Opinion
No. 54896/2010.
2012-06-27
Harry SABOWITZ, Plaintiff, v. Ilana SABOWITZ, Defendant.
Jonathan E. Kroll, Esq., Garden City, for Plaintiff. Elliott S. Martin, Esq., Brooklyn, Wayne Mazur, Esq., New York, for Defendant.
Jonathan E. Kroll, Esq., Garden City, for Plaintiff. Elliott S. Martin, Esq., Brooklyn, Wayne Mazur, Esq., New York, for Defendant.
ERIC I. PRUS, J.
Upon the Notice of Motion, dated August 11, 2011, the affirmation of Elliott S. Martin, Esq., dated August 11, 2011, the Notice of Cross–Motion, dated September 2, 2011, the affidavit of Harry Sabowitz, dated September 1, 2011, the affirmation of Jonathan E. Kroll, Esq., dated September 2, 2011, the affidavit of Harry Sabowitz, dated September 1, 2011, the affirmation of Jonathan E. Kroll, Esq., dated September 1, 2011, the affirmation of Elliott S. Martin, Esq., dated September 12, 2011, the affirmation of Jonathan E. Kroll, Esq., dated September 13, 2011, the affirmation of Elliott S. Martin, Esq., dated September 13, 2011, defendant's memorandum of law, dated October 12, 2011, the affirmation of Benjamin M. Oxenburg, Esq., dated October 31, 2011, plaintiff's reply memorandum of law, dated October 31, 2011, the Order to Show Cause, dated November 15, 2011, the affirmation of Wayne J. Mazur, Esq., dated November 7, 2011, the affirmation of Jonathan E. Kroll, Esq., dated December 6, 2011, the affirmation of Jonathan E. Kroll, Esq., dated December 22, 2011, and upon all exhibits annexed thereto and upon oral argument:
The parties to this matrimonial action procured a divorce in June of 2003. Most recently, both the plaintiff and the defendant have petitioned this Court for relief with respect to the Stipulation of Settlement (hereinafter “Stipulation”) and subsequent Judgment of Divorce (hereinafter “Judgment”).
The plaintiff/husband commenced an action seeking to void the Stipulation and Judgment claiming both were procured as a result of the defendant/wife's multiple acts of fraud, duress, overreaching and unconscionability. Defendant filed a Notice of Motion seeking the following: an Order pursuant to CPLR § 3211(a)(1) dismissing the plaintiff's Complaint and for failure to state a cause of action; an Order pursuant to CPLR § 3211(a)(7) dismissing plaintiff's Complaint for failure to state a cause of action; an Order pursuant to CPLR § 3212 dismissing the plaintiff's Complaint as the plaintiff has failed to raise an issue of fact for any cause of action; an Order pursuant to CPLR § 1003, dismissing the plaintiff's Complaint for failure to join two necessary parties (the children of the litigants); an Order pursuant to CPLR § 3212, granting the defendant summary judgment on her counterclaim as asserted in her Answer to the Complaint, dated December 3, 2010 (see below). Plaintiff's Notice of Cross–Motion seeks a judicial Order granting him leave to amend his Complaint and his reply to the defendant's counterclaim.
Facts pertinent to the resolution of these applications are as follows:
• July 2, 1974—The plaintiff and the defendant were married.
• January 4, 1981—Daughter Dafna was born.
• December 19, 1982—Daughter Dalia was born.
• 1999—The parties became estranged.
• 1999—The plaintiff moved to Jamaica.
• January 31, 2001—The plaintiff was indicted by the United States District Court in Pennsylvania. The indictment contained 31 counts relating to the plaintiff's participation in illegal activity involving the purchase of rental cars with high mileage readings, rolling back the odometers, ordering new titles from different states, washing the titles through multiple owners and re-selling the cars at auctions in Pennsylvania as low mileage cars.
• January 28, 2003—The defendant signed the Stipulation in Brooklyn, New York. The Stipulation was not acknowledged.
• January 30, 2003—A Rabbi (Rabbi Samowitz) and a cousin of the defendant, Michael Birk (now deceased), traveled to Jamaica to get the Stipulation signed by the plaintiff and for the Rabbi to procure a religious divorce (hereinafter “Get”) for the defendant. The Stipulation was signed by the plaintiff in Jamaica before a Justice of the Peace/Magistrate named M.A. Phillips; the Magistrate signed and stamped the Stipulation but it was not notarized or acknowledged. As a result of the obligations set forth in the Stipulation, the plaintiff was to (and did) receive $100,000 in cash and in addition, the defendant agreed to assume approximately $30,000 of his debt.
At the same time, defendant's cousin presented the plaintiff with a Summons and Complaint for a divorce action. Plaintiff granted and signed all necessary documents for the defendant to obtain a Get.
• February 1, 2003—The plaintiff, Harry Sabowitz signed an “Affidavit of Defendant in Action for Divorce” as the defendant in the action for divorce.
