Separation Agreements — Contracts Governed by Contract Law

In fact, even constitutional rights may be given up under the terms of a contract. In L. K. Comstock & Co. v. New York Convention Ctr. Dev. Corp., 179 A.D.2d 322 (1st Dept. 1992), the First Department, citing the U.S. Supreme Court's decision in Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983 (1972), found that a contractor waived his right to challenge the constitutionality of the minority-owned-business provision in the contract in issue by agreeing to that provision and benefiting from it. Id., 179 A.D.2d at 329.

Courts have also ruled that parties to a lease may waive the right to a jury trial “in any action, proceeding or counterclaim thereon other than one for personal injury.” Fay's Drug Co. of Riverside v. P & C Property Cooperative Inc., 51 A.D.2d 887 (4th Dept. 1976); see also, Uribe v. Merchants Bank of New York, 227 A.D.2d 141 (1st Dept. 1996) (“Jury waiver provisions are valid and enforceable as a general matter.”). Arbitration clauses in contracts that act to preclude the filing of court actions in many circumstances have also been regularly upheld. See Matter of Dunay v. Weisglass, 54 N.Y.2d 25, 30-31 (1981); Matter of the Arbitration of Quick & Reilly, 103 A.D.2d 958 (3d Dept. 1984).

Just as these other rights can be given up contractually, so too, it would seem, can the right to have the courts presume that resumption of marital relations negates the couple's intent to separate, thereby invalidating the separation agreement.

The 'Four Corners' of the Agreement

A court must endeavor to interpret every provision in a separation agreement, and may not simply ignore some wording in favor of others. Courts that interpret contract provisions must give meaning to all the words within the contract. Williams Press Inc. v. State, 37 N.Y.2d 434, 440 (1975). Thus, the court may not ignore specific language in the separation agreement stating that the resumption of marital relations will not constitute a reconciliation and impair the viability of the agreement. The appellate courts in both Lotz and Pugsley recognized this fundamental principal when they stated, “No reason has been offered … which would justify ignoring this specific provision of the parties agreement.”

Further, where the terms of the separation agreement are unequivocal, parole evidence is simply not allowed. See Gillman v. Gillman, 176 A.D.2d 305 (2d Dept. 1991) (“It is well established that the same rules of construction applicable to contracts generally apply to the interpretation of separation agreements — where the language of the agreement is unambiguous, the court will discern that intent from the document itself.”); see also In re Ault, 207 A.D.2d 312 (1st Dept. 1994) (“It is well-settled law that absent ambiguity … the interpretation of a contract is a question of law to be resolved by the court. Further, evidence outside the four corners of the agreement as to what was really intended is generally inadmissible to vary the terms of that agreement.”).

Thus, the post-separation conduct of the parties, including an alleged reconciliation, becomes irrelevant.

Waiver of Claims After Receipt of Benefits Under Agreement

Waiver has been defined as the voluntary relinquishment of a known right. A party may waive maintenance and/or child support payments as part of an oral agreement to change a prior agreement. Moreover, where a party accepts the benefits of the agreement by acceptance of payment, that party ratifies the terms of the agreement. Niosi v. Niosi, 226 A.D.2d 510, 511-12 (2d Dept. 1996). In Parmigiani v. Parmigiani, 250 A.D.2d 744, 745 (2d Dept. 1998) the court affirmed the trial court's finding that a wife waived maintenance and child support payments in her agreement when she accepted a lump sum payment. In Wasserman v. Wasserman, 217 A.D.2d 544 (2d Dept. 1995), the court allowed an agreement to stand where the wife waived rights to her husband's medical practice.

