Opinion
2012/0167
01-08-2016
W.T., Plaintiff, v. E.T., Defendant.
W.T., Plaintiff/Respondent Pro se Roberta G. Williams, Esq. Auburn, New York Attorney for Defendant/Petitioner
W.T., Plaintiff/Respondent Pro se Roberta G. Williams, Esq. Auburn, New York Attorney for Defendant/Petitioner Richard A. Dollinger, J.
"Speak now or forever hold your peace."
These words, uttered reverentially to an audience of admirers at the start of a marriage, may end up being even more important when recited, in substance if not in form, by a judge in an oral stipulation when a marriage ends.
In this matter, a couple endured a lengthy and somewhat contentious divorce. The husband held two jobs: he served as an elected official in a small town and he worked for a large national delivery company. In both jobs, he accumulated pension benefits during the term of the marriage.
In the financial disclosure made by the husband in 2012, he did not include a reference to his public employee pension benefits. Only during the negotiation of the settlement of the divorce action did the wife and her counsel learn that the husband had pension or retirement benefits from both his jobs. During the remaining course of negotiations, and over a period of more than six months, the wife's attorney - and her client - knew that the wife had a marital interest in both retirement plans.
After somewhat extended negotiations failed to result in a settlement, this court became involved and assisted the parties in the final negotiation of a settlement. The discussions occurred in the courthouse, and after deliberation by both sides, the parties were invited to recite the terms of a settlement stipulation. The wife's attorney - an experienced and extremely competent counsel - took the lead. She recited the following term: Both parties have minimal 401K plans less than $2,000.00 each, both actually closer to a thousand. And they waive rights to each other's 401K plans. It is understood that [the husband], has a pension, a true pension with his primary employer that he will provide whatever information is necessary for the wife to obtain through her own counsel, a qualified Domestic Relations order for a Majauskas share of that pension. Importantly, the wife's counsel simply mentioned the "primary pension" and made no reference to a second pension or any public employee pension. After the wife's counsel had concluded the stipulation, husband's counsel advanced several terms, but none involved any pension benefits. Thereafter, the court added the following language: Fourth, both parties by executing this agreement are executing a general release in favor of the other. Any other claims, any other actions that you may have against each other - somebody borrowed $5.00 for the parking meter this morning - that $5.00 debt goes away because it's either in this agreement or it doesn't exist. That constitutes a general release of the parties. In addition, the clause is going to have - this agreement has what's called a zipper clause, which means any prior agreements that you've worked out on the side, anything that you talked about - "Oh, by the way, you know, the driving mower in our garage - I'll give you that." Those agreement are all subsumed by this agreement. It's either in this agreement or it's not agreed to. All right? This is a zipper clause. We're wrapping everything up and closing up everything. After the wife's counsel concluded her rendition of the stipulation, the court asked both counsel: "Anything else, counsel?" Both attorneys responded: "no."
Gandell v. Gandell, 247 AD2d 913 (4th Dept. 1998) (the experience of counsel as a factor in considering efficacy of stipulation)
Majauskas v. Majauskas, 61 NY2d 481 (1984).
See Croman v. Wacholder, 2 AD3d 140 (1st Dept. 2003); Maharaj v Maharaj, 41 Misc 3d 1221 (A), at p. 9, n. 1 (Sup. Ct. Monroe Cty. 2013) (discussion of zipper clauses).
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When the entire stipulation was recited, the court, as part of its usual practice, oversaw the execution of an adoption of the oral stipulation by the husband and the wife. The court then questioned both the husband and wife regarding their understanding of the stipulation and its impact on their rights and obligations. The court's colloquy with the wife occurred as follows: Q: You understand that if I accept this document into the record of this proceeding today, the terms of the oral stipulation that we've described here today shall become binding on you immediately and furthermore, that this document and the agreement that we've entered here today shall be incorporated, but not merged into a judgment of divorce that will forever terminate your marriage to [HUSBAND]. A: Yes. Q: With that understanding, do you ask me to accept this document in this record today? A: Yes. With that confirmation, the oral stipulation was admitted into the record of the proceeding by the court and the court rendered findings that the agreement was fair and reasonable and finally resolved all the disputed issues in the divorce.
Several months later, the court signed the divorce decree which included the following language: That the Plaintiff has a pension through his primary employer and he shall provide information necessary for the Defendant to obtain, through her counsel, a QDRO for her Majauskas share of that pension. Eighteen months later, wife's counsel wrote the husband's attorney asking for information from the husband's counsel regarding his client's public employment pension, indicating that she intended to draft a qualified domestic relations order to secure the wife's marital share of the pension. The husband's attorney never responded in writing although counsel for both sides discussed the public employee pension and the wife's demand for her share of it. Eventually, wife's counsel brought this application seeking a court order to amend the judgment of divorce to include specific language to allow the wife "to file a QDRO for her marital share of the plaintiff's pension with the [public employer]."
