S.H. v. E.S.

Full title: S.H., Plaintiff, v. E.S., Defendant.

Court: Supreme Court, Westchester County, New York.

Date published: Oct 24, 2014

43 N.Y.S.3d 769 (N.Y. Sup. Ct. 2014)

Opinion

No. xx/14.

10-24-2014

S.H., Plaintiff, v. E.S., Defendant.

Teitler & Teitler LLP, New York, Attorneys for the Plaintiff. Cohen Clair Lans Greifer & Thorpe LLP, New York, Attorneys for the Defendant.

LINDA CHRISTOPHER, J.

Teitler & Teitler LLP, New York, Attorneys for the Plaintiff.

Cohen Clair Lans Greifer & Thorpe LLP, New York, Attorneys for the Defendant.

LINDA CHRISTOPHER, J.

This action for divorce was commenced on November 4, 2009. On September 8, 2011 the Court granted defendant a divorce based on cruel and inhuman treatment. The plaintiff did not contest the divorce. The parties entered into a stipulation entitled Custody and Parenting Agreement on September 9, 2010. The Court held a trial for 28 days on the issues of equitable distribution, child support, professional fees and maintenance over a period commencing September 8, 2011 and concluding January 23, 2012.¹ The trial did not continue day to day due to some medical issues of one of the trial attorneys as well as certain scheduling issues of the attorneys and the Court. Upon conclusion of the trial, the Court took an unexpected medical leave of absence that extended for the better part of 2012.

1 The Amendments to this Decision are made pursuant to the Court's Decision and Order, rendered from the bench on October 20, 2014 (post trial) in connection with plaintiff's motion filed July 28, 2014 and defendant's cross motion filed September 17, 2014, as well as the stipulations entered into by the parties on October 20, 2014 in connection with said motion and cross motion.

The witnesses who testified before the Court included both parties as well as a number of experts whose reports were also submitted into evidence:

Experts

Reports from the following experts were submitted by the Husband:

a. Jonathan Miller, Michael J. Grassi, Richard A. Carlson, Miller–Samuel, Inc.—expert and reply reports for Westchester County House, Amagansett Beach House and Westchester County House No.2.

b. Joan Lipton, ParenteBeard LLC.—Expert and Reply Report for Expense Analysis and Compensation

c. Rona Wexler, Wexler Consulting LLC.—Expert Report

Reports from the following experts were submitted by the Wife:

a. John R. Johnson and Thomas A. Hutson, BST Valuation & Litigation Advisors, LLC—expert report and reply report.

b. Peter N. Davidson, MBA, ASA, Peter N. Davidson Co.—expert report and reply report.

c. John Philip Mason, Mason Appraisal Services—expert report and reply report.

d. Steven M. Kaplan, CPA/ABV, MBA, Eisman, Zucker, Klein & Ruttenberg, LLP—expert report and reply report.

e. Lynn Mizzy Jonas.

Christopher Gaillard, Jason Preston, and Edward Lewand of Gurr–Johns International were retained jointly by the Husband and the Wife and issued expert reports to both with respect to the valuation of personal property. The parties agree upon the valuations contained in these reports.

At the conclusion of the trial, the Court reserved decision, and the Court received post trial memoranda, as well as Stipulations compiled and submitted by each side.

After considering the testimony of the parties and the witnesses, a careful review of the documents admitted into evidence which include numerous "plan" documents and expert reports that the Court spent many, many hours reviewing, the parties' Net Worth Statements, Stipulation of Facts Not in Dispute and the post trial memoranda, the Court makes the following findings of facts deemed established by the evidence and reaches the following conclusions of law.

Divorce Grounds

After inquest, the defendant is granted a divorce on the ground of cruel and inhuman treatment by the plaintiff. The plaintiff did not contest the defendant's testimony on grounds and consented to the divorce to defendant based on cruel and inhuman treatment.

Background

The parties were married on ____, 1994. The action for divorce was commenced on November 4, 2009. Plaintiff, S.H. ("Husband"), was born ____ 1964 (age 46 at the time the trial commenced). Defendant, E.S. ("Wife"), was born on ____, 1965 (age 46 at the time the trial commenced).

The parties have four children, R. H., born on ____, 1994 (age 17 at the time of trial), social security number xxx-xx-xxxx, W. H., born on ____, 1996 (age 15 at the time of trial), social security number xxx-xx-xxxx, G. H., born on ____, 1999 (age 12 at the time of trial), social security number xxx-xx-xxxx, and A. H., born on ____, 2002 (age 9 at the time of trial), social security number xxx-xx-xxxx.

The issues of custody, access and decision-making were resolved by a Custody and Parenting Agreement dated September 2010. The terms will be incorporated by reference into the Judgment of Divorce.

The parties jointly own a house known as Westchester County House, New York. The parties purchased the marital residence in or about ____, 2005 for $8 million and the house is encumbered by both a home equity line of credit and a mortgage. The parties made significant improvements to the residence.

The Wife presently resides at Westchester County House, New York, with the parties' children.

The Husband presently resides at Westchester County House # 2, New York, which he purchased in or about ____, 2010, with his separate property.

The parties jointly own a house known as ____, Amagansett, New York (the beach house). This house was purchased in or about ____, 2000 and is currently encumbered by a mortgage. They agreed upon its value at $7,425,000.

The parties' jointly owned vacation properties known as Weeks 10 and 47 at the ____, Colorado. They have been sold and the net proceeds from the sale were divided equally between the parties pursuant to the Stipulation dated September 10, 2010 ("September 10, 2010 Stipulation").

The parties did not value their interests in either H., Ltd. or R ., LLC, and such interests are to be divided equally upon sale pursuant to Stipulation dated September 10, 2010.

Each party took an advance against equitable distribution and agreed to payment of interim living expenses pursuant to a Stipulation dated January 2010 (the "January 2010 Stipulation"). The complete terms and conditions of the January 2010 Stipulation are incorporated herein by reference.

Each party received from the parties' joint Bank account an advance on equitable distribution pursuant to Stipulation dated April 2010 (the "April 2010 Stipulation"). The complete terms and conditions of the April 2010 Stipulation are incorporated herein by reference.

Each party received as an advance on equitable distribution securities from the parties' joint B.'s investment account—3798 and distributed other assets pursuant to the Stipulation dated October, 2010 (the "October 2010 Stipulation"). The complete terms and conditions of the October 2010 Stipulation are incorporated herein by reference.

The parties entered into a confidentiality Stipulation concerning documents or information relating to B.PLC and Bank Capital, dated June 17, 2010. The complete terms and conditions of the Confidentiality Stipulation are incorporated herein by reference.

The parties entered into another stipulation regarding interim living expenses on June 1, 2011, the complete terms and conditions of which are incorporated herein by reference.

Plaintiff was employed by prior Bank from July 1993 until September 2008 at which time prior Bank went bankrupt and as of September 2008 Mr. H. ceased to be employed by prior Bank. The Husband's employment with Bank Capital commenced on September 22, 2008.

The Wife was employed by M.A. & S. from the summer of 1987 through February 1994.

The parties' children, ages 17, 15, 12 and 9, each attended private schools.

STIPULATED ASSETS AND VALUES

C. Accounts

Plaintiff's C. Checking Account x7117 had a balance of $0.00 as of the date of commencement.

Plaintiff's C. Account x0638 had a balance of $0.00 as of November 1, 2009.

F.R. ("FR") Accounts

Plaintiff's FR–6274 had a balance of $2,194 as of November 1, 2009. This is the Husband's separate property.

W. ("W") Accounts

Defendant's W–0605 had a balance of $17,760 as of November 6, 2009. This is the Wife's separate property.

Defendant's W–2130 had a balance of $14,098 as of November 6, 2009, which is marital property.

Defendant's W–7367 had a balance of $12,821 as of November 6, 2009. This is the Wife's separate property.

Defendant's W–9190 had a balance of $47,587 as of November 6, 2009, which is marital property.

Bank ("B") Accounts

The joint B–3798 had a balance net of margin debt of $13,400,175 as of November 1, 2009. This account had a balance net of margin debt of $15,406,788 as of July 31, 2011. This account is marital property.

Plaintiff's B–0957 had a balance net of margin of $3,393, 463.78 as of July 31, 2011. This account is the husband's separate property.

Plaintiff's F. 401k Account # 4452

The marital portion shall be distributed equally between the parties by QDRO or other order.

Prior Bank Pension Plan

The marital portion will be QDRO'd pursuant to Stipulation of the parties.

Westchester County House

Agreed fair market value of property is $7,600,000. Mortgage as of July 15, 2011—principal balance $1,995,322. HELOC as of July 15, 2011—principal balance $1,189,808. Wife's installation of pool—Wife to receive a credit of $100,000.

Wife's completion of Nanny Suite—Wife entitled to a credit (no stipulation as to the value of the credit).

Westchester County House Furnishings—Wife entitled to keep and to be assessed the value pursuant to Stipulation of the parties.

Amagansett House

Stipulation FMV is $7,425,000. Furnishings to be dealt with pursuant to Stipulation. No Stipulation as to the distribution of the asset.

—P. Road

Purchased by Husband with advances against equitable distribution; this is the Husband's separate property. Furnishings and 2008 Aston Martin pursuant to Stipulation.

2009 Suburban and ES 2009 Lexus GX470

Husband to keep his Suburban/Wife to keep her Lexus. Wife to pay Husband $6,500 to equalize.

Bank 2010 and 2011 Share Value Plan (SVP)

Husband's separate property pursuant to Stipulation.

Bank 2011 Contingent Capital Plan

Husband's separate property pursuant to Stipulation.

Bank 2010 Plan Cycle Capital Value Incentive Plan

Husband's separate property pursuant to Stipulation.

Bank 2010 Cash Value Plan (CVP)

Husband's separate property pursuant to Stipulation.

Frequent Flyer/Hotel Points

Agreed to pursuant to Stipulation.

Children's Accounts

To be maintained as they are currently set up.

Business Interests

H., Ltd.—To be sold pursuant to Stipulation and proceeds divided equally.

R., LLC—To be sold pursuant to Stipulation and proceeds divided equally.

—Colorado Weeks 10 and 47

Sold pursuant to Stipulation and proceeds equally divided.

MLP's

Master Limited Partnership shall be divided equally between the parties including embedded taxes. (The issue of imbedded taxes continued past the trial with the parties arguing what they agreed to.) As a result of the parties being unable to agree on the issue of the embedded taxes of capital loss carry forwards, the parties shall divide the assets "in kind" that contain such capital loss carry forwards.

R.M. LLP

Husband's separate property.

Other

Defendant's C.S.B. IRA Account xxx-xxx-xxxx-xxx had a balance of $141,220 as of July 31, 2011. This account is the Wife's separate property.

Defendant's C.S.B. Account xxx-xxxxx-xx-xxx had a balance of $4,723,849 as of July 31, 2011. This account is the Wife's separate property.

The Facts and Analysis

Mr. H., who worked his way up from modest means, graduated from NYU Business School with an MBA in the early 1990's and began working full time with O. the same year, in their equity research department. In 1993, he started with former Bank. In March, 1994, he became a father and married Ms. S. the same year. Ms. S., who prefers to be called "B." is a 46 year old (at the time of trial) graduate of Trinity College. While employed by M.A. & S., she was a stock analyst who passed three levels of the CFA exam. At first, the parties were living in B., New York. Within a year, they moved to L., New York. They soon bought a house in Westchester County (prior to the second home they bought in Westchester County where the defendant currently lives.) It was approximately 5300 square feet on 2/3 acre. They renovated the house and bought the lot next door. The parties sold the house in 2005 for $2,995,000 and the lot for $950,000.

Mr. H.'s schedule called for him to generate work very early during the week and afforded him weekends off to spend with his family. He was actively involved as their Little League coach, with soccer and other sports. Mr. H.'s adjusted gross income for the years 1997–2010 was as follows:

1997	$1,821,563	Ex 327
1998	$1,676,000	Ex 328
1999	$1,854,696	Ex 329
2000	$2,081,091	Ex 331
2001	$3,601,482	Ex 331
2002	$4,938,970	Ex 330
2003	$7,294,030	Ex 147
2004	$5,900,762	Ex 146
2005	$15,127,479	Ex 145
2006	$10,624,565	Ex 144
2007	$10,168,407	Ex 143
2008	$2.8 Million	Ex 80
2009	$4.8 Million	Ex 148
2010	$3.6 Million	Ex 299

Between 1997–2004, the parties sold their first beach house and bought another. They bought more cars and began to employ more help.

As shown above, Mr. H.'s income surged in 2005 as a result of both increased income and vesting of deferred compensation. As he testified, the parties decided to "buy and renovate a mansion". In 2005, they sold first Westchester County Home and moved into second Westchester County Home, which is 15,000 square feet, 35 rooms on 4.5 acres. Mr. H. described the result as a "disaster". The parties lost $4—$5 million and they engaged in marital strife over the maintenance and renovation of the house.

The cost to the parties of maintenance, property taxes, domestic help, renovation costs, and landscaping all increased dramatically, as did the household staff. The parties embarked on major renovations and B. went off to Europe and India to find furniture and rugs appropriate for their mansion. In 2006, Mr. H. earned $10,624,565 (Ex 144). In 2007, he earned $10,168,407 (Ex 143).

As early as 2003, the parties smartly decided to diversify their investments into non-Wall Street connected investments, such as coal, natural gas and health care. These and other investment decisions were made by the parties together. The defendant's experience as a stock analyst was helpful as she studied and made investment decisions with plaintiff.

