Separation Settlement Agreement
Today we wanted to highlight an interesting New York County Supreme Court decision issued by Justice Paul A. Goetz, which interpreted certain provisions of a separation settlement agreement permitting defendant (Wife) to buy out decedent's share of the marital residence. The dispute in question arose when the Plaintiff (the Executor of the deceased husband’s Estate) brought an action for breach of contract to recover fifty (50%) of the net sale proceeds after the Defendant subsequently sold the marital residence which home had been awarded to her in the divorce action subject to certain conditions. The Court found in favor of the Plaintiff and the relevant facts of, as well as a link to, the case are set forth below.
Pursuant to a 1998 separation agreement, incorporated into a judgment of divorce, the husband conveyed the marital residence to his wife who, in turn, agreed to pay him $75,000. If the wife later resold the home, the husband had a right of first refusal to purchase the property for one-half of its fair market value “less the balance owed to him on the wife’s initial purchase price from him of $75,000.” If the husband chose not to buy the house, the wife was to give the husband one half of the selling price, reduced by $75,000 or whatever portion of that amount that had been paid. In 2017 the wife sold the property. The Executor and Administrator of the husband’s estate sued to recover 50% of the proceeds from the sale less $75,000, which had previously been paid.
The wife contended that under the settlement agreement the fifty-fifty split of sale proceeds applied only if a sale took place before the $75,000 was paid. The Supreme Court, New York County, granted the Plaintiff’s motion for summary judgment. According to the Court, “…defendant’s obligations under the settlement agreement did not end upon her payment to decedent of the full $75,000 because defendant subsequently decided to sell the house thereby triggering the provision obligating her to pay decedent half of the purchase price she received for the house.” Gollub v. Gollub, 2023 NY Slip Op 31220, decided April 18, 2023, is posted at
https://www.nycourts.gov/reporter/pdfs/2023/2023_31220.pdf
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