How Far Back Can Child Support Be Recalculated?

Ordinarily, proceedings to modify child support or related expenses are retroactive to the date of filing of the new application or petition. However, proceedings that argue that the court order or settlement agreement didn’t comply with the relevant requirements of the Child Support Standards Act are treated differently. Where the court finds, sometimes many years later, that an order, or an agreement, is non-compliant, it has to recalculate child support and related obligations retroactive to the original date of the order or agreement. Non-compliance can happen for a variety of reasons such as an invalid opt-out provisions or a failure to include proper acknowledgment clause.

In Martelloni v. Martelloni, the Appellate Division, Second Department, held that the trial court erred in failing to grant wife’s motion for recalculation of unreimbursed medical and childcare costs retroactive to parties’ stipulation of settlement date of January 12, 2012. Parties’ stipulation of settlement survived but was not merged into divorce judgment.

In 2014 wife commenced plenary action to vacate and recalculate medical and childcare expenses retroactive to the date of stipulation. In 2015 court consolidated wife’s plenary action with another post judgment matrimonial proceeding and determined stipulation provision pertaining to unreimbursed medical was invalid as it deviated from CSSA without an acknowledgment, and dismissed wife’s plenary action due to consolidation. Wife then filed motion to compel husband to pay pro-rata share of unreimbursed medical and childcare, retroactive to 2012 stipulation date.

The Appellate Division held that the trial court improperly determined reimbursement of medical and childcare costs were retroactive only to the date of filing of the motion. It held that since wife properly commenced plenary action to vacate and recalculate stipulation provision which action was consolidated, court should have granted recalculation of arears owed retroactive to date of parties’ stipulation of January 2012.

This determination is likely to create an unexpected financial obligation for the now ex-husband. The amount of it is likely to be significant since it had merited an appeal. In my practice as a child support attorney, I see a surprisingly high number of orders and agreements that for one reason or another do not comply with the Child Support Standards Act. Under appropriate circumstances, those situations represent an opportunity to undo a bad agreement or wrong court decision.

Automatic Orders During Divorce Can Only Be Enforced Prior to the Entry of Judgment

WHAT ARE “AUTOMATIC ORDERS”?

When a divorce action is filed and defendant is served, among other documents that person is served with a ‘Notice of Automatic Orders.’ Those orders are designed to keep the status quo with respect to certain issues, without a judge having to act.

WHAT ISSUES DO THESE AUTOMATIC ORDERS COVER?

Automatic Orders prohibit the sale or transfer of real or personal property without the consent of the other party or an order of the court. This doesn’t apply to spending related to the normal course of business, usual household expenses, or reasonable attorney fees. Automatic Orders prohibit the sale or transfer of retirement accounts without the consent of your spouse or a court order. Automatic Orders prohibit further borrowing against any home equity loan, taking out new loans on any assets, or using credit cards for anything outside the normal course of business, usual household expenses, or reasonable attorney fees. Automatic Orders prohibit you from dropping your children or spouse from any medical insurance policy. You are also prohibited from dropping the policy altogether – health insurance must remain in effect. Automatic Orders prohibit changing the beneficiary of any life insurance policy and require that the parties keep all life, auto, homeowners, and renters insurance in place. The idea behind Automatic Orders is that everything stays the same during the divorce to avoid any sudden changes. If you do need to make big changes because of unusual circumstances, there are ways to go about it.

A RESTRAINING ORDER PREVENTS A PARTY IN A DIVORCE CASE FROM SELLING OR TRANSFERRING PROPERTY.

The reason behind a restraining order is that some spouses try to hide or sell off assets of the marriage. In New York, parties no longer need to apply directly to a judge for a restraining order, as the retraining order and other orders are now automatic. These “Automatic Orders” go into effect when a divorce case is filed in New York. There is no requirement that a Supreme Court Justice sign the Automatic Orders before they become effective. The automatic Orders are imposed on the plaintiff when the Summons is filed with the County Clerk’s office. The Automatic Orders are imposed on the defendant when the defendant is served with the Summons with Notice, and a Notice of the Automatic Orders.

WHAT HAPPENS IF THE AUTOMATIC ORDERS ARE VIOLATED?

In a recent case, decided by the Second Department of the Appellate Division, Spencer v. Spencer, the court held that the remedy of civil contempt of court for a violation of the Automatic Orders is no longer available once the divorce judgment is signed. Thus, any contempt proceeding must be completed before the divorce judgment is signed or there is no longer a remedy for the violation it is waived.

The facts in Spencer are straightforward. Following the entry of her November, 2015 divorce judgment, the wife discovered that while the divorce action was pending, her husband sold a warehouse in Brooklyn, without the knowledge or consent of the wife or the court, netting $300,000.00.

Pursuant to Court Rule 22 N.Y.C.R.R. §202.16-a, the automatic orders are binding upon a plaintiff upon commencement of the matrimonial action and upon a defendant upon service of the summons or summons and complaint (see Domestic Relations Law §236[B][2][b]). Automatic Orders seek to preserve the status quo while the action is pending, by prohibiting the transfer or encumbrance of real and personal property and retirement funds, the accumulation of unreasonable debt, and changes in beneficiaries on existing health and life insurance policies.

