SETTING ASIDE AN UNFAIR SEPARATION AGREEMENT

TUZZOLINO v. TUZZOLINO, 2017 NY Slip Op 8991 - NY: Appellate Div., 4th Dept. 2017:

"We agree with plaintiff that the agreements are unfair and unconscionable and should be set aside. Separation agreements are subject to closer judicial scrutiny than other contracts because of the fiduciary relationship between spouses (see Christian v Christian, 42 NY2d 63, 72 [1977]; Gibson v Gibson, 284 AD2d 908, 909 [4th Dept 2001]). A separation agreement should be set aside as unconscionable where it is "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 . . ., the inequality being so strong and manifest as to shock the conscience and confound the judgment of any person of common sense" (Christian, 42 NY2d at 71 [internal quotation marks and brackets omitted]; see Dawes v Dawes, 110 AD3d 1450, 1451 [4th Dept 2013]; Skotnicki v Skotnicki, 237 AD2d 974, 975 [4th Dept 1997]). We note that the unconscionability or inequality of a separation agreement may be the result of overreaching by one party to the detriment of another (see Tchorzewski v Tchorzewski, 278 AD2d 869, 870 [4th Dept 2000]).

Here, at the time the parties entered into the agreements, defendant wife was represented by counsel but plaintiff was not, which, while not dispositive, is a significant factor for us to consider (see Gibson, 284 AD2d at 909; Tchorzewski, 278 AD2d at 870; Skotnicki, 237 AD2d at 975). Another factor to consider is that the agreements did not make a full disclosure of the finances of the parties (see Tchorzewski, 278 AD2d at 870-871). In particular, defendant, who had a master's degree in business administration and was a professor at a SUNY college, would receive two pensions upon retirement, neither of which was valued. The separation agreement did not provide for any maintenance for plaintiff despite the gross disparity in incomes and the length of the marriage and, while the modification agreement provided maintenance for plaintiff, it also required plaintiff to transfer his interest in the marital residence to defendant. In opposition to the motion, defendant averred that the parties "wanted an agreement whereby [plaintiff] would keep his income and retirement assets and I would keep mine." As shown by their statements of net worth, which were prepared after the agreements were executed, plaintiff's assets totaled approximately $77,000 whereas defendant's assets, which included the marital residence, totaled approximately $740,000. Based on our consideration of all the factors, we conclude that the agreements here are unconscionable and were the product of overreaching by defendant and thus should be set aside (see Dawes, 110 AD3d at 1451; Gibson, 284 AD2d at 909; Tchorzewski, 278 AD2d at 871). We therefore reverse the judgment in appeal No. 1 insofar as appealed from, grant the motion, vacate the second and third decretal paragraphs, and we remit the matter to Supreme Court to determine the issues of equitable distribution and maintenance."