Divorce: New York

Divorce: New York

Making It Tougher To Deviate From Presumptive Formulas on Temporary Support Awards

Posted in Temporary (Pendente Lite) Relief

Going farther than simply holding that the lower court temporary support award was inadequate, the Appellate Division, Second Department, in its September, 2015, decision in Kaufman v. Kaufman, discussed the detailed decision necessary to deviate from presumptive temporary maintenance and child support formulas. Doing so, the court reversed the May 15, 2013 order of Supreme Court Justice Edward A. Maron and remanded the matter for new determinations. The appellate court also substantially increased the interim counsel fee award. Domestic Relations Law § 236(B)(5-a) [amended after this decision], sets forth formulas for courts to apply to the parties’ reported income in order to determine the presumptively correct amount of temporary maintenance. “In any decision made pursuant to that section, the lower court shall set forth the factors it considered and the reasons for its decision.” “[A] court may deviate from the presumptive award if that presumptive award is unjust or inappropriate.” Under such circumstances, the court must “set forth, in a written order, the amount of the unadjusted presumptive award of temporary maintenance, the factors it considered, and the reasons that the court adjusted the presumptive award of temporary maintenance.”

Additionally, when a court is unable to perform the needed calculations as a result of being “presented with insufficient evidence to determine gross income, the court shall order the temporary maintenance award based upon the needs of the payee or the standard of living of the parties prior to commencement of the divorce action, whichever is greater” (Domestic Relations Law § 236[B][5-a][g]).

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9% Interest Rate on Equitable Distribution Payouts

Posted in Equitable Distribution

As there is no contrary statutory authority, the interest rate on a distributive award payout is 9%.

So held the Second Department in its October 7, 2015 decision in Cohen v. Cohen. In so holding, the appellate court modified the decision of Nassau County Supreme Court Justice Arthur M. Diamond that had directed that 5% interest be paid.

In this divorce action, the Second Department held that Justice Diamond providently exercised his discretion in finding that the wife was entitled to only a 25% share of the husband’s interest in his law firm. Furthermore, the appellate court upheld the lower court’s evaluation. Nothing in the testimony of the court-appointed appraiser undermined the conclusions in his report as to the proper valuation of the husband’s interest in the firm.

However, it was error to compute postjudgment interest on the wife’s share of the husband’s interest in his law firm at a rate of 5% per annum. Interest was awarded from the date of entry of the judgment of divorce.

Unless otherwise provided by statute, interest on a judgment is to be calculated at the statutory rate of 9% per annum. . . . Here, no applicable statute authorizes interest on the judgment other than at the statutory rate.

The Second Department also held that Justice Diamond erred when failing to award the wife a 50% share of so much of parties 2001 income tax refund as constituted marital property. This appears to have been calculated based upon the pre-commencement portion of the year in which the action was commenced (2001).

Victor Levin, P.C., of Garden City, represented the wife. Sol Barrocas and Allan Cohen, pro se, of Barrocas, Mintz, Misuraca & Record, P.C., of Garden City, represented the husband.

Maintenance and the Pentagenarian Spouse

Posted in Maintenance

The award of maintenance to the divorcing unemployed or under-employed spouse in his or her 50s may be one of the more challenging exercises of a judge’s discretion in a divorce action: too old to develop a lucrative career; too young to collect retirement assets built up over a lengthy marriage.

Although not exactly on point, in its September 30, 2015 decision in Brady v. Bounsing-Brady, the Second Department modified the maintenance award of Orange County Supreme Court Justice Debra J. Kiedaisch that had limited maintenance to 5 years at $1,733 per month. Instead, the appellate court extended the duration of maintenance to the earliest of the wife’s remarriage, her attainment of age 67, or the death of either party.

The 53-year-old wife had been disabled by a workplace injury since 1998. The parties had been married 14 years at date of commencement. The wife had been collecting $20,784 in yearly Social Security disability benefits and retirement disability benefits. (The Second Department held it was error for Justice Kiedaisch to impute another $9,216 in annual income to the wife.) By contrast, the husband was employed as a New York City firefighter earning in excess of $100,000 yearly.

The duration of maintenance is a matter committed to the sound discretion of the trial court and every case must be determined on its unique facts.

The factors to be considered in awarding maintenance include the standard of living of the parties during the marriage, the income and property of the parties, the distribution of marital property, the duration of the marriage, the health of the parties, the present and future earning capacity of both parties, the ability of the party seeking maintenance to become self-supporting, and the reduced or lost lifetime earning capacity of the party seeking maintenance.

Here, the Second Department held that Justice Kiedaisch had improvidently exercised her discretion when awarding the defendant maintenance for only 5 years.

