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

The First Department, in its February 19, 2013 decision in David v. Cruz, threw out an entire settlement agreement because of its failure to include  language required by the Child Support Standards Act.

The C.S.S.A. sets out a presumptive formula for the calculation of a parent’s child support obligation.

Parents are free to agree to vary the formula and fix their own base periodic child support obligation. They may also fix the parents’ respective liabilities for addition health care, child care and add-on expenses, if not others. However if they so agree, the parents must recite in their agreement what would have been the results had the presumptive statutory formula been applied.

As noted by the First Department, an agreement purporting to opt out of the presumptive basic child support obligations set forth in the Child Support Standards Act must include a provision stating that the parties have been advised of the provisions of the C.S.S.A., must specify the amount that the basic child support obligation would have been, and must state the reason or reasons for the deviation (Family Court Act § 413 [1] [h]; Domestic Relations Law § 240[1–b][h]). That required recitation may not be waived by either party or by counsel.Continue Reading Settlement Agreement’s Failure to Include C.S.S.A. Recitation Invalidates Entire Agreement

scissors contract 2.jpgWhat happens when only one provision of an agreement is invalid because it violates some statute or public policy?  The answer may depend on who the court wants to benefit, instead of consistently-applied rules of contract law.

Take, for example the April 5, 2011 decision of the Second Department in Duggan v. Duggan.  In that case, the parties had resolved their divorce by a surviving February 26, 2009 stipulation of settlement. Under that stipulation, the father, who had gross income of $475,000.00, agreed to pay a base monthly child support obligation of $8,000.00.  That amount deviated from the presumptive amount under the Child Support Standards Act (C.S.S.A.) of $11,929.54. The mother had no income.

Apparently, the stipulation also had a provision which called for the reduction in the father’s monthly obligation in the event his income was reduced.

In 2010, the mother brought a Family Court enforcement proceeding when the father ceased making the payments to which he originally agreed. The father raised the stipulation’s modification provision, arguing that his $8,243.00 annual reduction in income to $466,757.00 entitled him to a $76,800.00 annual reduction in child support (to $1,600.00 per month)!

Finding that the father’s interpretation of the stipulation modification provision was “not plausible,” Nassau County Family Court Judge Julianne S. Eisman denied the father’s objections to the Order of Support Magistrate Tejindar S. Kahlon which granted the mother’s arrears petition. Finding that the language of the Stipulation, as interpreted by the father, would violate the C.S.S.A., and was against the best interests of the children, the modification provision was ignored.

On appeal, the Second Department affirmed, holding that the Family Court had the authority to find that a provision in a stipulation of settlement violated the C.S.S.A. The appellate court found that a provision which called for a reduction in child support to 13% of the presumptive C.S.S.A. amount, merely because the father’s income dropped by 1.7% was “against the best interests of the children.”

It is noteworthy that the appellate court did not quote the startling modification provision. Equally noteworthy is that there was no discussion of any interpretation of the modification provision other than the one the Family Court considered implausible.

In order to have obtained the Judgment of Divorce, it would have been necessary to have made the recitation in the stipulation of settlement that the parties had been made aware of the C.S.S.A. and its presumptive formula in their case. D.R.L. §240(1-b)(h).  The parties would have had to have stated the reasons they agreed to deviate from the C.S.S.A guidelines. Specific Findings of Fact would have been made by the Supreme Court upholding those reasons.

It is understandable that the presumed failure of the Supreme Court to review the specific modification provision might not estop the mother from later attacking that provision when it was sought to be applied. Thus, the form language of a divorce judgment that “the parties are directed to comply with every legally enforceable term and provision” of the agreement incorporated into the judgment, does not mean that every provision is, in fact, legally enforceable.

What then is, or should be the impact of rendering unenforceable only one provision of a settlement agreement?Continue Reading Severability: When Only One Provision of a Divorce Settlement Agreement Is Invalid