Divorce: New York

Divorce: New York

Double Dipping and the Distinction Without a Difference

Posted in Equitable Distribution, Maintenance
It Need Not Be Rocket Science
It Need Not Be Rocket Science

A business, professional practice, or (until recent statutory amendments) license may be valued as a asset for divorce purposes based upon the amount of income it generates for the owner/holder. That asset may then be equitably distributed by granting the non-owner a monetary award equal to some percentage of the value.

Double-dipping, or double-counting, is the term for using the same stream of income both to value the business/practice, and then, after distributing an award to the non-owner based on the asset’s value, using the stream of income generated by the business/practice to base an award of spousal support (or child support, for that matter). If the non-owner spouse receives a “piece” of the income stream as an asset award, should the spouse get another piece as spousal support (maintenance)?

The “law” is yes, no and maybe. There is a rule against double-dipping, except when there’s not.

For the most part, if the business/practice is recognized as a “tangible asset,” just as the court would characterize a piece of real property, or publicly-traded stock, or a privately-held company whose income is a result of the work of many people, then it is generally held that the rule against double-dipping does not apply. The non-owner would get a distributive award based on the asset. Maintenance may also be awarded based upon the income generated by the tangible asset business. The rule against double-dipping rule does not apply.

If however, the business value is recognized as an “intangible asset,” then the rule against double-dipping applies, and the same stream of income may not be twice used.

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Support When the Child Graduates College in Three Years

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

female graduate with her fatherWhen a divorce settlement contemplates paying child support throughout four years of college, what happens when the child graduates in three?

The statutory obligation to support a child ends at the child’s 21st birthday. It is common with divorce settlements to extend child support beyond the 21st birthday if the child is continuing to attend college on a full-time basis. However, defining when the periodic support obligation will end is not always made clear.

Take the March 30, 2016 decision of the Appellate Division, Second Department, in Fleming v. Fleming. The parties’ divorce stipulation of settlement required the father to pay periodic child support until the children reached the age of 21, or the completion of “four (4) academic years of college,” whichever occurred last, but in no event beyond the school year of the child’s 23rd birthday.

However, the parties’ daughter graduated from college after only three years of study, one month after her 21st birthday. The father stopped paying child support. The daughter went on to graduate school.

The mother moved to enforce the stipulation’s obligation for the father to pay periodic child support. She asserted that the stipulation required the father to continue paying child support during their daughter’s first year of graduate school. Suffolk County Supreme Court Justice Stephen M. Behar granted the mother’s motion, finding that the child had completed only three academic years of college. Justice Behar directed the father to continue paying child support until the child completed “four (4) full academic years of college, or until the child’s 23rd birthday, whichever occurs first.”

The Second Department reversed.

When interpreting a contract, such as a separation agreement, the court should arrive at a construction that will give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized.

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Child Support and the Parent Deprived of Visitation

Posted in Child Support (C.S.S.A.)

May the non-custodial parent deprived of seeing a child terminate his or her child support obligation? According to two March 16, 2016 decisions of the Appellate Division, Second Department, the result may turn on both who is to blame and how old is the child.

In Brinskelle v. Widman, and in response to his ex-wife’s post-divorce Family Court application for an upward modification of child support, a father asked to be relieved of his obligation to support the parties’ 18-year-old son on the ground that the son was emancipated within the meaning of the parties’ stipulation. The father also sought to terminate his support obligation for his 14-year-old daughter on the ground of constructive emancipation. After a hearing, Suffolk County Support Magistrate Denise Livrieri granted the mother’s petition and denied the father’s petition. Suffolk County Family Court Judge Bernard Cheng denied the father’s objections and the father appealed.

The Second Department affirmed. Under New York law, a parent is required to support a child until the child reaches the age of 21 (see Family Ct Act § 413[1][a]). However, a child may be deemed emancipated if he or she is fully self-supporting and financially independent from his or her parents. Alternatively, the parties may provide in a written agreement for emancipation contingencies. Here, the father failed to meet his burden to prove that the 18-year old son was emancipated as defined by the parties’ divorce stipulation of settlement: that the child had reached the age of 18, and was employed at least 30 hours per week, and was not a full-time student.

