Opinion
No. * * * * */12.
09-01-2015
S.M.S., Plaintiff v. D.S., Defendant.
Agulnick and Gogel LLC by William Gogel Esq., Great Neck, for Plaintiff. Jay Baum Esq., Staten Island, for Defendant.
Agulnick and Gogel LLC by William Gogel Esq., Great Neck, for Plaintiff.
Jay Baum Esq., Staten Island, for Defendant.
CATHERINE M. DiDOMENICO, J.
Procedural History
By Summons and Complaint filed July 17, 2012, Plaintiff S.S. (hereinafter "Wife") commenced this action for divorce against Defendant Husband D.S. (hereinafter "Husband"). Husband filed an Answer with Counterclaims on or about August 14, 2012.On February 7, 2014, the parties agreed by Short Form Order that Wife would be granted a divorce on the grounds that the marriage had broken down irretrievably for a period of six months pursuant to DRL § 170(7). (Jud.Not.2). The parties were married on November 17, 1990 in a religious ceremony. There are three children of this marriage: P.S. (age 23), M.S. (age 20) and C.S. (age 17). By Consent Order dated January 24, 2013, the parties agreed that Wife would have sole custody of the subject child C.S. with Husband being afforded liberal visitation. The Court notes that C.S. is the only child subject to this Court's jurisdiction for the purposes of adjudicating custody and parenting issues (Jud.Not.1).
By Petition dated July 12, 2012, Wife commenced a Family Offense Proceeding against Husband. Wife alleged, among other things, that Husband was physically and verbally abusive, threatened to "put a bullet in her head," and struck her in the head with a clock. She further alleged that Husband maintained firearms in the marital residence. Family Court granted Wife a Temporary Order of Protection which excluded Husband from the marital home and ordered him to stay away from Wife. (Jud.Not.3).
By Order dated September 20, 2012, the Family Offense proceeding was consolidated into this matrimonial action. After review of that Petition, and hearing from the parties, this Court expanded the Temporary Order of Protection to include a full gun surrender provision and a prohibition against all contact and communication, unless expressly permitted by Supreme Court Order. Specifically, Husband was ordered to immediately surrender all firearms in his possession, custody, or control to the 120Police Precinct. He was further enjoined from "obtaining any firearms," and his privilege to "carry, possess, repair, sell or otherwise dispose of a firearm" or to secure a license respecting the same was suspended and revoked. (Jud.Not.4, 12) (the "Supreme Court Order of Protection"). Husband was advised of the terms of this Order on the record, and signed for this Order in the presence of the Court.
During the course of this matrimonial action, Wife has been represented by three different attorneys. Wife was initially represented by Margaret Stanton, Esq. until January of 2013 when she was substituted by Kurt Richards, Esq. Mr. Richards represented Wife until April 9, 2013 when his application to be relieved as counsel was granted. On April 18, 2013, Wife retained the services of her trial attorney, William Gogel, Esq. Husband has been represented by two attorneys. He was first represented by Robert Cohen, Esq. until December of 2013 when he was substituted by Jay Baum, Esq.
The Trial
The parties' claims for maintenance, child support, equitable distribution, contempt, and family offense were tried before this Court on February 7, 2014, March 18, 2014, April 7, 2014, April 28, 2014, April 29, 2014, June 19, 2014, August 6, 2014, October 1, 2014, November 25, 2014, December 2, 2014, December 3, 2014, December 4, 2014, December 16, 2014, December 17, 2014, January 13, 2015, January 14, 2015, January 15, 2015, and February 5, 2015. Wife testified on her own behalf and called the court appointed business valuator, Heidi Muckler, a life insurance representative, Steven Herzberg, and a representative from Citibank, Torre Birt, as witnesses. Husband testified on his own behalf and called no other witnesses. Both parties submitted documents into evidence (Pl. Exs. 1–86; Def. Exs. A–DD).
Notwithstanding the terms of the Supreme Court Order of Protection, on or about September 26, 2014, while this trial was ongoing, this Court received notification that Husband had attempted to purchase a firearm from a pawn shop in the state of Georgia. Because this Court's Order of Protection was entered into the mandated federal and state databases, the existence of this Order was revealed during the course of the federal background check initiated by the pawn shop. The sale was denied, and Husband was not permitted to purchase the firearm.
Upon learning of Husband's attempt to purchase a firearm in violation of this Court's Order of Protection, this Court convened a conference call with all available counsel. On the record, counsel was advised of Husband's actions in Georgia. At the following expedited court appearance, Wife indicated that she would be moving to hold Husband in contempt for his attempted firearm purchase together with other alleged violations of Court Orders. Wife filed said application on October 14, 2014. The Court granted a continuance of the trial in chief to conduct a full evidentiary hearing regarding the contempt application.
On or about November 21, 2013, Wife brought a motion to preclude Husband from offering evidence in relation to his failure to comply with this Court's Order relating to the valuation of his business, P .M.X.F. Systems Inc. By Order dated February 7, 2014, Wife's motion was granted. Accordingly, Husband was precluded from offering any evidence, documents, proofs or claims regarding P.M.X.F. Systems Inc. In addition, all issues of fact regarding P.M.X.F. Systems Inc. were to be resolved in Wife's favor. See Hartloff v. Hartloff, 296 A.D.2d 847 (4th Dept.2002) ; Pearl v. Pearl, 266 A.D.2d 366 (2d Dept.1999) ; Miceli v. Miceli, 233 A.D.2d 372 (2d Dept.1996).
Factual Findings
A. Plaintiff Wife.
Plaintiff Wife, S.M.S., was born on September 28, 1961. She is currently 53 years old. She graduated from Tottenville High School in 1979. (Tr.2/7/14 p. 43). Wife worked as a secretary at an entity known as "BBDO advertising agency" following her graduation. Wife took some time off to take classes at the College of Staten Island, but she did not matriculate or earn a degree. Wife's salary while at BBDO was $9,000 a year. (Tr. 4/7/15 pp. 8–15). Wife left BBDO in1984 and has never acquired administrative skills beyond the use of a manual typewriter. (Tr. 2/7/14 pp. 44–45). After leaving BBDO, but before getting married, Wife performed temporary secretarial jobs, including working for a talent search entity known as "Little Stars". She also briefly worked as a secretary for an attorney.
The parties married on November 17, 1990. Wife was not working at the time of the marriage. Wife credibly testified that the parties agreed that she would not work outside the home during the marriage in order to raise the parties' three children. Wife credibly testified that she was the children's primary caretaker and that she maintained the household. Wife further testified that Husband controlled every aspect of the parties' finances to the point that she had to ask permission for financial transactions exceeding her "allowance" of $400 a week.
B. Defendant Husband.
Defendant Husband, D.S., was born on February 18, 1960. He is currently 55 years old and in good health. Husband graduated from Canarsie High School in 1978. Husband attended Westchester Community College for a year following his graduation, but he did not earn a degree. (Tr. 1/13/15 p. 89). Husband began working in the freight forwarding, or "trucking" field following his graduation from high school.
In or around 1982, Husband opened his own trucking business, Overland Freight. (Tr.1/13/15 p. 91). In 1998, during the marriage, Husband changed the name of his business to P.M.X.F. Systems Inc. following a lawsuit with the World Trade Center. (Tr. 1/13/15 pp. 96–97). Husband claims to have lost a significant amount of customers following the 2008 financial crisis and during the course of this divorce litigation. He testified at trial that he currently has about 2–3 consistent customers. (Tr. 1/13/15 p. 99)
Husband testified that, contrary to Wife's claims, he has suggested that she seek employment outside the home, specifically referring her to a job with the Department of Education. He further claimed at trial that Wife has a more extensive work history than she admits. He claims that she has worked for his company, Overland Freight, for an attorney, and for her uncle, all in an administrative assistant capacity.
Family Offense
On or about July 12, 2012, Wife filed a Family Offense Petition seeking an Order of Protection. In furtherance of this Petition, which was consolidated into this matrimonial action on or about September 20, 2012, Wife testified that in 2010, after an argument, Husband struck her in the head with an alarm clock causing physical injury including bruising and bleeding. (Tr. 2/7/14 p. 63). Husband admits many of the facts relating to this incident but claims that he did not strike Wife with the clock, but instead that Wife somehow ran her head into the clock while he was holding it. (Tr. 1/14/15 pp. 29–30). Husband's testimony was patently incredible in this regard. In a post trial submission, Wife argues that the Court should consider awarding her a five year Order of Protection due to aggravating circumstances.
This Court finds that Wife's credible testimony regarding Husband's action of striking her in the head with a clock, and causing her injury, has established by a fair preponderance of the evidence the family offense of Assault in the Third Degree such that a Final Order of Protection should issue. See PL § 120.00[1]; See also, Matter of Musheyev v. Mucheyev, 126 AD3d 800 (2d Dept.2015).
In addition to this single event, which in and of itself is sufficient to award an Order of Protection, Wife also credibly testified to a litany of other incidents throughout the marriage. Wife credibly testified that she often went to sleep "very, very afraid" (Tr. 6/19/14 p. 49). Amongst other things, Wife credibly testified that Husband kicked her off the bed, dragged her by the hair, put his hands around her neck, and threatened to put a bullet in her head (Tr. 2/7/14 pp. 59–60); (Tr. 8/6/14 pp. 99–100). The Court notes that Husband's threat of gun violence holds an increased significance as Wife was aware, and Husband does not deny, that he had more than fifteen unlawful, unlicensed firearms in the house at the time the threat was made.
Often repeated at trial, Husband's testimony regarding his "federal constitutional right" to possess unlicensed firearms is alarming to this Court as it represents both a flagrant disregard for the law of this state, and a threat to Wife's safety. Husband's disregard for this Court's Order prohibiting him from possessing firearms, and the New York State and City laws that restrict the possession of unlicensed firearms, is well documented. In one such incident which occurred during the course of this trial, Husband attempted to purchase a firearm in the State of Georgia in clear violation of this Court's Temporary Order of Protection. In addition to causing Wife to seriously fear for her safety, Husband's attempt to purchase a firearm resulted in significant delay in this trial as Wife requested an immediate contempt hearing to determine the facts relating to this attempted firearm purchase.
Accordingly, after considering all of the relevant factors, this Court finds that Wife's credible testimony evidencing a pattern of threats and violence, together with Husband's flagrant disregard for the Order of Protection, and his adamant misplaced belief that he has a "right" to possess unlicensed firearms regardless of licensing laws, supports a finding of aggravated circumstances such that a five year Order of Protection should be granted. See FCA § 827 ; 842; See also, Matter of Liu v. Yip, 127 AD3d 1196 (2d Dept.2015) ; Matter of Margary v. Martinez, 118 AD3d 1004 (2d Dept.2014) ; Matter of Kondor v. Kondor, 109 AD3d 660 (2d Dept.2013).
Therefore, it is hereby Ordered that an immediate Order of Protection shall issue, which shall extend for a period of five years from the date of this Decision. This Order, which shall issue contemporaneously with this Decision, will provide that Husband not commit an unlawful act against Wife, together with a provision that Husband stay away from Wife, her home, her school or place of employment at all times, and refrain from communication from Wife unless that communication is made in writing, by email or text message, for the purpose of facilitating visitation between Husband and the subject child C.S., effectuating the disposition of assets herein, or any other subject that the parties may agree to in writing. This Order shall also enjoin Husband from possessing any firearms or obtaining a license to possess such firearms as set forth more fully therein.
Criminal Contempt
By Order to Show Cause dated October 1, 2014 (Jud.Not.16), Wife sought a finding of contempt against Husband for his attempted purchase of a firearm in the State of Georgia in violation of this Court's Temporary Order of Protection. As indicated above, this Court's Order clearly prohibited Husband from obtaining or possessing any firearms. The Court notes that in addition to alarming Wife, Husband's attempt to purchase a firearm had the immediate effect of this Court having to adjourn the parties' ongoing divorce proceeding to hold an immediate contempt hearing, which resulted in a significant delay in the trial and increased legal fees.
At the Contempt hearing, Husband admitted that throughout his life, and his marriage, he has possessed numerous firearms including handguns and rifles, for which he did not have a lawful license or permit to possess. He further testified that, on or about September 25, 2014, he traveled to a pawn shop in the State of Georgia and attempted to buy a firearm (Tr. 10/1/14 p. 20). He admitted at the hearing that at the time he attempted to purchase this firearm, he was aware of this Court's Temporary Order of Protection (Tr. 11/13/14 pp. 14–15).Husband further claimed that he believed this Court's Order of Protection did not extend to Georgia. He further testified that it was his right under the Second Amendment to the United States Constitution to bear arms despite any State, Federal, or local laws reasonably restricting that right (Tr.12/02/14 p. 90); (Tr. 12/3/14 p. 9). It is well settled law that both Federal and State governments may impose reasonable restrictions on firearm ownership. See Parker v. District of Columbia, 478 F3d 370 (DC Cir2007) ; See also, People v. Handsome, 18 Misc.3d 543 (Crim. Ct. Kings Cty.2007).
The transcript from this hearing was referred by this Court to the Richmond County District Attorney's Office.
