Case Update (2020): Choupak v. Koroleva; Divorce, Comity, Catchall Language in a Separation Agreement

Mr. Choupak filed a suit for conversion and unjust enrichment against his ex-Wife in their former state of residence, New York. On April 23, 2020, the Supreme Court of the State of New York dismissed his claims.  (Choupak v. Koroleva, 2020 NY Slip Op 31443(U) (NY Sup Ct 2020))

Mr. Choupak and Ms. Koroleva moved from New York to London in 2010.  Shortly thereafter, due to certain unreported foreign bank accounts and wages from Ms. Koroleva, the parties learned they owed back taxes, so they entered into an arrangement with the Internal Revenue Service for payment.  Then, in 2012, Ms. Koroleva filed for divorce in the Family Court in London, with the parties entering into a Separation Agreement on February 22, 2013. The separation agreement was converted into a financial remedy order on March 4, 2015 by the Family Court.  Just over one year later, in May 2016, the IRS determined the couple had overpaid their back-taxes for 2010 and 2011, and issued a joint check for a net refund of $1,507,535.  Since the check was jointly issued, both ex-spouses needed to execute it in order to cash it.  Ms. Koroleva refused to sign it, however, unless Mr. Choupak agreed to give her half of the refund. He begrudgingly agreed, she signed the check, he gave her half, and then he sued her in New York to recoup the money he felt he overpaid to her given that the refund was attributed to his payment of far more of the taxes than Ms. Koroleva. 

The New York court specifically reviewed the language in the parties’ UK financial remedies order.  More specifically, it said, the terms were “accepted in full and final satisfaction of … all other claims of any nature which one may have against the other howsoever arising either in England and Wales or in any other jurisdiction.”  It further provided that “the parties will split equally any remaining joint assets.”  The New York Court concluded that the IRS refund, having been made payable to both spouses on a prior joint tax debt, fell squarely within this language, and the catchall provisions precluded Mr. Choupak from bringing a suit in New York.  The UK order was entitled to recognition as a matter of comity.

An appeal has been noted.