Prenuptial Agreements: Statute of Limitations During Divorce
The law giveth and the law taketh away...as did the New York State legislature when Governor Spitzer signed into law July 3, 2007.
Unfortunately, the noble goal to protect spouses during marriage by tolling the statute of limitations, only applies to one segment of such class, but not to others similarly impacted by such legislation. As such, the new statute has a likely prospect to be declared unconstitutional and set aside.
New Legislation on Statue of Limitations
If one were to make a perfunctory reading of the new legislation without reading it to the very end, the fact that the legislation does not apply to agreements executed on or before the effective date of the new legislation, would not be known. Despite the fact that anyone signing a post or pre nuptial agreement on or after July 3rd will only be required to bring an action within three years after separation occurs to contest the agreement, any litigants who continue in their marriage and have agreements that predate the statute would be simply out of luck. As such, the new legislation simply does not afford equal protection of the law to all of its citizens similarly situated. In essence, there are one class of citizens who will be permitted to attack an unconscionable agreement and another group that will be denied such right simply because their agreements were signed prior to the effective date of the legislation, and even if their actions for divorce are instituted on the same date.
Viewed from any aspect, such a result is grossly unfair. This is especially true since such spouses entering into pre and post nuptial agreements prior to the effective date of this legislation, will not have had a judicial determination concerning their marriage or its financial aspects.
Questions remain as to the impact of this statute in other areas. For example, there has been a dichotomy that exists between the First and the Second Judicial Department concerning whether or not during marriage the statute of limitations is tolled. In the past, the view in the First Department was that there is such tolling, but in the Second Department the court has ruled otherwise.
Prenuptial Agreement Example
Consider the following example when determining the extent of the injustice that will befall future litigants. A couple marry and enter into a pre nuptial agreement. The husband has $100,000,000 in assets, the wife none. The wife after completing college with no work experience enters into a pre nuptial agreement which provides her $10,000 maintenance for 5 years. Her husband at the time of the making of the agreement earned between $750,000 and $1,500,000 annually. Ten years later after the birth of three children and the acquisition of another $25,000,000 in assets, the husband commits adultery and communicates a sexual disease to the wife. There is no provision whatsoever for the wife to obtain equitable distribution unless properties are placed in her sole name or in joint names with her husband during marriage. No such properties exist.
Because the new statute continues to recognize the six year statute of limitations as a bar to attacking the pre nuptial agreement, the wife is without remedy since she lives in the Second Department. If she brings an action for divorce seeking maintenance, equitable distribution, or child support, an attack of her pre nuptial agreement will be barred by the statute of limitations and she will be unable to receive any property award from the court and be relegated to $10,000 a year support for 5 years. Consider further that the marital residence was constructed for $7,000,000 and the wife actually was in charge of its acquisition, construction and furnishing. Despite the husband’s promise to place title in both their names, title rested solely in his name. Under such fact pattern, she could not attack the agreement and would be forced to accept the financial benefits provided, if she asked for a divorce and wanted to move on with her life. Conversely, if she was fortunate enough to live in the First Department, she could bring such action since there was a tolling of the statute, and she could bring an action for divorce and have the issue of whether the agreement was fair and conscionable decided by the court. If she was successful and the agreement was set aside, the court could fix maintenance for her and the children and make a distribution of marital assets, i.e. any property acquired during the marriage. Does that make any sense to you? Is this the result the legislature sought to achieve? Since the legislative intent of the statute was to aid spouses during marriage from an unfair result, why did it exclude another segment of its citizens who are equally affected?
I am certain that the next case that is litigated in the Second Department counsel will argue that the Appellate Court should reverse its position and adopt the view in the First Department that the statute of limitations should be tolled during marriage because the new legislation is an expression of what the law should be. Because of the tremendous injustice that becomes apparent when considering these concepts, the Second Department should change its view to be consistent with the tolling rule during marriage in the First Department.
Unfortunately, during the time DeMille v. DeMille was being litigated, the Court of Appeals denied a motion for leave to appeal because the order of the Appellate Division at such time was not a final determination of the case. Further, the Court of Appeals in Bloomfield v. Bloomfield declined to address the tolling issue. As things now exist, the Court of Appeals has an opportunity to hear the next case brought before it because of the split in views in the First and Second Department. Moreover, the Court of Appeals should right the wrong the legislature enacted, by a holding that the statute is tolled during marriage.
Whether the Court of Appeals will do so, or when it will do so, and whether the statute will be attacked for unconstitutionality, remains to be seen. But, it remains clear that thousands of prospective litigants, will be sentenced to a lifetime of grief and unhappiness, because they cannot divorce their spouse due to financial concerns. Whatever indeed will happen we are hopeful that it will happen sooner rather than later. Or perhaps an amendment to the statute will shortly be made to right this wrong.
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