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Another Update On No-Fault Divorce In New York

Monday, July 5th, 2010

I have previously written about the slow progress of no-fault divorce legislation though New York’s Senate and Assembly here and here. Finally, it appears that New York is on the cusp of passing no-fault divorce law and joining the rest of the country.

On July 1, 2010, the Assembly passed no-fault divorce bill, which previously was approved in the Senate. If signed by Gov. David Paterson, New York would no longer be the only state that doesn’t allow no-fault divorce.

Under no-fault divorce, couples would be allowed to divorce after six months and the resolution of all financial issues. They would not have to prove fault, such as abandonment or adultery, or develop a separation agreement and live apart for at least a year in order to get divorced. Proponents said the changes would save time and money and court resources.

The Assembly and Senate previously approved two other bills related to no-fault divorce. One would require counsel fees to be awarded at the beginning of a divorce process and the other would address issues related to spousal support. The measure dealing with spousal support would establish temporary spousal maintenance while the divorce proceeding is pending, revise factors for final maintenance awards and require the Law Revision Commission to study the economic consequences of divorce and maintenance actions.

While the elimination of marital fault is extremely important and would greatly benefit people seeking divorce here in Rochester and elsewhere in New York State, it is the bill dealing with temporary spousal support that is likely to present some significant legal issues if it becomes law.

The bill is interesting since unlike the existing law regarding temporary spousal support, it utilizes a formula to calculate a temporary spousal support award. The amount of spousal support and its duration are calculated on the basis of a formula as follows:

3 5-A. TEMPORARY MAINTENANCE AWARDS. A. EXCEPT WHERE THE PARTIES HAVE
4 ENTERED INTO AN AGREEMENT PURSUANT TO SUBDIVISION THREE OF THIS PART
5 PROVIDING FOR MAINTENANCE, IN ANY MATRIMONIAL ACTION THE COURT SHALL
6 MAKE ITS AWARD FOR TEMPORARY MAINTENANCE PURSUANT TO THE PROVISIONS OF
7 THIS SUBDIVISION.
8 B. FOR PURPOSES OF THIS SUBDIVISION, THE FOLLOWING DEFINITIONS SHALL
9 BE USED:
10 (1) “PAYOR” SHALL MEAN THE SPOUSE WITH THE HIGHER INCOME.
11 (2) “PAYEE” SHALL MEAN THE SPOUSE WITH THE LOWER INCOME.
12 (3) “LENGTH OF MARRIAGE” SHALL MEAN THE PERIOD FROM THE DATE OF
13 MARRIAGE UNTIL THE DATE OF COMMENCEMENT OF ACTION.
14 (4) “INCOME” SHALL MEAN:
15 (A) INCOME AS DEFINED IN THE CHILD SUPPORT STANDARDS ACT AND CODIFIED
16 IN SECTION TWO HUNDRED FORTY OF THIS ARTICLE AND SECTION FOUR HUNDRED
17 THIRTEEN OF THE FAMILY COURT ACT; AND
18 (B) INCOME FROM INCOME PRODUCING PROPERTY TO BE DISTRIBUTED PURSUANT
19 TO SUBDIVISION FIVE OF THIS PART.
20 (5) “INCOME CAP” SHALL MEAN UP TO AND INCLUDING FIVE HUNDRED THOUSAND
21 DOLLARS OF THE PAYOR’S ANNUAL INCOME; PROVIDED, HOWEVER, BEGINNING JANU-
22 ARY THIRTY-FIRST, TWO THOUSAND TWELVE AND EVERY TWO YEARS THEREAFTER,
23 THE PAYOR’S ANNUAL INCOME AMOUNT SHALL INCREASE BY THE PRODUCT OF THE

EXPLANATION–Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD17166-10-0
A. 10984–B 2

