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Divorce Actions and New Automatic Stay Orders

Sunday, September 6th, 2009

Since the enactment of Domestic Relations Law §236(B), often referred to as  the “Equitable Distribution Law,” divorce lawyers have had to deal with transfers of, or encumbrances on, marital property which might frustrate the eventual disposition of a divorce case.

Immediately after the enactment of the Equitable Distribution Law, attorneys attempted to prevent transfers and encumbrances of marital property by various means, such as seeking injunctive relief to prevent or undo any transfers, filing notices of pendency with regard to real property which would form part of equitable distribution, and seeking other forms of relief from the courts.  Eventually, the case law made clear that a notice of pendency cannot be filed in a divorce case since an equitable distribution action did not directly affect the title to, or the possession, use or enjoyment, of real property. This left injunctive relief as the only means to restraining transfers during the pendency of an action.  Since the burden of obtaining an injunction was considerable, the moving party had to make a requisite showing that the party to be restrained was threatening to dispose, or was already disposing, of marital assets so as to adversely affect the movant’s ultimate rights to equitable distribution.  Typically, the burden of making the application, and the expenses of doing so, fell on the non-titled spouse.

The different courts in New York State took different approaches to address this issue.  Here in Rochester, the supreme court justices handling matrimonial cases would issue, if requested, standing orders which restrained the parties from substantially altering their financial positions. However, the standing orders would be issued in most cases after a motion was brought or after a preliminary conference was held.

Now, effective Sept. 1, 2009, there is a statute which provides for an automatic stay in all matrimonial actions. The present DRL §236(B)(2) has been redesignated as DRL §236(B)(2)(a) and subparagraph (b) has been added, which reads:

b. With respect to matrimonial actions which commence on or after the effective date of this paragraph, the plaintiff shall cause to be served upon the defendant, simultaneous with the service of the summons, a copy of the automatic orders set forth in this paragraph. The automatic orders shall be binding upon the plaintiff in a matrimonial action immediately upon the filing of the summons, or summons and complaint, and upon the defendant immediately upon the service of the automatic orders with the summons. The automatic orders shall remain in full force and effect during the pendency of the action, unless terminated, modified or amended by further order of the court upon motion of either of the parties or upon written agreement between the parties duly executed and acknowledged. The automatic orders are a follows:

(1) Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or by order of the court, any property (including, but not limited to, real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats) individually or jointly held by the parties, except in the usual course of business, for customary and usual household expenses or for reasonable attorney’s fees in connection with this action.

(2) Neither party shall transfer, encumber, assign, remove, withdraw or in any way dispose of any tax deferred funds, stocks or other assets held in any individual retirement accounts, 401K accounts, profit sharing plans, Keogh accounts, or any other pension or retirement account, and the parties shall further refrain from applying for or requesting the payment of retirement benefits or annuity payments of any kind, without the consent of the other party in writing, or upon further order of the court.

(3) Neither party shall incur unreasonable debts hereafter, including, but not limited to further borrowing against any credit line secured by the family residence, further encumbrancing any assets, or unreasonably using credit cards or cash advances against credit cards, except in the usual course of business or for customary or usual household expenses, or for reasonable attorney’s fees in connection with this action.

(4) Neither party shall cause the other party or the children of the marriage to be removed from any existing medical, hospital and dental insurance coverage, and each party shall maintain the existing medical, hospital and dental insurance coverage in full force and effect.

(5) Neither party shall change the beneficiaries of any existing life insurance policies, and each party shall maintain the existing life insurance, automobile insurance, homeowners and renters insurance policies in full force and effect.

The Office of Court Administration has  promulgated a Rule already and is in the process of issuing an Official Form incorporating the Notice required under the Statute.  Until the official form is issued, a divorce attorney should attach a notice to the summons stating that, upon service, an order is in effect and then reciting, word-for-word, the five elements listed above.  In my experience, the Monroe County Clerk’s Office will provide a form at the time the summons is filed, unless the requisite notice is already attached to the summons.

