Matisoff v. Dobi

• Decision Date: 08 May 1997
• Citation: 659 N.Y.S.2d 209,681 N.E.2d 376,90 N.Y.2d 127
• Parties: , 681 N.E.2d 376 Louise MATISOFF, Appellant, v. Stephen DOBI, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 209

659 N.Y.S.2d 209

90 N.Y.2d 127, 681 N.E.2d 376

Louise MATISOFF, Appellant, v. Stephen DOBI, Respondent.

Court of Appeals of New York.

May 8, 1997.

Clair & Daniele, New York City (Bernard E. Clair and Karen Golden, of counsel), for appellant.

Shays, Kemper, New York City (Stanley D. Heisler, of counsel), and Squadron, Ellenoff, Plesent & Sheinfeld, L.L.P. (Neal M. Goldman, of counsel), for respondent.

OPINION OF THE COURT

KAYE, Chief Judge.

Domestic Relations Law § 236(B)(3) states that a nuptial agreement made before or during the marriage must satisfy three requirements to be "valid and enforceable in a matrimonial action." First, the agreement must be in writing. Second, it must be subscribed by the parties and third, it must be "acknowledged or proven in the manner required to entitle a deed to be recorded." At issue here is the validity of a written postnuptial agreement that was signed by the parties but not acknowledged. Because neither the statute's unambiguous language nor its history suggests that the Legislature intended the acknowledgment prerequisite to be dispensable, we conclude that the unacknowledged agreement here is unenforceable.

I.

Plaintiff Louise Matisoff and defendant Stephen J. Dobi were married on April 13, 1981. Because of defendant's two prior unsuccessful marriages, plaintiff wished to protect her real property and other assets in the event that their marriage failed. Thus, at plaintiff's urging, the parties entered into a postnuptial agreement one month later. At the time, plaintiff was a real estate salesperson in the New York cooperative apartment market, and defendant was an advisor to the Commissioner of the New York City Department of Cultural Affairs. Each earned approximately $40,000 annually.

The agreement provided that the parties waived any rights of election pursuant to the Estates, Powers and Trusts Law "and other rights accruing solely by reason of the marriage" with regard to property presently owned or subsequently acquired by either party. It further specified that "neither party shall have nor shall such party acquire any right, title or claim in and to the real and personal estate of the other solely by reason of the marriage of the parties." The agreement was drafted by an attorney friend of plaintiff and signed by both plaintiff and defendant. It is undisputed, however, that the document was not acknowledged by the parties or anyone else.

Throughout their 13-year marriage, plaintiff and defendant maintained substantially separate finances. They kept separate bank accounts; divided household, vacation and entertainment costs; borrowed money from one another; reimbursed each other for occasional purchases made on the other spouse's credit card; and either filed individual tax returns or separately paid proportional shares of a joint return.

During the first few years of marriage, defendant, who had previously fulfilled most of the requirements for a Ph.D. in film, completed his dissertation and received his Ph.D. After working in the performing arts and film fields for several years, defendant decided to attend business school. He received a Masters in Business Administration in 1987 and subsequently worked as a stock market research analyst in a New York City investment firm.

This divorce action was commenced on September 17, 1992. By that time, defendant's annual salary had risen to over $400,000, while plaintiff continued to earn approximately $40,000. Defendant sought to enforce the postnuptial agreement as a bar to any claim of entitlement by plaintiff to his property acquired before or during the marriage. Plaintiff, however, contended that the agreement was invalid because it was not acknowledged as required by Domestic Relations Law § 236(B)(3). Both parties testified at trial that they had signed the agreement, and neither made any allegation of fraud or duress.

Supreme Court deemed the agreement unenforceable, concluding that admissions by the parties, during a divorce trial 13 years later, that the signatures on the agreement were genuine failed to validate the unacknowledged agreement. The court granted the divorce, divided the marital property and awarded plaintiff monthly maintenance and attorney's fees.