To punish a party for civil contempt, the movant bears the burden of proving, by clear and convincing evidence: (1) the existence of a lawful mandate of the Court; (2) that the contemptuous party was aware of that mandate; (3) that a violation of that mandate was committed and; (4) that the aggrieved party's rights were prejudiced as a result. See Matter of Figueroa– Rolon v. Torres, 121 AD3d 684 (2d Dept.2014). The Appellate Division, Second Department, has recently clarified that despite prior cases utilizing the word "willful" a showing of willfulness is not required for a finding of civil contempt. See El–Dehdan v. El–Dehdan, 114 AD3d 4 (2d Dept.2013). In addition to the above, a party seeking a finding of civil contempt must establish that less restrictive alternatives would be ineffectual to remedy the prejudice caused by the contemptuous act. See Keller v. Keller, 126 AD3d 940 (2d Dept.2015). Finally, a party found to be in civil contempt has a right to purge the contemptuous act by doing what he or she was ordered to do. See People v. Sweat, 24 NY3d 348 (2014) ; See also, Vasquez v. Vasquez, 281 A.D.2d 301 (1st Dept.2001) ; Citibank, N .A. v. Angst, Inc., 61 AD3d 484 (1st Dept.2009).
While it is clear that Husband was aware of this Court's Order, and Wife established that he violated its terms by attempting to purchase a gun in Georgia, a finding of civil contempt is not supported by the record. Wife failed to establish how Husband's actions prejudiced her in such a way that a finding of civil contempt would serve as an appropriate remedy. Moreover, Husband's attempted purchase of a firearm did not result in a redress against Wife that is "purgeable." The purpose of a civil contempt finding is to "remediate prejudice against a litigant" and is usually financial in nature. "Unlike fines for criminal contempt where deterrence is the aim and the State is the aggrieved party civil contempt fines must be remedial in nature and effect. The [remedy] should be formulated not to punish an offender, but solely to compensate or indemnify private complainants". Ruesch v. Ruesch, 106 AD3d 976 (2d Dept.2013).
Wife's counsel argued at trial that Husband's attempted purchase of a firearm also amounted to criminal contempt. (Tr. 12/2/14 pp. 54–61). The purpose of criminal contempt, in contrast to civil contempt, is to vindicate this Court's Orders. See El–Dehdan v. El–Dehdan, 114 AD3d 4 (2d Dept.2013). Despite its nomenclature, "criminal" contempt may be litigated in a civil proceeding. See Goodman v. State, 31 N.Y.2d 381 (1972). As the aggrieved party in a criminal contempt proceeding is the Court, a showing of prejudice to Wife is not required, nor must a purge condition apply. See New York City, Tr. Auth. v. Transport Workers Union of Am., 35 AD3d 73 (2d Dept.2006). In order to establish a finding of criminal contempt, the moving party must show, beyond a reasonable doubt, (1) the existence of a lawful mandate of the Court, (2) that the alleged contemnor was aware of the mandate, and (3) that the alleged contemnor willfully violated the mandate. See Judiciary Law § 750 ; See also Gomes v. Gomes, 106 AD3d 868 (2d Dept.2013).
Accordingly, after considering the testimony of the parties, including Husband's admissions, the Court finds that Wife has proven, beyond a reasonable doubt, that Husband's trip to the State of Georgia with the intention of purchasing a firearm, and his actual attempt to purchase that firearm, amounts to a willful violation of this Court's Order that he be prohibited from "buying, possessing, or transferring a handgun, rifle, shotgun, or other firearm" (See Jud. Not. 4, 12) (Tr. 12/3/14 pp. 8–9).
While the Court notes that Husband was unsuccessful in his attempt to purchase a firearm due to the seller's responsible compliance with federal background check laws, Husband is still accountable for his actions. This Court finds that Husband's conduct constitutes a violation of this Court's Order of Protection such that a finding of criminal contempt is warranted. See People v. Charland, 30 AD3d 838 (3rd Dept.2006) ;See also Penal Law § 110/215.50(3); See also People v. Eva (Serge), 24 Misc.3d 136(A) (2d Dept.2009). The Court further finds that, of the numerous firearms Husband possessed, he only surrendered four weapons to the New York City Police Department. While Husband testified that he surrendered the remaining firearms to his friend who was the alleged original owner of the guns, there is no evidence to substantiate his claim. The exact whereabouts of these firearms remains unknown to this Court.
As Husband has been found to be in criminal contempt of this Court's Orders, this Court must fashion an appropriate remedy. Wife clearly indicates that she is not seeking to incarcerate Husband. While Wife does seek an unequal distribution of marital property as a remedy, she offers no law to support that remedy for a finding of criminal contempt, nor does this Court find it appropriate. Rather, this Court finds that a fine of $1,000is warranted, payable to the New York City Department of Finance within 30 days of this Decision's date. See Goodman v. State, 31 N.Y.2d 381 (1972) ; See also, Nehring Bros. v. Pettyjohn, 5 Misc.3d 1008(A) (Civ.Ct.Kings.Cty.2004) ; Judiciary Law § 751(1). Husband is to provide proof of payment to this Court, through counsel or in person, on or before October 19, 2015. In the event that Husband has not provided proof of compliance, he is hereby ORDERED to appear before this Court on November 5, 2015. Husband's failure to appear on that date may result in a warrant being issued for his arrest.
The Court notes that it has also specifically considered Husband's contemptuous conduct in connection with Wife's application for a five year Order of Protection, which was granted. The Court also specifically considered Husband's actions in conjunction with Wife's application for counsel fees, as Husband's contemptuous conduct both severely delayed this trial, and caused Wife to incur unnecessary counsel fees in conjunction with the filing of a contempt application. See Guzzo v. Guzzo, 110 AD3d 765 (2d Dept.2013) ; See also, Khan v. Ahmed, 98 AD3d 471 (2d Dept.2012). Finally, the Court has seriously considered the issue of domestic violence in conjunction with its award of maintenance.
Equitable Distribution
The Domestic Relations Law recognizes that a marriage relationship is an economic partnership. As such, during the course of a marriage, spouses share in both its profits and losses. When the marriage comes to an end, courts are required to equitably distribute both the assets and liabilities remaining from the marriage. See Fields v. Fields, 15 NY3d 158 (2010). A trial court considering the factors set forth in the Domestic Relations Law has broad discretion in deciding what is equitable under all of the circumstances. See Krolikowski v. Krolikowski, 110 AD3d 1449 (4th Dept.2013). Indeed, when it comes to the equitable distribution of marital property, Domestic Relations Law § 236(B)(5)(d)(13) authorizes the trial court to take into account "any other factor which the court shall expressly find to be just and proper." Consequently, the trial court has substantial flexibility in fashioning an appropriate decree based on what it views to be fair and equitable under the circumstances. See Mahoney–Buntzman v. Buntzman, 12 NY3d 415 (2009). Equitable distribution does not necessarily indicate equal distribution. See Groesbeck v. Groesbeck, 51 AD3d 722 (2d Dept.2008).
When making its determination as to equitable distribution, the Court has considered the factors enumerated in DRL § 236. See Henery v. Henery, 105 AD3d 903 (2d Dept.2013). In addition to any factor specifically considered in relation to a particular asset herein, the Court finds that: (1) this is marriage of long duration; (2) that Husband is the monied spouse in this action as the owner / operator of a well established freight trucking company while Wife is unemployed; (3) both parties are in general good health though Wife had a surgical procedure during the course of this proceeding; (4) the Wife currently resides in the marital home together with the three children of this marriage, two of whom are adults; (5) Wife shall be entitled to an award of maintenance as delineated herein; (6) Wife has made considerable contributions to Husband's success by providing support as a spouse and primary caretaker of the marital home and children; (7) Husband has a superior opportunity for financial growth as the owner of a successful business, while Wife's opportunity for future economic growth is limited and; (8) both parties withdrew funds (Wife $15,000 and Husband $85,000 ) from a marital account in anticipation of this divorce proceeding.
P.M.X.F. Systems, Inc.
By Order dated January 24, 2013, Ms. Heidi Muckler was appointed by the Court to value Husband's trucking and freight business P.M.X.F Systems, Inc. Ms. Muckler testified before this Court on April 29, 2014. Ms. Muckler testified that she was unable to complete her evaluation, or issue a report to this Court because she was hindered by Husband's lack of participation, a lack of document production, and his initial failure to pay the court ordered amount owed to her. (Tr. 4/29/14 pp. 12, 20, 32).
Due to Husband's failure to cooperate, Ms. Muckler testified that she could not establish a value for Husband's business, or identify the physical assets belonging to that business. She did, however, credibly testify that the business had incomplete books. She also credibly testified that she could not account for various ATM withdrawals and checks payable to Husband. When Ms. Muckler contacted Husband's accountant in an attempt to clarify some of the discrepancies she found, he told her "good luck". (Tr. 4/29/14 pp. 49–50). Husband claims that he utilized these various withdrawals for legitimate business expenses. (Tr. 12/4/14 p. 27).
In response to Husband's failure to cooperate with Ms. Muckler's evaluation, Wife filed a motion for preclusion, which was granted by Short Form Order dated February 7, 2014. ("the Preclusion Order"). According to the terms of that Order, all issues of fact in relation to P.M.X.F are to be resolved in Wife's favor, however, this does not remove Wife's basic burden of proof in regard to the valuation of an asset of which she seeks distribution. See Shapiro v. Shapiro, 151 A.D.2d 559 (2d Dept.1989) ; See also, Michalek v. Michalek, 114 A.D.2d 655 (3rd Dept.1985).
Ms. Muckler established, and Wife did not refute, that Husband owns 100 percent of the common stock in the business. (Tr. 4/29/14 p. 44). Accordingly, Wife, as the non-titled spouse, "had the burden of proving the asset's value so as to afford the Court a sufficient basis upon which to make a distributive award." See Antoian v. Antoian, 215 A.D.2d 421 (2d Dept.1995). While any reasonably supported valuation offered by Wife would become uncontested under the terms of the Preclusion Order, Wife failed to offer any valuation whatsoever.
At trial, Husband attempted to establish that P.M.X.F is his separate property because the current business originated from a prior business that he owned before the marriage. Husband testified that he owned a company known as Overland Freight and that, in or around 1998, he switched the name to P.M.X.F. Systems Inc. Husband further testified that all of Overland's assets transferred to P.M.X .F. as did its "vehicles, workers, and equipment." (Tr. 1/13/15 pp. 92–97). Despite the Preclusion Order, Wife did not object to this testimony. Moreover, Wife does not refute Husband's testimony. Rather, she admits that Husband owned a similar freight trucking business when they met. (Tr. 6/19/2014 p. 42). Wife testified that when she met Husband he owned a business known as Overland Freight and that he later changed the name to P.M.X.F. Systems Inc., "sometime in the middle of their marriage." (Tr. 4/28/14/ p. 59).Wife admitted at trial that Overland Freight, which predated the marriage, became the business that Husband owns today. (Tr. 6/19/14 p. 44). Accordingly, Wife's own testimony supports Husband's claim that the business should be "traced" to his separate property and is therefore not a marital asset other than for a claim for any appreciation in value. See Geisel v. Geisel, 241 A.D.2d 442 (2d Dept.1997).
Despite her testimony, in her summation after trial, Wife asserts a claim that P.M.X.F is a marital asset subject to equitable distribution. However, she does not suggest a way of distributing the same. As Wife's testimony establishes that P.M.X.F. should be traced to Husband's premarital business, the proper claim would be for one for appreciation. See Clark v. Clark, 117 AD3d 668 (2d Dept.2014). To establish an appreciation claim, Wife would have to show that she somehow contributed to the business. See DRL § 236(B)(1)(d)(3). Since Wife admitted at trial that she did not participate in Husband's business activities, has never been to the warehouse, has never met its employees, and had no personal knowledge regarding its operation, her purported claim for appreciation must be denied for failing to meet her burden of proof. (Tr. 6/19/14 p. 47). See Wagner v. Dunetz, 299 A.D.2d 347 (2d Dept.2002).
For these reasons set forth above, but with specific weight afforded to the fact that Wife failed to establish any reasonable value for the business, and further failed to show any involvement in the business, Husband is granted 100% of the interest in P.M.X.F. Systems Inc., and Wife's claim to an equitable portion thereof, or any appreciation during the marriage, is denied as unsupported by the record. See Post v. Post, 68 AD3d 741 (2d Dept.2009) ; See also; Sutaria v. Sutaria, 123 AD3d 909 (2d Dept.2014) ; Alper v. Alper, 77 AD3d 694 (2d Dept.2010) ; Antonian, Supra.
b. Conklin Realty/ Brooklyn Warehouse.
In 2006, the parties' jointly acquired the land and warehouse upon which Husband's business, P.M.X.F. Systems Inc., conducts its business. This land was purchased for the sum of $1,282,756 with Husband borrowing $600,000 from M & T bank together with a Small Business Administration (SBA) loan to fund the purchase.(Tr. 12/4/14 pp. 61–70). This property is located at 179–183 27th Street, Brooklyn, New York. Both parties testified that a limited liability company was formed, Conklin 99 Realty LLC ("Conklin") for the purpose of holding this property. The property was owned by Conklin throughout this divorce proceeding. Wife is a 5% shareholder of Conklin and Husband owns the remaining 95%. However, these percentages are in no way binding on this Court as equitable distribution may be ordered "regardless of the form in which title is held. See Fields v. Fields, 15 NY3d 158 (2010) ; See also, Halley–Boyce v. Boyce, 108 AD3d 503 (2d Dept.2013). Moreover, the Court credits Husband's testimony that Wife's 5% share was for convenience in obtaining health insurance. (Tr. 12/4/14 p. 73). Neither party has offered any evidence as to the value, if any, of Conklin as an entity separate and apart from its sole asset, the warehouse. Husband credibly testified that he derives very little, if any, personal income from Conklin as the rent collected from P.M.X.F. directly offsets the mortgage attributable to that property. (Tr. 1/15/15 pp. 72–74).