There is nothing in the case law to suggest that it is against public policy to specifically waive the right to assert an alleged reconciliation by post- separation conduct. The question is whether or not an appellate court will find that such waiver, if specific and appropriately drafted, is dispositive. That issue was squarely presented in the recent case of Katz v. Beckman, 2003 N.Y. App. Div. LEXIS 1888 (2d Dept. 2003). In Katz, the parties had in 1991 entered into a separation agreement that provided in pertinent part:

“This Agreement shall not be invalidated or otherwise affected by a reconciliation between the parties hereto, or a resumption of marital relations between them unless said reconciliation or said resumption be documented by a written statement executed and acknowledged by the parties with respect to said reconciliation and resumption and, in addition, setting forth that they are canceling this Agreement.” The husband brought an action for a conversion divorce some 10 years later, in 2001.

When the parties in Katz separated in late 1990, the husband rented an apartment in Brooklyn while the wife retained the marital apartment in Manhattan. The husband complied with and paid all of the financial obligations imposed on him in the separation agreement. Beginning in the fall of 1991 the parties resumed cohabitation. Over the ensuing approximate 9 years, they rented a vacation home and spent three summers together; they went to social events and professional conferences as husband and wife; the husband consistently wrote loving notes and e-mail messages to the wife; the wife became pregnant with the husband's child (but the pregnancy was terminated); they allegedly spent time in both apartments together; the husband lavished gifts on the wife; and they celebrated the anniversary of their marriage and took vacations together. They did, however, file separate tax returns. The relationship ended when the husband moved to Reno, NV, and the wife refused to join him.

Agreement of Separation

Shortly before commencing the divorce action, the parties signed and separately notarized a memorandum of agreement of separation, “acknowledging the existence of the separation agreement”. After issues were joined, the husband — relying on the separation agreement and particularly its language limiting reconciliation to a written document — moved, inter alia, for summary judgment on his cause of action for a conversion divorce. The Supreme Court denied the motion, finding a triable issue of fact as to whether the parties had resumed the marital relationship, thereby abandoning the separation agreement.

The appellate court determined that the husband had established a prima facie right to summary judgment based on the separation agreement, the absence of a document of reconciliation or resumption of the marital relationship, and the memorandum. The burden then shifted to the wife to produce sufficient evidence to raise a triable issue of fact. Although the court found that “Unquestionably, the wife's detailed evidence establishes a reconciliation … [h]er execution of the Memorandum is fatal to her defense of a reconciliation that constituted a mutually-intended abandonment of the separation agreement.” The lower court was reversed and the husband's motion for summary judgment for a conversion divorce was granted.

The court emphasized that the wife had signed the memorandum after the reconciliation, that she acknowledged her execution of it before a Notary Public in a different county in which the husband acknowledged his signature and that “Nowhere in the record did the wife explain why, if she and the husband had intended to abandon the separation agreement by resuming marital relations, she signed a memorandum acknowledging the existence of the separation agreement nine years later.”

The Second Department thus sidestepped the issue of the effect of the specific language in the agreement requiring documentation of a reconciliation or resumption of the marital relationship. So where does this leave you when drafting separation agreements for your clients? Although there appeared to be a reluctance on the part of the Second Department to hold that the above-quoted language in the separation agreement was dispositive, the inclusion of such language in separation agreements should go a long way toward avoiding the very kind of litigation found in Katz. Any such language should also be amplified so as to expressly state that its purpose is to avoid future litigation and to ensure the continued viability of the separation agreement.

A separation agreement is a contract subject to the principles of contract construction and interpretation. “Where the contract is clear and unambiguous on its face, the courts must determine the intent of the parties from within the four corners of the contract.” Meccico v. Meccico , 76 N.Y.2d 822, 823 (1990); see also Cappelli v. Cappelli , 286 A.D.2d 359 (2d Dept. 2001). Normally, the only way to change the agreement is by consent of all parties. Mancini v. Mancini , 236 A.D.2d 449 (2d Dept. 1997).

There appears to be no reason why the parties to a separation agreement cannot specifically provide in their agreement that a resumption of marital relations will not be deemed a reconciliation, and that the separation agreement will not be impaired or invalidated thereby unless a formal written document is executed by the parties acknowledging such reconciliation and affirmatively canceling the agreement. Indeed, such language is commonly found in separation agreements, and its obvious purpose is to avoid subsequent litigation in the event of a failed reconciliation attempt.

