Opinion
Index No. 55095/2014
05-19-2023
V.K. a/k/a V.K., Plaintiff, v. I.S., Defendant.
Attorney for Plaintiff Brian D Perskin BRIAN D. PERSKIN & ASSOCIATES P.C. Attorney for Defendant Christopher James Chimeri Quatela Chimeri, PLLC
Unpublished Opinion
Attorney for Plaintiff
Brian D Perskin
BRIAN D. PERSKIN & ASSOCIATES P.C.
Attorney for Defendant
Christopher James Chimeri
Quatela Chimeri, PLLC
Hon. Delores J. Thomas, J.S.C.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of Plaintiff's/Defendant's order to show cause/notice of motion are as follows:
Papers Numbered
Order to Show Cause/Cross Motion and
Affidavits (Affirmations) Annexed 3-16;17-28
Answering Affidavits (Affirmations 30-34
Reply Affidavits (Affirmations) 35-38
Plaintiff, V.K., moves, post-judgment, by order to show cause for an order: (1) holding Defendant I.S. in contempt pursuant to DRL § 245 and Judiciary Law §§ 753 and 756, for his willful failure to comply with the parties' Stipulation of Settlement dated November 21, 2014, which was incorporated into their Judgement of Divorce dated August 10, 2015, for failing to pay monthly maintenance to Plaintiff since July 2017 until the present; (2) compelling Defendant to pay maintenance arrears for the months of July 2017 to the present; (3) entering a judgment in favor of Plaintiff for said arrears; (4) ordering Defendant to place into escrow the remaining sum of maintenance owed to secure remainder of the maintenance payments owed to Plaintiff; and (5) awarding the Plaintiff reasonable counsel fees, cost and expenses for the prosecution of this application.
Defendant responded with a cross-motion for an order: (1) denying Plaintiff's motion for contempt in its entirety; (2) cancelling all accrued maintenance arrears; and (3) terminating Defendant's maintenance obligation entirely.
FACTUAL AND PROCEDURAL HISTORY
Plaintiff and Defendant were married on August 1, 2009, in a civil ceremony in New York, New York. Plaintiff filed a summons and complaint on November 11, 2014 with a Request for Judicial Intervention (RJI) in an uncontested divorce. The matter was resolved by the Stipulation of Settlement (Agreement) dated November 21, 2014. Thereafter, a Judgement of Divorce (JOD) dated August 10, 2015, was entered on September 17, 2015. The Agreement stated that Defendant would pay maintenance to Plaintiff in the amount of $4,166.66 monthly for a period of 10 years.
Plaintiff filed an order to show cause in July of 2016 due to Defendant's nonpayment, and Defendant cross-moved seeking vacatur of the Agreement on the grounds that he was not of sound mind when it was executed and that it was unconscionable. The court denied Defendant's cross-motion and ordered him to pay the arrears (Plaintiff's exhibits D and E).
Plaintiff has again filed an order to show cause because Defendant has stopped all maintenance payments in July of 2017.
In September of 2017, two months after support payments ceased, Defendant suffered a massive left side intracranial bleed complicated by a left ventricular thrombus (Massive Stroke). As a result, Defendant is permanently paralyzed on his left side, nonverbal, and confined to his home and bed. He has been rendered incontinent and requires a permanent stomach feeding tube and assistance being transported anywhere inside or outside of his home (Defendant's exhibit C).
Defendant's current wife, O.S. (Mrs. S.), filed an order to show cause in Kings Country Supreme Court seeking to be appointed as his legal guardian on January 27, 2021. The order to show cause was signed by the Honorable Miriam Cyrulnik on January 27, 20219 (Defendant's exhibit D). Thereafter, the court granted Mrs. S.'s application and appointed Mrs. S. as Defendant's legal guardian pursuant to § 81.27 of the Mental Hygiene Law. The order appointed Mrs. S. the guardian of Defendant's person and property (Defendant's exhibits E and F).
A virtual oral argument hearing for the instant motions was held in October 2021 . As neither party requested a trial, and both presented that there were no material issues of fact to dispute, the court reserved decision on submission. The transcript of the oral argument was submitted on November 22, 2021 (NYSCEF Doc. No. 40).
A typo on the transcript reads the date as 'October 514, 2021', therefore the exact date is unknown.
Due to a myriad of unforeseeable and unavoidable issues, coupled with a back log of cases resulting from the COVID-19 pandemic, the court has been delayed a year and a half in rendering this decision.