1 AVERAGE ANNUAL PERCENTAGE CHANGES IN THE CONSUMER PRICE INDEX FOR ALL
2 URBAN CONSUMERS (CPI-U) AS PUBLISHED BY THE UNITED STATES DEPARTMENT OF
3 LABOR BUREAU OF LABOR STATISTICS FOR THE TWO YEAR PERIOD ROUNDED TO THE
4 NEAREST ONE THOUSAND DOLLARS. THE OFFICE OF COURT ADMINISTRATION SHALL
5 DETERMINE AND PUBLISH THE INCOME CAP.
6 (6) “GUIDELINE AMOUNT OF TEMPORARY MAINTENANCE” SHALL MEAN THE SUM
7 DERIVED BY THE APPLICATION OF PARAGRAPH C OF THIS SUBDIVISION.
8 (7) “GUIDELINE DURATION” SHALL MEAN THE DURATIONAL PERIOD DETERMINED
9 BY THE APPLICATION OF PARAGRAPH D OF THIS SUBDIVISION.
10 (8) “PRESUMPTIVE AWARD” SHALL MEAN THE GUIDELINE AMOUNT OF THE TEMPO-
11 RARY MAINTENANCE AWARD FOR THE GUIDELINE DURATION PRIOR TO THE COURT’S
12 APPLICATION OF ANY ADJUSTMENT FACTORS AS PROVIDED IN SUBPARAGRAPH ONE OF
13 PARAGRAPH E OF THIS SUBDIVISION.
14 (9) “SELF-SUPPORT RESERVE” SHALL MEAN THE SELF-SUPPORT RESERVE AS
15 DEFINED IN THE CHILD SUPPORT STANDARDS ACT AND CODIFIED IN SECTION TWO
16 HUNDRED FORTY OF THIS ARTICLE AND SECTION FOUR HUNDRED THIRTEEN OF THE
17 FAMILY COURT ACT.
C. THE COURT SHALL DETERMINE THE GUIDELINE AMOUNT OF TEMPORARY MAINTE-
19 NANCE IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH AFTER DETER-
20 MINING THE INCOME OF THE PARTIES:
21 (1) WHERE THE PAYOR’S INCOME IS UP TO AND INCLUDING THE INCOME CAP:
22 (A) THE COURT SHALL SUBTRACT TWENTY PERCENT OF THE INCOME OF THE PAYEE
23 FROM THIRTY PERCENT OF THE INCOME UP TO THE INCOME CAP OF THE PAYOR.
24 (B) THE COURT SHALL THEN MULTIPLY THE SUM OF THE PAYOR’S INCOME UP TO
25 AND INCLUDING THE INCOME CAP AND ALL OF THE PAYEE’S INCOME BY FORTY
26 PERCENT.
27 (C) THE COURT SHALL SUBTRACT THE INCOME OF THE PAYEE FROM THE AMOUNT
28 DERIVED FROM CLAUSE (B) OF THIS SUBPARAGRAPH.
29 (D) THE GUIDELINE AMOUNT OF TEMPORARY MAINTENANCE SHALL BE THE LOWER
30 OF THE AMOUNTS DETERMINED BY CLAUSES (A) AND (C) OF THIS SUBPARAGRAPH;
31 IF THE AMOUNT DETERMINED BY CLAUSE (C) OF THIS SUBPARAGRAPH IS LESS THAN
32 OR EQUAL TO ZERO, THE GUIDELINE AMOUNT SHALL BE ZERO DOLLARS.
33 (2) WHERE THE INCOME OF THE PAYOR EXCEEDS THE INCOME CAP:
34 (A) THE COURT SHALL DETERMINE THE GUIDELINE AMOUNT OF TEMPORARY MAIN-
35 TENANCE FOR THAT PORTION OF THE PAYOR’S INCOME THAT IS UP TO AND INCLUD-
36 ING THE INCOME CAP ACCORDING TO SUBPARAGRAPH ONE OF THIS PARAGRAPH, AND,
37 FOR THE PAYOR’S INCOME IN EXCESS OF THE INCOME CAP, THE COURT SHALL
38 DETERMINE ANY ADDITIONAL GUIDELINE AMOUNT OF TEMPORARY MAINTENANCE
39 THROUGH CONSIDERATION OF THE FOLLOWING FACTORS:
40 (I) THE LENGTH OF THE MARRIAGE;
41 (II) THE SUBSTANTIAL DIFFERENCES IN THE INCOMES OF THE PARTIES;
42 (III) THE STANDARD OF LIVING OF THE PARTIES ESTABLISHED DURING THE
43 MARRIAGE;
44 (IV) THE AGE AND HEALTH OF THE PARTIES;
45 (V) THE PRESENT AND FUTURE EARNING CAPACITY OF THE PARTIES;
46 (VI) THE NEED OF ONE PARTY TO INCUR EDUCATION OR TRAINING EXPENSES;
47 (VII) THE WASTEFUL DISSIPATION OF MARITAL PROPERTY;
48 (VIII) THE TRANSFER OR ENCUMBRANCE MADE IN CONTEMPLATION OF A MATRIMO-
49 NIAL ACTION WITHOUT FAIR CONSIDERATION;
50 (IX) THE EXISTENCE AND DURATION OF A PRE-MARITAL JOINT HOUSEHOLD OR A
51 PRE-DIVORCE SEPARATE HOUSEHOLD;
52 (X) ACTS BY ONE PARTY AGAINST ANOTHER THAT HAVE INHIBITED OR CONTINUE
53 TO INHIBIT A PARTY’S EARNING CAPACITY OR ABILITY TO OBTAIN MEANINGFUL
54 EMPLOYMENT. SUCH ACTS INCLUDE BUT ARE NOT LIMITED TO ACTS OF DOMESTIC
55 VIOLENCE AS PROVIDED IN SECTION FOUR HUNDRED FIFTY-NINE-A OF THE SOCIAL
56 SERVICES LAW;