The potential for 14 years of maintenance (plus retroactive support) after a 14-year marriage violates old rules of thumb (perhaps a third of the length of the marriage). It also is outside the presumptive range for an award under the new maintenance statute signed into law by Governor Cuomo on September 25, 2015 (D.R.L. §236[B][6][f]):

  • O up to and including 15 years: 15% – 30%
  • More than 15 up to and including 20 years: 30% – 40%
  • More than 20 years: 35% – 50%

Nonetheless, blind adherence to rules of thumb, or the new statutory range may not be appropriate for the non-monied 50-year-old divorcing spouse.

Robert M. Rametta, Esq., of Rametta & Rametta, LLC, of Goshen, represented the wife.

Double-Dipping: Using an Income Stream as Both an Asset and to Calculate Maintenance

Posted in Equitable Distribution, Maintenance

A professional practice is an asset which may be valued and equitably distributed in a divorce. Generally, that value is a function of the income generated by the practice after deducting reasonable compensation being paid to the professional. However, once valued, the income attributable to ownership of the practice may not also be the basis on which to award spousal maintenance.

Take the September 10, 2015 decision of the Appellate Division, Third Department, in Mula v. Mula. There, after 42 years of marriage, the husband commenced this action for a divorce. The wife counterclaimed for divorce and, by agreement, the parties were awarded mutual divorces on the grounds of irretrievable breakdown. During the marriage, the husband earned his C.P.A. license in 1981 and became the sole proprietor of an accounting practice in 1997. During the course of the marriage, the wife was primarily involved with the upkeep of the parties’ home and raising their three children.

Among other rulings, Ulster County Supreme Court Justice Anthony McGinty awarded the wife durational maintenance of $1,500 per month.

On appeal, the Third Department reduced this award to $1,000 per month, holding that Justice McGinty had double-counted the value of the husband’s professional practice. The lower court had valued the income generated by the practice as an asset and equitably distributed that asst. However, Justice McGinty also deemed the husband’s income to include the entire income generated by the practice when calculating the maintenance award to the wife.

The accounting practice was valued at $255,000. Apparently, the husband’s C.P.A. license was separately valued at $39,000.The husband contended on appeal that Justice McGinty had erred when calculating maintenance by failing to reduce his available income to reflect the court’s distributive award of his professional practice and license.

At issue is the rule against double counting, which provides that once a court converts a specific stream of income into an asset, that income may no longer be calculated into the maintenance formula and payout.

The husband’s solely-owned accounting firm was a service business for purposes of this rule.

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Father’s Visitation With Son Suspended, But Child Support Suspended As Well

Posted in Child Support (C.S.S.A.), Custody and Visitation

The father petitioned the Family Court for enforcement of his rights to visit with his 13-year old son. Alternatively, the father asked to suspend his child support obligation. Instead, Westchester County Family Court Judge Hal B. Greenwald granted the mother’s cross petition to modify the prior order of custody and visitation and suspended the father’s visitation with the subject child.

The Appellate Division, Second Department, modified that order by suspending the father’s child support obligation, affirming the suspension of all visitation in its September 2, 2015 decision in Matter of Coull v. Rottman.

In determining custody and visitation rights, the most important factor to be considered is the best interest of the child. Here, the evidence demonstrated that despite the fact that the child had participated in therapy for several months in an effort to foster a relationship with his father, the child remained vehemently opposed to any form of visitation with the father. Furthermore, while the express wishes of the child were not controlling, they were entitled to great weight, particularly where the child’s age and maturity would make his or her input particularly meaningful. Here, the appellate court held that the Judge Greenwald was entitled to place great weight on the child’s wishes, since he was mature enough to express them. Judge Greenwald’s finding that further attempts to compel the child, who was then 13 years old, to engage in visitation would be detrimental to the child’s emotional well being had a sound and substantial basis in the record and, thus, would not be disturbed.

However, contrary to Judge Greenwald’s conclusion, the evidence justified a suspension of the father’s obligation to make future child support payments. The forensic evaluator testified that there was a “pattern of alienation” resulting from the mother’s interference with a regular schedule of visitation. The evaluator was unable to complete her evaluation because the mother refused to consent to the evaluator’s request to speak with mental health providers or school officials, and the child did not appear for his interview.

Moreover, after the father’s last visit with the child, the father continued to go to the exchange location on visitation days for several months. On one occasion, the mother and child appeared, but the mother said the child would not come out of the car. On the other occasions, neither the mother nor the child appeared, nor did the mother communicate with the father. The father was never told about the child’s medical needs or that the child had been hospitalized until after the fact, nor was he advised of any information about the child’s school or school events.

