New York Law Review

Tag: prenuptial agreement

  • Galetta v. Galetta, 21 N.Y.3d 186 (2013): Enforceability of Prenuptial Agreements and Defective Acknowledgments

    Galetta v. Galetta, 21 N.Y.3d 186 (2013)

    A prenuptial agreement must be acknowledged in the manner required to entitle a deed to be recorded, and a defective acknowledgment, where a core component is missing, cannot be cured by a later affidavit if the affidavit does not provide sufficient detail of the notary’s customary practices.

    Summary

    In a divorce action, Michelle Galetta sought to invalidate a prenuptial agreement due to a defective acknowledgment of Gary Galetta’s signature. The New York Court of Appeals held that the acknowledgment was indeed defective because it omitted language confirming the notary’s verification of the signer’s identity. Furthermore, the court found that the notary’s affidavit, submitted later, was insufficient to cure the defect as it lacked specific details about the notary’s customary practices. The Court emphasized that prenuptial agreements must adhere strictly to the formality required for recorded deeds, ensuring deliberation and authentication of the signatures. As a result, the prenuptial agreement was deemed unenforceable.

    Facts

    Michelle and Gary Galetta signed a prenuptial agreement a week before their wedding in 1997. Each party signed separately, with different notaries public witnessing their signatures. The agreement stipulated that their separate properties would remain separate and neither would seek maintenance from the other. Gary’s certificate of acknowledgment omitted a crucial phrase indicating the notary confirmed Gary’s identity. In 2010, Gary filed for divorce, and Michelle sought to invalidate the prenuptial agreement based on the defective acknowledgment.

    Procedural History

    The Supreme Court denied Michelle’s motion for summary judgment, finding substantial compliance with the Real Property Law. The Appellate Division affirmed, holding the acknowledgment was defective but could be cured, finding the notary’s affidavit raised a triable issue of fact. A dissenting opinion argued the defect could not be cured. The Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the certificate of acknowledgment accompanying the husband’s signature was defective.

    2. Whether a defective certificate of acknowledgment can be cured after the fact, and if so, whether the notary public’s affidavit was sufficient to raise a question of fact precluding summary judgment.

    Holding

    1. Yes, because the certificate of acknowledgment omitted language indicating the notary public knew or had ascertained the signer was the person described in the prenuptial agreement.

    2. No, the affidavit was insufficient because it lacked specific details about the notary’s customary practices for verifying identity, even assuming a defect can be cured, therefore it did not raise a triable question of fact.

    Court’s Reasoning

    The Court reasoned that Domestic Relations Law § 236 (B) (3) requires prenuptial agreements to be executed with the same formality as recorded deeds, as per Real Property Law § 291. This formality serves to authenticate the signer’s identity and impose deliberation in signing, as established in Matisoff v. Dobi, 90 N.Y.2d 127 (1997). Real Property Law §§ 292, 303, and 306, read together, mandate that the notary confirm the signer’s identity and certify that confirmation. The court emphasized that “acknowledgment serves to prove the identity of the person whose name appears on an instrument and to authenticate the signature of such person.”

    The Court distinguished Weinstein v. Weinstein, 36 A.D.3d 797 (2d Dept 2007), noting that the case involved a deviation in form, not substance, unlike the present case where a core component of a valid acknowledgment was missing. While the Court acknowledged the possibility of curing a defective acknowledgment under certain circumstances, it found the notary’s affidavit insufficient. The affidavit lacked specific details about the notary’s routine procedure for verifying identity. “Custom and practice evidence draws its probative value from the repetition and unvarying uniformity of the procedure…”. Because the notary only generally stated that it was his practice to “ask and confirm” the identity of the signer, it was too conclusory to establish a triable issue of fact.

  • Van Kipnis v. Van Kipnis, 11 N.Y.3d 573 (2008): Enforceability of Foreign Prenuptial Agreements on Equitable Distribution

    11 N.Y.3d 573 (2008)

    A prenuptial agreement designating assets as separate property, including those acquired during the marriage, will be enforced to preclude equitable distribution upon divorce, absent an express waiver of equitable distribution in the agreement.

    Summary

    This case concerns the enforceability of a French prenuptial agreement in a New York divorce proceeding. The Court of Appeals held that the agreement, which established a separation of estates regime, validly precluded equitable distribution of separately held assets. The court clarified that a prenuptial agreement need not contain an explicit waiver of equitable distribution to be enforceable, as long as it clearly designates assets as separate property. The Court also addressed maintenance and attorney fees, remitting the case for reconsideration of legal fees incurred while contesting the applicability of the prenuptial agreement.

    Facts

    Claire and Gregory Van Kipnis married in France in 1965. Before the wedding, they executed a “Contrat de Mariage” under the French Civil Code, opting for a separation of estates regime. This agreement stipulated that each spouse would retain ownership of their assets, acquired before or during the marriage. After marrying, the couple moved to New York, maintained separate accounts, and acquired two jointly-owned homes. In 2002, Claire filed for divorce, seeking equitable distribution of all assets.

