Opinion
28341/03
6-30-2009
AGNES KRUP, Plaintiff(S), v. DONALD L. FEHR, Defendant(S).
Robert Zeif, Esq., Dobrish & Zeif, New York, New York, Attorney for Plaintiff. Saul Edelstein, Esq., Edelsteins, Faenburg & Brown, New York, New York, Attorney for Defendant.
Upon the foregoing papers, in this post-judgment proceeding, defendant Donald L. Fehr moves for an order: (1) granting him a downward modification of his child support obligation as contained in the Stipulation of Settlement dated December 5, 2003, (the Stipulation), as incorporated, but not merged, in the judgment of divorce dated February 24, 2004. Plaintiff Agnes Krup cross moves for an order: (1) directing defendant to immediately obtain life insurance in the amount of $750,000.00 for the benefit of the parties' child, so long as the child is unemancipated, as required pursuant to the Stipulation and judgment of divorce; (2) directing defendant to immediately obtain and pay for medical insurance for the child, for so long as she is unemancipated; (3) directing the immediate sale of the former marital residence (the Brownstone) to a third party buyer in an arm's length transaction, and upon the sale of the premises, directing that a sufficient portion of the net proceeds, but not less than $200,000.00, be set aside in order to satisfy a substantial portion of defendant's child support obligation until the child is emancipated; (4) directing the entry of a money judgment in favor of plaintiff and against defendant in the amount of $2,246.97 for child support arrears and $690.00 for child care arrears, for a total amount of $2,936.97, plus statutory interest at the rate of 9%; in her reply papers, plaintiff reduces that amount of the judgment demanded to $400.00, plus interest; and (5) directing defendant to pay plaintiff's counsel fees and expenses in the amount of $12,500.00 incurred in this proceeding.
Facts and Procedural Background
The parties herein were married on June 9, 1995. They have one child who was born on July 22, 1999. Plaintiff commenced the instant action on August 1, 2003 seeking a judgment of divorce and other ancillary relief. On December 5, 2003, the parties resolved their marital dispute by executing the Stipulation, which was incorporated, but not merged, into the judgment of divorce entered on February 24, 2004.
As is relevant herein, the Stipulation provides that the child resides primarily with plaintiff and defendant is obligated to pay $2,000.00 per month for basic child support, a pro rata amount of unreimbursed medical expenses, child care expenses and tuition. He is also obligated to maintain a life insurance policy for the benefit of the child in the amount of $750,000.00.
Defendant's Request for Downward Modification
Defendant
In support of his motion, defendant argues that since the Stipulation was executed, he has suffered a substantial, unanticipated and unreasonable change in circumstances in that his salary and earnings have decreased to significantly lower levels. More specifically, defendant alleges that when the Stipulation was executed, he was employed by the Smithsonian Institution at a salary of approximately $170,000.00 per year. When the Stipulation was executed, plaintiff was employed at the Karpfinger Agency at a salary of approximately $80,000.00 per year.
Defendant alleges that in March 2006, he was laid off; he received a seven month severance package that allowed him to continue to receive his salary, health insurance coverage and life insurance coverage. Defendant did some consulting work during the fall in 2006, which continued into February of 2007, but he was unable to find full time employment. In May 2007, he accepted a position as the Executive Director of Dova, Inc. (Dova), at a salary of $72,000.00 per year; that position was subsequently terminated on October 1, 2007, when defendant was again laid off. He then performed various consulting jobs until he found employment with Kaplan, Inc. (Kaplan), effective May 1, 2008, at an annual salary of $90,000.00. To support his assertions, defendant annexes a copy of his 2007 federal income tax return, which indicates that he had an adjusted gross income of $102,738, which included a distribution of $73,063.33 from TIAA-CREF, along with an income statement from Kaplan which indicates that he earned $54,346.17 as of December 9, 2008, and 1099 forms from the Alfred P. Sloan Foundation in the amount of $5,000.00 and from The Waterford Press in the amount of $6,875.00
Defendant therefore asserts that he is unable to earn the salary that he did at the time that the Stipulation was executed and requests that the amount of basic child support that he is obligated to pay be adjusted or terminated to reflect his current condition. Defendant further avers that since their child is now in public school, and it is expected that she will remain there for the next few years, there is no need for the court to order him to pay a pro rata share of the child's tuition costs and expenses.
Plaintiff
In opposition to defendant's motion and in support of her cross motion, plaintiff first alleges that she is currently employed by Sanford J. Greeburg, Inc., as a literary agent, earning an annual salary of $100,000.00. She further asserts that her take home pay is $5,121.00 per month, her expenses are $8,996.00 per month and she has $124,264.00 in savings remaining from the sale of her share of the Brownstone. She therefore claims that even with the child support that she receives, she is unable to make ends meet. Plaintiff further alleges that she has been forced to use her savings to pay her life insurance policy premiums and to contribute to her daughter's 529 college savings plan. She explains that the child is currently attending a public school in Brooklyn Heights, but since the school is no longer meeting the child's needs, plaintiff has no choice but to enroll her in private school. To date, the child has been accepted at a private school which offered her a 50% reduction in tuition. Pursuant to the Stipulation, she and defendant share the cost of private school in Brooklyn on a pro rata basis, only if both parties consent to the child's attendance at the school. Since defendant has refused to consent to the private school or to pay his share of the cost of the child's's math tutor, plaintiff believes that she will have to bear the entire cost of tuition. She further advises the court that plaintiff has a Masters degree from Harvard and that on July 18, 2009, he plans to marry a woman who moved into the Brownstone during the weekend of February 7, 2009.
Plaintiff also argues that defendant acted in bad faith when he bought out her interest in the Brownstone, since his main priority in life has been to profit from the sale of the premises. In this regard, she avers that pursuant to the Stipulation, the Brownstone was to be sold. After the agreement was signed, however, plaintiff insisted on buying out her interest; this court denied her request for an order prohibiting him from so doing, since the Stipulation did not preclude a sale to either party. Defendant thereafter borrowed large sums of money to convert the Brownstone into a condominium and sold the two smaller units, choosing to reside in the largest. Plaintiff accordingly concludes that instead of complying with his child support obligations, defendant chose to spend his money on this conversion, in which he realized a significant profit.
Succinctly stated, defendant argues that inasmuch as plaintiff should have known that his position at the Smithsonian Institute was precarious, he should have allowed the Brownstone to be sold to a third party and he should have held onto the proceeds of the sale as a financial cushion so that he would have sufficient funds to pay child support instead of borrowing money to renovate the building and to convert it to condominium ownership. In the alternative, he should have sold or rented out the duplex apartment in which he now resides, which plaintiff claims has a rental value of approximately $5,000.00 per month and a sales value of approximately $1,200,000.00, and moved into the smaller apartment on the second floor. Instead, he went deeply into debt to finance the conversion, fell into arrears in his child support obligation and now seeks a downward modification. Moreover, after the conversion, defendant sold one unit for $ 425,000.00 and the other for $620,000.00, for a total of $1,045,000.00; he used none of this money to ensure that he would be able to pay child support and instead chose to pay off his outstanding mortgage, leaving him with a mortgage of only $200,000.00. Plaintiff thus concludes that defendant should not be granted a downward modification of his child support obligation and the court should instead order him to sell his apartment and to place a portion of the proceeds in an escrow account, which can be used to protect defendant from any future failure to pay his support obligations.
