Opinion
305190/16
03-09-2017
Allison B., Plaintiff v. Edward A., Defendant.
For Plaintiff: Dror Bikel Esq. Bikel & Mandarano 18 East 48th Street, Suite 1001 New York, NY 10017 For Defendant: John Katsandonis, Esq. Katsandonis, P.C. 325 Broadway, Suite 404 New York, NY 10007
For Plaintiff: Dror Bikel Esq. Bikel & Mandarano 18 East 48th Street, Suite 1001 New York, NY 10017 For Defendant: John Katsandonis, Esq. Katsandonis, P.C. 325 Broadway, Suite 404 New York, NY 10007 Laura E. Drager, J.
In this divorce action, the Plaintiff ("Wife") moves by order to show cause for pendente lite relief. Some of the issues raised in the Wife's motion were resolved. The remaining issues are the Wife's request for: (1) temporary maintenance in the sum of $18,110 per month; (2) child support in the sum of $10,329 per month;(3) a direction that the Defendant ("Husband") pay 100% of the child's add-on expenses, including 100% of the Child's extracurricular activities and non-reimbursed medical, dental, orthodontia, therapy, optical and pharmaceutical expenses; (4) an award of $50,000 in counsel fees, with leave to request further fees as may be necessary; and (5) any further relief the court may deem just and proper. The Husband opposes all relief sought by the Wife.
A temporary parenting access schedule is in place and further consideration of custody related issues are reserved for trial. The parties agreed that the Wife shall have exclusive occupancy of the Marital Residence.
Background
The parties were married on July 14, 2000. They have one daughter, age 7 (the "Child"). The Child attends private school in Manhattan. The Wife commenced this action on May 11, 2016.
Both parties are attorneys. The Husband, age 45, is a partner at a New York law firm. In 2015, he reported income of $1,391,261 on his tax returns. The parties agreed that he earned $1,284,000 in 2016. (12/15/16 Stipulation). The Wife reported $155,691 on her 2015 tax returns. At that time, she was employed as an attorney at a corporate law firm. She left that position in January 2016. She currently works as a federal government lawyer. She earned $177,000 in 2016.
The parties filed individual tax returns in 2015. There returns were filed with the court after his motion was submitted. Neither party raises objections to the accuracy of these returns. The court has considered these returns in deciding this motion.
In 2010, the parties' purchased for $1.1 million a co-operative apartment on the Upper East Side of Manhattan (the "Marital Residence"). They took out a second mortgage to pay for renovations. As of the date of commencement, the combined mortgages on the property totaled approximately $1,467,500. (Husband's Ex. B). The monthly cost to maintain the Marital Residence, including mortgage interest payments and maintenance, is $8,654. The Wife and Child reside in that apartment. Since October 2016, the Wife has paid 100% of the costs to maintain the Marital Residence from her own income. (Wife's OSC, p. 4). The Husband lives in a rental apartment costing $8,000 per month with his current girlfriend. (Husband's Opp., Ex. C).
In addition to the Marital Residence, the other marital assets identified from the net worth statements include the marital portion of each party's retirement accounts, a BMW Vehicle, a wine collection, art, the Husband's partnership interest, jewelry and bank accounts. (Wife's OSC Ex. A; Husband's Opp., Ex. B). The parties agreed to sell the BMW Vehicle.
Despite his substantial income, the Husband contends that he has depleted his liquid assets and is unable to provide significant support. He claims $2.7 million in marital debt, of which $1,467,500 is attributable to joint mortgages on the Marital Residence. He contends there is additional debt attributable to renovations for the apartment, but provides no proof. (Husband's Opp, ¶. 33). In addition, he claims to owe approximately $500,000 to the IRS for his 2015 taxes and anticipates that he will owe a comparable amount in unpaid taxes for 2016. (Husband's Opp., ¶34.)
The Wife claims that the excess debt is not due to the apartment or taxes. Rather it is the result of the Husband's profligate spending on his personal entertainment during the marriage and after commencement of this action. These expenses include strip clubs, liquor, food, travel and his girlfriend's expenses. She contends his claim of debt is an excuse to avoid paying support. (Wife's Reply, p. 8). Other than paying for the Child's school tuition for the 2015-2016, he had not contributed to the family's expenses since August 2016 when the parties separated. Only in January 2017 did the Husband agree to pay the Wife $2,000 in basic child support, pending a determination of this motion. (January 17, 2017 So-Ordered Stipulation).
