First Department Affirms Award of Costs of Higher Education, Including College, for 7 Year Old Child Because it Appeared to Be an Inevitable Expense for this Child

In Klauer v Abeliovich,  --- N.Y.S.3d ----, 2017 WL 1450277, 2017 N.Y. Slip Op. 03110 (1^st Dept., 2017) the parties were married in December 2008 and there was one child of the marriage, born in 2010.

The Appellate Division held that Supreme Court correctly rejected the Referee’s recommendation as to basic child support when it determined that in setting the basic child support obligation the parties’ combined income above the $141,000 statutory cap should be taken into consideration (Domestic Relations Law § 240[1–b][f] ). In deciding to utilize the parties’ combined income up to $800,000 in setting support, the court examined whether the capped support “adequately reflects a support level that meets the needs and continuation of the child[’s] lifestyle” and concluded that it did not (Beroza v. Hendler, 109 AD3d 498, 500–501 [2d Dept 2013] ).

The Appellate Division  held that Supreme Court, under the circumstances, providently exercised its discretion in ordering that the husband pay 20% of the child’s educational expenses, including college, until the child attains age 21 (see Cimons v. Cimons, 53 AD3d 125, 131 [2d Dept 2008] ). The court took into consideration several factors, including the high educational achievements of both parties and their professions. Plaintiff, a financial analyst, has a B.A. from Georgetown and an MBA from Columbia Business School; she also holds series 3 and 7 licenses. Defendant, an associate professor of medicine at Columbia University Medical School, has a B.A. from Massachusetts Institute of Technology and a M.D./Ph.D. from Harvard. During the marriage the parties agreed the child would be privately educated and their enrollment of the child in a private nursery school when he was only nine months old reflects their agreement. There was no indication that defendant could not afford to pay his share of private school tuition, and his argument that the child was too young for the court to have addressed higher education issues does not warrant modification of Supreme Court’s order. There was no reason to delay resolution of the issue of higher education, including college, because it appeared to be an inevitable expense for this child, given the parties’ apparent commitment to an enriched education, the parties’ means and their high level of educational achievements. It affirmed the award because it was not an improvident exercise of the court’s discretion.

The Appellate Division held that absent an agreement to the contrary, or without engaging in a proper analysis under the paragraph “(f)” factors of the Domestic Relations Law, the court should not have ordered defendant to pay for summer and/or extracurricular activities (Domestic Relations Law § 240[1–b][f]; Michael J.D., 138 AD3d at 154). Unlike health care and child care expenses, these “add-on” expenses are not separately enumerated under the CSSA and it is usually anticipated that they will be paid from the basic child support award ordered by the court. Furthermore, without explaining why, Supreme Court allocated these add-ons in the same manner it allocated educational expenses (i.e. 20% to defendant as opposed to 10.5%). Because the court made its determination before the Court’s decision in Michael J.D., where it  clarified how these add-ons should be analyzed and separately justified under paragraph (f), it  remitted to Supreme Court the issue of how summer and/or any other extracurricular activities not specifically agreed to by the parties will be allocated between them, if at all.

The Appellate Division modified to eliminate the award of the separate property credit to plaintiff in the amount of $350,000 and otherwise affirm Supreme Court’s denial of any further separate property credit to plaintiff in the amount of $932,000 for payments toward the principal and/or renovation costs of their Fifth Avenue coop. It held that Plaintiff was not entitled to a separate property credit for the $350,000 downpayment or the additional sum of $932,000 the parties applied towards the purchase price of the Fifth Avenue coop. The conveyance of separate funds under these circumstances resulted in the separate assets becoming presumptively marital and partial use of separate funds to acquire a marital asset does not mandate that plaintiff be credited for any separate funds she committed (see Fields, 15 NY3d at 167).

The Appellate Division held that the court  correctly determined that plaintiff’s bonus, although paid after the action was commenced, was compensation for her past performance, not tied to future performance (see DeJesus v. DeJesus, 90 N.Y.2d 643, 652 [1997] ). As a general rule, bonuses paid as compensation for past services are marital property and subject to equitable distribution (see Ropiecki v. Ropiecki, 94 AD3d 734, 736 [2d Dept 2012] ). The court properly prorated the bonus to reflect that although it was paid for the 2011 calendar year, the parties separated in May 2011, meaning only 40% of the total amount could be considered marital.

 The Appellate Division held that while it was a provident exercise of the court’s discretion to permit plaintiff to make payments to defendant of his distributive share of the marital assets in installments, post-decision interest is mandatory on the distributive award pursuant to CPLR 5002, and should be awarded (see Moyal v. Moyal, 85 AD3d 614, 615 [1st Dept 2011] ).

First Department Holds That Invoices Standing Alone May Not Be Regarded as Evidence of Title or Ownership of Property.

