Opinion
55185/08.
Decided April 6, 2010.
Eleanor Newirth, Esq., New York, NY, Attorney for the Plaintiff.
Leigh Baseheart Kahn, Esq., New York, NY, Attorney for the Defendant.
Upon the foregoing papers, plaintiff Ernestine Crowther moves for an order declaring the pre-nuptial agreement between the parties invalid on the grounds that: (1) said agreement is not an enforceable "opting out" agreement within the meaning of Domestic Relations Law § 236 (B) (3); (2) the rights of the parties are not governed by said agreement; and/or (3) the enforcement of said agreement would be unconscionable. Plaintiff bases her above request on the following: (1) that the pre-nuptial agreement was not subscribed by the parties, nor was it acknowledged or proven in the manner required to entitle a deed to be recorded; (2) the power of attorney, which purportedly gave authority to their attorneys-in-fact to execute the pre-nuptial agreement on the parties' behalf, was invalid pursuant to both New York law (where the pre-nuptial agreement was signed and where the parties lived during their marriage) and Dutch law (where the purported pre-nuptial agreement was drafted and apparently signed); and (3) enforcement of the pre-nuptial agreement would be unconscionable since, pursuant to its terms, the plaintiff would have no rights or claims to the defendant's Master's degree from Harvard University's Graduate School of Business, his majority ownership in the business known as Skram Media, or his cooperative apartment, the three significant assets allegedly acquired by the defendant during the marriage.
The instant motion concerns a pre-nuptial agreement/"notarial deed" dated December 15, 2000, as well as a "power of attorney," dated December 11, 2000.
Defendant Mark Crowther opposes plaintiff's motion and cross-moves for an order granting the following relief: (1) declaring that the law of the Netherlands is applicable to the determination of issues relating to the execution, interpretation, and validity of the pre-nuptial agreement; (2) declaring the pre-nuptial agreement valid and enforceable; or, in the alternative, (3) directing that any issue requiring the application of the law of the Netherlands bearing enforceability and validity of the pre-nuptial agreement be determined in the Netherlands by binding third-party arbitration or a declaratory action; or, in the alternative, (4) declaring that the pre-nuptial agreement is not unconscionable and that there existed no mistake of fact in its execution; (5) declaring that the division of property in this action for divorce shall be governed by Article 10 of the pre-nuptial agreement and the substantive law of the Netherlands; (6) pursuant to CPLR 3212, granting the defendant partial summary judgment finding that Skram Media is his separate property by operation of Article 10 (a) of the pre-nuptial agreement and the substantive law of the Netherlands; (7) pursuant to CPLR 3212, granting the defendant partial summary judgment finding that the Master's degree obtained by him during the marriage, as well as any enhanced earning ability realized by him during the marriage, is not an asset subject to equitable distribution by operation of the substantive law of the Netherlands; or, in the alternative, (8) bifurcating the issue of equitable distribution of the marital property and referring same for determination and resolution in and by the courts of the Netherlands, and (9) directing that the plaintiff, forthwith, comply with items 6 and 7 demanded in the defendant's notice for discovery and inspection as relevant to the issues raised herein.
FACTUAL BACKGROUND
Plaintiff, a Dutch citizen, and defendant, a citizen of the United Kingdom, were married in a civil ceremony on December 17, 2000, at the Dutch Embassy in Accra, Ghana, where the plaintiff's father served as the Dutch Ambassador. Prior to their marriage ceremony, and throughout the duration of the marriage, the parties resided together in New York. It is undisputed that the parties initially decided to enter into the pre-nuptial agreement, which was drafted in the Netherlands, at the suggestion of plaintiff's parents, who are Dutch citizens. It is further undisputed that Enno Wiersma (Wiersma), a friend of plaintiff's father and an attorney working at the Dutch law firm of DeBrauw Blackstone Westbroek-Linklaters Alliance (DeBrauw), arranged for his firm to draft the pre-nuptial agreement at his own expense, as a wedding gift for the couple. The parties do not dispute that Wiersma employed the services of a Dutch civil law notary, Kasper Maria Franciscus Josephus Houben (Houben), who worked for DeBrauw, to draft and finalize the pre-nuptial agreement. Both parties acknowledge that, on December 7, 2000, approximately one week prior to their departure to Ghana for their wedding, Houben sent them a copy of a draft of the pre-nuptial agreement, as well as a statement of the parties' assets, and the power of attorney. It is not disputed that both parties read the draft pre-nuptial agreement at that time, and that neither of them made any changes to the document. According to plaintiff, a December 8, 2000 communication from Houben instructed the parties to sign the power of attorney, have their signatures authenticated, and to return it to him by fax, along with copies of their passports. Plaintiff and defendant did, in fact, sign the power of attorney before a notary public in New York, on December 11, 2000, and then faxed said document (along with a list of their separate assets) to Houben, as instructed. Next, Houben prepared a "state of contributions" based upon the parties' listed assets, and faxed it to them in New York on December 13, 2000. Both plaintiff and defendant signed the state of contributions on the following day, December 14, 2000, and faxed it back to Houben, who added his signature. The pre-nuptial agreement was then allegedly signed by two attorney agents working for DeBrauw in the Netherlands on December 15, 2000.
On this point, plaintiff notes that she "presumes" that the pre-nuptial agreement was signed by their agents, but that she was not present at the signing and she never received a signed copy of the agreement.
THE PRE-NUPTIAL AGREEMENT
The subject pre-nuptial agreement allegedly consists of three documents: a "notarial deed" reflecting the terms of the agreement, an attached "state of contributions" and a "power of attorney." The state of contributions is dated December 12, 2000, and was signed by plaintiff, defendant and Houben on December 14, 2000. In said document, each party lists their assets at the time of the marriage, including bank accounts, securities, liabilities and real estate.
In addition, as previously mentioned, the power of attorney, dated December 8, 2000, was signed by the parties and notarized by a New York notary on December 11, 2000. The power of attorney lists plaintiff and defendant as the undersigned "principals," and it states that they:
"grant a power of attorney to each lawyer working with DeBrauw Blackstone Westbroek N.V. at Blaak 34, 3011 TA Rotterdam (the Authorised Persons'), to represent the undersigned at the executing of the deed containing their marriage settlement, such in accordance with the draft of that deed, drawn up by DeBrauw Blackstone Westbroek N.V., whereof the contents is expected to be recorded literally in this power of attorney, and furthermore to do everything what the Authorised Persons deem useful or necessary."
The power of attorney also specifically states that, "[t]he relationship between the Principal and the Authorised Persons arising from this power of attorney shall be governed exclusively by Dutch law." Among other things, the power of attorney contains the "provisions" to be entered in the marriage settlement, which are listed as Articles 1-11.
The notarial deed constituting the parties' settlement agreement is dated December 15, 2000, and lists Houben as the "notaris" (civil law notary) who prepared the deed. The agreement also lists Marielle Asther Stijger, a "candidate civil law notary" employed by DeBrauw in the Netherlands, as the individual "acting as written authorised person" for plaintiff. Further, Remco Bosveld, also a "candidate civil law notary" employed by DeBrauw in the Netherlands, is the "written authorised person" acting for defendant. According to this notarial deed, the above-mentioned "authorised persons" appeared before Houben on December 15, 2000, and "declared on behalf of the principals that: (a) the future spouses intend to marry; (b) the future spouses designate the law of the Netherlands as the law applicable to their matrimonial property regime; and (c) the future spouses regulate the proprietary consequences of their marriage by the following PROVISIONS [Articles 1-11]. . ." A comparison of the terms of the aforementioned power of attorney and this notarial deed reveals that the provisions listed as Articles 1-11 in both agreements are identical.
