Opinion
2005-151.
Decided June 16, 2006.
James E. Konstanty, Esq., Attorney for Plaintiff, Oneonta, NY.
Nancy K. Deming, Esq., Attorney for Defendant, Delhi, NY.
The issues for decision in this matrimonial action are equitable distribution, maintenance and child support. The parties have stipulated that the plaintiff will receive a divorce on the grounds of constructive abandonment and to joint custody of Sarah and Caitlin, their two children under 21, with physical residence with their mother and visitation with their father as the parties may agree. They have also agreed that furniture and personal property has been divided to their satisfaction. Each will retain the vehicle in his or her possession and be responsible for any loan payments thereon. This action was commenced February 10, 2005, but the valuation date will be March 17, 2006, the date of trial. The trial date is selected since the parties testified as to assets and debts as of that date. DRL § 236(B)(4)(6).
The parties were married on November 2, 1980. Both had graduated from West Virginia University with B.S. degrees in agriculture. They have 3 children, John, now a senior in college, Sarah, just graduated from high school and accepted into a 4 year program at SUNY Delhi for Fall 2006, and Caitlin, having completed 10th grade. The children were home schooled until 1999 when they entered Lighthouse Christian Academy (LCA), a private school in Oneonta, NY Defendant is employed by Cornell Cooperative Extension and as such is in the federal Civil Service Retirement System (CSRS). Commendably, plaintiff went back to SUNY-Delhi in 2002 and received an Associates degree in nursing on May 21, 2005. She was licensed as a registered nurse (RN) in September 2005. From the birth of their first child until about 1998, Plaintiff was a full time homemaker and provided most of the children's home schooling. Then she started driving a school bus to have flexible time with the children and also to provide extra income for private school tuition and expenses.
Currently, plaintiff earns $18.74 per hour for a 36 hour week or $35,081.28 annually. (Ex. 24), which after subtracting FICA is $32,397.56. Defendant's current income is $62,904.96 (Ex. F and 29) which after subtracting his CSRS payment of $4,403.30 leaves $58,501.66.
In addition, plaintiff's father died in 2002 and she received an inheritance of approximately $371,000.00 (See Plaintiff's Net Worth Statement). Defendant does not dispute this is separate property. Part of the inheritance is pension annuities from which she received $5,789.18 and $3,276.03, totaling $9,065.21 in 2004 (Ex. 18). In 2005, the first annuity was reduced to $3,644.50 due to a change from her father's life expectancy to her life expectancy. (Ex. 19). She also took an $18,000.00 withdrawal in 2005 from the second to meet family expenses (Ex. 19). This withdrawal will reduce the annual payments by an unknown amount. She also receives about $1,500.00 per year in dividend and interest income from the inheritance (Ex. 17). In total she presently receives approximately $6,000.00 per year from these inherited sources.
Defendant also received an inheritance in 2004 from life insurance on the death of his father in the amount of $21,596.91. (Ex. G). He testified most of this money was spent meeting family expenses, with $3,900.00 now left.
There are a number of issues in regard to equitable distribution. The two main assets are the marital residence and the husband's CSRS pension. The parties have stipulated not to make any claims regarding enhanced earnings due to the husband's receipt of a Masters degree in 1990 and the wife's receipt of a nursing degree and license in 2005. Nor have they presented any proof on the issue of enhanced earnings.
The most important factor to consider regarding equitable distribution of the assets acquired during this marriage is that it is a long term marriage of 24 years with three children. During most of the marriage the wife was a homemaker, caretaker for the children, and their teacher, while the husband was employed by the Cooperative Extension. Neither had any significant property at the time of marriage and there is no substantial allegation, nor any testimony of marital fault. The main irritant in the marriage appears to have been economic with disputes regarding excessive spending, particularly in regard to some of the children's extra curricular activities, and son John's college costs. DRL § 236(B)(5)(d).