  In Anonymous v. Anonymous,--- N.Y.S.3d ----, 2017 WL 1234201, 2017 N.Y. Slip Op. 02613 (1st Dept., 2017)  the parties prenuptial agreement did not specifically address how the parties should divide their art collection upon dissolution of the marriage. It provided that any property owned on the date of execution of the prenuptial agreement, April 21, 1992, or "hereafter…acquired" by one party remains that party's separate property. It provided that "[n]o contribution of either party to the care, maintenance, improvement, custody or repair of… [the other's party]…shall in any way alter or convert any of such property…to marital property. The prenuptial agreement further provided that "any property acquired after the date of the marriage that is jointly held in the names of both parties" shall, upon dissolution of the marriage — which occurred on March 25, 2014 — be divided equally between the parties. Under the heading, Non-Marital Property, the agreement provided: "No property hereafter acquired by the parties or by either of them…shall constitute marital property…unless (a) pursuant to a subscribed and acknowledged written agreement, the parties expressly designate said property as marital property…or (b) title to said property is jointly held in the names of both parties." During the marriage, the parties agreed to acquire certain art as a joint collection, including pieces acquired through Art Advisory Services, Luhring Augustine, and The Kitchen. The husband moved, inter alia, for a declaratory judgment that, "consistent with the Prenuptial Agreement, the title to the art purchased during the marriage determines whether it is marital or separate property, regardless of the source of funds used to acquire it or the alleged intent behind the purchase." He argued that title should be determined based solely on the invoice or bill of sale. The motion court relied on the invoices as proof of whether the art was jointly or individually held in granting his motion. 
          The Appellate Division held to the contrary, that invoices, standing alone, may not be regarded as evidence of title or ownership of the art. An invoice is defined as "[a] list of goods sent or services provided, with a statement of the sum due for these" (Oxford Living Dictionaries [https://en.oxforddictionaries.com/definition/invoice]). "An invoice…is not a bill of sale, nor is it evidence of a sale. It is a mere detailed statement of the nature, quantity, or cost of the goods, or price of the things invoiced, and it is as appropriate to a bailment as a sale. Hence, standing alone, it is never regarded as “evidence of title" (Sturm v. Boker, 150 US 312, 328 [1893].  An invoice cannot be said to be dispositive of ownership. The purpose of the invoice is not to identify the titled owner. The unreliability of an invoice as sole proof of title was evidenced by various invoices in the record. The Appellate Division concluded that title to personalty cannot be determined by relying solely upon an invoice. In determining title to the artwork in question, all the facts and circumstances of the acquisition and indicia of ownership must also be considered. Accordingly, the order was reversed, on the law, the declaration vacated, and the matter remanded for further proceedings, including discovery and an evidentiary hearing to determine the ownership of the disputed art.

Third Department Holds That Failure to Effectuate Proper Service of a Motion Deprives the Court of Jurisdiction to Entertain the Motion

In Matter of Gariel v Morse, --- N.Y.S.3d ----, 2016 WL 7469484 (Mem), 2016 N.Y. Slip Op. 08921 (3d Dept., 2016) the Appellate Division held that the father’s letter to the court  had to be treated as a motion for voluntary discontinuance pursuant to CPLR 3217(b) (see Family Ct Act § 165[a]) and, as such, it had to  comply with the applicable service requirements. Inasmuch as the father’s failure to effectuate proper service  “deprive[d] the court of jurisdiction to entertain the motion”(Lee v. I–Sheng Li, 129 AD3d 923, 923 [2015]; see Matter of Lydia DD., 94 AD3d at 1386; Bianco v. LiGreci, 298 A.D.2d 482, 482 [2002]; Adames v. New York City Tr. Auth., 126 A.D.2d 462, 462 [1987]; Burstin v. Public Serv. Mut. Ins. Co., 98 A.D.2d 928, 929 [1983] ), it found that  Family Court erred in dismissing the petition.

Second Department Holds That Party Seeking Counsel Fees must Demonstrate, Prima Facie, Attorney Substantially Complied with 22 NYCRR 1400.2 and 1400.3

 In Piza v Baez-Piza, --- N.Y.S.3d ----, 2016 WL 7224738, 2016 N.Y. Slip Op. 08384 (2d Dept.,2016) following a trial, the defendant sought additional attorney’s fees, and, the Supreme Court, inter alia, awarded the defendant the sum of $7,500 in attorney’s fees for legal services provided following the earlier award of $3,500 in attorney’s fees. The Appellate Division held that Supreme Court erred in awarding the defendant total attorney’s fees in excess of the $7,500 retainer that she paid to her attorney, as she did not demonstrate, prima facie, that her attorney substantially complied with 22 NYCRR 1400.2 and 1400.3 (see Vitale v. Vitale, 112 AD3d 614, 615). It modified the judgment to provide that the additional award of attorney’s fees for legal services provided following the prior award of $3,500 be limited to the sum of $4,000 (see Mulcahy v. Mulcahy, 285 A.D.2d 587, 588–589).