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.

Discipline For Children Who Refuse to Engage in Court-Ordered Visitation

One of the most difficult problems facing non-residential parents is a situation where a child refuses to engage in court-ordered visitation. If a child is above a certain age, a child can be constructively emancipated. Another option that the court has is to suspend or terminate residential parent’s right to child support. However, that does not work in every situation. Dealing with such refusal and attempting to resolve this problem, in Matthew A. v. Jennifer A., 2020 N.Y. Slip. Op. 51071(U), Justice Dollinger of the Monroe County Supreme Court imposed disciplinary measures on the children to protect the parental choice of best interests for the children, and also imposed significant sanctions on the parent who violated visitation orders.

In Matthew A., the father sought a contempt finding against the mother for refusing to follow increased visitation provisions that were in place for the parties’ three children, ages 14, 12 and 10. The mother argued that she was unable to force the children to spend additional time with the father and that the children should visit the father upon a schedule determined solely by their wishes. In effect, the mother’s argument would give the children veto power over the father’s access to them. Justice Dollinger wrote about the children’s position that the children “offer no justification, however; they just do not want to have someone dictate their schedule. They want to make that choice themselves and, as they say it, live their own lives. They tell the Court that they can decide their own best interests”.

In the court’s view, this argument was contrary to the most basic of parental rights, the right to make decisions in the best interests of the children. The court stated that “giving parents adequate access to their children is at the very heart of the children’s “best interests”.”

Since the mother’s actions in violating provisions of the court orders related to visitation subjected her to a finding of contempt, the court, utilizing its contempt powers, imposed significant restrictions on the children that the mother would have to enforce. The restrictions included the children’s prohibition of participation in extracurricular activities, prohibition of visits with friends and family members, and any other activities outside of the home.

The children’s attorney objected to those restrictions. In response, the court wrote that:

AFC, in a post-submission email to this Court, argues that the children are being held hostage and the restrictions are substantially impacting their lives, their development, their time with their mother’s family and other pursuits. The restrictions designed by this Court are intended to do exactly that but, the notion that the sons are hostages or are being restrained in their daily activities against their will is misplaced. They have the key to relieve the restrictions: take time to visit with their father as their mother and father agreed the father should have. Once that occurs, the restraints imposed by this Court disappear. The AFC also argues that the father, in seeking this Court order, has unreasonably punished his children and that this Court should take his conduct, in seeking to restrict their busy social lives, as evidence of some malevolent inclination on his part. In this Court’s view, that argument is a serial assault on parenthood: a parent, seeking a child’s compliance with a reasonable parental request, usually invokes increasingly severe penalties to obtain a child’s compliance with any reasonable rule. When a child refuses to, say, eat their vegetables or go to their grandparent’s anniversary celebration, the discipline track starts with “go to your room,” advances to “no television,” then, “give me your phone and your ‘screen,'” followed by ” sorry, “no ride to practice or ride to your friend’s house,” eventually reaching, “sorry, I won’t sign the permission slip to play soccer.” These disciplinary steps are not novel but, instead universal.

In view of contempt findings based on the mother’s behavior, the court offered the mother a way to purge contempt by requiring the mother to finance family reunification therapy for the children and their father with a recognized therapist, with the mother financing the first $7,500.00 in therapy costs, and the mother paying an award of attorneys fees and costs to the father for the fees and costs to bring this motion

Additionally, as a result of the children’s refusal to visit, the father asked that his child support obligation be eliminated or reduced. The court agreed, holding that “the father’s child support obligation is suspended until the three sons participate in the visitation plan detailed by this Court.”

Given the mother’s conduct of involving the children in this litigation and other violations of the court’s orders, I am not surprised by the decision. It will be interesting to see if the order is going to be appealed and if it is, if it will be affirmed.

Temporary Spousal Maintenance and Marital Residence Expenses

One issue that keeps coming up repeatedly in appellate decisions is whether  the party paying temporary spousal maintenance, can also be ordered to pay carrying costs of the marital residence.   In Rouis v. Rouis, 156 A.D.3d 1198 (3rd Dept. 2018), the Appellate Division, Third Department, held that the statutory formula used to calculate the presumptive temporary maintenance award was intended to cover all of the nonmonied spouse’s needs and basic living expenses, including the carrying charges on the home and her vehicle expenses.

