Respondent,

v.

Jane Drake Hale, Defendant-Respondent-Appellant.  

ENTERED: MARCH 17, 2005

Mazzarelli, J.P., Marlow, Williams, Gonzalez, Catterson, JJ.

Resettled judgment, Supreme Court, New York County (Joan B. Lobis, J.), entered November 26, 2004, which, inter alia, awarded the wife $89,141 for her share in the parties' Connecticut condominium, permitted her to buy out husband's share of the New York co-op apartment for $324,670, determined that the distributions from the Drake Land Trust were separate property and that the alleged loans he received from his employer actually constituted part of his salary, and directed him to pay his wife $8,000 maintenance per month for four years, unanimously modified, on the law and the facts, to the extent of (1) requiring, as part of the buy-out condition for the New York apartment, that the wife pay her husband $273,846 as his separate property credit, $178,900.50 as his half share of the marital equity, as well as his post-commencement credits consisting of principal and not interest, to be determined on remand; (2) deleting the husband's award of $80,302.55 to his wife for post-commencement mortgage credits, and awarding him half of her $20,407 share of the 2000 proceeds from the Drake Land Trust; (3) deleting the provision holding the wife responsible for half the amount by which the mortgage on the parties' boat exceeds the sale price, and otherwise affirmed, without costs. The husband's appeal from order, same court and Justice, entered October 1, 2004, insofar as it denied reargument on resettling the judgment with respect to whether it should recalculate his separate property credit for the New York apartment and whether it should provide the parties the option of selling the apartment, unanimously dismissed, without costs, as taken from a nonappealable order. The husband's appeal from order, same court and Justice, entered on or about February 17, 2004, which, to the extent appealed from as limited by the briefs, denied his motion to resettle the judgment, unanimously dismissed, without costs, as taken from a nonappealable order. The husband's appeal from those portions of the divorce judgment, same court and Justice, entered October 28, 2003, "which relate to the distributive award," unanimously dismissed, without costs, as superseded by the appeal from the resettled divorce judgment. The husband's appeal from order purportedly entered July 31, 2003, unanimously dismissed, without costs, as superseded by his appeal from said order as actually entered October 22, 2003. The husband's appeal from order, same court and Justice, entered October 22, 2003, which, to the extent as limited by the briefs, refused his motion to reconsider the value of the Connecticut condominium or his wife's buy-out cost of the New York apartment, unanimously dismissed, without costs, as superseded by the appeal from the resettled divorce judgment. The wife's cross appeals from the original October 28, 2003 divorce judgment and the October 1, 2004 order directing resettlement unanimously dismissed, without costs.

As to the husband's appeal from those portions of the original divorce judgment relating to the distributive award, equitable distribution and a distributive award are two different elements of relief (see e.g. Gober v. Gober, 4 AD3d 175 [2004] ), and arguably, maintenance would not fall into either category. Where the only "distributive award" was the parties' Cadillac, precluding the husband's appeal from aspects involving equitable distribution for his choice of semantics would elevate form over substance. As for his arguments regarding maintenance, since he ultimately appealed from "each and every portion" of the amended judgment, he should not be denied the right to challenge the awards of maintenance and equitable distribution on appeal. The order denying his motion to resettle the decretal paragraphs of the judgment with respect to his separate property contribution to the New York co-op is not appealable (Hatsis v. Hatsis, 122 A.D.2d 111 [1986] ), nor does an appeal lie from the order denying reargument of that resettlement motion (Charney v. North Jersey Trading Corp., 184 A.D.2d 409 [1992] ).

The husband argues there was no evidence on which the court could have concluded the condo's appreciation in value was due in any way to the direct or indirect efforts of either party, and he thus urges that we delete the award of $89,141 for his wife's share. This issue involves a matter of credibility that the court resolved in the wife's favor (see Guarnier v. Guarnier, 155 A.D.2d 744, 745 [1989] ), and the husband only raises a challenge for the first time on appeal. Since the record contains evidence that the wife played some role in the upkeep and maintenance ofthe condo, it was not an abuse of discretion for the court to grant her a share in its appreciated value (cf. DeCabrera v. Cabrera-Rosete, 70 N.Y.2d 879 [1987] ).

Unavailing is the husband's assertion of error for the court to have accepted the wife's appraiser's $925,000 valuation based on comparable sales for properties much newer or larger than the condo. Substantial deference should be accorded to the court's rejection of the testimony of the husband's appraiser, whose associate left a note stating "150 K over, should be around 800 to 900 ...." (see Havell v. Islam, 301 A.D.2d 339, 347 [2002], lv denied 100 N.Y.2d 505 [2003] ).

However, it does not appear that the court, when it performed its calculations of the parties' marital share of the New York apartment, took into account the equity built through mortgage payments made during the marriage. Therefore, we calculate the wife's share of the marital equity by taking the date-of-trial equity of $631,647 ($775,000 minus the outstanding mortgage of $143,353) and subtracting the husband's $273,846 separate property equity credit (representing the purchase price of $530,000 minus the outstanding mortgage of $256,154 in 1996), yielding a difference of $357,801, and then dividing that marital equity in two, for a quotient of $178,900.50. The resettled judgment is modified accordingly.

Insofar as the husband asserts that we should modify the judgment so as to set forth the alternatives for disposition of the co-op, his claim is untenable and/or academic in light of the wife's undisputed intent to buy out his share.

Although the Drake Land Trust acquired the 2000 distributions after the parties commenced this litigation, the husband established his right to them, and they thus constitute marital property (see Capasso v. Capasso, 129 A.D.2d 267, 285-86 [1987], lv denied 70 N.Y.2d 988 [1988] ). Such a finding is consistent with the intent of the statute to expand the extent of marital property and diminish that of separate property (see Capasso, 129 A.D.2d at 286; see also Price v. Price, 69 N.Y.2d 8, 14-17 [1986] ).

Even though the wife did not produce witnesses to refute her husband's testimony that his employer loaned him substantial sums of money over the years, the burden remained on him to prove that the travelers' checks and other sums from the employer were loans and not part of his salary (see e.g. Matter of Powers v. Powers, 86 N.Y.2d 63 [1995] ). The court gave several reasons why it found that the husband failed to sustain his burden, including his acknowledgment that the writing constituted mere "housekeeping" he created subsequent to the purported loans, offering no explanation for the "moratorium." Affording the court's credibility findings great weight (see Eschbach v. Eschbach, 56 N.Y.2d 167, 173-74 [1982] ), we perceive no basis in the record to disturb its findings.

The husband argues that the court abused its discretion in distributing marital property and failing to apportion unsecured marital debt. This is unfounded since four of the "Marital Assets to Ms. Hale" on which he based his calculations are actually her separate assets and deserve to remain so.

Despite the arguments of both parties, we find the court's maintenance award resulted from a provident exercise of discretion (see Domestic Relations Law ? 236[B][6][a]; Spencer v. Spencer, 230 A.D.2d 645, 648 [1996] ). In light of the wife's age and limited earning capacity, it would be unreasonable to expect that she could support herself in a lifestyle approximating that which she enjoyed during the marriage (see Atweh v. Hashem, 284 A.D.2d 216, 217 [2001] ). During the marriage, the husband gave his wife an allowance of $2,500 per month, paid for all expenses, and they took frequent vacations. Although he has indicated his intention to retire when he is 65, this award is not for her lifetime, but only for four years, and his income and earning capacity demonstrate that he can manage the payments. While the parties were married only six years, they did live together for an additional eight years. In any event, a short marriage alone would not compel an award of lower maintenance in view of the marked disparity between the parties' income and earning capacity (see Allen v. Allen, 275 A.D.2d 225, 226-227 [2000], lv denied 96 N.Y.2d 708 [2001] ).