Mr. H. remained at former Bank through the fall of 2008, despite their filing for bankruptcy in September, 2008. Unfortunately approximately 50–60% of Mr. H.'s annual compensation had been deferred for five (5) years. Hence, when former Bank went bankrupt, the H.'s lost about $20 million.

Nevertheless in 2008, with a new employer, Bank, Mr. H. earned $2,809,903 (Ex 80). The breakdown of his compensation (as opposed to earnings) is as follows:

$200,000	Base
$2,910,000	Cash bonus received in February 2009 and reported on 2009 tax return
$890,000	EPP Incentive Award Plan (not received at time of trial)

(The parties split the cash bonus award received February, 2009 50/50 pre-commencement.)

His position there is Director and Head of a major Division of a major bank. In 2009 his income was $4.8 million. In 2010, it was $3.6 million.

DISCUSSION/ANALYSIS

Equitable Distribution

The premise of the equitable distribution law is that "a marriage is, among other things, an economic partnership to which both parties contribute as spouse, parent, wage earner or homemaker." O'Brien v. O'Brien, 66 N.Y.2d 576, 585, 498 N.Y.S.2d 743, 489 N.E.2d 712 (1985). "The Equitable Distribution Law reflects an awareness that the economic success of the partnership depends not only upon the respective financial contributions of the partners, but also on a wide range of nonremunerated services to the joint enterprise, such as homemaking, raising children, and providing the emotional and moral support necessary to sustain the other spouse in coping with the vicissitudes of life outside the home (citations omitted)." ' Price v. Price, 69 N.Y.2d 8, 14, 511 N.Y.S.2d 219, 503 N.E.2d 684 (1986).

Although equitable distribution does not necessarily mean equal distribution, the general rule calls for an equal distribution of the marital assets, unless the equities of an individual case require an unequal distribution. See, Conner v. Conner, 97 A.D.2d 88, 96, 468 N.Y.S.2d 482 (2nd Dept.1983). The basic premise of equitable distribution is that

modern marriage should be viewed as a partnership of co-equals. Upon the dissolution of a marriage there should be an equitable distribution of all family assets accumulated during the marriage and maintenance should rest on the economic basis of reasonable needs and the ability to pay. From this point of view, the contributions of each partner to the marriage should ordinarily be regarded as equal, and there should be an equal division of family assets, unless such a division would be inequitable under the circumstances of the particular case.'

Conner, 97 A.D.2d at 96, 468 N.Y.S.2d 482, citing, 11C Zett–Kaufman–Kraut, N.Y.Civ .Prac., Appendix B, p. 8.

"The trial court is vested with broad discretion in making an equitable distribution of marital property'... and unless it can be shown that the court improvidently exercised that discretion, its determination should not be disturbed (citations omitted)." Michaelessi v. Michaelessi, 59 A.D.3d 688, 689, 874 N.Y.S.2d 207 (2nd Dept.2009). At the time of the commencement of this action, Domestic Relations Law § 236B (5)(d), required the Court to consider the following 14 factors in making an equitable distribution of the marital property:

(1) the income and property of each party at the time of marriage, and at the time of the commencement of the action;

(2) the duration of the marriage and the age and health of both parties;

(3) the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;

(4) the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;

(5) the loss of health insurance benefits upon dissolution of the marriage;

(6) any award of maintenance under DRL § 236 B(6);

(7) any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;

(8) the liquid or non-liquid character of all marital property;

(9) the probable future financial circumstances of each party;

(10) the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;

(11) the tax consequences to each party;

(12) the wasteful dissipation of assets by either spouse;

(13) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;

(14) any other factor which the court shall expressly find to be just and proper.

Marital property is defined in Domestic Relations Law § 236 B(1)(c) as "all property acquired by either or both spouses during the marriage ..." Separate property is "property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse ...". DRL § 236 B(1)(d)(1). Under the law of equitable distribution, there is a presumption that all property acquired by either spouse during the marriage is marital property. See, DRL § 236 B(1)(c). Separate property also includes "property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse." DRL § 236 B(1)(d)(3).

Guided by these principles of law, the statutory factors, and the equities of the parties' circumstances, the Court makes an award of equitable distribution of the marital property as set forth below.

CONTESTED ISSUES AND DETERMINATION

Classification of Assets

Unfortunately, the parties in this case were unable to agree upon how to equitably distribute much of their marital estate which included significant assets. In particular, many of the various bonuses received by plaintiff incident to his employment were contested as to whether they were separate or marital property and if marital, what portion defendant would be entitled to receive as her equitable share.

Special Cash Award (SCA)

This is an award of $1,750,000 that plaintiff received pursuant to the employer letter of September 26, 2008 (TR Ex 102) when S.H. joined Bank. The SCA was given to plaintiff upon joining Bank; half payable on the first anniversary of his starting date September 22, 2009 (referred to by his attorney as the first retention bonus) after tax amount of $470,000 and the remainder payable on the second anniversary of his starting date (referred to as the second retention bonus) also $470,000 after taxes and paid September 22, 2010. The parties agreed that the first half was marital. The issue before the Court relates to the second half. The award letter reads,

"It is understood that you must be in active working status at the time the payments are due in order to receive them. Future bonus payments will be discretionary unless expressly stated otherwise in accordance with Bank practice." (emphasis added)

(TR Ex 102)

Plaintiff's position is that the second payment is only partially marital and that the Court should use the analysis set forth in DeJesus v. DeJesus, 90 N.Y.2d 643, 665 N.Y.S.2d 36, 687 N.E.2d 1319 (1997). Defendant argues it is all marital and subject to an equal split without a DeJesus diminution. She claims that the award was, essentially a "signing bonus" and or "replacement compensation" resulting from the husband's commencement of new employment with Bank following the bankruptcy of former Bank, his former employer. The Court agrees with defendant. The "Offer of Employment" letter, itself, refers to the Special Cash Award as a bonus when it cautions that, "... future bonus (emphasis added) payments will be discretionary unless expressly stated otherwise." (Tr Ex 102) This Special Cash Award was not based on plaintiff's performance nor that of the Company's. It came due only two years after signing on. He simply had to remain employed.

The Court concludes this upon a review of the DeJesus decision. DeJesus requires that, in certain cases, one should apply the "DeJesus formula", whereby "the numerator is the period of time from the date of the grant until the end of the marriage ... and the denominator is the period of time from the date of the grant until the stock plan matures." Id. at 652, 665 N.Y.S.2d 36, 687 N.E.2d 1319. The marital property may then be equitably distributed. However, before one applies this formula to apportion the marital share, one must first determine whether the asset in question is one that calls for the use of said formula. In DeJesus, insufficient testimony and evidence existed to make such a determination and the matter was remitted to the trial Court to determine what, if any, portion under consideration with DeJesus was for past compensation and what, if any, portion was incentive. The Court of Appeals directed the trial court to consider the following factors: Was this a reward for past services, as a valued employee or to incentivise Mr. DeJesus to retain him as an officer? Were the plans part of a "key employee compensation package?". Id at 651, 665 N.Y.S.2d 36, 687 N.E.2d 1319. What did the stock plans represent and how was the husband's entitlement calculated? Id. These questions illuminate the issues courts must consider in determining whether a DeJesus analysis applies.

Regarding the case before the Court, each party presented expert testimony and offered copies of plans and letters. This Court's opinion based upon a review of all the evidence, is as follows: Mr. H. is a highly compensated employee as Director and Head of a major Division of a major bank. One million seven hundred fifty thousand dollars was awarded to him on September 26, 2008, pursuant to the letter offering him employment that he accepted. Pursuant to said terms, there are no specific requirements that plaintiff must meet to receive the Special Cash Award, other than remaining employed. While anyone would admit that just remaining employed in S. H.'s position is no small feat, there remains the DeJesus requirement that this award be determined marital if it fails to meet certain criteria laid out by the DeJesus Court. Defendant argues that property acquired during the marriage is presumed to be marital property absent clear and convincing evidence to the contrary. The burden of demonstrating that property acquired during the marriage is separate property is upon the spouse who seeks to retain the property for himself.

DRL § 236B(l)(c) defines "marital property" as "all property acquired by either or both spouses during the marriage and before ... the commencement of a matrimonial action, regardless of the form in which title is held." In the seminal case of Price v. Price, 69 N.Y.2d 8, 15, 511 N.Y.S.2d 219, 503 N.E.2d 684 (1986), the Court of Appeals reaffirmed that "marital property" should be read as broadly as possible:

The Legislature, in defining this basic term "marital property", we have held, intended that the term should be construed broadly in order to give effect to the "economic partnership" concept of the marriage relationship recognized in the statute (see, Majauskas v. Majauskas, 61 N.Y.2d 481, 489, 490, 474 N.Y.S.2d 699, 463 N.E.2d 15 ). The term "separate property", on the other hand, which is described in the statute as an exception to marital property, we have stated, should be construed narrowly (Majauskas v. Majauskas, supra, at p. 489, 474 N.Y.S.2d 699, 463 N.E.2d 15 ).

Id.

In keeping with this mandate, there is a strong and clear presumption in favor of classifying an asset as "marital" where, as here, it was acquired during the marriage, and courts routinely reject separate property claims asserted over property acquired during the marriage. See, Raviv v. Raviv, 153 A.D.2d 932, 545 N.Y.S.2d 739 (2nd Dept.1989) (husband failed to overcome presumption that option to purchase property, acquired during the marriage, was marital property); Lischynsky v. Lischynsky, 120 A.D.2d 824, 501 N.Y.S.2d 938 (3rd Dept.1986) (real property purchased during marriage presumed to be marital, notwithstanding husband's claims to the contrary). A party seeking to show that property is separate must overcome the marital property presumption by clear and convincing evidence. In Parker v. Parker, 240 A.D.2d 554, 555, 659 N.Y.S.2d 790 (2nd Dept.1997), for example, the Second Department rejected the husband's claim that property inherited from a family member and property gifted to him by another family member were his separate property because his claims "were not established by clear and convincing evidence " (emphasis added). Id.

In the instant case, the Special Cash Award to plaintiff of $1,750,000 was made on September 26, 2008 (paid out over two payments). The Court agrees with defendant that this was, essentially, a "signing bonus", and was fully "vested" prior to the date of commencement. He met all of the criteria necessary to receive the award at the time the award was made. There were no corporate or personal performance conditions to be met in order to receive the award. It would be forfeited only if the plaintiff voluntarily resigned or was terminated for cause. One might argue as plaintiff did, that this was an incentive award because the delay in receiving the award was an incentive to keep plaintiff employed. However, if all such awards were determined incentive awards, then the DeJesus Court might simply have said, "If the award is delayed, it is an incentive award." It did not.

Based on the entirety of the circumstances of this case, the Court views the Special Cash Award as a signing bonus with payments made over the course of two years, and finds the award is a marital asset subject to equitable distribution without a DeJesus diminution. The Court awards defendant 50% of the Special Cash Award.

The 2008 EPP Award

Plaintiff's new employment was convenient to him as apparently he did not even need to move his office because he stayed in the same physical space. However, this convenience became a source of contention as plaintiff argued new employment/new compensation package, and defendant argued same office/not really new compensation package. Defendant claims that when viewing plaintiff's compensation package, particularly those items that require years to vest, essentially, plaintiff just had to be employed and alive, in order to collect at the end of the vesting period. Moreover, he did not really change jobs, she claimed. Proof positive was that he occupied the same corner office. Plaintiff responded that these packages were much more akin to discretionary, long term incentive awards designed to retain key employees. (See Ex 68).

The "Plan" documents were used by the Court to assess marital versus separate allocations. (Ex 68). According to the plan, if an employee leaves to go to work for another company, the award is forfeited. If he dies, it is not. Things in the employee's control result in forfeiture as opposed to things not in his control. (Trial transcript p. 449). However, plaintiff's 2008 $890,000 EPP Inventive Award, is an Executive Share Award Scheme Equity Participation Plan. "EPP is an equity based award consisting of three key components—basic award (423,928 shares), plus 20% bonus award (84,786 shares) and 10% bonus award (42,393 shares). The award shares are provisionally granted and released (at the discretion of the trustees of the plan ) (emphasis added) over a period of three to five years. Dividends received are normally awarded as additional shares and released at the same time." (Ex 68, p. 2)

Defendant's expert, John Johnson, argued that this award was compensatory and hence, the Court should determine it is 100% marital.

According to the EPP Brochure (e.g. "Bank's Capital Guidance Notes"), it explicitly states that its primary purpose is to align key employees' interests with those of Bank Group Shareholders. This is an incentivizing purpose. According to ParenteBeard's report by Joan Lipton, the Guidance Note for Equity Participation Plan specifically states the EPP awards are designed to reward and retain key individuals by allowing them to share in the long-terms growth and success of the Company during their continued employment. (Ex 69, p. 2)

Unvested compensation that is granted as incentive for future services, and requires future employment to vest is separate to the extent of the required future employment. See, DeJesus, 90 N.Y.2d at 646, 652–53, 665 N.Y.S.2d 36, 687 N.E.2d 1319 (marital portion excludes that portion of the grant or award that "come[s] into being during the marriage but [is] contingent on the spouse's continued employment with the company after the divorce."); Caffrey v. Caffrey, 2 A.D.3d 309, 770 N.Y.S.2d 33 (1st Dept.2003) (marital portion of stock options granted during marriage as incentive for future services but which vest after the commencement of the action, should be determined utilizing the fractional formula in DeJesus ); Pudlewski v. Pudlewski, 309 A.D.2d 1296, 765 N.Y.S.2d 570 (4th Dep't 2003) (plaintiff's share of stock options received by defendant as incentive for future continued performance properly calculated using formula set forth in DeJesus ).

