New York Divorce Report - New York's Divorce and Family Law Blog

Just because an agreement between spouses splits assets in an unequal or one-sided basis does not render the agreement unconscionable.

It has long to the policy of courts to hold parties to the terms of their agreements. An agreement between spouses, which is fair on its face, will be enforced even if one party received less than one half of the value of the marital assets unless there is proof of fraud, duress, overreaching, or unconscionability.

In the recently decided case of Shultz v. Shultz, the Appellate Division detailed what makes an agreement unconscionable:

An unconscionable bargain is one which no person in his or her senses and not under delusion would make on the one hand, and no honest and fair person would accept on the other, the inequality being so strong and manifest as to shock the conscience and confound the judgment of any person of common sense.  However, an agreement is not unconscionable "merely because, in retrospect, some of its provisions were improvident or one-sided" and simply alleging an unequal division of assets is not sufficient to establish unconscionability.

The reason for this strict standard is obvious-no agreement would be free from attack if it could, in retrospect, be reviewed for fairness

In Shultz, the Court cited two factors why it found the claims of unconscionability to be lacking. First, the defendant was represented by independent counsel during negotiations involving the parties' post nuptial agreement. Secondly, the agreement recited that the defendant entered into it "freely, voluntarily and with full knowledge of its consequences.

Last week’s article in the NY Times about how difficult divorce has become as a result of the housing crisis has stirred up quite a bit of debate.

The Times notes that:

In a normal economy, couples typically build equity in their homes, then divide that equity in a divorce, either after selling the house or with one partner buying out the other’s share. But after the recent boom-and-bust cycle, more couples own houses that neither spouse can afford to maintain, and that they cannot sell for what they owe. For couples already under stress, the family home has become a toxic asset.

In LadyBlog, Theodora Blanchfield opines that the difficulty in liquidating the marital home is a good thing. She writes:

. . . I think any other obstacle to divorce is actually a good thing. Combine that with the housing crisis, and you might actually have people thinking twice about buying a home they can’t afford or marrying someone they’re not in love with. For being a single girl living in New York City, it might be a little Pollyanna-ish for me to say this, but when I marry, it’s going to be forever, and when I buy a house it’s going to be something I can pay off before I die.

This is a wonderfully optimistic view when entering into a marriage or even when purchasing a home. However, when marital difficulties arise or when one spouse unilaterally decides that he/she no longer wants to be married, any barrier to divorce has the effect of imprisoning the parties.

One of the commentators to Mr. Blanchfield’s post best sums up the short-sightedness of her reasoning that the present economic conditions are somehow good for marriage.

When my wife decided a year ago that, after almost six fantastic years, she’d rather not be married anymore, we decided to try and fix things. It didn’t work, and the housing crisis hit. Now, although we have no difficulty paying our mortgage, neither of us can afford to move out.

I thought I was marrying for forever too, and three years ago our house looked like a pretty good investment. We got a fixed rate so we were never at any risk of foreclosure. Now I am stuck living in a house with a woman who no longer loves me.

Mr. Blanchfield ignores the simple fact that barriers to divorce do not compel a couple to resume any part of the martial relationship. The obstacles merely lock the parties in a dead relationship and prevent them from moving on with their lives. The inability to sell the marital home or to untangle their finances imprisons an estranged couple under the same roof. How is this a good thing?