Divorce: New York

Divorce: New York

The Divorce Settlement Must Predict How Finances Will Actually Work

Posted in Agreements and Stipulations

A divorce settlement agreement requires clear language. It must also anticipate the thousands of details needed to complete the financial disentanglement and establish post-divorce rights and obligations. The parties must unceasingly ask their counsel “what if? Before signing their agreement, parties must envision how each type of transaction will actually be accomplished.

That need is made clear in the June 29, 2016 decision of the Appellate Division, Second Department, in Frances v. Frances.

The parties entered their divorce stipulation of settlement on January 19, 2010. On this post-judgment application, the ex-husband asked to enforce the stipulation by directing his former wife to pay him 50% of the refund received from the parties’ 2009 joint tax return, 50% of the school tuition and camp expenses for the parties’ youngest child, and 50% of the cost of certain repairs to the marital residence. Rockland County Supreme Court Justice William A. Kelly granted that relief and the wife appealed.

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Charging a Party for Spending Marital Assets During the Divorce Action

Posted in Credits, Equitable Distribution

Focused man paying his bills in the living room

The filing of a divorce summons commences the action and terminates the marital economic partnership. As noted by the Court of Appeals in Mesholam v. Mesholam, 11 N.Y.3d 24, 27, 862 N.Y.S.2d 453 (2008), that partnership is to be considered dissolved when a divorce action is commenced.

Retroactive to the first request for support, often contained in the divorce summons, itself, the trial court has the power to order both spousal and child support. It can also determine the parties’ relative responsibilities for marital residence carrying charges and other expenses.

In light of the trial court’s power to determine the parties’ rights and obligations for the period the divorce action is pending, what should be done if a party’s uses marital assets to pay living expenses accruing after the divorce action is commenced.

In its June 30, 2016 decision in Carvalho v. Carvalho, the Appellate Division, Third Department, held that marital assets may be used while a divorce action is pending to pay for legitimate household and living expenses without needing to later offset the division of those assets. Moreover, the burden is on the non-spending party to prove that the marital assets were not used for such “legitimate” purposes.

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Mother’s Testimony Sufficient Foundation for Receipt in Evidence of Health Care Invoices and Payment Records

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

The Appellate Division, Second Department, has held in its June 15, 2016 decision in Schiero v. Perrotta, that a mother’s testimony was a sufficient foundation for the admission in evidence of her children’s medical bills and her proof of payment of those bills.

The mother had filed a violation petition alleging that the father had failed to pay his pro rata share of the children’s unreimbursed medical expenses. At the ensuing hearing, the mother testified that she had incurred $980 in medical expenses for the children. She attempted to offer into evidence copies of medical bills and proof of payment.

Support Magistrate Rachelle C. Kaufman, however, refused to admit the medical invoices into evidence on the ground that the medical invoices were hearsay, and were not admissible through the mother’s testimony. Magistrate Kaufman then held that the mother failed to demonstrate the amounts of each individual medical expense, or when they were incurred. The Magistrate dismissed that branch of her petition. The mother filed objections, which were denied by Rockland County Family Court Judge Sherri L. Eisenpress.

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You Can’t Make A Gift To Your Married Child Without Getting The Lawyers Involved

Posted in Equitable Distribution

The ever-changing landscape of Equitable Distribution case law makes it difficult, if not impossible, to rely on the “law.” A parent cannot (or rather, should not) make a gift to a married child without bringing the lawyers into it.

Take the April, 2016 decision of the Appellate Division, Second Department in Mistretta v. Mistretta. There, the parties had been married in 1991. During their marriage they lived in a home, at first owned by the husband’s mother, and deeded to the husband in 1996.

At the trial of this 2010 divorce action, the husband claimed that the residence was a gift from his mother, and therefore constituted separate property. However, he acknowledged that for many years, he paid his mother $500 per month “rent” (the opinion does not state whether rent was paid after the property was deeded to the husband). The husband and his sister both acknowledged that rental income from the subject premises was paid to the husband’s mother pursuant to the written agreement between the husband and his mother that was introduced into evidence.

