Opinion
No. 2009/12188.
01-24-2015
Sandra Jo WHITE, Plaintiff, v. Daniel P. WHITE, Defendant.
Vincent Ferrero, Esq., Davidson Fink LLP, Rochester, Attorney for Plaintiff. Michael D. Schmitt, Esq., Rochester, Attorney for Defendant.
Vincent Ferrero, Esq., Davidson Fink LLP, Rochester, Attorney for Plaintiff.
Michael D. Schmitt, Esq., Rochester, Attorney for Defendant.
Opinion
RICHARD A. DOLLINGER, J.
In this matter, the parents made an agreement that presumed continuation of their child's private school education, at the father's sole expense, and that this expense would be paid in lieu of child support. When one child, as children sometimes do, changed her mind and decided to attend a public school—in a district in which neither parent then resided—the narrowly structured agreement unraveled. This proceeding was triggered by an order to show cause, filed by the mother, which sought: a change in the residency schedule for the couple's younger child, an award of child support, payment of medical insurance and other expenses, and attorney fees. In response, the father moved to change the primary residency of the child, and sought child support. The court initially denied all the requests and scheduled a hearing on the dispute over the residency of the teen-aged daughter. The parties conducted depositions and engaged in other discovery. The court then held the hearing and the mother and father both testified, along with the father's employer regarding issues related to the father's income. At the time of the hearing, the issues had narrowed: the child had reconciled with her parents, and the parties were no longer disputing the primary residence of the child. However, issues related to the father's continuing obligation to pay child support, the unpaid medical expenses, and attorneys fees were placed before the court.
The couple were divorced in 2010. The couple had joint custody and the mother was the primary residential parent. Under their agreement, the couple created an unusual plan for the father's payment of child support. The following language drives this dispute:The parties agree that there shall be no formal child support amount paid by either parent to the other in consideration of the fact that the father will be paying both children's tuition to Aquinas High School through each child's graduation from high school. Tuition for C. [their older son, now graduated into college] is currently $7,200.00 per year, and A. [the younger daughter who is the subject of this proceeding] tuition is estimated to be approximately $5,000.00 per year (subject to change). The parties recognize this is a deviation from the CSSA (Child Support Standards Act) guidelines, but elect to do so based on the following reasons: (1) Since the father is paying total tuition for the children and sports fees (approximately $1,600.00 this year from bonus monies which may or may not be awarded in the future), his financial resources will be drained; and (2) The children's needs will be met in both households relatively equally, since, after tuition payments, both parent's net incomes will be approximately the same.
The same exact language is included in the judgement of divorce. In explaining the basis for the language, the couple, in their testimony before the court, both agreed that the concept was that after the father paid the tuition, and certain sports fees, the net incomes of the parties, under a shared residency plan, would be roughly equivalent. Importantly, the agreement makes no reference to what happens after the older child graduates, and presumably, the total tuition paid by the father annually drops from $12,200 (for both children) to $5,000 (for the last remaining child).
The older child graduated from high school in 2012, and the daughter elected to leave that same private high school when her brother graduated. The parents jointly agreed she would move to a public school. The child wanted to go to a certain public school, but at the time, neither parent lived in that district. In order to effectuate that, the father rented an apartment in the district. It is undisputed that the father did not live at the apartment: he lived nearly full-time with his then girlfriend, in another school district. The rented apartment allowed the daughter to go to the public school of her choice. The daughter remained at the school, and the father continued to rent the apartment.
After the daughter changed schools, the mother requested that the father now pay child support because he was saving the amount he would have paid for the daughter's education at the private school. The father countered that the rent paid on the apartment, that he did not otherwise need, but which allowed the daughter to attend the school of her choice, was the equivalent of the private school tuition. In his view, he was performing what he agreed to do under the agreement, i.e., pay the tuition cost of his daughter's selected high school. Because he was paying the rough equivalent of what he had agreed to pay, he argues that he has no further obligation. (There is no evidence that disputes the father's characterization that the apartment rental cost, paid solely by him, was equivalent to the private school tuition referenced in the couple's agreement.)
Importantly, it is undisputed that the daughter's decision to change schools had no financial impact on the mother. During her testimony, the mother could not identify any additional costs that arose as a consequence of the child changing schools. The daughter was frequently at her mother's house, but there was no evidence that it increased the mother's costs. In essence, the father argues that the daughter's decision to change schools had no financial impact on the mother, and did not constitute a change of circumstances sufficient to justify a change in child support.
