Bevilacqua v. Bevilacqua , 134 A.D.2d 747 ( 1987 )

Casey, J. P.

Appeal from an order of the Supreme Court (Smyk, J.), entered July 21, 1986 in Broome County, which granted plaintiff’s motion for summary judgment.

A separation agreement executed by plaintiff and défendant on November 6, 1984 provided, inter alia, that plaintiff was to pay a certain Sears, Roebuck & Company bill out of the proceeds of a flood insurance check and that defendant was to have possession of the marital home unless certain events occurred, one of which was her cohabitation with an unrelated male for a period greater than 24 hours. The agreement also provided that defendant could rescind the agreement if plaintiff substantially or materially breached any of its provisions.

On December 12, 1985, plaintiff served a summons and complaint on defendant alleging that defendant had cohabited with an unrelated male for a period greater than 24 hours and, as a result, the separation agreement required that the marital residence be sold. Defendant did not deny this claim in her answer. However, she did contend as a defense that she had the right to rescind the separation agreement because plaintiff had materially breached it by failing to pay the Sears, Roebuck bill with the proceeds from the flood insurance check. Plaintiff served a reply denying the allegations. Thereafter, plaintiff moved for summary judgment and also instituted an action for divorce based on the parties’ separation. Supreme Court found that defendant’s failure to deny the cohabitation allegation triggered the terms of the separation agreement which provided for the sale of the marital residence. The court went on to state that, while plaintiff had not used the proceeds of the flood insurance check as specified, his explanation of this failure (that he used the proceeds to pay child support while unemployed) was reasonable and did not indicate an intent to use the money to his own benefit. Supreme Court also found that plaintiff’s breach did not go to the heart of the agreement and was, therefore, not a proper ground for rescinding it. Consequently, the court ordered that the marital residence be put up for sale. This appeal by defendant ensued.

Since defendant failed to insist on plaintiff’s strict performance of the provision of the separation agreement requiring plaintiff to pay the Sears, Roebuck bill out of the proceeds of the flood insurance check, defendant has waived the default and, therefore, has no right under the separation agreement to seek rescission of that agreement.

There is undisputed evidence in the record that plaintiff received the flood insurance check in August 1984 and held the check pending the negotiation and execution of the separation agreement. Shortly after the agreement was signed in November 1984, plaintiff became unemployed and used a portion of the proceeds of the insurance check to pay child support. He also paid $500 of those proceeds to defendant. Plaintiff admits that he did not use any of the proceeds to pay the Sears, Roebuck bill, as required by the separation agreement, but he claims that he began making monthly payments on the bill after he found employment, and defendant concedes that there has been a reduction in the principal balance due on the bill. Assuming that, in these circumstances, plaintiff’s failure to pay the Sears, Roebuck bill out of the proceeds of the insurance check constituted a material or substantial breach of the provision requiring him to do so, defendant made no effort to insist on strict performance by plaintiff. Her first objection based upon plaintiff’s breach did not occur until February 1986, long after the breach had occurred, when she sought to use plaintiff’s breach as a means of avoiding compliance with another provision of the agreement.

The agreement itself provides, "The failure of either party to insist on strict performance of any of the provisions of the Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature” (emphasis supplied). Clearly, then, a party’s failure to insist on strict performance of any provision of the agreement does constitute a waiver of that particular default, and defendant’s failure to act within a reasonable time after plaintiff’s default herein must therefore be viewed as a waiver of that default. Accordingly, defendant has no right to rescind the separation agreement, and Supreme Court’s order granting plaintiff summary judgment should be affirmed.

Order affirmed, with costs. Casey, J. P., Weiss, Yesawich, Jr., and Harvey, JJ., concur.