Defendant's Reply
In reply, defendant alleges that he was "completely blind sided" when he lost his job with the Smithsonian Institute, since the publishing division that he managed had exceeded performance expectations for three years. Nonetheless, the company's joint venture with HarperCollins Publishing resulted in the elimination of several positions, including his. Immediately following his dismissal, defendant alleges that he hired an executive search firm, called every one that he knew in the industry and sent out approximately 15 resumes a week. He then expanded his job search to Philadelphia and Boston and lowered his expectations. He therefore contends that although he has a Masters Degree from Harvard in philosophy, he did not deliberately chose to take a lower paying job, but he had no other choice.
With regard to the Brownstone, defendant reminds the court that in May 2002, plaintiff filed a motion seeking an order permitting her and the child to remain in the former marital residence until the child, who was then two years old, reached emancipation; this court denied the motion and ordered that the house be put on the market and sold to the highest bidder. After the house was put on the market in March 2003, defendant's bid was the highest. This court then denied plaintiff's motion for an order precluding him from purchasing the Brownstone. He accordingly purchased plaintiff's share of the Brownstone for $350,000.00, the same amount of money that she would have received if it had been sold to a third party.
Defendant further explains that when he filed an offering statement with the Attorney General to convert the three-family Brownstone into a condominium, while he was seeking employment, no renovations were needed and the conversion costs consisted mostly of attorneys' fees, application fees, inspections, engineering reports and a tax lot division, for a total of approximately $25,000.00, which was financed from a home equity line. Moreover, in October 2008, after the two units were sold, he paid $24,000.00 to satisfy his child support arrears; a considerable portion of the $1,070,000.00 mortgage; $22,000.00 to repair the foundation and sidewalk as required by the new mortgagee; personal debt of approximately $60,000.00, a large portion of which was attributable to the cost of the drugs needed to treat his medical condition; the home equity line; and a "hefty" capital gains tax, so that he was left with $100.00 in his savings account, a $200,000.00 mortgage and no substantial debt.
Defendant further avers that in the fall of 2008, the apartment in which he resides was appraised at $960,000.00. He further opines that it is now worth only $700,000.00 and that the value is continuing to decrease, so that it is not worth $1,200,000.00 as argued by plaintiff. In addition, paying down the mortgage reduced his monthly payment from $6,000.00 to $1,400.00, which is eminently affordable in the City. In contrast, plaintiff chose to rent a house in an exclusive area of Brooklyn. Defendant thus concludes that his decision to invest in the real estate was not inappropriate or done in bad faith and that plaintiff is now upset because while she has about $120,000.00 in savings as a result of their settlement agreement, he made a wise financial investment that proved profitable and provided a home for him and his daughter. Defendant further avers that the child grew up in the apartment and that she and her two cats and one lizard live with him approximately 155 days a year, or 42% of the time, so that his investment decision provided continuity for the child. Defendant believes that forcing him to move out of the apartment will cause considerable disruption in the child's's life. He also alleges that he intends to leave the child at least a portion of the value of the apartment in his will.
In addressing plaintiff's assertion that his child support obligation should not be reduced because he has refused to consent to her desire to send the child to a private school, defendant asserts that he is not obligated to share in this expense pursuant to the Stipulation unless he agrees to do so. Defendant further alleges, however, that he will consider sharing in the cost if he can afford to do so and that he would be in a better position to contribute if his monthly child support obligation is reduced. Moreover, plaintiff refuses to keep informed with regard her intended plans for the child, which he learns about from the child after the fact, which violates the provisions of the Stipulation. More specifically, defendant asserts that plaintiff refuses to share the terms of the child's scholarship from a private school with him.
Accordingly, defendant concludes that plaintiff's request for child support to continue as set in the Stipulation is a ploy for him to subsidize her extravagant life style. He further alleges that it is not a coincidence that plaintiff filed the instant motion seeking to remove him from the Brownstone less than one week after his fiancé moved into the apartment.
Plaintiff's Reply
In reply, plaintiff argues that defendant should not be granted a reduction in his child support obligation, since his net worth has increased since the Stipulation was executed by reason of the sale of the units in the Brownstone. Plaintiff further avers that since defendant has taken out huge loans, i.e., the $1,070,000.00 mortgage, in order to convert the Brownstone into a condominium and he paid an additional $22,000.00 to repair the sidewalk and an undisclosed amount to repair the roof, he should be able to borrow sufficient funds to pay the child support obligation set forth in the Stipulation.
Plaintiff also asserts that defendant exaggerates his alleged inability to find employment. More specifically, he lost his position in March 2006, "long before the current economic recession began." She further contends that his claim that his age, 48, is an impediment to obtaining alternative employment is disingenuous, since she is a publishing executive herself and she knows that the industry values experience. In this regard, plaintiff argues that the woman who replaced defendant is also in her late forties. In addition, defendant fails to annex any evidence to corroborate his claim that he utilized a job search company.
The Stipulation
As is relevant to the issues now before the court, the Stipulation provides that:
"Until such time as the Child is emancipated, as that term is defined herein, and notwithstanding whatever periods of time the Child spends residing with each parent, the Father shall pay the sum of Two Thousand ($2,000) Dollars per month to the Mother as and for basic child support, as adjusted by the cost of living as hereinafter set forth. The basic monthly child support payments to the Wife shall commence on the first day of the first month following the execution of this Agreement and shall continue to be payable on the first day of each month thereafter as set forth above until the Child is emancipated."
(Article V, para 1[a], p 26).
The Stipulation further provides that:
"The parties shall also share the tuition, costs and expenses of . . . any future private school which the Child may attend, pro-rata, based upon each party's respective gross income as reported on his/her federal income tax returns for the prior year, provided that each party has consented, in advance, to such private school."
(Stipulation, Art V, para 7, p 30-31).
The Law
As a threshold issue, it must be recognized that it is now axiomatic that parents' child support obligations must be determined in accordance with the CSSA. Further, it has been held that:
"As [was] explained in Matter of Cassano v Cassano (85 NY2d 649, 652 [1995]), the CSSA provides a precisely articulated, three-step method for determining child support.' The first step requires the computation of combined parental income' (Domestic Relations Law § 240 [1-b] [b] [4]; [c] [1]). The amount of "income" attributed to each parent is derived by adding gross income, as reported on the most recent Federal tax return, and, to the extent not included as gross income, investment income, imputed income and other "income received" by the parent from eight enumerated sources' (Matter of Graby v Graby, 87 NY2d 605, 609-610 [1996], citing Family Ct Act § 413 [1] [b] [5])."
(Holterman v. Holterman, 3 NY3d 1, 10 [2004]). The court in Holterman further noted that the:
Family Court Act § 413 parallels Domestic Relations Law § 240(1-b). Both statutes were enacted as part of the CSSA (see L 1989, ch 567, §§ 7, 8). The eight enumerated sources of income received are workers' compensation, disability benefits, unemployment insurance benefits, Social Security benefits, veterans benefits, pensions and retirement benefits, fellowships and stipends, and annuity payments (see Domestic Relations Law § 240[1-b][b][5][iii][A]-[H]).
(Holterman, 3 N.Y.3 at 10, n 6). Hence, case law interpreting the CSSA as enacted pursuant to the Family Court Act is equally applicable to cases interpreting the CSSA as enacted pursuant to the Domestic Relations Law.
Finally, "[a] court may deviate from directing a noncustodial parent to pay his or her share of the basic child support obligation under the [CSSA] if it finds that amount to be unjust or inappropriate'" (see e.g. Hodges v. Hodges, 35 AD3d 370 [2 Dept., 2006], citing DRL § 240[1-b][f]; Bast v. Rossoff, 91 NY2d 723, 727 [1998]; Matter of Wade v. Pegues, 296 AD2d 417 [2 Dept., 2002]; Matter of Cary v. Megerell, 219 AD2d 334, 336 [3 Dept.,996], lv dismissed 88 NY2d 1065 [1996]).
