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Saturday, December 29, 2012

Important New Decisions - December 29, 2012

Second Department Affirms Holding Setting Aside Post Nuptial Which Was Manifestly Unfair.

In Petracca v. Petracca, --- N.Y.S.2d ----, 2012 WL 6030894 (N.Y.A.D. 2 Dept.), the parties were married on December 16, 1995. In March 1996, the parties entered into a postnuptial agreement. The agreement provided that the jointly-owned marital residence, which had been purchased for approximately $3.1 million after the parties were married, and which was subsequently renovated at a cost of between $3 million and $5 million, was the defendant's separate property. It further provided that if the parties divorced, the plaintiff, who had not been employed other than as a homemaker since October 1995, would waive her interest in any business in which the defendant had an interest, including any appreciation in the value of such interests accruing during the marriage. At the time the agreement was entered into, the defendant valued his interests in these business entities at over $10 million. The plaintiff also waived any and all rights she had to the defendant's estate, including her right to an elective share. At the time the agreement was entered into, the defendant valued his net worth at more than $22 million. Finally, the agreement provided that if the parties divorced, the plaintiff would waive any right to maintenance except as provided in schedule "C" of the agreement, which indicated that the plaintiff could receive maintenance of between $24,000 and $36,000 per year, for varying lengths of time, depending on the duration of the marriage. The defendant's obligation to pay the limited maintenance enumerated in the agreement was contingent upon his receipt of certain visitation with any children that the parties might have, and upon certain residency requirements imposed upon the plaintiff.

In 2008, the plaintiff commenced this action for a divorce. In his answer, the defendant sought enforcement of the postnuptial agreement. A hearing was held at which both parties testified. The plaintiff testified that the defendant had presented the postnuptial agreement to her for signature days after her 42nd birthday, and shortly after she had suffered a miscarriage. She testified that the defendant had "bullied" her into signing the agreement by threatening that they would not have any children and that the marriage would be over if she did not consent to the postnuptial agreement. The plaintiff testified that she and the defendant had agreed to have children prior to the marriage, and that their agreement to have children had been an important factor in her decision to marry him. She signed the agreement within days of receiving it and, although she reviewed some portions of it, she did not understand its terms and did not consult an attorney. The plaintiff also adduced evidence demonstrating that the statement of the defendant's net worth contained in the agreement was inaccurate at the time it was made in that it was undervalued by at least $11 million.  When the defendant testified, he denied any knowledge of the plaintiff's miscarriage and stated that he had wanted the postnuptial agreement in order to protect his son from a prior marriage. The defendant testified that the parties had discussed the issue of entering into a postnuptial agreement prior to the marriage and that they had negotiated the postnuptial agreement over the course of many weeks. The defendant testified that his attorney had drafted the agreement and that he believed that the plaintiff had consulted with her own attorney, although she had not disclosed her attorney's name to him. The defendant explained that the marital residence had been purchased in both parties' names because the plaintiff said she wanted to have her name on it "for perception purposes, for other people," but that she had been willing to sign the agreement converting it into the defendant's separate property shortly after its purchase. In a decision made after the hearing, the Supreme Court expressed doubts as to the defendant's veracity and credited the plaintiff's testimony over conflicting portions of the defendant's testimony. The court found that the plaintiff had not been represented by counsel and had been precluded from effectively analyzing the financial impact of the postnuptial agreement due to the inaccuracies contained in the financial disclosures that had been incorporated into the agreement. The court determined that the terms of the agreement were "wholly unfair" and, after examining the totality of the circumstances, concluded that it was unenforceable. In a subsequent order, made upon the decision, the court granted the plaintiff's cross motion to set aside the postnuptial agreement.

