Agreements Without Temporary Maintenance Recitals: Can This Contract Be Saved?

Editor's Note: In 2010, New York's Legislature enacted Domestic Relations Law (DRL) ' 236, Part B, subd. 5-a, in 2010. The statute, among other things, requires that agreements concerning temporary maintenance that deviate from its formula must, to be be enforceable, contain calculations for the amount that would have been set by the formula, along with a recitation that that amount is the presumed correct number, yet the parties deviated from it for reasons enumerated in the agreement. This statute's language is identical to that in The Child Support Standards Act, Family Court Act ' 413 subd. 1(h). But, although there are many cases concerning the viability of agreements that deviate from the child support guidelines, few judicial opinions have interpreted whether temporary maintenance agreements that lack the required opt-out provisions are enforceable.

The author continues here with more suggested arguments for saving a temporary maintenance agreement that does not contain the language and recitations required by subdivision 5-a(f) of DRL ' 236B. He begins with Point 3.

Continuing our discussion on defenses:

3. The agreement may be saved by pointing out it was signed when no litigation was pending ' especially if none was contemplated.

A second reason the Nassau County Supreme Court gave for ignoring the lack of recitals about temporary maintenance in J.L. v. D.J-L, Sup. Ct. Nassau County May 12, 2014, NYLJ 1202655590652 (reported May 19, 2014) (Goodstein, J.), is that the agreement at issue was signed before any matrimonial action had been filed. It pointed out that DRL ' 236B subd. 5-a(f) applies to an “agreement or stipulation voluntarily entered into between the parties in an action commenced after the effective date of this subdivision.” Id. at *6. The husband and wife in J.L. were not “parties to an action” until 16 months after they executed their agreement, when the wife filed for divorce. The court held that the requirements, therefore, did not apply to them. It defended that reading of ' 236B subd. 5-a(f) as a matter of policy: Married couples who are separating on a trial basis, as J.L. and D. J-L. were, and who are trying to resolve financial issues during that trial period amicably, should not have to “expend funds unnecessarily” (on lawyers and maybe accountants) to satisfy the recitation requirements, since they may never end up in court. Id. at *6-*7. (This policy rationale does not apply to all the cases that are exempt from the recital requirements according to the J.L. court. Often, parties sign an agreement expecting litigation, even though none is currently pending. For example, a couple who have agreed to separate may sign a separation agreement that resolves all their marital claims, expecting that they will soon file for an uncontested divorce and present the separation agreement to be incorporated in their judgment of divorce. In such a situation, the parties likely already have counsel, who will have reviewed their latest tax returns. Exempting those couples from the recital requirements, therefore, saves them little money.)

The statutory text can be read to support that conclusion. Paragraph 5-a(f) applies to agreements “voluntarily entered into between the parties in an action commenced after the effective date of this subdivision presented to the court for incorporation in an order. '” The words “in an action,” on which the J.L. court relied, do not appear in the similar CSSA requirements, DRL ' 240 subd. 1-b(h). Nor do they appear in ' 236B subd. 3, which sets the requirements for “[a]n agreement by the parties” to be enforceable. One could argue that the legislature must have intended those differences, which means the words “in an action” must be significant where they do appear, supporting the notion that ' 236B subd. 5-a(h) was only meant to apply to parties who have already commenced an action.

That reading might, however, fail. A court could read the key language in subdivision 5-a(h) merely to reflect its effective date, and not to say what types of agreement the paragraph is intended to cover. It refers to agreements “between the parties in an action commenced after the effective date of this subdivision,” i.e., after Oct. 12, 2010. Perhaps the Legislature meant only to say that agreements needed recitals if they are presented in a matrimonial action that was commenced after that date. On that reading, the language would reiterate the effective date provision of the statute, 2010 N.Y. Laws Ch. 371, ' 6. The CSSA requirements, in contrast, apply to “agreement[s] or stipulation[s] voluntarily entered between the parties after the effective date of this subdivision,” i.e., after Sept. 17, 1989 ' even if the action between the parties had been filed before that date. Even assuming that the Legislature meant to do something by inserting the words “in an action” with regard to temporary maintenance, it might have meant only to say that what matters for temporary maintenance is the date the action commenced, not the date the agreement was signed.