The parties have credit card debt of $34,854.00, and plaintiff has one credit card with a $3,400.00 balance. Plaintiff claims this debt is the result of excessive spending by defendant and should be considered a wasteful dissipation of marital assets. The husband testified creditably that the charges were to meet family expenses, such as payments on the family van, gasoline, food, children's clothing, children's ballet lessons, children's guitars and guitar lessons, ski trips he took as advisor to the children's ski club and skis and ski lessons and trips for the children. He also testified the ski club was begun at the request of his son, John. Plaintiff's testimony on the other hand was inconsistent. She admitted in her testimony that she used the charge cards. Among other items she testified some of her SUNY Delhi expenses were charged to them (Exhibits 13, 33, 37). She also testified she did not object to charges for ballet lessons for her two daughters, but did object to the guitar and ski expenses which her husband enjoyed with the children. She also admitted on cross that she did not object to all the credit card charges.
"Expenditures which were agreed to and enjoyed by both parties but which, through hindsight, may seem improvident to parties who can no longer reach rational agreement should not be characterized as a waste of assets and held against one party."
Willis v. Willis 107 AD2d 867 (3rd Dept. 1985).
It is held that all the credit card debt is marital debt and must be paid equally by the parties.
As to the defendant's CSRS pension, it is clearly a marital asset since it was earned from employment during marriage. He claims that because federal employees do not receive Social Security, and the plaintiff will receive Social Security due to her employment, there should be a reduction in the amount of the pension distributed to plaintiff. However, due to the fact that defendant does not receive Social Security, plaintiff loses both the right of a former wife in a 10 year marriage to receive Social Security benefits based on the husband's earnings and also the right to Social Security as a surviving spouse based on the husband's earnings. Scheinkman, New York Law of Domestic Relations, (West 1996) §§ 18.49 and 18.50.
It is clear that a divorced spouse is entitled to share in a CSRS retirement benefit. "Handbook for Attorneys on Court Ordered Retirement Benefits under the Civil Service Retirement Benefits" (Ex. 16); Scheinkman, supra, §§ 18.28 and 18.29.There are three types of benefits that may be provided for in a court order on civil service retirement benefits; employee annuities, refunds of employee contributions and survivor annuities. (Ex. 16, p. 5-6). The court perceives no reason why this marital asset should not be divided in the normal manner pursuant to the formula in Majauskas v. Majauskas 61 NY2d 481 (1984). Thus it is the order of the court that all three of the retirement benefit types be divided pursuant to Masjauskas with plaintiff receiving 50% of the amounts accrued during the total months of the marriage for which benefits were earned. Owens v. Owens 288 AD2d 782 (3rd Dept. 2001); Irato v. Irato 288 AD2d 952 (4th Dept. 2001). The court order to be submitted by plaintiff for the retirement system shall include a requirement that defendant must elect the benefit for a surviving spouse annuity, if plaintiff so requests.
The other major marital asset is the marital residence. It has been appraised for $155,000 (Exhibit 25 with attached Exhibit D). The parties agree the mortgage balance is $57,000. Plaintiff claims a credit for an inheritance she received of $10,000.00 (Exhibits 4 and 8) and also half a joint gift from defendant's parents (Ex. 20) which were used to purchase the house and adjoining vacant lot. The inheritance was received in 1993 and deposited in a joint account (Ex. 8). The parties agree the house and lot were purchased in the joint names of the parties. The house was purchased in 1995 and the lot shortly thereafter. It is well established that when inherited or gifted, property is placed in a joint account and used to purchase a joint asset, the funds are commingled and become marital property. Rosenkranse v. Rosenkranse 290 AD2d 685 (3rd Dept. 2002). This is particularly true where the claim of separate property is first raised 10 years after the funds were commingled. Plaintiff's claim for a credit is denied.
The parties agree that plaintiff should have exclusive occupancy of the marital residence at least until the youngest daughter graduates from high school in 2008. They disagree as to whether occupancy should continue beyond that and as to how to divide the proceeds of sale.
Defendant argues occupancy should end in 2008 while plaintiff maintains it should last until 2010 when Sarah, who plans to live at home, will finish SUNY-Delhi. Plaintiff claims defendant's share of the equity in the residence should be determined now, whereas defendant's position is that the house should be sold when occupancy ends and the net proceeds then divided equally. The court has the authority to award exclusive occupancy. DRL § 236(B)(5)(f).
