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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 »

Modification of Child Support Orders and Family Court’s Jurisdiction

Sunday, July 12th, 2009

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

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

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

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

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

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

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

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

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

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

Child Support, Equitable Estoppel and Same-Sex Relationship

Monday, June 15th, 2009

I have previously written about issues of equitable estoppel, which may result in non-biological parent being treated as a biological parent of the child. Recently, I came across a case, H.M. v. E.T., 2009 N.Y. Slip Op. 04240 (2nd Dept. 2009) that dealt with applicability of equitable estoppel to child support in a same-sex relationship situation.

In October of 2006, H.M., an Ontario resident, and the birth mother of a 12-year-old child, filed a “Support Application” with a Canadian agency, seeking to have E.T., a Rockland County resident, and H.M.’s former same-sex partner, adjudicated a parent of the child. H.M. also sought an award of child support retroactive to the date of the child’s birth.  In support of her application, H.M. alleged that in August 1989, the parties lived in New York, entered into a monogamous relationship, and started cohabitating. H.M. alleged that the parties then agreed that she would attempt to become impregnated via artificial insemination, and that after a child was born, they would parent that child together. H.M. alleged that pursuant to this agreement, and with E.T.’s assistance and encouragement, she became impregnated by sperm from an anonymous sperm donor. In September 1994, H.M. gave birth to the child. H.M. alleged that over the next few months, E.T. acted as a parent to the child by nurturing and caring for him. However, H.M. alleged that in January 1995, E.T. ended the parties’ relationship. H.M., who subsequently relocated with the child to Canada, alleged that after the relationship ended, she made numerous requests of E.T. for child support, all of which were refused.

After the child support proceeding was commenced in Canada, the case was transmitted to the Family Court, Rockland County pursuant to the Uniform Interstate Family Support Act (Family Ct Act art 5-B (hereinafter “UIFSA”).  Initially, the Support Magistrate found that under the present law of New York, there was no basis upon which the Family Court could adjudicate E.T. a parent of the subject child and require her to pay child support. In this regard, the Support Magistrate noted that E.T. was not the birth mother of the child or an adoptive parent of the child, never executed an official acknowledgment of parentage of the child, and was not in a legally recognized same-sex marriage or civil union with H.M. when she gave birth to the child. The Support Magistrate, pointing out that the Family Court is a court of law with limited subject matter jurisdiction, found no provision in Family Court Act Article 5, or in any other article of the Family Court Act, applicable to a controversy between a birth mother and another female concerning the other female’s parentage of a child. Finally, the Support Magistrate, deeming all of H.M.’s factual allegations to be true, and observing that equitable considerations might suggest that E.T. be adjudicated a parent of the child and required to pay child support, noted that the Family Court cannot grant equitable relief.

Subsequently, after the objections to the Support Magistrate’s Order were filed, the Family Court overturned the Support Magistrate’s Order citing cases where courts “held individuals responsible for the support of a child even though they were not related to the child by biology or adoption.” The Family Court observed that in those cases, the courts applied the doctrine of equitable estoppel which, the Family Court noted, will be applied in order to protect the best interests of a child born out-of-wedlock. Thus, the Family Court concluded that “a paternity proceeding [can] proceed against a same sex partner if circumstances are established justifying the [doctrine's] application.” Then, the Family Court, noting that the subject child was born as a result of E.T.’s “promises,” concluded that H.M.’s allegations, if true, could support a finding that E.T. “should be estopped [from denying] her role as a person responsible to provide support for [that] child.” Accordingly, the Family Court directed a hearing to determine whether E.T. “should be equitably estopped [from denying] her responsibility to provide support to the subject child.”

E.T. appealed from the order of the Family Court. The Appellate Division, Second Department, reversed the Family Court’s order and reinstated the order of the Support Magistrate dismissing the petition. The Appellate Division stated that the basic premise of the petition was that  H.M. who was never married to or in a civil union with E.T., sought to have E.T., a woman having no biological or legal connection to the subject child, adjudicated a parent of that child and required to pay child support. Since the Family Court received H.M.’s support application pursuant to UIFSA, it was authorized to determine “parentage” (Family Ct Act § 580-301[b][6]; § 580-701). UIFSA provides that in deciding such a proceeding, the Family Court is required to apply the procedural and substantive law generally applicable to a “similar” proceeding originating in this State, and may only exercise whatever “powers” and provide whatever “remedies” that are “available” in such a proceeding.

