Opinion
XXXXXX/20XX
09-15-2022
J.N., Plaintiff, v. T.N., Defendant.
Teitler & Teitler, LLP, New York City (Jaime Weiss and Nicholas Lobenthal of counsel), for plaintiff. T.N., pro se, and Sipsas, PC, Astoria (Ioannis P. Sipsas of counsel), for defendant.
Teitler & Teitler, LLP, New York City (Jaime Weiss and Nicholas Lobenthal of counsel), for plaintiff.
T.N., pro se, and Sipsas, PC, Astoria (Ioannis P. Sipsas of counsel), for defendant.
Kathleen Waterman-Marshall, J. INTRODUCTION
There are cases in which the end of the marriage does not mark the end of the abuse. This, unfortunately, is one of those cases.
On the surface, this divorce action, overall and specifically the financial issues, should have been relatively easy work to settle or to try. Plaintiff J.N. ("Wife") and Defendant T.N. ("Husband") did not have a long-term marriage; they are married just under eleven years. They have three children who are well-cared for and generally in good health. The custody trial concluded on February 24, 2020, and the Court issued its Decision and Order on custody on October 7, 2020. Their marital assets are not complicated and consist largely of stocks and investments acquired as a result of Wife's employment with [a global investment bank, herein the investment bank]. Wife fully disclosed all of the marital and separate property assets in her name and control and had them valued by experts. She complied with discovery throughout this litigation and with this Court's trial rules. She appeared ready for trial on each day. Yet, getting to and completing the financial trial has been neither simple nor easy. From the start, Husband took every opportunity to delay this matter and harm Wife, emotionally and financially. His harassing conduct during the litigation — in and out of the courtroom — was a continuation of his abusive conduct during the marriage. He asserted meritless claims and employed litigation strategies admittedly meant to run up attorney's fees and wear Wife down. He utterly failed to comply with discovery. He took intentional and calculated actions to damage Wife's career and professional reputation in direct violation of Court Order. He then refused, without excuse, to show up for trial.
In determining equitable distribution of marital assets, the court considers fifteen factors, including, inter alia , the contributions of each party to the financial partnership, wasteful dissipation, and the impossibility of ascertaining marital assets. As of 2020, when the New York State Legislature amended DRL § 236 B (5)(d)(14), the court now may consider domestic violence, as that term is defined in the Social Services Law, in formulating a distributive award. This case implicates this new provision. Indeed, this Court cannot reach the correct equitable result on the parties’ financial matters without considering Husband's domestic violence during the marriage, abuse throughout this litigation, and its effects.
In this regard, and by necessity, the trial record goes far beyond purely financial matters. It includes the testimony and documents from the custody trial, including a domestic violence finding, and an almost exhaustive representation of Husband's post-Note of Issue motions and other efforts to delay and sabotage the financial trial. What follows, therefore, is a chronology of these things, all of which support the conclusions herein.
THE CUSTODY ORDER
On October 7, 2020, following a full and fair trial including party and forensic testimony, the Court (Hon. Lori S. Sattler, J.S.C.) issued its Decision and Order awarding Wife custody of the parties’ three minor children with parenting time to Husband. The Court specifically found, inter alia, that Husband perpetrated domestic violence during the marriage against Wife:
The Court further makes a finding that there was domestic violence during the marriage of an emotional nature. Plaintiff holds a position of great authority at [the investment bank] and earns significant amounts of money. Yet, it is clear that she capitulated throughout the marriage toward Defendant's positions. His obsessional style and his paranoia seeped into their day to day living. He did not trust anyone who worked for them or any of her family members. He made it clear that he also did not trust Plaintiff. He did not trust her to
protect the children; and he actively sought to limit her contact to the children, even so far as making them go to sleep before she came home.
Defendant presented a narrative where he was the primary parent, even when that could not be found to be true based on the parties’ descriptions of their use of the nannies every day. He convinced Plaintiff that she had ADHD, that he was the beleaguered parent, and that he was the glue that held the family together as the only one who did not have something wrong with them. This sort of behavior can only be viewed as a form of abuse; a case where Plaintiff was so worn down that she gave in to Defendant repeatedly even when she questioned some of his judgment choices; a case where she was so worn down, she
even followed his belief that she required medications when for years she had held down a high-powered job that would have been difficult for someone with ADHD to have effectively managed.
The Court also made note of Husband's delays from the outset of the litigation by way of, inter alia , "multiple changes of counsel" (totaling four as of October 2020) and terminating his attorney on the eve of the custody trial.
THE PARTIES’ POST-NOTE OF ISSUE MOTIONS AND HUSBAND'S MERITLESS CLAIMS AND MALICIOUS CONDUCT
Discovery on the financial issues was closed on May 5, 2021.
Two months later, on July 6, 2021, Wife filed her Note of Issue and Certificate of Readiness together with a motion to preclude Husband from introducing evidence on financial matters for which he failed to produce discovery and to deem certain financial issues resolved in accordance with Wife's claims ("the motion to preclude").
One day later, on July 7, 2021, Justice Sattler held a conference during which she set a return date for the motion to preclude; scheduled the financial trial to commence on February 28, 2022 and continue on several dates in March 2022 ; and issued an Order awarding Husband $200,000 "as an advance against his equitable distribution, to be paid directly to his incoming counsel upon [Husband] providing the contact information for counsel to the attorneys for [Wife]." Husband did not engage a new attorney for the financial trial. Rather, on July 23, 2021, he moved, as "Defendant pro se", pursuant to 22 NYCRR § 202.21 to vacate the Note of Issue and Certificate of Readiness upon the ground that Wife failed to produce discovery ("the motion to vacate the Note of Issue").
This Court vacated the February 28, 2022 date and the trial commenced on March 3, 2022.
On September 9, 2021, Husband had the children for his parenting time. He was late for the exchange but did not answer Wife's calls and texts to confirm the children's whereabouts. Concerned, Wife sought the help of the NYPD to locate the children. She called 911 and went to a local New York City Precinct. As a result, the police called Husband and then went to his apartment for a wellness check. Only then did Wife learn that her children were safe.
Sometime in or prior to October 2021, Husband violated the parties’ March 15, 2019 So-Ordered Confidentiality Stipulation ("the Confidentiality Order") by providing reporters and other third-parties with confidential documents and information about Wife's employment with [the investment bank]. The Confidentiality Order (paragraph D therein) defines [the investment bank] information as "all documents and testimony and all information contained therein" related to [the investment bank], and Wife's employment and relationship to [the investment bank].
On October 5, 2021, a journalist emailed Wife, advising that he had been in communication with Husband about this divorce and her relationship with [the investment bank]. The journalist mentioned a 2015 private evaluation report compiled by Wife's supervisors about her performance and asked her pointed questions about her work. The journalist also asked about the September 9, 2021 wellness check, intimating that it undermined the Court's domestic violence finding against Husband in the custody trial. On October 9, 2021, the journalist published an article about these matters based solely upon Husband's allegations and disclosure of confidential information.
At this time, Wife also learned that Husband spoke with a father's rights activist, with whom he also shared the domestic violence finding, his opinion that the finding was false, and his claim of harm due to the September 9, 2021 wellness check. The activist then contacted the Board of Directors of [a not-for-profit organization], on which Wife sits as a member, accusing her of lying about domestic violence and asking the Board to retract an award they recently gave her. Husband had also discussed the children in this litigation with the reporters and third-parties. Consequently, on October 8 and again on October 29, 2021, Wife moved, by separate Orders to Show Cause, for separate preliminary injunctions, enjoining Husband from further violating the Confidentiality Order and discussing the children in this litigation. Wife demonstrated that she could lose certain restricted stock acquired as a result of her employment, as well as her job itself, by Husband's lies, defamatory statements, and disclosure of confidential information. The Court issued an interim restraining order on Husband ("the preliminary injunction motions").
On October 20, 2021, Ionas Sipsas, Esq. appeared for Husband on a "limited scope representation" solely for the preliminary injunction motions.
Twenty days later, on November 9, 2021, Mr. Sipsas filed an "Amended Notice of Appearance Limited Scope Representation," expanding his representation of Husband to include Wife's motion to preclude and Husband's motion to vacate the Note of Issue (matters relating to the financial trial); Justice Sattler's July 7, 2021 Order awarding Husband attorney's fees; discovery and related issues regarding the September 9, 2021 wellness check, "including but not limited to any court appearances, motions to renew/reargue and appeals including relief from the Appellate Division and Court of Appeals related to above."
December 2021 was a busy month for Husband and his limited scope attorney. In accordance with his Amended Notice, Mr. Sipsas served a Notice to Admit as to the September 9, 2021 wellness check. He also served documents ostensibly related to financial matters, to wit: (1) a subpoena upon [the investment bank] for Wife's entire employment file, including among other things "comprehensive compensation information" and stock ownership; (2) a subpoena upon Andersen Tax LLC for, inter alia , Wife's tax returns; and (3) a subpoena upon AMEX for Wife's credit card statements and information. Wife moved for a protective order as to the Notice to Admit, and then separately moved to quash the subpoenas.
Also in December 2021, Mr. Sipsas moved on behalf of Husband for another form of financial relief: additional pendente lite support in the form of rent payments ("the pendente lite motion"). By that time, Husband had already squandered $480,000 in temporary maintenance ($20,000 a month for 24 months) paid by Wife and a $563,000 advance on his equitable distribution. Mid-month, on December 14, 2021, unbowed by Justice Sattler's refusal to sign a subpoena directing the NYPD to produce records relating to the September 9th wellness check, Husband filed a Family Offense Petition against Wife in New York County Family Court based upon that event. In the petition, he alleged that on September 9, 2021 Wife falsely reported to the police that she did not know the children's location, causing the police to come to his home and call him, which caused him "serious emotional and mental harm" and put him in "risk of grave physical harm." Husband alleged that such conduct amounted to harassment and reckless endangerment warranting the issuance of an Order of Protection.
On February 10, 2022, this Court, by separate Decisions and Orders, decided almost all of the Post Note of Issue motions, as follows:
-Granted Wife's motion to preclude, finding: that Husband "utterly refused, without any reasonable excuse, to provide discovery on his financial matters"; that he last provided "meaningful discovery in April of 2019"; that his refusal to engage in discovery was willful, contumacious and part of his calculated pattern of delay throughout this litigation; that his earned income for all purposes is not less than $500,000 per year; and that he has undisclosed investments of not less than $550,795; and deeming the $700,000 loan from Husband's employer listed on his Statement of Net Worth as an asset or income;
-Denied Husband's motion to vacate the Note of Issue, finding that Wife "is not deficient in, and rather has fully complied with, her discovery obligations," including producing "thousands of pages of financial documents," many of which Husband relied upon in his various motions;
-Granted Wife's motions for a protective order as to Husband's Notice to Admit and to quash his subpoenas served on [the investment bank], Andersen Tax LLC, and AMEX, explaining that discovery on the custody and financial issues was closed on May 5, 2021 and discovery requests therefore are "untimely";
-Denied Husband's request for pendente lite relief and referred all financial issues to the trial; and
-Referred the preliminary injunction motions to
trial.
During an on-the-record conference that same day, this Court directed the parties to file and serve their trial documents in accordance with this Court's Part Rules by February 17, 2022.
On February 17, 2022, Wife filed her Second Statement of Net Worth, Statement of Proposed Disposition, and Amended Trial Exhibit List. She had previously filed her Amended Witness List on January 26, 2022; this document was not further revised or amended.
Husband did not file his trial documents on February 17, 2022 in accordance with the Court's Part Rules. Indeed, he took no action to prepare his case. Instead, a week later, he moved to strike Wife's Notice to Admit as to her proposed trial exhibits and to compel Wife to produce [the investment bank] documents under a business records certification. In support of his motion, Husband argued, in the main, that he was concerned about the authenticity of Wife's documents based upon alleged ethical misconduct of Wife's attorneys and the Court — a claim which had already been addressed and dismissed on no less than three occasions. The very next day, February 25th, he submitted for signature twenty-one (21) separate trial subpoenas to [the investment bank] and Wife's banking and financial institutions.
