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Tax Implications in Divorce – Need for Trial Evidence

Sunday, June 5th, 2011

One of the issues that frequently comes up in divorce is cases has to do with tax implications of the divorce action.  Tax issues may involve dependency exemptions, or may involve issues dealing with allocation of taxes on income or assets subject to equitable distribution.  The courts have addressed these issues in the past and have always required some admissible proof with respect to tax implications of the relief sought in the divorce action. However, some parties still fail to present admissible trial evidence that would allow the court to make decisions allocating tax liabilities, if any.

In Bayer v. Bayer, 80 A.D.3d 492 (1st Dept. 2011), the Appellate Division had to address whether the trial court properly disregarded the tax consequences impacting plaintiff’s receipt of fifty percent of monies which defendant had earned in the fiscal quarter preceding commencement of the divorce action.  The Appellate Division held that since defendant failed to present evidence from which the court could determine the amount of such taxes, the trial court acted properly.  The Appellate Division relied upon D’Amico v. D’Amico, 66 A.D.3d 951 (2nd Dept. 2009).  In D’Amico, the court held that “[W]hile this court has recognized that the value of a pension should be discounted by the amount of income tax required to be paid by a party, where the party seeking the discount fails to present any evidence from which the court could have determined the dollar amount of the tax consequences, the computation of the award without regard to tax consequences will be deemed proper”. (citations omitted)

Therefore, if there are tax issues associated with dependency exemptions, maintenance, retirement assets or equitable distribution, in order to have trial court consider those issues , a party must present admissible evidence of any tax consequences that may result. If a party fails to do so, the trial court will not consider any tax implications. As a result, a party seeking the court’s decision with respect to tax issues will have to present expert testimony of an accountant who would be able to present admissible evidence of any tax implications.

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

Downward Modification of Child Support, Scope of Job Search and Custody Issues

Sunday, May 8th, 2011

I have previously written about downward modification of child support in a situation where the payor has lost his job or experienced a significant reduction in his income. Recently, I was personally involved in a case which also involved custody issues that directly impacted payor’s job search and were raised as a defense to an argument that the job search was insufficient. While I almost never write about cases while they are still pending, in this case, an article about the decision was published in the paper serving Rochester legal community, and I think that it is interesting one, because of the interplay between the child’s need for support and parent’s wish not to search for a job outside of his present community.

In Szalapski v. Schwartz n/k/a Szalapski, Justice Richard A. Dollinger had to decide whether an unemployed parent with support obligations must clearly make a diligent job search limited to the Rochester area, or expand it beyond Rochester. Mr. Szalapski, who lost his employment earning six-figure income a number of months ago, brought a downward modification obligation claiming that despite his diligent job search, he was unable to find a comparable job and his income for child support purposes should be reduced to $15,000 per year. Mr. Szalapski has a number of advanced science and engineering degrees, and has held both teaching and industry positions. When Ms. Schwartz raised an argument that Mr. Szalapski was obligated to search for a job outside of Rochester area, Mr. Szalapski claimed that because of the parties’ custodial and visitation arrangements, and his involvement in one of his children’s life, he did not have to search for employment beyond 60 mile radius from his present residence. As result, the court had to address the apparent tension between the children’s need for support and the parent’s wish to maintain existing relationship with his child. Mr. Szalapski argued that if he is forced to accept a job some distance away from Rochester, his relationship with his son would be negatively impacted.

The court ruled that a potentially high earning plaintiff such as Mr. Szalapski, who is seeking modification, should be required to examine the prospects of employment in another area before the court substantially reduces his child support obligation. “New York law is strangely silent on this issue and, based on this court’s research, the question of the ‘radius of a reasonable job search’ has been seldom analyzed in the Empire State,” Justice Richard A. Dollinger wrote in the decision. “In essence, the husband [plaintiff] must prove that the benefit of the increased support, occasioned by finding a job in a new location, would be outweighed by the deleterious impact on his relationship with his son and that no alteration in the visitation schedule could accommodate his visitation with his son.” The court suggested that a high paying job (in excess of $100,000) in a nearby city such as New York, Boston, Cleveland or Washington, D.C., may be able to accommodate a visitation schedule that requires a short airplane flight.

“The paramount importance of maintaining the child’s standard of living is what drives the need for a diligent job search when an obligated parent loses their employment,” Justice Dollinger wrote. “In this court’s view then, the scope of the job search should extend beyond the convenience of either parent, and reach to a point where the benefit of employment in a new more distant location outweighs the consequence s of distance on the relationship between the parent and child” the justice continued. The court noted that the burden of  establishing whether the job search was adequate rests with the plaintiff seeking modification to prove “diligent search for employment” and ordered a hearing on the adequacy of his job search.

I think that this is an interesting decision and that Justice Dollinger did an excellent job addressing both sides of this factual scenario. As far as hearing, it is still in the future.