During the course of the pre-trial proceedings this one story commercial warehouse with approximately 8,000 square feet of building area was appraised. (Pet.Ex.35). By Report dated February 13, 2013, East Coast appraised this property at a value of $1,444,000.In her summation after trial Wife requests that the property be sold. Wife argues that any net proceeds from the sale should be distributed 100% to her. Husband submits that he should be permitted to compensate Wife for her interest in that property so that he can continue to operate P.M.X.F. and secure his employment as the sole source of income for this family.
Wife offers no support for her request that this Court award her 100% of the distribution of this property and the Court believes that such a distribution would be erroneous. See Bricker v. Bricker, 69 AD3d 546 (2d Dept.2010). Moreover, the Court agrees with Husband that as P.M.X.F is the sole source of income for this family, it would be prudent for the parties to attempt to have it remain in Husband's possession if at all possible. However, this goal must be effectuated in a way that preserves Wife's right to her equitable share of the property.
Accordingly, the Court finds that Husband shall be entitled to a right of first refusal, to purchase the property, at its market value, in accordance with the percentages stated below. See Rubackin v. Rubackin, 107 AD3d 872 (2d Dept.2013). Husband shall be entitled to "buy out" Wife's equity in the property as determined by an updated appraisal to be conducted by "East Coast Appraisals" or any value that can be stipulated to by the parties in writing. In the event that the parties cannot stipulate to a value, the appraisal must be initiated within 20 days of the signing of the Judgment of Divorce. The purpose of this updated appraisal is to determine the current market value of the property as the original appraisal is now over a year old. See Opperisano v. Opperisano, 35 AD3d 686 (2d Dept.2006). Husband shall be responsible for any fees and costs associated with this updated appraisal. Upon receipt of the appraisal, or stipulation as to the agreed upon value, Husband shall have 90 days to utilize his buy out option unless the parties stipulate in writing to a longer time period.
In the event that Husband is unable, or chooses not to buy out Wife's interest, this property shall be placed on the market for sale at its current market value as determined by a licensed commercial real estate broker. The property shall be listed for sale within 15 days of Husband's decision not to utilize his buy out provision or no later than 15 days after expiration of his 90 day buy out period.
Both parties shall participate in the sale as follows: Husband shall select three commercial real estate brokers who operate in Brooklyn and shall forward their contact information to Wife. Wife shall then select one of those brokers to handle the sale. Husband shall be responsible for showing the property. Husband shall make any reasonable reductions to the asking price to facilitate the sale, provided that the reduced price is in accordance with the advice of the broker.
Regardless of whether Wife's share of the commercial property is "bought out" by Husband at the appraised value, or the property is sold to a bona fide purchaser, the equitable distribution percentage shall be as follows:50% percent of the proceeds from the sale of the property shall be distributed to Wife and 50% percent of the proceeds from the sale of the property shall be distributed to Husband, after the payment of all encumbrances, loans and expenses attributable to that property. After consideration of the factors enumerated in DRL § 236, the Court finds this equal distribution to be equitable under the circumstances. See Miller v. Miller, 128 A.D.2d 844 (2d Dept.1987).
In regard to Conklin, neither party has established a value as to this entity other than its very limited income earning potential from rent in excess of the warehouse's mortgage. As neither party has valued this asset, and there seems to be no market value, the Court shall decline to distribute the same and it shall remain owned as titled.
c. Marital Home.
The parties purchased the former marital residence, a one family detached home located on Covington Circle in Staten Island, New York in November of 1999 for a purchase price of approximately $450,000 . In December of 2005, the parties refinanced this home for $549,500 and received approximately $280,164 in cash proceeds. Husband credibly testified that these proceeds were placed into a joint account and used during the next two years to pay bills, improve the marital home, and fund vacations. (Tr. 2/3/14 pp. 59–63). The funds were also partially used to purchase the property located on 27th Street in Brooklyn. (Tr. 1/14/15 p. 62). Wife claims she was wholly unaware of the refinancing, despite the fact that she was present at the closing and signed the documentation. The Court finds this testimony not credible. Wife seeks equitable distribution of one half the loan proceeds or $140,000 as a distributive award, on top of her equitable share of the equity in the house. In addition to this refinance, Wife testified as to a number of other smaller equity loans on the home, including one from M & T Bank in the amount of $35,000. Husband admits that the M & T loan is in default. (Tr. 1/15/15 p. 21).
The refinancing was negotiated in December of 2005 during the course of the marriage. (Tr. 2/7/14 p. 125). Despite Wife's claims that she knew nothing about the refinancing, both parties are signatories to the refinancing agreement. (Pl.Ex. No. 7). The same applies to the M & T equity loan which was entered into in July of 2010. (Tr. 2/7/14 p. 140). The Court credits Husband's testimony that that money was used for marital expenses and the down payment on the Brooklyn property, and was fully utilized by the parties to maintain their lifestyle. There is no evidence in the record that Wife objected to the use of the funds at the time they were obtained. Further, Wife did not inquire or object when Husband asked her to sign the applicable loan documents. (Tr. 2/7/14 pp. 126–131).
Generally, "courts should not second-guess the economic decisions made during the course of a marriage, but rather should equitably distribute the assets and obligations remaining once the relationship is at an end". See Caracciolo v. Chodkowski, 90 AD3d 801 (2d Dept.2011). Here, the monies at issue were obtained in 2005 and 2010, both well before the commencement of this action. While Wife would arguably have an equitable claim to one half of any proceeds that still existed in an account, here Wife has failed to establish that those monies have not been spent during the course of the marriage as Husband claims. Accordingly, Wife's request for a distributive award in relation to the 2005 refinance and 2010 equity loan are hereby denied. See Mahoney–Buntzman v. Buntzman, 12 NY3d 415 (2009) ; See also, Kessler v. Kessler, 118 AD3d 946 (2d Dept.2014).
By Order dated September 20, 2012, this Court ordered the former marital residence appraised at Husband's expense. The resulting appraisal report was entered into evidence as Plaintiff's Exhibit 11. This report, which is dated July 17, 2013 indicates an "as is" value of $675,000. While the exact amount of the current mortgage outstanding on the home was not testified to at trial, the parties agree that the property is heavily encumbered. Defendant admits that he has not paid the mortgage since January of 2014 despite the Pendente Lite Order directing him to do so. Husband claims that he lacks the funds to do so as his business income decreased. He further testified that he tried to modify the mortgage in early 2014 but the modified payment was in excess of the original mortgage payment, and therefore not feasible. The Court does not credit Husband's claimed inability to pay the mortgage and finds that his failure to do so constitutes the wasteful dissipation of a marital asset, to wit, the equity in the home. See Maggiore v. Maggiore, 91 AD3d 1096 (3rd Dept.2012) ; See also Noble v. Noble, 78 AD3d 1386 (3rd Dept.2010)
Wife seeks an Order compelling Defendant to deliver these premises to her free and clear of all liens. She further testified that she would like to remain in the home with C.S. and the parties' adult children. Husband requests that the house be sold and the proceeds distributed equally.
While the distribution of assets need not be equal, it must be equitable. See Rizzo v. Rizzo, 120 AD3d 1400 (2d Dept.2014). Accordingly, Wife's request for the house to be transferred to her free and clear of all liens is unsupported by the record, or the law, as it would unreasonably extinguish Husband's claim to equity in that property. See Bricker v. Bricker, 69 AD3d 546 (2d Dept.2010).
As Wife has shown an interest in remaining in the marital home with the children of this marriage, she shall have the right of first refusal, to purchase the home at its market value in accordance with the percentages stated below. See Rubackin v. Rubackin, 107 AD3d 872 (2d Dept.2013). Wife shall be entitled to "buy out" Husband's equity in the property as determined by an updated appraisal to be conducted by the Court appointed neutral appraiser "Wonica Realtors," or any value that can be stipulated to by the parties in writing. In the event that the parties cannot stipulate to a value, the appraisal must be initiated within 20 days of the signing of the Judgment of Divorce. The purpose of this updated appraisal is to determine the current market value of the property as the original Court Ordered appraisal is now two years old. See Opperisano v. Opperisano, 35 AD3d 686 (2d Dept.2006).Wife shall have 90 days to utilize her buy out option unless a longer time period is agreed to between the parties. Wife shall be responsible for any fees and costs associated with this updated appraisal. If Wife chooses to buy out Husband's share of the property, she must remove his name from the mortgage relating thereto by either obtaining a substitute mortgage in her name, or paying off the mortgage balance in full.
In the event that Wife chooses not to buy out Husband's interest, the parties are hereby directed to place the marital home on the market for sale at its current market value as determined by a licensed real estate broker. The property shall be listed for sale within 15 days of Wife's decision not to utilize her buy out provision or no later than 15 days after expiration of her 90 day buy out period. In light of the Order of Protection issued herein, Wife shall have exclusive use and occupancy of the marital residence until it is sold or otherwise disposed of as provided herein.
Both parties shall participate in the sale as follows: Wife shall select three real estate brokers who operate in Staten Island and shall forward their contact information to Husband. Husband shall then select one of those brokers to handle the sale. Wife shall be responsible for showing the property. Wife shall make any reasonable reductions to the asking price to facilitate the sale, provided that the reduced price is in accordance with the advice of the broker.
Whether Husband's share of the home is "bought out" by Wife at the appraised value, or the house is sold to a bona fide purchaser, the equitable distribution percentage shall be as follows: 70% percent of the net proceeds from the sale of the home shall be distributed to Wife and 30% percent of the net proceeds from the sale of the home shall be distributed to Husband, after the payment of all encumbrances, loans and expenses attributable to that property. After consideration of the factors enumerated in DRL § 236, the Court finds this unequal distribution to be equitable under the circumstances. See Holterman v. Holterman, 3 NY3d 1 (2004).
In ordering an unequal distribution, the Court has considered, among other factors, the disparity in the parties' current and future incomes, the parties' ages at the time of distribution, and the marital waste committed by Husband in his failure to pay the mortgage which further encumbered the property at issue. See Branche v. Holloway, 124 AD3d 553 (1st Dept.2015). The Court has also considered that Wife's failure of proof in relation to Husband's business was due in part to Husband's failure to cooperate with the Court appointed business appraiser. See Maharam v. Maharam, 245 A.D.2d 94 (1st Dept.1997) ; See also, Solomon v. Solomon, 276 A.D.2d 547 (2d Dept.2000).
d. New Jersey Shore House.
In November of 1995, the parties purchased a second home, intended for vacation use, located in Manahawkin, New Jersey for $130,000. Husband testified that there is currently an outstanding line of credit debt associated with that house in the approximate amount of $268,000. It appears from the record that this debt originated from a transaction in 2006 wherein Husband refinanced the New Jersey Home for $300,000, which was first used to pay off the outstanding mortgage of $100,000, with the rest withdrawn in cash. (Tr. 12/3/14 p. 123). Wife now seeks one half of the approximate $200,000 in cash that was withdrawn from the home as an equitable distribution award. As detailed above, the Court is not in a position to second guess the financial decisions made by the parties during their marriage. See Mahoney–Buntzman, supra. Moreover, there is no evidence in the record that Wife objected to the refinancing, or the use of the proceeds at the time they were used to maintain the parties' lifestyle. The Court credits Husband's testimony as to the disposition of those proceeds, all during the course of the parties' marriage. (Tr. 12/3/14 pp. 123–126). Accordingly, Wife's request for a distributive award relating to the loans taken against this house is denied.
The parties agree that this waterfront home sustained severe damage in Hurricane Sandy in October of 2012. Due to this damage, the parties received insurance proceeds that were held in the escrow account of Husband's attorney, Robert Cohen Esq. At trial, Wife intimated that the repair invoices presented by Husband to insurance adjusters may have been fraudulent in nature, but she admitted that substantial repairs had been made to the house which included demolition, mold remediation, reconstruction and painting. In this regard, the Court credits Husband's testimony that he utilized the funds for legitimate purposes. Wife also objected to the fact that Husband threw out all the furniture in the home, but this Court credits Husband's account that he had no choice but to dispose of these items as they had all been submerged in the rising tidal water that flooded their house and the adjacent properties.
During the course of this case, the New Jersey property was appraised by Bay Shore Realty. The appraisal report, which is dated November 27, 2012, indicates an "as is" value of approximately $175,000 to $200,000. In his summation after trial, Husband makes a request that this property be sold and the net proceeds split. Wife requests that the property be transferred to her "free and clear" of any liens. Wife does not offer any support for this proposition which would negate Husband's claim for equitable distribution.
As this property has served as Husband's primary residence during the course of this trial, he shall have the right of first refusal to purchase the New Jersey home at its market value in accordance with the percentages stated below. See Rubackin v. Rubackin, 107 AD3d 872 (2d Dept.2013). Husband shall be entitled to "buy out" Wife's equity in the property as determined by an updated appraisal to be conducted by "Bay Shore Realtors" or any value that can be stipulated to by the parties in writing. In the event that the parties cannot stipulate to a value, the appraisal must be initiated within 20 days of the signing of the Judgment of Divorce. The purpose of this updated appraisal is to determine the current market value of the home, as the original appraisal is over two years old and Husband has testified that he has made substantial repairs to the home. See Opperisano v. Opperisano, 35 AD3d 686 (2d Dept.2006) ;(Tr. 12/2/14 p. 119). Husband shall be responsible for any fee associated with this updated appraisal. Upon receipt of the appraisal, or stipulation as to agreed upon value, Husband shall have 90 days to utilize his buy out option unless a longer time period is agreed to between the parties. If Husband chooses to buy out Wife's share of the property he must remove her name from the mortgage relating thereto by either obtaining a substitute mortgage in his name, or paying off the mortgage balance in full.
In the event that Husband chooses not to buy out Wife's interest, the parties are hereby directed to place the New Jersey home on the market for sale at its current market value as determined by a licensed real estate broker. The property shall be listed for sale within 15 days of Husband's decision not to utilize his buy out provision or no later than 15 days after expiration of his 90 day buy out period.
