Interpretation

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JengaOn June 12, 2018, the Court of Appeals in a 5-2 decision, affirmed the ruling discussed below.

It is common in agreements, and often the case in judicial decisions, for the parent paying periodic child support to receive a credit against those payments for college room and board expenses paid by that parent. May parties agree that the credit exceed the amount allocated by the parties to the support of the particular child attending college? No, (probably) said the Appellate Division, First Department, in its April 6, 2017 decision in Keller-Goldman v. Goldman.

The parties entered into a Stipulation of Settlement and Agreement that resolved all issues surrounding their separation. As may be relevant to the court’s determination, although the parties had four unemancipated children, the agreement only provided for support for the three children for whom the wife was deemed the custodial parent (the parties were to share equal time with these three). The husband retained custody of the fourth child, but agreed to receive no support for him from the mother. The opinion noted that had the parties not negotiated the issue of child support, the mother stood to collect $5,000 per month in child support payments, pursuant to the Child Support Standards Act, a fact acknowledged by the agreement. Instead, she agreed to monthly child support payments of $2,500.

Paragraph 10.3 of the parties’ agreement provided for a graduated reduction in the father’s child support payments upon the emancipation of each of the three children. Upon the first emancipation his monthly payment would be reduced by $350 to $2,150 per month; and upon the second emancipation the payment would be reduced to $1,462 per month.

The agreement provide for a room and board credit at paragraph 10.4, immediately following the support reduction schedule:

During the period in which a Child is attending a college and residing away from the residences of the parties and [the father] is contributing towards the room and board expenses of that Child, [the father] shall be entitled to a credit against his child support obligations in an amount equal to the amount [the father] is paying for that Child’s room and board. The credit shall be allocated in equal monthly installments against [the father’s] child support payments.

Continue Reading Uncapped Room and Board Credit Violates Public Policy

OverstuffedIn contrast to its decision in Zaratzian, the subject of yesterday’s blog post, the Second Department, in Eagar v. Suchan, held the same day that a father was entitled to receive child support from a mother after their two children moved in with him.

In Eagar, the parties’ 1999 Settlement Agreement which was incorporated, but not merged into their judgment of divorce, contained separate provisions for child support and the payment of college expenses for the children. At the time, the then 7- and 5-year old sons of the parties lived with their mother.

After the parties’ two children began to reside with the father, he petitioned to terminate his child support obligation.

After a hearing, Suffolk County Support Magistrate (and former Judge) Barbara Lynaugh granted the father’s petition. She determined that the parties’ older child, then 21, was emancipated, and directed the mother to pay child support to the father for the parties’ younger child, then 19, in the sum of $344 per week. Family Court Judge Martha L. Luft denied the mother’s objections to the ruling.

The Appellate Division, Second Department affirmed. It held that Magistrate Lynaugh properly exercised her discretion when applying the Child Support Standards Act formula percentage to the combined parental income in excess of the statutory cap. “Here, the Support Magistrate properly articulated her reasons for applying the statutory percentages to parental income over the statutory cap, and her determination was not an improvident exercise of discretion.” It appears that the mother’s C.S.S.A.-adjusted annual income was approximately $105,000.00, which (applying the 17% formula) resulted in a $344.00 per week award.

The appellate court did not discuss the language of the parties’ Stipulation of Settlement, or why that language allowed for an affirmative award to the father.Continue Reading “I’m Moving In With Daddy”: The Child Support Perspective (Part II)

Packed and Ready to GoAmong the hardest jobs of the matrimonial lawyer is to draft divorce settlement agreements that anticipate post-divorce events and then resolve them with precision. Two May 20, 2015 decisions of the Second Department highlight just how hard those jobs can be when it comes dealing with the child who switches his or her primary residence.

In Zaratzian v. Abadir, the appellate court affirmed a decision of Westchester County Supreme Court Justice John P. Colangelo that applied one couple’s Agreement to resolve their conflict in a manner neither party may have wanted.

Under their 2006 divorce settlement Agreement, the parties, both medical doctors, agreed to equally-shared time with their three children, and older daughter, then age 12, and 10 and 6-year old sons. Following the father’s remarriage in 2008 and the pregnancy of his new wife, the time-sharing arrangement broke down. The daughter resided only with the mother, the older son with the father and the younger son continuing to switch. Subsequent Family Court custody proceedings resulted in both boys living with their father.

Under the Separation Agreement, the father had agreed to pay the mother $1,500 per month in maintenance until the emancipation of one of the children. Until then, the father would pay an additional $1,500 per month in child support for all three unemancipated children. Upon the emancipation of one child, maintenance would stop, but child support would be increased to $1,750 per month. Upon the second emancipation, child support would be reduced to $1,000 per month.

