“It depends on what the meaning of the word ‘is’ is.” Bill Clinton, August 17, 1998
“What does “means” mean?” Justice Richard A. Dollinger, June 22, 2012
By statute, a court may direct a parent to contribute to a child’s education, even in the absence of special circumstances or a voluntary agreement of the parties. Under the Child Support Standards Act (D.R.L. 240[1-b][c] and F.C.A. 413[c]) the court may award educational expenses:
Where the court determines, having regard for the circumstances of the case and of the respective parties and in the best interests of the child, and as justice requires, that the present or future provision of post-secondary, private, special, or enriched education for the child is appropriate.
In my May 9, 2012 blog, I discussed the April 24, 2012 decision in Tishman v. Bogatin, in which the Appellate Division, First Department, held that a parent’s contribution to a child’s college education would not necessarily be limited to a portion of the expense to attend a campus within the State University of New York system: the “SUNY cap.” In making a decision, there is no burden placed on a parent to show that the child’s needs cannot be met adequately at a SUNY college. “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 its July 25, 2012 decision in Lynn v Kroenung, the Second Department reaffirmed that unlike the obligation to provide support for a child’s basic needs, support for a child’s college education is not mandatory. Instead, absent a voluntary agreement, whether a parent is obligated to contribute to a child’s college education is “dependent upon the exercise of the court’s discretion, and an award will be made only “as justice requires.”
In L.L. v. R.L., Monroe County Supreme Court Justice Richard A. Dollinger was compelled to determine what “means” meant in a couple’s separation agreement. That agreement provided that the parents would finance the children’s college education “according to their respective means at the time the child attends college, after grants and scholarships have been taken into consideration.”
In 2011, the parties’ oldest son applied, was accepted, and enrolled at Penn State (Harrisburg). Before he left for school, the mother moved for an allocation of the college expenses. In a prior decision, Justice Dollinger reserved this issue. When the couple’s second son recently applied to Hofstra (stated cost $33,000 annually), the mother sought an allocation of those expenses as well.
Justice Dollinger clarified the issue he would be deciding:
This Court is not deciding what the parents should contribute to their children’s college education expenses. The agreement clearly indicates that both parents would contribute something if they had the means to do so. The only issues before the court are questions of contract interpretation and contractual rights: what the parents agreed they would contribute, what obligation may be enforced against either parent under the agreement, and whether either party has, to date, breached their obligations thereunder.
Neither party argued that the use of the word “means” was ambiguous. Justice Dollinger agreed that it was not. Nevertheless, Justice Dollinger was amazed by the apparent absence of legal interpretations of the phrase “respective means.”
Family Court Act §545 provides that in a paternity case, after an order of filiation is made, “the court shall direct the parent or parents possessed of sufficient means or able to earn such means to pay weekly or at other fixed periods a fair and reasonable sum according to their respective means . . . .”
F.C.A. §415 provides that “the spouse or parent of a recipient of public assistance or care or of a person liable to become in need thereof or of a patient in an institution in the department of mental hygiene, if of sufficient ability, is responsible for the support of such person or patient. . . . the court may apportion the costs of such support among [the responsible persons] as may be just and appropriate in view of the needs of the petitioner and the other circumstances of the case and their respective means.”
[Note: in both these cases, the statutory scheme ultimately has the court use C.S.S.A. standards (see F.C.A. §513). Thus, “respective means” ends up being decided using C.S.S.A. rules. Again, with respect to the college obligation, that is “the circumstances of the case and of the respective parties and in the best interests of the child, and as justice requires.”]
Rather than use C.S.S.A. caselaw, Justice Dollinger got into the minds of the parties, wrestling with the factors that non-divorced parents face when deciding how to pay for a child’s college education.
The Court held the agreement’s use of the term “means” permitted a review of the parties’ assets and liabilities in addition to their annual income before determining their “respective” shares of the obligation.
Viewed in this context, the Court interpreted the term “means” to be an amount of contribution by each parent that will support the child’s college education, but not unduly overburden either parent while maintaining a reasonable lifestyle.
Justice Dollinger noted that he did not interpret the term “means” to include an obligation to borrow to finance the children’s college expenses.
the agreement makes no provision that either party borrow money to finance their child’s college education. The court is readily aware that borrowing by parents is often required to finance college costs, but in this case, the agreement makes no reference to it, or the parties’ capacity to do so.
The Court proceeded to analyze the “respective” incomes, expenses, and assets of these parents of modest means.
After paying his taxes and his child support, the father had $28,478 in “spendable income” in 2010 and $40,024 in 2011. The Court found that after paying his personal expenses, the father did not have any excess income, or “means,” to contribute to his oldest son’s college education in 2010. The father’s base expenses exceeded his net available income after paying taxes and child support.
The father also made a $400-per-month retirement contribution, which Justice Dollinger found reasonable for a 54-year-old man. In one view, this contribution was an available resource for contributing to the son’s college education. However, the Court declined to hold that college education expenses for the children are more important than retirement savings for the adult.