• June 20, 2003—The Court issued a final Judgment on default; the plaintiff failed to appear.
• July 1, 2003—A Judgment of Divorce was entered.
• 2007—The plaintiff voluntarily surrendered himself into the custody of the Federal Bureau of Prisons. He pled guilty to one count of Interstate Transport of Fraudulent Securities and was sentenced to 24 months in prison.
• March 2, 2008—The plaintiff alleges that he first became aware of the defendant's alleged fraud when the Stipulation was first read to him by a friend; plaintiff also alleges that he is functionally illiterate and was deceived as to the contents of the Stipulation.
• November 25, 2009—The plaintiff is released from federal custody.
• September 14, 2010—The plaintiff filed a Summons and Complaint alleging four causes of action: fraud, duress, overreaching and unconscionability with respect to the Stipulation and Judgment. Plaintiff seeks to rescind and vacate the Stipulation and Judgment.
• December 2010—The defendant filed an Answer to the plaintiff's Complaint. A counterclaim is interposed requesting an injunction from the Court that directs the transfer of plaintiff's 50% interest in Leyte Taxi, Inc. to the parties' daughters as is agreed upon in the Stipulation. Defendant also interposed counterclaims including the affirmative defense of the statute of limitations, waiver, equitable estoppel, ratification and acquiescence.
• June 16, 2011—The plaintiff moved to vacate the Judgment and Stipulation by Order to Show Cause.
THE STIPULATION
The subject Stipulation is dated January 30, 2003. The pertinent provisions of the document are as follows:
—WHEREAS, each party has been fully advised with respect to the legal, financial, and practical effect of this agreement by their respective counsel....
3. Responsibility for Debts. The parties agree to divide up the marital debt as follows:
1. Twenty Two Thousand ($22,000.00) Dollars to David Kahn by the Husband is hereby cancelled.
2. Nine Thousand Five Hundred ($9,500.00) Dollars debt owed to Manfred Kahn is hereby cancelled....
5. Equitable Distribution .... The parties have divided to their mutual satisfaction, all of the property now owned by the parties, or either of them. Except as otherwise provided herein, (i) Harry Sabowitz will retain his IRA and Life Insurance Policy with the provision that the children become the beneficiaries of the policy (ii) Harry Sabowitz waives any and all right, title and interest in the following properties: (a) 6102 16th Avenue, Brooklyn ...; (b) 160 Pearl Street, New York, New York ...; (c) 991 East 5th Street, Brooklyn ...; (d) 995 East 5th Street, Brooklyn ...; (e) 2362 Brisco Road, Swan Lake, New York ....(iii) Leyte Taxi Inc.'s fifty (50%) percent is owned by Harry Sabowitz which he agrees to change to Dafna Sabowitz Dalia Shabatian, Harry Sabowitz is to indemnified (sic) against any and all loans owed by this corporation.... The parties, by execution of this Stipulation, have provided for the equitable distribution of all property belonging to the parties, whether such property qualifies as “separate property” or as “marital property” within the meaning of said terms under the provisions of Part B of Section 236 of the Domestic Relations Law of the State of New York. Each party waives and renounces all claims or rights to any equitable distribution of any separate property or marital property owned by the other, and any distributive award, and all claims of rights for maintenance, support, counsel fees, suit money, or any similar claim, except as expressly provided herein....In connection with this Stipulation, the Wife has had the benefit of the advice of Goldberg & Cohn, LLP, independent counsel of her own selection. The husband has had the advice of Martin Gershon, Esq. Independent (sic) counsel of his own selection. Both parties acknowledge that this Stipulation has been achieved after competent legal representation and honest negotiations. Each party acknowledges that all of the matters embodied in this Stipulation, including all terms, covenants, conditions, waivers, releases and other provisions contained herein, are fully understood by him or her; that he or she is entering into this Stipulation freely, voluntarily and after due consideration of the consequences of doing so; and that this Stipulation is valid and binding upon him or her....Both parties acknowledge that this is a fair Agreement and is not the result of any fraud, duress or undue influence exercised by either party upon the other, or by any other person or persons upon either party.... This Stipulation is entire and complete and embodies all understandings and agreements between the parties....No representation, warranty, agreement or undertaking of any kind or nature has been made to either party to induce the making of this Stipulation, except as is expressly set forth herein. The parties acknowledge that there is no other agreement, oral or written, existing between them. No oral statement or prior written matter outside of this Stipulation shall have any force or effect....
