Divorce: New York

Divorce: New York

Wife Awarded $475,000/Year Rent Received by Husband for East Hampton Residence She Was To Occupy

Posted in Agreements and Stipulations

A wife has been awarded the $475,000 annual rent received by a husband who leased out the parties’ East Hampton residence. The parties’ divorce Modification Agreement provided that the wife shall have “exclusive use and possession of the East Hampton Residence . . . until September 30, 2017 or her earlier remarriage or cohabitation with an unrelated male.”

Affirming the order of New York County Supreme Court Justice Laura E. Drager, the First Department in its March 25, 2014 ruling in Hirschfeld v. Hirschfeld, found that the plain language of the agreement was sufficient to withstand the husband’s argument that the Modification Agreement limited the wife’s use and possession of the East Hampton Residence to summers only.

Justice Drager properly measured the wife’s damages for the husband’s breach of the Modification Agreement, where he leased the East Hampton Residence to third parties during the wife’s period of exclusive use and possession. The fair market rental value of the property was the proper measure of damages, as evidenced by the actual rent of $475,000 per year received by the husband during 2009 through 2012. There was no basis for requiring the wife to prove how many times or on which occasions during the course of each year she would have actually used the property if it had been made available. The husband was given credit for for the $175,000 payments he made to the wife in 2009, 2010 and 2011, and any sums paid to the wife for 2012.

The appellate court also upheld Justice Drager’s award of 3% prejudgment interest as a proper exercise of her discretion.

Ira E. Garr of Garr Silpe, P.C., of Manhattan represented the husband. James A. Moss of Balber Pickard Maldonado & Van Der Tuin, PC, of Manhattan represented the wife.

Unemployment, Alone, Does Not Prove Inability To Pay Child Support

Posted in Child Support (C.S.S.A.), Enforcement of Support and Orders

Unemployment, alone, is not sufficient to avoid incarceration for the willful failure to pay child support. So held the First Department when on April 8, 2014 it affirmed the determination of Bronx County Family Court Judge Sidney Gribetz in Gina C. v. Augusto C.

Based upon the fact-finding determination of the Support Magistrate, Judge Gribetz had found that the father willfully violated a child support order, and committed him to the New York City Department of Corrections for a term of four months intermittent weekend incarceration, unless discharged by payment of $7,000.00 to the Child Support Collection Unit.

The First Department held that the Support Magistrate properly found that respondent wilfully violated the order of child support. The mother made her prima facie showing that the father’s failure to pay child support over a five year period was a willful violation of the order of support. The father failed to respond with a showing that the violation was not willful by evidence that he was unable to make the required payments. The father and his witnesses gave conflicting testimony as to whether he was working. There was no basis upon which to disturb the Support Magistrate’s credibility determinations.

Further, the appellate court held that unemployment alone does not establish inability to pay, especially given the father’s failure to show that he used his best efforts to obtain employment commensurate with his qualifications and experience. Moreover, prior to each court appearance, the father had appeared with a promise of employment and a minor payment on his outstanding arrears, only to lose the new job and discontinue support between hearing dates.

The father’s last minute attempts to avoid the consequences of his previous failure to pay, including staving off a potential jail sentence, should not be countenanced.

Joint Custody: This Month’s Five Appellate Decisions

Posted in Custody and Visitation

Five appellate decisions this month have dealt with the propriety of joint custody awards.

On March 20, 2014, the First Department upheld New York County Supreme Court Justice Lori S. Sattler‘s decision to continue the parents’ joint custody arrangement. In Boyce v. Boyce, the appellate court agreed that the mother had failed to make an evidentiary showing sufficient to warrant a hearing on her request to change that arrangement.

For the appellate court, the fact that the parties, who have joint decision-making authority, have different views on education or extracurricular activities did not mean that they could not co-parent. Indeed, the parties had anticipated that they may have these disagreements and provided for a procedure to deal with them in their stipulation of settlement. In the event the procedures failed, as occurred here, the parties reserved their right to resolve such matters in court.

Again supporting joint custody, in Johanys M. v. Eddy A., the First Department on March 11, 2014 reversed the order of Family Court Bronx County Referee Jennifer S. Burtt that had awarded sole custody of a child to the mother.

Referee Burtt had found that the parties had similar abilities to provide for the child financially; that there was no difference in the emotional bonds that they each had established with the child;and that the child had essentially spent an equal amount of time with each party. Nevertheless, the Referee awarded custody to the mother on the grounds that she no longer worked outside the home and thus was “fully available” to care for the child (and a newborn), while the father worked outside the home. The Referee was also concerned about the father’s testimony about the mother because it was “globally negative.”

