In matrimonial matters, which can be emotional and contentious, settlement offers parties a means of resolving the issues between them in a manner which, under the right circumstances, can minimize conflict and allow the parties to maintain control over the outcome. Settlement agreements entered into by litigants on a knowing and voluntary basis are judicially favored. However, as matrimonial lawyers, we are often presented with Chapter 2 in the saga: when one party wishes, for one reason or another, to revisit or set aside a settlement agreement. In such a scenario, it is critical that both parties remain informed as to their respective rights and obligations and the circumstances under which a Court will revisit the terms of a duly executed settlement agreement.
The Nassau County Supreme Court was recently presented with a case, J.G. v. N.G., in which the Court considered the issue of enforceability of a marital settlement agreement executed in 2020. See J.G. v. N.G., NY Slip Op 50524(U) (Sup. Ct. Nassau Cty., June 8, 2021) . The Court’s analysis of the issues before it reveals the differing approaches taken by courts in considering requests for modification with respect to financial issues versus issues of custody. In general, matrimonial settlement agreements are presumed enforceable and will not be judicially set aside, absent a showing of fraud, overreaching, duress or unconscionability (an extremely high bar). Similarly, in order for a Court to modify the provisions of a settlement agreement that govern maintenance (alimony), a party is required to prove that s/he will suffer an extreme hardship if the agreement is enforced as written (in practice, an extremely difficult standard to meet). However, when considering requests for modification of provisions of settlement agreements that bear upon the custody, access and wellbeing of children, the courts, which sit in a position of parens patriae (legal protectorship), always maintain discretion to modify agreements in furtherance of the children’s best interests.
In the case at issue, the wife, who owned a delicatessen, and the husband, who worked as a critical care nurse, separated in 2017. Subsequently, in 2020, they entered into a stipulation of settlement, which resolved the financial issues between them as well as the issues of custody and access to their two children. Pursuant to the parties’ settlement agreement, the wife maintained residential custody of the parties’ two children, M.G. and V.G. In light of the husband’s fluctuating work schedule, the agreement provided that the husband’s access to the children would vary on a monthly basis depending on his schedule for that month. Specifically, the agreement provided that within 72 hours of receiving his work schedule for a given month, the father would email the mother his requested parenting time schedule for that month. Additionally, both parties agreed to afford the children reasonable contact with the other parent during each party’s access time. With respect to the financial issues, the agreement provided that the wife would retain sole ownership and occupancy of the marital residence, and would be solely responsible for paying all carrying costs, including the mortgage and home equity loan payments each month.
In his moving papers, the husband asserted that the wife had violated the terms of the stipulation in refusing to permit him to exercise his requested weekday parenting time with the children for two months, and had denied him telephone access to the children. Furthermore, the husband claimed that the wife had defaulted on the agreement by failing to pay the mortgage and home equity loans on the marital residence for the same period.
In opposition, the wife filed a cross motion in which she claimed that the parties’ agreement was void as it had been executed under duress. The duress to which the wife alluded included what she characterized as harassment and “relentless” efforts by the husband to convince her to sign the agreement, including persistent phone calls, texts, an appearance at her place of business by the husband’s girlfriend and an anonymous, unfounded report to CPS alleging the wife’s neglect of the children. In addition, the wife noted that the she was not represented by counsel in the negotiation or execution of the agreement, and that her proposed changes had never been included. As a result, she claimed that the agreement was extremely one-sided, and should be set aside. On the subject of the carrying costs that she had failed to pay for two months, the wife claimed that the amounts due and owing to the husband should be offset against amounts allegedly owed by him to her on account of certain unemployment benefits that were required to be repaid and student loan payments the husband had allegedly pledged to cover. Additionally, the wife claimed that since the parties’ separation, she had been delivering the funds necessary to cover the carrying costs to a joint checking account between the parties, an account which the husband had abruptly drained, creating the shortfall.
Upon consideration of the arguments raised by the parties, the Court concluded that the allegations made by the wife with respect to the husband’s conduct leading up to the execution of the agreement, even if taken as true, were insufficient to substantiate a claim of duress, unconscionability, fraud or overreaching. As the Court noted, the wife failed to present a prima facie case that the husband’s behavior had “precluded the exercise of her free will,” an essential element of a claim of duress, and the agreement, which appeared balanced on its face, did not appear so one-sided as to “shock the conscience” of the Court. The Court rejected any suggestion that the wife’s lack of counsel during the negotiation or execution of the agreement established overreaching, observing that this fact alone did not lend itself to an automatic conclusion that the agreement was void, particularly where, as here, the wife had been specifically advised of her right to counsel and had chosen to proceed pro se. This being the case, the Court found the provisions of the stipulation of settlement that dealt with the wife’s obligation to pay carrying costs on the marital residence to be enforceable in full. The Court noted that the wife had failed to establish any legal or contractual basis to set off the carrying costs she owed on the marital residence against the debts that she claimed to be due and owing to her from the husband, which were not addressed in the parties’ agreement. However, the Court ordered that to the extent the husband had liquidated the funds in the joint account, 50% of which belonged to the wife, the wife was entitled to set off the reimbursements due and owing to the husband from the funds to which she was entitled from the joint account. In short, the Court found that the financial provisions of the agreement were enforceable in their entirety.
Contrastingly, with respect to the claims raised by the parties with respect to the custody and access issues, the Court took a different approach. Here, the Court noted that provisions agreed upon by parents with respect to custody, access and the general wellbeing of their children are not binding on the courts, which are empowered and charged, pursuant to Domestic Relations Law §§ 70 and 240, to make custody and visitation orders based upon the children’s best interests. Here, applying greater scrutiny to the provisions of the settlement agreement concerning the children, the Court concluded that the flexible and variable visitation schedule agreed upon by the parties in light of the father’s fluctuating work schedule was not aligned with the children’s best interests. Specifically, as noted by the Court, the inconsistent visitation schedule gave rise to significant inconsistency and instability in the children’s daily routines and engendered conflict between the parties that did not further the children’s best interests. Similarly, the provision of the parties’ agreement which accorded each party “reasonable” telephone access to the children was found to be too vague and unpredictable to promote family accord. Accordingly, the Court modified the parties’ agreement to provide that the husband would have regular parenting time on two fixed weekends per month in addition to one weekday visit per week on a fixed day. Daily telephone access would also be provided to the parent who was not with the children, at a fixed time each day. Interestingly, despite what we as practitioners would expect, the Court did not rely on the usual standard of a “substantial change in circumstances” when determining whether it was appropriate to modify these provisions of the parties’ settlement agreement. While such an analysis seems to be implied from the Court’s focus on the uncertainty and instability in the family’s home life, as well as the opportunity for conflict between the parents, the Court does not explicitly reference a substantial change in circumstances in its analysis.
For practitioners and litigants, there are several takeaways to this decision. First, parties in matrimonial matters would be well advised to note that in general, matrimonial settlement agreements are presumed enforceable and upheld by the courts, particularly with respect to financial issues. Litigants must be cautioned to carefully consider the future implications of their decisions when entering into matrimonial settlement agreements, as they will likely be held to them. On the other hand, parties should be aware that parental agreements concerning custody and access of children are never beyond the long arm of the courts, and are always subject to review based on the best interests of the children involved. Finally, it is worth noting that agreements with specific language governing custody and access are more likely to be enforced by the courts, and that in the presence of conflict, the courts are more likely to default to bright line provisions detailing each party’s rights and obligations.