Published on:

Palaia v Palaia

2018 NY Slip Op 01076

2/14/18

 

This is an appeal from Westchester County Supreme Court. The order that is under appeal deals with branches of the defendant’s motion which addresses stipulations between the parties from a settlement back in 1997. According to the stipulation, the plaintiff was to receive a 50% share of a 401K as of the date of the stipulation and wasn’t due any portion of a supplemental employee retirement plan. The cross-motion to enforce this stipulation was denied, which directed the defendant to pay the 50% share of the value of the 401K and the employee retirement plan from the date of the plaintiff’s retirement.

A New York Family Lawyer said that the court ruled that the order is modified by deleting portions of the stipulation that the plaintiff was entitled to 50% of the 401k value but none of the employee retirement plan.

When the parties divorced in 1997, they entered into a stipulation which was merged with the judgment. The stipulation said that the defendant had $77k in a 401K account and that the plaintiff shall receive one half of that amount. It also said that the defendant had an employee retirement plan, and the plaintiff was entitled to ½ of that as well. This was to be based on a “Majauska” formula (Majauska v Majauska 61 NY2d 481).

New York law stated that the defendant moved for a determination pursuant to the stipulation. He contended that the plaintiff is entitled to 50% of the 401K and employment retirement account from the date execution of the stipulation agreement. Since the retirement account had no value as of the date of execution, and it wasn’t marital property, he didn’t have to pay it. The plaintiff cross-moved to enforce the terms of the stipulation.

The court said that a “stipulation of settlement is a contract and is enforceable according to its terms” (Klein v Klein 134 AD3d 1066, Stein v Stein 130 AD3d 694). When a stipulation is vulnerable to different interpretations, the court needs to look at the entire agreement (Springer v Springer 125 AD3d 842).

In this case, the language is unclear. The retirement account doesn’t fund until the defendant retires.

The courts must use contract interpretations in these types of circumstances (Kraus v Kraus 131 AD3d 94). Courts also can’t reform an agreement if the parties haven’t agreed to it. In this case, the parties consented to reformation by their stipulation. In the stipulation of the parties agreed to use the Majauska’s formula dividing these assets.

The court cites Olivio v Olivio (82 NY2d 202). In that case, an ex-wife was not able to collect the ex-husband’s social security payment-as this particular payment didn’t exist at the time of the divorce. Here, the retirement plan wasn’t funded but did exist.

The portion of the stipulation regarding the 401K was also ambiguous. It is unclear if the Majauska formula should have applied.

The Supreme Court should have read the stipulation to mean that the plaintiff was granted ½ share of the 401K and retirement account per the formula set out, as of the date of retirement.

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