We agree with the wife that her husband should not have been given 100% of the credit for the mortgage payments he made on the New York co-op, including principal and interest. When he began deducting the co-op's carrying charges from her maintenance installments in May 2003, the payments he made to the third parties for the mortgage and other charges should have been viewed as in lieu of spousal support. Thus, while the court was correct in determining that he could not offset payments made in lieu of direct spousal support (see e.g. Parisio v. Parisio, 240 A.D.2d 900 [1997] ), it should have awarded him property credit for only that portion representing the principal, not interest (see Litman v. Litman, 280 A.D.2d 520, 522 [2001] ). Furthermore, since the court awarded each party a 50% interest in the co-op, it should have awarded him only 50% of the credit toward the principal of the mortgage (see Beece v. Beece, 289 A.D.2d 352, 353 [2001]; cf. Leeds v. Leeds, 281 A.D.2d 601, 602 [2001], lv denied 97 N.Y.2d 602 [2001] ). Since it is unclear how much of the $88,302.55 consisted of principal and how much was interest, we remand for a determination of that credit and entry of an appropriately amended judgment on the final distributive award.

The court should have used the value of the parties' boat at the commencement of the action, which the husband estimated at $450,000. Since he had exclusive possession, he should be solely responsible for any drop in value, in light of his witness's testimony that increased engine usage would hasten depreciation (see Heine v. Heine, 176 A.D.2d 77, 87 [1992], lv denied 80 N.Y.2d 753 [1992] ).

We reject the wife's attempt to deprive her husband of his equal share of her frequent flyer miles. Her testimony made it clear that she did have such miles, and although he never established the exact amount, the judgment awarding him his share specified that the parties should present their mileage statements as of the commencement of the action, for comparison and balancing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

CLERK

It is important to hire a lawyer who stays up to date on the latest developments in the law. For further information about The Law Offices of Brian D. Perskin please click here.

It is important to hire a lawyer who stays up to date on the latest developments in the law. For further information about The Law Offices of Brian D. Perskin please click here.

In this recent case from the third department, a wife never knew her husband retired and was unable to collect the past benefits that were beyond the statute of limitations.  Make sure your new york divorce lawyer files for a qualified domestic relations order, upon the granting of the divorce in New York.

66.7.25 - - - Boylan v. Dodge

Boylan v. Dodge, --- N.Y.S.2d ----, 2007 WL 1932106 (Third Dept. 2007)(July 05, 2007):

Supreme Court, Appellate Division, Third Department, New York.

VIRGINIA M. BOYLAN, Formerly Known as VIRGINIA M. DODGE, Respondent,

v.

HAROLD E. DODGE, Appellant.

July 5, 2007

Harvey C. Shapiro, Binghamton, for appellant.

Coughlin & Gerhart, L.L.P., Binghamton (Carl A. Kieper of counsel), for respondent.

Before: Mercure, J.P., Spain, Carpinello, Mugglin and Kane, JJ.

MEMORANDUM AND ORDER

Carpinello, J.

Appeal from an order of the Supreme Court (Tait, J.), entered March 28, 2006 in Tioga County, which granted plaintiff's motion for summary judgment.

Following a 38-year marriage, the parties entered into a separation agreement in 1991 pursuant to which plaintiff was to receive a 41% share of defendant's monthly pension upon his retirement. A judgment of divorce was entered on November 13, 1992 and defendant retired shortly thereafter without telling plaintiff. According to plaintiff, she did not know that defendant retired and never received her share of the pension during his first 12 years of retirement. Accordingly, in October 2004, she commenced this action for breach of contract seeking specific performance of the pension provision of the separation agreement. Supreme Court found that defendant breached the separation agreement by failing to provide plaintiff with her share of his monthly pension and thus awarded her summary judgment. It also determined that the six-year statute of limitations precluded recovery of arrears prior to October 1998. Supreme Court then issued a Qualified Domestic Relations Order (hereinafter QDRO) directing the pension plan administrator of defendant's former employer to pay plaintiff 41% of defendant's monthly pension payment pursuant to the terms of the separation agreement, plus an additional monthly payment of 50% of the remaining amount to satisfy those arrears that accrued within the statute of limitations. Defendant appeals. FN1

1. We deem defendant's appeal from the March 28, 2006 order of Supreme Court as being taken from the subsequently-entered judgment (see CPLR 5520[c]; see also Harrington v. Harrington, 300 A.D.2d 861, 862 [2002]; Alessi v. Alessi, 289 A.D.2d 782, 782-783 [2001] ).

We agree with Supreme Court's assessment that a QDRO is the proper method for plaintiff to collect the pension arrears in this case (see Peek v. Peek, 301 A.D.2d 201, 204-205 [2002], lv denied 100 N.Y.2d 513 [2003] ). Plaintiff's entitlement to a portion of defendant's monthly pension benefits was a right created under the separation agreement (see Domestic Relations Law ? 236[B] [3] ) and Supreme Court's order issuing the QDRO merely recognized such right (see 29 USC ? 1056[d][3][B][i][I] ). This being the case, the order was "made pursuant to a State domestic relations law" (29 USC ? 1056[d][3][B] [ii][II] ) and thus we find no error in Supreme Court's decision to direct payment of pension arrears via the QDRO (see Peek v Peek, supra; see generally Kaplan v Kaplan, 82 N.Y.2d 300, 305-306 [1993]; McDermott v. McDermott, 119 A.D.2d 370, 379-380 [1986], appeal dismissed 69 N.Y.2d 1028 [1987] ).

It is important to hire a lawyer who stays up to date on the latest developments in the law. For further information about The Law Offices of Brian D. Perskin please click here.

It is a common misconception that jewelry is necessarily the separate property of the wife and is never subject to equitable distribution.  In fact, many people don't even mention jewelry when discussing assets during a divorce case.  See the excerpt below for an example of equitable distribution of jewelry and don't forget to discuss your family jewels with your attorney.

Excerpt from   Ciaffone v. Ciaffone, 645 N.Y.S.2d 549 (1996).

         Supreme Court's classification of certain items of jewelry given plaintiff by defendant during the marriage as marital property was correct (see, Chase v Chase, 208 A.D.2d 883, 884, 618 N.Y.S.2d 94). It should, however, have given plaintiff a credit of $1,724 for the evidence shows that these funds were plaintiff's separate property which she utilized to purchase a ring. This credit reduces the distributive value of the jewelry to $7,676 ($9,400 - $1,724) and plaintiff's distributive award therein to $3,070.

It is important to hire a lawyer who stays up to date on the latest developments in the law. For further information about The Law Offices of Brian D. Perskin please click here.

Decided August 15, 1996 

The trial court properly concluded that an inheritance received by the plaintiff from his brother and sister, and thereafter placed in the Merrill Lynch investment account, was his separate property upon receipt, and that he continued to maintain this asset as separate throughout the marriage ( McGarrity v McGarrity, 211 A.D.2d 669, 622 N.Y.S.2d 521; Alaimo v Alaimo, 199 A.D.2d 1039, 606 N.Y.S.2d 117; Feldman v Feldman, supra). The fact that the plaintiff may have made withdrawals from his separate account to pay marital expenses does not alter this conclusion ( Feldman, supra, at 216), as there was insufficient evidence of commingling to conclude that this account was transmuted into marital property.

It is important to hire a lawyer who stays up to date on the latest developments in the law. For further information about The Law Offices of Brian D. Perskin please click here.

The question of whether or not an inheritance is subject to equitable distribution has gotten in a lot of attention.  Take a look at the following excerpt from Spencer v. Spencer which finds that inheritance is separate property, but its appreciated value is marital property...

Excerpt from Stencer v. Stencer, 646 N.Y.S.2d 674, 230 A.D.2d 645
Decided August 15, 1996 

The trial court properly concluded that an inheritance received by the plaintiff from his brother and sister, and thereafter placed in the Merrill Lynch investment account, was his separate property upon receipt, and that he continued to maintain this asset as separate throughout the marriage ( McGarrity v McGarrity, 211 A.D.2d 669, 622 N.Y.S.2d 521; Alaimo v Alaimo, 199 A.D.2d 1039, 606 N.Y.S.2d 117; Feldman v Feldman, supra). The fact that the plaintiff may have made withdrawals from his separate account to pay marital expenses does not alter this conclusion ( Feldman, supra, at 216), as there was insufficient evidence of commingling to conclude that this account was transmuted into marital property.

April 3, 2007 Page 1.

Appellate Division: Second Judicial Department

D14539

C/hu

AD3d Argued - February 20, 2007

STEPHEN G. CRANE, J.P.