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Posted in child support, Child Support Standards Act, court orders, Domestic Relations Law, Family Law, imputed income, modification, New York Law, Supreme Court | No Comments »

Contempt and Enforcement of Court Orders

Wednesday, April 20th, 2011

One remedy to a failure of one party to abide by existing court orders that is available to the parties in divorce and other family law actions is contempt of court. The power to punish for contempt arises out of the inherent power of the court, which is limited by §753(A)(3) of the Judiciary Law. It provides, in part:

753. Power of courts to punish for civil contempts
A. A court of record has power to punish, by fine and imprisonment, or either, a neglect or violation of duty, or other misconduct, by which a right or remedy of a party to a civil action or special proceeding, pending in the court may be defeated, impaired, impeded, or prejudiced, in any of the following cases:
3. A party to the action or special proceeding, an attorney, counsellor, or other person, for the nonpayment of a sum of money, ordered or adjudged by the court to be paid, in a case where by law execution can not be awarded for the collection of such sum except as otherwise specifically provided by the civil practice law and rules; or for any other disobedience to a lawful mandate of the court.
8. In any other case, where an attachment or any other proceeding to punish for a contempt, has been usually adopted and practiced in a court of record, to enforce a civil remedy of a party to an action or special proceeding in that court, or to protect the right of a party.

The power of contempt is exists to punish the party who engages in an evasion or a violation of duty, or misconduct, which resulted in defeating or prejudicing the other party’s rights. There are a number of procedural requirements that have to be strictly followed in order for the court to find a party in contempt. A motion to punish for contempt will be dismissed unless on its face it contains both a notice that the purpose of the hearing is to punish for contempt and that such punishment may consist of a fine or imprisonment. Without this notice and warning, the court is without jurisdiction to punish for contempt.

The party must also be advised by the court of the right to counsel and assigned an attorney if financially unable to obtain counsel. In addition, DRL §245 requires a finding that payment cannot be enforced pursuant to DRL §243 or §244 or CPLR §5241 and §5242 and the exhaustion of these remedies or a finding that they would be ineffectual as a prerequisite to a contempt for disobeying an order requiring payment of money in a matrimonial action.  The court must find that the violation was willful and find expressly that the actions of the defaulting spouse were calculated to or actually did defeat, impair or impede or prejudice the other spouses rights or remedies. Nonpayment alone does not establish the requisite willfulness to support contempt. DRL §246(3) provides that financial inability to pay is a defense to a contempt proceeding under DRL §245. A person who asserts in an opposing affidavit financial inability to comply with the order is entitled to an evidentiary hearing to determine whether he or she has an ability to pay.

The punishment for contempt for failure to make ordered payments is imprisonment until payment is made. The defaulting spouse may pay the money due and be released. If the court finds that the party committed the offense charged and that it was calculated to or actually did defeat, impair, impede or prejudice the rights or remedies of the other spouse, the court must make a final order directing fine, imprisonment or both, as it finds necessary.

Civil Rights Law §72 limits the length of imprisonment for nonpayment of alimony, maintenance, distributive award, special relief in a matrimonial action and counsel fees in a divorce case to three months for a default of less than $500, and to six months for $500 or more. Noticeably absent is any mention of child support. If a party has an actual loss or injury because of the proven other spouse’s misconduct, a fine must be imposed sufficient to indemnify the aggrieved party and when collected, paid to the aggrieved party.

In contrast to the DRL, the Family Court Act (FCA) takes a tougher approach by providing for commitment as one of the remedies for nonpayment of support. Section 454(2) provides that where a respondent is brought before the court for failure to obey any “lawful order” of the Family Court for support and following a hearing the court is satisfied that the respondent has failed to obey the order, it may enter a money judgment, make an income deduction order, require an undertaking, make a sequestration order or suspend the respondent’s driving, professional or business license.

Here is an example of how a contempt application will be viewed by the court. In a recent case, H.S.M. v J.T.M., 2011 N.Y. Slip. Op. 50069(U) (Sup. Ct. Nassau Co. 2011), the court was asked to hold defendant in contempt of Court for his willful failure to comply with the Judgment of Divorce entered in this action , and for his willful refusal to pay the sum of $43,351.87, together with interest. The parties’ marriage was dissolved pursuant to the Judgment of Divorce, entered June 24, 2008, which incorporated but did not merge with a Stipulation of Settlement, dated December 19, 2007. The Stipulation stated in pertinent part that:

The Husband shall pay to the Wife, as and for child support, the sum of One Thousand Seven Hundred Eighty-five ($1,785.00) Dollars per month … The parties agree that the child support payments will be made through the Nassau County Support Collection Unit. [Article XXVI]

Pursuant to the Order of the Hon. Denise L. Sher, J.S.C., dated October 4, 2006, the Court ordered pendente lite relief awarding to the Wife the sum of One Thousand Four Hundred ($1,400.00) Dollars per month temporary maintenance, as well as child support in the sum of Two Thousand ($2,000.00) Dollars per month. The award was retroactive to the date of service, which was July 18, 2006. [Article XXVII]