Plaintiff's expert, Dr. Lipton, propounded two alternative analyses of the $890,000 EPP award (both using the DeJesus analysis) that "cliff" vests. The first assumption is that Mr. H. holds his basic and 20% bonus shares after they vest on April 27, 2012 but then sells them before the fifth anniversary of the grant, that is before April 27, 2014. The second analysis is based upon him holding onto the shares past April 27, 2014 and thus being entitled to the 10% bonus shares. There is no information before the Court that would call for Mr. H. selling his shares before April 27, 2014 (such as economic necessity for example), so the Court chooses the second variant. Using this analysis, results in an aggregate marital component, including dividend shares, of 94,163 and the aggregate separate component of 463,308 shares. This analysis is based on the precepts set forth in DeJesus v. DeJesus, used by plaintiff's expert in arriving at these proportions. The Court agrees with Dr. Lipton's analysis and finds that this was an incentive type award, given to incentivise Mr. H. to come on board, stay and work hard and, of course, deliver. All of which he apparently did. The Court awards defendant 50% of the marital share as calculated above by Joan Lipton.

The Incentive Share Plan

The Incentive Share Plan (ISP) was granted to plaintiff on April 30, 2009 pursuant to letter dated May 5, 2009. (Plaintiff's Tr Ex 133). Plaintiff was awarded 54,799 shares and has also accrued 633 accrued dividend shares at a price of 2.51726 British Pounds. Upon issuing the award letter, A. Trust (the designated Trustee of the Plan) wrote, "Your award is in the form of a provisional allocation, which means that we have earmarked Incentive Shares for release to you in three years time, but you have no right to them or any interest in them until any release is made to you (emphasis added). We will normally consider releasing your Incentive Shares to you on the third anniversary of your award dates." (See Ex 140).

Plaintiff's expert, Joan Lipton, quipped that the very name of the Plan, "Incentive Share Plan", denotes it's character as one of incentive. Defendant countered that it was fully "vested" prior to date of commencement. The Court disagrees. The language, "... but you have no right to them [the shares] or any interest in them until any release is made to you," belies defendant's claim. The ISP shares cliff vest after three (3) years, garnering them a 17.2% marital designation. (See Ex 199) The Court awards defendant 50% of said marital share.

Cash Value Plan and SVP Shares

The cash value plan and the SVP shares were granted after commencement and are separate property (See Ex. 68 and 69), pursuant to stipulation.

2009 CVIP Plan

The Capital Value Incentive Plan (CVIP) is another award given by Bank to eligible executives who were recommended for participation. "Participants in the Plan are the most highly valued executives in the firm and membership is a reflection of my assessment of your past and potential future contribution to exceptional business performance." (Tr Ex 138). What makes this asset complicated in determining its character, whether marital or separate, is that it was "awarded" in August, 2010, but "recommended" in 2009 (the precise date is unknown) for plan cycle 2009–2011.

That this is an incentive award is unchallenged. To participate in the pool of the available award, the executive's area must meet certain goals. As set forth in BST's CVIP Report, at p. 3, 665 N.Y.S.2d 36, 687 N.E.2d 1319, the plan documents state that the aims of the CVIP are as follows:

(1) create an opportunity for participating executives to earn additional rewards for continued superior performance over and above any annual discretionary incentive award bonuses they received, (2) encourage a strong focus on the medium term performance of Bank Capital as a whole, and (3) encourage and reinforce cross-business co-operation and vision and to foster a partnership culture amongst senior executives.

Any Award made under the CVIP plan is not considered part of the executive's "Total Compensation" (see SRH07320 at Appendix E). It is over and above the total compensation provided to each participating executive each year.

The report sets forth when awards are used:

A CVIP Plan Award is made to a participant if: (1) the Plan Cycle has ended and the performance goal is achieved (hurdle rate is exceeded), (2) the Remuneration Committee, after consulting with the Group Chief Executive and Chief Executive, decides that the participant's performance merits an Award, (3) the participant is employed by Bank and is not working out a period of notice on the date the Awards are made, and (4) the Remuneration Committee determines that the underlying financial health of the Bank Group has not significantly deteriorated over the relevant Plan Cycle. If a participant is dismissed for misconduct before the release date of any ESAS shares awarded under the plan the Remuneration Committee will recommend that their provisional allocation should lapse. If a Participant leaves for any other reason the Group Chief Executive and Chief Executive will, at their discretion, make a recommendation as to whether any ESAS shares and Associated Dividend Shares should be released by the ESAS Trustee (see SRH07324 at Appendix E).

Plaintiff argues that the award was not made until August, 2010. Hence the award is separate property, pure and simple. According to Dr. Lipton, the fact that the award was recommended in 2009 is irrelevant. It is the award date that controls. Plaintiff argues that because the value of the CVIP Award will not be determined or distributed to him until after the commencement of this action, the award is entirely his separate property. This argument is noteworthy but unpersuasive because: 1) The asset is as set forth above, is clearly an incentive award; 2) A portion of the award is for work done during the marriage (most of 2009); and 3) The third prong, resting on when the award was given, resolves in favor of the wife. The question presented is, was the award made when Mr. H. was recommended to be included in this Award Pool (sometime in 2009) or, was it made when he got the letter advising him of his inclusion in August, 2010? Here, the argument resolves in favor of the wife because first, the asset is marital unless shown to be separate by clear and convincing evidence. Parker, 240 A.D.2d 554, 659 N.Y.S.2d 790. Second, it was for work done during the marriage. Failing to put forth proof that this is separate property, plaintiff's position fails and causes the Court to find in favor of the wife for some of the reasons set forth below.

The Court of Appeals directs that "... under the broad interpretation given marital property, formalized concepts such as vesting' and maturity' are not determinative." DeLuca v. DeLuca, 97 N.Y.2d 139, 144, 736 N.Y.S.2d 651, 762 N.E.2d 337 (2001). Rather, the Courts are charged with fostering a "a view of marital property that emphasize[s] the purpose of the [plan] ... [and][t]o the extent such plans [are] compensation for past services, the fact that they came into being shortly before the divorce [is] not determinative of their status as marital property." Id. at 45, 736 N.Y.S.2d 651, 762 N.E.2d 337. Whether an award relates to past services or is an incentive for future services, the relevant inquiry is whether and to what extent the benefit is attributable to the years of service rendered by the participant during the marriage and not the date on which the value of the award is determined or paid to the titled spouse. DeLuca, 97 N.Y.2d 139, 736 N.Y.S.2d 651, 762 N.E.2d 337, DeJesus, 90 N.Y.2d 643, 665 N.Y.S.2d 36, 687 N.E.2d 1319 (1997).

In Olivo v. Olivo, 82 N.Y.2d 202, 207, 604 N.Y.S.2d 23, 624 N.E.2d 151 (1993), considering a pension, the Court of Appeals stated:

Even though workers are unable to gain access to the money until retirement, their right to it accrues incrementally during the years of employment. Thus, that portion of a pension based on years of employment during the marriage is marital property.

At issue in Olivo was whether a nontitled spouse was entitled to share in an early retirement incentive award made after the divorce was finalized, where the titled spouse's pension was subject to a Qualified Domestic Relations Order providing the nontitled spouse with a pro rata share based on the "Majauskas " formula [see, Majauskas v. Majauskas, 61 N.Y.2d 481, 474 N.Y.S.2d 699, 463 N.E.2d 15 (1984) ], i.e., calculated on the basis of the number of years of marriage and working as a fraction of the total number of years of employment. Specifically, the early retirement incentive award allowed retirees to collect full pension benefits even though they had not worked the requisite number of years. Olivo, 87 N.Y.2d at 205–206.

The Court of Appeals concluded that the value of the pension would necessarily change by factors beyond the control of either party after the judgment of divorce was entered and those changes (such as an early retirement incentive benefit or the final salary level achieved by the employee spouse) do not affect the nontitled spouse's entitlement. The Court reasoned, that, "[w]hat the nonemployee spouse possesses, in short, is the right to share in the pension as it is ultimately determined ..." and that "... the enhancement was a modification of an asset not the creation of a new one." Olivo, 82 N.Y.2d at 210, 604 N.Y.S.2d 23, 624 N.E.2d 151.

This analysis has repeatedly been employed. For example, in Beiter v. Beiter, 67 A.D.3d 1415, 888 N.Y.S.2d 825 (4th Dept.2009), which also involved an early retirement incentive, the appellate court cited to Olivo, DeLuca, (discussed infra), and Majauskas, to reject plaintiff's contention that the post divorce change in his pension plan allowing him to receive benefits after only 20 years of service as opposed to 25, which occurred after the commencement of the divorce action, resulted in a new benefit that was his separate property.

In Osorio v. Osorio, 84 A.D.3d 1333, 925 N.Y.S.2d 111 (2nd Dept.2011), the wife had been employed and contributing toward her pension with AT & T during the marriage. Pursuant to the judgment of divorce, the husband was entitled to receive his pro rata Majauskas share of the pension. The wife was subsequently terminated but was thereafter hired by Lucent, whose pension plan credited the years of service with AT & T during the marriage, notwithstanding that the wife had started working for her employer Lucent well after the judgment of divorce was granted. The Court found that "[t]o the extent the Lucent pension was compensation for past service to AT & T during the marriage, it constituted marital property (citations omitted)." Osorio, 84 A.D.3d at 1335, 925 N.Y.S.2d 111.

There is also a presumption of marital property, premised on the contemporary view of marriage as an economic partnership, crediting each party's contributions, whether monetary or not, to the growth and value of the marriage, and their marital property subject to equitable distribution consists of a wide range of intangible interests which in other context might not be recognized as divisible property at all. See, O'Brien, 66 N.Y.2d 576, 498 N.Y.S.2d 743, 489 N.E.2d 712. The Court finds that a portion of the CVIP is marital. BST, by Thomas A. Hutson CPA/ABV CFP CFF, Partner, detailed the calculations of the wife's share as follows:

Mr. H. is a Participant in the 2009 Plan Cycle, which runs from January 1, 2009 through December 31, 2011, a total of 1,095 days. The date of commencement of the matrimonial action was November 4, 2009, 308 days after the start of the Plan Cycle.

Since 308 days out of a total of 1,095 days of the Plan Cycle occurred during the marriage, 28.127854% of the Award is marital property. The Award is expected to be delivered during the first few months of 2012 (see SRH07323 at Appendix E). Mr. D.'s letter to Mr. H. and the document titled "2009 Plan Cycle—A Brief Summary" indicate that it is expected that 50% of the 2009 Plan Cycle Award will be made in cash and that the other 50% will be delivered by means of a provisional allocation of Bank PLC shares under ESAS. Following the allocation of the shares in early 2012 the only thing necessary for the benefit to be realized is that Mr. H. remains employed for a stated period of time or until the shares are earlier released.

(See BST's CVIP Report.)

Defendant is awarded 50% of the 28.127854% of the award as if and when it is paid to Mr. H.

The One Off Payment

By letter dated December 17, 2009, plaintiff received a "one off" payment of $45,955 net of taxes in January, 2010. (See Tr Tr 125 and 1905). Essentially, in exchange for the payment, plaintiff agreed to give three months notice of intent to leave or forfeit the payment. Defendant seeks equitable distribution of this payment, arguing it is partial compensation for past services. The plaintiff submits it is received post commencement in exchange for plaintiff's agreement to provide three months notice of intent to leave employment. The Court agrees with plaintiff. This payment, while calculated based on the past employment, constituted post commencement compensation for future acts, i.e. in exchange for an agreement to abide by the terms of the agreement as it relates to future services. As the Court of Appeals found in Olivo, 82 N.Y.2d 202, 604 N.Y.S.2d 23, 624 N.E.2d 151 and reiterated in DeLuca, 97 N.Y.2d 139, 736 N.Y.S.2d 651, 762 N.E.2d 337"a blanket length of service' rule ... could lead to absurd results." Id. at 145, 736 N.Y.S.2d 651, 762 N.E.2d 337. "... [P]ayments intended to compensate for events after the divorce, such as severance pay, were separate property not subject to equitable distribution (citations omitted)." Id. Hence, the analysis in the instant case leads to the conclusion that the "one off" payment is not a form of deferred compensation. Plaintiff had no right to this payment during the marriage. Therefore, it is separate property and is awarded to plaintiff husband, not subject to equitable distribution.

Division of the Foregoing Awards

Plaintiff argues that Defendant should, in keeping with the direction taken by the Second Department in dividing business assets, receive an interest of less than 50% in the marital assets plaintiff earned while working at Bank.

He argues that defendant did not entertain his clients or business associates to any great degree, that he was off on weekends and available at that time for the children to as great an extent as his wife and that she, essentially, hired help to take care of the domestic chores, including cooks, housekeepers and chauffeurs for the children.

This Court disagrees with his argument requesting less than 50/50 division of marital assets. Plaintiff has confused the concepts used in cases involving the equitable division of a business owned by a party as opposed to that of the division of income and assets earned from working for a business. Plaintiff does not have an ownership interest in Bank other than the stock given as part of his compensation. However, this Court does not find that the ownership of a small (by comparison) amount of stock in this huge financial organization is the type of ownership interest the Appellate Courts had in mind when they refused to place an owner of a business in the poor house in order to pay his or her spouse their equitable interest, nor to double dip when an business owner is ordered to pay maintenance. Obviously, no professional license is at issue.