In some respects, having a formula creates some predictability with respect to temporary spousal support awards that has been missing in the present law. At the same time, the blind application of the formula is likely to cause a different set of problems. If the bill passes, how these provisions are going to be interpreted by the courts is somewhat uncertain. As far as the divorce lawyers are concerned, this is likely to force divorce lawyers to spend even more time counseling clients with respect to temporary spousal support and post-divorce spousal support issues.

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

Prenuptial Agreements and Waiver of Retirement Rights

Sunday, May 16th, 2010

One issue that consistently comes up dealing with prenuptial agreements is whether or not rights to future retirement benefits can be waived prior to the marriage despite the fact that any such future rights will not come into existence until after the marriage.  Prior case law wasn’t particularly clear in dealing with this issue since by necessity any such prenuptial agreement implicated Employee Retirement Income Security Act (“ERISA”).  The prior case law held that under ERISA, only a spouse can waive spousal rights to employee plan benefits, that a fiancee is not a spouse, and that such rights, therefore, cannot be effectively waived in a prenuptial agreement.

In Strong v. Dubin, 2010 N.Y. Slip. Op. 04121 (1st Dept. 2010), the Appellate Division, First Department, overturned the prior case law, including its own decisions, and held that a waiver of retirement rights included in a prenuptial agreement is valid and does not violate ERISA.

The court’s reasoning in reaching this conclusion was as follows. Initially, the parties’ prenuptial agreement, read as a whole and giving effect to all provisions, expressed an intent to opt out of the statutory scheme governing equitable distribution, which encompassed plaintiff’s retirement funds.  The prenuptial agreement provided that “[t]he parties desire, in advance of their marriage, to settle their financial, property, and all other rights, privileges, obligations and matters with respect to each other arising out of the marital relationship and otherwise, as more particularly hereinafter provided”.  Article I of the prenuptial agreement provided: ”it is the intention [of the parties] . . . that the property owned by each of them shall remain completely and wholly vested in each such person in whose ownership it presently exists.”

Article I of the Agreement expressly referenced Domestic Relations Law § 236(B)(3), which provides that a prenuptial agreement may include, among other things a “provision for the ownership, division or distribution of separate and marital property,” and reflects an intent to opt out of equitable distribution “with respect to the division of all marital and separate property either now in existence or which is hereafter acquired” (emphasis added), which encompasses the retirement funds at issue.   According to the Appellate Division, if this clause is disregarded, that would render the reference to property that is “hereafter acquired” meaningless, leaving that provision without force or effect.  According to the prenuptial agreement, the only assets specifically designated to be “marital property” are the prospective joint banking, savings or investment accounts or assets purchased from the proceeds of those joint accounts set forth in Article I, paragraph 5. The retirement assets in question were not held in joint names or funded with money from an account in the joint names of the parties and are not marital property within the meaning of the agreement.  The agreement also included a waiver which provided that

Except as otherwise expressly provided herein, each party hereby releases . . . the other, of and from all causes of action, claims, rights, or demands, whatsoever, in law or in equity (including, but not limited to claims for equitable distribution, distributive award or claims against the separate property of the other spouse) which either of the parties hereto ever had, or now has, against the other, except (a) nothing herein contained shall be deemed to prevent either party from enforcing the terms of this Agreement or from asserting such claims as are reserved by this Agreement to each party against the estate of the other; provided, however, that the claims so asserted arise out of a breach of this Agreement; and (b) nothing herein contained shall impair or waive or release any and all cause [sic] of action for divorce, annulment or separation, or any defenses which either may have to any divorce, annulment or separation action which may hereafter be brought by the other.

According to the Appellate Division, the contention that this waiver clause encompasses only property which either of the parties held at the time the prenuptial agreement was executed, to the exclusion of after acquired property, was unsupportable.  While the waiver clause stated that it is a release of all causes of action, claims, rights or demands whatsoever in law and in equity “which either of the parties hereto ever had, or now has against the other.” However, the illustrative claims listed include, but are not “limited to claims for equitable distribution, distributive award or claims against the separate property of the other spouse.” At the time the prenuptial agreement was signed, neither party had any of these delineated claims, all of which would accrue in the future, once the parties were married. Similarly the exceptions for breach of the antenuptial agreement and divorce demonstrate that the waiver clause was intended to apply to future causes of actions that would accrue after the marriage. In light of this language, to limit the claims to property that either party had at the time of the marriage would render the waiver clause meaningless in that property owned by either party at the time the prenuptial agreement was entered into would already be separate property as to which there is no right to equitable distribution or a distributive award.