GLORIA GOLDSTEIN

STEVEN W. FISHER

ROBERT A. LIFSON, JJ.

2005-07041 DECISION & ORDER

(Index No. 18409/02)

In an action for a divorce and ancillary relief, the defendant husband appeals from a judgment of the Supreme Court, Queens County (Fitzmaurice, J.), dated May 24, 2005, which, after a nonjury trial, inter alia, granted the plaintiff wife a divorce on the ground of cruel and inhuman treatment. ORDERED that the judgment is reversed, on the law and in the exercise of discretion, without costs or disbursements, and the matter is remitted to the Supreme Court, Queens County, for a new trial, before a different Justice. The plaintiff wife commenced this action seeking, inter alia, a divorce on the ground of cruel and inhuman treatment. The husband counterclaimed for a divorce on the same ground, but based, in effect, on allegations of abandonment and adultery. Contrary to the husband’s contention, the wife presented evidence which, if believed, would support the Supreme Court’s finding of cruel and inhuman treatment (see Hessen v Hessen, 33 NY2d 406, 411; Meltzer v Meltzer, 255 AD2d 497, 497-498). Nevertheless, under the unusual circumstances presented, a new trial is required because

April 3, 2007 Page 2.

SHAGOURY v SHAGOURY

the trial court impermissibly and repeatedly precluded the husband from eliciting relevant testimony in his defense, as well as in support of the factual allegations contained in his counterclaim, and thereby deprived him of a fair trial (see Arbital v Allstate Ins. Co., 282 AD2d 560, 561; cf. Habib vHabib, 278 AD2d 277, 278). In light of our determination, we do not reach the defendant’s remaining contentions.

CRANE, J.P., GOLDSTEIN, FISHER and LIFSON, JJ., concur.

Clients often ask about the distribution of stock or employee stock options upon divorce.  Unfortunately, there is no one way to determine the value of these assets without immediate sale, which is frequently undesirable for both parties.  For a discussion of the factors that may be used in valuing a stock interest, see Amodio v. Amodio which is copied below. 

The only issue before the court in this divorce action is the value, for equitable distribution purposes, of defendant's 15% stock interest in Capitol Electrical Supply Co., Inc., a closely held corporation. Defendant acquired the stock in 1980 for $87,500 pursuant to the terms of a shareholder's agreement which provides that if defendant seeks to sell his stock within 20 years, the other shareholders may exercise a right of first refusal and purchase his shares for the price paid. The agreement also provides that if defendant dies within its 20-year term, the surviving stockholders can acquire his interest for $87,500. After a trial the court concluded that the stock was worth $87,500 and the Appellate Division affirmed.

There is no uniform rule for valuing stock in closely held corporations. "One tailored to the particular case must be found, and that can be done only after a discriminating consideration of all information bearing upon an enlightened prediction of the future" (Snyder's Estate v United States, 285 F2d 857, 861). The Internal Revenue Service has declared that appropriate factors to be considered in valuing such stock for tax purposes include: (1) the nature and history of the business, (2) its particular economic outlook and that of its industry generally, (3) the book value of the stock and the financial condition of the business, (4) the company's earning capacity, (5) its dividend paying capacity, (6) its goodwill and other intangible assets, (7) other sales of the corporation's stock, and (8) the market price of stock of comparable corporations (Rev Rul 59-60, IRS Cum Bull 1959-1, at 237).

The Internal Revenue Service's formulation is not the only method of valuing stock in a closely held corporation, but it has been recognized by authors and applied by appellate courts and was one of the two methods used by plaintiff's expert witness in this case (see, Matter of Blake v Blake Agency, 107 A.D.2d 139, 146-147, lv denied 65 N.Y.2d 609; Kaye v Kaye, 102 A.D.2d 682, 687; 3 Foster, Freed and Brandes, Law and the Family, New York § 15:2, at 644-645 [2d ed 1986]; Golden, Equitable Distribution of Property §§ 7.08-7.09, at 215-219 [1983]; 11C Zett-Kaufman-Kraut, NY Civ Prac, Equitable Distribution Actions § 69.04 [3], [4], at 69-26 - 69-44). Whatever method is used, however, must take into consideration inhibitions on the transfer of the corporate interest resulting from a limited market or contractual provisions (see, 3 Foster, Law and the Family, op. cit., at 645; 11C Zett, NY Civ Prac, op. cit., at 69-25, 69-46 - 69-48; cf., Matter of Blake v Blake Agency, supra, at 149). If transfer of the stock of a closely held corporation is restricted by a bona fide buy-sell agreement which predates the marital discord, the price fixed by the agreement, although not conclusive, is a factor which should be considered (see, Kaye v Kaye, 102 A.D.2d 682, 687, supra; Bowen v Bowen, 96 NJ 36, 473 A2d 73; Rev Rul 59-60, § 8; cf., Stern v Stern, 66 NJ 340, 331 A2d 257). The decisions below, however, could be read as indicating that the courts found the price fixed in the agreement controlling because under the agreement the stock was not currently transferable. That the stock could not immediately be sold is not dispositive; marital property may have a value to the holder notwithstanding that it has no present market value (see, O'Brien v O'Brien, 66 N.Y.2d 576, 586-587 [value of professional license]; Majauskas v Majauskas, 61 N.Y.2d 481 [value of vested but unmatured pension]; see also, 11C Zett, NY Civ Prac, op. cit. § 69.04 [1], at 69-24 - 69-25). The court must consider all the circumstances reflecting on the present worth of the property to the titleholder. It need not rely solely on the price set forth in a buy-sell agreement if other evidence exists.

In this case plaintiff's expert witness, using two different methods of appraisal, testified that the value of defendant's stock was between $172,000 and $253,000. His first method computed the value of the stock by dividing the corporation's estimated shareholder equity by defendant's 15% interest in the corporation. The other valued the corporation, and defendant's stock interest in it, by applying the guidelines for valuing close corporations set forth in Revenue Ruling 59-60. However, the witness did not consider the stock transfer restrictions contained in the shareholders' agreement in either method. That being so, the courts properly determined defendant's stock was worth $87,500, the price contained in the shareholders' agreement, because that was the only evidence in the record of its actual value.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

The Validity of Prenuptial Agreements

Joel R. Brandes

New York Law Journal
December 22, 1998

PROPERTY SETTLEMENTS are encouraged as consistent with the public policy of New York. Such settlements in prenuptial agreements must be fair and reasonable and not tainted with fraud, misrepresentation, coercion or imposition. In the absence of such taints, these agreements have been presumed to be valid, and the party alleging taints or defects has had the burden of proof to establish their invalidity.1

Domestic Relations Law (DRL) §236,[B](3), enacted in 1980, attempted to modernize the New York law dealing with prenuptial agreements and with agreements made between spouses during their marriage. Such agreements are commonly referred to as a "stipulation of settlement," "property settlement," "settlement agreement" or "opting out agreement" (referred to as "settlement agreements" in this article).

The subject matter of such agreements includes:

1) a contract to make a testamentary provision of any kind, or a waiver of any right to elect against the provisions of a will; (2) provision for the ownership, division or distribution of separate and marital property; (3) provision for the amount and duration of maintenance or other terms and conditions of the marriage relationship, subject to the provisions of §5-311 of the General Obligations Law, and provided that such terms were fair and reasonable at the time of the making of the agreement and are not unconscionable at the time of entry of final judgment; and (4) provision for custody, care, education and maintenance of any child of the parties.

Where a settlement agreement has been incorporated into a judgment that is valid on its face,2 collateral attack is inhibited. Representation by experienced counsel3 and ratification4 of the agreement, or laches,5 also inhibit or bar subsequent challenges to the validity of the agreement.

The Issue of Disclosure

'Influence and Advantage'

Whenever * * * the relations between the contracting parties appear to be of such a character as to render it certain that * * * either on the one side from superior knowledge of the matter derived from a fiduciary relation, or from an overmastering influence, or on the other from weakness, dependence, or trust justifiably reposed, unfair advantage in a transaction is rendered probable, * * * it is incumbent upon the stronger party to show affirmatively that no deception was practiced, no undue influence was used, and that all was fair, open, voluntary and well understood" * * * .