The parties were married in 1993 and had two children. The wife commenced this action for divorce in 2014, after the husband departed the marital residence. Applying the pre-2015 temporary maintenance formula on the wife’s motion for temporary relief, the trial court granted the wife, among other things, temporary maintenance ($1,958 per month) and child support ($2,720 per month) and required the husband to pay for the carrying costs of the marital home ($4,859 per month), private school for the youngest child ($848 per month), health insurance for the family ($1,921 per month), interim counsel fees ($10,000) and the wife’s vehicle and fuel costs ($644 per month). The husband appealed.

The Appellate Division recognized that the combined monthly awards amounted to an annual award of $155,400, not including an additional $10,000 in interim counsel fees, to be paid from the husband’s annual gross income of $183,300.50 (the wife’s pre-award income was $11,700.00).  It held that the temporary awards were excessive and should be modified.

The Appellate Division noted that the (pre-2015) temporary maintenance formula resulted in a presumptive monthly temporary maintenance amount of $4,387.50. The trial court also granted the wife’s request that the husband also pay the $4,859 in the expenses related to the marital residence, including the mortgage, taxes, utilities, insurance and costs of maintenance. While acknowledging that it would not be equitable to require the husband to pay full maintenance, child support and all carrying costs on the marital home, it gave a reduction to the husband for one half of the carrying costs on the home ($2,429.50 per month) by reducing the presumptive maintenance award by that amount, resulting in a temporary maintenance award of $1,958 per month. The Appellate Division noted that when the wife’s vehicle expenses were added ($644 per month), the total combined monthly award was $7,461, plus the children’s tuition ($848 per month) and child support, the net effect of the trial court’s order was that the husband was ordered to pay the full presumptive maintenance award plus one half of the carrying costs on the home and the wife’s vehicle expenses.

The Appellate Division held that the statutory formula used to calculate the presumptive temporary maintenance award was intended to cover all of the nonmonied spouse’s needs and basic living expenses, including the carrying charges on the home and her vehicle expenses. In its holding, the Court cited the First Department’s observation in its 2012 decision in Khaira v. Khaira, 93 A.D.3d 194 (1st Dept. 2012), that “[n]o language in either the new temporary maintenance provision or the [Child Support Standards Act] specifically addresses whether the statutory formulas are intended to include the portion of the carrying costs of their residence attributable to the nonmonied spouse and the children. . . . But, in the absence of a specific reference to the carrying charges for the marital residence, we consider 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.”

Nonetheless, the Third Department held that while requiring the husband to pay a portion of the housing costs may have been appropriate, the trial court should stated its reasons why the presumptive award of temporary maintenance was “unjust or inappropriate” and the factors it considered.

The Appellate Division found that the combined award for maintenance, carrying costs and the expenses of the wife’s vehicle ($7,461 per month) — which was $3,073.50 per month in excess of the presumptive maintenance award ($4,387.50 per month) (without considering health insurance costs, child support or tuition) — was excessive. Accordingly, the court reduced the husband’s obligation to pay the carrying costs on the marital home by approximately one half of that $3,073.50 excess amount, or $1,540 per month, to $3,319 per month, leaving the $1,958 temporary maintenance award unchanged.

One interesting aspect of the decision was the issue of upkeep on the marital residence. The husband was required by the trial court to pay the monthly excess upkeep amount ($1,168), if any, into a separate account. The Third Department clarified that the upkeep payment was to be a part of the husband’s obligation to pay a total of $3,319 per month in carrying costs on the marital home. The Appellate Division stated in a footnote that wife, “of course,” is to be responsible for paying the remaining carrying costs on the home (other than the specified upkeep costs) from her temporary maintenance award. The parties’ respective pro rata obligations, in the event that the upkeep costs in any month exceed $1,168 and exceed any amount in the excess account, were to be deposited into a separate account pending resolution of equitable distribution issues.  What makes this unusual is the amount of upkeep and the direction that any unspent funds get deposited into a separate account and, if not used for upkeep, any remaining balance “shall be returned to the wife when the house is sold.”  Given that any post-commencement earnings are generally separate property of the party who had earned it, it is unclear what the trial court’s reasoning was with regard to those funds.

The propriety and fairness of awarding the wife the balance of any funds paid by the husband into the upkeep account is a matter to be resolved at trial as part of the overall equitable distribution award and, accordingly, the Third Department did not comment on that issue at this juncture.

The Appellate Division also found that the trial court had miscalculated the child support award and the parties’ pro rata shares of add-on expenses and remitted the case for immediate recalculation of the husband’s temporary child support obligation.

