Divorce: New York

Divorce: New York

Temporary Maintenance All But Denied to Wife Able to Work and Who Had Lived With Another Man

Posted in Temporary (Pendente Lite) Relief

Is a wife entitled to formula temporary maintenance in a divorce action, merely because she is the less-monied spouse? No, says New York County Supreme Court Justice Matthew F. Cooper in his October 22, 2014 decision in Joseph M. v. Lauren J.

In this matrimonial action, the wife sought temporary custody of the parties’ child, as well as an order awarding her pendente lite maintenance, child support, and counsel fees. Although the custody applications were premature, the financial issues were ripe for determination.

In many ways, this case highlights the tension that exists when imposing a statutorily prescribed formula for awarding temporary maintenance on a determination that has traditionally been left to the sound discretion of a court.

The parties were married in 1997 and had one child, a daughter, born in 2009. The couple separated eight months after the child’s birth when, in May 2010, the wife left the marital residence in Yonkers to live with a man with whom she had been involved since before the pregnancy. The wife continued to reside with this man and was largely supported by him for almost four years. They recently stopped living together because their church objected to them continuing to cohabit while she was still married to the husband. As a result, the wife had been living for the last few months in a hostel in upper Manhattan.

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Another Prenup Bites the Dust, Maybe

Posted in Agreements and Stipulations

The November 12, 2014 decision of the Appellate Division, Second Department, in Bibeau v. Sudick reversed the granting of summary judgment upholding the validity a 2000 prenuptial agreement, remanding the matter for a hearing on that issue.

In September 28, 2000, two days before their wedding, the 70-year old future husband and the 38-year old future wife executed a premarital agreement. It provided that in the event of a divorce, the wife would receive, in lieu of maintenance, support, and equitable distribution, the sum of $25,000 for each year of the marriage. The parties also agreed to waive their interest in the elective share of each other’s estate, and to make no claim to property titled in the other’s name.

According to financial statements attached to the premarital agreement, the future husband had assets of more than $10,000,000, while the future wife had assets of approximately $170,000. The agreement was signed in the office of the husband’s attorney, in the presence of another attorney who was purportedly representing the wife.

At the time of the marriage, the wife, who had a background in marketing works of fine art to corporations, had recently opened an art gallery in California. She closed this business and relocated to Pine Bush, New York, in order to reside with the husband in preparation for their marriage, and assist him in his business endeavors. These included real estate development, as well as breeding thoroughbred horses and managing polo ponies.

In October, 2010, within days of New York’s adoption of no-fault divorce, the husband commenced this action for divorce. There were no children of the marriage.

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Appellate Reversals of Custody Decisions

Posted in Custody and Visitation

Two of three November 5, 2014 custody decisions of the Appellate Division, Second Department, reversed Family Court determinations.

In the only affirmance in Mondschein v. Mondschein, the Second Department upheld the order of Westchester County Family Court Judge David Klein which, after a hearing, granted a father’s petition to modify the custody provisions of the parties’ divorce (2011) stipulation of settlement, awarding the father sole legal and physical custody of the parties’ two younger children, with supervised visitation to the mother. Affirming Judge Klein, the Second Department noted:

Since custody determinations necessarily depend to a great extent upon an assessment of the character and credibility of the parties and witnesses, deference is accorded the Family Court’s findings. Therefore, its findings should not be set aside unless they lack a sound and substantial basis in the record.

Here, contrary to the mother’s contention, the appellate court found that Judge Klein had properly considered the totality of the circumstances, and that the record supported his determination that there had been a sufficient change in circumstances requiring a change in custody to protect the best interests of the parties’ two younger children. That record included the hearing testimony and the recommendation of the court-appointed forensic evaluator.

In Burke v. Cogan, the Second Department reversed the determination of Suffolk County Family Court Judge Martha Luft that had dismissed the petition of a mother to modify a prior custody order by awarding her sole residential custody of the parties’ 13 year-old child. The appellate court awarded the mother such custody.

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A Party’s Sworn Statement Of Irretrievable Breakdown Is Incontestable: The First Department Weighs In

Posted in No-fault (irretrievable breakdown)

In its October 30, 2014 decision in Hoffer-Adou v. Adou, the Appellate Division, First Department, affirmed the granting of summary judgment awarding a no-fault divorce solely upon the plaintiff’s (here the wife) sworn statement. That award had been made below by Supreme Court, New York County Justice Deborah A. Kaplan.

