Court Discusses Enforceability of Separation Agreements Under New York Law

It is not uncommon for married couples to separate while contemplating whether they want to legally end their marriage. In such instances, they will often enter into a separation agreement indicating their rights and duties during their time apart. Such agreements are essentially contracts and are enforceable as such. There are exceptions, however, like agreements that are the result of overreaching or duress that will cause a court to deem them unenforceable, as demonstrated in a recent New York case. If you are determining whether you should end your marriage, it is smart to talk to a New York divorce lawyer to determine what steps you can take to protect your rights.

Facts of the Case and Procedural Setting

It is reported that the husband initiated a divorce action asserting that the parties had been living separately under a property settlement and separation agreement filed nearly two years prior, as per Domestic Relations Law Ā§ 170 (6). The husband sought summary judgment to enforce the separation agreement, while the wife countered with a cross-motion, alleging that certain provisions of the separation agreement were unconscionable and the result of fraud, duress, coercion, and lack of financial disclosure by the husband.

Allegedly, the trial denied the husband’s motion and granted the wife’s cross-motion, setting aside the entire separation agreement on grounds of unconscionability. The court based its decision on questions of fact regarding fraud, duress, coercion, overreaching, and lack of financial disclosure, deeming a hearing unnecessary due to the agreement’s overall unconscionability. The husband appealed the decision.

Enforceability of Separation Agreements Under New York Law

On appeal, the court began its analysis by emphasizing the heightened scrutiny separation agreements undergo due to the fiduciary relationship between spouses. In doing so, the court reiterated that such agreements should be set aside if they are so unfair as to shock the conscience and confound judgment.

In the subject case, the court found significant factors that indicated the unconscionability of the separation agreement. Namely, the husband was represented by counsel while the wife was not, and the husband failed to make a full financial disclosure prior to the execution of the agreement. Further, the court found certain terms of the separation agreement to be egregious terms, such as the wife relinquishing her equitable share in marital property and forfeiting child support and maintenance, demonstrating overreaching by the husband.

The court acknowledged, however, that the separation agreement included a severability clause that indicated that not all parts of the agreement might be unenforceable. Therefore, the court determined that the trial court erred in invalidating the entire agreement without holding a hearing on the issue of severability.

Consequently, the court modified the order, denying the cross-motion to invalidate the entire agreement and remanding the matter to the trial for a hearing to determine whether the severability clause was applicable, and to address triable issues regarding overreaching, fraud, coercion, duress, and lack of financial disclosure.

Confer with a Trusted New York Attorney

If parties who are considering a divorce enter into a separation agreement, they will generally be bound by its terms unless a court deems them unconscionable or finds other grounds to set it aside. If you are weighing whether to end your marriage, it is in your best interest to confer with a lawyer as soon as possible. Ksenia Rudyuk is a trusted New York divorce attorney who can inform you of your rights and help you to seek the best outcome available. You can reach Ms. Rudyuk by callingĀ 212-706-2001 or using the form online to arrange a meeting.

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