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Smart Summary

Factual and Procedural Background

This matrimonial action concerns the validity of a 1994 separation agreement between Daniel P. Klein (plaintiff husband) and Jane Klein (defendant wife). The agreement provided for child support of $250 per week and no spousal maintenance. The parties were married approximately 10 years and had one child, about 9 years old at the commencement of the action in September 1996. Plaintiff is a physician with substantial assets; defendant, a nurse, worked sporadically and had no independent income since marriage. The agreement required defendant to relinquish interests in valuable marital assets, including two cooperative apartments in New York City, plaintiff's medical practice, and other assets valued by defendant at over $4 million. Defendant lived with the child in a condominium purchased by plaintiff in New Jersey.

Defendant sought to set aside the agreement, claiming it was unfair, unreasonable, and unconscionable both at execution and at the time of the application. She alleged inadequate child support relative to plaintiff’s income and loss of significant marital assets. Defendant also claimed she was medically incapacitated after a coronary artery bypass operation in 1996 and needed financial support, including attorneys' fees. Plaintiff cross-moved for appointment of a law guardian and psychiatric evaluation of the child.

Supreme Court's June 19, 1997 order denied defendant’s application to vacate the agreement but granted pendente lite relief: $350 weekly temporary maintenance, $650 weekly interim child support, $20,000 in interim legal fees to defendant’s counsel, and $2,000 for expert fees. The court also granted plaintiff’s cross-motion for appointment of a law guardian and independent psychiatrist.

Plaintiff then moved for summary judgment divorcing the parties and for expedited hearing on the validity of the separation agreement. Defendant opposed, alleging plaintiff obstructed financial disclosure, and cross-moved to amend her answer to assert rescission of the agreement. The October 31, 1997 order denied plaintiff’s summary judgment, allowed defendant to amend her answer, and granted additional pendente lite relief, including financial disclosure and counsel fees.

Legal Issues Presented

  1. Whether the 1994 separation agreement is valid and enforceable, particularly regarding child support and spousal maintenance provisions.
  2. Whether the Supreme Court erred in awarding interim child support and counsel fees despite the existence of the separation agreement.
  3. Whether defendant is entitled to financial disclosure from plaintiff given the separation agreement.
  4. Whether defendant’s allegations and evidence suffice to set aside or rescind the separation agreement.
  5. The applicability of statutory requirements under Domestic Relations Law § 240 (1-b) (h) to the child support provisions of the agreement.

Arguments of the Parties

Defendant's Arguments

  • The 1994 separation agreement is manifestly unfair, unreasonable, and unconscionable both at execution and at the time of the application.
  • Child support of $250 per week is grossly inadequate compared to plaintiff’s income, constituting less than 1% of his weekly earnings.
  • She relinquished substantial marital assets valued at over $4 million but received only a condominium and a lump sum of $15,000.
  • She underwent a serious medical procedure rendering her unable to work and in urgent need of financial support, including attorneys' fees.
  • Plaintiff obstructed attempts to obtain financial disclosure, hindering her ability to challenge the agreement.
  • She seeks to rescind the separation agreement and obtain interim maintenance, child support, and economic relief.

