Statutory Cap

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A court gavel on 100 bills - legal concept

In its December 30, 2016 decision in Peddycoart v. MacKay, the Second Department reduced a father’s obligation to pay child support from $542 to $378 per week by holding that the Family Court should not have imposed the support obligation on the parents’ income in excess of the C.S.S.A. “statutory cap” (then $141,000).

The parties, who were never married, had one daughter together, born in 2009. The father signed an acknowledgment of paternity less than nine days after the child was born. The parties did not have an order of child support for approximately six years. In 2015, the mother filed a petition against the father seeking an award of child support. After a hearing, Support Magistrate Barbara Lynaugh determined that the mother had income of $36,112 and that the father had income of $166,096, for combined parental income of $202,208, exceeding the cap by $61,208.Continue Reading Imposing Child Support on Income Over Cap Not Warranted

Calulator on 100s 3In its April 1, 2015 decision in Pittman v. Williams, the Appellate Division, Second Department, reversed a decision of Supreme Court, Kings County Court Attorney/Referee (and now Family Court Judge) J. Machelle Sweeting that awarded child support equal to 17% of the father’s entire $441,000 income.  The Second Department also deleted a requirement that the father pay private school tuition after preschool, and allocated the wife’s child care expense equally between the father’s child and another of the mother’s children for whom care was provided.

In this child support proceeding, the parties’ combined income was $489,937. The father’s income represented 90% of this sum or C.S.S.A.-adjusted income of approximately $441,000 per year; the mother’s 10% share was approximately $49,000. Referee Sweeting directed the father to pay child support in the sum of $6,246 per month, child care expenses in the sum of $291.60 per week, and his pro rata share of the child’s tuition at the Brooklyn Waldorf School.

The Second Department reversed and remitted the matter for a new determination of the amount of the basic child support obligation.

The Child Support Standards Act sets forth a formula for calculating child support by applying a designated statutory percentage, here 17% for one child, to combined parental income up to a particular ceiling. The court, in fixing the basic child support obligation on income over the ceiling, i.e., the “statutory cap” (in this case, $136,000), has the discretion to apply the factors set forth in the statute, or to apply the statutory percentage, or to apply both.

However, there must be some record articulation of the reasons for the court’s choice to facilitate review. The court’s decision should reflect a careful consideration of the stated basis for its exercise of discretion, the parties’ circumstances, and its reasoning why there should or should not be a departure from the prescribed percentage. In addition to providing a record articulation for deviating or not deviating from the statutory formula, a court must relate that record articulation to the statutory factors.

Here, the Second Department held that the Referee properly determined that the parties’ combined parental income was $489,937. However, when determining the amount of child support, Referee Sweeting failed to articulate her reasons for applying the statutory percentage of 17% to the combined parental income over the statutory cap of $136,000. As a result, her determination was reversed. It was held that the matter must be remitted for a new determination in this regard and the court must articulate its reasons for the new determination.Continue Reading Reasons To Apply CSSA Formula to Father's $441,000 Income Must Be Stated; No Private School Payment Without Proof Of Superiority Of Education

The alleged failure of the mediator and the husband’s counsel to advise the husband that a court need not apply the C.S.S.A. formula to the husband’s entire agreed-upon income of $1,200,000.00 per year income is not a basis to set aside a divorce settlement agreement, or its $29,500.00 per month child support obligation. So held Westchester County Supreme Court Justice Lawrence H. Ecker in his January 16, 2014 opinion in A.B. v. Y.B.

The couple involved separated after 12 years of marriage. Following three years of mediation, the parties entered into an agreement that resolved issues of custody and access to the parties’ three children, maintenance, child support, and equitable distribution. The husband is a 50% equity partner in a brokerage firm. The wife is owner and operator of her own business.

Upholding the agreement, Justice Ecker took pains to quote several of its provisions. One acknowledged that the parties had waived the “compulsory financial disclosure” requirements of the Domestic Relations Law and court rules, and agreed not to exchange Net Worth Statements. Nonetheless, the parties represented to each other that each made a full and complete disclosure of assets, liabilities, income and expenses, and that they relied on the information provided.

The agreement recited the husband’s disclosure, to the best of his knowledge, of his gross personal 2010 income as approximately $156,427.00. The parties agreed to use the 2010 income because their 2011 income was not yet available. The Husband disclosed that in no event was his income from any and all sources more than $156,427.00 in said year.

Nonetheless, for purposes of the agreement, the parties agreed to use an imputed income of$1,200,000 in computing the child support calculation under the Child Support Standards Act.

The parties acknowledged that they reached their agreement with the aid of the mediator, but that the mediator provided no legal representation to either of the parties. Further, although “the mediator may have provided information or opinions concerning the state of the law generally, neither party has relied upon such information or opinions in executing this Agreement.”

The parties further represented that each had ample opportunity to obtain independent legal counsel, and counsel [apparently recommended by the mediator] for each spouse was named.