The court further stated that for purposes of equitable distribution, a waiver of any interest in a pension as marital property by an otherwise valid prenuptial agreement is not prohibited by ERISA.  In New York, vested or matured rights in a pension plan are considered marital property subject to distribution in a divorce action to the extent that the benefits result from employment by the participant after the marriage and before the commencement of the divorce action.  There is nothing in the matrimonial law of New York prohibiting a spouse from waiving his or her interest in such marital property by agreement made before or during the marriage in accordance with Domestic Relations Law § 236(B)(3).

This is an important decision since it resolved some to the uncertainty associated with waivers of future retirement rights included in prenuptial agreements.  In the future, divorce lawyers can be more comfortable in including such waivers for their clients.  In appropriate situations, value of such waiver can amount to a substantial amount of money and may become subject of litigation in divorce.

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Posted in Domestic Relations Law, New York Law, Supreme Court, divorce, drafting, pre-nuptial agreement | No Comments »

Varying From Statutory Child Support Percentages

Sunday, May 9th, 2010

I have previously written about the court’s ability to consider not only the income one or both parties actually reported but the income as should have been reported.  What is not commonly known is that the court, whether Supreme Court or Family Court, can vary from the statutory percentages, by either increasing or reducing child support amounts.

In Irkho v. Irkho, 66 A.D.3d 682 (2d Dept. 2009), the Appellate Division held that Family Court properly denied the father’s objections to the order of the Support Magistrate, which departed from the numerical guidelines of the Child Support Standards Act and directed him to pay 50% of the child’s regular monthly expenses.  The Appellate Division held that a hearing court is not bound to apply the statutory percentage established in Family Court Act 413(1)(c), but may determine the child support obligation through the application of the percentage set forth in Family Court Act 413(1)(c), the factors delineated in Family Court Act 413(1)(f), or a combination of both (see Cassano v. Cassano, 85 N.Y.2d 649 (1995)).  Family Court providently exercised its discretion in departing from the prescribed percentage.

The above is fairly uncommon situation since in vast majority of the cases the courts will apply the CSSA.  It is unfortunate that the Appellate Division did not discuss the facts of the case in detail.  Whatever the circumstances were that resulted in the court’s decision may applicable in other cases.  If the child’s monthly expenses exceed the amount that the father would be obligated under the CSSA, family law lawyers would certainly appreciate knowing under what circumstances their clients may receive or be obligated to pay child support in excess of the CSSA amounts.

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

Grounds for Divorce Revisited

Monday, April 26th, 2010

I have previously discussed New York’s grounds for divorce and lack of no-fault divorce.  While the cases have traditionally stated that the longer is the duration of the marriage, the higher is the burden of plaintiff with respect to the grounds such as cruel and inhuman treatment.  Recently, I came across the case that left me surprised despite handling many divorce cases here in Rochester over the last 14 years.

In S.K. v. I.K., 2010 N.Y. Slip. Op. 50556(U) (Sup. Ct. Nassau Co. 2010), the plaintiff husband was seeking a divorce on the grounds of cruel and inhuman treatment after 29 years of marriage.  One of the grounds alleged was cruel and inhuman treatment.  Specifically, the husband testified that wife was extremely physically abusive, and that in August of 2005, she attempted to attack him with a Japanese sword.  Husband testified that wife could have killed him if not for the parties’ daughter’s intervention.  He testified that the sharp edge of the sword came within a few inches of his chest. He testified that wife came to the marital residence around 1:00 p.m., and when husband questioned her as to where she had been, wife refused to answer, and stated that she did not have to tell him. He testified that wife began acting “crazy” and began yelling and screaming at him. She then came after him waving her hands and pounding on his chest, striking him repeatedly.  He testified that at the start of the confrontation, the parties were in the kitchen, but that upon escalation of the incident, he ran to the master bedroom, and fearing for his safety, he locked himself in the bedroom for his protection.  He testified that wife began pounding on the door and kicking it with her feet, while screaming and insisting that he open the door.  Husband testified that he heard the parties’ daughter come out of her bedroom, and that she was pleading for the wife to stop.  Fearing that wife would hurt their daughter, he came out of the bedroom and walked towards the kitchen where the wife was holding the large Japanese sword, while their daughter was trying to block wife and stop her from moving forward. Husband testified that he observed the wife pushing their daughter back in an attempt to reach the bedroom, but when she saw husband in the kitchen, she began to charge at him and waive the sword through the sides of their daughter’s body. He testified that the wife became frantic in her attempts to reach him and almost did hit him on the head and parts of his chest.  He testified that he slowly retreated back in the bedroom and locked himself in for the night, fearing that the wife would come back and hurt him in the middle of the night. He did not call the police at any point in this incident, nor did he testify as to any actual injuries inflicted by the wife upon him during the course of the incident.

