Calulator on 100s 3In its April 1, 2015 decision in Pittman v. Williams, the Appellate Division, Second Department, reversed a decision of Supreme Court, Kings County Court Attorney/Referee (and now Family Court Judge) J. Machelle Sweeting that awarded child support equal to 17% of the father’s entire $441,000 income.  The Second Department also deleted a requirement that the father pay private school tuition after preschool, and allocated the wife’s child care expense equally between the father’s child and another of the mother’s children for whom care was provided.

In this child support proceeding, the parties’ combined income was $489,937. The father’s income represented 90% of this sum or C.S.S.A.-adjusted income of approximately $441,000 per year; the mother’s 10% share was approximately $49,000. Referee Sweeting directed the father to pay child support in the sum of $6,246 per month, child care expenses in the sum of $291.60 per week, and his pro rata share of the child’s tuition at the Brooklyn Waldorf School.

The Second Department reversed and remitted the matter for a new determination of the amount of the basic child support obligation.

The Child Support Standards Act sets forth a formula for calculating child support by applying a designated statutory percentage, here 17% for one child, to combined parental income up to a particular ceiling. The court, in fixing the basic child support obligation on income over the ceiling, i.e., the “statutory cap” (in this case, $136,000), has the discretion to apply the factors set forth in the statute, or to apply the statutory percentage, or to apply both.

However, there must be some record articulation of the reasons for the court’s choice to facilitate review. The court’s decision should reflect a careful consideration of the stated basis for its exercise of discretion, the parties’ circumstances, and its reasoning why there should or should not be a departure from the prescribed percentage. In addition to providing a record articulation for deviating or not deviating from the statutory formula, a court must relate that record articulation to the statutory factors.

Here, the Second Department held that the Referee properly determined that the parties’ combined parental income was $489,937. However, when determining the amount of child support, Referee Sweeting failed to articulate her reasons for applying the statutory percentage of 17% to the combined parental income over the statutory cap of $136,000. As a result, her determination was reversed. It was held that the matter must be remitted for a new determination in this regard and the court must articulate its reasons for the new determination.

Continue Reading Reasons To Apply CSSA Formula to Father's $441,000 Income Must Be Stated; No Private School Payment Without Proof Of Superiority Of Education

Gavel mainIn its February 18, 2015 decision in Dunleavy v. Dunleavy, the Second Department modified the order of Suffolk County Supreme Court Justice Carol Mackenzie by increasing the wife’s temporary maintenance award from $75 to $784.62 per week.

The Second Department noted that 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 amount of temporary maintenance. It further provides that the court shall order the presumptive award of temporary maintenance in accordance with the formulas, unless it finds that the presumptive award is unjust or inappropriate. If so, the court must set forth, in its written order, the enumerated factors it considered and the reasons it adjusted the presumptive award of temporary maintenance.

Here, Justice Mackenzie applied the statutory formulas set forth in Domestic Relations Law § 236(B)(5-a) and arrived at a presumptive award of $784.62 per week, but found that the presumptive award was unjust and inappropriate. The court awarded the wife only $75 per week in temporary maintenance, a 96% reduction of the presumptively correct award.

The appellate court held that the record did not support any reduction of the presumptively correct award, or otherwise lead to the conclusion that the presumptive award was unjust or inappropriate under the circumstances of this case.

While an appellate court should rarely modify a temporary maintenance award, here, we conclude that justice requires an award equal to the statutorily presumptive award.

The Second Department also held that Justice Mackenzie had improvidently exercised her discretion in awarding the plaintiff an attorney’s fee in the sum of only $2,500. Considering the parties’ relative circumstances, including the disparity in the parties’ respective incomes, and considering all of the relevant factors, the appellate court increased the attorney’s fee to the sum of $7,500.

Of interest here may also be the fact that Justice Mackenzie’s order was dated June 21, 2013 (the motion having obviously been made months before that). It thus took some 20 months for the wife’s temporary support to be increased.