Further, the record reflected that the mother, who represented herself before Judge Greenwald, assumed an inappropriately hostile stance toward the father and witnesses who testified in his favor. Judge Greenwald noted in its decision that the mother stated “many times, that she will never allow [the father] to see the subject child and that she would do whatever it takes to keep the subject child away” from him.

Robin D. Carton, of White Plains, N.Y., attorney for the child.

Son Awarded $5,000 Against Mother Who Failed To Turn Over Bar Mitzvah Gift

Posted in Miscellaneous Actions and Proceedings

In his August 25, 2015 decision in Zeidman v. Zeidman, Nassau County District Court Judge Scott Fairgrieve awarded $5,000 to 17-year old Jordan Zeidman who had sued his mother, Shirley Zeidman, for refusing to deliver Jordan’s Bar Mitzvah gift from his maternal grandmother that had been entrusted to his mother.

In 1998, Jordan’s parents were divorced. In their separation agreement, the parents stipulated that they would contribute pro rata to Jordan’s college fund. The mother had not made any such contributions and, in October, 2007, Jordan moved from his mother’s home because of their uneasy relationship. Mother and son had been estranged ever since.

Also in October, 2007, Jordan and his family celebrated his Bar Mitzvah at Zachary’s restaurant in Hempstead. Neither Jordan’s mother, nor his grandmother received an invitation to the party. The two “crashed” the party, but were not asked to leave.

Jordan claimed that at the celebration, his grandmother told him that she was going to give him $5,000 for his religious achievement. The grandmother supposedly gave the $5,000 to Jordan’s mother with the understanding that it would be delivered to Jordan. According to Jordan, his grandmother told him “I have $5,000 for you. Just like I gave to your brother and sister. And I’m going to give it to your mom to hold for you.” Jordan testified his mother never delivered the $5,000 to him.

At trial, Jordan submitted into evidence a document given to him by his father, ostensibly showing that his mother had acknowledged and received Jordan’s plaintiff’s $5,000 gift. The document was a bank confirmation statement of deposits that were made into Jordan’s college fund. The top of the document contained a handwritten statement which read, “I owe Jordan $190.00 + $5,000 from Baba” [the nickname by which the family referred to the grandmother].

On cross-examination, the mother testified that she didn’t recall writing the note, but that it could have been her handwriting. She denied receiving a $5,000 gift from her mother for Jordan’s benefit. Jordan testified that he was familiar with his mother’s handwriting because of the amount of time they spent living together, and the number of times he had seen her make numerous other writings.

The grandmother testified that she neither gave a $5,000 gift directly to Jordan, nor did she give the mother $5,000 to hold for Jordan’s benefit. However, the grandmother admitted to giving $5,000 gifts, in either cash or check form, to Jordan’s siblings for their Bar and Bat Mitzvahs.

Judge Fairgrieve found that Jordan had proven by clear and convincing evidence the elements necessary to establish an inter vivos gift:

  1. donative intent to make an irrevocable transfer of ownership;
  2. actual physical or constructive delivery of the property; and
  3. acceptance of the gift by the donee.

The evidence clearly established that Jordan’s grandmother came to his Bar Mitzvah with the intention of giving Jordan a $5,000 gift. The grandmother gave direct testimony attesting to the fact that she went to the plaintiff’s Bar Mitzvah, uninvited, with the intent to give him a gift with “all of her heart.” The grandmother had given $5,000 gifts to Jordan’s older siblings for their Bar and Bat Mitzvahs in the past. The bank document further supported that a gift was made. That evidence, coupled with the fact that Jordan and the grandmother shared a family relationship, convinced Judge Fairgrieve that the grandmother came to the Bar Mitzvah with the intention of giving the plaintiff a $5,000 gift. The evidence also demonstrated an irrevocable transfer of ownership: the mother received delivery of $5,000 as agent for Jordan in a fiduciary capacity.

Further, Jordan established by clear and convincing evidence that he received constructive delivery of the $5,000 gift. Delivery may be made to someone other than the donee to accomplish a gift. That third party represents the donee as agent, and there may be a valid delivery, even in circumstances where the donee does not have knowledge of the gift.

Here, there was valid delivery of the $5,000 gift made to Jordan. The mother was acting as agent for Jordan when she retained the gift. Moreover, the handwriting on the banking confirmation statement proved that the mother received the $5,000 gift as Jordan’s fiduciary-agent.

