Chapter 5 MERGER AND SURVIVAL OF AN AGREEMENT

JurisdictionNew York

Chapter Five

Merger and Survival of an Agreement

I. Merger Versus Survival

In Rainbow v. Swisher,1775 the Court of Appeals succinctly explained the distinction between an agreement that has merged into the judgment of divorce and one that survives the judgment. Once an agreement has merged into the judgment of divorce, the agreement ceases to exist as a separately enforceable contract. If not merged, the agreement may survive as a basis for suit, independent of other available procedures for enforcing the decree. Merger and survival provisions are constantly used and are sanctioned by the courts.1776 A separation agreement is a legally binding, independent contract between the parties so long as it is not merged into the divorce decree.1777

A. Lack of Decisional Uniformity When an Agreement Is Nonspecific as to Merger or Survival

In deciding whether an agreement should survive or be merged into a judgment of divorce, the intentions of the parties are controlling.1778 Nevertheless, appellate courts have not been unanimous in the treatment of separation agreements that fail to specifically state whether they are to be merged into—or survive—the divorce judgment.

B. Second Department

In 1973, in Nicoletti v. Nicoletti,1779 the Second Department held that silence in an agreement as to survival or merger results in merger.

In Sendelbach v. Caravaggi,1780 the defendant argued that the plaintiff's claim for maintenance as provided in the parties' separation agreement was barred by the six-year statute of limitations in N.Y. Civil Practice Laws & Rules 213(2) (CPLR) governing contract actions. The plaintiff contended that the agreement was incorporated but not merged into the divorce judgment and was therefore governed by the 20-year statute of limitations in CPLR 211(e). The Appellate Division noted the extensive references in the agreement and the divorce judgment to the agreement's incorporation without merger into any divorce judgment and deemed any omissions as clerical errors that could be corrected pursuant to the language in the agreement, which required the party instituting a divorce action to "request" that the judgment "contain a provision" incorporating the agreement without merger.

Khlevner v. Khlevner1781 remanded for additional testimony because the court improperly precluded testimony concerning whether the plaintiff's former attorney had acted mistakenly when he included a provision in the proposed judgment of divorce which, contrary to the settlement agreement itself, provided that the settlement agreement would be merged into the judgment. Following Khlevner, the Second Department, in Vest v. Vest,1782 held that "[w]here a stipulation is not expressly made to survive the final judgment of divorce, it merges with the judgment and retains no contractual significance."

C. Third Department: From Merger to Survival

This issue has followed a difficult course in the Third Department. However, in 1975, Family Court held that the absence of a clear declaration in an agreement regarding merger-survival meant that the document had merged.1783 In 1976 the Third Department affirmed1784 and in 1977 the Court of Appeals dismissed the appeal.1785 In 1978, in Lynch v. Pierce,1786 the Third Department held that silence is to be construed as merger.

Earlier in 1975, Tamas v. Tamas1787 held that in a case where the separation agreement has no express provision for either survival or merger in regard to a subsequent decree of divorce, a factual hearing should be held to determine the intent of the parties is not an abuse of discretion.

In Small v. Small,1788 the Third Department held that a separation agreement is deemed to have survived a divorce decree unless otherwise provided. However, Small simultaneously stated that when an agreement fails to specify either survival or merger in any subsequent decree of divorce, a factual hearing should be held to determine the intent of the parties. Small turned to the conduct of the parties following the divorce to determine their intention1789—the conduct of the parties, or, practical construction, is a factor only when there is an ambiguity in the agreement.1790

In 1995, the Third Department, in Steinard v. Steinard,1791 citing Second1792 and Fourth Department1793 authority, held that it is well settled that merger occurs unless the parties' agreement expressly stipulates against it.

However, in 1999, in Von Schaaf v. Von Schaaf,1794 the Third Department reversed itself on this issue and specifically "rejected" the reasoning in Steinard. Von Schaaf held that when a judgment of divorce is silent as to whether the underlying separation agreement is to survive or merge therein, the parties' intent must be gleaned from within the four corners of the agreement itself. If the agreement is ambiguous, then a hearing must be held where extrinsic evidence may be introduced. In the event that no extrinsic evidence is available, or a review of such evidence fails to resolve the issue of the parties' intent, the separation agreement is presumed to have survived the resulting decree.