Equal Footing

----------------------

Notes

 - - - Darrin

 Darrin v. Darrin, --- A.D.3d ---, --- N.Y.S.2d --- (Third Dept. 2007)(2007 WL 1555892)(2007 N.Y. Slip Op. 04558)(May 31, 2007):

Susan C. DARRIN, Appellant,

v.

David DARRIN, Respondent.

May 31, 2007

Before: CARDONA, P.J., MERCURE, CARPINELLO, MUGGLIN and KANE, JJ.

CARDONA, P.J.

Appeal from an order of the Supreme Court (Teresi, J.), entered November 28, 2006 in Albany County, which granted defendant's motion for partial summary judgment finding the prenuptial agreement executed by the parties to be valid and enforceable.

On July 20, 1987, five days before their wedding ceremony, plaintiff and defendant entered into a prenuptial agreement wherein, among other things, defendant disclosed his financial status and acknowledged his future potential interest in a substantial family trust. In accordance with certain provisions of the agreement, defendant was to make fixed monthly payments to plaintiff which would increase upon their tenth wedding anniversary and, in the event of divorce, a cash settlement based upon the length of the marriage would be paid to plaintiff. Given these monthly payments and cash settlement, plaintiff waived, among other things, all rights to spousal support, maintenance and equitable distribution in the event the parties divorced. Thereafter, a July 25, 1987 wedding ceremony was held, however, due to a problem with the filing of the marriage certificate, the parties were not officially married until a subsequent ceremony in November 1987.

In April 2005, plaintiff commenced this action seeking a divorce as well as, among other things, maintenance and equitable distribution. Defendant moved for partial summary judgment declaring the prenuptial agreement to be valid and enforceable. In opposition, plaintiff alleged that the agreement was procured through fraud, duress and overreaching. Supreme Court granted defendant's motion, resulting in this appeal.

We find no error in granting defendant partial summary judgment upholding the validity and enforceability of the parties' prenuptial agreement. It is well settled that a prenuptial agreement is accorded the same presumption of legality as any other contract (see Matter of Garbade, 221 A.D.2d 844, 845 [1995], lv denied 88 N.Y.2d 803 [1996]; Brassey v. Brassey, 154 A.D.2d 293, 294-295 [1989] ) and the validity of such an agreement is presumed unless the party opposing the agreement comes forward with evidence demonstrating "fraud, duress, or overreaching, or that the agreement or stipulation is ... unconscionable" (Korngold v. Korngold, 26 AD3d 358, 358 [2006], lv dismissed 7 NY3d 861 [2006]; see Costanza v. Costanza, 199 A.D.2d 988, 989 [1993] ). " ?[I]n the absence of proof of facts from which concealment or imposition may reasonably be inferred, fraud will not be presumed.... Such a presumption [of fraud] must have as its basis evidence of overreaching-the concealment of facts, misrepresentation or some other form of deception? " (Matter of Sunshine v. Sunshine, 51 A.D.2d 326, 328 [1976], affd 40 N.Y.2d 875 [1976], quoting Matter of Phillips, 293 N.Y. 483, 491 [1944] ). Furthermore, where the spouse opposing the validity of the agreement fails to raise any triable issue of fact, the proponent of the agreement is entitled to summary judgment (see Tremont v. Tremont, 35 AD3d 1046, 1047 [2006] ).

Even accepting plaintiff's allegations as true, a review of the record herein fails to demonstrate any triable issues of fact with respect to fraud, duress or overreaching in connection with the execution of the prenuptial agreement. With respect to plaintiff's allegation of duress, the substantial financial disparity between the parties was fully disclosed at the time the agreement was executed. Moreover, despite the fact that plaintiff was unemployed at the time the agreement was executed and allegedly dependent on defendant's support, there is no evidence that defendant used his wealth as leverage to coerce plaintiff to sign the agreement. Although plaintiff also alleges coercion in the hurried nature of the circumstances surrounding the procurement of the agreement, the record fails to support such a contention, particularly in light of the fact that the parties were not officially married until four months after the agreement was signed. In regard to plaintiff's challenge to the effective and independent representation of her attorney, the conclusory allegations are insufficient to raise a triable issue of fact (see Korngold v. Korngold, supra at 358-359; see also Colello v. Colello, 9 AD3d 855, 858 [2004] ).

Turning to plaintiff's allegation of fraud in the inducement as evidenced by defendant's failure to abide by various provisions in the agreement-specifically his failure to increase his monthly payments to her on their tenth anniversary or transfer title to certain property-such allegations relate to defendant's breach of the agreement, not the validity of the agreement itself, and are insufficient to raise a question of fact as to any undisclosed intention on defendant's part not to perform the promises therein at the time the agreement was executed (see Colello v. Colello, supra at 858).

Finally, the record does not support plaintiff's contention that the agreement is unconscionable (see Domestic Relations Law ? ? 236[B][3][3]; Colello v. Colello, supra at 859-860; Lounsbury v. Lounsbury, 300 A.D.2d 812, 814 [2002] ). Considering all the provisions of the prenuptial agreement, we cannot say that it was so unfair "as to shock the conscience and confound the judgment of any [person] of common sense" (Lounsbury v. Lounsbury, supra at 814 [internal quotation marks and citations omitted] ).

Plaintiff's remaining contentions have been reviewed and found to be without merit.

ORDERED that the order is affirmed, without costs.

The Child Support Standards Act (Domestic Relations Law ? 240[1-b]; hereinafter the CSSA) requires the court to establish the parties' basic child support obligation as a function of the income that is, or should have been, reflected on the party's most recently filed income tax return (see Domestic Relations Law ? 240[1-b][b][5][I]; Miller v. Miller, 18 AD3d 629, 631; Bains v.. Bains, 308 A.D.2d 557; McNally v. McNally, 251 A.D.2d 302, 303). Thus, although it is not improper to impute income to a party where the record demonstrates that a party's income tax return does not reflect the party's actual income (see Renzulli v. Renzulli, 251 A.D.2d 482; Murphy-Artale v. Artale, 219 A.D.2d 587) or demonstrated earning potential (see Nebons v. Nebons, 26 AD3d 478; Zabezhanskaya v. Dinhofer, 274 A.D.2d 476; Phillips v. Phillips, 249 A.D.2d 527), the statute does not permit the court to determine a party's income for child support purposes by excluding actual overtime wages (see Parise v. Parise, 13 AD3d 504; Kelley-Milone v. Milone, 256 A.D.2d 554) or by averaging a party's earnings over several years (see Reilich v. Reilich, 275 A.D.2d 929), as the Supreme Court did here. Although the Supreme Court properly found that the plaintiff was capable of earning $35,000 a year based upon her education, past employment, and earnings potential, it was improper to base the child support calculation on an average of the defendant's past earnings. In determining the defendant's income for child support purposes, the Supreme Court correctly deducted from the defendant's income the maintenance he is required to pay (see Thoma v. Thoma, 21 AD3d 1080, 1082; Chalif v. Chalif, 298 A.D.2d 348, 349), but incorrectly included the maintenance payments in the plaintiff's income (see Shapiro v. Shapiro, 35 AD3d 585; Harrison v. Harrison, 255 A.D.2d 490) and should have provided for a corresponding adjustment in child support upon the expiration of the durational maintenance award (see Domestic Relations Law ? 240[1-b][b][5][vii][c]; Navin v. Navin, 22 AD3d 474; Parise v. Parise, supra; Rohrs v. Rohrs, 297 A.D.2d 317, 318; Lee v. Lee, 18 AD3d 508, 509; Smith v. Smith, 1 AD3d 870). Finally, the Supreme Court did not articulate its reasons for awarding child support in addition to basic child support, as it is required to do (see Matter of Cassano v. Cassano, 85 N.Y.2d 649, 654-655; Clerkin v. Clerkin, 304 A.D.2d 784; Wagner v. Dunetz, 295 A.D.2d 501).

Divorce Preparation: Step 10 - Stay Put (until further notice)

Divorce Preparation: Step 9 - Avoid additional debt or major purchases

v.

