In a recent case in New York County, Wong v. Wong, 158126-2017 published on November 9 in the New York Law Journal, a husband and a wife entered into a stipulation of settlement to settle their divorce proceeding after the court had conducted a hearing to determine what was marital property and how to distribute it.  The plaintiff wife then started a new action after the stipulation of settlement was signed alleging fraud. The wife went before the court again, stating that her husband failed to disclose and give information about the properties that he owned in Taiwan in his net worth statement. 

The plaintiff wife, moved for summary judgment on fraud. She claimed there was no issue of facts, and the court should find in her favor. She argued that the husband committed fraud and breached his fiduciary obligations and she relied on his misinformation and his representations. She claimed if she knew the information, she would never have signed the divorce agreement.  

The defendant husband answered and moved to dismiss her action arguing that he disclosed many of the assets in dispute and that the plaintiff agreed that any real estate properties he had in Taiwan were his separate property and NOT marital.  The court denied the motion to set aside the stipulation of settlement stating that the defendant husband’s nondisclosure as to those particular assets did not constitute fraud and was insufficient to void an otherwise fair agreement.  

            What is of interest in this case is to note that just because someone omits something in a net worth statement does not necessarily mean that you will be able to vacate an entire agreement. It is important you and your attorney do due diligence in finding out what assets your soon to be ex has.  

If this does happen the court will look to see on whether or not there was any knowledge of that property in drafting an agreement and whether or not the property would have impacted the settlement.  Also, the court looks to see if an agreement is fair and not unconscionable. Unconscionable means it is so patently unfair it shocks the conscience.

Note that the court does not like to overturn agreements and wants people to settle their cases, and the case law and the law favors not overturning agreements unless there is a true basis in the law to do so.  The lesson here is to make sure that you have full disclosure and if you are agreeing that certain properties or business is separate then you cannot state that they should be considered in the agreement.