Particularly in the Second Department, the last few years have brought a host of cases threatening the enforceability of prenuptial agreements. To review a few just type “prenup” in the keyword search at right. It’s going to get worse.

New York’s Domestic Relations Law §236(B)(3) provides that prenuptial and other marital agreements executed with proper formalities are valid and may include

(1) a contract to make a testamentary provision of any kind, or a waiver of any right to elect against the provisions of a will;

(2) provision for the ownership, division or distribution of separate and marital property;

(3) provision for the amount and duration of maintenance or other terms and conditions of the marriage relationship, subject to the provisions of section 5-311 of the general obligations law, and provided that such terms were fair and reasonable at the time of the making of the agreement and are not unconscionable at the time of entry of final judgment;

and (4) provision for the custody, care, education and maintenance of any child of the parties, subject to the provisions of section two hundred forty of this article.

The December 24, 2014 decision of the First Department in Anonymous v. Anonymous, is a case in point.

In this matrimonial action the wife had sought, among other things, to set aside the parties’ prenuptial agreement.Ruling on several motions, Supreme Court, New York County Justice Ellen Gesmer upheld the validity generally of the the prenuptial agreement, but held the issue of the current unconscionability of the spousal support provision would be resolved at trial.

Continue Reading Litigating Prenuptial Agreements Is Going To Get Messier

The second of four decisions this month with an international flavor was also decided by New York County Supreme Court Justice Ellen Gesmer.

In M v. M, 2014 N.Y.Misc. Lexis 3201, decided July 3, 2014, Justice Gesmer again voided a marital agreement, this time applying the laws of Spain and the Dominican Republic.

On June 27, 2001, one year and five months before their marriage, the parties signed an Agreement in Madrid, Spain, that purported to govern the disposition of property in the event of marriage and divorce. As with the Agreement in J.R. (see yesterday’s blog post), it provided that the parties would marry in a system of absolute separation of property.

At the time of the Agreement, the wife, born in the Dominican Republic, had Italian citizenship and was a domiciliary of Spain. The Husband is a citizen of Spain.

The parties were married in the Dominican Republic on December 12, 2002. Their marriage certificate, and the certification issued by the Office of Vital Statistics from the local government district, so listed the husband as a Spanish citizen, domiciled in Spain, and the wife as an Italian citizen, domiciled in Spain.

The wife commenced this divorce action in New York in 2012. Seeking now to invalidate the Agreement, the wife alleged that she never read the Agreement before signing it, that no one else read it to her, and that no formalities, particularly an oral recitation of the Agreement, were conducted when it was signed. She claimed that the husband brought her to the office of his attorney, and asked her to sign an accounting document drafted by his attorney to help him protect assets from business dealings. She claimed she never saw the document before the evening she signed it, and never saw or discussed it with the husband again until he raised it after commencement of this action. The husband disputed the wife’s claimed lack of awareness of the contents and significance of the Agreement.

Continue Reading Melting Pot (Part 2 of 4): Prenuptial Agreement Voided Applying the Laws of Spain and the Dominican Republic

Among the challenges for the matrimonial bench and bar is the need to become instantly familiar with any type of business and any family situation. Applying the ever-changing New York family law to matters routine and novel is a Herculean task, worthy of  Dwayne “the Rock” Johnson’s IMAX 3D movie opening this weekend.

New York’s cosmopolitan population often presents still another layer of law and fact through which our judges must navigate. Four decisions this month reveal the breadth and complexity of those international issues.

In a July 21, 2014 decision in J.R. v. E.M.New York County Supreme Court Justice Ellen Gesmer decided to apply New York law to set aside a marital agreement for its failure to meet New York formalities, although the procedure followed in the Spanish Consulate where it was signed may have been far better able to achieve the goals New York’s formalities were designed to achieve.

On March 3, 2004, the day after they were married in New York City, the parties signed a “Matrimonial Property Agreement” before the Spanish Consul at the Consulate in New York City.

The wife is a Peruvian citizen; her husband is a Spanish citizen. Justice Gesmer noted that both parties are well-educated and accomplished native Spanish-speaking professionals, both currently employed by the United Nations.

