Expectation

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It is not rare, and may be commendable, to resolve child support obligations based upon anticipated future circumstances: an expected job, obtaining a degree or license, etc. However, when doing so, care must be taken to anticipate not meeting those expectations. When is relief available? The issue is complicated if the parties “opt out” of the statutory ability to seek a modification upon a 15% change in income or three years from the support order.

Consider the 2021 decision of the First Department in Matter of Solomon M. v. Adelaide M., 192 A.D.3d 424, 142 N.Y.S.3d 542. There, at the time the parties entered their child support stipulation, the husband was unemployed and had no income. When the husband later obtained a job, the husband complained his take home pay was inadequate to cover his agree-upon support obligations.

The husband petitioned the Family Court for a downward modification. Bronx County Support Magistrate Shira Atzmon denied the husband’s petition. The Magistrate noted that the husband’s financial situation and potential earning capabilities had actually improved by the time of his petition as compared with the time of the stipulation he sought to modify. By the time of his petition, the husband had earned an MBA and was earning approximately $30,000 per year. Bronx County Family Court Judge Phaedra Perry denied the husband’s objections to the Magistrate’s order. The Appellate Division, First Department, affirmed.Continue Reading Anticipating Future Finances when Agreeing to Support Obligations

Spock illogicalAt the point the literal construction of a contract leads to an absurd result, the actual words should yield to logic and the mutual understanding of the parties. The First Department held otherwise in its March 19, 2015 decision in Buckingham v. Buckingham when depriving the former wife of a 20% share of the stock in a publicly-held company the husband sold for $7,279,117.62.

In this case, under a prenuptial agreement signed eight days before the parties’ marriage, the wife was to receive a percentage of the post-marital appreciation from the proceeds of the sale of that company, Mobile Streams PLC (“MS”).

The husband is the founder and CEO of that company and, at the time of the prenuptial agreement, had a majority interest. MS retails Mobile Content including Apps, Games, eBooks, Music and Videos globally through mobile carrier partners and its Appitalism.com applications storefront.

The agreement stated:

Simon owns approximately 55.83% of the issued and outstanding shares of [Mobile Streams] [ MS’]. If MS or any of its subsidiaries or related companies are sold, and the sale takes place after the occurrence of an Operative Event, and proceeds of sale are not otherwise invested or reinvested in another business enterprise, but rather Simon retains the proceeds for himself and provided the parties are married for five (5) years or more, Simon, will place the following percentages of the net proceeds less the value of the MS shares on the date of marriage, in an account established in Nisha’s sole name which shall be deemed Nisha’s Separate Property:
(i) if the parties are married for 5 or more years – 20%; or
(ii) if the parties are married for 10 or more years – 25%; or
(iii) if the parties are married 15 or more years – 30%; or
(iv) if the parties are married for 20 or more years – 40%; or
(v) if the parties are married for 25 or more years – 50%.

Continue Reading Marital Agreements: Balancing The Literal With The Absurd