The only proceeding in this State “similar” to a proceeding for a determination of “parentage” is a proceeding pursuant to Family Court Act article 5. Yet, as the Support Magistrate recognized, Family Court Act article 5, entitled “paternity proceedings,” only provides a vehicle for resolving controversies concerning a man’s fatherhood of a child.  After analyzing the language of the Family Court Act, the court concluded that a paternity proceeding requires “the male party” to be “the father” of the child.

The court further held that although the doctrine of equitable estoppel can be applied in a proceeding pursuant to Family Court Act  Article 5, when the Family Court applies the doctrine, the Family Court is merely precluding a party from “denying a certain fact”.  This is not the same thing as the Family Court granting equitable relief, something the Family Court lacks the power to do. Therefore, when the Family Court applies the doctrine, the Family Court is doing so as a means of granting relief specifically authorized by the Constitution or statute. That is, the Family Court is applying the doctrine as a means of adjudicating a “male” “the father” of a child. However, H.M. has demanded certain relief the Family Court is not specifically authorized by the Constitution or statute to grant. Under these circumstances, the Family Court could not apply the doctrine, and could not reach the issues of whether E.T. should be estopped from denying her parentage of the subject child, and whether estopping E.T. from denying her parentage of the child would be in the child’s best interests. If the Family Court applied the doctrine as a means of granting relief not specifically authorized by the Constitution or statute, that would be tantamount to the Family Court granting equitable relief.

The logic of the Appellate Division’s decision, its heavy emphasis on the language of the Family Court Act, and especially the use of the term “male”, raise the question of whether a different result would have been reached on these facts if both parties to this litigation were male. Since recent decisions in this area of family law have been gender neutral, it seems likely that the Court of Appeals, if the case is appealed, will likely focus on on whether any such applications should be considered on a gender neutral basis and also, even more importantly, whether the courts will move away from “paternity by estoppel” toward “parentage by estoppel” as a matter of equity. I believe that we may learn the answer to this question in the foreseeable future.

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Posted in child support, court orders, Family Court, Family Law, jurisdiction, New York Law, paternity, UIFSA | No Comments »

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

Recoupment of Maintenance After Successful Appeal

Tuesday, June 2nd, 2009

I have previously written about recoupment of pendente lite maintenance in a divorce action after the entry of a final maintenance award. The recent decision by the Court of Appeals in Johnson v. Chapin, previously discussed in this post, allowed recoupment of pendente lite maintenance as an adjustment to the equitable distribution award.

But what happens if the permanent maintenance award is overturned on appeal? In Rader v. Rader, 54 A.D.3d 919 (2nd Dept. 2008), the Appellate Division, Second Department, held that public policy prohibits recoupment of both pendente lite and permanent maintenance paid pursuant to court order or judgment which is subsequently set aside on appeal.

In Rader, the plaintiff stopped paying the defendant maintenance in January 2006, contending that the parties’ judgment of divorce entered September 18, 1998 required him to pay maintenance only for a period of 10 years, retroactive to the commencement of the divorce action in January 1996. The defendant claimed that she was entitled to maintenance until July 2007-10 years after the date of the decision awarding her maintenance.

In an order dated July 7, 2006 the Supreme Court granted the defendant’s motion, directed the plaintiff to pay the defendant maintenance for a period of 10 years, retroactive to July 1997, when the decision awarding her maintenance was made, and granted the defendant leave to enter a money judgment for maintenance arrears, plus the sum of $1,500 as an attorney’s fee. A money judgment was subsequently entered on July 26, 2006. The plaintiff appealed, and after some additional litigation between the parties, ultimately paid the sum of $54,000 in maintenance for the period from July 2006 until April 2007, plus the sum of $2,000 as an attorney’s fee, for a total sum of $56,000, while the appeal was pending.

In a decision dated April 17, 2007, the Appellate Division reversed the money judgment, and modified the order dated July 7, 2006 upon finding that the plaintiff’s obligation to pay maintenance terminated on January 9, 2006, or 10 years after the divorce action was commenced. Subsequently, the plaintiff moved for reimbursement of the sums of $54,000 in maintenance and $2,000 in attorneys’ fees he paid. In opposition, the defendant noted, inter alia, that she already spent the disputed $56,000 on her living expenses and attorneys’ fees. The Supreme Court denied the plaintiff’s motion.