The clear intention of the parties is that the father would pay tuition costs for both children during high school. The mother, in the agreement, acknowledged that having the husband pay the tuition for the children—instead of direct child support—was a “deviation” from the standards set forth in the Child Supports Standards Act. The couple made no provision for any change in the “deviation” for when the older child graduated, even though it was easily foreseeable that the father's annual payment would then be reduced by more than 50 percent. Because it was clearly foreseeable that the older child would eventually graduate, the only reasonable conclusion is that the mother, in signing the agreement, agreed that the deviation also allowed the father to reduce his payments when the inevitable happened. Thus, although the father's support dropped from $12,2000 annually to approximately $5,000 annually, and while this lower amount would be significantly less than what the father would be obligated to pay, given his annual income under CSSA, nonetheless, the mother agreed to this deviation.
When the younger child left the private school and wanted to attend a particular public school, the parents agreed that the child would enroll there. They are joint custodial parents and it was a joint decision. However, the parents faced a dilemma: if neither parent resided in the district, that option was foreclosed. It was—or should have been—readily apparent to both parents, that one of the two of them had to live in the district to allow the daughter to attend school there. There is no evidence that the mother objected to the daughter's attendance at this school and she must have known that in order to attend the school, the father would have to establish a “residence” in the school's district. Because the parties agreed that the father's contribution to child support was to pay the cost of his daughter's education, the father, albeit through a backhand method—renting an apartment—achieved the agreed goal: paying for access to the education which the daughter had selected and the parents agreed to.
In this Court's view, the father, under the agreed deviation from the CSSA, paid all the costs associated with providing his children with a high school education at the school of their choice, approved by both parents. Now the father is still paying the cost of the remaining child's chosen form of high school education and which both parents agreed to have the child attend. Although the school has changed, the impact on the parents is exactly what they bargained for under the agreement. The mother pays nothing more than what she was required to pay under the agreement. Her costs have not increased, she is still a 50 percent parent, and she pays no more out of pocket. The father pays exactly what he agreed to pay as a substitute for child support; i.e., the cost necessary to access the child's selected and mother-approved education.
It would stretch the intentions underlying this agreement beyond a breaking point, to require the father to pay child support over and above the cost of the apartment. The mother claims that the father had no other residence, and therefore, by renting the apartment in the school district, he was incurring a cost that he would otherwise have to pay. However, the proof at trial clearly established that the father was residing with his girlfriend and would not have otherwise needed the apartment. At the same time, the mother admits that the father never actually lived at the apartment, and therefore, she claims the father was defrauding the school district at to his actual residence. Two facts mute this claim. First, the mother, who approved the child's attendance at the school, knew the circumstances under which father rented the apartment, and there is no evidence that she ever voiced any objection to her daughter or her ex-husband, while the daughter attended the school of her choice. Second, the allegation that the father may have defrauded the selected district does not impact the mother's claims under the agreement. The school district may have a claim for tuition against the father (and, potentially against the joint custody parent, the mother), but that fact gives the mother no greater claim under the separation agreement. The mother's argument also ignores the undisputed intention of the agreement: the father agreed to pay the education costs of his children and hold the mother harmless for those costs instead of paying child support. How he paid those costs or how much he would actually pay is not set forth in the agreement. For example, the agreement does not address what would happen if the father's costs were reduced by a scholarship or a grant. The fact that agreement does not contemplate what happens if the cost is reduced provides a final response to the mother's argument that the apartment costs were less than the private school tuition and that he now owes her the difference. In this court's view, the father has done exactly what the agreement required: paid for the schooling (as agreed upon by both parents) for their children.
The mother, in seeking to change the terms of the agreement, has the burden of proof to show a “substantial change in circumstances.” The court finds that the credible evidence adduced in this hearing does not establish by a preponderance of the evidence that father has failed to perform his agreed-upon obligations. For these reasons, the mother's claim that she is owed child support for the period in which the child attended the agreed-upon school is denied.
