Important New Decisions - March 21, 2012

Temporary Maintenance Guidelines Income Cap Raised from $500,000 to $524,000.
The "cap" on each spouses annual income, to be utilized in calculating temporary maintenance orders, has increased from $500,000 to $524,000 effective January 31, 2012 in accordance with Domestic Relations Law § 236 [B][5-a][b][5] . (See Temporary Maintenance Guidelines Worksheet, revised January 31, 2012 at www.nycourts.gov/divorce/TMG-worksheet.pdf or Temporary Spousal Maintenance Guidelines Calculator, revised January 31, 2012 at www.nycourts.gov/divorce/calculator.pdf)  Beginning January 31, 2010 and every two years thereafter, the income cap increases by the product of the average annual percentage changes in the consumer price index for all urban consumers (CPI-U) as published by the united states department of labor bureau of labor statistics for the two year period rounded to the nearest one thousand dollars. The office of court administration is required to determine and publish the income cap. See Domestic Relations Law § 236[B], [5-a][b][5].


Downward Modification of Child Support Based on a Loss of Employment Due to Injury Granted Where Father Demonstrated Injuries Severely Limited His Ability to Resume His Veterinary Practice
In Smith v Smith, --- N.Y.S.2d ----, 2012 WL 88100 (N.Y.A.D. 3 Dept.) pursuant to a 2002 judgment of divorce, defendant (mother) was awarded sole custody of the parties' four children. Pursuant to the Child Support Standards Act (DRL 240[1-b] ), plaintiff (father) was directed to pay $2,887 per month in child support based on his imputed income of $160,000 as the sole proprietor of a veterinary practice. The mother, who had no income, was awarded durational maintenance. In 2007, the father was seriously injured in a motor vehicle accident and, in 2009, he sought a downward modification of his child support payments, alleging that there had been a substantial change in circumstances because, among other things, his injuries severely limited his ability to resume his veterinary practice and to perform veterinary services. After a hearing, Supreme Court granted the motion and recalculated the father's monthly child support payments under the Child Support Standards Act to be $634.96 based on the mother's present income of $49,605 from her work as a part-time dental hygienist and the father's income of $24,877.20 from his limited practice and his Social Security disability benefits.  The mother appealed, contending that, despite the father's injuries and disability, the motion for a downward modification should have been denied because the father could provide support through some other type of veterinary practice. The Appellate Division affirmed. It observed that she did not present any evidence contradicting the father's proof of his limited ability to work or supporting her claim that he could hire other veterinarians to assist in running his practice. While a request for a downward modification of child support based on a loss of employment due to injury or illness may be denied where the parent seeking the modification still has the ability to provide support through some other type of employment Supreme Court credited the father's testimony that he is no longer able to work full time at his own practice, could not  afford to hire another person to assist him in his practice and was not employable at another practice because of his condition. Giving deference to Supreme Court's credibility determinations there was no basis to disturb its determination that the father demonstrated a significant change in circumstances warranting a downward modification of his child support obligation. The Appellate Division rejected the mothers argument that the presumptively correct amount of child support was unjust or inappropriate and that, as a result, the father's personal injury settlement should have been considered in determining his child support obligation The children  received derivative Social Security benefits, and the evidence established that most of the father's settlement had already been used to pay the father's child support arrears, continue his child support payments and otherwise mitigate his financial problems.


Appellate Division Generally Accords Deference to Supreme Court's Determination Regarding Amount and Duration of Maintenance as Long as the Court Considers the Statutory Factors and Provides a Basis for its Conclusion
                 In O’Connor v O’Connor, --- N.Y.S.2d ----, 2012 WL 88226 (N.Y.A.D. 3 Dept.) the parties in this matrimonial action were married in 1986, they had three children (one born in 1990 and twins born in 1992), and plaintiff commenced this action in August 2009 premised upon defendant's abandonment. Following a nonjury trial, Supreme Court, as relevant to this appeal, awarded plaintiff maintenance of $1,000 per month until she was eligible for Social Security retirement benefits in January 2022, subject to earlier termination upon various conditions, including if she remarries or the commencement of her receipt of her share of defendant's pension. In its decision and order, the court also partially granted plaintiff's motion for counsel fees, awarding $7,500 of the over $20,000 in then unpaid counsel fees and disbursements. These awards were included in the April 2011 judgment of divorce. Defendant, challenging the duration of maintenance, appealed from the judgment, which prompted plaintiff to cross-appeal therefrom and to move for an award of appellate counsel fees. Supreme Court, in July 2011, granted plaintiff $900 in counsel fees for making the motion and $9,000 for appellate counsel fees. Defendant appealed from the July 2011 order.
The Appellate Division stated that while its  authority is as broad as Supreme Court's regarding maintenance it generally accords deference to Supreme Court's determination regarding the amount and duration of maintenance" 'as long as the court considers the statutory factors and provides a basis for its conclusion.  Maintenance is appropriate where, among other things, the marriage is of long duration, the recipient spouse has been out of the work force for a number of years, has sacrificed her or his own career development or has made substantial noneconomic contributions to the household or to the career of the payor. The fact that a wife has the ability to be self-supporting by some standard of living does not mean that she is self-supporting in the context of the marital standard of living. Here, Supreme Court discussed each of the statutory factors. This was a long-term marriage of 24 years and plaintiff was 50 years old. Although she had a marketing degree and had a job related to her degree early in the marriage, she passed on a promotion because defendant would not move, and later she gave up her position in order to raise the parties' children. She has not worked in marketing since early 1992. At the time of the divorce, she worked as a school aide and her earnings for 2009 and 2010 were about $14,000 and $18,000, respectively. Supreme Court accepted her testimony that she would need considerable educational updating of an unknown duration and cost before being able to return to a marketing position or another professional field. Defendant's 2010 income was about $78,854, but Supreme Court noted that he did not work available overtime which, in the prior four years, resulted in income levels between approximately $95,000 and $117,000. Defendant's child support obligation for the oldest child ended in August 2011 and the remaining obligation ceases in June 2013. In light of Supreme Court's discussion of the pertinent factors, the length of the marriage, career sacrifice by plaintiff, large discrepancy in current earning power and plaintiff's age, the Appellate Division was unpersuaded that the duration of maintenance determined by Supreme Court should be modified. It rejected defendants argument that it was error to order him to pay counsel fees for the underlying action and the appeal. It is within the discretionary power of Supreme Court to award counsel fees and, in doing so, "a court should review the financial circumstances of both parties together with all the other circumstances of the case, which may include the relative merit of the parties' positions" ( DeCabrera v. Cabrera-Rosete, 70 N.Y.2d 879, 881 [1987]). Supreme Court discussed the financial position of the parties, including defendant's superior earning capacity, and otherwise adequately explained its reasons for awarding counsel fees. Although plaintiff did not pursue her cross appeal, plaintiff's counsel stated in an affirmation that the cross appeal involved a narrow issue that appellate counsel had indicated did not affect her fee. It found  no abuse of discretion by Supreme Court in the award of counsel fees .