There is another policy reason, not discussed in J.L. or anywhere else, why parties who have not yet gone to court should not have to recite what the guideline level of temporary maintenance would be: Often, they have no idea what that guideline level might be by the time it is relevant. The formula for temporary maintenance, like the formula for child support, begins with parties' income “as should have been or should be reported in the most recent federal income tax return.” DRL ' 240 subd. 1-b(b)(5). Section 236B subd. 5-a(b)(4)(a) applies that definition to temporary maintenance. Parties signing an agreement can recite the incomes shown on the tax returns they most recently filed before the agreement, and calculate a guideline level of temporary maintenance based on those incomes. But by the time litigation starts and temporary maintenance can be ordered, that information might be years out of date.

For example, the parties in J.L. v. D.J-L. signed their agreement in February 2012, when they probably had tax returns only through 2010. Subdivision 5-a(f) would have demanded they acknowledge that applying that statutory formula to their 2010 income “results in the correct amount of temporary maintenance.” That amount, however, would not even have been presumptively correct by the time maintenance was set. Had the Supreme Court's May 2014 ruling set temporary maintenance, as the father asked, it would probably have used his 2012 income and the mother's 2013 income. (The father's law firm “draw” was presumably reported on a Schedule K-1, and the Schedule K-1 showing his 2013 income might well not have been generated until September or October 2014.) If the agreement had included an acknowledgement under subdivision 5-a(f); therefore, the acknowledgement would have been false and perhaps misleading.

The statutory acknowledgment is even more attenuated when it appears in a pre-nuptial agreement. If the parties who have signed a pre-nuptial agreement ever need a court to set temporary maintenance, that may happen decades later. A party's income may have increased dramatically, such as if he or she received a degree or developed professional expertise during the marriage. A party's income may also have decreased dramatically, especially if he or she stopped working to care for children. A calculation based on the parties' pre-marital incomes, therefore, may well not be remotely “correct.” It may even be misleading, because it obscures how much maintenance a spouse who has left the workforce can expect.

In short, applying the recital requirements only to parties who are already in litigation makes sense as a matter of policy and is supported, at least by the ruling in J.L. . The textual basis for such a limitation, however, is arguable.

4. The court may be willing to grant a prayer for relief that is framed so as not to request that the agreement be incorporated in an order or judgment.

The J.L. court offered yet a third reason that the recital requirements under DRL ' 236B subd. 5-a(f) should not apply to the agreement at issue; namely that the agreement “is not currently presented to a court for incorporation in an order.” J.L. at *6. Although that reasoning repeats the language of the statute, it flouts the statute's plain intent and common sense. The “Decision and Order” concludes, “the Wife's request to enforce the terms of the parties' Agreement is GRANTED and the Agreement is hereby found to be valid and enforceable. ' Accordingly, both parties are hereby ORDERED to immediately resume depositing all of their income into the respective joint bank accounts as set forth in the Agreement.” A party who failed to do so could surely be punished for contempt. See, e.g., Judiciary Law ' 750(A)(3) (allowing a court of record to punish “[w]ilful disobedience to its lawful mandate”); Gen. Constr. Law ' 28-A (defining a “mandate” as a written direction). Although the Decision and Order did not include words like “The Agreement is hereby incorporated herein by reference,” that omission has no practical significance.

Subdivision 5-a(f) is clearly meant to protect parties who have agreed on temporary maintenance without knowing the guideline level. It may also have been meant to create incentives for parties to inform each other about, and agree on, the guideline levels before signing an agreement. The statute achieves those goals by rendering agreements unenforceable. If an agreement that fails to meet its standards can be found “enforceable” and “enforced,” the statute has no value.

The mother in J.L. may have framed her prayer for relief carefully to avoid presenting the agreement for incorporation. A party who hopes to rely on an agreement that may not satisfy subdivision 5-a(f) would do well to attempt the same tactic.