Plaintiff's Arguments

  • The existence of the 1994 separation agreement precludes awards of interim child support and counsel fees absent an unanticipated and unreasonable change in circumstances or unmet needs of the child.
  • The court erred in granting interim relief contrary to the agreement and controlling case law, citing Matter of Boden v. Boden.
  • The separation agreement should bar financial disclosure since support is not in issue.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Matter of Boden v. Boden, 42 N.Y.2d 210 Interim child support and counsel fees precluded by valid separation agreement absent change in circumstances or unmet child needs. Court found plaintiff's reliance on Boden partially misplaced because it concerns modification of incorporated but not merged agreements, not validity challenges.
Bennett v. Bennett, 56 A.D.2d 782 Separation agreements preclude temporary maintenance and counsel fees unless unsupported spouse risks becoming public charge. Supports principle that separation agreements bar pendente lite relief unless unmet needs or public charge risk shown.
Davis v. Davis, 195 App. Div. 430 Same as Bennett, reinforcing preclusive effect of separation agreements on temporary maintenance awards. Referenced as part of established case law supporting separation agreement preclusive effect.
Burkhardt v. Burkhardt, 28 Misc.2d 976 Same principle regarding separation agreements and temporary maintenance. Referenced similarly as supporting precedent.
Zysman v. Zysman, 140 Misc. 617 Same principle regarding separation agreements and temporary maintenance. Referenced similarly as supporting precedent.
Curran v. Curran, 169 A.D.2d 975 Exception allowing temporary maintenance if unsupported spouse risks becoming public charge. Supports statutory exception to preclusive effect of separation agreements.
Solomon v. Solomon, 224 A.D.2d 331 Limits of preclusive effect of antenuptial agreements on maintenance awards. Found inapplicable here because case involves antenuptial, not separation agreements.
Tregellas v. Tregellas, 169 A.D.2d 553 Same as Solomon regarding antenuptial agreements. Also found inapposite for same reasons.
Fischman v. Fischman, 209 A.D.2d 916 Separation agreement does not bar counsel fees for matters unrelated to enforcement. Supports award of attorneys' fees despite existence of separation agreement.
Thompson v. Thompson, 91 A.D.2d 683 Preclusive effect of child support provisions in separation agreements subject to court's power to increase support as justice requires. Supports principle that child support provisions are not absolute bar to modification or interim relief.
Moat v. Moat, 27 A.D.2d 895 Courts may increase child support provisions despite separation agreement. Referenced to support court's power to adjust child support.
Kulok v. Kulok, 20 A.D.2d 668 Same as Moat regarding child support modifications. Referenced similarly.
Matter of Brescia v. Fitts, 56 N.Y.2d 132 Distinguishes disputes over validity of separation agreements from disputes solely about child support obligations. Clarifies burden of proof for interim awards when validity of agreement is challenged.
Ragusa v. Capetola, 199 A.D.2d 311 Applicant for additional interim child support must show child's needs are unmet despite separation agreement. Supports requirement of proof of unmet child needs for interim support.
Matter of Bill v. Bill, 214 A.D.2d 84 Child support provisions not enforceable if agreement fails to comply with statutory requirements. Supports finding that child support provision in 1994 agreement is unenforceable.
Formato v. Formato, 173 A.D.2d 274 Court retains discretion to award pendente lite child support despite separation agreement noncompliance. Supports court's authority to award interim child support here.
Shiffman v. Shiffman, 57 A.D.2d 519 Financial disclosure required only when alimony or support is in issue. Supports limitation on financial disclosure absent challenge to support provisions.
Gleeson v. Gleeson, 69 A.D.2d 964 Same as Shiffman. Referenced similarly.
Oberstein v. Oberstein, 93 A.D.2d 374 Financial disclosure permissible only upon prima facie showing that support provisions should be set aside. Supports court's requirement of legitimate factual predicate before ordering disclosure.
Picciano v. Picciano, 134 A.D.2d 418 Party seeking financial disclosure under separation agreement must establish legitimate factual basis. Supports court's ruling allowing disclosure after defendant's showing.
Rosenhaus v. Rosenhaus, 121 A.D.2d 707 Resumption of marital relations may indicate abandonment of separation agreement. Supports defendant’s prima facie showing that parties resumed marital relations, potentially voiding the agreement.
Brody v. Brody, 190 App. Div. 806 Same as Rosenhaus regarding abandonment of separation agreement. Quoted in Rosenhaus to support principle.
Costa v. Costa, 192 A.D.2d 1034 Separation agreement is void ab initio if parties were not actually separated at or immediately after execution. Supports defendant’s claim that agreement may be void if separation did not occur.

Court's Reasoning and Analysis

The court began by recognizing the general rule that a valid separation agreement precludes awards of temporary maintenance and interim counsel fees unless the agreement is set aside or the unsupported spouse is at risk of becoming a public charge. The court found that the Supreme Court erred in ignoring the 1994 agreement's terms when awarding temporary relief.

However, the court sustained the award of attorneys' fees based on the agreement's express provision allowing attorneys' fees for enforcement and not barring fees unrelated to enforcement.

Regarding child support, the court held that the 1994 agreement's child support provision was unenforceable because it failed to comply with the statutory requirements of Domestic Relations Law § 240 (1-b) (h), which mandates that agreements deviating from the basic child support obligation must specify the amount of the basic obligation and reasons for deviation. The agreement's conclusory waiver was insufficient.

Because the child support provision was unenforceable, Supreme Court retained discretion to award pendente lite child support. Defendant demonstrated that the child's needs were not met by the nominal support in the agreement.