Both parties shall participate in the sale as follows: Husband shall select two commercial real estate brokers who operate in New Jersey and shall forward their contact information to Wife. Wife shall then select one of those brokers to handle the sale. Husband shall be responsible for showing the property. Husband shall make any reasonable reductions to the asking price to facilitate the sale provided that the reduced price is in accordance with the advice of the broker.
Whether Wife's share of the home is "bought out" by Husband at the appraised value, or the house is sold to a third party purchaser, the net proceeds from the sale of the home shall be distributed evenly (50% / 50%) after the payment of all encumbrances, loans and expenses attributable to that property. See Safi v. Safi, 94 AD3d 737 (2d Dept.2012) ; See also, Carr–Harris v. Carr–Harris, 98 AD3d 548 (2d Dept.2012).In the unfortunate event that the sale of this house results in a deficiency judgment, each party will be responsible for one half of that debt as it is marital in nature. See Turco v. Turco, 117 AD3d 719 (2d Dept.2014). The Court notes that Husband credibly testified that he has consistently paid the mortgage associated with this property, though he was at times late with payments. (Tr. 12/2/14 p. 130).
e. Vacant Land (Greenville, New York).
In April 2009, the parties purchased a plot of vacant land in the Town of Greenville, New York. There is conflicting testimony in the record as to how much participation Wife had in the selection and purchase of this land. Wife claimed to know very little about its purchase, however the Court credits Husband's testimony that Wife was both involved and aware of the purchase details.
When this property was purchased, the parties sought financing with the "National Bank of Coxsackie." While Wife admits that she was present for the signing of a mortgage relating to that property, and that she signed the contract, she indicated that she did not read the document, nor was she aware of the amount of the loan, or the particulars of the sale. Wife testified that this land was to be used by Husband and the parties' sons for hunting. According to the foreclosure documentation entered into evidence, the parties borrowed $87,500 from the National Bank of Coxsackie at the time of purchase. (See Pl.Ex. 26).
By Pendente Lite Order dated September 20, 2012, Husband was ordered to "pay the mortgages on the marital residence and all other real property." Despite this Order, Husband stopped making mortgage payments of approximately $928 a month in or around February of 2013. Husband claims that he stopped making payments because he was financially unable to pay the mortgage in conjunction with his other obligations relating to this divorce. Husband testified that he attempted to save the land by refinancing the mortgage, but that the lender refused to accept his proposed 30 year term. It is undisputed that this parcel of vacant land was lost in a foreclosure proceeding during the course of this litigation.
When a party is ordered to pay a mortgage in order to preserve a marital asset, and he fails to do so, it amounts to the wasteful dissipation of the equity that existed in that marital asset. See Maggiore v. Maggiore, 91 AD3d 1096 (3rd Dept.2012). Here, Husband admittedly failed to pay the mortgage despite a Court Order to do so.
During the course of these proceedings, the Greenville property was valued, and that evaluation was introduced into evidence as Plaintiffs Exhibit number 25. According to this valuation, the property was worth $55,000 as of December 6, 2012. While a party seeking equitable distribution of an asset has a burden to offer evidence as to value, the market value of a property must be gauged against any mortgage relating to that property to determine the equity which is subject to equitable distribution. See Newman v. Newman, 35 AD3d 418 (1st Dept.2006) ; See also, Kilkenny v. Kilkenny, 54 AD3d 816 (2d Dept.2008). Neither party has testified or offered evidence as to the exact balance of the outstanding mortgage at the time Husband ceased his payments in February of 2013. However, the documentary evidence offered at trial indicates that at as of May 2013 the outstanding balance was $74,341.51. As Husband stopped paying the mortgage some four months earlier it is a fair assumption that the mortgage balance at the time Husband ceased payment was at least $70,629 (4 months at $928 a month). As the balance of the outstanding mortgage was at least $15,630 more than the value of that property, the Court finds that there was no equity in the property at the time Husband violated this Court's Order regarding the payment of the mortgage.
Accordingly, as Wife failed to show that there was any equity in the property at the time Husband stopped paying the mortgage, a distributive award to account for marital waste is not warranted. However, as Husband failed to preserve the asset that he was Ordered to preserve, he shall be 100% responsible for the payment of any outstanding deficiency judgment, if there is one, relating to the Green County Court's Ordered foreclosure sale of the property at issue. (Pl.Ex.27, 28); (Tr. 12/3/14 p. 49).
f. Personal Property.
1. Cash
Plaintiff credibly testified that during the course of her marriage she witnessed Husband storing large sums of cash in the marital home. After the parties separated, in the Spring of 2012, but prior to the July 17th commencement of this action, Wife and the subject child M.S. opened up Husband's briefcase, which had been left in the marital home, and discovered that it contained $37,000 .
Wife credibly testified that she left the briefcase, only to find that Husband later removed it without her knowledge on a brief visit to the home. Wife testified that, Husband came to the house to take a shower before a graduation event, and when she next looked, the briefcase was gone. Wife seeks equitable distribution of one half the proceeds of this briefcase or $18,500.
During the course of the trial, Wife indicated that she intended to call her daughter M.S. as a witness to corroborate her testimony regarding this cash. However, as Husband objected to his daughter testifying against him, the parties entered into a So Ordered Stipulation by which they agreed that "if [M.S.] testified, that she would testify that she was in the marital residence and saw and participated in the counting of the sum of thirty seven thousand [dollars] of United States currency." (Jud.Not.25).
The Court credits Wife's testimony regarding the cash stored in the house, as corroborated by the subject child's stipulated testimony. While the money was taken shortly before the commencement of this action, the Court finds that it was a marital asset taken by Husband and secreted, or converted, without Wife's consent in anticipation of the present divorce proceeding. See Housset v. Housset, 200 A.D.2d 508 (1st Dept.1994). Accordingly, Wife is hereby awarded a distributive award in the amount of $18,500 payable within 30 days of the signing of the Judgment of Divorce or useable as a credit in any buyout provision sought to be utilized by Wife.
Wife does not dispute that immediately prior to the commencement of this divorce action, Wife removed $15,000 from a joint checking account. Wife credibly testified that she did so on the advice of her attorney at the time and utilized $10,000 of these funds for an initial attorney retainer and kept $5,000 for food and living expenses in the event that Husband ceased providing support after she filed for divorce. Husband seeks equitable distribution of one half of these funds or $7,500.
It is undisputed that, on July 9, 2012, eight days before the commencement of this action, Husband withdrew the sum of approximately $85,000 from an additional joint account, leaving nothing behind. (Tr. 12/3/14 pp. 72, 86). At the time Husband withdrew these funds, he was aware that Wife was intending to file for divorce. Husband admits he withdrew the funds, in part, because Wife's withdrawal of $15,000 caused his checks to bounce. Husband credibly testified that when he took the money he deposited it in his business bank account, and that as of the time of his testimony, no funds remained. (Tr. 1/15/15 p. 75).
Both of the withdrawals at issue occurred shortly before the commencement of this action, and before the issuance of the "Automatic Orders" contained in DRL § 236(B)(2)(b). However, transfers made in anticipation of a divorce proceeding may be considered in relation to equitable distribution under DRL § 236(B)(5)(d)(13). Here, both parties withdrew monies and closed out marital accounts without informing the other, however the sum withdrawn by Wife was considerably less than that withdrawn by Husband. While both parties had equal access to these monies, as they were placed in joint accounts, neither party had the right do deprive the other of their 50% equitable portion of those funds. Accordingly Husband shall be required to pay a distributive award in the amount of $35,000 representing one half of the funds withdrawn by Husband, less one half of the funds withdrawn by Wife. See DeGroat v. DeGroat, 84 AD3d 1012 (2d Dept.2011). This distributive award may be paid in a lump sum, or in equal payments of $730 over the consecutive 48 months immediately following the signing of the Judgment of Divorce. In lieu of payment, Wife may use this sum of $35,000 as a credit in relation to any buyout provision she has been granted herein.
2. Jewelry
At trial Wife credibly testified that Husband converted twelve pieces of her jewelry without her consent. Husband converted Wife's diamond heart necklace, two wedding bands, a heart charm bracelet, a gold link bracelet, a gold bracelet, a diamond tennis bracelet, a diamond heart bracelet, her engagement ring, her Rolex watch, and a small gold cross. While Wife's testimony on the subject was unclear, it appears that approximately half of the pieces were purchased during the marriage. (Tr. 12/2/14 p. 73). Wife did not clearly indicate which items were purchased when and by whom. Wife further did not present any expert testimony as to the value of these items, however, she testified in detail as to her belief as to the value of each of these items from research she did on the internet, resulting in a total of $29,783.
Wife testified as to the value of the jewelry as follows: a diamond heart necklace worth $299, small wedding band worth $3,999, diamond wedding band worth $2,900, heart charm bracelet worth $186, gold link bracelet worth $298, a gold bracelet worth $421, diamond tennis bracelet worth $6,887, diamond heart bracelet worth $250, engagement ring worth. $6,799, Rolex watch worth. $7,559, and small gold cross worth approx. $185. (Tr. 2/7/14 pp. 151–163).
Husband admits that he took Wife's Rolex watch and diamond bracelet and sold them without her permission. (Tr. 12/4/14, pp. 79–81).Husband further admits that he was less than truthful at his deposition when he stated that he didn't take the jewelry.(Tr. 2/5/15, pp. 24, 86). While Husband admits that he took certain pieces of jewelry, he disputes the number of pieces claimed by Wife. The Court finds that Husband's testimony was not credible on this subject.
At trial, at this Court's direction, Husband returned the single piece of jewelry that he claims he still had, a diamond studded gold cross that had belonged to Wife's mother. (Tr. 1/15/15, pp. 23–25). Husband testified that he received $500 for the sale of the diamond bracelet and $800 for the Rolex when he sold these items and presented a receipt indicating the same. (Tr. 12/16/14, pp. 15–16).
Husband argues that since Wife failed to value the jewelry that he converted without her permission, this Court cannot issue a distributive award regarding the value of those items. Husband's argument is unpersuasive. While it is generally correct that a party seeking the distribution of a marital asset has the burden of valuing that asset, Husband has frustrated Wife's ability to value the jewelry at issue by removing it from her possession and converting it. Husband cannot benefit from his improper conversion, and any deficiency in the record regarding the value of the missing jewelry is Husband's own doing. See Hilts v. Hilts, 248 A.D.2d 788 (3rd Dept.1998) ; See also, Spilman–Conklin v. Conklin, 11 AD3d 798 (3rd Dept.2004). Wife offered credible testimony as to her belief of what the items in question were worth based upon her research of the same. See Cuozzo v. Cuozzo, 2 AD3d 665 (2d Dept.2003) ; See also, Spenello v. Spenello, 274 A.D.2d 822 (3rd Dept.2000) ; Felicello v. Felicello, 240 A.D.2d 625 (2d Dept.1997).However, in valuing the assets, the Court finds that the money obtained by Husband for the two pieces sold, albeit without authorization, offers a better reflection of market value than Wife's research. Wife admits that the research she did was based upon the retail price of new items, as opposed to the missing items which were many years old. While this Court in no way condones Husband's unauthorized sale of marital property, the record does not support Wife's valuation in light of a third party purchase of those items. Accordingly, the value of the Rolex watch shall be $800 and that value of the tennis bracelet shall be $500.
For the reasons set forth above, the Court finds that Husband inappropriately dissipated Wife's jewelry. However as gifts given during the marriage are considered marital property, Husband had a claim to one half of at least some of those pieces. See Smithie v.. Smithie, 122 AD3d 719 (2d Dept.2014). The Court hereby determines the reasonable value of the assets at issue, to be $9,588. Accordingly, Husband is hereby directed to pay Wife a distributive award in the amount of $7,191 representing 75% of the value of the jewelry. This distributive award shall be made within 30 days of the signing of the Judgment of Divorce or useable as a credit in any buyout provision sought to be utilized by Wife. The Court finds an unequal distribution of the value of these items to be appropriate under the circumstances as Wife testified, and Husband did not refute, that certain of these items were her separate property, and that any proof relating to this jewelry was frustrated by Husband's unauthorized conversion of the same.
3. Boats
Throughout the trial, both parties testified as to the existence of at least three boats obtained by the parties during the marriage. These boats included an 18 foot boat, a 23 foot "Sea Pro" power fishing boat, and a "Nor'Sea" sailboat. (Tr. 12/16/14 pp. 18–19). Husband testified that during the course of the pre trial proceedings both of the parties' agreed, through their prior attorneys, to sell the sailboat, for which they received the sum of approximately $51,000. (Tr. 12/16/14 p. 22, 25). The Court credits Husband's testimony that the proceeds of that sale were split between the parties with each party receiving somewhere near the amount of$22,950 after commissions. While Wife admits that she received money from this sale, she testified that she received a few thousand dollars as her then attorney apportioned the rest as counsel fees. (Tr. 1/13/15 p. 20). By Order dated August 6, 2014, the title of the Sea Pro boat was transferred from Husband's name to Wife's name. Husband testified that this boat still remains dry docked in New Jersey. (Jud.Not.20). While there is some evidence in the record that the parties' also owned a third boat, there is little evidence of the disposition of that asset, other than Husband's testimony that the boat was sold on an unspecified date to purchase the fishing boat. (Tr. 1/15/15 p. 16).
While Husband initially testified that the boat sold for over $60,000 the Court credits his testimony as offered on December 16th after he reviewed the documents pertaining to the sale.
