Adultery and Equitable Distribution Under New York Divorce Law

Under The New York Law, Adultery by A Spouse Will Not Effect Equitable Distribution

No, you don’t get the house if s/he cheated on you.

One of the most frequent questions I get asked is: “If my spouse cheated on me, do I get the house?” To put this question in proper legalese, the question is “if my spouse committed adultery will it effect equitable distribution.”  People believe that cheating spouse (husband or wife) should pay for this misdeed. Sadly, cheating during marriage is a not uncommon. Just as sadly, the New York Divorce Courts are not really interested in the whys of a failed marriage.

The New York Divorce Courts Do Not Punish A Cheating Spouse by Altering Equitable Distribution

The first thing to keep is mind is divorce law, as opposed to criminal law, is not concerned with punishment. The court is seeking to get an equitable resolution and not punishing someone for a moral lapse. While adultery is considered a moral lapse by many religions, it is not punished in divorce.

Under New York divorce law, the courts draw a line between determining the grounds or reason for the divorce, and the division of property.

While infidelity  is emotionally harmful to the marriage, and can have an adverse impact on the children, the courts will generally not consider it as a factor in division of the marital property. Cheating, by itself will not result in you “getting the house.” Equitable distribution is not effect by cheating. The New York Divorce Courts do not take any moral position about adultery. The court is only interested in a fair distribution of property.

While the cheated on spouse may feel it is fair to get more property, the courts did not agree. The New York Divorce Courts view marriage as an economic partnership. Each party puts an economic value into the marriage. It is this economic value that the court divides with equitable distribution. Emotional hurt, such as that caused by adultery is not considered as a factor by the courts.

But, Sometimes Adultery Can Effect Equitable Distribution by The Courts

I know it sounds like I’m contradicting myself.  On one hand I just explained how adultery does not effect equitable distribution. But, I am not. I said, adultery, by itself will not effect equitable distribution.

Now, lets look at other facts of adultery which could effect equitable distribution. For example, if the cheating spouse diverted marital funds or assets to the girlfriend /boyfriend. (We divorce lawyers use the term “paramour”). The typical examples are the purchase of an apartment or of jewelry. This conduct is called “dissipation of marital assets.” Under those condition, a judge can, under New York divorce law, recover the money that the cheating spouse spend on his/her boyfriend or girlfriend. But, remember, the court is not going to give the non-cheating spouse the house as punishment. So, infidelity  is not punished, but is a factor when showing that assets have been wrongfully taken from the marriage.

Same Sex Divorce – Same Sex Marriage? Trends In New York Divorce Law

The area of Same Sex marriages has become a real hot topic for litigation. Last week’s decision by the Honorable Laura Drager, Supreme Court, New York county has just turned the heat up of notch.

In the care of Beth R . v. Donna M., Justice Drager has extended the decisions from other New York courts regarding same sex marriages obtained in Ontario, Canada. In my some of my prior posts, I have referred to cases where a same sex couple gets married in Canada, and then applied for employment marital benefits in New York. The Fourth Department ruled that the denial of such benefits was discrimination.

Justice Drager has taken that reasoning one step further. If the marriage is valid for benefits, it is valid for application of New York divorce law.

Basically, Beth R. and Donna M. got married in Ontario, Canada. After a few years the marriage fell apart, and the couple parted. Beth R. commenced an action for divorce, and for visitation of the two children born via artificial insemination to Donna M.

Justice Drager found that the couple had a wedding, sent out birth announcements and generally held themselves out to the children and the world as the parents of the children. Therefore, Beth R. did have “parental” rights.

In order to arrive at this decision, Justice Drager had to apply several legal precedents. First, using the same rationale as the Fourth Department in Martinez v. Monroe Community College , she found that the marriage in Canada was afforded recognition. Since the marriage was legal, she reasoned, then the Domestic Relations governing divorces also applied.

It appears that Justice Drager is the first judge to apply the divorce law, including equitable distribution, to same sex marriages contracted outside of New York state.

