Opinion
06-09-2016
Gary M. KENNEDY, Plaintiff v. Emily A. KENNEDY, Defendant.
What happens when two of New York's most important values in the raising of children collide? In this case, the forces are—the immovable object—a mother's time with her children—and an unstoppable force—her concomitant obligation to generate income. The Big Bang is inevitable but in this case, the laws of physics give way to the text of New York's Domestic Relations Law.
The “Big Bang” theory has been described by courts as “an astronomical interpretation of the creation of the universe.” Malnak v. Yogi, 592 F.2d 197, 209 (3d Cir1979). A state court described it as follows, in a satirical reference: The “big bang” theory which suggests that the universe is ever expanding is not applicable to the liability of the gas company. Lowenschuss v. Southern Cal. Gas Co., 11 Cal.App. 4th 496, 501 (Ct.App.2d Dist.Cal.1992). A California dissenting judge referred to the theory as follows: “The majority, following the big bang theory of creation, view this public entity liability case in an exploding universe of common law tort liability.” Larson v. County of San Diego, 183 Cal.App.3d 1059, Ct.App. 4th Dist. Cal.1986)(Butler, J., dissenting). In Texas, a state court referred to the mushrooming of deadly weapons cases “as following the Big Bang theory of creation.” Coleman v. State, 145 S.W.3d 649, 655 (Tex .Ct.Crim.App.2004). The Big Bang, as applied to the powerful but competing forces of maternal affection and financial stress in this case, has only created ever expanding headaches for the couple involved and their attorneys.
This couple have shared custody of their two children, ages six and three. The parties, in their separation agreement, adjusted gross incomes for each—$23,400 for the wife and $53,962 for the husband—calculated the presumptive amount for child support ($1,124 .14/mth) and agreed on a deviation under which the husband paid the wife $1000 per month for child support. The husband is a W–2 wage earner: the wife is a daycare provider. The parties further agreed that if either parties' gross income changed by more than 15 per cent or a substantial change in circumstances occurred after the date of last calculation, then the child support would be “subject” to a modification. The agreement makes no reference to the amount of such modification and makes no reference to the impact on any modification of the deviation contained in the original agreement. The agreement also contained an unusual provision regarding daycare: rather than provide for shared or pro rata contributions to the cost of daycare, the parties agreement states:
The parties agree that there are currently no daycare services associated with the children. The wife provides for that care on a daily basis without charge to the husband. She shall have first opportunity to do so in the future prior to the husband incurring charges from a third-party or leaving the children with a third-party to provide that care.
After a series of disputes over the parties' respective incomes, the husband moved to modify the support payments because he claimed, the wife's gross income had increased by 15 per cent or more, as the agreement required as a prelude to a modification/recalculation of support. The husband argues, based on the wife's increased income, that the parties now “have substantially similar financial resources in their respective homes and there should be no child support paid by either party due to the shared custodial arrangement .” In short, the husband, claiming that his wife's income has increased by more than 15 per cent, now seeks to be relieved—entirely—from a child support obligation that he agreed, less than a year ago, was reasonable support for his children.
The wife, in response, cross-moved for sole custody. In response to the husband's claims, she claimed 2015 was her first year as a daycare provider, she was unsure of her total net income, but she added that because she was providing care for two of her children, “the presence of my children limits my additional income from such activity.” She also noted that the husband's income changed as well but, with equal emphasis, she argues that her husband now lives in an apartment with his girlfriend, who has a two-year old child as well. As a result, she complains that her children are routinely tired and hungry as the husband “provides neither funds nor food for either of the two children.” The mother also alleges that the husband interferes with her attempts to talk to the children on the telephone and that the parents do not communicate over administration of medicines to the children.
In reply, the husband notes that the wife is licensed to operate a daycare for six children and can even oversee more children. Based on an increased census, the husband states that the mother can earn $53,664 annually, which is a 43 per cent increase in the salary set forth for the wife in the agreement. Interestingly, the husband acknowledges that “having the wife watch the children while I am at work on my custody days was something she petitioned for and was not of my choosing.”
The facts in this case are easy: the couple has two children, both young enough to require daycare. The mother, a college graduate, is a daycare provider, licensed by the state to provide daycare for up to six children. The mother, however, does not have six paying children under her care, as she provides daycare for her own two children rather than fill those slots with paying customers. Her children attend daycare everyday during the school year. As a result of using two of the daycare slots for her own children, she earns less income—probably $10–12,000 annually—than if she filled those slots with paying customers. The husband also argues that his ex-wife receives cash payments for providing daycare that are not reflected in her annual tax returns and that their older child is not counted in the mother's authorized daycare slots and she could fill another slot—and generate as much as $10,000 annually—without violating any rules or regulations.