Temporary Maintenance
The court is required to apply a statutory formula in determining temporary maintenance awards. DRL §236(B)(5-a). The statutory formula requires calculation of the guideline amount of temporary maintenance based upon given percentages of the parties' respective incomes (up to $175,000 of the "payor's" income). DRL §236(B)(5-a)(b)(5). If the payor earns in excess of $175,000 the court must calculate the payor's income up to and including the income cap and then determine whether an additional amount of maintenance should be awarded taking into consideration any of the factors specified in the statute. DRL §236(B)(5-a)(d) and (h)(1).
The court must apply the provisions of DRL § 236 B (5-a) in effect as of October 25, 2015.
The parties agree that the Husband earned $1,284,000 and that the Wife earned $177,000 in total compensation in 2016. Neither party disputes that the calculated guideline amount of maintenance under the statute is $0.
The court need not make deductions for FICA or NYC taxes given that the result would be the same.
The question remains whether the Wife is entitled to an award of maintenance based on her contention that awarding the guideline amount of maintenance would be unjust and inappropriate. DRL §236(B)(5-1)(d). She claims her request for $18,000 in temporary maintenance is justified in reliance on the statutory factors of the marital standard of living and the Husband's alleged dissipation of marital income. (DRL §236[B][5-a][h][1][e],[k]). (Wife's OSC, p. 14). The Husband objects to paying the Wife any amount of maintenance, claiming that she is self-supporting. Moreover, he contends that her request is excessive and would leave him impoverished.
Although the Wife earns income, neither party disputes the fact that the Husband's income funded the parties' standard of living. The parties' tax returns indicate that since 2013 he consistently earned over $1.2 million. It is anticipated that he will continue to earn the same income. The record demonstrates that the parties enjoyed a high standard of living. They purchased and renovated the Marital Residence. The Child attends private school in Manhattan. The family enjoyed costly vacation trips, belonged to an expensive country club, employed household help and spent freely on food, liquor and entertainment. The Wife's income alone does not allow for the same standard of living enjoyed during the marriage. DRL §236[B][5-a][h][1][k].
The Husband contends that the parties cannot sustain the marital lifestyle due to the debt incurred for the renovations for the Marital Residence. However, the Husband provides no evidence that he is paying down any of that debt. In fact, it appears that the parties are required to pay only the interest on their mortgages and that the Wife alone is now paying this expense. To the extent that the Husband previously paid this debt before August 2016, the interest payments are only $3,766 per month, well within his ability to pay. How the parties will distribute the underlying debt will be addressed at trial. The Wife cannot afford to maintain this asset on her income alone nor should she have to pay down her separate assets to maintain this marital obligation. Both have an interest in maintaining this asset during the pendency of this action.
In addition to the debt arising from the Marital Residence, the Husband argues the parties' financial distress has been further exacerbated by tax liabilities he incurred in 2015 and 2016. He claims he owes the IRS $1 million. (Id., pp.10, 11). He contends that paying this debt must be prioritized or his ability to practice law will be placed in jeopardy. (Husband's Opp., p. 10).
The Husband presents no proof of these alleged tax liabilities. He acknowledges that he receives three tax draws during the year from his partnership earnings. He claims he did not use any of this money to pay taxes. Id. He suggests that he used these tax draws to pay down marital debt, but offers no proof to support that contention. If such amounts are owed to the IRS, there is no indication that he has applied his earnings towards the payment of his taxes.
The Wife argues that the Husband's financial distress arises not from the cost of the Marital Residence or tax liabilities, but from his dissipation of income. DRL §236[B][5-a] [h][1][e]. She provides proof that the Husband spent hundreds of thousands of dollars of his income in the months preceding and after the commencement of this action on strip clubs, his girlfriend, and other "personal" expenses, all without the Wife's knowledge. The Wife presents numerous text messages between the Husband and his paramour in 2016 indicating that the Husband provided her with $14,000 to pay her "debt"; deposited $7,500 into her bank account; purchased gifts for her, including an expensive handbag; and planned a trip for them in France. The Husband and his paramour stayed at expensive hotels and dined at expensive restaurants. (Wife's OSC, Exs. C,D, E). The Wife loaned the Husband $40,000 to help him rent a new apartment, but subsequently learned that he used these funds for personal expenses for himself and girlfriend.