PLAINTIFF'S CONTENTIONS
Plaintiff asserts that pursuant to DRL § 245 and Judiciary Law §§ 753 and 756, the requirements for civil contempt have been met by the facts of this case. Plaintiff has shown that there is a clear mandate to pay maintenance, Defendant has not complied since July 2017, Defendant had knowledge of the order, and Plaintiff has been prejudiced by having been forced to expend legal fees and has been without sufficient funds for several years. Plaintiff contends that under these facts, the court may not refuse to enter a judgment for arrears of support because there are no issues of fact and, significantly, Defendant does not contest the arrears owed.
Plaintiff likewise does not contest Defendant's medical excuse. However, Plaintiff argues that, in the four years that Defendant has failed to pay maintenance, Defendant never moved to modify his support obligations, and therefore has not shown good cause for not being held in contempt or compelled to meet the obligations before the accrual of arrears. The burden is on the defaulting spouse to explain the lack of promptness in seeking a modification. Accordingly, the court must compel Defendant to comply with his obligations or, in the alternative, award Plaintiff a money judgment for the amounts sought in Plaintiff's order to show cause. The court must also find Defendant in contempt for his willful failure to comply with his maintenance payments to Plaintiff and mandate Defendant to secure the remainder of the support owed to Plaintiff in escrow, to be paid out each month until Defendant's obligation has terminated.
Regarding counsel fees, Plaintiff argues that under these circumstances, where a party is compelled to bring a motion to enforce terms set forth in a stipulation of settlement, courts have often exercised their discretion to award counsel fees to the moving party. The court in this matter should do the same pursuant to DRL § 238.
DEFENDANT'S CONTENTIONS
Defendant's cross-motion argues that the court must terminate Defendant's maintenance obligations and arrears pursuant to DRL § 236(B) which provides that a court may annul or modify any prior order as to maintenance upon a showing of the payee's inability to be self-supporting, or upon a showing of a substantial change in circumstances or extreme hardship. Defendant's status as an incapacitated person under Mental Hygiene Law § 81.02 constitutes an unforeseen change of circumstances, such that Defendant would experience serious hardship were the court to deny the relief requested. Particularly, the Second Department has found extreme hardship where a party suffered a grave medical condition resulting in an unintentional loss of income. Defendant's condition is such that he will require critical care for the rest of his life, and it is almost certain that he will incur significant medical costs as his condition worsens over time.
Defendant is currently earning $34,300 per year in Social Security Disability and Veteran's Affairs benefits, as opposed to the 6-figure salary he was earning when he entered the Agreement. Defendant does not have any assets to liquidate, except for the home in which he resides, and it would be cruel for the court to force him to sell his home while he is incapacitated and bed ridden.
As for failing to seek a modification prior to the accrual of arrears, Defendant argues that his stroke, which occurred two months after the arrears began to accrue, made him unable to tend to his affairs. His wife, Mrs. S., took it upon herself to care for him but, as a Russian immigrant, lacks an understanding of the American legal system and did not understand the concept of a downward modification, much less the necessary steps to file an application for same.
Furthermore, Defendant should not be held in contempt because his failure to obey the order was not willful or involuntary, given his inability to make conscious decisions. An award of counsel fees for Plaintiff should be denied for the same reasons set forth above.
DISCUSSION
Arrears
Plaintiff asks the court to enter a judgement in favor of Plaintiff against Defendant for maintenance arrears owed from the month of July 2017 until the present as well as statutory interest pursuant to DRL § 244. Defendant argues that all accrued maintenance arrears should be canceled.
"Where the amount of arrears is shown to be due and unpaid, and where there is no good cause alleged for failure to pursue a modification of support order, the court has no discretion to refuse to enter a judgment for arrears of support" (Felton v Felton, 175 A.D.2d 794 [2d Dept 1991]). DRL § 244 "puts the onus upon the defaulter the burden is on the defaulting spouse to explain the lack of promptness" in seeking relief from an order of support (Shirback v. Shirback, 115 A.D.2d 992, 497 N.Y.S.2d 555, 556 [4th Dep 1985]).
"The provisions of DRL § 244 which require a defaulting party to show cause why he or she did not seek modification prior to the accrual of maintenance or non-support related arrears constitutes a legislative adaption of the principle announced in Benjamin v Benjamin, 70 A.D.2d 813, 417 N.Y.S.2d 479 (1st Dept. 1979), where the Appellate Division approvingly quoted the ruling below that a party who waits until the other party attempts to enforce the judgment or order before seeking a retroactive nullification of arrears should be denied relief on the ground of laches. If the court decides to reduce or cancel arrears, it must set forth in its decision the facts and circumstances it finds to constitute good cause for relieving a party from failing to make a prompt application for a downward reduction" (DRL § 244).