 Equitable Distribution and Counsel Fees Denied Where Parties Elected Not to Treat Marriage as an Economic Partnership                                                  
In Medley v Medley, 2011 WL 6975934 (N.Y.Sup.), 2011 N.Y. Slip Op. 52457(U) (Table, Text in WESTLAW), Unreported Disposition, the action was commenced August 2007 for absolute divorce by Plaintiff, Claudette Medley, against Defendant, Maurice Medley. A divorce was granted in favor of Defendant after inquest on the grounds of constructive abandonment. There were no children of the marriage. A trial was held on the ancillary issues of equitable distribution and counsel fees. The parties were married in a civil ceremony on March 5, 1997, after a brief courtship. At the time of the marriage, Plaintiff was in the United States with temporary legal status and Defendant was an American citizen. Prior to the marriage, each party resided in and owned their own home. Plaintiff's home, 141-15 255th Street, Queens, N.Y. ("255 Street property"), was jointly owned with a friend and Defendant was the sole owner of 130-60 221st Street, Queens, N.Y. ("221 Street property"). The parties agree that they lived together at 130-33 221st Street, Queens, N.Y. ( "130-33 Street property"), from March 2005 until July 7, 2007. The parties' living arrangements between March 1997 and 2005 were disputed and was the core issue at trial. Both parties engaged in real estate investments. Plaintiff as a real estate sales agent and owned real estate businesses. Defendant bought and sold investment properties. Except for one joint ownership, all their investments, businesses were conducted separately by each.
            Supreme Court found that Plaintiff migrated to the United States in 1988 under a temporary Visa with a work permit. She was employed in administration at a Hospital. In 1994, Plaintiff purchased the 255 Street property, jointly with a friend. Her friend and co-owner subsequently deceased and the one half share was inherited by her friend's daughter. Upon the death of Plaintiff's friend, the mortgage insurance paid off the mortgage on the 255 Street property. Plaintiff later refinanced the property by herself and solely kept the undisclosed proceeds. It was unclear how Plaintiff, solely, refinanced the joint ownership 255 Street property. The daughter did testify that she was aware the property was refinanced; however, no documents were executed by the daughter nor did she receive any of the undisclosed proceeds. After three months of dating, in early 1997, Plaintiff showed Defendant a letter from Immigration and Naturalization Service ("INS") informing Plaintiff that her Visa status had expired. The parties ensued in a conversation on how to change Plaintiff's status or whether Plaintiff will leave the United States to, what Plaintiff classified as, "her father's farm". After this conversation, the parties immediately planned the wedding. The day before the marriage, at Plaintiff's residence, the parties discussed drafting a pre-nuptial agreement. Plaintiff wrote a handwritten document. The document entitled, Prenuptial Agreement between Maurice Medley and Claudette as of 3/3/97,' states "that neither party would take any legal action to seek the other's assets". The agreement, though not acknowledged, is signed by both parties and dated March 4, 1997. One day later, the parties were married, March 5, 1997.  It was undisputed that the parties resided together from March 2005 until July 2007 at the 130-33 Street property. Plaintiff had one child, not of the marriage, who resided with Plaintiff and one other family member. There was no document placed into evidence to show that the parties filed joint tax returns or commingled their incomes and bank accounts. Although no tax records were placed into evidence, as Plaintiff claimed joint filing, she contradicted her testimony by acknowledging that as of 2003 she filed as head of household. Plaintiff filed as head of household to show diminished income so that her son could receive financial aid and a scholarship from the private school he attended in New Jersey. The tuition for the school was approximately $28,000.00 to $30,000.00 annually. As a result of Plaintiff's tax filing and the financial application she misrepresented to the school, her son obtained the scholarship and she paid $2,400.00 annually as a single parent.
          Plaintiff obtained a Bachelor of Arts degree from York College in 2004. From 1997 through 2005, she earned approximately $30,000.00 annually from Memorial Sloan Kettering. In 2005, her salary increased to $50,000.00. Plaintiff obtained her real estate license in 1997 and began real estate sales. In addition to Plaintiff's earnings from the hospital, she earned additional income ranging through 2010 from as high as $50,000.00 to low as $2,000.00. Consistent with the document signed on March 4, 2005, Plaintiff kept her income separate and apart from Defendant and some of this income was not disclosed prior to the commencement of this case.
          All income received from the properties were kept and used by Defendant towards the mortgages and carrying charges on the properties. Although there was a marriage on paper, the parties communication and financial partnership was non existent. Plaintiff's incomes were either not disclosed or shared. Defendant's income although known was not shared.
          The credible evidence showed that the parties lived their lives in a manner consistent with the written document they signed in March 1997. Each engaged in separate investment ventures, buying and selling investment properties and kept all their incomes separate from each other. Plaintiff did not disclose any of her real estate investment income prior to trial to Defendant although she claimed entitlement to Defendant's. Defendant did not claim any entitlement to Plaintiff's income, investments or license claiming this was the intent of the parties. Throughout the marriage, there was no credible evidence that the parties spent any significant time together but rather maintained a separate business lifestyle. At most the parties had a sparse emotional life but it was impacted by a clear separate financial life. What contribution Plaintiff made to the investment property purchased with Defendant's funds was unproven since the record was devoid of any documents to support Plaintiff's claim except her testimony.