A review of cases dealing with this issue is instructive. In Grunfeld v. Grunfeld, 94 N.Y.2d 696, 709 N.Y.S.2d 486, 731 N.E.2d 142 (2000), the Court of Appeals, commenting on McSparron v. McSparron, 87 N.Y.2d 275, 639 N.Y.S.2d 265, 662 N.E.2d 745 (1995), wrote

Most significantly for the case at hand, McSparron also cautioned lower courts to "be meticulous in guarding against duplication in the form of maintenance awards that are premised on earnings derived from professional licenses" (id. ). To allow such duplication would, in effect, result in inequitable, rather than equitable, distribution. In contrast to passive income-producing marital property having a market value, the value of a professional license as an asset of the marital partnership is a form of human capital dependant upon the future labor of the licensee. The asset is totally indistinguishable and has no existence separate from the projected professional earnings from which it is derived. To the extent, then that those same projected earnings used to value the license also form the basis of an award of maintenance, the licensed spouse is being twice charged with distribution of the same marital asset value, or with sharing the same income with the nonlicensed spouse.

Id at 704–705, 639 N.Y.S.2d 265, 662 N.E.2d 745.

The analysis in Keane v. Keane, 8 N.Y.3d 115, 828 N.Y.S.2d 283, 861 N.E.2d 98 (2006), commenting upon Grunfeld provides further illumination regarding the issues presented. The Keane Court wrote,

Double counting may occur when marital property includes intangible assets such as professional licenses or goodwill, or the value of a service business. As we said in Grunfeld, "[i]n contrast to passive income-producing marital property having a market value, the value of a professional license as an asset of the marital partnership is a form of human capital dependant upon the future labor of the licensee" (citations omitted). It is only where "[t]he asset is totally indistinguishable and has no existence separate from the [income stream] from which it is derived" (id. ) that double counting results.

Here, the rental property was split between the parties for distributive purposes. The rental income from that property was then considered in determining maintenance. The property will continue to exist, quite possibly in the husband's hands, long after the lease term has expired, as a marketable asset separate and distinguishable from the lease payments. The mortgage payments, in contrast, were properly distributed as an asset and not counted for maintenance purposes because the payments themselves were the marital asset.

Id at 122, 828 N.Y.S.2d 283, 861 N.E.2d 98.

The plaintiff's argument is inapposite to the issues before the Court. Plaintiff's assets to be divided were neither an intangible asset nor business to be distributed. Rather, the assets are more akin to the real property division referred to in Keane which would be equitably distributed and taken into account when determining maintenance.

Accordingly, defendant is awarded 50% of the SCA, 50% of the marital share of the 2008 EPP Award, 50% of the marital share of the ISP Award, and 50% of the marital share of the 2009 CVIP Award.

With regard to the Bank's incentive compensation being distributed in part to Ms. S., it is the net after tax proceeds of the awards that are to be divided.

The Westchester County House and the Beach House

The Westchester County House

The cost of running a mansion in Westchester comes at a price. Upon this, the parties agreed. They argued, however, as to the actual cost of maintaining the Westchester County house. They also argued as to what was a reasonable expense for certain construction and maintenance expenses. For example, they argued over whether it was appropriate for B. to put in full grown trees as opposed to less expensive, smaller trees but finally agreed upon a middle ground, only after presenting significant testimony on the issues. Likewise they disagreed as to the reasonable and necessary costs of a nanny suite.

Plaintiff sought the immediate sale of the residence, claiming there was too much conflict between the parties to allow them to retain it. Defendant sought exclusive possession until fall, 2017. At this time, G., the second youngest child, will be off to college, she argued. "[E]xclusive possession of the marital residence is usually granted to the spouse who has custody of the minor children of the marriage." Goldblum v. Goldblum, 301 AD23d 567, 568 (2nd Dept.2003). In making this determination, "the need of the custodial parent to occupy the marital residence is weighed against the financial need of the parties." Id. While there is a preference for allowing a custodial parent to remain in the marital residence until the youngest child becomes 18, the court must consider the cost of comparable available housing in the same area at a lower cost and the parties' financial difficulties. See, Campbell v. Campbell, 286 A.D.2d 467, 468, 729 N.Y.S.2d 531 (2nd Dept.2001). In making such an award, the court "should give weight to the relative financial resources of the parties, the need of either party for occupancy of the home, and the duration of the exclusive possession." Ripp v. Ripp, 38 A.D.2d 65, 69, 327 N.Y.S.2d 465 [2nd Dept.1971), aff'd, 32 N.Y.2d 755, 344 N.Y.S.2d 950, 298 N.E.2d 114 (1973.) The court should consider such factors as "the cost of maintaining the home in comparison to the benefits received, the financial hardship suffered by either party by the refusal to authorize a sale of the property, the presence or absence of children to enjoy the use of the home, or the size and expansiveness of the home in relation to the expected use." Id.

In the case at bar, the defendant has already had the benefit of continued residence with the children in the marital residence; in essence, exclusive possession. The parties have been financially able to support this which has provided the children with a stable home. However, the oldest child left for college in 2012 (presumably) and W. will leave for college this fall. This will leave only two children at home. In an effort to give the parties an opportunity to resolve all outstanding issues set forth below (the Bank's 3798 account and final accounting and distribution of all accounts) and so as to provide defendant an opportunity to prepare for sale, the Court directs the parties to list the Westchester County residence for sale on or before March 1, 2015. In the interim, defendant will continue to have exclusive possession of the Westchester County house. For, while the parties may be able to afford to have defendant and children remain in the Westchester County house beyond 2017, it is a significant asset, it is expensive to maintain and the parties have had significant conflict over it. Furthermore, defendant and the children will have the Amagansett house.

Commencing April 1, 2010 the defendant shall be responsible for the carrying costs of the Westchester County house, including, but not limited to the mortgage, taxes, HELOC, homeowner's insurance and ordinary maintenance and upkeep, if any. Any major repairs, (defined as a repair in excess of $15,000 per repair), are to be agreed upon by the parties in writing, except in the case of an emergency. The cost of a major repair shall be shared equally by the parties. At the time of sale the defendant shall be entitled to a credit for 50% of difference between the principal balance of the mortgage on April 1, 2010 and the amount due at closing.

It is hereby directed that the Westchester County house be listed for sale at a listing price to be agreed upon between the parties and a broker to be agreed upon. If the parties are unable to agree upon a price, they shall list it at the agreed upon value of $7,600,000. If they are unable to agree upon a broker, they shall each choose one and the two brokers shall agree upon a third with whom the parties shall list the marital residence. Each of the parties shall receive one-half of the net proceeds after sale and payment of the mortgage and HELOC as well as the broker's commission, transfer tax and usual and customary costs of sale. In addition, the wife shall receive, prior to division of net proceeds, from the sale of the residence, the agreed upon sum of $100,000 (the cost paid by the wife for installing the pool) and the sum of $68,900 as credit to her for the expense of constructing the nanny suite. The total spent by defendant on the nanny suite was $68,902. This was a capital improvement to the marital residence and, as such, shall be paid for equally by both parties.

The Amagansett Beach House (The Beach House)

The parties stipulated to the value of the Beach House as $7,425,000 (Tr p. 1619). Plaintiff requests that the Court order it sold. Defendant asks that it be awarded to her. Plaintiff argues that she cannot afford it and if awarded to her, he should not be charged with a higher amount of maintenance caused by her retaining the beach house. (Plaintiff initially set forth in his statement of proposed disposition that it should be awarded to him then changed his request to ask that it be ordered sold. Defendant argues that this was a cloaked request to allow him to buy it away from her.) Plaintiff's argument is essentially that, owning the beach house would add too much in the expense column and B. could, just as easily, rent or buy a less expensive beach alternative. Defendant, on the other hand, argues that the beach house was important to the family life that she maintained. She and the children spent entire summers at the beach house, she argued, so plaintiff should simply pay her maintenance sufficient to enable her to continue her pre-divorce standard of living which included the beach house.

Hence, the issue of who gets the beach house is inextricably intertwined with the maintenance issue, discussed herein later.

The court views the issue as follows: Plaintiff first asked that it be awarded to him, claiming he was the first one to rent beach houses (before he even met B.) and that it is really his by right, so to speak. While this might hold true for certain issues, (although none come to mind) the fact is, in this case, for years the family has vacationed at the beach house. As the defendant will be selling the marital residence (to be listed within a year), she has sufficient assets to "buy out" the plaintiff's share and the children will be able to continue to vacation in the beach house. The Court awards the beach house to defendant who shall pay plaintiff one-half the net value after deducting the mortgage and any HELOC from her share of the assets, said "buy out" to take place in coordination with the final accounting as set forth in this Decision.

Commencing April 1, 2010 the defendant shall be responsible for all the carrying costs of the beach house, including, but not limited to the mortgage, taxes, HELOC, homeowner's insurance and maintenance and upkeep, if any.

In support of this decision, the Court makes reference to the cases cited above in awarding defendant exclusive possession of the Westchester County house to the extent that this Court takes into account the fact that this was a home that was important to the lives of this family that spent its summers at the beach. It will provide continuity to the children, especially once the Westchester County house is sold.

The defendant argued that she should be entitled to deduct the capital gains tax she will have to pay upon the sale and transfer tax upon sale. In support of this proposal, defendant cites to a corporate dissolution decision. In the Matter of Edward Murphy, et al. v. United States Dredging Corporation, 74 A.D.3d 815, 903 N.Y.S.2d 434 (2nd Dept.2010). In this case, the Second Department actually found that the Supreme Court, "properly limited (emphasis added) the liability for taxes on unrealized capital gains, referred to as built-in gains, to the present value ... The Supreme Court made this determination on its conclusion that the Corporation's intention was to hold its real property for a lengthy period of time ... [T]he Corporation had sufficient cash to pay the judgment without liquidating any of its assets to which a built-in gains tax applied." Id. at 818, 903 N.Y.S.2d 434.

If any analogy is to be made from a review of the case above to the case at bar, it is that one should not impute taxes as argued by defendant because she has no stated interest in selling the beach house. To reduce her buyout cost by a capital gains rate in effect today and transfer tax in effect today as well as a possible real estate commission is unreasonable given that she gave no indication that she would ever sell the beach house.

A. Club

The parties are joint members of the A. Club. There is no bond. Each party wants the Club membership awarded to them. The parties advised that the Club will not allow them to both continue to be members based on the contentious nature of their divorce. Plaintiff's argument is that defendant rarely uses it, unlike he who regularly golfs there and uses the facilities. Defendant claimed the family frequently used the Club for special occasions like Thanksgiving, the Christmas holidays, and birthdays. The husband argued that defendant, besides rarely using the Club, also has a pool at her home.

The Court hereby awards the A. Club membership to the husband. Particularly, as the defendant will have the year round use of the beach house, it seems only fair that plaintiff be awarded the Club membership.

Distribution of Assets

The following is partially agreed upon and the balance are Court determined awards:

Bank: F.R. ("FR" Accounts)

Name on Account

Account	# Plaintiff	Defendant	Date	Amount	H	W	Marital
6258	X		DoC	$65,187			X ag
				+1,520 (paycheck)
				(Bal. Is Pl's.)
6266 1st ret. bonus	X		DoC	17854			X ag
6274	X		DoC	2194	X ag
7460 1st ret. bonus	X		DoC	369893			X ag
9536	X			0
5518 2nd ret. bonus	X			470575			X *
4245 CVP 3/10	X			116000	X

^*as determd by ct

W.

Name on Account Distribution

Account	# Plaintiff	Defendant	Date	Amount	H	W	Marital
2130		X	DoC	$14,098			X ag
9190		X	DoC	47587			X ag
7367		X	DoC	12821		X ag
605		X	DoC	17760		X ag
8326	Joint)-Husband		Doc	1700			Xag
2792	Joint)-received			Combined			Xag
1249	Joint)						Xag

M.S.

Name on Account Distribution

Amount	# Plaintiff	Defendant	Date	Amount	H	W	Marital
4507 Advance on E.D.		X	40754	$4,723,849		X ag

C.S. B. IRA

Name on Account

Account	# Plaintiff	Defendant	Date	Amount	H	W	Marital
2507 (see Stip of Facts not in dispute para. 39)		X	40754	$141,220		X ag

Bank

Name on Account

?

Prior Bank Pension Plan

Agreed to QDRO Marital Portion.

Claim Against Prior Bank

Defendant is awarded 50% of the value plaintiff may receive as a result of his claim against prior Bank for unvested stock owed to plaintiff at the time of the prior Bank's bankruptcy.

The Security Deposit for Q. Road

The security deposit for Q. Road shall be equally distributed.

PERSONAL PROPERTY

Plaintiff shall retain his Suburban and defendant shall retain her Lexus as his/her respective sole and separate property and defendant shall make a distributive award to plaintiff in the amount of $6,500 to reflect the difference in values between the vehicles, as agreed to by the parties.

Plaintiff shall retain the appraised personal property previously located at—Q. Road (including his jewelry and his Aston Martin car) and pay defendant $36,721, representing fifty (50%) of the value of said property.

Defendant shall retain the appraised personal property located at the Westchester County House (including her jewelry) and pay plaintiff a distributive award equal to fifty percent (50%) of the value of the property, in the amount of $86,298.

Defendant shall retain the appraised personal property located at the Beach House and pay plaintiff a distributive award equal to fifty percent (50%) of the value of the property, in the amount of $13,350.

