Casey, J. (dissenting). Collateral estoppel is applicable only when the issue has actually been litigated and determined in the prior action or proceeding (see, Koch v Consolidated Edison Co., 62 NY2d 548, 554, cert denied 469 US 1210). The prior proceeding in Family Court concerned only the question of whether an earlier order of Family Court should be vacated pursuant to CPLR 5015 (a) (3). The instant action concerns the validity of a stipulation which was incorporated but not merged in the earlier Family Court order that was the subject of the CPLR 5015 motion. Because the stipulation, which modified a prior stipulation executed by the parties during their divorce action, was not merged in the earlier Family Court order, it remained an independent contract (see, Nopper v Nopper, 50 NY2d 1009), and the scope of review upon a motion to vacate an order is substantially different from that applied by the courts in deciding whether to set aside an agreement made in the context of a matrimonial matter (compare, CPLR 5015 [a] [3], with Christian v Christian, 42 NY2d 63, 71; Grunfeld v Grunfeld, 123 AD2d 64, 68). It is also significant, as noted by Supreme Court, that Family Court lacks the equity jurisdiction necessary to set aside the parties’ agreement (see, Matter of Brescia v Fitts, 56 NY2d 132, 139).
Plaintiff seeks rescission in this case based, inter alia, upon the emotional stress created by the financial hardship which resulted when defendant Steven G. Somlo (hereinafter defendant) unilaterally reduced his child support/maintenance payment from $800 to $400 per month, leaving plaintiff with insufficient funds to provide for herself and her children. According to plaintiff, she believed that her only recourse was to give in to all of defendant’s demands and, therefore, she gave up physical custody of her two children and waived her right to any maintenance in return for defendant’s payment of $3,000 in arrearages. The issue raised by these allegations concerning the validity of the stipulation clearly was not litigated in the prior Family Court proceeding. Instead, Family Court simply noted that such allegations were insufficient to constitute fraud, misrepresentation or other misconduct within the meaning of CPLR 5015 (a) (3). Accordingly, it is my *953view that Supreme Court correctly rejected defendant’s collateral estoppel defense.
Ordered that the order is modified, on the law, without costs, by reversing so much thereof as denied the cross motion regarding the first three causes of action; cross motion granted to that extent, summary judgment awarded to defendant Steven G. Somlo and said causes of action are dismissed; and, as so modified, affirmed.