The statutory language that allows a court to modify child support provisions is found in Domestic Relations Law section 236(B)(9)(b), which states that:
"Upon application by either party, the court may annul or modify any prior order or judgment as to maintenance or child support, upon a showing of the recipient's inability to be self-supporting or a substantial change in circumstance or termination of child support awarded pursuant to section two hundred forty of this article, including financial hardship."
In discussing the modification of provisions pertaining to child support contained in a separation agreement that is incorporated, but not merged into the judgment, as is the case here, the Court of Appeals has explained that:
"The terms of a separation agreement incorporated but not merged into a judgment of divorce operate as contractual obligations binding on the parties (see Merl v Merl, 67 NY2d 359 [1986]). Thus, where the parties have provided for child support within a separation agreement, it is to be assumed that they have anticipated and adequately provided for the child's future needs and the terms of the agreement should not be freely disregarded' (Matter of Boden v Boden, 42 NY2d 210, 212-213 [1977]). . . . [I]n Boden, we recognized the need for modification based on maintaining the fairness of the original agreement as between the parties in light of a subsequent unanticipated change in circumstances, or undoing an agreement that was unfair ab initio."
(Gravlin v. Ruppert, 98 NY2d 1, 5 [2002]). It has also been recognized, however, that "the change in circumstances must be substantial" (Davis v. Davis, 13 AD3d 623, 624 [2004], citing Beard v. Beard, 300 AD2d 268 [2 Dept., 2002], lv dismissed 5 NY2d 746 [2005]; accord Matter of Fragola v. Alfaro, 45 AD3d 684, 685 [2 Dept., 2007]; Cervone v. Cervone, 44 AD3d 985, 986 [2 Dept., 2007]; Gross v. Gross, 15 AD3d 442 [2 Dept., 2005]).
As is also relevant herein:
"The party seeking modification of a support order has the burden of establishing the existence of a substantial change in circumstances warranting the modification (see Matter of Marrale v Marrale, 44 AD3d 773; Carr v Carr, 187 AD2d 407). In exercising its discretion whether to modify a child support order, the . . . Court may consider various factors, including a loss of income or assets by a parent or a substantial improvement in the financial condition of a parent' (Matter of Brescia v Fitts, 56 NY2d 132, 141[citations omitted]; see Family Ct Act § 451)."
(Nieves-Ford v .Gordon, 47 AD3d 936, 936-937 [2 Dept., 2008]; accord Matter of Figueroa v. Herring, ___ AD3d ___, 2009 NY Slip Op 3519, 1-2 [2 Dept., 2009]). " Importantly, in determining if there is a substantial change in circumstances to justify a downward modification, the change is measured by comparing the payor's financial circumstances at the time of the motion for downward modification and at the time of the divorce or the time when the order sought to be modified was made" (Matter of Parascandola v. Aviles, 59 AD3d 449, 450 [2 Dept., 2009], quoting Matter of Sannuto v. Sannuto, 21 AD3d 901, 903 [2 Dept., 2006]; Klapper v. Klapper, 204 AD2d 518, 519 [2 Dept., 1994]). Further, a party seeking downward modification of his or her child support obligation must demonstrate that the alleged changes in financial position was not of his or her own making (see e.g. Matter of Arciniega v. Arciniega-Luizzi, 48 AD3d 677 [2 Dept., 2008]; Matter of Broomhall v. Jones, 47 AD3d 711 [2 Dept., 2008]; Matter of Terjesen v. Terjesen, 29 AD3d 705, 705 [2 Dept., 2006]; Matter of Heyward v. Goldman, 23 AD3d 468, 469 [2 Dept., 2005]).
"Where the change in circumstances is the loss of employment, a party seeking a downward modification must make a good-faith effort at seeking re-employment commensurate with his or her qualifications and experience" (Davis, 13 AD3d at 624, citing Matter of Madura v. Nass, 304 AD2d 579, 580 [2 Dept., 2003]; Matter of Musumeci v. Musumeci, 295 AD2d 516 [2002]; Matter of Austein-Gillman v. Gillman, 292 AD2d 524 [2 Dept., 2002]). Further:
"A parent's loss of employment may constitute such a change in circumstances, justifying a downward modification, where the termination occurred through no fault of the parent and the parent has diligently sought re-employment (see Beard v Beard, 300 AD2d 268 [2002]; Matter of Yepes v Fichera, 230 AD2d 803 [1996]; Matter of Meyer v Meyer, 205 AD2d 784 [1994]). The proper amount of support to be paid, however, is determined not by the parent's current economic situation, but by the parent's assets and earning capacity (see Hickland v Hickland, 39 NY2d 1, 5-6 [1976]; Beard v Beard, supra; Matter of Yepes v Fichera, supra; Matter of Fries v Price-Yablin, 209 AD2d 1002)."
(Matter of Muselevichus v. Muselevichus, 40 AD3d 997 [2 Dept., 2007]; accord Matter of Fragola, 45 AD3d 684; Matter of Terjesen, 29 AD3d 705; Matter of Heyward v. Goldman, 23 AD3d 468 [2 Dept., 2005]; Matter of D'Altilio v. D'Altilio, 14 AD3d 701 [2 Dept., 2005]).
Hence, by way of example, in Cox v. Cox (20 AD3d 527 [2 Dept., 2005]), it was held that Family Court erred in concluding that the father's loss of employment was not an unanticipated change of circumstances where there was no evidence in the record from which the court could reasonably conclude that he should have anticipated the loss of his most recent employment because he had been terminated from his previous position. The court therefore remitted the matter for a determination of the issue of whether the father made a diligent search for new employment commensurate with his qualifications and experience (see also Matter of Awwad v. Awwad, ___ AD3d ___, 2009 NY Slip Op 3719, 1-2 [2 Dept., 2009] [although the loss of employment can constitute a change in circumstances, the father failed to present competent proof that, after he lost his job, he made a good-faith effort to obtain new employment commensurate with his qualifications and experience]; Matter of Falk v. Owen, 29 AD3d 991 [2 Dept., 2006] [the father was not entitled to a downward modification of his child support obligation where he admitted that he voluntarily left his job in Westchester County and moved to Otsego County, where he obtained employment at less than half the salary he had been earning because he felt obliged to relocate in order to care for his 60-year-old mother who had back problems that required surgery, since he did not establish that the change in his financial circumstances was unavoidable, especially in light of the evidence that he had two sisters who already lived in the immediate vicinity of his mother]; Baffi, 24 AD3d 578 [defendant did not meet his burden warranting vacatur of his support obligations or a reduction beyond the extent ordered by the court where he established that the number of jobs in his field decreased dramatically due to a consolidation in the industry resulting from a change in governmental regulations, but he took a low-paying job as manager of a flower shop and did not keep up his efforts to find a position commensurate with his qualifications and experience, so that the court properly imputed income to him based on his prior earnings history and based on the value of the rent-free home provided for him by a relative]; Carr, 19 AD3d at 843 [father's petition for downward modification of his support obligation was denied where the evidence demonstrated that his income and assets remained substantial, he voluntarily depleted his savings to maintain his prior standard of living, he conceded that he typically billed no more than 18 hours per week at the law firm where he was employed, and he spent significant sums of money on luxuries such as country club fees and lawn care, all of which belied any claim that he could not afford his child support obligation]; Fries, 209 AD2d at 1003 [a parent responsible for support may not unilaterally forego employment in an attempt to evade support responsibilities]).