The support Article of the Agreement contained the following typewritten provision:

Both parties agree to be bound by the provisions set forth in this Article III and each party agrees that neither party shall at any time make any application to modify the financial provisions of this Article III or the financial provisions of the divorce decree subsequently entered between the parties.

The Agreement defined various emancipation events, including:

Permanent residence away from the residence of the Father and the Mother. A residence at boarding school, camp, or college is not to be deemed a residence away from the residence of the Wife, and hence, such a residence at boarding school, camp, or college is not an emancipation event.

The emancipation Article also contained the following handwritten provision:

Notwithstanding any other term or provision contained in this agreement, in the event one or more of the children reside primarily with the Father, he shall be permitted to make any application he deems appropriate to modify his child support obligation as set forth in Article III and the resulting order shall supercede the terms of this agreement.

Following the Family Court proceedings, the mother moved in Supreme Court for an order relating to the payment of private school tuition for the daughter (she later asked for child support for the daughter computed under the Child Support Standards Act). The father cross-moved for an order requiring the mother to pay him C.S.S.A.-computed child support for the parties’ two sons.Continue Reading "I'm Moving In With Daddy": The Child Support Perspective (Part I)

How.jpgIn its November 20, 2012 decision in Kang v. Kim, the First Department affirmed what appears to be an unwarranted interpretation of a divorce settlement marital residence buyout provision. In doing so, the appellate court yielded to the construction of the provision used by the “trier of fact” to resolve the ex=wife’s post-divorce motion to enforce the parties’ property settlement agreement.

That agreement gave the ex-wife the right to purchase the husband’s interest in the marital residence, a cooperative apartment. The clause provided:

If the parties are unable to agree as to the terms for such purchase within 30 days of the day that the Wife gave notice to the Husband then the value of the Husband’s interest (the ‘buy-out price’) shall be one half of the value of the apartment as determined by a Real Estate Appraisers [sic ] agreed to by the parties less the outstanding amount owed upon the First Mortgage.

The wife claimed that the provision was unambiguous. The price (“P”) she was to receive was one half of the value of the apartment (“V”) less the entire outstanding mortgage (“M”). The entirety of the mortgage was to be subtracted from the ex-husband’s half-share of the gross value.

Recalling math class from, oh, so many years ago, the wife successfully argued:

P = (V/2) – M

The husband had argued that the buyout price was half the value of the apartment less the wife’s one-half share of the outstanding amount of the mortgage. Mathematically, the husband argued:

P = V/2 – M/2

Thus, the husband asserted that the buyout price was one half of the equity in the apartment. This might also be written:

P = (V-M)/2

The First Department noted that the lower court, New York County Supreme Court Justice Matthew F. Cooper, found the provision “unambiguous.”

However, the First Department disagreed on the issue of ambiguity, nevertheless deferring to the construction used by the lower court. The appellate court found that:

upon examination of the settlement agreement in its entirety, and considering the relation of the parties and the circumstances under which it was executed, the agreement is ambiguous because the provision is reasonably susceptible of more than one interpretation.

Indeed, the First Department noted, the settlement agreement also provided that all marital property was to be divided 50/50 and that if the premises were sold to a third party, the “net proceeds of sale” were to be divided equally.Continue Reading Drafting Formulas in Divorce Stipulations of Settlement: Use Examples and Math Concepts

square peg1.jpgEntering open-court oral stipulations of settlement to a divorce action is treacherous.  It’s easy to miss something or be imprecise in language.

However, striking the deal while the iron is hot is a necessary part of matrimonial litigation.  Letting the parties walk out of the courthouse without putting the day’s agreement “on the record” may cost the parties their deal.  Emotions, particularly in divorce cases, often cause second (and hundredth) thoughts on settlement provisions.  Giving friends and family one more opportunity for input may likely undermine the day’s efforts.

However, there are reasons that the typical written settlement stipulation consumes scores of pages. The boilerplate and legalese so offensive to the public is the necessary consequence of the thousands of decisions which interpret the words found in or missing from decades of previous settlements or otherwise requiring attention in any final agreement.  Moreover, without reflecting on the written word, it’s easy just to miss things.

Take the recent Second Department decision in Zuchowski v. Zuchowski.  The parties’ oral in-court stipulation announced that “all joint bank accounts have been split to the mutual satisfaction of the parties and here and forward each party shall keep any bank accounts in their respective names . . .”Continue Reading The Nature of 529 Education Savings Plans Should Not be Disregarded Under the Guise of Divorce Stipulation Interpretation

Divorce Agreementl.jpgIn its February decision in Fragin v. Fragin, the Second Department interpreted a 1995 separation agreement which survived the entry of the parties’ 1995 divorce judgment. Pursuant to that agreement, the ex-wife was obligated to contribute to the basic graduate school expenses of the parties’ unemancipated children. However, in fact and not surprisingly, at…