In addition, Article 10 of the agreement, also titled the "final settlement clause," states that:
(1) "[a]t the end of the marriage, including legal separation, the spouses or their heirs (which term includes residuary beneficiaries) shall settle as if the spouses were married in general community of property.
(2) Such settlement shall be exclusive of:
(a) the value of the assets which a spouse has acquired through succession, testamentary disposition or gift;
(b) the value of the assets which are specified in the list of assets to be attached to this deed;
(c) the value of acquisitions by a spouse through investment or reinvestment of his assets referred to in a and b against a consideration, which at the time of the acquisition was charged for more than fifty per cent to those assets;
(d) the amount of the debt relating to the assets referred to in this paragraph 2, in a, b and c, in so far as not belonging to the housekeeping expenses . . ."
In addition to the above-listed "provisions," the pre-nuptial agreement also states that, "the persons appearing declared on behalf of the principals [sic] that:
(a) the future spouses shall bring into the marriage rights to bearer and the movables, not being registered property, as specified in a list to be annexed to this Deed and signed by them and myself, notaris;
(b) the future spouses' intended marriage will be solemnised in Accra (Ghana) on the seventeenth day of December two thousand;
(c) the future spouses' address continues to be 425 Westbroadway, Apartment 3e, 10012 New York, New York (U.S.A.). The written powers of attorney to the persons appearing are evidenced by a private instrument, which is attached to this Deed. In witness whereof the original of this deed which will be retained by me, notaris, is executed in Rotterdam, on the date first mentioned in the head of this deed."
Finally, the notarial deed states that:
"[h]aving conveyed the substance of the deed and given an explanation thereto and having pointed out the consequences arising from the contents of the deed for the parties or one or more of them and following the statement of the persons appearing that they have taken note of the contents of the deed and agree with the same, this deed is signed, immediately after reading those parts of the deed which the law requires to be read, by the persons appearing, who are known to me, notaris, and by myself, notaris. (signed): M.E. Stijger, R. Bosveld, K. Houben."
The notarial deed submitted by defendant states that it is "issued for true copy" by Bartheke Weerstra, candidate civil law notary, acting for Richard Willem Clumpkens, notaris civil law notary, on July 9, 2009. The agreement is also apparently signed and stamped by Weerstra.
THE PARTIES' CONTENTIONS
In her affidavit submitted in support of her motion, plaintiff alleges, among other things, that the pre-nuptial agreement is not valid or enforceable. Concerning the drafting of said agreement, plaintiff alleges that neither she nor defendant had discussions with any Dutch attorney as to what language should be in the pre-nuptial agreement. Plaintiff further contends that the agreement, which was faxed to the parties for their review, was a standard form, and that it was her understanding that "there would be an exclusion of any community of property, to protect each party's pre-marital assets in case of the bankruptcy of the other, but that we would each keep our own property." Furthermore, plaintiff alleges that, according to her understanding of the pre-nuptial agreement:
"[a]t the end of the marriage, the joint property and any property acquired with the fifty percent or less of separate property of the other, would be shared between us. Not only would Dutch law apply to the terms of the divorce, but the assets would be valued by an expert appointed in a Dutch court, even though Mark and I lived in New York and intended to continue living there, with no intention for us to move to the Netherlands."
Plaintiff further states that, "[t]his was not a contract we signed to protect our assets in the event of divorce and I never would have signed anything related to it, had someone explained it to me."
Preliminarily, plaintiff argues that New York law should apply to determine the validity and enforceability of the pre-nuptial agreement. In support of this argument, plaintiff stresses that the parties resided in New York at the time they signed the power of attorney, they resided in New York during the length of their marriage (except for two years when defendant was enrolled in Harvard Graduate School of Business), and the within matrimonial action is pending in New York courts. With respect to the alleged execution deficiencies under New York law, plaintiff notes that, (1) she was never provided an actual signed copy of the prenuptial agreement; (2) the pre-nuptial agreement submitted by her husband is not subscribed by the parties, and (3) the agreement does not bear the signatures or acknowledged signatures of their purported agents. Thus, plaintiff's counsel avers that the pre-nuptial agreement is not valid pursuant to DRL § 236 (B) (3). Moreover, plaintiff also contends that the power of attorney submitted by defendant is not in the form required by New York law, that it does not give the names of the agents whom they are authorizing to act for them, and that it is also not acknowledged. Plaintiff insists that the subject power of attorney does not contain any of the warnings, notices, safeguards or requirements for a valid, legal and enforceable power of attorney under New York law, specifically, under General Obligations Law § 5-1501.
Notwithstanding the foregoing, even if the court were to determine that Dutch law applied to the instant action, plaintiff avers that the subject power of attorney is also invalid under Dutch law. In this regard, plaintiff argues that the power of attorney lacks the proper formalities and requirements to confer authority to their purported agents under Dutch law. In support of this argument, plaintiff submits a copy of an unsworn "legal advisement" from her Dutch counsel, Sandra Verburgt (Verburgt), of the law firm Schlicter Avocaten, dated August 7, 2009, along with a copy of Verburgt's curriculum vitae. According to plaintiff, Verburgt states that the power of attorney is invalid, pursuant to Book 1, Section 115, Subsection (2) of the Dutch Civil Code, since it "does not include a provision that the parties designate Dutch law as the law to be applied on their matrimonial property regime." Plaintiff also cites Verburgt's legal advisement to support the conclusion that, if the power of attorney is in fact invalid, then it does not grant lawful authority to the purported agents and, therefore, the purported pre-nuptial agreement signed by the agents is similarly invalid.
In addition to the aforementioned "technical reasons," plaintiff argues that the pre-nuptial agreement is also invalid since its enforcement by this court would be unconscionable. In this regard, plaintiff alleges that, if the pre-nuptial agreement is enforced, defendant will receive all of the financial rewards earned during the marriage, and plaintiff will receive none of them, despite her significant efforts toward the marital partnership. Plaintiff's counsel also states that, "not only would plaintiff receive no share of the millions of dollars worth of property acquired by defendant during the marriage, . . ., but plaintiff would likewise have no claim to maintenance." According to plaintiff, when they married, defendant was a business director with BBC Worldwide in New York, earning a salary of $125,000 per year. At that time, plaintiff states that she was a also full-time associate with International Baccalaureate in New York, earning a salary of $35,000 per year. Plaintiff contends that, in early 2001, defendant decided to pursue an advanced degree, and began applying to business schools. Defendant was allegedly accepted into Harvard Graduate Business School, and plaintiff alleges that he asked her to move with him to Cambridge, Massachusetts, where he would begin his studies. According to plaintiff, the parties quit their full-time jobs and moved in the summer of 2001. Plaintiff alleges that defendant received a small fellowship of $2,500.00 per year, student loans, and a monthly allowance from his father, in order to attend graduate school. According to plaintiff, the aforementioned funds were deposited into the parties' joint checking account at Fleet Bank, along with her earnings of approximately $20,000 per year from her job as an after school program coordinator with the Cambridge Public School System. Plaintiff notes that defendant paid his tuition, fees, and the parties' living expenses from this joint bank account.
To that effect, plaintiff's counsel lists the parties' significant assets as: (1) the MBA degree defendant earned from the Harvard Graduate School of Business; and (2) the multi-million dollar business, Skram Media, he built from an investment which he claims to be $96,000.00. According to plaintiff's counsel, the above assets are subject to equitable distribution under New York law.
