Loss of Health Insurance Benefits Added As a Factor

Laws of 2009, Ch 229 amends the domestic relations law, in relation to maintenance and equitable distribution of marital property, effective September 14, 2009 to add "the loss of health insurance benefits upon dissolution of the marriage as a factor to be considered by the court in making a maintenance award and in making a property distribution.

Domestic Relations Law § 236 [B][5][d],subparagraphs 5, 6, 7, 8, 9, 10, 11, 12 and 13 of are renumbered subparagraphs 6, 7, 8, 9, 10, 11, 12, 13 and 14, and a new subparagraph 5 is added to read as follows: (5) the loss of health insurance benefits upon dissolution of the marriage;

Domestic Relations Law § 236 [B][6][a][10] is amended to read as follows: (10) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;

Domestic Relations Law 236 [B][6][a][11] is renumbered subparagraph 12 and a new subparagraph 11 is added to read as follows: (11) the loss of health insurance benefits upon dissolution of the marriage; and

The amendments apply to any action or proceeding commenced on or after the effective date of September 14, 2009. See Laws of 2009, Ch 229, § 4.

DRL 177 Repealed and Replaced By DRL 255

Domestic Relations Law § 177 has been repealed, and replaced by Domestic Relations Law § 255, which was signed into law on July 11, 2009. It becomes effective 90 days after the date it was signed into law and applies to all actions in which judgment has not been entered as of the effective date. (See Laws of 2009, Ch 143)

Domestic Relations Law § 255, subdivision 1 provides that prior to signing a judgment of divorce or separation, or a judgment annulling a marriage or declaring the nullity of a void marriage, the court must ensure that both parties have been notified, at such time and by such means as the court determines, that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party's health insurance plan, depending on the terms of the plan. In the case of a defaulting defendant, service upon the defendant, simultaneous with the service of the summons, of a notice indicating that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party's health insurance plan, depending on the terms of the plan, shall be deemed sufficient notice to a defaulting defendant. (Go to http://www.nysdivorce.com to download a suggested Notice of Possible Loss of Eligibility For Health Care Coverage)

Domestic Relations Law § 255, subdivision 2 provides that if the parties have entered into a stipulation of settlement or agreement, on or after the effective date of Section 255, resolving all of the issues between the parties, the stipulation of settlement or agreement must contain a provision relating to the health care coverage of each party. The provision must either: (a) provide for the future coverage of each party, or (b) state that each party is aware that he or she will no longer be covered by the other party's health insurance plan and that each party shall be responsible for his or her own health insurance coverage, and may be entitled to purchase health insurance on his or her own through a COBRA option, if available. The requirements subdivision 2 may not be waived by either party or counsel. In the event that it is not complied with, the court must require compliance and may grant a thirty day continuance to afford the parties an opportunity to procure their own health insurance coverage. (Go to http://www.nysdivorce.com to download a suggested Agreement-Stipulation Provision for Compliance with Domestic Relations Law § 255)

Automatic Restraining Orders

Domestic Relations Law 236 [B] [2] was amended, by Laws of 2009, Chapter 72, § 1, effective September 1, 2009, to add a subdivision b, which provides for automatic restraining orders that come into effect upon the commencement of a matrimonial action and bind both parties.

Domestic Relations Law § 236 (B) (2) (b) provides that the plaintiff shall cause to be served upon the defendant, simultaneous with the service of the summons, a copy of the automatic orders set forth in subdivision (b). This paragraph places upon the plaintiff a duty to serve upon the defendant automatic orders which bind both parties. The automatic orders are binding upon the plaintiff upon the commencement of the action by the filing of the summons or summons and complaint. They are binding upon the defendant upon service of the Summons or ‘Summons and Complaint. The automatic orders remain in full force and effect during the pendency of the action, unless terminated, modified or amended by further order of the court, upon motion of either of the parties, or upon written agreement between the parties duly executed and acknowledged. The automatic orders are as follows: (1) Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or by order of the court, any property (including, but not limited to, real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats) individually or jointly held by the parties, except in the usual course of business, for customary and usual household expenses or for reasonable attorney's fees in connection with this action.(2) Neither party shall transfer, encumber, assign, remove, withdraw or in any way dispose of any tax deferred funds, stocks or other assets held in any individual retirement accounts, 401K accounts, profit sharing plans, Keough accounts, or any other pension or retirement account, and the parties shall further refrain from applying for or requesting the payment of retirement benefits or annuity payments of any kind, without the consent of the other party in writing, or upon further order of the court. (3) Neither party shall incur unreasonable debts hereafter, including, but not limited to further borrowing against any credit line secured by the family residence, further encumbrancing any assets, or unreasonably using credit cards or cash advances against credit cards, except in the usual course of business or for customary or usual household expenses, or for reasonable attorney's fees in connection with this action. (4) Neither party shall cause the other party or the children of the marriage to be removed from any existing medical, hospital and dental insurance coverage, and each party shall maintain the existing medical hospital and dental insurance coverage in full force and effect. (5) Neither party shall change the beneficiaries of any existing life insurance policies, and each party shall maintain the existing life insurance, automobile insurance, homeowners and renters insurance policies in full force and effect. (Go to http://www.nysdivorce.com to download a suggested form notice of automatic restraining orders)

Court of Appeals Holds Non-custodial Parent Does Not Retain Decision-making Authority

Non-custodial Parent Does Not Retain Decision-making Authority Pertaining to Education of Child Where Custodial Parent Granted Exclusive Custody of the Child and Decree and Custody Order Are Silent as to Right to Control Such Decisions.


