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Constructive Emancipation, Burden of Proof and Contact With the Child By Non-Custodial Parent

Saturday, December 12th, 2009

I often see cases involving constructive emancipation which typically arise when the child refuses to have contact with the non-custodial parent.  If the contact cannot be reestablished after a period of time, the non-custodial parent can move to terminate the child support obligation, assuming that the non-custodial parent was not at fault for the breakdown in the relationship and the child is of the employeable age.  Burden of proof ofconstructive  emancipation rests on party making the assertion.  Constructive emancipation cases are not easy to prove and are factually intensive.  I have previously written about various issues in constructive emancipation here.

A recent example of such case was Dewitt v. Giampietro, 66 A.D.3d 773 (2nd Dept. 2009).  According to the Appellate Division, although the daughter refused to have contact with the father after some incident which was not described, the father ceased making attempts to reestablish contact with daughter after approximately one month.  According to the Appellate Division, one month period of trying to reestablish a relationship with the daughter could not be considered as a serious effort by the father.  The court also noted that the daughter testified that she loved her father and would be willing to re-establish visitation gradually through counseling.   According to the Appellate Division, the child’s reluctance to see parent is not considered to be abandonment.

Accordingly, if a non-custodial parent is in a situation where the child of employable age, generally high school graduate or older, is refusing to have any contact with the parent, the parent must keep on trying to reestablish contact for a period of time in excess of several months.  Any such contact may take several different forms, and phone calls, email, letters, postcards, and even text messages may be utilized.  It is important that the parent remembers the child’s birthdays and other special occasions.  Generally, the courts are reluctant to terminate child support and will do so only if the non-custodial parent will demonstrate that the continuing pursuit of the relationship with the child would be fruitless.

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Posted in Child Support Standards Act, court orders, emancipation, Family Court, Family Law, modification, New York Law | No Comments »

What Is Required For A Document To Be Accepted As A Separation Agreement?

Sunday, November 29th, 2009

Periodically, I see documents that were prepared by the parties on their own while attempting to resolve whatever legal issues they were facing.  Occasionally, the parties will prepare their own separation agreements.  Unfortunately, in many cases, those self-prepared separation agreements do not meet the statutory requirement applicable to either child support, maintenance, or other significant issues.  A recent example of why such self-prepared agreements are problematic was illustrated in a recent case, Scully v. Haar,  2009 N.Y. Slip. Op. 08261 (4th Dept. 2009).

Plaintiff and defendant were married on May 8, 1993 and have three minor children.  The parties have lived apart since March 2005.  On March 4, 2005, plaintiff commenced an action for divorce.  After extensive and ultimately futile negotiations between the parties, plaintiff filed a complaint on August 11, 2006, that did not specify any misconduct on the part of defendant but requested that plaintiff be awarded custody of the parties’ children.  On September 15, 2006, Supreme Court granted defendant’s motion to dismiss the complaint based on the insufficiency of plaintiff’s allegations but “retained jurisdiction over ancillary issues.”

Thereafter, the parties entered into the agreement, the preamble to which provides that “the parties are now desirous of resolving custody and ancillary issues without a trial.”  The agreement granted sole custody of the parties’ children to defendant and establishes a detailed access schedule for plaintiff.  It further provided that the agreement “shall be submitted to any court in which either [p]arty may seek a judgment or decree of divorce and . . . shall be incorporated in such judgment or decree by reference.”  The agreement was signed by both parties, notarized, and filed with the Erie County Clerk’s Office on May 11, 2007.

On May 13, 2008, just over one year after the agreement was filed, plaintiff commenced this action fo divorce based on Domestic Relations Law §170(6), alleging that the parties had lived separate and apart pursuant to an agreement for a period of a year or more.  A copy of the agreement was attached to the complaint.  Defendant moved to dismiss the complaint on the ground that the agreement was not a “written agreement of separation” within the meaning of section 170(6) because it addressed only parenting issues, it did not expressly recite the parties’ intent to live separate and apart, and it was not intended to serve as a separation agreement.  Plaintiff cross-moved for summary judgment on the complaint, contending that the terms of the agreement clearly established that the parties were living separate and apart.  The trial court denied the relief requested by the plaintiff.

Domestic Relations Law §170(6) sets forth one of the two “no-fault” grounds for divorce in New York State.  Specifically, that section provides that an action for divorce may be maintained on the ground that “[t]he husband and wife have lived separate and apart pursuant to a written agreement of separation . . ., for a period of one or more years after the execution of such agreement”.  The section further provides that the agreement must be signed by the parties and “acknowledged or proved in the form required to entitle a deed to be recorded”. Moreover, the agreement must be filed in the office of the clerk of the county in which either party resides.

The Appellate Division affirmed the lower court’s decision holding that “No-fault divorce applies only where there is a previous decree of separation or a written separation agreement, as required by statute [and, here, t]he parties have neither”.  Plaintiff attempted to rely on a “Parenting Plan Agreement” executed by the parties after an earlier divorce action commenced by plaintiff was dismissed and the court in that action retained jurisdiction over ancillary issues.  The agreement related solely to matters of custody and visitation and, although it was signed and acknowledged by the parties and filed with the County Clerk by plaintiff, it neither purported to be a separation agreement as that term is generally understood, nor made any explicit reference to the parties’ separation.  The Fourth Department concluded, particularly in light of the circumstances in which the agreement was made, that the agreement did not “evidenc[e] the parties’ agreement to live separate and apart, [and] thus [it did not] satisfy[ ] the statutory requirement [with] respect to a separation agreement”.

As I stated previously, it important that the parties understand that New York does not make it easy for someone to prepare and execute a valid separation agreement.  In my opinion, even if someone decides to follow a self-help approach, any document should be reviewed by a family law lawyer to make sure that it fully represents the parties’ intent and complies with applicable law.  While it may be tempting for someone to do it for a variety of reasons, any future disputes involving such documents is likely to require involvement of lawyers.

