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.

Is a child who leaves one parent’s residence to live with the other “constructively emancipated,” depriving the new residential parent of child support relief? In its May 30, 2018 decision in Root v. Root, the Appellate Division, Second Department, said no.

The parties were married in 1992, and have two children together. The parties were divorced in 2012, with the judgment incorporating, but not merging the parties’ stipulation of settlement. The parties had agreed to joint custody of their children, with residential custody to the mother. Pursuant to the judgment, the father was obligated to pay the mother child support and a pro rata share of certain add-on expenses.

In August 2015, the father filed a petition to modify his support obligation. The father argued that the parties’ son had moved in with him and, therefore, he was entitled to an offset against his child support obligation for the amount he was expending to support that child. The mother opposed the petition, arguing that the father was not entitled to an offset because the son was constructively emancipated.

After a hearing, Westchester County Family Court Support Magistrate Rosa Cabanillas-Thompson issued an order in which she found that the child was constructively emancipated, and thus that the father was not entitled to an offset against his child support obligation for the amount he was expending to support that child. Family Court Judge Nilda Morales Horowitz denied the father’s objections to the Support Magistrate’s order, and the father appealed.

The Second Department reversed: the Support Magistrate should not have found that the son was constructively emancipated and that the father was not entitled to an offset against his child support obligation for the amount he was expending to support that child.

The appellate court noted that a child may be deemed constructively emancipated if, without cause, the child withdraws from parental supervision and control. Thus, a child of employable age and in full possession of his or her faculties who voluntarily and without cause abandons his or her home, against the will of the parents and for the purpose of avoiding parental control, forfeits the right to demand support.

Here, however, the mother failed to sustain her burden of establishing that the parties’ son was constructively emancipated. The son’s move from one parent’s home to the other parent’s home did not constitute constructive emancipation, as [the son] was neither self-supporting nor free from parental control.

Accordingly, the matter was remitted to the Family Court, Westchester County, for a recalculation of the father’s child support obligation.

Notably absent from the decision was any reference to what the parties’ Stipulation of Settlement did nor did not provide in the event of a change of residence of a child. Was the change of residence deemed an emancipation event? Did the Stipulation contemplate the event? Also, why would the relief be an offset based upon what the father was “expending to support that child?” Why would there not be a redermination based upon offsetting C.S.S.A. presumptive formula awards?

Daniel L. Pagano, of Yorktown Heights, represented the father; the mother represented herself.

May a non-custodial parent withhold his or her consent from the custodial parent’s efforts to obtain a passport for a child? Apparently not, especially if the need for the passport is for the child to visit an ailing grandparent.

In Snowden v. Snowden, a June 6, 2018 decision of the Appellate Division, Second Department, the parties’s June 27, 2016 divorce judgment was entered upon the father’s default. The judgment provided that the mother would have custody of the parties’ minor child, and the father would have physical access.

Following the divorce, the mother attempted to obtain a passport for the child so that the child could visit her ailing maternal grandmother in South America. However the father refused to provided his needed consent and thus, the mother was unable to obtain the passport.

As a result, and within three months of the entry of the divorce judgment, the mother filed a petition pursuant to Family Court Act Article 6, seeking to modify the judgment of divorce so as to award her sole legal and residential custody of the child and to permit her to obtain a passport for the child. Following a hearing, Suffolk County Family Court Ct. Atty. Ref. Colleen M. Fondulis granted the mother’s petition. The father appealed.

The Second Department affirmed. The Court held that Referee Fondulus had properly determined that a change in circumstances sufficient to support a modification of the judgment of divorce was established by the mother’s inability to obtain a passport for the child so that the child could visit her maternal grandmother and the father’s refusal to consent to the mother obtaining the passport. The totality of the circumstances justified the modification so as to award the mother sole legal and residential custody of the child and to permit her to obtain a passport for the child in order to protect the best interests of the child. Accordingly, the Second Department held the determination of Referee Fondulus was supported by a sound and substantial basis in the record and would not be disturbed.

It is not clear what practical changes were caused by the change in the custody award itself, as the mother had had legal and primary residential custody under the divorce judgment. However, it is clear that to withhold consent to a passport application, a parent should have a substantial reason.

Kevin G. McClancy, of Central Islip, NY, represented the mother. Gina M. Scelta, of Huntington, represented the father. Jordan M. Freundlich, of Lake Success, NY, served as attorney for the child.

