Simkin v. Blank

Steven Simkin (plaintiff) and Laura Blank (defendant) had been married for 30 years when they decided to divorce. The settlement agreement set forth a comprehensive division of marital property. Simkin agreed to pay Blank $6.25 million as an equitable distribution of property. Though the agreement acknowledged that the property division was fair and reasonable, it did not state that the parties intended an equal distribution or other designated percentage division of the martial estate. Simkin and Blank further acknowledged that the settlement constituted an agreement between them with respect to all funds, assets, and property. At the time the parties entered into the agreement, Simkin owned a brokerage account that was managed by Bernie Madoff. At the time the marital assets were valued, the account was valued at $5.4 million. Simkin withdrew funds from this account to pay a portion of his payment to Blank. Simkin continued to invest in the account after the divorce. Four years later, Madoff’s Ponzi scheme was exposed. As a result of the disclosure of Madoff’s fraud, Simkin commenced a lawsuit against Blank, arguing that the settlement agreement should be reformed due to mutual mistake. Simkin argued that the settlement agreement was intended to accomplish an approximately equal division of the couple’s marital assets. Simkin argued that $2.7 of Blank’s $6.25 million payment represented her share of the Madoff account. Simkin claimed that the parties’ intention to equally divide the marital estate was frustrated because both parties operated under the mistake as to the existence of a legitimate investment account with Madoff, which turned out to be a fraudulent Ponzi scheme. Simkin called for the court to alter the settlement terms to reflect an equal division of the actual value of the Madoff account. Blank moved to dismiss the complaint. The lower court sided with Blank. The case was then heard by the state’s highest court.