This legislation basically preserves the status quo during the pendency of a matrimonial action by shifting the burden of seeking relief from a spouse asking for the imposition of an injunction to a spouse moving to vacate or modify that restraint.  What is unclear at this time, is how this automatic order will be enforced, and what are the remedies for its violation.

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

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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Posted in Child Support Standards Act, Domestic Relations Law, Family Court, Family Law, New York Law, Settlement Agreements, Stipulations, Supreme Court, Uncategorized, child support, court orders, divorce, jurisdiction, modification | No Comments »

The Right to Create Grandchildren After the Death of A Child

Wednesday, March 4th, 2009

Can someone create your biological child after your death? The Appellate Division, First Department, answered this question in the negative in Speranza v Repro Lab Inc., 2009 NY Slip Op 01543 (1st Dept. March 3, 2009).

In 1997, Mark Speranza deposited a number of semen specimens in the facility of Repro Lab, Inc., a tissue bank licensed by the State of New York. The specimens were frozen and stored in defendant’s liquid nitrogen vaults. Mark was about to undergo treatment for an illness, and was concerned about being able to conceive a child afterwards. As part of his agreement with Repro Lab, he filled in and signed a form document entitled, “Ultimate Disposition of Specimens,” which contained several options for the disposition of the specimens by the tissue bank in the event of Mark’s death. One option on the form directed that the specimens be given the depositor’s spouse, another directs that the samples be destroyed, and a third option, with the heading “Other,” leaves a blank to be filled in. Mark checked off the provision stating that in the event of his death, “I authorize and instruct Repro Lab to destroy all semen vials in its possession.” The document concluded with the statement that “[t]his agreement shall be binding on the parties and their respective assigns, heirs, executors and administrators.” Six months later, on January 28, 1998, Mark died.

Mark’s parents were named administrators of his estate, and they contacted Repro Lab about the specimens. They were then informed that Mark had deposited the specimens for his use only, in that the specimens were not screened as required for donation to a member of the public. Mark’s parents then began to seek a surrogate mother to be artificially inseminated with those semen specimens, with the hope of producing a grandchild for them. In 2005, the Speranzas contacted Repro Lab to ascertain the procedure for obtaining the specimens and were informed that the lab could not turn over the specimens. Plaintiffs, in their position as administrators of their son’s estate, then commenced an action seeking a declaration that the estate is the rightful owner of the specimens.

In its decision, the Appellate Division held that public policy interests as well as New York law preclude giving plaintiffs possession of the specimens for purposes of engendering Mark’s biological child, their grandchild, with the sperm he left behind.

The Court relied upon the regulations of the New York State Department of Health in deciding this case. These regulations define two distinct categories of semen depositors with tissue banks: depositors and donors. A “client-depositor” is “a man who deposits reproductive tissue prior to intended or potential use in artificial insemination or assisted reproductive procedures performed on his regular sexual partner” (10 NYCRR 52-8.1[d]). A “donor” is “a person who provides reproductive tissue for use in artificial insemination or assisted reproductive procedures performed on recipients other than that person or that person’s regular sexual partner, and includes directed donors” (10 NYCRR 52-8.1[f]). A “directed donor” by definition “includes a man providing semen to a surrogate, but who is not the regular sexual partner of the recipient” (10 NYCRR 52-8.1[e]).

The regulations contain extensive screening and testing requirements that apply to “donors” only, and not to “depositors” (10 NYCRR 52-8.5, 52-8.6). This required screening and testing is deemed unnecessary by the regulations only when, at the time of the deposit, the specimen was intended to be used only by the depositor or his regular sexual partner. Any other potential recipient, including a surrogate who was not the regular sexual partner of the donor, is included among those intended to be protected by these regulations, which strictly mandate thorough testing before any such use.

The regulations also contain very particularized provisions for the manner in which a tissue bank must treat deposited reproductive tissue, and require the informed consent of a tissue donor, including a statement that the donor has the right to withdraw his or her consent to donation up until a specified point in the assisted reproduction process (10 NYCRR 52-8.7, 52-8.8[a][6]).