Suzanne M. PULVER, Respondent.

May 24, 2007

O'Brien & Asssociates, Albany (Stephen W. Rossi of counsel), for appellant.

Law Offices of David J. Clegg, Kingston (David J. Clegg of counsel), for respondent.

Before: CARDONA, P.J., SPAIN, MUGGLIN and ROSE, JJ.

SPAIN, J.

Appeals from two orders of the Supreme Court (Doyle, J.), entered April 15, 2005 in Ulster County, ordering, inter alia, equitable distribution of the parties' marital property, upon decisions of the court.

Plaintiff and defendant were married in July 1992 and have three children (born in 1993, 1995 and 1997). Prior to their marriage, defendant and her siblings were given an interest in New York businesses owned by her father. In 1990, defendant moved to New York to be closer to her family and began working in the family businesses and plaintiff moved to New York to join her soon thereafter. On the day before their wedding, the parties-under the supervision of their respective attorneys-duly executed and acknowledged separate but identical prenuptial agreements at two separate locations.

Just prior to their marriage, defendant used separate funds toward the purchase-in her own name-of what became the marital residence in the Town of Saugerties, Ulster County. Defendant's parents loaned her $30,000 toward the down payment and closing costs on the home. Although the mortgage remained in defendant's name, she subsequently deeded the residence to plaintiff, who transferred the property to the parties jointly. During the marriage, defendant spent $150,000 of her separate funds for improvements to the residence, and plaintiff made the mortgage payments until the commencement of this action.

In August 1995, defendant's family's businesses, where she was employed, were sold for $12.5 million and she placed her share of those funds, approximately $2.5 million, in a separate account. Meanwhile, plaintiff began to manage most of the investments in defendant's family's sizable portfolio and used $40,000 of marital assets to form his own company, Lockwood Financial Services.

Plaintiff commenced this divorce action in July 2002 and the parties ultimately agreed to dissolve the marriage on the ground of defendant's constructive abandonment; a trial was subsequently held to determine how their assets would be distributed.FN1 After hearing proof with respect to the parties' prenuptial agreement, Supreme Court, by decision and order, determined that it was valid and enforceable. Upon the completion of the trial, the court issued a second decision and order which, among other things, ordered plaintiff to pay monthly child support of $2,175 and child support arrears, directed the parties to each pay half of the cost of the children's unreimbursed health care expenses and private schooling, determined that neither party was entitled to spousal maintenance, awarded defendant 70% of the marital residence after finding it to be marital property, and required plaintiff to pay defendant 50% of the value of his business. Plaintiff now appeals.

FN1. In January 2003, by temporary order, Family Court, Ulster County, ordered plaintiff to pay $1,700 in monthly child support. However, by the time of the November 2004 trial, plaintiff was $18,900 in arrears. In June 2003, Family Court granted sole custody of the parties' children to defendant.

Initially, there is ample support in the record for Supreme Court's determination that the parties' prenuptial agreement was properly executed and enforceable. A duly executed prenuptial agreement will be considered valid and binding unless the contesting party can establish that he or she was induced by fraud, overreaching or duress attributable to the party seeking enforcement (see Matter of Greiff, 92 N.Y.2d 341, 344 [1998]; Costanza v. Costanza, 199 A.D.2d 988, 990 [1993] ). Evidence demonstrating "concealment of facts, misrepresentation or some form of deception" is necessary to establish fraud (Matter of Phillips, 293 N.Y. 483, 491 [1944] ); however, "a failure to disclose does not, standing alone, constitute fraud or overreaching sufficient to vitiate" a prenuptial agreement (Panossian v. Panossian, 172 A.D.2d 811, 813 [1991] ).

Here, plaintiff first asserts that although both parties signed the agreement on the same day, they signed and acknowledged-before notaries-two separate documents, at different locations, and when they each signed their respective copy, the line for the other party's signature was blank. Indeed, the fact that the agreement was signed by the parties at separate locations does not render it invalid; "a binding agreement may be assembled from more than one writing, even if all are not signed by the party against whom enforcement is sought" (Nolfi Masonry Corp. v. Lasker-Goldman Corp., 160 A.D.2d 186, 187 [1990], citing Crabtree v. Elizabeth Arden Sales Corp., 305 N.Y. 48, 54-55 [1953]; see Raj Jewelers v. Dialuck Corp., 300 A.D.2d 124, 126 [2002] ). Here, although the agreements were signed at separate locations, they are identical and plaintiff conceded that he understood beforehand that even though neither of the documents would be signed by both parties, their terms were binding on both parties.

Similarly unpersuasive is plaintiff's claim that the prenuptial agreement was unenforceable as defendant inadequately disclosed her financial standing prior to its execution. Notably, in the signed agreement, the spaces provided for the amount of stock that defendant held in each of the family businesses were left blank. However, plaintiff testified that he was aware when signing the agreement that it did not set forth the number of defendant's shares in the family businesses but was not concerned by that omission, and that defendant's financial status had made no difference to him before the marriage and that, even if she had disclosed her financial status, it would not have changed his decision to sign the agreement. Further, the record indicates that plaintiff-an experienced stockbroker who had attended meetings of the companies' executive committee during the period leading up to the agreement-had a thorough knowledge of defendant's finances before signing the agreement. Finally, since he entered into the agreement with the assistance and advice of his own attorney, plaintiff may not now "complain that his ... interests were not adequately safeguarded" (Price v. Price, 289 A.D.2d 11, 13 [2001] ). Indeed, ample evidence supports the conclusion that the prenuptial agreement is valid and enforceable.

We also find support in the record for Supreme Court's calculation of plaintiff's child support obligation. The court determined plaintiff's income for child support purposes to be $90,000, applied the statutory percentage to this income and found plaintiff's monthly child support obligation to be $2,175. Plaintiff initially argues that Supreme Court did not follow the statutory requirement as it did not exclusively rely on his most recent tax return when calculating his parental income (see Domestic Relations Law ? ? 240[1-b][b][5][i] ). Plaintiff claims that this mistake was egregious as his recent tax returns consistently indicated his income to be much lower than $90,000. However, the court may impute income from any source that is not reported on an income tax return (see Domestic Relations Law ? ? 240[1-b][b] [5][iv] ), and such imputed income may be attributed to a party so long as the court articulates the bases for the imputation and its calculations are supported in the record (see Matter of Calabrese v. Johnston, 274 A.D.2d 971, 971 [2000] ). Here, the court noted that plaintiff's 2003 income tax return listed his income as $77,278,FN2 but additionally observed that the 2004 business ledger of plaintiff's company showed his income for the first 10 months of 2004 to be $94,087.16. The court also found that plaintiff took upwards of $42,700 from his business in 2004 to pay a number of personal expenses. Consequently, there was sufficient record support and explanation for imputing additional income to plaintiff and setting his income for child support purposes at $90,000.

FN2. Notably, plaintiff's 2002 tax return indicates his income to be only $55,756.

Plaintiff next claims that Supreme Court failed to sufficiently articulate why it would not depart from the given statutory percentages when evaluating his income over $80,000 for child support purposes (see Domestic Relations Law ? ? 240[1-b][c][3]; [f] ). However, the court adequately stated its rationale, indicating that it took into account, among other things, the children's standard of living and their level of activities. Similarly unpersuasive is plaintiff's claim that the court erred in requiring him to pay 50% of the cost of the children's private schooling, asserting that such a mandate was improper as he never agreed to send his children to St. Mary's of the Snow, a private parochial school. The court's finding, however, that this choice of schooling was jointly decided by both parties is also supported in the record.

Plaintiff next argues that Supreme Court failed to determine the combined parental income before applying the child support percentage contrary to Domestic Relations Law ? ? 240(1-b)(c)(1), (2). Indeed, the court did not state defendant's parental income and appears to have merely applied the correct child support percentage of 29% to plaintiff's assessed income of $90,000. Since the statutory percentages should be applied only to the combined parental income (see Domestic Relations Law ? ? 240[1-b][b][3], [4] ), the court should have added defendant's income to the $90,000 attributable to plaintiff before calculating his prorated child support obligation. However, implicit in the court's decision is that defendant's income for child support purposes was also $90,000; and the record amply supports this determination. FN3 Accordingly, based upon a combined parental income of $180,000, the court properly calculated plaintiff's monthly child support obligation to be $2,175 after applying the child support percentage and prorating the results (see Domestic Relations Law ? ? 240[1-b][b], [c] ).