The Husband does not deny that that his expenditures contributed to the parties' significant debt. (See, Treffillet v. Treffillet, 252 AD2d 635 [1998]; compare Burnett v. Burnett, 101 AD3d 1317 [2012]). Moreover, notwithstanding his claimed financial distress, he lists monthly personal expenses of $19,791 on his Net Worth Statement.
On the other hand, the court finds that the Wife's request for a maintenance award of $18,110 unjustified. Some of the expenses she lists in her Net Worth statement are no longer being paid (i.e., $1,680 for housekeeper, $711 for parking). Of her remaining expenses, approximately $10,000 is attributed to the Child's add-on costs and is appropriately addressed in awarding child support. (See, infra). Some of her monthly expenses appear excessive (i.e., $600 for dry-cleaning, $2,000 for clothing, $600 for beauty-aids, $3,500 for vacations).
Taking all of these circumstances into account, the court finds an award of temporary maintenance in the amount of $7,500 per month, taxable to the Wife, to be just and appropriate. This amount, coupled with the Husband's payment of child support (as will be discussed below), will be sufficient to meet the Wife's daily needs in accordance with the parties' lifestyle. From this amount, the Wife shall pay the carrying costs on the Marital Residence. The Wife shall be responsible for paying the carrying costs on the Marital Residence. She shall pay for her own health insurance and unreimbursed medical, dental, drug, therapy and pharmaceutical expenses. This award is retroactive to the date of this application.
In addition to the guideline amount of temporary maintenance, the Plaintiff requests that the temporary maintenance award direct the Defendant to pay the rent and expenses for the Plaintiff's rental apartment. However, the statutory formula for calculating temporary maintenance is intended to cover all of the payee spouse's presumptive reasonable expenses, including an allowance for housing. Otherwise, this award would include an impermissible double shelter allowance. Khaira v. Khaira, 93 AD3d 194 (1st Dept. 2012).
Child Support
In awarding temporary child support, the court can, but is not required to consider the guidelines contained in the Child Support Standards Act ("CSSA"), DRL § 240 (1-b)(c). Rubin v. Salla, 78 AD3d 504, 505 (1st Dept. 2010); Readick v. Readick, 80 AD3d 512 (1st Dept. 2011). The court may also consider the factors that permit a deviation from the standard calculation, as delineated in DRL §240 (1-b) (f). Anonymous v. Anonymous, 63 AD3d 493 (1st Dept. 2009).
Pursuant to the CSSA, to calculate the presumptive amount of child support, the court must first determine the combined parental income. The Wife's income for purposes of calculating child support is $297,000 (with the added maintenance) and the Husband's income is $1,164,000 (less temporary maintenance to the Wife) as calculated above. DRL §§ 240 (1-b) (b), (c). The combined parental income is $1,461,000. The Husband's pro-rata share of the combined parental income is 80% and the Wife's pro rata share is 20%. The presumptive amount of basic child support is obtained by calculating 17% (the statutory percentage for one children) of the combined parental income up to the current statutory cap of $143,000, which is $23,970 per year. The Husband's 80% pro rata share of that sum is $19,176 annually or $1,598 monthly.
The court must next consider the amount of child support to be awarded, if any, on the income that exceed the statuary cap of $143,000 through consideration of the factors set forth in DRL §240(1-b)(f) and/or the child support calculation. (DRL §240 [1-b][c]).
Under the circumstances presented here the court, in light of the parties' income and the marital standard of living, the court finds it is just and appropriate to apply the CSSA calculation to combined parental income up to $450,000. The court concludes that the award should not be based on the full combined income. Kosovsky v. Zahl, 272 AD2d 59 (1st Dep't. 2000). It is not necessary for either parent to commit all of his or her income to meet the needs of the child, even recognizing the Husband's significant income. Thus, the Husband's pro rata share of the child support obligation is $61,200 per year, or $5,100 per month. This amount of support will meet the needs of the child and is commensurate with the lifestyle the child would have enjoyed if the marriage had remained intact.