5. If the agreement does provide for the payment of maintenance, it may be saved by an argument that it provides for permanent, not temporary, maintenance.

In the other case construing the recital requirements for temporary maintenance, a court held they did not apply because the agreement provided for payments at the same level before, during, and after the pendency of litigation. Therefore, the New York County Supreme Court held, the agreement was not about temporary maintenance and did not need recitals about the guideline level of temporary maintenance.

The parties in H.W. v. M.W., No. 306008/11, NYLJ 1202546467834 (Sup. Ct. N.Y. County Mar. 15, 2012) (Drager, J.), had married in 1972. The husband moved out of the marital residence in 2009. Later that year, he asked the wife to reconcile. She replied that she was not interested in reconciliation, but that she (who had substantial assets derived from her father) would pay his expenses. Id. At *1, *4. In June 2009, the parties signed an “Interim Agreement,” under which they would live separate and apart. Until one of them died, the wife would pay the husband $5,200 per month, tax free, and would cover the premiums for his health and long-term care insurance. Id. at *5. (Apparently, support would continue even if the parties were divorced and the husband remarried.)

The husband released all claims for “support and maintenance” except for those in the agreement. Id. at *8. Starting in June 2009, the wife tendered those payments and the husband accepted them. Id. at *5. In 2011, the husband filed for divorce. The wife prayed for a summary judgment dismissing the husband's claim for maintenance beyond the $5,200 per month, and he responded by arguing, among other things, that the “Interim Agreement” could not preclude him from seeking temporary maintenance because it did not comply with DRL ' 236B subd. 5-a(f). Id. at *1, *6, *9.

The Supreme Court ruled for the wife because it held the Interim Agreement did not “pertain[] to temporary maintenance.” Because the agreement provided for lifetime support, it was in effect for a “final award[] of maintenance.” Therefore, it did not need to satisfy the requirements of subdivision 5-a(f), but only the requirements for an agreement about permanent maintenance under subdivision 3. Id. at *9. (Language in DRL ' 236B subd. 5-a(a) arguably supports this conclusion, as discussed in part 7 of this article, but the H.W. court did not cite that language.)

The ruling that the Interim Agreement in H.W. did not even relate to temporary maintenance is difficult to accept at face value. Although the agreement apparently did not use the words “temporary,” “interim,” or “pendente lite,” it provided for a monthly payment, which would continue even if one party filed a matrimonial action and even if a judgment of divorce were issued. The Interim Agreement released other “claims and demands, past, present, and future, for support and maintenance.” As the court noted, that language was broad enough to include temporary maintenance. Under the law in force when the Interim Agreement was signed, it would have precluded claims for pendente lite maintenance. (Before the 2010 statute, the rule was that “temporary maintenance is barred if a separation agreement is in effect and is being complied with.” Alan D. Scheinkman, Practice Commentaries 236B:40; see also supra note 17 and accompanying text.)

To describe the Interim Agreement accurately, one would not say it ignored temporary maintenance. One would say it set temporary maintenance at the same level as permanent maintenance and at the same level as support during the parties' (already existing) separation.

Satisfying the general requirements for a marital agreement under DRL ' 236B subd. 3, therefore, should not have been enough to validate the agreement. An agreement regarding child support must satisfy both subdivision 3 and the special requirements of the CSSA in ' 240 subd. 1-b(h). By the same token, an agreement regarding temporary maintenance should satisfy both subdivision 3 and the special requirements of subdivision 5-a(f).

If other courts ignore those statutory arguments and accept the reasoning in H.W. , they will exempt at least some agreements from the recital requirement for temporary maintenance. This defense is most likely to protect other agreements that do not specifically address temporary maintenance, but set a level of support (or a formula for support) that applies the same way whether a matrimonial action is pending or has been completed.

That defense of an agreement is unlikely to prevail, however, unless the party who is attacking the agreement has made himself or herself unsympathetic ' as the husband in H.W. had done by accepting benefits for 22 months under an agreement he said was unconscionable.

Matthew A. Feigin, an attorney at Katsky Korins LLP., thanks Marcy L. Wachtel for her review and input and Peter E. Bronstein for encouraging him to explore the recital requirements.