FN3. For example, Supreme Court determined that the parties should equally split the child support add ons.

We next reject plaintiff's assertion that Supreme Court should have considered, prior to assessing his income over $80,000, that he was left impoverished when defendant's family withdrew its investments from his control (see Domestic Relations Law ? ? 240[1-b][f][10]; [g] ). Given the evidence, however, that plaintiff's business was still lucrative and that he continued to lead an expensive lifestyle following the parties' separation, his argument is unpersuasive.

We also reject plaintiff's assertion that Supreme Court erred in valuing his individual retirement accounts as of the date of trial. So as to avoid a windfall to the titled spouse and an injustice to the other, "where increases to a marital asset are passive, that is, affected by outside market influences rather than the actions of the titled spouse, the asset should be valued as closely as possible to the date of trial" (Harrington v. Harrington, 300 A.D.2d 861, 864 [2002]; see Soule v. Soule, 252 A.D.2d 768, 771 [1998]; Heine v. Heine, 176 A.D.2d 77, 87 [1992], lv denied 80 N.Y.2d 753 [1992] ). Here, plaintiff, on direct examination, testified that the market was a factor in the increase and conceded on cross-examination that the increase was "strictly a result of market forces." In all, plaintiff failed-despite his expertise in that field-to demonstrate that he actively managed the individual retirement accounts during the pendency of the action. Accordingly, no error occurred.

As to the distribution of the marital residence as marital property, we find ample support in the record for Supreme Court's choice of expert opinions in setting the value of the marital residence at $350,000, the issues of the quality of the proof and credibility having been resolved in defendant's favor by the trier of fact (see Walasek v. Walasek, 243 A.D.2d 851, 853 [1997]; Holihan v. Holihan, 159 A.D.2d 685, 686 [1990] ). We also reject plaintiff's argument that the court unfairly distributed the marital residence. It is well settled that a party is entitled to a credit for any contribution of separate property used in the purchase or improvement of the marital dwelling (see Stots v. Daniels, 22 AD3d 413, 413-414 [2005]; Gonzalez v. Gonzalez, 291 A.D.2d 373, 374 [2002]; Strang v. Strang, 222 A.D.2d 975, 977 [1995]; Mink v.. Mink, 163 A.D.2d 748, 749 [1990]; Lord v. Lord, 124 A.D.2d 930, 931 [1986]; Cunningham v. Cunningham, 105 A.D.2d 997, 998-999 [1984] ). Here, defendant purchased the residence in her own name with her separate funds for the down payment and closing costs totaling $47,301, a sum which included a $30,000 loan to her from her parents which they later forgave as a gift. Notably, despite the conflicting testimony regarding that gift, the loan clearly was made to defendant only and our review of the testimony supports the court's determination that it was subsequently gifted to her alone and not to both parties.

Moreover, we cannot say that Supreme Court abused its discretion in awarding plaintiff only 30% of the balance of the value of the residence, a decision based on defendant's expenditure of upwards of $150,000 of her separate funds to renovate and improve the marital residence. While defendant may have been entitled to a full credit for these improvements (see Strang v. Strang, supra at 977; Lord v. Lord, supra at 931; Cunningham v. Cunningham, supra at 998-999), the court, within its broad discretion, reasonably awarded defendant 70% (20% more than a 50/50 split) of the balance of the value of the residence.

There is also support in the record for awarding a credit to defendant for a portion of the $74,546 that she paid from her own funds for the carrying charges-mortgage, taxes, maintenance-on the residence from July 2002, when plaintiff ceased making payments on the mortgage (see Cunningham v. Cunningham, supra at 998-999). In light of the 70/30 split in distributing the marital residence, however, defendant's credit for the carrying charges should be limited to 30% instead of the 50/50 split awarded by Supreme Court.

We also find merit in plaintiff's contention that Supreme Court improperly directed him to pay defendant 50% of the $40,000 in marital property used to start his business, Lockwood Financial Services. In order to avoid "double counting," seed money voluntarily contributed from marital funds to help one of the parties create a new business should not be reimbursed during distribution if the value of that business is equitably distributed (see Garvey v. Garvey, 223 A.D.2d 968, 971 [1996] ). Thus, as defendant received a 50% share of plaintiff's business in equitable distribution, the court erred in directing plaintiff to repay defendant $20,000, i.e., half of the $40,000 of marital property used to start his business.

We have considered plaintiff's remaining contentions, including Supreme Court's denial of maintenance, and find them to be without merit.

ORDERED that the orders are modified, on the law and the facts, without costs, by reversing so much thereof as (1) credited defendant with 50% of the $74,564.56 she expended with respect to the marital residence during the pendency of the action, and (2) directed plaintiff to pay defendant $20,000 in marital assets used to start plaintiff's business; defendant is entitled to only a 30% credit for the moneys she expended with respect to the marital residence; and, as so modified, affirmed.

CARDONA, P.J., MUGGLIN and ROSE, JJ., concur.

Make Sure Your Lawyer Follows the Rules!!!!

  In a recent case the appellate division dismissed a divorce action, because the lawyer failed to file the proper paper work in a timely fashion.  As the Court pointed out in Farkas v. Farkas, rules about time are meant to be taken seriously.  Your lawyer cannot just say he or she was too busy, or there was a mistake by a paralegal.  All too often litigants here the Judge say : settle judgment of divorce with findings of fact and conclusions of law within 60 days or your action will be deemed dismissed. Well guess what happened?....... continue reading

Order and judgment (one paper), Supreme Court, New York County (Phyllis Gangel-Jacob, J.), entered June 23, 2005, awarding plaintiff $750,000 with interest from August 6, 2003, reversed, on the law, without costs, the judgment vacated and the claim underlying the judgment dismissed as abandoned pursuant to 22 NYCRR 202.48(b).

The Court of Appeals has recently made it clear that "statutory time frames - like court-ordered time frames - are not options, they are requirements, to be taken seriously by the parties" (Miceli v State Farm Mut. Auto. Ins. Co., 3 NY3d 725, 726 [2004] [citation omitted], following Brill v City of New York, 2 NY3d 648 [2004]). Thus, where a statute or court rule prescribes a limited time frame in which to take a procedural step in litigation, and states that a party's failure to act within that time frame will be excused only upon a showing of "good cause," such a showing requires demonstrating, as the dissent puts it, "more . . . than [the] merit . . . [of] the underlying application and a lack of prejudice to the other party." This bench is unanimous in holding that this principle applies in the instant case, in which plaintiff failed to comply with the 60-day time frame for the submission of a judgment to the court for signature (Uniform Rules for Trial Cts [22 NYCRR]
§ 202.48[a], [b]). Because plaintiff has failed to show good cause for her failure to comply with the time frame set forth in the Uniform Rules, we are constrained to reverse and vacate the judgment.

The dissent, while agreeing that a showing of "good cause" in this case requires plaintiff to provide "[a] satisfactory explanation' for not meeting the 60-day time frame of 202.48," seems to hold that this standard is satisfied wherever the judgment in question arises from a "complex matrix of litigation" and the adverse party is, colloquially speaking, a "bad guy" (a term that indisputably applies to defendant). In view of these purportedly "unique circumstances," the dissent deems excusable the entirety of plaintiff's four-and-a-half-year delay in submitting a judgment, even though the only reason the dissent can find for plaintiff's last 21 months of delay is that she was actively litigating other issues against defendant, and (due to defendant's wrongful conduct) could not have immediately enforced the judgment in any event. Not only does the dissent not adduce any specific factor that impeded plaintiff's ability to submit [*2]a judgment during the final 21 months of the period at issue, the record contains an admission by plaintiff's counsel that the failure to timely submit a judgment was the result of counsel's own "oversight." In our view, excusing plaintiff's failure to comply with the 60-day time frame under these circumstances is tantamount to abolishing the requirement of "good cause" in any case in which the court finds it distasteful to enforce the rule. We see no warrant for such a departure from the approach mandated by the Court of Appeals' recent case law.