Relying on the regulations, Repro Lab pointed out that Mark, as a “client depositor” rather than a “donor,” had not been examined and screened as directed by 10 NYCRR 52-8.5, and that his blood and semen had not been tested for the infectious diseases covered in 10 NYCRR 52-8.6; rather, his specimens were simply stored without any medical screening or testing. Therefore, the tissue bank could not properly release the specimens for insemination of a surrogate.

Notwithstanding the regulations, Mark’s parents sought to either reform or terminate Mark’s agreement with the lab so as to eliminate the applicability of the directive that the specimens be destroyed, or to otherwise claim a legal right to ownership of the specimens. Accourding to the court, the parents had no viable cause of action that would entitle them to take possession of the specimens for insemination of a surrogate to produce the child he did not create while he lived.

The court further held that the contract between Mark and Repro Lab could not be reformed since it was clear and unambiguous, finding that it represented his choice that the sperm should be available to him so he could protect his ability to procreate if he survived. It did not protect any possibility that his genetic or biological issue could be created after his death; and the directive that his semen be destroyed in the event of his death precluded such a possibility. Under applicable regulations as well as the terms of the contract between Mark and Repro Lab, the specimens were not assets of the estate over which the administrators had possessory rights.

The legal obligations with regard to the possession and handling of the semen specimens were dictated solely and completely by the applicable Department of Health regulations. The proposed use of Mark’s semen would fundamentally violate 10 NYCRR 52-8.6(g), which requires that a semen donor be “fully evaluated and tested” prior to the use of his semen “by a specific recipient, other than his current or active regular sexual partner.”

This decision further illustrates the need to pre-plan in situation where one’s health may impact future reproductive activities. While I sympathize with Mark’s parents, the court had to follow the regulations and enforce the contract.

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Posted in Family Law, New York Law, Supreme Court, Uncategorized, grandparents, procedure, reproductive rights | No Comments »

Downward Modification of Maintenance

Saturday, February 28th, 2009

In these uncertain economic times, someone obligated to pay maintenance may lose a job, experience significant investment losses, or suffer other adverse financial events. Can something be done about maintenance under those circumstances? The answer, as I have often written, depends on the specific facts.

A party seeking the reduction of a maintenance obligation bears the burden of establishing a substantial change of circumstances. Klapper v. Klapper, 204 A.D.2d 518 (2d Dept. 1994). In Klapper, the Second Department held that, in determining whether there was a substantial change in circumstances sufficient to warrant downward modification, the change is to be measured by a comparison between the payor’s financial circumstances at the time of the motion for downward modification and at the time of divorce or, as the case may be, the time that the order of which modification is sought was made.” Id. at 519. The Appellate Division, Fourth Department utilized the same standard of review in Able v. Able, 245 A.D.2d 1026 (4th Dept. 1997).

In Simmons v. Simmons, 26 A.D.3d 883 (4th Dept. 2006), defendant lost his job and subsequently moved for a downward modification of his maintenance obligation. The Appellate Division held that since despite defendant’ diligent job search, he had little prospect of finding employment at a salary comparable to his salary at the time of the divorce, the downward modification was warranted.

The party seeking to modify the maintenance provisions of a judgment of divorce in which the terms of a stipulation of settlement have been incorporated but not merged, must demonstrate that the continued enforcement of the party’s maintenance obligations would create an “extreme hardship”. Beard v. Beard, 300 A.D.2d 268 (2d Dept. 2002) (the proper amount of support payable is determined not by a parent’s current economic situation, but by a parent’s assets and earning powers). See also, Domestic Relations Law § 236(B)(9)(b).

A reduction in the payor’s income will not result in decreased maintenance where it is the result of a voluntary action, such as self-imposed retirement. Fendsack v. Fendsack, 290 A.D.2d 682 (3d Dept. 2002); DiNovo v. Robinson, 250 A.D.2D 898 (3d Dept. 1998). In Dallin v. Dallin, 250 A.D.2d 847 (2d Dept. 1998), the Second Department held that Family Court properly rejected the father’s claims that his financial situation, prolonged unemployment, and illnesses warranted a drastic reduction of his maintenance and child support obligations. The father had failed to produce any competent evidence to support his claim that he used his best efforts to obtain employment commensurate with his qualifications and experience or that his medical conditions rendered him unemployable.

