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LAW AND THE FAMILY
Survival or Merger of Agreements
Joel R. Brandes
New York Law Journal
September 29, 1999
Although matrimonial agreements about maintenance and property settlements are not
usually subject to judicial modification, there is a threshold question as to the life and
present status of the support and maintenance provisions of an agreement when enforcement
or modification is sought. Did the agreement survive and does it still exist, or was it
merged into a court order or judgment? The answer, which affects the court's power to
enforce and modify the agreement, depends on the intention of the parties as expressed in
the agreement. [FN1]
In Goldman v. Goldman, the Court of Appeals held that where a valid and unimpeached
separation agreement was incorporated into the divorce judgment and survived, the Supreme
Court, in the exercise of its statutory powers, could modify the alimony provisions of the
judgment downward, based upon a substantial change in the husband's financial
circumstances, without impeding the contractual provisions of a surviving agreement.
The agreement could neither limit the statutory power of the Court nor could it confer
power. The downward modification of the judgment did not affect the rights of the wife to
recover in an action to enforce the agreement. As it had not been modified and was still
an enforceable contract, the wife could sue on the contract for the difference between the
contract amount and the reduced amount set by the modified judgment. [FN2]
Rulings on Modification
In McMains v. McMains, the Court of Appeals held that the Supreme Court could modify
the alimony provisions of the judgment upward, where the former wife "is actually
unable to support herself on the amount heretofore allowed and is in actual danger of
becoming a public charge.'' [FN3] It held that, notwithstanding a valid separation
agreement, a wife who had not remarried could obtain a modification of the alimony
provision contained in a divorce judgment where it was necessary to prevent her from
becoming a public charge. The Court reasoned that its modification of the alimony award
was independent of and did not vary the terms of the agreement, but was merely a
recognition of the husband's statutory duty imposed by General Obligations Law s5-311.
[FN4]
In Schmelzel v. Schmelzel, the Court of Appeals held that where an agreement was
incorporated into and survived a judgment, and was sustained by the Court as free of fraud
and duress, and where the defendant was not in default under the agreement nor had
abandoned or acquiesced in the efforts of the other spouse to repudiate the agreement, and
there was no question of inadequacy, as in McMains, the separation agreement is in full
force and effect, and the Court cannot increase the amount provided for alimony. Although
the husband's income and finances had improved, the Court could not modify the alimony
provisions of the judgment upward.
However, where a separation agreement executed before July 19, 1980, was merged by the
court into its judgment, the agreement no longer existed as an independent contract; it
became a part of the judgment, separate from the contract and subject to all the rules and
regulations respecting such a judgment, and the court could modify the alimony provision
upward or downward based merely upon a showing of a substantial change of circumstances.
[FN5]
Legislative Change
Domesitc Relations Law s236 (B)(9)(b), which applies to all agreements, orders and
judgments entered into or made in actions commenced on or after July 19, 1980, provides
that a court-ordered provision for maintenance may still be modified upward or downward
upon a showing of the recipient's inability to be self-supporting or a substantial change
of circumstances, including financial hardship. This modification power exists where an
agreement has been incorporated into an order or dissolution judgment and merges into it.
Since 1980, DRL s236 (B)(9)(b) expressly authorizes the court to modify the maintenance
provisions of a judgment where there is a surviving agreement, which is incorporated into
it, upon a showing of extreme hardship, and in that case the terms of the judgment as
modified supersede those in the agreement for such period of time and under such
circumstances as the court determines. This provision may not survive a constitutional
challenge. [FN6]
The Supreme Court does not have the authority to modify an agreement on the ground of
extreme hardship where there is no dissolution, or where a separation agreement or
stipulation of settlement survives the entry of the judgment of divorce but is not
incorporated into it. [FN7]
The advantage of having the agreement survive is that in the event that one party fails
to perform the contract, it gives the other party the remedy of an action on the contract,
in addition to the relief provided in the DRL for the enforcement of judgments. Where
there is an intention to merge the agreement as to support into the divorce judgment and
the judgment embodies the agreement as to support, no right to enforce the support
provisions of the agreement survives. [FN8]
The advantage to the supporting party if the agreement survives is that, ordinarily, it
precludes an upward modification of maintenance (due to a change in circumstances) so that
the financial obligation is relatively fixed and certain, unless the #12; supported party
becomes destitute and is a candidate for public assistance.
Usually, a matrimonial agreement provides that its terms shall be incorporated into the
court order or judgment and that the agreement shall either survive or merge into it. In
order to avoid any question as to whether an agreement survives or merges into a court
order or judgment, the parties should clearly express their intentions in the agreement or
stipulation.
The Second Department's rule is that where the stipulation or agreement is silent as to
survival or merger, it is merged into the judgment. It is error to provide in a divorce
judgment that a stipulation shall survive and not be merged in the judgment, where there
is no reservation in the stipulation that it should survive after entry of the judgment.
[FN9] In Fishman v. Fisher, [FN10] an unsigned stipulation that was dictated into the
record contained no statement by the court or either counsel that it was to survive such
incorporation. The judgment of divorce set forth, in separate paragraphs, all of the
agreed-upon provisions, without mention of the stipulation, based "upon the findings
of fact and conclusions of law heretofore signed herein." The Second Department held
that under the circumstances there was a merger of the stipulation with the divorce
decree.