By Decision and Order dated March 2, 2022, this Court denied Husband's motion to strike Wife's Notice to Admit and for an order as to the [the investment bank] records. The Court found that the documents listed in Wife's Notice to Admit were produced by the parties per Court Order; that "[m]any, if not the lion's share, of the documents have been procured directly from the banking, financial, and credit institutions" at which the parties maintained their accounts and were of the type that are admissible without the need for authenticating testimony or business records certifications; and that Wife provided business record certifications for the [the investment bank] Records. The Court further found that Husband had the documents listed in the Notice to Admit "for months if not years"; waited for the eve of trial to raise objections thereto; and did not appear or respond to Wife's Notice of Intent, in which he was invited to inspect the documents she intended to introduce at trial.
This Court rejected Husband's purported concerns about the authenticity of the documents due to purported ethical misconduct, and his inability to defend himself:
Defendant's claim of misconduct is without merit.
Justice Sattler considered and, in her discretion, rejected Defendant's claim that a conflict existed because her junior law clerk is the sister of one of Plaintiff's attorneys. On January 22, 2020, Justice Sattler made clear on the record that she fully and completely insulated and "walled off" her junior law clerk from this case and disclosed that fact to the parties and their counsel. Indeed, upon such disclosure, Defendant's prior attorneys withdrew his first two recusal requests. Defendant's assertion that a conflict existed because Plaintiff's attorneys made contributions to Justice Sattler's judicial campaign, is equally unavailing. Judges are absolutely prohibited from knowing who contributed to their judicial campaign; they may not attempt to have a list of contributors made available to them, nor seek to learn the identity of those who contributed to their campaign. See Judicial Ethics Opinion 07-88 (September 6, 2007) (identities of those who contribute to a judicial candidate's campaign should be kept from the candidate); Judicial Ethics Opinion 02-06 (January 24, 2002); Judicial Ethics Opinion 87-27 (January 28, 1988). Defendant has failed to offer any proof that Justice Sattler actually knew about the subject contributions — prior to his disclosure of same — or otherwise violated the applicable rules as to judicial campaign contributions.
Finally, Defendant may not rely on his self-represented status, a choice he made of his own volition, to avoid engaging in proper trial preparation and trial proceedings, which includes a review of the documents Plaintiff seeks to introduce at trial and for which she has served a Notice to Admit as to authenticity. It is undisputed that as of July 2021, when the trial dates were set, Defendant had at his disposal $200,000 to engage an attorney for the financial trial in this matter. He chose — and continues to choose — not to do so.
THE FINANCIAL TRIAL
The financial trial commenced on March 3 and continued on March 4, 31 and April 4, 2022. Wife appeared ready for trial with her attorneys each day.
Husband appeared on March 3 and 4 only and made his appearance as a "self-represented" defendant, although Mr. Sipsas was present those days and attempted to speak on his behalf. Husband purportedly sustained an injury on his way to Court on March 10, 2022. Thus, the trial did not go forward on that day or the following day, March 11th, but did continue on March 31 and April 4, 2022. Husband failed to show up on March 31st and April 4th and his absence was not excused (more on that below). For the two days he did appear at trial, Husband made a series of requests and persisted in objecting to Wife's exhibits and evidence upon the ground that they had not been timely produced in discovery, all in an attempt to delay the trial if not stop it altogether. Husband's attempts were rejected for reasons reiterated, by that time, ad nauseum. This Court also noted that he failed to review Wife's trial documents despite clear invitation to do so (i.e., per the Notice of Intent) and that he admittedly failed to read the expert reports.
To start, on March 3rd, Husband made three applications. First, he requested permission for Mr. Sipsas, who was also in attendance, to sit at the table as his "legal advisor" and be able to take breaks throughout the trial to consult with him. The Court noted that Mr. Sipsas had been part of the case "since at least October." Indeed, Mr. Sipsas represented Husband on the parties’ post-Note of Issue motions, all of which related to the financial trial, purportedly hired an expert for Husband as to Wife's document production and prepared subpoenas to Wife's employers, accountant, and other banking and financial entities. Nevertheless, when asked, Husband unequivocally stated that Mr. Sipsas was not his "financial matrimonial attorney." Thus, Husband's request that Mr. Sipsas sit at defendant's table was denied.
Second, Husband renewed his request for an additional $300,000 in attorney's fees, on top of the $200,000 awarded to him on July 7, 2021. Husband confirmed that "roughly" $100,000 of the $200,000 was still available to him. Thus, the Court denied, without prejudice, Husband's request for more fees upon the ground that he had $100,000 available to pay an attorney yet had not in fact retained one to represent him at trial.
The Court explained: "If there is a retainer that comes to pass in the next six days of trial, and there is a demonstration that the balance of $100,000 has been spent down, such that more attorney's fees are needed, I will reconsider and I will do the appropriate thing." All the while Mr. Sipsas, who worked on the financial issues since October 2021, sat in the gallery.
Third, he claimed that Wife committed "a significant perjury" in that she failed to provide any K-1s and that his "financial expert provided a sworn affidavit that no K-1s have been provided." The Court reminded Husband that he did not have an expert, or witnesses, or exhibits, and that his motion to vacate the Note of Issue had been denied. The Court also noted that the issue of K-1s would likely come up during the trial, as they were listed in Wife's Exhibit List and Notice to Admit (which this Court sustained) and he could raise any appropriate objection when they were admitted into evidence.
In an abundance of latitude — given Husband's failure to participate in discovery since April 2019 and utter failure to file trial documents — the Court entertained an offer of proof from Husband for his 21 trial subpoenas. Husband argued that the subpoenas were "the only way I could be assured I'm going to get a complete set of records from the various custodians. And, you, know, they mirror that trial subpoenas that plaintiff delivered upon my financial institutions. So, I think the absence of them would be highly prejudicial for me." The Court declined to sign the subpoenas, explaining "your subpoenas call for production of documents that you've already received or that were going to be produced pursuant to plaintiff's subpoena."
Wife moved to close the courtroom upon the ground that "a lot of this trial is going to have to do with [the investment bank] information" and that, pursuant to the Confidentiality Order, [the investment bank] information is deemed confidential. Therefore, Wife requested that "at any point when we are discussing the confidential information as defined in paragraph D of the [Confidentiality Order], that the courtroom be closed and the testimony sealed and not be made available." Wife pointed out that Husband had already violated the Confidentiality Order, and that his violation thereof was before the Court on the preliminary injunction motions. She sought to have the courtroom closed and record sealed upon the additional ground that Husband had provided the transcripts of the parties’ custody trial to third-parties; a claim also raised in the preliminary injunction motions.
Husband objected to closing the courtroom upon the ground that the parties never intended that the Confidentiality Order would result in a closed courtroom. When asked by this Court whether he produced the custody trial transcripts to third-parties, Husband blithely evaded the question and said "I'm not sure, your Honor. I have to double check."
The Court denied Wife's request for a totally closed courtroom upon the ground that it believes in open courtrooms and a case involving high net worth parties does not automatically require a closed courtroom. The Court also denied Husband's request for a totally open courtroom noting its concern about Husband's "invitation to the public into the private matters of his family" and violation of the "parties’ own agreement as to what can remain confidential and what shall not." Instead, the Court ruled that it would make individualized determinations on whether to close the courtroom based on the evidence proffered.
As indicated in the trial transcripts, the Court sealed all testimony about [the investment bank], [the investment bank] documents and information, and Wife's employment with and relationship to [the investment bank], in accordance with the Confidentiality Order. Wife's attorneys are directed to submit to the Court, for signature, a sealing order in accordance with the Court's rulings on sealing as indicated on various pages throughout the Trial Transcripts (Pages 67; 90-92; 240; 373-376).
The Court noted that Wife's motion to dismiss the Family Offense Petition was pending for decision. Husband believed that the Court should consider his purported domestic violence claim against Wife based on the September 9, 2021 wellness check in determining financial issues. The Court also noted that the preliminary injunction motions were pending and reminded Husband that he was under Court Order restraining his disclosure of [the investment bank] information.
On March 4th, and despite this issue having been resolved the day prior, Husband again raised the issue of production of K-1s in an attempt to sabotage the trial. This time Mr. Sipsas, speaking for Husband (albeit from the gallery), claimed that the K-1s were never delivered to his office by way of electronic link or otherwise and demanded that "this trial has to be stopped."
In response, Wife's attorneys demonstrated that they in fact produced the K-1s to Mr. Sipsas and Husband by way of flash drive and electronic link in December 2021 and January 2022. The attorneys established, by submission of copies of letters and FedEx receipts, that they sent Mr. Sipsas a flash drive containing the K-1s and that Mr. Sipsas rejected and returned the flash drive as "improper because they exceed the scope of my limited representation. They should have instead been directly sent to Husband." Clearly, Mr. Sipsas overlooked the subpoenas he himself had served on Wife's accountant and employer. In any event, at Mr. Sipsas’ direction, Wife's attorneys sent the flash drive to Husband with copies of all the letters between them and Mr. Sipsas, and also sent an electronic link to the K-1s.
In the face of clear and competent proof that Wife's attorneys produced the K-1s to him, Husband boldly persisted in his blanket denial of receipt. The Court found Husband's denial to be incredible, found that Husband received the K-1s, admitted them into evidence, and rejected his request to stop the trial.
Having not succeeded on his attempt to stop the trial, Husband then requested a continuance so that his purported new attorney, who he had not yet formally retained (although the retainer agreement was purportedly on his phone), could appear. The Court declined the request in the absence of a signed retainer and Notice of Appearance and noted that there will be no adjournments of this case "not even for five minutes."
HUSBAND'S UNEXCUSED ABSENCE FROM THE TRIAL
Undeterred from his singular goal of delaying the trial, Husband found a way to do so. He just did not show up.
At 9:52 a.m., on March 10, 2022, the third day of trial, this Court received an email from Husband stating that he fell in the subway and was going to the hospital. The Court responded by email at 10:07 a.m. as follows:
The Court regrets to hear of your fall, and hopes that you are not injured.
However, we are in the middle of the trial. Please provide proof that you have been evaluated at a hospital or other medical facility. If you are at home today, we will continue the trial this afternoon at 2:30 p.m. in Part 9 Virtual Courtroom, and I expect to continue in person tomorrow at 9:15 a.m.
At 2:06 p.m. Husband sent another email advising that he had CT scans which did not show brain or spinal damage. He later sent discharge records from New York Presbyterian Hospital indicating that he received some tests, all of which were clear, and that he was prescribed Tylenol for his self-reported head injury. The records did not set forth any injury, or any restrictions upon Husband based upon any injury. It set forth only a self-reported head injury, with no diagnosis of any injury by any medical professional. At 3:30 p.m. Husband appeared, as did Wife and her attorneys, in Virtual Part 9 Courtroom. The conference lasted at least thirty minutes. Husband told the Court that the "advice" of the doctor who discharged him was that "it was like a hangover that's going to get worse" and that he "should just rest and hydrate."
The Court noted that Husband looked well. The Court also noted that Husband did not provide any medical proof of a medical reason excusing his appearance, and, thus, made clear that the trial was going forward virtually on March 11th. In that regard, the Court directed everyone to show up in Virtual Part 9 Courtroom on March 11th at 9:30 a.m. and stated that the trial would continue in the absence of a competent medical opinion that Husband's alleged injury prevented him from participating. The Court also made clear that the trial would definitely continue on March 31 and April 4, 2022 in person.
At the close of the conference, Husband reiterated his threadbare claims that Wife's discovery is "incomplete" and that he did not receive the K-1s. The Court pointed out that he was provided with courtesy copies of the K-1s in Court on March 3rd and 4th. He also asked to cancel his upcoming parenting time with the children scheduled to start the next day, Friday March 11, 2022 after school, due to his alleged injury. After some discussion, Husband agreed that he would be ready for parenting time with his children on Saturday March 12th at 9:00 a.m., and that he would have them through Spring Break as scheduled. Wife was going in for surgery on Monday, March 14, 2022.
