Statute of Limitations and No-Fault Divorce

Since no-fault divorce became law in New York State almost 2 years ago, it was still unclear whether a statute of limitations would apply to to a cause of action under Domestic Relations Law §170(7), specifically, allegations that the relationship between the parties was irretrievably broken. Basically, this question can be asked in this way: from what date does the clock begin to run on this cause of action and when does the clock expire?  The answer was recently given by the Appellate Division, Fourth Department.

In a recent case, Tuper v. Tuper, 2012 N.Y. Slip Op 04467 (4th Dept. 2012), the Appellate Division held that the statute of limitations under DRL §170(7) does not begin to run while the relationship between the parties remain broken.  Specifically, the court held that a cause of action for divorce under the no-fault statute should be treated similarly to a cause of action for divorce based upon imprisonment of a spouse (DRL §170 (3), which is also governed by the five-year statute of limitations set forth in section 210).  In holding so, the Fourth Department relied upon the Court of Appeals’ decision in Covington v. Walker, 3 N.Y.3d 287, 291 (2004), which held that a cause of action for divorce based on imprisonment “continues to arise anew for statute of limitations purposes on each day the defendant spouse remains in prison for three or more consecutive years’ until the defendant is released.” The Appellate Division stated that “[l]ike a spouse serving a life sentence, an irretrievable breakdown in a married couple’s relationship is a continuing state of affairs that, by definition, will not change. After all, the breakdown is “irretrievable.” It thus stands to reason that a cause of action under the no-fault statute may be commenced at any time after the marriage has been “broken down irretrievably for a period of at least six months”.

I think that this is the correct result.  Alternatively, a contrary ruling would force a spouse to unwillingly remain in a dead marriage. If the accrual date of a no-fault cause of action were to be determined to arise only on the day that the relationship initially became irretrievably broken, assuming that an exact date could even be identified, the only couples who could get divorced under the no-fault statute would be those whose relationships irretrievably broke down within the past five years but not within the last six months. Couples whose relationships irretrievably broke down more than five years ago would have to remain married.  Clearly, the New York Legislature did not intend such result in passing the no-fault statute.

Statute of Limitations and QDROs

One of the questions that I was asked several times during the last year was whether there is a statute of limitations applicable to Qualified Domestic Relations Orders (QDROs)? This question usually come up in situations where one former spouse was entitled to a portion of the other former spouse’s retirement benefits, however, the QDRO was never done, and a substantial period of time has passed. If there was an applicable statute of limitations, the former spouse who has failed to act would lose his or her right to collect a portion of the former spouse’s retirement.

However, a couple of recent decisions made it clear that with respect to QDROs, there is no applicable statute of limitations and a QDRO can be submitted to the court at any time. In Denaro v. Denaro, 2011 N.Y. Slip. Op. 04409 (2nd Dept 2011), the Appellate Division, Second Department, held that “the statute of limitations does not bar issuance of the QDRO.”  Relying on Bayen v Bayen, 81 A.D.3d 865 (2nd Dept. 2011), the court held that “[M]otions to enforce the terms of a stipulation of settlement are not subject to statutes of limitation… [B]ecause a QDRO is derived from the bargain struck by the parties at the time of the judgment of divorce, there is no need to commence a separate action in order for the court to formalize the agreement between the parties in the form of a QDRO”. Id. (citations omitted.)

While I would not recommend to anyone delaying preparing and submitting a QDRO, any such submission is not going to be barred by a statute of limitations. At the same time, any late submission is likely to cause another set of problems if the retirement asset is in pay status  and payments are being made to the other spouse.

Divorce, Monetary Obligations and Statute of Limitations

It is is not uncommon for a party to obtain a right to receive a sum of money in the judgment of divorce.  That right usually comes in situations where there are assets that are subject to equitable distribution.  It is also not uncommon for the parties to make their own agreements following the judgment of divorce as to how such sums of money will be paid.  One issue that would raise a concern for me would be a situation where the payment is extended over a long period of time.  It is a concern because a statute of limitations may come into play and, possibly, bar recovery.

In Woronoff v. Woronoff, 2010 N.Y. Slip. Op. 01479 (2nd Dept. 2010), the Appellate Division held that where a monetary award in the judgment of divorce is not reduced to a monetary judgment, such award is subject to a six year statute of limitations.  In Woronoff, the parties were divorced by judgment dated December 21, 1988, which provided, inter alia, that the plaintiff would pay the defendant the sum of $87,500 for her share of his businesses.  In 1990, the parties entered into an agreement which modified this portion of the judgment so as to, among other things, set forth a different payment schedule for the distributive award.  This agreement was not reduced to a court order.  The defendant never entered her distributive award as a money judgment nor sought to enforce collection thereof until 2007, when she obtained a clerk’s judgment against the plaintiff.  Thereafter, however, the plaintiff successfully moved to vacate the clerk’s judgment.

The plaintiff then commenced an action, inter alia, to recover damages for wrongful procurement of the clerk’s judgment including the counsel fees he expended in moving to vacate the clerk’s judgment.  The defendant’s first counterclaim asserted that the plaintiff had failed pay her the full amount of her distributive award for her share of his business, and alleged damages resulting therefrom in excess of $150,000.

The Appellate Division held that contrary to the defendant’s contention, the distributive award made to her in the divorce judgment for her share of the plaintiff’s business was not a “money judgment” subject to a 20-year statute of limitations.  Instead, her claim to enforce this award was governed by the six-year statute of limitations set forth in CPLR 213(1) and (2).  Accordingly, since the defendant did not seek to enforce her distributive award nor reduce it to a money judgment until well beyond six years after the divorce judgment was entered, and even well beyond six years after the parties entered into their modification agreement, the Supreme Court properly dismissed this counterclaim as time-barred.

The lesson of the above case for divorce lawyers is that in the event there is a monetary award in the judgment of divorce, it is a good idea to reduce it to a monetary judgment.  Alternatively, if the parties agree to extend the payment of the amount due beyond six years, such agreement should be reduced to writing and should include a provision specifically waiting statute of limitations.