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

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DRL§177 has been repealed to resolve the numerous practical problems it presented to the litigants.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.

Divorce Actions and New Automatic Stay Orders

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.

Making Deals in Divorce and Subsequent Change in Circumstances

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.

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

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.

Divorce and Dissolution of Out-Of-State Civil Unions

I have previously written about New York’s recognition of foreign marriages, including same-sex marriages and divorce. While same-sex marriage and divorce are becoming more common, some states have incorporated civil unions into their statutes as an alternative to same-sex marriage.  One of New York’s neighbors, Vermont, has permitted such civil unions for some time.  Until recently, it was unclear what position New York courts would take if the parties who entered into a civil union sought divorce, or dissolution of that union in New York.

In B.S. v. F.B., 2009 N.Y. Slip Op. 29315 (Sup. Ct. Westchester Co. 2009), the court had to decide whether it could grant a divorce to a couple who entered into a civil union in Vermont.

In B.S., the parties have resided together for a number of years. In October 2003 the parties entered into a “Civil Union” in the state of Vermont. In 2009, plaintiff by Summons with Notice and Verified Complaint commenced an action in Westchester County Supreme Court seeking dissolution of “the marriage between the parties” on DRL § 170 (1) grounds of cruel and inhuman treatment.

The Vermont statute, effective July 1, 2000, provides that parties to a civil union be entitled to “the benefits and protections” and “be subject to the rights and responsibilities” of “spouses” (Vermont Stat Ann, Title 15, § 1201 [2]). Civil union affords “all the same benefits, protections and responsibilities under law, whether they derive from statute, administrative or court rule, policy, common law or any other source of civil law, as are granted to spouses in a marriage” (Vermont Stat Ann, Title 15 § 1204 [a]). A party to a civil union is included in the definition of the term spouse, family, immediate family, dependent, next of kin and “other terms that denote the spousal relationship, as those terms are used throughout the law.” (Vermont Stat Ann, Title 15, § 1204 [b].) Parties to a civil union are responsible for support “to the same degree and in the same manner as prescribed under the law for married persons” (Vermont Stat Ann, Title 15, § 1204 [c]). Annulment, separation, divorce, child custody and support, property division and maintenance apply to parties to a civil union (Vermont Stat Ann, Title 15, § 1204 [d]).

Defendant argued that New York courts lacked jurisdiction to grant a divorce in a situation where the parties entered into a civil union, as opposed to a marriage. After discussing how neighboring states treated civil unions and whether or not those states were able to grant divorce to the couples who entered into civil unions, the court examined New York’s law dealing with these issues.

The Supreme Court stated that New York has not attempted to create any method by which same sex partners can “legalize” their relationships. In the absence of such a rule, regulation or statute, this Court has no precedent or authority to use as a standard to address plaintiff’s application herein. New York’s judicial position with respect to permitting same sex marriage is currently articulated in Hernandez v. Robles, 7 N.Y.3d 338 (2006). In Hernandez, the New York Court of Appeals declined to extend the right to marry to the same sex couples.

New York courts have recognized same sex unions celebrated in a sister state or foreign country by application of the principal of full faith and credit. By extending full faith and credit to same sex marriages from other jurisdictions, New York has recognized the same sex spouse’s right to health and other insurance benefits; in estate proceedings to qualify as a surviving spouse in the probate of an intestate estate; and in divorce actions. See Martinez v. County of Monroe, 50 A.D.3d 189 (4th Dept. 2008). But the essential predicate for Martinez and subsequent judicial determinations was the existence of a valid marriage.

As a matter of comity, New York courts will generally recognize out -of-state marriages, including common law marriages, unless barred by positive law (statute) or natural law (incest, polygamy), or where the marriage was otherwise offensive to public policy. While falling short of placing a civil union on the same level as a valid marriage, New York has evidenced by executive and local orders a clear commitment to respect, uphold and protect parties to same sex relationships and their families. The Vermont Legislature’s decision to create a civil union was an recognition of the right of same sex couples to have some legal protections and some of the rights and responsibilities of opposite sex married people.

At the same time, civil unions were never treated by New York court as equal to marriage. Therefore, the court felt constrained by judicial precedent and legislative inaction and  held that it could not treat the civil union as a marriage and, therefore, could not grant a divorce. Yet, after finding that it could not grant a divorce under New York law, the court attempted to come up with a road map for the parties and stated that if the plaintiff plead a complaint to dissolve a Vermont civil union, New York Supreme Court would have jurisdiction to hear and decide the case.