In Lenigan v. Lenigan, 146 Misc.2d 627 (Sup.Ct., Albany County 1990), the defendant sought to reduce his maintenance and child support obligations. The defendant claimed that, in the prior three months, his compensation as a stock broker had been reduced. It is well settled that the party seeking to obtain a reduction of support bears the burden of establishing a substantial change of circumstances. Id. A drastic change in income can constitute a substantial change of circumstances. Id. In Lenigan, the defendant was a stockbroker, and by the very nature of his business, his income would fluctuate throughout the year. The Supreme Court held that, adopting the defendant’s theory of allowing a modification based upon temporary fluctuations in income would lead to a ludicrous result. Although the defendant asserted a three-month lull in business, there was nothing to establish that sales would not pick up in the following months.

In conclusion, an experienced divorce lawyer faced with a significant change in client’s economic situation, must carefully construct an argument for the court that the change was not created by his/her client, that the change is significant, that it is likely to last for a some time, and that the client has exhausted all other alternatives.
In Watrous v. Watrous, 292 A.D.2d 691 (3d Dept. 2002), at age 55, the plaintiff voluntarily retired from State employment and, shortly thereafter, moved to terminate or, in the alternative, reduce his maintenance obligation. The plaintiff asserted as a substantial change in circumstances that he took early retirement due to his poor health and would be experiencing a significant reduction in income. A hearing was held and, at the close of plaintiff’s proof, Supreme Court granted defendant’s motion to dismiss, finding that plaintiff had failed to establish a sufficient change in circumstances. The Third Department affirmed on appeal, stating that a maintenance obligation established by a judgment of divorce will not be modified absent clear and convincing proof of a substantial change in circumstances. The record revealed that, at the time of the divorce, Supreme Court was aware of both the medical restrictions on plaintiff’s employment and the possibility that his poor health might cause him to retire early. Accordingly the circumstances existing at the time of the plaintiff’s application for downward modification were foreseeable, and anticipated at the time of the parties’ divorce. Furthermore, the record was devoid of evidence that the reduction in the plaintiff’s income would substantially diminish his standard of living or his ability to satisfy his maintenance obligation. The Third Department therefore concluded that the plaintiff failed to establish a substantial change in circumstances.

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Posted in Domestic Relations Law, Family Law, New York Law, Settlement Agreements, Stipulations, Supreme Court, Uncategorized, court orders, divorce, maintenance, modification, procedure | No Comments »

Divorce and Exclusive Possession of Marital Residence During Pendency of the Action

Sunday, February 22nd, 2009

I am often asked by a party to a divorce action if the other party can be forced to leave the marital residence. My usual response is that it can be done under the appropriate circumstances. Exclusive use and occupancy of the marital residence may be awarded during pendency of a divorce action upon a showing that a spouse’s presence has caused domestic strife and/or that the spouse has voluntarily established an alternative residence. See, Domestic Relations Law §234; Annexstein v. Annexstein, 202 A.D.2d 1062 (4th Dept. 1994). The standard for granting exclusive possession is a flexible one and may include any circumstance warranting judicial intervention. See, Grogg v. Grogg, 152 A.D.2d 802 (3rd Dept. 1989) (The presence of marital strife can be a recognized standard for an award of exclusive possession). In I.Q. v. A.Q., 228 A.D.2d 301 (1st Dept. 1996), where there was no dispute of a significant potential for strife should defendant return, and no genuine issue raised that defendant’s exclusion from the marital residence would cause him more than minimal disruption, the motion court’s award of temporary exclusive possession, without a hearing, was a proper exercise of discretion. Id.