The wife, then, brought a motion to hold the husband in civil contempt (Judiciary Law §753). After a hearing, the trial court granted that motion and directed that unless the defendant purged the contempt by immediately paying $150,000.00 to the wife, the husband would be incarcerated every weekend for a period of six months. The husband appealed.

The Second Department reversed. In doing so, it stated the elements needed to be proven by clear and convincing evidence to support a finding of civil contempt are:

      • that a lawful order of the court, clearly expressing an unequivocal mandate, was in effect;
      • that the party against whom contempt is sought disobeyed the order;
      • that the party who disobeyed the order had knowledge of its terms; and
      • that the movant was prejudiced by the offending.

The husband argued that the automatic orders do not constitute “unequivocal mandates” of the court, but are merely administrative rules. The Second Department affirmed that part of trial court’s decision that the automatic orders could form the basis for a finding of contempt. The appellate court found the husband’s argument contrary to the express language of 22 N.Y.C.R.R. §202.16-a, as well as being against public policy.

However, the Second Department held that where a judgment of divorce has already been entered, the remedy of civil contempt is not available for a violation of the automatic orders.

In the context of a matrimonial action, the Court of Appeals has recognized that a final judgment of divorce settles the parties’ rights pertaining not only to those issues that were actually litigated, but also to those that could have been litigated.
The automatic orders are temporary and exist only “in full force and effect” during the pendency of the action until “terminated, modified or amended by further order of the court or upon written agreement between the parties” (22 NYCRR 202.16-a[b]). Upon entry of a judgment of divorce, the purpose of the automatic orders ends, and, when the life of the automatic orders thus expires, the statutory remedies for their enforcement fall at the same time.

In the context of a matrimonial action, the Court of Appeals has recognized that a final judgment of divorce settles the parties’ rights pertaining not only to those issues that were actually litigated, but also to those that could have been litigated. The automatic orders are temporary and exist only “in full force and effect” during the pendency of the action until “terminated, modified or amended by further order of the court or upon written agreement between the parties” (22 NYCRR 202.16-a[b]). Upon entry of a judgment of divorce, the purpose of the automatic orders ends, and, when the life of the automatic orders thus expires, the statutory remedies for their enforcement fall at the same time.

Public policy concerns recognizing the finality of judgments are additional reasons to find that, after a judgment of divorce is entered, a party is not entitled to pursue a motion for contempt of court for a late-discovered violation of the automatic orders even though such violation occurred during the pendency of the divorce action. Preventing vexatious litigation and promoting judicial economy, as well as the goal of avoiding inconsistent rulings where a judgment of divorce might actually conflict with the finding in a hearing on a violation of the automatic orders, also dictate the conclusion that a remedy of civil contempt is not available for a violation of the automatic orders once a judgment of divorce is entered.

While reversing the trial court, the Second Department noted that the unavailability of civil contempt as a remedy to enforce the terms of the automatic orders after the entry of the judgment of divorce did not render the wife without available remedies. It listed a variety of approaches, including a vacatur of the judgment of divorce based on newly discovered evidence, a civil contempt motion for a violation of the judgment of divorce, a proceeding to enforce the terms of the judgment of divorce or to obtain an order directing the payment of 50% of the value of the property which was awarded to the plaintiff in the judgment of divorce, or amendment of the judgment of divorce are all remedies that the wife could have sought.

Thus, it is absolutely critical to enforce a party’s rights for violation of the Automatic Orders as soon as the violation is discovered by filing a contempt motion unless circumstances mandate a different approach.

Sperm Donation, Paternity, and What Not to Do

Generally, a sperm donor is not treated as a father under New York law. However, a typical sperm bank will have prospective mother sign a contract that will disclaim any liability for the donor. A recent case has demonstrated that a donor who chooses to make a private sperm donation without an agreement in place, may expose himself to unexpected consequences.

In Matter of Claudia B. v Darrin M., the Appellate Division, First Department, held that a private sperm donor can be treated as a parent. After the parties’ relationship ended, the petitioner asked the respondent to donate sperm so she could conceive. He agreed. When the respondent donated 17 vials of semen to a fertility center, the parties were still negotiating an agreement providing that he would have no parental rights or responsibilities. No binding agreement was ever reached and executed.

The respondent moved to dismiss the petition on equitable estoppel grounds arguing that the parties intended that he be a sperm donor only, without any legal rights or obligations to the child. The lower court denied the motion and ordered him to submit to DNA testing; and, subsequently, declared him to be the biological father of the child. The First Department affirmed stating:

Respondent’s estoppel claim rests on the premise that the parties had a binding preconception agreement. Contrary to respondent’s contention, there was no binding enforceable oral or written agreement between the parties, either before or after respondent donated his sperm. There is no dispute that a signed contract does not exist. Nor was any final oral agreement reached.

This case makes it clear that trying to do certain things without an attorney familiar with New York’s Family Law, is risky, and can create a life-long financial responsibility. As a result of lacking understanding of legal issues involved, respondent became a legal father of the child without intending to do so. Respondent will be responsible for child support, portion of health insurance and child care costs, and potentially college costs as well, until the child reaches the age of emancipation, which in New York, is 21 in most circumstances.