The Husband agrees that arrears for child support and maintenance as of the date of execution of this Agreement amount to Thirty-Eight Thousand Two Hundred ($38,200.00) Dollars, and agrees to the entry of judgment for said arrears. Said arrears shall be liquidated by the Husband paying to the Wife the sum of Three Hundred ($300.00) Dollars per month until all arrears are paid. The Father further agrees that in order to liquidate arrears, the Father shall remit to the Mother his income tax return refunds that he receives commencing with the tax year 2007 and shall pay over to the Mother the entire refund by June 1, 2008, and by June 1st every year thereafter until such time as his arrears have been liquidated. [Article XXII]

The Husband shall pay to the Wife, as and for spousal maintenance, the sum of Four Hundred ($400.00) Dollars per month…through support collection. [Article XXXVI]

Pursuant to the “So-Ordered” Stipulation of the parties dated May 19, 2010, “Def[endant] agrees to pay to Pl[aintiff] as and for child support arrears the minimum sum of $1,000.00 (One Thousand and no/100) by May 26, 2010.

Wife claimed that Husband has willfully failed to i) comply with the Judgment of Divorce dated August 6, 2008, which incorporates the Stipulation; ii) comply and pay the money judgment entered on February 3, 2010, in the sum of $49,746.27; and iii) comply with the “So-Ordered” Stipulation entered into by the parties on May 19, 2010. Wife claimed that subsequent to the entry of the money judgment, she contacted the Nassau County Office of Child Support Enforcement to seek payment of the child support obligation for the parties’ three children, as well as maintenance for herself. She claimed that notwithstanding the attempts of the Child Support Enforcement Bureau, no payments have been received from the defendant or his employer. She further alleged that the total sum now due and owing is $87,864.01, and that none of it has been paid.

In February of 2010, husband testified that he has no assets nor property which could be sequestered. In support of her application, wife claimed that nothing less than a fine and incarceration will persuade the husband to comply with the Court orders and judgments. She argued that other enforcement devices, including income deduction orders, income executions or sequestration will be unsuccessful in view of husband having made himself judgment proof; moving out of the State of New York; and failing to comply with any judgment or stipulation entered into by the parties.

Wife claimed that she is attending graduate school but that in the interim, she is completely dependent on her family for her support and the support of the parties’ three children. She claimed that the last time she received any funds from husband was in March of 2010, and that since that time she has received no support payments or maintenance. She argued that based upon those facts, husband’s intentional non-compliance with the judgment, orders and “So-Ordered” Stipulation has defeated, impaired and prejudiced her rights.

The court stated that a contempt citation is a drastic remedy which should not be granted absent a clear right to such relief.  Further, to prevail on a motion to punish a party for civil contempt, the movant must demonstrate that the party charged with contempt willfully violated a clear and unequivocal mandate of a court’s order, with knowledge of that order’s terms, thereby prejudicing the movant’s rights.  The court further held that pursuant to Domestic Relations Law §245, before a defaulting party can be held in contempt for the non-payment of a sum of money, it must appear “presumptively, to the satisfaction of the Court,” that the movant exhausted the less drastic enforcement remedies available under Domestic Relations Law §§ 243, 244 and 245, CPLR §§ 5241 and 5242, or such other enforcement mechanisms that would be ineffectual.  Once the movant has made a prima facie showing that the party against whom a contempt citation is sought has failed to pay a sum of money as ordered, the burden then shifts to the obligor to adduce some competent, credible evidence of his inability to make the required payments, in order to show that the failure to pay was not willful. The court determined that wife has satisfactorily demonstrated the existence of a clear and unequivocal mandate of the court, and that husband has knowingly violated the order’s terms, thereby prejudicing her rights. The court also found that other methods of enforcement would prove ineffective in light of husband having made himself judgment proof. The court, however, determined that it must conduct a hearing to determine husband’s willfulness in violating the subject orders. In order for a non-compliant party be incarcerated for his willful violation of the court’s mandates, the movant must prove such willfulness beyond a reasonable doubt.

The above decision illustrates that while contempt is a remedy, it may require a substantial motion practice and, most likely, a hearing.  Thus, contempt motions should not be brought unless all other remedies were exhausted.

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

Can a Divorce on No-Fault Grounds Be Opposed?

Saturday, April 9th, 2011

One question that so far has not been resolved with any degree of certainty by the courts is whether in a divorce action brought pursuant to the new no-fault divorce statute requires specific proof that the parties’ marriage was irretrievably broken for a period of six months or longer. It is an important question since in the past divorce attorneys were able to challenge grounds for divorce and force plaintiffs to establish that there were adequate grounds for divorce. In a significant number of cases, grounds trials were held for economic reasons, i.e., the monied spouse did not want to divide assets and/or pay spousal maintenance.

Six months after the no-fault statute was enacted by the New York’s legislature, we are learning that the courts are divided on this issue, with some courts requiring proof that the marriage was actually irretrievably broken for a period of six months or longer, and with some courts holding that there is no defense to the no-fault grounds.