However, Justice Drager went further and also applied the rules of equitable estoppel. In other posts, I have discussed the issue of equitable estoppel. Basically, if a man raises a child as his own, he cannot later contest paternity, even if he is not the biological father. The rationale is that the child, who believes this man is his father, would be damaged if he suddenly discovered the truth.

Here, Justice Drager applied the same principal of law to same sex marriages. The couple held themselves out as the parents of the children. “The parties taught J.R. to call Plaintiff ‘mom’ and Defendant as ‘mommy’. J.R. calls Plaintiff’s mother ‘nana’ and refers to Plaintiff’s siblings as ‘aunt’ and ‘uncle.’” The parties made joint decisions about pre-school and camp. They jointly made decisions about the pediatrician and the nanny. In all matter the couple acted as parents.

Using the principle of equitable estoppel, Justice Drager found that although, generally, a biological stranger has no interests in a child, in this case, Plaintiff made a showing of entitlement. Further, the court found that an additional factor was the marriage. “Moreover, although people enter into marriages for many reasons, creating familial bonds is one of the most significant reasons, particularly for the benefit of their children. The parties were clearly committed to becoming married, having traveled twice to Canada and having obtained two marriage licenses. It is noteworthy that the Defendant voluntarily entered into the marriage after her first child was born. Furthermore, as Plaintiff argues, the artificial insemination during the marriage resulting in the birth of [the second child] S.R. may require a finding that she is the legitimate child of both parents.”

The ramifications of this decision are murky. First, Justice Drager is a lower court judge. The Court of Appeals in Hernandez v. Robles 7 NY3rd 338 (2006) has clearly stated that New York cannot create a same sex marriage. Therefore, it is not clear what the appellate division, of the First Department will do here. The Court of Appeals will ultimately have to weigh in. Second, Justice Drager’s decision regarding the visitation is also problematic as it is novel. It is one thing to say that a child should not be confused as to who his father is, it is another to extend that reasoning to a same sex relationship.

Until the Court of Appeals or the legislature weighs in, Justice Drager’s decision merely makes a murky situation more confused. I still advise same sex couples to invest in a partnership agreement as a hedge against the current uncertainties of the law. Basing important life decisions on the confused state of the law could be a disaster.

Tax implications for Military Retired Pay

Before I start, let me state that I am not an accountant or tax attorney. Do not make any decisions regarding taxes based upon this posting. Discuss any tax plans with your accountant.

In a recent decision by the U.S. Tax court, Proctor v. IRS, 129 TC No. 12 the division of military retired pay was treated as alimony not a property distribution. This may also have implications for the New York Police or Fire Department VSF.

Under New York law, any benefit to be paid in the future, but earned during the marriage is subject to equitable distribution. Military retired pay is a perfect example. The right to the pay was earned by 20 years of service. The retiree gets paid after she/he retires and as long as he/she lives. Unlike a 401K, there is no account with money to be drawn upon. New York treats this as property, and is subject to property division.

But, apparently, the tax law treats military retired pay differently. In the Proctor decision, the court stated that under Internal Revenue Code section 71(b) payments to an ex-spouse of her share of military retired pay can be considered alimony, and therefore tax deductible to the retiree. The court stated that “in order to qualify as alimony, payments must meet the requirements of section 71(b)(1) (A) through (D)”.

(b) Alimony or separate maintenance payments defined. For purposes of this section–
(1) In general. The term “alimony or separate maintenance payment” means any payment in cash if–
(A) such payment is received by (or on behalf of) a spouse under a divorce or separation instrument,
(B) the divorce or separation instrument does not designate such payment as a payment which is not includible in gross income under this section and not allowable as a deduction under section 215 [26 USCS § 215],
(C) in the case of an individual legally separated from his spouse under a decree of divorce or of separate maintenance, the payee spouse and the payor spouse are not members of the same household at the time such payment is made, and
(D) there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment (in cash or property) as a substitute for such payments after the death of the payee spouse.

The court found that payment order met the requirements of the statute. This is true even if the divorce decree refers to the payments as part of the division of martial property. The court stated the divorce court’s classifications do not matter. “Labels attached to payments mandated by a decree of divorce or marriage settlement are not controlling.” The court went on to say that “while the designation need not mimic the statutory (B) will generally be met if there is no ‘clear, explicit and express direction” in the divorce decree stating that the payment is not to be treated as alimony.” Since the decree in question does not contain such language the requirements of section 71(b)(1)(B) were met.