The parties’ children testified and corroborated the husband’s testimony.  The wife denied the allegations of Husband with respect to the incident involving the Japanese sword.

The trial court, after hearing all of the testimony involving the Japanese sword, held that the husband did not sustain his burden of proof with respect to physical or mental injuries. The testimony was that no one sustained any physical injuries, neither party was seen at a hospital or by any doctor.  The court stated that the husband never contacted the police nor did he seek protection from the Family Court, and he testified that he continuously pleaded with the wife to return to the marital residence to work on their marriage.

Husband provided no testimony from any physicians nor did he produce any medical records.  Accordingly, the trial court held that the husband failed to establish a prima facie showing of cruel and inhuman treatment by the wife, and dismissed that cause of action.

What is surprising about this case is that there was corroborated testimony that the wife engaged in conduct that would have likely resulted in a serious injury or death of the husband, were it not interrupted by the parties’ daughter.  If attempting to kill or seriously injure your spouse with a sword is not cruel and inhuman treatment, it is hard to conceve of the conduct that would actually amount to cruel and inhuman treatment.

In my view, the cases such as S.K. continue to reiterate the need for New York to pass no-fault divorce legislation.  At the same time, the husband’s divorce lawyer should have presented testimony with respect to how this attack affected the husband.  It should have been possible to have the husband evaluated by a psychologist and have psychologist’s testimony presented to the court.  As a postscript, while the trial court did not grant divorce on the grounds of cruel and inhuman treatment, the divorce was ultimately granted on the grounds of abandonment because the wife moved for a period of time to Virginia and said move was unjustified and without an intention to return.

The irony of all of the above is that this case is not unique.  While the facts in S.K. are shocking, there are many marriages that have ended many years ago but cannot be legally dissolved.  Until New York does something about its grounds requirements, similar cases will continue to take place.

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

Are Lifetime Medical Insurance Benefits Subject to Equitable Distribution?

Saturday, April 10th, 2010

Once in a while I see a divorce action where one of the parties to the action is entitled to lifetime medical insurance benefits as a result of his/her employment.  For obvious reasons, such benefits may be of great value to one or both parties.  What happens if one of the parties makes an argument that such benefits are subject to equitable distribution?

In Henig v. Henig, 2010 N.Y. Slip. Op. 50546(U) (Sup. Ct. Nassay Co. 2010), the husband was a former New York City Police Officer who retired in 2007. Since his retirement on December 31, 2007, he has been entitled to and does receive lifetime medical, dental and vision benefits for himself, wife, and the parties’ children.  Wife argued that the medical insurance is a marital asset and subject to Equitable Distribution, and/or equals a benefit to be included in determining husband’s income.

Wife argued that the Domestic Relations Law contemplates an expansive view of marital property and analogized the lifetime health benefits to a pension insofar as such benefits are an asset, received only upon retirement.   She claimed that husband’s rights to the coverage matured as of his retirement, and Wife has rights independent of the husband, i.e., if there were no divorce and husband were to die, Wife and children would still receive benefits.

While wife made that argument, however, her lawyer had not submitted any documentary evidence, specific to the plan, to substantiate these claims.   Wife’s attorney also argued that lifetime benefits, like a pension, are contractual rights, which have some value because they are received in lieu of higher compensation, which husband would have earned otherwise, however, wife’s counsel again provided no proof to substantiate this claim.

Husband argued that since enactment of DRL §236 B, neither the Court of Appeals nor the four appellate divisions have held that employee-subsidized health insurance benefits are marital property subject to Equitable Distribution.  In fact, in contemplation of the loss of such health benefits, DRL§255(a) directly addresses the issue stating that ” once a judgment is signed a party there to may or may not be eligible to be covered under the other party’s health insurance plan.” Husband’s lawyer also argued that amendments to DRL§236(B) provide that loss of health insurance benefits upon dissolution of marriage are factors that a court must consider for the purposes of determining maintenance and Equitable Distribution, but that such benefits are not itself an asset, and if the Legislature intended that such benefits be included in the definition of marital asset, it would have done so as it has amended and modified other provisions concerning health insurance.