All concur except Peradotto, J., who dissents and votes to reverse in accordance with the following Memorandum: I respectfully dissent and would reverse because I agree with plaintiff that the 30-page “Parenting Plan Agreement” (agreement) at issue in this matter constitutes a “written agreement of separation” within the meaning of Domestic Relations Law § 170 (6).
Plaintiff and defendant were married on May 8, 1993 and have three minor children. The parties have lived apart since March 2005. On March 4, 2005, plaintiff commenced an action for [*2]divorce by summons with notice. After extensive and ultimately futile negotiations between the parties, plaintiff filed a complaint on August 11, 2006 that did not specify any misconduct on the part of defendant but requested that plaintiff be awarded custody of the parties’ children. On September 15, 2006, Supreme Court granted defendant’s motion to dismiss the complaint based on the insufficiency of plaintiff’s allegations but, as noted by the majority, “retained jurisdiction over ancillary issues.”
Thereafter, the parties entered into the agreement, the preamble to which provides that “the parties are now desirous of resolving custody and ancillary issues without a trial.” The agreement, inter alia, grants sole custody of the parties’ children to defendant and establishes a detailed access schedule for plaintiff. It further provides that the agreement “shall be submitted to any court in which either [p]arty may seek a judgment or decree of divorce and . . . shall be incorporated in such judgment or decree by reference.” The agreement was signed by both parties, notarized, and filed with the Erie County Clerk’s Office on May 11, 2007.
On May 13, 2008, just over one year after the agreement was filed, plaintiff commenced this action for divorce based on Domestic Relations Law § 170 (6), alleging that the parties had lived separate and apart pursuant to an agreement for a period of a year or more. A copy of the agreement was attached to the complaint. Defendant moved to dismiss the complaint on the ground that the agreement was not a “written agreement of separation” within the meaning of section 170 (6) because it addressed only parenting issues, it did not expressly recite the parties’ intent to live separate and apart, and it was not intended to serve as a separation agreement. Plaintiff cross-moved for summary judgment on the complaint, contending that the terms of the agreement clearly established that the parties were living separate and apart.
The court granted defendant’s motion to dismiss the complaint and denied plaintiff’s cross motion. Although the court acknowledged that an agreement need not be in any specific form to qualify as a “written agreement of separation” pursuant to Domestic Relations Law § 170 (6), the court determined that defendant did not consent to the termination of the marriage by signing the agreement.
Domestic Relations Law § 170 (6) sets forth one of the two “no-fault” grounds for divorce in New York State. Specifically, that section provides that an action for divorce may be maintained on the ground that “[t]he husband and wife have lived separate and apart pursuant to a written agreement of separation . . ., for a period of one or more years after the execution of such agreement” (id.). The section further provides that the agreement must be signed by the parties and “acknowledged or proved in the form required to entitle a deed to be recorded” (id.). Moreover, the agreement must be filed in the office of the clerk of the county in which either party resides (id.).
Here, it is undisputed that the parties have lived separate and apart since March 2005, well in excess of the statutory period (see Domestic Relations Law § 170 [6]). It is also undisputed that the agreement was signed by both parties, acknowledged in the requisite manner, and filed in the County Clerk’s Office (see id.). Thus, the only issue before this Court is whether the agreement qualifies as a “written agreement of separation” pursuant to the statute (id.). In my view, the legislative history and intended purpose of Domestic Relations Law § 170 (6), the important public policies underlying the “no fault” divorce grounds, and the Court of Appeals’ precedent confirming the limited function of the written agreement, compel the conclusion that the agreement in this case constitutes a “written agreement of separation” within the meaning of section 170 (6).
In Gleason v Gleason (26 NY2d 28, 35), decided shortly after the enactment of Domestic [*3]Relations Law § 170, the Court of Appeals recognized that the “real purpose” of the statute’s no-fault provisions was “to sanction divorce on grounds unrelated to misconduct.” As the Court explained: “Implicit in the statutory scheme is the legislative recognition that it is socially and morally undesirable to compel couples to a dead marriage to retain an illusory and deceptive status and that the best interests not only of the parties but of society itself will be furthered by enabling them to extricate themselves from a perpetual state of marital limbo’ ” (id.).
Thus, it is the physical separation of the parties, not the written agreement, that supplies the ground for a divorce pursuant to Domestic Relations Law § 170 (6) (see Christian v Christian, 42 NY2d 63, 69; Littlejohns v Littlejohns, 76 Misc 2d 82, 86, affd on opn of Korn, J., 42 AD2d 957). Indeed, the written agreement “is simply intended as evidence of the authenticity and reality of the separation” (Gleason, 26 NY2d at 35; see Christian, 42 NY2d at 69; Harris v Harris, 36 AD2d 594). As the Court of Appeals reaffirmed in Christian, “[t]he vital and operative’ fact[] in subdivision (6) divorce cases[] is the actual living apart of the parties——pursuant to the separation agreement . . . Put a bit differently, the function of the document is merely to authenticate the fact of separation’ ” (42 NY2d at 69). The statutory requirement that the parties live separate and apart for the prescribed period pursuant to a written agreement is unique to New York State and “reflects legislative concern over the fraud and collusion which historically infected divorce actions involving adultery” (id. at 68; see Littlejohns, 76 Misc 2d at 86 ["the written agreement serves primarily as a means of preventing fraudulent or collusive claims of separation and so discourages quickie' divorces"]).
The statute does not define the term “written agreement of separation,” nor does it set forth any specific provisions that are required in such an agreement (see Littlejohns, 76 Misc 2d at 86). In light of the limited function of the written separation agreement, i.e., to document and authenticate the physical separation of the parties, and the public policy underlying the statute, “the courts, where the parties have parted permanently, should not be excessively rigid or demanding in determining whether a writing satisfies the statutory requirement for an agreement of separation’ ” (id. at 87). All that a party seeking a divorce pursuant to Domestic Relations Law § 170 (6) must prove “is that there is some kind of formal document of separation” (Gleason, 26 NY2d at 37). As one court aptly observed: “Too great stress has been placed upon the instrument, the indicia of proof of the separation of the parties, rather than the fact of separation. It is not the decree, judgment, or agreement that is the essence of the ground for divorce. They are merely the documentary proof” (Markowitz v Markowitz, 77 Misc 2d 586, 587-588).
In light of the legislative history and manifest purpose of Domestic Relations Law § 170 (6) and the decisions of the Court of Appeals that liberally construe the documentation requirement, I cannot agree with the majority’s conclusion that the agreement in this case does not constitute a “written agreement of separation” within the scope of the statute. The agreement clearly and unambiguously “contemplate[s] permanent separation” (Morhaim v Morhaim, 56 AD2d 550, 552 [Silverman, J., dissenting], revd on dissenting mem of Silverman, J., 44 NY2d 785, rearg denied 44 NY2d 949). Implicit and recognized throughout the agreement is that the parties were in fact living apart when they entered into the agreement and that they intended to continue to live apart for years to come. The agreement lists separate addresses for plaintiff and defendant in its preamble and repeatedly references the parties’ separate residences throughout the remainder of the document. In setting forth plaintiff’s visitation schedule, the agreement recites that “[a]ll access shall take place away from the custodial residence of [defendant].” The article of the agreement establishing plaintiff’s access schedule includes a clause that the parties are free to agree on additional access “without setting a precedent for other calendar years,” thus emphasizing the long-term duration of the physical separation. [*4]
Moreover, the agreement specifically contemplates the possibility of the parties’ eventual divorce and the remarriage of either or both of the parties. In particular, the agreement states that “the provisions of this [a]greement shall be submitted to any court in which either [p]arty may seek a judgment or decree of divorce and . . . shall be incorporated in such judgment or decree by reference and shall not merge . . . .” With respect to the possible remarriage of either of the parties, the agreement provides that the parties’ children “shall not, for any purpose or for any reason, assume or use the name of any subsequent Husband of [defendant].” Thus, viewed as a whole, the agreement “can be consistent only with the fact of the parties’ then existing and continued separation” (Littlejohns, 76 Misc 2d at 86).
The fact that the agreement is not entitled a “separation agreement” and does not explicitly recite that the parties shall live separate and apart is of no moment (see Sint v Sint, 225 AD2d 606, 607). ” [T]he validity of the agreement . . . depend[s] upon the existence of the fact [of living apart], not upon a recital of it’ ” (Morhaim, 56 AD2d at 552; see Littlejohns, 76 Misc 2d at 85). Here, the agreement serves as ” evidence of the authenticity and reality of the separation’ ” (Christian, 42 NY2d at 68, quoting Gleason, 26 NY2d at 35), thereby fulfilling the statutory purpose.
Contrary to the contention of defendant, it is irrelevant whether she intended the agreement to serve as the predicate for a subsequent divorce action pursuant to Domestic Relations Law § 170 (6). Indeed, the Court of Appeals has held that Domestic Relations Law § 170 (5), which supplies the other “no-fault” ground for divorce, i.e., that the parties have lived apart pursuant to a decree or judgment of separation for a certain period of time, applied retroactively to separation decrees rendered prior to the enactment of the statute (Gleason, 26 NY2d at 34-36). The Court in Gleason recognized that the defendant wife who prevailed in a separation action commenced prior to the enactment of section 170 (5) “had no warning that the separation decree granted to her might later furnish basis or ground for divorce by [her] guilty’ husband” (id. at 40). Likewise, in Morhaim, the First Department noted that the six-year delay between the execution and filing of the written separation agreement in question “may indicate that the parties at the time of the execution of the agreement did not realize that the agreement might qualify as a separation agreement under the no-fault divorce statute. But that does not alter the legal effect of the agreement or the public policy involved” (56 AD2d at 552 [emphasis added]).
In sum, the agreement in this case “evidenced the parties’ actual and continued separation and thus satisfied the requirements of the statute” (id.; see Littlejohns, 76 Misc 2d at 86-87). I therefore would reverse the order, deny defendant’s motion to dismiss, reinstate the complaint, grant plaintiff’s cross motion for summary judgment on the complaint, and remit the matter to Supreme Court to grant judgment in favor of plaintiff and to determine the remaining issues.
Entered: November 13, 2009
Patricia L. Morgan
Clerk of the Court

