Gottlieb v. Gottlieb

138 A.D.3d 30

25 N.Y.S.3d 90

Jacob GOTTLIEB, Plaintiff–Appellant–Respondent,

v.Alexandra Lumiere GOTTLIEB, Defendant–Respondent–Appellant.

Supreme Court, Appellate Division, First Department, New York.

Jan. 28, 2016.

Berkman Bottger Newman & Rodd, LLP, New York (Walter F. Bottger and Jacqueline Newman of counsel), for appellant-respondent.

Law Office of William S. Beslow, New York (William S. Beslow and Aimee M. Maddalena of counsel), for respondent-appellant.

JOHN W. SWEENY, J.P., RICHARD T. ANDRIAS, DAVID B. SAXE, ROSALYN H. RICHTER, PAUL G. FEINMAN, JJ.

RICHTER, J.

In anticipation of their planned marriage, plaintiff Jacob Gottlieb (the husband) and defendant Alexandra Lumiere Gottlieb (the wife) entered into a prenuptial agreement. The agreement was the product of months of negotiations among the parties and their attorneys, and provided for, in the event of a divorce, the distribution of assets, spousal maintenance and health insurance, inheritance rights, and the purchase by the husband of a luxury apartment in which the wife and children would reside. Prior to the agreement's execution, the wife's counsel, an experienced matrimonial practitioner, advised her not to sign it, but the wife ignored that advice.

After the parties' marriage broke down, the husband filed this divorce action and the wife moved to set aside the agreement, claiming it was the product of overreaching resulting in manifestly unfair terms. The motion court dismissed the wife's claim that the entire agreement is unenforceable, but reserved for trial the limited issue of whether the agreement's maintenance provisions could be enforced. For the reasons that follow, we reject all of the wife's challenges to the agreement, and issue declarations in the husband's favor upholding the agreement and all its provisions. We also vacate the court's award of interim counsel fees to the wife and remand the matter for further proceedings on that issue.

The wife, now 37 years old, was born in New York City, attended private schools in Manhattan and Connecticut, and received a bachelor's degree in economics from the University of Pennsylvania. After working for several years in advertising and finance, she decided to pursue a real estate career, and obtained a salesperson's license and a position with Brown Harris Stevens, Inc. She later obtained a certification enabling her to teach yoga classes, but has not worked outside the home for several years. The husband, now 44 years old, also grew up in New York City, and obtained a bachelor's degree from Brown University and a medical degree from New York University School of Medicine. After working as a portfolio manager for various financial firms, he started a hedge fund, of which he is currently majority owner.

The parties met in September 2003, began living together in the beginning of 2004, and became engaged in September 2005. Prior to the engagement, the husband told the wife that he would not marry her unless there was a prenuptial agreement, and the parties began to discuss terms. In October 2005, while negotiations were ongoing, the wife learned that she was pregnant. She told the husband that she did not want to have a child out of wedlock, and asked to finalize the prenuptial agreement so that they could marry before the child was born.

The parties discussed the terms of the prenuptial agreement many times during the wife's pregnancy, but no agreement was reached. In mid–March 2006, after consulting with a number of attorneys, the wife retained the services of a partner in a prominent New York matrimonial firm. The husband, however, told the wife that, on the advice of his attorney, he would not finalize the prenuptial agreement, or marry her, until after the child was born. In May 2006, the wife gave birth to a daughter, and the negotiations temporarily abated.

In the fall of 2006, the wife asked her attorney to resume negotiations and finalize the terms of the agreement. In early 2007, the husband's counsel sent a draft agreement to the wife's counsel. In a letter dated March 2, 2007, the wife's attorney proposed changes to the draft, many of which were incorporated into the final agreement. The letter states that the wife "understands all that she is potentially giving up by virtue of this Agreement."