In support of the application, the wife's counsel notes that the husband failed to disclose his public employee pension in his statement of net worth, sworn to March 15, 2012, more than a year before the stipulation. However, it is conceded by the wife's counsel that the public employment pension was discussed by both sides in a conference in July 2012. In further support of the wife's application, the wife's counsel's produced her own typewritten notes, with handwritten entries, described as "Topics to be Discussed at 4 Way" and the first typewritten item on the list reads "Division of [private employer] and [public employer] pensions" and then contains a handwritten word: "Majauksas." The wife's counsel also produced a page of handwritten notes from the conference which contain references "2 Pension + 401K" and include, in a bracket, the words "Town and [private employer]." After service of the motion, the husband filed a letter with the court, but failed to file any sworn response. The husband appeared at the return date of the motion, argued the wife was not entitled by the terms of the stipulation to the requested relief. He indicated that he would retain counsel if needed, but elected, at this stage, to proceed without counsel, reserving his right to seek assistance of counsel at a later time. The court informed both parties that it would consider the husband's written response, even though unsworn, and the wife's counsel did not object.
Initially, this court considers this application as a challenge to the oral stipulation because the court cannot modify or amend the judgment unless authorized by language in the stipulation or law. McCoy v. Feinman, 99 NY2d 295 (2002); Centro Empresarial Cempresa S.A. v. América Móvil, S.A.B. de C.V., 17 NY3d 269, 277 (2011)(courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include). The stipulation in this case is a contract subject to the principles of contract construction and interpretation and where the contract is clear and unambiguous on its face, the courts must determine the intent of the parties from within the four corners of the instrument. Meccico v Meccico, 76 NY2d 822, 823-824 (1990). Stipulations embody a compromise between competing parties that, if not ambiguous, must be construed according to their plain language, without relying on what a party may have been able to prove in litigation. Matter of Banos v Rhea, 25 NY3d at 276. Finally, whether a contract is ambiguous is a question of law, and courts may not resort to extrinsic evidence to aid in interpretation unless the document is ambiguous. Consedine v Portville Cent. School Dist., 12 NY3d 286, 293 (2009). In this matter, if the stipulation is unambiguous, then no extrinsic evidence - e.g., the attorney notes from the four-way conference - can be considered by the court, despite the protest from the wife and her counsel.
Hornbook law decrees that when considering a challenge to a postnuptial agreement, this court must review the agreement in its entirety and under the totality of the circumstances. Reiss v Reiss, 21 AD3d 1073, 1074 (2nd Dept. 2005). Stipulations of settlement in matrimonial matters - such as the oral stipulation entered into here - are favored by the courts and are not lightly set aside. Tuccillo v Tuccillo, 8 AD3d 659 (2nd Dept. 2004) This court's review must be exercised sparingly, with a goal of encouraging parties to settle their own differences. Brennan-Duffy v Duffy, 22 AD3d 699, 699-700 (2nd Dept. 2005]. This court also cannot, under the guise of contractual interpretation, rewrite the parties stipulation. Attea v Attea, 30 AD3d 971 (4th Dept. 2006), affd 7 NY3d 879 (2006). See also Matter of Nelson v Nelson, 48 AD3d 688 (2nd Dept. 2008) (a court may not write into a contract conditions the parties did not insert by adding or excising terms under the guise of construction and it may not construe the language in such a way as would distort the contract's apparent meaning); accord Matter of Banos v Rhea, 25 NY3d 266, 276 (2015)
In this case, the wife's attorney, in describing the husband's retirement accounts in the oral stipulation, described 401K accounts held by the parties. She said that both parties were waiving any claims to those accounts. She then said that the husband: [H]as a pension, a true pension with his primary employer that he will provide whatever information is necessary for the wife to obtain through her own counsel, a qualified Domestic Relations order for a Majauksas share of that pension. (Emphasis added.) The wife's counsel never mentioned a second pension, specifically, the husband's public employee pension. To that extent, the statement by the wife's counsel is unambiguous: by the express terms of the stipulation, only one pension - the husband's pension with his "primary employer" - would be subject to a QDRO. There is no dispute that the husband's counsel and the wife's counsel both understood that private employer - not the Town - was the husband's "primary employer." The husband disclosed his employment with the private employer on his statement of net worth and it was the subject of negotiation throughout the settlement process. There is no dispute that the husband and his counsel have cooperated with the wife and her counsel in providing the necessary documents to effectuate an order that has already, or will in the future, transfer the wife's marital share of the husband's private employer pension.