AFFIDAVIT OF DEFENDANT IN ACTION FOR DIVORCE
On February 1, 2003, the plaintiff signed an Affidavit of Defendant in Action for Divorce (hereinafter Affidavit of Defendant). The Affidavit of Defendant was ostensibly notarized by M.A. Phillips, Justice of the Peace, in Manchester, Jamaica. In pertinent part, the affidavit states as follows:
I appear in this action. However, I do not intend to respond to the summons or answer the complaint and I waive the twenty (20) or thirty (30) day period provided by law to answer the summons. I waive the forty (40) day waiting period to place this matter on the calendar....I waive the service of all further papers in this action except for the Judgment of Divorce....I am not seeking equitable distribution other than what was already agreed to in a written stipulation. I understand that I may be prevented from further asserting my right to equitable distribution....I fully understand that the plaintiff's attorneys ... cannot represent both parties to this action and that such representation would be highly improper. I have elected to decline to be represented by an attorney, and instead have chosen to represent myself. I am fully aware of the potential implications and consequences of my decision to represent myself....
WHEREFORE, I respectfully request that judgment be entered for the relief sought and such other relief as the Court deems fitting and proper....
PLAINTIFF'S CONTENTIONS
In support of his application to have the Stipulation and Judgment voided, the plaintiff cites the requirement in the statutory provision DRL § 236(B)(3) which directs that “[a]n agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded”.
In the instant matter, it is undisputed that the defendant, who signed the Stipulation in New York, did not have her signature to the document notarized or acknowledged. Further, there are no dates to the signatures of either party or proper acknowledgments.
Plaintiff accuses the defendant of submitting the Stipulation to the Court knowing it was not properly executed (like a deed). In fact, M.A. Phillips, the Jamaican Justice of the Peace, while in Jamaica, signed and “acknowledged” or “notarized” the defendant's signature although it was effected in Brooklyn. This very misrepresentation by the defendant, according to the plaintiff, demonstrates that the Stipulation has a fraudulent notarization and should be voided since the defendant was never in front of M.A. Phillips. (If the Stipulation and Judgment is voided based on improper execution, then the other issues raised by the plaintiff—fraud, overreaching, unconscionability and duress—are rendered moot.) And, plaintiff notes, his signature to the Stipulation was not property acknowledged either. Although his signature is at the end page of the Stipulation, the acknowledgment of his signature on the following page is not dated nor was it properly notarized/acknowledged. Both acknowledgments are improper and fail to comply with the DRL.
Further, the defendant's request of this Court that she re-execute the Stipulation before a Notary Public and have the Stipulation deemed valid nunc pro tunc is a true admission that the Stipulation should be voided and found to be unenforceable. (Plaintiff notes that initially the defendant posited that the acknowledgments were appropriate and then changed her position to aver that even if the signatures weren't properly acknowledged, such failure was de minimus and the ministerial act of a statutorily acceptable signing can now be accomplished.) Even if the Court were inclined to honor such request, the plaintiff argues that a matrimonial agreement cannot be re-executed before a notary public after the fact, let alone 8 1/12 years later.
Plaintiff cites New York's Real Property Law §§ 301, 301(a) for the proposition that the Stipulation signatures are also in improper form for an international acknowledgment. According to the applicable sections, when a deed is signed outside of the United States, the document must be signed before a person permitted by the statute and must be accompanied by a certificate to the effect that it conforms with such laws by such person as permitted under the statute. In the instant circumstances, the defendant has not provided a certificate for the plaintiff's signature.
Defendant also, according to the plaintiff, and as noted in the Stipulation, represented that the plaintiff had legal counsel at the time the Stipulation was negotiated and signed when in fact, he did not. If plaintiff had been represented by counsel, then the defendant would have served divorce papers on said counsel but it is undisputed that all papers relating to the Stipulation and divorce were served directly on the plaintiff.
Plaintiff also alleges that he was never served with the Judgment, obtained on default, pursuant to CPLR § 5015 and as required by the Court. Even the Affidavit of Defendant contained admitted service of the Summons and Verified Complaint for divorce (on a date not specified and left blank), and waived service of all further papers “in this action except for the Judgment of Divorce”. Clearly, since the plaintiff was never served with a Judgment, no proof of service was ever filed. Defendant's response that the service of the Judgment and the filing of proof of service is merely a ministerial act is illegitimate.
Plaintiff only realized the defendant's fraud and deceptions with respect to the improperly executed Stipulation and the failure to serve the Judgment in May and June of 2011 when these matters came before this Court. Plaintiff claims that due to his illiteracy and the deception practiced by the defendant, he could not nor should he have reasonably been expected to realize the fraudulent notarization on the Stipulation and his failure to be served with the Judgment. Prior to May of 2011, the plaintiff was unaware that any divorce action had been commenced or resolved. Defendant's fraud and the existence of the Judgment were only discovered in the past year.
In further support of his contentions, the plaintiff asserts that he is a functional illiterate. He was unable to read the Stipulation when it was presented to him by the defendant's cousin while he was in Jamaica, and no one explained or read the Stipulation to him; if he had known the contents of the Stipulation and that it concerned the division of marital assets, he would never have signed it. It was plaintiff's assumption that he was to receive $100,000 for the giving of a Get. Plaintiff believed this because, he maintains, this is what he was told by Rabbi Samowitz who accompanied the defendant's cousin to Jamaica for the express purpose of procuring the Get.
