Abbate v. Abbate

• Decision Date: 27 July 1981
• Citation: 441 N.Y.S.2d 506,82 A.D.2d 368
• Parties: Anne Marie ABBATE, Respondent, v. Guy ABBATE, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 506

441 N.Y.S.2d 506

82 A.D.2d 368

Anne Marie ABBATE, Respondent, v. Guy ABBATE, Appellant.

Supreme Court, Appellate Division Second Department.

July 27, 1981.

Cadwalader, Wickersham & Taft, New York City (Howard R. Hawkins, Jr., Earl H. Nemser and Richard C. Finke, New York City, of counsel), for appellant.

Brookman & Brookman, New York City (Michael D. Brookman, New York City, and Sanford J. Shaffer of counsel), for respondent.

Before HOPKINS, J. P., and DAMIANI, LAZER and MANGANO, JJ.

DAMIANI, Justice.

The issues on this appeal are whether the facts present a basis for the exercise of so-called long-arm jurisdiction over the person of the nonresident defendant and whether plaintiff's action for rescission of a contract upon the ground of fraudulent inducement is barred by the Statute of Limitations.

THE FACTS

The parties were married in 1956 and have four children. The defendant husband is a medical doctor. They moved to this country from Europe in 1960 and took up residence in Brooklyn, New York. The husband became an officer in the United States Air Force and his family moved with him to his assigned post in Illinois. While the parties were residents of that State, the wife obtained a decree of divorce from the Circuit Court for the Twentieth Judicial Circuit of Illinois, filed September 28, 1966, upon the ground of the husband's adultery. The wife was awarded custody of the children and the decree contained the following provision regarding their support and alimony for the wife:

"c. That child support for the four (4) minor children of this marriage shall be paid by the defendant through the Clerk of this Court to the plaintiff for the use and benefit of said children in the sum of Five Hundred ($500.00) Dollars per In the summer of 1972 the parties executed an agreement which had the effect of modifying the provisions of the Illinois divorce decree by increasing the $700 monthly payments specified therein to $900 at first, and to $1,000 per month shortly thereafter. The agreement also contained, inter alia, a clause which provided for the adjustment of monthly payments at the end of each calendar year by an amount reflecting the increase in the United States Department of Commerce Cost of Living Index. While the agreement thus increased payments to the wife, it did not contain a provision like the one in the divorce decree calling for the husband to pay her one-half of his "after tax income".

month and at the same time and in the same manner alimony shall be paid to the plaintiff in the sum of Two Hundred ($200.00) Dollars per month, said first payment of Seven Hundred ($700.00) Dollars to be due and owing on or about the first day of October, 1966. Said Seven Hundred ($700.00) Dollars monthly obligation shall continue until the defendant's income from all sources after Federal Income Taxes equals Sixteen Thousand Eight Hundred ($16,800.00) Dollars per year whereupon, and immediately upon reaching said figure in any calendar year, child support and alimony shall be based on a percentage basis. After said Sixteen Thousand Eight Hundred ($16,800.00) Dollar income is reached, Fifty Per Cent (50%) of defendant's income as above described shall go to the plaintiff and minor children as follows. Twenty Per Cent (20%) of defendant's income to the plaintiff as alimony and Thirty Per Cent (30%) of the defendant's income to the plaintiff for the use and benefit of the children as child support. The Court being aware of the defendant's consent to support the minor children until the age of twenty-one (21) or until emancipation after the age of Eighteen (18) years, it is hereby ordered and decreed that said child support shall extend to each child until that child reaches twenty-one (21) or becomes emancipated after the age of eighteen (18) years, whichever occurs first. For these purposes a child leaving its home to reside elsewhere for the purpose of schooling or other educational reasons shall not be interpreted as leaving the household of the plaintiff. When a child becomes emancipated or reaches twenty-one (21) whichever occurs first, after the age of eighteen (18), said thirty per cent (30%) figure above-described shall be reduced accordingly by one-quarter, there being four (4) minor children of this marriage."

In 1978 the wife learned that her former husband had become very successful and that his 1972 income was more than she had been led to believe when she signed the agreement. On or about October 10, 1978 this action was commenced by personal service of a summons upon the defendant at his home in North Carolina. The complaint was served on December 4, 1978, seeking, in substance, to set aside the agreement dated August 14, 1972 upon the ground that it was induced by fraud.