The key point is that the divorce decree must either be silent as to the designation of the payments, or state that the payments will be treated as alimony. If you already have a decree, please don’t use this decision as license to take the deductions, talk to your accountant and follow his/her advice.

Same Sex Marriages – Martinez v. Monroe- Trends In New York Divorce Law

An appellate court just issued a decision recognizing as valid a same-sex marriage. (Martinez v. County of Monroe). But, there is a caveat: the marriage took place in Ontario, Canada, and not in New York.

The Court of Appeals of the State of New York stated in Hernandez v. Robles that same-sex marriages performed in New York are invalid. Basically, the court held that under the New York Constitution and statutes, there is no positive right for a same sex couple to get married under New York law. The court did not address whether a same-sex marriage obtained in another state would be valid in New York.

The Appellate Division for the 4th Department, which covers Western New York, issued a decision, published in the Law Journal for February 7, 2008, finding that a same sex marriage performed in Ontario, Canada, must be recognized as a valid marriage in New York.

The court observed that such marriages are legal in Ontario, Canada and there is no law in New York prohibiting the recognition of same-sex marriages. Therefore, the court concluded, “the plaintiff’s marriage to Golden, valid in the Province of Ontario, Canada, is entitled to recognition in New York in the absence of express legislation to the contrary.”

The court, finding that the marriage of legal, stated that the failure of the county of Monroe to recognize the marriage constituted discrimination under the New York Executive law.

The decision joins a growing number of decisions recognizing same-sex marriages when performed in a jurisdiction where they are legal.

One interesting note: the court found that failure by the county of Monroe to accord the Plaintiff with all the marital benefits was discrimination. Therefore, the court recognize a right to enforce recognition of the marriage.

Quite frankly, I don’t know where these cases will finally end up. Either the Court of Appeals is going to weigh in the topic or the legislature. If the Court of Appeals upholds this decision, then absent action by the legislature, same-sex marriages performed in other jurisdictions will be valid in New York.

My advise for any same-sex couple seeking to get married in another jurisdiction, hedge your bets and get some type of partnership agreement signed. In the event either the Court of Appeals or Legislature comes down against same-sex marriages, many separating couples could face significant property issues. It’s best to lock down the rules for dividing up the property before you buy that house. In that case, the name of the person on the deed is the owner and the person not on the deed has no property interests.

Child Custody Cases and the Cost

My father, God rest his soul, had a sign over his desk which read “In the law, nothing is certain but the expense.” He told every client that walked in that the sign was not a joke.

That sentiment is doubly true for custody cases. Let me state up front: custody cases are expensive and there is absolutely no guarantee of success. In fact, I’m going to be adding that language to my retainers because no matter how many times and different ways I say it, someone will hear what they want to hear.

Let’s talk expense. The first thing a New York divorce or family court judge does when she hears the words “custody battle” is to appoint a law guardian. The law guardian is an attorney hired by the court to represent the interests of the child in the battle. Guess who pays for the LG? Not the court, the parties. The court could divide it 50/50, 60/40, or 100 percent to one party. It is based upon the financial resources of the parties, and the discretion of the court. I never predict how that will turn out. But, generally speaking the person making the most money will pay the most money.

In the average custody case, the LG can end up billing at least $15,000 and many times will bill more than that.

Next, the court will appoint a forensic psychologist to interview the parties, the child, and whoever is living with the parties. The average price tag for the report is $10,000. If the psychologist needs to testify at trial, expect another $7,000 to be added to the bill.

Before you even pay your lawyer, you can be out of pocket $25,000.

You must also pay your lawyer. I was involved in a particularly nasty custody battle that lasted three years, had numerous courts appearances, several appeals and ended in a three week trial. The legal cost to my client was in excess of $120,000.

So, what do you get for all the money you shell out? This is not a game, the person with the most money is not guaranteed to win. There are many factors that must be weighed and considered by the court. Ultimately, the decision is in the discretion of the court. Any lawyer who claims to be able to predict the result of a custody battle is a fool or liar.

