Opinion
Docket No. F-30317/2004/19F
01-11-2022
In the Matter of a Proceeding for Support Under Article 4 of the Family Court Act MICHELLE B., Petitioner, v. THOMAS Y., Respondent.
The mother was represented by Rena C. Dawson, Esq., Karasayk & Moschella, LLP, 233 Broadway, suite 2340, New York, NY 10006, Phone: (212) 233-3800, rdawson@kmattorneys.com; the Father was unrepresented.
The mother was represented by Rena C. Dawson, Esq., Karasayk & Moschella, LLP, 233 Broadway, suite 2340, New York, NY 10006, Phone: (212) 233-3800, rdawson@kmattorneys.com; the Father was unrepresented.
Papers Numbered
Summons, Petitions, Affidavit & Exhibits Annexed 1
Objections, Affidavit in Support & Exhibits Annexed 2
Court Proceedings Transcripts 3
Upon the foregoing papers and for the following reasons, the Objections by Petitioner Michelle B. (Hereinafter "Mother"), to an Order on Motion dated October 29, 2021, by Support Magistrate Jennifer L. Castaldi, are granted in accordance with the following decision.
The Mother and Respondent Thomas Y. (hereinafter "Father") are the parents of the subject Child of these proceedings, born out-of-wedlock on XX XX, 1992. By Order of Support dated January 7, 2011, the Father was ordered to pay child support to the Mother payable through the Support Collection Unit ("SCU"). Pursuant to a prior violation proceeding by the Mother, the Father was found in willful violation of the Support Order and was incarcerated for six months from January 2019 to July 2019. The remaining arrears were converted into a Judgment against the Father for which he was paying $23 bi-weekly consistent with the Terms of the SCU payout arrangement.
By Violation Petition dated October 15, 2019, the Mother commenced the instant proceeding against the Father in Kings County Family Court, alleging that he has not paid those scheduled arrears since 2018, and that his failure to comply was again willful requiring remedies pursuant to Family Court Act § 454. As of November 13, 2019, when the parties initially appeared before Support Magistrate Castaldi, the Father had outstanding arrears of $206,055.44 for the now-emancipated Child, according to the SCU Accounts and Records Statement. The Magistrate assigned an attorney to Father and adjourned the matter to December 12, 2019.
On January 17, 2020, Mother appeared pro se and Father appeared with his appointed attorney who appeared by phone. The SCU Statement dated January 15, 2020, reflected that the Father had paid $1,050 to the SCU since the prior court date. The Father's attorney informed the Magistrate that Father, who was employed by the Department of Corrections for 12 years, has a total of $67,000 in a pension fund managed by the New York City Employees Retirement System ("NYCERS"). The Magistrate adjourned the case to February 21, 2020, when the Magistrate noted that a NYCERS letter dated December 20, 2019, indicated that Father had in fact $67,674.36 in his account. The Father convinced the Magistrate that NYCERS will release the money, and she adjourned the case to March 20, 2020.
Unfortunately, due to the COVID-19 Pandemic, the matter was administratively adjourned, and the parties next appeared before the Magistrate via Skype on August 3, 2020, when the Mother appeared pro se and Father appeared with counsel. The SCU Statement of that date reflected arrears owed by the Father in the amount of $211,148.16. According to the August 3, 2020 transcript, the Magistrate again referenced the NYCERS letter acknowledging the $67,674.36, and it was placed on the record that Father would not be eligible for that money until he turns age 62 in 2025. Negotiations ensued wherein the Father's attorney described the Father as being 58 years old with a "litany of illnesses," and that "the best that he can do" would be to sign his NYCERS pension balance over to the Mother. If that were accepted by the Mother, counsel stated that it would be on the condition that all arrears were deemed "cleaned up, done, finished, gone, goodbye." The Father reported that, as per the legal department at Corrections, a Qualified Domestic Relations Order ("QDRO") had to be filled out, notarized and signed by the judge, wherewith the Mother could obtain the money upon the Father reaching the retirement age.
