May a parent be directed to maintain life insurance in a Family Court support proceeding? Do an aunt and uncle awarded primary residential and, with the father, joint legal custody of his children, share responsibility for the children’s health and education expenses? Such were the questions addressed by the Appellate Division, Second Department, in its September 12, 2018 decision in Lozaldo v. Cristando.

Following the death of the children’s mother, the maternal aunt and uncle were awarded residential custody of the children and shared joint legal custody with the father. The aunt and uncle commenced this proceeding for child support from the father. After a hearing, Nassau County Family Court Support Magistrate Patricia Bannon entered a support order which, inter alia, required the father to pay 100% of the children’s unreimbursed medical and educational expenses, and to maintain a life insurance policy in the sum of $1,000,000, designating the children as irrevocable primary beneficiaries. The father objected to these provisions of the order of support. Family Court Judge Conrad D. Singer denied his objections. The father appealed.

The Second Department agreed with requiring the father to pay 100% of the children’s medical and educational expenses. There was no basis to find the maternal aunt and uncle liable for a portion of such expenses.

Continue Reading Family Court-Mandated Life Insurance | Non-Parent Liability for Health and Education Expenses

Tom Griffiths, psychologist, cognitive scientist and Princeton professor, concludes his TED talk, 3 ways to make better decisions — by thinking like a computer, with the following lesson:

“You can’t control outcomes, just processes; and as long as you’ve used the best process, you’ve done the best that you can.”

Dr. Griffiths has researched the connections between natural and artificial intelligence to discover how people solve the challenging problems they encounter in everyday life. His 2016 book authored with Brian Christian, Algorithms to Live By, illustrates how the algorithms used by computers can inform human decision-making (and vice versa). The book was named one of the Amazon.com “Best Science Books of 2016” and appeared on Forbes’s “Must-read brain books of 2016” list as well as the MIT Technology Review’s “Best books of 2016” list.

In New York, most couples going through a divorce, although aware of litigation and mediation, do not know that they have a choice of a third structured process to unravel the marital relationship and transition the family through the divorce. Most divorcing couples don’t know that they have a chance to apply Griffiths’ lesson and select a process that can reduce the time, cost, anguish and damage that so often accompanies divorce litigation, yet address the shortcomings of mediation.

Continue Reading Divorcing Couples Can Learn a Lesson From Computer Algorithms

Here’s a reminder. Look over the “boilerplate” counsel-fees-on-default provision of your settlement agreements; and re-read them when resolving enforcement proceedings.

Take a lesson from the July 25, 2018 decision of the Appellate Division, Second Department, in Posner v. Posner. There, The parties’ 2010 judgment of divorce incorporated, but did not merge, their stipulation of settlement. That stipulation provided that where one of the parties commences litigation to enforce it, and that litigation does not “result in a judgment or order in favor of the party” who commenced the litigation, that party shall reimburse the other party for any and all expenses, including attorney’s fees.

In 2011, the husband commenced litigation in the Family Court to enforce certain stipulation provisions. Thereafter, the wife filed a contempt motion under a separate docket number. After eight days of trial over nine months, the parties agreed to withdraw their respective petitions with prejudice. The parties nevertheless “reserve[d] all other rights provided for” in the 2010 stipulation of settlement.

In January 2014, the wife filed a motion in the Supreme Court seeking an award of attorney’s fees pursuant to the parties’ 2010 stipulation of settlement for the 2011 Family Court litigation. Westchester County Supreme Court Justice Francis A. Nicolai granted the wife’s motion to the extent of finding that the wife was entitled to an award of attorney’s fees and set the matter down for a hearing as to the appropriate amount. In a judgment entered September 27, 2016, after a hearing, Justice Janet C. Malone awarded the wife a judgment for attorney’s fees in the sum of $224,287. The husband appealed.

Continue Reading Counsel Fees Per Divorce Settlement For Withdrawn Enforcement Proceedings

The prospective husband’s attorney who drafted a couple’s prenuptial agreement was not disqualified from representing the husband in the couple’s divorce action, nor in the action to set aside the prenuptial agreement that had been joined for trial. So held the Appellate Division, Second Department, in its August 15, 2018 decision in Lombardi v. Lombardi. Moreover, it was held that an interim award of counsel fees to the wife was improper.