On the evening on March 10, 2022, Husband emailed an unsigned ER record from New York Presbyterian which did not provide a specific medical condition/diagnosis excusing him from the March 11th appearance. The Court rejected the letter and directed Husband to appear on March 11th at 9:30 a.m.
At 9:26 a.m. on March 11th, Husband emailed another letter, this time from City MD and electronically signed, purporting to excuse him from work until March 15, 2022 based upon a "diagnosed concussion." He also asked to cancel his parenting time. The Court held an on-the-record conference at 9:30 a.m., as scheduled; Husband did not appear and his appearance was not excused. The Court noted that the letter contained the first diagnosis of concussion, although no details were provided and although Husband had been evaluated the day before but no concussion found. The Court also noted that it had received a six-page letter from Husband dated March 9, 2022, demanding that this Court report to the appropriate ethics committees the alleged misconduct by the prior jurist and Wife's attorneys. In his letter, Husband intimated that this Court's failure to do so would be its own ethical violation.
The Court declined to take Husband's default on March 11th but again noted that the trial would continue on March 31 and April 4, 2022 and set the matter down for a conference on March 17, 2022 at 10:00 a.m. to discuss the logistics of the continued trial and Husband's March 9th letter. The Court provided written notice to Husband of the March 17th conference and directed him to appear.
True to form, on March 16, 2022 at 4:08 p.m., Husband emailed a third doctor's letter purporting to excuse his appearance at the March 17th conference because his purported recovery was now extended for another week to March 21, 2022. He also asked for a response to his March 9th letter. The Court stated that his letter was insufficient to excuse him and again directed him to appear. The Court stated that "in the absence of competent medical proof that you have sustained a concussion or other competent proof that you are legally incapacitated, the conference and trial dates in this matter will go forward." On the morning of March 17th, the Court again emailed Husband advising him that if he did not show up at the conference he would be held in default.
If nothing else, Husband is consistent in his disregard for Court orders. He did not show up at the March 17th conference and the Court held him in default. The Court also addressed on-the-record Husband's March 9th letter. The Court rejected, once again, Husband's claims of purported ethical violations by Justice Sattler and Wife's attorneys and purported discovery deficiencies in this action, and rejected, for the first time, his new claim of ethical misconduct by Justice Sattler and Wife's attorneys in a totally unrelated divorce action. The Court provided Husband notice that the trial would continue on March 31, 2022 at 9:30 a.m., in person at the courthouse.
Like clockwork, on March 31, 2022 at 7:37 a.m., Husband emailed yet another letter from a doctor, this time purporting to excuse his appearance until April 11, 2022 — a full month from the date of his alleged fall for which no injury was diagnosed. The Court notified Husband, in writing, that his appearance at the trial was not excused and his default would be taken. Parenthetically, also on March 31, 2022, Wife received an e-mail from "reporters at the New York Post" stating that they are in possession of information about Wife's "fabricated" domestic violence claims, that [the investment bank] was aware of the claims and hired a law firm "to prevent the information from coming to light"; and that "the judge overseeing the case received campaign contributions" from the lawyers representing Wife. This email came despite the clear terms of the Confidentiality Order, Justice Sattler's Order, and this Court's direction to Husband that he was restrained by those Orders and bound to follow them.
Husband did not appear for trial on March 31 or April 4, 2022. He did not provide competent medical proof of a medical injury which prevented him from appearing at the financial trial before this Court. He did not explain how he went from no injury on March 10, 2022 to a purported concussion which rendered him unable to attend the trial for a month. During the same time period, however, Husband enjoyed Spring Break parenting time with the children and engaged in litigation before Justice Sattler and the Appellate Division, First Department.
During an on-the-record conference on May 20, 2022, this Court declined to sign Husband's motion, pursuant to CPLR 4402, for a mistrial and recusal upon the ground that the Court failed to grant Husband a continuance based upon his purported injury.
Husband was also well enough to email Wife's attorneys on April 4, 2022, requesting that he be provided with the approximately $110,000 balance left on the July 7, 2021 $200,000 attorney fee award. The balance was provided to him.
TRIAL TESTIMONY AND EXHIBITS
During the four-day trial, Wife put on her case by way of her own testimony, and the testimony of her real estate expert and financial expert, and the admission into evidence of forty-six Exhibits, inclusive of seven Court Exhibits. Husband had any opportunity to, and did, cross-exam Wife on March 4th. He did not refute any of Wife's proof, all which established her claims as to child support, maintenance, separate property, martial property and equitable distribution thereof.
The Court found Wife to be highly credible. Throughout the trial, she testified in a consistent and straightforward manner on all matters — material and minor. Her description of her career trajectory and present employment with [the investment bank] was clear; she explained her duties, responsibilities, and conditions of employment. Her testimony about the challenges investment banking presented in raising three young children was sincere. She explained her income and earnings and how they were used to pay the family expenses. She testified, credibly, about Husband's negative contribution to the marriage. She was emotional and clearly troubled when recalling Husband's abusive conduct during the marriage and throughout the litigation. To the extent that there were inconsistencies in her testimony, they were as to minor issues only and Wife addressed them by way of documentary proof. Wife's Early Life
Although he did not testify, Husband's credibility, or lack thereof, is relevant to the ultimate issues on this trial. The Court finds Husband to be incredible as to matters both material and minor, based on his statements and demeanor during the two days he appeared at trial and his virtual appearance on March 10, as well the documents he submitted to the Court. Husband made representations on the record as to Wife's document production that were demonstrably false and rejected by this Court several times. The Court found that his "blanket denial" of receipt of Wife's K-1s "not credible." He continued to assert claims of purported conflict of interest after they had been considered and rejected by the prior jurist and this Court several times. He boldly and blatantly violated Court Orders prohibiting the disclosure of Wife's [investment bank] information and details of this litigation to third-parties. He evaded direct questions about whether he disclosed custody trial transcripts to third-parties. He utterly failed to produce competent, medical proof of any injury that prevented him from participating in the financial trial on March 10, 11, 31, and April 4, 2022, yet during this same time period he continued to have parenting time with the three children and engaged in litigation before Justice Sattler and the Appellate Division.
Born in a small town in India, Wife immigrated to the United States with her parents in 1980 when she was three years old. After Wife's father obtained his master's degree in North Carolina, the family moved to a small town in southern Virginia where her father was a professor in local colleges. She has three siblings; the family is incredibly close and enjoys a loving and supportive relationship.
Wife's intelligence and strong work ethic was apparent early: she skipped a grade in elementary school and took college classes in high school from which she graduated at age sixteen. Wife attended University of Virginia, where she had three majors, various internships, as well as worked at "odds and ends jobs." Her work with a quadriplegic professor inspired her to pursue work in the healthcare system. Thus, when she graduated college in 1998 at age twenty, she went into finance "with the focus of staying in the healthcare industry." All of Wife's siblings work in finance.
In 2005, Wife's parents developed health issues. So, she bought them a house solely with her own earnings. The home is in North Carolina where her parents have a big community and which is close to hospitals. Wife pays the mortgage; her parents pay the utilities and maintenance for the home. Wife and her siblings opened and jointly funded a bank account for their parents with a total sum of $25,000.
Wife's Career
Wife's entire career, to date, has been in the financial industry, specifically, healthcare investment banking. She started out on the banking side as an investment banker, where her job was to advise corporate clients. Between 2000 and 2006, she worked at several financial/investment companies such as AXXX BXXXX, CXXXXX SXXXXX, and DXXXXX BXXX. At each employer, she was quickly promoted. She obtained each of her jobs through her own reputation and hard-work. Wife explained that investment banking "is all about external reputation" and success requires having the trust of the clients.
In October of 2006, Wife, then a Vice-President at DXXXXX BXXX, received an offer to work at [the investment bank]. She took the job and joined the firm as a Vice President in the healthcare investment banking group. Although she was asked to take a one-year "step back" when she joined, she advanced quickly — by 2008 she was promoted to managing director and became a partner in 2012. According to Wife, the employees at [the investment bank] are held to a "really high standard," have to be on top of their game and cannot "coast." When being considered for partnership, the company assesses your commercial skills, your reputation, and whether you are doing other things for the firm, such as sitting on boards. She explained that the work atmosphere is very competitive both inside and outside of [the investment bank] and that you can get "de-partnered."
At present, Wife is [a global head/managing partner] in [the investment bank's] asset management division. In essence, her job is to invest other people's capital in healthcare funds. She explained that she is responsible for "diligence" on any healthcare deal that gets put into a fund that she manages. This is an active role which requires her to sit on the board of the healthcare companies included in the funds in which she herself invests, and to participate in management of those companies. In addition to her day-to-day work, Wife is the cohead of The Women's Network; she sits on the steering committee for 1 Million Black Women; she sits on [the investment bank's] investment committee for corporate investing, its sustainable investment committee, and COVID committee. She has been on the board of [a not-for-profit organization] for five years. She also sits on multiple corporate boards: two public boards and three private company boards.
After about eighteen years in investment banking, Wife became burnt out. She explained that investment banking was not easy to do with three kids. She felt guilty about not spending enough time with her children. Her health was not good, she broke a tooth from stress, she was not sleeping well, and she "was literally not functioning physically or mentally." She wanted to retire.
In 2018 — and over vigorous objection by Husband (discussed more fully below) — Wife accepted an opportunity to go from investment banking into asset banking, a position which does not require as much travel and gives her flexibility in her schedule. However, the role raises "significant capital issues," as she has to borrow money to invest in the funds she manages. She explained that "because we are investing other people's money, they need to see that the investors are also invested in the funds" and that if she does not make such investments, she cannot keep her job.
The Parties and The Marriage
The parties met when they were in college; Wife was seventeen. Husband attended Duke and as noted, Wife was close by at University of Virginia. They dated during and after college for about eight years. Husband graduated magna cum laude. Both pursued careers in finance, although independently of each other, and both moved around as they developed in their respective careers — New York, Boston, and San Francisco. To the extent that the parties lived together prior to their marriage, which was not often, Husband moved into Wife's apartments. However, they did not have any financial partnership prior getting married.
In 2006, the parties got engaged. At the time, Husband was out of work and the funds for the engagement ring came largely from Wife's earnings.
Husband had absolutely no role in Wife's employment and career advancement prior to or during the marriage. In fact, Husband objected to Wife taking the position at [the investment bank] in 2006, the company at which she is now a successful managing director.
Throughout the marriage, Wife's earnings and income funded all if not the lion's share of the family expenses. At the time the parties were married in 2007, she was already employed at [the investment bank]. Her yearly income and bonuses were deposited into the family operating account at First Republic Bank from which bills were paid. There was also an account at TD Bank into which she deposited some of her earnings and from which the mortgage on her parents’ home was paid. She receives $950,000 per year pre-tax salary (approximately $35,000 to $40,000 per month), plus a discretionary cash bonus and a discretionary equity bonus received in January of each year. The cash bonuses would be used to pay all family's expenses, and she also sold shares of stock "on a regular practice basis" to cover those expenses. The parties’ expenses included, among other things, monthly rent for the marital apartment, monthly living expenses, the children's private school tuitions, nannies and baby-sitters, and the like. Husband purchased four vehicles during the marriage with money earned by Wife.
On the other hand, Husband had minimal employment and earnings during the marriage, by choice. Prior to the marriage he held several positions in the financial industry, at times earning more than Wife and over $1 million per year. He worked for SAC Capital as an analyst investing in tech in the first year of the marriage. He lost that job in 2008, which was the last "outside role" he had during the marriage. Husband stayed unemployed until after the parties’ son was born in 2010, when he told Wife that he wanted to invest her earnings in the hopes of making a return, which he could parlay into a new investment job. Wife wanted to help him and so conceded to his request. She had to obtain special permission from [the investment bank] for Husband to trade in public markets. She set up office space for him and paid the $3,000 monthly rent. She paid the $30,000 - $40,000 yearly fee for a Bloomberg terminal. Wife never saw any statements about Husband's trading account during the marriage, as she is prohibited from doing so due to her employment. At some point prior to the commencement of this action, she learned that Husband had a net operating loss of $1.2 million.
