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claim.2 The court noted that petitioner had agreed pursuant to
the 1989 settlement agreement not to reopen the divorce case or
the divorce agreement. Consequently, the court held petitioner
and the corporation to be barred by judgment and estopped by
agreement from asserting the conversion claim against Ms. Smith.3
The Southampton Property
During their marriage, Ms. Smith and petitioner owned real
property located in Southampton, New York (the Southampton
property). The divorce agreement designated the Southampton
property as the separate property of Ms. Smith. With respect to
encumbrances on real property subject to the divorce agreement,
the divorce agreement contained the following indemnity provision
(the indemnity provision):
Assumption of Encumbrances. Each party hereby
assumes the encumbrances, ad valorem taxes and liens on
all the property each will hold subsequent to the date
of this Agreement, unless express provision is made
herein to the contrary; and each party agrees to
indemnify and hold harmless the other party and his or
her property from any claim or liability that the other
party will suffer or may be required to pay because of
such encumbrances or liens.
2As discussed below, the trial court also granted summary
judgment with respect to petitioner’s claims that Ms. Smith
breached the divorce agreement by failing to assume the liability
for liens on certain real property and for failing to file a
proper 1986 Federal income tax return.
3Although petitioner and the corporation appealed the
judgment of the trial court, they did not claim on appeal that
the trial court erred in granting summary judgment with respect
to the conversion claim.
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