In 2004 the parties entered into a prenuptial agreement setting forth their rights and obligations in the event of a divorce. The wife commenced this action for a divorce in 2011.

Approximately one year later, the wife commenced a separate action to set aside the prenuptial agreement on the grounds of duress, coercion, undue influence, and unconscionability, and to recover damages for legal malpractice against the husband’s attorney, Dorothy Courten, who had drafted the prenuptial agreement on the husband’s behalf.

On a prior motion, Supreme Court, Suffolk County, Justice Hector D. LaSalle granted the husband’s motion to dismiss the complaint in the second action. On appeal, the Second Department modified that order by denying those branches of the motion which were to dismiss the causes of action alleging fraudulent inducement against the husband and seeking to set aside or rescind the prenuptial agreement on the basis of duress, coercion, undue influence, and unconscionability (see, Lombardi v. Lombardi, 127 A.D.3d 1038, 7 N.Y.S.3d 447 [2015]). However, the award of summary judgment dismissing the complaint insofar as asserted against Ms. Courten was affirmed.

Thereafter, the wife moved to consolidate this divorce action with the second action, to disqualify Ms. Courten and her law firm from representing the husband, and for an award of interim counsel fees. Justice James F. Quinn joined the two actions for trial, disqualified Ms. Courten and her law firm from representing the husband, and awarded the wife $10,000 interim counsel fees.

Continue Reading Attorney-Draftsman of Prenuptial Agreement Not Disqualified; No Interim Counsel Fee

 

JengaOn June 12, 2018, the Court of Appeals in a 5-2 decision, affirmed the ruling discussed below.

It is common in agreements, and often the case in judicial decisions, for the parent paying periodic child support to receive a credit against those payments for college room and board expenses paid by that parent. May parties agree that the credit exceed the amount allocated by the parties to the support of the particular child attending college? No, (probably) said the Appellate Division, First Department, in its April 6, 2017 decision in Keller-Goldman v. Goldman.

The parties entered into a Stipulation of Settlement and Agreement that resolved all issues surrounding their separation. As may be relevant to the court’s determination, although the parties had four unemancipated children, the agreement only provided for support for the three children for whom the wife was deemed the custodial parent (the parties were to share equal time with these three). The husband retained custody of the fourth child, but agreed to receive no support for him from the mother. The opinion noted that had the parties not negotiated the issue of child support, the mother stood to collect $5,000 per month in child support payments, pursuant to the Child Support Standards Act, a fact acknowledged by the agreement. Instead, she agreed to monthly child support payments of $2,500.

Paragraph 10.3 of the parties’ agreement provided for a graduated reduction in the father’s child support payments upon the emancipation of each of the three children. Upon the first emancipation his monthly payment would be reduced by $350 to $2,150 per month; and upon the second emancipation the payment would be reduced to $1,462 per month.

The agreement provide for a room and board credit at paragraph 10.4, immediately following the support reduction schedule:

During the period in which a Child is attending a college and residing away from the residences of the parties and [the father] is contributing towards the room and board expenses of that Child, [the father] shall be entitled to a credit against his child support obligations in an amount equal to the amount [the father] is paying for that Child’s room and board. The credit shall be allocated in equal monthly installments against [the father’s] child support payments.

Continue Reading Uncapped Room and Board Credit Violates Public Policy

In its July 25, 2018 decision in Crago v. Diegel, the Appellate Division, Second Department, affirmed a counsel fee award to a wife, the monied spouse in this divorce action. Supreme Court Kings County Justice Esther M. Morganstern had awarded the wife 55% of her total counsel fees. Upholding the award, the Second Department noted:

In its determination of a counsel fee application, the trial court must consider the relative financial circumstances of the parties, the relative merit of their positions, and the tactics of a party in unnecessarily prolonging the litigation. Although the defendant correctly contends that he is the less monied spouse, the Supreme Court’s award to the plaintiff of 55% of her total counsel fees, upon its determination that the defendant’s obstructionist conduct unnecessarily prolonged the pretrial motion practice and the trial, was not an improvident exercise of discretion.

