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  • Deepti Shenoy

K.G. v. J.G: Marital Agreements Bearing on Third Party Interests

Matrimonial courts are often called upon to determine thorny issues of contract enforcement and interpretation. These issues are exponentially complicated when they implicate the rights and obligations of third parties. In K.G. v. J.G., NY Slip Op 21140 (Sup. Ct. Suffolk Cty., May 20, 2021), the Suffolk County Supreme Court was recently presented with one such issue, which addressed an agreement between parties to a divorce and Reproductive Medical Associates, a third-party fertility clinic, entered into while the parties were seeking reproductive assistance via in vitro fertilization (IVF) during the course of their marriage. In the contract, “Consent for Cryopreservation of Embryo(s) by Couples with Joint Custody,” the parties agreed that in the event of a divorce, the plaintiff-wife would have dispositional control over six embryos created with both parties’ genetic material and stored with Reproductive Medical Associates, up to and including the right to elect implantation of the embryos (and a potential pregnancy). Once separated, the two parties entered into a dispute over the enforceability of the contract. In deciding the issue, the Court considered the relative merits of the parties’ respective positions, as well as the rights and interests of the third-party fertility clinic.

In moving for declaratory judgment regarding her rights pursuant to the contract, the plaintiff-wife noted that in making the agreement, the parties considered the options of (a) allowing the plaintiff-wife alone to have dispositional authority over the embryos, (b) allowing the defendant alone to have dispositional authority, and (c) discarding the embryos in the event of a divorce. Upon consideration of the three alternatives, the parties specifically elected to award total control over the embryos in the event of a divorce to the plaintiff-wife. In short, the plain language of the contract bound the parties to this interpretation.

In response, the defendant-husband, moving for summary judgment, argued that the contract was unenforceable as a marital agreement in the parties’ divorce proceedings. As noted by the defendant- husband, Domestic Relations Law (DRL) §236(B)(3) provides that in order for a marital agreement to be enforceable in a matrimonial proceeding, the agreement must be subscribed and acknowledged or proven (in other words, notarized) in the manner required to enable a deed to be recorded. Accordingly, the issue, as presented to the Court, concerned an apparent issue of first impression; namely, whether DRL §236(B)(3) applies to contracts which include services from and benefits to a third party-- in this case, Reproductive Medical Associates. Significantly, as the Court noted in its analysis, many provisions of the agreement were there solely to benefit the fertility clinic, to provide direction and certainty as to its rights to control how embryos are to be stored, its right to payment and its limitation of liability in connection with the services provided to the parties.

In resolving these issues, the Court noted, as an initial matter, that binding Court of Appeals precedent, in Kass v. Kass, 91 NY2d 554 (1998) had previously addressed the issue of the disposition of embryos in an agreement between married parties and a third-party fertility clinic. In that case, the Court of Appeals unequivocally provided that “agreements between progenitors… regarding disposition of their pre-zygotes should generally be presumed valid and binding and enforced in any dispute between them.” In reaching its decision, the apex Court noted that parties to such agreements should be encouraged to carefully think through the future implications of their agreements and to explicitly codify their intentions in writing, and observed that certainty with respect to such agreements was necessary to ensure the effective implementation of IVF programs.

In line with the Kass precedent, the Suffolk County Supreme Court concluded that the parties’ agreement with Reproductive Medical Associates was valid and enforceable. Significantly, as the Court pointed out, in the Kass decision, as in the matter at bar, the Court of Appeals enforced the parties’ agreement notwithstanding the fact that it was not notarized or subscribed in accordance with the procedures set forth in DRL §236(B)(3). The Court noted that it could not presume that the Court of Appeals had overlooked the DRL in reaching its decision in Kass. Accordingly, the Court concluded that DRL §236(B)(3) did not apply to the matter at hand, in which the contract at issue was between married parties and a third-party provider of services, not between the parties themselves. This being the case, under the governing precedent, the Court was bound to presume the validity of the parties’ agreement. Interestingly, this brings a practitioner to the converse conclusion: under the Court’s analysis, had the agreement not borne upon the interests of Reproductive Medical Associates to the degree identified in the Court’s decision, and had it instead been solely an agreement between the parties as to the disposition of their embryos, the contract could (and should) have been declared unenforceable in the matrimonial proceedings in light of DRL §236(B)(3).

Significantly, as the Court noted, the Kass decision contains a footnote that preserves the Court’s ability to determine that an IVF contract such as the one at issue is unenforceable as violative of public policy or in light of significantly changed circumstances even if DRL §236(B)(3) does not operate as a bar to enforcement. In this regard, the Court considered (and ultimately rejected) the defendant-husband’s argument that there were significantly changed circumstances at issue in light of the defendant’s contention that the plaintiff had committed domestic abuse against the defendant and the parties’ existing son, B, and that he no longer desired to have another child with the plaintiff as a result. The defendant also noted that he did not wish to be obligated to pay child support in the event of the birth of a child with his genetic material. In rejecting the defendant-husband’s arguments in this regard and declining to hold a hearing as to these issues, the Court observed that the issues raised by the defendant had been foreseeable at the time of the parties’ agreement and that the parties had nonetheless contracted to give the plaintiff sole control over the disposition of the embryos. In other words, as the Court noted, when entering this contract, the defendant had the opportunity and obligation to specifically consider the possibility of co-parenting future children, the possibility that the plaintiff might not be a good parent, and the possibility that he might have to pay child support for any children resulting from the parties’ embryos in the event of a divorce.[1] Accordingly, these issues were not a significantly changed circumstance. Additionally, IVF contracts such as the one at issue were not violative of public policy—indeed, they were specifically in line with the public policy set forth in Kass—i.e., the public interest in certainty with respect to such agreements.

Ultimately, the takeaway of this decision for practitioners advising their clients with respect to these types of sensitive issues is to consider the possibility that an agreement that includes and bears sufficiently upon the interests of a third party may be found enforceable under certain circumstances in a matrimonial proceeding notwithstanding the requirements of DRL §236(B)(3).Clients entering into these types of agreements must be cautioned to carefully and comprehensively consider the potential future impact of their elections in such agreements.

[1] It bears noting that the Court appears to have placed minimal weight on the husband’s allegations of domestic abuse against the wife, noting that such allegations are commonplace in matrimonial matters in which custody is contested.

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