After informing the Mother of her right to counsel, the Magistrate summarized: "So here's what they're saying * * * is whatever comes out of the NYCERS account, let's just call it in round numbers right now $70,000, that that would be paid to you in full satisfaction of outstanding arrears. Is that something that you are agreeing to?" To which the Mother responded: "Yes, I agree to it." The Magistrate then stated "I am going to make a note of that, ma'am. Okay? So, once again, you are agreeing to accept the funds that are in the NYCERS for full satisfaction of outstanding arrears." The Mother responded: "if they are going to give it to me in a lump sum." The Magistrate stated: "In order to resolve this, I think the best bet is to get the QDRO in place. I just need to have somebody put that together. Let me see what I can do with the Volunteer Attorney Program." She further stated: "The QDROs are quite technical. They have to be very specific." The Magistrate then described the process of setting up the QDRO: "it's a document that needs to be prepared, sent to you, sent to Mr. London to send to Mr. Yarborough." Thereafter, the Magistrate directed the Father to pay at least $50 per month until Mother receives the NYCERS money, and adjourned the matter to October 5, 2020 for the Voluntary Attorneys Program to assist the Mother in setting up the QDRO. No order was generated by the Magistrate to memorialize the Agreement.
On October 5, 2020, both parties appeared with counsel before the Magistrate via Skype and phone. The SCU statement dated September 29, 2020 reflected $214,250.72 in outstanding arrears. The Mother's attorney informed the Magistrate that she prepared the QDRO, but that the approval process can take between two to three months. Counsel also indicated that an income withdrawal order will be needed, as well, and that she would prepare it. The Father's attorney informed the Magistrate that the Father consents to a QDRO for all of his funds in the NYCER's account. The Court relieved him from representing the Father and adjourned the case to January 19, 2021, when the Mother and her attorney appeared, but not the Father. The SCU statement dated January 13, 2021 reflected $217,489.44 in outstanding arrears. The Mother's counsel informed the Magistrate that she submitted the proposed QDRO to NYCERS in September 2020, and that she was still awaiting approval.
On the adjourned date of April 7, 2021, the Mother appeared with counsel and Father appeared pro se via Teams. No SCU statement was available for that date. The Magistrate noted that correspondence received from the Assistant General Counsel at NYCERS dated January 20, 2021, rejected the QDRO and requested a SCU Income Execution Order. The Magistrate ordered SCU to issue an Income Execution Order to NYCERS and adjourned the case to June 10, 2021. On that date, the Mother appeared with counsel and Father appeared pro se via Teams. The SCU statement dated June 8, 2021 reflected $222,437.29 in arrears. The Mother's attorney informed the Court that after attempts at a QDRO, the funds in Father's NYCERS account are not available to liquidate; or subject to an Income Execution Order until 2025. The Magistrate adjourned the case to July 29, 2021.
In the meantime, by Order to Show Cause dated June 11, 2021, the Mother moved before the Magistrate for an Order, pursuant to CPLR 5015(a)(2)(3) and the Family Court Act: (1) vacating the Agreement set forth in the transcript of the proceedings dated August 3, 2020; (2) entering an Income Execution Order for NYCERS; (3) reinstating the Violation Petition against the Father and reappointing him counsel as required by law; (4) recalculating the SCU Statement to reflect that no child support arrears are forgiven or waived; and (5) entering an order directing that the matter be restored to the calendar for hearing purposes to determine the de novo matters pertaining to child support and child support arrears from August 3, 2020. In support of her Motion, the Mother argued that, prior to her attorney joining the case, she entered into an oral Agreement on August 3, 2020 agreeing to forego $144,473 out of $211,148.16 of accumulated child support arrears only in exchange for a lump sum payment of $67,674.36 from the Father's NYCERS account, which was supposed to be effectuated by the execution of a QDRO to be signed by the Magistrate. As of that date, both parties believed that she would be entitled to a lump sum of $67,674.36, but the Father was only entitled to a monthly allowance upon retirement age (62) and only that amount could be garnished. Neither the parties nor the Magistrate had the new evidence that NYCERS requires an Income Execution Order not a QDRO to garnish child support arrears. Furthermore, the parties and Magistrate were not aware that that a lump sum was not available to Mother, therefore her waiver of $143,473 should fail for lack of consideration based on a mutual mistake. The Magistrate received the Father's Affirmation in Opposition arguing that the Agreement was valid and enforceable, as well as Mother's Reply Affirmation, and reserved decision with no new appearance scheduled.