A disability or other health condition, in and of itself, without more, is not a good cause for terminating arrears when a modification was not sought (see Theodoreu v Theodoreu, 225 A.D.2d 686, 687 [2d Dept 1996]; Michalski v Michalski, 69 A.D.2d 854 [2d Dept 1979]).
The former husband's argument that he should have been relieved of his obligation to make support payments during the period when he was recuperating from several broken ribs is without merit, insofar as he failed to seek appropriate relief by application to the court for a modification, and instead resorted to self-help.
Money judgment in favor of wife representing arrears in alimony and child support should have been vacated and parties given opportunity to present new evidence, in light of husband's evidence that he was totally disabled, that he was thousands of dollars in debt from medical expenses and was arranging for disability support payments to be made directly to wife, and that wife had at times prevented visitation with his children
Here, Defendant's reason for not seeking to modify the support order for four years is that Mrs. S., Defendant's legal guardian and wife, was unaware of this legal remedy. As an immigrant from Russia, Mrs. S. is allegedly unfamiliar with the American legal system. This, coupled with Defendant's stroke, which left him paralyzed, bed-ridden, non-verbal, and unable to tend to his own affairs, prevented Defendant from petitioning the court for a modification and arrears accumulated. Additionally, Defendant argues that he does not have the funds or the assets to pay the arrears, or any future maintenance. In response to Plaintiff's list of Defendant's assets, Defendant then counters that forcing him to give up his remaining assets would be cruel, and that he will need the assets in the future to pay medical costs as his condition worsens.
While the court is sympathetic to Defendant's health condition, Defendant's good cause excuse does not withstand even the most basic level of scrutiny. First, although incapacitated, Defendant has not shown that his wife, Mrs. S., has been utterly unable to seek out advice on managing his affairs. Most importantly, Mrs. S. has continued to pay the mortgages as well as all maintenance and utility bills on Defendant's current home located at XXXXX, Brooklyn, New York and his second property located at XXXXX, Cudjoe Key, Florida (Defendant's Exhibit C). Mrs. S. has also been paying the car insurance on both of Defendant's vehicles, a 2015 Chevrolet Silverado and a 2010 Ferrari Italia 458 (id.). Mrs. S. even holds title to Defendant's living trust. Defendant does not attempt to show that Mrs. S., his legal guardian, was unaware of his maintenance obligations to Plaintiff. Defendant offered absolutely no evidence to show that he has defaulted or fallen behind on other payments handled by Mrs. S. Defendant only argues that his legal guardian was unable to manage this particular affair, while somehow managing to take care of every other facet of Defendant's life. If Mrs. S. has been able to be designated the trustee of Defendant's estate and petition for appointment as a guardian, as well as seek counsel in this action, there is no reason she would not have the skillset been able to petition for a modification, or at the very least, seek out advice on the matter, sometime in the span of four years.
Mrs. S.'s affidavit is boilerplate, omitting all crucial details pertaining to her knowledge or lack thereof.
Because Defendant has not established good cause for not seeking the modification sooner, the court has no choice but to enter a money judgment with the total arrears owed to date of $291,666.20 (70 months [July 2017-May 2023] x $4,166.66 [monthly maintenance obligation]).
Civil Contempt
Plaintiff's order to show cause asks the Court to hold Defendant in contempt for his failure to comply with the parties' Agreement and JOD. "The elements of civil contempt, which must be shown by clear and convincing evidence, are four-fold: (a) the existence of a lawful order clearly expressing an unequivocal mandate; (b) the violation of the order; (c) knowledge of the order by the offending party; and (d) prejudice to the right of the moving party. The motive for the violation is not material; what matters is whether the disobedience of the court order defeated, impaired, or prejudiced the rights of a party. However, where the violation is failure to pay money, the accused may seek to establish inability to pay. But the obligation to go forward with evidence of financial inability is on the accused" (DRL § 245).
Here, the elements for civil contempt have been met. Defendant's obligation to pay maintenance was clear and unequivocal, he was aware of the Agreement and JOD, and violated the order by not complying with his maintenance obligations. This violation prejudiced Plaintiff by depriving her of the economic stability she is entitled to, thereby forcing her to expend resources to bring forth this motion to retrieve the court-ordered support she has been denied for multiple years.
