Greiff, Matter of

• Decision Date: 27 October 1998
• Citation: 703 N.E.2d 752,680 N.Y.S.2d 894,92 N.Y.2d 341
• Parties: , 703 N.E.2d 752, 1998 N.Y. Slip Op. 9251 In the Matter of Herman GREIFF, Deceased. Helen GREIFF, Appellant, v. Wallace J. GREIFF et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 894

680 N.Y.S.2d 894

92 N.Y.2d 341, 703 N.E.2d 752, 1998

N.Y. Slip Op. 9251

In the Matter of Herman GREIFF, Deceased.

Helen GREIFF, Appellant, v. Wallace J. GREIFF et al., Respondents.

Court of Appeals of New York.

Oct. 27, 1998.

Miller and Korzenik, L.L.P., New York City (Jeffrey Craig Miller, of counsel), for appellant.

Ronnie M. Schindel and Stanley M. Nagler, New York City, for respondents.

OPINION OF THE COURT

BELLACOSA, Judge:

This appeal raises the question whether the special relationship between betrothed parties, when they execute a prenuptial agreement, can warrant a shift of the burden of persuasion bearing on its legality and enforceability. A party challenging the judicial interposition of a prenuptial agreement, used to defeat a right of election, may demonstrate by a preponderance of the evidence that the premarital relationship between the contracting individuals manifested "probable" undue and unfair advantage (Matter of Gordon v. Bialystoker Ctr. & Bikur Cholim, 45 N.Y.2d 692, 699-700, 412 N.Y.S.2d 593, 385 N.E.2d 285). In these exceptional circumstances, the burden should fall on the proponent of the prenuptial agreement to show freedom from fraud, deception or undue influence.

The reversal by the Appellate Division of the Surrogate's Court's decree reflects a misapprehension of governing law, in that the Appellate Division reached its conclusion without factoring or finding facts relevant to fixing the evidentiary burden for this kind of case. Thus, this Court should remit for plenary consideration of the particular legal issue, and all others explicitly bypassed but raised at the intermediate level of appellate review.

Appellant Helen Greiff married Herman Greiff in 1988 when they were 65 and 77 years of age, respectively. They had entered into reciprocal prenuptial agreements in which each expressed the usual waiver of the statutory right of election as against the estate of the other. The husband died three months after the marriage, leaving a will that made no provision for his surviving spouse. The will left the entire estate to Mr. Greiff's children from a prior marriage. When Mrs. Greiff filed a petition seeking a statutory elective share of the estate, Mr. Greiff's children countered with the two prenuptial agreements which they claimed precluded Mrs. Greiff from exercising a right of election against her husband's estate (see, EPTL 5-1.1[f] ).

A trial was held in Surrogate's Court, Kings County, on the issue of the validity and enforceability of the prenuptial agreements. The Surrogate explicitly found that the husband "was in a position of great influence and advantage" in his relationship with his wife-to-be, and that he was able to subordinate her interests, to her prejudice and detriment. The court further determined that the husband "exercised bad faith, unfair and inequitable dealings, undue influence and overreaching when he induced the petitioner to sign the proffered antenuptial agreements," particularly noting that the husband "selected and paid for" the wife's attorney. Predicated on this proof, the credibility of witnesses and the inferences it drew from all the evidence, Surrogate's Court invalidated the prenuptial agreements and granted a statutory elective share of decedent's estate to the surviving spouse.

The Appellate Division reversed, on the law, simply declaring that Mrs. Greiff had failed to establish that her execution of the prenuptial agreements was procured through her then-fiance's fraud or overreaching. This Court granted the widow leave to appeal. We now reverse.

A party seeking to vitiate a contract on the ground of fraud bears the burden of proving the impediment attributable to the proponent seeking enforcement (see, Matter of Gordon v. Bialystoker Ctr. & Bikur Cholim, 45 N.Y.2d 692, 698, 412 N.Y.S.2d 593, 385 N.E.2d 285, supra ). This rubric also applies generally to controversies involving prenuptial agreements (see, Matter of Phillips', 293 N.Y. 483, 488, 58 N.E.2d 504). Indeed, as an incentive toward the strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements, including prenuptial agreements (see, Matter of Davis', 20 N.Y.2d 70, 74, 281 N.Y.S.2d 767, 228 N.E.2d 768; Matter of Phillips', supra, at 491, 58 N.E.2d 504; EPTL 5-1.1, formerly Decedent Estate Law § 18), this Court has eschewed subjecting proponents of these agreements to special evidentiary or freighted burdens (see, Matter of Sunshine, 40 N.Y.2d 875, 876, 389 N.Y.S.2d 344, 357 N.E.2d 999).

Importantly, however, neither Sunshine in 1976 (supra ) nor Phillips' in 1944 (supra ) entirely insulates prenuptial agreements from typical contract avoidances. That proposition includes the kind of counterpoint advanced by the surviving spouse in this case to offset her stepchildren's use of the prenuptial agreements against her claim for her statutory elective share (see, Matter of Davis, supra, at 76, 281 N.Y.S.2d 767, 228 N.E.2d 768; Rhodes [editor], New York Actions and Remedies, Family Law, Wills and Trusts, Marriage and Dissolution, § 2.10; 3 Lindey, Separation Agreements and Antenuptial Contracts §§ 90.03, 90.06).

This Court has held, in analogous contractual contexts, that where parties to an agreement find or place themselves in a relationship of trust and confidence at the time of execution, a special burden may be shifted to the party in whom the trust is reposed (or to the proponent of the party's interest, as in this case) to disprove fraud or overreaching (see, e.g., Matter of Gordon v Bialystoker Ctr. & Bikur Cholim, supra, at 698-699, 412 N.Y.S.2d 593, 385 N.E.2d 285; Christian v. Christian, 42 N.Y.2d 63, 72, 396 N.Y.S.2d 817, 365 N.E.2d 849; Sharp v. Kosmalski, 40 N.Y.2d 119, 121-122, 386 N.Y.S.2d 72, 351 N.E.2d 721; see also, I Farnsworth, Contracts § 4.11, at 452 [2d ed.] ).

As an illustration, in Gordon (supra ), the administrator of the decedent's estate challenged the transfer of funds by the decedent, one month before her death, to the nursing home in which she was a patient. The Court restated its applied guidance, as part of the invalidation of the transfer, as follows:

"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...