During the litigation, Husband disclosed that he was the CIO of PXXXXXXX, a company owned by Husband's college friend who lives in Dubai. Wife was not able to obtain by subpoena any employment and earnings documents from PXXXXXXX.
Wife testified that Husband worked in the parties’ bedroom if he was not in the office that she had rented for him. She also testified that Husband left a computer or hard-drive in the parties’ bedroom running throughout the night, which he told her not to touch. She speculated at trial that perhaps there was bitcoin on the hard-drive and that the hard-drive was stored in a safe in the parties’ home. Husband took the safe and hard-drive when he moved out of the marital apartment; the safe also contained a few thousand dollars, some jewelry, and some papers. He did not provide an inventory of the safe's contents.
Wife's testimony about the mental and emotional abuse she suffered at the hands of Husband was clear, consistent, and credible. Husband was controlling, verbally abusive, and threatening. His conduct began before the marriage and continued throughout.
"Victimized" by Wife's purchase of a home for her parents in 2005, Husband "relentlessly" harassed and berated her. According to Wife, Husband felt that she had made a unilateral financial commitment without his consent and that his parents did not get equal treatment. The parties, however, were not married in 2005, did not have a financial partnership in 2005, and Wife used her own money for the home purchase. Nonetheless, Husband was relentless on this issue throughout the marriage and was verbally abusive toward her for this perceived harm. She gave in to his demands that she put his name on the deed to her parents’ home. She sought to appease his parents by renovating his childhood home and hosting a very expensive wedding reception in Georgia.
Consistently throughout the marriage, Husband called Wife a "bitch" and "cunt" and then blamed his abusive conduct on her — he would tell her that she made him do it. He would threaten her, telling her she could continue to work and pay for everything, that she was only good for making money, and that if she left him she would lose custody of the children and have to support him. Anytime the parties went to therapy to address these issues Husband would soon quit because he thought the therapists were taking Wife's side. Husband constantly degraded Wife's fitness to parent. During the marriage, Wife spent as much time with the children as she could, including one-on-one time with each child, given her work responsibilities and commitments. She chose clients in the same geography to make travel easier and limited. She would take "red eye" flights to make sure she was there for the kids. She took the children to school when not travelling. She did everything possible to stay in their lives. On the weekends, she primarily took care of them and brought them to activities. She found the concierge pediatrician; participated in interviews of therapists; got a consultant to help them pick private school; and selected their activities. All of this, on top of being the family's primary financial support.
Nevertheless, Husband told Wife that she was "unsafe as a mother and that I — I couldn't be trusted to take care of the kids because I had ADHD ... and the kids weren't safe with me. So he, toward the end, said I couldn't be around the kids by myself." Wife does not have ADHD. She was visibly upset when testifying about this abuse at the hands of Husband.
The Custody Decision reflects that Husband held a meeting with Wife, her parents, and his mother during which he called her diseased and unfit before diagnosing her with ADHD.
Husband also took the position that he was the children's primary caretaker, a claim roundly rejected by the Court on the custody trial and fully undermined, again, by Wife's testimony before this Court. Resentful of having to be Wife's "back-up" if she needed to work, and not wanting to have to care for the kids himself, Husband insisted on having childcare coverage all the time. The parties had overlapping nannies from the time the children woke-up in the morning until 8:00 pm at night; nannies and babysitters on the weekends and on vacations; and back-up babysitters just in case the original caregivers cancelled, all for a cost of hundreds of thousands of dollars per year.
Husband did not contribute anything towards Wife's career and professional life. She could not talk to him about work. He did not like when she spoke to his friends about work. He was dismissive of her professional projects, such as a podcast, that she worked on. He resented when she asked him to attend work events with her, even though her job was "outward facing" and required client entertainment. Anytime he attended an event, it came "always with a cost." He would cancel if she was not on her best behavior; she was always on eggshells and never knew what he would do.
Indeed, as noted above, Husband did not want Wife to take the job at [the investment bank] in 2006. He thought it was an insult that they asked her to take a one-year step-back and that she could earn more money somewhere else. The issue caused a big fight.
Husband was not just unsupportive of Wife's career, he was abusive and sought to undermine it. When, in 2018, Wife discussed with Husband her opportunity to move into asset banking — a position which would give her more flexibility and less stress — he did not want her to do it despite knowing that she was burnt out and her health was declining in her then role. The parties had "several very bad discussions." She told him that she was not functioning, not well, and needed a change. In response,
A: ... [T.] did not want me to take the job. He thought I would make more money going to another investment bank potentially. He thought I couldn't do this job. He was very abusive about how he described that.
Q: Can you tell us what he said?
A: That I was stupid. I was incapable. There was no way I'll be successful. I was putting the family at risk. It got very ugly. And it got to a place where I — I literally, like it was — I couldn't continue on the path I was on. I had to do something different. So I made the decision to take the job. And it was — You know, he was not very nice about it and it wasn't great.
Husband made Wife "jump through hoops" to justify the initial investment for her transition to asset banking. Once the investment was made, he said it was a bad investment and that she was "making us broke." He called her "different flavors of you're an idiot. You're stupid. You don't know what you're doing."
Post-Commencement Behavior
Husband expressly agreed, when asked by a reporter, that his conduct in this litigation is akin to a "kamikaze mission." He rejected Wife's reasonable attempts to settle with two separate mediators. He engaged in a campaign of delay throughout the litigation and attempted to stop the financial trial. Wife testified, sincerely and credibly, that "I have wanted nothing but for this case to be over since the beginning." Husband made every matter more difficult than necessary, requiring Wife's attorneys to be involved in every issue, even routine matters for the children. He cancels his parenting time last minute, requiring Wife to cancel her obligations or obtain last minute childcare at a high cost. He does not communicate with Wife directly, even on basic things for the kids. Wife explained:
I e-mailed him, texted him. He decided that was harassment and decided that he was no longer going to respond to any of my e-mails or any of my texts. He turns my son's phone off. I have no way to communicate with the kids. The only way he communicates is through my lawyers, even though I said I have to bear that burden. I even bought like Our Family Wizard. I bought his subscription. I gave him access. He refuses to use that. Instead he only goes to my attorneys, and I have to bear those costs.
... And I've said repeatedly this is costing money. He says you can afford it. That's basically the end.
The Parties’ Age and Health
As of March 3, 2022, Wife was forty-four and Husband was forty-six years old. Wife had breast cancer in 2019, for which she underwent a lumpectomy and radiation treatment. She continues to monitor the situation and is screened every six months. She had ACL surgery on March 14, 2022.
By all outward appearances, and as far as this Court could tell from his limited appearances, Husband is in good health.
Child Support and Maintenance
At the time of trial, Husband had not paid a penny in basic child support. He also had not contributed anything to the costs of the children's school, their medical expenses, extra-curricular expenses, or any other add-on expenses.
Wife testified, credibly, as to the children's expenses, including tuition ($14,499 per month), summer camp, extracurriculars, and childcare expenses. At the time of trial, Wife had paid all of the children's expenses without any contribution from Husband.
As for child support, Wife's testified, as supported by her Maintenance and Child Support Calculator, that considering her income and this Court's imputation of income to Husband in the sum of no less than $500,000 per year, Husband's pro rata share of basic child support and add-ons should be 5.35%. She also testified that, retroactive to August 2018 (and through January 2022), Husband's basic child support arrears amount to $27,158.88 ($646 x 42 months), and that his add-on arrears for the same time period (calculated at 5.35%) are: $32,579 for school, $8,239 for camp, $2,247 for activities, and $16,131 for childcare. In total, Husband's arrears amount to $86,354. Wife requested that Husband's arrears be paid from his share of equitable distribution.
Wife does not presently have a college fund for the children but expects to pay for college herself.
The family health insurance, under which Husband has been covered, is through Wife's employment. She has two tiers of insurance — the first is "normal insurance" which requires a deductible if care is in network, and the second "kicks in for anything not covered by the primary insurance." Husband makes no contributions towards the insurance premiums. He asked for reimbursement of his uncovered medical expenses, of course, and Wife has reimbursed him. Husband is eligible for COBRA coverage.
Although Husband has not financially supported his children since 2018, he received $480,000 in tax-free maintenance during the course of this litigation. He also received, in November of 2018, the entire balance of the parties’ family operating account in First Republic Bank totaling $683,000 — representing all of the marital liquidity — and kept his own operating accounts. Within months, he spent all of his interim equitable distributive award, on top of which he incurred $300,000 in debt. Among other things, Husband spent his money on rooms at the Four Seasons Hotel during the nesting period; Wife slept on her sister's couch when the parties nested. He spent excessively on an expensive apartment and took no responsibility when he ran out of money, instead playing victim. In the Custody Decision, the Court found that Husband's victimhood was a "theme throughout the proceeding" and his "financial decisions not only call into question his judgment, but his ability to provide financial stability for the children."
After the First Republic Bank account balance was transferred to Husband, Wife had to start all over again. She took loans from her brothers as well as three separate $1 million temporary loans from [the investment bank] against her future bonuses ($1 million loan per year for three years).
On the other hand, after Husband spent down the over $1,000,000 he was paid ($563,000 advance on equitable distribution plus $480,000 tax-free maintenance), he asked Wife for more.
Separate Property and Marital Property
In support of her claims for separate and marital property, Wife prepared two Balance Sheets. Each Balance Sheet contains information derived from the exhibits in evidence at trial, inter alia : bank statements; investment account statements; private equity account statements; tax returns with all schedules and attachments; Wife's K-1s; [the investment bank] Confidential Documents (i.e., agreements and other documents relating to Wife's employment and compensation); and expert reports. The detailed information contained in the documentary evidence tied into the Balance Sheets, which were also supported by the credible testimony of Wife, her real estate expert witness Tanya Register, and her financial expert Michael Raymond of BST & Company CPAs LLP.
The first Balance Sheet, entitled "Exhibit 1A — Amended Marital Balance Sheet," sets forth: each item of marital property; the marital portion of each asset in percentages ranging from 19.9% to 100%; the values of each asset set at date of commencement or closer to trial (either 12/31/2021 or 1/18/2022); the tax liability impacting each asset; and Wife's position as to the parties’ respective equitable shares of each asset. Wife initially proposed that the parties’ equitable shares of most of the assets be 80% to Wife and 20% to Husband, with a 50/50% split as to others. During her closing statement, however, Wife submitted an Amended Balance Sheet (entitled "Exhibit 1A-Revised — Amended Marital Balance Sheet"), which conforms to the unrefuted proof at trial of Husband's domestic violence and negative contribution to the marriage and proposes that Husband's 20% share of be reduced to 15% (subject to a handful of exceptions).
The second Balance Sheet, entitled "Exhibit 1B — Amended Wife's Separate and Post Commencement Balance Sheet," sets forth each item of Wife's separate property and values thereof.
Husband did not submit to the Court an exhibit or witness list, as required. He did not submit an updated Statement of Net Worth, and a Statement of Proposed Disposition identifying separate and marital assets and his proposed equitable share thereof. Husband did not offer a single document identifying the bank accounts, investment accounts, retirement accounts, and other marital and separate property in his name and under his control and the values thereof. He submitted no paystubs or other proof as to his employment and earnings. Husband's last meaningful document production occurred in 2019 and the last tax return he produced was for 2018. Any documents Wife obtained after April 2019 were produced pursuant to subpoenas that her attorneys served.
Separate Property : Wife's separate property consists of various assets, as follows. She has two bank accounts at First Republic which she opened in November 2018, and into which all of her post-commencement earnings (paychecks and bonuses) are deposited and from which all of her family's expenses are paid. She is a joint account holder with her siblings on two Bank of America accounts for the benefit of their parents. She has [the investment bank] stock and Restricted Stock Units ("RSUs") and various public and private equity investments, all of which were acquired post-commencement as part of her employment with [the investment bank]. She has a plot of land and a car, both of which she purchased post-commencement with post-commencement earnings. There is a portion of her 401(K) Retirement account which is her separate property, having been earned prior to the marriage.
