Adhesion Contracts

Sep 29, 2016

In Corman v. Corman, the husband and wife married in 1994, had two children together, and divorced on July 2, 2013 after an uncontested hearing.  About a year later, the wife moved to set aside parts of the marital settlement agreement that was incorporated into the judgment of divorce.  The wife claimed that she had agreed to unfair terms and waived distribution of certain realty in Brooklyn because: (1) the husband had promised to keep their family intact post-divorce; (2) the husband and wife never exchanged discovery; and (3) the husband had misrepresented his assets and finances, including their joint home equity credit line.  The wife alleged that the husband told her that six properties he had in Brooklyn were “on the verge of collapse” and that he only wanted a divorce so he could file for bankruptcy without hurting the wife’s credit.  On the basis of these allegations, the wife sought a plenary hearing, asserting equitable estoppel, fraud, and detrimental reliance, and claiming that the agreement was a contract of adhesion.

The Family Part judge concluded that the wife had not made a prima facie case that the agreement she signed was a contract of adhesion.  In other words, the wife did not show that she had no choice but to enter into the agreement at issue to save their marriage.  The Family Part judge also found no proof of any side agreements to remain an intact family.  Similarly, the judge did not find that the husband intended that the wife rely to her detriment on the alleged promise, or that he gained an undue advantage through some unconscientious act or omission.  Accordingly, on August 8, 2014, the Family Part judge entered an order denying the wife’s requests for a plenary hearing regarding equitable distribution and alimony.  But the judge did agree that child support should be recalculated because the husband’s obligation had been set below the Child Support Guidelines without valid justification.  The husband’s obligation was ultimately raised to $5,400 per month on March 9, 2015.

The wife appealed, arguing that the Family Part judge erred in denying her a plenary hearing on the issues of duress, detrimental reliance, and fraud.  The wife further argued that the judge erred by finding that she waived those issues when she testified under oath that she understood the agreement and intended to be bound by it.  The Appellate Division rejected the wife’s arguments and affirmed the lower court.  The Appellate Division agreed with the reasoning of the Family Part judge.  The Appellate Division agreed that the wife had not made a prima facie showing that a plenary hearing was necessary, pointing to the wife’s own testimony that she understood the terms of the agreement and that she intended to be bound by its terms.  The Appellate Division also noted that the wife’s certification to support her August 2014 motion states that her attorney warned her that the agreement was a “bad deal,” but the wife entered into it anyway—thus establishing that the wife agreed to those terms of her own volition and undermining her claim that she was under duress.

If you have a post-judgment alimony or equitable distribution issue, contact the skilled matrimonial attorneys at Sarno da Costa D’Aniello Maceri LLC.  Call us today at (973) 274-5200.