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Monday, May 16, 2011

Important New Decisions - May 16, 2011

In Determining Parents' Respective Obligations Towards Cost of College, a Court Should Not Take into Account Any College Loans for Which the Student Is Responsible

In Matter of Yorke v Yorke, --- N.Y.S.2d ----, 2011 WL 1499108 (N.Y.A.D. 2 Dept.) the parties were the parents of a child who was a college student beginning in the Fall 2007 semester. By orders dated October 16, 2007, and December 20, 2007, respectively, the father was directed to pay 83% of the college tuition for the child prior to March 2009, and 82% of the tuition for the child subsequent to March 2009. Those orders provided that the father was not responsible for contributing towards the child's room and board at college. In 2009 the mother commenced a proceeding, alleging that the father had failed to contribute the required amount to college tuition for the five semesters from Fall 2007 through and including Fall 2009. Family Court issued an order dated March 29, 2010, in which that court determined the father's obligation for college costs for the child and found that the father was entitled to a credit in the sum of $3,407. In the order the Family Court deducted financial aid, including "Stafford" loans, prior to determining the father's share of college costs for the child. The Appellate Division held that in determining the parents' respective obligations towards the cost of college, a court should not take into account any college loans for which the student is responsible. Therefore, any loans for which the child is responsible should not have been deducted from the college costs prior to determining the father's pro rata share of those costs. Here, the record did not indicate whether the child was responsible for repayment of the Stafford loans reflected on the statements from the college. Accordingly, the matter was remitted to the Family Court for clarification of this matter. In addition, the Family Court erred in applying the total amount of scholarships, grants, and student loans for which the child was not responsible ( financial aid). First, the Family Court should have calculated the total cost of attending college, including tuition, and room and board. Next, it should have determined the percentage of that total cost which was covered by financial aid. That percentage should then have been applied to the tuition portion. Finally, the father's share of the net tuition, after deducting the pro rata financial aid, should have been calculated based upon his percentage of responsibility . For example, if tuition is $12,000 and room and board is $8,000, totaling $20,000, and financial aid is $15,000, or 75% of the total college cost, the net tuition after pro rata financial aid would be $3,000. The father's pro rata tuition obligation should then be applied to that amount to determine his contribution to tuition. Accordingly, the matter was remitted to the Family Court for recalculation of the father's obligation to contribute towards college costs.

No Reduction of Child Support Arrears Accrued Prior to the Making of Application for Modification Even Where Noncustodial Parent Establishes His Income Is less than Poverty Income Guidelines Amount

In Matter of Fisher v Nathan, --- N.Y.S.2d ----, 2011 WL 1499660 (N.Y.A.D. 2 Dept.), the Appellate Division held that Family Court properly denied the father's objection to the order of the Judicial Hearing Officer, which denied his motion for a temporary downward modification of his obligation to pay arrears for his daughter's college expenses. Although child support arrears cease to accrue above the sum of $500 where a noncustodial parent can establish that his or her income is less than or equal to poverty income guidelines amount for a single person, as reported by the United States Department of Health and Human Services (see Family Ct Act 413[1][g] ), a "modification, set aside or vacatur [of a child support obligation set forth in a judgment or order] shall not reduce or annul child support arrears accrued prior to the making of an application pursuant to this section" (Family Ct Act 451). "In that regard, contrary to the father's claim, child support arrears may not be reduced or annulled even where the defaulting party shows good cause for failing to make an application for relief from the judgment or order of support prior to the accrual of arrears or where requiring the party to pay the arrears will result in a grievous injustice" (Matter of Mandelowitz v. Bodden, 68 AD3d 871, 875; see Matter of Dox v. Tynan, 90 N.Y.2d 166, 173-174). Here, the father failed to establish that any decline in business sustained by his solo law practice as a result of his illness left him below the Federal poverty income guidelines. Accordingly, his obligation for child support arrears continued to accrue, and there is no basis in law to adjust or reduce his obligation to pay child support arrears.