Under general contract law, statutory privileges are commonly contracted away. For example, a party may, with certain limitations, contractually give up the right to appeal. People v. Taylor , 65 N.Y.2d 1 (1985) (a defendant waives right to appeals in exchange for guilty plea). This is true in the civil context as well, as in Kesseler v. Kesseler , 10 N.Y. 2d 441 (1965), and Department of Soc. Servs. v. Herbert R. , 213 A.D.2d 636 (2d Dept. 1995), in which the right to appeal was contracted/stipulated away.

In fact, even constitutional rights may be given up under the terms of a contract. In L. K. Comstock & Co. v. New York Convention Ctr. Dev. Corp. , 179 A.D.2d 322 (1st Dept. 1992), the First Department, citing the U.S. Supreme Court's decision in Fuentes v. Shevin , 407 U.S. 67, 92 S. Ct. 1983 (1972), found that a contractor waived his right to challenge the constitutionality of the minority-owned-business provision in the contract in issue by agreeing to that provision and benefiting from it. Id., 179 A.D.2d at 329.

Courts have also ruled that parties to a lease may waive the right to a jury trial “in any action, proceeding or counterclaim thereon other than one for personal injury.” Fay's Drug Co. of Riverside v. P & C Property Cooperative Inc. , 51 A.D.2d 887 (4th Dept. 1976); see also, Uribe v. Merchants Bank of New York , 227 A.D.2d 141 (1st Dept. 1996) (“Jury waiver provisions are valid and enforceable as a general matter.”). Arbitration clauses in contracts that act to preclude the filing of court actions in many circumstances have also been regularly upheld. See Matter of Dunay v. Weisglass , 54 N.Y.2d 25, 30-31 (1981); Matter of the Arbitration of Quick & Reilly, 103 A.D.2d 958 (3d Dept. 1984).

Just as these other rights can be given up contractually, so too, it would seem, can the right to have the courts presume that resumption of marital relations negates the couple's intent to separate, thereby invalidating the separation agreement.

The 'Four Corners' of the Agreement

A court must endeavor to interpret every provision in a separation agreement, and may not simply ignore some wording in favor of others. Courts that interpret contract provisions must give meaning to all the words within the contract. Williams Press Inc. v. State, 37 N.Y.2d 434, 440 (1975). Thus, the court may not ignore specific language in the separation agreement stating that the resumption of marital relations will not constitute a reconciliation and impair the viability of the agreement. The appellate courts in both Lotz and Pugsley recognized this fundamental principal when they stated, “No reason has been offered … which would justify ignoring this specific provision of the parties agreement.”

Further, where the terms of the separation agreement are unequivocal, parole evidence is simply not allowed. See Gillman v. Gillman , 176 A.D.2d 305 (2d Dept. 1991) (“It is well established that the same rules of construction applicable to contracts generally apply to the interpretation of separation agreements — where the language of the agreement is unambiguous, the court will discern that intent from the document itself.”); see also In re Ault , 207 A.D.2d 312 (1st Dept. 1994) (“It is well-settled law that absent ambiguity … the interpretation of a contract is a question of law to be resolved by the court. Further, evidence outside the four corners of the agreement as to what was really intended is generally inadmissible to vary the terms of that agreement.”).

Thus, the post-separation conduct of the parties, including an alleged reconciliation, becomes irrelevant.