The Second Department cited Meara v. Meara, 104 A.D.3D 916, 960 N.Y.S.2d 911 (2013) in which the financial circumstances of the parties was not discussed, and Quinn v. Quinn, 73 A.D.3d 887, 899 N.Y.S.2d 859 (2010), in which the parties were described as being on equal footing.

However, a counsel fee award to the monied spouse is contrary the rule in the First Department as announced in Silverman v. Silverman, 304 A.D.2d 41, 47-49, 756 N.Y.S.2d 14, 19-21 (1st Dept. 2003). Below, Supreme Court New York County Justice Marilyn Diamond had awarded the husband $50,000 in attorney’s fees, out of a total of over $ 200,000 incurred, based upon the dilatory conduct of the wife and her then counsel. Eliminating the award, the First Department held:

This award of attorney’s fees was not proper under Domestic Relations Law §237, because awarding attorney’s fees to the monied spouse does not comport with the purpose and policies of that section of the Domestic Relations Law.

Continue Reading Awarding Counsel Fees to the Monied Spouse: Conflict in the Departments

Jerilyn Klein Bier writes “How Advisors Help HNW [High Net Worth] Clients ‘Collaborate’ On Divorce” in the current issue of Financial Advisor, a monthly publication for financial planners, registered investment advisors and independent broker-dealers, She begins with a quote from Danny DeVito, portraying a divorce attorney in The War of the Roses, “When a couple starts keeping score, there is no winning, it’s only degrees of losing.”

Wealth managers “are having more success getting clients to settle their affairs amicably through collaborative divorces that enable splitting spouses to retain more of their wealth for themselves, their kids and their charities. Retaining wealth is particularly important for couples divorcing later in life with significant assets because there’s less time to rebuild wealth and finances before retirement.”

Ms. Bier reports that mediation and Collaborative Divorce are better divorce forums than the courts, providing the family the opportunity for holistic planning and a variety of flexible financial solutions to maintain family wealth.

She tells of Kim Kenawell-Hoffecker, a Pennsylvania Certified Divorce Financial Analyst (CDFA), who works several ways on collaborative divorces. She serves as a financial neutral on collaborative divorce teams for couples who are not clients. Ms. Kenawell-Hoffecker also takes on divorcing or divorced clients to manage their wealth.

But never both. The rules of the Collaborative Process assure the couple that financial and mental health experts will be neutral, in part, by prohibiting the expert from taking on a spouse as a client following the divorce. The Process demands there be no incentive for a neutral expert to favor one side.

Conversely, financial advisors and therapists who represent one or both spouses can be confident referring their clients to the Collaborative Process, because the experts retained to be neutral during the divorce will not “steal” their clients after the divorce.

Ms. Kenawell-Hoffecker also reminds dueling spouses that with the hourly rates being charged for legal fees, that it is easy to quickly blow past the cost of the actual assets the couple is fighting over. Additionally, “the divorce is a tough enough decision to come to,” she says, “without adding salt to the wound.”

A Collaborative Divorce can avoid that, while expanding available solutions to maximize the goals of the couple.

In a divorce, to what extent may a court award property rights to the parties’ cryopreseved embryo?

In its June, 2018 decision in Finkelstein v. Finkelstein, the Appellate Division, First Department, determined that the parties’ agreement with the fertility center they used would control. That agreement enabled the husband to withdraw his consent to the use of the embryo. Accordingly the Court enabled the center to dispose of the embryo as required by that agreement.

The parties were married in 2011. In 2012, they engaged the services of the New Hope Fertility Center (NHF) in the hope of conceiving a child via implantation of cryopreserved embryos in the wife’s uterus. They signed an agreement with NHF entitled “Consent for the Cryopreservation of Human Embryo(s)” (the Consent Agreement) in which the parties agreed “to the cryopreservation of embryos for our own use.”