According to the plaintiff, defendant's acts of fraud are numerous. Plaintiff alleges that the defendant fraudulently served the divorce papers, fraudulently procured the plaintiff's signature on various related documents, fraudulently notarized the Stipulation, made fraudulent representations to the Court with respect to the divorce documents, fraudulently procured a default divorce judgment and fraudulently caused the plaintiff to remain in Jamaica.
Plaintiff's request to vacate the Stipulation and Judgment almost nine years after they were signed and submitted to the Court is based on a reasonable excuse and meritorious defense. Plaintiff claims, as noted hereinabove, to be a functional illiterate. In 2003, the plaintiff was also ill with kidney failure and financially broke without money for food or medicine. He was ultimately incarcerated upon his return to the United States and never represented by an attorney. Accordingly, the plaintiff was unable to hire a legal representative who would have read the divorce documents—delivered by the defendant's cousin—prior to their presentation to him in Jamaica. Plaintiff was still unable to hire counsel as late as 2008 when he first became aware of the provisions of the Stipulation due to his incarceration. Only when he was released from prison at the end of 2009 was he able to borrow money in order to retain an attorney.
Plaintiff also questions the propriety of the Affidavit of Defendant. Curiously, it is signed by the plaintiff himself on February 1, 2003, a date subsequent to the Stipulation. Plaintiff also complains that the cause of action in this divorce is the abandonment of the defendant by the plaintiff but the Affidavit of Defendant referenced hereinabove, states that the plaintiff was abandoned by the defendant.
Plaintiff bolsters his claim of illiteracy by submitting an affidavit of a tutor attesting to the fact that his efforts to teach the plaintiff how to read were unsuccessful. Plaintiff also refutes the affidavits submitted by his two daughters which attest to the fact that their father is able to read; plaintiff labels these representations as lies. He also informs this Court that he does not have a good relationship with his children, that they are influenced by their mother and that they have a financial interest in claiming that he can read.
DEFENDANT'S CONTENTIONS
Defendant represents that the plaintiff was in Jamaica in order to elude federal law enforcement officials and not for a vacation as claimed by the plaintiff. Defendant refutes plaintiff's representation that he traveled to Jamaica in order to exploit existing employment opportunities. Defendant maintains that the plaintiff had significant debt obligations to organized crime figures and on personal credit cards. At the time of his departure for Jamaica, the plaintiff was in the midst of several construction projects in Brooklyn. Consequently, the plaintiff's claim that the defendant forced him to go to and remain in Jamaica is blatantly false. Accordingly, the defendant needed to obtain a divorce while she was in Brooklyn and the plaintiff was in Jamaica.
Defendant questions the plaintiff's allegation that he is a functional illiterate. She points out that it is undisputed that the plaintiff obtained a driver's license, a commercial driver's license, and a “hack” license from the Taxi and Limousine Commission, and ran a sophisticated criminal enterprise involving falsification of documents. The plaintiff's “tutor” who attested to his illiteracy is in fact a fellow inmate who was incarcerated after pleading guilty to mail fraud; accordingly, his credibility must be questioned. Affidavits from both of the plaintiff's daughters attest to his ability to read English (see discussion below).
Even if this Court were to accept the plaintiff's claim that he is not a proficient reader, no reasonable explanation is proffered explaining why he never had anyone read the Stipulation to him for many years following the execution of the agreement. Defendant maintains that his failure to do so constitutes gross negligence and a waiver of any potential claims or rights.
It is also curious that the plaintiff, in 2003 would have relied on the defendant's alleged representations that the documents he was signing were only concerned with a Get and a payoff for the Get of $100,000. Defendant questions why the plaintiff would put his faith and trust in the defendant, relying on the defendant's alleged representation that the documents did not relate to the marital estate when they were in an adversarial relationship—having been estranged since 1999—and when the plaintiff perceived the defendant to be manipulative and vicious. Plaintiff inexplicably proceeded to sign the Stipulation, the Affidavit of Defendant, and accept receipt of the Summons and Complaint bearing a caption representing some type of litigation and yet still be unaware that the parties were involved in a civil proceeding.
Plaintiff's action must also be dismissed based on CPLR § 3211(a)(1)—permitting a party to move for a judgment dismissing an action based on a defense founded upon documentary evidence. Here, the plaintiff clearly signed the Stipulation on January 30, 2003. Plaintiff became aware of defendant's alleged fraud no later than March 2, 2008, and surrendered himself to United States custody on March 3, 2008 and was released from prison on November 25, 2009, filing a Complaint on September 14, 2010.