After commencing her divorce action in 2013, the wife moved to set aside the marital agreement. She claimed that although the Agreement had been drafted before the parties went to the Consulate, she did not first see it until arriving at the Consulate on March 3, 2004.

Continue Reading New York: The Divorce Melting Pot (Part 1 of 4)

Count the overnights. “Legal” custody or decision-making power does not matter. Child Support is only payable to the parent with the children the majority of the overnights. If overnights are equally shared, the parent with the higher income is deemed to be the noncustodial parent for C.S.S.A. purposes.

Such is the rule of law made clear in two recent Appellate Division cases. In its June 28, 2013 decision in Leonard v. Leonard, the Fourth Department held that despite  the father having sole legal custody, as parenting time was equally shared and the father had the higher income, the father would be deemed the noncustodial parent and obligated to pay child support.

In Rubin v. Della Salla, an April 18, 2013 decision of the First Department, where each parent had spheres of decision-making, it was held that the father with whom the child spent 56% of the overnights could not, as a matter of law, be ordered to pay child support under the C.S.S.A.

In Leonard, upheld the decision of Monroe County Supreme Court J.H.O. to award the husband sole legal custody. The wife sought joint legal custody, bu the Fourth Department agreed that the parents’ acrimonious relationship and inability to communicate effectively with respect to the needs and activities of the children made joint custody not feasible. Moreover, the J.H.O. did not abuse his discretion in failing to split decision-making “zones of influence.”

The Fourth Department, however, held that it was error for the J.H.O. to award child support to the husband. Child support should have been awarded to the wife. As the residency arrangement was shared, and neither parent had the children for a majority of the time, the party with the higher income was to be deemed to be the noncustodial parent for purposes of child support.

Here, the residency schedule affords the parties equal time with the children. Inasmuch as the husband’s income exceeded that of the wife (at the time of trial, the husband earning $134,924.48 annually, with the J.H.O. imputing income of $25,000 to the wife), the husband was the “noncustodial” parent. As such, he must pay child support to the wife.

The Fourth Department acknowledged that the authority presented by the wife involved awards of joint legal custody, whereas the husband, here, was awarded sole legal custody. That fact, however, should not affect the child support determination.

Although the award of sole legal custody to plaintiff allows him to make important decisions in the children’s lives, that decision-making authority does not increase his child-related costs. A parent’s child-related costs are dictated by the amount of time he or she spends with the children.

Continue Reading Parenting Time, Not Legal Custody, Determines Entitlement to Child Support

Prenup.jpg

When your lawyer tells you that you are about to make a really bad deal, you disregard that advice at your peril.

That is one lesson to be learned from a split-decision of the Appellate Division First Department in its April 17, 2012 decision in Barocas v. Barocas. The court affirmed a decision of Supreme Court New York County Justice Ellen Gesmer which for the most part denied a wife’s attack on the prenuptial agreement she signed with her future husband in 1995.

Their marriage two weeks after the agreement was signed is now ending in divorce. Under the parties’ agreement, Deborah Barocas will not receive any maintenance (personal support). (The agreement contained no provision regarding the support for the parties’ two children.) Moreover, under the agreement, Deborah will also not share in any property accumulated by Victor during the marriage. Indeed, the agreement provided that Deborah would forfeit any gifts or jewelry she had been given by Victor before and during the marriage. Over their 15 years of marriage, Victor accumulated some $4,600,000 in assets, while Deborah had only $30,550 in an I.R.A.

Deborah was born in Guyana, the second of seven children. She arrived in the United States in 1981, at the age of twenty-one. She obtained a GED in 1982, and worked menial jobs. In 1989, she worked part-time as a receptionist for Victor’s family business. While working there, the parties began to date. In 1993, she moved into Victor’s Sutton Place apartment. Other than sporadic attempts at small business ventures, Deborah did not work outside the home for the duration of the marriage. She has no further education and no special skills.

Now attacking that agreement, Deborah noted that she has no other assets or sources of income. She alleged that she can no longer work, as she is now 50 years old and that her husband had thwarted her efforts to get a college education and pursue a career during the marriage.

The three-judge majority of this five-judge appellate court upheld Justice Gesmer’s decision to uphold the property division provisions of the prenuptial agreement. With regard to those provisions, Deborah Barocas failed to establish that her execution of the agreement was the result of inequitable conduct on her husband’s part. Rather, the parties fully disclosed their respective assets and net worth.