On financial disclosure, the court held that disclosure is not automatically barred by the existence of a separation agreement. Instead, the moving party must make a prima facie showing that the support provisions should be set aside. Defendant met this burden by showing potential overreaching and possible abandonment of the agreement through resumption of marital relations, which could void the agreement.

Accordingly, the court affirmed the pendente lite awards of interim child support and counsel fees, as well as the order granting financial disclosure, concluding that the separation agreement was not fully enforceable and that defendant had made a sufficient showing to justify relief.

Holding and Implications

The court affirmed the Supreme Court's June 19, 1997 and October 31, 1997 orders, which granted defendant interim child support of $650 per week, interim counsel fees totaling $26,500, and financial disclosure from plaintiff.

The decision directly affects the parties by upholding pendente lite relief and disclosure despite the existence of a separation agreement, emphasizing statutory compliance requirements for child support provisions and the necessity for a prima facie showing to challenge such agreements. No new precedent was established beyond the application of existing law to the facts.

DANIEL P. KLEIN, Appellant, v. JANE KLEIN, Respondent.

RUBIN, J.

At issue in this matrimonial action is the validity of a 1994 separation agreement that provides for payment of only $250 a week in child support and no spousal maintenance. The parties, who have been married approximately 10 years, have one child, who was approximately 9 years old when this action was commenced in or around September 1996. Plaintiff husband is a physician with substantial assets. Defendant, who holds a degree in nursing, has worked only sporadically and has had no independent source of income since her marriage to plaintiff in 1987. Pursuant to the separation agreement at issue, defendant gave up any right, title and interest in a professional cooperative apartment and a residential cooperative apartment, both located in New York City and acquired during the marriage, together with any purported interest in plaintiff's medical practice and other assets, estimated by defendant to have an aggregate value exceeding $4 million. Defendant resides with the parties' daughter in a condominium apartment in Ocean Grove, New Jersey, also purchased by plaintiff during the marriage.

Defendant wife sought to set aside the agreement and to obtain interim maintenance, child support and other economic relief. Defendant asserted that the agreement was manifestly unfair, unreasonable and unconscionable, both when made and at the time of the application. Based upon a 1992 tax return showing that plaintiff had a net income of $430,000, submitted with her application, defendant noted that the $250 a week in child support provided for in the agreement was less than 1 percent of plaintiff's weekly income. Defendant alleged that she received a single lump-sum payment of $15,000 and the New Jersey condominium (valued at $183,000) and was divested of any interest in the New York residential cooperative apartment (valued at approximately $500,000), the New York commercial cooperative apartment (valued at approximately $350,000), the parties' 401-K plan (worth approximately $250,000) and another $250,000 in savings plans, investments and stocks. The agreement, defendant maintained, gave plaintiff virtually everything while she received little more than a four-room condominium apartment.

Defendant further alleged that, on December 31, 1996, she underwent a single-vessel coronary-artery-bypass operation, with the result that she was rendered unable to work outside the home and was in desperate need of financial support. She asserted that she had no resources to pay for her attorney or for appraisal fees. Defendant's attorney submitted an affidavit in support of the application for the award of attorneys' fees.

Plaintiff husband cross-moved for appointment of a law guardian for his daughter and for her evaluation by a forensic psychiatrist.

In the first order subject to appeal, entered June 19, 1997, Supreme Court denied defendant wife's application to vacate the agreement but granted pendente lite relief of $350 a week in temporary maintenance and $650 a week in interim child support. The order further directs plaintiff husband to pay $20,000 in interim legal fees directly to defendant's attorney, together with $2,000 in interim expert fees to enable defendant to retain the services of an accountant. The court granted plaintiff's cross motion to the extent of appointing a law guardian and an independent expert psychiatrist.

Plaintiff husband then moved for summary judgment granting a divorce and for an expedited hearing on the validity of the 1994 separation agreement. Defendant opposed the application on the ground that plaintiff was thwarting defendant's attempts to obtain disclosure of his financial records. Defendant cross-moved to amend her answer to assert a counterclaim seeking rescission of the separation agreement. In the second order appealed from, dated October 31, 1997, Supreme Court denied plaintiff's motion for summary judgment, finding that defendant's papers presented the issue of overreaching with respect to the separation agreement and raised the question of whether the parties had in fact lived separate and apart for a period in excess of one year subsequent to its execution. The court granted defendant leave to amend her answer, stating that plaintiff failed to demonstrate any prejudice that would result from the assertion of a counterclaim for rescission of the agreement. The court further granted defendant's application for pendente lite relief to the extent of granting her leave to enter a money judgment against plaintiff in the amount set forth in a stipulation between the parties and directing plaintiff to pay $553 in medical expenses and $6,500 in counsel fees in connection with enforcement proceedings.