The Appellate Division affirmed. It observed that in general, a postnuptial agreement which is regular on its face will be recognized and enforced by the courts in much the same manner as an ordinary contract. Because of the fiduciary relationship between spouses, postnuptial agreements "are closely scrutinized by the courts, and such agreements are more readily set aside in equity under circumstances that would be insufficient to nullify an ordinary contract. To warrant equity's intervention, no actual fraud need be shown, for relief will be granted if the [agreement] is manifestly unfair to a spouse because of the other's overreaching" ( Christian v. Christian, 42 N.Y.2d at 72-73). In determining whether a postnuptial agreement is invalid, "courts may look at the terms of the agreement to see if there is an inference, or even a negative inference, of overreaching in its execution. A spouse seeking to set aside a postnuptial agreement initially bears the burden to establish a fact-based, particularized inequality. Where this initial burden is satisfied, a proponent of a postnuptial agreement "suffers the shift in burden to disprove fraud or overreaching. Here, the plaintiff demonstrated that the terms of the postnuptial agreement were manifestly unfair given the nature and magnitude of the rights she waived, particularly the relinquishment of her property rights in the marital residence and her waiver of all of her inheritance rights, in light of the vast disparity in the parties' net worth and earnings. Inasmuch as the terms of the agreement were manifestly unfair to the plaintiff and were unfair when the agreement was executed, they give rise to an inference of overreaching. This inference of overreaching was bolstered by the evidence submitted by the plaintiff, including her testimony, regarding the circumstances which led her to give her assent to the postnuptial agreement. The defendant's testimony which tended to show that he did not engage in overreaching raised an issue of credibility, and it declined to disturb the Supreme Court's determination with respect thereto.

Court of Appeals Holds that  The Predicate for Admission of Tape Recordings in Evidence Is Clear and Convincing Proof That the Tapes Are Genuine and That They Have Not Been Altered

In Grucci v Grucci, --- N.E.2d ----, 2012 WL 5845008 (N.Y.), 2012 N.Y. Slip Op. 07856 Plaintiff Michael Grucci and defendant Christine Grucci were married in 1988 and had two children. In 1998, Christine sued Michael for divorce. A few months later, Michael was charged with harassing Christine, and the District Court issued an order of protection directing him to stay away from her. In January 2000, Michael was accused of violating the order. The matter was presented to a grand jury, which returned an indictment charging Michael with two counts of first-degree criminal contempt for placing Christine in fear of death or injury by telephone, and harassing her by repeated telephone calls with no purpose of legitimate communication (Penal Law § 215.51[b][iii], [iv], respectively). After a bench trial in August 2001, County Court acquitted Michael. The court concluded that Christine's testimony was not credible because of "discrepanc[ies]" in the way she described Michael's alleged threat to the police, the grand jury and at trial. In March 2002, Michael brought a civil action against Christine to recover damages for malicious prosecution. At trial Michael sought, through the testimony of his brother, Anthony Grucci, to play for the jury an audiotape of a telephone conversation in which Christine purportedly made clear to Anthony, at some point after she went to the police, that she was not afraid of Michael. Christine's attorney successfully objected, inter alia, to admission of the audiotape. Michael's attorney sought to play the audiotape during Anthony's testimony "as part of [his] presentation of [the telephone] conversation" with Christine that Anthony was recounting. Christine's attorney objected to the audiotape's admission on the grounds it was unreliable, "pieced together from a number of things" and "unintelligible"; that no chain of custody had been established; and generally that "no foundation [had been] laid for it at [that] point."In response, Michael's attorney offered only to have Anthony identify the voices on the tape and state "whether or not the tape recording [was] fair and accurate." When the judge asked if the tape had been authenticated, Michael's attorney responded "Not yet; this witness will authenticate."The judge then sustained the objection, and Michael's attorney stated that he had no further questions for Anthony.

The Court of Appeals affirmed. In an unsigned memorandum, it observed that while a party to a taped conversation can identify the speakers, "identity and authenticity are separate facets of the required foundation, both of which must be established" ( People v. Ely, 68 N.Y.2d 520, 528 [1986] ). The Court of Appeals stated: "The predicate for admission of tape recordings in evidence is clear and convincing proof that the tapes are genuine and that they have not been altered" ( People v Ely, supra, at 522). Here, there was no attempt to offer proof about who recorded the conversation, how it was recorded (e.g., the equipment used) or the chain of custody during the nearly nine years that elapsed between early 2000, when the conversation allegedly took place, and the trial in late 2008. Given the facts and circumstances of this case, the judge did not abuse his discretion by requiring more than Anthony's representation that the tape was "fair and accurate" to establish a sufficient "predicate" before playing the tape for the jury.


