were read on this motion for PARTIAL SUMMARY JUDGMENT.
The following e-filed documents, listed by NYSCEF document number (Motion 004) 83, 84, 85, 86, 87, 89, 103, 104, 105, 106 were read on this motion to INTERVENE.
The following e-filed documents, listed by NYSCEF document number (Motion 005) 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 108 were read on this motion to/for LEAVE TO FILE.
This action arises out of plaintiff Veronique Bich's efforts to enforce the terms of a postnuptial agreement existing between her and her late husband, defendant Bruno Bich. The marriage bore three children, who now seek to intervene in this action: Gonzalve, Charles, and Guillaume Bich.
Bruno Bich passed away on May 30, 2021. The parties’ children are serving as personal representatives of his estate.
The parties first entered into a marital agreement approved by a court in France in December 2000. They executed a new matrimonial property regime in August 2001, governing the ownership and distribution of their property in France, and then executed a postnuptial agreement in December 2001. That postnuptial agreement was superseded by an amended postnuptial agreement made on May 13, 2008, which provides for the disposition of the couple's assets in case of a separation short of divorce.
The 2008 amended postnuptial agreement is the focus of this action. Both parties agree that they are bound by its terms. The dispute here concerns only whether the parties have adhered to those terms.
The parties later divorced. The judgment of divorce, entered in January 2021 by this court (Michael L. Katz, J.), provides that the amended postnuptial agreement survives as a separate contract between the parties that may be enforced by a plenary action. This action, brought before entry of the judgment of divorce, therefore continued after entry of that judgment.
Plaintiff sent defendant written notice in 2017 informing him that she no longer wished to live with him. Plaintiff argues that this mailing constituted an "operative event" under the amended postnuptial agreement, triggering obligations owed by both parties under the agreement. Defendant contends that the 2017 written notice did not constitute an operative event. Each party also claims that the other has breached contractual duties imposed by the agreement.
Four motions are now before this court: (1) plaintiff's motion for a preliminary injunction (mot seq 002), (2) the Bich children's motion to intervene (mot seq 004), (3) defendant's motion to strike documents submitted by plaintiff and for leave to file a surreply (mot seq 005), and (4) plaintiff's motion and defendant's cross-motion for partial summary judgment (mot seq 003). The court consolidates these motions for disposition.
DISCUSSION
The parties’ 2008 amended postnuptial agreement governs this matter. That agreement is a contract. (See Levine v Levine , 56 NY2d 42, 47 [1982] ; Christian v. Christian , 42 NY2d 63, 72 [1977].) The agreement is binding not only on the parties, but also on their heirs and executors. (See Amended Postnuptial Agreement, NYSCEF No. 51, at ¶ 52.)
Operation of the amended postnuptial agreement is triggered by the occurrence of an "operative event." (See Agreement ¶ 18 [a].) An operative event under the agreement consists of one of the following: (1) a contractual party's filing for divorce; (2) a party's executing a written separation agreement signed by the other party; or (3) a party's sending written notice to the other party saying that the sending party no longer wished to live with the receiving party, followed by the parties not residing together for at least 30 days after mailing of the notice. (See ¶ 18 [a] [i]-[iii].)
The amended agreement calls for both parties to split substantial property equally among themselves. (See e.g. ¶¶ 17, 18 [c], 19, 27.) After an operative event occurs, the parties are to allocate and transfer property among themselves so that each party receives 50 percent of the "professionally appraised value of all real property and tangible and intangible personal property held, directly or indirectly, by either or both of them." (¶ 17.) To the extent any inequity results from the division and transfer of property under the agreement, the difference is to be made up in cash (or cash equivalents). (See ¶ 22 [c].)
I. Plaintiff's Request for a Preliminary Injunction (Mot Seq 002)
Plaintiff seeks a preliminary injunction (1) to stop defendant, his agents, employees, and anyone acting on his behalf from selling, transferring, or disposing property held individually or jointly by the parties; and (2) to require defendant to deposit money earned from stock dividends into an escrow account held by plaintiff's law firm, pending further order of this court.
Under CPLR 6301, preliminary injunctions are granted when an "act in violation of plaintiff's rights" regarding the subject of the action is likely which would "render [a] judgment ineffectual." A preliminary injunction is a drastic remedy, granted only to maintain the status quo until there can be a full hearing on the merits. (See Spectrum Stamford, LLC v 400 Atlantic Title, LLC , 162 AD3d 615, 616 [1st Dept 2018] ; 1234 Broadway LLC v West Side SRO Law Project , 86 AD3d 18, 23 [1st Dept 2011] ; Mucchi v Eli Haddad Corp. , 101 AD2d 724, 725 [1st Dept 1984].)