Erik C. Howard, of Foster, Vandenburgh, & Riyaz, LLP, of Westhampton, represented the wife. Alan M. Wolinsky, of Wolinsky, Parnell & Montgomery, LLP, of Lake Ronkonkoma, represented the husband.

In a 3-1 decision on February 4, 2015 in Cohen v. Cohen, the Second Department disqualified a prominent Long Island matrimonial firm from representing the wife in this 2011 divorce action.

It was disputed whether in November 2010 the husband had consulted Steven J. Eisman, senior partner in Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Einiger, LLP. The husband was unable to substantiate his allegation that he consulted with Mr. Eisman. Mr. Eisman stated that while the husband had scheduled an appointment for a consultation, he canceled it. Mr. Eisman further asserted that the husband had consulted with various top matrimonial attorneys in the area to prevent the wife from hiring an attorney.

However, it was not disputed that the husband’s brother met with Mr. Eisman in July, 2010. The brother stated that he had shared with Mr. Eisman confidential information concerning various businesses the husband and his brother owned and in which they shared common interests. This included detailed information concerning the day-to-day operations of the businesses which he operated jointly with the husband, illustrated by a diagram, described how the businesses earned a profit, and provided his opinion as to the value of the businesses. Mr. Eisman acknowledged that he had discussed with the husband’s brother “surface details” concerning, among other things, the husband’s brother’s employment, the brother’s marriage, residence, and children.

The brother (and obviously the husband) never retained the law firm as his counsel. The wife did. The husband moved to disqualify Mr. Eisman’s firm.

The Second Department first noted that the disqualification of an attorney is generally a matter resting within the sound discretion of the court. In his ruling below, Supreme Court Justice Norman Janowitz had denied that motion.

Nonetheless, the Second Department reversed, noting “doubts as to the existence of a conflict of interest must be resolved in favor of disqualification so as to avoid even the appearance of impropriety.” The appellate court held that here, Justice Janowitz should have granted the husband’s motion to disqualify the law firm. Given the undisputed evidence of the consultation between Mr. Eisman and the husband’s brother, as well as the nature of the matters disclosed there was a resulting substantial risk of prejudice.

The very appearance of a conflict of interest was alone sufficient to warrant disqualification of the law firm as a matter of law without an evidentiary hearing, and notwithstanding the existence of a factual dispute as to whether Eisman met with the [husband].

Continue Reading Disqualification of Counsel: Is It A Shield Or A Sword?

Three Second Department decisions within eight days this month reveal the discretion of the trial court when income is not apparent (no pun intended) on a determination of a parent’s basic child support obligation.

In Fein v. Fein, the Appellate Division, Second Department, affirmed the determination of Westchester County Supreme Court Justice Bruce E. Tolbert to impute $125,000.00 as the annual income of the father, and $65,000.00 as the annual income of the mother, but then to cap the non-custodial husband’s support obligation on his share (65.79%) of the $130,000.00 Child Support Standards Act (C.S.S.A.) cap in effect when the 2011 order was made. The court awarded $450.00 per week in child support and also awarded the wife $346.15 per week ($18,000.00 per year) for 3 years as maintenance.

In Fein, the parties had three children (29%). The husband had worked as a trader in the financial industry before losing his job in late 2009. The mother stayed at home with the children. The Second Department stated that it was proper for Justice Tolbert to have imputed to the husband an annual income of $125,000.00 for the purpose of calculating child support, given the plaintiff’s current employment situation, his future earning capacity, and the evidence presented relating to additional streams of income.

[The actual calculation, though, is not discussed. If the combined parental income was imputed to be $190,000.00, the husband’s share would be 65.79% of the total. For the three children, using the formula, the father’s base obligation would be 65.79% of 29% of $130,000.00, or $24,802.83 per year ($476.98 per week). Alternatively, and deducting the $18,000.00 annual maintenance from the $130,000.00 cap, would leave $112,000.00 in parental income. The father’s support obligation based on this sum would be $410.31 per week ($21,336.11 per year). Perhaps the difference was based on attributed FICA and Medicare taxes, or other adjustments.]