Plaintiff further notes that defendant attended Harvard Business School for two years, graduating in June of 2003. Plaintiff states that their daughter, E., was born on XX/XX/2003, and that she ceased her employment shortly before that time. After ceasing her employment, plaintiff alleges that she had to make accelerated withdrawals from her pre-marital savings and cash gifts given to her by her family, in order to pay the family's living expenses. During the six-months after E. birth, and prior to defendant's graduation, plaintiff states that she cared for her daughter full-time, while also working a freelance job marking papers and presenting workshops for her former employer, International Baccalaureate. Plaintiff claims that the money she earned from freelancing was deposited into her pre-marital account, and then transferred into the parties' joint account as needed, in order to pay living expenses. During the parties' residency in Massachusetts, plaintiff alleges that the provided almost all of the domestic and housekeeping services for their shared apartment, and that she provided all of the child-care for their daughter, allowing defendant to concentrate on his studies.
Additionally, plaintiff asserts that, during defendant's final year at Harvard, he entered a business plan competition to create a business model for a corporation. According to plaintiff, defendant received second place in the competition for his model for an urban climbing magazine business, which, to her knowledge, was later implemented in the business he later acquired, Skram Media. After defendant's graduation in June of 2003, plaintiff avers that the parties moved back to New York, where she was a full-time stay-at-home mom, and defendant began working for Internet Broadcasting System at a salary of $80,000 per year, plus bonus and commissions. Plaintiff adds that, on XX/XX/2005, their son A. was born, and that during this same month, defendant started Skram Media, with money that he now claims was a gift from his father. However, plaintiff recalls that at the time defendant's father gave him the money, he stated that it was a loan against the value of his London apartment, not a gift. Plaintiff states that defendant was earning some money after starting Skram Media, but that, he claimed he needed more time to build up the business in order to make it successful. Plaintiff alleges that defendant received additional monies from his father to invest in the company in October of 2005, "either as a loan or as a gift." During the years of 2006 and 2007, when the family was making less income, plaintiff contends that she had to further dip into her pre-marital savings and use holiday cash gifts from her family in order to pay the family's living expenses. Plaintiff alleges that although defendant did not want her to work after having children, she nonetheless arranged for a babysitting swap with a friend so that she could begin freelance work for Scenarios, Inc. in late 2006.
According to plaintiff, while defendant was working for Skram Media in Colorado, their relationship grew very tense. As a result, plaintiff notes that she decided to move out of the marital apartment with her children in December of 2007, while defendant was away. Thereafter, in January of 2008, plaintiff asserts that defendant purchased a cooperative apartment on Sterling Place in Brooklyn, in his own name, which he alleges to be his separate property. Plaintiff questions defendant's claims that, during the time he was working in Colorado, he was receiving no salary from Skram Media. Plaintiff also insists that defendant is a 67% owner of Skram Media, which has assets of $2,750,000.00, and a capital account of almost $1,500,000.00.
In his affirmation in support of his cross motion, and in opposition to plaintiff's motion, defendant notes, initially, that the parties agree to the genuineness of the pre-nuptial agreement. Defendant also points out that plaintiff admits that she signed the power of attorney freely and voluntarily, without undue influence, coercion or duress. With respect to plaintiff's capacity for understanding the agreement, defendant emphasizes the fact that plaintiff is well-educated, having attended elite private schools, and also that she pursued both college and graduate level degrees. Further, defendant claims that plaintiff was raised in a prominent Dutch family, and that both of her parents studied law in the Netherlands. Defendant notes that it was plaintiff's parents who suggested that defendant sign a prenuptial agreement. According to defendant, plaintiff also had the benefit of advice from two civil law notaries, as well as her father's lawyer friends in the Netherlands and in the United States, prior to entering into the pre-nuptial agreement. To the contrary, defendant alleges that he is the product of a first generation immigrant midwife and a school teacher, and that he attended local grammar school. Moreover, defendant argues that plaintiff admitted her continuing nexus to the Netherlands in her affidavit, when she stated that she was a citizen of the Netherlands, that she never revoked her Dutch citizenship, and also that the marriage was solemnized pursuant to Dutch law. Additionally, defendant points out that plaintiff admits that it was her intention and understanding that the pre-nuptial agreement made a choice of law, specifically, that she was choosing Dutch law to govern the distribution of assets in the event of divorce. Accordingly, defendant argues that the only "fact" that is in dispute with regard to the pre-nuptial agreement is that plaintiff no longer wants to be bound by the terms of said agreement, since she now deems the terms to be financially unfavorable to her.
In particular, defendant contends that plaintiff's parents insisted on the "huwelijksvoorwaarden," or pre-nuptial agreement, in order to protect their daughter's assets in the event that defendant started a business that failed, or that he accumulated debt from graduate school, both future goals which he had discussed with them.
According to defendant, in an email from plaintiff's mother sent on November 19, 2000, he learned that plaintiff and her parents had contacted a notary candidate, Karen Lemckert, from the Dutch law firm of Trenite van Doorne. Defendant avers that he was not privy to any advice given to plaintiff from the above Dutch firm. Defendant argues that, from the context of the e-mail, it is clear that plaintiff's parents did more than merely suggest that plaintiff and defendant enter into a pre-nuptial agreement. According to defendant, the aforementioned e-mail clearly evinces the stated intent of the pre-nuptial agreement, namely, that everything the parties own will not be split 50/50. Additionally, defendant alleges that the e-mail clearly evidences an intent for the pre-nuptial agreement to make his possible business and education debt separate from the marital assets. Defendant further argues that plaintiff's mother was intricately involved with drafting the terms and conditions of the pre-nuptial agreement, and that she counseled her daughter to liquidate certain assets (such as her apartment in the Netherlands) that could be considered marital if they were not disposed of prior to the wedding. In addition, defendant claims that plaintiff's mother advised her to omit inherited assets from the final settlement clause of the pre-nuptial agreement to ensure that none of her likely inheritance from her maternal grandfather, a high net worth individual in poor health, would be considered marital assets. Defendant also submits copies of communications between Wiersma and other members of his firm, including Houben, who ultimately drew up their pre-nuptial agreement. According to defendant, the above e-mail chain shows the involvement of plaintiff's father and his friend Wiersma, as well as various other attorneys at De Brauw, in advising plaintiff and presumably looking out for her best interests.
On November 21, 2000, defendant alleges that he received a second e-mail from plaintiff's mother, with instructions to pass the e-mail along to plaintiff, wherein her mother advises plaintiff to contact the De Brauw law firm. According to defendant, two weeks later, on December 7, 2000, he and plaintiff spoke with Houben on the telephone. In support of his contention that both parties spoke to Houben on that date, defendant submits a copy of a letter sent to the parties in which Houben references the alleged discussion on December 7, 2000. Defendant insists that Houben explained his function to the parties, specifically, that he was a neutral official who was required to weigh and balance the interests of all parties to the legal transaction. According to defendant, Houben explained that he was charged with the duty of ensuring that the parties understood what they were signing. Defendant alleges that plaintiff insisted upon the inclusion of a "final settlement clause," based upon advice from her parents and the attorneys recommended by them. Defendant avers that the final settlement clause governs the distribution of property in the event of divorce, and that Houben specifically noted its inclusion in a letter to the parties dated December 8, 2000.