The First Department, however, found that the it was in the best interests of the child for the parties to have joint legal custody. Although sharing physical custody was no longer feasible because the parties now resided in different boroughs, there was no evidence that the parties’ relationship was characterized by acrimony or mistrust.

Moreover, over the course of the child’s life, the parties had been able to resolve any visitation or custody disputes between themselves. They also appeared to have been in accord with respect to the child’s best interests, despite their failure to communicate directly with each other.

The [father] should not be deprived of a decision-making role in the child’s life because he is unable to care for the child full time. The record shows that he has a strong interest and plays an active role in the child’s life, including aggressively seeking out necessary services to foster the child’s development, and that he arranged for child care while he worked.

Here, although the father’s testimony may have painted an unfairly negative picture of the mother, there was no evidence that he disparaged her in the presence of the child. The record showed that his concern for the child’s welfare was paramount.

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“Clear and Beyond Doubt” is Burden of Proof for Correction of Mutual Mistake in Divorce Settlement Agreement

Posted in Agreements and Stipulations, Equitable Distribution

The Second Department has imposed what may be an impossible burden of proof needed to correct a mathematical miscalculation (the alleged mutual mistake) in a divorce settlement agreement. That is the effect of the March 19, 2014 decision  in Hackett v. Hackett. 

After 22 years of marriage, the husband commenced an action for a divorce in 2005. A year later, the parties executed a written settlement agreement, which was incorporated, but not merged into their judgment of divorce.

Under the terms of the settlement agreement, the wife received the marital residence, which the parties estimated to be worth $465,000, and she assumed responsibility for repayment of a first mortgage and a home equity loan with combined outstanding balances of $195,124. The husband retained sole ownership of his restaurant business, which had an appraised value of between $360,000 to $385,000, but which the parties agreed to value, for purposes of their settlement, at only $325,000. The wife also agreed to waive valuation of the husband’s certification as a public accountant, which he acquired during the marriage. “Schedule A” to the divorce settlement agreement listed the dollar values of the assets being allocated to each party. The settlement “purportedly” [the Court’s word] equalized the division of assets by requiring the husband to pay the wife $19,336.

Approximately two years later, the ex-husband commenced this action, seeking to reform the settlement agreement on the ground that an alleged mutual mistake had resulted in the unequal division of the marital assets. He alleged that the settlement agreement contained a “computational error” on Schedule A. As a result the wife’s share of the marital assets was undervalued, resulting in a windfall to her in excess of $100,000. The husband maintained the expressed intent of the agreementcertain was to equally divide the parties’ assets.

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Failure in Prenup to Specify Earnings as Separate Property Warrants Recoupment

Posted in Agreements and Stipulations, Equitable Distribution

The failure of a prenuptial agreement to specify that earnings during the marriage were separate propertywarranted a breach-of-contract recovery as part of a distribution on divorce when those earnings used to pay sparate liabilities. So held Supreme Court New York County Justice Laura E. Drager in her January 15, 2014 decision in R.B. v. M.I (New York Law Journal published decision).

Once again, the focus of the court’s attention was on the import of a prenuptial provision that limited marital property to that held jointly by the parties.

In Zinter v. Zinter, Saratoga County Supreme Court Justice Thomas D. Nolan, Jr., last month held it was unconscionable for a prenuptial agreement to give the husband  power to control whether earnings and other after-marriage acquired property would be placed into joint or indiviual accounts, and thus marital or separate property (see, my March 17, 2014 blog post).

Here, the Justice Drager held that whether pproperty was owned jointly or individually at the commencement of the divorce action did not end the inquiry, if a breach of contract claim arising during the marriage is viable.

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Court Strikes Prenup Provision Giving Husband the Power to Determine Whether After-Marriage Acquired Property was Marital or Separate

Posted in Agreements and Stipulations

After surgically excising eight words, Saratoga County Supreme Court Justice Thomas D. Nolan, Jr., in his February 7, 2014 decision in Zinter v. Zinter, upheld the balance of a prenuptial agreement. Those words had given the husband the unconscionable power to control whether earnings and other after-marriage acquired property would be placed into joint or indiviual accounts, and thus marital or separate property.