In order not to disturb the children's living arrangements exclusive occupancy by the plaintiff is granted until September 1, 2010. It seems to the Court only fair that each party should pay half the carrying charges of this jointly owned marital asset (mortgage, taxes, insurance) until occupancy ends and that each should then receive an equal share of the net proceeds of sale of this marital asset. Plaintiff as occupant should pay utilities and minor repairs (under $500.00). The house should be listed for sale on the multiple listing service on March 1, 2010 at a price agreed to by the parties or, if they cannot agree, at a price determined by the appraiser who prepared the appraisal in evidence (Ex. 25). Any offer within 10% of the listing price should be accepted.
Alternatively, if plaintiff chooses she may pay defendant $49,000.00 for his equity interest in the residence within 90 days of the date hereof. If plaintiff makes such payment, defendant shall simultaneously deliver to her a bargain and sale deed with covenant against grantor's acts. Plaintiff shall then secure defendant's removal from liability on the mortgage or indemnify him against further liability on the mortgage.
Turning to child support, there are also several issues. First is whether back child support should be ordered from the date of commencement to the present. Plaintiff claims it should, while defendant claims he has more than met this obligation by paying the children's expenses. Defendant testified believably and submitted detailed records of the expenses he paid. (Exhibits M through S). He paid the school tuition, doctor and dentist bills, guitar and dance lessons, camp and church conference fees. In addition, he paid the full amount of the monthly mortgage payment (which included taxes and insurance), car payment and auto insurance and credit card bills. As discussed above the credit card bills were for family expenses, including many expenses for the children. Both parties also spent approximately $18,000.00 from inherited funds for family expenses. (See p. 3 above). The mortgage and car payments also benefit the children as they lived in the house and drove or rode in the cars. Excluding the mortgage and car payments which affect equitable distribution and maintenance, the monthly payments made by defendant exceeded $1,600.00 per month. As will be seen, the payments he made exceed his monthly child support as calculated using the Child Support Standards Act. (CSSA). DRL § 240 (1-b) Thus retroactive child support is denied.
As set forth above, plaintiff's income is $32,397.56 and defendant's is $58,501.66 after subtracting for FICA. To plaintiff's income must be added $6,000.00 from dividend, interest and annuity income. Total income is $96,899.22 of which plaintiff's share is 40% and defendant's is 60%. However, it is appropriate to cap income for child support at $80,000.00 since two of the children will be in college and the third in private school. Since only two of the children are under 21, the proper percentage is 25% x $80,000.00 equals $20,000.00. Defendant's 60% share is $12,000.00 or $1,000.00 per month. Even if 25% were applied to the full $96,899.22 defendant's child support would be $1,211.24 per month, well below the $1,600.00 he had been paying. Defendant is ordered to pay plaintiff $1,000.00 per month child support commencing July 1, 2006.
In addition, defendant shall continue to provide medical insurance coverage for the children through his employment. The parties shall share unreimbursed medical and dental expenses for the children with 60% paid by defendant and 40% by plaintiff.
Another factor to be considered regarding the children is college and private school expenses. As with all parents of college age children, paying for college will be the focus of their economic activity for the next few years. It is clear that both parents value education highly. Both are college graduates with advanced training. The children were home schooled and then enrolled in private school. John will be a senior in college and Sarah a freshman in the fall.
Until now defendant has paid the children's LCA expenses (Exhibits M-S). In addition he testified he has taken out loans totaling $31,584.00 for their son's college tuition and expenses (Ex. H, I J) on which he is solely obligated.
The court has the discretion to direct the parents to pay college and private school expenses for the children. DRL § 240 (1-b) (c) (7). MacVean v. MacVean 203 AD2d 661 (3rd Dept. 1994). Thus the college expenses for Sarah, and LCA and college expenses for Caitlin, if she attends, should be shared between the parties in proportion to their incomes, 60% by defendant and 40% by plaintiff. The children should be required to secure the maximum amount of scholarship and/or loans available for their education as well as any work study, summer or other earnings they can secure. The parents would then be obligated only for the net amount after subtracting the children's contributions. The college expenses to be so shared would include tuition, room, board, books and incidental fees and expenses charged by the college.