With respect to the June 19, 1997 order, plaintiff limits his arguments on appeal to the award of interim child support and counsel fees. He contends that, in the absence of an unanticipated and unreasonable change in circumstances or a showing that the needs of the child are not being met, interim child support and counsel fees are precluded by the existence of the 1994 separation agreement (citing Matter of Boden v. Boden, 42 N.Y.2d 210, 213).

It is established that a separation agreement, not invalid on its face, precludes the award of temporary maintenance and interim counsel fees until such agreement is set aside (Bennett v. Bennett, 56 A.D.2d 782; Davis v. Davis, 195 App. Div. 430; Burkhardt v. Burkhardt, 28 Misc.2d 976; Zysman v. Zysman, 140 Misc. 617), unless there is evidence that the unsupported spouse is in danger of becoming a public charge ( see, General Obligations Law § 5-311; Curran v. Curran, 169 A.D.2d 975). The enactment of Domestic Relations Law § 236 (B) (6), which sets forth the court's authority to award temporary maintenance in matrimonial actions ( see, Scheinkman, Practice Commentary, McKinney's Cons Laws of NY, Book 14, Domestic Relations Law C236B:15, at 241-242), does not alter the rule, providing, "a. Except where the parties have entered into an agreement pursuant to subdivision three of this part providing for maintenance, in any matrimonial action the court may order temporary maintenance or maintenance in such amount as justice requires".

Supreme Court erred in ignoring the terms of the 1994 separation agreement in awarding temporary relief in contravention of the statute and prevailing case law. The decisions of this Court in Solomon v. Solomon ( 224 A.D.2d 331) and Tregellas v. Tregellas ( 169 A.D.2d 553), upon which Supreme Court relied, concern the lack of preclusive effect of antenuptial agreements and are therefore inapposite. However, Supreme Court's ruling can be sustained on other grounds.

The separation agreement recites, "Nothing herein shall be construed as a waiver or denial of the right of either party to secure payment of attorneys' fees as provided by law for any breach by the other party of any provision of this Agreement." The agreement expressly contemplates the award of interim counsel fees to effect its enforcement. Moreover, it does not specifically bar recovery of attorneys' fees incurred on matters unrelated to enforcement of its terms. Therefore, it constitutes no bar to the award of attorneys' fees in this case (see, Fischman v. Fischman, 209 A.D.2d 916 [parties' statements that they "`not to go to a divorce attorney'" and that the "`divorce shall be obtained amicably, and with no further litigation on either side'" do not preclude award of counsel fees]).

The preclusive effect accorded to a provision for child support in a separation agreement (e.g., Thompson v. Thompson, 91 A.D.2d 683) is not without limit. As this Court noted in Bennett v. Bennett ( 56 A.D.2d 782, 783, supra), "While minor children are not parties to a separation agreement between their parents, and the courts may increase provisions for child — support as justice requires (Domestic Relations Law, § 240; Moat v. Moat, [ 27 A.D.2d 895]; Kulok v. Kulok, [ 20 A.D.2d 668]), there is no need to do so where, as in this case, there is an absence of proof that adequate support has not been provided the children." However, plaintiff's reliance upon Matter of Boden v. Boden (supra) is not entirely appropriate. Boden and its progeny address applications to modify separation agreements that have been incorporated, but not merged, into the terms of a divorce decree. Although Boden has been applied to pendente lite awards (see, e.g., Sessa v. Sessa, 84 A.D.2d 786), it does not address the movant's burden of proof with respect to interim awards when the efficacy of a purported separation agreement is in issue, but "when the dispute is directed solely to readjusting the respective obligations of the parents to support their child" (Matter of Brescia v. Fitts, 56 N.Y.2d 132, 139).