As to her separate property liabilities, Wife has capital commitment obligations on her equity investments that will require her to pay $3,944,575 to realize their value. As a senior partner, Wife has significant future private equity capital commitments. However, she has no savings and must constantly borrow money to meet her equity fund investments obligations. Among other things, she has a low liquidity line of credit against her public equities from [the investment bank] in the sum of $988,516, which she claims as her separate liability.
Wife also has separate property liabilities such as $175,000 in counsel fees, and $675,000 in taxes. Post-commencement, she has paid all tax liabilities on her income and assets and any fees incurred as a result of the sale of securities.
Marital Property : The marital estate consists of five main financial assets, and several miscellaneous assets, with a total tax-impacted value of $10,653,002. The five financial assets are [the investment bank] stocks, [the investment bank] RSUs, dividends from RSUs, and public and private equity investments, all of which were acquired as a direct result of Wife's employment with [the investment bank] ("[the investment bank] assets"). Both Wife and Mr. Raymond testified credibly as to [the investment bank] assets. They explained which percentages of those assets were marital and which were separate; they identified the assets that are passive and those that are actively managed by Wife; they explained the extent to which the assets are subject to "claw back" from [the investment bank] and the extent to which they are illiquid. They itemized the actual and potential tax implications upon the sale of the different assets, assuming that the sales would be recognized as capital gains and therefore taxed at the lower capital gains rate. Mr. Raymond testified that capital gains tax impacting will favor Husband because it increases the net value of certain assets for which he will receive a share. Wife asks that Husband be awarded 15% of the marital portion of each of [the investment bank] assets.
Wife explained that, as part of her compensation, she receives a yearly equity bonus in the form of RSUs. The restricted shares are distributed in three tranches over three years, then held in a custody account for two years before they are delivered. Every year a tranche of the shares get vested and 55% of the shares immediately go to pay taxes thereon. Once the RSUs are delivered, she then pays another tax on the incremental gain between the issue price and sale price.
During the entire five-year pre-delivery period, the RSUs are subject to "claw back" which is triggered by, inter alia , termination of employment for any reason, failure to consider risk around the business, and engaging in any conduct which causes the firm financial or reputational harm. The conditions for "claw back" are contained in a "pages long" document, and include matters such as extortion, false statements, violating security laws, and the like. [The investment bank] can "claw back" the RSUs in whole or in part, even if Wife has already paid taxes on them. Wife testified that [the investment bank] has clawed back RSUs from employees for reputational issues "in some pretty high profile ways"; she explained that "if you step out of line, they can take it back, and they have done it to other people." However, she testified that although the RSUs are not guaranteed, she "like[s] to think that I conduct myself very ethically."
[The investment bank] RSUs are only partially marital and have been valued and allocated by Wife's expert in accordance with DeJesus v. DeJesus , 90 N.Y.2d 643, 665 N.Y.S.2d 36, 687 N.E.2d 1319 (1997). Essentially, because the RSUs are earned over a period of time and vest over a period of time spanning both pre and post-commencement, the portion of the RSUs that are marital varies by tranche. The value of each RSU is also variable. Wife and Mr. Raymond testified that, given the "at risk" status of the RSUs, Husband should be awarded his share of the marital portion of the RSUs, tax-impacted, "if, as, and when" they are delivered to Wife without restrictions.
The public and private equity investments consist of some passive assets that were simple investment opportunities, and some active assets which she manages as part of her duties in asset banking. Mr. Raymond valued these assets at times relative to their passive/active status. In addition, certain of the equity investments are illiquid. For this reason, and because the value of these assets depends on the market, their values were discounted.
The remaining marital assets are of varying types. There are three marital bank accounts: (1) the First Republic Bank checking account. This was the family operating account until November 2018, when the $683,000 account balance was transferred to Husband as an advance on his equitable distribution and part payment of temporary maintenance; (2) a TD Bank checking account maintained for the purpose of paying the mortgage on Wife's parents’ home. Husband transferred $119,000 from this account to the First Republic account prior to obtaining all of the funds in the First Republic account; and (3) a Bank of America checking account with a balance of $10,362. Wife requests that the bank accounts be distributed 50/50%.
Husband had exclusive use of funds in the marital accounts in his name which he used for trading. However, no documents as to these accounts were produced at trial. Husband also had exclusive control over investments in Azure Capital Partners LP and related entities. No documents were produced as to this investment either.
In the February 10, 2022 Decision and Order granting Wife's motion to preclude, this Court found that Husband had undisclosed investments in Azure Capital and M & T Bank of not less than $550,795. At trial, Wife pointed out that Husband had shown that the $550,795 in M & T Bank represented the security deposit held by the parties’ old landlord. The Court hereby amends the aforesaid Decision and Order accordingly.
The parties each have their own retirement accounts. Wife has a 401(K) with [the investment bank] that she opened in 2006, and into which she consolidated her 401(K) accounts from her prior employers. Wife made automatic contributions into her 401(K) up through commencement of this action, and the value, as per Mr. Raymond, of the marital portion of Wife's 401(K) is $550,952. Husband has an IRA valued at $18,207 based on documents Wife obtained pursuant to a subpoena that her attorneys served. Husband did not produce documents about his IRA, and Wife has no idea whether he has any other 401(K) or retirement accounts. Wife proposes that each party retain 100% of their own retirement accounts.
There is a "tax loss carryforward" valued by Mr. Raymond at $435,000. The "tax loss carryforward" is identified on Husband's 2018 tax return and was created by the $1,253,162 in losses that he sustained by his trading activities with Wife's earnings. It is an asset that can be used against future investment gains to reduce, whether or in whole or part, a capital gains tax. Wife requests that the value of this asset be distributed 50/50%.
Tanya Register, Wife's real estate appraiser, appraised Wife's parents’ North Carolina home at $885,000. After deducting the $464,363 balance of the mortgage from $885,000, leaves a net equity in the home of $420,637. Husband did not read Ms. Register's appraisal report; would not consent to its entry into evidence; required Ms. Register to testify at trial; and then had no cross-examination of her and no objection to her conclusions as to the fair market value of the home as stated in her report. Wife requests that Husband receive 15% of the net equity in the home, and that the deed be transferred back into her name. She agrees to pay all expenses for the deed transfer. The parties’ 2015 Mercedes Benz S-63 is in Husband's possession and has a fair market value of $76,990. Wife requests that the value of this asset be distributed 50/50%.
Wife did not value, and proposes that each party keep, their respective jewelry and household furniture and items.
Credits Due to Wife
During the litigation, Wife made certain payments on behalf of Husband for which she seeks a credit. The parties owned a condo in Puerto Rico which they agreed to and did sell in 2020. Before they sold it, Wife paid Husband's share of the carrying costs for the condo in the sum of $39,015.
Husband kept all four cars purchased during the marriage. He sold three of the cars and remains in possession of the 2015 Mercedes Benz S-63. He provided no documents or information as to the profit he realized from the sale of three cars. Wife seeks a credit of $25,000 as and for her share of the estimated net sales proceeds.
Wife seeks a credit in the sum of $86,354 for basic child support arrears and add-ons due from Husband for the period from August 2018 through January 2022. She also seeks $50,000 in attorney's fees incurred by Husband's frivolous motion to strike her Notice to Admit and other meritless claims and litigation strategies.
Before he absented himself from the trial, Husband had an opportunity to, and did, cross-exam Wife on March 4th. He inquired on two issues: the hard drive in the parties’ bedroom, and the RSUs. He did not ask a single question about her testimony as to abuse and domestic violence. He never returned to complete his cross-examination of Wife and her financial expert witness or to put on his own case.
Payment of Husband's Distributive Share
Wife proposes that Husband's distributive award, amounting in all to $1,995,428, be paid by: (1) distributing certain assets to him (his IRA, the Mercedes S-63, and the tax loss carryforward); (2) applying, as previous part payments, the November 2018 advance on equitable distribution in the sum of $563,000 and the July 7, 2021 $200,000 interim attorney's fee award; (3) crediting Wife for payments made on behalf of Husband, child support arrears, her share of the net sales proceeds of the cars, and $50,000 in attorney's fees she incurred during the trial; and (4) providing an equalizing payment in the form of cash or low basis saleable securities at her election. As for that part of Husband's distributive award that is comprised of [the investment bank] RSUs that are still at risk, Wife proposes that Husband's 15% share of the marital portion of those RSUs be distributed "if, as, and when" they are delivered to Wife without restrictions.
The Family Offense Petition and Preliminary Injunction Motions
By Decision and Order dated April 4, 2022, this Court dismissed Husband's Family Offense Petition for failure to state a cause of action.
By Decision and Order dated August 23, 2022, this Court granted Wife's preliminary injunction motions. EQUITABLE DISTRIBUTION
Husband has taken an appeal from all but one of this Court's Decision and Orders, including the Court's on-the-record determination to decline to sign his May 20, 2022 order to show cause for a mistrial and to recuse, and off-the-record determination to decline to sign his January 28, 2022 order to show cause for contempt. Husband has also asked for recusal of the prior jurist and this Court.
Before the Court can distribute marital assets, it must first determine what they are. Fields v. Fields , 15 N.Y.3d 158, 161, 905 N.Y.S.2d 783, 931 N.E.2d 1039 (2010) ("although the manner in which marital property is distributed falls within the discretion of the trial court, ‘the initial determination of whether a particular asset is marital or separate property is a question of law, subject to plenary review on appeal’ ").
In order "to give effect to the ‘economic partnership’ of the marriage," the term marital property is broadly construed. Fields v. Fields , 15 N.Y.3d at 163, 905 N.Y.S.2d 783, 931 N.E.2d 1039 ; DeJesus v. DeJesus , 90 N.Y.2d 643, 647, 665 N.Y.S.2d 36, 687 N.E.2d 1319 (1997) ("The statute is sweeping and ‘recognizes that spouses have an equitable claim to things of value arising out of the marital relationship’ "); DRL § 236 B (1)(c) ("marital property shall mean 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").
On the other hand, separate property, which is an exception to marital property, is construed narrowly. Fields v. Fields , 15 N.Y.3d at 163, 905 N.Y.S.2d 783, 931 N.E.2d 1039. The party claiming that an asset is separate property has the burden of proof on the issue. Id. ; DeJesus v. DeJesus , 90 N.Y.2d at 652, 665 N.Y.S.2d 36, 687 N.E.2d 1319 ("statutory presumption that all property, unless clearly separate, is deemed marital property and must further recognize the titled spouse's burden to rebut that presumption."); Saasto v. Saasto , 211 A.D.2d 708, 709, 621 N.Y.S.2d 660 (2d Dept. 1995) ("A court is not bound by a party's own account of his or her finances, and where a party fails to trace the sources of money claimed to be separate property, the court is justified in treating it as marital property.").
Wife met her burden of establishing, by way of competent, admissible proof, the precise assets which are marital and those which are her own separate property. She fully disclosed the identity, extent, and location of the assets held in her name or which are in her possession and control. The value of each asset, whether marital or separate, was derived from the hundreds of pages of bank statements, investment account statements, private equity account statements, and other documents, including the expert reports, all of which were admitted into evidence.
Wife established, by way of her own credible testimony, as well as that of her expert, that her separate property was either acquired prior to the marriage (i.e., a portion of her 401(K); checking accounts held with her siblings for their parents), or post-commencement with post-commencement earnings (i.e., plot of land; car; certain [investment bank] assets). Her expert, Mr. Raymond, traced the contributions into Wife's 401(K) account to determine the separate/marital portions thereof and allocated the separate/marital percentages of [the investment bank] shares at risk and RSUs pursuant to the DeJesus formula. Having read the reports and related documents, and heard Mr. Raymond's testimony, there is no basis for this Court to conclude any differently as to Wife's separate property claim. Husband, who appeared for trial on two days, did not challenge Wife's showing as to her own separate property.
Accordingly, Wife established, and this Court so finds, that her separate property consists of the assets set forth in Schedule 1 [redacted here in total], all of which are not subject to equitable distribution and shall remain in her name, possession, and control.