Waiver of Claims After Receipt of Benefits Under Agreement

Waiver has been defined as the voluntary relinquishment of a known right. A party may waive maintenance and/or child support payments as part of an oral agreement to change a prior agreement. Moreover, where a party accepts the benefits of the agreement by acceptance of payment, that party ratifies the terms of the agreement. Niosi v. Niosi , 226 A.D.2d 510, 511-12 (2d Dept. 1996). In Parmigiani v. Parmigiani , 250 A.D.2d 744, 745 (2d Dept. 1998) the court affirmed the trial court's finding that a wife waived maintenance and child support payments in her agreement when she accepted a lump sum payment. In Wasserman v. Wasserman , 217 A.D.2d 544 (2d Dept. 1995), the court allowed an agreement to stand where the wife waived rights to her husband's medical practice.

There is nothing in the case law to suggest that it is against public policy to specifically waive the right to assert an alleged reconciliation by post- separation conduct. The question is whether or not an appellate court will find that such waiver, if specific and appropriately drafted, is dispositive. That issue was squarely presented in the recent case of Katz v. Beckman , 2003 N.Y. App. Div. LEXIS 1888 (2d Dept. 2003). In Katz, the parties had in 1991 entered into a separation agreement that provided in pertinent part:

“This Agreement shall not be invalidated or otherwise affected by a reconciliation between the parties hereto, or a resumption of marital relations between them unless said reconciliation or said resumption be documented by a written statement executed and acknowledged by the parties with respect to said reconciliation and resumption and, in addition, setting forth that they are canceling this Agreement.” The husband brought an action for a conversion divorce some 10 years later, in 2001.

When the parties in Katz separated in late 1990, the husband rented an apartment in Brooklyn while the wife retained the marital apartment in Manhattan. The husband complied with and paid all of the financial obligations imposed on him in the separation agreement. Beginning in the fall of 1991 the parties resumed cohabitation. Over the ensuing approximate 9 years, they rented a vacation home and spent three summers together; they went to social events and professional conferences as husband and wife; the husband consistently wrote loving notes and e-mail messages to the wife; the wife became pregnant with the husband's child (but the pregnancy was terminated); they allegedly spent time in both apartments together; the husband lavished gifts on the wife; and they celebrated the anniversary of their marriage and took vacations together. They did, however, file separate tax returns. The relationship ended when the husband moved to Reno, NV, and the wife refused to join him.

Agreement of Separation

Shortly before commencing the divorce action, the parties signed and separately notarized a memorandum of agreement of separation, “acknowledging the existence of the separation agreement”. After issues were joined, the husband — relying on the separation agreement and particularly its language limiting reconciliation to a written document — moved, inter alia, for summary judgment on his cause of action for a conversion divorce. The Supreme Court denied the motion, finding a triable issue of fact as to whether the parties had resumed the marital relationship, thereby abandoning the separation agreement.

The appellate court determined that the husband had established a prima facie right to summary judgment based on the separation agreement, the absence of a document of reconciliation or resumption of the marital relationship, and the memorandum. The burden then shifted to the wife to produce sufficient evidence to raise a triable issue of fact. Although the court found that “Unquestionably, the wife's detailed evidence establishes a reconciliation … [h]er execution of the Memorandum is fatal to her defense of a reconciliation that constituted a mutually-intended abandonment of the separation agreement.” The lower court was reversed and the husband's motion for summary judgment for a conversion divorce was granted.

The court emphasized that the wife had signed the memorandum after the reconciliation, that she acknowledged her execution of it before a Notary Public in a different county in which the husband acknowledged his signature and that “Nowhere in the record did the wife explain why, if she and the husband had intended to abandon the separation agreement by resuming marital relations, she signed a memorandum acknowledging the existence of the separation agreement nine years later.”

The Second Department thus sidestepped the issue of the effect of the specific language in the agreement requiring documentation of a reconciliation or resumption of the marital relationship. So where does this leave you when drafting separation agreements for your clients? Although there appeared to be a reluctance on the part of the Second Department to hold that the above-quoted language in the separation agreement was dispositive, the inclusion of such language in separation agreements should go a long way toward avoiding the very kind of litigation found in Katz. Any such language should also be amplified so as to expressly state that its purpose is to avoid future litigation and to ensure the continued viability of the separation agreement.