Fourth Department Affirms Holding of Supreme Court that Where Complaint States a Cause of Action for a Divorce on the Ground of Irretrievable Breakdown There is No Right to a Trial.

In Palermo v Palermo, 35 Misc.3d 1211(A)950 N.Y.S.2d 724 (Sup Ct 2011), an action for a divorce, the Supreme Court denied the defendant's motion to dismiss the complaint for failure to state a cause of action. It held that the complaint stated a cause of action for a divorce on the ground of irretrievable breakdown, because a sworn statement by one partner that the marriage has been irretrievably broken for a period in excess of six months was set forth on the face of the amended pleadings, and complied with the language of the statute. Supreme Court held that it was not subject to the trial right under DRL § 173. The court also denied the motion to dismiss for violation of the statute of limitations. It held that there is no statute of limitations under DRL § 170(7) because the cause of action only arises at the time the party swears that the marriage has been irretrievably broken for a period in excess of six months. A cause does not accrue until there is “a legal right” to be enforced.. The cause of action for divorce on the basis of irretrievable breakdown accrues at the time of the attestation by one partner and not sooner. The statute of limitations has no pertinence to a cause of action that arises at the time of the filing of the complaint. In Palermo v Palermo, 953 NYS2d 533 [4th Dept 2012], 2012 WL 5458608 (Mem), 2012 N.Y. Slip Op. 07528 2012 NY Slip Op 07528 the order of the Supreme Court was unanimously affirmed without costs for reasons stated in the decision at Supreme Court. (See Palermo v Palermo, 35 Misc.3d 1211(A), 950 N.Y.S.2d 724 )

Second Department Holds That Family Offense Proceeding Did Not Constitute a "Child Custody Proceeding" Within the Meaning of the UCCJEA Where it Did Not Raise an Issue of Legal Custody, Physical Custody, or Visitation with Respect to the Children

Matter of Hassan v. Silva,
--- N.Y.S.2d ----, 2012 WL 5503641 (N.Y.A.D. 2 Dept.) the father appealed from orders of the Family Court as, upon finding that the Court of Common Pleas, Monroe County, Pennsylvania, was the more appropriate forum for the father to seek custody of the subject children, or obtain any other related relief, declined jurisdiction over the matters and dismissed his child custody and family offense petitions upon the ground that New York is an inconvenient forum. The Appellate Division pointed out that a court of this state which has jurisdiction under the Uniform Child Custody Jurisdiction and Enforcement Act, may decline to exercise it if it finds that New York is an inconvenient forum and that a court of another state is a more appropriate forum (Domestic Relations Law §76-f[1]) The factors to be considered in making this determination include the length of time the child has resided outside the state, the distance between the court in this state and the court in the state or country that would assume jurisdiction, the nature and location of the evidence required to resolve the pending litigation, the ability of the court of each state to decide the issue expeditiously and the procedures necessary to present the evidence, and the familiarity of the court of each state with the facts and issues in the pending litigation (Domestic Relations Law § 76-f[2]). Family Court providently exercised its discretion in adhering to so much of its original determination as declined jurisdiction over the father's custody petitions and dismissed those petitions on the ground that New York is an inconvenient forum. The children, who were now five and three years old, lived in Pennsylvania since August 2010 with the father's permission and, therefore, evidence regarding their care, well-being, and personal relationships was more readily available in Pennsylvania. There was no evidence that the children retained substantial connections with New York or that significant evidence was in this State. The Court of Common Pleas, Monroe County, Pennsylvania, was familiar with the family and the pending issues, having issued a final order of protection against the father in favor of the mother and children and an interim custody order in the mother's custody proceeding. Furthermore, the travel time between the courts was only 2 ½ hours, and the Pennsylvania court is willing to exercise jurisdiction. Accordingly, the Family Court properly determined that the Pennsylvania court was a more appropriate forum to determine the issues of custody and visitation.

However, the father's family offense proceeding did not constitute a "child custody proceeding" within the meaning of the UCCJEA since it did not raise an issue of legal custody, physical custody, or visitation with respect to the children (Domestic Relations Law §75-a[4] ). Accordingly, the Family Court erred in dismissing it pursuant to Domestic Relations Law 76-f. All of the acts complained of in the petition occurred in New York (Family Ct Act § 818).


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