Defendant also argues that, after they approved the draft, they followed Houben's specific instructions in signing the power of attorney before a New York notary public on December 11, 2000. According to defendant, the power of attorney contained all the terms of the pre-nuptial agreement, as required by Dutch law. Defendant avers that the parties returned the power of attorney to Houben with the understanding that the notarial deed containing the pre-nuptial agreement would be entered into in the Netherlands, pursuant to their authorization and instructions. According to defendant, Houben advised them that this was proper procedure, and that he would register the notarial deed as a valid marriage contract in compliance with Dutch law. Thereafter, defendant alleges that the parties were provided a certified copy of the notarial deed containing the pre-nuptial agreement, and that plaintiff filed it in a "marriage file" she maintained in a safe at their marital residence. Defendant alleges that he obtained the aforementioned certified copy from the marriage file and submitted it to the court. Defendant avers that in alleging the defects of execution and unconscionability with respect to the pre-nuptial agreement, it is plaintiff who bears the heavy burden of proof to overcome the agreement's presumption of validity. Defendant argues that plaintiff fails to meet this burden.
According to defendant, the threshold issue to be determined by the court is whether New York or Dutch law should apply in the instant action. In this regard, defendant seeks a declaratory judgment that the law of the Netherlands is applicable to the determination of issues relating to the execution, interpretation and validity of the pre-nuptial agreement. Defendant submits the affidavit of Dutch attorney Carla L.M. Smeets (who maintains offices in Rotterdam, and is a deputy judge at the Family Court of Appeals in Hertogenbosch), in support of his proposition that Dutch law applies to the instant property distribution, and that this is the choice of law made by the parties when they executed the pre-nuptial agreement. As the pre-nuptial agreement was drafted by a Dutch "Notar," for the benefit of a Dutch national who was getting married by a Dutch official, pursuant to Dutch law, defendant avers that there can be no other conclusions drawn from these facts, other than that the parties intended that issues relating to the execution, interpretation, and validity of the pre-nuptial agreement be determined pursuant to the law of the Netherlands.
Defendant contends that, pursuant to the modern approach to choice of law cases, the theory of significant contacts should be given heavy weight in determining which law to apply. In consideration of the foregoing, defendant argues that the law of the Netherlands should be applied in the instant case. Defendant again notes that plaintiff is a Dutch citizen at the time the agreement was made, and at the time of the marriage. Moreover, defendant points out that the agreement was drafted in the Netherlands by a Dutch civil law notary, entered into in the Netherlands, and filed with the central registry in the Netherlands. Additionally, defendant alleges that the marriage was solemnized pursuant to Dutch law, and that the parties clearly intended that Dutch law be applied to the execution, interpretation, and validity of the contract (as evidenced by the aforementioned e-mail communications and by the four corners of the agreement itself). In this regard, defendant notes that, although the parties were domiciled in New York at the time the agreement was prepared, they elected to have the law of the Netherlands apply to the matrimonial property regime, rather than hiring a New York attorney to prepare an agreement in accordance with New York law, which they could have done easily.
Moreover, defendant cites the sworn statement of Smeets in order to demonstrate that the pre-nuptial agreement is valid and enforceable under Dutch law. Defendant notes that, according to Smeets and her interpretation of the Dutch Civil Code, "both the deed containing the marital terms and the choice of law are fully in compliance with the law and the [Hague] Convention and are valid." In addition, defendant quotes Smeets' statement that, "the deed containing the marital terms as well as the choice of law for Dutch law are completely valid and were drawn up and executed in accordance with Dutch law and Dutch international private law." In addition, contrary to the contentions of plaintiff's Dutch attorney, defendant argues that the power of attorney is indeed valid because it "contain[s] the provisions to be included in the marriage contract." In addition, according to defendant, Smeets also opines that, "[t]he provisions of the nuptial agreement were included in the text of the power of attorney. Neither the law or the earlier mentioned Convention prescribes that a choice of law must be part of the provisions of a nuptial agreement itself." Defendant further points out that the affidavit of plaintiff's purported expert, Dutch attorney Verburgt, recites the law in an unsworn letter, and the law recited does not support her position alleged. According to defendant, Verburgt cites no authority for her position that the choice of law must be specified in the power of attorney for it to be valid.
In the event that the court disagrees that the pre-nuptial agreement is valid under Dutch law, defendant also argues that the pre-nuptial agreement is valid and enforceable under New York law. In this regard, defendant avers that, although plaintiff's attorney correctly argues that the pre-nuptial agreement, or "Notarial Deed," was not acknowledged in a manner that would permit a deed to be filed in New York, it was in fact acknowledged in a manner that would permit a deed to be filed where it was executed, in the Netherlands. According to defendant, DRL § 236 (B) (3) does not state that the acknowledgment must be made in a manner that would permit a deed to be filed in New York, and therefore, the pre-nuptial agreement is valid and enforceable even under New York law.
With respect to plaintiff's claims that the pre-nuptial agreement is unconscionable, defendant submits a letter from Houben, wherein he states that he has retained his file relating to the subject agreement, and that he is available to testify, if necessary. Applying the principles set forth by the Court of Appeals in Christian v Christian, ( 42 NY2d 63), defendant asserts that the agreement is not unconscionable, since it is not "manifestly unfair to a spouse because of the other's overreaching." According to defendant, the enhanced earnings of both parties will remain their separate property pursuant to the pre-nuptial agreement, benefitting both parties. Further, defendant contends that, contrary to plaintiff's contention, she is not left without any marital property. In this regard, defendant concedes that, by operation of the pre-nuptial agreement and Dutch substantive law, plaintiff would be entitled to 50% of the value of the cooperative apartment, after credit for defendant's investment of separate property, and after satisfaction of the mortgage principal. Defendant avers that the pre-nuptial agreement cannot be described as one that "no person in their right mind would enter into," since the agreement is more generous than the most common pre-nuptial agreement which would bar distribution of any property that is not jointly titled. Defendant maintains that plaintiff has previously verbally acknowledged that the pre-nuptial agreement is valid, and also that, prior to signing the agreement, she had considered how the contract would effect the distribution of property in the event of a divorce. According to defendant, plaintiff understood the agreement, and she chose to sign it.
With respect to assets accumulated during the marriage, defendant contends that, although plaintiff is correct that he obtained a master's degree and started a business during the marriage, she is incorrect in alleging that he acquired a co-op apartment solely in his name. In this regard, defendant claims that the co-op apartment was acquired by the parties together, and that the stock certificate names both plaintiff and defendant as shareholders in joint name. According to plaintiff, the $118,000 down payment toward the purchase of the cooperative apartment came from his pre-marital separate property, specifically, from the proceeds of the sale of his pre-marital apartment in London, which was listed as separate property in the pre-nuptial agreement. Defendant alleges that the balance of the purchase was obtained by an interest only mortgage in the amount of $417,000. According to defendant, he has made the mortgage payments since the date of the closing. Defendant argues that the cooperative apartment is a marital asset under Article 10 of the pre-nuptial agreement and, therefore, that he is entitled to the return of his separate property ($118,000), while the balance of the equity in the co-op should be split between plaintiff and himself.
Defendant also states that, under the pre-nuptial agreement, the advanced degrees obtained by both of the parties during the marriage are not property subject to distribution. In this regard, defendant asserts that, even under New York law, his Master's degree is not a valuable asset. Among other things, defendant notes that, since obtaining his Master's degree in 2003, he has not earned more than he did prior to attending graduate school, and also that is he now saddled with $146,038 in debt by way of student loans.