Add-On Expenses:
The Wife seeks to have the Husband pay 100% for all of the child's add-on expenses, including monthly costs for private school ($3,833), organized school events ($650), extracurricular activities ($150), summer camp ($250), and childcare ($3,800). She also seeks to have the Husband pay the Child's health insurance and 100% for all of the Child's unreimbursed medical and dental expenses ($160). The current combined cost of these expenses is approximately $97,316 per year. Although the Husband's pro- rata share of add-on expenses would be 80% if the statute were strictly applied, the Wife argues that the Husband should be responsible for 100% of these costs based on the lifestyle the child enjoyed during the marriage and the Husband's significant income.
The court finds that the Husband should contribute 80% of all add-on costs for the Child. DRL §240(1-b)(c)(5)(v). Given the party's relative incomes, the court finds no basis to deviate from the pro-rata statutory formula.
The Husband shall pay 80% and the Wife shall pay 20% of the Child's health insurance cost. Since the Husband provides the health insurance coverage for the Child, his monthly basic child support payment to the Wife shall be reduced by her 20% contribution for the Child's health insurance. The Husband shall pay 80% and the Wife shall pay 20% of the Child's unreimbursed medical, dental, ophthalmology, and therapy expenses. The parties shall use in-plan medical providers whenever possible, except for non-plan providers presently used.
The Husband shall pay 80% and the Wife shall pay 20% of the Child's private school tuition, school fees, lunch costs (if provided by the school), school activity fees, and school books. The Husband shall pay 80 % and the Wife shall pay 20% of the Child's extra-curricular and summer activities. The court finds that such fees are appropriate in consideration of the standard of living of the Child during the marriage, the activities the Child participated in during the marriage, and the ability of the parties to pay these costs. ([DRL ¶240 [1-b][f]; Michael J. D. v. Carolina E. P., 138 AD3d 151 [1st Dept. 2016]).
The Husband shall pay 80% and the Wife shall pay 20% of the Wife's childcare costs for a total of forty hours. The Husband complains that the Wife's childcare expenses are excessive. However, the Wife works full time, necessitating this cost. Although the Child attends school full time, the court finds that her young age requires full time childcare at this time.
Each party shall reimburse the other party for his or her share of those costs within 15 days of receipt from the other party of proof of payment to a third party. These awards are retroactive to the date of filing of this motion.
Counsel Fees
Pursuant to DRL §237, the court may direct either spouse to pay counsel and expert fees to enable the other spouse to carry on or defend the action as, in the court's discretion, justice requires, having regard to the circumstances of the case, and of the respective parties. Domestic Relations Law §237(a) creates "a rebuttable presumption that counsel fees shall be awarded to the less monied spouse." An award of interim fees is warranted where there is a significant disparity in the parties' financial resources. The less-monied spouse is not required to spend down all of his available funds to finance the divorce litigation. See, Lennox v. Weberman, 109 AD3d 703, 704 (1st Dep't 2013); Charpie v. Charpie, 271 AD2d 169 (1st Dep't 2000); Prichep v. Prichep, 52 AD3d 61, 66 (2d Dep't 2008).
The Wife requests an award of $50,000 for interim counsel fees with leave to apply for additional fees if needed, based on his status as the "non-monied spouse."The Husband opposes an award of counsel fees to the Wife, claiming that she engaged in bad faith litigation tactics. The Husband paid his attorneys $30,000 in June 2016 and claims he has no available funds to pay his current counsel until he receives his year-end distribution from his company in 2017. He claims that the Wife's income and liquid assets enable her to pay for her own counsel fees.
The Husband is in a substantially stronger financial position than the Wife. While his Net Worth Statement indicates no assets of substantial value, he does not deny that he received distributions from his company after the filing of his Net Worth Statement. He provided no proof of the substantial debt he claims to have and continues to incur excessive expenses for his own pleasure. He claims that the Wife has engaged in excessive discovery. The court finds, however, that he has not been forthcoming about his finances. The Husband has retained three attorneys in this litigation, which was commenced less than a year ago (his most recent attorney was retained after this motion was submitted). He provides no billing records from his prior counsels or any indication of the current fees he owes.
