Counsel Fees

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In its April 10th decision in Angello v. Angello, the Third Department upheld the trial determination that a wife’s refusal to approve a mid-action sale of the husband’s insolvent business constituted a wasteful dissipation of the largest marital asset. Such warranted saddling the wife with half of the business’s debts. It also, in part, justified a downward deviation from the maintenance guidelines but did not warrant an award of counsel fees to the financially-superior husband.

The parties were married in 1989 and had one adult child. The husband commenced this divorce action in 2016, and the trial began in 2019. The marital property at issue included a local, organic grocery distribution business primarily operated by the husband, which had incurred significant debt and had ceased operations by the time of trial. Marital property also included a warehouse associated with the business, as well as the marital residence. At the conclusion of the trial, the parties each moved for an award of counsel fees.

Columbia County Supreme Court Justice Margaret Walsh found that the wife had wastefully dissipated marital assets by refusing to agree to the 2018 sale of the business to one of the marital business’ competitors in exchange for the buyer assuming responsibility for $900,000 in business debt. The trial court valued the business as of the date of trial and directed that the wife be responsible for half of its $995,000 in debt. Justice Walsh also directed that the warehouse be sold and that the sales proceeds net of liens be applied against the remaining business debt. Justice Walsh also directed that the marital residence be sold with the net proceeds equally divided between the parties.

The presumptive amount of maintenance to which the wife was entitled was $914 a month, but Justice Walsh determined that a downward deviation was warranted, directing the husband to pay $305 a month for five years.Continue Reading Wife’s Refusal to Consent to Mid-Action Sale of Husband’s Business is Wastefull Dissipation

In this divorce action, Strauss v. Strauss, the husband had obtained access to wife’s iPad and private text messages. He falsely told her that he did not have the iPad and that it was lost. The husband did provide the text messages to his counsel. However, it was not until two years after the fact that it was disclosed that the husband was in possession of the iPad and text messages They announced that they intended to use the text messages at the parties’ custody trial. The husband did not explain how or why he was legally permitted to retain wife’s iPad without her knowledge, and to access and take possession of wife’s personal data located on her iPad.

The lower court, New York County Supreme Court Justice Deborah A. Kaplan, granted the wife’s motion for sanctions and awarded $180,000.00 in fees to the wife’s counsel, Cohen Clair Lans Greifer Thorpe & Rottenstreich LLP, for the “frivolous conduct” of her husband and his counsel.Continue Reading Husband and Counsel Sanctioned for Taking Wife’s iPad and Keeping Secret for 2 years

In a February, 2019 decision, the Appellate Division, Second Department, foiled the cooperative efforts of previously-divorced parties, by their settlement of post-judgment issues, to avoid an interim fee award to the ex-wife’s counsel to prosecute an appeal.

In Rhodes v. Rhodes, the parties were married in 1993, had three children, and divorced in 2008. In 2013, the ex-husband successfully moved to modify the parties’ custody arrangement and, in a December, 2014 order, was granted residential custody of the children. The ex-wife appealed from that order.

In May 2015, the ex-wife moved for interim appellate attorney’s fees and costs. In an August 25, 2015 order, Former Suffolk County Supreme Court Acting Justice Marlene L. Budd granted that motion, awarding the ex-wife $20,000 in attorney’s fees and costs “for the prosecution of the appeal, with leave to apply for additional sums upon the completion of the appeal.” The ex-husband was directed to pay those attorney’s fees and costs to the ex-wife’s then-attorney, Karyn A. Villar, PLLC (hereinafter Villar), within 20 days of the order.

When payment was not made, on September 23, 2015, Villar moved to hold the ex-husband in civil contempt of the fee order. The ex-husband cross-moved for leave to renew his opposition to the ex-wife’s prior motion for interim appellate attorney’s fees and costs. The ex-husband attached to his cross motion a stipulation of settlement dated September 28, 2015, in which the parties agreed that the ex-wife would waive payment of attorney’s fees and costs owed by the ex-husband pursuant to the August, 2015 order. The ex-wife retained new counsel, and thereafter cross-moved to impose sanctions against Villar, arguing that Villar’s contempt motion was punitive and an abuse of process.

In an order dated March 7, 2016, Suffolk County Supreme Court Justice Carol MacKenzie (1) denied Villar’s motion to hold the ex-husband in civil contempt, (2) vacated the August, 2015 interim fee award and denied a fee, and (3) granted the ex-wife’s cross motion to impose sanctions against Villar, directing Villar to pay the ex-wife’s new attorneys $2,500. Villar appealed.Continue Reading Divorced Parties Foiled in Efforts to Avoid Counsel Fee Award

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

In its July 25, 2018 decision in Cravo 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

In a lengthy, thoughtful August 29, 2017 opinion in S.M. v. M.R., Richmond County (Staten Island) Supreme Court Justice Catherine M. DiDomenico resolved the financial issues incident to the parties’ divorce. Among the issues were those that arose from parties’ family and financial ties to Egypt, the absence of proof on various financial matters, and the wife’s 1999 medical degree in Egypt, all but abandoned since moving to the United States in 2002 resulting in her current need for rehabilitative maintenance.

The final issue tackled by the Court was the wife’s request for an award of counsel fees in the sum of $43,000 for her attorney’s handling of the entirety of this divorce proceeding. The wife based her claim upon the fact that she was the non-monied spouse in this action (D.R.L. §237[a]). In support of her claim, the wife submitted a copy of her attorneys’ retainer agreement, together with legal billing.

The husband objected to any award on the basis of the language of that retainer agreement: the wife and her attorney had agreed to “cap” counsel fees at the sum of $10,000.

You agree to pay Your Attorney for legal services at the rate of $250.00 per billable hour and $750.00 per each half-day appearance in Court by Steven Scavuzzo Esq. The foregoing rates are valid for services rendered in calendar years 2013 and 2014. In the event that such rates are modified you will be advised and requested to execute an amendment reflecting the new rates. Legal fees in this matter shall be capped at $10,000, not including costs, disbursements, post-judgment enforcement and any appeal You wish to pursue.”

The husband argued that this cap should inure to his benefit; that as the wife can never be charged more than $10,000 for the divorce proceeding, as a matter of law he cannot be responsible for any more than that amount. The wife’s attorney should be prohibited from seeking an award of counsel fees by the clear language of his own retainer agreementContinue Reading Husband Benefits From Wife’s Retainer Agreement Cap On Counsel Fees

In its December 14, 2016 decision in Piza v. Baez-Piza, the Appellate Division, Second Department, stated that a father was required to prove a change of circumstances before modifying a prior award of temporary custody. The court also held that where a wife’s attorney did not comply with billing rules, a trial court could not award the wife counsel fees in excess of the retainer amount initially paid by the wife to her attorney.

The parties were married in 1996 and later separated. The husband commenced this action for a divorce in 2010. They have a son, who is now 17 years old.

The parties cross-appealed from their judgment of divorce entered in the Supreme Court, Suffolk County (Marlene L. Budd, J.), that was entered upon a decision after trial of Justice Stephen M. Behar. That decision:

  • awarded the plaintiff custody of the parties’ child;
  • directed the defendant to pay child support in the sum of $293.20 per month;
  • awarded the mother $150 per week for the period of April 26, 2010, through July 11, 2016; and
  • awarded the wife an additional $7,500 in attorney’s fees for legal services provided following an earlier award of $3,500 in attorney’s fees.

Continue Reading The Burden At Trial to Change Temporary Custody Award; Counsel Fees Where Rules Not Followed