With respect to his company Skram Media, Inc., defendant avers that the business was started by him with two gifts of capital from his father, which were documented by submitted financial discovery, including records of relevant wire transfers. To that effect, defendant alleges that, pursuant to the terms of the final settlement clause of the pre-nuptial agreement, his entire interest in Skram Media is his own separate property. According to defendant, "there is no vast wealth in Skram Media as alleged by plaintiff. It is a fledgling company that has turned no profit in the 5 years it has been in existence." Thus, defendant contends that the agreement is not unconscionable, and it should be enforced by the court, as it reflects exactly what plaintiff bargained for.
Moreover, defendant argues that he is entitled to summary judgment on the following issues: (1) Skram Media is his separate property by operation of Article 10 [a] of the pre-nuptial agreement and the substantive law of the Netherlands; and (2) his Harvard MBA obtained during the marriage, and any alleged enhanced earnings, are not assets subject to equitable distribution by operation of the pre-nuptial agreement and the substantive law of the Netherlands. According to defendant, there is no dispute that if the pre-nuptial agreement is deemed valid and enforceable, his interest in Skram Media will not be subject to distribution, since the business was funded entirely by gifts from his father. Further, defendant contends that there is no dispute of fact between the parties that if the pre-nuptial agreement is found to be valid, that his Harvard MBA is not subject to distribution. In this regard, defendant cites Smeets affidavit to the effect that advanced degrees and enhanced earning capacities are not considered assets that are subject to distribution in the Netherlands.
Finally, defendant seeks enforcement of certain discovery requested in defendant's demand for discovery and inspection served on July 10, 2009. According to defendant, plaintiff responded by stating that the above demands were "not relevant to the current issues." Defendant notes that it is his belief that plaintiff acquired assets through inheritance or gift during the marriage, and if so, this would be relevant to plaintiff's allegations that the pre-nuptial agreement is unconscionable. Defendant further notes that, in her own demand for discovery from defendant, plaintiff made nearly identical demands to those she refused to respond to by defendant.
Specifically, defendant states that plaintiff failed to comply with the following requests:
"6. Any and all documents evidencing a claim, if one exists, that Plaintiff acquired asset(s) during the marriage by succession, testamentary disposition or gift."
"7. If Plaintiff is claiming to have acquired asset(s) during the marriage by succession, testamentary disposition or gift, any and all documents evidencing: (a) the value of such asset(s) at the time it was acquired; (b) the dates and manner of investment or reinvestment of such asset from the date of the marriage to the present; (c) the current form of such asset(s); (d) the value of such asset(s) in their current form; and the value of such asset on the date of summon."
In opposition to defendant's cross motion, and in further support of her own motion, plaintiff contests defendant's factual assertions regarding her family's wealth and her upbringing. According to plaintiff, it was her father, and not her mother, that studied law in the Netherlands, and she points out that he did not focus on Dutch civil law. Additionally, plaintiff argues that, although her parents are respected figures in the foreign service, they live in modest accommodations and are not wealthy, and also that her maternal grandfather was not a high net worth individual from whom she inherited any money. In comparison, and contrary to defendant's assertions, plaintiff argues that defendant's parents own a large and luxurious villa in England and that his father is a psychologist and expert trial witness, while his mother is a member of Iran's land-owning elite. According to plaintiff, she does not have a Master's degree from any university, as opposed to defendant, who earned a Master's degree from Harvard, which she helped subsidize through her separate property contributions and her marital income. Additionally, plaintiff alleges that she sold her apartment quickly prior to her marriage, not to prevent defendant from having rights to the apartment, but because Amsterdam has strict laws against "absentee landlords," which would not allow her to rent out the apartment while living in the United States. Plaintiff contends that she used the majority of the proceeds from the sale of her home in Amsterdam to support their family during the marriage. Moreover, plaintiff alleges that, although defendant claims that she maintained all of the documents relating to the pre-nuptial agreement, and that she was intimately involved and knowledgeable regarding the terms of the agreement, the evidence is to the contrary. In this regard, plaintiff contends that defendant was the party in possession of all of the documents, and the person who annexed them to the exhibits, even though she left the marital apartment with the children while he was away on a business trip in Colorado. According to plaintiff, if she was the party who maintained the records, she would have taken them with her when she moved out. Further, plaintiff alleges that, looking at her own handwritten notes written on printed copies of e-mails from her mother, it is clear that she was interested in the flowers, colors, and music for the wedding, rather than the provisions of the pre-nuptial agreement.
Furthermore, plaintiff alleges that her parents' concerns regarding the pre-nuptial agreement were to "protect my property rights, during marriage, against Mark's creditors, rather than as to rights against each other upon divorce." According to plaintiff, the agreement was drafted by a Dutch attorney as a wedding gift, who "naturally drafted the agreement to apply the law he knew, even though it had no relation to their marriage." Plaintiff also argues that defendant "fails to make any reasonable argument why a New York court, in a New York divorce, should use Dutch law to interpret a New York contract (the power of attorney) when the cause of action arose in New York, which was where we lived as husband and wife, when we never lived together in the Netherlands and never even discussed, much less intended, to live together there during our marriage." As such, plaintiff insists that there is no basis for Dutch law to apply to the determination of any issues relating to the execution, interpretation or validity of the prenuptial agreement, which was entered into by their purported agents, who were not properly authorized to act on their behalf. In this regard, plaintiff adds that defendant does not even provide a copy of an executed pre-nuptial agreement for the court to consider. Plaintiff insists that, not only does the power of attorney lack the requirements for validity under New York law, but it is also invalid pursuant to Dutch law. With respect to defendant's request to refer the issues regarding the pre-nuptial agreement to the Netherlands, plaintiff argues that it would be inconvenient and costly to litigate the divorce in two separate forums.
Finally, plaintiff insists that defendant's request for partial summary judgment must be denied, since he has made no showing of the sources of the monies invested by him in Skram Media, and also because a review of records from the parties' joint bank account demonstrates that monies went from that account to purchase Skram Media. According to plaintiff, the money in their joint account came from many sources, including their respective earnings throughout the marriage, plaintiff's premarital savings, gifts received by her during the marriage, and defendant's pre-marital bank account. Plaintiff further argues that defendant's request for partial summary judgment should be denied since, under New York law, defendant's MBA and his enhanced earning capacity are marital assets subject to equitable distribution.
With respect to defendant's discovery requests, plaintiff maintains that the information he seeks is not relevant to the issues at hand, and that his motion should be denied. In particular, plaintiff notes that, unlike her husband, she is making no claim of separate property ownership at this time and, thus, that his request for information regarding inheritance or gifts she received throughout the marriage is not relevant to the enforceability or validity of the pre-nuptial agreement. Plaintiff claims that any gifts she received during the marriage were used by the family towards payment of their living expenses while defendant was in school, or while he was earning little or no income because he was trying to grow his business and purportedly protect his father's investment.
In an attorney affirmation offered in opposition to defendant's cross motion, and in support of plaintiff's motion, plaintiff's counsel points out that there was only one contract entered into between the parties, the power of attorney, and this document failed to comply with the requirements of New York law. Plaintiff's counsel maintains that defendant's request that the court bifurcate the instant case, and apply Dutch law, or refer the property distribution issue for determination in the Netherlands, is "beyond absurd, especially considering the Court cannot determine maintenance or child support issues until property distribution is determined, and that the Courts of the Netherlands lack jurisdiction over the parties." With respect to the contents of the pre-nuptial agreement, plaintiff's counsel argues that the power of attorney is invalid, even under Dutch law, since it does not include the specific language contained in the prenuptial agreement (that Dutch law applies to the marital property regime). According to plaintiff's counsel, to be valid, a power of attorney to authorize agents to enter into a prenuptial agreement on behalf of principals must contain all of the provisions of the pre-nuptial agreement. Furthermore, plaintiff's counsel alleges that the subject pre-nuptial agreement was not executed by the parties or their agents pursuant to a proper power of attorney.