Direction in Judgment to Pay "One-half of the Mortgage and Real Estate Charges of the Marital Residence and Half of the Cost of Any Repair to the Home in Excess of $750.00" Constituted an Improper Open-ended Obligation

In Mosso v Mosso--- N.Y.S.2d ----, 2011 WL 1733948 (N.Y.A.D. 2 Dept.) defendant appealed from so much of a judgment of the Supreme Court as (1) imputed an annual income to him of $52,000 for the purpose of calculating his child support obligations, (2) directed him to pay $1,160 per month in child support retroactive to the date of the commencement of the action, (3) directed him to pay one-half of the mortgage and real estate tax charges of the marital residence and half the cost of any repair to the home in excess of $750, (4) directed him to pay 100% of a $30,000 home equity loan on the marital residence, (5) awarded the plaintiff $13,777 from certain bank accounts, and (6) awarded the plaintiff exclusive use and occupancy of the marital residence until the last of the parties' children reaches majority. The Appellate Divison held that Supreme Court did not improvidently exercise its discretion in it imputing an annual income to the defendant of $52,000 for the purpose of calculating his child support obligations. However, in calculating the child support award, the Supreme Court's direction that the defendant pay both child support and half of the carrying charges on the marital residence resulted in an improper double shelter allowance. The matter was remitted to the Supreme Court to recalculate the child support award ‘taking into account the shelter costs incurred by the defendant in providing housing to the plaintiff and the minor children". It held that Supreme Court also improperly awarded retroactive child support to August 1, 2007, the date of the commencement of the action, since the plaintiff did not request child support until she filed an amended complaint on August 27, 2007. It directed that since an award of child support may be made "effective as of the date of the application therefor" (Domestic Relations Law 236[B][7][a] ), on remittal, the Supreme Court's new child support award should be made retroactive to August 27, 2007. It found the defendant's contention that the plaintiff was not entitled to any retroactive child support because she later withdrew her amended complaint was without merit. The record established that the amended complaint was withdrawn solely to relinquish a cause of action for divorce on the ground of cruel and inhuman treatment, and that the plaintiff's request for child support was intended to remain a part of the action. In addition, the matter had to be remitted to the Supreme Court because the Supreme Court's directive that the defendant pay "one-half of the mortgage and real estate charges of the marital residence and half of the cost of any repair to the home in excess of $750.00" constituted an improper open-ended obligation (citing 22 NYCRR subtitle D, Ch III, subchapter B0. The direction to pay for repairs and other maintenance should state a maximum monthly or yearly amount. The Appellate Divison held that Supreme Court also improvidently exercised its discretion in directing that the defendant be 100% responsible for repayment of a $30,000 loan drawn on a home equity line of credit. Expenses incurred prior to the commencement of a divorce action constitute marital debt and should be equally shared by the parties. Although the defendant should be solely responsible for repaying $10,000 of this loan, which he used to pay his attorney's fees, the burden of repaying the remaining $20,000 should be shared by the parties since this debt was incurred during the marriage and the evidence at trial failed to establish a compelling reason why the defendant should bear the cost of repayment alone. The Appellate Division held that Supreme Court did not err in granting the plaintiff and the parties' children the exclusive use and occupancy of the marital residence until the youngest child reaches the age of 18. Exclusive possession of the marital residence is usually granted to the spouse who has custody of the minor children of the marriage. In making this determination, the need of the custodial parent to occupy the marital residence is weighed against the financial need of the parties. The evidence at trial established that the parties were capable of maintaining the marital residence and that suitable comparable housing could not be obtained at a lesser cost than the cost to maintain the marital residence. Further, the defendant failed to establish an immediate need for his share of the proceeds of the sale of the marital residence. The defendant failed to meet his burden of establishing that certain assets in a bank account, acquired during the marriage, were not marital property subject to equitable distribution. Accordingly, the Supreme Court properly provided for the equitable distribution of those funds.