         The Court found that there were several innuendoes of the purpose and true meaning of the parties nuptial. Their arrangement was a sparse emotional life with no financial partnership. For an approximate ten year marriage, the parties lived together for a total of two years and four months just prior to filing of the action. There was evidence that Plaintiff filed deceptive and misrepresented legal school documents and tax returns. Although the Court would not define or marshal what is a "married life". The cliche "you know it when you see it" could be inferred in this case. These parties engaged in a pattern of behavior that was inconsistent of any semblance of a marriage life in its ordinary and reasonable meaning. Plaintiff  failed to present any documentary proof or credible evidence for her claims of entitlement. It was undisputed that during the marriage, Defendant purchased three properties, titled solely in his name. Defendant claimed that Plaintiff failed to meet her burden to establish that she made any contribution to these properties, thus warranting an equitable distribution of the value of these real properties. Defendant made no claim of an equitable distribution of Plaintiff's businesses or license.
      Looking to DRL 236(B)(1)(c), it was clear that all property acquired during a marriage acquired by either spouse, with the exception of property in specifically delineated categories, is considered to be marital property. In this matter, Defendant purchased the Dean Street property, the DeCosta Avenue property, and the 130-33 Street property, during the marriage in 1999, 2001 and 2005, respectively. Pursuant to the statutory presumption, all three properties are deemed to be marital property.    In addition to the real property acquired during the marriage, both parties also acquired retirement benefits throughout the duration of the marriage. The Court found that to the extent the benefits were accrued during the marriage, the retirement benefits were marital property.
      Turning to the unique circumstances of this case, the Court considered the economic partnership, as created by the parties in this marriage. While the living arrangements of the parties from March 1997 through May 2005 was disputed, it was undisputed that from the outset of the marriage the parties agreed not to treat the marriage as an economic partnership. While the document signed on March 4, 1997, was not a pre-nuptial agreement, as it did not satisfy the requirements for a pre-nuptial agreement as required by DRL 236(B)(3), the written signed document evinced the intent of the parties to forego any legal claim each party may have to the other party's assets in the event that the marriage was unsuccessful. While the Plaintiff testified that the agreement only concerned the property owned prior to the marriage, the evidence presented established that the parties maintained separate finances throughout the life of the marriage. Although Plaintiff testified that the parties held one joint account until approximately 2004, she failed to present evidence to establish the existence of that or any joint account. Plaintiff did not contribute to the down payment or mortgage payments nor made any spousal or homemaker contribution on any of the properties purchased by Defendant.  Moreover, while Plaintiff testified that the parties filed joint tax returns during the early years of the marriage, until approximately 2004, she failed to present any joint tax returns for any year during the marriage.
In addition to maintaining separate bank accounts, the parties also conducted their real estate investments and business endeavors separately. The parties' separate real estate dealings evinced an intention to maintain separate financial accounts and investments consistent with the document written and signed on March 4, 1997. Plaintiff's testimony of the parties' intent was inconsistent with the parties' actions. The manner in which the parties conducted their real estate endeavors was inconsistent with the economic partnership theory.
Supreme Court observed that Courts have held in matrimonial proceedings where parties conduct themselves in a manner inconsistent with the economic partnership, the Court may find that equitable distribution of property is not warranted (see  Duspiva v. Duspiva, 181 A.D.2d 810, [2d Dept 1992];  Miller v. Miller, 4 AD3d 718, [3d Dept 2004];  Galvin v. Galvin, 20 AD3d 550, [2d Dept 2005] ). The parties began their marriage with an agreement that neither party would pursue legal action to claim the other party's assets. For the duration of the marriage, the parties lived in a manner consistent with the terms of that the document they wrote and signed. Although the parties resided in the same residence, 130-33 Street property, the Court found that the parties continued to conduct themselves in a manner consistent with the terms of the document signed on March 4, 1997, and conducted themselves in a manner inconsistent with the typical economic partnership and, therefore, equitable distribution of the property was not warranted.
Plaintiff presented evidence and testimony to establish that she purchased furniture for the residence at 130-33 221st Street  in the sum of $11,734.23. Plaintiff further testified that although she left the residence in July 2007 Defendant did not allow her to remove the furniture from the residence. In light of the parties' agreement and conduct consistent with the agreement, the Court finds that the furniture purchased for the 130-33 221st Street residence is property of Plaintiff. However, as the furniture has remained in Defendant's possession since 2007, Defendant had to pay Plaintiff for the cost of the furniture. Defendant was directed to pay Plaintiff $11,734.23 for the furnishings in the residence.
Plaintiff sought counsel fees. According to Plaintiff's testimony, in 2009, she earned approximately $70,000.00 from her employment at the hospital and an additional $20,000.00 from her real estate businesses. Additionally, she testified that for the year 2010, she anticipated earning approximately $70,000.00 from the hospital and has already derived $15,000.00 from her real estate businesses. Plaintiff earned a minimum of $85,000.00 in 2010. Defendant's Amended Statement of Net Worth indicated that Defendant's monthly income was $12,707.44. While Defendant's income was greater than that of Plaintiff, throughout the duration of the marriage, the parties maintained separate finances and Plaintiff was able to meet her financial obligations without the assistance of Defendant. Considering the unique circumstances of this case, Plaintiff's request for counsel fees was denied.