Moreover, the agreement was reviewed by independent counsel. Indeed, Deborah’s own lawyer admittedly had told her that the agreement was “completely unfair” and advised against signing it. The fact that the husband’s attorney recommended the wife’s attorney, and that the husband paid Deborah’s counsel’s fees, was insufficient to demonstrate duress or overreaching sufficient to base an attack upon the agreement.  Still further, the claim that Deborah believed that there would be no wedding if she did not sign the agreement, that the wedding was only two weeks away and that wedding plans had been made, was an insufficient basis to attack the agreement on the grounds of duress.

Although application of the provisions would result in plaintiff [husband] retaining essentially all the property, courts will not set aside an agreement on the ground of unconscionability where inequitable conduct was lacking and simply because, in retrospect, the agreement proves to be improvident or one-sided . . . . The circumstances surrounding the execution of the agreement disclose no issue of fact as to whether there was overreaching. We therefore adhere to the general rule that “‘[i]f the execution of the agreement . . . be fair, no further inquiry will be made’. . . .

Continue Reading Signing a Prenuptial Agreement Against the Advice of Counsel Bars Subsequent Attack

square peg2.jpgThere is a gap in New York’s child support statutes. They do not contemplate a custodial parent paying support to a non-custodial parent.

The Family Court Act does declare that both parents are chargeable with the support of their children. Moreover, the Family Court Act does not make a distinction between the “custodial” and “non–custodial” parents when declaring that parents of a child under the age of 21 years ,“if possessed of sufficient means or able to earn such means, shall be required to pay for child support a fair and reasonable sum as the court may determine.” F.C.A. §413(1)(a). (The Domestic Relations Law contains no such preamble to its section providing for an award of child support within matrimonial actions.)D.R.L. §240(1-b).

However, those same Family Court Act and the Domestic Relations Law provisions provide that awards of child support “shall″ be made “pursuant to the provisions” of those subdivisions. The subdivisions, then, set out the presumptive formula to determine awards of child support. The presumptive formula is to be varied only in the event the court finds, based upon factors specified, that the “non-custodial parent’s pro rata share of the basic child support obligation is unjust or inappropriate.” In all events, the statutes only contemplate support being paid by the non-custodial parent to the custodial parent.

Although the statutes carefully define many of the terms used, “non-custodial parent” is never defined. Thus, in ever-increasing scenarios, the courts have had to decide who is the “non-custodial.”

In Bast v. Rossoff, 91 N.Y.2d 723, 675 N.Y.S.2d 19 (1998), the Court of Appeals recognized that in most instances, the court can determine the custodial parent by identifying which parent has physical custody of the child for a majority of the time. In cases where the child’s time was divided approximately equally between the parents, the more-monied parent has been deemed the non-custodial parent because such a rule maximizes the benefits realized by the child at both homes. Baraby v. Baraby, 250 A.D.2d 201, 681 N.Y.S.2d 826 (3rd Dept. 1998).

Nonetheless, the best interests of a child may require an award of child support from the custodial parent to the non-custodial parent.

Take, for example, New York County Supreme Court Justice Ellen Gesmer’s February 29, 2012 decision in M.R. v. A. D. In that case, the court denied a father’s motion for summary judgment dismissing a mother’s claim for child support. In a painstaking decisionmade earlier in the case, Justice Gesmer (32 Misc.3d 512, 928 N.Y.S.2d 429) awarded the parents “parallel custody” of their 6-year old son with significant learning disabilities. After a through review of the evidence, and as neither parent was sufficiently better than other parent to warrant an award of sole custody, Justice Gesmer gave the father primary custody during school year, and gave the more permissive and disorganized mother primary custody during summer and other school breaks.

Continue Reading Awarding Child Support to the "Non-Custodial" Parent

women fighting over man.jpgThe First Wives Club appears to be alive and well in New York.

Brooklyn Supreme Court Justice Jeffrey S. Sunshine‘s December 19, 2011 decision in Tawil v. Tawil resolved the application of a second wife (now involved in her own New York County divorce action) to join in the post-divorce judgment proceedings between her husband and his first wife.