A movant may obtain a preliminary injunction on a showing that (1) movant would suffer an irreparable injury absent it, (2) movant is likely to succeed on the merits, and (3) the balance of the equities favors movant. (See Harris v Patients Med., P.C. , 169 AD3d 433, 434 [1st Dept 2019].) Harm is not irreparable if it is compensable by money damages that a court can calculate. (See Chiagkouris v 201 West 16 Owners Corp. , 150 AD3d 442, 442 [1st Dept 2017].)
Plaintiff's requested injunctive relief is overly broad and burdensome on defendant. Moreover, this court is unpersuaded that the injury that plaintiff is seeking to ward off would be irreparable by money damages. Plaintiff's motion for partial summary judgment itself seeks damages as an alternative form of relief. The motion is denied.
II. The Bich Children's Motion to Intervene (Mot Seq 004)
Intervenors are minority owners of Grenelle LLC. They rely on that ownership status as a basis for their motion to intervene.
CPLR 1012 (a) (3) allows intervention as of right in an action involving property when a judgment might adversely affect the moving party. Courts liberally grant requests to intervene. (See Yuppie Puppy Pet Products, Inc v Street Smart Realty, LLC , 77 AD3d 197, 201 [2010].)
Intervenors contend that plaintiff's claims implicate the interests of Grenelle because plaintiff seeks a declaration that she has the exclusive right to use an apartment in Paris owned by Grenelle. Intervenors argue that this claim thereby affects their interests as minority members of Grenelle, warranting the grant of leave to intervene. (See NYSCEF No. 84 at 5.) This court agrees.
Plaintiff maintains that she is not trying to seize Grenelle property, but seeks only the transfer to her of an "indirect beneficial interest" in the Paris apartment. (NYSCEF No. 89 at 5 [plaintiff's mem. of law in opposition].) But plaintiff's complaint alleges that upon the occurrence of the operative event, she is to "retain or receive title to the Paris Apartment." (NYSCEF No. 12 at 7.) And plaintiff argues on this motion that the "transfer of [plaintiff's] Grenelle [shares] was intended to effectuate the transfer of ownership of the Paris Apartment." (NYSCEF No. 62 at 16 [plaintiff's mem. of law in support].)
Plaintiff is claiming a property right to Grenelle's Paris apartment, which implicates intervenors’ rights as Grenelle members. The motion to intervene is granted.
III. Defendant's Motion to Strike Marital Documents and for Leave to File a Surreply (Mot Seq 005)
Defendant moves by order to show cause to (1) strike plaintiff's submission, in her reply papers in support of summary judgment, of an oral-argument transcript from the couple's divorce proceeding (NYSCEF No. 79); and (2) grant him leave on his cross-motion to file a surreply to plaintiff's reply.
With respect to the oral-argument transcript, defendant argues that plaintiff's including the transcript breached the confidentiality of matrimonial matters. Defendant argues that Domestic Relations Law (DRL) § 235(1) "mandates that all papers filed in a matrimonial matter be designated as confidential." (NYSCEF No. 91 at ¶ 8.) But § 235 (1) provides only that an "officer of the court" shall not allow papers filed in a matrimonial matter to be used by anyone other than "a party, or the attorney ... except by order of the court." ( DRL § 235 [1].) The statute does not require complete confidentiality for all documents in a matrimonial file.
Thus, in Tornheim v Blue & White Food Products Corp. , the Appellate Division, Second Department, affirmed the denial of the plaintiff's request to sanction defendant for gaining access to deposition testimony given by plaintiff in his matrimonial action, because DRL § 235 ’s prohibition on disseminating matrimonial files applies to court employees, not litigants. (See 73 AD3d 747, 747 [2d Dept 2010].) Kodsi v Gee (54 AD3d 613, 613 [1st Dept 2008] ), relied upon by defendant, is inapposite. That decision concerned whether two separation agreements would be confidential in a later legal malpractice action filed against a third party—not, as here, an action between the formerly married spouses. The motion to strike is denied.
