Temporary (Pendente Lite) Relief

Calulator on 100s 5.jpgThe 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

Palmieri.jpgResolving the rights and obligations of a couple incident to their divorce often involves the delicate balancing of property rights, spousal and child support, and custody and parenting issues. Attempting an orderly resolution in different forums simultaneously may be impossible.

The July 26, 2012 decision of Nassau County Supreme Court Justice Daniel Palmieri in Loike v. Kletenik, shows just how messy things can get. That decision resolved a husband’s application to vacate the award of a Jewish tribunal, a “Beth Din,” and to downwardly modify a Consent Order of support entered October 25, 2010 before Nassau County Family Court Support Magistrate Neil Miller. That order directed the husband to pay bi-weekly support for the three minor children of the marriage.

In the subsequently commenced Supreme Court divorce action, Justice Jeffrey S. Brown issued a pendente lite order that denied a request for temporary child support because the Consent Order was in place. This, Justice Palmieri opined, lent additional judicial force to the terms of the Consent Order and effectively adopted it in lieu of a separate order for temporary child support.

The wife thereafter moved to hold her husband in contempt for his failure to comply with the temporary support order.  However, that contempt motion was withdrawn on March 7, 2011 when the parties entered into a written agreement to arbitrate their financial and other issues before the Beth Din.

After the parties entered that agreement, the Family Court on June 7, 2011 issued a Final Order of Custody and Parenting Time (Stacey D. Bennett, FCJ). However, even though the parties had earlier entered their agreement to arbitrate, the Beth Din arbitrators were not empowered to make final and enforceable decisions about custody and visitation. New York’s public policy requires that such decisions only be made by the secular courts.

On that basis, Justice Palmieri vacated that portion of the Beth Din award that provided that unresolved disputes concerning the children would be referred to a named Rabbi.

A party gives up substantial rights under both substantive law and procedure when electing to arbitrate. Appellate review is all but completely absent.

Here, having participated in the Beth Din arbitration and failing to raise objections to the panel, the husband waived any claim that the process was tainted or was biased against him. Quoting the  of Appeals in Matter of Silverman (Benmore Coats), 61 N.Y.2d 299 (1984), Justice Palmieri held:

The only basis upon which an award can be vacated at the behest of a party who participated in the arbitration. . . Is that the rights of that party were prejudiced by corruption, fraud or misconduct in procuring the award, partiality of an arbitrator, that the arbitrator exceeded his power or failed to make a final and definite award, or a procedural failure that was not waived.

The husband’s claims that the arbitrators exceeded their powers must rest on the fact that the award violated a strong public policy, was irrational, or clearly exceeded a specific limitation on the arbitrators’ powers.


Continue Reading Substantial Legal and Procedural Rights Are Lost in Divorce Arbitration Before Jewish Beth Din Panel

Generations.jpgWhat 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

Scheinkman photo 2.jpgFrom the “You Can’t Make This Stuff Up” Department:

During the course of this Westchester County divorce action, Elizabeth Perry “engaged in inappropriate litigation behavior.” She refused to comply with court orders to produce documents or to submit to an examination before trial, she secreted assets (including millions of dollars of cash assets), and she apparently illicitly acquired documents and computer files belonging to her husband, Jeffrey.

The July 17, 2012 decision of Supreme Court Justice Alan D. Scheinkman (pictured) in Perry v. Perry, resolved a motion prompted by the wife’s alleged transmission to the husband of an unsigned, haphazardly redacted and truncated letter from an undisclosed attorney writing to “confirm” an understanding with the wife and which recommended the filing of a civil RICO action against the husband in the United States District Court.  The document suggested that the litigation would be based on the husband’s failure to fully disclose his income and assets on his Statement of Net Worth.

Mr. Perry alleged that at the outset of the case, his wife’s first of 11 attorneys in this 19-month pending action made similar allegations. Although the husband attested to having provided tens of thousands of pages of documents, the wife refused to provide any.

It was also alleged that the wife had intercepted some nine boxes of files intended for the husband and hid them. Ms. Perry apparently orchestrated the hacking of her husband’s computer, including privileged matter. Mr. Perry alleged that in order to circumvent a restraint imposed by the Court, his wife put the housekeeper in a disguise and directed her to take a taxi to a storage unit in order to remove a suitcase full of jewelry. It was also claimed that Ms. Perry emptied a money market account of $5 million and removed valuable furniture, artwork and mirrors from the marital residence. Further, recent bank information indicated that of the approximately $11.5 million held in a particular Chase account of the wife in April 2012, there is only just over $1 million left.