The Mother attached a letter dated April 11, 2019 from NYCERS to Father, which described various options available to Father at retirement. Only Scharon Y. is listed as a beneficiary. The letter also indicates that the Father has an outstanding loan in the amount of $55,736.58, and the loan would reduce Father's maximum retirement allowance by $3,947.63 per year.
By Order on Motion dated October 29, 2021, the Magistrate denied the Mother's Motion to vacate the Agreement, reasoning on her Findings of Fact dated October 6, 2021, that she found no basis to vacate the Agreement as placed on the record because the Mother "entered into a stipulation of settlement on record" and agreed to accept funds in Father's NYCERS account via a QDRO in full satisfaction of arrears totaling $211,148.16. The Magistrate found that Mother answered in the affirmative each time the Magistrate asked her if she understood and agreed. There was some considerable discussion on the record that the Father would continue to pay $50 per month to the SCU until the funds in his NYCER's account would be make available, at the Mother's request. In conclusion, the Magistrate found no fraud, duress or mistake of fact, noting that the Mother was the one who initially stated that she was aware that the monies in the NYCERS account would not be available until 2025.
On December 2, 2021, the Mother filed Objections to that Order on Motion and Findings of Facts, arguing that the Magistrate improperly denied her application to vacate the Agreement based on multiple mistakes of fact, overreaching and unconscionability. Throughout the proceedings, according to the Mother, the Father and Magistrate assured her that in exchange for her waiver of outstanding arrears beyond $67,674.36, she would receive this amount in a lump sum payment. The mutual mistake was that the Magistrate and the parties believed that a QDRO would release the funds, and that Mother would receive $67,674.36 as a lump sum. The Mother contends that it is clear that she will not receive a lump sum, but will only be entitled to payments under an income deduction order when the funds are eligible for disbursements in 2025. She further contends that on its face the Agreement fails for lack of consideration and unconscionability, and she requests that this Court vacate the stipulation and restore her to the position that she was in when she commenced the violation petition against the Father. Finally, the Mother points out that the Father has failed to pay support for many years, and he would be the only one that benefits from the unfair stipulation due to its unconscionability and the mutual mistakes. Said Objections were forwarded to the Undersigned for review, and the Father has not submitted a Rebuttal. This Court agrees with Mother.
It is well-settled that the Family Court has continuing jurisdiction over support proceedings and is empowered to determine applications to modify or enforce judgments and orders of support (see Matter of Saratoga County Support Collection Unit v. Hubert , 160 AD3d 1071 [3rd Dept. 2018] ). Pursuant to FCA § 453, proceedings under this part "shall be originated by the filing of a petition containing an allegation that the respondent has failed to obey a lawful court order" (Matter of Pudvah v Pudvah, 172 AD3d 1475 [3rd Dept. 2019; see Matter of Messick v Mesick , 71 AD2d 737 [3rd Dept. 1979] ). Generally, stipulations of settlement settling those petitions "are favored by the courts and a stipulation made on the record in open court will not be set aside absent a showing that it was the result of fraud, overreaching, mistake or duress" (Matter of Abidi v Antohi , 64 AD3d 772, 773 [2nd Dept. 2009] ; see Matter of Blackstock v. Price , 51 AD3d 914 [2nd Dept. 2008] ). However, the law is also quite clear that the court shall not reduce or annul child support arrears prior to the making of an application (see Family Court Act § 451[1] ; Matter of Dox v Tynon , 90 NY2d 166 [1997] ). Failure to file a petition for the vacatur or reduction of arrears renders the Family Court without subject matter jurisdiction to hear the matter (see Matter of Pudvah , 172 AD3d at 1476 ; Matter of Sheehan v Sheehan , 221 AD2d 897, 898 [3rd Dept. 1995] ).