The Appellate Division reversed, one Justice dissenting. The majority held that failure to comply with the statutory requirement of acknowledgment did not constitute an absolute bar to enforcing a nuptial agreement. Noting that the purpose of the statute was to prevent fraud and overreaching in marital contracts, the court found that here there was no allegation by plaintiff of fraud, duress or misunderstanding. To the contrary, it was plaintiff who had insisted upon the agreement to protect her property interests, and the agreement had been drafted by an attorney selected by her. The Court further concluded that the terms of the postnuptial agreement "were acknowledged and ratified in the daily activities and property relations of the parties throughout [the] marriage" (228 A.D.2d 200, 202, 644 N.Y.S.2d 13). The Appellate Division thus determined that, in these particular circumstances, the nuptial agreement should be enforced.

We disagree. Under the Appellate Division analysis, the enforceability of an unacknowledged nuptial agreement would vary with the original motivation of the party challenging the agreement and whether the couple's behavior during the marriage was consistent with the terms of the agreement. Such uncertainty is contrary to the plain language of Domestic Relations Law § 236(B)(3), which recognizes no exception to the requirement of formal acknowledgment. We therefore reverse, holding that the requisite formality explicitly specified in Domestic Relations Law § 236(B)(3) is essential. Because the Appellate Division never reached the trial court's equitable distribution and maintenance determinations, we remit to that court for review of Supreme Court's award in light of our determination.

II.

Domestic Relations Law § 236(B) was enacted in 1980 as part of the Equitable Distribution Law, which significantly reformed the New York statutory scheme governing division of property, economic life and familial rights and obligations upon dissolution of a marriage (see, L. 1980, ch. 281). In keeping with the strong public policy in favor of individuals resolving their own family disputes (see, Scheinkman, New York Law of Domestic Relations § 6.1, at 123), subdivision (3) authorizes spouses or prospective spouses to contract out of the elaborate statutory system and provide for matters such as inheritance, distribution or division of property, spousal support, and child custody and care in the event that the marriage ends.

Domestic Relations Law § 236(B)(3) provides that such "[a]n agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded" (emphasis added).

Pursuant to the Real Property Law, proper acknowledgment or proof is an essential prerequisite to recording a deed in the office of the county clerk (see, Real Property Law § 291). Such acknowledgment or proof, moreover, must meet various specifications. The Real Property Law dictates who may make an acknowledgment or proof (see, Real Property Law § 292); before whom such acknowledgment or proof may be made (see, Real Property Law §§ 298, 299); that an officer taking an acknowledgment must "know[ ] or [have] satisfactory evidence, that the person making it is the person described in and who executed such instrument" (Real Property Law § 303; see also, Real Property Law § 304 [concerning proof by subscribing witness] ); ); that the person taking the acknowledgment or proof must attach a certificate of acknowledgment (see, Real Property Law § 306); and the contents of that certificate (see, id.).

The agreement here is concededly unacknowledged and, therefore, does not comply with the terms of Domestic Relations Law § 236(B)(3). Defendant argues that literal compliance with the statutory requirement of acknowledgment is not required so long as the purpose of that requirement is satisfied. Plaintiff, on the other hand, urges that the statute mandates strict compliance with its terms.

Generally, acknowledgment serves to prove the identity of the person whose name appears on an instrument and to authenticate the signature of such person. According to defendant, acknowledgment is thus essential only where fraud, duress or mistake is alleged with regard to a nuptial agreement. He contends that where, as here, the party seeking to void an agreement admits having signed the agreement, the agreement was entered into at that party's behest, and the couple conducted its economic affairs in a manner consistent with the terms of the agreement, there is no issue of fraud or overreaching and the absence of acknowledgment does not undermine the validity of the agreement.

We are thus faced with a not-unfamiliar dilemma for courts charged with interpreting statutes: should we be guided by the apparent rationale underlying a statute or by its actual terms? Indeed, more than a century ago this Court observed that

"we are warned on the one side that the strict letter of the law is not to master its obvious spirit and intent; and on the other that we are judges and not legislators, and must not assume to make exceptions or insert qualifications, however justice may seem to require it. Both warnings are just and sanctioned by authority, and must have their influence upon our judgment" (Chamberlain v. Spargur, 86 N.Y. 603, 606).

Most often, the letter and spirit of the law are congruent, or any alleged disparities can be reconciled. Thus, where a statute's language is capable of various constructions, the "obvious spirit and intent" of a statute necessarily informs the meaning...