In this divorce action, the parties were married on December 23, 2005. The wife was then 29 years old, a music teacher with a Master’s degree, and reported a net worth of $71,500.00. The husband was then 35 years old, a college graduate, and an officer and part owner of his family-owned and operated business, with a reported net worth of approximately $2.7 million.

The husband had retained an attorney to prepare a prenuptial agreement. In November 2005, both the prospective husband and prospective wife met with that attorney to review the proposed agreement. At the time, the wife was not represented by counsel. The husband’s attorney provided the wife with the names of three attorneys experienced in matrimonial law. Shortly thereafter, she retained one of them, with whom the wife met three times before the agreement was signed four days before the marriage.

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Fraudulent Tax Returns in Divorce Actions: Sword or Shield?

Posted in Child Support (C.S.S.A.), Equitable Distribution, Tax Matters

It is certainly not a rare problem. When confronted with fraudulent income tax returns, what is a divorce court to do? Should they be used as swords or shields?

In her January 31, 2014 decision in Morille-Hinds v. Hinds, Supreme Court Queens County Justice Pam Jackman Brown appears to have disregarded the failure to report a husband’s income on the parties’ joint income tax returns when recognizing his claim to a 50% share of marital property. Nevertheless, those returns were honored when fixing the wife’s entitlement to child support.

The parties, both 54, married in 1993. The wife had commenced this divorce action in 2007. The husband had appealed from the 2009 decision of Judicial Hearing Officer Stanley Gartenstein who had awarded him only 15% of the marital property. The J.H.O. had also imputed to the husband an annual income of $80,000 for the purpose of determining his child support obligation. The Second Department reversed, holding that decision was patently unfair to the husband. The case was sent back for a retrial on the issues of equitable distribution and child support.

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Does Small Claims Court Have Jurisdiction to Resolve Divorce Settlement Agreement Disputes?

Posted in Agreements and Stipulations, Counsel Fees, Enforcement of Support and Orders, Jurisdiction, Settlement

Not according to Richmond County Civil Court Judge (and Acting Suprme Court Justice) Philip S. Straniere, seemingly running afoul of a contrary body of case law, particularly in the Second Department.

Small Claims Court proceedings may well be the only practical way to redress relatively modest, but often important breaches of divorce settlement agreements as to matters of support and property. Such proceedings are quick, inexpensive, can be pursued without lawyers, and do substantial justice. Eliminating Small Claims Court as a proper forum for such relief would often leave parties without a reasonable remedy.

In his February 19, 2014 decision in Pivarnick v. Pivarnick, Judge Strainiere, held that Small Claims Court was without subject matter jurisdiction to enforce a divorce settlement agreement.

Doing so, he vacated an arbitrator’s $4,000 award to an ex-wife for counsel fees she incurred in connection with her submission to the Supreme Court of a proposed Qualified Domestic Relations Order to implement a division of the ex-husband’s pension and her defense of the ex-husband’s motion to dismiss that proposed QDRO. The ex-wife had cross-moved for sanctions “in the form of ‘attorneys’ fees for his engagement in frivolous conduct.’” Those post-divorce Supreme Court submissions were resolved by a so-ordered stipulation under which the entitlement of the ex-wife to share in the ex-husband’s pension was restated. No reference in the stipulation was made to the wife’s “attorneys’ fee claim” by cross-motion.

Thereafter, the ex-wife sought her counsel fees in Small Claims Court. The arbitrator had awarded the claimant legal fees in the amount of $4,000.00 and dismissed the defendant’s counterclaim for his own counsel fees.

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Applying the Ambiguous SUNY-Capped Contribution-to-College Clause

Posted in Agreements and Stipulations, Child Support (C.S.S.A.)

Where a divorce settlement agreement contains a SUNY cap on the parents’ obligations to contribute to college expenses, do you subtract financial aid first from the SUNY cap, or first from the total actual costs of the child who chose to attend a private college? Do you include loans in the “financial aid” formula?

In its February 20, 2014 decision in Apjohn v. Lubinski, the Third Department decided to benefit the child.

The parties’ 1994 separation agreement contained a SUNY cap provision limiting the obligations of these parents to contribute to their then 1-year-old son’s college education. Each parent’s obligation would be limited to half of the cost of tuition, room and board at a college or university that is part of the State University of New York.

The agreement further provided that the son must apply to “the said college or university” for all possible grants, scholarships and financial aid before either party would be obliged to pay any college costs. Here, the son applied for and obtained financial aid from the private college where he enrolled in September 2011. the son also received an outside scholarship.