And as tough as a custody battle is, motion to change custody is even tougher. The courts require that there be a strong showing that the custodial parent is unfit, and it is in the best interests of the child to change custody.

In future posts, I addresses some the factors that the courts consider. But, be advised, custody is expense, emotionally draining, and unpredictable. Before you walk this path, consider your options very carefully. Think it through, discuss it with your family and lawyer. Then chose wisely. In the end, it is your decision whether to take this path.

Divorce and Equitable Distribution Where There Are Hidden Assets, Part II

One of the biggest questions in New York divorce actions involves hiding assets. Many times one spouse controls all the money issues and the other spouse is utterly ignorant of the finances. Other times, property “mysteriously” vanishes without a trace. The challenge for the innocent spouse is how to get his/her fair share.

It is very important to remember that New York uses equitable distribution to divide assets, not title. Under New York divorce law, the courts are not concerned with whose name is in the deed to a piece of property or even on a bank account. The courts will look to a true owner.

This is critical when property has been transfered in order to cheat a spouse in a divorce. For example, if the husband owns a house in his own name, but transfers it to his brother around the time or just before the divorce, the court will reach back and provide the wife her share. The court can also adjust the scale and then award the innocent spouse more than 50 percent. In Niland v. Niland, 291 A.D.2d 876, court did just that. Finding a fraudulent transfer of property, the court awarded the wife 60 percent of the asset. Remember, equitable distribution is not “equal.” Therefore, the court can adjust the scales in the interest of fairness.

New York Divorce Law Pre-Nuptial Basics, Part II

This post will bring together a number of concepts visited in other posts, particularly the ones on maintenance and equitable distribution. New York divorce law and the law of property distribution can be a little hairy and not all the pieces of the Domestic Relations law play well with each other. It really is important to try and understand how the pieces of New York divorce and family law work or do not work together. This area on pre-nuptial agreements is a perfect example.

In the equitable distribution posts I have discussed the issue of separate property versus martial property. The purpose of the pre-nup is to ensure that the lines between the two properties do no cross.

As a general rule, property acquired before marriage is separate property and property acquired afterwards is marital property. But, this simple rule rarely remains simple.

For example, a house is acquired before marriage, and the couple lives there for ten years. During the course of the marriage, the house increases in value from $125,000 to $500,000. The increased value could be considered marital property. Or, wife has a stock account before marriage in the amount of $100,000. During the marriage she uses the money to buy a house, and the couple lives there for the next 20 years. An argument can be made that the entire house is marital. Or, wife gets a personal injury settlement, which is separate property. She puts the money into a joint account with the husband. He claims that since she “co-mingled” the money, he is entitled to half of the personal injury settlement. Finally, husband buys a house before the marriage, ten years into the marriage, he sells the house and uses the proceeds to buy another house. The wife now claims the entire house is martial property.

The way to avoid these problems is to get a pre-nuptial agreement. A will drafted pre-nuptial will reduce if not eliminate headaches and legal expenses. A poorly drafted pre-nuptial could put your lawyer’s daughter through college.

The first step to getting a good pre-nuptial agreement is not to do it yourself. Good legal documents do not come from the internet or by the people who make software packages. Also avoid those places which claim that although they are not attorneys, they can help you with drafting your legal documents.

The next step is to be complete on your assets. I like to get a full list of all the current assets. Then I draft clauses ensuring that not only is the property currently held separate but it will remain separate in the future. I specifically address the issues of increased value, co-mingling and transformation. If these issues are not addressed up front, then you will be opening yourself up for a fight at the divorce.

Finally, consider maintenance. A provision waiving or requiring maintenance can be put into the agreement. But be careful to address not only the current needs of the parties but the future ones as well. An agreement to pay $1,000 a week in 2008 may sound generous, but may be completely inadequate in 2038. The ability to actually pay maintenance must be gauged against future events. I’m sure that many executives at Enron thought their futures were secure.