Defendant argues that, due to his incapacitation, which occurred two months after the arrears began to accrue, his failure to pay cannot be considered willful for the purposes of civil contempt. However, willfulness is not an element of civil contempt (El-Dehdan v El-Dehdan, 26 N.Y.3d 19 [2015]). Defendant's cross-motion also argues that he is incapable of paying the arrears because his monthly maintenance obligation is double his total monthly income and he lacks liquid assets. However, when Plaintiff pointed out Defendant's various assets in her opposition papers, Defendant submitted he can no longer maintain the lifestyle that he enjoyed before his stroke and would have to liquidate his only remaining assets to fund Plaintiff's maintenance, which, it is respectfully submitted, qualifies as an "extreme hardship."
Again, the court is sympathetic to Defendant's well-documented health issues. However, Defendant has not met his burden of showing an inability to pay. Firstly, Defendant only submits a statement of net worth that provides very little information (NYSCEF Doc. No. 28; Defendant's exhibit C). There are no bank statements or tax returns attached to add any context. Notably, Defendant argues that he does not file taxes because it is unnecessary as his only income is derived from Social Security Disability benefits (totaling $29,072 per year) and Veteran's Affairs benefits (totaling 435.69 per month), however, he included a figure of $258 for monthly income taxes paid under "Income Taxes: Monthly" on his statement of net worth (id. at page 5). If he is paying monthly taxes, a tax return should be provided.
Secondly, Defendant lists various assets for which he claims significant expenses for but does not list any valuations for those assets. Namely, Defendant's current home located at XXXXX, Brooklyn, New York, his second property located at XXXXX, Cudjoe Key, Florida, a 2015 Chevrolet Silverado, and a 2010 Ferrari Italia 458. While Defendant discusses the Brooklyn and Florida properties in his moving papers, he does not provide any reason for his inability to liquidate the two vehicles. yet lists both corresponding car insurance payments under 'Insurance: Monthly' (id. at page 3).
Defendant contends that he is not the owner of this property, as he transferred the property in 2015 to his living trust I.M.S. Living Trust, whose title owner is Mrs. S.
Defendant's proof of inability to pay is lacking in various ways. His papers appear to be deliberately unforthcoming, lacking every kind of official document (e.g., bank statements, tax returns, property valuations, brokerage statements for stocks/shares, etc.) to corroborate the statement of net worth. While it is obvious that his direct monthly income is limited given his condition, Defendant's assets are available, and his arguments range from claiming liquidation would be cruel to denying ownership all together. Given the various arguments, the issue of assets is better discussed by assessing each asset individually.
Brooklyn Property
The XXXXX, Brooklyn, New York property is listed as a 3-family home on some formal documents, and 1-family home on others, therefore it is unclear whether Defendant can rent out other units in the property (Plaintiff's exhibit I). When the issue was raised during oral arguments, Defendant's attorney asserted that he had no knowledge as to the composition of the property, but that in the event that the property is in fact a 3-family home, Defendant could not have tenants due to being unable to manage the property while incapacitated and argues that having tenants would be dangerous considering the Covid epidemic (tr at 13:13-22). Mr. S. claims that he is bed-ridden and only leaves the residence by ambulance for medical appointments; therefore, it is unclear how he would be exposed, if there are two separate individual units where tenants may reside. Mrs. S. is already managing the entire property, and Defendant fails to show that she would be incapable of renting out any available units and collecting rent on his behalf. If anything, Mrs. S. seems to be diligent in handling most of Defendant's health and economic matters, and she has been granted nearly exclusive power to do so.
In the event that this property is actually a 1-family home, as some documents suggest, there are other significant properties Defendant can liquidate.
Florida Keys Property
Defendant insists that he has not owned the property located at XXXXX, Cudjoe Key, Florida since 2015, and that he has no vested interests in the property, however, Defendant lists the amount paid on the mortgage and maintenance of said property on his statement of net worth. In 2015, the same year that the JOD was finalized, Defendant transferred the property to his living trust, and named Mrs. S. the title owner. Defendant has not provided any documentation regarding the formation of the trust, therefore there is no way to know what kind of trust was created. Defendant makes a conclusory argument that the property is under the trust and therefore, Defendant does not have any rights to it. However, this would only be true if the trust is irrevocable. The only information Defendant provided for the court is its description on his statement of net worth: I.M.S. Living Trust. If the court is to presume anything about this trust given its description, it would be that it is a living trust, which is a type of revocable trust (§ 3:1. Many types of revocable trusts, Harris 6th NY Estates: Estate Planning & Taxation § 3:1). A revocable trust is one that can be freely amended or revoked by the grantor. EPTL § 10-10.6, supported by New York case law, is clear that "where a creator reserves an unqualified power of revocation, he remains the absolute owner of the property disposed of so far as the rights of his creditors or purchasers are concerned." If the I.M.S. Living Trust is revocable, then Defendant, as the grantor, still has powers of alienability. He can revoke the trust and liquidate the property or rent it for profit, which would allow him to pay the maintenance arrears. Defendant has not provided any proof that the trust is irrevocable and that he has no vested interest in this asset, only a boiler-plate affidavit and conclusory statements made by his attorney.
