Posts Tagged ‘New York Law’

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

Sunday, August 16th, 2009

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

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

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

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

and equitable distribution of marital property

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

BLY, DO ENACT AS FOLLOWS:

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

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

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

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

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

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

7  MARRIAGE;

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

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

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

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

12  al action without fair consideration; [and]

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

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

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

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

17  MARRIAGE; AND

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

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

20  on or after such effective date.

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

[ ] is old law to be omitted.

The bill memo provided the following justification for the bill:

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

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

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

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

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

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

Divorce and Dissolution of Out-Of-State Civil Unions

Sunday, August 2nd, 2009

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.

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

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

Sunday, July 19th, 2009

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Saturday, June 20th, 2009

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.

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Divorce, Timeliness of Qualified Domestic Relations Orders and Statute of Limitations

Sunday, June 7th, 2009

I have previously written that in order to divide retirement assets after the parties’ divorce, the court must enter a qualified domestic relations order (“QDRO”) to divide such assets. However, it is not uncommon that a QDRO is not entered right away. Occasionally, I see cases where there is a need to enter a QDRO many years after the entry of the judgment of divorce. Recently, in Patricia A. M., v. Eugene W. M., 2009 N.Y. Slip. Op. 29232 (Sup. Ct. 2009), the Supreme Court, Erie County, provided an illustration of what pitfalls may be faced by a divorce litigant who waits a significant period of time before obtaining a QDRO.

Eugene M., retired on November 4, 2000, and began receiving pension benefits at that time. A QDRO was signed on March 15, 2006, and an amended QDRO was granted on November 21, 2006, putting into effect the rights of Patricia M., regarding Mr. M.’s pension benefits. Prior to entry of either QDRO, Mr. M. began paying part of his pension benefits to Ms. M., commencing in May, 2002, at the rate of $650.00 per month.  Ms. M. brought a motion seeking recovery of amounts she claims she should have been paid as her portion of Mr. M.’s pension prior to the commencement of direct payments pursuant to the QDRO. These amounts covered the period from the date of retirement to April, 2002, a missed payment in November, 2005, and the period from February, 2006 to December, 2006, when no payments were made. In addition, she alleged that she received only a partial payment in December, 2005. The total amount allegedly owed was $19,770.46.

Mr. M. opposed the motion, arguing that this motion, inter alia, was barred by the statute of limitations applicable to contract actions. He asserted that the equitable distribution of his pension benefits was not specifically mentioned in the judgment of divorce and, therefore, Ms. M.’s only remedy is a breach of contract action. The court held that, under Tauber v. Lebow, 65 N.Y.2d 596 (1985), payments awarded in a divorce decree “do not constitute a judgment debt until the arrearages are reduced through further proceedings to a judgment.” Ms. M.’s claim for breach of the agreement accrued at the time of the breach, which was no earlier than the date of Mr. M.’s retirement, in November, 2000. Because Mr. M.’s obligation was to pay on a monthly basis as pension benefits were paid to him, each failure to pay constituted a separate breach. This left Ms. M. unable to recover for those amounts she claimed were not paid from November, 2000, to April, 2002.

The lesson of this case is that this litigation could have been avioided, and Ms. M would not have lost those retirement payments, had the lawyer for Ms. M. entered a QDRO in a timely fashion.  Further, the statute of limitations applicable to contract actions may arise in post-dviorce proceedings in other ways as well.  For example, if a post-divorce child support arrears cannot be enforced by seeking an enforcement of the judgment of divorce, and instead the party is forced to proceed to enforce a separation agreement as a contract, the same six year statute of limitations may be applicable.

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New York Child Support Add-Ons and Basics of Child Support

Monday, May 25th, 2009

Under New York law, child support consists of two elements: “basic” child support and the “add-ons.”  Pursuant to Domestic Relations Law §240, New York requires that basic child support be calculated in two parts: (a) the support based on the total combined income of both parents up to $80,000; and (b) the support based on the total combined income of both parents over $80,000.  For both parents’ combined adjusted gross income over $80,000, the court has the discretion to apply the same statutory guidelines, and for all practical purposes will do so. See Cassano v. Cassano, 85 N.Y.2d 649 (1995).  The result will be the total combined basic child support attributable to both parents for the combined income in excess of $80,000.  From the combined basic child support as calculated under the statute, a pro-rata share of each parent’s income is calculated.  Each parent’s pro-rata share is a ratio equal to that parent’s adjusted gross income divided by the combined adjusted gross income for both parents.  That pro-rata share is used to calculate each parent’s share of child support add-ons.