In so holding the First Department joined the Fourth Department in holding that whether there has been an irretrievable breakdown is purely subjective. In a decision issued November 9, 2012 in Palermo v. Palermo, the Fourth Department (December 13, 2012 blog post) had affirmed a decision of Monroe County Supreme Court Justice Richard A. Dollinger (January 30, 2012 blog post) for the reasons stated in Justice Dollinger’s opinion: a party’s sworn statement of irretrievable breakdown is incontestable. It is not subject to attack at trial.

The First Department, here, held:

Contrary to the husband’s contention, the wife was entitled to a judgment of divorce under the no-fault provision of DRL § 170(7), since her statement under oath that the marriage was irretrievably broken for a period of six months was sufficient to establish her cause of action for divorce as a matter of law.

However, as noted in prior blog posts, the subject has not been without debate. Two decisions of the Nassau County Supreme Court, Townes v. Coker (relied upon by the First Department and discussed in the blog post of February, 20, 2012), and A.C. v. D.R. (discussed in the April 4, 2011 post), both held that New York’s new no-fault ground was purely subjective.

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Attacking Open-Court Divorce Stipulations: Is There a Double Standard?

Posted in Agreements and Stipulations

In its October 22, 2014 decision, the Appellate Division Second Department in Ebel v. Ebel  upheld an open-court divorce settlement stipulation against the attack of the wife.

In his June, 2012 determination of the lower court, then Supreme Court Suffolk County Justice Hector D. LaSalle (now himself an Associate Justice on the Appellate Division Second Department) had rejected the argument of the wife that her emotional state prevented her from entering that May, 2011 settlement stipulation knowingly, voluntarily and intelligently.

On appeal, the Second Department first noted that the wife’s contention that the terms of the parties’ stipulation of settlement were unconscionable was not properly raised on appeal, as it was not raised at the trial level.

The wife’s additional contention on appeal that the stipulation should have been vacated because it did not address, and she did not waive her claims regarding, certain financial issues was also found to be without without merit.

The Second Department noted that stipulations of settlement are favored by the courts and are not lightly cast aside, particularly when the parties are represented by attorneys.

Where, as here, the record demonstrates that the parties validly entered into a comprehensive open-court stipulation by which the plaintiff knowingly, voluntarily, and intelligently agreed to be bound, the agreement will not be set aside.

Here, the terms of the parties’ agreement, including issues of financial support and equitable distribution of the marital residence, were placed on the record in what the Justice LaSalle characterized as a “global stipulation of settlement.” Moreover, the wife’s counsel affirmatively waived all other equitable distribution matters and withdrew all outstanding requests for relief.

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It Just Became Tougher To Validate Prenuptial Agreements

Posted in Agreements and Stipulations, Temporary (Pendente Lite) Relief

The Second Department seems to have taken another bite out of prenuptial agreements. My March 25, 2013 post asked, Is it Open Season on Prenuptial Agreements? That post discussed the Second Department’s February, 2013 decision in Cioffi-Petrakis v. Petrakis and its December, 2012 decision in Petracca v. Petracca. Both cases affirmed Supreme Court Nassau County decisions setting aside the prenuptial agreements in issue,

Now, in an October 15, 2014 decision in McKenna v. McKenna, the Second Department modified an order of Nassau County Supreme Court Justice Margaret C. Reilly that had granted a husband summary judgment motion declaring the parties’ prenuptial agreement to be valid and enforceable. Justice Reilly had also denied the wife’s motion for an award of pendente lite maintenance and counsel fees.

Holding that summary judgment was not warranted, the appellate court may have increased or changed the burden needed to uphold a prenuptial agreement; changing the role of a contract’s “merger clause.” That clause declares that no factual representations not specifically referenced in the contract may later be used to claim the contract was fraudulently induced. Typically, it is a shield used to protect the agreement from attack.

In McKenna, the Second Department suggests a merger clause may be used as a sword: preventing a court from learning the wife’s actual knowledge of the husband’s finances at the time the prenuptial agreement was entered. As that knowledge could only have come from representations of the husband, the merger clause would bar proof of such representations not referenced by the agreement.

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Ex-Husband May Fire Ex-Wife Despite Intent to Use Employment As Support Device

Posted in Agreements and Stipulations, Maintenance

A couple that used “employment” of the ex-wife by the ex-husband as a device to provide post-remarriage support to the ex-wife was bound to employment rules. The wife could be fired for misconduct. So held the Appellate Division, Fourth Department, in its September 26, 2014 decision in Anderson v. Anderson.

The Separation and Property Settlement Agreement that was incorporated into, but survived the entry of the parties’ divorce decree, provided that if the wife remarried, terminating the husband’s maintenance obligation, the husband would “employ” the remarried wife as a “consultant” for a stated weekly salary. That “employment” was to continue until husband’s child support obligations under the Agreement terminated. Although the Agreement did not require the wife “to work any particular number of hours,” it did require her to “be available at reasonable times and from time to time to consult, as needed by the [husband], with respect to [his] various business interests.”

