Where a divorce settlement agreement contains a SUNY cap on the parents’ obligations to contribute to college expenses, do you subtract financial aid first from the SUNY cap, or first from the total actual costs of the child who chose to attend a private college? Do you include loans in the “financial aid” formula?
In its February 20, 2014 decision in Apjohn v. Lubinski, the Third Department decided to benefit the child.
The parties’ 1994 separation agreement contained a SUNY cap provision limiting the obligations of these parents to contribute to their then 1-year-old son’s college education. Each parent’s obligation would be limited to half of the cost of tuition, room and board at a college or university that is part of the State University of New York.
The agreement further provided that the son must apply to “the said college or university” for all possible grants, scholarships and financial aid before either party would be obliged to pay any college costs. Here, the son applied for and obtained financial aid from the private college where he enrolled in September 2011. the son also received an outside scholarship.
Refusing to make any contribution, the father contended that the agreement required the son to apply to a SUNY institution for financial aid. As the son did not do so (he applied to his private college), the father argued he had no obligation to contribute anything.
The Third Department resolved the ambiguity as to whether the requirement to apply to “the said college or university” for financial aid referred to a SUNY institution or to the college attended by the son, by noting that the agreement did not require the son to attend or apply for admission at a SUNY school. (The father also did not show that it was possible to apply to a SUNY institution for financial aid without also applying for admission.)
Further, the contract provided that the parties “expect and desire” the son to pursue higher education. It was a reasonable inference that the parents intended to facilitate this mutual goal not only by contributing to the cost, but also by ensuring that any available financial aid would be secured from the institution attended by the son to make it as affordable as possible. Accordingly, the Third Department upheld Green County Family Court Judge Charles M. Tailleur’s determination (denying objections to the ruling of the Support Magistrate) that the son’s financial aid application to the college where he enrolled was sufficient to trigger the father’s contractual obligation to contribute to the son’s expenses.
The Third Department held that the agreement was further ambiguous as to whether the financial aid obtained by the son would be applied first to reduce the parties’ contributions, or first to the son’s remaining expenses. The Third Department upheld the Family Court’s reduction of the father’s tuition obligation by the amount of the son’s outside scholarship — a relatively small, one-time award — but not by the amount of a four-year grant received directly from the private college.
As applied here, the private college grant, calculated in accord with that school’s tuition cost rather than the lower tuition at a SUNY school, was sufficiently large such that setting it off against the father’s SUNY-capped contribution would result in completely negating any tuition obligation from him, while leaving the son with a substantial bill. The Third Department held that the agreement could not reasonably be interpreted to require this result; a result inconsistent with the parties’ stated desire for the son to obtain higher education and their explicit intent to contribute to this expense. [The fact that the outside scholarship was small, or was only a one-time award, would not seem to be contractual basis to benefit the parents and not the child. Either aid is to be applied first against the SUNY cap, or it isn’t.]
In view of this clearly-expressed intent, the Third Department also held that the Family Court erred in when it subtracted loans obtained by the son from the amount to be contributed by the parties. The agreement required the son to apply for “scholarships, grant money or financial aid,” but did not mention loans, nor required the son to obtain them. As repayment would be the son’s responsibility rather than that of either party, and in the absence of clear direction in the agreement, it was error to take the loans into account in calculating the parties’ obligations.
The appellate court also held that there was no error when the lower court credited the father’s already-existing child support obligation against room and board costs, but not against tuition. In the absence of specific contractual language, the availability and amount of such a credit depended “upon the facts and circumstances in the particular case, taking into account the needs of the custodial parent to maintain a household and provide certain necessaries.” Here, the agreement simply required that the amount of child support being paid by the father and the actual costs and expenses of the mother “shall be considered” — and Family Court gave due consideration to these circumstances.
Here, the child support credit was greater than half of the cost of room and board at a SUNY institution and thus, this aspect of the father’s obligation was fully satisfied. [The Court did not discuss whether the actual cost at the son’s private college was higher than the SUNY, or if so, whether applying the credit off the top of actual costs would have here led to a different result.]
The appellate court did hold that it was error to expand the father’s obligation to make contributions to expenses not specifically listed in the parents’ agreement. It was error for the Family Court to have included costs for fees, books and supplies (even if SUNY-capped), in addition to SUNY tuition. Doing so, the Third Department noted that a court must not create a new agreement for the parties under the guise of contract construction, but must instead ascertain their intent “to the extent that [they] evidenced what they intended by what they wrote.” Here, the plain language of the parties’ agreement provided that the maximum amount was to be calculated based solely upon “tuition, room and board” at a SUNY institution.
Jon Kosich, of Greenville, represented the mother. The father represented himself.