Temporary Maintenance Guidelines Income Cap Raised from $500,000 to $524,000.

Temporary Maintenance Guidelines Income Cap Raised from $500,000 to $524,000.
The "cap" on each spouses annual income, to be utilized in calculating temporary maintenance orders, has increased from $500,000 to $524,000 effective January 31, 2012 in accordance with Domestic Relations Law § 236 [B][5-a][b][5] . (See Temporary Maintenance Guidelines Worksheet, revised January 31, 2012 at www.nycourts.gov/divorce/TMG-worksheet.pdf or Temporary Spousal Maintenance Guidelines Calculator, revised January 31, 2012 at www.nycourts.gov/divorce/calculator.pdf)  Beginning January 31, 2010 and every two years thereafter, the income cap increases by the product of the average annual percentage changes in the consumer price index for all urban consumers (CPI-U) as published by the united states department of labor bureau of labor statistics for the two year period rounded to the nearest one thousand dollars. The office of court administration is required to determine and publish the income cap. See Domestic Relations Law § 236[B], [5-a][b][5].

Important New Decisions - February 26, 2012

Supreme Court Holds Once a Party Has Stated under Oath That the Marriage Has Been Irretrievably Broken for a Period of at Least Six Months, the Cause of Action for Divorce Has Been Established as a Matter of Law and There Is No Defense

In Townes v Coker, --- N.Y.S.2d ----, 2012 WL 444054 (N.Y.Sup.) the parties were married on June 12, 1981 and had three emancipated children. On October 6, 2008, Wife commenced an action for divorce against Husband. In her verified reply the Wife consented to the entry of the Judgement of Divorce based on Husband's counterclaim for constructive abandonment. On March 23, 2009, the parties executed a Stipulation, "So-Ordered" by Hon. Anthony J. Falanga, wherein Wife agreed to discontinue the 2008 action so that Husband may commence his own action on the grounds of constructive abandonment. Pursuant to the terms of the March 23, 2009 Stipulation, on or about April 8, 2009, the Husband commenced an action for divorce based upon the grounds of constructive abandonment. (Action No. 1). The Wife served a Verified Answer consenting to a divorce on the grounds of constructive abandonment. On or about March 21, 2011 the Husband made a motion seeking to discontinue Action No. 1. The Court denied Husband's motion. On or about February 15, 2011 the Wife commenced Action No. 2 and moved to consolidate Action No. 1 and Action No. 2 pursuant to CPLR 602 which the Court granted. The wife then moved Summary Judgment with respect to her cause of action alleged in Action No. 2, based upon the irretrievable breakdown of the marriage between the parties for at least six (6) months. The Wife's cause of action in Action No 2 was predicated upon the "no-fault" ground for divorce established in DRL 170(7), the irretrievable breakdown of the relationship of the parties. The Wife's Verified Complaint (Action No. 2) stated in relevant part: 11. The grounds for divorce are as follows: Irretrievable Breakdown of the Relationship (DRL Sec. 170(7)): The relationship between the Plaintiff and Defendant has been broken down irretrievably for a period of at least six (6) months. In opposition to Wife's application for summary judgment as to grounds, the Husband categorically denied his Wife's claims that the marriage had broken down irretrievably. The Supreme Court found that the Legislature did not enact a defense to this cause of action and courts cannot employ statutory construction to enact an intent that the Legislature did not express. Thus, neither the Husband, nor the Court, may create a defense where it is clear that the Legislature intentionally declined to do so. See, Pajak v. Pajak, 56 N.Y.2d 394, 452 N.Y.S.2d 381 (1982). Since the Wife stated "under oath" that the marriage is irretrievably broken, there was no basis for directing a trial with regard to this action of action for divorce. DRL 170(7) states that a divorce may be granted where: (7) The relationship between husband and wife has broken down irretrievably for a period of at least six months, provided that one party has so stated under oath. Thus, once a party has stated under oath that the marriage has been irretrievably broken for a period of at least six months, the cause of action for divorce has been established as a matter of law. The Court declined to follow the holding in Strack v.. Strack, 31 Misc.3d 258, 916 N.Y.S.2d 759 (Sup.Ct., Essex Cty., 2011), which held that a husband has the right to a trial on the "no fault" ground asserted by Wife. Also, see Schiffer v. Schiffer, 33 Misc.3d 795 (Sup.Ct. Dutchess Co., 2011). Supreme Court held that pursuant to DRL §170(7), once either party states under oath that the marriage has been irretrievably broken for at least six months, the grounds are no longer at issue and there is no right to a trial, by jury or otherwise. The entire purpose of the statute was to permit the Court to grant a divorce without requiring a trial. It noted that in AC v. DR, 32 Misc.3d 293, 305, 927 N.Y.S.2d 496 (Sup.Ct. Nassau Co., 2011), Justice Falanga stated the plaintiff's self-serving declaration about his or her state of mind is all that is required for the dissolution of a marriage on grounds that it is irretrievably broken. In the court's view, the Legislature did not intend nor is there a defense to DRL 170(7). Notwithstanding the foregoing and assuming arguendo, that the Husband was entitled to a defense regarding DRL 170(7), here the Husband's general denial of Wife's allegations that the marriage was broken down irretrievably was belied by his sworn statement in his Verified Complaint (Action No. 1) in which he stated: Continuing for a period of more than one (1) year immediately prior to the commencement of this action, defendant has continuously refused to have sexual relations with the plaintiff despite plaintiff's repeated requests to resume such relations. Based upon the Husband's sworn admission that his Wife has refused to have sexual relations with him for at least one (1) year despite his repeated request for same, it was difficult for this Court to imagine a better example of a irretrievable breakdown of the marriage relationship where one spouse continually refuses to have sexual relations with the other spouse for a period of at least one year. Here, the Husband was bound by his own sworn admission contained in his Verified Complaint, thereby eliminating any triable issues of fact for the Court to determine.



