Holsberger v. Holsberger

• Decision Date: 26 October 2017
• Docket Number: 523961.
• Citation: 154 A.D.3d 1208,63 N.Y.S.3d 559
• Parties: Nancy M. HOLSBERGER, Respondent, v. Carl E. HOLSBERGER, Appellant.
• Court: New York Supreme Court — Appellate Division

154 A.D.3d 1208

63 N.Y.S.3d 559

Nancy M. HOLSBERGER, Respondent,

v.Carl E. HOLSBERGER, Appellant.

523961.

Supreme Court, Appellate Division, Third Department, New York.

Oct. 26, 2017.

Carl E. Holsberger, Schenectady, appellant pro se.

Rappazzo & Bauscher, Schenectady (Rachel A. Rappazzo of counsel), for respondent.

Before: McCARTHY, J.P., LYNCH, CLARK, AARONS and PRITZKER, JJ.

LYNCH, J.

Appeal from an order of the Supreme Court (Reilly Jr., J.), entered December 30, 2015 in Schenectady County, which, upon reargument, directed, among other things, defendant to pay plaintiff certain amounts.

Plaintiff (hereinafter the wife) and defendant (hereinafter the husband) were married in September 1980 and divorced in January 1998. The judgment of divorce incorporated, but did not merge, a separation agreement executed in 1988, as amended in a 1998 addendum. In relevant part, the separation agreement provided that "[n]either party at any time shall contract any debts, charges or liability whatsoever, for which the other party ... shall or may become liable for; and the [h]usband and [w]ife covenant and agree that they will keep each other free and indemnify from any and all debts, charges and liabilities hereinafter contracted or incurred by the other party." Pursuant to the addendum, the parties agreed that the husband would purchase the marital residence, and the husband acknowledged his obligation to pay a 1993 note and mortgage in the amount of $50,000 held by the wife to secure her interest in the property. In 2000, the husband signed a "mortgage note" to consolidate certain debt owed to the wife under the separation agreement as amended, including the amount due on the 1993 note.

In April 2012, the wife was informed by a credit card company that the husband had stopped making payments on a credit card that was once jointly held but was assumed by the husband when the parties separated. She obtained a copy of her credit report and learned that a personal loan in the amount of $6,810 had been taken on the same credit card. The wife paid the credit card debt and, in October 2012, she moved by order to show cause for an order pursuant to CPLR 5104 punishing the husband for contempt for his failure to comply with the provisions of the judgment. In addition to seeking indemnification for the credit card debt, the wife also sought an order directing the husband to pay her the amount she claimed was due pursuant to the mortgage note executed in 2000. After an evidentiary hearing, Supreme Court denied the wife's motion. The court thereafter granted the wife's motion to reargue and directed the husband to pay the wife $6,301.17 towards the credit card debt, $23,651 plus interest in the amount of $17,738.25 pursuant to the terms of the note, together with counsel fees in the amount of $11,000. The husband now appeals.

This appeal presents two threshold issues. First, whether the wife can enforce the separation agreement and the 2000 mortgage note by order to show cause, and, second, whether enforcement of either or both is barred by the statute of limitations. With respect to the credit card debt, the wife testified that at the time the parties divorced, the credit card had a zero balance. The husband acknowledged that he used the credit card from 1997 until 2010 and claimed that he attempted to remove the wife's name from the account. The wife indisputably paid off the debt. As for the mortgage note, the wife testified that the husband made payments in the amount of approximately $23,000 pursuant to the 1993 mortgage note. In 2000, the husband executed the second note in the amount of $23,651, which represented the remaining sum due to the wife after the sale of the marital residence. Pursuant to the second mortgage note, the husband was required to make monthly payments for a period of seven years, but the wife testified that no payments were made.

Initially, we reject the husband's argument that the wife was obligated to commence a plenary action to enforce the terms of the separation agreement. "A separation agreement that is incorporated into, but does not merge with, a subsequent judgment of divorce is a legally binding, independent contract between the parties and is interpreted so as to give effect to the parties' intent" ( Bell v. Bell, 151 A.D.3d 1529, 1529, 54 N.Y.S.3d 776 [2017] [citations omitted] ). Where, as here, a separation agreement is incorporated within a judgment of divorce, the judgment may be enforced by "application ... upon such notice to the spouse ... as the court may direct" ( Domestic Relations Law § 244 ; see Parnes v. Parnes, 41 A.D.3d 934, 936, 837 N.Y.S.2d 777 [2007] ; Enck v. Enck, 228 A.D.2d 999, 1000, 645 N.Y.S.2d 121 [1996] ). We do agree with the husband that Supreme Court was not authorized to punish him for contempt because the wife "did not allege that any non-contempt enforcement method had been attempted or would not be effective" ( Parnes v. Parnes, 41 A.D.3d at 936, 837 N.Y.S.2d 777 ; see MacKinnon v. MacKinnon, 277 A.D.2d 636, 638, 716 N.Y.S.2d 449 [2000] ; Mastrantoni v. Mastrantoni, 242 A.D.2d 825, 826, 661 N.Y.S.2d 874 [1997].¹ That said, since the husband was clearly on notice, we find that Supreme Court properly characterized the wife's application to be indemnified for the credit card payment as one for enforcement pursuant to Domestic Relations Law § 244 (see Parnes v. Parnes, 41 A.D.3d at 936, 837 N.Y.S.2d 777 ). Since the covenant against debts derives from the separation agreement that was incorporated into the judgment, a plenary action to formalize that obligation was not necessary, and the wife was entitled to enforce this obligation through a Domestic Relations Law § 244 motion (see Kraus v. Kraus, 131 A.D.3d 94, 102, 14 N.Y.S.3d 55 [2015] ).

We reach a different result with regard to the enforcement of the 2000 mortgage note. By the 1998 addendum, the parties added various provisions to the separation agreement "as if fully incorporated therein." Pertinent here, the addendum includes the husband's acknowledgment of the 1993 note and mortgage payable to the wife. The 2000 note expressly provided that the document "consolidated and coordinated" "a number of documents, including [the] [s]eparation [a]greement ... and [the 1993 note and mortgage] ... so that together there is owed the sum set [forth] in this agreement." Notably, it provided that "[a]ll terms and conditions of the prior documents that are in conflict with any terms and conditions of this note shall be controlled by the terms and conditions of this note and security agreement so that in the future only this note and security agreement exists " (emphasis added). Given the underscored phrase, we conclude that the 2000 mortgage note effectively superceded the first note and cannot be treated as having been incorporated into the prior judgment of divorce. Since there is no separate order directing payment of the 2000 mortgage note, payment could not be enforced pursuant to Domestic Relations Law § 244 (see Baker v. Baker, 66 N.Y.2d 649, 651, 495 N.Y.S.2d 959, 486 N.E.2d 817 [1985] ; Anonymous v. Anonymous, 27 A.D.3d 356, 360, 814 N.Y.S.2d 21 [2006] ; Mendler v. Mendler, 158 A.D.2d 276, 277, 550 N.Y.S.2d 678 [...