While New York Supreme Court has the general jurisdiction to hear and decide all equitable civil actions, it is unclear to me whether it could dissolve a civil union in the absence of some action by New York’s Legislature. For a divorce lawyer, the above represents an excellent example of uncertainty created by the lack of uniformity in the states’ treatment of same-sex relationships. It also brings up a host of interesting legal issues that attorneys must recognize in handling similar situations.

Custody, UCCEJA and Jurisdictional Issues

I often deal with situations where either parent  and/or their child relocates to out of state and the other wishes to petition the court for custody of the child, visitation, or modification of existing order or, perhaps, enforcement of a custody order.  While in many cases the noncustodial parent seeks court intervention because the custodial parent relocated without permission, there are situations where the consent was given initially but then intervening events resulted in the need for modification or enforcement of the current custody order.

New York, as well as many other states, has adopted the Uniform Child Custody Jurisdiction and Enforcement Act (“UCCEJA”).  UCCEJA aims to discourage interstate child abductions and to prevent “forum shopping” by parents trying to strategically remove the child to a state  to avoid another state’s jurisdiction.  The statute explicitly sets forth the circumstances in which New York courts have jurisdiction, particularly when there is a question which state has the right to exercise jurisdiction because one parent and/or the child no longer resides in New York.  Although it is usually invoked in petitions seeking custody or visitation, or modification and/or enforcement of custody or visitation orders, it also applies to guardianship proceedings, divorce, paternity, child abuse or neglect, termination of parental rights, and domestic violence cases. Since jurisdiction is usually not in issue when the child lives in New York or has moved from the state within six months of filing the petition, the UCCJEA helps to resolve jurisdictional issues in other circumstances where the child has moved to another state or his or her physical presence in the state.  These include cases where the noncustodial parent lives in New York but the child does not; where the child moved from the state more than six months prior to the filing of the petition (but without the noncustodial parent’s consent or to somewhere unknown to that parent);  or where the child is in New York and there are concerns of abuse and/or neglect. These are all scenarios that warrant the application of the UCCJEA.

The UCCJEA sets forth alternative rounds of asserting jurisdiction, which are:  1)  where it is in the best interests of the child based on the “significant connections”  to the state and there is “substantial evidence” within the court’s jurisdiction concerning the child’s current or future care; 2) where there is an emergency situation ; 3) where no other state has jurisdiction or 4) another state has refused jurisdiction.

New York courts’ jurisdiction under the first ground only applies to cases where there is no home state and there has not been a home state for the past six months.  This limitation is imposed by the federal statute, the Parental Kidnapping Prevention Act which trumps the UCCJEA because of the constitutional supremacy clause (Article VI, Clause 2).  This act serves to provide more uniformity amongst states, resolve conflicts between various states that may have an interest and to address the inconsistency caused by the application of the prior act, the Uniform Child Custody Jurisdiction Act (“UCCJA”), which was the basis for states applying their own version resulting in inconsistent orders.  Its objective is to avoid forum shopping, while encouraging the preference for the issuing state to maintain jurisdiction so long as one of the parents or the child remains a resident of the state.  Based on this, as well the two part analysis required to meet the criteria, there are rare cases where this particular section applies.  For example, showing that there are “significant contacts with the state” may be attainable, but proving that there is “substantial evidence” concerning the child’s current or future care is much more challenging.

New York courts’ jurisdiction under the second ground arises typically in child abuse or neglect cases or where the child was abandoned by the parent or legal guardian.  However, although the act serves to limit jurisdiction to situations where some emergency intervention by the courts is required, the statute is strictly construed.  In other words, a mere allegation of abuse and/or neglect is not enough, the courts must be convinced that abuse or neglect actually exist, placing the child’s physical and/or emotional well-being into question.   And even still, the courts may assert only limited or temporary jurisdiction, deferring the case to the home state of the child for further proceedings.  Furthermore, the child must physically be present in the state, and cannot be removed from the state for any reason under this provision.

New York courts will assert jurisdiction under the third ground in the cases where the child has not had a home state anywhere during the previous six months and no significant connections or emergency situation exists.  This is really a safety measure, an effort to avoid the case going unheard by any court.  Cases like this arise when the child moved from New York, then to another state for a short period (less than six months), then back to New York less than six months before the filing of the petition.