Paragraph 7 of the Consent Agreement, entitled “Voluntary Participation,” provided, “I/We may withdraw my/our consent and discontinue participation at any time . . . .” Paragraph 16, entitled “Authorization,” provided, “This consent will remain in effect until such time as I notify NHF in writing of my/our wish to revoke such consent.”

After five or six further unsuccessful IVF attempts with NHF, the husband, then 58 years old, filed for divorce and requested sole custody of the one remaining cryopreserved embryo. He also moved to enjoin the wife, then 47 years old, from destroying, using, or preserving the embryo. The husband obtained an ex parte temporary restraining order embodying that relief. However, Supreme Court New York County Justice Deborah A. Kaplan later found that the husband had not demonstrated a likelihood of success on the merits, as there was nothing in the Consent Agreement that would prevent the wife from going ahead with implantation unilaterally. Justice Kaplan issued a preliminary injunction enjoining NHF and the wife from “destroying or transferring the cryopreserved embryo to anyone other than the wife.”

Continue Reading Divorce Award of Frozen Embryo Based on Agreement with Fertility Clinic

If divorcing parties will file their income tax returns jointly, how do you allocate each party’s fair share of taxes? How do you draft an unambiguous provision that spells that out?

Such were among the questions raised by the July 18, 2018 decision of the Appellate Division, Second Department, in Cohen v. Cohen.

There, in October 2013, the parties entered into a settlement stipulation which was incorporated into their 2014 judgment of divorce. Article XIII, paragraph “1,” of the stipulation addressed the parties’ respective liability for their jointly-filed 2013 tax returns: any taxes due were to be “paid by the parties in proportion to their respective income.”

In January 2015, the husband moved to enforce the stipulation by seeking a determination of the wife’s proportionate liability for the parties’ jointly filed 2013 taxes and to direct the wife to pay that sum. In the order appealed from, Supreme Court Nassau County Justice Stacy D. Bennett granted the husband’s motion and determined that the wife was responsible for 11.3% of the parties’ tax liability for 2013, giving the parties credit for any payments already made.

On appeal, the Second Department held that the relevant provision was ambiguous as to how to calculate the parties’ respective income. The appellate court noted that whether an agreement is ambiguous is a question of law for the courts. Moreover, the Second Department held that the parties’ submissions to Justice Bennett were insufficient to resolve the ambiguity.

Continue Reading Drafting an Income Tax Allocation Provision for Returns Filed During the Divorce

Are verbal promises and statements of intention relating to child support enforceable? It is a basic tenet of family law that to be enforceable, agreements between parents must be in writing and acknowledged before a notary; except, it appears, when they don’t have to be.

In Manfrede v. Harris, Nassau County Family Court Support Magistrate Patricia Bannon, S.M., directed a father to pay 61% of the out-of-pocket private college expenses of the parties’ child. Family Court Judge Thomas Rademaker denied the objections of the father to that order. The Appellate Division, Second Department, in its June 27, 2018 decision, affirmed.

The Court noted that a parent may be directed to contribute to a child’s private college education, even in the absence of special circumstances or a voluntary agreement of the parties, as long as the court’s discretion is not improvidently exercised. In determining whether to include such educational expenses as part of the parent’s child support obligation, the court must consider the circumstances of the case, including the circumstances of the respective parties, the best interests of the child, and the requirements of justice . Here, it was not an improvident exercise of discretion for the Support Magistrate to direct the father to pay 61% of the child’s out-of-pocket college expenses, which the Support Magistrate calculated to be his pro rata share based on the parties’ incomes.

Furthermore, it was not an improvident exercise of discretion for the Support Magistrate to decline to impose a SUNY cap in calculating the father’s obligation for the child’s out-of-pocket college expenses. The father had promised to help the child with the cost of attending private college, and the child relied upon that promise in choosing the private college the child was attending.

The Court did not discuss the issue of a room and board credit against the father’s periodic child support obligation. We were not told to what extent the child’s expenses were reduced by grants and scholarships. Student loans were not discussed. The parties’ incomes and net worth were not revealed.

The lesson: when it comes to aiding a child, the rules are very flexible. Here, there was no need for a written promise; no need for an acknowledged agreement; and no need for a Child Support Standards Act recitation.