The parent paying child support is also obligated to pay for his/her pro-rata share of the following add-ons.

Day Care

Domestic Relations Law §240 (1-b)(c)(4) and Domestic Relations Law §240 (1-b)(c)(6) provide that when a custodial parent is working, seeking work, or is in school or training which will lead to employment, reasonable day care expenses will be allocated in a ratio equal to the each parent’s income to the combined income.  Reasonable day care expenses vary and each situation should be discussed with an experienced family law lawyer to determine each party’s rights and responsibilities.

Health Care Expenses

Domestic Relations Law §240 (1)(d) provides that the cost of health care insurance shall be allocated in the same proportion as each parent’s income is to the combined parental income.  Domestic Relations Law §240 (1-b)(c)(5) provides that reasonable health care expenses not covered by insurance are allocated in the same proportion as each parent’s income is to the combined parental income.  Obviously, the parties can opt-out of the CSSA’s provisions with respect to the add-ons. Any provisions with respect to the cost of health insurance are enforceable just like child support provisions.

In Rochester and Monroe County, as well as in surrounding counties, the Supreme Court and Family Court usually require the non-custodial parent to carry health care insurance for the children.  However, similarly to child care, there may be situations where it is more beneficial financially for the custodial parent to pay for the cost of health insurance for the children and for the non-custodial parent to contribute his or her share.  The parties should be mindful of the cost of health care coverage and should discuss these issues with a family law attorney before entering into a separation agreement or agreeing to a judgment of divorce.

Educational and Extracurricular Expenses

In addition, the parents may be obligated to pay for the cost of extracurricular expenses and educational expenses, such as a private school or college.  I have previously discussed issues related to the college costs, and will address issues related to paying for a private school at a later date.

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Overpayment of Pendente Lite Maintenance and Equitable Distribution

Saturday, May 16th, 2009

I have previously written that the Supreme Court has wide latitude in fashioning pendente lite (interim) maintenance awards while the divorce action is pending.  But what happens if the trial court ultimately decides that the pendente lite maintenance award was excessive?  The Court of Appeals recently addressed this issues in Johnson v. Chapin, 2009N.Y.  Slip. Op. 03630 (2009).

In Johnson, the Court of Appeals held that when a pendente lite award of maintenance is found at trial to be excessive or inequitable, the court may make an appropriate adjustment in the equitable distribution award.  Thus, the Court of Appeals held that the trial court did not abuse its discretion in giving husband a credit representing the amount of the pendente lite maintenance he paid that exceeded what he was required to pay under the final maintenance award.  In determining the temporary maintenance award, Supreme Court imputed an average salary in excess of $2 million to husband. However, at trial, it was established that his income was significantly lower. Given the disparity in the maintenance amounts, under the circumstances of this case, it was appropriate for the husband to receive a credit for excessive maintenance paid.

This decision is significant since it reaffirms the principle that pendente lite awards are temporary and are subject to adjustment.  An experienced divorce lawyer will not rest after obtaining a favorable pendente lite relief for the client, but will continue to work to make sure that the any pendente lite maintenance, or other interim award, is preserved as a part of a final decision.

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Payments on Pre-Marital Debt and Right of Recoupment – Update

Sunday, May 10th, 2009

I have previously written about the case of Mahoney-Buntzman v. Mahoney, 51 A.D.3d 732 (2nd Dept. 2008), which stood for the proposition that that marital property used to pay one spouse’s obligations incurred either prior to the marriage, or benefitting only one spouse, could be recouped.  In Mahoney-Buntzman, the Appellate Division held that the husband’s maintenance obligation to his first wife and the boat loan constituted debts incurred by him prior to the parties’ marriage and were solely his responsibility. Accordingly, the court granted to the wife a credit for one half of the payments made.