The father also argued that the parties’ 14-year old daughter was constructively emancipated. Here, despite the fact that it was not the father’s fault his 14-year old daughter was refusing to see him, she was not old enough to be punished. The father would remain liable to support her.

Under the doctrine of constructive emancipation, where a minor of employable age and in full possession of his or her faculties, voluntarily and without cause, abandons the parent’s home, against the will of the parent and for the purpose of avoiding parental control, he or she forfeits his or her right to demand support. However, “where it is the parent who causes a breakdown in communication with his or her child, or has made no serious effort to contact the child and exercise his or her visitation rights, the child will not be deemed to have abandoned the parent.”

Here, the Second Department held that even accepting the father’s testimony that the parties’ 14-year old daughter had voluntarily and without cause rejected his efforts to maintain a relationship with her in an attempt to avoid his parental control, the daughter was not “of employable age,” and thus, the father, as a matter of law, could not establish the daughter’s constructive emancipation.

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Postnuptial Agreement Formalities Strictly Enforced

Posted in Agreements and Stipulations

NotaryA signature by a notary is not a proper acknowledgment. As a result “Promissory Note” deemed a postnuptial agreement was unenforceable. So held the Appellate Division, Second Department, in its March 2, 2016 decision in Ballesteros v. Ballesteros.

In this case, the parties were married on July 27, 2008. Prior to their marriage, on July 23, 2008, the parties had signed a prenuptial agreement, opting-out of New York’s statutory scheme governing maintenance and equitable distribution. Thereafter, in the summer of 2009, the husband told the wife he wanted a divorce and she needed to leave his home. The wife began looking for a place to live.

The husband then changed his mind and told the wife he did not want to get divorced and that they should try to resolve their problems. The wife did not want to get divorced and told the husband she was willing to work on their marriage, but she needed financial security from him. The husband agreed to sign a document entitled “Promissory Note” in which he agreed to purchase a condominium for the wife, in the event of a divorce, in an amount not less than $250,000. The wife drafted the agreement, and both she and the husband signed it on September 3, 2009. The husband told the wife he would return the agreement to her after he had it notarized. A notary signed the agreement, but did not attach a certificate of acknowledgment.

The parties continued to work on their marriage, but at some point thereafter, the husband again asked the wife to leave his home. The wife commenced an action on June 14, 2012, for a divorce and to enforce the promissory note.

After a hearing, Supreme Court, Putnam County Justice Francis A. Nicolai held that the document entitled “Promissory Note” was an enforceable agreement and directed the husband to pay the wife $250,000. The husband appealed.

The Second Department held that contrary to the wife’s contention, the agreement signed by the parties, despite its title of a “Promissory Note,” was an agreement between spouses subject to Domestic Relations Law § 236(B)(3). Pursuant to Domestic Relations Law § 236(B)(3):

[a]n agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded.

A written agreement between parties made before or during a marriage which does not meet the formalities of Domestic Relations Law § 236(B)(3) is not enforceable. Therefore, the appellate court concluded that a postnuptial agreement that is signed but not acknowledged is invalid and unenforceable in a matrimonial action. Here, although the postnuptial agreement was signed by a notary public, it was not properly acknowledged and was unenforceable.

Notaries public commonly serve two functions relating to documents. First, they can administers oaths so that the author may swear to the truth of the contents. Second, authors may acknowledge their signatures before notaries who by then signing the acknowledgment form, verify the identity of the authors and their signatures. It is the latter that is required for marital agreements. That is the “form” entitling a deed to be recorded. The form recites:

On [DATE], before me, the undersigned, personally appeared [AUTHOR], personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that [HE/SHE] executed the same in [HIS/HER] capacity and that by [HIS/HER] signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

Wilson Soto, Esq., of Soto Sanchez & Negron, LLP, of Yonkers, represented the husband. Daniel M. Miller, PLLC, of Mahopac, represented the wife.