More difficult to explain is the January 15, 2014 decision in Best v. Hinds. There the Second Department affirmed the order of Kings County Family Court Alan Beckoff (who, in turn, denied the father’s objections to the order of Support Magistrate John M. Fasone) that granted a father’s downward modification of his child support obligation, but only to $738.00 per month. When doing so, the Family Court imputed an annual income to the father in the sum of $35,000.00.

$738.00 per month for the one child to benefit from this order, would gross up to $52,094.12 per year as the income upon which to apply the C.S.S.A. formula ($738.00 x 12 ÷ 17%). The failure to limit the child support award to the formula application to his imputed income of $35,000.00 per year is more noteworthy, as the father also had custody of three other children. Although the Second Department held that Support Magistrate Fasone’s failure to consider this fact was not properly preserved for appellate review, the appellate court did state that such was not an improvident exercise of discretion. In determining whether the full amount of support under the standard guideline would be unjust or inappropriate, a court may consider the needs of the children of the noncustodial parent who are not the subject of the support proceeding and for whom the noncustodial parent is providing support.

However, the court may only take this factor into consideration where the resources available to support such children are less than the resources available to support the children who are the subject of the proceeding.

Such a finding was not supported by the evidence.

[The May 31, 2012 blog post reported on the Second Department’s decision in Bershadskaya v. Nemirovsky, which reversed a determination of Magistrate Fasone because he did not impute income to a father received in fringe benefits.]

Finally, in the January 8, 2014 decision in Speranza v. Speranza, the Second Department upheld the order of Dutchess County Family Court Judge Denise M. Watson  (who, in turn, denied the father’s objections to the order of Support Magistrate Rachelle Kaufman) that had based a support award on income of the father imputed to be the income represented by the father some five years earlier.

The earlier representation of the father’s annual income of $61,467.00 formed the basis of a November 30, 2007 Family Court support order had been issued on the consent of the parties. In a December, 2010 stipulation of settlement that was incorporated, but not merged into the parents’ 2011 judgment of divorce, the parties agreed that the father’s obligation to pay child support would be suspended for 15 months, after which his child support obligation would resume and be calculated pursuant to the C.S.S.A.

When the mother petitioned the Family Court to so redetermine the father’s support obligation, the father failed to make any financial disclosure. To resolve the matter the Magistrate used the 2007 income figure. That was upheld by the Family Court Judge and, here, the Second Department.

Where a respondent in a support proceeding fails, without good cause, to comply with the compulsory financial disclosure . . . , ‘the court on its own motion or on application shall grant the relief demanded in the petition or shall order that, for purposes of the support proceeding, the respondent shall be precluded from offering evidence as to respondent’s financial ability to pay support’ . . . .

Under the circumstances it was a  provident exercise of discretion to direct that the father pay child support based upon an annual income of $61,467.00.

We don’t know whether the father benefited from this or not. What is clear is that when basing support on imputed income, the trial court has a large degree of flexibility and discretion, both in determining the amount of income imputed and then in how to apply the C.S.S.A.

In FeinEvan Wiederkehr of DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, of White
Plains, represented the mother. Bryce R. Levine  of Jeffrey S. Schecter & Associates, P.C., of Garden City, represented the father.

In Best, Alan S. Cabelly of Cabelly & Calderon,of Jamaica, represented the father.

In its September 18, 2013 decision in Abramson v. Gavares, the Second Department briefly reviewed the interplay between prenuptial agreements and interim awards in divorce actions.

In this case, the parties were married in 2004 and hade one child, born in 2006. This divorce action was commenced in 2009 [before the 2010 laws on counsel fees and temporary maintenance].

On the wife’s motion for various relief pendente lite, Nassau County Supreme Court Justice Margaret C. Reilly had awarded the wife $4,250 per month temporary child support, $1,000 per month in temporary maintenance, and a $15,000 interim counsel fee. The husband was also directed to pay 100% of the costs of the court-appointed forensic evaluator and the attorney for the parties’ child.