Last week, the Court of Appeals issued its decision in Mahoney-Buntzman v. Mahoney, __ N.Y.2d __, 2009 N.Y. Slip. Op. 03629 (2009), and reversed the Appellate Division holding that that marital property used to pay maintenance and child support to the husband’s wife from a previous marriage should not be recouped to the marital estate.  The opinion used very broad language which is likely to eliminate any kind of recoupment of marital money expended for separate property purposes.  Specifically, the Court of Appeals held that:

[D]uring the life of any marriage, many payments are made, whether of debts old or new, or simply current expenses. If courts were to consider financial activities that occur and end during the course of a marriage, the result would be parties to a marriage seeking review of every debit and credit incurred. As a general rule, where the payments are made before either party is anticipating the end of the marriage, and there is no fraud or concealment, courts should not look back and try to compensate for the fact that the net effect of the payments may, in some cases, have resulted in the reduction of marital assets. Nor should courts attempt to adjust for the fact that payments out of separate property may have benefitted both parties, or even the non-titled spouse exclusively. The parties’ choice of how to spend funds during the course of the marriage should ordinarily be respected. Courts should not second-guess the economic decisions made during the course of a marriage, but rather should equitably distribute the assets and obligations remaining once the relationship is at an end.

Expenditures made during the life of the marriage towards maintenance to a former spouse, as well as payments made pursuant to a child support order, are obligations that do not enure solely to the benefit of one spouse. Payments made to a former spouse and/or children of an earlier marriage, even if made pursuant to court order, are not the type of liabilities entitled to recoupment.

This is not to say that every expenditure of marital funds during the course of the marriage may not be considered in an equitable distribution calculation. Domestic Relations Law § 236(B)(5)(d)(13) expressly and broadly authorizes the trial court to take into account “any other factor which the court shall expressly find to be just and proper” in determining an equitable distribution of marital property. There may be circumstances where equity requires a credit to one spouse for marital property used to pay off the separate debt of one spouse or add to the value of one spouse’s separate property (see e.g. Micha v Micha, 213 AD2d 956, 957-958 [3d Dept 1995]; Carney v Carney, 202 AD2d 907[3d Dept 1994]). Further, to the extent that expenditures are truly excessive, the ability of one party to claim that the other has accomplished a “wasteful dissipation of assets” (DRL 236 [B][5][d][11]) by his or her expenditures provides protection. The payment of maintenance to a former spouse, however, does not fall under either of these categories.

Thus, it is unlikely that any recoupment will be allowed by the courts in the future.  This decision makes it even more important that each marital estate is carefully scrutinized by an experienced divorce lawyer to establish the respective rights and obligations of the parties.

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

Parental Interference With Visitation and Suspension of Child Support

Sunday, April 26th, 2009

I have previously written that a child support obligation can be suspended or terminated in situations where the court makes a finding that the child has deliberately severed his/her relationship with a parent, thereby abandoning that parent. However, in order for a court to make a finding of abandonment, the child must be of employable age.

Even if the child is not of employable age, the non-custodial parent’s child support obligation can be suspended or terminated, if the breakdown in the parent-child relationship came as a result of the actions of the custodial parent.

In Ledgin v. Ledgin, 36 A.D.3d 669 (2nd Dept. 2007), the Appellate Division held that interference with visitation rights can be the basis for the cancellation of arrears of maintenance and the prospective suspension of both maintenance and child support. However, such relief is warranted only where the custodial parent’s actions rise to the level of “deliberate frustration” or “active interference” with the noncustodial parent’s visitation rights.

In Frances W. v Steven M., 15 Misc.3d 839 (Fam. Ct. Queens Co. 2007), the court held that petitioner was not entitled to child support where she intentionally aided her sister in brainwashing the child, who is almost 20 years old, into falsely believing that the father had sexually abused her when she was an infant, and otherwise poisoned the child’s relationship with respondent from the time she was four years old. The court stated that since petitioner was an active participant in destroying her niece’s relationship with the father, “she was precluded from obtaining child support from respondent as a matter of fundamental fairness.”