Tracing One Spouse’s Pre-Marital Home Sold During Marriage To Purchase Another

Posted in Equitable Distribution

What do you do upon divorce when the home purchased during the marriage and titled in one spouse’s name was purchased using the proceeds from the sale of the home owned at the date of marriage solely in the name of that same spouse?

The Appellate Division, Second Department, in its March 2, 2016 decision in Ahearn v. Ahearn, applied well-established equitable distribution principles to affirm the determination of now-retired Suffolk County Supreme Court Justice William J. Kent, III, and hold that the home purchased during the marriage was marital property even though titled in only the one spouse’s name. Moreover, the titled spouse was entitled to a dollar-for-dollar separate property credit against the equity in the marital-property home for the use of the first home’s net sales proceeds.

The fact pattern was straightforward. In June 1996, the wife-to-be purchased a house on Salem Street in Patchogue. Approximately nine months later, the parties were married and lived together in the Salem Street house. In December 2004, the wife sold the Salem Street house and used the $143,000 in net proceeds from that sale toward the purchase, in March 2005, of a house in Holbrook. Only the wife’s name was on the Holbrook deed, but, at the time of trial, both parties were listed on the mortgage.

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Child Support Awards of Private School Tuition and Activities Require Statement of Factors Considered

Posted in Child Support (C.S.S.A.)

Trinity timesIn its February 18, 2016 decision in Michael J. D. V. Carolina E. P., the Appellate Division, First Department, held that because the trial court did not follow the precise requirements of the CSSA when determining that private school education and summer, extracurricular and weekend activities should be paid over and above basic child support, those awards would be vacated.

When making child support awards, the requirements of the Child Support Standards Act (CSSA) (Family Court Act §413 and Domestic Relations Law §240[1-b]) must be strictly followed. After the calculation of the basic periodic child support amount, the statute allows for the payment of certain categories of enumerated add on expenses, prorated according to the parents’ relative incomes.

The add on expenses expressly addressed in the CSSA are:

  1. child care expenses when a custodial parent is working, looking for work and/or engaged in an educational or training program that will lead to employment;
  2. health insurance and unreimbursed medical expenses; and
  3. educational expenses.

In the case before it, the parties were the parents of a son born December 17, 2008. The parties were never married and were not living together when the child was born. After the father learned he had a son, the mother and the child moved into the father’s luxury apartment in lower Manhattan. The parties were hopeful of continuing as a family and while living together, discussed marriage and the possibility of having a second child. They also discussed their son’s future, and the possibility he would attend a private school. It was their expectation at that time that the child would enjoy the “best of everything.” This living arrangement, however, was short-lived, lasting only four months (from May – August, 2009).

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Support Check Memo Line Comments Violate Order of Protection

Posted in Family Offenses

Check censoredFinding statements made by a father on the memo portion of three child support checks offensive, the Appellate Division, Second Department, found that such violated the mother’s order of protection.

Doing so in its February 3, 2016 decision in Clovis v. Clovis, the Second Department reversed the order of Orange County Family Court Judge Andrew P. Bivona that had dismissed the mother’s petition.

The mother had alleged that the father violated her order of protection by communicating with her by mail. Specifically, instead of making his child support payments through alternate means, the father knowingly and intentionally mailed to her seven checks for child support and that, on three of the checks, he had written offensive remarks in the memo portion. After a hearing, Judge Bivona stated that the memos on three checks “may be offensive,” yet, without explanation, found that the memos did not constitute a violation of the order of protection.

Reversing, the Second Department found that the mother had established by a fair preponderance of the evidence that the father, by mailing the child support checks, willfully violated the order of protection, which expressly prohibited any form of communication by the father with the mother, including the use of mail. The father admitted at the hearing that he had communicated with the mother by mail, despite being aware that the order of protection prohibited such communication. Moreover, under the circumstances of this case and the history between the parties, the statements in the memo portion of the three checks were offensive.

Kelli M. O’Brien, of Goshen, represented the mother. Richard N. Lentino, of Middletown, represented the father. William E. Horwitz, of Ardsley-on-Hudson, served as attorney for the child.

