Monday, April 30, 2012

The No-Divorce Clause

 

“Some of us think holding on makes us strong; but sometimes it is letting go.” - Heman Hesse

In many hotly contested matrimonial actions, one of the parties delays agreeing to a divorce for fear that the other side will refuse to abide by his/her financial obligations a minute after the divorce is granted. Such was the case discussed in a recent New York Law Journal article, entitled “Judge Voids Pact Blocking Divorce Until Home is Sold.”

In that action, the couple was married for nearly 20 years and have an adult child. In 2008 they signed a Separation Agreement that contained the following provision, “neither party shall file any papers to obtain a judgment of divorce in court until the apartment is sold.” The couple’s marital residence was a Manhattan apartment, which, after the Separation, was occupied by the husband and has been on the market for sale since 2008 for over 3 million dollars. Neither party had the funds to buy the other’s interest and retain the apartment, which is why in 2008 they decided that it had to be sold. At this point, 4 years later, the parties are still married, the apartment has not been sold and the husband continues to reside in the apartment with his girlfriend and their 3 year old son.

The husband argued that the provision that blocked the parties from getting divorced until after the sale should be vacated, because the wife was abusing it to demand an inflated price and force him to stay married. The wife, who is struggling financially, claimed that the sale was a condition precedent to the divorce and that if divorce were granted without it, the husband would have no incentive to sell the apartment at all, depriving her of her share of the proceeds. She pointed to her agreement to waive spousal maintenance in consideration of receiving the money from the sale of the Manhattan apartment. In her view, the husband has been deriving a huge benefit from living in a luxury apartment, which has no mortgage, together with his new family at her expense.

Nevertheless, upon hearing the case, Supreme Court Justice Matthew Cooper said that the clause was not enforceable and so cleared the way for the husband to proceed with his divorce action, despite the fact that the apartment was not yet sold. Judge Cooper said that instead of fully moving on with their lives, the parties tried to lay blame on each other for their apartment languishing on the real estate market. However, as a matter of public policy, he said that whatever the reason for the inertia of the real estate sale process, the “no divorce clause” was responsible for indefinitely delaying the parties’ divorce and was against public policy, which, over the last years and decades, has been to make divorce progressively easier to obtain in New York State.

The Takeaway: Do not insert clauses that delay or prevent the divorce until completion of a certain financial requirement in a Separation Agreement, - courts may consider them contrary to public policy. Each party must comply with the financial requirements imposed upon him/her by the Settlement Agreement. However, failure to do so, will not prevent him/her from getting a divorce.

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2 comments:

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