Temporary (Pendente Lite) Relief

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The Second Department seems to have taken another bite out of prenuptial agreements. My March 25, 2013 post asked, Is it Open Season on Prenuptial Agreements? That post discussed the Second Department’s February, 2013 decision in Cioffi-Petrakis v. Petrakis and its December, 2012 decision in Petracca v. Petracca. Both cases affirmed Supreme Court Nassau County decisions setting aside the prenuptial agreements in issue,

Now, in an October 15, 2014 decision in McKenna v. McKenna, the Second Department modified an order of Nassau County Supreme Court Justice Margaret C. Reilly that had granted a husband summary judgment motion declaring the parties’ prenuptial agreement to be valid and enforceable. Justice Reilly had also denied the wife’s motion for an award of pendente lite maintenance and counsel fees.

Holding that summary judgment was not warranted, the appellate court may have increased or changed the burden needed to uphold a prenuptial agreement; changing the role of a contract’s “merger clause.” That clause declares that no factual representations not specifically referenced in the contract may later be used to claim the contract was fraudulently induced. Typically, it is a shield used to protect the agreement from attack.

In McKenna, the Second Department suggests a merger clause may be used as a sword: preventing a court from learning the wife’s actual knowledge of the husband’s finances at the time the prenuptial agreement was entered. As that knowledge could only have come from representations of the husband, the merger clause would bar proof of such representations not referenced by the agreement.Continue Reading It Just Became Tougher To Validate Prenuptial Agreements

A spouse’s pre-divorce judgment death results in the unenforceablitity of divorce action orders, including the automatic orders mandated by Domestic Relations Law §236(B)(2)(b). As a result, Westchester County Supreme Court Justice Paul I. Marx held in his April 17, 2014 decision in A.V.B. v. D.B. that a husband was without a remedy for his wife removing the husband as a beneficiary of her retirment account and life insurance policy.

After 13 years of marriage and two children, the wife commenced this divorce action on September 12, 2012. Pursuant to stipulated Preliminary Conference Orders, it was agreed that the wife would be awarded the divorce on the grounds of irretrievable breakdown, an Attorney for the Child was appointed and the pre-trial schedule was fixed.

On April 22, 2013, the wife committed suicide. During the administration of her Estate, it was learned that on February 14, 2013, while the divorce action was pending, the wife had changed the named beneficiaries on her ING 403(b) account from her husband as her sole beneficiary to the parties’ two children as 50% primary beneficiaries. It was further discovered that on or about March 10, 2013, the wife changed her designation of the husband as the sole named beneficiary on her Prudential life insurance policy to the husband as a 1% primary beneficiary, the parties’ daughter K. as a 49% beneficiary and daughter R. as a 50% beneficiary.

The husband’s counsel then submitted a letter to Justice Marx with a proposed order directing that the named beneficiaries on the wife’s ING account and Prudential life insurance policy revert back to the date of the commencement of the action and directing ING and Prudential to pay out the balance in the wife’s annuity and the “death benefit” under her life insurance policy to the named beneficiaries that existed before the changes were made. At that time, the husband’s lawyer also submitted the supporting affirmation of the attorney for wife’s Estate, declaring that the Estate consented to the proposed order.

Justice Marx declined to sign the proposed order. Instead, the Court scheduled a conference at which the Court directed defense counsel to move by Order to Show Cause. Although no papers were submitted in response to that motion, Justice Marx nevertheless denied it. The relief sought in the motion was not warranted by the law, nor by a good faith extension of the law.

While it is regrettable that Plaintiff violated the automatic orders and seems to have reached beyond the grave to thwart Defendant’s efforts to recover his share of her assets, this Court is unable to remedy the violation in this proceeding.

Continue Reading Automatic Orders, Violated During Divorce Action, Cannot Be Enforced After Pre-Judgment Death

Mid-trial in a “high-end” matrimonial, it was held that the “monied” husband would not be required to continue to pay his wife’s continuing fees. Rather, in his October 10, 2013 decision in Sykes v. Sykes, Manhattan Supreme Court Justice Matthew F. Cooper held that such fees would be paid from $2 million in marital assets; each side to use half of the sum to pay his or her own outstanding and prospective counsel and expert fees, subject to reallocation after trial.

From the divorce action’s commencement in December, 2010, until February, 2013, just before the trial, Mr. Sykes had paid close to $1 million in counsel fees for himself and, voluntarily, for his wife. Then, in March 2013, the wife’s attorneys billed the husband $238,196 for their services rendered that month. He paid that bill in full. In April 2013, during which the first eight days of trial took place, the wife’s attorneys billed the husband $355,329 for their services. In addition, the husband was billed $74,853 for the wife’s experts’ services. Mr. Sykes, then decided he could no longer foot the litigation costs for both sides. He declined to pay the April 2013 bills or any subsequent bills incurred by the wife for her attorneys’ or experts’ services absent further order of the court.

Instead, Mr. Sykes, moved for an order authorizing him to release $2 million from marital funds and evenly share that amount with his wife so that each party could pay his or her own interim litigation expenses. He argued that not only had his income and personal funds significantly declined over the last two years, but that permitting the wife to proceed without “skin in the game” (a phrase attributed to Warren Buffett), enabled her to push forward with the litigation without any concern for its cost or any eye towards settlement.