The parties shall agree to the disposition of items regarding the children, including photographs and other items of sentimental value.

Division of Property

All marital property shall be divided equally unless specifically determined otherwise. Interest accrued on awards shall be divided in the same proportion as the award has been determined.

MAINTENANCE

" ‘The amount and duration of maintenance is a matter committed to the sound discretion of the trial court, and every case must be determined on its own unique facts'. The overriding purpose of a maintenance award is to give the spouse economic independence, and it should be awarded for a duration that would provide the recipient with enough time to become self-supporting." ’ Kilkenny v. Kilkenny, 54 A.D.3d 816, 820, 863 N.Y.S.2d 807 (2nd Dept.2006). "In fixing the amount of a maintenance award, a court must consider the financial circumstances of both parties, including their reasonable needs and means, the payor spouse's present and anticipated income, the benefitting spouse's present and future earning capacity, and both parties' standard of living (citation omitted)." Morrissey v. Morrissey, 259 A.D.2d 472, 473, 686 N.Y.S.2d 71 (2nd Dept.1999). "The main purpose of a maintenance award is to give the nonmonied spouse economic independence (citation omitted)." Giokas v. Giokas, 73 A.D.3d 688, 900 N.Y.S.2d 370 (2nd Dept.2010).

At the time of commencement of this action, DRL § 236 B(6)(a) required the Court to consider the following factors in determining the appropriate amount and duration of maintenance:

1. The income and property of the respective parties including marital property distributed pursuant to subdivision five of DRL § 236 ;

2. The duration of the marriage and the age and health of both parties;

3. The present and future earning capacity of both parties;

4. The ability of the party seeking maintenance to become self-supporting and, if applicable, the period of time and training necessary therefor;

5. Reduced or lost lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment or career opportunities during the marriage;

6. The presence of children of the marriage in the respective homes of the parties;

7. The tax consequences to each party;

8. Contributions and services of the party seeking maintenance as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party;

9. The wasteful dissipation of marital property by either spouse;

10. Any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;

11.The loss of health insurance benefits upon dissolution of the marriage; and

12.Any other factor which the court shall expressly find to be just and proper.

In addition to these enumerated factors, the parties' pre-divorce standard of living is an essential component of evaluating and properly determining the duration and amount of the maintenance award to be accorded a spouse. Hartog v. Hartog, 85 N.Y.2d 36, 50–51, 623 N.Y.S.2d 537, 647 N.E.2d 749 (1995).

In determining a party's support obligation, "the court need not rely upon a party's own account of his or her finances, but may impute income based upon the party's past income or demonstrated earning potential." Brown v. Brown, 239 A.D.2d 535, 657 N.Y.S.2d 764 (2nd Dept.1997). "[W]here a party's account is not believable, the court is justified in finding a true or potential income higher than that claimed." Rohrs v. Rohrs, 297 A.D.2d 317, 318, 746 N.Y.S.2d 305 (2nd Dept.2002).

The parties each spent considerable time and expense setting forth the plaintiff's realistic income and the defendant's realistic expenses as compared to her expected income.

Mr. H. is the proverbial self made man. He came from modest means, starting out as a teenager working in a gas station and ending up a world class financier. He took pains to explain that while he and defendant may now own a $8 million beach house in Amagansett, in addition to the mansion in Westchester County, he started out with a more pedestrian beach house that cost less than $1 million. Likewise, while the parties currently own the most prestigious house in Westchester County and certainly one of the premier mansions in Westchester, they only recently acquired such a luxurious home. Before this, they sold their home at—M. in 2005 for $3 million plus $1 million for the adjacent lot. All of this, he argues is a result of the parties' most recently acquired substantial wealth. During most of their marriage, they were "well off", not super rich. As a result, Mr. H. argues, Ms. S. is not entitled to continue this lifestyle of largess on his dime because the Great Gatsby life, as it were, was a flash in the pan.

Ms. S., however, looks to continue that to which she has become accustomed. She worked hard supporting her husband by managing the home and children, she argues. She downplayed the cooks and the drivers, the maids and the gardeners, with explanations such as, they simply dropped off pre-cooked food; she has four children to get to activities and she needs help getting them around.

As with most divorces, the answer lies somewhere in between these two divergent arguments.

While Ms. S. has devoted most of her married life to her family of four children and husband, she is not without substantial credentials. She herself worked in the world of finance and was a stock analyst until 1994. In fact, she has used her prowess in the financial field to pick stocks both with and without her husband. For example, after the parties separated, she chose Apple and did extremely well. But before the parties separated, she insisted, and her husband did not argue in the least, that she participate in choosing their portfolio. Unlike other women who have little to fall back on when the marriage dissolves, Ms. S. will be left with not only substantial assets but the savvy and acumen to invest them wisely. Her argument aside, that she must invest mostly in very safe financial vehicles, Ms. S. will undoubtedly use her significant smarts and training to do quite well for herself.

This does not mean, however, that Mr. H. should be entitled to go off as he will undoubtedly do and continue in his meteoric rise in the financial world making jaw dropping income, while Ms. S. is left with only her share of assets. Whether the parties lived their current lifestyle for years rather than decades, Ms. S. still gave up a lucrative career to be supportive to her husband and family. Mr. H. spent significant time with his children but Ms. S. was the family organizer and coordinator. Whether she had it done or did it herself, she made sure the family of six ran smoothly.

The following is the Court's analysis of the facts of this matter in consideration of the factors set forth in DRL § 236 B(6):

1. The income and property of the respective parties, including marital property distributed pursuant to Domestic Relations Law section 236B(5).

Plaintiff argues that defendant wife should not receive maintenance for two reasons. First, he contends that to pay interim maintenance would amount to double dipping as he has, in essence, divided his income with her and secondly, she does not require long term maintenance based on her anticipated income from the assets that she can expect to have at the conclusion of the trial. In fact, when viewing this compared to her reasonable expenses, the husband argues, defendant will have a surplus.

The husband argues that the funds available to the parties prior to the first interim support stipulation dated January 22, 2010 were only the interest and dividends from the Bank Account # 3798 and the 2009 Cash Bonus Award. All payments agreed to pursuant to this Stipulation were made without prejudice to any and all issues to be decided at trial, including retroactive spousal maintenance, child support, and professional and expert fees and disbursements and determination of equitable distribution (February 25, 2014 So Ordered Stipulation pp 5–6).

It is important to note, for a historical understanding of the parties' finances, that they actually separated in July, 2008. So, when Mr. H. received a cash bonus in February, 2009, he agreed to split it with his wife 50/50. The amount he received was $2.9 million, (Tr Transcript 123). Mr. H.'s income in 2009 was $4,846,796, (Tr Transcript p. 125). It included the $2.9 million he received and split with defendant as well as his salary of $287,500. In addition, Mr. H. received, as part of his compensation package for 2009, a cash incentive award of $1,725,000 paid in February, 2010 and distributed to the parties, pursuant to Stipulation dated January 21, 2010, a share value plan of deferred stock paid out in thirds in 2011, 2012, and 2013 and a cash value plan as deferred cash (instead of stock) also paid out in thirds in 2011, 2012, and 2013. (Portions of which were determined to be marital.)

On her updated Net Worth Statement dated May 11, 2009, E.S. lists her net marital worth as $32,272,910. Her separate assets total $4,730,810. She lists monthly expenses of $105,265. She claims she requires $70,000 monthly maintenance to maintain her current lifestyle.

Mrs. S. spent the following according to the expert, Mr. Kaplan:

2005	$1,369,869
2006	$2,243,322
2007	$1,461,491
2008	$1,235,720	or $102,976/Month
2009	$1,132,842	or $ 94,404/Month

(Tr Tr 2579–2581).

Plaintiff argues that defendant will walk away with between $15,730,599 to $13,230,395 of investable assets. He arrives at this conclusion by making the following assumptions if defendant receives 50% of the assets: There will be around $7,500,000 to be awarded to Ms. S. from the joint Bank Account (3798) net of margin; she will have $4,800,000 from her separate property previously divided; she will receive $2,782,000 from sale of the Beach House, $1,884,000 from sale of the Westchester County House (assuming she buys a house for $4,500,000 and takes out a $2,000,000 mortgage); $799,000 from sale of the businesses, $65,831 from the 1st Tranche of the Bank Special Cash Award received September, 2009, net of taxes; $130,660 as her marital share of 55.6% of the 2nd Tranche of the Bank's Special Cash Award received September, 2010, net of taxes; $67,258 as her marital portion of $134,516 of the unvested Bank's Incentive Shares (2008 EPP of 89,677 shares) net of taxes; $7,131 as her marital share of the 2009 incentive share plan (9,508 shares); $33,296 from the F. R. 6258 and $7,049 from W. #2130 (marital); $23,794 from W. 9190 (marital); $12,821 from W. 7367 (Separate adv. on E.D.); and $1,776 W. 0605 (Separate adv. on E.D.). This excludes her share of her 401k, the husband's 401k and former Bank private equity (if any), personal property and autos.

After arriving at this figure, plaintiff argues that defendant, based on defendant‘s past investment behavior as well as the investment trends going back over a fourteen (14) year period, should be able to earn at least 3.5 –4.5% investment income, after taxes. With this scenario, he argues, defendant will be in a surplus, especially in light of the fact that defendant's recent lifestyle is not the "marital lifestyle". Rather, it is "... the lifestyle of the few years when Mr. H. had extraordinary income from appreciated stock in former Bank." (Plaintiff's Reply Trial Memorandum on certain issues p. 2). In support of this position, plaintiff presents an excerpt from NY Law of Domestic Relations:

As the Hartog court cautioned, however, a lavish predivorce lifestyle will not be automatically preserved. For instance, in Pejo v. Pejo , [213 AD2d 918, 624 N.Y.S.2d 290 (3d Dep't 1995) ], the court imposed a durational limitation on the wife's maintenance because financial reversals prevented the parties from maintaining their luxurious predivorce standard of living.... In Carr v. Carr , [291 AD2d 672, 738 N.Y.S.2d 415 (3d Dep‘t 2002) ], maintenance of only one year was ordered despite the prior lavish lifestyle where the husband, an attorney, had sustained serious financial reversals and, under the circumstances, the court would not accept wife's contention that, despite her prior employment, she was under no obligation, other than dire necessity, to work.

A. Scheinkman, 11 N.Y.Prac., NY Law of Domestic Relations, § 15:5 ("Standard of Living").

Mr. H. argues that since former Bank went bankrupt, his income has fallen back to the levels of the years when the parties lived in a more modest home, their children attended public school and their spending levels were lower. Mr. H. puts forward evidence of his more modest current lifestyle. He resides in a house valued at $3.6 million and he rents a beach house for $35,000 monthly for eleven (11) weeks for $90,000 (Tr Tr at 1291).

Plaintiff laments that Ms. S. claims to be entitled to spend $100,000 monthly while residing in the Westchester County mansion and using the Amagansett Beach House. Moreover, he denounces her claim that she must adjust her investment strategy to one of little or no risk.

Plaintiff convincingly argues that defendant was fully informed (actually involved) in the joint investment account that produced capital appreciation of 7–3/4% – 12–1/8% plus 9% annual dividends (Tr Tr at 157; Tr Tr at 195). Ms. S., he argues never invested in tax free municipal bonds or US Treasuries. Plaintiff claims defendant will have a surplus when all is said and done.

Plaintiff's expert, Joan Lipton, testified as to the expenses that should be deducted from defendant's lifestyle analysis. Many of her points were quite valid. She reduced Mrs. S.'s expenses to reflect medical bills that were submitted for reimbursement ($8,475); expenses attributed to Mr. H. for 2008 ($22,734) plus clothing expenses for him ($3,604), Mr. H.'s dining out expenses ($3,746) and Yankee tickets based on what Ms. S. actually used ($22,000). Much of her testimony related to what she considered non-recurring and discretionary expenses. She also made adjustments to travel based on what she considered was appropriate because Mr. H. was traveling with Ms. S. during the years reviewed. She segregated the Beach House expenses because she did not know what the Court would do regarding this issue. She sorted out divorce related expenses ($191,000 yearly or $15,955 per month). After taking out many of these expenses, she came up with a calculation of $53,000 per month of what she claimed were "non-recurring expenses". Then she went about putting back in the budget for Ms. S. what Joan Lipton thought were more appropriate figures. Many of her points were valid. However, many were not. For example, after taking out the Beach House expenses, she replaced them with the expense of $48,000 claiming this is what Mr. H. spent. (Tr Tr p 534). But he testified that he spent $90,000. (See Tr Tr 1291) She arbitrarily decided Ms. S.'s expenses would be one-half for a new home as compared to the Westchester County house. Dr. Lipton did a commendable job in sorting through the innumerable records but frankly the Court has difficulty agreeing with many of her cavalier assumptions regarding the lifestyle Ms. S. should live rather than the lifestyle she did live.

Moreover, the amount of assets Ms. S. will receive is a moving target. Joan Lipton testified defendant received $2.1 million and would receive $12 million plus $140,000 of investable assets for a total of about $14 million. This differs by about $1 million from the figures referred to in Plaintiff's Reply Trial Memorandum on Ceratin Issues, Exhibit 3.

Defendant argues that she will only have about $8,150,000 of investable assets according to her expert from BST, Mr. Kaplan (Tr Tr 2708). He supported defendant's position that she must only invest in low risk investments to preserve capital, avoid loss of purchasing power and to produce income. He criticized Joan Lipton's Rate of Return. He claimed the Court should only consider the income thrown off by the investment, not the growth because, "she can't rely on this." The expert provided in depth testimony as to why the Court should only consider interest income and not capital appreciation. However, if the Court were to do this, it would do so in the face of Ms. S.'s investments in Apple which paid no dividends but appreciated by 68% in eighteen (18) months that defendant held the stock and Nike that appreciated by 65.4%.