Husband further argued that wife may elect continuation of coverage under a COBRA option, or she could obtain her own health insurance benefits through full-time employment, the cost of which is a consideration in her support award, if any.  Wife’s available remedy through the election of COBRA coverage would ensure the avoidance of any possible double-dipping by ordering the husband, to pay for her health insurance.  Husband’s counsel, however, has not submitted any proof of the availability of a COBRA option to wife upon dissolution of the marriage, nor was there any proof presented with as to wife’s ability to obtain benefits through employment.

As far as the health insurance benefits themselves, the husband currently pays $15.32 per month for such benefits and an annual deductible $300.00.  The continuation of the benefits is at a continued cost to husband, and his failure to make such payments will result in the cessation of such benefits.  In further support of the proposition that lifetime health benefits are not defined like a pension, husband’s lawyer asserted that wife has already received her marital portion of the insurance having enjoyed its benefits during the marriage, and even the period after husband’s retirement and until such time that the Judgment of Divorce is entered.  Furthermore, he argued that upon divorce Husband will pay the monthly premium from his separate property, and continuation of the health insurance policy is conditioned upon payments made from separate property and therefore any marital right to the insurance terminates upon divorce.

Wife’s divorce attorney cited Walek v. Walek, 193 Misc 2d 241 (Sup. Ct. Erie Co. 2002), where the trial court held that health insurance benefits were a marital asset and subject to Equitable Distribution. The court in Henig found that case distinguishable since in Walek, the husband used a portion of his sick time, which could have been paid to him directly, to fund the 10% required premium payment necessary to receive those post-retirement, lifetime benefits.  The sick time had a value, which was arguably marital property, which marital property was then used to directly fund those lifetime benefits.

Section 255 of the Domestic Relations Law states in pertinent part that:

A court, prior to signing a judgment of divorce or separation, or a judgment annulling a marriage or declaring the nullity of a void marriage, shall ensure that:

1. Both parties have been notified, at such time and by such means as the court shall determine, that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party’s health insurance plan, depending on the terms of the plan.
2. If the parties have entered into a stipulation of settlement/agreement on or after the effective date of this section resolving all of the issues between the parties, such settlement/agreement entered into between the parties shall contain a provision relating to the health care coverage of each party; and that such provision shall either: (a) provide for the future coverage of each party, or (b) state that each party is aware that he or she will no longer be covered by the other party’s health insurance plan and that each party shall be responsible for his or her own health insurance coverage, and may be entitled to purchase health insurance on his or her own through a COBRA option, if available.
***

Section 236 B(6) of the Domestic Relations Law states in pertinent part that:

In determining the amount and duration of maintenance the court shall consider:

(11) the loss of health insurance benefits upon dissolution of the marriage; and
***

The trial court held that the threshold question was whether the lifetime health benefits constituted property and the wife has failed to submit proof establishing this.  Even if it were to be deemed property, wife has failed to provide the court with a sufficient showing to justify classifying such benefits are “marital property” or that  the post-retirement lifetime benefits involved a reduction in husband’s earned wages in order to obtain such benefits or that these lifetime benefits are provided through the employer utilizing funds set aside from a portion of the husband’s income earned through his employment.  She did not allege that husband had an opportunity to “opt out” of such benefits in exchange for higher wages.

Additionally, the argument with respect to the de minimus amount husband is required to pay for the continued health insurance and that husband’s cost for such comparable medical benefits pales in comparison to that which it would cost wife was not persuasive.  Even if this argument were accepted, the loss of benefits for one spouse has been contemplated by the Legislature in its amendment to the Domestic Relations Law to include the loss of health insurance benefits in the determination of maintenance.  Although wife’s attorney argued that such savings for Husband constitutes an asset to which Wife contributed, this argument did not persuade the court.

What is the final lesson of Henig?  I agree with the court that the health benefits are not marital property as contemplated by the Domestic Relations Law.  Furthermore, it was the intent of the Legislature to exclude such benefits from the totality of marital assets, as evidenced by the amendments to the Domestic Relations Law that specifically ensure that such loss of benefits by a spouse post-judgment is a consideration in the determination of maintenance, as well the recent language adopted to ensure that all parties are aware of the possibility of loss of such health benefits.  Wife was not left without a remedy, since the future cost of health benefits is a consideration for any award of maintenance and Equitable Distribution.