Defendant also seeks leave to file a surreply. A trial court has the authority to regulate the motion practice before it, as well as the discretion to determine whether to accept late papers or even surreply papers for good cause. (See U.S. Bank Trust, N.A. v Rudick, 156 AD3d 841, 842 [2d Dept 2017] [holding that the lower court properly exercised its discretion to consider a surreply]; McMullin v Walker , 68 AD3d 943, 944 [2d Dept 2009] [holding that the lower court abused its discretion by considering a surreply].) Defendant did not renew this request at oral argument, and this court finds that the record is sufficient to present both parties’ arguments fully and fairly. Defendant's motion is denied.
IV. Plaintiff's Motion and Defendant's Cross-Motion for Partial Summary Judgment (Mot Seq 003)
Plaintiff moves for partial summary judgment. She seeks an order (1) directing defendant to perform specifically his obligation under the postnuptial agreement to transfer to her 50% of his Société Bic shares and his 98.983798% interest in Grenelle; (2) directing an immediate and expedited hearing if those transfers cannot be accomplished; (3) declaring that plaintiff has exclusive right to the Paris Apartment; (4) declaring that plaintiff is the rightful owner of the New York apartment; and (5) finding that defendant is liable to plaintiff for attorney fees.
Defendant cross-moves for partial summary judgment. He seeks an order finding plaintiff liable to defendant for (1) breaching provisions of the amended postnuptial agreement; and (2) breaching fiduciary duties arising out of that postnuptial agreement. Defendant also seeks (3) an order directing plaintiff to (i) perform specifically by obtaining appraisals of the tangible personal property in dispute, (ii) perform specifically by assuming responsibility for two categories of debt set out in ¶ 23 of the amended agreement and holding defendant harmless for expenses relating to one of those two debts, and (iii) pay defendant's reasonable attorney fees.
Defendant's cross-motion seeks significantly broader relief than what he requested in his counterclaims. That broader relief is premised on theories and factual allegations that defendant did not plead in the counterclaim section of his answer. (Compare e.g. NYSCEF No. 27 at 21-24 [counterclaims], with NYSCEF No. 64 [notice of cross-motion].) A court may, however, award a party summary judgment "on an unpleaded cause of action if the proof supports such cause and if the opposing party has not been misled to its prejudice." ( Weinstock v Handler , 254 AD2d 165, 166 [1st Dept 1998].) Here, neither party identified or discussed the issue that defendant's cross-motion is seeking summary judgment on unpleaded counterclaims. Beyond not raising this issue as a ground for denying the cross-motion, plaintiff has not suggested that defendant's reliance on unpleaded claims prejudiced her ability to oppose the motion. To the contrary, the record reflects that plaintiff has been able to respond fully to defendant's arguments and evidentiary submissions. For that matter, much of the cross-motion is based on the language of the postnuptial agreement between the parties, of which plaintiff has had full notice. This court therefore declines to deny sua sponte requests for relief made in defendant's cross-motion that are based on unpleaded counterclaims, and instead considers those requests for relief on their merits.
CPLR 3212 (e) provides that "summary judgment may be granted as to one or more causes of action, or part thereof, in favor of any one or more parties, to the extent warranted, on such terms as may be just." The party seeking partial summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. (See Alvarez v Prospect Hosp. , 68 NY2d 320, 325 [1986].) If movant makes out this showing, nonmovant "must demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action." ( Zuckerman v City of New York , 49 NY2d 557, 560 [1980].)
The amended postnuptial agreement at issue here must, as a written contract, be construed according to the parties’ intent; and the best evidence of what contractual parties intend is what they provide for in writing. (See Schron v Troutman Sanders LLP , 20 NY3d 430, 436 [2013].) When an agreement is clear and unambiguous on its face, the question of intent is one of law decided on a motion for partial summary judgment. (See Babbio v Babbio, 119 AD3d 474, 475 [1st Dept 2014].)
To succeed on a breach-of-contract claim, a party must prove (1) the existence of a binding contract; (2) the injured party's performance of the contract; (3) breach by the other party; and (4) damages. (See Stonehill Capital Mgmt. LLC v Bank of the W. , 28 NY3d 439, 448-449 [2016] ; Nevco Contr. Inc. v R.P. Brennan Gen. Contrs. & Bldrs., Inc. , 139 AD3d 515, 515 [1st Dept 2016].)
A. The Timing of the Operative Event
The parties dispute the timing of the operative event that would trigger their obligations under the amended postnuptial agreement. The amended postnuptial agreement provides that an operative event occurs when, among other things, one party provides "written notice to the other party, sent by certified or registered mail to the last known address of the party ... that he or she no longer intends to reside with the other, followed by such party in fact no longer residing with the other for a period of no less than thirty (30) days." (Agreement ¶ 18 [a] [iii].)
