For what expenses will a support payor (here, the husband) receive credit against the retroactive support award made incident to the final divorce determination?
The Second Department clarified the rules in its May 14, 2014 decision in McKay v. Groesbeck.
Six years earlier (!), on a prior appeal (Groesbeck v. Groesbeck, 51
Two decisions within the last 10 days confirm the need for agreements relating to support to be in (an acknowledged) writing, and then incorporated in a court order.
In one, the Second Department affirmed the award of maintenance arrears without a hearing despite the claimed reduction of maintenance under an oral modification of the parties’ separation agreement. In the second, Albany County Family Court Judge W. Dennis Duggan directed a father to pay 71% of his older son’s private middle school expense, despite the mother’s conceded agreement to pay the full tuition.
In its January 30, 2103 decision in Parker v. Navarra, the Second Department affirmed the award of maintenance arrears by Dutchess County Supreme Court Justice James V. Brands. The ex-husband alleged that he and his ex-wife had orally modified the maintenance provisions of their separation agreement and, alternatively, that the ex-wife should be equitably estopped from enforcing the maintenance provisions of the separation agreement. The ex-husband had requested an evidentiary hearing so that he could present the testimony of witnesses on those issues. Justice Brands denied the request for an evidentiary hearing, awarding arrears on the basis of the parties’ submissions.
The Second Department affirmed, noting that the ex-husband failed to make a showing sufficient to entitle him to a hearing on this issue:
Where, as here, the parties’ separation agreement contains a provision that expressly provides that modifications must be in writing, an alleged oral modification is enforceable only if there is part performance that is unequivocally referable to the oral modification. The defendant did not demonstrate that the plaintiff’s acceptance of reduced monthly maintenance payments was unequivocally referable to an alleged oral modification by, for example, demonstrating that consideration was given in exchange for the plaintiff’s alleged oral agreement to accept reduced maintenance payments.
Moreover, to establish a defense of equitable estoppel, the ex-husband was required to have shown that the ex-wife’s conduct induced his significant and substantial reliance upon an oral modification. Again, the ex-husband was required to have shown that the conduct relied upon to establish estoppel was not otherwise compatible with the agreement as written.Continue Reading Support Modification Agreements: Get’em in Writing; Get’em into Court (Part II)
In a January 15, 2013 decision in Alvarado v. Alvarado, Richmond County Supreme Court Justice Catherine M. DiDomenico, held that the husband’s veteran’s and Social Security disability benefits are separate property for purposes of equitable distribution. Moreover, the veteran’s disability benefits could not be considered on a maintenance award. The Social Security benefits could.
As discussed in the comment, below (far more detailed than may be appropriate for this blog), veteran’s disability payments should be able to be considered when making maintenance awards in divorce actions.
In Alvarado, as a result of his military service in the United States Marine Corps prior to the marriage, the husband was now receiving monthly veteran’s disability benefits. The husband successfully argued to Justice DiDomenico that the veteran’s benefits were not to be considered. The Uniformed Services Former Spouse’s Protection Act (USFSPA) declared them to be separate property. 10 U.S.C. § 1408. The Court rejected the wife’s argument that veteran’s disability payments should be considered for purposes of maintenance.
Congress enacted USFSPA in direct response to the 1981 U.S. Supreme Court decision in McCarty v. McCarty, 453 U.S. 210, which had held that federal law as it then existed completely pre-empted the application of state divorce property law to military retirement pay. USFSPA authorized state courts to treat disposable retired pay as marital property. However, Federal disability benefits remained excluded, and any military retirement pay waived in order for the retiree to receive veterans’ disability benefits also remained excluded. Mansell v. Mansell, 490 U.S. 581 (1989).
Justice DiDomenico noted that while the Second Department had yet to address the issue, the Third and Fourth Departments had held that state courts are prohibited from distributing veteran’s disability benefits in an action for divorce. The Court cited Hoskins v. Skojec, 265 AD2d 706 (3d Dept. 1999), leave to appeal denied, 94 NY2d 758 (2000), and Newman v. Newman, 248 AD2d 990 (4th Dept. 1998). Similarly, Justice DiDomenico ruled, Social Security Disability Benefits are separate property and are not subject to equitable distribution. DRL § 236 (B) (1) (d) (2); Miceli v. Miceli, 78 AD3d 1023 (2d Dept. 2010).
However, as Justice DiDomenico held, Social Security Disability Benefits are to be considered by the Court when determining a payor spouse’s ability to pay maintenance, citing Cerabona v. Cerabona, 302 AD2d 346 (2d Dept. 2003). and Carl v. Carl, 58 AD3d 1036 (3d Dept. 2009). Justice DiDomenico also noted that in Carl, it was stated that while disability benefits obtained from other sources may be considered for purposes of maintenance, veteran’s disability payments are precluded from consideration.Continue Reading Considering Veteran's and Social Security Disability Payments in Divorce
Two decisions last month of Queens County Supreme Court Justice Pam Jackman Brown provide insights on how courts might cope with the overlap of the statutory temporary maintenance formula and the payment of marital residence carrying charges.