The agreement in Ventura v. Leong1795 clearly evinced the parties' intent that it be incorporated in the judgment of divorce, and that it not merge therein; and absent any evidence that a substantial right of the defendant will be affected, the mistake in the judgment should be cured so as to conform its terms with the parties' unequivocal intent.

II. Conflicts Between Settlement Agreements and Subsequent Divorce Judgments

Where there is a conflict between a settlement agreement and the decretal provisions of a later divorce judgment from which no appeal was taken nor modification sought, the judgment will govern.1796

The separation agreement in Perera v. Perera1797 provided for its incorporation and survival. However, the divorce judgment was silent as to incorporation or survival—it simply provided that "all future matters pertaining to child support . . . shall be referred to the Family Court of the State of New York."1798 The petitioner commenced a proceeding for an upward modification of child support. Family court held "that it had no jurisdiction to modify the terms of a separation agreement which was neither incorporated nor merged into the judgment of divorce."1799

Citing Rainbow v. Swisher,1800 the Appellate Division noted that "[n]otwithstanding the conflicting provisions of the separation agreement and the judgment of divorce with respect to its incorporation, it is well settled that 'the decretal provisions of a later divorce judgment will govern.' "1801 Rainbow stressed that "absent unusual circumstances or explicit statutory authorization, the provisions of the judgment are final and binding on the parties, and may be modified only upon direct challenge."1802 This provision is often confused with the rule that when there is a conflict between an order or judgment and the court's written decision, the decision controls and the written order must conform strictly to the decision.1803

The Third Department held that "[w]hile it [was] clear that the separation agreement survived the judgment of divorce, thereby creating a separately enforceable contract, Family Court remained without jurisdiction to set aside or modify its terms" and although "binding on the parties . . . the . . . children are not so bound" and an action could, therefore, be commenced for support despite the agreement's existence because there was thus no prior order for support from which a modification could have been made.1804 However, Family Court had jurisdiction to entertain an original application pursuant to Family Court Act § 461(a) and, upon that basis, could have converted the matter to its proper form pursuant to CPLR 103(c).

In Markell v. Markell,1805 the judgment of divorce was inconsistent with the stipulation of settlement regarding each party's child support obligation. About eight years after the judgment, the defendant moved to modify the judgment to accurately reflect the Findings of Fact and Conclusions of Law and the agreement. Supreme Court denied his application on the grounds of laches, in that he waited eight years to make the motion. The Appellate Division reversed because the provisions of the judgment were the result of a clerical error, as the parties had been adhering to the terms of the agreement for approximately eight years, and that the plaintiff had only recently informed him that the judgment contained terms different from those in the agreement and Findings of Fact and Conclusions of Law. The plaintiff also did not demonstrate that a correction would prejudice her.

The judgment of divorce in Conrad v. Lewis1806 provided that the separation agreement survived the divorce decree, but the judgment failed to incorporate the terms of the separation agreement. Therefore, Conrad held, there was no order with respect to child custody or support. When the petitioner brought a petition in Family Court styled as a petition to enforce an order of support, Family Court had before it no support order to enforce. "Nevertheless, family court had authority to make an order for support '[i]n the absence of' an order of another court (Family Ct. Act, § 461, subd. [a])."1807 It can certainly be argued that inherent in a judgment which notes an agreement's survival is the implicit notion of the agreement's incorporation by reference.

III. Surviving Agreements and Modification of Divorce Decrees

In Makarchuk v. Makarchuk,1808 the plaintiff commenced an action in 2006 to enforce the defendant's obligation to pay carrying costs on the marital residence pursuant to their 1970 separation agreement. A decree of divorce was entered in 1971, and although the decree expressly incorporated the agreement, it did not contain a nonmerger clause. In 1975, the Supreme Court modified the decree by ordering that the defendant was no longer responsible for paying those obligations. The Appellate Division held that a surviving...

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