Justice Sunshine gave away the ending as he detailed the parties’ background.

Mary Tawil (W#1) and her ex-husband, Evan Tawil were divorced on October 24, 2001. Justice Sunshine pointed out that just four days later, Mr. Tawil married his second wife (W#2). Justice Sunshine also noted that W#2  was the daughter of an attorney who had represented Mr. Tawil on a prior post-judgment contempt enforcement application brought by W#1.

Mr. Tawil and W#1 have two unemancipated children.  Mr. Tawil and W#2 also have two unemancipated children.

On October 15, 2010, three days after New York’s no-fault divorce law went into effect, Mr. Tawil commenced a New York County action for divorce against W#2. In that action, Justice Ellen Gesmer granted W#2 pendente lite relief. By July, 2011, W#2 was seeking a money judgment for $186,000 in support arrears.

Mary Tawil’s (W#1) current application was to hold Mr. Tawil in contempt for the alleged failure to pay some $57,000 in tuition for his children with W#1. W#1 also sought to restrain her former husband from disposing or encumbering the apartment in which W#2 and her children were living, the jewelry Mr. Tawil gave W#2, certain artwork, and to restrain Mr. Tawil from making certain payments towards mortgages and leases.

It was into that proceeding that W#2 wanted to intervene. She claimed that if Justice Sunshine was going make rulings that were going to have effects on her apartment, jewelry, artwork, and other property, she wanted to be heard.

Justice Sunshine said no.  Any final determination of W#1’s applications would solely apply to Mr. Tawil and to his assets. As such, it could not be said that any final determination in Brooklyn would inequitably impact the “current” Mrs. Tawil. W#2 will not be bound by any final determination resulting from W#1’s applications against Mr. Tawil. W#2 may assert any claim she may have against Mr. Tawil in the New York County proceeding irrespective of the ultimate determination made regarding W#1’s  applications.

On the other hand, the Court noted that if a pendente lite sale of assets were to be permitted in the New York County action, Mary Tawil (W#1) must take priority. Mr. Tawil’s obligation to his first family as a matter of law and equity must come first.

Here, the current Mrs. Tawil’s attempt to race to the courthouse to obtain a judgment cannot be used to defeat the strong public policy in favor of priority to support a first family. This is especially true where the current spouse knows, or should have known, of the any [sic] financial obligations existing to the first family.

New York’s highest court made it clear in 2009 that second spouses accept the “baggage” that comes along with the “used” spouse. In Mahoney–Buntzman v. Buntzman, the Court of Appeals held that a spouse was not entitled to a recoupment credit for maintenance payments made by the other spouse to his prior spouse. A divorce trial is not to look back to adjust the asset division because one spouse was paying child support or maintenance throughout the marriage.

[T]he current Mrs. Tawil was, or should have been, fully cognizant that the plaintiff had financial obligations to a first family and, as such, she cannot credibly aver that she was unaware that said obligations would decrease the income and assets available to the subsequent family she built with the plaintiff . . . .  [T]he current Mrs. Tawil has no basis to claim that she will be inequitably affected by [her husband] fulfilling any court ordered financial obligations he owes to the prior Mrs. Tawil and the children of his first family.

Permitting W#2to join the Brooklyn action would not result in fairness to W#1. Her interests and the interests of W#2 are diametrically opposed. Justice Sunshine recognized that permitting W#2 to join the Brooklyn proceeding would almost certainly cause substantial prejudice to W#1 and the children of the plaintiff’s first family, delaying and making unnecessarily complex W#1’s post-judgment enforcement application (this was the 15thpost-judgment application since mid-2001 in the Brooklyn action; there have been 11 motions made in 2011 in the New York County action.)

Note: If a second spouse-to-be wants prior familial obligations to be taken into account in the event of the termination of the second marriage, such should be made the subject of a pre-nuptial agreement.

1040.jpgThe Appellate Division, Second Department, has again told J.H.O. Stanley Gartenstein that it was improper for him to award nontaxable spousal maintenance.