Cost of Living Adjustments to the Maintenance and Child Support Formulas

Posted in Child Support (C.S.S.A.), Maintenance, Statutes

As of January 31, 2016, the “income cap” for maintenance is $178,000.

The presumptive final maintenance formula on the first $175,000 of the payor’s annual income only just came into effect 6 days before that, for cases filed on or after January 25, 2016 (New York’s Laws of 2015, chapter 269 (D.R.L. §236[B][6][b][4]). For temporary maintenance, the $175,000 income cap under D.R.L. §236(B)(5-a)(b)(4) became effective for cases filed after October 24, 2015.

The Cost of Living Adjustment (COLA) to the $175,000 income cap is to be made every two years:

“[B]eginning January thirty-first, two thousand sixteen and every two years thereafter, the income cap amount shall increase by the sum of the average annual percentage changes in the consumer price index for all urban consumers (CPIU) as published by the United States department of labor bureau of labor statistics for the prior two years multiplied by the then income cap and then rounded to the nearest one thousand dollars. The office of court administration shall determine and publish the income cap.”

However, the income cap for child support purposes is still the $141,000 that has been in place since January 31, 2014.

Why? Because under New York’s Laws of 2015, chapter 347, Social Services Law §111-i was amended to change the COLA date from January 31st to March 1st. The child support cap will remain $141,000 until March 1, 2016.
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Extending the Order of Protection: Defining “Good Cause”

Posted in Family Offenses

What is the “good cause” needed to extend a Family Court Order of Protection nearing its expiration? In its January 20, 2016 decision in Molloy v. Molloy, the Second Department, answered that question.

The parties were married in May 2002, and are the parents of one child. In February 2010, the wife filed a family offense petition against the husband and, following a finding that the husband had committed certain family offenses, obtained a two-year stay-away order of protection in favor of the wife and the parties’ child.

As the expiration date of the order of protection approached, the wife moved to extend it for five years, arguing that there was “good cause” for the extension, citing Family Court Act §842.

In her supporting affidavit, the wife alleged that the husband had violated the order of protection by, for example, showing up at her apartment and banging on the door, and driving his vehicle too closely to the wife, a wheelchair user, while she was on her way to a police station for a custody exchange. Fearing for her safety, she reported some of these incidents to the police. She alleged that he had recently been arrested for violating the order of protection, and that the case was pending in the Criminal Court of the City of New York, Queens County. The wife also claimed that the husband’s girlfriend warned her that the husband said that when the wife’s order of protection expired he would return to her residence, and he threatened to kill her.

The wife also noted that because she and the husband have a child in common they have to frequently interact regarding the child’s visitation. The wife claimed that the husband’s conduct during the course of their interactions over the past several years had so terrified her that she carried a panic alarm whenever she left her home. She feared that once the order of protection expired the husband would begin harassing her again and might harm or kill her.

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Child Support Award Includes 25% of Father’s Future Bonuses

Posted in Child Support (C.S.S.A.)

In its January 7, 2016 decision in Fermon v. Fermon, the Appellate Division, Third Department, affirmed that part of the order of Rensselaer County Supreme Court Justice Raymond J. Elliott, III, that included in a permanent award of child support that the husband pay 25% of his future bonuses from his employer.

Here, the parties were married in 2000 and had two sons (born in 2002 and 2006). They were divorced in 2012 and, pursuant to a written stipulation of settlement that was incorporated but not merged with the judgment of divorce, they retained joint custody of the children and waived application of the Child Support Standards Act (see Domestic Relations Law § 240 [1-b]) to provide for no payments of basic child support.

Extensive motion practice ensued, with the wife seeking a variety of relief that included modification of the custody and child support provisions of the judgment, an assessment as to whether the husband committed fraud in the negotiations that led to the execution of the stipulation and an award of counsel fees to the wife. Justice Elliott conducted a hearing on the motions, after which he modified the provisions of the judgment to grant the wife sole legal custody of the children and directed the husband to pay the wife basic child support, arrearages and various add-ons> He further directed the husband to pay an additional $11,500 to the wife due to his alleged fraud in misrepresenting the value of his individual retirement account, and awarded the wife $35,000 in counsel fees. Both parties appealed.

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