The Court agrees with Joan Lipton and finds based on defendant's past history of investments, as well as her knowledge of investing, defendant will be able to receive 3.5% after tax revenue from her investable assets, which the Court finds to be approximately $11 million. This figure is arrived at by tallying the following assets:

Scenario 1 (Prior to Sale of Westchester County House)

The Bank 3798 account has increased from date of commencement when it was $11,000,000. Plaintiff alleges that as of February 24, 2012, it had increased $6 million to over $17,000,000 even after withdrawals.

EBS‘s one-half of Bank's # 3798	$7,500,000
EBS separate property	4800000
Beach House due to Husband		-$2,782,000 (due husband)
Westchester County House Sale	+$7,600,000
Mortgage-	-$2,000,000
HELOC	-$1,200,000
Cost of Sale	-$532,000
Credit to Wife for Pool	+$100,000
Credit to Wife for Nanny Suite	+$68,900
	$4,036,900	$2,018,450
Replacement House	$4,500,000
Mortgage	-$2,000,000	-$2,500,000

50% of Businesses

2Businesses (Equity $1.7MM Less Ass'd 6% Sale Costs)To Be Divided 50–50 by Stipulation ($1,598,000–S. H. Testimony and Wife's Net Worth Statement

$799,000

Remainder of 1st Tranche Bank Special Cash Award Rec'd 9/09 Net of Tax	PX219, 220	$131,661	$65,831
Marital Portion of 2D Tranche Bank "Special Cash Award" Rec'd 9/10 Net of Tax Paid	PXS69 (EX2). 218 & 225	$470,575	$235,287
Marital Portion of Unvested Bank Incentive Shares @$2.50/SH & Net of 40% Income Tax) 2008 EPP (89,677 Shares) 2009 Incentive Share Plan (9,508 Shares)	PX69, EX.2 PX69, EX.2	$134,516 $14,262	$67,258 $7,131
F.R.–6258 [Marital]	PX256	$66,592	$33,296
W.–2130 [Marital]	PX256	$14,098	$7,049
W.–9190 [Marital]	PX256	$47,587	$23,794
W.–7367 [W Separate Property Advance on ED]	PX256	$12,821	$12,821
W.–0605 [W Separate Property Advance on ED]	PX256	$17,760	$17,760
3.5%	X		$10,787,227

$377,553 divided by 12 = $31,462/Month Prior to Sale of Westchester County House

Scenario 2 (After the Sale of Westchester County House)

The Bank # 3798 account has increased from date of commencement when it was $11,000,000. Plaintiff alleges that as of February 24, 2012, it had increased $6 million to over $17,000,000 even after withdrawals.

EBS's one-half of Bank's # 3798	$7,500,000
EBS separate property	4800000
Beach House due to Husband		-$2,782,000 (due husband)
Westchester County House Sale	+$7,600,000
Mortgage-	-$2,000,000
HELOC	-$1,200,000
Cost of Sale	-$532,000
Credit to Wife for Pool	+$100,000
Credit to Wife for Nanny Suite	+$68,900
	$4,036,900	$2,018,450
Replacement House	$4,500,000
Mortgage	-$2,000,000	-$2,500,000

50% of Businesses

3Businesses (Equity $1.7MM Less Ass'd 6% Sale Costs) To Be Divided 50–50 by Stipulation ($1,598,000–S. H. Testimony and Wife's Net Worth Statement

$799,0000

Remainder of 1st Tranche Bank Special Cash Award Rec'd 9/09 Net of Tax	PX219, 220	$131,661	$65,831
Marital Portion of 2D Tranche Bank "Special Cash Award" Rec'd 9/10 Net of Tax Paid	PXS69 (EX2). 218 & 225	$470,575	$235,287
Marital Portion of Unvested Bank Incentive Shares @$2.50/SH & Net of 40% Income Tax) 2008 EPP (89,677 Shares) 2009 Incentive Share Plan (9,508 Shares)	PX69, EX.2 PX69, EX.2	$134,516 $14,262	$67,258 $7,131
F.R.–6258 [Marital]	PX256	$66,592	$33,296
W.–2130 [Marital]	PX256	$14,098	$7,049
W.–9190 [Marital]	PX256	$47,587	$23,794
W.–7367 [W Separate Property Advance on ED]	PX256	$12,821	$12,821
W.–0605 [W Separate Property Advance on ED]	PX256	$17,760	$17,760
3.5%	X		$10,305,677

$360,699 divided by 12 = $30,058/Month After Sale of Westchester County house

The wife claims that if she gets the Amagansett beach house, that she could only expect to earn 2% on her investments after tax and that she could only expect to earn $39,000 yearly upon her return to work. Based on these facts, she should receive $59,296 monthly until Mr. H. turns 65 or his full-time retirement. If the Court does not award her the Amagansett beach house but instead awards her the Westchester County family home, she will need more maintenance for a total of $75,873 monthly through September, 2017 and then $66,811 monthly until Mr. H. turns 65 or retires. This increase is due to her need for a comparable summer home in the Hamptons at the estimated cost of $350,000 per summer. She requested maintenance retroactive to April 1, 2010.

2. The duration of the marriage and the age and health of both parties.

As previously set forth, the parties were married fifteen (15) years as of the date of commencement. At the conclusion of trial (2012), Mr. H. was 47 (date of birth is ____, 1964) and Ms. S. was 46 (date of birth is ____, 1965). Both parties are in good health.

3. The present and future earning capacity of both parties.

Mrs. S. last worked for M.A. & S. from 1987–1993, earning $70,000 including bonus her last year there. She has not worked outside the home since 1994. She has a CFA, Chartered Financial Analyst, retired status. She will require updated training to re-enter the workforce and in order to activate her CFA designation. With minimal re-training, she could earn between $43,640 and $64,920 according to her expert Lynn Jonas.

Contrast this with Mr. H.'s recent earnings as follows:

2003	$7,294,030 Total Income
2004	$5,900,762
2005	$15,127,479
2006	$10,624,565
2007	$10,168,407
2008	$2.8 Million
2009	$4.8 Million
2010	$3.6 Million

His income when the parties were married in 1994, working for former Bank was $234,071.

Mr. H. has an earning history of approximately $6 million yearly if averaged over the past eight (8) years. If the most recently filed tax year is used, it is $4.8 million.

4. The ability of defendant to become self-supporting and the period of time and, if applicable, the period of time and training necessary therefore.

The defendant will have significant assets that will generate income approaching $400,000 annually without touching her assets of at least $11 million and not counting significant capital appreciation that Joan Lipton claimed was an average of 7.9% on investments. She will be able to earn close to $60,000 yearly. Maintenance should enable her to get back into the work force if she chooses and to earn a more substantial income, all of which will enable her to become self supporting.

5. Reduced or lost lifetime earning capacity of defendant as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage.

The wife has reduced current and potential income as a result of her years out of the workforce.

6. The presence of children of the marriage in the respective homes of the parties.

The wife has primary custody of the children but the children spend significant time with plaintiff.

7. Contributions and services of defendant as a spouse, parent, wage earner and homemaker and to the career potential of plaintiff.

Ms. S. has been and continues to be the children's primary caretaker. With four (4) children attending two schools on three different campuses, she was quite busy attending to their needs. The youngest, A., has been evaluated for "ADHD" and receives medication and language therapy.

The husband argued that the wife contributed little to his career, however, his wife provided him with the smoothly run management of the homes, four children and the accoutrements of a well run life. He had the luxury of devoting himself to his work knowing that his wife was taking care of the other aspects of his life.

8. The tax consequences to each party.

Ms. S. seeks tax-free maintenance. The Court denies this request.

9. The wasteful dissipation of marital property by either spouse.

The wife claims her husband wastefully spent money with his paramour and rental furniture. Given the extent of the parties' assets and plaintiff's income, this claim is of little consequence. However, his payments made on behalf of his paramour will be charged against him. He admitted these expenses during his testimony.

10. Any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration.

There were no transfers made in contemplation of the matrimonial action without fair consideration.

11. The loss of health insurance benefits upon dissolution of the marriage.

Ms. S. will lose her health insurance benefits upon divorce.

Plaintiff submits that defendant should not receive maintenance because he has already divided his assets with her. To do so, he argues, would be to double dip. The Court rejects this argument for the most part. While defendant received a substantial amount of assets from plaintiff's 2009 earnings, she only received 50% of the marital share of the 2008 and 2009 EPP Award, she received none of the CVP or SVP shares, only 50% of 28.127854% of the 2009 CVIP Plan Award and none of the "One Off" payment. Defendant did not even contest the 2010 awards.

However this issue is considered by the Court in making its award, as is the significant amount of assets distributed to defendant, in making its maintenance award.

Defendant argues that her expenses exceed $100,000 monthly. However, in reviewing her lifestyle analysis, the Court finds that her expense for furniture will be greatly reduced, her household maintenance figures will be significantly less than claimed because the Westchester County house has been extensively renovated, and that many expenses are optional. While the Court is attempting to ensure that defendant's lifestyle is not drastically altered, she, like most couples after divorce, must face the reality of an altered life as a result of having to maintain two households when there was previously only one.

Furthermore, the Court declines to order non-durational maintenance or maintenance until plaintiff turns 65 or retires.

To borrow from Justice Cooper's recent decision in Sykes v. Sykes, N.Y. Slip Op 50731(U), (Sup Ct, N.Y. Cty, 2014) a strikingly similar case, in many respects,

There is nothing in the law that even suggests that equitable distribution awards are somehow inviolate and that the capital can never be invaded. To the contrary, case law establishes that a distributive award, like any other asset, is to be considered a source of funds upon which a party can draw so as to meet his or her needs, irrespective of the marital lifestyle (see Alexander v. Alexander, ––– A.D.3d ––––, 985 N.Y.S.2d 1, 2014 N.Y. Slip Op 02386 [1st Dept 2014] [affirming modest award of durational maintenance where distributive award totaled approximately $2,750,000]; Grumet v. Grumet, 37 A.D.3d 534, 829 N.Y.S.2d 682 [2d Dept 2007] lv. denied, 9 N.Y.3d 818 [2008] [reducing amount of lifetime maintenance where trial court "failed to take into account the large distributive award wife will receive"]; Kohl v. Kohl, 6 Misc.3d 1009[A] [Sup Ct 2004] aff'd 24 A.D.3d 219, 806 N.Y.S.2d 35 [1st Dept 2005] [denying request for lifetime maintenance by finding that the "wife will have her own assets from which she can draw funds to support herself in a manner similar to the marital lifestyle"] ).

The wife's papers focus much too narrowly on her expected income and completely ignore her ability to draw from her sizeable assets. The wife cites to no authority for her proposition that she should not have to dip into her plentiful assets. Of course, the maintenance statute expressly requires the Court to not only consider the receiving spouse's income but also her property.

15 Misc 3d 1105(A) at *35.

Although plaintiff is correct that defendant is not entitled to keep her multi-million dollar award of equitable distribution forever, whole and untouched, he cannot expect her to "dip into" it while at the same time seek to have her live off the income it is generating. The two are, to a large extent, mutually exclusive: the greater the utilization of the assets themselves, the less revenue they will produce.

Id.

Based on the foregoing factors and taken into consideration the wife's needs in addition to child support, this Court awards defendant the sum of $40,000 per month, commencing June 1, 2014 retroactive to April 1, 2010 and continuing until December 31, 2017, taxable as income to the wife and tax deductible to the husband to cease upon the earlier of December 31, 2017, "the death of either party or upon the [wife's] valid or invalid marriage, or upon modification pursuant to paragraph (b) of subdivision nine of [DRL § 236 B] or [DRL § 248 ]." DRL § 236 B(1)(a).⁴

4 Since the issuance of the Decision After Trial, pursuant to plaintiff's motion filed July 28, 2014 and defendant's cross motion filed September 17, 2014, the parties have stipulated with respect to how to address the issue of "recapture".

Child Support

This Court, pursuant to Domestic Relations Law § 240(1–b), has considered the calculations delineated in Domestic Relations Law § 240(1–b)(c) as well as the factors set forth in Domestic Relations Law § 240(1–b)(f) which permit a deviation from the calculations set forth in Domestic Relations Law § 240(1–b)(c). If the combined parental income exceeds the statutory cap of $141,000, the Court must decide the amount of child support for the amount of the combined income in excess of the cap through consideration of the factors set forth in paragraph (f) of DRL § 240(1–b) and/or the child support percentage, and the Court must articulate a rationale for its determination. Casano v. Cassano, 85 N.Y.2d 649, 628 N.Y.S.2d 10, 651 N.E.2d 878 (1995).

The paragraph (f) factors include:

(1) The financial resources of the custodial and non-custodial parent, and those of the child;

(2) The physical and emotional health of the child and his/her special needs and aptitudes;

(3) The standard of living the child would have enjoyed had the marriage or household not been dissolved;

(4) The tax consequences to the parties;

(5) The non-monetary contributions that the parents will make toward the care and well-being of the child;

(6) The educational needs of either parent;

(7) A determination that the gross income of one parent is substantially less than the other parent's gross income;

(8) The needs of the children of the non-custodial parent for whom the non-custodial parent is providing support who are not subject to the instant action and whose support has not been deducted from income pursuant to subclause (D) of clause (vii) of subparagraph five of paragraph (b) of this subdivision, and the financial resources of any person obligated to support such children, provided, however, that this factor may apply only if the resources available to support such children are less than the resources available to support the children who are subject to the instant action;

(9) Provided that the child is not on public assistance (i) extraordinary expenses incurred by the non-custodial parent in exercising visitation, or (ii) expenses incurred by the non-custodial parent in extended visitation provided that the custodial parent's expenses are substantially reduced as a result thereof; and

(10) Any other factors the court determines are relevant.