Thereafter the defendant moved pursuant to CPLR 3211 (subd. pars. 5 and 8) to dismiss the action upon the grounds that (1) plaintiff's cause of action for rescission of their 1972 agreement was barred by the Statute of Limitations and (2) the courts of New York lacked jurisdiction over his person. A hearing was held on the motion before Mr. Justice DOUGLAS F. YOUNG in Special Term, Nassau County. The proof adduced at the hearing established that after their divorce in Illinois the parties each eventually returned to New York. In May of 1971 the defendant moved with his new wife to Waynesville, North Carolina, where he established a medical practice.

In 1972 the defendant's after tax income, for the first time, exceeded the $16,800 trigger figure specified in the divorce decree and his accountant wrote to the plaintiff informing her that based on defendant's 1971 tax return he had $17,255.80 in after tax income. The plaintiff then became entitled to one-half the defendant's after tax income rather than the specified monthly payments of $700. The result was an increase of only $227.90 per year, from $8,400 to $8,627.90.

In the spring of 1972 the plaintiff made several telephone calls to defendant at his home in North Carolina seeking more money. Finally, she spoke to a New York lawyer who agreed, as an accommodation, to write to the defendant on her behalf despite the fact that she could not afford to employ him.

In mid May, 1972 defendant, after receiving the letter from the New York lawyer, contacted an attorney named John I. McMahon, who was admitted to the bar of the courts of Pennsylvania and had his offices in that State. McMahon testified at the hearing that he became acquainted with defendant in 1970 when he became general counsel to an investment advisory company then called Personal Money Management, Inc., which directed its efforts toward incorporating high income individuals such as doctors and establishing pension plans and "all the other things that go with a professional corporation." It had a branch in North Carolina and Dr. Abbate became its client. Apparently, McMahon handled the establishment of a professional corporation for Dr. Abbate and the creation of pension and profit sharing plans, etc. The incorporation papers were filed on September 15, 1971.

Defendant spoke to McMahon by telephone and revealed that he had previously been married and divorced and that the former Mrs. Abbate had asked him to change the terms of the alimony and support provisions of the divorce decree. Defendant asked McMahon for help.

Defendant testified that in the spring of 1972 he had held some seven telephone conversations with his former wife concerning her request for more money and that, as a result of those conversations, he reached an agreement with her to increase monthly payments. During these conversations he told plaintiff that if they stayed with the old agreement things would probably get a lot better because he had just started his North Carolina practice. After he negotiated all the terms of the agreement on the telephone with his wife, he called McMahon and asked him to put those terms in the form of a legal document that would supersede the original divorce decree. He did not give McMahon authority to negotiate with plaintiff.

The plaintiff's version of these telephone conversations was quite different from that of defendant. According to her, she called defendant in the spring of 1972 and told him that she was having financial troubles and needed more money. Defendant said that he could not help her and, although they spoke on the telephone about modifying the divorce decree, they always ended up arguing and they never agreed to anything.

Defendant testified that during these telephone conversations with plaintiff he never said that he was broke and could not afford to pay more. When plaintiff asked for more money, the only thing that he thought necessary was to reach agreement on "a fee that she could accept."

In any event, when defendant called McMahon he "laid out" the financial terms of the agreement and McMahon suggested the cost of living escalation clause. McMahon could not recall whether defendant told him that he had reached agreement on those terms, but he assumed that there had to have been some prior discussion and that defendant had not "dreamed" them up "out of the air." Defendant told McMahon that he wanted him "to go to New York and to get this deal made with Mrs. Abbate" and McMahon said that he would do the best he could. He testified that his instructions from defendant were to "persuade to sign the agreement."

Thereafter, McMahon called the New York attorney who had written to defendant and, after ascertaining that that attorney did not represent Mrs. Abbate, he called her directly. He told plaintiff that he wanted to talk with her about her request to modify the Illinois divorce decree and they arranged to meet in New York City on August 14, 1972. McMahon then telephoned defendant and reviewed the terms of the new agreement with him. As the result of that conversation, or several conversations, a document was prepared and McMahon was extensively examined by counsel...