In his June 13th decision in E.J. v. M.J., Nassau County Supreme Court Justice Edmund M. Dane resolved the complex financial issues arising when a divorce action is commenced after a child begins attending a private university, but before the child turns 21 or graduates. The fact pattern presents a blend of Equitable Distribution and child support add-on issues.
Here, the parties were married in 1997 and had two children born in 2001: a son who by the time of the decision had turned 21 and had just graduated from Quinnipiac College and a daughter with developmental disabilities for whom the parties had agreed to adult dependent support.
The wife commenced this divorce action in May 2021. The parties entered a Settlement Agreement resolving most of their issues. However, issues of their son’s college education expenses and counsel fees remained to be decided upon written submissions.
The wife alleged that in the year prior to commencement of the action, the husband signed a series of Parent Plus loans for their son, totaling approximately $141,000. She argued that the Court should consider the husband’s financial ability to contribute to those expenses, as well as the academic backgrounds of the parties and the best interests of the child. The wife further contended that if she were to be obligated to contribute to the Parent Plus loans, her obligation should be capped at a SUNY rate. The wife maintained that there was no prior agreement between the parties regarding the payment of college expenses for their child.
The son started college at Quinnipiac in 2019. When the action began in May 2021, he had completed three semesters. The wife further claimed that their son turned 21 in December 2022 and has been estranged from her since 2020, and that therefore, he should be considered emancipated. The wife claimed that she made it clear in January 2021 that she no longer agreed to contribute towards Quinnipiac.
Indeed, in January 2021, the wife sent a “joint” email to the school which stated:
Please contact me as soon as possible regarding my son J’s financial aid for Spring semester. His behavior during the break has been so unacceptable that we have decided not to allow him to return to campus. As our Parent Plus loan is what provides funding for most of his education we are requesting that it be pulled for this semester. We would prefer some other way to get him under control but he has left our home and we do not know where he is staying. Since he refuses to return home nor turn over his car keys we cannot continue to support his education. As he is legally an adult, we cannot think of any other way for us to address this need for him to not return to school.
The wife believed that the husband should be responsible for the loans incurred from Spring 2021 until their son’s graduation, and the loans incurred before that should be allocated based on the parties’ pro rata shares of child support and other expenses. The wife argued that the husband was in a far superior financial position as the monied spouse, evidenced by a $110,000 disparity in the incomes of the parties.
The husband argued that he should not have to pay the entire loans. He pointed out that the wife agreed to the loans at the beginning, started objecting later on, and that he did not have enough funds from his share of the sale of the marital residence to cover the whole loan.
The Court recognized that it appeared from the emails sent directly from the wife herself that the parties – either explicitly or implicitly – agreed to utilize a Parent Plus loan to fund J’s college education costs for a period of time.
The Court decided to treat the part of the loan incurred during the marriage and before the commencement of the action as a marital debt. That was to be distributed equitably. On the other hand, the part of the loan incurred after the commencement of the action until the son turned 21 was recognized as a child support add-on issue; an obligation to contribute to the college costs and expenses of the child. That was allocated accordingly.
After considering the statutory Equitable Distribution factors, the Court equally divided the parties’ responsibility for the repayment of the principal of the pre-commencement Parent Plus loans. Particularly as the parties agreed to equally divide the proceeds of sale of the marital residence – arguably the largest asset of this marriage – the Court found no countervailing factors to treat the marital portion of the Parent Plus loan any different in terms of its allocation. Moreover, the Court found that the wife appears to have agreed to send their son to Quinnipiac for the first year and a half.
However, no loan documents were provided during discovery. The wife asserted that most of the Parent Plus loans were incurred after the commencement of the divorce action, and that it was unclear which portion of the debts were accumulated before the action.
Particularly as there was no documentary or other evidence, from an accountant or otherwise, regarding how much interest, if any, had already accrued on the Parent Plus loans, or how much interest, if any, would prospectively accrue on the Parent Plus loans, Justice Dane declined to make the wife responsible for any interest on the loans.
It did not appear that the wife signed any documents relating to the post-commencement loans,. Moreover, the Court noted that in general, post-commencement expenses are the responsibility of the party who incurred the debt. The college expenses were not household living expenses which are generally divided. As a result, post-commencement loans were not subject to Equitable Distribution.
Rather, Justice Dane allocated responsibility for the post-commencement loans as an add-on to child support through the son’s 21st birthday. In doing so, the Court considered the educational background of the parties: the wife held a master’s degree, and the husband held a doctorate.
The Court also considered the parents’ ability to pay (the wife earned in excess of $100,000 per annum and the husband earned in excess of $225,000 per annum); the child’s academic ability; that the son’s best interests would be furthered by obtaining a college degree and by the experience of attending college; and the circumstances of the case (including the son’s estrangement from the wife and the wife’s lack of knowledge of the son’s education). The Court also noted that although the wife wanted to contribute only on a pro rata basis and only towards pre-commencement loans, she was not completely averse to paying a portion of the Parent Plus loan.
Justice Dane also recognized that the child should not be punished:
The Court declines to truncate the [wife’s] responsibility for college costs after commencement, as such a conclusion would be tantamount to financial punishment thrust upon [the parties’ son] for pursuing a college education just like his parents did.
As to the wife’s request for a SUNY cap, the Court noted that whether to impose a SUNY cap is to be determined on a case-by-case basis considering the parties’ means and the child’s educational needs. In light of these parties’ means, the Court exercised its discretion to impose a SUNY cap on the wife’s obligation to contribute to the son’s post-commencement college costs and expenses. The Court noted that besides the parties’ earnings, both parties were over 70, the parties had de minimis savings, and that the Court did not know how much equity there was in the marital residence. Justice Dane Court also noted that the son also been accepted into SUNY Binghamton and had been offered a full scholarship to attend SUNY Oswego.
The Court ordered that the wife pay her pro rata 34% share of SUNY-capped post-commencement pre-21 expenses.
[Note: The wife’s share may be estimated at almost $5,000 per semester. The Court implicitly made the husband responsible for the balance, the remaining $30,000 in costs per semester; or at least the remainder of the post-commencement Parent Plus loans (including those incurred after the son turned 21.
Question: In fact, the child had graduated by the time of this decision. Would the result be any different when the decision must be made before the final college semester or year? If there is no implicit agreement by parents to continue their contributions (until 21 or graduation) as envisioned before the college is selected, will not the child be punished by a transfer mandated by these circumstances? Does this fact pattern fall under that legal axiom, “s### happens”?]
Aiello & DeFalco LLP, of Garden City, represented the wife. Farley & Kessler, PC, of Jericho, represented the husband.