Yesterdays blog reported upon the Second Department’s November 21, 2012 agreement in Woodford v. Woodford with the First Department in Khaira v. Khaira that the statutory temporary maintenance formula is intended to include the portion of marital residence carrying costs attributable to the nonmonied spouse.
In the November 5, 2012 decision in Liebman v. Liebman, Justice Jackman Brown balanced the factors presented by directing the husband to continue to make the marital residence carrying charge payments, but deducting the full amount of those charges from the presumptive maintenance formula.
The wife had sought an award of temporary maintenance based upon husband’s 2011 W-2 income. The wife also asked that in addition to the calculated temporary maintenance sum, the husband should be directed to continue to pay the maintenance, mortgage and carrying charges on the marital residence.
The Court found that the presumptive temporary maintenance award would be $6,337.70 monthly. However, under the facts presented, Justice Jackman Brown found that the presumptive award would be unjust or inappropriate. Specifically, the Court adjusted the presumptive temporary maintenance award after considering factor: (q) any other factor which the court shall expressly find to be just and proper.
The Court noted that the statute is silent regarding whether the Court shall order the presumptive maintenance award in proceedings in which the payor spouse has agreed or is directed to maintain the mortgage and/or carrying charges on the marital residence. In Liebman, it was undisputed that the husband had been paying the carrying charges, including the mortgage, maintenance and insurance, in the sum of $1739.91 monthly.
The Court deducted the sum of $1,739.91 from the husband’s presumptive monthly temporary maintenance obligation $6,337.70, and awarded the wife $4,597.79 monthly. The Court also directed the husband to continue to pay the mortgage, maintenance and insurance on the marital residence.Continue Reading Temporary Maintenance Awards and Marital Residence Carrying Charges: Justice Jackman Brown Weighs In
The statutory temporary maintenance formula is intended to include the portion of marital residence carrying costs attributable to the nonmonied spouse. So concluded the Appellate Division, Second Department in its November 21, 2012 decision in Woodford v. Woodford.
Accordingly, the appellate court vacated so much of Suffolk County Supreme Court Justice James F. Quinn
In its November 14, 2012 decision in Shah v. Shah, the Appellate Division, Second Department, held that Suffolk County Supreme Court Justice Mark D. Cohen did not improperly “double count” the income generated by the husband’s business when he awarded the wife four years of maintenance.
That business was started by the husband and a partner during the marriage, and was purportedly transferred by the husband for no consideration to his partner shortly before commencement of the divorce action. Justice Cohen awarded the wife 30% of the value of the husband’s interest in the business and additionally awarded the wife $4,000 per month for four years.
Among the issues presented on the appeal was whether the income generated by the business should have been considered when making that maintenance award.
Put differently, the question is (or should be) if the income generated by assets has already been “divided,” should that income again be “divided” through a maintenance award.
That issue became focused when the Court of Appeals in Grunfeld v. Grunfeld (94 N.Y.2d 696 [2000]) recognized the inequity of double-counting income, at least when awarding maintenance after the asset value of a license or degree has been divided. In 1985, in O’Brien v. O’Brien (66 N.Y.2d 576), the Court of Appeals had determined that New York would be unique and recognize the enhanced earnings attributable to attaining a license or degree as property to be divided upon a divorce. Earnings enhanced during the marriage through some achievement are an intangible asset capable of being divided.Continue Reading Income Generated by Tangible Assets Divided in Divorce Is Considered on Maintenance Award
Under a 2004 stipulation of settlement that was incorporated, but survived the entry of the judgment of divorce that ended the parties seven-year marriage, the ex-husband/father was to pay $250,000.00 in annual maintenance and $140,000.00 in annual child support emancipated.
The stipulation further provided that the father would be able to apply for a reduction of his child support and spousal maintenance obligations in the event of an “involuntary, substantial, adverse change” in income. Moreover, if a downward modification were to be granted, the parties’ stipulation would be deemed amended to the extent of any relief afforded. The particular provision provided:
Anything herein to the contrary notwithstanding, in the event of an involuntary, substantial, adverse change in the Husband’s income, including income produced by his assets (such as involuntary loss of employment), he shall have the right to make application to a court of competent jurisdiction, which must include a sworn statement of net worth, for an appropriate modification of child-related support and/or spousal maintenance obligations hereunder, and if granted, the parties’ Agreement shall be deemed amended to the extent of any relief afforded on such application.
