Separation Agreements Reached Through Mediation Are Binding

The goal of divorce mediation is for a couple to reach a settlement on one or more issues related to their divorce. To that end, a neutral third party known as a mediator helps each side understand the relative strengths and weaknesses in their position and tries to move them closer to a consensus. While neither party may get exactly what they want, they try to come to an agreement with which they can both live. Often, mediation allows for a better outcome than litigation, and it can be easier on a couple’s children.

If an agreement is reached at mediation, it may be formalized in a separation agreement. Courts treat this agreement the way they would treat other contracts. Although a neutral third party may help the parties reach a different outcome than what a judge would have decided, the court will treat the agreement seriously, except in certain circumstances.

In Ruparelia v. Ruperalia, a husband and wife were married in 1994 and had three children. The husband was a doctor, and the wife had a Master’s degree in social work. In 2011, the couple experienced significant discord, causing them to participate in divorce mediation. During the mediation, they reached an agreement as to asset distribution, spousal maintenance, and child support. These agreements were formalized in a separation agreement, executed in the summer of 2011.

That winter, the husband sued for a divorce judgment into which the agreement would be incorporated. The wife filed a counterclaim to rescind the agreement and then also filed for divorce. These lawsuits were consolidated, and the court decided that the wife hadn’t established enough of a basis to set aside the agreement that had been reached through mediation. However, it recalculated child support based on the parties’ agreement on this point. The judge entered a divorce judgment incorporating the separation agreement, and the wife appealed.

On appeal, the wife argued that the lower court had made a mistake in failing to rescind the agreement. The appellate court explained that a separation agreement is more closely examined than ordinary contracts, due to a married couple’s fiduciary relationship, but it won’t be set aside without evidence of a bargain so inequitable that nobody reasonable would agree to it, or without evidence of fraud or duress. However, these agreements are not set aside when a spouse makes an unwise decision, and the appellate court defers to a trial court when there is a question as to a witness’ credibility.

In this case, the separation agreement permitted the husband to keep the couple’s home, which was worth $300,000, and the wife received a cash payout of $250,000. She kept a lake cottage, and the husband kept a vacant lot. They both retained their retirement funds from their lives in Canada prior to moving to the United States. The wife waived any interest she might have had in a medical practice in which her husband was a partner.

The husband made more than $400,000 per year and agreed to pay maintenance of $70,000 to his wife for five years, plus health insurance and other expenses for three years. The husband also agreed to pay for the three children’s college educations, as well as child support. The lower court had modified the child support to be more than what the parties had agreed would be fair.

The wife claimed that the husband abused her verbally and hid some assets, and that she hadn’t made a good decision due to cancer treatments. She claimed her husband had hidden an account worth $294,000 and a retirement account. However, the wife had seen statements from the first account arrive in the mail. The appellate court noted that it was clear the husband had not hidden any assets.

The wife had also claimed she didn’t want any portion of the value of her husband’s medical practice, even though she knew she could. The mediator told her she could consult an attorney at any point, and her friends had urged her to talk to an attorney.

The appellate court found that the hostility in the marriage didn’t establish undue influence or duress that was enough to dissolve the agreement. The wife hadn’t provided any evidence to establish that her medication, condition, or treatment had stopped her from understanding the agreement. Instead, the record showed that the couple had negotiated over several weeks with a mediator’s help to divide assets and address other issues in their divorce. The agreement that resulted wasn’t egregiously disproportionate such that a reasonable person wouldn’t agree to it. The judgment was affirmed.

If you are considering using mediation for your New York divorce, contact the Law and Mediation Office of Darren M. Shapiro at 516-333-6555 or via our online form. Our principal Darren Shapiro is an experienced, compassionate family law attorney and mediator.

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