Supreme Court, Suffolk County Justice Joseph Santorelli held that the home was marital property subject to equitable distribution. He directed the sale of the premises, with the parties to share equally in any net proceeds or deficiency from such sale.

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K-1 Income and the Calculation of Child Support

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

K-1-cropped-wideIn its May 11, 2016 decision in Eifert v. Eifert, the Appellate Division, Second Department, appears to discuss the interrelationship between the calculation of child support and the “income” shown on a partnership K-1 tax form. In truth, it does not.

In their divorce settlement agreement, the parties agreed that the father would pay child support consisting of two components. The first component required the father to pay $4,400 per month. As summarized by the Second Department in its opinion, the second component required the father to pay “25% of the income he derived from his ownership of stock in Eifert French & Co.”

Years later, the mother sought to recover child support arrears in the sum of $63,283.25 arising from the second component of the father’s child support obligation. The mother arrived at this sum by performing calculations based on K-1 statements received by the father from Eifert French & Co.

In opposition, the father contended that the second component of his child support obligation should be calculated based only on distribution checks he received from Eifert French & Co, rather than the income reflected on his K-1 statements. Based on that limitation, the father calculated that the correct amount of arrears he owed for this second component of his child support obligation was $21,137.49.

Supreme Court, Westchester County Justice Colleen D. Duffy agreed with the father and found arrears to be $21,137.49. The mother appealed.

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Automatic Increase in Child Support Ruled Unenforceable Penalty

Posted in Agreements and Stipulations

In its May 25, 2016 decision in Fitzpatrick v. Fitzpatrick, the Appellate Division, Second Department, affirmed the denial of an ex-wife’s application to enforce a divorce settlement provision that called for an automatic increase in child support upon the ex-husband’s default in any other obligation of that settlement.

The parties entered into that separation agreement in 2012, which had been incorporated, but not merged into the judgment of divorce. In relevant part, the agreement provided that, in consideration of the husband’s agreement to pay 100% of the costs associated with maintaining the marital residence (in which the wife and the parties’ four children continued to reside), the husband would pay $1,500 per month in child support until the the sale of the marital residence, and $5,076.29 per month thereafter. However, the agreement continued, if at any time prior to the sale of the marital residence, the husband was not in compliance with “all of the terms” of the agreement, then his child support obligation would be increased to $5,076.29 per month.

Supreme Court, Westchester County Justice Francis A. Nicolai, after a hearing (Duffy, J.), denied that aspect of the ex-wife’s post-judgment application. The Second Department affirmed.

The appellate court recognized the agreement that there be automatic increase in child support as a liquidated damages clause. Generally, parties to an agreement may provide for the payment of liquidated damages upon its breach, and such damages will be upheld if:

(1) the amount fixed is a reasonable measure of the probable actual loss in the event of breach, and

(2) the actual loss suffered is difficult to determine precisely.

However, the Court held that if the liquidated damages do not bear a reasonable proportion to the loss actually sustained by a breach, they will constitute an unenforceable penalty.

Without discussion of how the marital residence expense clause and automatic child support increase were interrelated, the Court held that contrary to the ex-wife’s contention, the Supreme Court correctly determined that the subject provision, as drafted, constituted an unenforceable penalty clause and was unenforceable.

Ms. Fitzpatrick represented herself on the appeal. The ex-husband was represented by Joan Iacono, of Bronxville (Barbara Martensson, of counsel).

Mother Must Equally Share Costs of Post-Divorce Parenting Coordinator

Posted in Custody and Visitation

To help ensure that parents take responsibility for their post-divorce conduct, they should equally share the costs of a parenting coordinator appointed to help implement the custody and visitation provisions of a divorce judgment.

So held the Appellate Division, Second Department, in its May 11, 2016 decision in Headley v. Headley, when it affirmed Queens County Supreme Court Justice Lenora Gerald.

