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.
Thursday, May 21, 2009
Saturday, May 16, 2009
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.
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.
Court of Appeals Holds When Pendente Lite Award Of Maintenance Is Found To Be Excessive Or Inequitable Court May Make An Appropriate Adjustment
In Johnson v Chapin, - N.Y3d -, 2009 WL 1227869 (2009) the Court of Appeals, in an opinion by Judge Pigott, held that when a pendente lite award of maintenance is found at trial to be excessive or inequitable, the Court may make an appropriate adjustment in the equitable distribution award. However, it rejected the husband's claim that he should be entitled to a credit for excess child support payments pointing out that it has long been held that there is a "strong public policy against restitution or recoupment of support overpayments".
The Husband and wife were married in 1991 and had one child. The husband had four children from a previous marriage and was required to pay both maintenance and child support. At the time the parties married, both were working attorneys. The Wife stopped working outside the home when the parties' son was three years old. The Husband was a partner at a law firm from 1968 until 1999, and thereafter became a managing director at a major investment banking firm until 2001. Prior to the marriage, the husband owned a home on approximately 160 acres of land in Claverack, New York. During the marriage the parties spent approximately $2 million to renovate and improve the property. While the husband played a larger role in these improvements, the wife also participated in some of the project's details. In November 2001, the wife commenced an action for divorce after discovering husband was having an extramarital affair. Prior to trial, she made an application for interim maintenance and child support. Supreme Court imputed an average annual income of $2,273,680 to the husband and ordered him to pay $18,465 monthly maintenance to wife and child support of $10,625 per month. The Husband was also ordered to pay the wife interim counsel fees of $100,000.
A judgment of divorce on the grounds of cruel and inhuman treatment was awarded to the wife. The Trial court recognized that the Claverack property was the husband's separate property, but held the funds spent on the renovations to be marital property subject to equitable distribution. The court awarded 50% of the appreciation of the Claverack estate to the wife. It also credited the wife with 50% of the marital property the husband used to pay the maintenance and child support obligations to his first wife. After considering that the wife had not worked outside the home for nine years and that it would take six years to develop her career, the court awarded the wife durational maintenance of $6,000 per month for six years. It also awarded wife legal fees and expert fees to be determined by a referee due in part to the fact that wife and her son "have suffered day to day crises resulting from the [husband's] harassment of them."
The Appellate Division modified the judgment by reducing the wife's share of the enhanced value of the Claverack property to 25% and by crediting the husband for his pendente lite maintenance obligations (49 AD3d 348). The majority noted that the husband had consistently been less than forthcoming regarding his income and that Supreme Court had found him incredible in the reporting of his income and assets. The majority therefore upheld the imposition of legal and expert fees on husband, noting that he "engaged in a pattern of obstructionist conduct which unnecessarily delayed and increased the legal fees incurred in the litigation".
The Court of Appeals, in an opinion by Judge Pigott, held that when a pendente lite award of maintenance is found at trial to be excessive or inequitable, the Court may make an appropriate adjustment in the equitable distribution award. Thus, Supreme Court did not abuse its discretion in giving husband a credit representing the amount of the pendent lite maintenance he paid that exceeded what he was required to pay under the final maintenance award. In determining the temporary maintenance award, Supreme Court imputed an average salary in excess of $2 million to husband. However, at trial, it was established that his income was significantly lower. Given the disparity in the maintenance amounts, under the circumstances of this case, it was appropriate for the husband to receive a credit.
The Court of Appeals rejected the husband's claim that he should have been entitled to a credit for excess child support payments, pointing out that it has long been held that there is a "strong public policy against restitution or recoupment of support overpayments" and nothing in this record showed it was error to deny that relief.