In the presence of an enforceable separation agreement, the applicant for additional interim child support is required to demonstrate that the needs of the child are not being met (supra; see also, Ragusa v. Capetola, 199 A.D.2d 311). However, the separation agreement in this matter is unenforceable for its failure to conform to the requirements of the Domestic Relations Law. Specifically, the 1992 amendment (L 1992, ch 41, § 146) to Domestic Relations Law § 240 (1-b) (h) provides: "A validly executed agreement or stipulation voluntarily entered into between the parties after the effective date of this subdivision presented to the court for incorporation in an order or judgment shall include a provision stating that the parties have been advised of the provisions of this subdivision, and that the basic child support obligation provided for therein would presumptively result in the correct amount of child support to be awarded. In the event that such agreement or stipulation deviates from the basic child support obligation, the agreement or stipulation must specify the amount that such basic child support obligation would have been and the reason or reasons that such agreement or stipulation does not provide for payment of that amount. Such provision may not be waived by either party or counsel. Nothing contained in this subdivision shall be construed to alter the rights of the parties to voluntarily enter into validly executed agreements or stipulations which deviate from the basic child support obligation provided such agreements or stipulations comply with the provisions of this paragraph. The court shall, however, retain discretion with respect to child support pursuant to this section."

The child support provision of the 1994 agreement between the parties states, in conclusory fashion, "In this agreement the provisions for child support have been set in a fair amount based on many considerations including the parties' respective finances and other financial provisions of this Agreement. The custodial parent hereby waives her right to seek child support under the Child Support Standards Act." This language does not comply with the statutory requirement to state the amount of the basic child support obligation or the reason why such amount is not to be paid. Therefore, the child support provisions of the agreement are not enforceable against defendant (see, Matter of Bill v. Bill, 214 A.D.2d 84), nor do they limit the power of Supreme Court to award pendente lite relief pursuant to the factors enumerated in Domestic Relations Law § 240 (1-b) (f) (see, Formato v. Formato, 173 A.D.2d 274).

Plaintiff also appeals from so much of the October 31, 1997 order as grants defendant disclosure of his financial affairs, arguing that the existence of the separation agreement renders financial disclosure inapplicable (see, Shiffman v. Shiffman, 57 A.D.2d 519 [alimony not an issue until support provisions of separation agreement set aside]; Gleeson v. Gleeson, 69 A.D.2d 964 [statute requires financial disclosure only where alimony or support in issue], lv dismissed 47 N.Y.2d 709). In Oberstein v. Oberstein ( 93 A.D.2d 374), this Court examined the continued viability of the nondisclosure rule under equitable distribution, deciding (supra, at 378-380) that while Domestic Relations Law § 236 (B) (4) continues the prior rule in effect ( see, Domestic Relations Law former § 250), some modification is required in its application. Where the support or maintenance obligations of the parties are fixed by agreement, "neither support nor maintenance is `in issue' unless there is a real and legitimate presentation to vacate the support terms of the agreement on the basis of criteria explicitly set forth in the statute" (supra, at 380). Therefore, before financial disclosure can be obtained, the moving party must make a prima facie showing that the support provisions of the existing separation agreement should be set aside (supra, at 379; accord, Picciano v. Picciano, 134 A.D.2d 418 [party to separation agreement seeking financial disclosure must establish a legitimate factual predicate]).

Mere cohabitation subsequent to the execution of a separation agreement is not, in and of itself, sufficient to destroy the validity of the agreement. However, defendant in this case has made a prima facie showing that there was "`such a resumption of the marital relation as to indicate an intention to abandon the agreement of separation'" (Rosenhaus v. Rosenhaus, 121 A.D.2d 707, 708, quoting Brody v. Brody, 190 App. Div. 806, 807). As stated by the Appellate Division, Third Department, in Costa v. Costa ( 192 A.D.2d 1034, 1035), "It is fundamental that, in the absence of the parties' actual separation at the time of execution of a separation agreement or immediately thereafter, a separation agreement is void ab initio".

Accordingly, the order of the Supreme Court, New York County (Sherry Klein Heitler, J.), entered June 19, 1997, which, to the extent appealed from, as limited by plaintiff's brief, granted defendant wife's application for pendente lite relief to the extent of awarding defendant $650 a week in interim child support and $20,000 in interim counsel fees, should be affirmed, without costs. The order of the same court and Justice, entered on or about October 31, 1997, which, to the extent appealed from, as limited by the brief, granted defendant financial disclosure and awarded an additional $6,500 in counsel fees, should be affirmed, without costs.

LERNER, P.J., ELLERIN, TOM and ANDRIAS, JJ., concur.

Orders, Supreme Court, New York County, entered June 19, 1997 and October 31, 1997, affirmed, without costs.

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KLEIN v. KLEIN
(Jul 9, 1998)