The Court has considered these factors. Based upon the facts and circumstances of this matter, including the lifestyle and standard of living of the parties and the children established during the marriage, the standard of living the children would have enjoyed had the marriage not ended, the plaintiff's substantial income and the parties' substantial resources, the Court finds that applying the guidelines to income up to $350,000, the amount sought by the wife, is appropriate and would result in a just and appropriate award for child support. Matter of Cassano v. Cassano, 85 N.Y.2d 649, 628 N.Y.S.2d 10, 651 N.E.2d 878 (1995).

Defendant's income for support purposes is in the sum of $60,000.Plaintiff's income for support purposes is in the sum of $4,800,000. The defendant's pro rata share of the combined parental income is 1% and the plaintiff's pro rata share of the combined parental income is 99%. Applying the CSSA percentage of 31% for four children to the $350,000⁵ income cap, the non-custodial parent's pro rata share (99%) of the basic child support obligation on income up to the statutory cap of $141,000 is $43,273 per year, or $3606 per month, and the non-custodial parent's pro-rata share (99%) of the basic child obligation on income in excess of the statutory cap and up to $350,000, ($209,000) is in the amount of $64,142 per year, or $5345 per month.

5 In order to calculate the child support award under the CSSA, the maintenance award, which is made concurrently with the child support award, as well as FICA is deductible from the payor's income. However, considering the court imposed income cap, these deductions would not be appropriate.

Accordingly, the defendant is awarded and the plaintiff is directed to pay the sum of $8951 per month as and for child support, directly to defendant, commencing on June 1, 2014, retroactive to date of commencement. Upon emancipation of each child, child support shall be recalculated.

Health Insurance

Plaintiff shall maintain in effect health care insurance for the benefit of the children until their emancipation. If requested, defendant shall pay her pro-rata share of the health insurance premium attributable to the children.

Add–Ons

Plaintiff is directed to pay 99% and defendant 1% of all the children's future unreimbursed health care expenses for which health insurance is available, but payment is excluded by the insurer as a co-payment or deductible. Defendant shall use in network providers unless otherwise agreed to in writing by the parties, or in the case of an emergency. Plaintiff shall pay 99% of other statutory add-ons and defendant shall pay 1% retroactive to date of commencement.

Private School and College

Pursuant to DRL § 240(1–b)(c)(7)

Where the court determines, having regard for the circumstances of the case and of the respective parties and in the best interests of the child, and as justice requires, that the present or future provision of post-secondary, private, special, or enriched education for the child is appropriate, the court may award educational expenses.

In this case private school is part of the family's lifestyle. Plaintiff shall pay 99% and defendant 1% of private school tuition including college for the parties' children retroactive to date of commencement.

Dependency Exemptions

While all four (4) children are under 21 years of age, the parties are each entitled to claim the dependency exemption for two (2) of the children. When the first child emancipates, the parties shall alternate claiming the dependency exemption for the three (3) unemancipated children with plaintiff claiming two (2) children the first year and defendant claiming one child, and alternating yearly thereafter. When the second child emancipates, each party shall be entitled to claim the dependency exemption for one (1) of the two (2) unemancipated children. When the third child emancipates, the parties shall alternate claiming the dependency exemption for the remaining unemancipated child with the defendant claiming the child the first year, and the parties alternating yearly thereafter.

Life Insurance

The husband shall maintain life insurance sufficient to insure his maintenance liabilities with the wife as irrevocable beneficiary; said policy may be in declining amounts sufficient to insure his obligation.

He shall also maintain life insurance sufficient to insure his child support obligation with the children as irrevocable beneficiaries and the wife as trustee. Said policy may also be in declining amounts sufficient to insure his obligation.

He shall provide proof of same upon request within 60 days of the Judgment of Divorce and annually thereafter.

Disability Insurance

The husband shall maintain disability insurance sufficient to insure his maintenance liabilities.

He shall also maintain disability insurance sufficient to insure his child support obligation.

He shall provide proof of same within 60 days of the Judgment of Divorce and annually thereafter.

Counsel Fees and Expert Fees

Defendant first retained Bodnar & Milone LLP, who represented her commencing in August 2008 until in or about October 2009, when she changed counsel and retained Cohen Lans LLP whose name was changed to Clair Lans Greifer & Thorpe LLP in May 2011. Defendant also retained various experts over the course of the litigation, most of whom submitted reports and/or testified. According to the wife, the total professional fees incurred by her through February 2012 were $2,316,952, and are comprised of counsel fees in the sum of $1,891,367, expert fees in the sum of $392,727 and payments totaling $32,857 made to court reporters from the parties' joint account.

The Court notes the following discrepancies between the amounts stated to have been paid/owed by defendant to various professionals as set forth in the billing statements, and the amounts set forth in her counsel's affirmation:

1. Defendant's counsel's affirmation states defendant has paid Cohen Clair Lans Greifer & Thorpe LLP $1,557,133 and that an additional $165,875 is outstanding; the billing statements submitted show that as of February 8, 2012, defendant had paid counsel $1,538,842, had a trial retainer balance of $25,000 and that an additional $165,875 is outstanding;⁶

2. Defendant's counsel's affirmation states defendant has paid Bodnar & Millone LLP $168,358.03; the billing statements submitted show that $162,858 was paid.

3. Defendant's counsel's affirmation states that defendant has paid BST Valuation & Litigation Advisors, LLC ("BST") $124,141 and that $15,123.46 additional fees are due and outstanding. BST's billing statements indicate that the total billed was $124,141, and of that amount, $15,123.46 is outstanding;

4. Defendant's counsel's affirmation and the Affidavit of Steven M. Kaplan state that he and his predecessor firm, Eisman, Zucker, Klein & Ruttenberg ("EZKR") have been paid $180,388 by defendant. Additionally, although Mr. Kaplan's affidavit indicates that there is work that has not yet been billed, he does not set forth the amount of payment that is due. However, defendant's counsel states that Mr. Kaplan informs him that there is at least $10,000 in work not yet billed.

5. Defendant's counsel's affirmation states that court reporters were paid $32,857 for transcripts of the trial. The billing statements evidence the total billed was $31,969.

6 Defendant's counsel provided a reasonable explanation for this apparent but not actual discrepancy.

The Court finds the total counsel fees incurred by defendant for services rendered by her prior counsel are in the amount of $162,858 the amount reflected by the billing statements, as opposed to $168,358, the amount claimed by defendant. The Court further finds that the total counsel fees incurred by defendant for services rendered by her current counsel are in the sum of $1,679,717 as opposed to $1,723,008, the amount claimed by defendant. The sum of $1,679,717 reflects the payments set forth on the billing statements in the sum of $1,538,842, plus the outstanding balance of $165,875, reduced by the trial retainer balance of $25,000.

With regard to the experts, the Court finds that the total expert fees incurred by defendant for her experts are in the amount of $326,789, as opposed to $351,912 claimed by defendant. The difference represents: 1) a reduction of $10,000 representing the $10,000 estimated outstanding balance due to EZKR that was not documented; and 2) a reduction of $15,123 representing the amount that defendant claims is due and owing to BST, in addition to payments made of $124,141 which would result in a total billed of $139,264. The bills submitted, as well as the affidavit of Thomas A. Hutson indicate that the total billed was actually $124,141, and that of that amount, $15,123 is outstanding. Therefore, the total expert fees incurred by defendant for her experts are comprised of the following: BST-$124,141; EZKR-$180,388; Peter Davidson—$13,500; John Saluto-$3350; John Mason-$3700; and Lynn Mizzy Jonas-$1710.

The total expert fees incurred for the parties' joint experts are in the amount of $40,815 comprised of the following: Gurr–Johns–$18,862 and Dr. L. Behrman-$21,953.

The Court finds the total fees paid to the court reporters are in the amount of $31,969, the amount reflected by the billing statements, as opposed to $32,857 the amount claimed by defendant.

The majority of the counsel fees and expert fees were paid from marital funds, although the defendant claims that $614,040 was paid with her separate funds, and she still owes $192,848. Defendant is requesting repayment by plaintiff of 100% of the attorney and professional fees paid from her separate assets, and assuming she would receive½ of the value of the joint Bank investment account (–3798), she requests reimbursement to her of 50% of the attorney and professional fees paid from that account on her behalf (defendant claims her fees paid from marital funds are in the amount of $1,510,061.60). In summary, defendant is requesting reimbursement in the amount of $1,207,260 for counsel fees incurred in connection with representation by her current counsel; reimbursement in the amount of $84,179 for counsel fees incurred in connection with representation by her prior counsel; reimbursement in the amount of $254,052 for expert fees; and $16,428 for fees paid to court reporters.⁷ Defendant is requesting that plaintiff pay a total of $1,561,920.60 as follows:

7 Defendant states that in her request for relief she also has a claim for reimbursement for 50% of the total of the plaintiff's attorneys fees paid from the parties' marital assets.

Entity	Fees	Paid From	Request For
Cohen Clair Lans	$525,635.21	W's sep. funds	Payment of $525,635.21
Griefer & Thorpe	$1,031,498.42	Joint account	Reimburse $515,749.21
LLP/Cohen Lans	$165,875.43	Outstanding	Payment of $165,875.43
LLP–Current Counsel
Bodnar & Milone–Prior Counsel	$168,358.03	Marital assets	Reimburse $84,179.01
BST	$60,270.42	W's sep. funds	Payment of $60,270.42
Assessment of	$63,870.59	Joint account	Reimburse$31,935.30
Plaintiff's Compensatory Awards, Rate of return analysis	$15,123.46	Outstanding	Pay to Wife $15,123.46
EZKR/Steve	$13,135.00	W's sep. funds	Payment of $13,135.00
Kaplan	$167,253.00	Joint account	Reimburse $83,626.50
Lifestyle Analysis	approx. $10,000	Outstanding	Payment of $10,000
Peter Davidson	$13,500.00	W's sep. funds	Pay to Wife $13,500
Real Estate Appraisal
of Beach house, etc.
John Saluto	$1,500.00	W's sep. funds	Payment of $1,500
Report on real estate	$1,850.00	Outstanding	Payment of $1,850
taxes on $4–$5 million residences in Westchester County Houses
John Mason	$3,700.00	Joint account	Reimburse $1,850
Real Estate Appraisal of Marital Residence
Lynn Mizzy Jonas	$1,710.00	Joint account	Reimburse $855
Vocational Expert
Gurr–Johns–	$18,862.09	Joint account	Reimburse $9,431.05
Joint appraisal of parties' personal property
Court Reporters	$32,857.00	Joint account	Reimburse $16,428.50
Dr. L. Behrman	$21,953.00	Joint account	Reimburse $10,976.50
Retained by both parties to assist parties in resolving divorce amicably
Total fees	$2,316,951.65
Total request			$1,561,920.60

The husband opposes the wife's request for professional fees and counter proposes that the parties should each bear the professional fees incurred by them, in the same proportion as they receive the marital assets; ie., if the defendant receives 50% of the assets (which according to plaintiff will give defendant at least $12.5 to $14.3 million investable assets, without counting Bank deferred compensation plus a $4 to $5 million dollar house), she should pay 50% of the fees. He asserts that the bulk of the fees were paid from investment income in the joint Bank investment account –3798, which has increased by $6 million during the pendency of the action, net of all withdrawals including fees. The plaintiff opines that defendant's share of the fees is only 6%–7% of the investable assets she stands to receive in this matter, which is a fair result.

Plaintiff's position is that the bulk of the fees were paid from joint investment income, as there was effectively no other source of income with which to pay them, and that for the fees paid from said joint investment account, there need not be any readjustment. Plaintiff claims that the only funds available for professional fees were the cash bonuses either distributed as separate property, used to pay the parties' living expenses or preserved for distribution after trial, and the joint investment account.

Plaintiff further argues that a payment to plaintiff in the amount of $677,279 with each party paying their respective "outstanding" fees equalizes the parties' use of separate property to pay fees, so that each will have paid 50% of the total fees.⁸ Plaintiff claims that the following separate property funds, totaling $1,547,406, were, or will be, expended by him for professional fees: 1) $576,064 to pay his own professional fees in the latter half of 2011; 2) $408,005 currently owed to plaintiff's counsel and his expert; and 3) $563,337 paid into the joint account over the period of time from July 2011 to November 2011 which was to fund deficits⁹ in the joint Bank account. Plaintiff claims that all of the $563,337 went to fund professional fees; $155,320 of his fees, $387,144 of defendant's fees and $20,873 paid to court reporters. Plaintiff asserts that based on defendant's representation that her "outstanding" bills total $192,848, the total separate funds that will have been spent by both parties is $1,740,254 (($1,547,406 by plaintiff and $192,848 by defendant).¹⁰ Therefore, based on plaintiff's position that both parties should spend an equal amount of separate funds on all professional fees, each party would spend $870,127 ($1,740,254/2), which would require defendant to pay her outstanding bill of $192,848 with her separate funds, and would require payment of $677,279 to plaintiff.