Similarly, in Iuliano v. Iuliano, 30 A.D.3d 737 (3rd Dept. 2006), testimony clearly demonstrated the existence of marital strife between the parties requiring an award of exclusive possession to insure the personal safety of the parties. Given the disparate financial circumstances of the parties, the award of exclusive possession to defendant was deemed to be proper. Id. In Mitzner v. Mitzner, 228 A.D.2d 483 (2nd Dept. 1996), the Supreme Court was found to have properly awarded the defendant temporary exclusive possession of the marital residence, given the domestic strife caused by the plaintiff’s presence in the home and the fact that he had voluntarily established an alternative residence. Id. See, also, Block v. Block, 245 A.D.2d 153 (1st Dept. 1997) (In light of husband’s admission that due to marital strife, he voluntarily vacated the marital residence shortly after signing a one-year sub-lease for an apartment, and the unrebutted expert evidence concerning the impact of the domestic strife on the wife prior to the husband’s departure and the potential harm to the wife and children if the husband returned, the motion court erred in not granting the wife’s cross-motion for exclusive occupancy of the marital residence and in granting the husband’s motion for complete access thereto).

If the presence of one party has caused significant domestic strife in the marital residence and that party has sufficient means to secure an alternate residence, the other party may be granted exclusive use and occupancy of the marital residence. During a divorce, exclusive possession is one of the most important tools available to a divorce lawyer to improve client’s position, and to force the other party to establish a separate household. Grant of exclusive possession is likely to have significant consequences with respect to custody, visitation, temporary maintenance and other issues. Since the grant of exclusive possession under Domestic Relations Law §234 is within the court’s discretion, it is difficult to have it overturned on appeal.

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Posted in Domestic Relations Law, Family Law, New York Law, Supreme Court, Uncategorized, court orders, divorce, procedure | 1 Comment »

Same Sex Marriage and Inheritance Rights

Monday, February 9th, 2009

I have previously blogged about recognition of same sex marriages by New York courts, and specifically, Martinez v. County of Monroe, 50 A.D.3d 189 (4th Dept. 2008). The courts have applied Martinez in recognizing the right to benefits, divorce, adoption, and now, inheritance rights. In a recent decision, In re Ranftle, N.Y.L.J., (Feb. 3, 2009), the Surrogate Court in New York County recognized a same-sex marriage entered into in Canada for the purpose of determining decent’s distributees.

The decent H. Kenneth Ranftle, married his same sex partner, J. Craig Leiby, in Monreal, Canada, on June 7, 2008. He died on November 1, 2008, and was survived by Mr. Leiby and three siblings. Relying on Martinez, the Surrogate Court recognized the marriage as valid and entitled to recognition in the Sate of New York. Therefore, Mr. Leiby was declared to be decedent’s surviving spouse and sole distributee under Estates Powers & Trusts Law §4-1.1. Under Estates Powers & Trusts Law §4-1.1, Mr. Ranftle’s siblings will not be entitled to any part of his estate.

Posted in Domestic Relations Law, New York Law, Supreme Court, Uncategorized, procedure, same sex marriage | No Comments »

Non-Marital Property Is Not Subject to Distribution

Monday, February 9th, 2009

I have previously written about relevant classification of property for equitable distribution purposes. Normally, the property is classified as either separate or marital, regardless of how the title is held. However, once in a while I have seen situations where property rights are claimed in a property which is titled in neither the husband’s or wife’s name.

In Mattioli v Mattioli,48 A.D.3d 1143 (4th Dept. 2008) the Appellate Division held that Supreme Court properly refused to treat the former marital residence, which was titled in the names of plaintiff’s parents or in one of their names, as marital property subject to equitable distribution, despite the fact that plaintiff paid her father $42,899 during the marriage as a down payment towards its purchase. The Appellate Division held that the trial court erred, however, in basing its decision solely on the fact that title to the property was held by one or both of plaintiff’s parents, rather than by plaintiff and/or defendant. That fact was not necessarily dispositive because Domestic Relations Law 236(B)(1)(c) defines marital property as “all 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.” Thus, the dispositive issue was whether plaintiff and/or defendant held “any valuable property rights” in the former marital residence, inasmuch as property is “not marital property [where] neither the wife nor the husband [holds] any valuable property rights” in it. While the parties in this case alluded to an agreement between plaintiff, defendant, and plaintiff’s parents for the purchase of the former marital residence, no written agreement for the purchase and sale thereof was presented to the court. In the absence of a written contract, there was no evidence before the court that either plaintiff or defendant held the requisite “valuable property rights” in the former marital residence to render it marital property.