On appeal, the husband challenged certain parts of the award on the basis of the prenuptial agreement entered into by the parties. The Second Department upheld the awards of child support and counsel fees, but struck the award of temporary maintenance.

Continue Reading Second Department Approves Interim Counsel Fee in Excess of Prenuptial Agreement’s Cap, But Reverses Award of Interim Spousal Maintenance

Considering the add-ons for private school, health care, child care, and extra-curricular activities, imposing a base child support obligation upon a father (the less-moneyed spouse) in excess of his pro rata share of the first $136,000 of combined parental income would be unjust and inappropriate. Such was the holding of Acting Supreme Court Kings County Justice Debra Silber in her August 12, 2013 decision in A.C. v. J.O.

That ruling, at first blush, would appear to be at odds with the Second Department’s August 14, 2013 decision in  Beroza v. Hendler, the subject of Monday’s blog post. There, the appellate court held it was improper for the trial court to have limited the base child support obligation of the father (the less moneyed spouse) to less than his pro rata share of the first $400,000 in combined parental income.

Any comparison, however, must be clouded by the vast number of factors that Justice Silber considered when deciding all of the issues incident to the parties’ divorce.

In A.C. v. J.O., at the time of the commencement of the divorce action in May, 2011, the parties had been married for almost 13 years. They had two children, a daughter now 12 and a son now 10. The parties were still living together. The wife, 52 years old, had her own dental practice, with income stipulated to be $251, 395. The husband, 47, worked as a first assistant director, primarily for television. He also wrote screenplays and recently made a full length film, which he both wrote and directed. The husband’s income was stipulated to be $171,706.

In a lengthy opinion, Justice Silber awarded the mother both physical and legal (decision-making) custody of the two children. Although both parents could handle parenting responsibilities alone, joint custody was not appropriate as the parents’ “cannot easily agree upon anything.” Justice Silber provided a detailed plan for the father’s “parental access” and consultation on major decisions.

Continue Reading No Child Support Awarded Upon Combined Parental Income in Excess of $136,000 Statutory Cap

Two published decisions last week ruled on the whether to award child support upon combined parental income in excess of the base child support amount. In the first, the Second Department in Beroza v. Hendler, found it was an improvident exercise of discretion for the trial court to have capped the parties’ combined parental income at $255,000.00. On appeal, the Second Department increased the cap to $400,000.00 and awarded the mother the father’s pro rata portion of that capped amount.

In the second case, A.C. v. J.O. (to be the subject of Wednesday’s blog post), Acting Kings County Supreme Court Justice Debra Silber, determined that although the parents had net combined parental income of $423,100.00, the father’s child support obligation would be limited to his pro rata share of the $136,000.00 cap.

In Beroza, the father had commenced this divorce action in 2001 after 11 years of marriage. At that time the oldest of the parties’ three children was 4½ years old and their twins were 18 months old. The parties were both educated professionals. The father was a veterinarian with a private practice devoted to horses and a related horse-boarding business and the mother was a partner in a group anesthesiology practice. Both parties worked throughout the marriage. the family enjoyed an affluent lifestyle in Laurel Hollow.

Underlying the parties’ 2008 divorce judgment, Nassau County Supreme Court Justice Ira Warshawsky imputed gross annual income to the father of $259,100.00. The father’s base annual child support obligation was fixed at as 29% of $200,000.00, or $4,833.33 monthly.

On the husband’s appeal from the 2008 judgment, the Second Department agreed with amount of the father’s imputed annual gross income, but remitted the matter to the Supreme Court because it had failed to properly set forth the parties’ pro rata shares of child support. Additionally, the lower court failed to adequately explain its application of the “precisely articulated, three-step method for determining child support’” pursuant to the Child Support Standards Act (Beroza v Hendler, 71 AD3d 615, 617, 896 N.Y.S.2d 144 [2010]).

On remittitur, Justice Warshawsky re-determined the parties’ respective annual net C.S.S.A. incomes to be $248,721.00 for the father and $487,693.00 for the mother, for net combined parental income of $736,414.00. However, for the purpose of determining the plaintiff’s child support obligation, the court capped combined parental income at $255,000.00.

