Sunday, January 28, 2007
Just before the new year, in Gonzalez v. Green, a New York trial court "declared valid and in full force and effect" a separation agreement between a gay couple. Kenji Yoshino (Yale) published an op-ed in today's NY Times. Here's his synopsis of the facts:
The case sounds like a contracts question on the New York Bar Exam. Steven Green and David Gonzalez moved in together in 2001. Over the course of their relationship, Mr. Green, whom the court describes as “a person of considerable assets and income,” showered Mr. Gonzalez with gifts, including cars and a ski house.
In 2005, the couple, whose primary residence was in Westchester County, traveled to Massachusetts, which permits resident same-sex couples to marry, and took part in a marriage ceremony on Valentine’s Day. But months later, they decided to end their relationship.
In September 2005, the two men signed a written separation agreement under which Mr. Green paid Mr. Gonzalez $780,000 and Mr. Gonzalez transferred the title of the ski house to Mr. Green. More than a year later, when Mr. Gonzalez filed for divorce, Mr. Green sought to rescind the contract. He argued that because there was no marriage, the contract was invalid. Question: Can Mr. Green get his money back?
[The answer is after the jump.]
The court declared the Massachusetts marriage null and void (Massachusetts law provides: "No marriage shall be contracted in this commonwealth by a party residing and intending to continue to reside in another jurisdiction if such marriage would be void if contracted in such other jurisdiction, and every marriage contracted in this commonwealth in violation hereof shall be null and void.").
The issues remained, however, whether Green could have the parties' "Separation Agreement" unraveled based on lack of consideration or mutual mistake (the parties believed mistakenly that they were married). The court held that consideration supported the agreement:
Defendant's claim of lack of consideration similarly fails. "The valid consideration which will support a contract need not be equal on both sides, and if a minimal yielding of a position by one side promotes an agreement, then it will be deemed enforceable. There is no need to measure the relative weight of the consideration provided by each party." Silver v. Starrett, 176 Misc 2d 511, 519 (S. Ct. NY Co. 1998).Here, as in Silver v. Starrett, supra, the Agreement provides at the outset that it is made "in consideration of the premises and of the mutual promises hereinafter contained...." (Agreement at 1).The Agreement, which was drafted with deliberation by defendant's own attorney, purports the settlement of all claims between the parties indeed, it contains a mutual release of all claims, causes of action or demands that might arise in law or in equity which either party has, ever had or will have against the other which further supports this court's finding of valid consideration in support of enforcement of the Agreement.
Apparently, however, the defendant, who on each counterclaim seeks the return of the $780,000.00 he paid to plaintiff upon his execution, and thus his ratification, of the Agreement, mistakenly believes such things as promises to act or to forbear from acting that constitute detriment to the promisor are not sufficient consideration to support the Agreement in light of the tangible sums he paid to plaintiff upon its execution (which he selectively characterizes as support or maintenance, but which is also defined in the deliberately drafted Agreement as an "other form of payment by either party hereto to the other" [Agreement at 3]). As set forth above, the law is otherwise (e.g., Silver v. Starrett, supra, Anonymous v. Anonymous, supra) and defendant's assertions in this regard are intrinsically mistaken. Never the less, to further alleviate defendant's curious logic in this regard, I find that the plaintiff delivered tangible property of more than sufficient value to defendant in consideration of his entering into the Agreement.
Further, the court held that the Separation Agreement was not voidable on the ground of mutual mistake:
Nor do I find that the Agreement is voidable under the doctrine of mutual mistake. Defendant claims that since both sides mistakenly thought they were married at the time they entered into the Agreement, with all of the rights and obligations that attend such status, the fact that they were not actually married when they believed they were should vitiate the Agreement. However, defendant defeats his own argument by his own statement in his moving papers in support of his motion; he asserts: "[t]he Court should note that the Plaintiff and I never filed Joint-tax Returns and always filing such returns as single' and we never purchased property as married people and only had the marriage, because it seemed like a nice thing' to have, since couples in the gay community' are seeking such status" (Defendant's moving affidavit sworn to June 26, 2006, p. 3, n. 1). It could not be more obvious that defendant never took the idea that he was married to plaintiff seriously. Moreover, the law of New York at the time the parties returned from Massachusetts was not yet settled on the issue of same sex marriages, and the law of Massachusetts was that it had to be recognized in both Massachusetts and the jurisdiction in which the parties resided in order to be valid in Massachusetts. Whether or not the parties considered themselves married in nature, defendant, a sophisticated businessman, must have considered the strong possibility of illegality while the law was in such a developing state. Accordingly, defendant's position that there was a mutual mistake of fact which impairs the validity of the Agreement is disingenuous. Nor is the Agreement invalid under the doctrine of mutual mistake of law. CPLR 3005 provides:
When relief against a mistake is sought in an action or by way of defense or counterclaim, relief shall not be denied merely because the mistake is one of law rather [*5]than one of fact.
As explained by Professor David D. Siegel in his practice commentary to this statute (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3005:1, at 620): "The point is, that one cannot draw a total parallel between a mistake of law and a mistake of fact and permit undoing of the transaction for a mistake of law merely because a mistake of fact might have justified it. **** It really leaves the matter to the court to determine whether the particular law mistake is sufficiently analogous to a fact mistake to justify a judicial result to which the fact mistake would lead. It does not permit a mere misreading of the law by any party to cancel an agreement. If it did, the courts would be flooded with applications to get out from under because one party assumed its right to be of a kind and quality greater than it was. As long as the mistake has not been induced by the other party's misrepresentations...resort to CPLR 3005 may be misplaced." (Id. At 621).
Yoshino's commentary points us to the "real issue" here:
The real issue, the court said, was whether separation agreements between unmarried, cohabiting individuals are binding. Under New York law, such contracts are enforceable so long as “illicit sexual relations were not part of the consideration of the contract.” In other words, contracts will not be invalidated just because the parties are cohabiting, so long as they do not violate the prohibition on prostitution.
It may seem obvious that a separation agreement is not what used to be called a “meretricious contract.” But other courts in other times have deemed contracts between two people who have been sexually involved with each other with suspicion, particularly if the people are of the same sex. In dispensing with the “meretricious contract” exception in a footnote, the court properly refused to dignify arguments made under it. It concluded that the contract was enforceable.
According to Yoshino, this was the obvious and correct result. But, he reminds us that private contracts between same-sex couples should not be viewed as a substitute for marriage:
My only concern about such decisions is their potential to serve as substitutes for same-sex marriage, rather than as stations toward it. Too many people reacted to the New York decision by reaffirming that gays could get all the significant benefits of marriage through contract. This is false.
Gays cannot enter into a contract for benefits bestowed on married couples by third parties. Such benefits include those that the government provides, like immigration rights, custody rights, tax benefits and the various spousal privileges available in litigation. They also include benefits provided by private institutions, like access to a partner’s hospital room or coverage under his health plan. And a gay couple, of course, cannot enter a contract with each other for the simple dignity of having the state recognize a commitment between them as a marriage. This seems to be the only count on which Mr. Green was right: marriage is indeed “a nice thing to have.”
The fiction that gays can get the rights of marriage through contract is pernicious because it permits inertia on the part of those who have incentives to remain inert. As with any civil rights struggle, those in power will be tempted to rest on their laurels. Prior to election, Gov. Eliot Spitzer was an open and ardent supporter of same-sex marriage. His Jan. 3 State of the State address, however, made no reference to the issue, other than the oblique phrase that the civil rights movement in the state “still has chapters to be written.”
But the final chapter in this struggle must be marriage. And it must be written soon.
[Meredith R. Miller]