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

It is often said that it is difficult, if not impossible to prove a negative. The concept may be extended to finding the intent of the parties to a contract, and more particularly a divorce settlement agreement

One would think a divorce settlement agreement would provide for all of the rights and obligations of a divorcing couple arising from their marriage, children, and divorce. So what happens when a subject is not specifically covered? If the agreement does not state that a specific child support-related expense is to be paid by the non-custodial parent, does that mean that that parent does not have such an obligation? Is an agreement required to specifically provide that any obligation not specifically stated does not exist?

Take the November 26, 2014 decision of the Appellate Division, Third Department, in Malone v. Malone. In that case, the Third Department upheld the denial of an ex-wife’s requested upward modification of the ex-husband’s child support because the underlying divorce settlement agreements were not unfair or inequitable when entered into; there was no proof the children’s needs were not being met (pardon the double negative); and there was no other basis for an upward modification. Doing so the Third Department affirmed the holding of Rensselaer County Supreme Court Acting Justice Peter A. Lynch.

Continue Reading Divorce Settlements: It’s Not Just What You Say, But What You Don’t Say

Two of three November 5, 2014 custody decisions of the Appellate Division, Second Department, reversed Family Court determinations.

In the only affirmance in Mondschein v. Mondschein, the Second Department upheld the order of Westchester County Family Court Judge David Klein which, after a hearing, granted a father’s petition to modify the custody provisions of the parties’ divorce (2011) stipulation of settlement, awarding the father sole legal and physical custody of the parties’ two younger children, with supervised visitation to the mother. Affirming Judge Klein, the Second Department noted:

Since custody determinations necessarily depend to a great extent upon an assessment of the character and credibility of the parties and witnesses, deference is accorded the Family Court’s findings. Therefore, its findings should not be set aside unless they lack a sound and substantial basis in the record.

Here, contrary to the mother’s contention, the appellate court found that Judge Klein had properly considered the totality of the circumstances, and that the record supported his determination that there had been a sufficient change in circumstances requiring a change in custody to protect the best interests of the parties’ two younger children. That record included the hearing testimony and the recommendation of the court-appointed forensic evaluator.

In Burke v. Cogan, the Second Department reversed the determination of Suffolk County Family Court Judge Martha Luft that had dismissed the petition of a mother to modify a prior custody order by awarding her sole residential custody of the parties’ 13 year-old child. The appellate court awarded the mother such custody.

Continue Reading Appellate Reversals of Custody Decisions

Father and daughter.jpgParents sometimes enter child support agreements which track the presumptive formula set out in New York’s Child Support Standards Act (Family Court Act §413; Domestic Relations Law §240[1-b]). However, parents in their agreements often deviate from the presumptive formula to reflect various considerations. That deviation for a married couple may reflect the delicate balancing of property rights, spousal maintenance and child support.

For example, parents may reduce the presumptive child support amount where the child(ren) spend more time with the “non-custodial” parent than what might be considered the “normal” alternate weekends and a mid-week dinner.

May the non-custodial parent’s failure to fully exercise visitation rights under an agreement serve as a basis to increase child support?

In its July 11, 2012 opinion in McCormick v. McCormick, the Appellate Division Second Department said, “Yes.” It found that the substantial reduction in a father’s visitation with his child warranted an upward modification of the father’s child support obligation. That reduction in visitation provided the substantial change in circumstances needed to justify a support modification.

[T]he mother established that an increase in the father’s child support obligation was warranted by a change in circumstances … Specifically, the substantial reduction in the father’s visitation with the child, which significantly reduced the amount of money the father was required to spend on the child, “constituted an unanticipated change in circumstances that created the need for modification of the child support obligations.”

The Second Department was quoting from the 2002 decision of the Court of Appeals in Gravlin v. Ruppert, 98 NY2d 1, 743 NYS2d 773. That case also addressed a father’s failure to live up to his scheduled substantial parenting time.

Continue Reading Father's Failure To Visit Child Is Grounds To Increase Child Support

Gavel main.jpgIn a stipulation which settled a prior dispute between parents, the father agreed to pay child support. The mother had sole custody of the parties’ child.

The father thereafter commenced a Nassau County Family Court proceeding to terminate his child support obligation. Upon the mother’s motion, Support Magistrate Penelope Beck Cahn dismissed the father’s petition.

Handshake 1.jpgParticularly when it comes to agreements fixing child support obligations, “shaking on it” is simply not enough.

Both the Domestic Relations Law and the Family Court Act authorize parents to enter agreements which establish their child support obligations. DRL §§236B(3) and 240(1-b)(h) and FCA §413(1)(h) set out many requirements for such agreements.

Nothing suggests that