However, the Wife earns income and has over $200,000 in liquid assets. The Wife did not seek pendente lite support for months after this action commenced, yet managed to pay 100% of the carrying costs on the Marital Residence, suggesting that her available funds may be higher than claimed. Moreover, the Husband is paying 100% of the cost for the parenting coordinator.
Taking all these factors into account, the court awards the Wife $30,000 for counsel fees, without prejudice to his making further application as may be necessary. See, DRL §237(a). The Husband shall pay $30,000 in attorneys' fees directly to the Wife's counsel Dror Bikel Esq., Bikel & Mandarano, located at 18 East 48th Street, Suite 1001, New York, NY 10017, $15,000 to be paid within 45 days and $15,000 to be paid within 120 days from the date of this Decision and Order without notice of entry. If the Husband fails to make said payments, then Mr. Bikel shall, on notice, cause the clerk of the court to enter a money judgment against the Husband for any unpaid amount.
Accordingly, it is hereby
ORDERED, that the Husband shall pay to the Wife the sum of $7,500 per month for temporary spousal maintenance, taxable to the Wife, with payment due in equal installments of $3,750 on the first and fifteenth day of each month. The first payment shall be made on March 15, 2017. This award is retroactive to the date of the filing of this motion, August 2, 2017, with the Husband to receive a credit for maintenance already paid to the Wife for which he can show proof of payment. From this amount, the Wife shall pay the costs for the Marital Residence. Arrears, if any, shall be paid at the rate of $1,000 a month, until fully paid; and it is further
ORDERED, that the Husband shall pay the sum of $5,100 per month to the Wife in temporary basic child support to be paid in equal installments of $2,550 on the first and fifteenth day of each month. The first payment shall be made on March 15, 2017. This award is retroactive to the date of the Wife's application, August 2, 2016. Arrears shall be paid at the rate of $1,000 per month, and continuing until all arrears are paid in full; and it is further
ORDERED, that the Wife is responsible for her own health insurance coverage and shall pay 100% of the cost for her own non-reimbursed medical, dental, drug, therapy and pharmaceutical expenses; and it is further
ORDERED, that the Husband shall pay 80% and the Wife shall pay 20% of the Child's health insurance cost. Since the Husband provides the health insurance coverage for the Child, his monthly basic child support payment to the Wife shall be reduced by her 20% contribution for the Child's health insurance. The Husband shall pay 80% and the Wife shall pay 20% of the Child's unreimbursed medical, dental, ophthalmology, prescribed pharmaceuticals and therapy expenses. The parties shall use in-plan medical providers whenever possible, except for non-plan providers presently used; and it is further
ORDERED, that the Husband shall pay 80% and the Wife shall pay 20% of the Child's private school tuition, school fees, lunch costs (if provided by the school), school activity fees, and school books; and it is further
ORDERED, that the Husband shall pay 80 % and the Wife shall pay 20% of the Child's extra-curricular and summer activities; and it is further
ORDERED, that the Husband shall pay 80% and the Wife shall pay 20% of the Wife's childcare costs for a total of forty hours; and it is further
ORDERED, that each party shall reimburse the other party for his or her share of those costs within 15 days of receipt from the other party of proof of payment to a third party;
ORDERED, that these awards for add-on expenses are retroactive to the date of filing of this motion; and it is further
ORDERED, that the Husband shall pay $30,000 in attorneys' fees directly to the Wife's counsel Dror Bikel Esq., Bikel & Mandarano, located at 18 East 48th Street, Suite 1001, New York, NY 10017, $15,000 to be paid within 45 days and $15,000 to be paid within 120 days from the date of this Decision and Order without notice of entry. If the Husband fails to make said payments, then Mr. Bikel shall, on notice, cause the clerk of the court to enter a money judgment against the Husband for any unpaid amount; and it is further
ORDERED, that any relief not granted is denied.
This is the Decision and Order of the court. Dated: March 9, 2017 Hon. Laura Drager, J.S.C.