Decided November 5, 2008

Justice Jeffrey S. Brown

NASSAU COUNTY
Supreme Court

ORDER

Defendant/husband moves by Notice of Motion for the following relief: pursuant to CPLR §3103, vacating in its entirety the plaintiff's First Notice of Discovery and Inspection dated June 16, 2008.

Plaintiff/wife cross-moves for the following relief: denying defendant's motion in its entirety; and setting aside and/or declaring null and void the alleged marital agreement dated March 25, 1996.

The parties were married on December 16, 1995. On March 25, 1996, approximately three months after the marriage, the parties executed a postnuptial agreement. Whether this marital agreement is enforceable is in dispute.

Defendant asserts that the agreement addresses issues of maintenance, equitable distribution of marital assets, as well as determines what assets are the separate property of each party in the event of divorce, separation, or death. Defendant avers that the one and only issue, not controlled by the agreement, which remains to be determined, is the issue of child support for the parties' minor twin children. The court notes that issues of custody and visitation were previously resolved by an order of the Family Court dated October 12, 2007 (Phillips, Court Attorney Referee).

On or about June 16, 2008 plaintiff served a discovery demand upon counsel for the defendant. Defendant asserts that the demand is overly broad, unduly burdensome and "basically a fishing expedition" for documents which are neither material nor relevant to the sole issue before this court; namely, the issue of child support. Defendant states that the discovery demand consists of 21 pages and seeks documents in 87 different categories. The demand additionally spans over a 13-year period, beginning at the date of marriage through the present. Defendant argues that discovery in this matter should be limited solely to discovery of the respective incomes of both parties for child support purposes. Defendant submits that all that is required to be produced are defendant's tax returns which will show his gross income for child support purposes.

Plaintiff opposes the motion for a protective order and cross-moves to set aside the alleged marital agreement arguing it was facially unconscionable when it was signed and remains unfair today; the agreement lacked real consideration and, thus, is unenforceable; the representations of financial net worth made by defendant in the document were fraudulently, intentionally and grossly undervalued and misrepresented; and the defendant failed to adhere to proper acknowledgment procedures.

With respect to the application for a protective order, plaintiff states that the defendant's argument that the parties' alleged postnuptial agreement precludes discovery, except as it relates to income information for this year and the two prior years because the only issue to be determined is child support, and the only documents that should be produced in this matter are his tax returns, is totally without merit. Plaintiff states, assuming arguendo, that the sole issue is child support, full financial disclosure is still necessary and appropriate. Additionally, plaintiff claims, assuming arguendo that the marital agreement is found to be an enforceable contract, there remain issues beyond child support that the court will be required to address, and plaintiff is absolutely entitled to discovery relative thereto.

In anticipation of defendant's assertion that the statute of limitations bars plaintiff's cross-motion to set aside the marital agreement, plaintiff cites Bloomfield v. Bloomfield, 97 NY2d 188 (2001) for the following proposition: since plaintiff is contesting the validity of the subject agreement by way of defense, defendant is precluded from raising the statute of limitations as a bar. Plaintiff also cites recently enacted Domestic Relations Law §250, arguing that this statute specifically tolls the statute of limitations on a nuptial agreement during the marriage until after the matrimonial action is commenced and process has been served. Thus, plaintiff claims that both Bloomfield and DRL §250 independently and separately permit plaintiff's cross-motion.

Defendant opposes plaintiff's cross-motion to set aside the marital agreement and claims that the agreement is a binding and enforceable contract. Defendant additionally asserts that the statute of limitations bars plaintiff's challenge to the agreement as it is over twelve (12) years after the agreement was allegedly entered into. Defendant further argues that DRL §250 is inapplicable because this action was pending when the statute was enacted. Additionally, if the legislature intended for an amendment of a statute to apply to cases already pending at the time the amendment is enacted, it must clearly and unequivocally so state. Defendant further asserts that absent such clear and express language, the amendment will not be applied to cases already pending and will not revive an action which was already barred at the time the amendment was enacted.

Defendant also argues that Bloomfield does not apply since the Court of Appeals used CPLR §203(d) to permit a defendant to challenge the validity of a prenuptial agreement. In the instant case, defendant avers that only if plaintiff challenged the validity of the agreement as a defense or counterclaim in a pleading, would she not be precluded by the statute of limitations from doing so. Here, defendant states that plaintiff has done neither. She has merely made a motion to set aside the agreement which is neither a defense, nor a counterclaim, nor any assertion made in a pleading.

In reply, plaintiff claims that defendant admits recognition of the tolling provisions of DRL §250; however, defendant's argument that the statute is inapplicable because the action was already pending is without merit. In fact, plaintiff avers that the amendment is explicitly effective as of July 3, 2007, prior to the commencement of this action, and an action to set aside the agreement was never "previously barred" by a court.

Plaintiff further cites Bloomfield, in reply, for the proposition that defendant cannot raise the statute of limitations as a bar to plaintiff's cross-motion because plaintiff is contesting the validity of the subject agreement by way of defense as defendant affirmatively asserted the postnuptial agreement in his verified answer and in his motion to bar discovery.

Upon the foregoing, the decision of the court is as follows:

This application of Domestic Relations Law §250 appears to be one of first impression since amendment L2008, ch 86, §1, effective May 21, 2008. In July 2007, DRL §250 was enacted resolving the issue of whether the statute of limitations to set aside a marital agreement is tolled during the course of marriage.