Must be Sufficient Evidence to Support Interim Counsel Fee Award for Services Previously Rendered

In Mimran v Mimran, --- N.Y.S.2d ----, 2011 WL 1496465 (N.Y.A.D. 1 Dept.) Supreme Court directed defendant to pay plaintiff $200,000 as interim counsel fees. The Appellate Division reversed. It held that regardless of whether plaintiff otherwise made a sufficient showing to support an award of interim counsel fees defendant was correct that neither plaintiff nor her counsel provided adequate documentation of the amount of fees already paid, the amount required for experts, the dates and nature of the services previously rendered, or the number of hours of work to be performed. Thus, there was insufficient evidence to support an award for outstanding fees already incurred and no basis upon which an appropriate prospective fee award could be determined.

Agreement Provision for Full Indemnification of Attorneys' Fees in Enforcement Proceedings must Be Enforced

In Colyer v Colyer,--- N.Y.S.2d ----, 2011 WL 1496486 (N.Y.A.D. 1 Dept.) upon granting plaintiff's motion for an order compelling defendant to pay college and medical expenses of the parties' daughter, Supreme Court awarded plaintiff $20,000 in attorneys' fees. The Appellate Division increased the attorneys' fees to $54,467.50 and otherwise affirmed. It noted that Plaintiff's entitlement to attorneys' fees in connection with the instant proceeding arose from the parties' separation agreement, which provided for defendant's full indemnification of fees if he defaulted on his obligation to pay the daughter's college expenses and certain medical expenses and it became necessary for plaintiff to bring proceedings to enforce his obligations. Thus, plaintiff was entitled to collect the full amount of her attorneys' fees in connection with the successful enforcement proceeding. Although defendant complained generally about the reasonableness of the total amount of attorneys' fees sought, he did not contend that any amounts should be excluded as unrelated to the successful portion of the application. Thus, there was no basis for reducing the total amount, which was $45,270.

Liberal Policy to Vacate Default Judgment in Matrimonial Cases Where Meritorious Position with Respect to Ancillary Issues

In Osman v Osman, --- N.Y.S.2d ----, 2011 WL 1601891 (N.Y.A.D. 2 Dept.) the Appellate Division held that Supreme Court improvidently exercised its discretion in denying the defendant's motion to vacate her default in appearing for a trial on the ancillary economic issues attendant to the parties' divorce. Although a party seeking to vacate a default must establish a reasonable excuse for the default and a potentially meritorious cause of action or defense, the courts of this state have adopted a liberal policy toward vacating defaults in matrimonial actions. In matrimonial actions, "[t]he State's interest in the marital res and allied issues ... favor[s] dispositions on the merits". The record revealed that the defendant former wife was taken directly from court to the hospital by ambulance on December 15, 2009, where she underwent medical tests, including a chest x-ray and EKG, before being released with a diagnosis of anxiety. Under these circumstances, it found that the wife's claim that the anxiety attack she suffered on December 15, 2009, caused her to misapprehend the Supreme Court's instructions as to the time she was required to return to court the next day, constituted a reasonable excuse for her failure to appear on the morning of December 16, 2009. Furthermore, the parties had been married for 27 years at the time of the commencement of the action, and the plaintiff former husband allegedly was the primary wage earner throughout the marriage. Thus, the wife had a potentially meritorious position with respect to all ancillary economic issues, including maintenance, which were resolved after the inquest held upon her default.

Appeal Dismissed for Failure to Include All Transcripts of Proceedings

In Kociubinski v Kociubinski,--- N.Y.S.2d ----, 2011 WL 1631591 (N.Y.A.D. 2 Dept.) the Appellate Division pointed out that it is the obligation of the appellant to assemble a proper record on appeal, which must include any relevant transcripts of proceedings before the Supreme Court. The record must contain all of the relevant papers that were before the Supreme Court, including the transcript, if any, of the proceedings. Here, the plaintiff appealed from an order and judgment of the Supreme Court which, inter alia, granted the defendant's motion, after a hearing, for an award of child support arrears pursuant to the parties' judgment of divorce and stipulation of settlement. However, the plaintiff's failure to provide this Court with the full hearing transcript renders the record on appeal inadequate to enable the Court to reach an informed decision on the merits and, thus, the appeal was dismissed.