The Appellate Division held that the trial court erred in applying the doctrine of judicial estoppel in precluding defendant from presenting evidence of funds received by plaintiff from the sale of the former marital residence. Defendant attempted to establish that the $8,000 to $9,000 received by plaintiff from the sale of the former marital residence was marital property in the form of appreciation in the value of the property resulting from improvements he made to it during the marriage. The Supreme Court erred in relying on its decision when it applied the doctrine of judicial estoppel to the former marital residence. The record established that during the marriage defendant twice filed for bankruptcy under chapter 7 of the Bankruptcy Code and received discharges, and that he claimed in both bankruptcies that he was single and did not list the former marital residence as an asset in his bankruptcy schedules. The court thus determined that judicial estoppel prevented defendant from claiming any interest in funds received upon the sale of the former marital residence. Because marital property rights are determined upon the granting of a divorce, and defendant was not required to list possible future rights to marital property in the bankruptcy schedules. The Appellate Division modified the judgment by remitting the matter to Supreme Court to reopen the proof at trial to permit defendant to submit evidence that the funds received by plaintiff from the sale of the former marital residence were marital property.

The lesson of Mattioli is a simple one. If you are entering into any kind of agreement that may involve property to which you may have to establish a right to, make sure that the agreement is in writing.

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

Basics of Prenuptial Agreements

Sunday, February 1st, 2009

One of the basic agreements in divorce and family law is the prenuptial agreement, which is signed prior to the parties’ marriage. It is typically used to protect one or both parties’ separate property from becoming marital property or to address any other issues between the parties in the event of dissolution of the marriage. Prenuptial agreements are encouraged as consistent with the public policy of New York. Such agreements, however, must be fair and reasonable and not invalidated by fraud, misrepresentation, coercion of one of the parties. In the absence of fraud, misrepresentation, coercion, these agreements are presumed to be valid, and the party seeking to set aside the agreement has the burden of proof.

Domestic Relations Law (DRL) §236(B)(3) governs prenuptial agreements and addresses their subject matter. Such agreements typically address the following:

1) The right to make a testamentary provision of any kind, or a waiver of any right to elect against the provisions of a will;
(2) Ownership, division or distribution of separate and marital property;
(3) The amount and duration of maintenance or other terms and conditions of the marriage relationship; and
(4) Custody, care, education and maintenance of any child of the parties.

The courts carefully scrutinize such agreements if one of the parties is seeking to enforce it. For example, an agreement concerning the amount and duration of spousal maintenance must be fair and reasonable at the time it is made, and not unconscionable at the time of entry of final judgment in the divorce action. See Domestic Relations Law §236(B)(3); Deckoff v. Deckoff, 284 A.D.2d 426 (2d Dept. 2001). Further, no spouse may relieve the other of the requirement of support to the extent that the spouse may become a public charge. Bloomfield v. Bloomfield, 97 N.Y.2d 188 (2001). An agreement as to child support must set forth the amount of child support that would be owed under the relevant guidelines and, if the amount agreed to deviates from the same, an explanation why. Domestic Relations Law §240(1-b)(h). Moreover, even if the agreement complies with the statutory requirements, the courts “retain discretion with respect to child support”. Domestic Relations Law § 240(1-b)(h); Gravlin v. Ruppert, 98 N.Y.2d 1, 5 (2002). Similarly, a prenuptial agreement as to child custody is not binding on the court. Friederwitzer v. Friederwitzer, 55 N.Y.2d 89 (1982); Fanelli v. Fanelli, 215 A.D.2d 718 (2d Dept. 1995). Nor is an agreement concerning the physical location of a child subject to a joint or shared custody arrangement. Tropea v. Tropea, 87 N.Y.2d 727 (1996). In short, the statutory scheme may trump an agreement if there is an inconsistency.