In Fuentes v Board of Educ. of City of New York, --- NY3d ----, 2009 WL 1148636 (2009) Plaintiff Jesus Fuentes and his wife were divorced in 1996. Family Court entered an order granting the wife exclusive custody of the three children, including a son, M.F., who, due to a genetic disorder, was legally blind. M.F. attended public school in New
York City and received special education services to accommodate his disability. In 2000, plaintiff believed that M.F.'s special education services and accommodations were inadequate and requested a reevaluation. When the Committee on Special Education for the Hearing, Handicapped, and Visually Impaired responded that M.F's services were adequate, plaintiff requested a hearing from the Impartial Hearing Office of the New York State Department of Education to review that determination. In 2001, plaintiff's request for a hearing was denied based on his status as the non-custodial parent of M.F. The Office concluded that because plaintiff was not the "person in parental relation" (Education Law 3212), he did not have the right to make educational decisions pertaining to M.F. and, consequently, did not have a right to request a hearing. Plaintiff then commenced an action in the United States District Court, alleging, among other things, that he was denied his right under the federal Individuals with Disabilities Education Act (IDEA) to a hearing to review the determinations of the Board of Education. After a dismissal, appeal, and remand on issues not pertinent to the certified question, the district court dismissed plaintiff's case for lack of standing under the IDEA. On appeal, the United States Court of Appeals for the Second Circuit found that no precedent from the Court of Appeals directly addressed the dispositive issue and certified a question, which the Court of Appeals reformulated: " Whether, under New York Law, the non-custodial parent of a child retains decision-making
authority pertaining to the education of the child where (1) the custodial parent is granted exclusive custody of the child and (2) the divorce decree and custody order are silent as to the right to control such decisions. " As reformulated the certified question was answered in the negative. The Court of Appeals noted that it is well settled in the
Appellate Division that, absent specific provisions in a separation agreement, custody order, or divorce decree, the custodial parent has sole decision-making authority with respect to practically all aspects of the child's upbringing. It declined to recognize an implied right of non-custodial parents to exercise decision-making authority with respect
to their child's education notwithstanding the custody order's silence on this subject and emphasized the importance of parties determining these issues at the time of separation or divorce. The Court noted the distinction between a non-custodial parent's right to "participate" in a child's education and the right to "control" educational decisions. Generally, there is nothing which prevents a non-custodial parent (even one without any decision making authority) from requesting information about, keeping apprised of, or otherwise remaining interested in the child's educational progress. However, unless the custody order expressly permits joint decision-making authority or designates particular authority with respect to the child's education, a non-custodial
parent has no right to "control" such decisions. This authority properly belongs to the custodial parent.

Court of Appeals Establishes Rule with Respect to Payments to Former Spouse

In Mahoney-Buntzman v Buntzman, --- N.Y.3d ----, 2009 WL 1227875 (2009) the Court of Appeals established the general rule that "where payments are made before either party is anticipating the end of the marriage, and there is no fraud or concealment, courts should not look back and try to compensate for the fact that the net effect of the payments may, in some cases, have resulted in the reduction of marital assets. Nor should courts attempt to adjust for the fact that payments out of separate property may have benefitted both parties, or even the non-titled spouse exclusively. The parties' choice of how to spend funds during the course of the marriage should ordinarily be respected. Courts should not second-guess the economic decisions made during the course of a marriage, but rather should equitably distribute the assets and obligations remaining once the relationship is at an end." Thus, the Court held that payments made to a former spouse and/or children of an earlier marriage, even if made pursuant to court order, are not the type of liabilities entitled to recoupment. And, a student loan, which was both incurred and fully paid for during the marriage, was a marital obligation for which responsibility was to be shared between the parties. The Court also held that, as a matter of public policy, a "party to litigation may not take a position contrary to a position taken in an income tax return."
The parties were married in New York in 1993 and had two daughters. The wife had an adult child from a previous relationship. The husband was married once before, and had two adult children from that marriage. Pursuant to a divorce judgment, the husband was obligated to pay his first wife maintenance. During the present marriage, the husband and another individual formed Educational Video Conference Inc. (EVCI), a New York Corporation that went public in 1999. At the time of the action, the husband owned a number of shares and options of EVCI stock, all of which were acquired during marriage. Prior to his marriage to plaintiff, the husband had an interest in Arol Development Corporation (ADC), a real estate development company he founded with his father in 1971. In 1983, the husband founded another company, Big Apple Industrial Buildings, Inc., 80% of which he sold to ADC in 1989. In 1998, the husband entered into an agreement with his father whereby he agreed to relinquish his stock ownership in both corporations in exchange for a lump sum payment. The agreement provided that the payment would be reported on a "1099" form issued to him by the purchasing company. In order to account for the increased tax liability that the husband would incur as a consequence of treating the payment as ordinary income rather than as a sale of stock, the payment was increased by 17 percent. This money, amounting to $1.8 million was received by the husband during the marriage and reported on the parties' joint income tax return as self-employment business income. In May 1996, the husband obtained a doctorate in education from Fordham University for which he had taken out a student loan that was repaid two years later. On May 19, 2003, the wife commenced the divorce action.