Ms. Sykes opposed the release of the money for the payment of counsel and expert fees. She maintained that she had “skin in the game” by virtue of having to travel from France to make periodic court appearances; she was every bit as motivated as the husband to reach a fair resolution of the case. Moreover, Ms. Sykes argued that because she had no income other than the husband’s $75,000 monthly interim maintenance and child support support payments, she must be considered the nonmonied spouse. Thus, she was entitled under statutory and case law to have her husband pay her interim legal fees. Moreover, she claimed the law was clear: interim counsel fees must come from her husband’s income and separate funds rather than marital funds so as not to deplete her assets.Continue Reading Wife Given “Skin In The Game” By Having To Pay Her Own Interim Counsel Fees Using Marital Assets

“Chutzpah” may be defined as audacity (wikipedia); or unmitigated effrontery, impudence or gall (urbandictionary.com and dictionary.reference.com). Perhaps Rosemarie B.T. should be pictured in those sources [no, that is not her pictured to the right].

Rosemarie married her second husband, Antony, in a civil ceremony in Beacon, NY, on April 28, 2000. Upon the…

In its September 18, 2013 decision in Abramson v. Gavares, the Second Department briefly reviewed the interplay between prenuptial agreements and interim awards in divorce actions.

In this case, the parties were married in 2004 and hade one child, born in 2006. This divorce action was commenced in 2009 [before the 2010 laws on counsel fees and temporary maintenance].

On the wife’s motion for various relief pendente lite, Nassau County Supreme Court Justice Margaret C. Reilly had awarded the wife $4,250 per month temporary child support, $1,000 per month in temporary maintenance, and a $15,000 interim counsel fee. The husband was also directed to pay 100% of the costs of the court-appointed forensic evaluator and the attorney for the parties’ child.

On appeal, the husband challenged certain parts of the award on the basis of the prenuptial agreement entered into by the parties. The Second Department upheld the awards of child support and counsel fees, but struck the award of temporary maintenance.Continue Reading Second Department Approves Interim Counsel Fee in Excess of Prenuptial Agreement’s Cap, But Reverses Award of Interim Spousal Maintenance

What does a court do with a wife who claims not to have discovered that she was a million-dollar winner of a May 19, 2011 lottery drawing until only days before the ticket would have expired a year later, and 11 months after she was awarded temporary support and counsel fees in her pending divorce action?

Almost a year ago, the media covered the claim of Lolymary Questel, a Queens pre-school teacher, that she discovered her million-dollar lottery ticket in her purse only days before the one-year deadline to produce the ticket to the Lottery Commission would have expired. “I was cleaning out an old bag and found some Lottery tickets,” explained Questel to the Lottery Commission. “I checked the drawing results on the Lottery’s website and realized one of the tickets was a million dollar winner.” Questel, a regular Mega Millions player, spent $1 on a set of Quick Pick numbers for the twice weekly drawing.

Seven months before the drawing, Ms. Questel’s husband had commenced his divorce action on October 28, 2010 (just weeks after New York’s no-fault law went into effect).

On June 22, 2011, 5 weeks after the lottery drawing, Queens County Supreme Court Justice Pam B. Jackman-Brown awarded Ms. Questel temporary maintenance of $127.39 per week and $4,500.00 in interim counsel fees. In April, 2011, less than a month before the drawing, Mr. and Ms. Questel had entered a Stipulation under which Mr. Questel agreed to pay C.S.S.A.-formula interim child support and his then  77% pro rata share of educational, extracurricular, summer camp and unreimbursed health expenses.Continue Reading Wife Wins Million-Dollar Lottery While Divorce Action Is Pending

On the wife’s motion for temporary relief, Supreme Court, New York County Justice Deborah A. Kaplan in Lennox v. Weberman, awarded the wife tax-free maintenance of $38,000 per month, plus the wife’s unreimbursed medical expenses up to $2,000 per month, interim counsel fees of $50,000, and expert fees of $35,000.

By its February 26, 2013 decision, the First Department modified that order, on the facts, to provide that such pendente lite relief would be treated as an advance on the 50 percent of the parties’ joint funds to which the wife is entitled pursuant to the parties’ prenuptial agreement.

Notwithstanding that the wife had waived any claim to a final award of alimony or maintenance in the parties’ prenuptial agreement, Justice Kaplan was entitled, in her discretion, to award pendente lite relief in the absence of an express agreement to exclude an award of temporary maintenance.

As to the amount of the temporary maintenance award, the appellate court found that Justice Kaplan properly applied the new temporary maintenance formula set forth at Domestic Relations Law § 236(B)(5–a)(c)(2)(a). Specifically, Justice Kaplan had listed all 19 of the enumerated factors, explained how 7 of them supported an upward deviation to $38,000 per month from the $12,500 a month in guideline support, and found that $38,000 per month was not “unjust or inappropriate.”Continue Reading Pendente Lite Award Prospectively Charged as an Advance Against Wife’s Share of Marital Property

In order to prevent the foreclosure of the marital residence, a court in a divorce action, and prior to judgment, may order the spouses to cooperate with a refinance application. Moreover, if the property is not successfully refinanced, the court, before divorce judgment, may compel a spouse to satisfy (at least) one half of the current mortgage in default.

Such was the holding of the Appellate Division, First Department, in its January 3, 2013 decision in Nederlander v. Nederlander. That decision unanimously affirmed the Order of New York County Supreme Court Justice Deborah A. Kaplan.

In this case, the bank was planning to foreclose on the marital residence. Until the wife made her motion, below, the husband had failed to submit a requested application and financial information to the bank. This was months after such was requested by the bank, and months after the wife submitted her information and application to the bank. The appellate court would not speculate whether the husband’s actions, which in effect contributed to the foreclosure, were by design or neglect.

The First Department based the authority to grant the wife her requested relief on Domestic Relations Law §234. That section empowers the court to determine questions of title to property and to “make such direction, between the parties, concerning the possession of property, as in the court’s discretion justice requires having regard to the circumstances of the case and of the respective parties.”Continue Reading Husband in Divorce Action Ordered to Refinance Home, or Pay Off Half of Mortgage Balance