The Second Department held that there is a strong public policy against recoupment of both pendente lite and permanent maintenance paid pursuant to a court order or judgment which is subsequently set aside on appeal. The reason for this policy is that maintenance and child support payments are “deemed to have been devoted to that purpose, and no funds exist from which one may recoup moneys so expended” if the award is thereafter reversed or modified. The Court further noted that if there were unpaid arrears of other obligations, such as carrying charges for the marital residence, the payor spouse may be granted a credit against those arrears for maintenance paid pursuant to an order which was reversed on appeal.

Is Rader still good law after the Court of Appeals’ decision in Johnson v. Chapin?. I believe that it is, especially with respect to the final maintenance awards. However, it is likely that we will see divorce lawyers making arguments for recoupment even with respect to the final maintenance awards overturned on appeal. I am familiar with a divorce case that is currently pending here in Rochester that may raise issues identical to those in Rader after the Court of Appeals’ decision in Johnson v. Chapin. I will post on that case once it has been resolved.

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

Attorneys Fees Ordered in Family Court and Discharge in Chapter 7 Bankruptcy

Sunday, May 31st, 2009

I have previously written how the bankruptcy courts deal with attempted discharge of the so-called domestic support obligations. However, that post focused primarily on discharge of obligation that arose as a result of divorce proceedings and child support. Occasionally, I see an attempt to discharge an obligation arising out of Family Court proceedings, specifically, attorneys fees.

While it is clear that the child support or spousal support obligations are not dischargeable in bankruptcy as domestic support obligations, the question of attorneys fees granted in a child support or other proceeding in Family Court was less clear cut until Ross v. Sperow, 57 A.D.3d 1255 (3rd Dept. 2008), where the Appellate Division, Third Department, held that the award of counsel fees by the Family Court was, in part, “in the nature of support” and, therefore, excepted from discharge in bankruptcy.

In Ross, the mother filed a petition for violation of a prior order of custody and visitation in 2005. In response, multiple cross petitions were filed by the father alleging violations by the mother and seeking modification of custody. In an August 2006 order resolving the parties’ petitions, Family Court sustained the mother’s motion for counsel fees and ordered that the father pay $ 5,000 of her counsel fees. The father subsequently filed for bankruptcy under chapter 7 of the Bankruptcy Code and, in Schedule F of his petition, he listed the award of counsel fees as an unsecured debt. The father was discharged by order of the Bankruptcy Court in January 2007 and, shortly thereafter, the mother commenced the present proceeding in Family Court for the violation of a court order based upon the father’s failure to pay the counsel fees. Contending that the debt had been discharged in bankruptcy, the father moved to dismiss the petition. Family Court, among other things, concluded that the counsel fees awarded in its prior order were a nondischargeable domestic support obligation, denied the father’s motion and granted the mother’s petition in part, finding the father to be in violation of a prior order.

The Appellate Division noted that state and federal courts have concurrent jurisdiction over the issue of the dischargeablity of a particular debt following the discharge of the debtor in bankruptcy. It reviewed the father’s contention that the counsel fees, although awarded in the context of a Family Court proceeding regarding custody and visitation, were not “in the nature of support” for the parties’ children. The Court held that since the mother’s initial petition commencing the proceeding clearly raised issues of financial need and hardship and her motion for counsel fees, which was sustained by Family Court in the August 2006 order, proposed consideration of her circumstances as one basis for an award of counsel fees. The Court held that the term “in the nature of support” is to be given a broad interpretation in the context of the discharge of debt obligations in bankruptcy and agreed with Family Court’s determination that the award of counsel fees in its prior order was, in part, “in the nature of support” and, therefore, excepted from discharge in bankruptcy.

The real issue in this case is whether the custody petition really was in the nature of support. The mother’s lawyer was able to persuade the both the Family Court and the Appellate Division that it was. While the Appellate Division relied on the award of attorneys’ fees and the relevant standard under the Family Court Act, an argument can be made that the Court should have looked to the underlying proceeding only and that proceeding dealt exclusively with custody issues. One of the factors in any award of attorneys’ fees is ability to pay, so that can make an award of attorneys fees in any proceeding in Family Court to be in the nature of support.

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Posted in attorneys fees, Bankruptcy, child support, court orders, custody, Family Court, Family Law, federal law, New York Law, visitation | No Comments »

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

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

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