In April 2007, the wife learned that she was pregnant again, and told her counsel that she wanted to execute a prenuptial agreement as soon as possible. Counsel for both parties continued negotiating. In a letter dated April 20, 2007, the husband's counsel sent the wife's counsel a list of revisions to the draft agreement, incorporating many of the changes that had been proposed by the wife's counsel. The husband's counsel also sent a statement outlining the husband's financial circumstances. On April 27, 2007, the wife went to her counsel's office and signed the agreement. The wife concedes that she ignored her counsel's advice not to sign the agreement. Several days later, the husband executed the agreement. The parties were married in May 2007 and their second daughter was born in November 2007.

The prenuptial agreement states that each party had legal counsel of his or her own choosing "who advised him or her fully with respect to his or her rights in and to the property and income of the other and with respect to the effect of this Agreement and that such party understands such advice." Each party acknowledged that the agreement was "fair and reasonable and not unconscionable," and was entered into "freely and voluntarily and not as a result of fraud, duress, coercion, pressure or undue influence exercised by the other." The agreement also stated that the parties had been advised that they might acquire other rights granted to divorcing spouses, but that such rights could be limited or forfeited by the terms of the agreement.

The agreement defines marital property as (i) all property held jointly by the parties; and (ii) any property agreed to by the parties in writing. Separate property is defined in the agreement as all other property, including business interests, retirement benefits, professional licenses and educational degrees, income earned during the marriage, and any interest in the increase in value of the parties' separate property. Although each party waived any right to equitable distribution, the agreement provided for the following in lieu of a distributive award. First, for each year of the marriage (up to a maximum of 15 years), the husband agreed to deposit into an investment account the sum of $300,000. In the event of divorce, the wife would receive these funds along with any accrued interest. Next, the parties agreed to divide equally all wedding gifts, and real property and financial accounts registered in both parties' names. Any other marital property would be divided in proportion to each party's financial contribution to the asset.

Further, if there were minor children of the marriage at the time of divorce, the husband agreed to purchase, at his total cost and expense, an apartment for the use of the wife and the children. The apartment was required to be in a full-service doorman building located between 60th and 80th Streets and Third Avenue and Broadway, above the third floor and with one bedroom each for the wife and the children.¹ The husband agreed to pay the maintenance charges, utilities, and other expenses of the apartment, until all of the children reached the age of majority, at which point the wife would vacate the apartment. The husband also is obligated to pay the wife's and children's moving expenses to the apartment. The agreement also provides that two specified Manhattan apartments, including the residence occupied by the parties during their relationship, shall remain the husband's separate property.

With respect to spousal support, the parties each acknowledged that in light of his or her assets, education, employment history, and rights under the agreement, he or she is "self-supporting and has sufficient ability to maintain a reasonable and satisfactory standard of living." Nevertheless, in the event of divorce, the husband agreed to pay the wife, as taxable maintenance, the sum of $12,500 per month, as long as there is a child of the marriage under the age of four. This amount was in addition to the husband's agreement to purchase, and pay all costs for, an apartment for the wife to live in. The husband also agreed to pay, as nontaxable maintenance, the wife's health insurance, until the parties' children are emancipated. Aside from these provisions, the parties waived any additional spousal maintenance and acknowledged that such waiver was fair and reasonable. In addition, in the spousal support section of the agreement, the wife waived any right to counsel fees, both interim and final.

The agreement also provided for certain inheritance rights for the wife and children. The parties agreed that if the marriage was still intact at the time of the husband's death, the wife would receive her elective share of the husband's estate. In the event of divorce, the husband agreed to leave, either outright or in trust, a specified percentage of his estate to the children of the marriage. Finally, financial statements annexed to the agreement list each parties' assets, liabilities and net worth, although the parties' incomes were not included. The husband and the wife explicitly acknowledged that, upon being advised by counsel, each fully understood the financial information provided by the other, and recognized that their financial circumstances could be considerably different at the time of dissolution of the marriage.

The marriage ultimately broke down, and in August 2012, the husband brought this action for divorce. In her answer, the wife asserts four counterclaims. The first counterclaim seeks a declaration that the entire prenuptial agreement is invalid and unenforceable. The fourth counterclaim seeks rescission of the agreement based on a purported...