New York courts’ jurisdiction under the fourth ground will be asserted in the cases where another state, presumed to have been the child’s home state, has denied jurisdiction based on its own provisions.  Typically states will deny jurisdiction for lack of significant ties, there is a case already pending in another state, there is a more convenient forum or merely for parties’ failure to ascertain legitimate residence, as is the case when parents take the child from another state and hide him or her from the noncustodial parent long enough to establish jurisdiction.

When it comes to modifying a child custody order in New York that was issued by another state, New York will not exercise jurisdiction unless the state that entered it no longer has jurisdiction.  So even if it is the non-custodial parent that remains in the issuing state, while the child and the custodial parent relocated to New York, that state still has jurisdiction unless it declines jurisdiction.  Conversely, New York will enforce a custody order if the child and one parent lives in the state if the order is registered in New York.

The above issues tend to be factually oriented, and family law lawyers will carefully review the parties’ circumstances before and after the move, and any other fact relevant to jurisdictional determinations.

A recent example of application of the above principles, took place in Felty v. Felty, 2009 N.Y. Slip. Op. 05859 (2d Dept. 2009). In Felty, the primary question was whether New York should exercise home-state jurisdiction in a child custody proceeding. The Appellate Division held that the facts supported the mother’s contention that she intended to remain permanently in New York where the children’s six-week visit to Kentucky during the summer of 2007 was a temporary absence, which did not interrupt the six-month pre-petition residency period required by the UCCJEA.

The court found that the father took no affirmative steps prior to the commencement of the New York proceeding to establish permanent residence for the children in Kentucky and the children’s six-week summer visit was merely a temporary stay similar to a summer vacation.
The court stated that even if there was a wrongful removal by the mother, such a removal will not be treated as a temporary absence if there is evidence that the taking or retention of the child was to protect the mother from domestic violence. Here, the mother misled the father about agreeing to reconcile their marriage because he would not permit her to return to New York if she refused to attempt reconciliation. Finally, the court agreed with the lower court’s finding that treating the six-week visit as a temporary absence “permits parties to child custody proceedings to freely vacation and visit family members in other states without fear of losing home-state status.”

As described above, courts will carefully review all of the circumstances related to the parties’ and children’s residences, as well as the reasons for any move. If you are dealing with a situation where a dispute may be litigated in two different states, it would be a good idea to speak with an attorney who has experience dealing with UCCJEA.

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

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.

Modification of Child Support Orders and Family Court’s Jurisdiction

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.

Pendente Lite Motions And Available Relief

A divorce case could easily last for a year or, occasionally, much longer. Therefore, it is common for the parties to seek various forms of relief from the court while the action is pending.  This type of relief is commonly referred to as pendente lite and is usually obtained by making a motion, brought by an order to show cause.  Such motion is usually supported by affidavits, exhibits, and statements of net worth. A pendente lite motion may seek such things as temporary custody of children, temporary schedule of visitation with the minor children, temporary child support, temporary maintenance, exclusive possession of the marital residence, temporary order of protection, interim award of attorneys fees, interim award of expert fees, and an order restraining marital assets.  Since pendente lite motions are made on expedited basis, not all facts may be known at the time the motion is brought.  Once the relief sought in the pendente lite is granted, the court’s decision is unlikely to be reversed on appeal since numerous cases have held that the proper remedy for objections to a pendente lite order is a plenary trial.  As the court stated in Penavic v. Penavic, 60 A.D.3d 1026 (2nd Dept. 2009), “[t]he best remedy for any perceived inequities in the pendente lite award is a speedy trial, at which the disputed issues concerning the parties’ financial capacity and circumstances can be fully explored.” After the final decision is made, the trial court has the power to adjust the pendente lite relief.

The most significant form of pendente lite relief in many cases is temporary maintenance.  As the court stated in Mueller v. Mueller, 61 A.D.3d 652 (2nd Dept. 2009), “pendente lite awards should be an accommodation between the reasonable needs of the moving spouse and the financial ability of the other spouse . . . with due regard for the  preservation standard of living”. It is the burden of the party seeking pendente lite relief to demonstrate the need for the award sought. The standard of living previously enjoyed by the parties is a relevant consideration in assessing the reasonable needs of a temporary maintenance applicant.

One critical issue that can be addressed by a pendente lite motion is preservation of marital assets. Pursuant to Domestic Relations Law § 234, a court has broad discretion in matrimonial actions to issue injunctive relief in the interest of justice to preserve marital assets pending equitable distribution. Place v. Seamon, 59 A.D.3d 913 (3rd Dept. 2009). Such request for restraints on property transfers can be granted upon the movant demonstrating that the spouse to be enjoined “is attempting or threatening to dispose of marital assets so as to adversely affect the movant’s ultimate rights in equitable distribution”.