In Strack v. Strack, 2011 N.Y. Slip. Op. 21033 (Sup. Ct. Essex Co. 2011), the court held that the question of whether the marriage was irretrievably broken was a question of fact requiring a trial.

The facts in Strack are as follows. The parties were married on May 25, 1963 and plaintiff sought a divorce based upon the no-fault grounds contained within Domestic Relations Law §170 (7). Defendant moved to dismiss the complaint, contending (1) that the complaint lacked specificity; (2) that the conduct alleged in the complaint was barred by the five-year statute of limitations; and (3) that the complaint failed to state a cause of action for divorce under Domestic Relations Law §170 (7).

Effective relative to actions commenced on or after October 12, 2010, Domestic Relations Law §170 (7) permits divorce where “[t]he relationship between husband and wife has broken down irretrievably for a period of at least six months, provided that one party has so stated under oath.” This additional ground for divorce has given parties the option of securing a divorce without alleging fault.

Here, the allegations in the complaint were as follows:

The relationship between husband and wife has broken down such that it is irretrievable and has been for a period of at least six months. For a period of time greater than six months, Defendant and Plaintiff have had no emotion in their marriage, and have kept largely separate social schedules and vacation schedules. Each year Plaintiff and Defendant live separately throughout most of the winter months. Though they share the residence for several months out of the year, Plaintiff and Defendant have not lived as husband and wife for a period of time greater than six months. Plaintiff believes the relationship between she and Defendant has broken down such that it is irretrievable and that the relationship has been this way for a period of time greater than six months.

Having decided that the above allegations stated a cause of action and were not barred by the statute of limitations, the court stated that Domestic Relations Law §170 (7) is not a panacea for those hoping to avoid a trial. Rather, it is simply a new cause of action subject to the same rules of practice governing the subdivisions which have preceded it. By referring to Domestic Relations Law §173 which provides that “[i]n an action for divorce there is a right to trial by jury of the issues of the grounds for granting the divorce” and, here, the Legislature failed to include anything in Domestic Relations Law §170 (7) to suggest that the grounds contained therein are exempt from this right to trial.  The court further held that since the phrase “broken down such that it is irretrievable” is nowhere defined in the statute, the determination of whether a breakdown of a marriage is irretrievable is a question to be determined by the finder of fact.

In a more recent decision, A.C. v. D.R., 2011 N.Y Slip. Op. 21113 (Sup. Ct. Nassau Co. 2011), the court held that once the plaintiff makes a sworn allegation that the marriage had irretrievably broken down, a trial not required, and there is no defense to the action. The court held that the only requirement to satisfy the no-fault ground for divorce is a party’s sworn statement alleging that the marriage has irretrievably broken down. Specifically, the court stated:

It is sufficient that one or both of the parties subjectively decide that their marriage is over and there is no hope for reconciliation.  In other words, a plaintiff’s self-serving declaration about his or her state of mind is all that is required for the dissolution of a marriage on grounds that it is irretrievably broken.

As the no-fault statute requires, in order for a judgment of divorce to be entered, all the issues relating to the divorce, including equitable distribution, maintenance, child custody and support need to be resolved before a party can be granted a divorce.

While I am not aware of the court decisions on this issue here in Rochester, I hope that the courts will grant divorce solely on the party’s subjective allegation that the marriage has irretrievably broken down. Since the trial courts are split on the issue, it is likely that appellate courts will have to address this issue eventually.  I hope that the holding of the more recent case will be widely adopted follwint he Legislature’s intent in creating a true no-fault divorce in New York.

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

When Can a Marriage Be Terminated by an Annulment?

Saturday, February 26th, 2011

An annulment is a type of matrimonial action commenced in the New York State Supreme Court under Article 9 of the Domestic Relations Law (§§140-146) to declare a marriage null and void. There are two types of marriages may be subject to an annulment: (1) a void marriage, which is void at its inception, and, therefore, never was legitimate, and (2) a voidable marriage, which can be voided only by a court judgment. A voidable marriage is void from the date the judgment of nullity is entered.

The following types of marriages are void: incestuous; bigamous; and marriages performed by an unauthorized person.  An incestuous marriage occurs between an ancestor and a descendant, such as a father and daughter, between siblings, or between an uncle and niece or an aunt and nephew.  A bigamous marriage occurs when one spouse marries a third person despite the fact that his or her prior spouse is still alive and the marriage has not been dissolved. A marriage performed by an unauthorized person usually involves a marriage that was performed by a civil official or a religious official who does not meet New York’s requirements for officiating a marriage ceremony.

The following types of marriages are voidable: when one or both spouses are under the age of consent, when one or both spouses are mentally incapable to consent to the marriage, when one or both spouses are physically incapable to consent to the marriage, or when one or more spouses is coerced into the marriage.