This appeal arises from a bitterly contested divorce action that was commenced in 1991. One of the matters at issue was a debt the parties owed to Chemical Bank, based on an equity line of credit defendant husband had obtained by pledging as security the cooperative shares assigned to the marital residence. Chemical Bank commenced a foreclosure action against the parties to recover this debt in 1994. The April 1999 judgment of divorce directed defendant to pay all sums due Chemical Bank within 30 days, failing which "plaintiff [wife] shall be entitled to enter a money judgment against defendant for the total amount due and owing to Chemical Bank without further order."

Defendant did not obey the court's directive to pay the parties' debt to Chemical Bank. Accordingly, in June 2000, plaintiff moved for entry of a money judgment in her favor against defendant in the amount of $984,401.17, which was then the amount Chemical Bank claimed the parties owed it. By order dated October 13, 2000, and entered October 17, 2000, Supreme Court granted this application, providing that "plaintiff may settle the judgment thereon." The relevant decretal paragraph further provided that, "[u]pon plaintiff's suggestion, such judgment may contain language staying execution thereon pending determination or other disposition of the Chemical Bank foreclosure action."

Although the order granting plaintiff's application for judgment in the Chemical Bank matter was entered on October 17, 2000, it was not until May 2, 2005 - four and a half years later - that plaintiff finally served defendant with a notice of settlement and a proposed judgment. The proposed judgment recited that plaintiff and Chemical Bank had settled the foreclosure action for $750,000.00 on or about August 6, 2003. Apparently based on this development, the proposed judgment was in the principal amount of $750,000.00 (rather than $984,401.17, the amount stated in the October 2000 order), with interest to run from August 6, 2003. Defendant opposed entry of the proposed judgment, arguing that it was untimely under 22 NYCRR 202.48(a), more than 60 days having passed since entry of the order directing settlement of the judgment ^[FN1]. Therefore, defendant argued, the action should be deemed abandoned pursuant to 22 NYCRR 202.48(b), since plaintiff had not shown "good cause" for the delay ^[FN2]. On June 20, 2005, the court, without making any finding on the "good cause" issue, signed the judgment [*3]submitted by plaintiff without material amendment, and it was entered on June 23, 2005 ^[FN3]. Defendant now appeals.

Although we agree that there was arguably good cause for delaying settlement of the judgment until after the Chemical Bank foreclosure action was settled in August 2003, the record reveals no justification for plaintiff's failure to submit a judgment for an additional year and nine months thereafter. The relevant portion of the October 2000 order granted plaintiff's application for judgment in the amount of the parties' debt to Chemical Bank, which was being litigated in the foreclosure action. While the foreclosure action was still pending, the amount of the debt to Chemical Bank was undetermined (as recognized by the October 2000 order itself), and, therefore, plaintiff's failure to submit a judgment during the foreclosure action's pendency was at least arguably justifiable. However, once the foreclosure action was settled on or about August 6, 2003, the amount of plaintiff's indebtedness to Chemical Bank was finally determined, and no reason remained for plaintiff to continue to delay her submission of a judgment.

As the dissent appears to recognize, plaintiff's failure to comply with the clear mandate of the Uniform Rules is not justified either by the lack of prejudice to defendant from the late submission of the judgment or by the merit of the claim on which the judgment is based (cf. Brill, 2 NY3d at 652 ["good cause" for a late summary judgment motion under CPLR 3212(a) "requires a showing of good cause for the delay in making the motion - a satisfactory explanation for the untimeliness - rather than simply permitting meritorious, nonprejudicial filings, however tardy"]). The dissent nonetheless claims to find the "good cause" required to save plaintiff's judgment in the circumstance that, throughout the period in question, the parties were embroiled in "strenuous legal battles fought simultaneously on a variety of fronts," and that such continuing litigation was necessitated by defendant's bad faith efforts to avoid paying his fully adjudicated legal obligations to plaintiff. While this is certainly true (indeed, defendant does not deny it), it does not change the fact that only the Chemical Bank foreclosure action had any bearing on plaintiff's ability to settle the judgment here at issue. We do not see how the other matters the parties were litigating during this period - however urgent they were, and however inexcusable defendant's misconduct — can be deemed to constitute "good cause" for plaintiff's counsel's failure to submit a judgment within 60 days after the settlement with Chemical Bank (if not earlier). After all, submitting such a judgment required nothing more than performing the essentially ministerial tasks of drafting, serving and filing a one-page notice of settlement and a two-page proposed judgment. We see no basis for the dissent's suggestion that the slight investment of counsel's time and effort that was required to settle the judgment would have interfered with plaintiff's unquestionable "need . . . to focus attention on enforcement [*4]techniques that might actually give [her] some relief."

While a judgment submitted for settlement within 60 days after the foreclosure action settled evidently would not have been enforceable immediately upon entry (which, unquestionably, was due to defendant's inexcusable misconduct), that circumstance, in itself, was no reason to wait more than another year and a half before seeking entry of such a judgment. Contrary to the dissent's statement that having a judgment entered at the time the foreclosure action settled would have been "an empty gesture," plaintiff's counsel was then actively seeking avenues for enforcing her extant judgments against defendant, and that search ultimately bore fruit. The implication of the dissent's position is that the 60-day period of 22 NYCRR 202.48 does not begin to run until the plaintiff knows that the judgment will be enforceable. Not only would the dissent thus essentially rewrite § 202.48, it would do so for no apparent good reason of policy, since uncertainty as to the enforceability of a fully litigated judgment is no impediment to settling that judgment.

The truth is that plaintiff's failure to timely submit a judgment based on the Chemical Bank debt was simply an instance of law office failure. In fact, plaintiff's counsel essentially has admitted as much. In reply to defendant's opposition to the belated submission of the judgment, plaintiff's counsel, after recounting the course of the parties' contentious litigation over the preceding years, concluded that "any failure to timely submit the Order [sic] for settlement is based on an oversight by the firm filing." In view of Brill and its progeny, however, law office failure clearly does not constitute "good cause" for delay within the meaning of 22 NYCRR 202.48(b).

The dissent, while acknowledging that plaintiff's noncompliance with 22 NYCRR 202.48 was the result of law office failure, suggests that such failure may itself constitute "good cause" for delay under the rule. We disagree. CPLR 2005, which provides that courts may exercise their discretion "to excuse delay or default resulting from law office failure," applies, by its express terms, only to applications to extend time to appear or plead under CPLR 3012(d) and to motions for relief from a judgment or order under CPLR 5015(a), neither of which is at issue here. While it is true that the Court of Appeals, in 1989, construed CPLR 2004's "good cause" requirement for an extension of "the time fixed by any statute, rule or order for doing any act" to be satisfied by law office failure (see Tewari v Tsoutsouras, 75 NY2d 1, 12-13 [1989]), the applicability of CPLR 2004 is expressly limited by its opening phrase ("Except where otherwise expressly prescribed by law"). In Tewari, applicable law did not expressly provide otherwise, since, as then-Judge Kaye noted in her concurrence, the underlying statute at issue (CPLR 3406[a]) did "not plainly authorize[] dismissal" for failure to meet the relevant deadline (75 NY2d at 13-14). Here, by contrast, 22 NYCRR 202.48(b) specifically provides that failure to comply with the mandated time frame "shall [not may] be deemed an abandonment of the motion or action" (emphasis added).