The court will not, under the guise of interpreting this agreement, require either parent to invade what are realistically minimal retirement assets for the purpose of financing their children’s college costs. Either parent could make such an invasion in the interests of their child, but given the parents’ ages (both are over 53) and the minimal amount of retirement assets, this Court will not require either parent to do so.
In 2011, when the father’s available net annual income increased to $40,024, Justice Dollinger found that the father had approximately $6,500 available as excess income or “means” to contribute to his children’s college expenses.
In considering the father’s means, Justice Dollinger also looked at the father’s modest $1,000 in liquid assets (and $3,500 in credit card debt) and a $68,000 thrift savings plan for retirement, an amount that was “reasonable and necessary for some limited financial security.”
The Court declined the invitation to require the husband to invade his retirement account—his sole source of retirement benefits—to fund his children’s college educations. Justice Dollinger would not require the father to sacrifice his reasonable retirement for his children’s college education under the guise of interpreting the phrase “respective means” under the agreement.
From the father’s $6,500 in 2011 “excess income,” the Court concluded that the father must contribute up to $3,500 towards his son’s college education. $3,500 was more than 50% of the father’s excess available resources for 2011. Justice Dollinger would not require the father to borrow or invade his retirement accounts.
The “up-to” $3,500 contribution is all he can afford, and when the second son goes to college, his obligation remains the same. Simply put, the only “means” the husband has is the $3,500 in available net resources, and this amount remains the same regardless of how many of his children need college assistance. Translated into another application, the husband pays approximately $17,000 annually ($3,500 for college expenses and an estimated $13,500 for child support) for the support of his children and this amount is what his “means” allows him to pay and what the agreement and law requires him to pay.
Both sides acknowledged that the Court could look to the income and assets of the father’s current spouse to determine whether these resources free up “means” of the husband to pay college costs. However, the Court declined to take that step. Neither the parties’ agreement nor equity required that.
Justice Dollinger, then, similarly analyzed the mother’s “means.” He noted that the mother received $13,000-$14,000 in support payments in each of the last several years. Thus, to the extent that the Court required the mother to make a college contribution, the Court may be requiring the mother to invade her child support payments. However, Justice Dollinger noted that considering the relative equities of both parties, even if the mother had to invade some portion of the support payments to finance her children’s college education, the ultimate beneficiary of those payments would be the couple’s children and, thus, the payment would be consistent with the spirit of the child support laws. [Note: the C.S.S.A. makes educational expenses an add-on to the base periodic child support obligation.]
Justice Dollinger declined to give the father a credit against his periodic support obligation for any portion of his college contribution deemed as being spent on room and board. The agreement never mentioned the credit. There was no requirement in the agreement that the father’s annual contribution to college costs be allocated to tuition, expenses, or room and board.
The Court then considered the question of whether either parent is required to pay college expenses after the children turn 21. The agreement made no reference to paying college expenses beyond any child turning 21. Justice Dollinger noted, however, that New York courts have increasingly held that in the absence of language in the agreement specifying an age for the cutoff of payment for college expenses, the parents, having generally agreed to pay them, must continue to pay until completion of the child’s college career, even if the child turns 21 before graduating. Accordingly, Justice Dollinger held that the parties intended the college contributions to continue for a period of up to four years after the children graduate from high school.
Justice Dollinger acknowledged that the sums awarded would not offset the cost of the children’s increasing college education. The Court had no information on what financial aid will be available to the students in the future or what, for that matter, college or governmental financial aid personnel might suggest is a reasonable contribution from each parent. The Court had no proof on the tax impacts of college education on either parent. However, Justice Dollinger noted that the determination of any financial aid office and the tax consequences to the parents were not relevant. The question before the Court is what the parents meant when they agreed to contribute “their respective means” to their children’s college expenses.
If some financial aid provider or the universities determine that the parents have a greater capability to contribute, so be it. If the parties had wanted a financial aid office in a university or the federal financial aid authorities to determine their “respective means” and contributions, they could have inserted that requirement in their agreement. Instead, they used other terms and this Court, based on their choice of language in their agreement, has resolved the extent of their contractual obligation to contribute to their children’s college costs.
Justice Dollinger never discussed if or why the “respective means” standard under the parties’ agreement was any different than the C.S.S.A. standard of “circumstances of the case and of the respective parties, the best interests of the child, and as justice requires.”
Often the C.S.S.A. standard results in an all-or-nothing pro rata contribution to all college expenses net of scholarships and grants. However, personally, I see no reason for the standards to be different.
The insights and effort of Justice Dollinger to balance the interests of all involved would seem to be called for as much under the C.S.S.A. as with an agreement’s “means” test.
The parties were represented by Steven M. Witkowicz, Esq., of Handelman, Witkowicz & Levitsky, and by Michael A. Rosenbloom, Esq., both of Rochester.