Further, it must also be recognized that in determining the amount of child support to be paid pursuant to CSSA, the Appellate Division, Second Department has held that "[t]hat provision permits a court to allocate a portion of a parent's non-recurring income to child support" (Mirkin v. Mirkin, 43 AD3d 1115 [2 Dept., 2007] [citations omitted]). Hence, for example, the court may properly impute a personal injury settlement award as income in crafting the amount of a child support award, particularly where a portion of such award was intended to compensate the father for future wages he would not be able to earn due to an injury which occurred during the course of his employment (Christian v. Christian, 5 AD3d 765, 766 [2 Dept., 2004]; accord Boyette v. Wilson, 291 AD2d 908, 908-909 [4 Dept., 2002] [the court erred in failing to consider that portion of respondent's personal injury award consisting of lump-sum payments at five-year intervals, including the initial lump-sum payment of $500,000, in determining respondent's child support obligation]. Similarly, in LaBombardi v. LaBombardi (220 AD2d 642, 644 [2 Dept., 1995]), the court held that it was proper to consider whether, in accordance with Domestic Relations Law section 240(1-b)(e), any portion of a $10,000.00 annuity payment which plaintiff expected to receive should be allocated to child support. It has also been held that a party's interest in a trust may also be considered by the court in making child support determinations (see e.g. Cynoske v. Cynoske, 8 AD3d 720, 724 [3 Dept., 2004], citing DRL 240[1-b][b][5][iv], [e]; Alvares-Correa v. Alvares-Correa, 285 AD2d 123, 126-127 [1 Dept., 2001], lv denied 97 NY2d 608 [2002]).
Also instructive is Cody v. Evans-Cody (291 AD2d 27 [2 Dept., 2001]), in which the court held that the Family Court erred in failing to award additional child support to petitioner father, based upon respondent mother's inheritance from her father's estate that "had been entirely spent" financing her move to Arizona to work on a ranch. Therein, the court reasoned that although inheritances are not included in the combined parental income used to calculate the "basic child support obligation" under the CSSA (see DRL § 240[1-b][e][4]; Family Ct Act § 413[1][e]) the CSSA expressly authorizes the court to treat the entire amount of a parent's inheritance as an available resource and award additional support. Hence, a child support award based solely on respondent's minimal income as a wrangler was held to be unjust and inappropriate in light of the $130,000 available to her when she left the marital residence, since the standard of living maintained by the family during the marriage was made possible because petitioner's modest income was supplemented by respondent's inheritance. In holding that respondent could not insulate an inheritance from consideration for child support by transforming it into a non-income producing asset, the court explained that:
"A court has the discretion to consider an inheritance as a financial resource, notwithstanding the fact that the parent may have spent it (see, Humphreys v DeRoss, 1999 PA Super 208, 737 A2d 775 [Pa], lv granted 563 Pa 216 [father used inheritance to purchase new home and other items for his new family; court ruled that entire amount of inheritance should be included as gross income used to calculate his support obligation]; County of Kern v Castle, 75 CaApp4th 1442, 455 [father spent entire inheritance between hearing dates; trial court abused its discretion in not factoring the inheritance into its support determination]; In re Marriage of Armstrong, 831 P2d 501, 502 [Colo] [father used inheritance to make gift to new wife and maintain business ventures; court imputed interest income inheritance would have generated if invested]; Connell v Connell, 313 NJSuper 426 [father used inheritance funds to buy a new home; court imputed interest income inheritance would have earned if invested])." As the Third Department has observed:
"It is not necessary that the court be able to impute income from an asset in order to consider it as a resource. Once the amount of basic child support obligation is found to be unjust or inappropriate, all resources may be considered, in whatever manner the court deems reasonable. In a given set of circumstances, the court may determine that it is appropriate to require a parent to reinvest or liquidate certain assets to provide for his or her children.' (Matter of Webb v Rugg, 197 AD2d 777, 779 [emphasis added]; see also, Matter of Ogborn v Hilts, 262 AD2d 857, 859.)"
(Cody, 291 AD2d at 32).
In addressing the issue of whether a parent's assets could properly be considered in making an award of child support, in Matter of Fragola (45 AD3d 684), it was held that the trial court properly considered the father's real estate holdings and his bank account, as well as his earning capacity, and determined that, under the circumstances, the father was not entitled to a downward modification. In Ogborn v. Hilts (262 AD2d 857 [3 Dept., 1999]), the court held that the Family Court did not err in concluding that petitioner father's nonincome-producing assets could be considered in determining whether petitioner had established a sufficient basis for a downward modification of his child support obligation, since the CSSA grants Family Court discretion to attribute or impute income from nonincome-producing assets to a parent charged with the support of his or her children and the father therein did not dispute that he received an $85,000 personal injury settlement in 1996, he owned two vehicles valued at $ 16,000 and $14,000, a residence with a net equity of $79,000, an $8,000 building lot and an IRA with a value of over $5,000. In so holding, as quoted above, the court held that it was not necessary for the court to be able to impute income from an asset in order to consider it as a resource, all resources may be considered, in whatever manner the court deems reasonable and that in a given set of circumstances, the court may determine that it is appropriate to require a parent to reinvest or liquidate certain assets to provide for his or her children.
In addressing the issue of how such a payment should be treated, it has been held that:
"One approach where a parent receives a nonrecurring large sum of money is to increase the weekly (or other periodic payment) support obligation by applying a reasonable rate of return to the funds received and imputing that amount as income (cf. Matter of Cody v Evans-Cody, 291 AD2d 27 [2001]). Indeed, this may be a preferred approach in most situations involving a lump-sum settlement. However, directing the payment of a portion of the nonrecurring sum received is not precluded by the statute (see Family Ct Act § 413) and may be appropriate under some circumstances (cf. Matter of Bryant v Bryant, 235 AD2d 116 [1997])."
(Matter of Walker v. Gilbert, 39 AD3d 1112, 114 [3 Dept., 2007]). Similarly, it has been held that:
"[W]hile New York does not consider inheritances to fall within the statutory definition of gross income used to calculate a parent's basic child support obligation, it treats the entire amount of the inheritance as an available resource where additional support is warranted. In awarding additional support based upon this resource, the court is not limited to the amount of interest that the inheritance earned or would have earned if invested (see, Domestic Relations Law § 240[1-b][e][4]; Family Ct Act § 413[1][e])."
(Cody, 291 at 31).
As is also relevant herein, it is well settled that "a court is not required to rely upon a party's own account of his or her finances and may impute income based upon that party's past income or demonstrated earning potential (see e.g. Matter of Azrak v. Azrak, 60 AD3d 937 [2 Dept., 2009]; Talero v. Talero, 1 AD3d 522 [2 Dept., 2003]). It is equally clear that the court has discretion to impute income to a parent based upon "money, goods, or services provided by relatives and friends'" (Matter of Simmons v. Simmons, 48 AD3d 691, 692 [2 Dept., 2008], quoting Domestic Relations Law § 240[1-b][b][5][iv][D]; Family Ct Act § 413[1][b][5][iv][D]; citing Matter of Abellard v. Aime, 18 AD3d 653 [2 Dept., 2005]; Mellen v. Mellen, 260 AD2d 609, 610 [2 Dept., 1999]; Matter of Ladd v. Suffolk County Dept. of Social Servs., 199 AD2d 393, 394 [2 Dept., 1999]; see also Baffi v. Baffi, 24 AD3d 578 [2 Dept., 2005] [it was proper for the court to impute income to the defendant based on his prior earnings history and based on the value of the rent-free home provided for him by a relative]; Miller v. Miller, 18 AD3d 629, 631 [2 Dept., 2005] [the court should have considered the assistance plaintiff received from her mother when calculating her child support obligation for the son]; La Point Phelps v La Point, 284 AD2d 605, 609 [3d Dept 2001] [it is well settled that for purposes of determining the amount of a parent's child support obligation, a court has the discretion to impute income where the parent receives financial support from a relative]; Johnson v. Robusto, 254 AD2d 828, 829 [4 Dept., 1998] [the Hearing Examiner properly attributed to respondent $3,000 in gifts from his brother to pay respondent's mortgage]).