Refusing to make any contribution, the father contended that the agreement required the son to apply to a SUNY institution for financial aid. As the son did not do so (he applied to his private college), the father argued he had no obligation to contribute anything.

The Third Department resolved the ambiguity as to whether the requirement to apply to “the said college or university” for financial aid referred to a SUNY institution or to the college attended by the son, by noting that the agreement did not require the son to attend or apply for admission at a SUNY school. (The father also did not show that it was  possible to apply to a SUNY institution for financial aid without also applying for admission.)

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Pet Custody: Part 2

Posted in Agreements and Stipulations, Equitable Distribution

Pets should be recognized as a “special category of property,” according to Albany County Supreme Court Justice Michael C. Lynch in his February 19, 2014 decision in Hennet v. Allan. As a result, he ordered a hearing to determine which member of this broken-up couple would be awarded sole possession of “Duke,” their black Labrador retriever.

The parties, Alisha and William, were involved in a non-marital relationship for over fifteen years, living together for the last four at their Altamont residence. Alisha commenced this replevin action seeking to recover possession of Duke. William had taken Duke from the residence on August 1, 2013, more than four months after he moved out on March 22, 2013.

Duke had been purchased in September, 2009. While there was a dispute as to which party purchased the dog, Duke’s title and registration had been placed in their joint names.

On July 23, 2013, Alisha refinanced the parties’ residence. At that time, William had deeded over his interest and signed an acknowledged release:

I, William Allan, Jr., waive any and all rights and titles to the [Altamont] property . . . along with any and all materials and possessions located therein.

As of today, July 23, 2013, I William Allan, Jr., have removed all personal property from above said property and forever relinquish rights and claims anything left behind. All personal property remaining at above said residence is therefore sole and exclusive property of Alisha Hennet.

The only issue before the Court was a determination of the parties’ respective claims to Duke. Alisha maintained that since William admitted Duke had resided at the residence on July 23, 2013, he lost any claim to Duke under the terms of the release. In opposition, William maintained that he only signed the release as part of the refinancing closing, being expressly advised that “the Release Agreement had nothing to do with my personal property and was required in order to transfer my interest in the real property only.”

Justice Lynch rejected William’s attack on the release. The express terms of the release contradicted William’s suggested limitation of the personal property to which it applied. William’s acknowledged reading of its express terms negated any claim of a plausible reliance on Alisha’s purported misrepresentation.

However, Justice Lynch held that Duke was not covered by the release. Duke was not mere personal property. Although dogs, traditionally, have been defined as “personal property,” the recent trend, however, has been to treat companion dogs as more than just property.

Justice Lynch discussed Justice Cooper’s “thoughtful and careful analysis” recently in Travis v. Murray, the subject of my December 9, 2013 blog post. Justice Cooper had concluded that a strict property analysis should not be used to resolve a dispute between divorcing spouses over possession of their dachshund, instead opting to apply a “best for all concerned” standard, rejecting the application of a “best interests” custody standard as unworkable.

[It is suggested that Justice Cooper probably went further than he had to. As a court has the power to equitably distribute a divorcing couple's property, and to determine questions of possession, it was not necessary to expand the notion of property to craft relief. Here, as the parties had not been married, they were not entitled to the benefits of the Domestic Relations Law.]

Justice Lynch noted:

Courts are essentially at a crossroads in determining whether a strict property analysis should still govern disputes between dog owners. . . .

Today, we should take the next step in recognizing that pets are more than just “personal property” when it comes to resolving a dispute between owners.

He concluded that the reference to “personal property” in the release did not extend to Duke.

Certainly, the attachment each party professes to have with Duke would only be consistent with recognizing that Duke falls within a “special category of property” that is simply not covered by the release.

In the absence of conclusive documentary proof, the Court ordered that a hearing be held to determine which party should be awarded sole possession of Duke. The Court stated that it would review the circumstances as to how Duke was acquired and cared for, and the actual arrangement between the parties for spending time with Duke after defendant left the parties’ residence.

The significant strain on the parties and the judicial system created by this dispute warranted a final resolution now, without the prospect of ongoing litigation involving compliance with a shared possession arrangement. Since both parties professed a strong relationship with Duke and extensive involvement in his care,  the Court was left with endeavoring to render a fair determination as to which party through his or her conduct has the most genuine right of possession.

Michael D. Assaf, of Assaf & Siegal, PLLC, of Albany, represented Ms. Hennet. F. Matthew Jackson, of O’Connell & Aronowitz, P.C., represented Mr. Allan.