Opinion
Index No. 365104/2022
01-23-2024
R.B., Plaintiff, v. J.B., Defendant.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 66, 67, 104 were read on this motion to/for PENDENTE LITE.
Upon the foregoing documents, it is
Introduction
In this motion sequence, Plaintiff Wife seeks to order the sale of the parties’ home in BridgeHampton, to set temporary support in the amount of $12,000 per month, to direct Defendant Husband to pay 100% of the carrying costs on the parties’ properties and for the children's add-on expenses, and seeks an award of counsel fees. Defendant Husband cross moves to set certain lesser amounts for support, to direct that add-on expenses be shared, to direct cooperation with the rental of the BridgeHampton home, and permitting him to utilize a Merrill Lynch account to pay for family expenses.
Background and Positions of the Parties:
The parties were married in January 2003 and have three children (aged 19, 18, and 15), one who resides with Plaintiff, one who attends Boarding School, and one who resides with Defendant. This action was commenced in March 2022. Plaintiff is 57 years old and Defendant is 66 years old. Defendant is a well-known and successful advertising executive and was the sole wage earner during the marriage, while Plaintiff gave up a career as a consultant to be a homemaker and stay at home parent.
Notably, while this case was filed in 2022, this is the second divorce action filed relating to this family and the parties have actually been litigating for years.
Plaintiff essentially requests that Defendant maintain the status quo by continuing to cover the carrying charges on the parties’ properties and various other basic family expenses. She also stresses the critical importance of covering the cost of the children's educational costs, as well as medical and therapy expenses for the children. The total of these costs amount to $37,192 per month. However, Plaintiff notes that if the BridgeHampton home is sold then these monthly costs would be reduced to $21,370.
Plaintiff also notes that in addition to those expenses, Defendant had been providing her with $12,000 each month to pay for other basic expenses for herself and the children.
Defendant claims that the family has a cash flow crisis and that he cannot afford what Plaintiff is seeking. In this regard, he states they previously accrued debt, used the proceeds from the sale of his premarital business, and used a credit line to pay their expenses. He also notes that Plaintiff controls the only liquid assets they have — an account with 1.3 million dollars.
Defendant proposes that the liquid assets be utilized to be pay various expenses and the ultimate responsibility would be reallocated by the Court later. Defendant also states that Plaintiff knows he wants to keep the BridgeHampton home since he has separate property invested in it. He also suggests that Plaintiff had previously agreed to sell the 4 bedroom apartment where she lives with their son. Separately, Defendant explains that the $12,000 referred to by Plaintiff is an amount he transferred into a shared account to pay the mortgages. According to Defendant, he only has approximately $24,000 each month with which to cover all the family's expenses including his own. He adds that Defendant receives a $50,000 per year salary from his company.
In sum, Defendant contends that the Court should direct that he pay maintenance of $5,384 per month, interim basic child support of $3,225 per month, that the children's add-on expenses should be allocated 80% to him and 20% to Plaintiff, with add-ons defined as the Children's health insurance premiums, unreimbursed medical expenses for the Children, the Children's agreed-upon tuition, the Children's agreed-upon tutors, the Children's agreed-upon summer camps, and the Children's agreed-upon extracurricular activities. He also seeks permission to use the liquid assets held by Plaintiff to pay family expenses.
Interim Order:
Following extensive oral argument on the motion, on October 31, 2023, the Court issued an interim order on the motion granting certain relief while the parties continued efforts to resolve this case. The interim order directed Defendant to pay 100% of all carrying costs on the properties, 100% of the children's add-on expenses, and $7,500 in unallocated support to Plaintiff each month.
Sale of the residence:
Plaintiff seeks an order directing the sale of the BridgeHampton home so as to reduce the parties’ monthly costs, which both parties seem to agree they can no longer maintain. Specifically, the monthly carrying cost for the home is approximately $16,322 including mortgage, utility and maintenance costs. The sale of the home would also generate millions of dollars in proceeds, and therefore create liquidity for the parties, which could be used to pay various expenses for the children, or counsel fees.
Defendant opposes the sale despite stressing the family's cash flow crisis. Instead, he suggests that renting it would supply sufficient income to cover its costs. He also prioritizes his potential plan to make that home his primary residence in the future.
There is no allegation that the BridgeHampton home is under threat of foreclosure or that there is currently any risk to this marital asset. In such circumstances, Plaintiff's concerns are premature and there is no basis to order the sale of this jointly owned asset (see Kahn v. Kahn , 43 NY2d 203 [1997] ).
However, as the parties were advised on the record, agreeing to sell the home would address many financial concerns raised by the parties and should be immediately considered. In a similar vein, Defendant raises valid points about considering the sale of the 4-bedroom apartment where the Plaintiff resides with only one child. The parties should certainly consider selling both these properties in order to reduce their monthly expenses and to address other financial concerns.