The Fourth Department has followed the rule of the Second Department. It has held that
merger occurs unless the agreement expressly provides otherwise. In Cooper v. Cooper,
[FN11] the Supreme Court denied the wife's application for an upward modification of
alimony and denied her a hearing on whether the parties' financial stipulation survived
the divorce judgment. The Appellate Division held that because the parties' agreement was
silent as to merger or survival, it must be deemed to merge into the divorce judgment and
did not survive as a separate and independent contract.
It stated that "merger occurs unless the parties" agreement expressly
stipulates against it.
In Steinard v. Steinard, [FN12] the Appellate Division, Third Department, agreed with
the Fourth Department when it affirmed an order of the Supreme Court that granted the
wife's motion for summary judgment enforcing the financial provisions of the parties' 1989
open court stipulation. Both the judgment of divorce and the stipulation were silent as to
whether the stipulation was to be incorporated and survive or merged into the parties'
judgment of divorce. The Third Department stated that "it is well settled that merger
occurs unless the parties' agreement expressly stipulates against it.''
This year in Von Schaaf v. Von Schaaf, the Third Department rejected the Second
Department's rule and adopted the presumption that an agreement or stipulation is presumed
to survive. The parties reached a separation agreement in Schoharie County, by which
plaintiff was to receive $800 per month in support and maintenance via a bank transfer
from defendant's pension deposits. The agreement, which was to be construed according to
the laws of the State of New York, provided that it would be incorporated by reference
into any resulting divorce decree.
Defendant thereafter relocated to North Carolina where, in 1995, he sued plaintiff for
divorce. Plaintiff consented to the requested relief, and a judgment of divorce was
granted to the parties in 1996, incorporating the separation agreement by reference the
separation agreement.
Beginning in November 1996, defendant initiated various proceedings in North Carolina
relative to the support and maintenance provisions of the separation agreement, which
culminated in an order staying defendant's obligations thereunder pending plaintiff's
compliance with certain outstanding discovery demands. Plaintiff thereafter commenced this
action against defendant and, in January 1998, moved for an order sequestering defendant's
pension assets, a qualified domestic relations order to effectuate the distribution of
such pension and two money judgments for arrears and legal fees, respectively.
Defendant cross-moved for dismissal, contending that the separation agreement had
merged into the North Carolina divorce decree and that the Supreme Court lacked subject
matter jurisdiction. The Supreme Court denied the cross-motion and granted defendant 20
days to respond to plaintiff's motion. Following receipt of defendant's answering
affidavit, Supreme Court granted plaintiff the requested relief finding, among other
things, that the parties' separation agreement survived the North Carolina judgment of
divorce and provided a contractual basis upon which plaintiff could seek enforcement of
the agreement in New York.
The Third Department held that where a judgment of divorce is silent as to whether the
underlying separation agreement is to survive or merge therein, the court must, consistent
with basic principles of contract interpretation, attempt to glean the parties' intent
from within the four corners of the agreement itself. If the agreement is clear and
unambiguous on its face, the inquiry is at an end. Should an ambiguity be evident, a
factual hearing should be held where extrinsic evidence may be received in an effort to
determine the parties' intent.
The court held that 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 survive the resulting decree. In a footnote the court stated,
"to the extent that this court's prior decision in Steinard v. Steinard (221 AD2d
835) holds to the contrary, we reject the reasoning employed therein."
In its view, a review of the separation agreement plainly evidenced the parties' intent
that the agreement was to survive the resulting judgment of divorce, that the separation
agreement remained a separate and enforceable contract upon which plaintiff could seek
relief and provided the Supreme Court with a valid basis for exercising subject matter
jurisdiction over this dispute.
Footnotes
FN(1) See McMains v. McMains, (1965) 15 NY2d 283 Goldman v. Goldman, 282 NY 296.
FN(2) King v. Schultz, 29 NY2d 718.
FN(3) McMains v. McMains, supra. Gardner v. Gardner (4th Dept.), 40 AD2d 153, affd 33
NY2d 899.
FN(4) McMains v. McMains, supra.
FN(5) Staehr v. Staehr, (1932), 237 AD 843, 261 NYS 103; Holahan v. Holahan (1932), 234
AD 572, 255 NYS 693; Kunker v. Kunker (1930), 230 AD 641, 246 NYS 118.
FN(6) In Busetti v. Busetti, 108 AD2d 769 (2d Dept., 1985), the Second Department,
stated that there was some question as to whether this is constitutional. See also Cohen
v. Seletsky, 142 AD2d 111 (2d Dept., 1988).
FN(7) Arnold v. Fernandez, __ AD2d __ , 584 NYS2d 231 (3d Dept., 1992).
FN(8) Bishop v. Bishop, 15 AD2d 494 (2d Dept., 1961).
FN(9) Nicoletti v. Nicoletti, 43 AD2d 699 (2d Dept., 1973), citing Kunker v. Kunker,
230 AD 641.
FN(10) 77 AD2d 596 (2d Dept., 1980). FN(11) 179 AD2d 1035 (AD4th, 1992).
FN(12) AD3d, 1995.
Joel R. Brandes has law offices in Garden City and New York City. He co- authored Law
and the Family New York (9 vols.) and Law and the Family New York Forms (both, Westgroup).
Bari B. Brandes, a member of the firm, co-authors the Annual Supplements to Law and the
Family New York 2d. She assisted in the preparation of this article.