There are a number of other factors that also need to be considered, but they will vary based upon your particular case. No “one size fits all” pre-nuptial agreement will work. That’s why it needs to be crafted to your particular circumstance. Maybe you don’t have a house, but hold a number of copyrights or patents. May you have an inheritance coming, or have a trust which will mature in a few years. Mature marriages have children from the first marriage to consider. Clauses can be placed in an agreement limited what property can be devised under a will.

For these and other reasons, consider a pre-nuptial agreement, but don’t pull one down from the internet.

National Guardsman Loses Child Custody Due to Deployment

Regular readers know I that don’t slam or criticize judges, I merely explain the law. Well that changes with this posting. I am furious at a decision by a panel of appellate judges in Albany who rubber stamped an ill-advised decision to penalize a mother for the crime of being a patriotic American. The case, Diffin v. Diffin involves a mother who got custody of her son as part of a divorce settlement in 2000. On April 2004, the mother got mobilized and went to Iraq.

The father moved for a change in custody, and the mother plead the Servicemembers Civil Relief Act. The Family Court stayed the action, but granted temporary custody to the father until the mother returned from Iraq.

When the mother returned, the Family Court awarded custody to the father. The appellate division, third department affirmed the decision. The reason was that because her military service, she has a less settled life. Therefore, it was in the best interests of the child to change custody to the father.

The Court tried to claim that the military service had no impact on the decision, but then they go on to find that her military service was the primary factor. To put a fig leaf on the decision, they talk about how in the past year the child is in a stable environment and that it would be disruptive to uproot him. But, in the end of the decision the anti-military bias shows through: “although the disruption caused by her deployment was not her fault, this record does not demonstrate that Darrell’s best interests would be enhanced by a order a change (i.e. a return to his mother) in his present physical custody.”

Justices, Cardona, Peters, Spain, Carpinello and Lahtinen, should be ashamed of themselves for this blatantly anti-servicemember decision. Justices Cardona and Spain bear particular responsibility as they are prior military.

There are a large number of single parents in the military and particularly in the Guard and Reserves. The reason we have the Servicemember’s Civil Relief Act (SCRA) and the Servicemembers Employment Re-employment Rights Act (USERA) is to fulfil a public policy of maintaining the Guard and Reserves. Patriotic Americans who go the extra step and serve our country should not be punished by small minded people who are shielded by sacrifices that our military members are making every day.

Here, we have a Guardsman who did not shirk from her duty. She did not make excuses. When the call came, she raised her hand and went into a war zone. The thanks that a grateful nation bestowed upon her was to take her son away from her.

To add insult to injury the knife was wielded by Presiding Justice Cardona, a Viet Nam veteran.

I encourage you to contact your congressman to get an amendment to the SCRA. We need a provision that prevents courts from considering military service to change child custody.

New York Equitable Distribution, The Former Spouses Protection Act and the National Guard

I just settled a strange little divorce in front Judge Kent, in Suffolk County. On it’s face, it was nothing too strange. A forty year marriage, where the only property was a pension and a house. As I explained in other posts, under New York divorce law, a pension is martial property and is divided according the number of years of marriage by number of years in the pension.

The husband in this case had retired as an AGR New York Guardsman. In 1998 when he retired from the National Guard, he took off for Puerto Rico. Eight years later, the wife decided to get a divorce. Under New York divorce law, the military retired pay is marital property, but under Puerto Rican law, it is not. The question facing Judge Kent was: which law to apply.

Under the Former Spouses Protection Act Congress specifically stated that military retired pay is subject to laws of the state where the divorce is ordered. There is one kicker, the military member must either be a resident of the state or consent to the state’s jurisdiction. If he is a resident of Georgia, and the spouse tries to divorce him in Nevada, the court cannot divide his military pay. It can only be divided in Georgia, or if he consents to the Nevada court.