Plaintiff argues that an operative event occurred on August 3, 2017, when she sent a written notice to defendant that stated she longer wished to live with him. (See NYSCEF No. 52 at Ex. 2 [plaintiff's written notice to defendant].) Defendant concedes that he received the notice from plaintiff and that he lived apart from plaintiff for more than 30 days thereafter. (See NYSCEF No. 53 at ¶¶ 46-47 [defendant's answer and counterclaims]; NYSCEF No. 66 at ¶ 25 [defendant's affidavit].) Defendant nonetheless asserts that the mailing of the notice was still insufficient to constitute an operative event. Instead, defendant argues, the operative event did not occur until Justice Katz held in December 2020—more than seven months into this litigation—that plaintiff could continue to maintain her divorce action in New York. This court agrees with plaintiff.
Defendant claims that the letter did not trigger an operative event because the parties agreed to "maintain the status quo" of their marriage after it was sent. (NYSCEF No. 65 at 19.) But whether the parties maintained the status quo after plaintiff sent the letter is irrelevant to whether the letter triggered an operative event. Indeed, ¶ 35 of the amended agreement provides that even if the parties decided to "reconcile and resume living together as husband and wife" following the occurrence of an operative event, they would "nonetheless continue to be bound by the terms and provisions of the postnuptial agreement effective subsequent to the operative event."
Paragraphs 48 and 49 of the amended agreement further weaken defendant's argument. Paragraph 48 requires modifications, amendments, or waivers of any terms to be in writing and duly executed by both parties. Defendant has not submitted evidence that the parties agreed in writing to change the agreement. Paragraph 49 provides that the failure of either party to insist on the "strict performance of" any of the terms or to "exercise any right" will not matter and that the postnuptial agreement will continue in "full force and effect." That plaintiff waited for several years to bring this action after sending the letter did not affect her rights (or defendant's obligations) under the amended agreement.
This court concludes as a matter of law that the operative event occurred in August 2017.
B. Specific Performance of Société Bic and Grenelle LLC Shares
Plaintiff, relying on ¶ 19 (a) (g) of the amended postnuptial agreement, contends that an operative event entitles her to receive 50% of defendant's Société Bic shares held when the operative event occurred, inclusive of any newly acquired shares by either party. When the amended postnuptial agreement was entered into, defendant owned 1,802,422 shares. (See Postnuptial agreement ¶ 9 (a).) On the date the operative event occurred, defendant owned 702,160 shares, entitling plaintiff to 351,080 shares. (See NYSCEF No. 57 [defendant's August 2020 JP Morgan statement]; NYSCEF No. 58 [defendant's loan of Société Bic shares]; NYSCEF No. 59 [defendant's March 2020 JP Morgan statement].) At the time the postnuptial agreement was made, defendant also owned 1,091,280 Société M.B.D. shares, which were subject to a 20% discount and are equivalent to 873,024 Société Bic shares. (Postnuptial agreement ¶¶ 9 [c], 20 [b].) An operative event entitles plaintiff to receive half the discounted Société M.B.D. shares, or 436,512 Société Bic shares.
Plaintiff also requests shares from defendant's interest in Grenelle, which owns an apartment at 88 Rue de Grenelle in Paris and 400,000 Société Bic shares. (See ¶¶ 8 [iii], 9[d], 19 [f]); NYSCEF No. 53 at ¶¶ 37, 39, 40 [defendant's answer and counterclaims].) Defendant owns a 98.983798% interest in Grenelle, meaning he owns 395,935 of Grenelle's Société Bic shares. (See ¶¶ 9 [d], 35-36).) According to the postnuptial agreement, defendant was to transfer his interest in Grenelle within 30 days of the operative event. (See ¶ 19 [f].)
Plaintiff has established entitlement to 985,559 Société Bic shares overall. Plaintiff requests specific performance of a different number of shares: the aforementioned number of Société Bic shares minus the 395,935 she will receive once defendant's interest in Grenelle transfers over to her, for a total of 589,624 shares. (See NYSCEF No. 82 at 16 [plaintiff's mem. of law in reply].)