In addressing the issues now before the court, it must also be recognized that once it is determined that modification is warranted, the court must also consider whether imposition of CSSA standards is the appropriate remedy after the contracted-for support provisions fails (see e.g. Gravlin, 98 NY2d at 7; see also Cimons v. Cimons, 53 AD3d 125 [2 Dept., 2008] [once a portion of the parties' agreement must be set aside, the basic child support obligation must be recalculated through the application of the CSSA]; Barbanes v .Smith, 27 AD3d 404, 404 [2 Dept., 2006] [under the circumstances, the court properly vacated the child support provisions of the separation agreement and properly required plaintiff to begin paying child support in an amount that would be determined pursuant to the CSSA]; Thomas v. DeFalco, 270 AD2d 277, 278 [2 Dept., 2000] [the Hearing Examiner properly based her calculations on the CSSA, since application of the CSSA to calculate child support is mandatory in determining modification petitions]). In addition, in applying the CSSA, the court must articulate and set forth the reasons why it applied the statutory percentage to any combined parental income exceeding $ 80,000 (see e.g. Barbanes, 27 .D.3d at 404, citing Matter of Cassano, 85 NY2d at 654; Eisenberg v. Eisenberg, 302 AD2d 422, 423 [2 Dept., 2003]; accord Clerkin v. Clerkin, 304 AD2d 784, 785 [2 Dept., 2003] [the court properly determined that the father was entitled to child support based upon an unanticipated change in circumstances creating the need for modification of child support obligations; the application of the statutory formula to the combined parental income over $80,000, however, failed to reflect a careful consideration of the parties' circumstances, having failed to set forth the factors it considered with respect thereto]).
It is also well settled that "[i]f the party seeking modification of his or her maintenance or child support obligations presents genuine issues of fact regarding his or her entitlement to a downward modification, then the court must conduct a hearing to determine whether modification is warranted" (David v. David, 54 AD3d 714 [2 Dept., 2008]).
Discussion
Herein, it is not disputed that defendant's income decreased from $170,000 per year when the Stipulation was executed in 1993 to $90,000 per year when the instant application was made in 2008. Defendant, however, fails to offer any evidentiary support for his assertion that this decrease in earnings was of not of his own making. More specifically, he fails to attach any documents to corroborate his claim that he diligently sought other employment after he was laid off, that he was unable to find employment at a higher salary and that he continues to search for another position with a salary commensurate with his prior earnings. In addition, the above discussion of law establishes that the court can impute income to a parent based upon contributions made by friend or relative (see Matter of Simmons, 48 AD3d at 692; Baffi, 24 AD3d 578; Matter of Abellard, 18 AD3d 653; Miller, 18 AD3d at 631; La Point Phelps, 284 AD2d at 609; Mellen, 260 AD2d at 610; Johnson, 254 AD2d at 829; Matter of Ladd, 199 AD2d at 394). Although defendant is now residing with his fiancé in the Brownstone and he plans to remarry in July, he does not address of what contribution, if any, she makes to his expenses, which contributions the court can consider in imputing income to him.
Moreover, inquiry does not end here, since plaintiff argues that defendant should not be granted any reduction in his child support obligation in view of the fact that he owns an apartment that she contends is valued at $1,200,000.00 and that he declined to hold onto the profits from the sale of the other two units when he sold the Brownstone to secure his ability to pay child support. The above discussed case law precedent unequivocally establishes that the court has the discretion to consider the non-recurring income that defendant realized when he sold the two units in the Brownstone last year (see Mirkin, 43 AD3d at 1116; Cynoske, 8 AD3d at 724; Christian, 5 AD3d at 766; Boyette, 291 AD2d at 908-909; Cody, 291 AD2d 30-31; LaBombardi, 220 AD2d at 644; Alvares-Correa, 285 AD2d at 126-127), and/or the value of the unit that he retained (see Matter of Fragola, 45 AD3d 684; Ogborn, 262 AD2d 857). Further, although plaintiff avers that defendant sold the two units for $1,045,000.00, this amount does not constitute income, since the costs of conversion, the payoff of any existing mortgage, the capital gains tax and other costs incurred in the sale have to be taken into account in order to determine income. In addition, neither party offers any evidence with regard to the value of the Brownstone or the value of the unit that he retained, with each instead relying upon his or her unsubstantiated opinions.
Plaintiff also fails to acknowledge that defendant's equity in the unit includes his equitable distribution award in the amount of $350,000.00. In this regard, it must be recognized that there is no authority to support plaintiff's conclusion that an award of equitable distribution may be considered as income in determining the proper amount of child support to be paid (see generally Holterman, 3 NY3d at 13 [the CSSA does not permit a distributive award to be viewed as income for the purpose of allocating combined parental income]). It is clear, however, that:
"Although the Child Support Standards Act does not provide for nor permit the inclusion or deduction of a distributive award when calculating parental income (see Holterman v Holterman, 3 NY3d 1, 11 [2004]; Domestic Relations Law § 240[1-b]), because a distributive award to be paid by one parent to the other pertains to the financial resources of the parties,' it is an appropriate factor to be considered by the court when determining the appropriate amount of child support for income in excess of $80,000 (Holterman v Holterman, supra at 14; see Domestic Relations Law § 240[1-b][c][3]; [f][1], [10])."
(Carman v. Carman, 22 AD3d 1004 [3 Dept., 2005]).
Accordingly, in view of these factual issues, the court is unable to determine whether defendant met his burden of establishing a substantial, unanticipated change in circumstances so as to be entitled to a downward modification of his child support obligation and, if so, how much, on the papers now before the court. The issue must therefore be determined after a hearing at which evidence addressing the above issues can be presented by the parties, including a searching inquiry into defendant's financial transactions since the stipulation and judgment. The court must be assured that defendant is not trying to extricate himself from his obligations pursuant to the judgment which was predicated on the parties agreement after obtaining his own financial security.
This hearing shall be held before Special Referee Charmaine Henderson.
As the above discussion of the issues presented makes clear, however, in order to properly determine defendant's motion for downward modification, the court must consider the parties' 2008 federal income taxes, since those returns represent the parties' earnings in the past year (see Holterman, 3 NY3d at 10; Matter of Graby, 87 NY2d at 605). It is particularly necessary that these returns are before the court in resolving the instant dispute, since defendant's return will evidence the income that he realized from the sale of the two units in the Brownstone. The parties are therefore ordered to exchange copies of his and her 2008 federal income tax return (see generally Kahn v. Oshin-Kahn, 43 AD3d 253, 256 [1 Dept., 2007] [the motion court's order insofar as it directed defendant to produce certain income tax returns was affirmed, since it was obvious that the financial circumstances of both parties were relevant to determining the appropriate amounts of maintenance and child support in determining plaintiff father's cross motion for downward modification of his child support obligation]), along with discovery demands addressing the other financial issues noted above, on or before July 15, 2009.