In S.M.B. v D.R.B, 17 Misc.3d 1132(A) (Fam. Ct. Onondaga Co. 2007), petitioner father sought vacatur of order of support contained in parties’ divorce judgment, which incorporated their opt-out agreement. Father began his action after the mother engaged in pattern of active interference and deliberate frustration of child’s relationship with father. Mother was very angry that father paid no more child support than what’s been ordered by court. Mother has withheld father’s access to child since she moved to Florida and remarried. The court found that mother’s acts of alienation were not isolated incidents but a continuing pattern. The court further found that the child now shows no interest in having relationship with father because of mother’s unfortunate endeavors. Father’s support obligation vacated since father met his burden of establishing that mother unjustifiably frustrated his right to reasonable access.

If the child is not of employable age, and the custodial parent did not interfere with the relationship between the non-custodial parent and the child, the non-custodial parent’s obligation to pay child support will not be terminated by the court. Foster v. Daigle, 25 A.D.3d 1002 (3rd Dept. 2006).

Since most of these cases are tried on the issue of parental interference, it is important that each such case, before it is brought, is carefully screened by an experienced family law lawyer. Because parental interference cases require a significant level of proof, it is important that a petitioner is represented by an attorney familiar with such cases.

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Posted in child support, child support enforcement, Child Support Standards Act, divorce, Domestic Relations Law, Failure to Pay Child Support, Family Court, Family Law, modification, New York Law, visitation | No Comments »

Divorce, Equitable Distribution and Marital Fault

Sunday, April 19th, 2009

I am often asked whether as a lawyer, I am able to persuade the court to divide the parties’ assets unequally in situations where one of the parties had an affair, engaged in some acts of domestic violence, or committed repeated acts of verbal and emotional abuse. In nearly every case, my response is that in most of the cases, marital fault is irrelevant to the equitable distribution issues.

The New York State Legislature, in 1980, enacted the Equitable Distribution Law (“EDL”) (codified as Domestic Relations Law § 236 B). The adoption of which had been advocated because the traditional common law theory of property resulted in inequities upon the dissolution of a marriage. The EDL was premised on the entirely new theory that a marriage is an economic partnership to which both parties contribute as spouse, wage earner or homemaker, and mandates the equitable distribution of marital assets based upon the circumstances of each particular case. Under the EDL, the distribution of marital assets depends not only on the financial contribution of the parties but also on a wide range of non-enumerated services to the joint enterprise, such as homemaking, raising children and providing the emotional and moral support necessary to sustain the other spouse in coping with the vicissitudes of life outside the home. Domestic Relations Law §236(B)(5)(d) lists 13 factors to be considered when making an equitable distribution award, which factors encompass, among other things, the income and property of each party at the time of the marriage and at the time the divorce action was commenced, the duration of the marriage, the age and health of the parties, a maintenance award if one had been issued, and the non-titled spouse’s direct or indirect contributions to the marriage.

It is now recognized that marital fault may be taken into account under the EDL’s “catchall provision,” which allows for the consideration of “any other factor which the court shall expressly find to be just and proper” (DRL §236[B][5][d][13]). The criteria which must be considered when evaluating whether marital fault should play a role in any particular case were first stated by the Appellate Division, Second Department, in Blickstein v. Blickstein, 99 A.D.2d 287, appeal dismissed, 62 N.Y.2d 502 (1984), which stated that the “marital misconduct [must be] so egregious or uncivilized as to bespeak of a blatant disregard of the marital relationship – misconduct that shocks the conscience’ of the court thereby compelling it to invoke its equitable power to do justice between the parties” (Id. at 292). This guideline was explicitly adopted by the Court of Appeals in O’Brien v. O’Brien, 66 N.Y.2d 576, 589-590 (1985).

In McCann v McCann, 156 Misc.2d 540 (Sup. Ct. 1993), the court addressed issues of marital misconduct. In McCann, a husband had married with the express promise to his wife to make every effort to have children. He subsequently refused to fulfill that promise after several years of lying, and as a result his wife became infertile because of her advanced age. The court found that, while the husband’s misconduct showed “a blatant disregard for the marital relationship” and was “morally reprehensible,” it did not constitute egregious marital conduct sufficient to be considered in equitably distributing the marital assets. To be deemed egregious, the court concluded, conduct must “callously imperil[] the value our society places on human life and the integrity of the human body”.