Justice Warshawsky found that $255,000.00 adequately reflected a support level that met the needs and continuation of the children’s lifestyle, as dictated by the past spending practices of the parties. Justice Warshawsky applied the 29% statutory percentage to combined parental income capped at $255,000.00 ($73,950.00 total support obligation), and the calculated that the husband’s 33.7% pro rata support obligation at $24,921.00, annually, or $2,076.75, monthly.

The Second Department modified. Although he had articulated his analysis pursuant to the three-step method for determining child support embodied in the C.S.S.A. guidelines, Justice Warshawsky, the appellate court held, improvidently exercised his discretion in capping the parties’ combined parental income at $255,000.00.

Continue Reading $400,000 Combined Parental Income Cap Imposed by Second Department when Determining Father's Child Support Obligation

In determining how to allocate college expenses between parents, a court must impute income to a parent for any payment of those expenses by the family of that parent. Such was the holding of the Appellate Division, Second Department, in its July 31, 2013 decision in Kiernan v. Martin.

The facts are not made clear in the opinion. However, the father had testified he received funds from his family to pay for the children’s college expenses. These funds were not loans that the father was obligated to repay.

Putnam County Family Court Support Magistrate Rachelle Kaufman ignored these funds when allocating 67% of the college expenses for the parties’ children to the mother and 33% to the father. (The mother was also directed to pay the father $28,210.02 in arrears for college expenses.) Putnam County Family Court Judge James T. Rooney denied the mother’s objections to that order.

The Second Department reversed, holding that although the record supported the conclusion that the mother should share in the college expenses of the subject children, the Support Magistrate improvidently exercised her discretion by failing to impute additional income to the father for the money he received from his family for the children’s college expenses.

The Second Department vacated the order and remitted the matter to the Family Court for a new determination of the parties’ respective obligations to pay college expenses. That determination is to follow a report from the Support Magistrate on the amount of money the father received from his family members for the children’s college expenses.

The Second Department mandated that gifts targeted to pay for college made by the family of a parent be deemed income to that parent.

One-of-a-kind are not the type of regularly-received gifts normally imputed as income to the recipient for child support purposes. The impact, here, of the mandate is not clear.

Suppose the father makes $30,000 per year; the mother $60,000. Suppose further that the father’s parents make a gift of $30,000 towards the child’s $50,000 in expenses to attend a private college for freshman year.

Is the import of this decision to mandate that the father be deemed to earn $60,000 per year, with the remaining $20,000 of college expenses for the year (after applying the grandparents’ $30,000 gift) thus to be divided 50/50, or $10,000 to each parent? Why penalize the father? Should the $30,000 given by the father’s parents be subtracted from the expenses for the year, with the remaining $20,000 in expenses allocated 67% to the mother and 33% to the father? Or, after deeming the father to earn $60,000 per year, and allocating expenses between the parents 50/50 (or $25,000 to each parent), does the father then get to apply his parents’ $30,000 gift against his $25,000 share (and carry forward the extra $5,000 to the next year)?

Why, as the Second Department ruled, should the mother benefit from this special gift from the children’s grandparents? Was it really an abuse of discretion for Magistrate Kaufman to rule that the mother should not so benefit?

Do the parents have to go back to court the next year for a new allocation when the grandparents decide not to repeat their gift? Does a court presume that this gift is available every year? If grandparents intend to make such a gift, should they wait until a court has made its decision on allocation, and only then give funds defraying their child’s share of the grandchild’s expenses?

In Kiernan,  Hugh B. Ehrenzweig, of White Plains, represented the mother. Mitchell Lieberman, of  Lieberman & Lebovit, of Yorktown Heights, represented the father.

In his January 7, 2013 decision in Gluck v. Gluck, Nassau County Supreme Court Justice Daniel R. Palmieri, determined that the wife pay 80% of the counsel fees incurred by the husband, as such reflected the wife’s pro rata share of the parties’ total income.