Judge Pigott noted that under the equitable distribution statute any appreciation in the value of separate property due to the contributions or efforts of the nontitled spouse will be considered marital property (Price v. Price, 69 N.Y.2d 8 [1986] ). This includes any direct contributions to the appreciation, such as when the nontitled spouse makes financial contributions towards the property, as well as when the nontitled spouse makes direct nonfinancial contributions, such as by personally maintaining, making improvements to, or renovating a marital residence. Thus, Supreme Court properly held that the improvements were marital, since the increase in the property was a result of both parties' efforts. He found that the Appellate Division did not abuse its discretion in reducing the award to wife from 50% to 25% of the property appreciation. The husband's income was the sole source of the funds expended on the property and, the husband's involvements in the renovations were far more extensive. The Court noted that it had held that when "exercising its discretionary power to award counsel fees, 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" (citing DeCabrera v. Cabrera-Rosete, 70 N.Y.2d 879 [1987]). Here, when awarding the fees, the court considered the parties' financial positions as well as the delay incurred as a result of husband's obstructionist tactics. Thus, it declined to disturb those awards. Finally, the Court held that the wife was not entitled to the 50% credit representing the money paid during the marriage towards husband's pre-marital obligations to pay his first wife maintenance and child support (citing "Mahoney-Buntzman v. Buntzman, NY3d", which it decided the same day).
The Husband and wife were married in 1991 and had one child. The husband had four children from a previous marriage and was required to pay both maintenance and child support. At the time the parties married, both were working attorneys. The Wife stopped working outside the home when the parties' son was three years old. The Husband was a partner at a law firm from 1968 until 1999, and thereafter became a managing director at a major investment banking firm until 2001. Prior to the marriage, the husband owned a home on approximately 160 acres of land in Claverack, New York. During the marriage the parties spent approximately $2 million to renovate and improve the property. While the husband played a larger role in these improvements, the wife also participated in some of the project's details. In November 2001, the wife commenced an action for divorce after discovering husband was having an extramarital affair. Prior to trial, she made an application for interim maintenance and child support. Supreme Court imputed an average annual income of $2,273,680 to the husband and ordered him to pay $18,465 monthly maintenance to wife and child support of $10,625 per month. The Husband was also ordered to pay the wife interim counsel fees of $100,000.
A judgment of divorce on the grounds of cruel and inhuman treatment was awarded to the wife. The Trial court recognized that the Claverack property was the husband's separate property, but held the funds spent on the renovations to be marital property subject to equitable distribution. The court awarded 50% of the appreciation of the Claverack estate to the wife. It also credited the wife with 50% of the marital property the husband used to pay the maintenance and child support obligations to his first wife. After considering that the wife had not worked outside the home for nine years and that it would take six years to develop her career, the court awarded the wife durational maintenance of $6,000 per month for six years. It also awarded wife legal fees and expert fees to be determined by a referee due in part to the fact that wife and her son "have suffered day to day crises resulting from the [husband's] harassment of them."
The Appellate Division modified the judgment by reducing the wife's share of the enhanced value of the Claverack property to 25% and by crediting the husband for his pendente lite maintenance obligations (49 AD3d 348). The majority noted that the husband had consistently been less than forthcoming regarding his income and that Supreme Court had found him incredible in the reporting of his income and assets. The majority therefore upheld the imposition of legal and expert fees on husband, noting that he "engaged in a pattern of obstructionist conduct which unnecessarily delayed and increased the legal fees incurred in the litigation".
The Court of Appeals, in an opinion by Judge Pigott, held that when a pendente lite award of maintenance is found at trial to be excessive or inequitable, the Court may make an appropriate adjustment in the equitable distribution award. Thus, Supreme Court did not abuse its discretion in giving husband a credit representing the amount of the pendent lite maintenance he paid that exceeded what he was required to pay under the final maintenance award. In determining the temporary maintenance award, Supreme Court imputed an average salary in excess of $2 million to husband. However, at trial, it was established that his income was significantly lower. Given the disparity in the maintenance amounts, under the circumstances of this case, it was appropriate for the husband to receive a credit.