Furthermore, pursuant to CPLR § 213, all four of the plaintiff's causes of action are untimely:
1. Fraud has a six year statute of limitations from the date the cause of action accrued or two years from the date the fraudulent acts could have or should have been discovered. Defendant's alleged fraudulent acts occurred no later than January 30, 2003. Yet, plaintiff filed his Complaint on September 14, 2010, almost eight years later; no tolling provision for incarceration is applicable and plaintiff has not sufficiently pled or delineated any justifiable reliance; plaintiff failed to read the Stipulation or ask that it be read to him. He was not reasonably diligent with respect to discovering the fraud. And, if the defendant surrendered to the Federal authorities in early 2008, then the earlier of the limitations periods (2 years) has still been violated since his Complaint was filed more than two years later, on September 14, 2010.
Defendant accuses the plaintiff of having failed to plead fraud with any particularity as required by statute. Specifically, plaintiff failed to demonstrate the required “justifiable reliance”. Plaintiff's reliance on the defendant's alleged “mis” representations cannot constitute justifiable reliance since the plaintiff did not read the agreement (or have someone else read it to him) which he should have.
All allegations relating to fraud in the inducement are time-barred. The plaintiff's claim that the defendant's failure to serve the Notice of Entry of the Judgment is fraudulent is time-barred. If the defendant's attorney failed to serve the Judgment, it cannot become a cause of action for fraud since this alleged fraud occurred in 2003 when the Judgment was entered and the Notice of Entry was not served on the plaintiff. Therefore, the six year statute of limitations started running in June of 2003. Plaintiff's argument that the fraud was only discovered in 2011 when his attorney reviewed the file is disingenuous since the Judgment, at that point, had been a matter of public record for over eight years. Additionally, the service of the Judgment with Notice of Entry was left to the attorneys to effectuate and therefore, the defendant cannot have committed fraud since she had no knowledge of the service, or lack thereof, on the plaintiff.
2, 3, and 4. Duress, overreaching and unconscionability each have statute of limitation period of six years (where no statute of limitations is set, the limitations period is six years). Again, the offending acts underlying these claims occurred on January 30, 2003 and plaintiff did not commence an action until September of 2010.
Defendant also seeks to dismiss plaintiff's action pursuant to the provisions of CPLR § 3212—no material issues of fact exist in this case.
Defendant maintains that the Jamaican Magistrate made a mistake when he placed his signature in both signature spaces for both parties. Compounding the error, the defendant's attorneys did not realize the mistake and submitted the documents to the Court as they were. Defendant maintains that such error was ministerial. In any event, the plaintiff does not contest the fact that his signature is on the Stipulation and was taken before the Jamaican Magistrate; plaintiff admits that he did sign the agreement. And, while the plaintiff repeatedly condemns the defendant for not having her signature properly acknowledged, the irony of that argument is that it is the defendant who is trying to enforce the terms of the Stipulation against the plaintiff. Nor does the plaintiff deny that he signed the Affidavit of Defendant in which he states that, in essence, he received the Summons and Complaint and would not contest the divorce.
The various and sundry actions and lies committed by the plaintiff suggest that he has waived, acquiesced and ratified the Stipulation and Judgment. The plaintiff was in the possession of the Stipulation for many years prior to complaining that it was improper. And, when he states that a “friend” finally read the agreement to him in 2008 while he was in prison, the defendant fails to identify said individual.
In general, the plaintiff's claims that the defendant's harassment and duress continued throughout the years from 2003 to the present day (defendant allegedly told the plaintiff that if he didn't cooperate with the divorce she would make sure that their children would reject him and have no further contact with him) are conclusory, “flimsy”, and lack detail. No legally satisfactory evidence has been provided by the plaintiff to prove that the defendant pressured the plaintiff.
Finally, the defendant urges this Court to find that the plaintiff is guilty of laches and to employ its powers of equity in considering the circumstances of the parties, the plaintiff's conduct and the fact that he did sign the Stipulation before a Magistrate in Jamaica.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
On a motion for summary judgment the movant must make a prima facie showing that there are no material issues of fact. See, Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851;Andre v. Pomeroy, 35 N.Y.2d 361. Once the moving party has succeeded in such a demonstration, the burden of proof shifts to the party opposing the motion to produce evidentiary proof in admissible form to establish that legally sufficient issues of fact exist which require a trial. See, Alvarez v. Prospect Hosp., 68 N.Y.2d 320. “Mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient.” Zuckerman v. City of New York, 49 N.Y.2d 557, 562.