For the same reasons, Wife established, and this Court so finds, that the marital estate consists of the assets set forth Schedule 2 [redacted here in total]. Again, Wife fully disclosed and was forthcoming about the assets acquired during the marriage and held in her name, including any bonuses (cash and stock) paid post-commencement but earned during the marriage. Klauer v. Abeliovich , 149 A.D.3d 617, 53 N.Y.S.3d 37 (1st Dept. 2017) ("As a general rule, bonuses paid as compensation for past services are marital property and subject to equitable distribution."); DeJesus v. DeJesus , supra .
The voluminous exhibits and credible testimony also established that certain of the marital assets should be valued as of the date of commencement, and others at a date closer to trial, and clearly demonstrated those respective values. DRL § 236 B (4)(b) ("the court shall set the date for valuation of each asset."); Mesholam v. Mesholam , 11 N.Y.3d 24, 28, 862 N.Y.S.2d 453, 892 N.E.2d 846 (2008) (same; noting that "economic partnership should be considered dissolved" upon commencement of divorce action implicating equitable distribution); McSparron v. McSparron , 87 N.Y.2d 275, 287-88, 639 N.Y.S.2d 265, 662 N.E.2d 745 (1995) (" ‘active’ assets should be valued only as of the date of commencement of the action, while the valuation date for ‘passive’ assets may be determined more flexibly"; these "formulations ... should be regarded only as helpful guideposts and not as immutable rules of law"). Although not specifically reflected in Schedule 2, the marital bank accounts, retirement accounts, North Carolina home, "tax loss carryover," jewelry, and other miscellaneous assets have been valued at a date close to trial as these are all passive assets. [The investment bank] assets which are passive (i.e., dividends and stock over which Wife has no managerial control) are also valued closer to trial, and those which are active (i.e., the limited partnerships and equity investments which Wife actively manages) are valued at date of commencement. These varied valuation dates, and related values, for each distinct asset are contained in the financial documents admitted at trial and the expert reports and are also "tied in" to Wife's Balance Sheet for marital property (also in evidence).
As noted above, the entire marital estate has a total tax-impacted value of $10,653,002. Husband does not have an automatic entitlement to half of that amount because equitable distribution does not necessarily mean equal distribution. Arvantides v. Arvantides , 64 N.Y.2d 1033, 1034, 489 N.Y.S.2d 58, 478 N.E.2d 199 (1985) ("there is no requirement that the distribution of each item of marital property be on an equal or 50-50 basis"); Ward v. Ward , 94 A.D.2d 908, 463 N.Y.S.2d 634 (3d Dept. 1983) ("Marital property is to be distributed on the basis of the factors enumerated in the equitable distribution statute, not on a simple 50-50 basis"). Instead, the Court considers "all relevant facts and circumstances" along with the factors presented in DRL § 236 B (5)(d) and fashions its award appropriately.
On this record, which speaks for itself, and considering the statutory factors contained in DRL § 236 B (5)(d), a distributive award of marital assets 85% to Wife and 15% to Husband (with some exceptions as to a handful of assets to be distributed 50/50%) is equitable, just, and correct. Although this Court understands that it need not engage in a "point-by-point catechistic discussion" of each factor under DRL § 236 B (5)(d) ( Sykes v. Sykes , 43 Misc. 3d 1220[A] at p. 4, 2014 WL 1797010 [Sup. Ct., New York County 2014] ), given the history of this case, and Husband's self-represented status, it finds it best to address each statutory factor specifically, albeit somewhat out of order. We begin with the most controlling facts and factors first. This is not a long-term marriage. The parties were married for just under eleven years. At the time of trial, Wife was forty-four and Husband was forty-six. Wife had breast cancer in 2019 and underwent lumpectomy and radiation; she has had some cancer scares since then. Husband appeared in good health at the first two days of trial. DRL § 236 B (5)(d)(2) (age and health of parties).
The parties started off in 2007 with modest assets and promising careers. Wife was already employed with [the investment bank]. Husband was also employed in the financial industry as a tech analyst earning over $1 million per year. In August 2018 (date of commencement), Wife was still employed with [the investment bank]; Husband had not been employed commensurate with his skills and experience since 2008. The family lived a comfortable New York City lifestyle and paid their expenses from Wife's earnings and yearly cash bonuses. They acquired a portfolio of stocks and investments as a result of Wife's work and professional reputation. Husband had trading accounts in his sole possession and control (the extent and value of which were not produced by Husband or otherwise provided to the Court). He may also have had bitcoin and/or other assets. DRL § 236 B (5)(d)(1) (parties’ income and property at time of marriage and date of commencement).
As to that last fact, and as amply shown in the record, it has been impossible to evaluate any marital assets in the name or control of Husband. He utterly failed to participate in discovery and in the financial trial. To the extent this Court had any information about assets in his name, it was provided by Wife as obtained by subpoenas served by her attorneys. DRL § 236 B (5)(d)(10) (impossibility or difficulty of evaluating any assets, etc).
Husband made little, if any, positive contributions, whether direct or indirect, to the acquisition or development of marital property during the marriage. He provided little, if any, "services as a spouse, parent, wage earner and homemaker, and to the career" of Wife. DRL § 236 B (5)(d)(7) (direct or indirect contributions to acquisition of marital property). Husband was not a supportive husband; he was an abusive husband. Indeed, the finding that there was "domestic violence during the marriage of an emotional nature" is the law of the case (see People v. Evans , 94 N.Y.2d 499, 502, 706 N.Y.S.2d 678, 727 N.E.2d 1232 [2000] [court's resolution of issue within litigation constitutes law of the case]) and is otherwise supported by the credible evidence on the financial trial (much more on this below). Suffice to say here that, notwithstanding Husband's opinion, which he voiced regularly, that Wife was "unsafe as a mother," Husband provided modest parenting support: he refused to watch the children, requiring Wife to pay for overlapping nannies, babysitters and back-up babysitters, and childcare on weekends and on vacations, to the tune of hundreds of thousands of dollars.
Husband was not a wage earner. After losing his job in 2008, he stayed unemployed until 2010. When he went back to work trading Wife's earnings, he sustained a $1.2 million loss, while Wife continued to pay his office rent and yearly Bloomberg terminal charges. DRL § 236 B (5)(d)(7); see also , DRL § 236 B (5)(d)(12) (wasteful dissipation).
Husband did not support Wife's career and instead was resentful of her success and sought to undermine it. He did not want her to take the job at [the investment bank] in 2006 — a lucrative job which permitted him to stay out of work essentially throughout the marriage. She could not talk to him about work and he was dismissive of her work projects. He did not want her to move into asset banking in 2018 and harshly criticized her for considering it, telling her that she was stupid and making the family broke. He refused to attend client entertainment events necessary for Wife's job, and when he did his behavior caused her great anxiety. For these reasons alone, an award of 15% of the marital portion of [the investment bank] assets is warranted. See generally Gering v. Tavano , 50 A.D.3d 299, 855 N.Y.S.2d 436 (1st Dept. 2008) (award of 15% interest in husband's business proper "given [wife's] failure to contribute to the business, lack of cooperation with respect to discovery of her own assets, and receipt of temporary maintenance"); Davenport v. Davenport , 199 A.D.3d 637, 641, 158 N.Y.S.3d 116 (2d Dept. 2021) (upholding award of 10% of appreciated value of plaintiff's interest in business and 25% of plaintiff's bank accounts given "brief duration of marriage" and defendant's minimal contributions"); compare G.R. v. K.R. , 68 Misc. 3d 1217(A), 2020 WL 5224257 (Sup. Ct., New York County 2016) (spouse awarded 15% of other spouse's business crediting "indirect contributions he made as a spouse and a homemaker"); DRL § 236 B (5)(d)(7).
Husband committed acts of domestic violence, as that term is defined in Social Services Law § 459(a), against Wife throughout the entire marriage. DRL § 236 B (5)(d)(14). Indeed, his harassment continues to date, has impacted her emotionally, financially, and reputationally, and warrants the distributive award and its implementation herein.
Briefly, New York traditionally did not consider marital fault generally, and domestic violence specifically, as a discrete factor in equitable distribution, and instead considered marital fault only under the prior "catch-all" provisions of DRL § 236 B (5)(d) and only where the conduct was so "egregious" as to "shock the conscience of the court." O'Brien v. O'Brien , 66 N.Y.2d 576, 589, 498 N.Y.S.2d 743, 489 N.E.2d 712 (1985) (explaining that "marital fault is inconsistent with the underlying assumption that a marriage is in part an economic partnership and upon its dissolution the parties are entitled to a fair share of the marital estate" and "fault will usually be difficult to assign" and involve the court in "collateral issues"); Howard S. v. Lillian S. , 14 N.Y.3d 431, 902 N.Y.S.2d 17, 928 N.E.2d 399 (2010) (same); Havell v. Islam , 301 A.D.2d 339, 345, 751 N.Y.S.2d 449 (1st Dept. 2002) (husband's attempted murder and brutal beating of wife in front of children was "shocking and despicable" warranting distributive award to him of 4.5% of marital assets); Linda G. v. James G. , 156 A.D.3d 25, 64 N.Y.S.3d 17 (1st Dept. 2017) (husband's criminal conduct that "significantly disrupted the family's stability and well-being" warranted distributive award to him of 25% value of marital home).
The law has since changed, ostensibly in recognition of the fact that certain fault is not difficult to assign and is also not just collateral to the partnership. As of 2020, under amended DRL § 236 B (5)(d)(14), a court may now consider "harassment, aggravated harassment" and other acts of domestic violence enumerated in the Social Services Law in awarding marital property when the spouse's act or acts resulted in "actual ... emotional injury or have created a substantial risk of ... emotional harm to [the victim] or [the victim's] child." SSL § 459(a) (italics added ). Due to the amendment's recent enactment, there are no cases to guide this Court's analysis. However, review of the statutory context and legislative history reveals the amendment's "spirit and purpose" and guides the Court in its interpretation and application. Sutka v. Conners , 73 N.Y.2d 395, 403, 541 N.Y.S.2d 191, 538 N.E.2d 1012 (1989). According to the New York Legislative Annual's 2020 publication:
[The amended statute] would require courts to specifically consider the effects of domestic violence on future financial circumstances of each party
while determining equitable distribution of property in a divorce. The legislation would require a court to examine the circumstances and results of domestic violence and would allow a court to find that a party has a diminished ability to make a living due to acts of domestic violence committed against them by the other party. This would enhance victims’ abilities to receive equitable distribution. New York Legislative Services, New York Legislative Annual 33 (2020).
In 2019, the Legislature attempted to add identical language to DRL § 236 B (5)(d) as the adopted amendment and included a Sponsor's Memorandum, reading in relevant part, "Domestic violence is a scrouge in our society. Often times, it not only leads to the dissolution of a marriage, but has physical, emotional, and psychological effects on the victim. Abuse within a marriage must be considered in order to properly adjudicate its dissolution and the financial situation established. This bill would direct a judge to consider abuse when making an equitable distribution decision." (Sponsor's Mem, Bill Jacket, 2019 NY Senate-Assembly Bill S6050, A1967).
Husband's verbal and emotional abuse of Wife throughout the marriage constituted harassment — his threats to take custody of the children and degrading comments alarmed her, were made without provocation, and served no legitimate purpose. The prior jurist, upon a complete trial record, expressly found that Husband engaged in "domestic violence of an emotional nature" against Wife, and this Court finds the same. Wife was subject to consistent, persistent verbal and emotional abuse. Husband called her names and degraded her in all aspects of her life. He told her to her face and in front of her family that she was diseased and an unfit parent who could not be around her children. He called her "bitch" and "cunt" at will and then callously blamed her for his despicable speech. As to her professional skills, he called her "different flavors of you're an idiot. You're stupid. You don't know what you're doing." This conduct continues unabated, albeit in a different form, and has the potential for destroying Wife's ability to make a living. This Court's finding of harassment by Husband during the marriage is substantiated by his harassment during this litigation. The man in the marriage is the same exact man in this litigation. He has continued his campaign of abuse for the past four years: having lost the power to curse and degrade her to her face at will, Husband has engaged in extreme and harassing litigation tactics for the stated purpose of wearing Wife down financially and emotionally. Indeed, he has said it himself — he is on a kamikaze mission. He has engaged in "clear, intentional, and relentless conduct in attempting to harm Wife in her professional life" by discussing her employment and the details of this litigation with third parties, including reporters, in direct violation of the Confidentiality Order. He asserted manufactured and wholly meritless claims of domestic violence against Wife. He has actively sought to disparage and defame her to the Board of Directors of [a not-for-profit organization on which she sits] and undermine her employment. He caused articles to be written about her, her relationship to [the investment bank], and this divorce, despite knowing that she could lose assets and her job for any reason including reputational and financial harm to her employer.