My case was different. The husband was a Guardsman for 20 years. He never left the state of New York and his boss was the TAG. Upon retirement he moved to Puerto Rico. So, does the Former Spouses Protection Act govern? Is it meant to cover a Guardsman who spent his entire military career in New York working for the TAG, and then moves out of state upon retirement? The answer is: I don’t know. At this time, there is no decision by any judge in the United States that I have been able find on this issue. My argument was that the act should not apply. He worked for 20 years for the Governor, not the President. I argued that the Former Spouses Protection Act was not designed to cover a career Guardsman being sued for divorce in the state where served and retired from. Naturally, my opponent argued the other side. Judge Kent was caught in the middle. Fortunately, the judge,who is a gentleman, and famous for cutting to the heart of an issue, managed to get the parties to settle. So, this question is still unanswered.

The lesson here is to be careful. If you are the spouse of guardsman who is retiring and he intends to leave the state, start the divorce now before he establishes residence in another state. If you are the guardsman, after you leave the state, establish residence and then commence the divorce. Here, because the parties let the matter sit for several years, multiple problems occurred. If we had not settled, the husband was facing 10 years of arrears payments to the wife, if we won. If we lost, the wife was potentially facing not getting any money from the pension.

New York Divorce Law Prenuptial Basics, Part I

New York divorce law loves agreements. An agreement means no trial, and the issues are resolved. In fact, so strong does the New York divorce law support agreements, that they are pretty impossible to break.

There are three basic agreements in divorce and family law: (1) the prenuptial ( and it’s close relative the post-nuptial); (2) the separation agreement; and (3) the stipulation settling the divorce.

The prenuptial is a strange creature to be filed under the “hope for the best but plan for the worst” category. Generally, it is used by a person who either is coming into the marriage with assets, or has been burned in a prior divorce, or both.

As readers of these pages know (and by the way, in the space of the month the average visitor comes back 3.7 times) property division is not that straight forward. Sure, the statute (DRL 236 B) states that property acquired before the marriage, such as an inheritance or money from a personal injury settlement are separate property, but creative lawyers have found ways to get the New York courts to chip away at the statute and create a host of exceptions. The two main exceptions are co-mingling and increase in value of the separate property. It is beyond my purpose in this post to explain them. Just take my word for it.

The question is: How do you protect your separate property from becoming marital property? The answer is a well drafted pre or post nuptial agreement. For example, assume you own a house. You want to insure that if there is a divorce the house remains your property. So, you sign a prenuptial which states that the house is separate property. Problem solved? Nope. Remember, where there’s a will there’s a lawyer. Suppose during the marriage, you sold your house and bought a new house. A clever lawyer could (and will) argue that while, yes indeedy, the old house was separate property, this new house is marital. The solution is a clause in the prenuptial which states that all separate property remains separate even if it is sold and new property was bought.

That protects the spouse with the separate property. But, what about the spouse who belatedly realizes that s/he has signed a bad deal? Can the agreement be broken? Remember what I said at the top of the posting? Courts love agreements. Judges use great phrases such as “public policy” and the “smooth administration of justice” and the like. But, what it comes down to, is that New York courts really, really hate to break an agreement absent fraud, duress, and over-reaching. In a future post I’ll address these three grounds to break an agreement. However, in my experience, they are very high standards to meet.

The Appellate Division, First Department, in a recent decision, has demonstrated just how high the standard is. Basically, in 1974 just before marriage the groom presented the wife, in Germany with a prenuptial agreement in German. The court upheld the agreement. I am putting the link here for anyone who wishes to read the full decision. I’m going to quote Judge Saxe’s dissent, because he really sets out why the decision is not fair. Stawski v. Stawski

In December of 1974, an affianced young American woman in the bloom of love, traveling with her German fiancé to his parents’ home in Frankfurt, en route to a skiing vacation in Switzerland, experienced a sudden and unexpected detour to a lawyer’s office in Frankfurt, where she was presented with a prenuptial agreement. Her execution of that document, and its enforceability, form the basis for this appeal.

The Special Referee, who was requested to hear and determine the controversy, held that the agreement is enforceable, and the majority agrees. However, in my view, the confluence of various questionable practices and procedural irregularities surrounding the execution of the agreement makes this the exceptional case in which an antenuptial agreement should be set aside. The evidence establishes that plaintiff’s signature was obtained through a combination of deception and overreaching, causing an unknowing waiver of unexplained rights. Accordingly, I dissent.