Husband testified at trial that the Sea Pro is still in existence, but needs an engine as it was damaged during Hurricane Sandy. Husband approximated its current value to be five or six thousand dollars (Tr.1/15/15 p. 18). After consideration of the record, the Court hereby determines that this boat should be sold at market value. As Husband successfully negotiated the sale of the sailboat, and the boat is docked adjacent to the property where Husband resides in New Jersey, he shall be charged with facilitating the sale through a boat broker or boat dealer. In so doing Husband shall forward the name and contact information of two brokers or dealers to Wife in writing. Wife shall pick one of these brokers or dealers to facilitate the sale at the boat's market value. Husband shall be entitled to make all decisions regarding the sale of the boat, so long as those decisions are in line with the broker's recommendations regarding price. The proceeds of this sale are to be distributed equally between the parties. See Schwartz v. Schwartz, 67 AD3d 989 (2d Dept.2009). This sale shall be initiated within 20 days of the signing of the Judgment of Divorce.
4. Personalty, etc.
There is virtually no information in the record regarding the equitable distribution of personalty, and absolutely no evidence as to the value of any personalty. Accordingly, the Court declines to specifically distribute any personal property owned by the parties. See Moller v. Moller, 188 A.D.2d 807 (3rd Dept.1992) ; see also, LaBarre v. LaBarre, 251 A.D.2d 1008 (4th Dept.1998). Instead, the Court finds that each party shall be entitled to the items of personal property currently in their possession, including all of the property in their current residences and the cars that they are currently driving. In so deciding the Court credits both parties' testimony that they have negotiated the distribution of certain items. (Tr. 12/2/14 p. 19). The Court further notes that during the course of this trial, counsel for both sides were directed to inventory the marital home during a lunch break to effectuate the distribution of personal and sentimental items. (Tr.1/15/15 pp. 35–40). To the extent that Wife made a claim regarding the furniture and personalty located in the parties New Jersey home, that application is denied as the Court credits Husband's testimony that the items were damaged in Hurricane Sandy and needed to be discarded. The Court also notes that Wife received the sum of $7,000 of the insurance funds received for this furniture. (Tr. 12/2/14 p. 29;31).
During trial Husband indicated that he has outstanding credit card debt with "American Express" which consists of both marital debts and debts incurred during these divorce proceedings. (Tr. 1/13/15 pp. 161–162). Generally, credit card debt incurred during the marriage is subject to the principles of equitable distribution. See Rizzo v. Rizzo, 120 AD3d 1400 (2d Dept.2014). Here, however, there is insufficient evidence in the record for the Court to determine the amount, and purpose, of any debt that existed at the commencement of this action to allow an equitable distribution of the same. The Court notes that Husband has been utilizing this credit card during the pendency of this action, and it is in some way linked to his business credit. For these reasons, all credit card debt shall remain the responsibility of the person who owes it by operation of contract. See Bernholc v. Bornstein, 72 AD3d 625 (2d Dept.2010).
Maintenance
Wife's first application for maintenance was made in her Summons and Verified Complaint dated July 17, 2012 wherein she sought an award of "adequate maintenance". In her written summation after trial, Wife requests the sum of $9,500 a month in non durational, lifetime maintenance. Wife suggests that this sum is based upon her reasonable needs, but at trial Wife testified at length that she is completely unaware of the household expenses as Husband pays them all. (Tr. 8/6/14 pp. 46–90). While Husband opposes the sum and duration requested by Wife, he acknowledges that he should pay some amount of maintenance to Wife. Husband requests that the Court issue an Order of durational maintenance in the amount of $1,000 a month until such time as Wife receives Social Security benefits, at which time he requests an automatic reduction, or the ability to return to court to seek a modification.
"The overriding purpose of a maintenance award is to give the [receiving] spouse economic independence, and it should be awarded for a duration that would provide the recipient with enough time to become self-supporting." Sirgant v. Sirgant, 43 AD3d 1034 (2d Dept.2007). The amount and duration of maintenance is a matter committed to the sound discretion of the trial court based upon the unique facts of a case. See Lamparillo v. Lamparillo, 12 N.Y.S.3d 296 (2d Dept.2015). When determining a maintenance award the Court is directed to review a list of enumerated factors, and indicate which factors it considered in making its award. See DRL § 236(B)(6)(a)(1–20).
In the case at bar the Court has considered the following factors (1) the standard of living of the parties; (2) the comparative income of the parties; (3) the equitable distribution of property; (4) the duration of the marriage; (5) the age, health, and future earning capacities of the parties; (6) the ability of the party seeking maintenance to become self supporting; (7) domestic violence; (8) the wasteful dissipation of marital assets; (9) the need for one party to incur education or training expenses and; (10) the presence of children in the recipient spouses' household. See Carroll v. Carroll, 125 AD3d 710 (2d Dept.2015) ; See also, Brian v. Brian, 36 AD3d 847 (2d Dept.2007).
a. Age, Duration, Health
The parties were married November 17, 1990 making this a marriage of long duration. See Ehrman v. Ehrman, 67 AD3d 955 (2d Dept.2009). Wife was born on September 28, 1961, she is currently 53 years old. Wife testified she had a medical condition which required surgery, but that she is now in good health.(11/25/14 Tr. p. 17). Husband was born on February 18, 1960 and is currently55 years old. There is no testimony in the record to indicate that Husband is not in good health. Both parties graduated from high school and went to college for a very short period of time without obtaining a degree.
b. Comparative Incomes/Ability to become Self Supporting
When examining the comparative incomes, and future income potential of the parties, the Court credits Wife's testimony that she has been out of the work force for some 31 years. Wife credibly testified that the last time she worked consistently was in 1984 when she was employed by an advertising agency earning approximately $9,000 a year. (Tr. 4/7/14 pp. 13–16). While Husband attempted to show that Wife has had sporadic employment since 1984, and Wife admitted that she has worked for a few weeks throughout the years, a showing of sporadic employment does not, in and of itself, establish an ability to be self supporting. See Donna E.F. v. Anthony S.F., 238 N.Y.L.J. 45 (Sup.Ct.West.Cty.2007). Moreover, Husband has not shown that Wife is capable of employment at a level sufficient to maintain a lifestyle approximating that which she enjoyed during the marriage. See Williams v. Williams, 99 AD3d 1094 (3rd Dept.2012) ; See also, Miller v. Xaio Mei, 295 A.D.2d 144 (1st Dept.2002).
This Court further credits Wife's testimony that her prior employment consisted of administrative or secretarial work that did not require the use of modern technology. Wife credibly testified that the last technology that she routinely utilized was a manual typewriter. (Tr. 4/7/14 pp. 13–14). Wife's unfamiliarity with the use of technology leaves her at a significant disadvantage when seeking future employment. Wife testified that since this proceeding has commenced, she has unsuccessfully sought employment in retail and babysitting.
In contrast, Husband has been gainfully employed as the owner of various trucking, or "freight forwarding" companies since before the parties met in 1989. While for reasons indicated above the Court has been unable to determine the value of Husband's current business, P.M.X.F. Systems Inc., it is undisputed that Husband is the only income producing spouse in this action. According to the tax returns provided by Husband, he earned the gross sum of $129,028 in 2012 and $107,753 in 2013 P.M.X.F Systems Inc. In addition to this income, the court appointed business evaluator, Ms. Muckler, indicated that she could not determine the amount that Husband was actually drawing from the business, as she was unable to account for various ATM withdrawals from business accounts, together with business checks payable to Husband. (Tr. 4/29/14 pp. 23–27). The only evidence in the record regarding these withdrawals is Husband's testimony that they were related to business expenses. (Tr. 12/4/14 p. 27). Accordingly, while there is insufficient evidence in the record to determine Husband's exact current income, for the purpose of a maintenance determination, it is clear that he is in a superior financial situation than his Wife.
c. Standard of Living
When determining a maintenance claim the Court's primary concern is whether the spouse seeking maintenance can become self supporting. See Walter v. Walter, 38 AD3d 763 (2d Dept.2007). However, in so determining, the Court is directed not to limit their consideration to a basic level of self support and consider the parties established standard of living. See Hartog v. Hartog, 85 N.Y.2d 36 (1995). A spouse in a marriage of long duration is entitled to an award of maintenance that will allow him or her to become self supporting at a level approximate to the standard of living that they enjoyed during the marriage. See Summer v. Summer, 85 N.Y.2d 1014 (1995).
Wife credibly testified as to the parties' standard of living, and that testimony is supported by the record. Wife testified that she lived a very comfortable lifestyle. In support of her position, Wife claims, and the Court credits, that the parties' owned their own home, enjoyed the use of a New Jersey vacation home, drove luxury vehicles, owned at least two boats, and had a Yacht Club membership. In addition, Wife testified that she owned expensive items such as a Louie Vuitton bag, various pieces of jewelry, and a Rolex watch. Husband did not contradict this testimony and added that the parties took yearly vacations to Marco Island, Florida. However, Husband argues the parties' standard of living was artificially inflated due to the use of cash proceeds from the refinancing of their real estate. (Tr. 12/3/14 pp. 67–69).
d. Equitable Distribution / Marital Waste
Among the factors to be considered by the Court when determining a maintenance award is a contemporaneous award of equitable distribution. See Falgoust v. Falgoust, 15 AD3d 612 (2d Dept.2005). The Court is also directed to consider any wasteful dissipation of marital assets. See Sperling v. Sperling, 165 A.D.2d 338 (2d Dept.1991) ; See also, Blickstein v. Blickstein, 99 A.D.2d 287 (2d Dept.1984).
Wife argues that many of the parties' assets have been lost due to Husband's failure to comply with Court Orders. Husband admits that he has fallen behind on the mortgage relating to the marital home, that his failure to pay the mortgage relating to the Greenville property resulted in foreclosure. While the Court has determined that the loss of the Greenville property did not result in the loss of any equity, the missed payments relating to the marital home has reduced the equity available in that asset. Husband testified that as of February 2015 the mortgage was over $80,000 in arrears, as he ceased payment in or around January of 2014. (Tr. 2/5/15 p. 65). In addition, the Court credits Wife's account regarding the missing briefcase full of money, and the various pieces of jewelry that Husband converted without Wife's permission.
However, these instances of waste must be balanced against the considerable awards of equitable distribution granted to Wife herein. Under the terms of this Decision Wife is entitled to 70% of the equity in the marital home, 50% of the equity in the Brooklyn, 50% of the equity in the New Jersey property, and distributive awards which will total to over $63,000.
e. Domestic Violence
Among the factors to be considered by the Court when determining maintenance, is the presence of domestic violence that has prohibited, or hindered, the applying spouse's ability to become self supporting. See DRL § 236(B)(6)(a)(7) ; See also, D.L. v. K.G ., 41 Misc.3d 1231 (Sup.Ct.Kings.Cty.2013).
Here, the record is replete with instances wherein Wife credibility testified that she has been afraid for her life, whether it be due to physical abuse, verbal abuse, or a seemingly credible threat that Husband would "put a bullet in her head." (Tr. 2/7/14 pp. 59–60). From the totality of Wife's testimony regarding her relationship with Husband it is clear that he never allowed her to financially contribute to the marriage despite her offer to work at Husband's business. When Wife indicated that she was interested in re-entering the workforce Husband would accuse her of wanted to go to Manhattan to "meet boyfriends". (Tr. 8/6/14 p. 148). This controlling behavior together with a history of violence created a climate of fear and intimidation such that Wife was unable to establish the self esteem necessary to become financially self supporting.
f. Subject Children / Foregone or Delayed Career Opportunities
Finally, the Court has considered the presence of children in the recipient spouses home. See Gordon v. Gordon, 113 AD3d 654 (2d Dept.2014). During the course of the trial Wife testified that the parties' three subject children currently reside with her in the marital home. It is undisputed that Wife was the children's primary caretaker during the course of the marriage and Husband admitted that he did not want Wife working outside the home after the children's birth. (Tr. 1/13/15 p. 151). While Husband objected to questions regarding the past care of their adult children, the testimony is relevant in that the presence of the children, when they were young, clearly limited Wife's opportunities to gain work experience, education, and training during the marriage. See DRL § 236(B)(6)(a) (9 & 11).
However, while Wife may have been hindered from seeking employment when the children were young, two of the subject children are now emancipated. Moreover, the only subject child who remains a minor, C.S., is 17 years old and capable of caring for himself while his mother is working.
Durational Maintenance Award
After considering the factors above, with considerable weight being afforded to the parties respective incomes, their earning potentials, and Wife's ability to become self supporting, the Court determines that Wife is employable in some capacity. Accordingly, the award of maintenance herein is intended to help Wife meet her reasonable needs while at the same time acting as an incentive, for her to obtain employment and/or training. See Naik v. Naik, 125 AD3d 734 (2d Dept.2015) ; See also, Griggs v. Griggs, 44 AD3d 710 (2d Dept.2007).
In determining that Wife is employable, and that she should be given an incentive to gain said employment, the Court credits her testimony that during the course of these proceedings she explored the possibility of bringing her office skills up to date, but that she found the cost of the same to be prohibitive. (Tr. 4/7/14 pp. 34–35). Wife credibly testified that if she were granted sufficient maintenance she would seek out training to update her skills. (Tr. 4/7/14 p. 39) Accordingly, the award of durational maintenance detailed below shall be staggered to allow Wife money "up front" to allow her to seek out training and vocational classes to improve her marketable skills. However, despite Wife's ability to become employed in some capacity, it is very unlikely that her earning potential will be sufficient to support the lifestyle that she enjoyed during marriage. Accordingly, the purpose of the award of durational maintenance herein is to supplement whatever income she can earn.