Editor's Note: In 2010, New York's Legislature enacted Domestic Relations Law (DRL) ' 236, Part B, subd. 5-a, in 2010. The statute, among other things, requires that agreements concerning temporary maintenance that deviate from its formula must, to be be enforceable, contain calculations for the amount that would have been set by the formula, along with a recitation that that amount is the presumed correct number, yet the parties deviated from it for reasons enumerated in the agreement. This statute's language is identical to that in The Child Support Standards Act, Family Court Act ' 413 subd. 1(h). But, although there are many cases concerning the viability of agreements that deviate from the child support guidelines, few judicial opinions have interpreted whether temporary maintenance agreements that lack the required opt-out provisions are enforceable.

The author continues here with more suggested arguments for saving a temporary maintenance agreement that does not contain the language and recitations required by subdivision 5-a(f) of DRL ' 236B. He begins with Point 3.

Continuing our discussion on defenses:

3. The agreement may be saved by pointing out it was signed when no litigation was pending ' especially if none was contemplated.

A second reason the Nassau County Supreme Court gave for ignoring the lack of recitals about temporary maintenance in J.L. v. D.J-L, Sup. Ct. Nassau County May 12, 2014, NYLJ 1202655590652 (reported May 19, 2014) (Goodstein, J.), is that the agreement at issue was signed before any matrimonial action had been filed. It pointed out that DRL ' 236B subd. 5-a(f) applies to an “agreement or stipulation voluntarily entered into between the parties in an action commenced after the effective date of this subdivision.” Id. at *6. The husband and wife in J.L. were not “parties to an action” until 16 months after they executed their agreement, when the wife filed for divorce. The court held that the requirements, therefore, did not apply to them. It defended that reading of ' 236B subd. 5-a(f) as a matter of policy: Married couples who are separating on a trial basis, as J.L. and D. J-L. were, and who are trying to resolve financial issues during that trial period amicably, should not have to “expend funds unnecessarily” (on lawyers and maybe accountants) to satisfy the recitation requirements, since they may never end up in court. Id. at *6-*7. (This policy rationale does not apply to all the cases that are exempt from the recital requirements according to the J.L. court. Often, parties sign an agreement expecting litigation, even though none is currently pending. For example, a couple who have agreed to separate may sign a separation agreement that resolves all their marital claims, expecting that they will soon file for an uncontested divorce and present the separation agreement to be incorporated in their judgment of divorce. In such a situation, the parties likely already have counsel, who will have reviewed their latest tax returns. Exempting those couples from the recital requirements, therefore, saves them little money.)

The statutory text can be read to support that conclusion. Paragraph 5-a(f) applies to agreements “voluntarily entered into between the parties in an action commenced after the effective date of this subdivision presented to the court for incorporation in an order. '” The words “in an action,” on which the J.L. court relied, do not appear in the similar CSSA requirements, DRL ' 240 subd. 1-b(h). Nor do they appear in ' 236B subd. 3, which sets the requirements for “[a]n agreement by the parties” to be enforceable. One could argue that the legislature must have intended those differences, which means the words “in an action” must be significant where they do appear, supporting the notion that ' 236B subd. 5-a(h) was only meant to apply to parties who have already commenced an action.

That reading might, however, fail. A court could read the key language in subdivision 5-a(h) merely to reflect its effective date, and not to say what types of agreement the paragraph is intended to cover. It refers to agreements “between the parties in an action commenced after the effective date of this subdivision,” i.e., after Oct. 12, 2010. Perhaps the Legislature meant only to say that agreements needed recitals if they are presented in a matrimonial action that was commenced after that date. On that reading, the language would reiterate the effective date provision of the statute, 2010 N.Y. Laws Ch. 371, ' 6. The CSSA requirements, in contrast, apply to “agreement[s] or stipulation[s] voluntarily entered between the parties after the effective date of this subdivision,” i.e., after Sept. 17, 1989 ' even if the action between the parties had been filed before that date. Even assuming that the Legislature meant to do something by inserting the words “in an action” with regard to temporary maintenance, it might have meant only to say that what matters for temporary maintenance is the date the action commenced, not the date the agreement was signed.