In reply, defendant argues that, contrary to plaintiff's arguments, his cross motion seeks distinct relief, separate from the mere denial of plaintiff's motion, the bulk of which plaintiff has failed to oppose in any meaningful way. Defendant also points out that plaintiff's attorney does not dispute that the instant case presents a valid choice of law question. Further, defendant argues that plaintiff's counsel does not dispute that defendant has set forth the proper legal standard regarding choice of law rules. However, according to defendant, rather than respond to his arguments, plaintiff's counsel engages in circular logic to assert that since the action for divorce is pending in New York, and because both parties reside in New York, that the court must therefore apply New York law. In this regard, defendant argues that plaintiff's logic is circular, since the court would not have to decide the issue of choice of law if the case were not pending in New York. Defendant also insists that venue and residency are not dispositive on this issue. Furthermore, defendant asks that the court accept, without opposition, the position of Dutch attorney Smeets in her sworn statement of "Advise," that the pre-nuptial agreement is valid and enforceable under Dutch law. Defendant also notes that plaintiff ignores his request for a declaratory judgment or third-party arbitration in the Netherlands, except to say that it would be "inconvenient." According to defendant, this is not the case since both parties have already hired Dutch attorneys. Additionally, defendant avers that it would be more inconvenient to fly experts to New York from the Netherlands to testify so that a New York court can make determinations of foreign law. To that effect, defendant contends that it would be much more practical and convenient to litigate the matter in the forum accustomed to applying its own laws. Further, defendant notes that the third-party arbitration option can be achieved with a phone call or an e-mail.
Moreover, defendant points out that plaintiff does not dispute that by operation of the pre-nuptial agreement, if enforced, she would be entitled to half of the equity in the marital home after credit is given to defendant for his separate property down payment. According to defendant, plaintiff also affirms that defendant experienced a drop in income after obtaining his advanced degree, and further does not dispute that there are no enhanced earnings to appraise. Defendant also reiterates his argument that the pre-nuptial agreement was not unconscionable. Defendant further asserts that the division of property is governed by article 10 of the pre-nuptial agreement, and that defendant is entitled to summary judgment finding that his business Skram Media, and his Harvard MBA and/or alleged enhanced earning capacity, are not assets subject to equitable distribution. In this regard, defendant notes that plaintiff does not dispute that enhanced earning capacities are not assets under Dutch law, nor does she credibly dispute that the business was started with two gifts from his father.
Finally, with respect to defendant's Notice for Discovery and Inspection, defendant argues that plaintiff should be directed to comply forthwith with requested items six and seven, since these items are relevant to the issues raised herein. Defendant notes that plaintiff has not explained why she failed to respond to these discovery demands, and she also has not moved for a protective order.
DISCUSSION
The court will first address whether New York law or Dutch law applies to the execution formalities of the pre-nuptial agreement. This case involves a challenge to a pre-nuptial agreement, which was drafted in another country, and which was allegedly executed in a foreign country, by the authorized agents of the parties, via a power of attorney which was executed in New York. Generally, where the parties have agreed on the law that will govern their contract, be it of another State of the United States, or of another country, it is the policy of New York to honor that choice if it has a sufficient nexus to the law selected ( see Cooney v Osgood Machinery, Inc., 81 NY2d 66, 70-71), and the law chosen does not violate a strong public policy of the State of New York ( see Finucane v Interior Construction, Corp., 264 AD2d 618, 20-621; North American Bank, Ltd. v Schulman, 123 Misc 2d 516, 518-521; see also Restatement, Conflicts of Laws 2d, sec. 187; see also 8 NY Jur., Conflicts of Laws, Sec. 24). In addition, as relevant here, an agreement that is clear and unambiguous will be enforced in accordance with its terms, and the question of whether an agreement is ambiguous is a question of law to be determined by the court ( see generally W.W.W. Associates, Inc. v Giancontieri, 71 NY2d 157). An agreement is not ambiguous simply because the parties urge a different interpretation of the terms of the agreement ( see generally Bethlehem Steel Co. v Turner Const. Co., 2 NY2d 456).
Against this background, plaintiff argues that the formalities followed in the execution of the pre-nuptial agreement were insufficient pursuant to both Dutch law and New York law. Plaintiff also argues that the pre-nuptial agreement is invalid, since the power of attorney which authorized the parties' agents to sign it did not include all of the terms of the pre-nuptial agreement, as required by Dutch law. Upon review of the evidence, the court finds that plaintiff's arguments as to the application of New York law and the invalidity of the pre-nuptial agreement are without merit.
To begin, the Hague Convention on the Law Applicable to Matrimonial Property Regimes 1978 (the Convention) applies to determine whether the pre-nuptial agreement is valid and whether the court should enforce the parties' choice of law contained therein. The Convention provides, in pertinent part, that:
Article 3: "The matrimonial property regime is governed by the internal law designated by the spouses before marriage. . . ."
Article 11: "The designation of the applicable law shall be by express stipulation, or arise by necessary implication from the provisions of a marriage contract."
Article 12: "The marriage contract is valid as to form if it complies either with the internal law applicable to the matrimonial property regime, or with the internal law of the place where it was made. In any event, the marriage contract shall be in writing, dated and signed by both spouses."
Article 13 "The designation of the applicable law by express stipulation shall comply with the form prescribed for marriage contracts, either by the internal law designated by the spouses, or by the internal law of the place where it was made. In any event, the designation shall be in writing, dated and signed by both spouses"
Defendant also submitted certified translated copies of relevant Dutch law, including Dutch Civil Code Book I, Article 115, Section 115, Subsections 1 and 2, which states that:
"(1) A nuptial agreement must be concluded by notarial deed subject to invalidity.
(2) A power of attorney to conclude a nuptial agreement must be granted in writing and must contain the provisions to be included in the nuptial agreement."
First of all, the Convention requires that a marriage contract must be in writing, and that it must be signed and dated by both spouses in order to be valid. As proof that the subject pre-nuptial agreement fulfilled these statutory requirements, defendant submitted a certified copy of the notarial deed which was executed by the parties' agents. Although plaintiff claims that the notarial deed is not signed or properly acknowledged by the parties, the document states that it is a certified copy of the original agreement, and it states that is was signed by the parties' agents, and also that the agents understood the implications of the agreement. Furthermore, the notarial deed is signed by the civil law notary that produced the certified copy. In addition, the power of attorney was undisputedly signed by plaintiff and defendant before a New York notary. The court finds that the subject pre-nuptial agreement is valid under the Convention, insofar as it is in writing, signed, and dated by both spouses or their agents.
