In a case involving the division of property after a divorce, the defendant appealed an order from the Supreme Court of Queens County, which limited her share of proceeds from the sale of the marital residence to $700,000. The court also denied her request to have the residence recognized as her separate property.
Background Facts
The parties married on July 8, 2011, and had two children. Prior to their marriage, they signed a prenuptial agreement that outlined how their marital and separate property would be divided in case of divorce. In this agreement, a “termination event,” including divorce, would trigger the division of marital property equally between them. However, the marital residence and any debt related to it were excluded from this equal division provision.
The prenuptial agreement stated that the plaintiff would contribute $700,000 toward the purchase of the marital residence. It further provided that if the purchase price was $700,000 or less, the residence title would be in the defendant’s name alone. If the purchase price exceeded $700,000, the title was to be in both names. Additionally, the agreement specified that if the couple divorced before their fifth anniversary, the defendant would receive a “Residence Payment” capped at $700,000 upon the residence’s sale. The plaintiff also had the option to cede all interest in the residence to the defendant instead of making a residence payment.
In December 2011, they bought a condominium for approximately $1.6 million as their marital residence. The plaintiff provided a $700,000 down payment and financed the remaining amount with a mortgage in his name. Despite the purchase price exceeding $700,000, the title was placed in the defendant’s name.
In 2013, the plaintiff initiated divorce proceedings. By October 2014, the couple reached a settlement, specifying that their prenuptial agreement would govern property distribution. This agreement and settlement were included in their divorce judgment dated March 3, 2016. In 2020, when the defendant planned to sell the marital residence, a dispute arose over how to divide the sale proceeds.
Question Before the Court
Whether the defendant’s share from the sale of the marital residence should be limited to $700,000, as stated in the prenuptial agreement, or if she had the right to a larger share by having sole title to the property.
Court’s Decision
The Supreme Court, Queens County, sided with the plaintiff, granting his motion to cap the defendant’s distributive award at $700,000 and denying her cross-motion that the residence was her separate property. The court interpreted the prenuptial agreement’s provisions on the division of marital and separate property as excluding the marital residence from equal distribution.
Discussion
The court relied on contract law principles in its analysis. According to the prenuptial agreement, the distribution of marital property did not apply to the marital residence. Instead, specific provisions governed the residence’s distribution based on the timing of the divorce. Since the divorce action began before the fifth anniversary, the defendant’s share of the residence was limited to the $700,000 contribution by the plaintiff.
The court examined the prenuptial agreement’s language, noting it clearly expressed the parties’ intentions. Under New York law, courts interpret agreements according to the plain meaning of their terms. If an agreement’s language is unambiguous, courts adhere to its terms without considering external factors. Here, the court found that the language of the prenuptial agreement was clear, and it limited the defendant’s share of the marital residence regardless of the title being in her name alone.
The defendant argued that having the title in her name made the residence her separate property. However, the court dismissed this argument, noting that sole title could not override the prenuptial agreement’s explicit terms. The prenuptial agreement gave the plaintiff sole responsibility for the mortgage, further supporting his claim to limit her distributive award to $700,000.
The court’s decision also referenced previous cases upholding prenuptial agreements as contracts binding on both parties. Courts typically interpret prenuptial agreements like other contracts, looking at the four corners of the document to determine intent. The court ruled that allowing the defendant a larger share would contradict the clear terms of the agreement and result in an unfair outcome, given the plaintiff’s financial responsibility for the mortgage.
Conclusion
The court’s decision affirmed that the defendant’s share in the marital residence’s sale proceeds was capped at $700,000, as per the prenuptial agreement. It underscores the importance of clear, precise language in prenuptial agreements and the courts’ role in upholding such agreements when they are unambiguous.
For those facing similar family law issues, consulting a qualified attorney can be beneficial. If you need guidance on divorce and property division matters, contact an experienced Queens divorce lawyer at Stephen Bilkis & Associates for a free no obligation consultation on your legal options.