UCCJEA Requires Court to Communicate with Sister State Court Where Custody Actions Commenced in Two States

In Guzman v Guzman, --- N.Y.S.2d ----, 2012 WL 401081 (N.Y.A.D. 2 Dept.) in November 2009, the mother commenced a proceeding, seeking to modify thecustody and visitation provisions of a 2008 Florida judgment of divorce, entered upon the parties' stipulation, which awarded the father primary residential custody of the child. Before any determination could be made in this proceeding, the father relocated with the child to Florida. Thereafter, on December 22, 2009, the Family Court issued a determination, in effect, dismissing the petition for lack of jurisdiction, and it advised the mother to seek relief in Florida. However, when the mother subsequently commenced a custody proceeding with respect to the child in Florida, the Florida court determined that Florida was an inconvenient forum and that New York was the more appropriate forum, and it stayed the custody proceeding commenced in the Florida court. The mother then moved in the Family Court, Queens County, to vacate the Family Court's determination dated December 22, 2009. Without consulting with the Florida court, the Family Court denied the motion in an order dated March 2, 2011. The Appellate Division held that under the circumstances of this case, the order dated March 2, 2011, had to be reversed, that branch of the mother's motion to vacate the determination dated December 22, 2009, granted, the petition reinstated, and the matter remitted to the Family Court, for further proceedings. At the time the mother commenced this modification proceeding in November 2009 the Family Court, Queens County, had jurisdiction over it pursuant to Domestic Relations Law §76-b, based on the fact that the parties and the child lived in New York, and none of them had resided in Florida for over a year. The child was enrolled in school in New York, her sister had resided in New York with the mother since 2007, the father had commenced a proceeding in New York to modify the custody provisions of the Florida judgment of divorce with respect to the sister, and the Family Court, Queens County, had obtained a forensic study of the parties for use in that proceeding. Therefore, the parties and the subject child had significant connections with this State, and it appeared that "substantial evidence [was] available in this state concerning the child's care, protection, training, and personal relationships" (Domestic Relations Law § 76[1][b][ii] ). Accordingly, New York had jurisdiction to modify the custody and visitation provisions of the parties' Florida judgment of divorce with respect to the subject child. Nonetheless, where custody proceedings relating to a child are pending in different states-in this case, New York and Florida-Domestic Relations Law § 76-e applies, and the courts of the two states must confer with each other. Since the Family Court made its initial determination, in effect, dismissing the petition in this proceeding, the father and the child apparently had resided in Florida. In view of these circumstances, upon remittal, the Family Court, Queens County, was directed to contact the Florida court so that the courts of the two states may confer with each other and determine which state was the more appropriate forum for the proceeding at this juncture.

　

important New Decisions - February 12, 2012

Child Support Cap Raised from $130,000 to $136,000

The "combined parental income amount" to be utilized in calculating child support orders has increased from $130,000 to $136,000 effective January 31, 2012. (See Child Support Worksheet (Form UD-8) revised January 2012). The amount of the "combined parental income" is established by Domestic Relations Law § 240 (1-b) (2) as the amount set forth in Social Services Law § 111-I (2) (b). Domestic Relations Law § 240 (1-b) (2) provides that the amount established shall be multiplied by the appropriate child support percentage and such amount shall be prorated in the same proportion as each parent's income is to the combined parental income. Social Services Law § 111-I (2)(b) provides that the 　$130,000 cap is increased automatically on January 31, 2012 and on January 31 every two years thereafter by the product of the average annual percentage changes in the consumer price index for all urban consumers (CPI-U) as published by the United States department of labor bureau of labor statistics for the two year period rounded to the nearest one thousand dollars. (See Bureau of Labor Statistics for its publications at http://www.bls.gov)



First Department Holds That Double Dipping Is Not Allowed Under Temporary Maintenance Guidelines
In Khaira v Khaira, --- N.Y.S.2d ----, 2012 WL 371997 (N.Y.A.D. 1 Dept.) the Appellate Division, in an opinion by Justice Saxe, considered the guidelines for awards of temporary spousal maintenance under Domestic Relations Law 236 (B)(5-a), particularly with regard to the circumstances in which the court may deviate from the guideline amount derived by formula (the presumptive award), and the procedures that must be undertaken to do so. The parties married on July 8, 2006. They had two sons, and the wife had a son from a previous marriage. In September of 2010, the husband voluntarily moved out of the marital residence, and in October 2010, the wife commenced the divorce proceeding. She moved for pendente lite support, asking for monthly maintenance of $11,500 and child support of $7,290, and a direction that the husband directly pay the carrying costs on the marital residence, child care expenses, and all health care expenses for the family.