Keeping in mind that stipulations of settlement are, as a matter of public policy, favored by the courts and “not lightly cast aside”, Hallock v. State, 64 N.Y.2d 224, 230;Brennan v. Brennan, 305 A.D.2d 524, 524–525 (“Judicial review of separation agreements is to be exercised sparingly, with a goal of encouraging parties to settle their differences on their own ....”), this Court finds that the defective execution of the Stipulation does not render it void ab initio under the circumstances of this case. See also, DeGregorio v. Bender, 4 AD3d 385 (a stipulation of settlement entered into in open court is judicially favored and will not be set aside absent a showing of cause sufficient to invalidate a contract, such as fraud, mistake, accident or collusion). If an agreement is fair on its face and its terms were arrived at fairly, in the absence of fraud, duress, overreaching, or undue influence, that agreement will not be set aside. See, Christian v. Christian, 42 N.Y.2d 63;Star v. Star, 260 A.D.2d 363.Furthermore, this Court is constrained to find that there are no material issues of fact with respect to the validity of the Stipulation which was signed by both parties. It is true that DRL § 236(B)(3) requires that an “agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded”. The Court of Appeals in the matrimonial case of Matisoff v. Dobi, 90 N.Y.2d 127, concluded that a separation agreement which had been signed but not acknowledged was not specifically enforceable; the legislature, when enacting DRL § 236, the Court held, had clearly required an acknowledgment as a prerequisite for validity with no exception—an unacknowledged agreement is invalid and unenforceable in a matrimonial action.
However, the Court suggested that equitable factors, such as who requested the agreement, the parties' conduct pursuant to it, and the admission of signature, would be considered in a judicial resolution of the marital issues....While an unacknowledged agreement may not be directly enforceable, it would seem that where the parties made an agreement, lived and abided by it, and anticipated that the agreement would be controlling, the terms of the agreement should, as a matter of equity, be given great weight in a judicial resolution of the matrimonial issues. Indeed, the courts should be especially careful not to permit either spouse to reap an unexpected, or undeserved windfall due to a legal technicality.
Scheinkman, Practice Commentaries, McKinney's Cons Laws of NY, Book 14, Domestic Relations Law C236B:12.
The First Department, Appellate Division held, in a matrimonial matter where a party sought to set aside a separation agreement based on duress and overreaching and where there was a failure to properly execute the document pursuant to DRL § 170(6), that because the movant “accepted all the benefits due him under the agreement, he is estopped from challenging its validity” even in the face of that improper execution. Mahon v. Moorman, 234 A.D.2d 1–2. See also, Beutel v. Beutel, 55 N.Y.2d 957;Weissman v. Weissman, 42 AD3d 448, 450 (the plaintiff was found to have ratified the terms of a stipulation of settlement by accepting the benefits thereunder for more than a year); Star, supra (the plaintiff was found to have ratified a stipulation of settlement by accepting its benefits for a period of five years in spite of defendant's claim of fraud); Kaplansky v. Kaplansky, 212 A.D.2d 667, 668 (“Moreover, there is evidence that the defendant complied with the terms of the agreement and accepted its benefits. Accordingly, even if due execution had not been proven, we would have found that he ratified the agreement ....”) (emphasis added) (citations omitted).
In the instant set of circumstances, it cannot be denied that the plaintiff effectively ratified the agreement. There is no dispute that over eight years ago the plaintiff accepted $100,000 and the satisfaction of various debts, assumed by the defendant in accordance with the Stipulation.
A party seeking to void or vacate an agreement for duress or overreaching must take immediate and prompt action to object or seek redress for an improperly procured agreement or be held to have ratified said agreement. See, Sheindlin v. Sheindlin, 88 A.D.2d 930. One of plaintiff's excuses for failing to challenge the Stipulation earlier is that he was incarcerated. The Court rejects this explanation as incarceration would not have prevented him from retaining a lawyer and filing an application in this Court.
Nor is there any claim or evidence offered to support the contention that any assets were hidden from the plaintiff or that the defendant misled the plaintiff as to the value of any of the marital assets; plaintiff was well aware of the property and other holdings acquired during the marriage. And, this Court rejects in its entirety the plaintiff's contentions that the defendant tricked him into signing the Stipulation and Affidavit of Defendant and threatened and coerced him into compliance (see discussion hereinbelow).
Further, although not dispositive of the issues presented for resolution, the Court notes that there is no indication that the plaintiff, during his eight year absence, did anything to help run, administrate, pay for or share in the expenses related to the marital businesses or properties. This again, is further corroboration of the fact that the plaintiff had ratified the Stipulation and acted in a manner consistent with the defendant's ownership of the properties and businesses in question pursuant to the terms of that Stipulation. “Acquiescing in the agreement for an extended period of time will constitute ratification.” Dwyer v.. Dwyer, 190 Misc.2d 319, 324; see also, Gloor v. Gloor, 190 A.D.2d 1007.
The plaintiff's claims of inaction due to illiteracy are completely unbelievable and he submits no legally sufficient or convincing proofs to establish his inability to read the 14 page agreement or, at the very least, to explain why he did not have someone read it to him. It is impossible for this Court to find that there exists even a question of fact surrounding the plaintiff's mistaking such a long agreement (including the Affidavit of Defendant and separate documents for perfecting the Get) with a deal to only provide the defendant with a Get for $100,000.
