House of money.jpgThe May, 2011 decision of the Appellate Division, Second Department, in Many v. Many, seems, at first blush, to be a rather routine matter. While their divorce action is pending, the interests of the parties are balanced. However, below the surface lurk issues which highlight the frustration and anxiety which spouses must feel as their case is squired through the judicial process.

By Order to Show Cause issued June 13, 2009, two years before this decision, the wife sought interim support.  She also sought a restraint against her husband refinancing the marital residence. One may surmise that Mr. Many was sole owner of the home; it was his “separate property,” subject to his wife’s claim to an equitable share.

Ms. Many received her award of temporary maintenance. However, by his Order of April, 2010, Supreme Court, Westchester County, Justice Edgar G. Walker, denied that branch of Ms. Many’s motion which was to restrain her husband from encumbering the marital residence.  In effect, Mr. Many was authorized to refinance the equity in the marital residence, but restricted from using the funds for any purpose other than paying his pendente lite maintenance obligation.

Restraints on borrowing against or other disposition outside the “ordinary course of business,” have been a common subject in divorce actions.  They often had been included routinely in the Preliminary Conference Order.  Effective September, 2009, just two months after Ms. Many made her motion, Domestic Relations Law §236(B)(2)(b) was amended to put certain “automatic orders” into effect immediately upon the commencement of a divorce action.  Those orders now remain in effect unless terminated, modified or amended by order of the court.

Among the automatic orders, neither party may now borrow against any property (including real estate) whether individually or jointly held, except in the usual course of business, for customary and usual household expenses or for reasonable attorney’s fees in connection with this action.  Further, for actions commenced in or after September, 2009, it is automatically ordered that neither party may incur “unreasonable” debts, including, but not limited to further borrowing against any credit line secured by the family residence, further encumbrancing any assets, or unreasonably using credit cards or cash advances against credit cards, except in the usual course of business or for customary or usual household expenses, or for reasonable attorney’s fees in connection with this action.

In Many, the Appellate Division affirmed the Justice Walker’s year-old decision to allow Mr. Many to refinance the parties’ home to pay is temporary support obligation. It also affirmed the award to Ms. Many of $15,000.00 in interim counsel fees, as her husband was the “monied spouse.”

Thus, it took two years for these interim financial issues to be resolved.

Justice Walker and the appellate court believed it was necessary for the marital residence to be further encumbered so that Mr. Many could afford to pay his temporary support obligation.

However, if the only way for the parties to pay their living expenses while their divorce is pending is to borrow against their home, why would only one party (here, Mr. Many) be obligated to access his assets to pay those expenses as temporary support.

The Second Department noted that it will be Mr. Many shares of assets which will be charged with the burden of supporting the family while the action is pending.

At a later date, the Supreme Court will be able to ensure that the plaintiff is reimbursed for her equitable share of any funds used by the defendant as a result of the sale or refinancing of the marital residence to meet his pendente lite maintenance obligation.

Isn’t an award of temporary support which cannot be paid out of current income per se excessive? If it is necessary to access assets to pay interim living expenses, shouldn’t both parties’ shares presumptively be charged?

So, too, with the award of interim counsel fees. If Mr. Many has to borrow money to make a payment to his wife’s lawyer, even if that award is subject to reallocation after trial, why is the presumption that it is he who is responsible?  If an award can only be paid by accessing the assets of the parties, why label, now, the party who is paying the award?

Justice Walker and the Second Department did keep priorities in focus: both parties must be enabled to live and to meet the the necessary expenses of the litigation so that the action can be made ready for resolution.  However, labeling responsibilities in a sea of conflicting sworn statements, is not necessary. While the mechanism for survival must be determined, beyond that, labeling responsibilities may only encourage delay by the party favored by the interim order.

It took two years to resolve these interim issues.  Both parties must be encouraged by the “rules of the game” to bring the game to a swift conclusion. After all, it’s not a game.