New York Family Law Blog
In a case about a child support arrears settlement agreement, the Family Court was asked to determine whether a mutual mistake of fact was sufficient grounds to vacate the settlement agreement and reinstate the full amount of the arrears.
Background
The mother and father are parents of a child born in 1992. The father was ordered to pay child support through the Support Collection Unit (“SCU”). However, he quickly accumulated an arrears. As of November 13, 2019, when the parties initially appeared before a Support Magistrate, the father had outstanding arrears of $206,055.44 for the child who was then an adult.
A December 20, 2019 letter from the New York City Employees Retirement System (“NYCERS”) indicated that the father had in fact $67,674.36 in his account. The father offered to sign the money over to the mother in settlement of the entire arrears. The mother agreed the settlement, stressing that she would agree to it as long as she would get the entire balance of approximately $70,000 in one lump sum immediately. However, it turned out that the father, who was 58, was not entitled to a lump sum payment immediately. His NYCERS account would not be available to liquidate until 2025.
The mother filed a motion to vacate the agreement to settle the child support arrears, to reinstate the Violation Petition against the father, and to recalculate the SCU Statement to reflect that no child support arrears are forgiven or waived. The Magistrate denied the mother’s Motion to vacate the Agreement, reasoning that the mother agreed to accept funds in father’s NYCERS account in full satisfaction of arrears and that the mother understood what she was agreeing to. The mother objected.
Discussion
The New York Family Court agreed with the mother and granter her objections. The court found that the mother properly initiated an enforcement proceeding in order to collect the arrears of $206,055.44, for the subject the child. The court noted that even though the child was emancipated in the 2013, the father still had to pay his arrears and that the mother had every right to seek enforcement. See Beckmann v Beckmann, 160 A.D.3d 799, 800 (2nd Dept. 2018).
Even though a court cannot legally reduce an arrearage, the party to whom the money is owed has the right to enter in an agreement to reduce the arrears. However, for an arrears to be canceled or reduced, the parties must file a petition to do so. In this case, even though the parties made an agreement to vacate the arrears in exchange for a lump sum payment, the mother never filed a petition with the court to vacate the arrears. Thus, the Magistrate did not have the requisite subject matter jurisdiction to accept the agreement to accept a lump sum to settle the arrears.
Furthermore, the court explained that even if the Magistrate did have subject matter jurisdiction, the agreement would fail due to unconscionability and mutual mistake. The mutual mistake was the assumption that upon the execution of that QDRO, the mother would be entitled to receive $67,674.36 in a lump sum payment from father’s NYCERS account. When they entered the agreement the parties were not aware that the mother would not be entitled to a QDRO as the vehicle to receive the lump sum because she was not a former spouse of the father.
Accordingly, the agreement was vacated, the arrears reinstated, and the Violation Petition restored.