Opinion
10-11-2024
R.B-H., Plaintiff, v. N.L., Defendant.
Counsel for Plaintiff: Gassman Baiamonte Gruner, PC By: Stephen J. Gassman, Esq. Counsel for Defendant: Aronson Mayefsky & Sloan LLP By: Alan E. Mayefsky, Esq. & Elizabeth A. Harvell, Esq.
Unpublished Opinion
Counsel for Plaintiff: Gassman Baiamonte Gruner, PC By: Stephen J. Gassman, Esq.
Counsel for Defendant: Aronson Mayefsky & Sloan LLP By: Alan E. Mayefsky, Esq. & Elizabeth A. Harvell, Esq.
Ariel D. Chesler, J.
Defendant-Wife moves by order to show cause seeking, inter alia, an award of counsel fees under motion sequences 004 and 005. Plaintiff-Husband opposes both applications except to the extent that the Wife should be awarded the "limited sum of $25,000.00 subject and without prejudice to all full exploration of the parties' proportionate obligations for payment of counsel fees at trial of this action." The Court heard oral arguments on these sequences.
The discovery and contempt aspects of these motions have been resolved in various interim orders and on the record and it is unnecessary to address them further here.
DISCUSSION
In resolving the issue of counsel fees under these motions, the Husband does not refute the fact that the Domestic Relations Law creates a presumption that he, as the monied spouse, should be responsible for the Wife's fees; he contends "the presumption is a rebuttable one" and further urges this Court look to the "equities" and his substantial previous payments of mainly professional fees but also counsel fees.
The Court notes that its analysis of the appropriate fee award places sufficient weight on the Husband's previous professional fee payments; notwithstanding, the financial circumstances of the parties and equities of this case cannot be ignored.
Pursuant to Domestic Relations Law § 237 (a), a court in a divorce action may award counsel fees to a spouse "to enable that spouse to carry on or defend the action or proceeding as, in the court's discretion, justice requires, having regard to the circumstances of the case and the respective parties." Section 237 replaced section 1169 of the Civil Practice Act, and - significantly - omitted the word "necessary" which had preceded the phrase "to enable the wife to carry on or defend the action." This omission left the courts with flexibility when considering applications for counsel fees [...]in exercising its discretionary power to award counsel fees, a court should review the financial circumstances of both parties together with all the other circumstances of the case, which may include the relative merit of the parties' positions. (De Cabrera v Cabrera-Rosete, 70 N.Y.2d 879, 881 [1987]; see e.g., O'Shea v Oshea, 93 N.Y.2d 187, 193-194 [1999]).
Moreso, the Court must also consider that this is an interim fee award in resolving the Wife's application. (See Prichep v Prichep, 52 A.D.3d 61, 65-66 [2d Dept 2008]["[C]ourts should not defer requests for interim counsel fees to the trial court, and should normally exercise their discretion to grant such a request made by the nonmonied spouse, in the absence of good cause-for example, where the requested fees are unsubstantiated or clearly disproportionate to the amount of legal work required in the case-articulated by the court in a written decision."]; Gober v Gober, 282 A.D.2d 392 [1st Dept 2001][Reversing denial of interim fees and granting $266,384.00 in interim fees despite movant receiving a prior interim fee award of $415,000.00 earlier in the litigation]).
In assessing a fee award, the Court puts strong weight into the temporal context of the application. First, the Wife has not received a fee award since 2022; second, and equally telling of a need for fees, is that this case was commenced in 2019 and discovery is still open and trial far away. The issues in this case are extremely nuanced given the complexity of the marital estate. Furthermore, this matter has been heavily litigated - the sixth motion sequence having just been filed.
Notably, the Wife's applications for fees under sequences 004 and 005 were related to compliance issues with discovery. Throughout this matter, this Court has been forced to issue multiple interim orders to facilitate compliance by the Husband. This has included multiple instances of compelling the Husband to pay experts. The consequence of the Husband failing to timely pay the is that it directly delays resolution. In this complex matter, the experts are performing essential services to understand the financial issues in this high-asset matrimonial action. Due to the complexity of this marital estate, absent this expert input, a reasonable settlement cannot be reached as both parties remain "in the dark" on essential elements of financial relief afforded in a divorce. This is especially so for the Wife, who has been historically shut out of the marital finances) Thus, the Husband has indeed caused a delay in this matter by failing to timely pay.
The Husband's reliance on Sykes v Sykes and P.S. v M.S. to argue the Wife should have "skin in the game" as it relates to fees is misguided. (41 Misc.3d 1061 [Sup Ct, NY Cnty 2013][Cooper, J.]; 2016 NY Slip Op 51803[U] [Sup Ct, Orange Cnty 2016][Vazquez-Doles, J.]).
First, this Court is facing a different question than Justice Cooper was in in Sykes. The "question" for Justice Cooper in Sykes was "whether it is appropriate to utilize marital assets for the payment of interim counsel and expert fees." (Sykes, supra at 1067).
On the other hand, M.S. clarified that "'skin in the game' refers to the belief that the best way to insure that a party to a divorce will litigate reasonably and responsibly is to require the party to share in the cost of the litigation." (Id. at *5 n. 3; citing, Sykes, supra at 1061). In the case at bar, there are no facts to support the argument that the Wife is litigating this matter unreasonably or irresponsibly as was the case in both Sykes and P.S. Indeed, the Wife has marshaled clear proof she has made reasonable efforts to avoid motion practice.
Moreso, the Husband's "skin in the game" argument is further weakened by the fact that the Husband has an established pattern of paying support late. As a result, the already limited financial resources available to the Wife are not even reliable due to the Husband's aloof approach to the orders of this Court.