The decision whether or not to award specific performance rests in the trial court's sound discretion. (See Sokoloff v Harriman Estates Development Corp. , 96 NY2d 409, 415 [2001] ; Van Wagner Advertising Corp. v S & M Enterprises , 67 NY2d 186, 193 [1986].) The branch of plaintiff's motion for an order directing defendant to perform specifically his obligation under the amended agreement to transfer over his 98.983798% interest in Grenelle is granted.
Setting aside those Société Bic shares owned by Grenelle, plaintiff is owed 589,624 shares under ¶ 19 (a) (g) of the agreement. Defendant's estate is ordered to turn those shares over to plaintiff. Should defendant's estate possess insufficient shares to turn over the full number of shares owed, then the estate is directed to make up any shortfall through a transfer of money to plaintiff. Plaintiff represents, and defendant does not dispute, that on the date of the operative event, the price of Société Bic was $102.10 per share. (See NYSCEF No. 62 at 17 & n 12.) Awarding money based on that per-share valuation to redress any shortfall in transferred shares would serve as a proper "alternative to specific performance." (NYSCEF Doc. No. 82 at 18 [plaintiff's mem. of law in reply].)
C. The Paris and New York Apartments
Plaintiff seeks a declaration that she has exclusive rights to the Paris apartment owned by Grenelle. The amended postnuptial agreement provides that defendant "has made a full and complete disclosure to [plaintiff] of all property owned by him ... as of the date of this Agreement." (Agreement ¶ 2.) Furthermore, defendant "warrant[ed] and represent[ed] that he has full power and authority to enter into this Agreement with respect to the disposition of the Société Bic shares" and "any other property that may be disposed of pursuant to this Agreement." (¶ 6.)
Regarding ownership of the Paris apartment, the parties under the amended agreement "acknowledge[d] and represent[ed] that they own, either in their joint names or in the name of [Mr. Bich], or have a beneficial interest in ... [t]he apartment in Paris ... title to which is held by Grenelle LLC." (¶ 8 [iii].) Paragraph 19 (f) of the amended agreement provides that upon the occurrence of an operative event, plaintiff will receive defendant's 98.983798% interest in Grenelle, and plaintiff will then have "exclusive right to the Paris Apartment, together with the works of art, furnishings, and contents" within, except for the items described in ¶ 19 (i ). Furthermore, ¶ 17 of the agreement provides that plaintiff will "retain or receive title to the New York Apartment and the Paris Apartment, together with the contents thereof."
Plaintiff also seeks a declaration that she is the rightful owner of the New York apartment. The postnuptial agreement provides that upon the occurrence of an operative event, plaintiff will retain title to the New York apartment together with the works of art, furnishings, and contents of the apartment. (See ¶¶ 17, 19 [e].)
The amended postnuptial agreement is clear. Plaintiff has exclusive rights to the Paris apartment and is the rightful owner of the New York apartment.
D. Plaintiff's Outstanding Debt
Defendant cross-moves for partial summary judgment requiring plaintiff to perform specifically her obligation under the amended agreement to assume half the couple's Lifestyle Debt (as defined by ¶ 23 of the agreement) and sole responsibility to pay the Grenelle Debt (defined there as well). Paragraph 23 provides that the Lifestyle Debt is €2,910,800.65 and the Grenelle Debt is €7,776,894.85.
With respect to the Lifestyle Debt, defendant's requested remedy of specific performance is inappropriate. Specific performance will not be ordered if money damages are adequate. (See Sokoloff , 96 NY2d at 415 ; Van Wagner Advertising Corp., 67 NY2d at 193.) Defendant has not sought monetary relief in the amount of the Lifestyle Debt or to establish that monetary relief would necessarily be inadequate. Defendant's request for summary judgment directing specific performance is denied.
The Grenelle Debt stands on a different footing. Paragraph 23 of the amended postnuptial agreement provides that in addition to plaintiff's being solely responsible to pay that debt, plaintiff "shall indemnify and hold [defendant] harmless from all expenses and liabilities arising therefrom." Relying on this indemnification language, Defendant contends that he is entitled to full reimbursement for his assertedly having paid the entire Grenelle Debt. He seeks monetary relief relating to the Grenelle Debt, not merely specific performance.
The first question presented by defendant's reimbursement request is whether plaintiff's obligation to pay the Grenelle Debt (and thus her obligation to reimburse defendant for expenses relating to that debt) arose in 2008, when the amended postnuptial agreement was signed, or in 2017, upon the happening of the operative event. This court concludes that the obligation arose in 2017.
