Avildsen v. Prystay

• Decision Date: 19 September 1991
• Citation: 574 N.Y.S.2d 535,171 A.D.2d 13
• Parties: John AVILDSEN, Plaintiff-Respondent, v. Myroslawa PRYSTAY, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 535

574 N.Y.S.2d 535

171 A.D.2d 13

John AVILDSEN, Plaintiff-Respondent, v. Myroslawa PRYSTAY, Defendant-Appellant.

Supreme Court, Appellate Division First Department.

Sept. 19, 1991.

Ann Detiere, New York City, for defendant-appellant.

Harvey I. Sladkus, of counsel (Feiden, Dweck & Sladkus, New York City, attorneys) for plaintiff-respondent.

Before ROSENBERGER, J.P., and WALLACH, ASCH, KASSAL and SMITH, JJ.

WALLACH, Justice.

We affirm the order appealed from essentially for the reasons stated by Justice Fingerhood. However the issue addressed by the dissent--the alleged unconscionability of the bargain (not discussed by the motion court and upon which the dissenters would reverse and remand for a further hearing)--requires a response.

The judicial power to annul a contractual obligation because of its unconscionability was known at common law (see Matter of Friedman, 64 A.D.2d 70, 84, 407 N.Y.S.2d 999) and it has found statutory expression in the Uniform Commercial Code (UCC § 2-302). A pivotal finding which could trigger the exercise of such judicial nullification, whether under Code or common law, was where an egregiously oppressive contractual provision was perceived to emanate from a gross inequality in bargaining power between the contracting parties (e.g., Fischer v. General Electric Hotpoint, 108 Misc.2d 683, 438 N.Y.S.2d 690; Leonedas Realty Corp. v. Brodowsky, 115 Misc.2d 88, 454 N.Y.S.2d 183; Jones v. Star Credit Corp., 59 Misc.2d 189, 298 N.Y.S.2d 264) resulting in a contract "such as no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other" (Earl of Chesterfield v. Janssen, 2 Ves.Senn. 125, 155 [28 Eng.Rep. Reprint 82, 100].

The difficulty with invocation of the doctrine here to reopen this contract made on May 26, 1983 between the father and mother of a child born out of wedlock on November 5, 1981 for support of that child is that the presumptive inequality of two such contracting parties has been considered and preempted by the Legislature in enacting § 516 of the Family Court Act. In recognition of a well-founded perception that a man and a woman enmeshed in a relationship of that kind are almost never in combat on a level playing field, the statute has crafted some fairly elaborate machinery to restore the balance. The section requires prior notice of the proposed support contract to specified public authorities, and the imprimatur of the court constituted by law as an omnipotent umpire to prevent overreaching after an open court hearing and such fact finding as the court may deem appropriate. The arrangement, made by two parties each represented by independent counsel, thus partakes of all the solemnity of a stipulation made in open court, with additional built-in safeguards. While any judge is free to believe that a better piece of machinery could or should be devised, any judicial intervention of that sort is foreclosed by the supervening legislative solution.

Some of the unconscionability cases emphasize that the fairness vel non of the bargain under scrutiny must be appraised from the point of view of the parties at the time the bargain was made (e.g., Matter of Young, 81 Misc.2d 920, 367 N.Y.S.2d 717). Prior to the date when this agreement became conditionally effective, by the mother's signature, both plaintiff-father and defendant-mother were negotiating in the shadow of uncertainty as to the actual paternity of the child. Not only the parties but the state itself had a vital interest in resolving this uncertainty, and that primal state interest was held in 1979 to be the basic rationale supporting the constitutionality of Family Court Act § 516 in Bacon v. Bacon, 46 N.Y.2d 477, 414 N.Y.S.2d 307, 386 N.E.2d 1327, a mere four years before the resolution of this controversy under the same statute. In Bacon the Court of Appeals rejected a constitutional attack on the statute based on lack of equal protection, leveled at the allegedly suspect distinction drawn in the legislation between legitimate and illegitimate children.

