Yuda v. Yuda

• Decision Date: 03 October 1988
• Citation: 533 N.Y.S.2d 75,143 A.D.2d 657
• Parties: Israel YUDA, Appellant, v. Rebecca YUDA, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 75

533 N.Y.S.2d 75

143 A.D.2d 657

Israel YUDA, Appellant, v. Rebecca YUDA, Respondent.

Supreme Court, Appellate Division Second Department.

Oct. 3, 1988.

Jeffrey A. Cohen, White Plains (Lynn Maier, of counsel), for appellant.

Ferraro Rogers Dranoff Greenbaum Cody Goldstein & Miller, P.C., Pearl River (Veronica A. Shea and Donald J. Hayde, of counsel), for respondent.

Before KUNZEMAN, J.P., and EIBER, HARWOOD and BALLETTA, JJ.

MEMORANDUM BY THE COURT.

In an action for a divorce and ancillary relief, the plaintiff husband appeals from an order of the Supreme Court, Rockland County (Nelson, J.), dated May 19, 1987, which, after a hearing, denied his motion to vacate an order and judgment (one paper) of the same court (Stolarik, J.), dated December 24, 1986, which was based on an oral stipulation of settlement.

ORDERED that the order and judgment is reversed, on the facts, without costs or disbursements, the order and judgment is vacated, and the stipulation is declared to be null and void.

The plaintiff Israel Yuda, currently about 63 years old, and the defendant Rebecca Yuda, currently about 64 years old, were married in 1956. On November 5, 1986, the plaintiff, pro se, and the defendant, who was represented by counsel, entered into a stipulation of settlement in open court. This stipulation was reduced to an order and judgment. The order and judgment provided, inter alia:

(1) With respect to the marital premises, the plaintiff was obligated to leave the marital abode by May 31, 1987. The defendant was given exclusive occupancy of the marital premises until the sale thereof which was to be at her sole discretion. Upon the sale of the premises the plaintiff was to receive one-half of the proceeds. The defendant could rent the premises and retain the rent which she received; however, the "defendant [could not] rent or sublet the entire marital abode".

(2) With respect to maintenance, after the plaintiff moved from the marital abode, he was required to pay the defendant $800 per month for life.

(3) With respect to equitable distribution, inter alia, the defendant was to receive 50% of the plaintiff's pension benefits when the plaintiff retired, in addition to the $800 per month payment.

The plaintiff moved to set aside the stipulation on the grounds, inter alia, that it was unconscionable. The Supreme Court denied the motion and this appeal ensued.

Relief from a stipulation of settlement will only be granted upon a showing of good cause sufficient to invalidate a contract (see, Daniels v. Banks, 136 A.D.2d 675, 523 N.Y.S.2d 1013; Sontag v. Sontag, 114 A.D.2d 892, 495 N.Y.S.2d 65; appeal dismissed 66 N.Y.2d 554, 498 N.Y.S.2d 133, 488 N.E.2d 1245). Moreover, "[s]tipulations of settlement are favored by the courts and not lightly cast aside (see, Matter of Galasso, 35 N.Y.2d 319, 321, 361 N.Y.S.2d 871, 320 N.E.2d 618)" (Sontag v. Sontag, supra, at 893, 495 N.Y.S.2d 65). Nevertheless, the courts will strictly scrutinize separation agreements "to see to it that they are arrived at fairly and equitably, in a manner so as to be free from the taint of fraud and duress, and to set aside or refuse to enforce those born of and subsisting in inequity" (Christian v. Christian, 42 N.Y.2d 63, 72, 396 N.Y.S.2d 817, 365 N.E.2d 849).

Actual fraud need not be shown if the agreement is manifestly unfair to a spouse because of the other party's overreaching. Thus, the courts will look at the terms of a separation agreement to see if there is an inference, or even a negative inference, of overreaching in its execution (see, Christian v. Christian, supra, at 71-73, 396 N.Y.S.2d 817, 365 N.E.2d 849).

An unconscionable bargain has been regarded as one "such as no [person] in his [or her] senses and not under delusion would make on the one hand, and as no honest and fair [person] would accept on the other" (Hume v. United States, 132 U.S. 406, 411, 10 S.Ct. 134, 136, 33 L.Ed. 393), the inequality being "so strong and manifest as to shock the conscience and confound the judgment of any [person] of common sense" (Mandel v. Liebman, 303 N.Y. 88, 94, 100 N.E.2d 149; Christian v. Christian, supra, at 71, 396 N.Y.S.2d 817, 365 N.E.2d 849).

Viewing the challenged stipulation in its entirety, and examining the totality of circumstances in this case, we find it was unconscionable and therefore must be set aside.

The economic provisions of the stipulation are unconscionable. The defendant is entitled to exclusive possession of the marital abode, the parties' major asset, which is to be sold only at her discretion. This provision effectively gives the defendant control over the parties' primary asset for life. Since the defendant is not obligated to sell the marital abode, it is possible that the plaintiff may never realize any income from this property. This is particularly disturbing in light of the plaintiff's limited financial resources.

The plaintiff is also obligated to pay the defendant $800 each month without time limitation, which would leave him with little monthly income. Lastly, it is shocking that after he retires (and he is about 63 years old), the plaintiff is to pay the defendant $800 per month plus one-half of his pension. On the basis of the record before us, it would appear that after retirement, the plaintiff's sole income will be his pension in the sum of $416 per month. His obligation to the defendant, pursuant to the terms of the agreement, will be approximately $1,008 per month. There is nothing in the record which would support a finding that the plaintiff has other income. This obviously inequitable arrangement, especially in view of the fact that the defendant will totally control the sale of the marital residence, leads to the inescapable conclusion that the stipulation is unconscionable.

Furthermore, the circumstances under which the stipulation was entered into lend support to our conclusion. The pro se plaintiff was put under some pressure by the court to settle at a time when the circumstances should have alerted the court to take a more active role in insuring that a conscionable result would be reached. Further, the defense counsel pressured the plaintiff into foregoing the possibility of seeking reimbursement for certain payments which the plaintiff had made. While such pressures were clearly not, by themselves, sufficient to...