In the oral argument in this matter, counsel concurred that if the court found no child support was owed by the father, then there was no need to calculate his income for child support purposes during the time his daughter attended the new school that she had selected. Nonetheless, this court will resolve any questions related to father's income for child support purposes during the calendar year 2014. The mother argues that the father's income, for purposes of calculating his child support in 2014, should be based on his total income in 2013, a year in which he received a bonus of $11,700, for his work in 2012. The husband produced his immediate supervisor as a witness and she testified that the husband did not qualify for a bonus in 2013, and hence, no bonus would be paid in 2014. The husband argues that his real income, for purposes of his 2014 support obligation should be only his current income as reflected on his pay stubs, and not the 2013 income, which is inflated by the amount of the bonus earned in 2012.
Pursuant to Family Court Act § 413(1)(b)(5)(i), a court must begin its child support calculation with the parent's gross income “as should have been or should be reported in the most recent federal income tax return.” See also DRL § 240 ; Matter of Lynn v. Kroenung, 97 AD3d 822 (2nd Dept.2012). However, the court may also consider income for the tax year not yet completed. Eberhardt–Davis v. Davis, 71 AD3d 1487 (4th Dept.2010) (a court may base its determination on [the parties'] actual income and ability to support the child and inasmuch as the mother was receiving a higher salary at the time of the hearing than she had received the previous year, the court was not required to determine her income based on her federal tax return for the previous year); Matter of Azrak v. Azrak, 60 AD3d 937, 938, (2nd Dept 2009) (court is also permitted to consider current income figures for the tax year not yet completed).
In this instance, the attempt to modify the child support, away from the agreed deviation, occurred during a year in which the father's income declined. The court finds the proof that he would not receive a bonus in the calendar year 2014 for his performance in calendar year 2013 persuasive and unchallenged. The mother's counsel attempted to undercut the testimony by suggesting that there was “some possibility” of a bonus paid in 2014. This suggestion is mere speculation. K.J. v. M.J., 14 Misc.3d 1235(A) (Sup.Ct. Westchester Cty.2007) (rejecting claim that future bonus would be paid as “mere speculation”). The court declines to add any bonus to the father's income for purposes of calculating his 2014 child support obligation or, for that matter, his pro rata contribution to additional expenses.
The mother's claim for reimbursement of medical and other health expenses for the children is countered by the father arguing that the mother failed to comply with the requirements in the separation agreement that she promptly provide the receipts for such expenses to him. The agreement provides that the couple will share healthcare expenses equally. The agreement states the parties will keep their receipts and reconcile the payments every three months, that they will cooperate in seeking insurance reimbursements, and if any claim was denied because of a failure to submit a claim form, the party failing to fulfill their obligation would pay the entire cost “as a result of such failure.” In the proof before the court, the wife established that she incurred expenses covered by this provision. The father does not deny that the expenses were incurred. The wife produced certified records, admitted at trial, confirming that the expenses were incurred, and that the amount requested was the father's half share of these expenses. The wife testified that she notified the father of these expenses, and from time to time, demanded payments, even though there was no testimony that the wife actually presented the invoices directly to the father. The wife testified that the father told her, when they discussed these expenses prior to commencing this proceeding, that he just could not pay them.
The agreement clearly requires the father to pay half these expenses. The proof before the court clearly establishes that the father owes his half share totaling $4,815.24. Furthermore, this court declines to read the language requiring the parties to “reconcile their respective payments every three months” as a form of statute of limitations that bars the wife from collecting these agreed sums if she failed to “reconcile” their amounts every three months for these add-ons expenses justified by statute. NY DRL §§ 240[1–b] (c)(4)(5). There is no language suggesting that the failure to “reconcile” the payment constitutes a waiver by the wife of her right to obtain reimbursement. When attempting to enforce a waiver, the proponent must establish the intentional relinquishment of a known right with both knowledge of its existence and an intention to relinquish it. Gould v. Board of Educ., 81 N.Y.2d 446 (1993). The language does not suggest that the failure to timely “reconcile” these reimbursements would result in forfeiture. Furthermore, the father can hardly claim that these expenses were unknown or a surprise. The fees requested cover the husband's contribution to health insurance, orthodontics, and approximately $850.00 in medical expenses for both children. He surely knew that his children were covered by his wife's health insurance plan (he never suggested he supplied health insurance coverage). It would be difficult for him to argue that he did not know of his daughter's orthodontic expenses or the medical expenses for his active children—and he doesn't. The mother has sustained her burden of proof for the payment of these expenses. The father's claim that the wife is not entitled to be paid because there is no evidence that she ever sought reimbursement fails. In order to sustain this claim, the father had the burden to show, by the preponderance of the evidence that some form of insurance reimbursement was available and the mother failed to pursue it. There is no evidence of such a failure on the part of the mother and this argument is unproven. However, as a result of the mother's failure to make a more transparent and convincing effort to “reconcile” these expenses, consistent with the language in the agreement, the court will allow extended time for the father to now pay the delinquent sum. The father must pay half the expenses within 90 days of the entry of an order based on this decision, and the remaining half, 90 days later.
