One of the important benefits of marriage is divorce––having available a legal mechanism to divide up the assets when partners decide to call it quits.
We don’t have gay marriage or divorce in New York yet, but some issues arising from divorce can be dealt with by advance planning through partnership agreements, provided, of course, that the courts are willing to enforce them.
In an important test of the enforceability of such agreements, New York State Supreme Court Justice Carol R. Edmead upheld such an agreement made by a gay male couple in 1983. Edmead’s decision was published in the New York Law Journal on February 27.
The parties, whose names were not published, are an artist, the plaintiff in the current case, and a lawyer, the defendant. According to the opinion, they were living together as a couple at 547 Fifth Avenue when the building converted to co-operative ownership in 1983. They become the joint owners of shares representing three apartments, two of which were contiguous on the fifth floor.
The couple retained a lawyer to draft an ownership agreement for them, which referred to them as “tenants in common with the right of survivorship.” At the time, the defendant, the attorney, apparently had access to substantially more cash than the artist plaintiff, and the agreement emphasized the plaintiff’s contribution of services, including design and repair of the contiguous apartments, one of which subsequently housed a karate studio. Most of the money to buy the shares in the co-op came from the defendant. Income from the two apartments they rented out was applied toward the couple’s mortgage and maintenance charges. Soon after the purchase, the plaintiff became ill and was unable to work.
In 1997, the parties ended their relationship and the defendant moved his things to the other unit on the fifth floor, while the plaintiff took in a roommate. The defendant then served the plaintiff with a notice to vacate the premises, claiming that he was the owner of the entire fifth floor and that their 1983 contract was unenforceable on grounds of “lack of consideration.” Consideration is a legal concept referring to the mutual commitment to exchange something of value that is necessary for a contract’s enforcement. The defendant charged he had been defrauded, because the plaintiff had promised to return to work in order to meet his financial obligations toward the apartment and had not done so.
The defendant also argued that the 1983 agreement was invalid because the lawyer who had drafted it had a conflict of interest in representing both members of the couple.
The plaintiff responded to the eviction notice by filing his lawsuit before Justice Edmead, seeking recognition of his ownership rights and formal legal division of the property or the proceeds of its sale.
Edmead found that the agreement was enforceable. Rejecting the defendant’s argument that the only basis for the agreement was “love and affection,” which is not valid as consideration for a contract under state law, she found that there were promises relating to other things of value.
“The Agreement herein clearly states that plaintiff would contribute his time and talent to the renovation of the parties’ residence,” she wrote. “That the Agreement indicates that defendant has contributed the ‘majority’ of the funds indicates that plaintiff quite possibly contributed a minority portion of the funds for such expenses and costs, in addition to his time and talents noted above ”
“This Court adopts the view that unmarried cohabitants may lawfully contract concerning their property, financial, and other matters relevant to their relationship, subject to the rules of contract law, except where sexual services constitute the only consideration for the agreement.”
“From the termination clauses,” she wrote, “it appears that the parties provided for a means by which they would divide their joint interest in the Fifth Floor loft in the event of what married couples would call a ‘divorce.’ Here, in the event either party terminated the Agreement, the parties, as agreed, would divide the premises into equal parts.”
Edmead also rejected the argument that any conflict of interest by the attorney who drafted the agreement would void the contract. The judge found that the attorney had functioned more as a “scribe” to put the parties’ agreement into writing than as a representative of their interests vis-a-vis each other. The defendant, himself a lawyer who had then recently passed the bar exam, had no need to be advised to seek independent counsel to protect his rights, she found.
Edmead ruled that any fraud allegations against the plaintiff for having misrepresented that he would resume working were long-since barred by the statute of limitations, which is six years for fraud.
Having cleared out the underbrush of the pretrial, Edmead ordered the parties to attend a conference in her courtroom on March 16 to discuss what discovery would have to be taken so that the case could be judged on the merits of the plaintiffs’ claim.
©2004 Community News Group