The Court of Appeals rejected the husband's claim that he should have been entitled to a credit for excess child support payments, pointing out that it has long been held that there is a "strong public policy against restitution or recoupment of support overpayments" and nothing in this record showed it was error to deny that relief.
Judge Pigott noted that under the equitable distribution statute any appreciation in the value of separate property due to the contributions or efforts of the nontitled spouse will be considered marital property (Price v. Price, 69 N.Y.2d 8 [1986] ). This includes any direct contributions to the appreciation, such as when the nontitled spouse makes financial contributions towards the property, as well as when the nontitled spouse makes direct nonfinancial contributions, such as by personally maintaining, making improvements to, or renovating a marital residence. Thus, Supreme Court properly held that the improvements were marital, since the increase in the property was a result of both parties' efforts. He found that the Appellate Division did not abuse its discretion in reducing the award to wife from 50% to 25% of the property appreciation. The husband's income was the sole source of the funds expended on the property and, the husband's involvements in the renovations were far more extensive. The Court noted that it had held that when "exercising its discretionary power to award counsel fees, 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" (citing DeCabrera v. Cabrera-Rosete, 70 N.Y.2d 879 [1987]). Here, when awarding the fees, the court considered the parties' financial positions as well as the delay incurred as a result of husband's obstructionist tactics. Thus, it declined to disturb those awards. Finally, the Court held that the wife was not entitled to the 50% credit representing the money paid during the marriage towards husband's pre-marital obligations to pay his first wife maintenance and child support (citing "Mahoney-Buntzman v. Buntzman, NY3d", which it decided the same day).
Wednesday, March 04, 2009
Standard of Proof in Family Offense Proceeding When Court Commits an Individual to a Jail Term Is Proof Beyond a Reasonable Doubt
In Matter of Rubackin v Rubackin, --- N.Y.S.2d ----, 2009 WL 486027 (N.Y.A.D. 2 Dept.) the Appellate Division, Second Department concluded that the standard of proof which must be met when the court commits an individual to a jail term is proof beyond a reasonable doubt that he or she willfully failed to obey a lawful order of the court. That same high standard is not applicable if one or more of the other available remedies under Family Court Act 846-a is utilized and a jail term is not imposed. The failure to obey a lawful order of a court is a species of contempt. A contempt of court ultimately may constitute a criminal contempt, a civil contempt, or both a criminal and a civil contempt. A period of incarceration may be imposed upon a finding of either a criminal or civil contempt. It noted that in Dalessio v. Kressler (6 AD3d 57), the distinction between civil and criminal contempt was discussed: "Civil contempt (see Judiciary Law 753) 'has as its aim the vindication of a private party to litigation' and includes as its elements knowledge of the order and prejudice to the rights of a party to the litigation [citations omitted] ... The purpose of criminal contempt (see Judiciary Law 750) is to vindicate the authority of the court [citations omitted]. No showing of prejudice to the
rights of a party to the litigation is needed 'since the right of the private parties to the litigation is not the controlling factor' [citations omitted]. An essential element of criminal contempt is willful disobedience (see Judiciary Law s 750[3] )" (Dalessio v. Kressler, 6 AD3d at 65-66). It noted that its holding changed the standard of proof previously found to be applicable under Family Court Act 846-a by it and by other departments of the Appellate Division. The Second Department held that when an individual is incarcerated as a punitive remedy for violating an order of protection issued under Family Court Act article 8, the imprisonment is for a definite term and the proceeding is one involving criminal contempt. The standard of proof that must be met to establish that the individual willfully violated the court's order is beyond a reasonable doubt. That higher standard, as opposed to the clear and convincing standard, is the requisite standard. The prior decisions of the Court, in cases where the respondent had been committed to a term in jail pursuant to Family Court Act 846-a, holding that the standard of proof is one of the lesser standards, should no longer be followed. A commitment to jail for a term not to exceed six months is only one of the five alternative, or cumulative, remedies the Family Court may impose pursuant to Family Court Act 846-a when it is satisfied that a party has willfully failed to obey the court's order or orders. When an order committing a respondent to a jail term is issued, either alone or in combination with another remedy, the commitment is punitive, to punish the individual for his or her disobedience, and the standard of proof is beyond a reasonable doubt. As a petition alleging that a respondent has failed to obey a lawful order of the court may result in a finding of criminal contempt, civil contempt, or both criminal and civil contempt, the parties should be informed of the potential findings and the applicable standards of proof.