Plaintiff wife and defendant husband are children of Holocaust survivors; the parents met in a displaced persons camp outside Frankfurt, Germany after World War II, and ultimately settled there. Plaintiff’s family moved to the United States 3½ years later, and settled in New York City, where plaintiff was born. Defendant’s family remained in Germany. He was educated in England beginning at age 10 and received a law degree from Birmingham University in England. After briefly meeting at a dance in Frankfurt in the 1960s when she was 12 and he was 14, plaintiff and defendant met again in 1971, when she was 19 and an undergraduate at New York University and he was 21 and studying for a Master’s degree in International Law at the same university. They became engaged in the summer of 1974 and married in 1975.

In December 1974, the affianced couple traveled together from New York to Frankfurt, where defendant’s parents lived, in anticipation of a winter ski vacation. Upon their arrival in Germany, defendant told plaintiff that before they left for Switzerland, it was necessary for both of them to attend a meeting with a lawyer. The parties dispute the exact explanation provided to plaintiff as to the need for this meeting; she testified that the reason defendant gave her was the necessity of “signing a piece of paper for bankruptcy.” Plaintiff also testified that she and defendant had no prior discussions regarding the signing of any agreement having to do with their marital or property rights. For his part, defendant testified that he brought up the subject of a premarital agreement with plaintiff in the autumn of 1974 and that she asked him to discuss the matter further with her father, which he testified he did, although both plaintiff and her father disputed this assertion.

The couple went to the office of a law firm in Frankfurt. It is undisputed that the law firm represented defendant’s family in various legal matters. The parties appeared before Dr. Nikolas Hensel, who, aside from being an attorney, was apprentice to a notar. In Germany, a notar is a public official before whom certain types of transactions, including marital agreements, must be executed in order for them to be valid. A notar serves as an independent consultant for the parties to the transaction, and is responsible for exploring and ensuring the parties’ understanding of the transaction and its legal consequences. At the time, Dr. Hensel was not yet officially a notar, but was apprenticed to an older notar, Dr. Rudolph Boergner, for whom he was properly [*5]substituting on the date of execution of the agreement.

After exchanging pleasantries with the parties, Dr. Hensel showed them the agreement, which was written in German. Apparently, neither of the parties had seen either the final document or even a draft of the document before the visit. Dr. Hensel initially read the agreement to the young couple in German. The agreement was not a long one. It stated that the signatories (plaintiff and defendant) planned to get married in 1975 and, as translated into English, that: “We hereby agree that for the time of our marriage we exclude the legal regime of joint ownership of any increase in property. Instead we will adopt the regime of legal separation of property. The notar’s representative informed us on the legal significance of such a decision.” Thirty years later, in a court in New York, it is this language that is relied upon to bar plaintiff from sharing at all in increases in the value of defendant’s separately-owned property during the course of the marriage.

Judge Saxe to goes, in a well reasoned dissent to explain why he would set aside the agreement. The rest of the court was unpersuaded. They cited the oft quoted legal maxims. I’ll provide an except below:

“[T]he decision of the fact-finding court should not be disturbed upon appeal unless it is obvious that the court’s conclusions could not be reached under any fair interpretation of the evidence, especially when the findings of fact rest in large measure on considerations relating to [*2]the credibility of witnesses” (Thoreson v Penthouse Intl., 80 NY2d 490, 495 [1992] [internal quotation marks omitted]). It cannot be said that the Special Referee’s conclusions were not based on a fair interpretation of the evidence, and there is thus no basis for reversal. The agreement is fair, neutral and valid on its face and the issue determined by the Special Referee was therefore solely one of credibility.

Furthermore, the public policy of this State favors ” ‘individuals ordering and deciding their own interests through contractual arrangements’ ” (Van Kipnis v Van Kipnis, 43 AD3d 71, 76-77 [2007], quoting Bloomfield v Bloomfield, 97 NY2d 188, 193 [2001]), and 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 [1980]). A party attacking the validity of the agreement has the burden of coming forward with evidence showing fraud, which will not be presumed, and must have as its basis evidence of overreaching—the concealment of facts, misrepresentation or some other form of deception (see Matter of Sunshine, 51 AD2d 326 [1976], affd 40 NY2d 875 [1976]). Plaintiff completely failed to meet that burden.