Paragraph 19 (f) of the amended agreement provides that upon an operative event, plaintiff is entitled to defendant's 98.983798% ownership interest in Grenelle, "subject to the then outstanding indebtedness described in paragraph 23"—i.e. , the Grenelle Debt. In other words, the agreement provides for plaintiff to receive this ownership interest in Grenelle, encumbered by the remaining Grenelle Debt, only upon the happening of an operative event, not upon execution of the postnuptial agreement. Defendant's position, on the other hand, appears to be that the amended agreement made plaintiff responsible for the Grenelle Debt (and for reimbursing defendant for debt payments) for an open-ended period before the happening of an operative event triggers a transfer to her of the ownership interest in Grenelle. That interpretation makes little sense.
Even on plaintiff's reading of ¶¶ 19 (f) and 23, however, plaintiff would still be responsible for the portion of the Grenelle Debt outstanding as of the operative event in August 2017. Defendant represents in his affidavit on the summary-judgment motion and cross-motion that this amount came to approximately €1.3 million. (See NYSCEF No. 66 at ¶ 8.) Defendant also represents that he personally repaid that remaining balance, and therefore is entitled to be reimbursed by plaintiff. In opposition, plaintiff contends that Grenelle itself, using its own income (Société Bic share dividends), completed payment of the Grenelle Debt, and therefore that defendant is not entitled to any reimbursement. (See NYSCEF No. 82 at 11; see also NYSCEF No. 80 [Grenelle account statements].) This factual dispute must be resolved by the factfinder at trial. Defendant's motion for summary judgment with respect to the Grenelle Debt is denied.
E. Breach of Contract
Defendant cross-moves for partial summary judgment declaring that plaintiff is liable for breach of contract with respect to the obligations set forth in ¶¶ 19 (f), 22, and 23 of the amended postnuptial agreement, and to direct plaintiff specifically to perform those obligations. Essentially, defendant argues that plaintiff failed to comply with conditions precedent to triggering the parties’ obligations under the postnuptial agreement.
A condition precedent is substantive when it describes acts or events that must occur before a party must perform a promise made pursuant to an existing contract. (See U.S. Bank N.A. v DLJ Mtge. Capital, Inc. , 33 NY3d 72, 80 [2019].) Here, defendant asserts that plaintiff did not follow the procedure in ¶ 22 for obtaining proper appraisals of tangible marital property. That paragraph recommits the parties to the equal division of marital property and provides procedures for assessing the value of their tangible property. The paragraph provides that after obtaining a valuation, "if the aggregate net fair market value of tangible marital property retained by one party exceeds the value ... received by the other party, then the party receiving" the greater value will pay the other party fifty percent of the difference. (¶ 22 [c].) Defendant argues that the presence of the word "if" creates a condition precedent, mandating the parties to ascertain the property value before distribution. (See NYSCEF No. 65 at 30-31 [plaintiff's mem. of law in opposition].)
But ¶ 22 anticipates a situation in which the postnuptial agreement compels a party to transfer assets if an equitable division has not properly occurred and one party received more than the other. If the postnuptial agreement produces an inequity after the parties have received their assets, this provision entitles the party receiving the less-valuable share to an offsetting differential payment to balance the property distribution. Paragraph 22 creates a mechanism that prevents an unwanted and unforeseen outcome in which one party receives an imbalance of marital property. Contrary to defendant's position, though, it does so only after the parties have either "retained" and "received" their distribution of the property.
Defendant makes a similar argument for ¶¶ 19 (f) and 23. The former provides that plaintiff takes possession of the Paris apartment "subject to the outstanding indebtedness described" in ¶ 23. Defendant asserts that plaintiff's right to the Grenelle shares under ¶ 19 (f) depends upon her assuming responsibility for the portion of Grenelle and Lifestyle Debt listed in ¶ 23. This argument fails for the reasons discussed above with respect to the Grenelle Debt. Even ignoring the absence of explicit language in the amended postnuptial agreement obligating plaintiff to take these steps before receiving ownership, the words "subject to" do not create a condition precedent any more than the word "if" does in ¶ 22. Paragraphs 19 (f) and 23 provide that upon transfer, plaintiff assumes responsibility for the debts, not before.
This branch of defendant's motion is denied.
F. Fiduciary Duties
Defendant's cross-motion for partial summary judgment also seeks a ruling that plaintiff is liable for breaching her fiduciary duties owed under the amended postnuptial agreement.