After her remarriage, however, the wife opened a business in competition with her prior husband. He moved to terminate the consultation fees being paid to his former wife on the ground that she, as his employee, had breached her duty of loyalty.

Niagara County Supreme Court Justice Frank Curso denied the motion, concluding in relevant part that “the employment provision is not a contract for employment, but rather . . . is a support provision which allow[ed] the defendant’s business to make payments to plaintiff instead of the defendant himself.”

The Appellate Division, Fourth Department, reversed. The appellate court concluded that the Agreement provision constituted an employment contract, thereby permitting the husband to terminate the payments upon the wife’s breach of her duty of loyalty to him as her employer.

The separation agreement was required to be “enforced according to the plain meaning of its terms.” The Fourth Department did agree with the wife and Justice Curso that the clear and unambiguous intent of the Agreement was to provide a substitute source of monetary support for the wife after the husband’s maintenance obligation terminated. Nevertheless, the appellate court concluded that:

the reason defendant agreed to employ plaintiff does not change the fact that the Agreement established an employment relationship with corresponding rights and obligations for both parties.

An employee may not compete with his or her employer’s business during the time of his or her employment. Here, when the wife opened a business in direct competition with the husband’s business, the wife breached her duty of loyalty to her employer, thereby permitting the husband to terminate the consultation fees and the employment relationship.

Comment: If, indeed, the “employment” of the ex-wife was simply a device to continue to provide support to the ex-wife despite her remarriage that was tax deductible to the husband (and includable in the income of the wife), the device seems wholly unnecessary. Post-remarriage maintenance (alimony) payments need not lose their tax deductibility if other tests for deductibility under the Internal Revenue Code are met. The obligation must terminate if the ex-wife dies before the end of the stated support period (I.R.C. §71[b][1][D]).

Lawrence J. Vilardo, of Connors & Vilardo, LLP, of Buffalo, represented the husband. Joseph M. Finnerty, of Hiscock & Barclay, LLP, of Buffalo, represented the wife.

Court Authorizes Facebook Service Of Child Support Petition

Posted in Jurisdiction, Statutes

Service by Facebook of a father’s petition to terminate child support was directed by Richmond County Family Court Support Magistrate Gregory L. Gliedman in a September 12, 2014 decision in Matter of Noel B. v. Maria A. (NYLJ link).

The father filed that application to terminate child support based on the alleged emancipation of his son.

The father was unable to effect service of court papers upon the mother by normal means. He submitted an affidavit that the mother was unknown to the current occupant of the the mother’s last known address. The father called and sent text messages to his 22-year old daughter to ask the mother’s location, but that no one answered the call or replied to his texts and voicemail. He also called and sent a text message to his son (the subject child on the instant petition) requesting that information, but again there was no reply of any kind. The father also did a Google search, but was unable to find any location for the mother.

Magistrate Gliedman noted that the Support Collection Unit (“SCU”) to which the father mailed his support checks still had that same last known address on file for the mother, meaning that all correspondence and communication with respect to the funds she was receiving for child support were being  sent to that address. The magistrate further noted that the mother provided that same address to the court when she sent an electronic testimony application to the court in March, 2013 in connection with a prior matter between the parties.

The father told the court that the mother maintains an active social media account with Facebook. The mother’s current spouse maintains her own Facebook account, and has posted photos that have been “liked” by the mother as recently as July, 2014.

Magistrate Gliedman described Facebook as a social networking website that allows its users to interact with friends, relatives, acquaintances and individuals with common interests. Due to its online nature, there are no geographic limitations on Facebook — people with whom an individual interacts with on Facebook can be as close as the house next door or as far away as a continent on the other side of the world.

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Wife Denied Separate Property Credit Against Home Deeded By Her to Herself and Husband

Posted in Equitable Distribution

Six years before the parties’ marriage in June 2000, the wife became the sole owner of real property, which would later become the parties’ marital residence. At the time of marriage, the wife owned the property free and clear of any liens or encumbrances. In 2005, apparently in an effort to consolidate debt, the husband and the wife jointly applied for a mortgage on the property (based upon her limited income, the wife was unable to qualify for a mortgage on her own). To satisfy the requirements of the mortgage lender, the wife executed a deed conveying ownership of the residence from her alone to both her and the husband and the mortgage was issued jointly to the parties that same day.

In December 2011, the wife commenced this action for divorce. The parties resolved all issues except the distribution of the marital residence and the debt attached thereto, which had amounted to approximately $160,000. Following a trial, Supreme Court Justice Gerald William Connolly issued a decision finding, among other things, that the marital residence and its accompanying debt should be equally divided between the parties. No credit for any separate property contribution was given.