    Procedural History

    The Supreme Court allowed Gregory to amend his answer to assert the prenuptial agreement as a defense against equitable distribution. The Appellate Division affirmed. A Special Referee determined the French contract provided for separate ownership of assets. The Supreme Court confirmed the Referee’s report. The Appellate Division affirmed, and the New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the 1965 French prenuptial agreement, establishing a separation of estates, precludes equitable distribution of property acquired during the marriage under New York Domestic Relations Law § 236 (B).

    2. Whether the lower courts properly weighed the factors in Domestic Relations Law § 236(B)(6)(a) when awarding maintenance.

    3. Whether the lower courts erred by precluding the wife’s recovery of legal fees under Domestic Relations Law § 237 for services provided in opposing the husband’s affirmative defense based on the prenuptial agreement.

    Holding

    1. Yes, because the agreement clearly designated assets acquired during the marriage as separate property, and Domestic Relations Law § 236 (B) (1) (d) (4) and (5) (b) provide that such assets remain separate upon dissolution of the marriage.

    2. No, because the record supports the findings of the lower courts, and there was no abuse of discretion in their calculation.

    3. Yes, because the wife’s request is similar to the fee application in Ventimiglia v Ventimiglia, where attorneys’ fees were awarded to a party who contested her spouse’s affirmative defense based on an antenuptial agreement; therefore, this portion of wife’s fee application should not have been excluded as a matter of law.

    Court’s Reasoning

    The Court reasoned that prenuptial agreements are generally valid and enforceable under New York law, reflecting a policy of allowing individuals to control their own interests through contracts. The court cited Bloomfield v Bloomfield, 97 NY2d 188, 193 (2001). The Court emphasized that such agreements must be interpreted based on the parties’ intent, as expressed in the writing. The Court stated, “a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (Greenfield v Philles Records, 98 NY2d 562, 569 [2002]). The agreement clearly stipulated a “separation of estates” where each party retained ownership of their assets acquired during the marriage. According to the Court, Domestic Relations Law § 236 (B) does not mandate an express waiver of equitable distribution in a prenuptial agreement. The key is whether the agreement sufficiently designates assets as separate property, thus removing them from the scope of equitable distribution. On maintenance, the Court found no abuse of discretion in the lower courts’ calculation. As for attorney’s fees, the Court distinguished the case from situations where a party seeks to set aside a prenuptial agreement. Because the wife was contesting the applicability of the agreement, the Court remitted the case for reconsideration of the legal fees related to that challenge, relying on Ventimiglia v Ventimiglia, 36 AD3d 899 (2d Dept 2007).

  • Bloomfield v. Bloomfield, 97 N.Y.2d 188 (2001): Enforceability of Prenuptial Agreements and Waiver of Support

    Bloomfield v. Bloomfield, 97 N.Y.2d 188 (2001)

    A prenuptial agreement that waives only property rights does not constitute a waiver of spousal support; however, the agreement remains subject to review for unconscionability at the time of enforcement.

    Summary

    This case addresses the enforceability of a prenuptial agreement executed in 1969. The New York Court of Appeals held that the agreement, which waived spousal property rights, did not implicitly waive the right to spousal support. The Court emphasized that contracts should be construed to favor legality when possible. Because the agreement was silent on the issue of support, it did not violate the General Obligations Law in effect at the time of its creation. However, the Court remitted the case to the Supreme Court to determine whether the agreement was unconscionable, considering the circumstances at the time enforcement was sought. This ruling underscores the importance of clear and explicit language in prenuptial agreements and the ongoing scrutiny of such agreements for fairness.

    Facts

    The husband, a 30-year-old attorney, and the wife, a 24-year-old antiques dealer, married in 1969. Before the marriage, the husband drafted a prenuptial agreement where the wife waived her rights to any of the husband’s property, present or future. The wife was not represented by counsel. In 1995, the husband initiated divorce proceedings, and two years later, he invoked the prenuptial agreement as a defense against the wife’s claim for equitable distribution.

    Procedural History

    The Supreme Court declared the prenuptial agreement void, citing violations of the 1969 General Obligations Law and non-compliance with Domestic Relations Law. The Appellate Division affirmed, holding the agreement constituted an impermissible waiver of support and allowed the wife to challenge the agreement’s validity due to the marriage tolling the statute of limitations. The husband appealed to the New York Court of Appeals.

    Issue(s)

    Whether a prenuptial agreement that waives spousal property rights also constitutes a waiver of spousal support, and whether such an agreement is enforceable.

    Holding

    No, because the agreement explicitly waived only property rights, not the right to support. The case was remitted to determine if the agreement was unconscionable at the time of enforcement.