Since Sarah will live at home, it is not appropriate to provide a credit against child support, as it would be if she had room and board at college. However, if either Sarah or Caitlin should reside away at school, two thirds of that child's share of child support paid by defendant would then be subtracted from and credited to college expenses. Paro v. Paro 215 AD2d 965 (3rd Dept. 1995). For example, if one child should move to a dormitory $213.33 per month of child support would be credited against defendant's share of college expenses ($80,000 x 8% x 60% ÷ 12 = $320 x 2/3 = $213.33). If both should reside away at school two thirds of the entire $1,000.00 per month would be credited.
As to son John's college expenses, the plaintiff testified she did not object to his choice of college, but did object to the cost of a private college. The courts have held that a parent's obligation for a child's college expenses should be limited to the cost of attending a SUNY college. Balk v. Rosoff 280 AD2d 568 (2nd Dept. 2001); Zion v. Zion 201 AD2d 404 (1st Dept. 1994). Since the defendant undertook the obligation for his son's college loans at a private college without his wife's consent it is held that he shall remain solely obligated on those loans as well as any additional loan necessary for the senior year.
The defendant has two life insurance policies that are separate property (see Net Worth Statement) and also has group life insurance through his employment. (Ex. 29) In order to provide some security for the child support and college payments the court directs that the children shall be named as equal beneficiaries on all of these policies on the life of defendant. DRL § 236(B)(8) (a).
Since defendant is providing all of the loans for son John's college, he shall be entitled to the dependency exemption for him as long as it is available. Plaintiff shall be entitled to the dependency exemption for Sarah and defendant for Caitlin, as long as available. This determination is made based upon the child support and college expenses for which each party is obligated.
The last item for decision is maintenance for plaintiff. The factors to be considered in determining an award of maintenance are set forth at DRL § 236(B)(6)(a). The principal fact to be considered is that plaintiff is now self supporting largely due to her efforts in becoming licensed as a registered nurse, although, much of her work to become a registered nurse took place before this action was commenced. In addition, she receives substantial income and property from her father's estate, while defendant's smaller inheritance from his father is essentially gone. Whichever option above she selects regarding the marital residence, she will benefit from use of the marital residence. While two of the children will reside with her she will receive substantial child support payments to be used for their care. The pre-divorce standard of living of these parties was typical for a middle income couple struggling to make ends meet. Even with the plaintiff's additional income as an RN, this struggle will continue for the next several years due to the existing and continuing college and private school expenses for the children. Also significant is that she testified she incurred $22,000.00 of college loans to secure her nursing degree on which she is paying $233.00 per month for 10 years. Just as defendant is obligated to pay the loans for son John's college, plaintiff must pay her own college loans.
There are several cases that hold that maintenance should not be awarded when the spouse seeking it is self supporting, particularly where the children are old enough that there is no need for child care. Lemczak v. Lemczak 105 AD2d 1157 (4th Dept. 1984); Robinson v. Robinson 256 AD2d 1011 (3rd Dept. 1998). In addition, plaintiff has been awarded substantial retirement benefits and will be entitled to her own Social Security. In Owens v. Owens, supra, the court took into account in determining maintenance that the spouse seeking it would receive her own Social Security as well as a share of the other spouse's federal civil service pension. Lastly, while not determinative, the court notes that with the addition of child support, plaintiff's total income will be equal to that of defendant. In addition the parties face continuing major expense over the next 6 or 7 years for their children's college, of which plaintiff will pay only 40% of her two daughters' expenses and none of her son's.
Taking all of this into account, the court determines that maintenance to plaintiff is not appropriate or required upon the facts of this case and it is denied.
Plaintiff also is not entitled to any award for maintenance retroactive to the date of commencement of the action. Both parties testified that plaintiff received the full amount of the 2004 Federal and State tax refunds totaling $9,590.00 (Ex. 17). In addition, defendant paid the full amount of the mortgage payment on the marital residence and the full amount of the car loan. He also made the payments on the credit cards, which plaintiff admitted she used. (Exhibits M-S). Ordinarily, plaintiff would be obligated to divide the tax refunds and to pay her share of these obligations on marital assets. Since she did not they constitute maintenance. Therefore the court denies any retroactive maintenance.
In light of all of the factors discussed herein, the court finds that each party shall pay his or her own attorney's fees.
The court has considered the other contentions of the parties and finds them to be without merit and denied.
Submit Findings and Judgment in accord with the determinations in this decision.