8 Plaintiff's calculation is based on an assumption of 50/50 division of assets.

9 Pursuant to the Stipulations entered into by the parties on January 21, 2010 and June 1, 2011, the parties agreed, inter alia, that their legal and other professional fees in connection with this action would be paid from the parties' joint Bank account –3798. The June 1, 2011 Stipulation also provided that commencing June 17, 2011, to the extent "that Surplus Income is less than the sum of the outstanding Expenses, both as of the 17th (i.e., there is a Deficit), the Husband will deposit into the Joint Bank Account prior to the Expenses being paid his separate property in an amount equal to the Deficit."

10 However, according to defendant's claim, in addition to her outstanding balance of $192,848, she also has paid $614,040 of professional fees with her separate funds.

With regard to the amount of professional fees paid by plaintiff, defendant states that through November 2011, plaintiff expended $2,467,990 in legal and expert fees.

The court may, in its discretion, award counsel fees and experts fees, as justice requires, having regard for the circumstances of the case and of the respective parties. DRL § 237(a) ; see, DeCabrera v. Cabrera–Rosete, 70 N.Y.2d 879, 524 N.Y.S.2d 176, 518 N.E.2d 1168 (1987) ; Morrissey v. Morrissey, 259 A.D.2d 472, 686 N.Y.S.2d 71 (2nd Dept.1999).The "court should review the financial circumstances of both parties together with all the other circumstances of the case, which may include the relative merit of the parties' positions." DeCabrera, 70 N.Y.2d at 881. "There shall be rebuttable presumption that counsel fees shall be awarded to the less monied spouse." DRL § 237(a). Furthermore, where there is a marked disparity in the respective party's incomes, an award of counsel fees is warranted, [Litvak v. Litvak, 63 A.D.3d 691, 880 N.Y.S.2d 690 (2nd Dept.2009) ; Bogannam v. Bogannam, 60 A.D.3d 985, 877 N.Y.S.2d 336 (2nd Dept.2009) ], and the fact that the distribution of the marital property resulted in a substantial award to the spouse with less income, does not preclude the award of counsel fees to that spouse [McCracken v. McCracken, 12 A.D.3d 1201, 784 N.Y.S.2d 437 (4th Dept.2004) ; Hackett v. Hackett, 147 A.D.2d 611, 538 N.Y.S.2d 20 (2nd Dept.1989) ]. "The mere fact that [defendant] may have been able to pay her own fees is but one factor to be considered by the court (citation omitted)." Vicinanzo v. Vicinanzo, 193 A.D.2d 962, 966, 598 N.Y.S.2d 362 (3rd Dept.1993). Additionally, a counsel fee award is warranted where the other party's negotiating positions and trial tactics contribute to a significant portion of the protracted litigation. McCully v. McCully, 306 A.D.2d 329, 760 N.Y.S.2d 686 (2nd Dept.2003). "An appropriate award of attorney's fees should take into account the parties' ability to pay, the nature and extent of the services rendered, the complexity of the issues involved, and the reasonableness of the fees under all of the circumstances' (Grumet v. Grumet, 37 A.D.3d 534, 536, 829 N.Y.S.2d 682 )." Kessler v. Kessler, 111 A.D.3d 894, 977 N.Y.S.2d 251 (2nd Dept.2013).

With regard to the merits of the parties' positions, each party prevailed on some of the contested issues. The issues of the parties' standard of living, the defendant's need for maintenance and counsel fees in light of the significant assets she would be receiving, as well as the equitable distribution of plaintiff's various deferred compensation awards, the equitable distribution of the marital residence and the Amagansett beach house, and whether defendant was entitled to 50% or a lesser percentage of the marital estate were hotly contested. At the end of the day, after millions spent, not surprisingly, neither party's position was totally embraced by the Court. On the issue of maintenance, while plaintiff's position was that defendant would have more than enough income from her considerable investable assets to support herself, negating the need for any maintenance, defendant was granted a substantial maintenance award for a number of years. On the issue of plaintiff's many deferred compensation awards, while the Special Cash Award was found to be all marital as was argued by defendant, the many other awards were found to be plaintiff's separate property or only partially marital. With regard to the beach house, defendant prevailed, having been awarded the right to purchase same. She also prevailed on the issue of her entitlement to 50% of the marital assets.

Both parties also argue that the other party engaged in tactics that prolonged the litigation, was unreasonable and refused to settle, ultimately forcing the case to trial and escalating the legal fees. "However, an award of [counsel fees] ... is not intended to address a party's decision to proceed to trial rather than agree to a settlement (citation omitted)." Comstock v. Comstock, 1 A.D.3d 307, 766 N.Y.S.2d 220 (2d Dept.2003). Defendant also complains of the lack of cooperation exhibited by plaintiff's counsel throughout this matter. The behavior engaged in by the parties and counsel goes with the territory of a highly contentious matrimonial matter where millions of dollars are at stake, and did not rise to a level of obfuscation or unreasonableness as to impact an award of counsel fees.

The purpose of a counsel fee award is to create a level playing field and while both parties emerge from this divorce with a great deal of wealth, and have the ability to pay the counsel fees at issue, the ability to pay is not the only factor to be considered. Vicinanzo, 193 A.D.2d at 966, 598 N.Y.S.2d 362.; DRL § 237(a). While the assets and wealth of the parties in this matter are in excess of the "usual" finances dealt with by the Courts in counsel fee matters, the basic premises remain the same. At the end of the day, while both parties are extremely financially well off, they are not in financial parity. See, Costa v. Costa, 46 A.D.3d 495, 849 N.Y.S.2d 204 (1st Dept.2007).A substantial distribution of marital assets as well as an award of adequate maintenance does not preclude an award of counsel fees, but are factors to be considered when the Court determines the appropriate amount of the award. See, Hackett, 147 A.D.2d 611, 538 N.Y.S.2d 20. Defendant is entitled to comparable representation with comparable fees to that which her husband has had the benefit of, without having to deplete her assets in the amount required to satisfy the fees incurred in this matter.

The Court recognizes that defendant is receiving one half of the substantial marital estate resulting in her receipt of assets of $12–13.5 million, but plaintiff too, will receive assets of at least this value and then some. Plaintiff also has the benefit of the deferred compensation awards that were determined by the Court to be his separate property. The Court has determined that defendant's assets can feasibly generate after tax income of about $30,000 per month, and has awarded defendant maintenance of $40,000 per month, and child support of $8951 per month, which even in conjunction with the earnings of up to $60,000 per year imputed to her yield her a potential income of $84,000 per month, for her and the parties' four children.This is compared to plaintiff's annual earnings found to be in the sum of an average of $6 million and his 2009 income of $4.8 million (which was his income used at the time of trial for purposes of calculating support), which is in addition to income he will receive from the investable assets awarded to him in this matter. Notwithstanding plaintiff's claims that he is earning less income than in past years, especially 2005, when he earned approximately $15 million, his compensation is still in the millions. And while the Court is cognizant that plaintiff's income is reduced by the maintenance and child support he is paying to defendant, he still remains in a financial position superior to that of defendant. Moreover, defendant is unemployed and has not worked outside of the home during most of the 15 year marriage, while plaintiff will continue to work and earn income in amounts that will far surpass any earnings defendant may have, resulting in a greater disparity in income in the future.

In considering the reasonableness and necessity of the counsel fees incurred the court must review "the difficulty of the questions involved, the skill required to handle the case, specifics as to the time and labor required, the [attorney's] experience, ability and reputation, and the customary fee charged for similar services (citations omitted)." Sand v. Lammers, 150 A.D.2d 355, 356, 540 N.Y.S.2d 876 (2nd Dept.1989). "In determining the appropriateness and necessity of [awarding expert] fees the court shall consider: 1.[t]he nature of the marital property involved; 2.[t]he difficulties involved, if any, in identifying and evaluating the marital property; 3.[t]he services rendered and an estimate of the time involved; and 4.[t]he applicant's financial status." DRL § 237(d).

Defendant's counsel fees total $1,842,575. Of this amount, $162,858 was charged by her prior counsel, who were retained to negotiate a separation agreement with plaintiff, and who represented her for approximately one year prior to this action being commenced. Defendant's fees incurred for services rendered by her current counsel who represented her during the pendency of the is action, are in the sum of $1,679,717. There is no question that counsel are highly regarded, experienced matrimonial litigators, and that the hourly rates were commensurate with compensation for attorneys of their professional standing and experience. The Court finds that the counsel fees incurred were reasonable and necessary for a high asset matrimonial case, with extremely complex financial issues, which resulted in a 28 day trial to determine, inter alia, issues regarding the parties' standard of living, defendant's need for maintenance and professional fees in light of the significant assets she would be receiving, equitable distribution of plaintiff's various deferred compensation awards, the equitable distribution of the marital residence and the Amagansett beach house, and whether defendant was entitled to 50% or a lesser percentage of the marital estate. Similarly, the expert fees incurred in the sum of $367,604 were reasonable and necessary, and are not out of the realm of what would be expected in litigating a matter involving millions of dollars in assets and income. The Court also notes that defendant's counsel fees and expert fees totaling $2,210,179, not including the fees in the sum of $31,969 paid to the court reporters, are no more extravagant than the amount of professional fees paid by plaintiff, which defendant claims were $2,467,990 through November 2011.

Upon consideration of all of the circumstances of the matter, and all of the factors set forth hereinabove, the Court does not agree with either party's position with regard to professional fees. Plaintiff's argument that each party should pay one half of all fees incurred by both parties is not persuasive based on the Court's view of the finances as set forth herein. However, defendant's argument that plaintiff should be responsible for all of her professional fees is no more persuasive than plaintiff's. While the Court does not believe that plaintiff should be required to pay all of defendant's professional fees, and recognizes that defendant is able to afford to pay much of her own fees, the Court has determined that plaintiff should be required to pay a larger share than defendant in order to level the playing field.

Accordingly, the plaintiff shall be responsible for payment of $1,440,136 of the defendant's counsel fees and expert fees, including fees paid to the court reporters. In making this award the Court has considered that with regard to the counsel fees paid to defendant's prior counsel, Bodnar & Milone LLP, and the fees paid to Dr. L. Behrman, whose assistance the parties jointly sought to resolve their divorce amicably, the Court has declined to award fees. According to defendant these fees were paid with marital assets/joint account, thus each party has paid half. Bodnar & Milone LLP's entire bill of $162,858 was incurred beginning approximately one year prior to commencement of the action and services were completed approximately one month prior to commencement. At this time the parties had divided some assets and it would appear that they had a common goal in attempting to resolve this matter without litigation. The Court finds that each party having paid one-half of these fees is not an unjust result. Although approximately one-half of the total fees in the amount of $21,953 sought in connection with Dr. Behrman's services were incurred subsequent to commencement, her services also appear to be entwined with the prior goal of settlement and similarly the Court finds that each party having contributed one-half is appropriate.

Defendant shall not be responsible for payment of plaintiff's legal and professional fees.

The parties are to determine the amount of professional fees due to defendant from plaintiff, in accordance with this decision. In connection therewith, the parties are to determine any credits due plaintiff for payment of defendant's counsel fees and/or expert fees that have been paid for which defendant is seeking payment as set forth in this Decision, taking into account that fees paid from the joint Bank account –3798 were paid 50% by each party. Additionally, plaintiff may not seek a credit for fees paid for the services of Bodnar & Milone LLP and Dr. L. Behrman, as the Court has already considered those payments.

Accounting

Regarding the redistribution of assets and an accounting, the Court finds that the parties have successfully co-mingled their finances during the pendency of this action such that it is nearly impossible to sort them out. However, as to the F.R. Account 7460 savings account, used by plaintiff to deposit the first Special Cash Award (also referred to as the 1st retention bonus) of $470,000 and the checking account associated with it, that is account no. 6266, plaintiff testified that he used the account for various expenses, including all household expenses for his house, "B.'s house" the Beach House, some construction related expenses, professional fees related to the divorce and tuition related expenses. (Tr Tr p. 597). The original $369,892 was reduced to $120,666 as of February 28, 2010. The money had been transferred into the checking account. The balance in the checking account was $17,854 as of October 31, 2009. (Tr Tr p. 596). In support of his position, plaintiff attached checks from his checking account at F.R. # 6274 to evidence this.

In addition, the parties entered into three stipulations referred to herein as to payment of expenses from the Bank # 3798 account. Within 60 days from the date of this decision, the parties should attempt to agree on an accounting of the foregoing assets based on the Court's decision. If unable to do so, they shall submit separate accountings with explanatory affidavits in support of the proposed Findings and Judgment. When doing so, in accordance with the precepts of Mahoney–Buntzman v. Buntzman, 12 N.Y.3d 415, 881 N.Y.S.2d 369, 909 N.E.2d 62 (2009), they shall take into account that the parties were paying marital expenses such as the Loyola pledge and Brunswick, both agreed to during the marriage and which were marital expenses.

CONCLUSION

The Court has based its decision on a preponderance of the evidence except for those issues where clear and convincing evidence is required.

The Court has considered the additional contentions of the parties not specifically addressed herein and finds them to be without merit. Those matters, other than those stipulated to, not specifically addressed are denied in the Court's discretion.

Both parties are on notice pursuant to Domestic Relations Law § 255"... that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party's health insurance plan, depending on the terms of the plan."

Defendant's counsel is directed to settle proposed Findings of Fact and Judgment of Divorce, in accordance with this Decision, and including the usual and customary language not specifically contained herein, within 60 days of the date of this Decision.

The forgoing constitutes the Decision of this Court.