This court also considers whether to award prejudgment interest on the amount owed. The demanded amount was liquidated at the time of the original petition to the court and prejudgment interest would seem to be required. CPLR 5001(a) & (b) (interest awarded dating back to the earliest ascertainable date the cause of action existed). Caselaw interpretations of these provisions make plain that a prevailing plaintiff in a contract case—such as the breach of the agreement in this case—is ordinarily entitled to statutory interest, as a matter of course, “from the date the debt becomes due.” See Putnam Leasing Co., Inc. v. Pappas, 995 N.Y.S.2d 457 (Dist. Ct. Nassau Cty.2014) ; Rachlin & Co v. Tra–Mar, Inc., 33 A.D.2d 370, 373, 308 N.Y.S.2d 153 (1st Dept.1970). However, the Domestic Relations Law requires that this court find, prior to awarding prejudgment interest, that the father's failure to pay was willful, in that he knowingly, consciously, and voluntarily disregarded the obligation under a lawful court order. DRL § 244. In considering this aspect of relief, this court can consider the mother's failure to “reconcile” the unpaid reimbursements in a timely fashion as militating against a finding that the father's refusal to pay was “willful” under the statute. M.M. v. T.M., 35 Misc.3d 1231(A), p. 3–4 (Sup.Ct. Monroe Cty.2012) (Dollinger, J .) (discussion of the willfulness doctrine under DRL § 244 ). The court declines to find that the father wilfully refused to pay, because the wife never complied with the requirements for timely presentation and reconciliation of the unpaid expenses. Any claim for prejudgment interest is denied. Interest, at the statutory rate, may run from the date of the filing of the judgment.
In the award of attorneys fees, this court has broad discretion. De Cabrera v. Cabrera–Rosete, 70 N.Y.2d 879, 881 (1987) (in exercising its discretionary power to award counsel fees, a court should review the financial circumstances of both parties together with all the other circumstances of the case, which may include the relative merit of the parties' positions); Odermatt v. Odermatt, 119 AD3d 754 (2nd Dept.2014). The father, arguing against any award of fees, claims that the wife, having failed to prevail on her claim for child support when the husband was paying the cost of “necessary apartment,” forfeits any claim to fees. The mother's counsel notes that the father's cross-petition to change custody of the daughter—a position eventually abandoned by the father prior to trial—caused unnecessary legal work and the father's persistent refusal to pay the unreimbursed expenses delayed resolution of the matter and caused the trial. This court declines to penalize the father for seeking a change in custody: there is prima facie evidence, in the father's original application, of a justification for a change in primary residence of the daughter, and the wife even concedes, in prior affidavits, that as a result of conflicts with her daughter, the daughter had established primary residence with the father, although she has now moved back with her mother. While the court will award no fees for that aspect of this matter, the court believes that legal work related to the payment of unreimbursed expenses does justify an award of fees. The father's argument that the reconciliation language serves as a form of a statute of limitations is unconvincing. The mother, by seeking child support when her husband was fulfilling his obligations to pay the costs of the daughter's chosen school, was equally unjustified, but there is no evidence that the father ever offered to pay his share of the healthcare costs or the unreimbursed expenses. There is no evidence of any serious effort to pay these costs, incurred by their mother, for the children and instead the father forced his wife to chase him to trial to get paid. Weighing against an award of substantial fee award is the wife's failure to strictly comply with the “reconciliation requirements” in the agreement. When all these competing factors are weighed, the court awards the wife $3,500 in fees, the costs of the motion filings, and the cost of trial transcript.
Submit an order on notice to all parties.