Applying these principles to the case at bar, the Mother's Objections must be granted. The record reflects that the Mother properly initiated an enforcement proceeding alleging that Father had not paid arrears owing on the Support Order amounting to $206,055.44, for the subject Child. Although the Father's obligation to pay current child support ended when the Child was emancipated on November 15, 2013, he remained obligated to pay those arrears and she had every right to seek enforcement for those outstanding arrears from the Father (see Beckmann v Beckmann , 160 AD3d 799, 800 [2nd Dept. 2018] ). After several appearances, on August 3, 2020, the Mother consented to vacate the arrears beyond the amount due to Father by NYCERS in exchange for a lump sum payment.
Nevertheless, the Court of Appeals and the Appellate Division have reminded us that "a court has no discretion to reduce or cancel arrears of child support which accrue before an application for a downward modification of the child support obligation" ( Beckmann v Beckmann , 160 AD3d at 800, quoting Matter of Gardner v Maddine , 112 AD3d 926, 927 [2nd Dept. 2013] ; see Matter of Dox v Tynon , 90 NY2d at 175-176 ). Of course, an exception to that rule exists where there is an agreement by the parties to vacate accumulated arrears under a proper petition. This Court acknowledges that the parties may enter into a valid agreement to vacate arrears, but, in this case, neither party has filed the jurisdictionally required petition to vacate, adjust arrears or downwardly modify the child support arrears owed by the Father (see e.g. Matter of Essex County Child Support Enforcement Unit v Crammond , 185 AD3d 1190, 1191 [3rd Dept. 2020] [mother's petition to terminate father's child support and forgive arrears permitted court to issue consent order terminating support obligation and vacating arrears]). In the absence of a such a petition, this Court finds that the Magistrate did not have subject matter jurisdiction to accept the parties’ Agreement while adjusting the significant arrears owed by the Father.
Even if there was valid petition pending before the Magistrate, this Court concludes that the Agreement fails due to unconscionability and mutual mistake. When the parties entered into the Agreement, it was unclear whether a QDRO could be set up with NYCERS to facilitate the Mother's receipt of the lump sum payment. The Magistrate informed the parties that it was a complicated process thereby advising the Mother to seek legal representation to assist her with the process. This case was adjourned for several court appearances where the Magistrate herself received updates on the progression of the QDRO. It becomes apparent that the parties should have completed the exploration and investigation into the QDRO before an Agreement could be knowingly and voluntarily reached. Moreover, prior to rendering a decision on the Motion, the record reflects that the Magistrate learned the following: that Mother did not qualify for a QDRO because she is not a former spouse; that she would only be entitled to monthly allotments under an Income Execution Order; and that as of April 11, 2019, Father had an outstanding loan in the amount of $55,736.88, which served to reduce his retirement allowance. Given his prior willful violation and his recalcitrant failure to pay accumulated child support arrears, there is a very slim possibility that the Father would pay the NYCERS loan prior to his retirement date.
Moreover, the existence of a mutual mistake may permit vacatur of an Agreement when "the mistake existed at the time the stipulation was entered into and that it was so substantial that the stipulation failed to represent a true meeting of the parties’ minds" ( Wit Capital, Ltd. v Obigor, 33 AD3d 859 [2nd Dept. 2006] ; see Mahon v New York City Health & Hosps. Corp., 303 AD2d 725 [2nd Dept. 2003] ). Here, a mutual mistake was made when there was an assumption that upon the execution of that QDRO, the Mother would be entitled to receive $67,674.36 in a lumpsum payment from Father's NYCERS account. Based on this record, the Court finds that the Magistrate should not have allocuted the parties prior to the filing of an appropriate petition and the completion of the investigation into the QDRO. As such, the Magistrate erred when she denied the Mother's motion to vacate the August 3, 2020 Agreement between the parties.
In accordance with the foregoing, the Court grants the Mother's Objections in their entirety and the matter is hereby remanded to Part 29 for the Magistrate to vacate the Agreement placed on the record on August 3, 2020, restore the Violation Petition to the calendar, and reinstate all outstanding arrears by the Father. The parties and counsel shall appear at a date to be scheduled by the Magistrate. This constitutes the decision and order of the Court.