Until such time as they are sold, however, Defendant will be responsible for paying all costs and carrying charges related to these properties.
Temporary support:
Plaintiff seeks a total interim support package of $71,659 per month as follows: $37,192 per month in family and housing expenses, $12,000 per month in direct support; $20,217 per month representing 100% of the children's add-on expenses including education, tutoring, summer, and extra-curricular expense; and $2,250 for unreimbursed medical expense for Plaintiff and the children. She claims that this request still requires her to cover $15,910 each month to meet the expenses for herself and the children.
Pursuant to DRL § 236(B)(5-a), courts must arrive at a presumptive award of temporary maintenance by first determining the parties’ incomes, based on the parties’ most recently filed tax returns and in accordance with the definition of income set forth in the Child Support Standards Act (see DRL § 240[1-b][b][5] ).
As noted, it is undisputed that Plaintiff has not earned money for some years and has minimal income. Defendant is a successful advertising executive and was the sole wage earner during the marriage. The status quo is that Defendant covered all the expenses for the family. Defendant's Net Worth Statement shows a 2022 income of $828,747. However, that sum did not include $200,000 in deferred compensation which is statutorily considered income, making the Defendant's total income $1,028,747. Defendant, however, attaches an updated Statement of Net Worth which states his income for 2021 income was $724,550 including deferred compensation. In this regard, he notes that the latest filed joint tax return is for 2021. He also notes that $71,551 of their income is attributable to Plaintiff.
Based on the history of his earnings, the Court can certainly impute income of $1 million to Defendant. However, for purposes of this motion the Court will use $828,747 as Defendant stated on his initial Statement of Net Worth. The Court will use of the sum of $71,551 as Plaintiff's income.
Using such sums results in a presumptive award of $24,649.47 per year or $2,054 in monthly temporary maintenance. However, the Court also considers the very comfortable marital lifestyle, which included significant travel, as well as the fact that Plaintiff has not worked for many years. In addition, it is clear based on the parties’ assets, vacations, expenses for the children and beyond that setting support only up to the statutory cap would not be appropriate.
Based on a consideration of all the factors, the Court will use an adjusted cap of $600,000 which results in monthly maintenance of $8,670.79.
The Court must also consider an award of child support. In awarding temporary child support, the Court can but is not required to consider the CSSA guidelines (see DRL 240 [1-b][c] ; Rubin v. Salla, 78 AD3d 504, 505 [1st Dept 2010] ). The presumptive amount of basic child support obtained by calculating the statutory percentage for 1 child (17%) of the combined parental income cap of $163,000 results in child support of $27,710 per year. The Plaintiff's pro rata share of that sum is $22,133.54 or $1,844.46 per month.
However, considering the same factors, the Court will similarly remove the cap and consider child support using an adjusted cap of $600,000, which would result in a child support award of $6,789.43 per month. Under this scenario, Defendant would be responsible for 80% and Plaintiff 20% of add-ons for the children.
This would result in temporary support amounts of $8,670.79 and $6,789.43 respectively for a total payment of $15,460.22.
It is important to note that two of the children reside with Defendant either entirely or during times not spent in Boarding school. Thus, Plaintiff also has a child support obligation. Using the same numbers and adjusted cap and considering her receipt of temporary maintenance, the monthly basic child support obligation for Plaintiff is $3,462.55. The net payment due to Plaintiff would therefore be $11,997.67.
Yet, the carrying costs on the marital apartment amount to $11,380 each month, which would leave Plaintiff with only approximately $617.67 for all her remaining expenses, including food, clothing, transportation, recreation, and travel for herself and one child. Surely, the status quo in this marriage was not such a low amount for non-housing related expenses. The Court is also aware that it cannot award a double shelter allowance.
In addition, Defendant must also maintain all insurance coverage for the family which costs more than $8,000 each month. Of course, as noted, it is no longer necessary or appropriate for Plaintiff to require the entire marital apartment for herself and one child, and sale of that property should be considered.
Any support award must also consider Defendant's own expenses such as his $6,100 in rent and his $6,200 in food expenses. Further, it must be considered that Defendant has been covering the nearly $20,000 in monthly costs related to the education of all three children, and that two of the children have been with him. Notably, Defendant estimates that the add-on costs of the children total $22,728 each month.
In reviewing all the many expenses for this family, which both parties agree exist, it is impossible to understand how they have actually been covered without selling or utilizing the assets possessed by the parties. Indeed, despite Defendant's tremendous income it has its limits, particularly after taxes are paid. Thus, it is a mystery how Defendant has been able to come up with money for the children's significant education costs, or for his luxurious travel. Relatedly, it is impossible to understand the refusal of Defendant to sell the BridgeHampton home. It is similarly difficult to comprehend why Plaintiff refuses to utilize the more than $1 million in liquid assets she controls. These are marital assets and spending from them in the interim can be made subject to reallocation. In any event, what the parties have been doing is not sustainable.