Arrears
The Parties' Contentions
By way of background, plaintiff advises the court that in 2006, after defendant fell into arrears in his child support obligation, he commenced a proceeding seeking a downward modification in family court. When the proceeding was adjourned to allow plaintiff to retain counsel, defendant commenced an enforcement proceeding. Prior to the return date, defendant withdrew his petition. On the return date, the parties entered into an agreement for the payment of arrears and counsel fees.
Since plaintiff has not provided the court with a transcript, the court will not address her allegations with regard to the proceeding before the Support Magistrate.
In opposition to plaintiff's cross motion, defendant alleges that when his severance package with the Smithsonian Institute ended, he was only able to pay $1,000.00 a month in child support, so that he fell into arrears. When plaintiff refused to agree to a reduction, he filed a petition in family court seeking a downward modification. Within two weeks of the hearing date, he secured a three month consulting position with The Waterford Press; this position, along with a withdrawal from his 401K plan, provided him with enough money to continue to pay $2,000.00 per month in child support, as required pursuant to the Stipulation., so that he withdrew his petition. When his position with The Waterford Press ended in March 2007, he again requested that plaintiff agree to a reduction in his child support obligation and she again refused; since he could only afford to pay $1,000.00 per month in child support, he again fell into arrears. When he secured his position with Dova, he was earning only $70,000.00 per year and did not have any health benefits; he again advised plaintiff that he could not afford the $2,000.00 per month child support obligation and she again refused to agree to any modification. During this period of time, defendant assured plaintiff that he would be able to become current on the arrears when the Attorney General approved the conversion plan and the two units were sold. In May 2008, he was offered the position with Kaplan at a salary of $90,000.00, which was significantly less than his salary at the Smithsonian Institute. Moreover, as was discussed above, after the two units in the Brownstone were sold in October 2008, he paid $24,000.00 to satisfy his child support arrears in full. Plaintiff, however, continued to refuse to bring his child support obligation in line with the 17% required by the CSSA instead of the 30% of his salary that he is now paying pursuant to the Stipulation.
Defendant further avers that no child support payments are past due and owing. More specifically, he alleges that after plaintiff sent him an invoice on February 9, 2009, he sent a check to her on February 11, 2009; the cross motion was served on February 12, 2009.
In reply, plaintiff argues that defendant is habitually late in his payment of child support, as is made clear by his admission that he used $24,000.00 of the proceeds from the sales of the units in the Brownstone to satisfy his outstanding arrears and by his assertion that he did not send the February 2008 payment until well after the first of the month, when it is due, and only after she sent him an invoice. Further, plaintiff alleges that she did not receive the March payment for defendant's basic child support obligation until the 9th of the month, so that that payment was late as well, and she had not received his share of the child care expenses as of March 10, when her affidavit was completed. Plaintiff further claims that defendant has refused to provide her with copies of his income tax returns every year so that his child support obligation can be increased in accordance with the annual cost of living adjustment, commencing August 1, 2005, as provided for in the Stipulation.
The Stipulation
As is relevant herein, defendant is obligated to pay basic child support in the amount of $2,000.00 per month, on the first day of each month, as discussed above. In addition, the Stipulation provides that:
"The parties shall share all costs of [the] child care provider, on a monthly basis (with payments by the Father to the Mother made on the first day of the month, in advance), pro-rata, based upon each party's respective gross income as reported on his/her federal income tax returns for the prior year."
(Stipulation, Art V, para 6[a], p 29).
Discussion
While the court does not condone defendant's conduct, it appears that he has been habitually late in making his child support payments. It further appears that plaintiff has acquiesced in his behavior. In this regard, plaintiff is correct in arguing that defendant's obligation to pay child support is not dependent upon her providing him with invoices (see generally Matter of Brink v. Brink, 55 AD3d 601, 602 [2 Dept., 2008] [the Support Magistrate incorrectly interpreted the judgment of divorce and the separation agreement in denying those branches of the mother's petition for reimbursement of child care, summer camp, and unreimbursed health care expenses, since there was no requirement that the mother present a formal demand to the father for reimbursement]). More significantly, however, it appears that defendant had satisfied the arrears that were due and owing by the time that the instant cross motion was served. In addition, plaintiff offers no explanation of how she calculated the parties' respective contribution to child care expenses, since the Stipulation provides that defendant's obligation is premised upon the income that the parties earned in the last year and plaintiff claims that he has not provided her with a copy of his income tax return.
Accordingly, plaintiff's motion for a money judgment is denied. Defendant is urged, however, to begin making payments in a timely fashion.
Medical Insurance
The Parties' Contentions
Plaintiff argues that although the Stipulation requires that defendant provide and pay for health insurance for the child, he has not done so since the insurance coverage provided by the Smithsonian Institute terminated in September 2006. Since that time, she has been forced to provide such insurance. Plaintiff accordingly concludes that defendant should be ordered to provide health insurance coverage or, in the alternative, he should be ordered to pay for the medical insurance that she obtained.
In opposition, defendant alleges that when he was unable to secure employment when his severance package from the Smithsonian Institute ended in October 2006, he was not able to afford the COBRA payments on his existing health insurance for the child, so he applied for coverage through the New York State Health Plus Program. Plaintiff refused to participate in this plan and instead took out a policy through Worldwide Health Insurance.
In reply, plaintiff argues that defendant enrolled the child in the Health Plus Plan without consulting her. While she admits that she did not want to join that plan because she did not want to have to use the doctors mandated thereunder, she further avers that the child was dropped from the Health Plus Plan during the summer of 2007 because of discrepancies between defendant's application and his 2006 income tax return. Plaintiff claims that she therefore had no choice but to obtain medical insurance for the child herself and did so by placing the child on her plan with a Danish company called ICHI/Bupa. That plan provided free coverage until the child reached the age of ten and the cost of coverage thereafter will likely be $3,000.00 per year, with an annual deductible of $1,600.00.
The Stipulation
As is relevant herein, the Stipulation provides that "[t]he Husband presently carries health insurance through his employment for the Child and shall continue to do so until the Child is emancipated" (Stipulation, Article V, para 5, p 29).
Discussion
The Stipulation clearly requires defendant to provide medical insurance for the child. Defendant does not refute plaintiff's contention that he has failed to do so, nor does he move to modify or eliminate his obligation to provide the insurance. Accordingly, that branch of plaintiff's cross motion seeking an order directing defendant to provide medical insurance coverage for the child, at his expense, is granted. If plaintiff chooses to continue the medical insurance currently in place, at her sole expense, she shall so notify defendant within 10 days of service upon her of a copy of this order with notice of entry and defendant shall be relieved of this responsibility. If plaintiff does not so notify defendant, he is ordered to obtain medical insurance for the child within 40 days of service upon him of a copy of this order with notice of entry, and to so notify plaintiff within ten days thereafter; plaintiff is directed to cooperate with defendant to the extent necessary to obtain this coverage. If defendant fails to obtain coverage within this period, he is ordered to begin paying the monthly premiums on the policy obtained by plaintiff.
Life Insurance
The Parties' Contentions
Defendant argues that the life insurance policy that was in force when the Stipulation was signed terminated when his severance package from the Smithsonian Institute ended and his attempts to convert the policy to personal insurance failed due to his chronic autoimmune disease. Similarly, he has tried to obtain another policy, but has not been able to do so. In this regard, defendant alleges that only one company would consider a policy in the amount of $100,000.00, but with a monthly premium of $1,250.00. Defendant therefore requests that the amount of the life insurance policy that he agreed to maintain be adjusted or terminated to reflect his current financial and medical conditions.