Unfortunately, it is fairly uncommon for the trial courts to make these types of mistakes related to temporary spousal support.  The remedy, in most situations, is the trial.

Exclusive Possession of Marital Residence Revisited

I have previously written about exclusive possession of a marital residence during a pending divorce action.  The applicable standard requires a showing of a marital strife and that the parties were unable to coexist in the same house.  I recently had an opportunity to litigate this issue in a situation where the parties’ conduct has not arisen to the level of marital strife, but the conflict was affecting the parties’ children.  Justice Richard A. Dollinger of the Monroe County Supreme Court reviewed and addressed this issue in L.M.L.v. H.T.N. a/k/a H.T.N., 57 Misc.3d 1207(A) (Sup. Ct. Monroe County 2017).

Having reviewed the history of the marital strife standard, Justice Dollinger wrote that lower courts have generally required more evidence of “strife” than the “petty harassments such as the hostility and contempt admittedly demonstrated herein that are routinely part and parcel of an action for divorce.”  However, he also noted that even minimal levels of domestic discord impact children living in a besieged household.  Given those circumstances, he wrote that:

The harm of a hostile home environment – populated with foul words, disparaging comments, loud demeaning voices, frequent arguments and verbal fights – and the fear for safety of the mother and the children rise, in this court’s view, to the level of domestic violence that [*10]mandates court intervention.Second, this court concedes that simply separating the parents may not end the torrent of verbal abuse directed at the other parent: even in new separate residences, a parent can unleashed verbal abuse and make demeaning comments about the other parent. The children will be exposed to that language, perhaps even harsher than what would be uttered in the company of both parents. But, the children will be spared the retort, the rising voices, the angry face-to-face confrontations that ensue when a parent begins a verbal argument. This difference — between the comments of separated parents living in separate residences and confrontations of parents living in the same residence — may be seem of minor importance to the judiciary, but it would seem to be easily classified as in the “better interests” of the children.

Justice Dollinger summarized the issues before the court as “[t]he mere suggestion that “exclusive use” should hinge, in any fashion, on the “voluntary establishment of an alternative residence” also suggests that preventing domestic violence may depend, in part, on the untenable notion that the convenience of one party’s ability to secure short-term housing away from the home is somehow more important than the emotional security of the children.”  The above holding represents a significant departure from the existing standard.  I agree with the decision and have always thought that the marital strife standard was unduly restrictive.  I will be interested to see if this decision will be followed by other court in pending divorce cases.

 

Final Custody Determination Requires a Plenary Hearing

A mother who lost custody of her children after she broke windows at their father’s house and set fire to his clothes in the driveway should have received an evidentiary hearing, the Court of Appeals has ruled in S.L. v. J.R., 2016 N.Y. Slip. Op. 04442 (2016).  According to the filings, the mother, identified as S.L., and the father, identified as J.R., were married in 1997 and had two kids together.

In September 2012, after 15 years of marriage, S.L. filed for divorce from J.R., and sought full custody of the children. Also that month, she texted J.R.—who had moved out of the family’s house several months prior—that she would burn down the house and set his clothes on fire.

J.R. arrived at the house to find his clothes burnt in the driveway and windows at the house smashed out.  He filed for temporary sole custody of the children, alleging that he feared for their safety because of incidents involving harassment by S.L. and that she also had extramarital affairs and abused alcohol and drugs.

S.L. admitted to setting fire to J.R.’s wardrobe and her involvement in several other incidents, including a past charge of aggravated assault. In October 2012, the trial ruled that there were “enough red flags” to justify granting temporary sole custody of the children to J.R. In April 2013, S.L.’s visitation was suspended after a therapist determined that it would not be in the best interest of the children to allow visitation to continue until she entered anger management therapy.

A few months later, the trial court granted sole custody to J.R. without having a hearing, writing that a hearing was not necessary because the “allegations are not controverted” and that S.L. was being charged in three pending cases in the Integrated Domestic Violence part. In two of the cases, the judge said, S.L. was charged with breaking orders of protection prohibiting her from contacting J.R. or the children.

S.L. appealed trial court’s ruling, but in 2015, the Appellate Division, Second Department affirmed the lower court in S.L. v. J.R., 126 A.D.3d 682 (2nd Dept. 2015), writing that, while custody decisions are generally only made following a comprehensive evidentiary hearing, no hearing is necessary when the court “possesses adequate relevant information to enable it to make an informed and provident decision as to the child’s best interest,” citing its 2004 ruling in Matter of Hom v. Zullo, 6 A.D3.d 536 (2nd Dept. 2004).