Pendente lite financial relief is usually retroactive to the date of filing of the motion.

For many, getting exclusive occupancy of the marital residence during the pendency of a divorce action can be as important as the ultimate divorce itself. Yet the emotional need to be free of the company of one’s spouse is never enough. The courts do not lightly infringe upon the right of a spouse to remain in his or her home even where, for example, that spouse continues an adulterous relationship, or the marital residence was owned by the other spouse prior to the marriage.

Where both parties remain in the home when the application for temporary exclusive occupancy is brought before the court, the party seeking occupancy must show that the other party is a threat to the safety of person(s) or property. The party seeking such relief must present detailed allegations supported by third party affidavits, police reports and/or hospital records may be needed to convince the court that the application is not an effort to force the other party out of the house. Even then, if the other party contradicts the allegations of the application with his or her own sworn affidavit, the court may order that a hearing be held to resolve the conflicting versions of the facts. Occasionally, the evidence of the threat to safety is sufficiently persuasive that a court will dispense with the requirement of a hearing, and grant an order of exclusive occupancy based only upon a review of the papers submitted. As I have written before, such relief can also be obtained from the Family Court on expedited basis and, occasionally, on ex parte basis,  if the safety of a party is at issue.

A pendente lite motion which requests either child support, maintenance or attorneys fees, must include a statement of net worth as an exhibit, even if the statement of net worth has been filed separately.

One form of relief that is typically not available as a part of a pendente lite application, is the order directing the sale of the marital residence. Such relief can only be obtained after trial.

If a party decides to violate the pendente lite order, the proper application is contempt. Shammah v. Shammah, 22 Misc.3d 822 (Sup. Ct. Nassau Co. 2008).

Usually, a pendente lite motion sets up the parties’ positions with respect to critical issues in their divorce case.  If a lawyer is successful in obtaining the relief sought, his/her client’s position going forward will better and the client’s negotiating posture may improve significantly.  Most  divorce attorneys recognize this and are careful in making pendente lite motions.

What Is Required to Obtain Divorce On Constructive Abandonment Grounds in New York

I have previously written about New York’s grounds for divorce, including constructive abandonment.  Simply put, constructive abandonment occurs when one spouse refuses to have sexual relations with the other, without excuse or justification, for a period of one year preceding the filing of the action for divorce.  Further, case law has established that the abandonment must continue despite repeated requests from the other spouse for resumption of cohabitation. When looking at divorce actions based on constructive abandonment grounds, a lawyer must make an inquiry whether spousal relations were requested, how many times, and over what period of time.   Until recently, it was not clear how many times a spouse must make such request.  The courts have held previously that “..evidence that the other spouse refused a single request to engage in sexual relations is insufficient to establish a cause of action on the grounds of constructive abandonment.”  Archibald v. Archibald, 15 A.D.3d 431 (2nd Dept. 2005).

The answer to this question has been somewhat clarified by a recent decision.  In BM v. MM, 2009 N.Y. Slip. Op. 29235 (Sup. Ct Nassau Co. 2009), the court held that a husband’s refusal to have sex with his wife three times within a year was enough to grant the wife divorce on the grounds of constructive abandonment.  The wife testified that she could remember three occasions where she made such requests which the defendant denied and the court credited her testimony. The husband argued that since the wife had made no attempt during the last five years to have sex with him, the grounds for constructive abandonment were not established. The court held that it has recognized that there comes a time in such relationships where it would clearly be futile for one spouse to continue to ask the other to engage in sexual relations. It further found that where the defendant, on his own, moved out of the marital bedroom and into a room on a separate floor and refuses a request, after that the plaintiff should be relieved of any requirement to continue to ask for sexual relations.

The above facts demonstrate that a New York divorce lawyer must be prepared to present specific factual testimony in order to obtain a divorce on the grounds of constructive abandonment. Unfortunately, it also demonstrates that in order to establish constructive abandonment grounds in New York, requires intrusions into marital privacy and disclosure of information most parties would rather keep private. The decision discussed above reinforces my opinion that New York needs to abandon its fault grounds for divorce. No-fault divorce, based upon the breakdown of a marriage, would dispense with the need for intrusions into the marital relationship. Forcing parties to accept fault or be found at fault is time consuming and costly, and generates unnecessary bitterness during the divorce process.