There is another policy reason, not discussed in J.L. or anywhere else, why parties who have not yet gone to court should not have to recite what the guideline level of temporary maintenance would be: Often, they have no idea what that guideline level might be by the time it is relevant. The formula for temporary maintenance, like the formula for child support, begins with parties' income “as should have been or should be reported in the most recent federal income tax return.” DRL ' 240 subd. 1-b(b)(5). Section 236B subd. 5-a(b)(4)(a) applies that definition to temporary maintenance. Parties signing an agreement can recite the incomes shown on the tax returns they most recently filed before the agreement, and calculate a guideline level of temporary maintenance based on those incomes. But by the time litigation starts and temporary maintenance can be ordered, that information might be years out of date.

For example, the parties in J.L. v. D.J-L. signed their agreement in February 2012, when they probably had tax returns only through 2010. Subdivision 5-a(f) would have demanded they acknowledge that applying that statutory formula to their 2010 income “results in the correct amount of temporary maintenance.” That amount, however, would not even have been presumptively correct by the time maintenance was set. Had the Supreme Court's May 2014 ruling set temporary maintenance, as the father asked, it would probably have used his 2012 income and the mother's 2013 income. (The father's law firm “draw” was presumably reported on a Schedule K-1, and the Schedule K-1 showing his 2013 income might well not have been generated until September or October 2014.) If the agreement had included an acknowledgement under subdivision 5-a(f); therefore, the acknowledgement would have been false and perhaps misleading.

The statutory acknowledgment is even more attenuated when it appears in a pre-nuptial agreement. If the parties who have signed a pre-nuptial agreement ever need a court to set temporary maintenance, that may happen decades later. A party's income may have increased dramatically, such as if he or she received a degree or developed professional expertise during the marriage. A party's income may also have decreased dramatically, especially if he or she stopped working to care for children. A calculation based on the parties' pre-marital incomes, therefore, may well not be remotely “correct.” It may even be misleading, because it obscures how much maintenance a spouse who has left the workforce can expect.

In short, applying the recital requirements only to parties who are already in litigation makes sense as a matter of policy and is supported, at least by the ruling in J.L. . The textual basis for such a limitation, however, is arguable.

4. The court may be willing to grant a prayer for relief that is framed so as not to request that the agreement be incorporated in an order or judgment.

The J.L. court offered yet a third reason that the recital requirements under DRL ' 236B subd. 5-a(f) should not apply to the agreement at issue; namely that the agreement “is not currently presented to a court for incorporation in an order.” J.L. at *6. Although that reasoning repeats the language of the statute, it flouts the statute's plain intent and common sense. The “Decision and Order” concludes, “the Wife's request to enforce the terms of the parties' Agreement is GRANTED and the Agreement is hereby found to be valid and enforceable. ' Accordingly, both parties are hereby ORDERED to immediately resume depositing all of their income into the respective joint bank accounts as set forth in the Agreement.” A party who failed to do so could surely be punished for contempt. See, e.g., Judiciary Law ' 750(A)(3) (allowing a court of record to punish “[w]ilful disobedience to its lawful mandate”); Gen. Constr. Law ' 28-A (defining a “mandate” as a written direction). Although the Decision and Order did not include words like “The Agreement is hereby incorporated herein by reference,” that omission has no practical significance.

Subdivision 5-a(f) is clearly meant to protect parties who have agreed on temporary maintenance without knowing the guideline level. It may also have been meant to create incentives for parties to inform each other about, and agree on, the guideline levels before signing an agreement. The statute achieves those goals by rendering agreements unenforceable. If an agreement that fails to meet its standards can be found “enforceable” and “enforced,” the statute has no value.

The mother in J.L. may have framed her prayer for relief carefully to avoid presenting the agreement for incorporation. A party who hopes to rely on an agreement that may not satisfy subdivision 5-a(f) would do well to attempt the same tactic.

5. If the agreement does provide for the payment of maintenance, it may be saved by an argument that it provides for permanent, not temporary, maintenance.