A person is guilty of harassment in the second degree when he "engages in a course of conduct or repeatedly commits acts which alarm or seriously annoy such other person and which serve no legitimate purpose." Penal Law § 240.26.
In this Court's considered view, Husband's domestic violence during the marriage and this litigation, which threatens Wife's professional reputation, fits squarely within what this Court is now authorized to consider under DRL § 236 B (5)(d)(14), as amended, and resembles the type of conduct previously recognized by courts in denying maintenance to an abusive spouse. See generally Stevens v. Stevens , 107 A.D.2d 987, 988, 484 N.Y.S.2d 708 (3d Dept. 1985) (maintenance award in amount exceeding that needed to keep wife from becoming public charge constituted unjust reward for her behavior including engaging in adulterous relationship; threatening future affairs; repeatedly berating husband in front of his coworkers, friends, family; physical violence); Jessica T. v. Kieth T. , 2020 N.Y. Slip Op. 50673(U), 2020 WL 3163793 (Sup. Ct., Suffolk County 2020) (awarding wife increased maintenance due to husband's abuse, frivolous litigation tactics, including delay, "compulsive lying," and requests that court recuse itself). This Court recognizes that the focus and purpose of awarding increased maintenance to an abused spouse is different than the focus and purpose of awarding an abused spouse a greater share of marital property. Maintenance is meant to remedy the abused spouse's diminished earning capacity as a result of the abuse and enable them to live a lifestyle similar to that enjoyed in the marriage. Jessica T. v. Kieth T. , supra . Distributive awards are meant to ensure that the equities are applied to reflect the contributions of each spouse to the partnership and to reach the right and just result as to marital property. Fields v. Fields , 15 N.Y.3d at 162, 905 N.Y.S.2d 783, 931 N.E.2d 1039 ("fundamental purpose of the Equitable Distribution Law — the recognition of marriage as an economic partnership in which both parties contribute"); Havell v. Islam , 301 A.D.2d at 344, 751 N.Y.S.2d 449 (where marital fault exists court compelled "to invoke its equitable power to do justice between the parties").
The Court cites maintenance cases in its interpretation of DRL § 236 B (5)(d)(14) because those cases employ a similar analysis of marital fault, and because SSL § 459(a), which defines domestic violence, is contained in both DRL § 236 B (5)(d)(14) and DRL § 236 B (5-a) and (6).
It simply cannot be the case that the equities prohibit the Court from taking into account the actions of an abusive spouse who is intent on ruining the other spouse's professional reputation, career, financial security, and health, simply because they have not yet totally destroyed their partner. Indeed, in its first iteration of the amended provision, the Legislature appears to have recognized the importance of considering domestic violence in and of itself in making a distributive award, irrespective of the financial consequences of the abuse. See FN 11; see also Havell v. Islam , 301 A.D.2d at 345-346, 751 N.Y.S.2d 449 (Court of Appeals, in addressing marital fault precedent under prior statute, notes that one such precedent "does not include impairment of economic independence" in definition of egregious and instead seeks "to identify a harm to a significant social value" and another "invokes the important rule in equity that a person should not be allowed to profit from his own wrongdoing").
The fact that Wife is still gainfully employed despite Husband's unabated harassment and abuse should not bar application of DRL § 236 B (5)(d)(14) to this Court's analysis and conclusions as to equitable distribution of assets. Indeed, it is clear from this record that Husband's "main desire seems to be to inflict some sort of harm upon [Wife] in any manner possible as displayed throughout the entirety of this case." Jessica T. v. Kieth T. , supra . His harassment did not stop at commencement but has continued and in fact accelerated over the past four years. By all accounts, this is an insidious case of domestic violence, the end of which has yet to be reached. Consequently, this Court is empowered to, and must on this record, find that Husband's acts resulted in "actual ... emotional injury " and has "created a substantial risk of ... emotional harm " to Wife, and has negatively impacted her professional reputation and career and threatened her ability to make a living. DRL § 236 B (5)(14).
In addition to the $1.2 million loss Husband sustained in trading Wife's earnings (mitigated, somewhat, by the tax loss carryforward incurred as a result of his losses; an asset which he is awarded), he also caused the family to unnecessarily incur hundreds of thousands of dollars in childcare because he did not want to be Wife's "back-up." During this litigation, he squandered over $1 million on lavish hotel living and an expensive apartment, causing instability for his children. All of this amounted to wasteful dissipation. DRL § 236 B (5)(d)(12).
Husband's probable future financial circumstances are good. DRL § 236 B (5)(d)(9). He graduated magna cum laude from Duke University. He is in good health. He has had several jobs in the financial industry, sometimes earning over a million dollars per year. By his own account, he is the CIO of PXXXXXXX, a company in Dubai. This Court has found that he earns no less than $500,000 per year. He may or may not have bitcoin. He may or may not have bank and investment accounts holding substantial sums of money. He sold the parties’ three cars and kept the net sales proceeds.
Although Wife's future financial circumstances are also good, they are under constant threat by reason of Husband's conduct. She built the family's finances back up after Husband received all of the marital liquidity in November 2018. She has substantial earnings and investments but they are coupled with substantial liabilities against the realization of those investments. In the meantime, Husband has continued, unabated, in his attempts to defame and disparage Wife based on meritless claims of domestic violence which have been rejected by this Court, and blatant violation of the Confidentiality Order. This conduct puts the majority of the marital assets — [the investment bank] RSUs — and Wife's employment, at risk of loss. There is no guarantee that Husband will stop his calculated kamikaze campaign to destroy Wife financially and emotionally, notwithstanding the fact that Wife is the sole support for the parties’ children. Wife has not received a penny in child support from Husband and will likely have to cover all of the children's expenses going forward, including college tuition.
Under the post-divorce maintenance statute, the statutory guideline maintenance amount is zero. Husband received temporary maintenance totaling $480,000 over a period of 24 months. As discussed more fully below, this Court declines to deviate from the guideline amount. DRL § 236 B (5)(d)(6).
As certain of [the investment bank] assets are illiquid, Wife will make an equalizing payment to Husband to compensate him for his equitable share of such assets (after awarding him other assets, deducting payments already made to Husband, and applying credits due to Wife). In addition, Husband will receive 15% of the marital portion of [the investment bank] shares at risk and RSUs, "if, as, and when" they are delivered to Wife free of restrictions. DRL § 236 B (5)(d)(8). Given Husband's conduct, it is desirable that Wife retain [the investment bank] assets "free from any claim or interference" by Husband. DRL § 236 B (5)(d)(10).
The Court has considered the tax implications of its equitable distribution award. DRL § 236 B (5)(d)(11). As the lion's share of Husband's award is being funded by assets already in his possession, credits in favor of Wife, and a small equalizing payment to Husband, each party shall bear responsibility for their equitable share in tax consequences. This applies also to Husband's equitable share of the marital portion of the RSUs which he will be entitled to receive "if, as, and when" they are delivered to Wife free of restrictions. Hartog v. Hartog , 85 N.Y.2d 36, 52, 623 N.Y.S.2d 537, 647 N.E.2d 749 (1995) (court properly considered tax consequences and reduced wife's distributive share of illiquid assets by her equitable share of tax liability); Teitler v. Teitler , 156 A.D.2d 314, 316, 549 N.Y.S.2d 13 (1st Dept. 1989) (failure to take tax consequences into consideration "would have the effect of inflicting a fundamental injustice upon one of the parties"; tax liability arising out of sale of asset "should properly be borne in the same proportion as each party's share of the property"); Sogoloff v. Sogoloff , 124 A.D.3d 539, 2 N.Y.S.3d 106 (1st Dept. 2015) (parties properly directed to pay their pro rata share of tax consequences on sale of stock).
Neither party has need to occupy or own the marital residence, as it was a rental. DRL § 236 B (5)(d)(3). Husband will not lose pension rights upon dissolution of the marriage; he will keep his own IRA. DRL § 236 B (5)(d)(4). Husband is entitled to COBRA benefits upon dissolution of the marriage. DRL § 236 B (5)(d)(5).
By reason of all of the foregoing, the distribution of the parties’ marital assets 85% to Wife and 15% to Husband (subject to some assets being distributed 50/50%), as set forth in Schedule 2, is equitable, appropriate, and just. For the same reasons, the payment of Husband's distributive award by awarding him assets already in his possession, applying previous payments and credits, and making an equalizing payment, is equitable, appropriate, and just, as is the distribution of his interest in [the investment bank] RSUs "if, as, and when" such RSUs are delivered to Wife free of restrictions, all as set forth in Schedule 3 [redacted here in total].
Attorney's Fees
An award of attorney's fees is a matter within the sound discretion of the trial court given due regard for the financial circumstances of the parties and "all the other circumstances of the case, which may include the relative merit of the parties’ positions." DeCabrera v. Cabrera-Rosete , 70 N.Y.2d 879, 881, 524 N.Y.S.2d 176, 518 N.E.2d 1168 (1987) ; Gordon v. Gordon , 179 A.D.3d 402, 403, 117 N.Y.S.3d 30 (1st Dept. 2020) ("wife's obstructionist tactics in needlessly prolonging this litigation, such as failing to disclose assets and comply with discovery demands, and in disrupting the courtroom during trial" supported award to husband of 60% of his total counsel fees); Ciampa v. Ciampa , 47 A.D.3d 745, 850 N.Y.S.2d 190 (2d Dept. 2008) ($100,000 advanced by defendant credited toward plaintiff's attorney and expert fees to reduce defendant's equitable distribution obligation); see generally Kaufman v. Kaufman , 189 A.D.3d 31, 76, 133 N.Y.S.3d 54 (2d Dept. 2020) ("in the event that it is subsequently determined, after the hearing directed herein, that the total amount paid by the defendant during the pendency of the action on account of the plaintiff's counsel fees exceeds his appropriate share of that expense, the court may grant the defendant a credit in the amount of the excess against the plaintiff's equitable distribution award").
The facts and circumstances of this case mandate that Husband must bear the cost of his own attorney's fees incurred in this litigation and that Wife's equitable distribution obligation be reduced by the entire $200,000 that she advanced to Husband for attorney's fees pursuant to the July 7, 2021 Order. Ciampa v. Ciampa , supra . From the outset, Husband engaged in harassing, obstructionist conduct, asserted meritless claims, and took positions resulting in delay and unnecessary litigation. The litigation will continue even after issuance of this decision, as Husband has at least five pending appeals and will likely appeal this decision, all of which will cost hundreds of thousands of dollars for Wife.
Husband's conduct in this action mirrored his conduct in the marriage. Rather than meeting his own obligations, rather than producing his own documents and preparing his own case, he spent the entire time attacking Wife. Each attack failed. He persisted. He resurrected the same threadbare claims prior to and during the trial over and over again. His attempts to delay this trial were epic, and are summarized as follows.
Husband made several post Note of Issue motions based upon his assertions about the purported deficiencies and infirmities in Wife's document production, each of which were carefully considered, shown to be without merit, and rejected. He asserted that Wife failed to produce documents. She demonstrated that all of the documents were in fact produced, that he had them for months if not years, and that he had, in fact, used some of them in his various motions and submissions to the court. Nevertheless, Husband had a running objection at trial that the documents in evidence were not produced or were produced "late."
He argued that he could not proceed with the trial because he needed business certifications for the documents. Wife produced the business certifications and affidavits.
He claimed that Wife did not produce K-1s. She demonstrated that Husband, through his "limited scope attorney," actually refused to accept delivery of the very K-1s that said attorney sought to obtain via subpoena in connection with his "limited scope" representation for discovery matters. Nevertheless, he sought to stop the trial based upon his purported failure to receive K-1s. Again, his attempt failed.