Upon consideration of all the factors, the Court directs that Defendant continue to cover all the costs of both the BridgeHampton home and the New York City apartment until either or both are sold. He shall also maintain and pay for all the insurance policies in place for the family. In addition, Defendant shall pay unallocated direct support to Plaintiff of $6,000 each month. If Defendant finds any aspect of the award onerous or impossible to meet it is within his power to significantly reduce his monthly obligation and free up liquid assets by immediately selling the BridgeHampton home.
Based on the support Plaintiff receives, the parties shall split the costs of the children's add-on expenses 80% to Defendant and 20% to Plaintiff. Such expenses shall include unreimbursed medical expenses, the Children's agreed-upon tuition, the Children's agreed-upon tutors, the Children's agreed-upon summer camps, and the Children's agreed-upon extracurricular activities.
This determination on pendente lite support shall be retroactive to the date the motion was filed, March 13, 2023. To the extent there are arrears owed by one party or the other, it is expected that counsel shall appropriately calculate arrears relating to direct support and add-on expenses and that such arrears shall be paid within 60 days of this order.
Counsel fees:
In matrimonial actions, the Court has discretion to direct one party to pay counsel fees for the opposing party ( Domestic Relations Law ["DRL"] § 237 ). DRL § 237 further creates a rebuttable presumption that counsel fees shall be awarded to the non-monied spouse. This presumption reflects the strong policy concern of ensuring "that marital litigation is shaped not by the power of the bankroll but by the power of the evidence" ( Charpie v Charpie, 271 AD2d 169, 170 [1st Dept 2000] ).
It is therefore especially important to award counsel fees for the non-monied spouse when there is a substantial discrepancy between the incomes of the parties ( id. at 171 ). However, in addition to looking at the incomes of the parties, "in exercising its discretionary power to award counsel fees, a court should review ... all the other circumstances of the case, which may include the relative merit of the parties’ positions" ( DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881 [1987] ).
In this case, there is no question that the Defendant is the monied spouse, and that Plaintiff has minimal income and has not worked for a number of years. However, Plaintiff does have access to considerable assets that could be utilized to pay her counsel fees.
On the other hand, Defendant has taken positions which have prolonged the litigation, particularly in his claims not to have liquid assets or sufficient income while refusing to agree to the sale of valuable property that could solve those concerns. Plaintiff has also taken unreasonable positions in this years-long litigation, which began with an earlier 2016 action, and Plaintiff has also been represented by numerous law firms.
Plaintiff asks for an award of $150,000 in counsel fees. She properly attaches her retainer agreement, invoices and the qualifications of counsel. While the Court is cognizant of the rebuttable presumption regarding an award of counsel fees, such awards are not automatic and are to be addressed to the discretion of the Court based on all the circumstances (see Sykes v. Sykes , 41 Misc 3d 1061 [Sup. Ct. New York County 2013] ). Here, both parties have been represented by able counsel and there is no indication of an uneven playing field. Further, both parties stand to obtain millions of dollars through equitable distribution. Notably, the Plaintiff holds significant liquid assets and the Defendant has requested to utilize the parties Merrill Lynch accounts to pay for the family's routine expenses.
While it would be inappropriate to expect Plaintiff to spend down all of the liquid assets to cover the family's expense or all of her counsel fees, it is not unreasonable to utilize the liquid assets to cover the parties’ legal fees at this time. Even the release of $150,000 would be a small percentage of the assets Plaintiff will eventually obtain. It is critical that both parties have "skin in the game" with regard to their litigation costs, and this reality should impact how they will each be incentivized to proceed in this action.
In this Court's view, in light of the foregoing, it is fair and appropriate for $150,000 to be released from marital funds — the Merrill Lynch accounts - with half to go to the husband and half to the wife. Each side will use the sum to pay his or her own outstanding and prospective counsel fees. The release of the funds shall occur within 30 days of this order and will be subject to reallocation at the conclusion of the trial.
Beyond what is now ordered, the parties are of course free to stipulate to the payment of counsel fees as well as advances of equitable distribution from any assets which they decide to sell.
Make no mistake, however, that should a party unnecessarily prolong this matter, take untenable positions, or refuse to cooperate or comply with Court orders, the Court will consider further applications for counsel fees going forward.
Finally, the parties should invest their energies in reaching settlement rather than continuing on a litigation path. This litigation path will ensure growing counsel fees and the depletion of the assets they will eventually split.
Any other relief not granted is denied.
This constitutes the Decision and Order of this Court.