An agent who exercises dominion or control over the property “of his or her principal beyond the extent of the agent’s authority, with the intent to dispose of it so as to alter its condition or interference with the owner’s dominion is guilty of conversion.” Fundamental to an agent-principal relationship is that an agent owes a duty of loyalty to his or her principal, and is “prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” Thus, Jordan was entitled to recover based upon conversion because the mother failed to pay him the $5,000 to which he was entitled.

Moreover, Jordan was entitled to recover for unjust enrichment. The elements necessary to establish a cause of action for unjust enrichment are:

  1. the other party was enriched;
  2. at that party’s expense; and
  3. that it is against equity and good conscience to permit the other party to retain what is sought to be recovered.

Here, the evidence demonstrated that the mother would be unjustly enriched if permitted to retain the $5,000 gift.

Steven Cohn, P.C., of Carle Place, represented the son. Jeffrey S. Schecter & Associates, P.C., of Garden City, represented the mother.

Pre-nup Upheld; Temporary Maintenance and Counsel Fees Increased on Appeal

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

In its August 19, 2015 decision in Hof v. Hof, the Second Department, almost matter-of-factly, addressed a number of pendente lite and pre-nuptial agreement issues.

To begin, the Court affirmed the determination of Suffolk County Supreme Court Justice John B. Collins, that after a hearing upheld the parties’ prenuptial agreement. By that agreement, at least in part, the parties had waived interests in each other’s pensions. Contrary to the wife’s contention, that mutual waiver was not unconscionable, and was not necessarily one-sided when it was made, as both parties had accumulated approximately three years in their respective pensions at that time. Moreover, the Court stated that the husband’s threat to cancel their wedding if the agreement was not signed did not establish duress.

The Second Department modified Justice Collins’ order insofar as it deviated from the presumptive temporary maintenance formula. Domestic Relations Law § 236(B)(5-a) sets forth formulas for the courts to apply to the parties’ reported income in order to determine the presumptively correct award of temporary maintenance.

Here, the Justice Collins had downwardly deviated from the presumptive award by awarding the wife the sum of only $1,500 per month in pendente lite maintenance. While a court may deviate from the presumptive award if that presumptive award is unjust or inappropriate, the Second Department here held, however, that it was not proper to so deviate. It was an insufficient basis to deviate that the husband “was maintaining the marital residence where he was living after the wife vacated the marital residence with the children, and the fact that the wife stayed home during a portion of the marriage to take care of the children.” Such did not render the presumptive award of pendente lite maintenance unjust or inappropriate. Accordingly, the Second Department held that it must modify the award of pendente lite maintenance to provide the wife with the presumptive award of $2,549.70 per month.

On the other hand, Justice Collins was not required to apply the Child Support Standards Act to determine the award of pendente lite child support. In that regard, any perceived inequity in the temporary child support award can best be remedied by a speedy trial, at which the parties’ financial circumstances can be fully explored.

Finally, the Second increased the interim award of counsel fees from $2,500 to $20,000, the full amount of counsel fees incurred by the wife to date related to the divorce issues. The husband was the monied spouse and, thus, there was a rebuttable presumption that the wife was entitled to an award of attorneys’ fees. At the time the wife moved for her award of attorneys’ fees, the attorneys’ fees she had already incurred amounted to approximately $25,000. Domestic Relations Law §237 does not provide for an award of counsel fees in actions to enforce or rescind prenuptial agreements, and approximately $5,000 of the $25,000 in fees that she actually incurred were attributable to challenging the prenuptial agreement. Therefore, at this juncture, the Second Department held the wife should be awarded interim attorneys’ fees in the sum of $20,000, rather than only $2,500.

Arnold B. Firestone, of Firestone & Breud, PLLC, of Commack, represented the wife. C. Donald Shlimbaum, of Shlimbaum & Shlimbaum, of Central Islip, represented the husband.

Co-parenting: Flexibility Cannot Be Ordered; Abusive E-mails Warrant Jail

Posted in Agreements and Stipulations, Custody and Visitation, Enforcement of Support and Orders

Sentencing a father (a police officer) to 15 days in jail for sending abusive e-mails to the mother, Supreme Court, Putnam County Justice Victor G. Grossman attempted to stop the war between divorcing parents.

Charging the parties with acting more like children, throwing tantrums, teasing and name-calling, Justice Grossman, in his decision in L.T. v. K.T.  noted that both parents behaved like preschoolers. Unfortunately, the Court could send the parties to their rooms. The parties’ three children have two parents whose embarrassing behavior has set a horrible example. the behavior of both parties was “all the more disappointing when one considers the parties should know better.” The father was a police officer, who had been trained to defuse difficult situations. The mother had a Master’s Degree in Psychology. Thankfully, the children had multiple outlets where they can see responsible adult behavior.