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Posted in divorce, Domestic Relations Law, Family Law, New York Law, procedure, Settlement Agreements, Supreme Court | No Comments »

Can Social Abandonment By A Spouse Be Sufficient As Grounds For Divorce?

Saturday, November 21st, 2009

While New York continues to be the last state that insists upon fault-based divorce, that has not stopped various attempts to broaden present grounds for divorce available under the Domestic  Relations Law.  In a recent decision, Davis v. Davis, 2009 N.Y. Slip. Op. 08579 (2nd Dept. 2009), the Appellate Division, Second Department, held that “social abandonment” of one spouse by the other, does not meet the definition of constructive abandonment, and can not be used as grounds for divorce.  This case demonstrates why divorce lawyers and their clients, here in Rochester and elsewhere in New York, can be in situation where they cannot get their clients divorced, despite significant breakdowns in marital relationships.

In Davis, the wife alleged that the husband refused to engage in social interaction with the wife by:

refusing to celebrate with her or acknowledge Valentine’s Day, Christmas, Thanksgiving, and the wife’s birthday, by refusing to eat meals together, by refusing to attend family functions or accompany the wife to movies, shopping, restaurants, and church services, by leaving her once at a hospital emergency room, by removing the wife’s belongings from the marital bedroom, and by otherwise ignoring her.  The parties have been married for 41 years and they reside at the same address.

The above claims were included as a part of the wife’s cause of action for constructive abandonment.  The husband filed a pre-answer motion pursuant to CPLR §3211(a)(7) to dismiss the constructive abandonment cause of action and, alternatively, moved for summary judgment dismissing that cause of action. The husband, while contesting many of the wife’s factual allegations of “social abandonment,” argued that the complaint fails to state a cause of action for a divorce based on “constructive abandonment.”

Domestic Relations Law §170 sets forth six statutory grounds on which a spouse may seek to divorce another. The abandonment ground for divorce, set forth in Domestic Relations Law §170(2), provides that an action for a divorce may be maintained based upon “[t]he abandonment of the plaintiff by the defendant for a period of one or more years.”   The essence of abandonment is the refusal of one spouse to fulfill “basic obligations springing from the marriage contract”.  The court noted that a viable cause of action under Domestic Relations Law §170(2) has been recognized in three different factual forms: (1)  a defendant spouse’s actual physical departure from the marital residence that is unjustified, voluntary, without consent of the plaintiff spouse, and with the intention of the departing spouse not to return; (2) the defendant spouse locks the plaintiff spouse out of the marital residence, absent justification or consent;  (3) “constructive abandonment,” which has been defined as the refusal by a defendant spouse to engage in sexual relations with the plaintiff spouse for one or more years prior to the commencement of the action, when such refusal is unjustified, willful, and continual, and despite repeated requests for the resumption of sexual relations.

the complaint alleges that the husband refused to engage in social interaction with the wife by refusing to celebrate with her or acknowledge Valentine’s Day, Christmas, Thanksgiving, and the wife’s birthday, by refusing to eat meals together, by refusing to attend family functions or accompany the wife to movies, shopping, restaurants, and church services, by leaving her once at a hospital emergency room, by removing the wife’s belongings from the marital bedroom, and by otherwise ignoring her. The parties have been married for 41 years and they reside at the same address.
The husband filed a pre-answer motion pursuant to CPLR 3211(a)(7) to dismiss the constructive abandonment cause of action and, alternatively, moved for summary judgment dismissing that cause of action pursuant to CPLR 3212. The husband, while contesting many of the wife’s factual allegations of “social abandonment,” argued that the complaint fails to state a cause of action for a divorce based on “constructive abandonment.” The wife opposed dismissal arguing, [*2]inter alia, that social abandonment has been recognized as a ground for divorce in fairly recent trial-level decisions rendered by the Supreme Courts in Nassau, Queens, and Westchester Counties.

After analyzing the applicable case law and plain language of the statute, the Appellate Division concluded that the plaintiff’s allegations of social abandonment may appropriately be viewed as merely another way of claiming “irreconcilable differences” between spouses, that do not constitute a cognizable ground for divorce. The plaintiff’s allegations of a “social abandonment,” designed to mimic the abandonment language of Domestic Relations Law §170(2), “elevated the artificial title of the claim over the substance of the causes of action that are statutorily recognized and understood.”