The decision of whether the six-year statute of limitations applicable to contracts pursuant to CPLR §213 should apply to prenuptial and postnuptial agreements has been the subject of interpretation. If the statute of limitation was to be applied, then parties, during the course of a presumably happy and intact marriage, would be forced to litigate the validity of a marital agreement or be forever barred.

Prior to the enactment of DRL §250, the statute of limitations applicable to marital agreements was six (6) years pursuant to CPLR §213. The First and Second Departments of the Appellate Division had conflicting viewpoints as to whether the statute of limitations is tolled during the course of the marriage.

The First Department consistently held that the statute of limitations is tolled until the parties physically separated, one of the parties died, or until commencement of an action for divorce or separation (Brody v. Brody 862 NYS 2d 738, citing Bloomfield v. Bloomfield, 281 AD2d 301, 723 NYS2d 143; Lieberman v. Lieberman, 154 Misc 2d 749, 587 NYS2d 107). Conversely, the Second Department consistently held that a challenge to the validity of a marital agreement was time barred if not brought within six (6) years of its execution (Brody v. Brody 862 NYS 2d 738, citing Pacchiana v. Pacchiana, 94 AD2d 721, 462 NYS2d 256; Rubin v. Rubin, 275 AD2d 404, 712 NYS2d 626; Matter of Neidich, 290 AD2d 557, 736 NYS2d 694).

Also prior to the enactment of DRL §250, the Court of Appeals in Bloomfield v. Bloomfield, 97 NY2d 188 (2001), did not directly address the tolling issue in its decision but permitted a challenge to a 25-year-old prenuptial agreement citing CPLR 203(d). The court specifically held that the statute of limitations would only bar affirmative claims and not those brought by way of defense. "Once a matrimonial action is brought and claim for equitable distribution advanced, either the agreement is raised as a defense or reliance upon the agreement is lost. Once the agreement is raised as a defense, then the statute of limitations, under Bloomfield had no sway. It does not matter whether the party challenging the agreement is the plaintiff asserting equitable distribution in a complaint, or a defendant asserting equitable distribution in an answer."(Scheinkman, Supplementary Practice Commentaries [McKinney's Cons Laws of NY, Book 14, DRL §250, Pocket Part, at 231].)

DRL §250 provides in pertinent part:

1. The statute of limitations for commencing an action or proceeding or for claiming a defense that arises from an agreement made pursuant to subdivision three of part B of section two hundred thirty-six of this article entered into (a) prior to marriage or (b) during the marriage, but prior to the service of process in a matrimonial action or proceeding, shall be three years.

2. The statute of limitations shall be tolled until (a) process has been served in such matrimonial action or proceeding, or (b) the death of one of the parties.

The Nassau County Supreme Court interpreted the newly enacted DRL §250, the session law, as written, and the Bloomfield decision in the case of Brody v. Brody 862 NYS 2d 738 (Ross, J. 5/6/08).

"By expressly providing that DRL §250 'shall not apply to any agreement that was time barred under the civil practice law and rules in effect immediately prior to such effective date,' then the prenuptial agreement before me, executed on January 26, 2001, is more than six years old on the effective date of this statute and is time barred by the provisions of CPLR §213. Accordingly all provisions of Domestic Relations Law §250, including tolling of the statute of limitations, are inapplicable here." (Id. At 742 emphasis added)

However, the court applied the Bloomfield analysis and allowed the defendant to attack the validity of the time barred prenuptial agreement, but only as a defense raised in her answer, only as a shield for recoupment purposes, and not to obtain affirmative relief.

The instant action is distinguishable from Brody. The final session law, Chapter 226, §2, effective July 3, 2007 provides as follows:

This act shall take effect on the same date as chapter 104 of the laws of 2007 takes effect; and shall not apply to any agreement where the commencement of an action thereon was previously barred by a court under the civil practice law and rules in effect immediately prior to such effective date. (Amd, L2008, ch86, §2, eff May 21, 2008). (Emphasis added)

The above stated final session law dated May 21, 2008, amends the prior session law in effect at the time of the Brody decision. This final session law is a modification with respect to which agreements the newly drafted statute applies. The effective date of the statute, clearly, is July 3, 2007. Therefore, DRL §250 applies to all actions brought on July 3, 2007 and thereafter. The statute specifically does not apply to any agreement where the commencement of an action was previously barred by a court under CPLR §213. Moreover, the statute should not be extended by construction beyond its express terms or reasonable implication to its language (McKinney's NY Statutes §94). In the instant case, the action to set aside the agreement was not previously barred by this court under the Civil Practice Laws and Rules. Therefore, this action is not time barred. All provisions of DRL §250, including tolling of the statute of limitations, are applicable to the case at bar (cf. Brody v. Brody, 862 NYS 2d 738).

Further, the court finds that the defendant affirmatively asserted the postnuptial agreement in his verified answer and in his motion for a protective order. Because plaintiff is contesting the validity of the postnuptial agreement by way of defense, defendant cannot raise the statute of limitations as a bar to plaintiff's cross-motion (Bloomfield v. Bloomfield, 97 NY2d 188 [2001]).

Accordingly, it is

ORDERED that the matter is referred to a HEARING on the issue of whether the postnuptial agreement is valid and enforceable pursuant to DRL §236(b)(3); and it is further

ORDERED that defendant's application pursuant to CPLR §3103, vacating in its entirety, the plaintiff's First Notice of Discovery & Inspection dated June 16, 2008 is hereby DENIED with leave to renew upon the conclusion of the hearing.

The parties are directed to appear for a HEARING on January 9, 2009 at 9:30 a.m.

This constitutes the decision and order of this Court. All applications not specifically addressed herein are denied.