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ALLEGATIONS THAT A POSTNUPTIAL AGREEMENT WAS UNCONSCIONABLE SURVIVED THE MOTION TO DISMISS, THE SUBSTANTIVE AND PROCEDURAL CRITERIA FOR THE DISMISSAL OF COUNTERCLAIMS AND AFFIRMATIVE DEFENSES ALLEGING FRAUD, DURESS, COERCION AND UNCONSCIONABILITY DISCUSSED IN SOME DEPTH (SECOND DEPT).

The Second Department, modifying Supreme Court, dealt with the analytical criteria for motions to dismiss counterclaims and affirmative defenses in the context of a postnuptial agreement which was alleged to have been tainted by fraud, coercion, duress and unconscionability. The “unconscionable” allegations survived the dismissal motion. The decision covers all these substantive and procedural issues in some depth and cannot, therefore, be fairly summarized here:

An unconscionable agreement is “one such as no person in his or her senses and not under delusion would make on the one hand, and as 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” … . Because of the fiduciary relationship between spouses, postnuptial agreements “are closely scrutinized by the courts, and such agreements are more readily set aside in equity under circumstances that would be insufficient to nullify an ordinary contract”  … . “To warrant equity’s intervention, no actual fraud need be shown, for relief will be granted if the [agreement] is manifestly unfair to a spouse because of the other’s overreaching” … . “Although courts may examine the terms of the agreement as well as the surrounding circumstances to ascertain whether there has been overreaching, the general rule is that [if] the execution of the agreement . . . be fair, no further inquiry will be made'” … .

Here, at this stage of the action, the defendant’s pleadings, as amplified by his submissions in opposition to the plaintiff’s motion and in support of his cross motion … , are sufficient to allege both procedural and substantive unconscionability. Shah v Mitra, 2019 NY Slip Op 02739, Second Dept 4-10-19

 

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