As a facial matter, it is not surprising that the supreme court justice reviewing the bargain found the consideration tendered by the father adequate. He was to pay a lump sum of $55,000, plus the mother's counsel fees of $8,000. He bound himself to pay monthly installments of $1,037.92 over the next sixty months, or a total in excess of $125,000. The fact that on June 9, 1983, only two weeks later, based on the most advanced serological scientific test available, an expert rendered a report fixing the likelihood of paternity at 99%, should not alter the finality or stability of the arrangement. If that had been crucial, the parties would have been free to defer finality until the test results were known; but, for whatever reason, they chose not to adopt this course. The outcome of the post-agreement test procedure, clearly within the contemplation of the parties at the time the agreement was made, was not reserved by either as a future escape hatch for its alteration, nor was any such suggestion made before the supreme court justice at the hearing held by her less than one month later on July 5, 1983. Therefore, in our view, no tribunal of the state is now competent, eight years later, to revise the settlement.

Such a conclusion is only strengthened by the subsequent conduct of the parties. Starting in 1984, based on the father's contention that the mother had breached the non-molestation provisions of the agreement, he withheld direct payment of the accruing installments from her by depositing them in escrow. Thereupon the mother enforced the father's full compliance by the most powerful enforcement tool in the civil armory, a contempt proceeding against the father. She also sued for and recovered the interest accumulated on the arrears. Thus, in the most decisive way possible, she ratified the agreement.

Research has disclosed no case where a party has gone to law to extract every benefit obtainable under a contract, and has thereafter been permitted to repudiate the reciprocal obligations then regarded, with the benefit of hindsight, as too onerous. Apart from the manifest inequities, the bar to such conduct arises from the nature of the doctrine of unconscionability itself. As was observed in Super Glue Corp. v. Avis Rent A Car System, Inc., 132 A.D.2d 604, 606, 517 N.Y.S.2d 764,

"The doctrine of unconscionability is to be used as a shield, not a sword, and may not be used as a basis for affirmative recovery. Under both the UCC and common law, a court is empowered to do no more than refuse enforcement of the unconscionable contract or clause" [citations omitted].

Accordingly, the order of Supreme Court, New York County (Shirley Fingerhood, J.) entered March 22, 1990, which denied and dismissed defendant's application to vacate the court approved agreement between the parties dated March 18, 1983, and for related relief, is affirmed without costs.

Application by defendant-appellant to direct that plaintiff-respondent pay counsel fees (in the event the appellant prevails on appeal) is denied.

All concur except ROSENBERGER, J.P. and SMITH, J. who dissent in an Opinion by SMITH, J.

SMITH, Justice (dissenting).

Because I believe that the compromise agreement entered into by these unmarried parties pursuant to Family Court Act Section 516 fails to make adequate provision for the support of their child and is, therefore, unconscionable, I would reverse and, accordingly, dissent. The matter should be remanded for a determination of a proper amount of support. Only if it becomes necessary should financial disclosure by the plaintiff father be required.

On November 5, 1981, the defendant, Myroslawa Prystay, gave birth to a son. Throughout her pregnancy and since his birth, defendant has maintained that plaintiff, John Avildsen, a successful film director, was the father. The defendant commenced a paternity action in Family Court, New York County against the plaintiff prior to the child's birth, but it was dismissed without prejudice due to improper service. Subsequent thereto, but also prior to the child's birth, the plaintiff commenced an action in the Supreme Court, New York County seeking, inter alia, a declaratory judgment that he was not the father of the unborn child.

Plaintiff's declaratory action and Prystay's allegation of paternity were resolved by a compromise agreement dated March 18, 1983, executed by Avildsen on that date and executed by Prystay on May 26, 1983. In the compromise agreement Avildsen, inter alia, acknowledged paternity pending the results of blood grouping and HLA (Human Leucocyte Antigen) tests and agreed to provide for the support, maintenance and education of the child to the extent of payment of $55,000 at the time of entry of the order or judgment approving the agreement and the sum of $1,037.92 each month for a period of sixty (60) months commencing one month after entry of the said judgment or order. However, the agreement specifically provided that

"... in the event the results of the HLA Test and/or other tests reveal that John is not the father of the Child and/or that substantial medical doubt exists as to John's paternity, then this Agreement shall be cancelled and deemed by the parties to be null and void and of no legal effect whatever. The parties expressly agree that they are relying solely on the results of the aforesaid tests as a condition precedent to the viability and enforceability of this Agreement."

Several other provisions of the compromise agreement require mention. Pursuant to a non-molestation, non-disclosure clause, Avildsen would be entitled to recoup all sums paid under the compromise agreement in the event Prystay breached that clause. No relief or recourse was provided for Prystay in the event of a breach thereof by Avildsen. A general release clause provided that except as otherwise provided in the...