The court observed that to determine temporary maintenance, the motion court had to apply Domestic Relations Law 236(B)(5-a), which had become effective on October 12, 2010. The court determined the presumptive award to be $11,500 per month, awarded the wife $13,870 in unallocated spousal and child support, tax deductible to the husband, and required the husband to directly pay to the lender the monthly mortgage payments on the marital residence in which the wife and the children continue to reside, and the health care insurance premiums and unreimbursed health care expenses for the family, including his stepson. It also directed the husband to pay the wife interim counsel fees of $42,000.

On appeal, the husband contended that the motion court awarded the wife an excessive sum because it failed to consider his actual, documented net monthly income and cash flow, and incorrectly calculated his annual income by including non-recurring earnings such as a one-time bonus, and illiquid, noncash equity compensation. He challenged the counsel fee award on the ground that the wife's mother guaranteed her counsel fee obligation, and counsel has been paid in full to date. He also challenged the directive that he pay the health care expenses of his stepson.

Justice Saxe observed that Domestic Relations Law 236(B)(5-a) reflects a substantial change in the Legislature's approach to temporary maintenance. The previous spousal maintenance provision gave the court great leeway, directing only in general terms that it order maintenance"in such amount as justice requires," considering the parties' standard of living during the marriage, the reasonable needs of the non-monied spouse and the monied spouse's ability to pay, and with regard to a list of factors such as the parties' respective earning capacities (former DRL 236[B][6] ). Courts applying that provision observed that pendente lite maintenance was awarded to "tide over the more needy party, not to determine the correct ultimate distribution and to ensure that a needy spouse is provided with funds for his or her support and reasonable needs" The new provision, rather than aiming merely to "tide over" the non-monied spouse, creates a substantial presumptive entitlement. He noted that the motion court properly followed the initial procedures. It applied the $500,000 cap to the husband's income, and using $60,000 as the wife's income, based on the monthly payments she acknowledged receiving from her parents, performed the two calculations: for the first, it subtracted 20% of $60,000 ($12,000) from 30% of $500,000 ($150,000), arriving at $138,000; for the second, it calculated 40% of $560,000 ($224,000), then deducted $60,000, arriving at $164,000. It properly treated the lesser of these two calculations, $138,000, as the guideline amount. At that point, the court observed that the parties' 2008 joint income tax return reflected an adjusted gross income of $851,549, almost all from the husband's earnings at the investment firm the Blackstone Group, and that their 2009 tax return reflected an adjusted gross income of $1,063,426, also almost entirely from the husband's employment. However, it did not then proceed to explicitly discuss whether an additional amount of maintenance was warranted from the portion of the husband's income that exceeded the $500,000 cap, as required by 236(B)(5-a)(c)(2). Instead, the court next examined the wife's submitted monthly expense budget of approximately $21,267 and concluded that with the exception of claims for $1,000 for gifts and $225 for charitable contributions, the remainder ($20,041), which included $4,125 for the cost of a nanny, represented the wife's and the children's reasonable needs. In essence, the court simply ruled that the husband should pay the full amount of the wife's and the children's claimed needs, partly through his payment of the mortgage on the marital residence ($5,317) and the family's health care premiums and unreimbursed medical expenses ($855), and partly through monthly payments to the wife of $13,870. In other words, the court awarded the wife $20,041 in unallocated spousal and child support without setting out a calculation of appropriate child support and without discussing or even mentioning the factors in Domestic Relations Law 236[B][5-a][c][2] ).

In considering the husband's challenge to the award, the Court rejected his suggestion that his support obligation should have been calculated based solely on his base pay, without reference to his bonus, or that the court should have taken into consideration his net pay. The statute instructs the court to base the calculations on the payor's gross income as reported in his federal income tax return, and the motion court properly did exactly that, correctly treating the husband's bonuses as income and ignoring his reliance on his net income (which can be manipulated with deductions and deferred compensation). However, the motion court did not strictly comply with the requisites of Domestic Relations Law 236 (B)(5-a).

Justice Saxe observed that no language in either the new temporary maintenance provision or the CSSA specifically addresses whether the statutory formulas are intended to include the portion of the carrying costs of their residence attributable to the non-monied spouse and the children. The new law "does not factor in child support issues or payment of household expenses. In the absence of a specific reference to the carrying charges for the marital residence, the Court considered it reasonable and logical to view the formula adopted by the new maintenance provision as covering all the spouse's basic living expenses, including housing costs as well as the costs of food and clothing and other usual expenses. The Court believed that the new approach of calculating spousal support payments to the non-monied spouse by means of a formula is intended to arrive at the amount that will cover all the payee's presumptive reasonable expenses. By calculating the guideline amount and then simply adding the direct mortgage payment on top of that, the motion court awarded more than the amount reached by the formula, without providing the required explanation.

Justice Saxe indicated that it is possible that directing payment above and beyond the guideline amount may be appropriate in certain situations. For instance, the direct mortgage payment might be justifiable as additional support when the payor's income exceeds $500,000 and the applicable factors listed in Domestic Relations Law 236 (B)(5-a)(c)(2)(a) are taken into account; or, depending on the size of the mortgage payment, perhaps only part of it should be treated as the payee's housing costs, and the remainder should be treated as the upkeep of a marital investment. He suggested that perhaps there are other reasons why the guideline amount is unjust or inappropriate. "It may well be that in this case, consideration of the enumerated factors, such as the stark difference in the parties' current earning capacities, their standard of living during the marriage, and the need to pay for day care, would justify the motion court's direction that the husband pay as additional maintenance a specified portion of his income beyond the $500,000 cap."