The Appellate Division further noted that there are several reasons why the courts have not recognized social abandonment as a cognizable ground for divorce, including the longevity of the current definitional understanding of constructive abandonment; its concern for a judicial usurpation of legislative authority; the fact that a social abandonment of one spouse by another is a provision of the marriage contract that necessarily equates with a spouse’s refusal to engage in sexual relations.; and the practical difficulties associated with trying to define a social abandonment cause of action, and of how courts might conceptualize the cause as separate and distinct from traditional notions of constructive abandonment.  In court’s view, “social abandonment” cannot be easily defined and therefore defies consistent and easily applied definitional interpretation, resulting in the courts examining the conduct of couples on a case-by-case basis, and presenting significant variations as to “the degree of social interaction involving family events, meals, holidays, religious activities, spousal expectations, cultural differences, and communications.”

The Davis case is just one more illustration of the fact that New York needs to abandon its fault-based grounds for divorce.  No-fault divorce would significantly reduce divorce litigation and make clients’, and attorneys’, lives less frustrating.  Unfortunately, the New York Legislature has not shown much interest in this issue over the years.  What is also interesting, is that the Second Department’s position in Davis appears to be contrary to the Third Department’s position in Dunne v. Dunne, 47 A.D.3d 1056 (3rd Dept. 2008), discussed in an earlier post, which held constructive abandonment has taken place in a situation where one spouse took an uncompromising position that plaintiff choose to either adhere to the advice of his treating physicians or cease taking his anxiety medication in order to return to the marital residence, thereby risking his well-being. If forcing a party to choose between taking a medication and returning to the marital residence amounted to “an unreasonable condition as a term of their relationship,” which violated marital obligation to the husband, I believe that a refusal to participate in various activities with the spouse represents a similar violation of marital obligation.

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Posted in divorce, Domestic Relations Law, Family Law, grounds, marital fault, New York Law, procedure, Supreme Court | No Comments »

Divorce, Equitable Distribution and Appreciation of Separate Property

Saturday, November 14th, 2009

One issue that comes up periodically in divorce cases has to do with appreciation of separate property brought into the marriage by one spouse.  If that separate property is a business that appreciated during the marriage, did that appreciation come as active spousal effort, which would render the appreciation marital property, or did the appreciation come as a result of passive, non-spousal effort, and therefore should be treated as separate property? In other words, what was the comparable economic contribution of each party to the appreciation of such asset?

While the courts do not utilize the terms active and passive appreciation as much as they did in the past, it is clear from the recent decisions that those concepts are still utilized.  In Smith v. Winters, 64 A.D.3d 1218 (4th Dept. 2009), the Appellate Division, Fourth Department, recently answered the above question by evaluating how much the efforts of the titled spouse increased the value of the asset in dispute, by looking at what specific efforts of the titled spouse led to the appreciation.  In Smith, the plaintiff owned a business that later on purchased another company, PNA.  PNA has appreciated significantly during the course of the marriage.  After discussing the facts related to the plaintiff’s efforts and involvement in PNA, the court stated:

With respect to PNA, the court found that the value of PNA appreciated by $20 million during the course of the marriage but that the increase in value attributable to plaintiff was minimal when compared to the increase attributable to those hired by plaintiff to run the company. The court thus determined that only 10% of the appreciation in value of PNA was marital property subject to equitable distribution.

Subsequently, the court held that the non-titled spouse was entitled to 40% of the appreciated marital value based on her contributions as a homemaker.  Thus, the titled spouse, in this case the husband, was able to retain 96% of appreciation of PNA.

The above represents continuation of the trend toward reevaluating the status of marital property on the basis of various forms of contribution by the parties to the marriage, or, perhaps, third parties as well.  The courts have long held that “an increase in the value of separate property of one spouse, occurring during the marriage and prior to the commencement of matrimonial proceedings, which is due in part to the indirect contributions or efforts of the other spouse as homemaker . . . should be considered marital property”.  See Price v Price, 69 N.Y.2d 8, 11 (1986).  However, the latest decisions in this area are refocusing on requiring  ”some nexus between the titled spouse’s active efforts and the appreciation in the separate property”, when a nontitled spouse’s claim to appreciation and the other spouse’s separate property is predicated solely on the nontitled spouse’s indirect contributions.  See Hartog v. Hartog, 85 N.Y.2d 36, 46 (1995).   Therefore in Smith, the Appellate Division Fourth Department held that the trial court properly considered the “active efforts of others and any additional passive or active factors” in determining the percentage of total appreciation that constitutes marital property subject to distribution.

The above case opens various possibilities to lawyers and titled-spouses contesting an appreciation claim.  Situations similar to the one in Smith will require a divorce attorney to evaluate carefully how the asset appreciated and what role each spouse or third parties played in that appreciation.

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Posted in divorce, Domestic Relations Law, equitable distribution, Family Law, New York Law, Supreme Court | No Comments »

Divorce, Equitable Distribution and Wasteful Dissipation

Sunday, October 18th, 2009
“Wasteful dissipation”
(i.e., DRL 236 (B)(5)(d)(11), hereinafter referred to as “Factor
11”) is a term of art that has never been defined with any real
precision, however. It can apparently consist of gambling and
poor business judgment, as well as other forms of economic
misconduct. Given the absence of appellate leadership in
establishing a reliable equation to which we practitioners can
refer, what may or may not constitute marital waste remains as
much a mystery as how that waste will ultimately affect equitable
distribution.
Until an ambitious Appellate Court commits itself to developing
a more reliable methodology for sniffing out marital waste, the
lower courts can be assured that the litigious will continue to
make a stink. Conclusion: Attorneys seeking to avoid being a
waste of marital funds themselves tend to mine any negative
impact on the marital estate that can be traced to the dubious
conduct of the other spouse. Hopeful that an adjustment to a
client’s equitable entitlement might be sparked by blaming the
other spouse for a decline in the overall value of the marital
estate, an unpredictable Factor 11 claim all too frequently becomes
an opportunity to leverage an outcome on a whim or whiff.Wife’s Inability to Testify with Specificity as to How She Spent the Proceeds of Loan Suggested She Dissipated Marital Assets in Contemplation of Divorce.
In Abrams v Abrams, — N.Y.S.2d —-, 2008 WL 5376644 (N.Y.A.D. 2 Dept.) the Appellate Division pointed out that “The overriding purpose of a maintenance award is to give the spouse economic independence, and it should be awarded for a duration that would provide the recipient with enough time to become self-supporting”. It held that the trial court properly awarded the former wife maintenance, but it improvidently exercised its discretion in extending the duration of the maintenance award beyond five years, and concluded that an award of $2,500 per month for five years was appropriate. It also found that the former husband correctly contended that he was entitled to a portion of the proceeds of a home equity loan that the wife obtained with respect to certain investment residential property, especially in light of the wife’s inability to testify with specificity as to how she spent the proceeds of that loan. This suggested that the wife dissipated these marital assets in contemplation of divorce. The judgment was modified to award the husband a credit which represented his share of the proceeds of that loan, after accounting for the taxes paid by the wife on both the marital residence and the investment residential property. It noted that a parent has no legal obligation to provide for or contribute to the support of a child over the age of 21 Therefore, the court erred

One issue that tends to come up in divorce case is wasteful dissipation.  While I mentioned it in the past, this post will address it in greater detail.