rights of a party to the litigation is needed 'since the right of the private parties to the litigation is not the controlling factor' [citations omitted]. An essential element of criminal contempt is willful disobedience (see Judiciary Law s 750[3] )" (Dalessio v. Kressler, 6 AD3d at 65-66). It noted that its holding changed the standard of proof previously found to be applicable under Family Court Act 846-a by it and by other departments of the Appellate Division. The Second Department held that when an individual is incarcerated as a punitive remedy for violating an order of protection issued under Family Court Act article 8, the imprisonment is for a definite term and the proceeding is one involving criminal contempt. The standard of proof that must be met to establish that the individual willfully violated the court's order is beyond a reasonable doubt. That higher standard, as opposed to the clear and convincing standard, is the requisite standard. The prior decisions of the Court, in cases where the respondent had been committed to a term in jail pursuant to Family Court Act 846-a, holding that the standard of proof is one of the lesser standards, should no longer be followed. A commitment to jail for a term not to exceed six months is only one of the five alternative, or cumulative, remedies the Family Court may impose pursuant to Family Court Act 846-a when it is satisfied that a party has willfully failed to obey the court's order or orders. When an order committing a respondent to a jail term is issued, either alone or in combination with another remedy, the commitment is punitive, to punish the individual for his or her disobedience, and the standard of proof is beyond a reasonable doubt. As a petition alleging that a respondent has failed to obey a lawful order of the court may result in a finding of criminal contempt, civil contempt, or both criminal and civil contempt, the parties should be informed of the potential findings and the applicable standards of proof.
Wednesday, December 24, 2008
French Prenuptial Agreement Adopting "Separation of Estates” Regime Constituted Waiver of Equitable Distribution.
Court of Appeals Holds French Prenuptial Agreement Opting out of “Community Property” Scheme in Favor of a “Separation of Estates” Regime Constituted Waiver of Equitable Distribution. Error to Preclude Recovery of Counsel Fees to Oppose Affirmative Defense Predicated on Prenuptial Agreement.
In Van Kipnis v Van Kipnis, --- N.Y.3d ----, 2008 WL 5244630 (N.Y.) the Court of Appeals held that the parties' foreign prenuptial agreement precluded the equitable distribution of certain property under New York law, affirming the courts below. Plaintiff wife and defendant husband were married in France in 1965. At the time of the parties' marriage, the wife was a Canadian citizen from Quebec studying at the Sorbonne and husband was a citizen of the United States, having recently completed college. Prior to the marriage ceremony, wife had a "Contrat de Mariage" drafted under the French Civil Code and arranged for legal counsel to explain the terms of the prenuptial agreement in English to husband. The agreement was executed by the parties on September 30, 1965. Under the provisions of the Contrat de Mariage, the parties opted out of the community property scheme (the governing custom in France) in favor of a separation of estates regime. In relevant part, the agreement provided: "The future spouses declare that they are adopting the marital property system of separation of estates, as established by the French Civil Code. "Consequently, each spouse shall retain ownership and possession of the chattels and real property that he/she may own at this time or may come to own subsequently by any means whatsoever. "They shall not be liable for each other's debts established before or during the marriage or encumbering the inheritances and gifts that they receive. "The wife shall have all the rights and powers over her assets accorded by law to women married under the separate-estates system without any restriction." After the wedding, the parties moved to New York where they resided during their38-year marriage. The Husband was employed in finance while wife worked as a professor at Cooper Union and later as a cultural counselor for the Quebec government. The Wife was also the primary caretaker of the parties' two children, now emancipated. Throughout their marriage, the parties maintained separate accounts and assets, with the exception of the joint ownership of their two homes--a $625,000 house in Massachusetts and a cooperative apartment in Manhattan valued at $1,825,000. In 2002, the wife commenced an action for divorce and ancillary relief. Before trial, Supreme Court granted husband's motion to amend his answer to assert the 1965 prenuptial agreement as a defense to wife's equitable distribution claims. Supreme