The lack of ambiguity in the wife's counsel's statement is re-enforced when examining the remainder of the agreement, which this court may consider in weighing the legal determination of whether the pension reference is "ambiguous." Matter of Banos v Rhea, 25 NY3d at 278 (all portions of a contract should be read together to determine its meaning). This court took pains to state to both parties - and their attorneys - that the stipulation constituted a general release, in which the parties waived any claims against each other. The court further explained the "zipper clause" with a colloquial description of its simplicity - "It's either in this agreement or it's not agreed to. All right?" The court then conducted a colloquy with the wife after signing the adoption of oral stipulation in which she affirmed the contents of the agreement. These affirmations dispel any notion that the parties were not fully cognizant of all aspects of the stipulation when it was entered. See Zurendo v. Zurendo, 85 AD3d 1283 (3rd Dept. 2011) (court colloquy, after recitation of the stipulation, attests to litigant's understanding and consent to its terms); Golfinpoulos v. Golfinpoulos, 144 AD2d 527 (2nd Dept. 1988) (representation by experienced counsel, extended negotiations, consultation with the court during negotiations, repeated acknowledgments, under oath, that the litigant understand the terms and was satisfied with them militate against vacating stipulation).
The circumstances in this case nearly parallel those in Hannigan v. Hannigan, 50 AD3d 957, 958 (2nd Dept. 2008). In that matter, the wife and her counsel failed to include a distribution of the husband's state pension and deferred compensation accounts in a stipulation in open court and later sought to vacate it. The trial court, faced with a spouse similarly-situated to the wife in this instance, unilaterally awarded the wife her marital shares. The appeals court, after finding that there was no ambiguity regarding the omission of the retirement accounts, reversed, noting that the wife's counsel was present at the time, had "primarily dictated" the terms of the stipulation, and declared that there was "nothing else" to place on the record. A further voir dire of the wife, overseen by the trial court, occurred thereafter. The Second Department held that the trial court "erred in unilaterally inserting the disputed provisions." Id. See also Cioffi-Petrakis v Petrakis, 72 AD3d 868 (2nd Dept. 2010). Nearly identical circumstances arise here. While this court understands - and to some extent, shares - the equitable impulses that guided the trial court in Hannigan v. Hannigan, the appeals court decision in that case dictates that no contrary result can be contemplated here. De Gaust v. De Gaust, 237 AD2d 862 (3d Dept. 1997)(strict reading of stipulation did not provide pre-retirement death benefits in a pension); Dyksytra v. Dykstra, 211 AD2d 745 (2nd Dept. 1995) (stipulation not re-opened simply because annuity was "inadvertently omitted"); Jill S. v. Marc S., 911 NYS2d 693 (Sup. Ct. Nassau Cty. 2010) (omission of pension benefit in oral stipulation resulted in forfeiture of interest by wife).
Even if this court considered the wife's counsel statement in the oral stipulation as ambiguous, no different result is warranted. The wife, in seeking to establish some ambiguity, contends that the husband's failure to include his public employee pension in his original statement of net worth somehow justifies interpreting the stipulation to cover both pension. However, the wife acknowledges that the parties engaged in extensive financial discovery prior to executing their agreement. The husband's failure or refusal to disclose his financial circumstances when the stipulation was read is not sufficient to void an agreement fair on its face, particularly when the wife was represented by counsel during the negotiations and execution. Kojovic v. Goldman, 35 AD3d 65, 70 (1st Dept. 2006). A divorce settlement agreement that has been negotiated between two independently counseled parties will not be set aside simply because entering into such an agreement may have been improvident on the part of one of the parties. Simkin v Blank, 19 NY3d 46, 54 (2012) (courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include). The wife was fully aware of this asset at the time of the stipulation and her husband's failure to disclose it in his statement of net worth more than a year before does not render the stipulation of settlement so patently unfair as to require its vacatur. Label v. Label, 70 AD3d 898 (2nd Dept 2010). Finally, the wife suggests that somehow a mistake - she contends it was a "mutual mistake" - requires vacatur of the stipulation. There is no evidence, in the stipulation, that both parties intended to divide the public employment pension and hence, no mutual mistake. Leacock v. Leacock, 132 AD3d 818 (2nd Dept. 2015).
In this instance, having "failed to speak now" to include the public pension when the stipulation was read, the wife must "hold her peace."
The motion to vacate or amend the stipulation is denied.
SUBMIT ORDER ON NOTICE. Dated: January 8, 2016 ________________________________ Richard A. Dollinger, A.S.C.J.