In order to give a valid consent to marriage in New York State, the person giving such consent must be at least eighteen years old.  In order for someone younger than eighteen to marry, written consent of both of the underage spouse’s parents is required. A person under the age of sixteen may marry, provided that both parental consent and a judge’s order are obtained. No one under the age of fourteen is permitted to marry.

A person under the age of eighteen as well as a parent of the underage spouse and/or the underage spouse’s guardian may seek to have the marriage annulled. It is in the court’s discretion to grant an annulment due to the spouse’s age, taking into consideration all of the facts and circumstances of the marriage.  The right to seek an annulment due to being under the age of consent terminates when the spouse reaches the age of 18.

In an action to determine a marriage voidable due to want of understanding, the court will decide if the parties were capable of fully understanding the nature of the marital relationship and its consequences.  An annulment action for want of understanding may be based upon the mental retardation or mental illness of a spouse.  An action brought due to mental illness may be brought by the mentally ill spouse when the illness has been cured, so long as he or she does not continue to cohabit with the spouse, which ratifies the marriage, i.e., makes it valid.  The spouse who is not suffering from mental illness may file to have the marriage determined voidable if: the other spouse was mentally ill at the time of the marriage, the non-mentally ill spouse was not aware of the illness, the action was brought as soon as the non-mentally ill spouse learned of the illness and the mental illness is present when the annulment is sought.

A spouse may seek to have a marriage declared voidable when the other is unable to have sexual relations due to an incurable condition (not sterility). It is commonly referred to as a failure to consummate the marriage. An annulment action brought for this cause must be filed within five years after the marriage.

Both parties to a marriage must knowingly consent to the marriage of their own free will. A marriage may be annulled if either party consents to the marriage due to duress, force or fraud. An action for this cause may be brought by a spouse, a parent of a spouse or a relative of a spouse who has an interest in annulling the marriage.

Finally, an action seeking an annulment may be brought by one spouse if the other spouse develops an incurable mental illness lasting five or more years. The mental illness can develop after the marriage.

In my practice, it is not common to see annulment actions since they are subject to very specific legal and factual requirements. If you think that you may be entitled to an annulment, you should discuss these issues with a divorce lawyer.

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

Automatic Orders and Contempt in Divorce Actions

Friday, February 18th, 2011

When the Domestic Relations Law was amended in 2009, it included additional requirements related to commencement of divorce actions.  Specifically, DRL §236(B)(2)(b) and 22 N.Y.C.R.R. §202.16-a included a requirement for the so-called automatic orders. Until recently, there was still a question of whether the automatic orders could be enforced using court’s contempt power since automatic orders are not signed by a judge but, instead, are signed by a divorce attorney.

In P.S. v. R.O., 2011 N.Y. Slip. Op. 21031 (Sup.Ct. New York Co. 2010), the court specifically addressed this issue.  The court held that violation of automatic orders can subject a party to civil contempt.

The wife commenced divorce on October 13, 2010, by filing summons with notice and notice of automatic orders setting forth the statutory automatic orders verbatim, which were served on husband. Parties owned joint vacation home in Vermont and had joint bank account. Upon separating, parties continued to deposit rental income from Vermont home into joint account to pay for Vermont home expenses, until December 15, 2010, when rental broker deposited $6,000 into joint account and wife transferred fund into her sole bank account. On January 4, 2011, wife transferred those funds back into joint account. Husband moved to hold wife in contempt, alleging that since May 2009, he has used funds in joint account to pay for Vermont home expenses. Wife contended that she transferred such funds out of account because she feared husband would not spend funds on Vermont home and dissipate such asset.

In addressing these issues, the court stated that to establish civil contempt, moving party must demonstrate by clear and convincing evidence that party charged with contempt violated clear and unequivocal court mandate which prejudiced moving party.

In analyzing whether the automatic orders amounted to a clear and unequivocal court mandate, the court reviewed the Court Rules, 22 N.Y.C.R.R. §202.16-a, which requires service of a copy of the “automatic orders” on defendant, and contains language identical to that found in DRL §236(B)(2)(b). The Court Rules are promulgated by the Chief Administrator of the Courts on behalf of the Chief Judge of the Court of Appeals under the authority vested in them by Judiciary Law Sections 211(1)(b) and 212(2)(b), and by Article Six, Section 30, of the New York State Constitution, to adopt rules to regulate practice and procedure in the courts. Thus, the court found that the Court Rules constitute lawful mandates of the court. It further found that the legislative history of Domestic Relations Law §236(B)(2)(b) makes clear that the legislature intended that a violation of the automatic orders would be redressed by the same remedies available for violations of any order signed by a judge.

Accordingly, the court found that civil contempt is available as a remedy for violation of the automatic orders, provided that the plaintiff has served the defendant with adequate notice of the automatic orders, as has been done in this case. However, the court in P.S. found that the wife did not violate the orders, or met the other requirements for imposition of contempt.