The Court finds that after a period of 12years, Wife should have sufficient investments and savings to support herself with any added income she should receive from social security. In so ruling, the Court notes that Wife will be receiving a considerable distributive award from the sale of the property associated with marital business and / or the sale of the parties' other parcels of real estate. Accordingly, Wife is hereby awarded a period of two years maintenance at the sum of $4,000 a month followed by ten years of durational maintenance at a rate of $3,000 per month. See Levitt v. Levitt, 97 AD3d 543 (2d Dept.2012). The initial payments of $4,000 a month shall be considered rehabilitative maintenance to afford Wife the financial support necessary to seek out the vocational training she testified she would like to pursue. (Tr. 4/7/14 p. 39). See Scheer v. Scheer, 130 A.D.2d 479 (2d Dept.1987). It is this Court's hope that this vocational training shall lead to gainful employment by the second year's end. The subsequent award of $3,000 a month is intended to supplement Wife's income in order for her to maintain a standard of living similar to that she enjoyed during the marriage. See Myers v. Myers, 118 AD3d 1315 (4th Dept.2014). For purposes of calculating retroactivity, the retroactive sum shall be considered $3000 a month. While the first two years of prospective maintenance shall be payable at $4,000 a month, the additional $1,000in those payments shall be considered purely rehabilitative in nature and thus not retroactive. See Levine v. Levine, 37 AD3d 550 (2d Dept.2007).
This award of maintenance shall be payable as follows: The first payment of maintenance under this Decision shall be due the week following service of the signed Judgment of Divorce. The pendente lite rulings of this Court shall remain in effect until that time. As Wife testified that she has been receiving weekly payments of support since the parties were married, Husband's support obligation shall continue to be paid weekly. For the first two years of the durational maintenance term Husband shall pay the sum of $923 a week as and for support ($48,000 a year). At the conclusion of the second year this amount shall reduce to the sum of $692 a week ($36,000 a year).
The award of maintenance issued herein shall end upon the death of either party or Wife's remarriage. See In re Riconda, 90 N.Y.2d 733 (1997). This award shall be taxable to Wife and tax deductable to Husband. See Girgenti v. Girgenti, 81 AD3d 886 (2d Dept.2011). While Husband correctly argues that an award of maintenance should be reduced, or terminated, by the receipt of social security, the triggering event is generally the receipt of "full" benefits at 66 years of age, not reduced benefits at 62 years of age. See Hymowitz v. Hymowitz, 119 AD3d 736 (2d Dept.2014) ; See also, Giokas v. Giokas, 73 AD3d 688 (2d Dept.2010).Accordingly, the maintenance award herein shall terminate upon Wife's eligibility to receive full social security benefits. See Baron v. Baron, 71 AD3d 807 (2d Dept.2010).In the event that Wife elects to obtain reduced benefits before her 66th birthday, the maintenance award herein shall be reduced by the sum of those benefits. See Summer v. Summer, 206 A.D.2d 930 (4th Dept.1994). Wife shall be responsible for informing Husband if she elects to receive Social Security before the maintenance term awarded herein ends.
Child Support
Wife seeks child support for the minor children of this marriage. Wife's first request for child support was made in her Summons and Verified Complaint dated July 1, 2012. At the time of this Decision only C.S. (age 17) and M.S. (age 20) remain within the jurisdiction of this Court for the purposes of child support. See Pfenning (Sichling) v. Pfenning, 287 AD3d 701 (2d Dept.2001). By Consent Order dated January 24, 2013, the parties agreed that Wife would have sole custody of C.S. While no Order of Custody can issue for M.S. as she is over the age of eighteen, it is undisputed that she resides primarily with her mother for purposes of calculating child support.
The Child Support Standards Act (CSSA) presumptively results in the correct amount of child support to be awarded to the custodial parent. Applying the statutory percentage of 25% (two children) to the combined parental income will provide the appropriate level of support to meet the basic needs of the subject children. Husband's basic child support obligation for M.S. will terminate on her 21st birthday on September 19, 2015, however it is retroactive to the date it was first requested. See King v. Geovanis, 45 AD3d 273 (1st Dept.2007).
When determining child support under the guidelines the Court is directed to utilize the income as it was, or should have been, reported on the parties' most recent tax return. See DRL § 240(1–b)(b)(5)(i) ; See also, Matter of Lynn v. Kroenung, 97 AD3d 822 (2d Dept.2012). However, there is authority to use more recent income information where available. See Eberhart–Davis v. Davis, 71 AD3d 1487 (4th Dept.2010). Moreover, the Court has the authority to impute income if a parties' account of their finances is less than credible. See Spiegel–Porco v. Porco, 127 AD3d 847 (2d Dept.2015). Where supportable by the record, the Court may impute income to reflect, among other things, a party's past income or demonstrated earning potential. See Matter of Funaro v. Kudrick, 128 AD3d 695 (2d Dept.2015) ; See also, Filippazzo v. Filippazzo, 121 AD3d 835 (2d Dept.2014).
The most recent tax information provided by Husband is his 2014 W2 which indicates gross income of $57,749 from his employment with P.M.X.F Systems, Inc. The Court notes that while Husband presents as a W2 employee, he is technically self employed as he is the sole owner / operator of P.M.X.F. and controls his own salary. In her post trial summation, Wife argues that Husband's income is inaccurate and that the Court should utilize the sum of $296,000 a year as and for his income. While at trial Wife indicated that she has no idea of what Husband earned during the marriage, her attorney argues that the above referenced sum should be utilized as it reflects an "average" between the sum of $288,708 and $305,139. Wife's attorney obtained these figures from the testimony of the Court appointed business appraiser, Heidi Muckler, who indicated that they reflect check and ATM withdrawals from this business payable to Husband.
While the Court does not credit Husband's position that he is only capable of earning only $57,479 a year, the income figures sought to be used by Wife are equally unsupportable. There is no evidence in the record that Husband is earning close to $300,000 a year. While Ms. Muckler does indicate that Husband made withdrawals to himself by check and ATM, she testified that she had "no idea" if those withdrawals were for legitimate business expenses. In short, Ms. Muckler testified, "Maybe yes, maybe no." (Tr. 4/29/14 p. 27, 40). As indicated above, Husband testified, in response to questions posed by Wife's counsel, that he utilized the sums withdrawn in his name towards business expenses except for the amounts claimed on his W2 as income. (Tr. 12/4/14 pp. 31–35).
While the Preclusion Order prevented Husband from offering evidence in relation to the value of his business, the questions posed were related to his income, and were asked by Wife's attorney which would amount to a waiver of the Order as it related to those questions.
While the income figures offered by Wife are not supported by the record, neither is Husband's current claimed income of $57,479. The Court notes that the record is replete with testimony regarding the parties' established standard of living, which included at least two boats, two houses, and luxury vehicles. When Husband was asked to approximate how much he draws from his business a month he indicated "five to six thousand a month net ". (Tr. 12/2/14 p. 147, emphasis added). This amount calculates to a yearly net salary of $72,000, which is more than his claimed 2014 income. Accordingly, for the purpose of calculating child support, the Court shall consider Husband's income to be $107,753 as reflected on his 2013 and tax return. This tax return includes Husband's W2 income of $104,071, together with real estate income from Conklin in the amount of $3,682. The Court finds that this figure better reflects Husband's demonstrated earning potential with an understanding that his income may vary from year to year as his customer base fluctuates. See Matter of Bustamante v. Donawa, 119 AD3d 559 (2d Dept.2014) ; See also, Hainsworth v. Hainsworth, 118 AD3d 747 (2d Dept.2014).
When determining child support, the Court must deduct payments of Social Security, Medicare and New York City taxes that have been "actually paid". See Kaufman v. Kaufman, 102 AD3d 925 (2d Dept.2013). According to his 2013 W2 Husband paid the sum of $6,452 in Social Security tax, $1,509 in Medicare tax and $2,816 in local income tax. Accordingly, Husband's adjusted income for the purpose of CSSA calculations shall be$96,976.
In addition to a deduction of allowable taxes, both the Family Court Act, and Domestic Relations Law allow for a deduction of prospective maintenance payments, so long as the Order includes an automatic adjustment in child support at the time the maintenance term ends. See FCA § 413(1)(b)(5)(vii)(c) ; DRL § 240(1–b)(b)(5)(vii)(c). Where, as here, the maintenance term will outlast the child support term, no such adjustment is possible. Accordingly the Court will utilize Husband's full income for determining child support. See Kerrigan v. Kerrigan, 71 AD3d 737 (2d Dept.2010) ; See also, Golden v. Golden, 98 AD3d 647 (2d Dept.2012) ; Niak v. Niak, 125 AD3d 734 (2d Dept.2015) ; Schmitt v. Schmitt, 107 AD3d 1529 (4th Dept.2013).Moreover, prospective maintenance to be received by Wife is not to be included as income when calculating her income for purposes of child support. See Shapiro v. Shapiro, 35 AD3d 585 (2d Dept.2006)
The CSSA statutory formula for calculating child support also considers the income of the custodial spouse, in this case Wife. It is undisputed that Wife is unemployed, however, she admits that she has been receiving the sum of $200 a week as and for pendente lite maintenance since September of 2012. (Tr. 2/7/14 p. 45) Under the United States Tax Code, maintenance is taxable as income to the receiving spouse. See 26 USCS § 71 ; See also, Chaudry v. Chaudry, 95 AD3d 1058 (2d Dept.2012) ; Markopoulos v. Markopoulos, 274 A.D.2d 457 (2d Dept.2000). Accordingly the Court shall utilize an income of $10,400 for Wife ($200 x 52 weeks) as this amount "should have" been reported on her last year's tax return. See Hughes v. Hughes, 79 AD3d 473 (1st Dept.2010). While the Court is directed to deduct the allowable statutory tax deductions that were "actually paid" there is no indication that Wife has paid taxes, as she testified that she has not filed a return "in the last several years". (Tr. 2/7/14 p. 45). See Brevilus v. Brevilus, 72 AD3d 999 (2d Dept.2010) ; See also, Kaufman v. Kaufman, 102 AD3d 925 (2d Dept.2013).
The combined parental income for purposes of calculating child support is $107,376. Applying the statutory percentage of twenty five percent (25%) to the combined parental income results in a combined child support obligation of $26,844 for C.S. and M.S. Husband's pro rata share of this guidelines child support obligation is 90% and Wife's share is 10%. Accordingly, Husband's child support obligation equates to $24,160 a year, $2,013 a month, or $465 a week. For the reasons set forth above, Husband is hereby ordered to pay child support in the amount of $465 a week commencing the week following service of the signed Judgment of Divorce. The pendente lite rulings of this Court shall remain in effect until that time.
The Court is aware that M.S. may age out of this Court's child support jurisdiction before service of a signed Judgment of Divorce can be effectuated. In the event that the Judgment of Divorce cannot be served until after M.S.'s 21st birthday, Husband shall be required to pay child support for C.S. only. Using the same income figures indicated above, after M.S. ages out of this Court's jurisdiction, the child support award shall be reduced to the sum of $16,489 a year, $1,374 a month, or $316 a week to reflect the CSSA guidelines for one child (17%). This sum shall continue to be payable on a weekly basis until C.S. reaches the age of 21.
This child support award may be revisited by a Court of competent jurisdiction upon a showing of "(i) a substantial change in circumstances; or (ii) that three years have passed since the order was entered, last modified or adjusted; or (iii) there has been a change in either party's gross income by fifteen percent or more since the order was entered, last modified or adjusted." See Mejia v. Mejia, 106 AD3d 786 (2d Dept.2013).
1. Retroactivity
The awards of child support and maintenance ordered herein shall be retroactive to the first time an application for support was made. See Schack v. Schack, 128 AD3d 941 (2d Dept.2015).Wife's applications for child support and maintenance were first made by her Summons and Verified Complaint dated July 17, 2012.
On the record of September 20, 2012, the parties entered into a Pendente Lite Order on consent. In addition to this Order, Wife made a request for pendente lite maintenance, which was granted. By the terms of this Court's directive stated on the record that date, Husband was directed to pay the sum of $550 a week in support, $350 of which was relegated to child support and $200 for maintenance. (Tr. 9/20/12 p. 34) Wife testified at trial that Husband has honored this directive and that she has been receiving $550 a week. (Tr. 2/7/14p.45).
The retroactive calculation of maintenance from July 27, 2012 to the present amounts to the sum of $111,000 (37 months x $3,000). Husband has paid the sum of $200 a week in pendente lite maintenance, or $867 a month, since September 20, 2012 amounting to a total of $30,545 (35 months x $867 + 1 week of $200). Husband is entitled to a credit for these payments made pursuant to Court directive. See McKay v. Groesbeck, 117 AD3d 810 (2d Dept.2014). Accordingly the sum of arrears attributable to Husband's maintenance obligation is $80,455 ($111,000–$30,545).
The retroactive calculation of child support from July 27, 2012 to the present amounts to the sum of $74,481 (37 months x $2,013). In relation to child support, Husband is entitled to a credit for payments of child support pursuant to Court Order, but not payments made voluntarily for the benefit of his children. See LiGreci v. LiGreci, 87 AD3d 722 (2d Dept.2011). By this Court's ruling dated September 20, 2012 Husband was directed to pay the sum of $350 a week, or $1,517 a month in pendente lite child support totaling to $53,445 (35 months x $1,517+ 1 week of $350). Accordingly the sum of arrears attributable to Husband's child support obligation is $21,036 ($74,481–$53,445).
