Opinion
February 11, 1999
Appeal from the Supreme Court, New York County (Lori Sattler, Spec. Ref.).
Justice Tolub's January 12, 1998 order merely determined, after defendant had an opportunity to address the issue, a question of law appropriate for consideration before trial (see, DeJesus v. DeJesus, 90 N.Y.2d 643, 647), namely, that the contingency fee cases defendant had commenced prior to the commencement of the instant divorce action are part of his firm's assets or value, and therefore constitute marital property (see, Litman v. Litman, 123 A.D.2d 310, 312; In re Garrett v. Garrett, 140 Ariz. 564, 567, 683 P.2d 1166, 1169; In re Vogt [Vogt], 773 P.2d 631, 632 [Colo Ct App]; see also, Burns v. Burns, 84 N.Y.2d 369, 376).
Although the parties and the Special Referee agreed that it would be prohibitively costly and time consuming, as well as speculative, to value the contingent cases based on the files, nevertheless, it was an improvident exercise of discretion to assign an arbitrary 25% of the net fees to be recovered as plaintiff's equitable share, the proper method being to compare the percentage of time spent by defendant during the marriage with the total time he spent in reaching each ultimate recovery (see, In re Garrett v. Garrett, supra, 140 Ariz, at 568, 683 P.2d, at 1170; In re Vogt [Vogt], supra, at 633). Accordingly, the case is remanded to the Special Referee to determine equitable distribution based upon that methodology, along with defendant's unaddressed request for access to the marital home to retrieve personal belongings.
The capitalization of earnings approach to value the goodwill of defendant's practice was appropriate (see, Davis v. Davis, 128 A.D.2d 470, 475), as was the application of a weighted average to reflect increasing income and a capitalization factor of 331/3% to reflect the risks and likelihood of success. The Special Referee considered all the Domestic Relations Law § 236 Dom. Rel. (B) (5) (d) factors in reaching an equitable distribution of 50% of the goodwill to plaintiff over the course of four years, which we decline to disturb.
The Special Referee also properly weighed plaintiff's ability to re-enter the workforce, the income defendant is capable of earning and the parties' standard of living prior to the divorce in awarding maintenance of $2,500 per month only until the parties' youngest child is enrolled in kindergarten (see, Kay v. Kay, 37 N.Y.2d 632, 637-638; Brownstein v. Brownstein, 167 A.D.2d 127, 129, lv denied 77 N.Y.2d 806).
The calculation of defendant's expected income, in determining child support, was well founded, but the amount of maintenance should not have been deducted from his income, since there was no provision for a concomitant increase in child support upon termination of maintenance (see, Lekutanaj v. Lekutanaj, 234 A.D.2d 429, 431; Huber v. Huber, 229 A.D.2d 904, 905). In addition, since defendant is bearing the entire cost of the children's financial needs, he, not plaintiff, should be permitted to declare them as tax exemptions (see, Burns v. Burns, 193 A.D.2d 1104, 1105, mod on other grounds 84 N.Y.2d 369).
The $26,859.65 home equity loan incurred by plaintiff effectively supplemented the pendente lite awards of maintenance, child support, counsel fees and necessary household expenses, and thus defendant should not be required to pay it. The Special Referee misapprehended Justice Tolub's order with respect to plaintiff's psychologist bills, which also should not be borne by defendant. The remaining arrears and reimbursements were proper expenses for which defendant is liable.
The award of $60,000 of plaintiff's counsel fees properly took into consideration her ability to pay them, as well as the obstructive tactics of defendant and his counsel observed by the Special Referee (see, DeCabrera v. Cabrera-Rosete, 70 N.Y.2d 879, 881-882; Lammers v. Lammers, 227 A.D.2d 255, lv dismissed 89 N.Y.2d 860).
It was a proper exercise of discretion to direct plaintiff to effect the sale of the house and to credit defendant with the home mortgage and tax payments he was directed to continue making.
The issue of custody and visitation was properly referred to the Family Court for consideration of the best interests of the children.
Concur — Williams, J. P., Wallach, Andrias and Saxe, JJ.