As to the basic child support obligation, the agreement provided it was agreed that the the husband’s would pay $29,500 per month [$354,000 per year] for 12 years, 5 months, subject to a cost of living increase biennially. The husband was further responsible for 100% of discretionary expenses and add-on expenses, including private school tuition for all three children, private college expenses, camp and summer programs, religion education expenses, Bar and Bat Mitzvah expenses, health insurance and unreimbursed medical expenses.Continue Reading Claimed Ignorance of C.S.S.A. Treatment of Income Over Cap Not Basis to Set Aside Divorce Settlement Agreement

Considering the add-ons for private school, health care, child care, and extra-curricular activities, imposing a base child support obligation upon a father (the less-moneyed spouse) in excess of his pro rata share of the first $136,000 of combined parental income would be unjust and inappropriate. Such was the holding of Acting Supreme Court Kings County Justice Debra Silber in her August 12, 2013 decision in A.C. v. J.O.

That ruling, at first blush, would appear to be at odds with the Second Department’s August 14, 2013 decision in  Beroza v. Hendler, the subject of Monday’s blog post. There, the appellate court held it was improper for the trial court to have limited the base child support obligation of the father (the less moneyed spouse) to less than his pro rata share of the first $400,000 in combined parental income.

Any comparison, however, must be clouded by the vast number of factors that Justice Silber considered when deciding all of the issues incident to the parties’ divorce.

In A.C. v. J.O., at the time of the commencement of the divorce action in May, 2011, the parties had been married for almost 13 years. They had two children, a daughter now 12 and a son now 10. The parties were still living together. The wife, 52 years old, had her own dental practice, with income stipulated to be $251, 395. The husband, 47, worked as a first assistant director, primarily for television. He also wrote screenplays and recently made a full length film, which he both wrote and directed. The husband’s income was stipulated to be $171,706.

In a lengthy opinion, Justice Silber awarded the mother both physical and legal (decision-making) custody of the two children. Although both parents could handle parenting responsibilities alone, joint custody was not appropriate as the parents’ “cannot easily agree upon anything.” Justice Silber provided a detailed plan for the father’s “parental access” and consultation on major decisions.Continue Reading No Child Support Awarded Upon Combined Parental Income in Excess of $136,000 Statutory Cap

Two published decisions last week ruled on the whether to award child support upon combined parental income in excess of the base child support amount. In the first, the Second Department in Beroza v. Hendler, found it was an improvident exercise of discretion for the trial court to have capped the parties’ combined parental income at $255,000.00. On appeal, the Second Department increased the cap to $400,000.00 and awarded the mother the father’s pro rata portion of that capped amount.

In the second case, A.C. v. J.O. (to be the subject of Wednesday’s blog post), Acting Kings County Supreme Court Justice Debra Silber, determined that although the parents had net combined parental income of $423,100.00, the father’s child support obligation would be limited to his pro rata share of the $136,000.00 cap.

In Beroza, the father had commenced this divorce action in 2001 after 11 years of marriage. At that time the oldest of the parties’ three children was 4½ years old and their twins were 18 months old. The parties were both educated professionals. The father was a veterinarian with a private practice devoted to horses and a related horse-boarding business and the mother was a partner in a group anesthesiology practice. Both parties worked throughout the marriage. the family enjoyed an affluent lifestyle in Laurel Hollow.

Underlying the parties’ 2008 divorce judgment, Nassau County Supreme Court Justice Ira Warshawsky imputed gross annual income to the father of $259,100.00. The father’s base annual child support obligation was fixed at as 29% of $200,000.00, or $4,833.33 monthly.

On the husband’s appeal from the 2008 judgment, the Second Department agreed with amount of the father’s imputed annual gross income, but remitted the matter to the Supreme Court because it had failed to properly set forth the parties’ pro rata shares of child support. Additionally, the lower court failed to adequately explain its application of the “precisely articulated, three-step method for determining child support’” pursuant to the Child Support Standards Act (Beroza v Hendler, 71 AD3d 615, 617, 896 N.Y.S.2d 144 [2010]).

On remittitur, Justice Warshawsky re-determined the parties’ respective annual net C.S.S.A. incomes to be $248,721.00 for the father and $487,693.00 for the mother, for net combined parental income of $736,414.00. However, for the purpose of determining the plaintiff’s child support obligation, the court capped combined parental income at $255,000.00.

Justice Warshawsky found that $255,000.00 adequately reflected a support level that met the needs and continuation of the children’s lifestyle, as dictated by the past spending practices of the parties. Justice Warshawsky applied the 29% statutory percentage to combined parental income capped at $255,000.00 ($73,950.00 total support obligation), and the calculated that the husband’s 33.7% pro rata support obligation at $24,921.00, annually, or $2,076.75, monthly.

The Second Department modified. Although he had articulated his analysis pursuant to the three-step method for determining child support embodied in the C.S.S.A. guidelines, Justice Warshawsky, the appellate court held, improvidently exercised his discretion in capping the parties’ combined parental income at $255,000.00.Continue Reading $400,000 Combined Parental Income Cap Imposed by Second Department when Determining Father’s Child Support Obligation