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

Multiple Child Support Orders and Change In Circumstances Warranting Modification of Child Support

Saturday, January 29th, 2011

One of the issues that I periodically see in child support cases is that a party who is already paying child support has another child or children with a different party, resulting in additional child support orders.  Usually in those circumstances, the child who is the subject of the first order is receiving support on the entire income of the payor.  The subsequent children receive child support on the basis of payor’s income after child support payable pursuant to the first order is deducted.  As a result, the child who is the subject of the first order will always receive higher child support amount than the child or children receiving child support under the subsequent orders.  In addition, the payor’s income is subject to multiple orders and can pay half or more of his gross income in child support.

The above approach has been traditionally applied in Family Court cases.  In a recent decision, Demetrius D. v. Lori T., 2011 N.Y. Slip. Op. 21025 (Fam. Ct. Clinton Co. 2011), the court questioned the logic of this approach.  The court noted that:

From the children’s perspective, the fact that one child receives more child support than another child based solely upon which custodial parent obtains the first support order is unfair and irrational. Obviously, the children cannot control which parent applies for support first nor can the child control the speed of litigation. Nevertheless, this is the statutory law of the State of New York. It should be noted that it is not the age of the children, but rather the order in which the children receive a child support order that determines which children will receive preference under the law[FN4]. Of course, it would also be unfair and irrational to give preference to one child over another based solely upon birth order.

Id. at 3.

Further, the court stated that creation of these additional support order may be grounds for modifying the original child support obligation under Family Court Act § 413(1)(b)(5)(vii)(D):

Subdivision D also raises multiple issues with respect to modification petitions. There is no express provision in the Family Court Act which limits the Subdivision D deduction in modification cases to court orders issued prior to the original order sought to be modified. In other words, in the event that a parent demonstrates a material change of circumstances which warrants the re-application of the Child Support Standards Act, there is no language that excludes new orders issued between the date of the original order and the date of the hearing on modification petition from Subdivision D. Thus, the Court concludes that if there is a material change of circumstances that warrants the new application of the Child Support Standards Act, the non-custodial parent would be entitled to a deduction under Subdivision D for all child support actually paid pursuant to Court orders for other children, whether or not the Court orders for other children were issued before or after the original order for the subject child.

But in Demetrius D., what the court gave with one hand, it took with the other.  The more flexible approach as stated in the decision, was subject to application of general child support modification standards, including a determination that the hardship came as a result of payor’s voluntary actions and was self-inflicted. The court found that having additional children was a self-inflicted hardship that came as a result of his voluntary actions that does not warrant downward modification of payor’s child support obligation.

What is the lesson here for the family law lawyers? If the payor can establish that somehow the act of having more children was involuntary, then the payor may be entitled to a modification of the original child support obligation on the basis of subsequent orders.  It is hard to see the circumstances where it would be remotely possible. On the other hand, under appropriate circumstances, the above approach may help a payor dealing with multiple child support orders.

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Posted in child support, child support enforcement, Child Support Standards Act, court orders, Domestic Relations Law, Family Court, Family Law, New York Law, procedure | No Comments »

Does Family Court Have Jurisdiction Over Family Offenses Committed Outside of New York?

Sunday, December 12th, 2010

In a recent case, the Appellate Division had to decide whether the Family Court has subject matter jurisdiction over family offense proceedings where the alleged acts occurred outside of the state and even outside of the country.  In Richardson v. Richardson, 2010 N.Y. Slip. Op. 07943 (2nd Dept 2010), the court held that Family Court Act §812 grants the Family Court subject matter jurisdiction to hear such proceedings, and that the Family Court properly exercised jurisdiction over the parties’ petitions, despite the fact that the acts alleged occurred on the island territory of Anguilla.

On March 4, 2009, petitioners filed three separate family offense petitions seeking the entry of orders of protection. The alleged family offenses included, inter alia, assault, harassment, and menacing. The petitions detailed certain incidents which allegedly occurred on February 19, 2009, on the island of Anguilla.

The Appellate Division began its decision by stating that the Family Court is a court of limited jurisdiction constrained to exercise only those powers conferred upon it by the state Constitution or by statute.  Included within the actions and proceedings over which the Family Court has been given subject matter jurisdiction are family offense proceedings. Pursuant to the New York State Constitution, family offense proceedings are to determine “as may be provided by law . . . crimes and offenses by or against minors or between spouses or between parent and child or between members of the same family or household” (N.Y. Const, art VI, § 13 [b] [7]). In light of the provision stating “as may be provided by law,” the grant of jurisdiction to the Family Court over family offense proceedings is permissive and requires legislative action to be implemented.

Family Court Act Article 8 delineates the parameters of the Family Court’s subject matter jurisdiction. The Family Court Act and the Criminal Procedure Law provide the criminal court and the Family Court with “concurrent jurisdiction” over certain enumerated criminal offenses when allegedly committed by one family member against another. Thus, while a family member may choose to seek redress for a family offense in the Family Court, a parallel criminal proceeding also is available. Indeed, the Legislature has specifically authorized a petitioner to commence a family offense proceeding in either or both Family Court and criminal court. Moreover, each court has the authority to issue temporary or final orders of protection.