Court appointed a Special Referee to conduct a hearing on the issues of equitable distribution, maintenance and counsel fees. The Referee determined that the French contract provided for the separate ownership of assets held in the parties' respective names during the course of the marriage. As a result, the husband retained his liquid assets of approximately $7 million and wife kept her assets ranging from $700,000 to $800,000. As to the jointly held properties, which the parties agreed were subject to equitable distribution, the Referee recommended that the wife be awarded the Manhattan apartment, together with $75,000 in reimbursement for repairs, and that the husband be awarded the country home in Massachusetts. The Referee proposed that the wife receive $7,500 per month in maintenance until either husband or wife dies or the wife remarries. The Referee concluded that legal fees expended in connection with wife's challenge to the prenuptial agreement were not compensable under Domestic Relations Law 237. After deducting that portion of wife's claim for counsel fees attributable to contesting the agreement, the Referee awarded wife $92,779.57 in attorneys' fees. Supreme Court confirmed the Referee's report. The Appellate Division affirmed , with one Justice dissenting. The Court of Appeals modified. The Court of Appeals rejected the wife’s contention that all of the parties' property should be subject to equitable distribution under Domestic Relations Law 236(B)(5) because the 1965 agreement, drafted and executed in France, was intended to apply to property ownership during the course of the marriage, but not to the distribution ofproperty in the event of a divorce. In her view, the primary purpose of theagreement was for each spouse to avoid liability for the other's debts. The Court of Appeals noted that it is well settled that duly executed prenuptial agreements are generally valid and enforceable given the "strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements" (Bloomfield v Bloomfield, 97 N.Y.2d 188, 193 [2001]. Prenuptial agreements addressing the ownership, division or distribution of property must be read in conjunction with Domestic Relations Law 236(B), enacted in 1980 as part of New York's Equitable Distribution Law. The statute provides that, unless the parties agree otherwise in a validly executed prenuptial agreement pursuant to section 236(B)(3), upon dissolution of the marriage marital property must be distributed equitably between the parties while separate property shall remain separate. As relevant here, separate property is defined to include "property described as separate property by written agreement of the parties pursuant to subdivision three of this part" . Under the statute, a prenuptial agreement may include a "provision for the ownership, division or distribution of separate and marital property" and is valid and enforceable if it "is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded" (Domestic Relations Law 236[B][3]. The Domestic Relations Law therefore contemplates two basic types of prenuptial agreement that affect the equitable distribution of property. First, parties may expressly waive or opt out of the statutory scheme governing equitable distribution. Second, parties may specifically designate as separate property assets that would ordinarily be defined as marital property subject to equitable distribution under Domestic Relations Law 236(B)(5). Such property would then remain separate property upon dissolution of the marriage. In either case, the intent of the parties "must be clearly evidenced by the writing" .(Tietjen v. Tietjen, 48 AD3d 789, 791 [2d Dept 2008] ). Here, the parties' written agreement, adopting a "separation of estates" scheme,fell within the second prenuptial agreement category. The agreement specifiedthat separate ownership of assets applies not only to the property that each partyhad acquired at the time of the marriage, but also to property that they "may cometo own subsequently by any means whatsoever." It further assures that "wife shallhave all the rights and powers over her assets accorded by law to women marriedunder the separate-estates system without any restriction." The Court held that contrary to wife's argument, the Domestic Relations Law contains no categorical requirement that a prenuptial agreement must set forth an express waiver of equitable distribution.When read together, Domestic Relations Law s 236(B)(1)(d)(4) and (B)(5)(b)provide that assets designated as separate property by a prenuptial agreement willremain separate after dissolution of the marriage. That was the case here. The Court of Appeals agreed with the courts below that the agreement constituted an unambiguous prenuptial contract that precluded equitable distribution of the parties' separate property, rendering it unnecessary to resort to extrinsic evidence.