Because the statute expressly requires the court to both make and explain that determination (DRL 236[B][5-a][c][2][b] ), the Appellate Division could not permit the award to remain as it stood. While the ultimate support award may well be appropriate, it must be appropriately supported and explained. The Court therefore modified so as to vacate the support award and remanded the matter for a reconsideration of the award in light of the directives of Domestic Relations Law 236(B)(5-a). It also vacated the portion of the order that placed responsibility on the husband for his stepson's health care insurance and unreimbursed health care expenses. There was no allegation that the stepson was a recipient of public assistance or that he was in danger of becoming a public charge, and no other legal rationale for imposing that obligation on the husband.

The Court upheld the award of counsel fees to the wife as the "less monied spouse" (Domestic Relations Law 237[a] ). Justice Saxe observed that the statute provides that "[p]ayment of any retainer fees to the attorney for the petitioning party shall not preclude any awards of fees and expenses to an applicant which would otherwise be allowed under this section"; the husband's argument that no award of fees was appropriate because the wife's mother paid her attorney's retainer fee failed to rebut the presumption in favor of the award.

Comment:

Counsel for the spouse paying temporary maintenance should request, in his opposing papers, that the temporary maintenance order contain a provision directed the spouse who is awarded temporary maintenance to pay the "carrying costs of the marital residence" . Without such a direction, the spouse receiving the temporary maintenance award will not be under any court ordered obligation to pay those expenses, even though the temporary maintenance award includes sums for their payment, and the credit rating of the payyor spouse may suffer or the mortgage may go into foreclosure..

Counsel for a spouse seeking temporary maintenance should to make sure, in preparing an application for temporary support, that the "presumptive award" will be enough to permit his client to pay the "carrying costs of the marital residence." The application for temporary maintenance should ask the court to specify what items are considered "carrying costs of the marital residence".

important New Decisions - February 12, 2012

Threat to Cancel Wedding Is Not Duress.

In Ramunno v Ramunno, --- N.Y.S.2d ----, 2012 WL 266464 (N.Y.A.D. 4 Dept.) Plaintiff commenced a action seeking a determination that the parties' Antenuptial Agreement was null and void on the grounds of , inter alia, duress. The Appellate Division held that Supreme Court property determined that defendant's threat to cancel the wedding unless plaintiff signed the agreement did not amount to duress (citing Colello v. Colello, 9 AD3d 855). The Appellate Division held that court erred, however, in sua sponte determining that plaintiff could not, prior to the marriage, waive her right to equitable distribution of defendant's pension (citing Strong v. Dubin, 75 AD3d 66, 72-73) or her right to maintenance (DRL 236[B][3][3] ), and modified the order accordingly.

Husband's Motion to Modify Divorce Judgment to Conform to Agreement Not Barred by the Doctrine of Laches, Although He Waited Eight Years to Make the Motion

In Markell v Markell--- N.Y.S.2d ----, 2012 WL 234084 (N.Y.A.D. 2 Dept.) in a stipulation of settlement dated May 14, 2002, the plaintiff former wife and the defendant former husband agreed, inter alia, that the defendant would pay child support on the fifteenth day of each month, and that unreimbursed health care expenses for their children would be divided equally after the plaintiff paid the initial sum of $500 per child. The Supreme Court issued Findings of Fact and Conclusions of Law dated December 10, 2002, which reflected this agreement. However, the judgment of divorce, which was entered on December 10, 2002, provided that the defendant was to pay child support on the first day of each month and two thirds of the children's unreimbursed health care expenses after the plaintiff paid the initial $500 per child. On or about December 10, 2010, the defendant moved to modify the judgment of divorce to "accurately reflect the provisions of the December 10, 2002 Findings of Fact and Conclusions of Law and [the] parties' May 14, 2002 Stipulation of Settlement." The Supreme Court denied the motion and, upon reargument, adhered to its original determination. The Supreme Court determined that the husband's motion to modify the judgment was barred by the doctrine of laches, in that he waited eight years to make the motion.
The Appellate Division modified the order made upon reargument. It observed that the doctrine of laches is an equitable doctrine which bars the enforcement of a right where there has been an unreasonable and inexcusable delay that results in prejudice to a party. The mere lapse of time without a showing of prejudice will not sustain a defense of laches. In addition, there must be a change in circumstances making it inequitable to grant the relief sought. Notably, prejudice may be established by a showing of injury, change of position, loss of evidence, or some other disadvantage resulting from the delay ( Skrodelis v. Norbergs, 272 A.D.2d at 316-317). In support of his motion, the defendant demonstrated that the subject provisions of the judgment were the result of a clerical error, as the parties had been adhering to the terms of the stipulation of settlement for approximately eight years, and that the plaintiff had only recently informed him at a Family Court proceeding that the judgment contained terms different from those in the stipulation of settlement and Findings of Fact and Conclusions of Law. In opposition, the plaintiff conceded that the parties had been complying with their stipulation of settlement since it was executed in May 2002. Since the parties had been operating under the terms of the stipulation of settlement for approximately eight years prior to the husband's motion, the plaintiff failed to demonstrate a change in circumstances that would render inequitable the relief sought by the defendant. Further, the plaintiff failed to show that she would be prejudiced by a modification of the judgment to accurately reflect the provisions contained in the stipulation of settlement and Findings of Fact and Conclusions of Law .