Family Court Act § 812(1) provides:

Jurisdiction. The family court and the criminal courts shall have concurrent jurisdiction over any proceeding concerning acts which would constitute disorderly conduct, harassment in the first degree, harassment in the second degree, aggravated harassment in the second degree, sexual misconduct, forcible touching, sexual abuse in the third degree, sexual abuse in the second degree as set forth in subdivision one of section 130.60 of the penal law, stalking in the first degree, stalking in the second degree, stalking in the third degree, stalking in the fourth degree, criminal mischief, menacing in the second degree, menacing in the third degree, reckless endangerment, assault in the second degree, assault in the third degree or an attempted assault between spouses or former spouses, or between parent and child or between members of the same family or household except that if the respondent would not be criminally responsible by reason of age pursuant to section 30.00 of the penal law, then the family court shall have exclusive jurisdiction over such proceeding. Notwithstanding a complainant’s election to proceed in family court, the criminal court shall not be divested of jurisdiction to hear a family offense proceeding pursuant to this section.

Furthermore, Family Court Act § 812(2)(b) provides: “[t]hat a family court proceeding is a civil proceeding and is for the purpose of attempting to stop the violence, end the family disruption and obtain protection.” There is no geographic limitation in Family Court Act § 812, or elsewhere in the Family Court Act, as to where a family offense is to have occurred in order to confer subject matter jurisdiction upon the Family Court. Family Court Act, Article 8, as enacted in 1962, was intended by the New York State Legislature to provide “practical help” to domestic violence victims through the use of civil proceedings in the Family Court.

The history of Family Court Act § 812, provides no indication that the Legislature intended to prohibit the Family Court from exercising jurisdiction over family offenses where the alleged acts occurred in another state or country. However, a question that arises is whether the geographic or territorial limitation on the jurisdiction of the criminal court also limits the jurisdiction of the Family Court. Criminal Procedure Law § 20.40(1)(a) provides, in pertinent part, that “[a] person may be convicted in an appropriate criminal court of a particular county, of an offense . . . when conduct occurred within such county sufficient to establish [a]n element of such offense.”

The Appellate Division concluded “[t]hus, to the extent that the appellant contends that the geographic limitation on the jurisdiction of the criminal court also applies to limit the jurisdiction of the Family Court over family offense proceedings, we hold that contention to be without merit.”

Therefore, if an act that would give a rise to an order of protection takes place anywhere, the party against whom it is committed can seek an order of protection in New York’s Family Court, provided that other procedural requirements are met and personal jurisdiction is obtained.

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Posted in court orders, Criminal Offense, Family Court, Family Law, New York Law, Order of Protection, procedure | No Comments »

Update of Recent Cases Involving Enhanced Earnings

Friday, November 19th, 2010

I have recently written about a trend in court decisions involving enhanced earnings toward reducing non-titled spouse’s interest to less than a 50% share.  A recent decision, Haspel v. Haspel, 2010 N.Y. Slip. Op. 08530 (2nd Dept. 2010) illustrates this issue very well.

In Haspel, the trial court granted to the wife 50% of the husband’s enhanced earnings which resulted from his acquisition of several professional licenses, including, several securities dealer’s licenses and a real estate broker’s license.  The trial court’s decision was appealed, and the Appellate Division modified the trial court’s decision.

Specifically, the Appellate Division held that the wife was entitled to 25% of husband’s enhanced earnings.  While the court did not provide specific reasons for this reduction, the parties were married for nearly 23 years before the divorce action was commenced, they had two children, and at the time of trial, the plaintiff was 52 years old and the defendant was 49 years old.  The wife was also going to receive spousal maintenance, however, this issue was remanded to the trial court for recalculation since the lower court’s decision improperly engaged in double counting of the same income for enhanced earnings calculations and maintenance calculations.

As I have written previously, the trend toward unequal division of enhanced earnings is continuing.  Divorce lawyers and their clients would be well advised to review evidence related to non-titled spouse’s contribution carefully, if an argument is being made that the non-titled spouse should receive more than 25% of such enhanced earnings.

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

New Temporary Maintenance – How Does It Work?

Saturday, November 13th, 2010

Among recent changes to New York’s divorce laws, the legislature amended provisions of the Domestic Relations Law that deal with temporary spousal maintenance.  DRL §236(B)(5-a)(c) presently includes a formula which, if applied according to the statute, results in the presumptively correct amount of temporary maintenance. DRL §236(B)(5-a)(c)(1) describes how those provisions are applied:

(a) the court shall subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.
(b) the court shall then multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent.
(c) the court shall subtract the income of the payee from the amount derived from clause (b) of this subparagraph.
(d) the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars.

