New York Divorce Lawyer Blog
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.
Allegedly, the wife moved to dismiss the cause of action asserting fraud under CPLR 3211(a), arguing that the husband’s claims failed to meet the legal standards required to support a fraud claim. The trial court granted the motion, finding the husband’s allegations were insufficient both legally and factually. The husband appealed this ruling.
Demonstrating Fraud in Divorce Actions
On appeal, the court affirmed the lower court’s dismissal, emphasizing the rigorous pleading requirements for a fraud claim under CPLR 3016(b). The court reiterated that a party asserting fraud must plead detailed facts showing a knowingly false representation, justifiable reliance, and injury. Here, the husband failed to allege sufficient detail regarding the supposed misstatements or to demonstrate that any reliance on such statements was reasonable under the circumstances.
The court noted that the post-judgment stipulation itself contradicted the husband’s claims. Specifically, the agreement stated that a divorce judgment had already been entered, directly refuting the husband’s allegation that he was told the divorce was not yet final. Additionally, the stipulation included a clause clearly awarding 100 percent of the sale proceeds of the marital home to the wife, regardless of its market value. This language refuted any claim that the husband relied on purported misrepresentations about the home’s value.
Because these provisions were plainly stated in the stipulation and signed by both parties, the court found that the husband was presumed to have read and understood the terms, and therefore could not credibly claim he was misled. The court cited established precedent holding that absent allegations of incapacity or duress, parties are bound by the terms of signed agreements, even if they later regret the outcome.
The court also declined to consider the husband’s claim that the agreement was unconscionable, noting that this argument was raised for the first time in an affidavit submitted in opposition to the dismissal motion and was not part of the initial complaint. The court viewed this as an impermissible attempt to introduce a new cause of action without leave to amend.
Consult a Knowledgeable New York Divorce Attorney
If you believe you were misled or coerced into signing a divorce stipulation, or if you are considering pursuing modification or enforcement of an existing agreement, it is crucial to speak with an attorney. Attorney Ksenia Rudyuk of Rudyuk Law Firm is a knowledgeable New York divorce attorney with extensive experience litigating and negotiating complex divorce and post-judgment matters. To schedule a confidential consultation, contact Rudyuk Law Firm at (212) 706-2001 or fill out our online form today.