    Court’s Reasoning

    The Court of Appeals reasoned that the agreement’s plain language only waived the wife’s right to the husband’s property, lacking any explicit or implicit reference to a waiver of support obligations. The Court stated, “A waiver of rights to present and future interests in plaintiffs property, without more, does not constitute a waiver of the right to receive support.” Construing the agreement to include a support waiver would be an improper addition to the contract’s terms. The Court emphasized the principle that contracts should be construed to favor legality when possible, citing Galuth Realty Corp. v Greenfield, 103 AD2d 819. Regarding the timing of applicable law, the Court noted that public policy changes, as reflected in the updated General Obligations Law § 5-311, should be considered at the time of enforcement, not just at the time of the agreement’s creation. The Court remanded the case to Supreme Court to address the unresolved issue of unconscionability, acknowledging the Appellate Division’s concerns about the agreement’s fairness but emphasizing that this issue was not fully addressed in the prior rulings. The Court acknowledged a “strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements” (Matter of Greiff, 92 NY2d 341, 344), but also implicitly recognized the need for fairness when enforcing prenuptial agreements, especially when significant time has passed since their execution.

  • Greiff v. Greiff, 92 N.Y.2d 341 (1998): Burden of Proof in Challenging Prenuptial Agreements

    Greiff v. Greiff, 92 N.Y.2d 341 (1998)

    When a confidential relationship exists between parties entering into a prenuptial agreement, the burden of persuasion shifts to the proponent of the agreement to prove it was free from fraud, deception, or undue influence.

    Summary

    This case addresses the evidentiary burden in challenges to prenuptial agreements, especially where a relationship of trust exists between the parties. Helen and Herman Greiff, ages 65 and 77, respectively, entered into prenuptial agreements before their marriage. Herman died three months later, excluding Helen from his will, which favored his children from a prior marriage. Helen sought her elective share of the estate, challenged by Herman’s children based on the prenuptial agreement. The Surrogate’s Court invalidated the agreement, finding Herman had exerted undue influence. The Appellate Division reversed, stating Helen failed to prove fraud. The Court of Appeals reversed again, holding that the burden of proof can shift to the proponent of the prenuptial agreement if the challenging party demonstrates a relationship of trust and confidence where unfair advantage was probable.

    Facts

    Helen and Herman Greiff married in 1988 when they were 65 and 77 years old. They executed reciprocal prenuptial agreements, each waiving their right to elect against the other’s estate. Herman’s will left his entire estate to his children, excluding Helen. Herman died three months after the marriage. The Surrogate Court found that Herman was in a position of great influence over Helen, selected and paid for her attorney, and engaged in unfair dealings.

    Procedural History

    Helen Greiff petitioned for her statutory elective share of Herman Greiff’s estate. Herman’s children opposed, citing the prenuptial agreements. The Surrogate’s Court invalidated the prenuptial agreements. The Appellate Division reversed, finding Helen failed to prove fraud or overreaching. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the special relationship between betrothed parties executing a prenuptial agreement warrants shifting the burden of persuasion regarding its legality and enforceability to the proponent of the agreement, specifically, whether Helen demonstrated that her premarital relationship with Herman manifested “probable” undue and unfair advantage.

    Holding

    Yes, because when the relationship between parties to a prenuptial agreement demonstrates a probable undue and unfair advantage by one party, the burden shifts to the proponent of the agreement to prove freedom from fraud, deception, or undue influence.

    Court’s Reasoning

    The Court of Appeals acknowledged the general rule that a party challenging a contract bears the burden of proving fraud. However, it recognized an exception where parties have a relationship of trust and confidence. In such cases, the burden shifts to the party in whom trust is reposed to disprove fraud or overreaching. The court clarified that this burden shift is not automatic but depends on the specific facts of the relationship between the parties. The court explicitly distanced itself from the outdated premise in Graham v Graham, which assumed men naturally had disproportionate influence over women. Instead, the court adopted a “fairer, realistic appreciation of cultural and economic realities.” The court noted that in Matter of Phillips, the court indicated some extra leverage could arise from the “circumstances in which the agreement was proposed.” The Court emphasized that, based on the Surrogate Court’s findings regarding Herman’s influence and conduct, the Appellate Division should have considered whether the relationship warranted shifting the burden of proof to Herman’s children to demonstrate the prenuptial agreements were free from fraud or undue influence. The Court remitted the case to the Appellate Division for further consideration of this issue and other issues not previously addressed. The Court stated, “Whenever * * * the relations between the contracting parties appear to be of such a character as to render it certain that * * * either on the one side from superior knowledge of the matter derived from a fiduciary relation, or from an overmastering influence, or on the other from weakness, dependence, or trust justifiably reposed, unfair advantage in a transaction is rendered probable, * * * it is incumbent upon the stronger party to show affirmatively that no deception was practiced, no undue influence was used, and that all was fair, open, voluntary and well understood.”