The issue is joined because the husband claims that he can provide child care services for his young children, either through the services of his sister or his girlfriend's mother. The husband argues that his wife is obligated to take additional paying childcare customers, increase her income to cover their own children's expenses and reduce his overall payments. He also contends that his sister and her mother can cover the time with the children and they will suffer no adverse consequences if removed from their mother's childcare and attended to by others.
To deal with the issues in this case, the Court moves backwards. First, the mother's concerns about the children being fed and having sufficient sleep do not constitute a change in circumstances sufficient to establish even a prima facie case for a change in custody or to require a hearing on that subject. There is no significant evidence of a lack of adequate sleep or any health consequence to the child as a result. Meola v. Meola, 301 A.D.2d 1020, 1022 (3d Dept 2003) (lack of adequate sleep can be factor if it impacts the child's health). The mother's concerns about the administration of medicines, while legitimate, are sufficiently rebutted by the father's opposing affidavit and there is no evidence of indifference or lack of care from the father. There is no evidence of any consequences from missed medications: no evidence of seizures, convulsions, hospitalizations as a result. There is no evidence of any danger to the children: no evidence of emergency room visits or any unexpected complications. There are no unexplained scars, cuts or bruises in the record. There are no medical opinions attesting to adverse consequences to the children. This Court cannot draw any conclusion from the allegations about lack of sleep for the children except to recognize that children, including the Court's own grandchildren, often exhibit evidence of exhaustion—and then proceed to stay awake and engage in vigorous activity for hours afterward. In this case, there is no evidence of any exposure to risk while the children are sleepy, no evidence of extended naps or other complications. The wife's motion to change custody or visitation is denied without a hearing.
Second, the husband's claim to remove the children from the mother's daycare to have the children cared for by his sister or his girlfriend's mother to allow the mother to generate additional income is unfounded, based on the terms of the agreement. In the agreement, the mother negotiated for—and obtained—the right to have the children continue in her daycare before the husband either paid for the daycare or provided others to care for the children. The husband's suggestion that his wife should have the children removed from her daycare and cared for by someone else so she could generate additional funds to cover the child is contrary to the language of the agreement: the husband agreed that the wife would have the choice to keep them in her own care before anyone else could be substituted. Having bargained away the right to change the daycare provision, the husband has no argument that he could save money—and increase the wife's income—by changing the daycare arrangements.
Third, the wife, while focusing her attention on her own children, and having bargained for the right to keep them in her daycare, is nonetheless obligated to enhance her income potential to realize the full benefits of her skills. In that respect, by failing to fill licensed slots in her daycare—which she admits remain unfilled—she is liable to imputed income equal to the value of the unfilled slots. Under the Domestic Relations Law, the court, at its discretion, may attribute or impute income against the mother in this case from “such other resources as may be available to the parent.” Domestic Relations Law § 240[1–b][b][5][iv]. What follows that description is a list of items, including “non-income producing assets.” However, the Legislature did not circumscribe this Court's determination of “resources” from which to attribute or impute income. The Legislature made sure that in describing the scope of this Court's discretion it would be “including” the items listed but, in a catch all phrase that seems to be as expansive as Hubble's expanding universe , the Legislature said the list of “resources ... as may be available to the parent” would “not be limited to” those in the following subdivision. The New York courts have long respected the gravity underling this constantly expanding scope of discretion. Siiss v. Siiss, 2009 N.Y. Slip Op 32452(U)(Fam. Ct. Albany Cty 2009) (when a parent is underemployed, a court may properly impute income based upon the parent's earning capacity); Matter of Muok v. Muok, 2016 N.Y. Slip Op 03335 (4th Dept 2016) (trial courts ... possess considerable discretion to impute income in fashioning a child support award ... [A] court's imputation of income will not be disturbed so long as there is record support for its determination); see also Belkhir v. Amrane–Belkhir, 118 AD3d 1396, 1398 (4th Dept 2014) ; Matter of McKenna v. McKenna, 137 AD3d 1464, 1466 (3d Dept 2016) (income may be imputed based upon “underreported business activity or payment of personal expenses from business accounts”).
The Family Court Act defines income to include “an amount imputed based upon the parent's former resources or income if the court determines that a parent has reduced resources or income in order to reduce or avoid the parent's obligation for child support.” NY FCA § 413(1)(b)(5)(v).
Edwin Hubble, as an astronomer at the Carnegie Observatories in 1929, determined that the universe was expanding, essentially from the time of creation. http:/ /www.physicsoftheuniverse.com/topics_bigbang_ expanding.html, visited on May 24, 2016. The seeing-eye into the universe, the Hubble Telescope, is named after the astronomer.