As noted in the defendant's submissions, the plaintiff obtained licenses to drive a cab and operate commercial vehicles. In addition, he engaged in a criminal enterprise over a period of years, consisting of defrauding consumers by falsifying documents and turning back mileage readings on cars. Plaintiff also conducted a real estate development business wherein he purchased and developed properties in Brooklyn. Accordingly, the plaintiff's activities over the years—legal and illegal—strongly implicate him as someone who, if not proficient in English, possesses the wherewithal to familiarize himself with any papers and documents that he is inclined to sign.
Plaintiff's Causes of Action for Fraud, Duress, Overreaching and Unconscionability
There is no merit to plaintiff's contention that the defendant committed fraud, or engaged in duress, overreaching, and/or foisted an agreement on the plaintiff that was unconscionable.
In order to sustain a cause of action for fraud, the essential elements to be proven are (1) a misrepresentation or a material omission of fact; (2) which was false and known to be false by a party; (3) made for the purpose of inducing the other party to rely upon it; (4)with justifiable reliance of the other party on the misrepresentation or material omission; and (5) injury or damages. See, Introna v. Huntington Learning Centers, Inc., 78 AD3d 896;Orlando v. Kukielka, 40 AD3d 829, 831;Cheng v. Young, 25 Misc.3d 1227(A), aff'd., 60 AD3d 989. Plaintiff has failed to make a prima facie case for any, let alone all of the elements of fraud.Plaintiff's charge that the defendant took advantage of his illiteracy and misrepresented the contents of the Stipulation is incredible and not supported by any of his submissions. Again, the plaintiff accepted the benefits of, but willingly chose not to read the details of the Stipulation himself, or have someone read it to him for almost eight years after it was signed. There is no submitted evidence in this application to permit this Court to conclude that the defendant did in fact make any type of fraudulent misrepresentation to the plaintiff by satisfying the five elements of such cause of action or creating questions of fact regarding them.
With respect to a claim for fraud, it is also a requirement that the circumstances of the fraud be “stated in detail” and include “specific dates and items”. See, Moore v. Liberty Power Corp., LLC, 72 AD3d 660, 661. Here again, plaintiff has not identified any credible material misrepresentation, nor has he alleged with any specificity any false statements made by the defendant that effectively induced reliance. The parties were in an adversarial relationship (the plaintiff, at best, allegedly thought that he was giving the defendant a Get) and there would have been no believable reason for plaintiff to think he could rely on any representation made by the defendant. Instead, the plaintiff has asserted only self-servingly that the defendant's failure to properly execute the Stipulation and abide by the statutory formalities of DRL § 236, and her inducement to get him to sign an improperly executed agreement in the first place was fraudulent.
The Court of Appeals has held that in order to void a contract for reasons of duress, it must be established that the “party making the claim was forced to agree to it by means of a wrongful threat precluding the exercise of his free will”. Austin Instrument v. Loral Corp., 29 N.Y.2d 124, 130;Sontag v. Sontag, 114 A.D.2d 892. And, the threats need to have deprived the targeted party of the ability to act in furtherance of his or her own interests. See, Mahon, supra.
The Court of Appeals has ruled that in a matrimonial action where the wife was admittedly under emotional strain when an agreement of separation was executed, she could not justifiably accuse her husband of duress by taking advantage of her weakened mental state in order to procure the agreement. This is true even though the husband incessantly phoned the wife and pressured her to sign the stipulation. See, Beutel, supra; Dwyer, supra at 321(summary judgment granted to defendant dismissing the plaintiff's action for rescission of a separation agreement wherein the plaintiff claimed to have been “broke,—destitute and a psychological mess” at the time of execution of the separation agreement).
In DeGuire v. DeGuire, 125 A.D.2d 360, the Second Department held that even if the husband was guilty of misconduct at the time the parties' separation agreement was signed, the wife is precluded from rescinding elements of the agreement since she continued to receive benefits proffered by the agreement for a period of more than six years without complaint; hence, she was deemed to have ratified the agreement. See also, Melchiorre v. Melchiorre, 142 A.D.2d 558, 560 (“Having acquiesced in its benefits for so long, the wife waived her right to belatedly challenge the agreement....”).
Even where the party seeking to vacate a nuptial agreement was not represented by independent counsel at the time of execution, the Second Department has found that an acceptance of the benefits of the agreement for over three years without objecting constituted a ratification of that agreement. Lack of representation does not automatically suggest that there existed overreaching, unconscionability or required “automatic nullification”. See, Wilson v. Neppell III, 253 A.D.2d 493, 494;Ricca v. Ricca, 57 AD3d 868. In the instant case, there is no credible indication that the plaintiff was prevented from obtaining representation by the defendant at any time before or after receiving the matrimonial documents in Jamaica. The Court in Wilson also opined that an agreement which is basically fair shall be enforced unless there is adequate “proof of fraud, duress, overreaching, or unconscionability”. Id. at 494; Christian, supra at 73; Ricca, supra; Korngold v. Korngold, 26 AD3d 358, 359. The plaintiff in the case before this Court has, again, failed in his application to provide the necessary and convincing proofs to demonstrate that he was a victim of fraud, duress, overreaching or unconscionability.