In Siskind v. Siskind, in addition to awarding the wife $65,000 per year in nontaxable maintenance until the wife reached her 65th birthday, J.H.O. Gartenstein equitably distributed the parties’ assets, awarded child support and a $340,000 counsel fee, and secured the husband’s support obligations with a $4 million life insurance policy (reduced on appeal to $3 million).

In its November, 2011 modification of that award, the Second Department recognized the presumption that spousal maintenance should be taxable income to the recipient spouse, and deductible to the payor. The appellate court stated:

. . . there was insufficient evidence justifying the Supreme Court’s direction that maintenance be nontaxable to the plaintiff, which is “a departure from the norm envisioned by current Internal Revenue Code provisions.”

In 2007, in Grumet v. Grumet, the Second Department had modified J.H.O. Gartenstein’s award to the wife of non-taxable maintenance, declaring that in the absence of a stated rationale for a departure from the norm envisioned by the Internal Revenue Code provisions, a maintenance award should be taxable.

Maintenance is appropriately taxable income to the recipient. Baron v. Baron (2nd Dept. 2010), Markopulous v. Markopulos, 274 A.D.2d 457, 710 N.Y.S.2d 636 (2nd Dept. 2000) ; see also Taverna v. Taverna (2008), where the Second Department modified the trial court award by making maintenance taxable. Such may have been the holding because the trial court properly declined to consider the husband’s tax liabilities resulting from the liquidation and distribution of investment accounts incident to equitable distribution, as the husband had failed to offer any competent evidence concerning the liabilities which would be incurred. See Fleishmann v. Fleischmann (2010 Supreme Westchester Co., Lubell, J.)

Continue Reading The Taxability of Spousal Maintenance Payments: a Subject of Inconsistent Court Decisions

Sad child torn picture.jpgIn an effort to help parents in high-conflict decision-making disputes, New York courts are now appointing “Parenting Coordinators.”

Professor Andrew Schepard of the Hofstra University School of Law in his  article, “Parenting Coordinator for High Conflict Parent” N.Y.L.J., 5/8/03, p. 3 col. 1, explained the role of Parenting Coordinator as “a combination educator, mediator and sometimes-therapist who helps parents develop conflict-management skills and decides disputes if they cannot. . . . [B]y supervising parenting and resolving conflict, a Parenting Coordinator helps high-conflict parents develop a tolerable working relationship (usually parallel as opposed to cooperative parenting) for the benefit of their children.”

In her 2007 article “Working with Parenting Coordinators” in the Summer, 2007 issue of the Family Advocate, the publication of the American Bar Association’s Section of Family Law, Eve Orlow, Ph.D., noted that a Parenting Coordinator mixes counseling and parent education with mediation and arbitration.

New York’s 8th Judicial District (the extreme west) has formalized the appointment process. Its court rules note:

Parenting coordination is a child-focused alternative dispute resolution (ADR) process in which a mental health or legal professional with mediation training and experience assists high conflict parents to implement their parenting plan by facilitating the resolution of their disputes in a timely manner, educating parenting about children’s needs. With prior approval of the parties and the court, the PC may make decisions within the scope of the court order or appointment contract.

The overall objective of parenting coordination is to assist parents in high conflict to implement their parenting plan, to monitor compliance with the details of the plan, to resolve conflicts regarding their children and the parenting plan in a timely manner, and to protect and sustain safe, healthy and meaningful parent-child relationships. Parenting coordination is a quasi-legal, mental health, alternative dispute resolution process that combines assessment, education, case management, conflict management and, upon consent, sometimes decision making functions.

New York courts seem to favor therapeutic or forensic evaluation backgrounds, rather than mediation skills and experience. Moreover, as Parenting Coordinators in New York are without final decision-making power, they may simply add another layer to the judicial process; in some instances only fueling the bitterness of one or both parents.

New York’s judiciary securely guards its exclusive power to make custody and visitation decisions.  Thus, in its October, 2011 decision in Silbowitz v. Silbowitz, the Appellate Division, Second Department reminded us that:

Although a court may properly appoint a Parenting Coordinator to mediate between parties and oversee the implementation of their court-ordered parenting plan, a court may not delegate to a Parenting Coordinator the authority to resolve issues affecting the best interests of the children.

Continue Reading Are Parenting Coordinators Too Little, Too Late in Custody and Visitation Disputes?