Allegations of fraud in post-divorce disputes can raise high-stakes questions about fairness, financial rights, and the enforceability of settlement agreements. However, while dissatisfaction with the terms of a divorce may lead one party to challenge a signed agreement, New York law sets a demanding legal standard for setting aside such contracts. A recent ruling from a New York court sheds light on how courts evaluate claims of fraudulent inducement, particularly when the stipulation language directly contradicts the allegations. If you are facing a legal battle over a marital settlement, it is in your best interest to contact a New York divorce attorney as soon as possible.
Facts of the Case
It is alleged that the parties married in 2004 and later divorced following the wife’s filing for divorce in January 2019. During the course of their marriage, they resided in a home in Westhampton Beach. The parties did not have children. The divorce action was resolved by a stipulation of settlement executed in August 2019. This original stipulation designated the husband as the monied spouse, required him to pay maintenance to the wife, and included provisions for the sale of the marital residence and the handling of liens tied to the husband’s debts. The stipulation was incorporated, but not merged, into the judgment of divorce entered in March 2021.
It is reported that the parties later executed a second agreement in May 2021, referred to as a post-judgment stipulation, which modified the original settlement. Under this agreement, the husband waived all rights to the marital residence and agreed to pay additional maintenance. The wife subsequently sold the marital home in February 2022. The husband filed a new action in March 2022 seeking to set aside the post-judgment stipulation, claiming he was fraudulently induced to sign it. He contended that the wife had misrepresented the status of their divorce and the value of the marital home, and that he relied on those alleged misstatements when waiving his rights to the property. Continue reading