On non-financial matters, the wife attempted to involve the police and commenced a now-dismissed family offense proceeding when her husband technically violated a driveway-pickup order when he entered the former marital residence in Scarsdale in order to convince his daughter to go with him on a planned vacation trip to Australia. As it happened, his wife’s absence from the home was also likely a violation of that portion of the order that required her to be inside the residence. While Ms. Perry’s effort to involve the police was not wholly successful (she did get Homeland Security officials to detain Mr. Perry and the children briefly upon return to this country), she obtained an ex parte Family Court temporary order of protection, which she used to derail the husband’s access to the children for a time.

Mr Perry also believed it was his wife, after Justice Scheinkman previously directed that Mr. Perry have custody of the children, who anonymously complained to Child Protective Services that the children were being held against their will at Mr. Perry’s residence. This claim was investigated and found to be unfounded.


Continue Reading Divorce Court Will Not Enjoin Wife From Commencing Federal RICO Action Against Husband

Prenuptial Agreement.jpgThe 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

NYPD shield.jpgWithin weeks after entering a temporary support stipulation, the husband in a Kings County divorce action, resigned from his employment as a police officer with the New York City Police Department (NYPD). He moved to Georgia and entered the police academy as an entry-level officer at $38,000.00 per year, a more than 50% reduction of

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As has been the trend, a court has held that despite what may be the superior parenting skills of one parent, that parent may be denied custody if that parent does not promote the relationship of the children with the other parent.

In an April 26, 2012 decision, the Third Department in Jeannemarie O. v.

Calulator on 100s 6 red.jpgIn the first appellate decision to apply the October 12, 2010 temporary maintenance amendment to the Domestic Relations Law, it was held that the recipient’s share of marital residence carrying charges is within the temporary maintenance award, itself. It was improper to have the payor spouse pay carrying costs directly in exhange for a credit against income before calculating maintenance.

In the February 7, 2012 decision in Khaira v. Khaira, the Appellate Division, First Department, considered the breadth of D.R.L. §236B(5-a). No longer was the temporary (pendente lite) maintenance award used simply to “tide over the more needy party,” but rather to provide “consistency and predictability in calculating temporary spousal maintenance awards.” The amendment “creates a substantial presumptive entitlement.”

The First Department modified the April 1, 2011 order of New York County Supreme Court Justice Deborah A. Kaplan.  In the case before it, Justice Kaplan had “properly followed the initial procedures” to determine that the presumptive temporary maintenance award would be $138,000.00 per year ($11,500.00 per month), at least based on the husband’s first $500,000.00 of income. Justice Kaplan, then, analyzed the reasonable needs of the wife and children after taking into account husband’s payment of the mortgage and health insurance and expenses. Justice Kaplan, then, awarded the wife $13,870.00 in monthly unallocated spousal and child support payments, in addition to requiring the husband to pay the $5,317.00 monthly mortgage payments and the family’s $855.00 monthly health care premiums and medical expenses. The award and expenses totaled $20,041.00 per month. Justice Kaplan, however, did not discuss the factors required by the amendment to be considered when making an award in excess of the formula applied to the first $500,000.00 of a spouse’s income.

Before remanding the issue to Justice Kaplan for redetermination, the First Department focused on the “suggestion” inherent in her decision “that the formula was intended to cover the support needs of the non-monied spouse, such as food and clothing, but not the cost of the mortgage payments for her residence.” However, because any specific reference to the carrying charges for the marital residence was absent from the temporary maintenance formula amendment, the First Department considered:

[It was] reasonable and logical to view the formula adopted by the new maintenance provision as covering all the spouse’s basic living expenses, including housing costs as well as the cost of food and clothing and other usual expenses.

The First Department noted that prior to the amendment, it was common to award support both in cash payments to the spouse as well as to third-parties. That practice was “not only eminently reasonable, but also the most expedient way of covering payment of the necessities, and protecting the home as a marital asset.” The “new approach” changes that, instead awarding “the amount that will cover all the payee’s presumptive reasonable expenses.”

The First Department did not rule out the possibility of a direct mortgage payment, but, as required by the statute, only after the analysis of income in excess of the $500,000.00 cap was made.