Wasteful dissipation is one of the statutory factors that must be considered by a trial court upon rendering a determination of the equitable distribution of marital assets as set forth in Domestic Relations Law §236(B)(5)(d):

(1) the income and property of each party at the time of marriage, and at the time of the commencement of the action; (2) the duration of the marriage and the age and health of both parties; (3) the need of a custodial parent to occupy or own the marital residence and to use or own its household effects; (4) the loss of inheritance and pension rights upon dissolution of the marriage as of the date of issolutio;(5) any award of maintenance under subdivision six of this part; (6) any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party; (7) the liquid or non-liquid character of all marital property; (8) the probable future financial circumstances of each party; (9) the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party; (10) the tax consequences to each party; (11) the wasteful dissipation of assets by either spouse; (12) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; (13) any other factor which the court shall expressly find to be just and proper.

“Wasteful dissipation” is a term commonly used to describe a spouse’s unnecessary or unjustified use of marital money to justify a disproportionate equitable distribution. What makes wasteful dissipation problematic from a lawyer’s point of view is that its definition is vague and imprecise.  It can consist of gambling and poor business judgment, as well as other forms of financial or economic misconduct.  While the appellate courts have not given a precise definition of what actions by a spouse fall within the scope of wasteful dissipation, the trial courts and divorce attorneys deal with this issue frequently.  This also provides a significant opportunity for prolonging divorce litigation.  At times, a party will look for situations where any negative impact on the marital estate can be traced to the imperfect conduct of the other spouse.  Divorce lawyers may seek to improve their clients’ equitable distribution award may blame the other spouse for a decline in the overall value of the marital estate.

With respect to a business, wasteful dissipation may occur if a party fails to recoup a value from an unsuccessful business or “it necessarily is a wasteful dissipation of assets to fail to recoup the value of a profitable business, such as plaintiff’s masonry business. “ Scala v. Scala, 59 A.D.3d 1042 (4th Dept. 2009).  Failure to take care or repair a marital property also may amount to a wasteful dissipation.

In a recent decision, Abrams v. Abrams, 57 A.D.3d 809 (2nd Dept. 2008), the Appellate Division held that the wife’s inability to testify with specificity as to how she spent the proceeds of loan suggested she dissipated marital assets in contemplation of divorce. The Appellate Division pointed out that “the former husband correctly contended that he was entitled to a portion of the proceeds of a home equity loan that the wife obtained with respect to certain investment residential property, especially in light of the wife’s inability to testify with specificity as to how she spent the proceeds of that loan. This suggested that the wife dissipated these marital assets in contemplation of divorce. The judgment was modified to award the husband a credit which represented his share of the proceeds of that loan, after accounting for the taxes paid by the wife on both the marital residence and the investment residential property.”

A party’s use of marital assets to pay for “basic living expenses” does not constitute wasteful dissipation.  Damas v. Damas, 51 A.D.3d 709 (2nd Dept. 2008).

If a party makes financial decisions and acts in such way that the marital estate is diminished, that party should be ready to provide a legitimate explanation for his or her actions. The client is well advised to make a full disclosure of all such activities to the divorce lawyer and to provide a detailed explanation for the course of action taken.

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Domestic Relations Law §255, Settlement Agreements and Judgments of Divorce

Sunday, September 13th, 2009

On October 9, 2009, Domestic Relations Law §255 will become effective.  DRL §255 is a replacement of DRL §177 which required:

1. Prior to accepting and entering as a judgment any stipulated agreement between the parties in the action for divorce, the judge shall insure that there is a provision in such agreement relating to health care of each individual.  Such statement shall either (a) provide for the future coverage of the individual; or (b) state that the individual is aware that he or she will no longer be covered by his or her spouse’s health insurance plan and that the individual will be responsible for his or her own health insurance coverage. Every agreement accepted by the court must contain the following statement, signed by each party, to ensure that the provisions of this subdivision are adhered to:

I, (spouse), fully understand that upon the entrance of this divorce agreement, I may no longer be allowed to receive health coverage under my former spouse’s health insurance plan. I may be entitled to purchase health insurance on my own through a COBRA plan, if available, otherwise I may be required to secure my own health insurance.

(Spouse’s signature) (Date)

2. Prior to rendering a decision in an action for divorce, the judge shall ensure that he or she notifies both parties that once the judgment is entered, a person may or may not be eligible to be covered under his or her spouse’s health insurance plan, depending on the terms of the plan. If, prior to accepting an agreement and entering the judgment thereon, the judge determines that the provisions of this section have not been met, the judge shall require the parties to comply with the provisions of subdivision one of this section and may grant a thirty day continuance to afford the parties an opportunity to procure their own health insurance coverage.

DRL§177 has been repealed to resolve the numerous practical problems it presented to the litigants.  Typical problems involved modifying previously executed separation and property settlement agreements.  Its replacement, DRL §255 provides as follows:

A Court, prior to signing a judgment of divorce or separation, or a judgment annulling a marriage or declaring the nullity of a void marriage, shall ensure that:

1. Both parties have been notified, at such time and by such means as the Court shall determine, that once the Judgment is signed, a party thereto may or may not be eligible to be covered under the other party’s health insurance plan, depending on the terms of the plan. Provided, however, service upon the defendant, simultaneous with the service of the summons, of a notice indicating that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party’s health insurance plan depending on the terms of the plan, shall be deemed sufficient notice to a defaulting defendant.

2. If the parties have entered into Stipulation of Settlement/Agreement on or after the effective date of this section resolving all of the issues between the parties, such settlement/agreement entered into between the parties shall contain a provision relating to the health care coverage of each party; and that such provision shall either (A) provide for the future coverage of each party, or (B) state that each party is aware that he or she will no longer be covered by the other party’s health insurance plan and that each party shall be responsible for his or her own health insurance coverage, and may be entitled to purchase health insurance on his or her own through a COBRA option, if available. The requirements of this subdivision shall not be waived by either party or counsel and, in the event it is not complied with, the Court shall require compliance and may grant a thirty-day continuance to afford the parties an opportunity to procure their own health insurance coverage.