What is the effect of a divorce settlement stipulation provision, incorporated in the judgment of divorce, that calls for a specified reduction in child support upon the emancipation of one of the children of the parties?

The fact pattern is almost routine. For example, say the parties have three children, 14, 17 and 19. Their divorce settlement tracks the C.S.S.A. Upon the first emancipation (presumably when the 19-year old turns 21, or, perhaps graduates college according to the definition of emancipation in the agreement), the stipulation provides that the child support obligation will go from $2,900 per month to $2,500 per month (tracking the reduction in the formula obligation from 29% for three children to 25% for two children). Assume the full stipulation is incorporated by reference into the parties’ divorce judgment.

Continuing the example, assume that upon the first emancipation, the child support payor in fact reduces his/her payment from $2900 to $2500, but does not have that reduction established by a new court order. A year later, the support recipient goes into court to seek 12 months of $400/per/month arrears. What happens?

Consider last month’s decision of the Appellate Division, Second Department, in Beckmann v. Bedckmann. There, the parties’ 2012 divorce judgment incorporated, but did not merge with, their 2011 stipulation of settlement. The parties had agreed that the husband would pay $700 semi-monthly in basic child support for their two children. In April 2013, the parties’ daughter became emancipated under the terms of the stipulation, and shortly thereafter, the husband reduced his child support payments from $700 to $476 semi-monthly [I am going to dangerously assume that an agreement that defined emancipation would also provide what was to happen on emancipation].

Continue Reading Divorce Settlements that Provide for Reductions in Child Support upon Emancipation

In its March 21, 2018 decision in Elkins v. Mizrahi, the Appellate Division, Second Department, struck a credit issued at the time a father’s new child support obligation was established. That determination tacitly affirmed the new obligation, after a lower court found that a prior waiver of future child support, to which both parties had stipulated, violated public policy. However, the same lower court had previously discharged prior arrears and terminated the father’s support obligation in the order entered that had incorporated that prior stipulation of the parties.

The parties, who have three children together, were divorced in March 2008. In 2014, the parties entered into a stipulation whereby they agreed, inter alia, that the father would pay the mother a lump sum of $50,000.00 in full satisfaction of his accrued child support arrears, which, at that time, exceeded $70,000.00, and that the father’s child support obligation would be terminated going forward. The mother received the $50,000.00 payment on November 21, 2014.

In an order dated January 29, 2015, Nassau County Family Court Judge Ellen R. Greenberg gave effect to the stipulation, terminated the father’s future child support obligation, and directed that the father’s remaining child support arrears of $21,385.46 be deemed satisfied.

Continue Reading Waiver of Future Child Support Voided, But Miscalculated Credit Struck

What happens on divorce when during the marriage, the marital residence that had been owned by one spouse prior to the marriage is conveyed during the marriage to the parties jointly? That was the issue addressed by the Appellate Division, Second Department, in its decision this month in Spencer-Forrest v. Forrest.

The parties were married on March 31, 1984. There were no children of the marriage, but children from each of the parties’ prior marriages resided with the parties in the marital residence during the children’s respective minorities. Both parties were employed for the majority of the marriage, and the wife provided care for the husband’s children, who were younger and resided in the marital residence longer than her children.

The husband had purchased the marital residence prior to the marriage, and transferred the property to himself and the wife as joint tenants in 1989. Other than the marital residence, the parties’ assets were held in their respective names. Both parties contributed to the household expenses, although the husband contributed a larger sum to household expenses and maintenance of the marital residence, and the wife ceased financial contributions in 2006 or 2007, after she retired.

In August, 2012, the wife commenced this action for a divorce and ancillary relief. The wife was 68 years old and the husband was 67 years old at the time of trial.

Except for the marital residence, Nassau County Supreme Court Justice Stacy D. Bennett divided the marital property) equally (other than the vehicles and personal items) regardless of the party holding title. As to the residence, Justice Bennett awarded the wife 20% of the appreciation in the value of the marital residence from 1989 (when the husband conveyed the home to the parties jointly) through the date of the commencement of the action, an award amounting to $30,000. The court declined to award the parties credits sought for assets allegedly secreted or wasted by the other party and denied the wife an award of maintenance.

Continue Reading When One Spouse Transfers Sole Title to the Home to Both Spouses Jointly