The wife also argued that the courts below erred in precluding her recovery of legal fees under Domestic Relations Law 237 for services provided in opposing her husband's affirmative defense predicated on the prenuptial agreement. The Court of Appeals agreed with her. Neither party sought to set aside the prenuptial agreement. Instead, their dispute centered on whether the terms of the contract applied to the ownership of assets upon divorce. In this respect, her request was similar to the fee application inVentimiglia v. Ventimiglia (36 AD3d 899 [2d Dept 2007] ), where attorneys' feeswere awarded to a party who contested her spouse's affirmative defense based on anantenuptial agreement. It held that remittal to Supreme Court for reconsideration wasnecessary because this portion of wife's fee application should not have beenexcluded as a matter of law.
In Van Kipnis v Van Kipnis, --- N.Y.3d ----, 2008 WL 5244630 (N.Y.) the Court of Appeals held that the parties' foreign prenuptial agreement precluded the equitable distribution of certain property under New York law, affirming the courts below. Plaintiff wife and defendant husband were married in France in 1965. At the time of the parties' marriage, the wife was a Canadian citizen from Quebec studying at the Sorbonne and husband was a citizen of the United States, having recently completed college. Prior to the marriage ceremony, wife had a "Contrat de Mariage" drafted under the French Civil Code and arranged for legal counsel to explain the terms of the prenuptial agreement in English to husband. The agreement was executed by the parties on September 30, 1965. Under the provisions of the Contrat de Mariage, the parties opted out of the community property scheme (the governing custom in France) in favor of a separation of estates regime. In relevant part, the agreement provided: "The future spouses declare that they are adopting the marital property system of separation of estates, as established by the French Civil Code. "Consequently, each spouse shall retain ownership and possession of the chattels and real property that he/she may own at this time or may come to own subsequently by any means whatsoever. "They shall not be liable for each other's debts established before or during the marriage or encumbering the inheritances and gifts that they receive. "The wife shall have all the rights and powers over her assets accorded by law to women married under the separate-estates system without any restriction." After the wedding, the parties moved to New York where they resided during their38-year marriage. The Husband was employed in finance while wife worked as a professor at Cooper Union and later as a cultural counselor for the Quebec government. The Wife was also the primary caretaker of the parties' two children, now emancipated. Throughout their marriage, the parties maintained separate accounts and assets, with the exception of the joint ownership of their two homes--a $625,000 house in Massachusetts and a cooperative apartment in Manhattan valued at $1,825,000. In 2002, the wife commenced an action for divorce and ancillary relief. Before trial, Supreme Court granted husband's motion to amend his answer to assert the 1965 prenuptial agreement as a defense to wife's equitable distribution claims. Supreme Court appointed a Special Referee to conduct a hearing on the issues of equitable distribution, maintenance and counsel fees. The Referee determined that the French contract provided for the separate ownership of assets held in the parties' respective names during the course of the marriage. As a result, the husband retained his liquid assets of approximately $7 million and wife kept her assets ranging from $700,000 to $800,000. As to the jointly held properties, which the parties agreed were subject to equitable distribution, the Referee recommended that the wife be awarded the Manhattan apartment, together with $75,000 in reimbursement for repairs, and that the husband be awarded the country home in Massachusetts. The Referee proposed that the wife receive $7,500 per month in maintenance until either husband or wife dies or the wife remarries. The Referee concluded that legal fees expended in connection with wife's challenge to the prenuptial agreement were not compensable under Domestic Relations Law 237. After deducting that portion of wife's claim for counsel fees attributable to contesting the agreement, the Referee awarded wife $92,779.57 in attorneys' fees. Supreme Court confirmed the Referee's report. The Appellate