Even with the courts’ ability to review and vacate prenuptial agreements, they are the single best tool family law lawyers have to plan ahead and to allow their clients to prearrange for orderly dissolution of the marriage. A prenuptial agreement may be required if one spouse is involved in a business, and his or her partners may want to protect the business from any effects of equitable distribution. If one of the parties is entering the marriage with valuable property, including real estate, a business or a license or a degree, that property, and any appreciation in its value can be protected. If one of the prospective spouses is attending law school or medical school, a prenuptial agreement will protect against such degree becoming marital property. A prenuptial agreement will allow both sides in the marriage to address issues that may arise if the marriage is dissolved. . It sets forth each party’s rights in the event of a divorce or separation.

Usually, the significant issue related to the validity of prenuptial agreements is nondisclosure. During marriage spouses are subject to the special duties imposed by their confidential relationship. As noted in Christian v. Christian, 42 N.Y.2d 63 (1977) those fiduciary duties are imposed independently of any statute. In addition, the Domestic Relations Law requires full disclosure between spouses, and to “opt out” of the statutory system there must be a full and complete disclosure of all financial data, unless there is an intelligent waiver. Courts ordinarily are wary of waivers of full disclosure.

Family law attorneys often insert clauses in settlement agreements that contain declarations that each party has made full financial disclosure to the other; that their respective counsel has fully explained to each of them the legal and practical effect of the terms of the agreement, and that the circumstances surrounding the preparation and execution of the agreement were fair, and not the result of fraud, duress or undue influence. However, unless such disclosure was actually made, there is a significant risk that the agreement would be vacated by the court.

If “unconscionability” is established, such clauses certainly have limited, if any, effect. But if the settlement agreement is fair on its face, and especially if the complaining party was represented by independent counsel, such clauses are effective and, at a minimum, place a heavy burden on the party who asserts invalidity. It should be noted that courts have sustained the validity of a prenuptial agreement where there was an intelligent waiver and full disclosure was not made. In Hoffman v. Hoffman, 100 A.D.2d 704 (3rd Dept. 1984), the court held that a failure to disclose the full extent of a party’s assets does not in itself constitute such fraud or overreaching that would invalidate a prenuptial agreement, where no representations were made and thus none were relied upon.

There are also important procedural requirements applicable to such agreements. A prenuptial agreement is valid only if it is “in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded”. Domestic Relations Law §236(B)(3); Matisoff v. Dobi, 90 N.Y.2d 127, 132 (1997). If the acknowledgment is does not comply with the statute, specifically Real Property Law §309-a, the agreement will be invalidated by the court.

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Same-Sex Spouse Needn’t Be Certified to Adopt Partner’s Child

Monday, January 19th, 2009

In November of 2008, I wrote about New York courts granting a divorce to a same sex couple. In C.M. v. C.C. (Sup. Ct. New York Co. October 14, 2008), the trial court held that the New York court had subject matter jurisdiction to grant a divorce to a same sex couple who were married in Massachussetts. The trial court held that in following Martinez v. County of Monroe and other cases dealing with recognition of the same sex marriage, it had the subject marriage jurisdiction and the divorce case between two women could continue. Since that time, we are seeing various rulings that followed the holding in Martinez. A few days ago, in Matter of Donna S., 2009 N.Y. Slip Op. 29009 (Fam. Ct., Monroe County, AC-14386-08), Judge Joan S. Kohout, held that there was no need for the same-sex spouse of a woman due to give birth in March to seek pre-certification to adopt her partner’s child. Judge Kohout ruled that because the couple’s Canadian marriage is recognized under New York law, the spouse could be treated exactly the same as the husband of a woman who became pregnant through donor insemination, in which case neither pre-certification nor an adoption proceeding would be necessary to establish a parental relationship with the child.