To establish a breach of fiduciary duty, a party must prove (1) the existence of a fiduciary relationship, (2) misconduct by the other party, and (3) damages directly caused by that party's misconduct. (See Pokoik v Pokoik , 115 AD3d 428, 429 [1st Dept 2014].) Under New York law, agreements "between spouses, unlike ordinary business contracts, involve a fiduciary relationship requiring the utmost good faith." ( Christian , 42 NY2d at 72.)
Defendant argues that plaintiff (1) hid the existence of real property she owned (and the income she had generated from its sale) from the postnuptial agreement drafting process; (2) lost or removed a 15th century painting and a French rug that defendant owns; (3) devalued many pieces of art held in one of the couple's trusts; and (4) refused to appraise marital property in accordance with the terms of the postnuptial agreement. (See NYSCEF No. 65 at 45 [plaintiff's mem. of law in opposition].) Defendant contends that this conduct by plaintiff breached the duty of loyalty and good faith imposed by their marriage. (Id. )
First , plaintiff, argues that she had no obligation to disclose the real property at issue because she sold it a year before they entered into the amended postnuptial agreement. (NYSCEF No. 108 at ¶ 17.) Defendant, admitting that the home in question sold before the amended agreement was signed, argues instead that plaintiff's failure of disclosure concerned the income received from that home's sale. Furthermore, defendant argues that plaintiff failed in bad faith to disclose other assets during the amended-agreement drafting process. Plaintiff's only rebuttal to this argument is that a schedule of plaintiff's assets was attached to the amended agreement and that defendant fully understood the agreement when he signed it. (See NYSCEF No. 82 at 19 [plaintiff's mem. of law in reply].) And plaintiff claims that when the postnuptial agreement was signed and acknowledged, she had assets worth "approximately $7,000,000" of which nearly none "was liquid" or "solely [held] by her." (NYSCEF No. 62 at 4 [plaintiff's mem. of law].) The record does not establish that either party is entitled to summary judgment. This material dispute of material fact must be resolved at trial.
Second , defendant contends that plaintiff has not returned the painting in dispute, a 15th century Fra Angelico oil painting, or the rug in dispute, a nine-feet-by-six-feet yellow-and-blue French rug. Neither party has disclosed the value of these items. Plaintiff asserts that a Bic staff member, not her, removed defendant's painting—and that the painting was returned to defendant several years ago. She also asserts that she returned the rug before beginning this litigation. (NYSCEF No. 78 at ¶¶ 9-10 [plaintiff's affidavit in opposition].) Defendant counters that he never received the painting or the rug, and that a delivery receipt of the rug, on which plaintiff relies, does not indicate to whom or where it was delivered. (See NYSCEF No. 91 at 2.) Again, these opposing assertions give rise to a dispute of material fact requiring trial.
Third , defendant argues that plaintiff refused to return approximately 28 pieces of artwork acquired for millions of dollars, located in the New York and Paris apartments at the time of the operative event (the "BB Trust Art"). In 2020, defendant brought an action against plaintiff in the Delaware Court of Chancery for an order declaring the BB Trust the rightful owner of the artwork. (See Bruno Bich v Veronique Bich, C.A. No. 2020-0359-SG [Del Ch Ct]; NYSCEF No. 65 at 14 [def. memo of law in opposition].) Defendant claims that plaintiff did not return the BB Trust Art until after she filed her summary-judgment motion in this action. The date of the complaint filed for the Delaware action is evidence that the artwork was not in defendant's possession for multiple years after the operative event occurred. [See NYSCEF No. 56 [defendant's Chancery Court amended complaint].)
Defendant claims that because of this delay, he was unable to place "inflation policy" insurance coverage on the works of art. The absence of an "inflation policy" resulted in the art being insured for only 100% of purchase price, not 150% of that price. Furthermore, Guillaume Bich, the parties’ son, claims that some of the art was altered and damaged during delivery. (NYSCEF No. 67 [Guillaume's affidavit]; NYSCEF No. 75 [AirSea Packaging Inventory].)
The postnuptial agreement provides that each "party shall vacate and remove all of [their] property from [the] other party's residence(s) within ninety (90) days of the occurrence of an operative event." (¶ 24.) That plaintiff returned the art more than three years after the asserted date of the operative event demonstrates that she breached this provision. Additionally, defendant has provided evidence through Guillaume's affidavit and the accompanying inventory not only that plaintiff transferred the art late, but that some of it had been damaged while in her possession. Plaintiff has not provided conflicting evidence that would give rise to a material dispute of fact on the issue of damage. This court concludes as a matter of law that plaintiff has breached this aspect of her fiduciary duty to defendant. Defendant's cross-motion does not provide evidence establishing the amount of his damages due to this breach. That amount must therefore be decided at trial.