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

Update on Dissolution of Out-of-State Civil Unions

Saturday, April 3rd, 2010

I have previously written regarding the problem posed by out-of-state civil unions.  Under New York law, while such unions are recognized through the principles of comity, New York does not have any legislation that addresses how these unions may be dissolved once one or both of the parties reside in New York.

The prior decision, made by the trial court, stated that the court would have jurisdiction to address dissolution of the civil union.  However, the court was searching for the way to accomplish this and suggested that the complaint be pled to seek dissolution of a civil union, as opposed to a divorce, as a complaint was plead initially.  As a trial court decision, B.S. v. F.B., did not carry a significant weight of authority and would not be binding on other trial courts.

Now we have the first appellate level decision to address this issue.  In Dickerson v. Thompson, 2010 N.Y. Slip. Op. 02052 (3rd Dept. 2010), the Appellate Division, Third Department, held that New York court have subject matter jurisdiction “to entertain an action for equitable and declaratory relief seeking dissolution of a civil union validly entered into outside of this state.”  The court did not determine the scope of the relief that may be available in such action.

What is obvious from the decision is that the Appellate Division believed that the courts had authority to handle such cases, but was struggling come up with the way to accomplish the dissolution.  What makes it difficult, is the fact that when a divorce takes place, the court will address such issues as custody, child support, spousal maintenance, and equitable distribution.  All of the above issues are resolved in accordance with the provisions of the Domestic Relations Law.  What is unknown is how the courts will handle custody, child support, spousal maintenance and equitable distribution in dissolution of a civil union, something that apparently carries less weight in New York courts than a traditional marriage.  Does entering into a civil union create a potential entitlement to a spousal maintenance?  I don’t know the answer to that question, I suspect that the courts do not know the answer to it either.  It is quite likely that New York legislature will have to address these issues and, until then, the courts will try to come up with some ways of addressing these issues.

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 Domestic Relations Law, New York Law, Supreme Court, divorce, jurisdiction, same sex marriage | No Comments »

Limitations on Child Support Arrears and Child Support Standards Act

Sunday, March 14th, 2010

One question that I am often asked with respect to child support arrears is whether there is a limit on the amount of child support arrears that can be accrued.  My usual response is that there is only one limitation in the Child Support Standards Act with respect to the limits on child support arrears and it exists solely in situations where the payor’s income is below the amount set by the poverty income guidelines for the single person, as reported by the federal Department of Health and Human Services.

Specifically, where the payor’s annual income is below the poverty income guidelines, then in accordance with the Family Court Act §413(1)(g), then payor’s child support arrears are limited to $500.00.  For 2009, the federal poverty guideline for a single person was set at $10,830.00.  This provision can be very helpful to family law lawyers and their clients since this provision allows for retroactive limitation on child support arrears, but it is limited to those situation where the party who owes child support has an extremely low level of income.

There are some limitations even in situations where the payor’s income was below the poverty guideline amount.  The party charged with paying child support couldn’t have voluntarily reduced his/her income, and must demonstrate inability to earn a higher amount (i.e., cannot have income imputed on the basis of ability to pay or other factors).  On practical level, the most likely situation where this provision becomes applicable is typically where a party becomes disabled and does not seek downward modification of the child support obligation until after child support arrears have accrued.

What is also interesting about the Family Court Act §413(1)(g), is that it directly contradicts Family Court Act §451, which prohibits the court from reducing or annulling arrears accrued prior to the filing of a modification petition unless the party shows good cause for failure to make the application sooner.  The courts were able to harmonize both sections by deciding that if the payor’s income is below the poverty level guideline, then by operation of section 413(1)(g) the arrears had never accrued.  Ronald F. v. Kathy Jo O., 25 Misc 3d 1229 (Fam.Ct. Erie Co. 2009)

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Posted in Child Support Standards Act, Domestic Relations Law, Failure to Pay Child Support, Family Court, Family Law, New York Law, Supreme Court, child support, child support enforcement, court orders, divorce, imputed income, procedure | No Comments »

Update on Progress of New York’s No-Fault Divorce Legislation

Sunday, March 14th, 2010

I have previously written about the lack of no-fault divorce in New York and the highly uncertain future of the bills creating no-fault divorce in New York.  Earlier this month, the New York State Senate Committee on the Judiciary advanced legislation (S.3890/A.9753), sponsored by Senator Ruth Hassell-Thompson and Assemblyman Jonathan Bing, that would allow a judgment of divorce to be granted to either a husband or a wife without assigning fault to either party.  The legislation now moves to the full Senate for consideration.