The Convention also provides that the matrimonial property regime is governed by the internal law designated by the spouses before marriage. As to a particular designation of law, the Convention provides that this designation can be either express or implied by the terms of the agreement, that it must comply with the form prescribed for marriage contracts, and that it must be in writing, signed, and dated by both spouses. Here, the parties unambiguously agreed that Dutch law would govern both the power of attorney and the notarial deed comprising the pre-nuptial agreement. The power of attorney, which was drafted in the Netherlands and executed in New York before a New York notary, states that, "[t]he relationship between the Principal and the Authorised Persons arising from this power of attorney shall be governed exclusively by Dutch law." The notarial deed further states that, "the future spouses designate the law of the Netherlands as the law applicable to their matrimonial property regime." While the choice of law provisions in the power of attorney and the notarial deed are not identical, it is clear that the parties intended for Dutch law to govern their pre-nuptial agreement. Additionally, as previously stated, the power of attorney and the notarial deed are both in writing and signed by both spouses or their agents. On these facts, it is clear that Dutch law is the law that was expressly designated by the parties to govern their matrimonial property regime.
Finally, the Convention also requires that both the marriage contract and the designation of the applicable law comply with the internal law applicable to the matrimonial property regime, or with the internal law of the place where the marriage contract was made. As this court has already determined that the parties chose Dutch law to govern the matrimonial property regime, it logically follows that the pre-nuptial agreement and the power of attorney must be in compliance with Dutch law in order to be valid. As articulated above, Dutch law requires that a nuptial agreement be concluded by a notarial deed in order for it to be deemed valid and enforceable. In addition, Dutch law requires that, when a power of attorney operates to conclude the nuptial agreement, as is the case here, the power of attorney must be granted in writing and it must contain the provisions to be included in the nuptial agreement.
With respect to Subsection 1, Section 115 of the Dutch Civil Code, the court finds that the subject pre-nuptial agreement is in fact concluded by a notarial deed. As for Subsection 2, the court notes that the power of attorney is in writing, and it does contain the "provisions" listed as Articles 1-11 in the notarial deed. However, although both agreements state that Dutch law is applicable, the choice of law provisions are not identical. Defendant submits the sworn legal opinion of Smeets, in support of his argument that the pre-nuptial agreement is nevertheless validly executed pursuant to Dutch law.
According to Smeets:
"It has been established neither in the law nor in the Convention that a choice of law must constitute part of the provisions of the nuptial agreement itself. After all, a choice of law can also be made by notarial deed prior or during marriage and is therefore not necessarily part of a deed containing marital terms.
In my opinion a clear distinction must therefore be made between the procedural rules applicable to the conclusion of the nuptial agreement, i.e. by notarial deed subject to invalidity, and the procedural rules applicable to a power of attorney for the execution of a deed containing marital terms (section 115 subsection 2 of Book 1 of the Dutch Civil Code). The law does not impose extra requirements on a power of attorney for the execution of a deed in which a choice of law has been included."
Furthermore, Smeets argues that neither Dutch law nor the Convention prescribes that a choice of law must be part of the provisions of the nuptial agreement itself. According to Smeets:
"[t]he law merely prescribes that for an expressly stipulated choice of law the same form must be selected as for nuptial agreements, i.e. in pursuant of section 115 subsection 1 of Book 1 of the Dutch Civil Code the form of a notarial deed. The choice of law derives from the notarial deed which was sent to the parties beforehand together with the power of attorney. As said, a choice of law does not need to be incorporated in the provisions of the nuptial agreement. To this extent it was therefore not necessary to incorporate the choice of law in the power of attorney."
Therefore, Smeets concludes that the deed containing the marital terms and the choice of law are fully in compliance with Dutch law and the Hague Convention and are valid.
Plaintiff argues that the omission of an identical choice of law provision in the power of attorney operates to void the notarial deed. By unsworn letter to defendant's counsel dated September 24, 2009, and in rebuttal to Smeets opinion, Verburgt states the following:
"Please be advised that this particular matter re the validity of the power of attorney and the choice of law, has never been dealt with the Dutch courts before and therefore an unprecedented matter, about which no relevant case law or conclusive literature, which could be applied in the case at hand. . . . More in particular, the consulted experts agree that this is a difficult question on a point of law, which has never been answered by the Supreme Court of the Netherlands before . . ."
Verburgt goes on to state that the Supreme Court of the Netherlands is very strict as to the formalities regarding the conclusion of marital contracts, and that this same strict approach should be carried out as to the formalities regarding the power of attorney. According to Verburgt, in a power of attorney, the literal and complete language of the nuptial agreement must be included, rather than a concise indication of the provisions of the nuptial agreement. Verburgt concedes that in the case at hand, the parties have entered into a pre-nuptial agreement by notarial instrument, in which they stipulated a choice of law for Dutch law. Verburgt further states that:
"the relevant question is not a question as to which form should be applied for the power of attorney with regard to the prenuptial agreement, like Mrs Smeets argues, but a question as to the substance of the power of attorney. . . .When the prenuptial agreement by its terms is to be governed by Dutch law, like in the case at hand, then the power of attorney must state that as well. In other words, the power of attorney should mirror the nuptial agreement in full, including the choice of law. This follows from article 11 of the Hague Convention 1978 . . . Because the prenuptial agreement states that Dutch law governs the matrimonial property regime, it is also a requirement that this term is also be included in the power of attorney, as it is a provision of the marriage contract."
Upon the foregoing evidence, and after reviewing both Dutch law and the Convention, the court accepts Smeets' sworn legal opinion that both the pre-nuptial agreement and the power of attorney were executed with the formalities required by Dutch law. Moreover, even though there is no specific requirement that the choice of law be included in the provisions of the pre-nuptial agreement, here, both the power of attorney and the pre-nuptial agreement include a provision which states that Dutch law is applicable to each agreement. The court finds that the choice of law provisions included in the power of attorney and in the pre-nuptial agreement are sufficiently similar to reflect the parties' clear intent that the pre-nuptial agreement be governed by Dutch law. With respect to the parties' intent, plaintiff confirms in her affirmation that she understood that the pre-nuptial agreement would be governed by Dutch law, and she also stated that she reviewed the draft documents before signing the power of attorney. In addition, the listed "provisions" concerning the distribution of property are identical in both agreements, as required by Dutch law. Plaintiff fails to sufficiently demonstrate, either through documentary evidence or sworn legal opinion, that the power of attorney is invalid under Dutch law.
Additionally, the court finds that plaintiff's status as a Dutch citizen, the parties' Dutch civil marriage ceremony at the Dutch embassy in Ghana, and the fact that the pre-nuptial agreement was drafted by a Dutch attorney in the Netherlands, and executed by the parties' agents in the Netherlands, provide a sufficient nexus for the application of Dutch law ( see generally Cooney v Osgood Machinery, Inc., 81 NY2d 66, 70-71; see also generally A.S. Rampell. Inc., v Hyster Co., 3 NY2d 369 [the jurisdiction whose law the parties intended to apply must bear a "reasonable relation" to the agreement]). Moreover, plaintiff does not allege, nor does the record reflect, that the application of Dutch law under the circumstances would violate any strong public policy of the State of New York ( see generally Finucane v Interior Constr. Corp., 264 AD2d 618). Accordingly, the pre-nuptial agreement is deemed valid under Dutch law, and there is no basis for the court to apply New York law. That branch of plaintiff's motion which seeks a determination that the pre-nuptial agreement is not valid pursuant to New York Domestic Relations Law § 236 (B) (3) is denied. That branch of defendant's cross motion which seeks a declaration that Dutch law applies to the pre-nuptial agreement is granted. Those branches of defendant's cross motion which seek a declaration that the pre-nuptial agreement is valid and enforceable, and that the property division is governed by the pre-nuptial agreement and Dutch law are also granted.