The Appellate Division, Third Department, in its July, 2014 decision in Myers v. Myers, affirmed.

The wife acknowledged that the residence had become marital property when she deeded it to herself and her husband. The wife contended that it was error to deny her a separate property origination credit in the amount of $165,000 for the estimated value of the marital residence at the time she did so.

The Third Department held that to the extent that a prior decision of the Third Department in Campfield v. Campfield (95 A.D.3d 1429, 944 N.Y.S.2d 339 [2012], lv. denied 21 N.Y.3d 857, 969 N.Y.S.2d 443 [2013]), may be read to limit a court’s discretion to award a separate property credit to a spouse, like the wife, who transmutes separate property into marital property without changing the nature of the property itself, it should no longer be followed.

The appellate court noted that credits are often given for the value of the former separate property. The decision to award a separate property origination credit in such a situation is a determination left to the sound discretion of the trial court. A court is not precluded as a matter of law from giving a credit when separate property has been transmuted into marital property.

Nonetheless, the appellate court was unpersuaded that the denial of the wife’s request for a separate property origination credit under the specific circumstances herein constituted an abuse of discretion. Justice Connolly had found “the overall picture is of the parties engaging generally in a financial partnership, of which the marital residence, and the loans thereupon, was simply one agreed-upon portion.”

The funds received from the mortgage, as well as the subsequent refinancing and home equity loan, enabled the wife and the husband to consolidate their debts, go on numerous family vacations, make improvements to the marital residence and, generally, live a lifestyle that may have been above their means. Notably, the wife’s individual debt was eliminated by the proceeds of a new, jointly-held debt which, in turn, was primarily paid from the husband’s income for a number of years.

Inasmuch as a separate property origination credit “is not strictly mandated since the property is no longer separate, but is part of the total marital property,” the Third Department could not say that Justice Connolly improperly denied the wife a credit.

Comment: This is not a rare scenario, particularly with second marriages. Rather than leaving such matters to the discretion of a trial judge, dealing with assets brought into marriage is properly the subject of a prenuptial agreement, or a post-nuptial agreement entered at the time the “separate” asset is “transmuted.” At that time the parties would have been independently counseled to consider the effect of using the mortgage proceeds for various purposes and paying the mortgage debt.

Cynthia Feathers, of Glens Falls, represented the wife. Paul W. Van Ryn, of Maxwell & Van Ryn, of Delmar, represented the husband.

Father Given Child Care Right of First Refusal By Appellate Court

Posted in Custody and Visitation

The Second Department has modified an order of Suffolk County Family Court Attorney-Referee Roseann Orlando to direct that when one parent is working, that parent, prior to making babysitting arrangements with a nonparent, shall first afford the other parent the opportunity to care for the subject child during such work period.

In its August 27, 2014 opinion in Matter of Saravia v. Godzieba, the Appellate Division otherwise upheld Referee Orlando’s order that had granted the mother sole custody of the parties’ almost 3-year old son.

The mother and the father had never been married. After the birth of their son in September, 2011, the parties resided together for approximately six months until the mother, with the child, moved out. In June, 2012, the parties cross-petitioned for sole legal and physical custody of the child. After a hearing at which the parties and one other witness testified, Referee Orlando awarded the mother sole legal and physical custody of the child.

The evidence at the hearing established that both parents loved the child, were gainfully employed, maintained their own homes, and could adequately provide for the child’s overall development. However, the Family Court, having the benefit of observing and listening to the witnesses, including the testimony of both parties, found that the mother was better suited to place the child’s interests ahead of her own and to foster the child’s relationship with the other parent. Upholding the custody determination, the Second Department held that here was a sound and substantial basis in the record to support Referee Orlando’s determination that it was in the best interests of the child to award sole custody to the mother, with visitation to the father.

Moreover, the Second Department rejected the father’s contention on appeal that an award of joint custody or equal parenting time would have been in the child’s best interests. The parties were sometimes antagonistic toward each other and demonstrated an inability to cooperate on certain important matters concerning the child.

However, the appellate court did add a child care right of first refusal.

Nonetheless, we find that under the circumstances of this case, where both parties have different work schedules and have expressed a desire to care for the child during the periods when the other parent is working, it would be in the best interests of the child for each parent, prior to arranging for a nonparent to babysit the child during a work period, to first afford the other parent the opportunity to care for the child during that time.

Clifford J. Petroske, P.C., of Bohemia, represented the father. No counsel for the mother was listed in the opinion. Thomas W. McNally, of Huntington, N.Y., served as Attorney for the Child.