The impact of this decision is clear.  However, it also reveals the lack of logic in the remaining support calculations required by the various support provisions.


Continue Reading Appellate Decision Clarifies Temporary Maintenance Calculations; Temporary Child Support Awards Must Be Next

1040.jpgThe Appellate Division, Second Department, has again told J.H.O. Stanley Gartenstein that it was improper for him to award nontaxable spousal maintenance.

In Siskind v. Siskind, in addition to awarding the wife $65,000 per year in nontaxable maintenance until the wife reached her 65th birthday, J.H.O. Gartenstein equitably distributed the parties’ assets, awarded child support and a $340,000 counsel fee, and secured the husband’s support obligations with a $4 million life insurance policy (reduced on appeal to $3 million).

In its November, 2011 modification of that award, the Second Department recognized the presumption that spousal maintenance should be taxable income to the recipient spouse, and deductible to the payor. The appellate court stated:

. . . there was insufficient evidence justifying the Supreme Court’s direction that maintenance be nontaxable to the plaintiff, which is “a departure from the norm envisioned by current Internal Revenue Code provisions.”

In 2007, in Grumet v. Grumet, the Second Department had modified J.H.O. Gartenstein’s award to the wife of non-taxable maintenance, declaring that in the absence of a stated rationale for a departure from the norm envisioned by the Internal Revenue Code provisions, a maintenance award should be taxable.

Maintenance is appropriately taxable income to the recipient. Baron v. Baron (2nd Dept. 2010), Markopulous v. Markopulos, 274 A.D.2d 457, 710 N.Y.S.2d 636 (2nd Dept. 2000) ; see also Taverna v. Taverna (2008), where the Second Department modified the trial court award by making maintenance taxable. Such may have been the holding because the trial court properly declined to consider the husband’s tax liabilities resulting from the liquidation and distribution of investment accounts incident to equitable distribution, as the husband had failed to offer any competent evidence concerning the liabilities which would be incurred. See Fleishmann v. Fleischmann (2010 Supreme Westchester Co., Lubell, J.)


Continue Reading The Taxability of Spousal Maintenance Payments: a Subject of Inconsistent Court Decisions

Calulator on 100s 8 red.jpgOn October 25, 2011 the New York State Law Revision Commission held a round-table discussion to review New York’s spousal support, i.e. “maintenance” statute, Domestic Relations Law §236(B)(5-a, 6). The discussion precedes a final report which that Commission is required to render under a mandate imposed by the Legislature when new laws concerning temporary maintenance, interim counsel fees and no-fault divorce were adopted last year. In part, the Commission was charged to:

review the maintenance laws of the state, including the way in which they are administered to determine the impact of these laws on post marital economic disparities and the effectiveness of such laws and their administration in achieving the state’s policy goals and objectives of ensuring that the economic consequences of a divorce are fairly and equitably shared by the divorcing couple . . . .

Lee Rosenberg, chair of the Nassau County Bar Association Matrimonial Law Committee, noted that last week’s round-table discussion revealed a gap in opinions.  Those advocating for lower income women and domestic violence victims believed that the interim temporary maintenance statute enacted last year should remain in effect, with permanent guidelines leaving little to judicial discretion needed as well. The rest of the attorneys and judges believed a “one size fits all” formulaic approach did not work, created more litigation and did not do justice for both parties.

Mr. Rosenberg commented that if there was any majority view, it was that the temporary maintenance statute needed a major overhaul or complete repeal, except perhaps in lower income cases. Courts should retain real discretion to consider long-established factors in making any award, temporary or final.

A Preliminary Report on Maintenance Awards in Divorce Proceedings (Law Revision Report on Maintenance May 11 2011.pdf) was issued by the Law Revision Commission on May 11, 2011. That Report concluded that the 2010 temporary maintenance law sparked “intense debate over whether a formula should be used to calculate temporary maintenance.” To pursue its mandate, the Commission is reviewing reported appellate and trial court decisions awarding or denying temporary and/or final maintenance over the past 14 years. The Preliminary report presented a summary of the most recent decisions.

Posts in this blog on March 23, April 5 and July 18 considered recent awards under the new temporary maintenance statute, criticizing the absence of a “reality check” in two of those decisions.


Continue Reading Spousal Maintenance Statute Difficulties Noted by New York's Law Revision Commission