As a result of its enactment, this section of the Domestic Relations Law will give judges greater discretion in insuring the time and method of notification of health insurance provisions and will eliminate DRL §177′ mandatory language, and replace with several different options that provide notification of the parties with respect to their health care coverage.   As stated in the Legislative Memorandum:

In sum, this measure should guarantee the most efficient processing of divorce actions while achieving section 177′s original objective, viz., to insure an awareness of the impact of divorce proceedings upon health insurance coverage, at less cost to and with fewer complications for the divorce litigants the statute sought to protect.

Divorce attorneys will have a greater degree of flexibility in providing appropriate notification during the course of divorce and that will certainly benefit their clients.

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Making Deals in Divorce and Subsequent Change in Circumstances

Sunday, August 23rd, 2009

I am asked occasionally whether a separation agreement, which was perhaps incorporated in the subsequent judgment of divorce, entered into years ago can be vacated because of subsequent changes in the parties’ circumstances.  My usual response is no, since in order to have the agreement vacated, the party must show grounds sufficient to vitiate a contract.  The burden of proof in those situations is very high and may also be subject to time limitations.  Similarly, with respect to modification of a child support obligation included in a stipulation or a separation agreement, the party must show an unreasonable and unanticipated change in circumstances since the time of the stipulation to justify a modification, and that the alleged changes in that party’s financial position was not of his/her own making. A recent decision by a trial court, Debreau v. Debreau, 2009 N.Y. Slip. Op. 51750 (Sup. Ct. Nassau Co.), demonstrated a good illustration of the above principles, holding that if the parties make a deal as a part of their divorce settlement, provided that the settlement was arrived at fairly, the settlement will stand despite the fact that the circumstances have changed.

In Debreau, the wife accepted title to the family home as prepayment for 15 years of child support.  After the house sold for only two-thirds of the value estimated at the time of the divorce, she sued for child support arrears.  The court held that “[t]he law is clear that both [the Domestic Relations Law] and the public policy in favor of finality require the enforcement of property distribution agreements pursuant to their terms, absent fraud, regardless of post-agreement changes in the values of the assets.”  The court stated that “[t]he law views the equitable distribution of marital assets as a snapshot, not a movie… If an agreement distributing marital assets is not subject to vacatur, on the date of its execution, on grounds sufficient to vitiate a contract, it may not be modified or set aside on the ground that future events have rendered the division of assets inequitable.”

When the parties divorced in 2007, they agreed by stipulation to allow the husband’s share of the marital home serve as a prepayment of the child support he would owe for the couple’s four children over the next 15 years. Mr. Deabreu’s child-support obligation was set at $2,972 per month, or a total of about $535,000. The parties agreed that the husband’s share of the $1.85 million Melville house, after paying off its $400,000 mortgage and other expenses, was comparable to that obligation. They therefore stipulated that his obligation would be met by transferring over title. In June 2008, the house sold for only $1.2 million, netting the wife $734,000 rather than the $1.45 million she had anticipated. Ms. Deabreu subsequently filed a motion seeking child support arrears of $484,492, the amount she contends her husband owes to her from 2006 through 2021.

The trial court rejected Ms. Deabreu’s motion, ruling that any shortfall in the sale of the house should be taken from the wife’s share of the marital assets, not from the husband’s prepayment of child support. “While the prepaid child support sum…was specified and fixed pursuant to the parties’ stipulation of settlement, the value of the marital assets distributed to each party was determined only as of the date of the stipulation,” Justice Falanga held. The sum that the wife was to receive for her marital share “was not guaranteed by the husband, but rather, was subject to various factors such as market fluctuations and the manner in which the premises was maintained.” The decision also mentioned that Ms. Deabreu was not without other methods of seeking redress. According to the decision, “[t]he receipt by the wife, upon the sale of the [house], of approximately $650,000.00 less than she expected when entering into a stipulation of settlement…may constitute an unanticipated and unreasonable change in her financial circumstances, and may have left her, as she has alleged in her within application, unable to provide for the financial needs of the parties’ four children, entitling her to seek an upward modification of child support.”

In my opinion, it is not likely that Ms. Debreau would be able to establish an unanticipated and unreasonable change in circumstances in the above situation.  I am also left wondering why the house was not sold earlier.  I also would like to know if Ms. Debreau entered into this stipulation after discussing the risk of decline in real estate values with her divorce lawyer. Personally, I don’t think that I would recommend this type of an arrangement to a client.  The risk of decline in the value of any asset subject to market forces is too great. As a divorce attorney, I would also be concerned about giving advice to the client to retain a fixed asset as a prepayment of future child support or maintenance obligation.

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Equitable Distribution, Maintenance and Health Insurance – Upcoming Changes in the Domestic Relations Law

Sunday, August 16th, 2009

I am asked frequently what happens to health insurance as a result of divorce.  My usual response is that once the judgment of divorce is entered, if you were receiving health insurance benefits through your spouse, you will lose your right to receiving this coverage in the future, unless you elect to receive COBRA coverage.

In fact, the disclosure of the above facts has been formalized in Domestic Relations Law §177 which provides that prior to accepting and entering as a judgement any stipulated agreement between the parties in an action for divorce, the judge shall ensure that there is a  provision  in  such agreement  relating to the health care coverage of each individual. Such statement shall either (a) provide for the future coverage of the individual; or (b) state that the individual is aware that he or she will no longer be covered by his or her spouse’s health  insurance plan and that the individual will be responsible for his or her own health insurance coverage. Every agreement accepted by the court  must  contain a specific statement, signed by each party, to ensure that the provisions of this subdivision are adhered to.

At the same time, since in most situations the health insurance is tied to one or both spouses’ employment, the Domestic Relations Law did not provide any formal way to include the loss of health insurance coverage into either maintenance or equitable distribution calculations.  This is about to change.  Effective September 21, 2009, an additional subsection of Domestic Relations Law §236 will be going into effect and will require the trial court to consider the loss of health insurance coverage as a factor in fashioning equitable distribution and maintenance awards.  Specifically, the new statute will provide as follows:

AN ACT to amend the domestic relations law, in relation  to  maintenance

and equitable distribution of marital property

THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-

BLY, DO ENACT AS FOLLOWS:

1    Section 1.  Subparagraphs 5, 6, 7, 8, 9, 10, 11, 12 and  13  of  para-

2  graph  d  of  subdivision  5  of  part  B of section 236 of the domestic

3  relations law, subparagraph 13 as renumbered by chapter 884 of the  laws

4  of 1986, are renumbered subparagraphs 6, 7, 8, 9, 10, 11, 12, 13 and 14,

5  and a new subparagraph 5 is added to read as follows:

6    (5)  THE  LOSS  OF  HEALTH  INSURANCE BENEFITS UPON DISSOLUTION OF THE

7  MARRIAGE;

8    S 2. Subparagraph 10 of paragraph a of subdivision  6  of  part  B  of

9  section  236 of the domestic relations law, as amended by chapter 884 of

10  the laws of 1986, is amended to read as follows:

11    (10) any transfer or encumbrance made in contemplation of a matrimoni-

12  al action without fair consideration; [and]

13    S 3. Subparagraph 11 of paragraph a of subdivision  6  of  part  B  of

14  section  236 of the domestic relations law is renumbered subparagraph 12

15  and a new subparagraph 11 is added to read as follows:

16    (11) THE LOSS OF HEALTH INSURANCE BENEFITS  UPON  DISSOLUTION  OF  THE

17  MARRIAGE; AND

18    S  4.  This  act  shall take effect on the sixtieth day after it shall

19  have become a law and shall apply to any action or proceeding  commenced

20  on or after such effective date.

