Stipulations in Open Court, a Dangerous Practice
by Elliot D. Samuelson, Editor
We noted with interest a short recent decision in the Appellate Division entitled Toussaint v. Toussaint[i], that highlights the dangers of entering into oral stipulations of settlement in open court. Consider the following hypothetical scenario which most certainly is experienced by matrimonial practitioners with frequent regularity.
You and your client have been engaged in a long protracted litigation for divorce involving issues of equitable distribution, maintenance, child support, custody, visitation, and the like. Numerous temporary applications have been made to the court resulting in pendente lite orders affecting the parties and their children. Following sixteen months of tortuous litigation, the case is set down for trial. You and your adversary continue to negotiate in an earnest effort to resolve the matter without proceeding to trial. The parties are concerned about the attendant costs that will be incurred which will include testimony of forensic experts, numerous other witnesses, as well as the introduction of countless financial exhibits. There is great pressure on the parties as well as their attorneys to fashion a reasonable settlement and avoid a trial. Your case is marked ready at 9:30 a.m. in the morning and the presiding judge informs counsel that other matters require his attention and urges the attorneys and their clients to utilize this time in an effort to reach an amicable resolution. Extensive negotiations begin and the parties with their attorneys attempt to narrow the issues and reach a mutual accommodation. The court breaks for lunch and admonishes the parties and their counsel to continue their efforts to settle the case.
Following the luncheon recess, the trial judge becomes involved with an emergency writ of habeas corpus and is unavailable until 3:30 p.m. to proceed with the trial. Settlement negotiations continue at a feverish pitch. Finally, at 4 o'clock the court advises the parties that unless they can reach a settlement and spread a stipulation on the record by 4:30 p.m., he wants the trial to begin and a witness called before the court recesses for the day.
The amount of child support was sharply contested. Great pains were taken to advise the clients concerning the Child Support Standards Act (CSSA), and to make an arithmetical computation of the presumptive amounts. The husband agreed to pay an amount that exceeds the guidelines.
The issues are narrowed and a global settlement within reach. All concerned believe it would be in their best interests to conclude the matter and not proceed to trial. Finally, the case is resolved and a settlement obtained. The attorneys, feeling that to leave the courthouse without spreading a stipulation of settlement on the record would be inadvisable (because the parties might well harden their positions and lose the settlement that was so very difficult to negotiate and reach), opt to dictate an oral stipulation.
After a brief discussion and comparing notes made detailing the terms of the settlement including the child support computations, the attorneys advise the court that they are ready to dictate the provisions on the record with the judge at the bench overseeing the matter. The court questions counsel about certain of the provisions spread on the record, including the child support amounts, and then when the stipulation is complete, allocutes each of the parties. The provisions of the stipulation are "So Ordered" by the judge. Upon leaving the courtroom, copies of the stipulation are ordered by each counsel. A week thereafter, the transcript is obtained and a judgment of divorce submitted to the court by the wife's attorney.
During this short time span, the husband becomes disenchanted with the settlement and looks for a way to set it aside. He meets with his counsel, and for the first time, it is noted that both attorneys, and apparently the court, overlooked the need to set forth the terms of the Child Support Standards Act, as well as the statutory presumptive amounts required and the reason for the upward deviation. The husband's counsel, upon receipt of the proposed divorce judgment, moves to set aside the entire stipulation on the grounds that the Child Support Standards Act's provisions were not included in the oral stipulation before the court. The wife's counsel objects, noting that not only was the Child Support Standards Act disclosed to both of the parties, and the husband was aware that he agreed to pay more than the minimal statutory amounts, but of more importance,the calculations were made by each of the attorneys. Counsel then urged the court to deny the motion and conduct a hearing to ascertain the truth of such allegations. Dismissing such arguments, the lower court grants the husband's motion and sets aside the entire stipulation of settlement made in open court. The wife appeals, and reasons that the failure to set forth the provisions of the Child Support Standards Act and the deviation agreed to by the parties, should not be the basis to vacate the entire stipulation of settlement, nor the child support provision. Moreover, it was urged that a hearing was necessary to determine whether the parties were aware of the provisions of the Child Support Standards Act and actually made the calculations pursuant to the statute, before the child support provisions were modified. Here, it is important, to note that the child was to receive a sum, in excess, of the statutory requirement.
InToussaint, supra, which had similar facts, the court applied the rule of strict construction, and tersely noted that the lower court "... properly determined that since the stipulation failed to comply with Domestic Relations Laws Section 240 (1-b)(h), those provisions of the stipulation relating to child support were invalid ..." and then commented that the remedy was to vacate only the child support provisions and not the entire stipulation. Although the court, in
Toussaint v. Toussaint, supra, cited cases it recently decided concerning this very issue[ii], that require a hearing to be held before a provision for child support can be set aside, it nevertheless concluded that the lower court's determination dismissing the provisions for child support was correct, and held that the balance of the in-court stipulation must be upheld.
It is remarkable that the Appellate Court cited its decisions in Sloam andMaser, supra, both of which held that in such circumstances a hearing was required to determine the intention of the parties and the stipulations
should not be vacated until it was learned that the statutory requirements were not known to the litigants.
Parenthetically, we note it is very difficult to determine the thinking of an appellate court when a Memorandum Decision is rendered without fully setting forth the facts upon which it is based with the result that the doctrine of stare decisis cannot be applied by the lower courts nor matrimonial practitioners, especially when most marital appeals are so very fact-sensitive.
Toussaint apparently reverses the court's prior holdings to the contrary and ignores the fact that the child would actually benefit financially if the stipulation was upheld. Instead, it places the law in a state of confusion and uncertainty. Nonetheless, one thing remains certain . . . and that is that in-court settlement stipulations should be avoided, even at the risk of losing the settlement. To do so because of the pressures of the court to complete the matter will surely lead to unwanted results. In
Toussaint, it appears that not only the attorneys, but the presiding judge as well, made a harmless oversight, and the husband agreed to pay more than the CSSA guidelines. The child will ultimately be the only party harmed if, upon remititur, the award is less than the father agreed to pay. The CSSA provisions should not be permitted to be used as a sword by a disgruntled litigant. It was intended as a shield to protect children from meager awards and should remain that way. Only then, will the safeguards to children required by enactment of the Child Support Standards Act be implemented.
[i]. __ AD2d__, N.Y.L.J., March 22, 2000, at 34, col. 1 (2d Dep't March 13, 2000).
Sloam v. Sloam, 185 A.D.2d 451, 586 N.Y.S.2d 651 (2d Dept. 1992),andMaser v. Maser, 226 A.D.2d 684, 641 N.Y.S.2d 714 (2d Dept. 1996)