Alternatively, even if Defendant had shown that the trust is irrevocable, Defendant still has failed to explain why the mortgage and utility bills are listed under his household expenses. If he is going to claim that expense, then there should be an explanation as to why it is not generating income. Inexplicably, Defendant's statement of net worth lists expenses of $550 per month in electricity, $240 in cable, and $216 in water for the property. No explanation is given as to what or who is generating these expenses. His wife, Mrs. S., is listed as the title holder and has been maintaining the property. Whether she is generating income from the property to contribute to Defendant's household is important to consider Defendant's resources and ability to pay the court ordered maintenance support. Therefore, Defendant not only failed to prove that he cannot personally liquidate the property, but he has also failed to show that he is not indirectly benefitting from the property through Mrs. S.'s title, which would make his claims of undue hardship more credible.
Motor Vehicles
Even if Defendant had unequivocally established that he cannot liquidate the Florida Keys Property or rent out the other units in his current residence, Defendant also has two motor vehicles that may be liquidated. He owns a 2015 Chevrolet Silverado and, notably, a 2010 Ferrari Italia 458. It is highly likely that the Ferrari alone may be worth more than the arrears accrued as of the date Plaintiff filed the order to show cause for contempt, which sought a total of $162,499.74. Although Defendant failed to state a value for any of his assets, the value of one Ferrari Italia 458, as a novelty luxury sports car, is universally known to be valued at no less than 6-figures, even with a mileage that would render any other ordinary vehicle worthless. Defendant fails to state a reason why he cannot liquidate either of these vehicles, especially considering his claims that he is bed-ridden and gets picked up by an ambulance for medical appointments.
Car listings in New York for a used Ferrari of the same or similar make and model that Defendant owns are priced within a range of $179,000 to $569,000.
Shares of Phoenix Consulting Group
Defendant holds title to shares of Phoenix Consulting Group. The current value of the shares is listed as unknown on his statement of net worth.
As previously indicated, the court sympathizes with Defendant's medical condition, and does not question its severity, however, it is difficult to ignore the blatant lack of transparency exhibited regarding his economic position. It is Defendant's burden to prove an inability to pay, and this cannot be done by omitting crucial details and making conclusory statements. It would be unjust to Plaintiff for the court to take Defendant's uncorroborated assertions at face-value and ignore the glaring discrepancies in his statement of net worth out of sympathy for his medical condition.
Because Defendant has not provided sufficient evidence and has attempted to hide assets from the court to prove an inability to pay, this Court must grant Plaintiff's motion to hold Defendant in civil contempt pursuant to DRL § 245, Judiciary Law §§ 753 and 756.
Defendant may purge contempt by paying the total arrears of $291,666.20 owed to date within ninety (90) days of the issuance of this decision. The regularly scheduled monthly obligation of $4,166.66 should also be resumed.
Pursuant to Judiciary Law § 753, a court punishing a party for contempt can impose a fine or imprisonment, or both. "'The Supreme Court exceeds its authority when it fashions a remedy not contemplated by the statute'" (Wel-Made Enters., Inc. v Mid Is. Redi-Mix, Inc., 81 A.D.3d 717, 719, 916 N.Y.S.2d 199, quoting Parker v Top Homes, Inc., 58 A.D.3d 817, 819, 873 N.Y.S.2d 112). Here, incarceration would be meaningless and impracticable given that Defendant is bed-ridden.