The numerous circumstances cited by plaintiff as irregularities, including her alleged lack of fluency in the German language, defendant’s superior education, the fact that she was unrepresented by counsel and that the agreement was written by a law firm that had previously done business with defendant’s family, do not establish overreaching on defendant’s part, especially in view of the uncontradicted testimony that the agreement was explained to plaintiff in English. In reaching the opposite conclusion, the dissent adopts a highly skewed version of the facts in the course of portraying plaintiff as a naive individual who was the victim of elaborate “machinations” that were calculated to induce her to sign an agreement she did not understand. However, at the time the agreement was executed, plaintiff had received her B.A. from a prestigious university, New York University (where she took such courses as “International Law,” “Ideas & Action I: Law in Society,” “International Politics” and “U.S. Foreign Policy”) and was pursuing a Master’s degree in political science from that same university.

How far will the courts go to enforce an agreement? In Van Kipnis v. Van Kipnis, the court enforced an agreement, even though the written agreement was contrary to the parties understanding. In 1965 the parties signed a contract in France. “At the time, the wife, a Canadian citizen, was studying at the Sorbonne and the husband, a citizen of the United States, had just finished college. Prior to the marriage ceremony, and at the specific request of the wife, the parties agreed to execute a “Contrat de Mariage” (Contract), which is a form of prenuptial agreement under the French Civil Code. The wife made all the arrangements for the Contract, including securing the presence of a “Notaire,” the French official who presides over the execution of such contracts, and obtaining an American attorney and interpreter to protect the husband’s interests. The expressly stated purpose of the Contract was to opt out of the “community property regime,” which is the custom in France, in favor of a “separation of estates” property regime.”

After 38 years of marriage, the parties started a divorce action. After months of litigation, the husband found the agreement and moved to have it enforced. “At the hearing, the wife testified that the Contract was executed for the sole purpose of opting out of the community property system of France, and instead adopting a complete separation of estates, whereby each party could not be held liable for the other’s debts. She also admitted, however, that the husband executed the Contract at her insistence, that he had no money at the time of the marriage and that she had never moved to set the Contract aside during the marriage.

The husband offered a similar understanding of the Contract in his testimony. Defendant testified: “I didn’t realize it was a prenuptial agreement. I just thought I had a marriage contract, which meant that we decided to protect ourselves from creditors, and we decided to keep our assets in separate names, and I never drew the conclusion that this had relevance in a divorce proceeding.”"

The court found that as the agreement was clear on it’s face, the parties understanding was irrelevant and inadmissible.

Two fundamental principles of contract interpretation are that “agreements are construed in accord with the parties’ intent,” and that “[t]he best evidence of what parties to a written agreement intend is what they say in their writing” (Greenfield v Philles Records, 98 NY2d 562, 569 [2002] [internal quotation marks omitted]). “Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (id.). “A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion” (id. [internal quotation marks and brackets omitted]).

Extrinsic evidence of what the parties really intended is generally inadmissible, and will be considered only if the agreement is found to be ambiguous, which is an issue of law for the court (id., citing W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]). However, extrinsic evidence may not be utilized to create an ambiguity that would otherwise not exist, since “before looking to evidence of what was in the parties’ minds, a court must give due weight to what was in their contract” (W.W.W. Assoc. at 162). An omission or mistake in a contract, such as a failure to include a specific contingency, does not itself create an ambiguity (see Reiss v Financial Performance Corp., 97 NY2d 195, 199 [2001]).

But, recently, the Second Appellate Department agreed to set aside a post-nuptial on the grounds that the husband engaged in overreaching. In Barchella v Barchella the court stated that “because of the fiduciary relationship that exists between spouses, postnuptial agreements are closely scrutinized by the courts and are more readily set aside on grounds that would be insufficient to nullify an ordinary contract.”

The lesson is that if you want to protect your property get a prenuptial agreement. If you are on the other side of the table, get a lawyer. A well drafted and fair agreement can save a lot of grief and trouble in the future.