To be complete, the court notes that plaintiff's challenge to the enforceability of the pre-nuptial agreement under New York law, on the basis that the agreement is unconscionable, also fails. Although plaintiff argues that enforcement of the pre-nuptial agreement would be unconscionable, since it would leave her with "nothing" of the parties' marital assets, plaintiff fails to present any evidence demonstrating that the agreement is in fact unconscionable under New York law. As relevant here, "[p]laintiff has a heavy burden to meet; with regard to separation agreements, it is well established in New York that judicial review of separation agreements is to be exercised sparingly, with a goal of encouraging the parties to settle their differences on their own'" ( Bernardi v Bernardi , 24 Misc 3d 1251 (A), *2 [2009], citing Ricca v Ricca , 57 AD3d 868 , 870; see also Van Kipnis v Van Kipnis , 43 AD3d 71 , 76-77, quoting Bloomfield v Bloomfield, 97 NY2d 188, 193[the public policy of this State favors "individuals ordering and deciding their own interests through contractual arrangements'"]). Thus, duly executed prenuptial agreements, including agreements executed in a foreign country, are accorded the same presumption of legality as any other contract ( see Greschler v Greschler, 51 NY2d 368). It is also well-settled that a "party seeking to rescind a separation agreement . . . has the burden of showing that the agreement was the result of fraud, duress or overreaching or that its terms were unconscionable" ( Rubin v Rubin , 33 AD3d 983 , 985). "That is, an agreement will not be overturned merely because it was improvident, not the most advantageous to the dissatisfied party, or because a party had a change of heart" ( Bernardi v Bernardi, 24 Misc 3d at *2 [internal citation and quotation omitted]). Moreover, "[a]n unconscionable bargain has been regarded as one such as no [person] in his [or her] senses and not under delusion would make on the one hand, and as no honest and fair [person] would accept on the other'" ( Hardenburgh v Hardenburgh, 158 AD2d 585, citing Hume v United States, 132 U.S. 406, 411), "the inequality being so strong and manifest as to shock the conscience and confound the judgment of any [person] of common sense'" ( Hardenburgh, 158 AD2d at 586, citing Mandel v Liebman, 303 NY 88, 94). The doctrine of unconscionability has no application to property settlement provisions of separation agreements where there is no fraud, duress, overreaching or incompetence ( see generally Christian v Christian, 42 NY2d 63). Lastly, "an agreement is not unconscionable merely because, in retrospect, some of its provisions were improvident or one-sided, and simply alleging an unequal division of assets is not sufficient to establish unconscionability" ( Schultz v Schultz , 58 AD3d 616 , 616).
As stated above, plaintiff's primary contention regarding the alleged unconscionability of the pre-nuptial agreement is that its enforcement would leave her with "nothing" of the parties' assets. A review of the evidence makes clear the fact that plaintiff signed the power of attorney freely and voluntarily. In addition, it was plaintiff's parents who suggested that the parties consider a pre-nuptial agreement prior to the marriage, and plaintiff's father's friend who offered the services of his law firm to draft the agreement. The evidence reflects that plaintiff and defendant were sent draft copies of the notarial deed and the power of attorney, and also that the parties reviewed these documents when they received them from Houben. Both parties further acknowledge that they followed Houben's instructions in reviewing and signing the power of attorney in New York before they faxed it back to the Netherlands. Plaintiff also affirmed that she understood that the pre-nuptial agreement would be governed by Dutch law, and that the agreement excluded certain assets from the marital property regime. Plaintiff fails to sufficiently allege any evidence of fraud, duress, or overreaching in connection with the execution or enforcement of the pre-nuptial agreement. In addition, as stated above, an agreement is not unconscionable simply because it will result in an unequal division of assets ( see generally Schultz v Schultz, 58 AD3d at 616). Considering all the provisions of the pre-nuptial agreement, the court also cannot say that it is so unfair "as to shock the conscience and confound the judgment of any [person] of common sense" ( see Lounsbury v Lounsbury, 300 AD2d 812). Therefore, the pre-nuptial agreement is not unconscionable and is enforceable as written. Accordingly, that branch of plaintiff's motion which seeks a determination that the pre-nuptial agreement is not enforceable due to its unconscionability is denied. In addition, that branch of defendant's cross motion which seeks a declaration that the pre-nuptial agreement is not unconscionable is granted.
However, those branches of defendant's cross motion which seek declarations that the pre-nuptial agreement's validity must be determined in the Netherlands, and also that the issue of equitable distribution should be bifurcated and referred to the Netherlands, are denied. Defendant does not argue that this court lacks jurisdiction over the subject matter herein, but, rather, he asserts that the issues would be more conveniently or appropriately decided in the Netherlands. Pursuant to CPLR 4511, this court may take judicial notice of foreign law. Here, the foreign law is properly stated in the pleadings of defendant, the party who intends to rely upon such law ( see also CPLR 3016 [e]). Under the circumstances, this court has the authority to interpret and apply Dutch law to the parties' pre-nuptial agreement. Therefore, the court declines to bifurcate the property issues or refer such issues to a foreign court for reasons of convenience.
Turning to those branches of defendant's cross motion which seek summary judgment finding that Skram Media is defendant's separate property, and also that his Harvard graduate degree is not subject to distribution, pursuant to the pre-nuptial agreement and Dutch law, the court declines to grant defendant this requested relief. As previously stated, pursuant to CPLR 3016 (e), foreign law must be properly pleaded by the party who intends to rely on it. An omission to properly plead the foreign law is a violation of the statute. Furthermore, pursuant to CPLR 4511 (b), the court may take judicial notice of foreign law, but it is not required to do so.
While defendant submits the sworn affidavit of Smeets, wherein she opines that defendant's business, Skram Media and his Harvard graduate degree are not assets subject to distribution pursuant to Dutch law, neither Smeets nor defendant cited or produced any certified copies of the Dutch law relevant to this determination. Therefore, although the pre-nuptial agreement is hereafter deemed valid and enforceable, and although it has been decided that Dutch law is applicable to the agreement, the court finds that the record is insufficient to make any determination regarding the distribution of property pursuant to the pre-nuptial agreement under Dutch law. Specifically, although the record contains certified copies of the Dutch Civil Code as it relates to the validity and enforceability of the pre-nuptial agreement and the power of attorney, the parties failed to submit any Dutch law regarding the actual distribution of property pursuant to the "marital property regime" referenced in the agreement. Consequently, the court denies those branches of defendant's cross motion which seek summary judgment regarding the above-stated property issues (specifically, defendant's request that his business and his graduate degree/enhanced earnings are not assets subject to distribution), and affords the parties the opportunity to brief these precise issues of property distribution under Dutch law. Following the submission of the parties' supplemental briefing within sixty days of service of this decision and order with notice of entry, defendant may renew his motion to dismiss if he so desires.
Finally, defendant also requests that the court direct plaintiff to comply with his prior discovery requests related to any possible gifts and/or inheritances she received during the marriage. Defendant reasons that this information is relevant to the determination of whether the pre-nuptial agreement is unconscionable. Since defendant has stated no other relevant reason for the requested information, and because the court has already ruled that the agreement is not unconscionable, that branch of defendant's cross motion which seeks an order directing plaintiff to comply with requested discovery items six and seven in his prior notice for discovery and inspection is denied as moot.
The parties and counsel are directed to appear in Part 5T, room 924 for a status conference on Wednesday, June 9, 2010 at 9:30 AM.
The foregoing constitutes the decision and order of this court.