However, the Husband's payment of $550 a week as directed does not end this Court's analysis of arrears and credits. In addition to this award, by Pendente Lite Order dated September 20, 2012 Husband was also directed to pay the mortgage relating to the marital residence together with all utility bills. When determining credits the Court is directed to treat the payment of shelter expenses as either child support, maintenance, or a split towards both. See Yunis v. Yunis, 94 N.Y.2d 787 (1999). The Court hereby determines that these payments are related to both the shelter of Wife and the children such that the credit should be applied first to child support arrears with the balance being applied to maintenance arrears. See Davidman v. Davidman, 97 AD3d 627 (2d Dept.2012) ; Yunis, Supra.
At trial, Wife indicated that she knew virtually nothing about the mortgage, its balance, or monthly payment amount. Wife's testimony was limited to the fact that she knew that at some point Husband stopped paying as she got phone calls from the bank. Husband credibly testified that he stopped paying the mortgage in December 2013 or January 2014. (Tr. 12/3/14 p. 41). Husband further testified that the monthly amount of the mortgage when he was paying it was $3,338 (Tr. 2/2/14 p. 115). Accordingly, this Court finds that it is undisputed that Husband paid the mortgage from the commencement of this action in July of 2012 to December of 2013, a period of seventeen months. As the maintenance and child support awards herein are retroactive of July of 2012 Husband is entitled to a credit for the mortgage payments made in the amount of $56,746 (17 x $3,338). The Court finds it appropriate to first apply this credit to the child support arrears owed in the amount of $21,036 leaving a credit balance in the amount of $35,710 ($56,746–$21,036). The balance of the credit shall be applied to maintenance arrears owed in the amount of $80,445 resulting in a final arrears total of $44,735 ($80,445–$35,710).
In addition to the mortgage Husband was required to pay additional expenses on Wife's behalf which should be credited to him as maintenance. See Heiny v. Heiny, 74 AD3d 1284 (2d Dept.2010). By this Court's Order dated March 31, 2014 Husband was directed to pay Wife the sum of $529 a month as and for a vehicle allowance. Husband credibility testified, and Wife did not refute, that while Husband was often late in making payments he was up to date with the amount owed. Accordingly, Husband is entitled to a credit for these payments made from March of 2013 to the present amounting to $8,993 (17 months x $529). This amount, applied to the maintenance arrears total of $44,735 results in an adjusted total of $35,742 ($44,735–$8,993).
In addition to the vehicle allowance, Husband was directed by Order dated September 20, 2012 to pay all utilities relating to the former marital home, pendente lite. The Court hereby finds that these payments qualify as the payment of maintenance as they constitute payments to "third parties" to cover Wife's expenses. See Yunis, Supra; See also; Bara v. Bara, 130 A.D.2d 613 (2d Dept 1987) ; Gillings v. Gillings, 56 AD3d 424 (2d Dept.2008). This Court credits Husband's testimony that while he often paid the utilities late he is currently up to date on all of the bills. While Wife indicated that she was constantly harassed by late payment calls, she did not refute Husband's testimony that the bills were ultimately paid. Moreover, Wife testified that she had no involvement with the bills whatsoever, and had no idea what they cost each month.
After considering the evidence in the record on the subject of utility bills, the Court credits Husband's testimony regarding the payments he made pendente lite. When asked to indicate the sum of the bills he paid Husband testified that he paid (1) a quarterly water and sewer bill in the sum of $150, or $50 a month; (2) a monthly Con Edison electric bill in the average amount of $358; (3) a National Grid gas bill in the amount of $100 a month, and; (4) a Verizon "Triple Play" (phone, television, internet) bill in the amount of $229 a month. These amounts, calculated over the relevant 37 month period of retroactive maintenance calculate to the sum of $27,269 towards his maintenance arrears. This credit, deducted from his arrears results in a sum owed of $8,473 ($35,742–$27,269).
Water and Sewer total of $1,850 (37x$50); Con Edison total of $13,246 (37x$358); National Grid total of $3,700 (37 x $100) and Verizon total of $8,473 (37x $229).
Finally, Husband credibly testified that in addition to the above, he has paid various bills during the pendency of this action that should be credited as support to Wife. Husband testified that he has paid for a cell phone plan for his family in the amount of $250 a month, car insurance for Wife and the subject children in the approximate amount of $629 a month, homeowners insurance in the amount of $189 a month, car payments for a second car located at Wife's house, (a Chevrolet Cobalt), unreimbursed medical expenses for Wife, landscaping for Wife's home, a homeowners association fee, and various college costs for M.S. The Court has calculated these amounts over the span of 35 months since the issuance of the Pendente Lite Order and finds that the sums far exceed the adjusted arrears total of $8,473. Accordingly, an exact calculation of credits is not required, as public policy prohibits reimbursement for overpayments of maintenance and child support. See Johnson v. Chapin, 12 NY3d 461 (2009) ; See also, Kaplan v.. Kaplan, 130 AD3d 576 (2d Dept.2015).
2. Children as Tax Dependents
While a child support award is being granted for M.S., she will only be entitled to receive child support for a period of weeks. Accordingly the only child to be considered as a tax dependant shall be C.S. There is no information in the record concerning any possible tax consequences of the monetary awards herein. After considering the totality of the circumstances the Court finds that the parties shall have the right to claim C.S. as a tax dependant on alternating years. Husband shall have the right to claim C.S. in 2015.
3. Life Insurance.
Husband shall be required to maintain life insurance in the amount of at least $523,000 ($456,000 for maintenance and $66,000 for child support) to insure the payment of his maintenance and child support obligations in the event of his death. See Alleva v. Alleva, 112 AD3d 567 (2d Dept.2013) ; See also, Sutaria v. Sutaira, 123 AD3d 909 (2d Dept.2014). The beneficiary of this policy shall be Wife. Husband shall have a right to adjust the amount of this life insurance policy (declining term) once a year to reflect the amount due under the balance of the maintenance and child support terms. See Levitt v. Levitt, 97 AD3d 543 (2d Dept.2012).
4. Additional Child Support Expenses
As indicated above, the only child that will likely be subject to additional child care expenses shall be C.S., as M.S. will age out of this Court's jurisdiction in a matter of weeks. Upon a review of the record the Court finds that there is very little information regarding any additional child care expenses that will likely be required for C.S.
Initially the Court finds it appropriate for Husband to be required to maintain health insurance for C.S. until he reaches the age of 21. See Carr–Harris v. CarrHarris, 98 AD3d 548 (2d Dept.2012). In addition, the Court shall adhere to the general rule that the cost of all reasonable and necessary unreimbursed medical and reasonable and necessary childcare expenses should be split on a pro rata basis. See Cassano v. Cassano, 85 N.Y.2d 649 (1995) ; See also, Leuker v. Leuker, 72 AD3d 655 (2d Dept.2010). Husband's pro rata share shall be 90% and Wife's pro rata share shall be 10%. See Harris v. Harris, 97 AD3d 534 (2d Dept.2012). As the custodial parent Wife shall have the obligation of sending Husband any bills to which she seeks financial contribution.
Wife's application, to the extent that one was made during trial, to compel Husband to contribute to M.S.'s ongoing college expenses, and or any ongoing medical expenses for the adult child P.S., are hereby denied. Wife offers no authority to support her argument that Husband can be compelled to contribute towards his adult children's expenses. Any obligation that Husband may have to support his adult children is moral, not legal. See Parker v. Parker, 189 A.D. 603 (1st Dept.1919). It is well settled law that the obligation of a parent to support his or her children terminates when the child reaches the age of 21 years. See FCA § 413(1) ; Bani–Esraili v. Lerman, 69 N.Y.2d 807 (1987). Wife's claim that Husband may have voluntarily extended his obligation towards his adult children, pendente lite, will be addressed in relation to her contempt application below as it has no bearing on the final determination made here.
Contempt Motions
During the course of this matrimonial action, Wife filed three contempt applications regarding Husband's alleged failure to comply with this Court's Orders. Wife's first such application, dated July 1, 2013 (Mot.Seq. No. 003) claims that (1) Husband failed to pay for the subject children's medical and college expenses; (2) Husband failed to make boat and loan payments; (3) failed to pay college expenses and; (4) failed to pay the mortgages relating to the marital properties. This motion was referred to the trial court.
Wife's second contempt application (Seq. No. 009) was withdrawn on the record of June 19, 2014. Wife's third contempt application (Seq. No. 012) seeks to hold Husband in contempt for his alleged failure to (1) pay for trial transcripts and; (2) comply with this Court's Order dated March 31, 2014 regarding car payments. This Order to Show Cause also addressed Husband's attempt to purchase a firearm in Georgia, a subject addressed at length earlier in this Decision.
As a preliminary matter, Husband argues, and the Court agrees, that both of Wife's applications to hold Husband in contempt completely fail to address the issue of alternative remedies. See Cooper v. Cooper, 21 AD3d 869 (2d Dept.2005). "A spouse may be punished for contempt for failing to make payments pursuant to [court order], but it must appear presumptively, to the satisfaction of the court, that payment cannot be enforced pursuant to Domestic Relations Law § 243 (sequestration), Domestic Relations Law § 244 (money judgment) or CPLR § 5242 (income deduction)." Keller v. Keller, 126 AD3d 940 (2d Dept.2015). A party seeking a finding of contempt must either show that these remedies have been exhausted or that they would be ineffectual. See Capurso v. Capurso, 61 AD3d 913 (2d Dept.2009). Wife clearly testified that her applications failed to address these issues. (Tr. 12/2/14 pp. 41–43). While this Court granted Wife application to reopen her direct testimony, to allow her to address the issue of alternative remedies, Wife's testimony was still insufficient to satisfy her burden. In fact, Wife testified that she believed there likely were various alternative remedies available to her. (Tr.12/2/14 pp. 68–74).
Accordingly, Wife's applications for contempt, to the extent that they relate to financial issues, must be denied as there is no evidence in the record, that she attempted to secure the monies allegedly owed through the mechanisms indicated above. See Murray v. Murray, 269 A.D.2d 433 (2d Dept.2000). While Wife's applications for findings of civil contempt must be denied for her failure to sufficiently address alternative remedies, many of the issues raised therein still require consideration as Wife has made arguments for enforcement throughout the trial.
Wife's application to hold Husband in contempt for his attempt to purchase a firearm need not be denied on this ground as there is no necessity to address alternative remedies in relation to a finding of criminal contempt.
Wife argues that Husband failed to pay the mortgage relating to the property in Greenville New York. As addressed more fully above, this Court has already found that while Husband has admittedly failed to comply with the Order directing him to pay the mortgage, Wife has failed to show that there was any equity in the property at the time he ceased payments. Accordingly, Wife's application in regard to the Greenville property must be denied as it has not been shown that she suffered any prejudice by Husband's failure to pay the mortgage. See Whitehead v. Whitehead, 122 AD3d 921 (2d Dept.2014) ; See also, Cherico, Stix & Assocs. v. Abramson, 235 A.D.2d 515 (2d Dept.1997).
Wife further argues that Husband failed to pay the mortgage relating to the former marital home. Husband admits that he stopped paying the mortgage in or around January of 2014. (Tr. 12/ 3/14 p. 41). Husband's admitted failure to pay the mortgage, has been specifically considered in relation to Wife's claims for equitable distribution of marital assets herein and maintenance, as it amounts to marital waste.
Wife also seeks a finding in relation to unreimbursed medical expenses for the subject children P.S. The Order in question, dated September 20, 2012, which was entered into on consent, indicates that Husband would be responsible to pay for "all unreimbursed medical and other health related expenses for the children". Upon review of its own Order, the Court finds that this Order relates to the children only for so long as they were subject to the Court's child support jurisdiction. There is nothing in the language of the Pendente Lite Order which would indicate an intention to extend Husband's obligation beyond that authorized by law.
It is undisputed that P.S. remained under this Court's jurisdiction for purposes of child support from the issuance of the Pendente Lite Order on September 20, 2012 until he reached the age of majority on February 21, 2013. Accordingly, Husband would be responsible to pay 100% of any unreimbursed medical bills incurred during that time.
Wife claims that Husband failed to pay the sum of $4,115 relating to P.S.'s substance abuse treatment. Husband argues, in opposition, that he should not be required to pay those sums because P.S. could pay for them himself as he was employed, and should be deemed emancipated. First, the Court finds that many of the bills submitted in support of Wife's application fall outside the relevant period from September 2012 to February 2013. The bills that fall within that period amount to the approximate sum of $1,802.
Second, when Wife testified in support of her application, she indicated that she did not pay for P.S.'s care, but instead that P.S ., who was 20 years of age at the time, and employed, paid for it by himself. (Tr. 8/6/14 p. 19). Accordingly, the Court finds that Wife cannot seek reimbursement for medical expenses paid for by P.S., as it would result in Wife receiving funds that she never expended on her child's behalf. In this limited regard, the evidence in the record supports Husband's argument that at the time the relevant expenses were incurred, P.S. was emancipated. See Fortunato v. Fortunato, 241 A.D.2d 720 (2d Dept.1997). The Court notes that there is an abundance of testimony in the record that P.S. is self supportive.
To the extent that Wife alleges that Husband failed to comply with this Court's Order granting her a car expense payment of $529 the Court notes that Wife testified that while frequently late, those payments were made. (Tr. 11/25/14 p. 66).
Wife's application regarding Husband's obligation to provide her with transcripts has been rendered moot by this Court's directive that the transcripts be provided to the parties pursuant to applicable law. The Court also notes that Wife withdrew these aspects of her contempt application on the record of August 6, 2014 (p.174). Moreover, the Credits Husband testimony that prior to this Court's directive regarding transcripts, Husband borrowed approximately $8,000 which he used to purchase transcripts. (Tr. 12/2/14 p. 178)
Finally, the court does not credit Wife's claim that Husband has failed to pay college expenses relating to M.S. The Court credits Husband's testimony that while the payments were frequently late, all payments were made. (Tr. 2/5/15 pp. 15–19) Likewise, the Court credits Husband's testimony regarding the family joint cell phone bill. (Tr. 12/2/14 p. 112,114). In regard to Wife's medical bills, the Court credits Husband's testimony that he has either paid those bills, or that he resubmitted them for reconsideration to his insurance company. (Tr. 2/17/14 p. 34).