The First Department has stated such conduct is pertinent in resolving a fees application,
Recognizing this reality of litigation, the possibility that even a woman who had enjoyed an affluent lifestyle can end up in dire financial straits cannot be ignored. Ironically, the theoretical framework for the concept of the "feminization of poverty," normally applied to households headed by women with only limited or low-level employment opportunities, whose earnings and resources fall short of their families' basic needs (see, Rowe, The Feminization of Poverty: An Issue for the 90's, 4 Yale J L & Feminism 73, 74), becomes applicable to the affluent in this context. When a couple's affluence has been due to the earnings of the husband, and his wife's earnings are minimal in comparison with the family's lifestyle, their separation and their divorce proceedings can leave such a wife without funds and at the mercy of her ex-husband, whose cooperation in making support payments is the only thing keeping her and their children from a lifestyle of substantially reduced means.
These considerations should be kept in mind on an application for counsel fees in a matrimonial litigation where a wife has assets that, although considerable, are finite, while her husband's wealth is far greater and his earnings continue to amass. (Charpie, supra at 171 [internal emphasis supplied]).
In arriving at its award, this Court stresses that motion sequence 004 was filed by the Wife in August of 2023 and that much time and litigation has since passed - the most recent moving papers of sequence 005 being now eight (8) months old. This is especially relevant as the last fee award was in 2022.
The parties are fifty-two (52) years old. The Wife was a homemaker during the marriage. The Wife has a "start-up" jewelry business as well. The Husband's Net Worth Statement under motion sequence 004 provides he is employed as a Real Estate Investor and Manager and has business interests in nine (9) entities.
Notably, the Husband failed to provide a compliant Net Worth Statement in his opposition to the Wife's fee application under motion sequence 004 as his Net Worth Statement was submitted without a Tax Return, or any of the other required income documentation. (DRL § 236[B][4][a]; 22 NYCRR 202.16[b]). Likewise, the submitted Net Worth Statement was not even the most recent - it was his first Net Worth Statement from June 16, 2021. This is puzzling to the Court because he subsequently updated his Net Worth Statement in motion sequence 002.
More concerning, the Net Worth Statement submitted under motion sequence 004 does not even contain the Husband's current counsel's retainer agreement and statement of client's rights and responsibilities.
The Husband did not submit a Net Worth Statement under motion sequence 005.
Indeed, even looking beyond the papers submitted under these sequences, there is no retainer agreement or statement of client's rights and responsibilities for the Husband's current counsel anywhere in the Court's NYSCEF file. (22 NYCRR 1400.3["[I]n actions in Supreme Court, a copy of the signed agreement shall be filed with the court with the statement of net worth."]).
This clouded financial picture creates a situation where, through the Husband's own omissions, the already complex financial circumstances of this family are made even more difficult to understand. Indeed, the Domestic Relations Law and Uniform Rules of the Supreme Court demonstrate a coordinated judicial and legislative intent to avoid this situation. (See DRL § 236; 22 NYCRR 202.16, 1400.3).
Under motion sequences 004 and 005, the Wife requests a sum of past and prospective counsel fees in the amount of $300,000.00. She retained her current counsel, Aronson Mayefsky & Sloan, LLP, for a retainer amount of $30,000.00. This initial retainer amount was paid with a promissory note. The Wife's moving papers for motion sequence 005 demonstrate that, as of February 2024, she had outstanding counsel fees in the amount of $225,074.64. This amount has surely increased as subsequent reply papers were filed, and oral arguments were held. Additionally, the Court is not ignorant of the months between the Wife's moving papers and the date of this decision. Just as the Husband's attorneys worked during those months, so too did the Wife's attorneys. (See Frankel v Frankel, 2 N.Y.3d 601, 607 [2004]["A matrimonial lawyer may be willing to carry a client on its accounts receivable books, but not as to accounts that will prove unreceivable. In this regard, the Legislature designed Domestic Relations Law § 237 (a) to eliminate the disparity between the monied and the nonmonied spouse."]).
It is beyond dispute that the Wife has already received a court-ordered award of fees in the total amount of $75,000.00 in counsel fees and 75,000.00 in expert fees. In addition to these Court awarded sums, the Husband further asserts he paid the Wife's former Counsel, Pryor Cashman, a total of $70,000.00 - this contention is not disputed by the Wife. Although not explicitly stated, it appears from the papers that of the $75,000.00 awarded pursuant to the court's prior order, the Wife's current counsel received $40,000.00 and her former counsel received $35,000.00, resulting in the Husband's total counsel fee payments to the Wife at $110,000.00.
In addition, the Husband has paid approximately a few hundred thousand dollars in additional expert fees. Notably, the Wife is not seeking any additional expert fees in these motions.
Based upon, inter alia, (1) the dilatory tactics engaged in by the Husband; (2) the Husband's pattern of non-compliance with court orders; (3) the age of the parties; (4) the vast disparity of wealth; (5) the disparity in access to liquid funds between the parties; (6) the interim nature of this award; (7) the litigious nature of this case; (8) the age of this case; (9) the previous sums advanced by the Husband compared to those outstanding; (10) the merits or lack thereof in the parties' positions; (11) the further increase in the Wife's legal fees made necessary to fully prosecute these applications; (12) the omissions in the Husband's financial submissions; and (13) the complexity of this matter, the Court finds it appropriate and reasonable to award the Wife interim counsel fees in the sum of $250,000.00, subject to reallocation at any time by this Court.
Accordingly, the branches of the Wife's Orders to Show Cause under motion sequences 004 and 005 are GRANTED to the extent of awarding the wife $250,000.00 in interim counsel fees.