EXPLANATION–Matter in ITALICS (underscored) is new; matter in brackets

[ ] is old law to be omitted.

The bill memo provided the following justification for the bill:

The Equitable Distribution and Maintenance factors have not been updated much since their introduction close to 30 years ago.  While loss of health insurance was not one of the factors added at the time, in light of the health care crisis and rising costs of access to health insurance, loss of health insurance is a critical factor that should be considered by courts in making determinations relating to equitable  distribution and maintenance. The impact of a divorce can be challenging for families and the added loss of health insurance can be financially devastating. The proposal in this bill, to add loss of health insurance as a factor to be considered for equitable distribution and maintenance determinations, is essential to address the realities of our current times. This legislation is intended to promote the health, safety and financial stability of the parties post divorce.

I believe that the above will be a helpful addition to the Domestic Relations Law since, as a divorce lawyer, I have dealt frequently with situations where the parties who wanted to be divorced could not do so, solely due to the fact that the loss of health insurance coverage would be devastating to one of the parties. In those situations, I have counseled clients to enter into separation agreements and the parties would live pursuant to such agreements without getting divorced for very significant periods of time.  This allowed for retention of employer provided health care coverage.  While I am happy to see the changes to the Domestic Relations Law §236, at the same time, this provision may be a paper tiger primarily due to the cost of obtaining health insurance coverage on the open market.

As a result of the new provisions, divorce attorneys will have to carefully review the issues related to their clients’ health insurance coverage, the availability of replacement coverage and its costs, and the likely impact of those issues on maintenance and equitable distribution.

I should note one more thing related to the issues discussed above.  Effective on October 11, 2009, Domestic Relations Law § 177 has been repealed, and replaced by Domestic Relations Law §255. The new statute, while mostly similar, adds additional procedural requirements that need to be complied with, sometimes as early as the time of service. Domestic Relations Law §255, subdivision 1 provides that prior to signing a judgment of divorce or separation, or a judgment annulling a marriage or declaring the nullity of a void marriage, the court must ensure that both parties have been notified, at such time and by such means as the court determines, that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party’s health insurance plan, depending on the terms of the plan. In the case of a defaulting defendant, service upon the defendant, simultaneous with the service of the summons, of a notice indicating that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party’s health insurance plan, depending on the terms of the plan, shall be deemed sufficient notice to a defaulting defendant.

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

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Equitable Distribution and Degrees, Licences and Enhanced Earnings Capacity Acquired During the Marriage

Sunday, July 19th, 2009

In a divorce action, the court can distribute not only tangible assets, such as homes, pensions and investment accounts, but also the value of educational degrees, professional licenses and enhanced earnings obtained during the marriage.  An academic degree may constitute a marital asset subject to equitable distribution, even though the degree may not necessarily confer the legal right to engage in a particular profession. The fact that a degree is an asset to be equitably distributed should not be in dispute. Generally, the value of the degree, license or enhanced earning capacity is open for debate and is determined through the use of expert testimony. I have previously written about some of these issues, but I decided to revisit them in this post.

A recent case of Purygin v Purygina, 2009 N.Y. Slip. Op. 51408(U) (Sup. Ct. Kings Co. 2009), provides a good illustration of the issues involved and the typical approach utilized by the courts in addressing them. In Purygin, between September 1997 and December 2000, the husband attended Long Island University as a full time student so that he could become proficient in English and apply to medical school; during this time, he continued to work part time in odd jobs. He did not receive any degree from LIU. From January 10, 2001 through April 2002, he attended a medical school in the Carribean; during this time, the wife remained in Brooklyn with the parties’ son. Subsequently, he completed another portion of his education in Miami. On December 20, 2002, he passed the first step of the United States Medical Licensing Examination (USMLE). Between December 2002 and November 2004, the husband continued his education at Kings County Hospital and Brookdale Hospital, where he did his clinical rotations. On May 28, 2004, plaintiff passed the second USMLE. He completed Medical School and graduated on April 1, 2005. The husband left the marital residence in December 2005. On November 26, 2007, plaintiff took and passed the third USMLE. This action was commenced on April 24, 2008. Presently, the husband is in his third year of residency.

During the time that the husband attended LIU, the wife continued to work full time at the hair salon. Beginning in September 2001 through October 2004, she attended night school at Touro College and continued to work full-time in the hair salon during the day. She became licensed as an assistant physical therapist in August 2006.

The court appointed a neutral appraiser to value husband’s enhanced earning capacity. By report dated October 31, 2008, the appraiser concluded that the husband’s enhanced earning capacity resulting from the education that he received during the marriage was $1,584,000, taking into account an appropriate reduction for plaintiff’s student loans and the remaining 11% of the training required for him to become a board certified anesthesiologist.

The husband argued that the wife should not be entitled to share in the enhanced earning capacity that she resulted from the 98 courses that he took at LIU between September 1997 and December 2000, because the courses did not result in his obtaining any degree or certification and were only “a stepping-stone to a license to practice medicine,” which he has not yet obtained. He further argues that the wife should not be entitled to share in the enhanced earning capacity resulting from the courses that he took at the medical school, because his medical degree has no value without a medical license, which requires a minimum of three years of residency and passing three examinations. He also contended that the wife should not be entitled to share in the enhanced earning capacity resulting from the one year residency that he completed prior to the commencement of the action on the grounds that he still had two years of residency to complete at that time.

The husband also argued that the wife did not make a significant contribution to his enhanced earning capacity, since she did not sacrifice her career or change her lifestyle for his education.  The husband also emphasized the fact that the parties separated in December 2005, so that wife did not make any contributions towards his education after this date.

The wife argued that the husband’s education and training is marital property subject to equitable distribution and that she substantially contributed to his enhanced earning capacity by providing the family with the bulk of their economic support, arranging and paying for child care, cleaning, cooking, paying the bills and attending to all household chores.

Pursuant to DRL § 236(B)(1)(c), marital property is broadly defined as “property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held.” In O’Brien v. O’Brien, 66 N.Y.2d 576 (1985), the Court of Appeals held that a professional license could constitute marital property subject to equitable distribution to the extent that it is acquired during the marriage. In further explaining this decision, the Court of Appeals later stated that “[t]he statute is sweeping and recognizes that spouses have an equitable claim to things of value arising out of the marital relationship”.