But, on June 9, the Court of Appeals unanimously reversed the Second Department’s decision. The Court wrote that while there should be no “one size fits all” rule mandating a hearing in every custody case, custody decisions should generally be made after a full and plenary hearing. In the case of S.L., there were facts relevant to the best interest analysis that were still in dispute, and the trial court appeared to base its decision on hearsay and on the statements of a forensic investigation whose credibility was not questioned by either party.

While the mother was successful in reversing the trial court’s determination, ultimately, I do not believe that it will make a difference when the case is tried. Given the conduct at issue, it is unlikely that the parties will be able to have a joint custodial arrangement.

What Makes a Marriage Valid?

Occasionally, it is not clear whether the parties have a valid marriage which can be critical to such issues such as spousal maintenance and equitable distribution. So what makes a marriage valid?

In a recent decision, a trial court held that a purported marriage between an Orthodox Jewish woman and a man was invalid, even though the parties lived together for ten years after a rabbi performed a marriage ceremony for them without a marriage license. Devorah H. v. Steven S., 2015 N.Y. Slip Op. 25228 (Sup. Ct., N.Y. Co.).

The parties never obtained a marriage license. They were living together with their young children from prior marriages in a small apartment, and sought help from their rabbi in finding more suitable housing when a complaint by the woman’s ex-husband to the Administration for Children’s Services caused alarm. The rabbi found them a larger apartment and suggested they should marry before moving. He then officiated an abbreviated religious marriage ceremony for them on the spot, partially completing a standard form certificate (which he didn’t sign) and urged them to get a marriage license. The parties did not not obtain one, however.

Ten years after the purported marriage ceremony, the woman filed for divorce and the man moved to dismiss, contending they were never validly married. The woman relied on New York Domestic Relations Law Sec. 25, which provides that a “properly solemnized” marriage is valid despite the lack of a marriage license.

After hearing the extensive testimony of the man, the woman, and the rabbi on the issue of whether this marriage was “properly solemnized,” the court concluded that the marriage was invalid, noting particularly the rabbi’s testimony that he had repeatedly urged the parties to “go to City Hall” to get a license, and that they had to know that they would need a new solemnization after a license was issued. The man testified that after they left the rabbi’s office, he had torn up the copy of the certificate that the rabbi gave them.

The trial court relied upon the Supreme Court’s decision in Obergefell v. Hodges (576 U.S. – [2015]):

In the over 100 years since the enactment of DRL Sec. 25, the way citizens marry in New York has changed immeasurably. While at one time the wedding ceremony was the central element of the process, that is no longer the case; church weddings are more and more the exception rather than the rule, and the new wage of marriage ceremonies would be almost unrecognizable to earlier generations.  What is key to the process is the marriage license itself.  This is not only true for New York, but for the entire nation.  After all, when the United States Supreme Court issued its historic decision in Obergefell v. Hodges (576 U.S. – [2015]) making the right to same-sex marriage the law of the land, it did so by decreeing that ‘States are required by the Constitution to issue licenses to same-sex couples’ (emphasis added).

Domestic Relations Law Sec. 25 was also critical to the court’s decision, with the court writing that:

DRL Sec. 25, in its present form, serves no useful function in today’s world. Conceivably, if the statute was amended to allow couples who justifiably believed they were legally married with a valid marriage license to protect the marriage from the claim that the license was improperly executed or otherwise defective, that would certainly serve the public interest. But as it exists now, the statute allows for the wholesale disregard of New York’s licensing requirements – requirements that, as we have seen, play a vital role in insuring that marriages are legally valid. Until DLR Sec. 25 is repealed or reformed, courts will be forced to grapple with situations like this, where the parties fully understood that they did not legally marry but one side seeks to abuse the statute to attain the financial remedies only available to litigants who are married to one another.

The court concluded that “[i]n light of the foregoing, it must be concluded that plaintiff cannot show that she and defendant are married, and therefore has failed to prove an essential element of her prima facie case for divorce.”

The court disregarded the couples’ ten years of cohabitation after the quick marriage ceremony as a basis for finding the woman eligible to seek a formal divorce and disposition equitable distribution of the parties’ assets. The court  concluded that the woman could not under the circumstances claim justifiable reliance on a belief that she was in a valid marriage with the man. The court noted that the man, the woman and the rabbi each provided a different account of what happened, leaving the court to sort out questions of credibility, which were resolved against the woman.