While this discretion seems endless, at least one court has suggested that judges must remain tethered to a limited universe in exercising their discretion.
CSSA [the Child Support Standards Act] also contains no provision that requires a person to work the maximum number of hours available to him within the limits of his endurance and the Court declines to invent such a rule. If such a rule was found in the CSSA, it would seriously test the parens patriae authority of the State when it legislates in the area of child welfare. In any case, creating a new rule of law which holds that a parent's child support obligation can be based on income from a second full time job he no longer has or from a second job that he could secure finds no support in the text of the law or decisional holdings. This Court holds that there is no reasonable interpretation of the CSSA that supports a conclusion that not working a second job is a willful underemployment. If such was the case, a court could then be routinely required to impute income from a full time hypothetical job to a mother who decides not to work outside the home to care for her children and had done so throughout the relationship or marriage.
What a court can do in its common law duty to fill in the interstices of the positive law and what a legislature can do in exercising its positive law making function are quite different. Under the circumstances as presented in this case, the Court is holding that a child support obligation can not be based on the parent's ability to work a second full time job
Siiss v. Siiss, 2009 N.Y. Slip Op 32452(U)(Fam. Ct. Albany Cty 2009). In short, there are outer limits to the Court's imputation of income, even in this instance. A court cannot require a parent to work beyond their capability or outside the scope of their usual and customary employment. But, in this Court's view, a court can require a party to reach their reasonable “earning capacity” and therefore, contribute to the costs of raising a family.
The Outer Limits was a mid–1960s science fiction television show which featured in some episodes future Star Trek actors William Shatner and Leondard Nemoy. https://en.wikipedia.org/wiki/The_Outer_Limits_(1963_TV_series).
In this case, the wife has excess capacity at her daycare facility and it should be filled with paying customers. The wife does not dispute that there are unused available slots. There is no evidence that filling the unused slots would change the wife's daily routine or, for that matter, her time spent with own children each day. The extra customers would, no doubt, increase the wife's time spent with other children and not her own. However, the extra customers would significantly increase the wife's income while not substantially increasing her business overhead. Even at $100 per week, a rate that the Court based on its own experience considers to be very modest, the two extra customers would add $200 per week or $10,000 annually to the wife's income and, while there would be some proportionate increase in expenses, the wife's net income would be adjusted upward, a fact which generates additional income to cover the costs and expenses of her own children.
Based on these facts, this Court imputes income to the wife in the amount of the reasonable fair market value of the unfilled slots in her daycare operation. This Court does not have the exact additional income that would be generated—or the net profit that would be attributable to these new customers. The Court holds that the wife can be imputed income equal to the net income increased by filling all the daycare slots for which the wife has a license, with paying customers. There will be one exception: the enrollment of the couple's youngest child in the daycare will consume one of the daycare slots. The benefit of the mother overseeing the child each day is, according to undisputed evidence, significant. This Court will not interfere with the bond between mother and child created through the daily contact in a daycare setting. However, as the couple agreed in their separation agreement, there will be no cost to the father for these services. The couple's older child does not count against the licensed slots in the daycare and while he may attend the daycare, his slot will be occupied by a paying customer.
Based on the imputation of income from paying customers occupying the two available slots, the wife's income would increase by at least $200 per week or roughly $10,000 annually. The parties, in their agreement, based the modification language on an increase in either party's “gross income.” The wife's reported income, in the agreement, is $23,400 and the additional imputed income—even if resulting in only a $5,000 increase in gross income (it may be closer to $10,000 or more), would trigger the husband's contractual right to insist on a modification under the 15 per cent threshold.
In reaching this conclusion, the Court notes that the child support, under the terms of the agreement, is merely “subject to modification.” There is no language in the agreement to support the husband's argument that child support should be eliminated if the wife's gross income increased by more than 15 per cent. The husband, in signing the agreement, acknowledged that he should pay support and the couple agreed to a deviation from the presumptive amount of support under CSSA based on their sharing of time with the children. The husband remains the more moneyed spouse and he would remain liable for the payment of support. Leonard v. Leonard, 109 AD3d 126, 128 (4th Dept 2013). Whether the deviation, granted in the past, remains pertinent is to be determined by the parties, or upon failure to reach an agreement, by this Court. This Court will not determine, based on the current application, the terms of any modified child support obligation and instead leaves that determination to further negotiation between the parties as their agreement intended.
The husband's motion to modify the terms of the decree regarding the payment of child support is granted in part and denied in part and the issue of the amount of such modification is referred to a hearing. The wife's application to dismiss the husband's petition is denied, her cross-motion to modify the visitation and custody provisions of the decree is denied as is her request for attorneys fees and other relief.
SUBMIT ORDER ON NOTICE