In opposition, plaintiff argues that defendant's contention that he should be relieved of the obligation to provide life insurance in the amount of $750,000.00 because such coverage can only be obtained at a prohibitive cost should be rejected by the court, since his medical condition predated the Stipulation. Hence, plaintiff argues that if defendant knew that he could not obtain the insurance, he should not have agreed to do so. Since he did not, he should not now be permitted to argue that he cannot afford the agreed upon coverage.
In reply, defendant avers that on October 24, 2006, he applied for term life insurance in the amount of $350,000.00 with the Prudential Life Insurance Company to supplement the $400,000.00 that he was provided with through his employment with the Smithsonian Institute; on January 15, 2007, his application was denied because of his illness. Although he continued to shop for insurance, his applications were denied after an initial screening because of his illness. Now that he is again employed, Kaplan provides him with coverage in the amount of $250,000 and the child is named as the beneficiary of that policy. Defendant further contends that although he was aware that he had a medical condition at the time that the Stipulation was signed, he was not aware that he would not be able to obtain life insurance. He further avers that neither party earns enough money to comply with the terms of the Stipulation as it pertains to life insurance, since it appears that plaintiff pays in excess of $1,000.00 per month for her coverage.
The Stipulation
With regard to the issue of life insurance, the Stipulation provides, in pertinent part, that:
"The Husband now carries through his employment, or shall obtain, a life insurance policy or policies on his life having an aggregate death benefit of not less than Seven Hundred and Fifty Thousand ($750,000,) Dollars for the irrevocable benefit of the Child, wherein the parties' Child shall be designated the irrevocable beneficiary, with the Wife designated as Trustee for the benefit of the Child until such time as the Child is emancipated."
(Stipulation, Art VII, para 1, p 37).
As is also relevant to the instant dispute, the Stipulation provides that:
"If as a result of the Husband's breach of his obligations under this article the full amount of the life insurance is not paid to the proper beneficiary upon the death of the Husband, in accordance with the provisions of this Article, then the Husband's estate shall be liable for the amounts specified in this Article and such indebtedness shall be a first charge and lien against his estate. The insurance proceeds provided for in this Article to be paid to the Child shall be paid to the Child free and clear of any transfer, estate or inheritance taxes accrued through or after the date of the Husband's death."
(Stipulation, Art VIII, para 7, p 40).
The Law
The parties' unmerged Stipulation provides that the husband was obligated to provide life insurance in the amount of $750,000.00 for the benefit of the child.
This agreement was entered into with the parties full knowledge that there was a pre-existing medical condition. In fact, the contract provides for a contingency in the event that the life insurance is not in place at the time of his death. The fact that the husband now argues that the cost of this agreement is too much is not unanticipated. This was a contentious divorce action where both parties were fully represented by competent counsel. To contend that the life insurance costs too much and therefore, is a basis to vitiate his obligations when the parties and counsel knew that he had a preexisting condition at the time the agreement was entered appears to be disingenuous. This was one of many issues that the parties bargained for at the time they entered into their agreement. The fact that you may not have a perfect agreement or believe that you made a "bad deal" is not a basis to be relieved of the obligation (see Brod v. Brod, 48 AD3d 499, 852 NYS2d 272 [2 Dept., 2008] ["A settlement agreement in a matrimonial action is a contract subject to principles of contract interpretation. Where the intention of the parties is clearly and unambiguously set forth, effect must be given to the intent as indicated by the language used."] see also Resnick v. Resnick, 52 AD3d 678, 858 NYS2d 900 [" . . . it was in accord with the parties' clear and unambiguous separation agreement"]).
In so holding, the court notes that since the Stipulation provides that plaintiff shall have a first lien against defendant's estate in the event that he defaults on this obligation, she and the child are adequately protected in the event that defendant does not, or cannot, obtain adequate life insurance pending resolution of the issue of modification. In the interim, however, defendant is ordered to designate the child as the irrevocable beneficiary, with plaintiff designated as Trustee for the benefit of the child until such time as the child is emancipated, on any and all policies of life insurance currently provided to him by his employer or otherwise obtained by him within ten days of service upon him of a copy of this order with notice of entry and to provide plaintiff with proof of same within ten days thereafter.
Security for Payment of Child Arrears
The Parties' Contentions
In support of this branch of her cross motion, plaintiff argues that inasmuch as defendant sold the Brownstone at a profit and is now seeking a downward modification of his child support obligation because he has no liquid assets and substantially reduced income, the court should order him to sell his apartment, with $200,000.00 being held in an account to secure future payments of child support, particularly in view of history of arrears.
In opposition to this demand, defendant first argues that no arrears in child support remain outstanding. He further contends that there is no legal authority to support the order requested by plaintiff. Defendant therefore concludes that plaintiff's request borders on frivolous and only serves to illustrate how bitter she is that he purchased the Brownstone. Moreover, defendant contends that since he never had a duty to sell his home and retain the cash to secure his child support obligation, his actions in converting it to a condominium and selling two units do not evidence bad faith and do not constitute misconduct.
In her reply papers, plaintiff alleges that pursuant to the Stipulation, defendant is obligated to pay child support in the amount of $2,000.00 on the first of each month, without regard to whether or not she sends him an invoice; defendant is routinely late in making the payments. In addition, the Stipulation requires that the parties will exchange income tax returns annually and that defendant's child support will be adjusted in accordance with the consumer price index; no such adjustments have ever been made.
The Law
"It is well settled that upon motion by a judgment creditor, the court may, in its discretion, appoint a receiver to sell any real property in which the judgment debtor has an interest for the purpose of satisfying an outstanding judgment" (Chlopecki v. Chlopecki, 296 AD2d 640, 641 [3 Dept., 2002], citing CPLR 5228[a]; Sealy v. Sealy, 57 AD2d 893, 893 [2 Dept., 1977]).
CPLR 5228(a) provides, in pertinent part, that:
"Upon motion of a judgment creditor, upon such notice as the court may require, the court may appoint a receiver who may be authorized to administer, collect, improve, lease, repair or sell any real or personal property in which the judgment debtor has an interest or to do any other acts designed to satisfy the judgment."
As is also relevant herein, pursuant to Domestic Relations Law section 243, the court has the authority to sequester assets where an obligated party fails "to make any payment required by the terms of such a [matrimonial] judgment or order."
"Enforcement of the support and maintenance provisions of an order or judgment entered in a matrimonial action by resort to sequestration and the appointment of a receiver pursuant to Domestic Relations Law § 243, is a drastic remedy, and should be invoked only when the record establishes that this remedy is necessary and appropriate (see, Matter of Brennan v Brennan, 109 AD2d 960, 961; see also, Peters v Peters, 127 AD2d 575; Hildenbiddle v Hildenbiddle, 110 AD2d 819). The appointment of a receiver is proper where the payor has a history of noncompliance with an obligation to pay temporary maintenance and child support (see, Catrone v Catrone, 92 AD2d 559)."
(Rogers v. Rogers, 190 AD2d 720, 722 [2 Dept., 1993]). Stated differently:
"[T]he appointment of a temporary receiver is an extreme remedy which can only be invoked in cases in which the moving party has made a clear evidentiary showing of the necessity for conservation of the property and protection of the interests of the movant (see, Serdaroglou v Serdaraglou, 209 AD2d 606; Modern Collection Assocs. v Capital Group, 140 AD2d 594)."
(DaSilva v. DaSilva, 225 AD2d 513 [2 Dept., 1996]). The determination of a request for the appointment of a receiver is addressed to and invokes the discretion of the court (see e.g. Fuegel v. Fuegel, 232 AD2d 608, 609 [2 Dept., 1996], citing Adinolfi v Adinolfi, 168 AD2d 401, 402 [2 Dept., 1990]; Rose v. Rose, 138 AD2d 475, 477 [2 Dept., 1988]).