So in order for the marriage to be valid, there has to be a marriage license and that the ceremony be performed. Ultimately, it will be interesting to see if this decision will be upheld on appeal.

New Temporary Spousal Maintenance Provisions are Now In Effect

I have previously written about upcoming changes to New York’s spousal maintenance law. The Governor finally signed the new maintenance law, Ch.269 of the Domestic Relations Law on Friday, September 25th.  The Temporary Maintenance provisions became effective 30 days thereafter, on October 25, 2015, and the balance of the law goes into effect 120 days after signing, on January 23, 2016. The new provisions represent a major change from the prior provisions that have been in effect since 2010.

The most significant of these changes is that formulas will now be used to determine both temporary and post-divorce maintenance. In the past, post-divorce maintenance determinations were largely up to the court’s discretion and were usually based upon applicable prior decisions. The following details how the two new formulas will work:

With child support where the maintenance payor is also the non‐custodial parent for child support purposes: (i) subtract 25% of the maintenance payee’s income from 20% of the maintenance payor’s income; (ii) multiply the sum of the maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result; (iii) the lower of the two amounts will be the guideline amount of maintenance.
Without child support, or with child support but where the maintenance payor is the custodial parent for child support purposes: (i) subtract 20% of the maintenance payee’s income from 30% of the maintenance payor’s income; (ii) multiply the sum of the maintenance payor’s income and the maintenance payee’s income by 40% and subtract the maintenance payee’s income from the result; (iii) the lower of the two amounts will be the guideline amount of maintenance.

Additionally, numerous other key changes are included.

A $175,000 income cap will be set on all temporary and post-divorce maintenance calculations. This is a major reduction from the current $543,000 cap. Maintenance calculations will now be made before child support calculations, thus allowing child support decisions to consider burdens from the maintenance determinations.

The duration of post-divorce maintenance will now be decided using a new advisory schedule:

Zero to 15 years of marriage: maintenance should last between 15 and 30 percent of the marriage’s duration.
16 to 20 years of marriage: maintenance should last between 30 and 40 percent of the marriage’s duration.
20 years of marriage or more: maintenance should last between 35 and 40 percent of the marriage’s duration.

Further, considerations of “enhanced earning capacity” will end. Until this statute was passed, attorney usually worked with experts to determine enhanced earning capacity, for example, the lifelong value of a professional degree that was earned over the course of a marriage. These calculations will no longer be used in helping to determine spousal maintenance. However, enhanced earnings may still be considered by the court when distributing other marital assets.

The changes to the Domestic Relations Law will likely result  in greater uniformity of spousal support awards. Further, elimination of enhanced earnings as a distributable asset represent a major change in New York’s law.

Enforcement Proceedings and Attorney Retainer

Whenever there are proceedings brought to enforce child support or spousal support awards, attorneys can issue executions against assets owned by responsible party. In M.M. v. T.M., 2015 N.Y. Slip.Op. 25294 (Sup. Ct. Monroe Co. 2015), the trial court held that a retainer paid to an attorney to defend an enforcement proceeding can be subject to an execution by the opposing party.

In M.M., the trial court had to determine whether the execution issued pursuant to the judgment for unpaid spousal maintenance can be used to restrain a retainer held in attorney’s trust account, that was paid to defend the enforcement proceeding. Specifically, defendant-husband objected to the execution stating that ‘to permit the turnover would cause the husband “extreme hardship.'” Further, defendant argued that he held no interest in the escrowed funds and that by virtue of commencing representation, the defendant’s attorney acquired an interest superior to that of the plaintiff.

In addressing these arguments, the court held that the evidence in this case, based on the affidavit from the defendant-husband, was insufficient to meet the extreme hardship test. There was no demonstrated evidence of any “extreme hardship” and no evidence of severe financial impact on the defendant-husband if the funds are subject to the wife’s restraining notice. The defendant baldly asserted that there is such harm, but when push comes to shove, had no extrinsic proof to back up his assertions. There was no evidence of other unpaid creditors or financial hardship to the defendant. In the absence of such factual assertions, the court was not inclined to grant any protective order based on an inherent financial harm to the defendant-husband.