According to Judge Kohout’s opinion, Donna R.S. and Lisa P. were married on July 4, 2007, in Ontario, Canada. Lisa has become pregnant through donor insemination, and is due to give birth in March. Donna initiated the process of being approved as an adoptive parent, with the intention of adopting the child when he/she is born. As part of a normal adoption process, she submitted to a home study by a social worker, who produced a positive report, and then she submitted her petition to the court to be “pre-certified” as an adoptive parent, so the adoption procedure could be handled expeditiously after the child is born.

Pre-certification is a legal process that is typically handled at the start of every adoption. A successful pre-certification process is critical and involves filing pleadings with the appropriate court, a home study, child abuse clearance and criminal record check. Once a prospective adoptive parent has been precertified, he/she can proceed with pursuing a domestic adoption. The “certification” includes a homestudy, child abuse clearance and criminal record check prior to the adoption, and a follow-up homestudy before the adoption is finalized. This requirement was brought into being as a result of the infamous Steinberg case, so that all parties in the adoption process are protected.

The petition did not specify that Donna was seeking to adopt any particular child, but merely wished to be certified as qualified in general to be an adoptive parent. The home study made it clear to the court that her intention was to adopt her same-sex spouse’s child.

Judge Kohout considered the pre-certification process to be unnecessary. Pointing out that the Appellate Division’s ruling last year in Martinez means that “the marriage of same sex couples legally married in other jurisdictions must be recognized by New York,” and mentioning as well that Governor David Paterson had directed New York state agencies to “apply statutes and regulations in a gender neutral manner to same sex parties validly married in another jurisdiction,” Judge Kohout decided to treat Donna similarly to the husband of a woman who has become pregnant through donor insemination.

In those situations, an adoption proceeding is unnecessary. Spouse’s parental status is established by the parties’ execution of a consent form, indicating their agreement that the birth mother’s spouse will be the legal parent of the child.

Additionally, Judge Kohout considered an alternative approach: “Since Ms. S. is the spouse of Ms. P., she will at the very least be considered a step-parent to Ms. P.’s child after the child’s birth. Step-parents are not required to be pre-certified as qualified adoptive parents for the purpose of adopting their spouse’s child.” However, step-parents would have to fulfill a one year waiting period to adopt, or get approval to waive the waiting period from the court.

In conclusion, Judge Kohout stated that the situation could be resolved by the statute governing donor insemination, pointing out that “a child born to a married woman by artificial insemination is deemed the legal child of the husband if both spouses execute a consent to that effect. Given the holding in Martinez, it would seem that by the simple execution of a consent, Ms. S. could become the baby’s legal parent without the necessity of an adoption.”

However, since all the paperwork was in order and there was a positive home study report on file, Judge Kohout granted the pre-certification petition, so the petitioner was eligible to adopt a child until the expiration of the petition in May 2010.

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Posted in Domestic Relations Law, Family Court, Family Law, New York Law, Uncategorized, adoption, jurisdiction, paternity, procedure, same sex marriage | No Comments »

Assigned Counsel in Divorce and Custody Cases

Monday, January 5th, 2009

I am often asked whether there is a right to assigned counsel in divorce and custody cases that are either brought or are pending in the Supreme Court. While assignment of counsel to those who cannot afford it is a common place occurrence in the Family Court, until fairly recently, there was no right to assigned counsel in the Supreme Court. However, the New York Legislature recognized that litigants in custody and visitation cases brought in the Supreme Court should have the same right to the assignment of free counsel as litigants in custody and visitation cases brought in the Family court. Thus, Judiciary Law §35 has been amended to require justices in the Supreme Court to assign counsel in such cases. The Supreme Court justices are now required to notify parties of the right to counsel, as well as the right to an adjournment to obtain counsel, and to the right to the appointment of free counsel, if they can not afford to retain an attorney. In divorce cases, the right to assigned counsel exists only where custody or visitation are at issue. Therefore, if you are a defendant in a divorce action, and the custody or visitation is at issue, you can have a court appointed attorney represent you if you cannot hire your own counsel.

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Posted in Domestic Relations Law, Family Law, New York Law, Supreme Court, Uncategorized, custody, divorce, procedure, visitation | No Comments »

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