In the other case construing the recital requirements for temporary maintenance, a court held they did not apply because the agreement provided for payments at the same level before, during, and after the pendency of litigation. Therefore, the New York County Supreme Court held, the agreement was not about temporary maintenance and did not need recitals about the guideline level of temporary maintenance.

The parties in H.W. v. M.W., No. 306008/11, NYLJ 1202546467834 (Sup. Ct. N.Y. County Mar. 15, 2012) (Drager, J.), had married in 1972. The husband moved out of the marital residence in 2009. Later that year, he asked the wife to reconcile. She replied that she was not interested in reconciliation, but that she (who had substantial assets derived from her father) would pay his expenses. Id. At *1, *4. In June 2009, the parties signed an “Interim Agreement,” under which they would live separate and apart. Until one of them died, the wife would pay the husband $5,200 per month, tax free, and would cover the premiums for his health and long-term care insurance. Id. at *5. (Apparently, support would continue even if the parties were divorced and the husband remarried.)

The husband released all claims for “support and maintenance” except for those in the agreement. Id. at *8. Starting in June 2009, the wife tendered those payments and the husband accepted them. Id. at *5. In 2011, the husband filed for divorce. The wife prayed for a summary judgment dismissing the husband's claim for maintenance beyond the $5,200 per month, and he responded by arguing, among other things, that the “Interim Agreement” could not preclude him from seeking temporary maintenance because it did not comply with DRL ' 236B subd. 5-a(f). Id. at *1, *6, *9.

The Supreme Court ruled for the wife because it held the Interim Agreement did not “pertain[] to temporary maintenance.” Because the agreement provided for lifetime support, it was in effect for a “final award[] of maintenance.” Therefore, it did not need to satisfy the requirements of subdivision 5-a(f), but only the requirements for an agreement about permanent maintenance under subdivision 3. Id. at *9. (Language in DRL ' 236B subd. 5-a(a) arguably supports this conclusion, as discussed in part 7 of this article, but the H.W. court did not cite that language.)

The ruling that the Interim Agreement in H.W. did not even relate to temporary maintenance is difficult to accept at face value. Although the agreement apparently did not use the words “temporary,” “interim,” or “pendente lite,” it provided for a monthly payment, which would continue even if one party filed a matrimonial action and even if a judgment of divorce were issued. The Interim Agreement released other “claims and demands, past, present, and future, for support and maintenance.” As the court noted, that language was broad enough to include temporary maintenance. Under the law in force when the Interim Agreement was signed, it would have precluded claims for pendente lite maintenance. (Before the 2010 statute, the rule was that “temporary maintenance is barred if a separation agreement is in effect and is being complied with.” Alan D. Scheinkman, Practice Commentaries 236B:40; see also supra note 17 and accompanying text.)

To describe the Interim Agreement accurately, one would not say it ignored temporary maintenance. One would say it set temporary maintenance at the same level as permanent maintenance and at the same level as support during the parties' (already existing) separation.

Satisfying the general requirements for a marital agreement under DRL ' 236B subd. 3, therefore, should not have been enough to validate the agreement. An agreement regarding child support must satisfy both subdivision 3 and the special requirements of the CSSA in ' 240 subd. 1-b(h). By the same token, an agreement regarding temporary maintenance should satisfy both subdivision 3 and the special requirements of subdivision 5-a(f).

If other courts ignore those statutory arguments and accept the reasoning in H.W. , they will exempt at least some agreements from the recital requirement for temporary maintenance. This defense is most likely to protect other agreements that do not specifically address temporary maintenance, but set a level of support (or a formula for support) that applies the same way whether a matrimonial action is pending or has been completed.

That defense of an agreement is unlikely to prevail, however, unless the party who is attacking the agreement has made himself or herself unsympathetic ' as the husband in H.W. had done by accepting benefits for 22 months under an agreement he said was unconscionable.

Matthew A. Feigin, an attorney at Katsky Korins LLP., thanks Marcy L. Wachtel for her review and input and Peter E. Bronstein for encouraging him to explore the recital requirements.