According to the legislative documents, the legislature intended that the temporary maintenance guidelines would only result in an award when there is an income gap between the two parties such that the less-monied spouse’s income is less than two thirds of the more-monied spouse’s income. For instance, if the payor’s annual income is $60,000 per year, the guidelines will only result in an award if the payee’s annual income is less than $40,000. The numerical guideline is only applied to the payor’s income up to $500,000 of her/his income, with a set of factors to be applied by the court to determine any additional amount of temporary maintenance on the payor’s income above this $500,000 cap.

Here are some examples of how the statute works:

Example 1

Step # 1: Determine Respective and Combined Income:
Payor‘s Income $60,000
Payee‘s Income $30,000
Combined Income $90,000
Step # 2: Perform Calculation # 1: (Subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.):
30% of Payor‘s Income (30% x $60,000) = $18,000
Minus
20% of Payee‘s Income (20% x $30,000) = $6,000
Result of Calculation # 1: $12,000
Step # 3: Perform Calculation # 2: (Multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent):
Payor‘s Income = $60,000
Plus
Payee‘s Income = $30,000
Combined Income Equals $ 90,000
Multiplied by 40% ($ 90,000 x 40%) = $36,000
Subtract Payee‘s Income from Product:
($36,000 minus $30,000 = $6,000)
Result of Calculation # 2: $6,000

Because paragraph (d) provides that the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars, and because Calculation # 2 is the lesser amount, specifically, $6,000, Calculation # 2 controls, and the temporary maintenance award would be $6,000.

Example 2

Step # 1: Determine Respective and Combined Income:
Payor‘s Income $120,000
Payee‘s Income $80,000
Combined Income $200,000
Step # 2:
Perform Calculation # 1: (Subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.):
30% of Payor‘s Income (30% x $120,000) = $36,000
Minus
20% of Payee‘s Income (20% x $80,000) = $16,000
Result of Calculation # 1: $20,000
Step # 3: Perform Calculation # 2: (Multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent):
Payor‘s Income = $120,000
Plus
Payee‘s Income = $80,000
Combined Income Equals $200,000
Multiplied by 40% ($ 200,000 x 40%) = $ 80,000
Subtract Payee‘s Income from Product:
($80,000 minus $80,000 = $0)
Result of Calculation # 2: $0

Because paragraph (d) provides that the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars, and because Calculation # 2 is the lesser amount, specifically, zero, Calculation # 2 controls and the temporary maintenance award would be zero.

Example 3

Step # 1: Determine Respective and Combined Income:
Payor‘s Income $100,000
Payee‘s Income $20,000
Combined Income $120,000
Step # 2: Perform Calculation # 1: (Subtract twenty percent of the income of the payee from thirty percent of the income up to the income cap of the payor.):
30% of Payor‘s Income (30% x $100,000) = $30,000
Minus
20% of Payee‘s Income (20% x $200,000) = $4,000
Result of Calculation # 1: $26,000
Step # 3: Perform Calculation # 2: (Multiply the sum of the payor’s income up to and including the income cap and all of the payee’s income by forty percent):
Payor‘s Income = $100,000
Plus
Payee‘s Income = $20,000
Combined Income Equals $120,000
Multiplied by 40% ($120,000 x 40%) = $48,000
Subtract Payee‘s Income from Product $100,000
($48,000 minus $20,000 = $28,000)
Result of Calculation # 2: $28,000

Because paragraph (d) provides that ―the guideline amount of temporary maintenance shall be the lower of the amounts determined by clauses (a) and (c) of this subparagraph; if the amount determined by clause (c) of this subparagraph is less than or equal to zero, the guideline amount shall be zero dollars,and because Calculation # 1 is the lesser amount, specifically, $26,000, Calculation # 1 controls and the temporary maintenance award would be $26,000.

There are several issues that are not addressed by the new statute. Initially, prior to its enactment, judges had discretion to set temporary awards based upon the actual needs of the parties. Under the prior statute, temporary maintenance was awarded to allow the non-monied spouse to preserve his or her financial circumstances and maintain the prior lifestyle during the divorce. While the goal of the prior statute was laudatory, unfortunately, the temporary maintenance awards varied greatly from case to case.

Since the new statute creates uniformity by using a formula, temporary maintenance awards are going to be consistent as far as their amount is concerned. At the same time, the new statute doe snot address duration of the maintenance and length of the marriage of the parties. For temporary maintenance purposes, a spouse in a long term marriage would receive the same temporary maintenance award as a spouse in a short term marriage. This is likely to create an incentive for parties in a short term marriage and their lawyers to extend the divorce action as long as possible.

Another problem with the new statute is that it applies to the first $500,000 of income, someone married to person who earns well in excess of that figure would receive less under the new statute than he or she would be entitled to receive under the old law, when the full income was used for determining temporary maintenance.

Finally, the temporary maintenance statute creates certain expectations on part of both litigants and judges. For litigants, there is now an expectation that any maintenance will be at the level set by the temporary maintenance formula. For judges, it is an easy way to set the final maintenance award.

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Posted in divorce, Domestic Relations Law, maintenance, New York Law, Supreme Court | No Comments »

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