In this motion Plaintiff seeks to set aside certain portions of the parties' separation agreement that was incorporated and not merged into their judgment of divorce. The motion was initially made before another Justice who granted the motion to the extent of ordering a hearing on the issues raised. Although a plenary action is the proper procedure to challenge the terms of an agreement, (Reiter v Reiter, 39 AD3d 616, 2nd Dept., 2007), this Court, in the interests of judicial economy, conducted a full hearing on movants' claims - a procedure that is not without precedent. Gaines v Gaines, 188 AD2d 204, 4th Dept., 1992. The hearing was tantamount to a plenary trial.

The parties were married on October 13, 1990 and, thereafter, executed and filed a separation agreement dated June 19, 2001. A judgment of divorce incorporating and not merging the separation agreement was rendered on January 6, 2003.

The Plaintiff contends that certain portions of the separation agreement must be set aside because Defendant fraudulently misrepresented the facts upon which the agreement was made. Specifically, Plaintiff contends, Defendant failed to disclose his interest in the Sergeants Benevolent Association Annuity Fund ^[FN1] ("hereinafter "Annuity Fund"). In response to Plaintiff's contention, Defendant contends that at the time of the execution of [*2]the separation agreement, all retirement benefits afforded to him as an employee of the New York City Police Department were fully disclosed.

To maintain an action based upon fraudulent representations, whether it be in tort for damages or the rescission of a contract, as here, one must establish that the defendant knowingly uttered a falsehood intending to deprive the plaintiff of a benefit and that the plaintiff was thereby deceived and damaged. Channel Master Corp. v. Aluminum Limited Sales, Inc. 4 NY2d 403,1958. Misrepresentation of a material existing fact, falsity, scienter, deception and injury must all be proven to sustain a claim of fraud. Sabo v. Delman, 3 NY2d 155, 159-160. Because of the fiduciary relationship existing between spouses, separation agreements are more closely scrutinized by courts than ordinary contracts and may be set aside 'upon the demonstration of good cause, such as mistake, fraud, duress or overreaching * * * or when found to be unconscionable' ". Sheridan v. Sheridan, 202 AD2d 749, quoting Cantamessa v. Cantamessa, 170 AD2d 792, 793. It is the Plaintiff's burden to show that the agreement was the result of fraud or overreaching, or that its terms were unconscionable (Jacobs v Jacobs, 234 AD2d 425, 2nd Dept., 1996) and that burden is heavier when each party was aided by their respective counsel throughout the negotiations. Riemer v. Riemer, 31 AD2d 482, 2nd Dept., 1969.

The relevant portions of the separation agreement provide as follows:

Article X (2)(a) Husbands' New York City Pension: "Identity and Division of Benefits. The Husband has earned certain retirement benefits under a pension plan of the NEW YORK CITY POLICE DEPARTMENT know as the NEW YORK CITY POLICE PENSION FUND (hereinafter "The Plan"). By reason of his employment and participation in The Plan, the HUSBAND is entitled to receive certain benefits. It is the parties' intention to equally distribute between them that portion of the HUSBAND'S pension benefits from the Plan that was acquired, credited or earned during the parties' marriage, defined as October 13, 1990 to November 5, 1999."

ARTICLE XVIII FULL DISCLOSURE " (a) Both the legal and practical effect of this Stipulation in each and every respect and the financial status of the parties have been fully explained to both parties by their respective counsel, and they both acknowledge that it is a fair Stipulation and is not the result of any fraud, duress or undue influence exercised by either party upon the other or by any other person or persons upon either."