A fine fashioned by the court for the purposes of civil contempt must be "remedial in nature and effect" and should be formulated "to compensate or indemnify" the moving party (Town of Southampton v R.K.B Reality, LLC, 91 A.D.3d 628, 630-31 [2nd Dept 2012]). The purpose is not to punish, but to compensate the injured party and/or coerce compliance (Dept. of Envtl. Protection City of New York v Dept. of Envtl. Conservation of State of NY, 70 N.Y.2d 233, 239 [1987]). Under Judiciary Law § 753, a fine cannot exceed the amount of actual damages incurred by the injured party, plus $250. In the instant case, the damages Plaintiff has suffered are the total arrears in question accruing as of July 2017, as well as enforcement costs that she is entitled to for this proceeding. Plaintiff has not shown any other additional damages. Therefore, if Defendant does not purge contempt, or make a timely application to the court for an extension of time with good cause, or show that it is impossible to purge, Defendant will be subject to a fine representing the total support arrears, plus the remaining payments owed to Plaintiff under the parties' court ordered Agreement, or $366,666.08 (88 months [July 2017-November 2024] x $4,166.66 [monthly maintenance obligation]) with interest.
See discussion of counsel fees on pages 17-18.
Future Maintenance
Defendant asks the court to terminate all his future maintenance responsibility. Meanwhile, Plaintiff asks the court to order Defendant to place the remaining balance of the maintenance in escrow to ensure future monthly payments.
Maintenance is temporary until November 2024, or until/upon Plaintiff's remarriage or death, whichever occurs earlier.
Under DRL § 236(B)(9)(b)(1), a court has the authority to terminate or modify a prior order or judgment regarding maintenance upon a showing that the obliged party is unable to be self-supporting or if there has been a significant change in circumstances. "A party seeking modification should be required to demonstrate that the continued enforcement of those provisions previously agreed to by the parties would create 'extreme hardship' (Pintus v Pintus, 104 A.D.2d 866, 867 [2d Dept 1984]). In determining if there is a substantial change in circumstances to justify a downward modification of spousal maintenance, the change is measured by comparing the payor's financial circumstances at the time of the motion for downward modification and at the time of the divorce or the time when the order sought to be modified was made (Connor v Connor, 171 A.D.3d 746 [2d Dept 2019]).
The court has established that disabilities and medical conditions may constitute a sufficient change in circumstance, however, there still needs to be a showing that this kind of change in circumstance results in significant economic hardship if the support award is not modified (see Taylor v Taylor, 107 A.D.3d 785 [2d Dept 2013]; see also Boatman v Boatman, 113 A.D.3d 951 [3d Dept 2014]).
Appellate Court affirmed trial Court's determination that ex-husband failed to establish that disability and retirement constituted substantial changes in circumstance because ex-husband received a substantial lump sum pension after his retirement.
The court denied an application for downward modification of maintenance because, although husband had health problems preventing him from seeking further employment, his combined retirement and Social Security income was about $64,000 per year and he had a net worth of over $1,500,000.
Defendant has not shown an extreme change in circumstances resulting in financial hardship, as discussed previously in this decision. Although Defendant can no longer work, he has accumulated valuable assets to keep him comfortable while still maintaining his obligations. His wife, Mrs. S. earns $60,000 per year (tr 10/14/21 at 23 [Defendant's attorney refers the court to page 5 of Defendant's statement of net-worth indicating that this figure was listed under the section for household income, but it is not listed there, and Mrs. S.'s occupation is listed as unknown on page 1]). Defendant receives $34,300 in government benefits per year, and the bulk of their claimed expenses may be eliminated by renting or liquidating their assets. Most importantly, Defendant claims minimal medical expenses ($50 per month) to support a finding that his disability has rendered him financially deficient.
Defendant briefly states that he owned a business, i.e., Taxman, that has allegedly gone under due to his inability to manage it but has not provided any proof of the profitability of the business to allow the court to determine that he has significant loss of income due to its failure. Defendant does not provide any documentation at all pertaining to the business. Plaintiff submits the business' webpage (plaintiff's exhibit G) and contends that it was still running when she filed this order to show cause in 2021.
Defendant does not provide a valuation or estimated value for any of his assets. Plaintiff submits a credible estimated total value of at least $2 million for all assets combined (plaintiff's exhibits L and M).
Defendant argues that Plaintiff has not disclosed her own financial circumstances to merit continuance of support, and Defendant is correct that both incomes are relevant in matters where modification is an issue. But nothing in the case law or relevant statutes purports that a party need disclose financial difficulties to enforce a matrimonial support award order that is already in place. The enforcing party's financial disclosure would only be material if the opposing party makes claims regarding the enforcing party's financial circumstances or when the enforcing party is also seeking a modification, and even then, Defendant is not relieved of his burden to prove significant change of circumstances (see Swartz v Swartz, 43 A.D.2d 1012 [4th Dept 1973]). Defendant never claims that Plaintiff's income or earning power has increased to the point where the support is no longer necessary, nor is Plaintiff seeking to modify the support. Therefore, Plaintiff's financial records were not necessary for this court's determination.