Court Should Not Rely on New Statutory Formula in Domestic Relations Law 236(b)(5-a) in Actions Commenced Prior to its Effective Date
In Truglia v Truglia, --- N.Y.S.2d ----, 2012 WL 233765 (N.Y.A.D. 2 Dept.) the Appellate Division held that in determining an award of pendente lite maintenance, a court should not rely on the new statutory formula in Domestic Relations Law 236(B)(5-a) in actions, such as this one, commenced prior to its effective date (see Ingersoll v. Ingersoll, 86 AD3d 684, 685). Here, however, the Supreme Court's award, while erroneously arrived at using the new statutory formula, was upheld in accordance with the prior standard under former Domestic Relations Law 236(B)(6)(a). The award of pendente lite maintenance reflected " 'an accommodation between the reasonable needs of the moving spouse and the financial ability of the other spouse... with due regard for the preseparation standard of living.

Plaintiff Made Direct Contributions to the Business Established by Husband Prior to Parties Marriage by Serving as Company Bookkeeper for Approximately Seven Years
In Scher v Scher,--- N.Y.S.2d ----, 2012 WL 233930 (N.Y.A.D. 2 Dept.) the Appellate Division held that contrary to the determination of the Supreme Court, the plaintiff was entitled to share in the appreciated value of Home Companion Services of New York, Inc., which the defendant incorporated approximately three years prior to the marriage. Separate property includes "property acquired before [the] marriage" (Domestic Relations Law 236[B] [1][d][1] ), such as the business interest in Home Companion Services in this case, as well as "the increase in value of [such] separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse" (Domestic Relations Law 236[B][1][d][3] ). In order for appreciation in the value of separate property to be deemed marital property subject to equitable distribution, the nontitled spouse must demonstrate the manner in which his or her contributions resulted in the increase in value and the amount of the increase which was attributable to his or her efforts. Here, the Supreme Court improvidently exercised its discretion in finding that the plaintiff made no direct or indirect contributions to the appreciation of Home Companion Services which resulted in the increase in the value of the company. The evidence established that the plaintiff made direct contributions to the business by serving as the company bookkeeper for approximately seven years. The evidence further established that the defendant's active participation in expanding the business was aided and facilitated by the plaintiff's indirect contributions as homemaker and occasional caretaker of one of his children from a prior marriage. Moreover, the defendant failed to establish that the plaintiff committed "wasteful dissipation" of marital assets in her role as bookkeeper. The Appellate Divison held that in light of the plaintiff's direct and indirect contributions, the Supreme Court should have awarded her 20% of the appreciated value of Home Companion Services. As the parties stipulated that the appreciated value over the course of the marriage amounted to $1,146,000, the plaintiff was entitled to an award of $229,200.
Furthermore, contrary to the determination of the Supreme Court, the plaintiff was entitled to an equitable share of the appreciated value of the marital residence over the course of the marriage, notwithstanding that the residence was the separate property of the defendant until March 2005, when the property was transferred to the plaintiff and defendant as tenants by the entirety. The increase in the value of separate property remains separate property except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse at which point the increase in value becomes marital property, in accordance with the rule that the definition of marital property is to be broadly construed, given the principle that a marriage is an economic partnership. The parties stipulated to a neutral appraisal which found that the marital residence had increased in value by $40,000 due to "active appreciation" in the form of physical improvements, and $300,000 due to "passive appreciation" in the form of "market forces, without regard to any improvements, except normal maintenance." Since the record established that the $340,000 in appreciation was attributable to the efforts of both parties, the plaintiff was entitled to share equitably in that increased value. Applying the plaintiff's 50% distributive share to the $340,000 in appreciation, she was entitled to an award of $170,000 for the appreciated value in the martial residence from the date of marriage. In light of the plaintiff's contributions, the Supreme Court should have awarded the parties equal shares in the increase in the value of the marital residence.
The Appellate Division found that Supreme Court erred in finding that the interest in Green Fields East Holding, LLC , which was held in the defendant's name, was the separate property of the defendant. Domestic Relations Law 236 defines "marital property" as "all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held". Likewise, expenses incurred prior to the commencement of an action for a divorce are marital debt to be equally shared by the parties upon an offer of proof that they represent marital expenses. Where a party has paid the other party's share of what proves to be marital debt, reimbursement is required. As the interest in Green Fields was acquired during the marriage and before the commencement of the instant action, it was marital property. Likewise, a loan in the approximate amount of $239,000 which was taken out simultaneously, was marital debt. Since the defendant established that he paid the plaintiff's share of the marital debt by satisfying the loan, reimbursement was required. Taking the market value of the interest in Green Fields ($350,000), and applying the plaintiff's 50% distributive share thereto, she was entitled to an award of $55,500 after reimbursing the defendant the sum of $119,500 for satisfying her portion of the marital debt.
The Appellate Division held that Supreme Court erred in awarding the defendant a separate property credit in the amount of $32,719.59. Where separate property has been commingled with marital property, there is a presumption that the commingled funds constitute marital property. However, a party may overcome this presumption by presenting sufficient evidence that the source of the funds was separate property. Defendant failed to present sufficient evidence to establish that the source of the funds in the disputed profit-sharing plan account was separate property.
Considering the plaintiff's distributive award with respect to the marital residence and Home Companion Services and Green Fields, and in light of the plaintiff's direct and indirect contributions, an award of 10% of the value of the parties financial accounts, except a 529 college savings plan account, was equitable. It declined to disturb the provision of the judgment which directed that the defendant was to receive all the proceeds of the 529 college savings plan account.
In light of the distribution of the marital property and the plaintiff's own testimony regarding her expenses and earning capacity, the Appellate Division declined to disturb the Supreme Court's determination that the plaintiff was not entitled to future maintenance payments and declined to disturb the Supreme Court's determination that the plaintiff was not entitled to an award of an attorney's fee. In light of the substantial distributive award in favor of the plaintiff, she was capable of paying for her own attorney.