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.

Continue Reading K-1 Income and the Calculation of Child Support

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).

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.

Continue Reading Mother Must Equally Share Costs of Post-Divorce Parenting Coordinator

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.

Continue Reading If The Pros Can't Tell When Children Lie, How Can Courts Decide Custody?

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.

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

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.

Continue Reading Double Dipping and the Distinction Without a Difference

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.

Continue Reading Support When the Child Graduates College in Three Years

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.

Continue Reading Child Support and the Parent Deprived of Visitation

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.

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.

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