Accordingly, the appointment of a receiver was found to be proper where the person obligated to make the payments repeatedly failed to pay and refused to comply with court orders (Manno v. Manno, 224 AD2d 395, 401 [2 Dept., 1996] [citations omitted]). Similarly, the court found no error in the appointment of a receiver of real estate properties pursuant to Domestic Relations Law section 243 in light of the husband's demonstrated propensity to remove and dissipate marital assets, to be less than forthcoming regarding his finances, and to disregard provisions of court orders and judgments with which he was able to comply (Lekutanaj v. Lekutanaj, 234 AD2d 429, 431 [2 Dept., 1996]). In another case, it was held that the appointment of a receiver was appropriate where the record was replete with evidence of the husband flouting prior court orders, his refusal to abide by the terms of the divorce judgment and his history of minimal or nonexistent employment over the past several years, so that the option of an income execution was not available (Beal v Beal, 196 AD2d 471, 472 [2 Dept., 1993]). As another example, it has been held that plaintiff wife was entitled to the remedy of sequestration under Domestic Relations Law section 243 under circumstances where defendant husband defaulted in the payment of the alimony decreed by the judgment and announced his intention not to comply therewith and to remain outside the jurisdiction of the court (Robinson v. Robinson, 24 AD2d 138, 139 [1 Dept., 1965]).
Discussion
As a threshold issue, the court will not address plaintiff's contentions with regard to defendant's alleged failure to increase his child support payments in accordance with an increase in the consumer price index inasmuch as plaintiff did not move or cross move for any relief on this basis (see CPLR 2214 and 2215; see generally Chun v. North American Mortgage. Co., 285 AD2d 42 [1 Dept., 2001] [the court was virtually without jurisdiction to grant the relief afforded to defendants where there was an absence of a notice of cross motion or any other notice to plaintiff that she would be required to respond to a motion to dismiss]; Bauer v. Facilities Dev., 210 AD2d 992 [4 Dept., 1994] [affidavits submitted in opposition to defendants' motions were insufficient to constitute a cross motion]).
Turning to the merits of plaintiff's demand, the court finds that she fails to allege facts sufficient to entitle her to the relief that she seeks. Significantly, inasmuch as there is no outstanding judgment against defendant, nor has a money judgment ever been issued against him, CPLR 5228 is inapplicable at this juncture.
Accordingly, "while the fact of some arrears is sufficiently established, defendant's claims of an extensive pattern of such, and of plaintiff's evasions of service of process, are too conclusory to warrant section 243 relief" (Sivigny v. Sivigny, 236 AD2d 205 [1 Dept., 1997]). In so holding, the court also notes that since defendant is a salaried employee, plaintiff could enforce any judgment that she may obtain by means of an income execution (see generally Matter of Sarfaty v. Recine, 37 AD3d 609, 610 [2d Dept., 2007], appeal withdrawn 8 NY3d 918 [2007], lv denied 8 NY3d 812 [2007]; Matter of Nieves-Ford, 26 AD3d at 385; Kramer v. Giannini, 2 AD3d 636, 638 [2 Dept., 2003]). In the alternative, since plaintiff owns the apartment in which he resides, plaintiff would also be able to enforce any money judgment that she may obtain against that property.
Attorneys' Fees
The Parties' Contentions
Plaintiff argues that she is entitled to an award of attorneys' fees in the amount of $12,500.00 to compensate her for the fees that she incurred in opposing defendant's motion and in making the instant cross motion.
In opposition, defendant argues that an award of attorneys' fees is inappropriate herein because there are no arrears due and owing and because no other basis exists for such an award.
The Stipulation
The Stipulation provides that:
"In the event that either party defaults with respect to any obligation hereunder, the defaulting party agrees to indemnify the other against or to reimburse him/her for any and all expenses, costs and attorney's fees at the customary hourly billing rates of the attorneys retained by the other party, resulting from or made necessary by the brining of any suit or other proceeding to enforce any of the terms, covenants or conditions of this Agreement to be performed or complied with by the other, provided such suit or other proceeding results in a judgment, decree or order in favor of the other. Any application for attorneys' fees hereunder shall be accompanied by an affidavit detailing the time spent by such attorneys by date, time, attorney and specific description of services for each such date and time.
"For the purpose of this Agreement, it is understood and agreed that in the event that a party shall institute a suit or other proceeding against the other to enforce any of the terms, covenants or conditions of this Agreement and after the institution of such action or proceeding and before judgment is or can be rendered, the defaulting party shall comply with such term or condition of the Agreement, then and in that [event], the suit, motion or proceeding instituted by the party shall be deemed to have resulted in a judgment, decree or order in favor of the other party."
(Stipulation, Art X, para 1 and 2, p 44-45).
The Law
It is well settled that a provision of a stipulation which obligates a defaulting party to reimburse the nondefaulting party for a reasonable attorney's fee incurred in seeking enforcement of its terms is enforceable (see generally Leiderman v. Leiderman, 50 AD3d 644, 646 [2 Dept., 2008]; Sayegh v. Sayegh, 49 AD3d 855 [2 Dept., 2008]; Brod v. Brod, 48 AD3d 499 [2 Dept., 2008]; Thelander v. Thelander, 42 AD3d 495, 496 [2 Dept., 2007]; Sieratzki v. Sieratzki, 8 AD3d 552, 555 [2 Dept., 2004]). It is equally well settled that "[w]ere the parties have agreed to provisions in a settlement agreement which govern the award of attorney's fees, the agreement's provisions, rather than statutory provisions, control" (Matter of Berns v. Halberstam, 46 AD3d 808, 809 [2 Dept., 2007]; accord Arato v. Arato, 15 AD3d 511, 512 [2 Dept., 2005] [where a stipulation of settlement provides the basis for an award of an attorney's fee, the terms of the agreement control]).
Discussion
Herein, the language of the parties' Stipulation clearly entitles the successful party seeking enforcement of the terms and conditions of the agreement to recover his or her attorneys' fees. Inasmuch as the post judgment issue herein has not been fully adjudicated, the request for counsel fees shall also be referred to Special Referee Henderson. Until there is a determination as to whom is the prevailing party the very issue is not ripe for adjudication pursuant to the terms of the parties stipulation.
Conclusion
For the above stated reasons, those branches of defendant's motion seeking a downward modification of his basic child support obligation is granted to the extent of setting the matter down for an evidentiary hearing. Plaintiff's cross motion is granted to the extent that defendant is directed to immediately obtain life insurance in the amount of $750,000.00 for the benefit of the parties' child, so long as the child is unemancipated, as required pursuant to the Stipulation and judgment of divorce. He is further directed to provide medical insurance, as provided above and the request for counsel fees shall be set down for a hearing. Plaintiff is entitled to comprehensive discovery in to test defendant's claim of a substantial change in circumstances, including, but not limited to, a review of his financial transactions and filings since the date of the agreement and earnings history on or before July 30, 2009, and to appear in before Special Referee Henderson for a hearing on these issues on August 20, 2009, at 9:30 a.m. to hear and determine. If not on consent, then it shall be referred to hear and report. Said report or determination shall be made within 60 days, upon the filing of the requisite forms and the approval of the Administrative Judge, pursuant to Article 22 of the Judiciary Law and 12 NYCRR Part 122. All other relief requested in the motion and cross motion is denied.
The foregoing constitutes the order and decision of this court.