In Warren v. Rabinowitz, 228 A.D.2d 492, 493, the Second Department held that a stipulation of settlement will not be voided or rescinded “merely because it was improvident, not the most advantageous to the dissatisfied party, or because a party had a change of heart....”. See also, Gaton v. Gaton, 170 A.D.2d 576. Here, the plaintiff, eight years after the Stipulation was signed by both parties, seems to have had a “change of heart”. This Court cannot accommodate the plaintiff's rude awakening so many years after he decided to accept $100,000 from the defendant even though the marital assets may not have been evenly divided. Clearly, the plaintiff's acceptance of the $100,000 and the assumption by the defendant of his debt obligations suited the plaintiff at the time the Stipulation was executed in 2003. See, Markovitz v. Markovitz, 29 AD3d 460.
An agreement has been deemed to be unconscionable or manifestly unfair when it is one that no one “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”. Christian, supra at 71; Hume v. United States, 132 U.S. 406.
In Tartaglia v. Tartaglia, 260 A.D.2d 628, 629, the court considered the subject marital agreement unconscionable where “substantially all of the marital assets” were assigned to one party “while leaving the other with substantial economic obligations” and at risk for becoming “a public charge”. An unconscionable agreement is one that would be such as to “shock the conscience and confound the judgment of any [person] of common sense”. Mandel v. Liebman, 303 N.Y. 88, 94. This requirement, or anything comparable, is not directly applicable to the circumstances of the instant case. Plaintiff accepted a significant amount of money under the agreement and it was the defendant who assumed a significant amount of plaintiff's debt. This is not an inequitable situation borne of fraud, duress, or overreaching, even though the defendant and the children might ultimately reap a larger monetary benefit pursuant to the terms of the Stipulation.
In an agreement tainted by overreaching, there exists a lack of transparency or disclosure. See, Christian, supra. It is undisputed that the plaintiff was aware of all the existing marital assets. It has not been and cannot be alleged that the defendant failed to disclose any of said assets. And, the plaintiff's claim that he did not know that the Stipulation addressed anything more than the giving of the Get is incredible and not supported by the record before the Court.
In the instant case, the defendant succeeded in making a prima facie showing that the plaintiff was not entitled to vacate the Stipulation. The plaintiff has failed to raise any triable issues of fact with respect to claims of fraud, overreaching, duress or unconscionability; his allegations are completely unsupported by legally sufficient proofs—documentary or testimonial. The charges against the defendant are merely vague, self-serving and conclusory.
The statements contained in the affidavits submitted by the adult children of the parties directly and unequivocally negate the plaintiff's position with respect to the defendant. They clearly affirm that their estrangement from their father existed prior to the 2003 Stipulation and is not due to any improper or manipulative conduct or representations by the defendant. The parties' daughters allege that their alienation from their father was the result of his decision to abandon the family in New York, not attend their graduations or weddings for fear of being arrested and incarcerated, and not to have any meaningful contact with them. The parties' children also confirmed defendant's allegation that the plaintiff fled to Jamaica in order to evade the federal criminal charges noted hereinabove. In the daughters' affidavits, they represent that the plaintiff had promised them that he would convey all of his interests in a marital business—Leyte Taxi, Inc.—to them. (The Stipulation contains a provision directing that the plaintiff's interest in said company be conveyed to both of his children). The subject affidavits also state that the plaintiff, although not proficient and fluent, can read basic English and is capable of printing English. They recall seeing their father read newspapers and magazines.
Accordingly, this Court finds that the plaintiff accepted the benefits of the Stipulation for more than 8 years and by virtue of that fact (and the rejection of his claim of illiteracy and inability to read or get a third party to read the Stipulation), he is found to have ratified the Stipulation by his conduct. Further, the plaintiff failed to raise a triable issue of fact, as his self-serving, uncorroborated and conclusory allegations were insufficient as a matter of law to create any inference of fraud, duress, overreaching, or unconscionability. This is so especially in light of his ratification of the terms of the Stipulation.
Any remaining issues not addressed by this Court are either moot or dismissed. Specifically, the plaintiff's requested relief under CPLR § 5015(a) is rejected for reasons contained herein. Furthermore, the plaintiff has failed to offer a reasonable excuse and a meritorious defense to any default or delay in his application to vacate the judgment.
Defendant's motion for summary judgment is granted and as no questions of fact have been generated by the plaintiff, there is no need for a hearing on any of the issues herein; plaintiff's motion is denied and his Complaint is dismissed.
This decision shall constitute the Order of this Court.