Following a 13-day trial, the parties agreed that the Court would consider the legal fee applications of  both parties on submitted papers. The defendant-husband (the less-monied spouse) sought $125,000.00 in counsel fees under Domestic Relations Law §237 for services rendered by the two law firms that had represented him consecutively in this action.

Justice Palmieri noted that earlier, and after the Court issued its Decision and Order on the issues of custody and parental access, the parties had entered into a stipulation regarding child support and certain holidays. Certain child care expenses were apportioned 80% to the wife and 20% to the husband. The Court adopted those proportions as appropriately based on the incomes of the parties (approximately $360,000.00 and $90,000.00, respectively).

In opposition to the husband’s application, the wife contended that the husband’s obstructionist tactics and unreasonable demands unnecessarily prolonged and delayed the action, going to trial and unreasonably refusing to settle. This, the wife claimed, unnecessarily added to her own counsel fees which were in excess of $200,000.00.

Neither party claimed that the bills of opposing counsel were excessive or not reflective of work performed.

Mary Ann Aiello, Esq., the husband’s latter attorney, conducted the trial and negotiated stipulations in March 2012 regarding the sale of the marital residence and in August 2012 on the issues of equitable distribution and maintenance. After the trial of the remaining issues, the parties settled the issue of child support and certain holiday visitation.

Continue Reading Divorce Counsel Fee Awards: Beware Formulaic Approaches

Bigamy.jpgDistinguishing the 2009 Court of Appeals decision in Mahoney–Buntzman v. Buntzman, the Second Department, in its October 24, 2012 decision in Levenstein v. Levenstein, has held that if marital funds are used to pay pre-marital support arrears, the non-obligated spouse may be awarded a credit towards equitable distribution.

In 1995, before the current marriage, Mr. Levenstein was convicted in the United States District Court for the Eastern District of Virginia, for the failure to pay child support (see 18 USC § 228). Incident to the criminal conviction, he was directed to pay arrears of $132,718.49 to his first wife by July 13, 1995. Mr. Levenstein failed to fully satisfy that obligation by that deadline.

Thereafter, the husband remarried twice. The second remarriage took place four years after the criminal conviction, but before the husband secured a divorce from his second wife. During the purported third marriage, the husband paid the remainder of his criminal restitution obligation, and made additional child support payments to his first wife that became due during the purported marriage.

In 2006, the third wife sought an annulment for bigamy. In 2008, grounds were established and a trial was held to determine the apportionment of the putative marital debt. In a decision dated February 25, 2009, now-retired Rockland County Supreme Court Justice Alfred J. Weiner awarded the wife a credit of 50% of the marital funds used to satisfy premarital maintenance and child support obligations that the defendant had paid to his first wife, including the amounts due under the criminal judgment. A judgment of annulment was entered in April, 2009.

One month later, in May, 2009, the Court of Appeals held in Mahoney–Buntzman v. Buntzman (12 N.Y.3d 415) that a spouse is not entitled to a credit for marital funds paid to a former spouse or a child pursuant to an order of maintenance or child support.

Based on Mahoney–Buntzman, Mr. Levenstein moved for a reconsideration of the decision which had granted the 50% credit. Justice Weiner granted the husband’s motion and denied the credit. The putative marital debt was reapportioned accordingly.

On appeal, the Second Department reinstated the credit. The appellate court noted that in Mahoney–Buntzman, the wife had sought credit for maintenance payments made to the husband’s former spouse that had become due and were paid during the marriage. In holding that such payments were not subject to recoupment by the wife, the Court of Appeals reasoned that maintenance obligations to a former spouse and to children pursuant to a support order “are obligations that do not enure solely to the benefit of one spouse.” Nevertheless, the Court of Appeals cautioned:

This is not to say that every expenditure of marital funds during the course of the marriage may not be considered in an equitable distribution calculation. … There may be circumstances where equity requires a credit to one spouse for marital property used to pay off the separate debt of one spouse or add to the value of one spouse’s separate property.”

Continue Reading Payment of Husband's Pre-marital Support Arrears Results in Equitable Distribution Credit to the Wife