Defendant claimed his ex-wife's increased earning potential merited termination of his support obligations, but the court determined that Defendant still needed to prove a significant change of circumstances to warrant a downward modification and that having a new family to care for was not enough.
The documentary evidence shows that Defendant has significant assets, and he has not proven that continuing maintenance payments would constitute undue hardship. Therefore, future maintenance will not be terminated.
Plaintiff also asks the court to order Defendant to place future maintenance payments in escrow, but no legal basis for this request was given. Defendant shall make future monthly payments to Plaintiff as prescribed by their Agreement.
Counsel Fees
Plaintiff seeks $20,000 in counsel fees for litigating the instant motion. Defendant challenged the reasonableness of the fee and demands a hearing if the court is inclined to award any amount.
DRL § 237(c) provides that in marital support enforcement proceedings, the respondent shall be ordered to pay counsel fees to the attorney representing the petitioner upon a finding that failure to pay the court ordered support was willful. Willfulness is established by proof that the defaulting party had the ability to pay but did not do so. The mere fact that payment was not made, by itself, does not establish willfulness (see e.g., Altschul v Altschul, 84 A.D.2d 798, 444 N.Y.S.2d 159 [2nd Dept 1981]; Bruno v Bruno, 50 A.D.2d 701, 375 N.Y.S.2d 442 [3rd Dept 1975]; Lamb v Lamb, 55 A.D.2d 830, 390 N.Y.S.2d 311 [4th Dept. 1976]). If willfulness is established, the court does not have discretion, and must make an award of counsel fees in favor of petitioner. However, even if the court finds that failure to pay was not willful, the court could still exercise its discretion, pursuant to DRL § 238, to make an appropriate award (DRL § 237). In fact, Plaintiff's request for counsel fees is pursuant to DRL § 238, therefore in this case, the amount awarded is under this court's discretion to determine regardless of whether Defendant is found willful or not. Domestic Relations Law § 238 provides that "[i]n any action or proceeding to enforce... any provision of a judgment or order entered in an action for divorce... or in any proceeding pursuant to... [Domestic Relations Law § 245]... the court may in its discretion require either party to pay counsel fees... directly to the attorney of the other party to enable the other party to carry on or defend the action or proceeding as, in the court's discretion, justice requires having regard to the circumstances of the case and of the respective parties." In short, a litigant is allowed to seek counsel fees in any enforcement or modification of a judgment or order entered in an appropriate matrimonial proceeding.
DRL § 238 contains a rebuttable presumption that the less monied spouse is entitled to recover his or her legal fees and expenses. In determining reasonable counsel fees, the factors to be considered include the parties' ability to pay; the merits of the parties' positions; the amount of time spent by counsel on the case; the effort and skill required to handle the issues presented; the nature and quality of the work performed by counsel; the difficulty and complexity of the issues involved; the tactics of a party in unnecessarily prolonging the litigation; counsel's experience, ability, and reputation; the relative contributions of the respective counsel toward achieving the outcome; the customary fee charged in the locality for similar legal services; the contingency or certainty of compensation; the amount involved and benefit resulting to the client from the services; and the reasonableness of counsel's performance and the fees charged under the circumstances (see Matter of Freeman, 34 N.Y.2d 1,9 [1974]; Diakhite v City of New York, 161 A.D.3d 479, 479-480 [1st Dept 2018] ; Bruzzese v Bruzzese, 152 A.D.3d 563, 566 [2d Dept 2017], lv dismissed 30 N.Y.3d 1035 [2017]; Vigo v 501 Second St. Holding Corp., 121 A.D.3d 778; 779-780 [2d Dept 2014] ; Matter of Felix v Felix, 110 A.D.3d at 805 ; Matter of Westergaard v Westergaard, 106 A.D.3d 926, 926-927[2d Dept 2013]; Green v Silver, 79 A.D.3d 1097, 1098 [2d Dept 2010]).
Plaintiff did not provide an updated statement of net worth; however, she had always been the less-monied spouse throughout the marriage, and Defendant offers no evidence to assert that this has changed. Defendant's only other rebuttal is that he does not have the income or assets. The court has already provided a thorough analysis on Defendant's assets and has determined that he has the necessary means to satisfy his maintenance obligation. Plaintiff's counsel's retainer fee was $7,500, and Plaintiff was billed at an hourly rate of $450 per hour, partner time at $425 per hour, senior associate attorneys at $400 per hour, associate attorneys at $335 per hour, senior paralegal time at $175 per hour, and paralegal time at $125 per hour (Plaintiff's exhibit J). Plaintiff submitted copies of invoices from March 2020-May 2020 (Plaintiff's exhibit K) that totaled $4,859 in fees. Based upon the record before it, the court finds that Plaintiff has shown entitlement to counsel fees pursuant to DRL § 238. However, as both parties make extensive arguments regarding Defendant's willfulness, the court will discuss the issue of counsel fees pursuant to DRL § 237(c).
