A Judge has voided marital agreements drafted under foreign laws in two separate divorce actions, saying the agreements in both cases had procedural defects that rendered them unenforceable.
Manhattan Supreme Court Justice Ellen Gesmer (See Profile) said the prenuptial agreement in M. v. M. 309652/12 fell short of Spanish Civil Code requirements, while a post-nuptial agreement in J.R. v. E.M., 301738/13, also enacted under Spain’s laws, was not in compliance with Domestic Relations Law.
In the latter case, Gesmer said that while Spanish law had been “painstakingly followed,” she was constrained to deem the agreement unenforceable because it was faulty under New York state law.
Michael Stutman, a partner at Mishcon de Reya and president of the New York chapter of the American Academy of Matrimonial Lawyers, noted that as people become more mobile, problems such as enforcing and interpreting international prenuptial agreements “are becoming more frequent.”
Stutman, who was not involved in either case, said a related challenge for practitioners is trying to anticipate what judicial forums marital agreements could end up in “and whether you can insert a provision to insist that the law of New York is law applied by other jurisdictions.”
In J.R. v. E.M., a Peruvian citizen, J.R., filed for divorce against E.M., her Spanish citizen husband . Both are well-educated professionals working at the United Nations, Gesmer said.
J.R. moved to set aside the matrimonial property agreement that both signed at the Spanish Consulate in Manhattan the day after they were married in 2004.
The wife argued her husband did not disclose financial information before the agreement was executed. The husband said she was equitably estopped from challenging the agreement.
Neither was represented by counsel in the drafting and execution of the agreement, which was done by a Spanish consul or “notaire.”
Gesmer said there was “no real dispute” the agreement was properly executed pursuant to Spanish law.
The wife argued New York law governed the agreement’s validity. The husband said Spanish law applied because the agreement invoked provisions of the nation’s civil code.
Gesmer agreed with the wife, observing that the parties had married in New York and the agreement was drafted and executed there. The couple lived in New York long before signing the agreement, their children always lived in New York and all their assets, such as four apartments, appeared to be located in the state, she said.
Turning to formality requirements, the wife said the agreement ran afoul of Domestic Relations Law §236(B)(3), which says matrimonial agreements must be “acknowledged or proven in the manner required to entitle a deed to be recorded.”
The husband said the document “substantially complies with New York Law.” Moreover, he said the agreement complied with Real Property Law provisions that discussed acknowledgements or proofs made in a foreign country— the Spanish Consulate in this case— for the conveyance of real property in New York.
The husband’s arguments did not sway Gesmer. “The Spanish consular offices is located in New York, not in a foreign country,” she said.
As for the acknowledgement requirements under Domestic Relations Law §236(B)(3), Gesmer noted a 1997 Court of Appeals decision Matisoff v. Dobi, 90 NY2d 127, which called the provision “essential” and a “bright-line rule.”
Gesmer said “the formalistic requirement of the form of the acknowledgment is not accompanied by any process that ensures that the parties are making an informed choice about these important matters.”
By contrast, the closely-followed Spanish law requisites “ensure that the parties are given a thorough explanation of the alternatives available to them, and the legal implications of the choice they are making,” she said.
Still, Gesmer said she was bound to follow Matisoff and void the agreement without reaching the merits.
Gesmer’s other ruling, M. v. M. 30-9652/12, dealt with the divorce that a Dominican Republic-born woman with Italian citizenship filed against her Spanish citizen husband.
In June 2001, they signed a prenuptial agreement in Madrid, which was silent on choice of law. They married in the Dominican Republic, more than a year later.
The couple moved to New York in 2004 and separated four years later. The wife, currently unemployed, spends most of her time in New York and the husband, a businessman, lives in Madrid.
When the wife commenced the divorce action in 2012, the husband pointed to the agreement as a defense to her equitable distribution bid.
The pair disputes the wife’s alleged lack of awareness when signing the document. Nevertheless, the couple does not dispute it was signed more than a year before the marriage and never registered in Spain or the Dominican Republic.
Among the wife’s arguments to nullify the agreement was that marriages in the Dominican Republic are subject to community property regimes unless a registered agreement says otherwise. Here, the agreement was not registered in the country.
Besides, the wife said, the Dominican Republic and Spain both view prenuptial agreements as non-enforceable if marriage does not occur within a year of execution.
Gesmer said Spanish law applied and said it was “clear that the agreement became void by operation of Spanish law when the parties failed to marry within one year after its execution, and that it is void under both Spanish and Dominican Republic law because the parties failed to register it with the appropriate civil authority.”
As a result, she said she did not need to reach the case’s merits.
Casey Greenfield of Greenfield Labby represented the wife in M. v. M. “We were very pleased with the ruling,” she said, noting that a general trend over recent years has been for courts to uphold prenuptial agreements.
She added that she was glad the decision was published as there was “scant case law” as to the validity of marital contracts in both the domestic and international context.
Jacqueline Newman and Jessica Toelstedt of Berkman Bottger Newman & Rodd represented the husband in M. v. M. Both attorneys said they were seeing more international marital agreements in their practice.
In J.R. v. E.M., the wife was represented by Mark Holtzer of Snitow, Kanfer & Holtzer, who said the unique twist in this case was that the marital agreement drafted under foreign laws was executed in a Manhattan-located consulate versus in a foreign country.
“I think the judge honed in on the issue, wrote a very well-reasoned decision,” he said, adding that the divorce was settled Thursday. “Decisions can help attorneys resolve cases.”
Robert Michaels of Dobrish Michaels Gross represented the husband. E.M. He said New York courts have long interpreted foreign marital contracts and most were enforced. Gesmer took a “hypertechnical position on this particular document,” he said.
Michaels added that it could be read into the decision that had they gone to Spain “and done the same exact thing, it would have been upheld.”