For the second time in six weeks the Appellate Division, Third Department, reduced an award of spousal maintenance for the failure to adjust for the distributive award based on the husband’s business. In its October 22, 2015 decision in Gifford v. Gifford, the Appellate Division, Third Department, modified a maintenance award because of the trial court’s failure to adjust the husband’s income for computation purposes to account for the distributive award to the wife based on the husband’s business. In September, in Mula v. Mula, the Third Department held that once valued, the income attributable to ownership of a professional practice may not also be the basis on which to award spousal maintenance (see, the September 14, 2015 blog post).

In Gifford, the parties in this divorce had stipulated a resolution of Equitable Distribution issues, including a $210,000 award to the wife based on the value of the husband’s geotechnical engineer business. After a trial on maintenance on counsel fees, Supreme Court Justice Vincent J. Reilly awarded the wife nondurational maintenance of $6,000 per month from January 1, 2014 through January 31, 2020, $3,000 per month from February 1, 2020 through June 1, 2022, and $800 per month thereafter, terminating upon either party’s death or the wife’s remarriage.

The Third Department held that Justice Reilley erred in utilizing the husband’s total average annual income of $332,431 for purposes of calculating a maintenance award, without making an adjustment for the distributive award of the company.


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Calculator formulaOn June 24, 2015, the New York State Senate passed Bill A7645-2015 relating to the duration and amount of temporary and post-divorce spousal maintenance. The bill passed the State Assembly on June 15th. It awaits approval by Governor Cuomo.

The law’s formulas apply to actions commenced on or after the 120th day after they become law (except for the temporary maintenance formulas which apply to actions commenced on or after the 30th day after they become law). The new law may not be used as a basis to change existing orders and agreements.

The law will undoubtedly be the subject of numerous articles and legal seminars. Years of decisions will be forthcoming that particularly focus on matters of discretion, just as they followed the enactment of the Child Support Standards Act in 1989.

Before getting to the new formulas, the law eliminates a major thorn in side of the matrimonial bench and bar: When equitably distributing the assets of the parties, the court is no longer to consider as a marital asset the value of a spouse’s enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement (however, it may be condidered when making other distributive awards).

As to maintenance, the following highlights may be noted, many of which are contained in the Sponsor’s Memo:


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A non-written agreement for cohabitants to share retirement benefits can be enforceable under a breach of contract claim, but will not support claims to impose a constructive trust, or for unjust enrichment or an accounting. Such was the holding of the Appellate Division, Second Department, in its November 13, 2013 decision in Dee v. Rakower.

In the majority opinion written by Justice Leonard B. Austin, the appellate court relied heavily on the facts as pleaded in the complaint. The parties had lived together in a committed, same-sex relationship for nearly 18 years. Two children were born of this relationship; each party being the biological parent of one child, legally adopted by the other.

After the relationship ended in 2007 (before the passage of New York’s Marriage Equality Act [see, Domestic Relations Law §§ 10-a, 10-b]), Ms. Dee commenced this action seeking to enforce the alleged oral “joint venture/partnership” agreement. Under that agreement, Ms. Dee was to share in assets, including Ms. Rakower’s retirement contributions and earnings, in exchange for Ms. Dee leaving her full-time job to care for the parties’ children.

Before they had children, each party was employed full-time, earning a salary and retirement benefits. The parties pooled their respective salaries to meet their shared expenses. The parties purchased a house as joint tenants with rights of survivorship.

After the parties’ first child was born, the parties agreed, it was alleged, that given the cost of child care, Ms. Dee would eschew her full-time employment and work part-time so that she could be home with the children and perform other non-financial services for the benefit of the family and for the parties’ partnership and/or joint venture while Ms Rakower would continue to work full-time. Ms. Dee alleged that her decision to leave her full-time employment was based upon the parties’ specific agreement that Ms. Dee would be entitled to one half of Ms. Rakower’s retirement contributions and earnings for the period.

Ms. Rakower moved to dismiss Ms. Dee’s complaint. Kings County Supreme Court Justice Yvonne Lewis granted that motion, determining that the facts did not support causes of action for breach of contract, to impose a constructive trust, for unjust enrichment or for an accounting.


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An ex-wife’s failure to obtain a Domestic Relations Order during her ex-husband’s lifetime did not bar relief after his death. The divorce settlement agreement provision that granted her the right to receive the ex-husband’s retirement plan death benefits could be enforced after his death more than seven years after the divorce judgment was entered.

Suchwas the holding of New York County Supreme Court Justice Debra A. James, in the August, 2013 decision in Paschall v. New York City Employees Retirement System.

After 20 years of marriage, Diana and Randy Paschall were divorced. Their 2004 divorce judgment incorporated the terms of their surviving 2003 Settlement Agreement.

By the time of his death in 2011, Mr. Paschall  had married again to Jewel Paschall. Jewel was issued letters of administration for Randy’s estate. She also exercised her personal right of election to take her elective share of her late husband’s estate pursuant to New York Estates, Powers & Trust Law 5-1.1-A.

During his  marriage to Diana, Mr. Paschall accrued benefits under the New York City Employees’ Retirement System (NYCERS). Diana and Randy’s divorce Settlement Agreement provided that in the event of Randy’s death before Diana, Diana would be entitled to Randy’s survivor annuity. The Agreement required Randy to designate Diana as his death benefit beneficiary.

Randy never designated Diana as his death benefit beneficiary. No Domestic Relations Order was ever entered by which Diana’s entitlement was ordered, nor was NYCERS otherwise notified of Diana’s entitlement before Randy’s death. Indeed, in 2009, Randy had designated his children as beneficiaries of his death benefit.

Here, Diana had sued Jewell and NYCERS, itself, seeking to enforce the Settlement Agreement insofar as it gave her rights to receive Randy’s retirement system death benefit.


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