The parties were married in 2005, and had one child the following year. The couple was divorced in 2008. The judgment of divorce incorporated, but did not merge a settlement stipulation pursuant to which the parties had agreed to joint legal custody of the child. The mother had residential custody and the father had substantial visitation.

In August 2011, the father filed a petition alleging that the mother violated the stipulation by denying him visits and phone calls with the child. In August 2013, the father moved to modify the judgment of divorce to award him physical custody of the child. A lengthy hearing was held over the course of 10 hearing dates. Justice Gerald heard testimony from, among others, the parties, the mother’s new husband, a forensic evaluator, and a court-appointed visitation supervisor.

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If The Pros Can’t Tell When Children Lie, How Can Courts Decide Custody?

Posted in Custody and Visitation

Lying childIn his February, 2016 TED talk, developmental researcher Kang Lee tells us that adults cannot tell whether children are lying.

As part of his research, Dr. Lee asked children to guess the numbers on two face-down cards. The children were told that if could do that, they would get a big prize. In the middle of the game with a child, the monitor leaves the room, telling the child not to peek at the cards. Hidden cameras record the actions.

More than 90 percent of children will peek as soon as the proctor leaves the room. The more important question for Dr. Lee was when the proctor returned, would the child confess or lie about cheating? By age 4 and up, at least 80% of the children lie.

However, Dr. Lee also wanted to know if we, adults, can tell when a child is lying or telling the truth. Dr. Lee played videos of these types of games for many, many adults from all walks of life. In half of the videos, the children lied. In the other half of the videos, the children told the truth. Recognizing that if the adults guessed randomly, there would be a 50% chance of them being right, an adult whose accuracy was around 50% was a terrible detector of children’s lies.

Spoiler Alert (although the title of this blog post gives it away): Please watch the video before proceeding.

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What’s the Court’s Dollar Value for a Religious Divorce (“Get”)?

Posted in Divorce, Maintenance, Sanctions

Mendel EpsteinAccording to Jewish law, God prescribed both the way to unite souls in marriage and gave instructions how those souls can be severed. While Jewish law requires one to follow the law of the land, and thus a civil divorce is required, that civil divorce cannot serve as a substitute for a halachic (conforming to the strictures of Jewish law) divorce, the “get.” Without a get, no matter how long the couple is separated, and regardless of civil law documents, in the eyes of Jewish law the couple is still married. As reported at Chabad.org:

“According to biblical law, a married couple is released from the bonds of matrimony only through the transmission of a bill of divorce from the husband to the wife. This document, commonly known by its Aramaic name, “get,” serves not only as a proof of the dissolution of the marriage in the event that one or both wish to remarry, it actually effects the divorce.”

To appreciate the scope of the problem, note, for example, that in December, 2015 70-year old Rabbi Mendel Epstein of Brooklyn (pictured), dubbed “The Prodfather,” was sentenced to 10 years in jail after he was convicted of charging wives thousands of dollars to torture their husbands into delivering a get. See, NY Daily News.

In 1983, New York enacted Domestic Relations Law §253 to address husbands who withhold the get. That section, in combination with DRL §236(B)(5)(h), and DRL §236(B)(6)(d) empowers a court to direct specific performance of a Ketubah (the marriage contract) or other agreement by which a husband previously agreed to provide a get to his wife. Civil contempt sanctions are available for non-compliance. Additionally, for withholding a get, the court may deny a husband any right to equitable distribution of the marital estate and/or award the wife maintenance at a level designed to encourage compliance. If the husband is the plaintiff, the court may also deny him a civil divorce.

In its April 13, 2016 decision in Mizrahi-Srour v. Srour, the Appellate Division, Second Department, affirmed Kings County Supreme Court Justice Esther M. Morgenstern‘s award to the wife of maintenance of $100 per week for five years, which would be increased to $200 per week if the husband did not provide a get to the wife within 60 days, and also distributed to the wife 70% of the marital assets, and awarded counsel fees.

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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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