The Court also blamed the lawyers, observing “how counsel for each of the parties has personalized the conflict to the point where they are incapable of communicating effectively beyond a litigating posture, to promote their clients’ interests.”

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Oops! I Forgot To Submit A QDRO: Delays, Arrears, Loans and Options

Posted in Equitable Distribution

A belated qualified domestic relations order (QDRO) is not barred by the contract Statute of Limitations. It may also be used to collect arrears in the ex-spouse’s share of pension payments paid to the retiring employee before the post-retirement QDRO first goes into effect. Moreover, while the employee’s post-divorce loan against the pension will be charged only against the employee’s share, the reduction in monthly benefits attributable to the employee electing after the divorce joint and survivor benefits with the next spouse is to be shared with the first spouse.

So held the Appellate Division, Second Department, in last month’s decision in Krause v. Krause. In that decision the appellate court addressed for the first time the question of whether the submission for judicial approval of a proposed QDRO, instead of a motion made on notice, may be employed by a party to a matrimonial action to obtain pension arrears. The Second Department held that a QDRO may be used for such a purpose. [A QDRO is a court decree recognized by the Internal Revenue Service that allows the division of retirement plan benefits incident to a divorce, without triggering current income taxation or early withdrawal penalties.]

Carol and Richard Kraus were married in 1973. During a portion of the marriage, the wife was employed by the State of New York as a hospital nurse. The husband was employed by the Fire Department of the City of New York (the FDNY) as a firefighter from 1977 to 2008. As a firefighter, the husband was a member of a pension system for much of the parties’ marriage. The wife was also a member of a pension system as a State employee.

In 1993, the wife commenced a divorce action. On November 1, 1995, the parties reached a settlement, pursuant to which each spouse was entitled to a marital share of the other spouse’s pension in accordance with the formula set forth in Majauskas v Majauskas (61 N.Y.2d 481). The stipulation expressly provided that “[a] Qualified Domestic Relations Order shall be prepared in the course of any divorce and forwarded to the Court for signature and filed with the Husband’s employer.” A judgment of divorce was signed by the Supreme Court on February 21, 1996.

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Custody Award Reversed Because Case Took Too Long

Posted in Custody and Visitation

It has been said that the court system is broken; its resources stretched to a point where its purposes cannot be achieved.

Take this month’s decision of the Appellate Division, Second Department, in Middleton v. Stringham.

On June 22, 2011, the parties agreed to share joint legal custody of their two children, with physical custody to the mother and liberal parenting time to the father. The parties were divorced by a judgment of divorce entered January 10, 2012. Seven months later, the mother filed a petition to modify the stipulation so as to award her sole legal and physical custody of the children, and the father cross-petitioned for the same relief. After a hearing at which the parties and two of their parent coordinators testified, Westchester County Family Court Judge David Klein modified the stipulation so as to award the father sole legal and physical custody of the subject children.

Generally, on a petition for a modification of joint custody, a court is required to determine whether the parents’ interaction was so acrimonious that it effectively precluded them from joint decision-making, and if so, to award sole custody to whichever parent serves the best interests of the children. Here, however, the Second Department held that the determination that it was in the best interests of the children to award sole custody to the father lacked a sound and substantial basis in the record.

The custody hearing concluded on May 15, 2014, over 20 months after the mother’s  petition was filed, and the order appealed from was issued 6 months after that.

For the most part, the evidence at the hearing focused upon allegations, events, and circumstances relating to the period of time that preceded the filing of the petition and cross petition, and the parents’ acrimonious relationship with each other, with limited evidence about the children’s more current circumstances and best interests. Accordingly, the appellate court found that a new hearing was needed to allow the court to elicit more up-to-date evidence.

Moreover, the Second Department noted that under the unique facts of the case (not discussed), and despite the children’s relatively young ages, the court should have conducted in camera interviews with the children.

The Second Department directed that the new hearing, in camera interviews, and new determination should be done with “all convenient speed.”

The parties have now been litigating for the three years that followed the one-year respite after they settled their custody dispute the first time. These cross-proceedings took so long that the reasons there were brought were no longer relevant. Instead, the appellate court wanted to know what had been going on while the Family Court proceeding was ongoing. Even with  “all convenient speed,” the resolution (with appeal) will take another year or two.

From the children’s perspective, it must seem like their entire lives have been spent with the sights and sounds coming from the court-system battleground. We owe them better.

William J. Larkin III, Esq., of Larkin, Ingrassia & Brown, LLP, of Newburgh, represented the mother. Neal D. Futerfas, Esq., of White Plains, N.Y., represented the father. Joy S. Joseph, Esq., of White Plains, N.Y., served as attorney for the children.