Further, the court addressed the argument that the defendant-husband did not have an interest in the escrowed funds. After reviewing the retainer agreement, the court found that according to the retainer agreement, the retainer paid was a “security retainer” that defendant’s attorney could not draw upon until the work was performed and the client was billed.  Until the bill was issued, the funds remained property of the client and the client would be entitled to the funds if the relationship was terminated. Therefore, the court held that defendant-husband continued to hold an interest in the retainer.

Finally, the husband’s attorney argued that his lien interest in the escrowed funds is superior to the plaintiff-wife’s claim for unpaid maintenance. The defendant-husband, in this instance, argued that the retainer funds, which are billed against, but not yet transferred into the attorney’s accounts, are subject to the attorney’s lien for services and that the wife, as a judgment creditor, did not have a superior claim to those funds. The court rejected this argument outright stating that:

To say husband’s argument is somewhat untested in New York is an understatement. This court can find no prior precedents to support this novel theory. In the absence of any precedents and the strong policy preference in New York statutory and case law to allow collection of family support funds, this court is unwilling to recognize that the husband’s counsel’s retaining lien holds a superior position when compared to the wife’s claims against the retainer funds on deposit with counsel.

Given the above, whenever a family law attorney is involved in defending post-divorce proceedings involving claims for unpaid spousal maintenance or child support, that attorney’s retainer is at risk of being restrained and, ultimately, collected by the opposing party. This makes representation of clients in similar circumstances risky and attorney is jeopardizing his chances of being paid. Since the court in M.M. suggested that advanced payment retainer, unlike the advanced payment retainer utilized by defendant-husband’s attorney, would not be considered property of the defendant, then the retainer would not be subject to being restrained. Therefore, utilizing that type of retainer would reduce the risk, however, there may be other issues since New York matrimonial rules frown upon non-refundable retainers. Another option, and probably a better one, would be to have a third party to pay the retainer.

Validity and Finality of Custody Stipulations

Many custody cases are resolved by agreement. When this happens, the parties often place their agreement on the record, either as an oral stipulation recorded by court stenographer or reduce it to a written agreement. Sometimes, immediately after or some time later on, a party to the stipulation may change his mind and ask that the court vacate the stipulation.

In Jon v. Jon, 2015 N.Y. Slip. Op. 51118(U) (Sup. Ct. Nassau Co. 2015), the plaintiff, immediately after entering into a written settlement stipulation, regretted her decision and changed her mind and attempted to have the stipulation vacated. Plaintiff argued that since she was not represented by counsel, that her agreement was not knowing and voluntary, and it came as a result of overreaching by defendant or undue pressure placed on her.

The court heard testimony of the parties determined that although wife was not represented by counsel, the absence of independent legal representation, without more, did not establish overreaching or require nullification of an agreement. She had the opportunity in just a few hours to negotiate with defendant’s counsel in the presence and with the assistance of a court mediator. She decided to pass on that opportunity.

Furthermore, plaintiff was not significantly disadvantaged by the lack of counsel because she could have obtained equal parenting time with her children if she had only agreed to it. She declined because she did not want the children shuttling between their parents. If defendant was not going to agree to let plaintiff have custody of the children—and he wasn’t—she decided to do what in her opinion was the next best thing: let the children stay with defendant. And she did not identify a single thing she wanted in the stipulation that was not included. Given that the stipulation was drafted and signed in “neutral territory”—the courthouse within earshot of the judge—and since the attorney for the children was present throughout, the absence of an attorney did not render the stipulation unfairly made.

The court concluded that neither the terms of the stipulation nor the circumstances surrounding its execution evidence overreaching on the part of defendant. As a result, the court held that it may “not intrude so as to redesign the bargain arrived at by the parties on the ground that judicial wisdom in retrospect would view one or more of the specific provisions as improvident” or imprudent. Christian v. Christian, 42 N.Y.2d 63, 72 (1977).

The key finding that the court made was the following:

This court does believe plaintiff in one important respect: she freely and fairly made a decision and executed an agreement that she very quickly regretted and desired to change. But there is no statute or case that affords a contracting party the opportunity to change their mind, regardless of how quickly they desire to do so, in the circumstances presented here. This court sees the wisdom in affording to an unrepresented party the opportunity within a short window the absolute right to rescind a custody agreement. That would be plaintiff’s only salvation when faithfully applying the current statutory and common law to the facts in this matter.

Stipulations are meant to bring resolution and finality to the parties. They should not be taken lightly and should be thoroughly understood before being finalized.