"This court has, on numerous occasions, indicated that the question of ability to pay is crucial to the issue of willfulness the court must exercise its discretion based upon 'competent proof', that is, evidence that tends to establish an ability to comply" (Altschul, 84 A.D.2d 798). In the matter of Tamborello v Tamborello, the Second Department stated that failure to pay is prima facie evidence of willfulness, and that upon this showing the burden shifts to respondent to come forward with competent, credible evidence that their failure to pay was not willful (181 A.D.3d 609 [2d Dept 2020]).
In the instant case, Defendant concludes that his conduct cannot be considered willful because of his disability. He is bed-ridden and non-verbal and has no way of tending to his own affairs. However, the facts presented by Defendant establish that his wife (and now legal guardian) Mrs. S. has been tending to all his affairs, including two homes and the utilities associated therewith, for the last four years while the arrears have accrued. The explanation that Mrs. S. was not aware of her ability to petition for a downward modification does not withstand scrutiny considering she was appointed as his legal guardian. Four years is a long time to claim ignorance while maintaining full knowledge that a court order is being violated and managing to pay every other creditor except for Plaintiff. If Mrs. S. were not capable, she would not have been appointed pursuant to a court order.
Defendant's financial fitness cannot be hidden behind his physical disability, especially when he claims less than $50 in medical expenses per month. The court has already established that Defendant has multiple valuable expendable assets. When the order to show cause for contempt was filed by Plaintiff in 2021, the arrears were $162,499.74, and instead of selling his 2010 Ferrari Italia 458, for instance, Defendant decided to expend resources to fight enforcement of his obligation and drastically downplay his financial capabilities. Willfulness, in this case, is more than apparent.
The court finds that counsel fees are appropriate and necessary under both DRL § 238 and DRL § 237(c) respectively. However, given that Plaintiff has not provided the court with copies of any invoices since May 2020, coupled with Defendant's demand for a hearing on the reasonableness of the fees, a hearing is required. The court refers this matter to a special referee to hear and determine the amount to be awarded in counsel fees.
Interest
Plaintiff seeks statutory interest on the arrears due to Defendant's willfulness in disobeying the court ordered Agreement. Upon a finding of willfulness, DRL § 244 states that the judgment must provide for interest, at the rate set in the CPLR, from the date that each payment was due. Once judgment is entered pursuant to DRL § 244, interest is earned on the judgment until paid (CPLR § 5003). Interest is currently set at 9% per annum. As previously discussed, the court finds Defendant willful in his failing to pay Plaintiff the monthly support she is entitled to as of July 2017. Therefore, interest will incur on this money judgment beginning on the date this order is executed.
Accordingly, it is hereby
ORDERED that Defendant's cross-motion is denied;
ORDERED that Plaintiff's motion is granted barring the request to have Defendant place all future maintenance payments in an escrow account;
ORDERED that Defendant is held in in civil contempt for violating the parties' Agreement and JOD;
ORDERED that Plaintiff is awarded a money judgment against Defendant in the amount of $287,499.54 in maintenance arrears which will accrue interest at a rate of 9% from the date of entry of the judgment; and it is
ORDERED that Defendant may purge his contempt pursuant to Judiciary Law § 774 by paying the sum of $143,479.77 (half the total arrears owed) by bank check or certified check to Plaintiff within 90 days after personal service of a copy of this order with notice of entry is effectuated upon him pursuant to CPLR § 308 (1); and it is also
ORDERED that if Defendant purges his contempt by paying the sum of $143,479.77, his time to pay the remaining balance owed should be extended an additional sixty (60) days; and it is further
ORDERED that if Defendant fails to timely purge his contempt, upon proof by affidavit, submitted on notice, that he has failed to purge his contempt, the court shall impose a fine of $366,666.08, plus interest accrued from the issuance of this decision pursuant to DRL § 244; and it is further
ORDERED that a special referee will hold a hearing to determine the reasonableness of the counsel fees Plaintiff seeks.
Any issue raised and not addressed herein is denied.
This constitutes the decision and order of the court.