The September 10, 2012 decision of Westchester County Supreme Court Justice John P. Colangelo in Mark P. v. Teresa P., resolved such an application to reduce his support obligations. The father based his application on the reduction of his annual income from $3.3 million in 2004, when the stipulation was signed to $651,000.00 in 2011, and an anticipated $251,000.00 in 2012. The father, a securities trader, claimed that the reduction in his income was due to “changes in the securities industry, the economy and a general decline in securities’ sales volume . . . .”
The ex-wife/mother contended that the agreement’s support reduction paragraph should be read only to provide the threshold setting the father’s right to apply for a support reduction, but not necessarily to obtain such a reduction. The mother claimed that the provision did not alter the standards for granting a reduction in child support (a substantial unanticipated an unreasonable change in circumstances) or spousal maintenance (extreme hardship).
Justice Colangelo agreed with the mother, and denied relief to the father. Although the Court acknowledged that the parties had “sought” in their stipulation to provide a “less restrictive standard than that provided by prevailing law,” the Court held that the any easing of the standard was “more circumscribed” than the father argued. Justice Colangelo noted that “conspicuous by its absence is any standard to apply once the threshold to apply for reduction was met.” Thus, the Court would apply “well established principles of whether a reduction in amount is warranted.” The father failed to meet that standard.
Justice Colangelo discussed several decisions which honored agreement provisions that only lowered the threshold to apply for relief, but also held that meeting the threshold did not mandate a reduction.
Only by an explicit agreement . . . may the parties successfully substitute a different standard for support payment reduction from the well-worn standards established by statutory and case law.
Continue Reading Divorce Stipulations That Change Court Standards Must Be Precise
What are the support rights and obligations of a couple who have habitually lived often the generosity of their parents?
That was the question Monroe County Suprme Court Justice Richard A. Dollinger answered in his July 23, 2012 decision in G.R.P. v. L.B.P. when determining temporary support.
The divorcing couple have been married for 20 years and have 3 children. Throughout the marriage, they enjoyed a “substantial” lifestyle: a comfortable home, country club and health club memberships, annual vacations in resort communities including skiing in Colorado and winters in Florida.
However, that lifestyle always exceeded the couple’s earned income. The husband had been employed as a photographer in a business owned by his father, but the business stalled and was closed in the last 18 months. The husband claimed $8,470 in annual income as of July 2011. Although the husband held two undergraduate degrees, he never earned significant sums, with annual earnings in 2000-2009 approximating $35,000. The husband provided no evidence of his efforts to find employment, except a “meek statement” of trying to find work as a self-employed photographer.
In considering his obligation to support his family, this court declines to give any significant credence to the husband’s employment efforts. Again, the only reasonable conclusion is that the husband’s parents have financed most of, if not all, the family’s expenses for at least two years, if not significantly longer.
The wife, who also held an undergraduate degree, earned $25,000 annually from her employment.
Nonetheless, the husband in his statement of net worth listed expenses of $94,812 annually. The wife estimated expenses at more than $107,000 annually. Moreover, neither party’s budget included any expenses for the education of the oldest child, now attending college.Continue Reading When Divorcing Parents Live Off Their Own Parents
The premarital agreement of the parties limited their rights to obtain spousal support upon divorce. It also contained a waiver of their rights to counsel fees.
Nevertheless, recently-retired New York County Supreme Court Justice Saralee Evans awarded the wife $6,000 per month in unallocated pendente lite support (an award not specifying how much of it
The rule of law discussed by Monroe County Supreme Court Justice Richard A. Dollinger in Lomaglio v. Lomaglio is undoubtedly correct. An ex-husband may not be required to provide health insurance beyond the period he is required to pay his ex-wife maintenance. The question is was he allowed to correctly apply the law?
With allusions to Gilbert and Sullivan’s H.M.S. Pinafore, Justice Dollinger answered his own question:
When does a trial court judge get to review or opine, expand upon or possibly modify an appellate division ruling? Answer: “hardly ever.”
Domestic Relations Law §236B(8) is straightforward enough. A divorcing spouse may not be required to provide health insurance beyond the support period:
8. Special relief in matrimonial actions. a. In any matrimonial action the court may order a party to purchase, maintain or assign a policy of insurance providing benefits for health and hospital care and related services for either spouse or children of the marriage not to exceed such period of time as such party shall be obligated to provide maintenance, child support or make payments of a distributive award.
So why is Justice Dollinger’s just-published February, 2012 opinion implementing this provision front page news (New York Law Journal 5/21/2012)? It is because 12 years ago, the Appellate Division Fourth Department appears to have held that Mr. Lomaglio would be obligated to provide health insurance to his ex-wife, permanently, although the 18-month period for which he was obligated to provide maintenance to his ex-wife had expired.Continue Reading Did Judge Overrule the Appellate Division to Hold Ex-Husband May Not Be Required to Provide Health Insurance Beyond Period He Is Required to Pay Support to Ex-Wife?