The Court has considered the balance of the claims raised by Wife regarding Husband's noncompliance with Court Orders and determined that those claims are unsupported by the record. Wife's claim that Husband's late payments may still be found to be contemptuous as he cannot purge after the filing of an Order to Show Cause is unsupported by law. (Tr. 12/2/14 p. 55). The only purpose of civil contempt is to redress prejudice, or "coerce compliance". People v. Sweat, 24 NY3d 348 (2014). A party facing civil contempt always has a right to purge by paying the monetary amounts owed, or by performing the act that he is still able to perform. See El–Dehdan v. El–Dehdan, 114 AD3d 4 (2d Dept.2013). Here, the Court credits Husband's testimony to the extent that he testified that he paid the amounts at issue, albeit late.
For the various reasons set forth above, Wife's contempt applications are denied, except regarding the finding of Criminal Contempt addressed at length herein.
Counsel Fees
Wife seeks a significant award of counsel fees in the amount of $75,000 to compensate her current attorney for legal fees incurred in relation to this matrimonial action. In addition to this sum, Wife requests an award of counsel fees relating to fees incurred by her two prior attorneys, Margaret Stanton, Esq. and Kurt Richards, Esq. At the conclusion of trial, both parties stipulated that the issue of counsel fees would be decided upon affirmations and billing documentation without requiring testimony from the various previous attorneys that participated in the trial and pre trial proceedings. See Matter of Feng Lucy Luo v. Yang, 104 AD3d 852 (2d Dept.2013). While acknowledging that he waived the right to a hearing on the issue, Husband opposes Wife's application on both procedural and substantive grounds.
An award of reasonable counsel fees is a matter within the sound discretion of the trial court. The issue of counsel fees is controlled by the equities and circumstances of each particular case. See Nicodemus v. Nicodemus, 98 AD3d 605 (2d Dept.2012) ; see also DRL § 237(a). While DRL § 237 permits consideration of many factors, paramount amongst these factors is financial need. See O'Halloran v. O'Halloran, 58 AD3d 704 (2d dept.2009) ; See also, Silverman v. Silverman, 304 A.D.2d 41 (1st Dept.2003). "An award of an attorney's fee will generally be warranted where there is a significant disparity in the financial circumstances of the parties." Cohen v. Cohen, 73 AD3d 832 (2d Dept.2010). The purpose of DRL § 237 is to "redress the economic disparity between the monied spouse and the non-monied spouse. See O'Shea v. O'Shea, 93 N.Y.2d 187 (1999). Other factors to be considered include the relative merits of the parties' positions, and if either party engaged in conduct that resulted in a delay of the proceedings or unnecessary litigation. See Vitale v. Vitale, 112 AD3d 614 (2d Dept.2013). For cases commenced after October of 2010, there is a rebuttable presumption that an award of counsel fees should be granted to the non monied spouse. See Hof v. Hof, 2015 N.Y. Slip Op 06573 (2d Dept.2015) ; See also, Vantine v. Vantine, 125 AD3d 1259 (3rd Dept.2015).
Before turning to the merits of Wife's applications, the Court addresses Husband's procedural objections. First, Husband argues that Wife's attorney should be prohibited from seeking counsel fees because his Law Firm (The Law Firm of Agulnik & Gogel, LLC) is structured as a Limited Liability Company (LLC) instead of as a Professional Limited Liability Company (PLLC). Husband argues that since counsel's firm is structured incorrectly he is technically prohibited from practicing law in the State of New York, and therefore cannot be entitled to a counsel fee award. Upon review of the applicable law, the Court finds this novel argument unpersuasive. It is undisputed that Mr. William A.Gogel Esq. is an attorney duly licensed to practice law in this state. The Court finds that this fact allows him to seek an award of counsel fees in the context of this matrimonial proceeding. Husband does not provide any legal authority for his position that the corporate structure of counsel's law firm somehow prohibits him from requesting fees, nor has this Court found any cases that support this position. See, e.g., Samuel v. Druckman & Sinel, LLP, 12 NY3d 205 (2009) (counsel fees awarded to an LLC).
Second, Husband argues that at least a portion of Wife's current counsel fee application, and the entirety of her prior motion for counsel fees (Seq. No. 010), are barred because Wife's counsel did not comply with the "60 day billing requirement" found in 22 NYCRR 1400.2. It is well settled law that a matrimonial attorney is precluded from seeking fees where that attorney has failed to comply with the 60 day billing requirement. See Hovanec v. Hovanec, 79 AD3d 816 (2d Dept.2010). Moreover, when a violation of 22 NYCRR 1400.2 is found, counsel fees cannot be sought from the opposing spouse. See Rosado v. Rosado, 100 AD3d 856 (2d Dept.2012) ; Vitale v. Vitale, 112 AD3d 614 (2d Dept.2013) ; Sherman v. Sherman, 34 AD3d 670 (2d Dept.2006)
A detailed review of Wife's counsel's submitted billing information reveals that during the initial phases of his representation, Mr. Gogel was not in substantial compliance with the requirements of 22 NYCRR 1400.2 and 1400.3. The only bill annexed to Wife's initial application for counsel fees (Seq. No. 010) is dated July 29, 2014 but covers a period of approximately 146 days from March 5, 2014 to July 29, 2014. The bills prior to that date, though closer in time span, are also not in compliance with the rules. For example, counsel's bill dated August 1, 2013 apparently covers a period extending back to April 18, 2013, and the next bill, which was sent on November 26, 2013 covers a period from August 4, 2013 to November 25, 2013, a period of 114 days.
During trial, after this issue was raised by Husband, Wife attempted to waive the 60 day billing requirement by her testimony and by Affidavit dated September 30, 2014. However when asked on cross examination as to why she suddenly waived her rights under 22 NYCRR 1400.2 she indicated that she did so under the advice of her attorney because she wanted her attorney to be able to recover fees from her Husband. (Tr. 1/13/15 pp. 77–78). Under the circumstances, the Court finds this waiver insufficient to cure the defect in counsel's billing. The Court finds that the bills sent by Wife during the period at issue were not in substantial compliance with the court rules, and as a result, Wife's counsel cannot recover those fees from Husband. Wagman v. Wagman, 8 AD3d 263 (2d Dept.2004) ; See also Zelenz v. Zelenz, 43 AD3d 1157 (2d Dept.2007) ; Mulcahy v. Mulcahy, 285 A.D.2d 587 (2d Dept.2001).
However, this does not end the Court's analysis. After being advised of 22 NYCRR1400.2 during the Course of this trial, it appears that Wife's counsel changed his billing practices to comply with the 60 day billing requirement. The Court notes, and Husband admits, that the billing documentation submitted in connection with Wife's post trial summation is now in substantial compliance with the rule. Accordingly, the Court will consider Wife's application to the extent that it covers the period of August of 2014 to April of 2015. These bills, including disbursements, amount to $59,232. Wife's application for fees in this amount shall be considered by the Court on their merits.
The relative financial circumstances of the parties has been well established through the credible testimony and documentary evidence offered at trial by both parties. Wife's only source of income is the money she will receive in maintenance which will amount to the sum of $48,000 over the next year. Husband, in contrast, has established that he is capable of earning at least $107,753 a year. Based only upon these figures it appears that Husband is the monied spouse, however, when the maintenance award is taken into consideration, the gap between the parties' current earnings decreases, as Husband will only retain $59,753 of his gross income before the payment of child support. ($107,753–$48,000=$59,753).
However, while the parties' incomes have been somewhat equalized by this Court's Decision, the Court notes that Husband has considerably more earning potential than Wife. Husband credibly testified that in the past his company has been considerably more successful than it is now. Accordingly, as Husband has retained 100% ownership of his business, any future successful years will result in an increase to his income while Wife's income will likely remain stagnant, unless she becomes employed. Accordingly, the Court finds that Husband has a much higher earning potential than Wife and therefore is still the monied spouse for the purpose of her counsel fee application. See Silverman v. Silverman, 304 A.D.2d 41 (1st Dept.2003) ; Saunders v. Guberman, 2015 N.Y. Slip Op. 06089 (1st Dept.2015).
In addition to the financial situation of the parties, the Court has considered, as it must, the merit of the positions taken by the parties during the course of this litigation. While Husband makes much of what he deems to be unsupportable positions taken by Wife's attorney, such as requesting child support for children above the age of majority, the Court finds that these arguments did not result in substantial delay in the trial, or amount to considerable legal fees.
On the other hand, Husband's conduct, both in and out of Court, has resulted in significant delay. On more than one occasion the Court had to admonish Husband to cease outbursts from counsel table, or direct him to answer questions without arguing with counsel. (Tr. 8/6/14 p. 106; 2/7/14 p. 90; 6/19/14 p. 69; 11/25/14 p. 56). Moreover, Husband's failure to comply with Court Orders, including but not limited to, his attempt to purchase a firearm in the State of Georgia in violation of this Court's Order of Protection, amounted to a significant delay in this proceeding and increased legal fees. Upon review of the trial transcripts, a good number of days were spent on a contempt proceeding which could have been avoided had Husband complied with Court Orders and not engaged in the conduct which resulted in this Court's criminal contempt finding against him. See Sutaria v. Sutaria, 123 AD3d 908 (2d Dept.2014) ; See also, Lubrano v. Lubrano, 122 AD3d 807 (2d Dept.2014).
After consideration of the totality of the circumstances with significant weight being afforded to the parties' comparative incomes, their comparative earning potential, and Husband's conduct that resulted in significant delay, it is hereby Ordered that Husband shall pay the sum of $35,539 representing a 60% contribution to the sum of $59,232 indicated above. See Dunnan v. Dunnan, 261 A.D.2d 195 (1st Dept.1999) ; See also, Chaudry v. Chaudry, 95 AD3d 1058 (2d Dept.2012). The Court finds this percentage equitable as Wife will receive significant distributive awards and maintenance from which she can contribute to her own counsel fees. See Mangels v. Mangels, 197 A.D.2d 505 (2d Dept.1993). This counsel fee award shall be payable directly to Wife's Counsel in three installments of $11,846. The first installment shall be paid within 120 days of the signing of the Judgment of Divorce, and the following two payments shall be made within two consecutive 60 day periods thereafter.
In addition to the sums awarded to her current attorney, Wife seeks reimbursement for funds paid to her prior attorneys Kurt Richards Esq. and Margaret Stanton Esq. While it is undisputed that the parties' stipulated to the submission of affidavits and bills in lieu of testimony, Husband argues that the information provided to the Court is inadequate to support an award of counsel fees. Upon a review of the information provided by Wife in support of her application, this Court agrees with Husband's position. Wife has failed to obtain affidavits from either of her prior attorney's clarifying the amounts they were actually paid, indicating amounts due and owing or setting forth their qualifications. This failure frustrated Husband's right to properly scrutinize the value of those services. See Stang v. Stang, 173 A.D.2d 812 (2d Dept.1991). The Court notes that Wife's current attorney is not in a position to argue in support of the prior attorneys' counsel fees, as he has no personal knowledge of the legal work conducted. The only testimony in the record as to the legal work conducted by Wife's prior attorneys' has been provided by Wife who now claims they were each discharged for cause for their alleged failure to represent her "properly".
Moreover, the sole bill provided in relation to Kurt Richards, Esq. consists of an inappropriate summary of billing that reflects a credit balance to Wife. See Mimran v. Mimran, 83 AD3d 550 (2d Dept.2011) ; see also, Darvas v. Darvas, 242 A.D.2d 554 (2d Dept.1997). The sole bill relating to Margaret Stanton, Esq. does not cover the entirety of her representation, and does not indicate the disposition of her retainer. For these reasons, Wife's application for reimbursement for counsel fees relating to her prior attorneys is hereby denied.
This Decision on the issue of counsel fees has considered, and is intended to adjudicate, all pending applications made by Wife's various attorneys during the course of this divorce proceeding.
Conclusion
For the detailed reasons set forth above, a Judgment of Divorce is granted to Plaintiff Wife on the grounds that the marriage has broken down irretrievably pursuant to DRL § 170(7). As to ancillary relief: Wife is granted rehabilitative maintenance in the amount of $4,000 a month for a period of two years, to be followed by a period of durational maintenance in the amount of $3,000 a month for a period of ten years. Wife is hereby granted an award of child support in the amount of $465 a week until the subject child M.S. attains the age of 21 at which time the child support amount will automatically reduce to the sum of $316 a week. The equitable distribution of the assets that the parties accumulated during the marriage shall be distributed as delineated herein. Wife's application for a Final Order of Protection is hereby granted for a period of five years. Wife's application to hold Husband in civil contempt is denied, however as Husband has been found to be in criminal contempt, he shall be required to pay a fine in the amount of $1,000 as indicated herein. Wife's application for a final award of counsel fees is granted, in part, in the amount of $35,539 to be paid as indicated herein.
All other issues not specifically addressed or decided herein are hereby denied. The Court has considered all pending motions that have been referred to this trial and finds that they have been adjudicated by the terms of this Decision. To the extent that any application has been referred to trial, and not specifically addressed herein, that application is hereby denied.
Defendant Husband is hereby directed to file a Judgment of Divorce together with Findings of Fact and Conclusions of Law, annexing this Decision, within 30 days. Counsel is directed to file the Judgment of Divorce directly to chambers.
This Constitutes the Decision of the Court.