Wife invited Husband to review, before trial, each document that she intended to offer into evidence at trial. He completely ignored the invitation. He did not review any documents, including the expert reports, and instead sought to use trial time to do trial preparation. This Court did not permit it.
Husband asserted, at least five times, a claim of ethical violations against Wife's attorneys and the prior jurist. As with his other complaints, the assertion was carefully considered and rejected. Indeed, in recognition of the lack of merit to this particular claim, Husband's own attorneys withdrew his motions to recuse the prior jurist. Nevertheless, he persisted in resurrecting the claim to this Court at least two times in an effort to stop the trial. He did not succeed.
He utterly failed and refused to participate in trial preparation in his own right on his own case and submit proper trial documents in accordance with this Court's rules, arguing that he was "self-represented." Yet, at the same time, he admitted, and the amended notice of appearance showed, that Mr. Sipsas was engaged to and did perform work on the financial trial including hiring a financial expert.
Having failed in his attempts to stop the trial, he just decided not to show up based upon a manufactured injury.
All of the time Husband spent drafting motions, crafting arguments, and filing complaints could and should have been dedicated to his own case on trial. Instead, he turned all of his attention and efforts toward building a narrative wherein he is the victim of Wife. Sadly, it is he who has victimized himself in his seeming endless desire to harm his wife.
For the same reasons, Wife is entitled to an award of $50,000 in counsel fees payable by Husband (and credited against his equitable distributive award), an amount which is a mere fraction of the $2.6 million in legal fees she incurred just through December 2021. Gordon v. Gordon , supra ; Ciampa v. Ciampa , supra ; Kaufman v. Kaufman , supra .
MAINTENANCE
Post-divorce maintenance is not appropriate in this case for at least two reasons. First, Husband did not ask for post-divorce maintenance; indeed, by his own default, he failed to put on any case. Second, the record simply does not support such an award. The amount and duration of maintenance is a matter committed to the sound discretion of the trial court. Rennock v. Rennock , 203 A.D.3d 675, 165 N.Y.S.3d 76 (1st Dept. 2022) ; Spencer v. Spencer , 230 A.D.2d 645, 648, 646 N.Y.S.2d 674 (1st Dept. 1996).
Pursuant to DRL § 236 B (6), the Court must determine the guideline amount of post-divorce maintenance based upon the parties’ incomes and applying the prescribed formula. Income for maintenance (and child support) is governed by the Child Support Standards Act ("CSSA"). DRL § 240(1-b)(b)(5) ; DRL § 236 B (6)(b)(3). Based on her 2020 tax return, Wife's income is $8,730,996. This Court already imputed and income of $500,000 to Husband. After accounting for CSSA deductions, Wife's income for child support is $8,181,101.87 and Husband's income is $462,567.68. The parties’ combined CSSA income is $8,643,669.55.
By Order dated February 10, 2022, upon Husband's contumacious refusal to engage in financial discovery, this Court precluded Husband from offering certain financial evidence at trial, including evidence to challenge his income being not less than $500,000 per year.
Next, the Court performs two calculations up to a cap of $203,000. DRL § 236 B (6)(c). The lesser amount of the two calculations is the guideline amount of maintenance. The first calculation is the difference between 30% of the payor's income (up to the statutory cap) and 20% of the payee's income. The second calculation is 40% of the parties’ combined incomes, less the payee's income.
Calculation 1 :
$60,900.00 [30% of $203,000] - $92,513.54 [20% of $462,567.68] = -$31,613.54
Calculation 2 :
$266,227.07 [40% of $665,567.68 ($203,000+$462,567.68)] - $462,567.68 = -$196,340.61
Where the guideline amount determined by the formula is less than or equal to zero, the guideline amount of maintenance is zero dollars. DRL § 236 B (6)(e)(1). Here, both calculations result in a number less than zero and so the statutory guideline maintenance is zero, a result which is neither unjust nor inappropriate. The Court has considered the factors set forth in DRL § 236 B (6)(e) to determine whether income above the statutory cap should be used to set a post-divorce maintenance award and determined that no amount of Wife's income above $203,000 should be used. These factors include, essentially, the same or similar factors used in this Court's equitable distribution analysis, to wit and inter alia : the parties’ age and health; earning capacity; wasteful dissipation of marital property; acts by one party against another that inhibited or continue to inhibit a party's earning capacity, including acts of domestic violence; tax consequences; the standard of living of the parties established during the marriage; the contributions and services of the payee as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and any other factor which the court shall expressly find to be just and proper.
As demonstrated in detail above — and thus unnecessary to repeat at length here — none of the factors warrant a post-divorce maintenance award. Briefly, Husband graduated magna cum laude from Duke University; is presently employed and self-supporting to the tune of at least $500,000 per year; had prior employment in the financial industry in which he earned over $1 million per year; and wastefully dissipated his advance on equitable distribution. Husband failed to disclose the nature and extent of marital property in his name and control, and his separate property. For all this Court knows, he could have substantial wealth. Husband also received pendente lite tax-free maintenance in the sum of $480,000 over a 24-month period, a duration within guidelines. See F.L. v. J.M ., 173 A.D.3d 428, 429, 105 N.Y.S.3d 379 (1st Dept. 2019) (court properly declined to award plaintiff post-divorce maintenance, plaintiff had an advanced degree, was employed full-time, and received pendente lite maintenance). Husband's domestic violence and harassing conduct also undermine any post-divorce maintenance award. Jessica T. v. Keith T. , supra ; Stevens v. Stevens , supra .
CHILD SUPPORT
Wife has sole custody of the parties’ three children. She is entitled to receive child support from Husband. To date, he has paid not a penny of support. It is unlikely, on this record, that other than the credit for support arrears deducted from Husband's equitable distribution award, Wife will receive child support from Husband without additional court proceedings.
The Court must assess his child support obligation in any event and arrive at the arrears. It is already shown that Wife's CSSA income is $8,181,101.87, Husband's CSSA income is $462,567.68, and the parties’ combined income is $8,643,669.55. Husband's pro rata share of the combined income is 5.35%; Wife's share is 94.65%.
Applying the statutory cap of $163,000, using 29% for one three children, results in a basic child support obligation of $47,270 per year or $3,939.17 per month. DRL § 240(1-b)(2) ; DRL § 240(1-b)(3)(i). Husband's 5.35% share of the monthly basic child support obligation would be $210.68.
The guideline child support amount of $210.68 per month is unjust and inappropriate. Therefore, the Court will deviate from the guidelines and set child support based on income above the statutory cap, specifically, $500,000 to which it will apply the statutory percentages. When exceeding the statutory cap, courts have the discretion to apply the DRL § 240(1-b)(f) factors "and/or" apply the statutory percentages to an income above the cap. Cassano v. Cassano , 85 N.Y.2d 649, 654, 628 N.Y.S.2d 10, 651 N.E.2d 878 (1995). This income amount is appropriate given the financial resources of the parties and the children's standard of living. Husband, therefore, shall pay $646 per month in basic child support ($500,000 x 29% = $145,000 per year x 5.35% = $7,757.50 per year, or $646.46 per month).
Husband is also responsible to pay 5.35% of the children's add-on expenses, including school, camp, extra-curricular activities, and childcare.
Accordingly, Husband shall pay basic child support in the amount of $646 per month and 5.35% of add-on expenses retroactive to August 20, 2018, the date of commencement of this action. At trial, Wife established that Husband owed a total of $86,354 in child support for the 42 months since the date of commencement (August 2018 through January 2022). This sum consists of $27,158 for basic child support, $32,579 for school, $8,239 for camp, $2,247 for activities $16,131 for childcare.
ANCILLARY ISSUES
On August 23, 2022, this Court granted Wife's preliminary injunction motions, directed Husband to comply with the terms and conditions of the Confidentiality Order, and restrained and enjoined him from disclosing [the investment bank] documents and information and discussing the children in this divorce action with third-parties. The Court also directed Husband to: (1) provide Wife with an affidavit, setting forth the names and contact information of all persons and entities to which he provided [the investment bank] confidential information; and (2) turn over to Wife all [the investment bank] documents and information in his possession, custody and/or control. As of this writing, this Court is not aware whether he has complied with the Court's directive. In any event, the preliminary injunction is effective until entry of the final judgment of divorce herein and there are remedies for any failure to comply with the Court's order.
Given Husband's abject refusal to follow Court orders, and inability to honor even his own agreement, and in view of the recognized principle that a person's future behavior is best predicted by his past conduct, it is entirely reasonable to conclude that after entry of the divorce judgment Husband will continue to disclose [the investment bank] confidential information and documents in an attempt to harm Wife. Indeed, it appears that he did so during the financial trial: on March 31, 2022 Wife received an email from NY Post reporters, claiming to have information about Wife's "fabricated" domestic violence claims and [the investment bank's] purported attempts to shield this information from the public.
Consequently, within five days of the entry of the Judgment of Divorce herein, Husband shall deliver to Wife's attorneys, each and every [investment bank] document (as that term is defined in the Confidentiality Order) in his possession and/or control. This includes, but is not limited to, each and every [investment bank] document produced in this litigation, whether directly by a party or via any subpoenas, or otherwise obtained by him by any other means. The Court notes, in passing, that its directives are not a bar to any claims Wife may have for any past, present, or future violations of the Confidentiality Order, or other harmful conduct, by Husband.
Accordingly, it is hereby
ORDERED that Wife is awarded all of her separate property listed in Schedule 1 of this Decision and Order; and it is further ORDERED that the total marital estate consists of the assets listed in Schedule 2 of this Decision and Order, with a total tax-impacted value of $10,653,002; and it is further
ORDERED that the parties’ respective equitable shares of each asset in the marital estate are as set forth in Schedule 2; and it is further
ORDERED that Husband's equitable share of the marital estate in the sum of $1,995,428 shall be satisfied in the manner set forth in Schedule 3 of this Decision and Order; and it is further
ORDERED that Husband is entitled to his 15% share of the marital portion of [the investment bank] shares-at-risk and RSUs (itemized in Schedule 2), "if, as, and when" those shares are delivered to Wife without restrictions. Husband is responsible for all taxes on the sale of those shares; and it is further
ORDERED that Wife shall make the equalizing payment of $167,830 due to Husband, as shown in Schedule 3, within twenty (20) days of this Decision and Order; and it is further
ORDERED that Husband shall sign all documents necessary to remove his name from, and effect a transfer of title for, the deed for the North Carolina property, within thirty (30) days of the date of this Decision and Order. Wife shall bear the costs and expense of preparing and filing all deed transfer documents; and it is further ORDERED that Husband is not entitled to post-divorce maintenance; and it is further
ORDERED that Husband's basic child support obligation is, and he shall pay, the sum of $646 per month (based on 29% for three children) on the first of every month starting October 1, 2022. Husband's pro rata share of add-ons for the parties’ three children is 5.35%. This child support award is retroactive to August 2018. Husband's arrears in basic child support and add-ons for the period from August 2018 through January 2022 is $86,354. Any child support arrears due for the period from February 2022 through September 2022 shall be paid in full within thirty (30) days of this Decision and Order; and it is further
ORDERED that the parties are directed to comply with the express terms of the March 15, 2019 Confidentiality Order. In addition, within five (5) days of the entry of the Judgment of Divorce herein, Husband shall deliver to Wife's attorneys each and every [investment bank] document (as that term is defined in the Confidentiality Order) in his possession and/or control, including but not limited to: each and every [investment bank] document produced in this litigation, whether directly by a party or via any subpoenas, or otherwise obtained by him by any other means, and every copy of every such document; and it is further
ORDERED that Wife shall submit to this Court for signature a Sealing Order in accordance with the Court's rulings on this issue throughout the financial trial, within ten (10) days of this Decision and Order; and it is further
ORDERED that all other request for either equitable distribution or support are denied; and it is further
ORDERED that Wife shall submit to this Court for signature, upon notice to Husband ( 22 NYCRR 202.48 ), a proposed Judgment of Divorce within thirty (30) days of this Decision and Order.