The legislation would allow for divorce when a marriage is irretrievably broken for a period of at least six months, provided that one party has so stated under oath.  A judgment of divorce can then only be granted if the following issues have been resolved: the equitable distribution of marital property, the payment or waiver of spousal support, the payment of child support, the payment of counsel and expert fees and expenses, and infant custody and visitation rights.  The bill is supported by the New York State Bar Association.

However, the fate of the legislation is still highly uncertain. The bill is opposed by New York State chapter of NOW, as well as other groups.

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

Divorce, Separation and Selection of Tax Status for Filing

Saturday, February 27th, 2010

I have previously discussed some of the tax issues related to divorce, maintenance and dependency exemptions.  As the tax season approaches, here is some additional information that may be of assistance.

In a typical divorce, unless the parties have been legally separated prior to December 31, they are still able file a joint return.   By filing a joint return, both spouses will be jointly and separately liable for any errors, omissions or deficiencies on the tax return.   If the parties are going through divorce, the issues related to division of any tax refunds may also become complicated.

If you are legally separated from your spouse, you are able to file as a head of household if you provided more than half the cost of keeping up a home for a child, dependent parent, or other qualifying relative for more than half the year.  According to the IRS, to claim head of household, you must either be unmarried or considered unmarried on the last day of the year.  In addition, the Abandoned Spouse rule may be applicable.   In order to qualify under the rule, if you and your spouse lived apart for the last six months of the year, you would be considered unmarried for the purpose of this filing status under the Abandoned Spouse rule.  If you meet the other two requirements for this status, you would be eligible to file as Head of Household.  The other two requirements are as follows:  1) paying more than half of the cost of keeping up a home as of the last day of the tax year;  2) a dependent child or other relative lived with you for more than half the year or you have a dependent parent (dependent parents are not required to live with you).

A party is required to file as single if he or she was unmarried as of December 31, or if legally separated as of the end of the year and does not qualify for another filing status.

There are other tax advantages and disadvantages that depend on the filing status elected by the party.  Please note that the above discussion is not tax advice, and these issues should be discussed with your tax professional.

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Posted in Family Law, Supreme Court, divorce, federal law, separation, taxes | No Comments »

Divorce, Monetary Obligations and Statute of Limitations

Saturday, February 20th, 2010

It is is not uncommon for a party to obtain a right to receive a sum of money in the judgment of divorce.  That right usually comes in situations where there are assets that are subject to equitable distribution.  It is also not uncommon for the parties to make their own agreements following the judgment of divorce as to how such sums of money will be paid.  One issue that would raise a concern for me would be a situation where the payment is extended over a long period of time.  It is a concern because a statute of limitations may come into play and, possibly, bar recovery.

In Woronoff v. Woronoff, 2010 N.Y. Slip. Op. 01479 (2nd Dept. 2010), the Appellate Division held that where a monetary award in the judgment of divorce is not reduced to a monetary judgment, such award is subject to a six year statute of limitations.  In Woronoff, the parties were divorced by judgment dated December 21, 1988, which provided, inter alia, that the plaintiff would pay the defendant the sum of $87,500 for her share of his businesses.  In 1990, the parties entered into an agreement which modified this portion of the judgment so as to, among other things, set forth a different payment schedule for the distributive award.  This agreement was not reduced to a court order.  The defendant never entered her distributive award as a money judgment nor sought to enforce collection thereof until 2007, when she obtained a clerk’s judgment against the plaintiff.  Thereafter, however, the plaintiff successfully moved to vacate the clerk’s judgment.

The plaintiff then commenced an action, inter alia, to recover damages for wrongful procurement of the clerk’s judgment including the counsel fees he expended in moving to vacate the clerk’s judgment.  The defendant’s first counterclaim asserted that the plaintiff had failed pay her the full amount of her distributive award for her share of his business, and alleged damages resulting therefrom in excess of $150,000.

The Appellate Division held that contrary to the defendant’s contention, the distributive award made to her in the divorce judgment for her share of the plaintiff’s business was not a “money judgment” subject to a 20-year statute of limitations.  Instead, her claim to enforce this award was governed by the six-year statute of limitations set forth in CPLR 213(1) and (2).  Accordingly, since the defendant did not seek to enforce her distributive award nor reduce it to a money judgment until well beyond six years after the divorce judgment was entered, and even well beyond six years after the parties entered into their modification agreement, the Supreme Court properly dismissed this counterclaim as time-barred.

The lesson of the above case for divorce lawyers is that in the event there is a monetary award in the judgment of divorce, it is a good idea to reduce it to a monetary judgment.  Alternatively, if the parties agree to extend the payment of the amount due beyond six years, such agreement should be reduced to writing and should include a provision specifically waiting statute of limitations.

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

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