The only cases in which reprehensible behavior has been deemed to constitute egregious fault sufficient to affect equitable distribution have involved extreme violence. In Havell v. Islam, 301 A.D.2d 339 (1st Dept. 2002), for example, the Appellate Division, First Department upheld the matrimonial court’s award of more than 95% of the marital estate to a wife where her husband beat her with a barbell and a piece of pipe, thereby breaking her nose, jaw and some of her teeth, causing multiple contusions and lacerations, along with neurological damage and other serious injuries. While the husband pleaded guilty to first-degree assault on his wife, the First Department accepted the lower court’s finding that the husband’s attack amounted to attempted murder and constituted egregious marital fault. Egregious fault has also been found in instances of rape, kidnapping , and protracted and severe physical abuse.

Conversely, conduct that courts have found not to be egregious include adultery , alcoholism, abandonment , and verbal harassment coupled with several acts of minor domestic violence.

A recent example of how high this standard is set, was demonstrated in Howard S. v. Lillian S., 2009 N.Y. Slip Op 01880 (1st Dept. 2009). In Howard S., the wife allegedly misrepresented to her husband that he was the biological father of one of their children, when in fact the child was conceived during her adultery and fathered by her lover.

The husband married the wife in May 1997 and they had four children. In February 2004, the wife had an extramarital affair with an unnamed man and became pregnant with a child, who was born in December 2004. Husband contends that the wife knew or should have known that husband was not the child’s biological father, but concealed that information from him.

According to the complaint, in February 2007, the wife began another affair which “continues to this day.” Wife also concealed this second adulterous relationship from husband, but in the spring of 2007, suggested that they separate and enter into a collaborative law process.

During this period husband had become suspicious about child’s parentage, allegedly due to all the jokes within the circle of family and friends that the child looked nothing like him. Without telling his wife, the husband, in February 2008, arranged for a DNA test of himself and the child. The test confirmed that he was not the child’s biological father. The wife now acknowledges that husband is not the child’s biological father, but claims that she learned this from the DNA test results and denies that she deliberately concealed the truth about the child’s parentage from her husband.

The divorce complaint filed by the husband asserted causes of action for divorce based on both cruel and inhuman treatment and adultery, and asserts a separate claim based on fraud. As damages for the fraud claim, husband seeks to recover his child support expenses for the child, the fees for the parties’ collaborative law process, and profits from the couple’s investments from the time of child’s conception until the commencement of the divorce action.

In May 2008, husband moved for “expanded discovery” to prove “defendant’s egregious fault,” the fraud claim, and her lack of contribution to and dissipation of the marital property. The lower court limited the recoverable damages to husband’s share of the fees for the collaborative law process. The court also denied the husband’s request for expanded discovery as to wife’s marital fault on the ground that her alleged misconduct did not constitute egregious fault and had no bearing on prospective spousal maintenance and equitable distribution. The husband appealed on the grounds that the court (1) erred by holding that he had failed to state a claim for egregious fault and (2) erred by holding that he could not recover child support payments and certain real estate investments as damages for his fraud claim.

The Appellate Division held that while the wife’s alleged misconduct could not be condoned and was clearly violative of the marital relationship, it did not rise to the level of egregious fault, since she neither endangered the lives or physical well-being of family members, nor deliberately embarked on a course designed to inflict extreme emotional or physical abuse upon them.

In view of the cases cited above, this result was almost certain from the beginning. As painful and harmful lies and deceit in a marriage may be, and Howard S. is as egregious of a case as I have ever seen, unless there was a significant violence between the parties, the court would not alter equitable distribution on the basis of marital fault. At the same time, New York’s equitable distribution principles do not require equal distribution, if other factors of the EDL can be satisfied. If you in a situation where you are dealing with these issues, and considering divorce, I suggest that you speak with an experienced New York divorce lawyer.

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

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