With respect to defendant's argument that plaintiff owes him a fiduciary duty to cooperate in determining the value of the marital property, as discussed above, that duty does not arise until the parties complete the property transfers provided for under ¶¶ 19 and 20 of the amended postnuptial agreement. Those transfers undisputedly have not been completed. Plaintiff is entitled to summary judgment as the non-moving party with respect to this aspect of defendant's cross-motion. (See CPLR 3212 [b].) This court reminds plaintiff, however, that upon the allocation and transfer of marital property as envisioned under the amended postnuptial agreement, ¶ 22 (c) of the agreement requires her to participate in good faith in the process of ascertaining the value of that property for purposes of any post-transfer differential adjustment.
G. Attorney Fees
Each party asks this court to award attorney fees against the other.
The postnuptial agreement provides that if one party is in default of the terms, the "aggrieved party shall have the right to sue" and the "successful party" is entitled to "reasonable attorneys’ fees, experts’ fees, expenses, and costs." (¶ 36.) An award of attorney fees is justified if a separation agreement between a married couple provides that if either party fails to perform financial and other obligations, "the parties shall have the right to seek legal remedies," and will indemnify each other from any expense incurred to enforce their rights with respect to the postnuptial agreement. ( Bergmann v Bergmann , 89 AD2d 516, 516 (1st Dept 1982).]
The question of attorney fees, costs, and expenses will be addressed at trial. Both parties’ requests on the pending motions are denied.
Accordingly, for the foregoing reasons, it is hereby
ORDERED that plaintiff's request for a preliminary injunction (mot seq 002) is denied; and it is further
ORDERED that the motion to intervene (mot seq 004) is granted; and it is further
ORDERED that defendant's motion to strike marital documents and for leave to file a surreply (mot seq 005) is denied; and it is further
ORDERED that the branch of plaintiff's motion for summary judgment requesting that defendant specifically perform by transferring to her the entirety of his 98.983798% interest in Grenelle (mot seq 003) is granted; and it is further
ORDERED that the branch of plaintiff's motion for summary judgment requesting that defendant specifically perform by transferring to her 589,624 Société Bic shares, or in the alternative, by compensating plaintiff in the amount of $102.10 per share (mot seq 003) is granted; and it is further
ORDERED that the branches of plaintiff's motion for summary judgment requesting declaratory judgments about her ownership rights to the Paris and New York apartments (mot seq 003) are granted; and it is further
ORDERED that plaintiff is hereby declared to have exclusive right to the Paris apartment and to be the rightful owner of the New York apartment; and it is further
ORDERED that the branch of defendant's cross-motion for summary judgment requesting that plaintiff specifically perform by assuming one-half of the Lifestyle Debt and assuming sole responsibility for the payment of the Grenelle Debt (mot seq 003) is denied; and it is further
ORDERED that the branch of defendant's cross-motion for summary judgment requesting that plaintiff specifically perform by fulfilling the obligations set forth in ¶¶ 19 (f), 22, and 23 of the amended postnuptial agreement (mot seq 003) is denied; and it is further
ORDERED that the branch of defendant's cross-motion for summary judgment seeking a ruling that plaintiff is liable for breach of fiduciary duty (mot seq 003) is granted as to defendant's claim regarding the devaluation of the BB Trust Art and is denied as to defendant's claims regarding plaintiff's asserted failure to disclose assets and plaintiff's asserted failure to turn over the Fra Angelico painting and the French rug; and it is further
ORDERED that that the branch of defendant's cross-motion for summary judgment seeking a ruling that plaintiff is liable for breach of fiduciary duty for failing to obtain appraisals of marital property (mot seq 003) is denied, and summary judgment is granted on this branch of the cross-motion to plaintiff as the non-moving party; and it is further
ORDERED that upon the division and transfer of marital property directed by ¶¶ 17-23 of the postnuptial agreement, plaintiff shall cooperate in good faith with defendant and defendants-intervenors in the process of obtaining appraisals of marital property, as set forth in ¶¶ 22 (a) and (b) of the agreement; and it is further
ORDERED that the branches of plaintiff's motion for summary judgment and defendant's cross-motion for summary judgment that seek an award of attorney fees (mot seq 003) are both denied without prejudice.