The court held that applying the above principles of law to the facts of this case, plaintiff’s education at LIU, which was a necessary prerequisite to his acceptance at the medical school, is a marital asset, as was his medical degree and the two years and nine months of his residency, since this education and training are held to have contributed to his enhanced earning capacity as an anesthesiologist. As a result, these marital assets were found to be subject to equitable distribution. The court relied on the holding in Vainchenker v. Vainchenker, 242 A.D.2d 620 (2d Dept. 1997), where the Appellate Division, Second Department, held that:

Although the husband was a practicing physician in Russia prior to the parties’ marriage, his earning capacity in the United States was enhanced due to the medical training he received in this country during the marriage. The Supreme Court therefore properly determined that the husband’s New York medical license was a marital asset subject to equitable distribution.

(Vainchenker, 242 A.D.2d at 621 (2d Dept. 1997) (citations omitted).

Here, husband’s education was completed as of the date of the commencement of the action, as were two years and nine months of his residency. Further, courts routinely apportion the value of the enhanced earning capacity resulting from courses of study both before and during the marriage. While the instant case is different in that plaintiff was not eligible to receive his medical license for three months after the commencement of the action, it is not disputed that from January 10, 2000 through the date of commencement, plaintiff was working towards acquiring this license. The court stated that if a spouse is permitted to avoid equitable distribution of enhanced earning capacity by commencing an action after the necessary education has been acquired, but before the sought after license is obtained, the rationale behind O’Brien would be abrogated. Under the facts of this case, where husband completed the training necessary to obtain a medical license within three months of the commencement of the action, there is no speculation with regard to whether the necessary studies will be completed.

The court found that the wife made a contribution to husband’s enhanced earning capacity, with the amount of such contribution to be determined at trial and in determining the share of the enhanced earning capacity to which she is entitled, the court can entertain the argument that the parties separated in December 2005.

Accordingly, whenever reviewing assets available for distribution in a divorce action, a family law attorney will typically address issues related to distribution of any degrees, license, or enhanced earning capacity obtained during the marriage.  The non-titled spouse’s contribution to the parties’ household, while the other spouse was obtaining such degree, license or enhanced earning capacity, is very important and should be discussed with the lawyer representing no-titled spouse in the divorce action.

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Modification of Child Support Orders and Family Court’s Jurisdiction

Sunday, July 12th, 2009

I frequently see child support petitions in Family Court seeking to modify child support provisions of either judgments of divorce, or stipulations or settlement agreements incorporated in the judgments of divorce. Sometimes these petitions argue that the child support provisions of the judgment of divorce, stipulation or settlement agreement are invalid as violating the Child Support Standards Act. Unfortunately, if brought in the Family Court, these petitions suffer from certain jurisdictional defects as demonstrated in Savini v. Burgaleta, 34 A.D. 686 (2nd Dept. 2006).

In Savini, in 1996, the father entered into a stipulation with the mother which provided that the father would “pay to the [mother] as and for child support 29 percent of his gross salary as defined under the Child Support Standards Act on a weekly basis calculated on actual income.” That stipulation was later incorporated but did not merge into a judgment of divorce.

In a 1997 handwritten agreement, which was neither incorporated nor merged into the divorce judgment, the mother allegedly agreed, inter alia, to accept the sum of $200 per week from the father as child support and not to commence any proceeding to recover the difference between that amount and the percentage of gross salary specified in the prior stipulation.

Subsequently, a child support proceeding was commenced in the Family Court by the mother, and the Family Court Support Magistrate, sua sponte, determined that “the prior Judgment of Divorce and the stipulations did not comply with the Child Support Standards Act” and therefore informed the parties that she would consider the issue of child support de novo. She directed the father, in the interim, to pay child support in the amount $446.15 per week effective February 11, 2005. After a hearing, the Support Magistrate determined, in relevant part, that the father should pay $559.78 per week in child support until June 29, 2005, and $482.57 thereafter, and made the order retroactive to the date of the petition. The Support Magistrate also awarded the mother an attorney’s fee in the sum of $11,990.

The father filed various objections to the Support Magistrate’s findings and order. He claimed that the Support Magistrate was without jurisdiction to hold a de novo hearing on the issue of child support as if the judgment of divorce had never existed. By order entered February 8, 2006, the Family Court, inter alia, denied the father’s objections and father appealed.

The Appellate Division agreed with the father that the Family Court was without subject matter jurisdiction, in effect, to vacate as illegal so much of the judgment of divorce as directed the father to pay child support and, thereafter, to determine the issue of child support de novo. What is particularly interesting in this case was its reasoning.  The Appellate Division made this determination on constitutional grounds, stating that New York Constitution, article 6, §13 (c) provides that the Family Court is vested with limited jurisdiction “to determine, with the same powers possessed by the [S]upreme [C]ourt, the following matters when referred to the [F]amily [C]ourt from the [S]upreme [C]ourt: . . . in actions and proceedings for . . . divorce, . . . applications to fix temporary or permanent support . . . or applications to enforce judgments and orders of support”. Similarly, Family Court Act §466 provides, in relevant part, that, unless the Supreme Court directs otherwise, the Family Court may entertain an application to enforce an order or decree of the Supreme Court granting support, or an application to modify such order or decree “on the ground that there has been a subsequent change of circumstances and that modification is required.” The Supreme Court’s judgment of divorce provided, in relevant part, that the Supreme Court “retain[ed] jurisdiction of the matter concurrently with the Family Court for the purpose of specifically enforcing such of the provisions of the stipulation of child support as are capable of specific enforcement, to the extent permitted by law”.

The Court held that “nowhere in the Constitution, in the Family Court Act, or in the judgment of divorce itself, is the Family Court empowered, in effect, to invalidate a stipulation incorporated into the judgment of divorce entered by the Supreme Court. Significantly, the purpose of the mother’s petition was to enforce the terms of the stipulation of October 29, 1996 – not to have it declared illegal. Had either party questioned the legality of the stipulation, the issue should have been determined by the Supreme Court, which had issued the judgment in which the stipulation was incorporated. Accordingly, the Family Court was without jurisdiction to invalidate the stipulation and determine the child support issue de novo.”

What makes this situation different from typical modification of child support, which I previously discussed, here and here, is that fact that the provisions of the judgment apparently violated the Child Support Standards Act. In those situations, the Supreme Court has the jurisdiction to vacate any child support provisions of the judgment and recalculate child support de novo, going back to the original date of the judgment or the parties’ agreement.  The Family Court does not have the jurisdiction to do so. Accordingly, this is an important procedural point that should be familiar to most divorce and family law lawyers handling child support issues.  If the provisions of the judgment of divorce dealing with child support violate the Child Support Standards Act, the proper venue to address such issues lies in the court that issued the judgment of divorce.

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