Division affirmed , with one Justice dissenting. The Court of Appeals modified. The Court of Appeals rejected the wife’s contention that all of the parties' property should be subject to equitable distribution under Domestic Relations Law 236(B)(5) because the 1965 agreement, drafted and executed in France, was intended to apply to property ownership during the course of the marriage, but not to the distribution ofproperty in the event of a divorce. In her view, the primary purpose of theagreement was for each spouse to avoid liability for the other's debts. The Court of Appeals noted that it is well settled that duly executed prenuptial agreements are generally valid and enforceable given the "strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements" (Bloomfield v Bloomfield, 97 N.Y.2d 188, 193 [2001]. Prenuptial agreements addressing the ownership, division or distribution of property must be read in conjunction with Domestic Relations Law 236(B), enacted in 1980 as part of New York's Equitable Distribution Law. The statute provides that, unless the parties agree otherwise in a validly executed prenuptial agreement pursuant to section 236(B)(3), upon dissolution of the marriage marital property must be distributed equitably between the parties while separate property shall remain separate. As relevant here, separate property is defined to include "property described as separate property by written agreement of the parties pursuant to subdivision three of this part" . Under the statute, a prenuptial agreement may include a "provision for the ownership, division or distribution of separate and marital property" and is valid and enforceable if it "is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded" (Domestic Relations Law 236[B][3]. The Domestic Relations Law therefore contemplates two basic types of prenuptial agreement that affect the equitable distribution of property. First, parties may expressly waive or opt out of the statutory scheme governing equitable distribution. Second, parties may specifically designate as separate property assets that would ordinarily be defined as marital property subject to equitable distribution under Domestic Relations Law 236(B)(5). Such property would then remain separate property upon dissolution of the marriage. In either case, the intent of the parties "must be clearly evidenced by the writing" .(Tietjen v. Tietjen, 48 AD3d 789, 791 [2d Dept 2008] ). Here, the parties' written agreement, adopting a "separation of estates" scheme,fell within the second prenuptial agreement category. The agreement specifiedthat separate ownership of assets applies not only to the property that each partyhad acquired at the time of the marriage, but also to property that they "may cometo own subsequently by any means whatsoever." It further assures that "wife shallhave all the rights and powers over her assets accorded by law to women marriedunder the separate-estates system without any restriction." The Court held that contrary to wife's argument, the Domestic Relations Law contains no categorical requirement that a prenuptial agreement must set forth an express waiver of equitable distribution.When read together, Domestic Relations Law s 236(B)(1)(d)(4) and (B)(5)(b)provide that assets designated as separate property by a prenuptial agreement willremain separate after dissolution of the marriage. That was the case here. The Court of Appeals agreed with the courts below that the agreement constituted an unambiguous prenuptial contract that precluded equitable distribution of the parties' separate property, rendering it unnecessary to resort to extrinsic evidence.
The wife also argued that the courts below erred in precluding her recovery of legal fees under Domestic Relations Law 237 for services provided in opposing her husband's affirmative defense predicated on the prenuptial agreement. The Court of Appeals agreed with her. Neither party sought to set aside the prenuptial agreement. Instead, their dispute centered on whether the terms of the contract applied to the ownership of assets upon divorce. In this respect, her request was similar to the fee application inVentimiglia v. Ventimiglia (36 AD3d 899 [2d Dept 2007] ), where attorneys' feeswere awarded to a party who contested her spouse's affirmative defense based on anantenuptial agreement. It held that remittal to Supreme Court for reconsideration wasnecessary because this portion of wife's fee application should not have beenexcluded as a matter of law.
Subscribe to:
Posts (Atom)