In the case Matter of Michelle B. v. Thomas Y., 2022 NY Slip Op 50020(U), the Family Court of Kings County reviewed objections filed by a mother challenging a Support Magistrate’s refusal to vacate an agreement she had made during a child support enforcement proceeding. The issue involved a stipulation in which the mother agreed to accept a future pension payment in exchange for waiving more than $140,000 in child support arrears.
Background Facts
Michelle B. and Thomas Y. are the parents of a child born out of wedlock in 1992. In 2011, a support order was issued directing the father to pay child support through the Support Collection Unit (SCU). The father was previously found in willful violation of the order and served a six-month jail sentence in 2019. At that time, arrears were converted into a judgment and the father began paying $23 bi-weekly under a SCU payment plan.
In October 2019, the mother filed a new violation petition, stating the father had not paid scheduled arrears since 2018. As of November 2019, the father owed over $206,000. The father was employed by the Department of Corrections and had approximately $67,000 in a pension account managed by NYCERS. During court proceedings in August 2020, both parties discussed a stipulation: the mother would accept the NYCERS funds in full satisfaction of the arrears.
The agreement was never formalized into an order, and it later became clear that NYCERS would not release a lump sum but only allow payments starting in 2025 when the father reached retirement age. The mother then moved to vacate the agreement based on mistake and lack of consideration.
Issue
The issue was whether the Support Magistrate’s refusal to vacate the agreement between the parties was proper, given that the agreement was based on a mutual misunderstanding of when and how the NYCERS funds would be available.
Holding
The Family Court granted the mother’s objections, vacated the August 3, 2020 stipulation, reinstated the violation petition, and restored the arrears to the amount calculated by SCU. The matter was remanded to the Support Magistrate for further proceedings.
Rationale
The Family Court first noted that under Matter of Saratoga County Support Collection Unit v. Hubert, 160 AD3d 1071, and related cases, Family Court retains jurisdiction over support enforcement and modification. While stipulations of settlement are generally favored, they may be set aside upon a showing of fraud, duress, overreaching, or mistake.
Here, the agreement to waive more than $140,000 in arrears was based on a mutual misunderstanding. Both parties and the Support Magistrate assumed the mother would receive a lump sum of $67,674.36 from the father’s NYCERS pension via a Qualified Domestic Relations Order (QDRO). However, NYCERS later informed the parties that a lump sum payment was not possible because the mother was not a former spouse, and that payments could only begin in 2025 when the father reached retirement age.
The Family Court found that the stipulation failed for lack of consideration because the mother would not receive what she was promised. Additionally, the required petition to adjust or vacate arrears was never filed. Without that petition, the Support Magistrate lacked subject matter jurisdiction to accept the stipulation under Family Court Act § 451(1).
The court also noted that even if a proper petition had been filed, the agreement would have failed due to mutual mistake. Both parties believed a QDRO could result in immediate access to the NYCERS funds, but that belief turned out to be false. The record showed that the Support Magistrate and both parties were unaware that a lump sum payout was not permitted, and that only an income execution order could be used for future monthly payments beginning in 2025.
Further, NYCERS documents showed the father had an outstanding loan on his pension of over $55,000, which would reduce his future pension payments. Given the father’s history of non-payment and prior incarceration for willful violation, the likelihood that the mother would ever receive the full value of the pension was uncertain.
Because the stipulation did not reflect a meeting of the minds and the mother would not receive the promised value, the Family Court concluded that it was invalid. The court vacated the stipulation, reinstated the original arrears, and remanded the matter for further proceedings.
Conclusion
The Family Court determined that the August 3, 2020 stipulation between the parties should be vacated due to mutual mistake and lack of consideration. The father did not have the authority or ability to provide the lump sum payment that was the basis for the mother’s waiver of arrears. Additionally, the lack of a proper petition meant that the Support Magistrate lacked jurisdiction to modify or vacate the arrears. As a result, the court reinstated the mother’s violation petition and directed that all arrears be restored.