In addition, the more contemporary Brill and Miceli decisions (which, tellingly, do not cite Tewari) indicate that courts are now expected to take a stricter approach to the enforcement of litigation deadlines (see also Andrea v Arnone, Hedin, Casker, Kennedy & Drake, 5 NY3d 514, 521 [2005] [holding that an action dismissed for noncompliance with discovery orders cannot be recommenced pursuant to CPLR 205(a), notwithstanding that it was "undesirable to punish plaintiffs for the failures of their counsel"]). The strictness mandated by Brill and Miceli necessarily implies that law office failure cannot generally be deemed to constitute "good cause," since, if good cause included law office failure, it would exist in every case of untimeliness [*5]where the opposing parties were not prejudiced by the delay. While the dissent correctly points out that the Brill approach to the determination of "good cause" for untimeliness leads to harsher results in the context of settling a fully litigated judgment than it does in the context of determining the right to summary judgment, the greater severity of the rule's impact in this case (which is regrettable) does not change the fact there was simply no good reason for the last 21 months of plaintiff's delay in seeking settlement of her judgment. ^[FN4]

Given the undisputed merit of plaintiff's claim, and defendant's long history of inequitable conduct, we reverse the judgment with reluctance. Still, we see no way to harmonize the dissent's approach with the current state of the law, given the language of 22 NYCRR 202.48, the Court of Appeals' construction of the term "good cause" in Brill, and the emphasis the Court of Appeals has placed in recent years on the importance of enforcing codified and court ordered litigation deadlines in order to protect "the integrity of our judicial system" (Brill, 2 NY3d at 653). As the Court of Appeals recently stated in a similar context, "[l]itigation cannot be conducted efficiently if deadlines are not taken seriously, and . . . disregard of deadlines should not and will not be tolerated" (Andrea, 5 NY3d at 521).

We could affirm the untimely submitted judgment here only by disregarding the Uniform Rules, and, if this Court will not uphold the Rules, we doubt that trial courts or practicing attorneys can be expected to do so. To reiterate, the Court of Appeals, by its decisions in Brill and subsequent cases, has served notice of its determination not to tolerate the approach taken by the dissent. Given the undeniable equities between the parties, the result to which this leads in the present case is as distasteful to us as it is to the dissent. Nonetheless, this result is what the law, as announced by the Court of Appeals, requires on the undisputed facts of this case.

All concur except Saxe, J.P. and Malone, J. who dissent in a memorandum by Saxe, J.P. as follows:

SAXE, J.P. (dissenting) [*6]

The majority deprives plaintiff ex-wife of the $750,000 judgment she was rightfully granted against defendant ex-husband following his undisputed failure to repay Chemical Bank amounts withdrawn on an equity line of credit, as directed by an earlier court order. It does so on the ground that her lawyer failed to settle the money judgment within 60 days, as required by Uniform Rules for Trial Courts (22 NYCRR) § 202.48, and that as a matter of law she failed to present the requisite showing of good cause required by § 202.48(b) to excuse the delay. It asserts repeatedly that it is, regrettably, constrained to do so by the Court of Appeals' recent pronouncements in Brill v City of New York (2 NY3d 648 [2004]) and Miceli v State Farm Mut. Auto. Ins. Co. (3 NY3d 725 [2004]), regarding compliance with statutory time limits. It ignores the component of discretion in any such determination of whether good cause was established (see Gonzalez v 98 Mag Leasing Corp., 95 NY2d 124, 129 [2000]), and in the process announces an absolute rule that under Brill and its progeny, law office failure cannot constitute good cause for the failure to comply with 22 NYCRR 202.48(b).

In the unusual circumstances presented here, I would uphold the discretionary determination of the IAS court that good cause for the failure was sufficiently established. In my view, in rejecting the assertion that good cause was shown for plaintiff's failure to settle a judgment within the time frame of 22 NYCRR 202.48, the majority neglects to consider the context of the litigation between these parties, and the overriding need, in view of defendant's undisputed avoidance of all his legal obligations, to focus attention on enforcement techniques that might actually give plaintiff some relief. To the extent counsel acknowledges that the failure was theirs, that law office failure should not be so cavalierly discarded as at least part of the basis for a finding of good cause.

Section 202.48(a) of the Uniform Rules requires that proposed orders or judgments be submitted for signature within 60 days after the filing of the underlying decision or order directing such submission or settlement. Subdivision (b) further provides that failure to timely submit the proposed judgment or order shall be deemed an abandonment of the motion, "unless for good cause shown."

Both Brill and Miceli involved the 120-day deadline for summary judgment motions imposed by CPLR 3212(a), particularly the provision that such motions may only be made after expiration of the 120-day period "with leave of court on good cause shown" (emphasis added). Brill held, and Miceli reiterated, that

" good cause' in CPLR 3212(a) requires a showing of good cause for the delay in making the motion - a satisfactory explanation for the untimeliness — rather than simply permitting meritorious, nonprejudicial filings, however tardy" (2 NY3d at 652).

It should be noted that Brill and Miceli's strict imposition of the "good cause" requirement merely resulted in forcing a party with a meritorious but belated claim for summary relief to proceed to trial; in neither instance did the rule result in the forfeiture of an enormous money judgment granted to a party against an opponent who had thrown every possible obstacle in her path in the course of the litigation.

This is not to say that we should ignore the Rule's requirement of good cause for plaintiff's belated entry of a judgment. In fact, while the good cause provision in 22 NYCRR 202.48 does not necessarily require an identical showing to that of CPLR 3212(a), I would agree that even under the former, more needs to be shown than merit to the underlying application and [*7]a lack of prejudice to the other party. A "satisfactory explanation" from plaintiff for not meeting the 60-day time frame of 202.48 is necessary.

Here, the complex matrix of litigation between and involving these former spouses is the framework in which such a satisfactory explanation can be found. It also bears noting that the IAS court was intimately familiar with the parties' litigation history, having handled both the matrimonial trial and the related motions. In such circumstances, the IAS court's discretion to determine whether there was good cause for the failure to settle an order within the time frame of the rule is entitled to some deference, and I cannot say that the ruling was an improvident exercise of discretion.

Ever since 1990, after a marriage of over thirty years, Ms. Farkas has been involved in ongoing, virtually unending litigation in an attempt to obtain relief to which she is clearly entitled from Mr. Farkas. The original equitable distribution decision issued by the trial court in 1996 described the husband's egregious dissipation of marital assets — including payments to another woman to whom he was "married" in a secret bigamous ceremony while still married to plaintiff — as well as his history of ignoring court orders and judgments and being held in contempt and incarcerated for failure to abide by support directives, while continuing to live in luxury himself through his mother's largesse. With regard to the equity line of credit debt on which Chemical Bank sought to foreclose, the trial decision directed Mr. Farkas to repay it in full, provided Mr. Farkas with two alternatives, and authorized Ms. Farkas, upon Mr. Farkas's failure to comply with either of these options, to enter a money judgment against him for the total amount due and owing to Chemical Bank. It bears emphasis that the judgment entered thereon, dated October 28, 1996, and the amended judgment dated April 14, 1999, authorized Ms. Farkas to enter a money judgment against defendant for the total amount due and owing to Chemical Bank without further order.

Three money judgments for support arrears totaling over $700,000 were entered between 1994 and 1998 by Ms. Farkas against Mr. Farkas. She was unable to collect on these judgments, however, because of Mr. Farkas's concealment of income and assets.

In June 2000, the trial judge was assigned three post-judgment applications brought by the parties. The first, which the court appropriately denied as "outrageous," was a baseless motion by Mr. Farkas to strike the provision of the judgment allowing Ms. Farkas to move for additional spousal support. The second was Ms. Farkas's application to punish Mr. Farkas for contempt based on his willful failure to pay the judgments for support arrears, which the court granted. The third was Ms. Farkas's motion for entry of a money judgment for $984,401.17, the principal sum said to be due to Chemical Bank, with interest and penalties; she also sought attorneys' fees for the amount she had incurred in defending the foreclosure action brought by Chemical Bank. The order dated October 13, 2000 granted this application as well, directing plaintiff to settle a judgment, and adding that "upon plaintiff's suggestion, such judgment shall contain language staying execution thereon pending determination or other disposition of the Chemical Bank foreclosure action."

While no such money judgment was settled, it is undisputed that in the intervening years (1) Ms. Farkas continued to actively litigate the foreclosure action with Chemical Bank until August 6, 2003, when the matter was finally settled, (2) Ms. Farkas was also forced to attempt to resolve her former counsel's claim to $337,506 in fees due and owing from the matrimonial and Chemical Bank actions, in litigation commenced in 2000 and only resolved in April 2005, and (3) Mr. Farkas continued to successfully evade enforcement of all the previously obtained money [*8]judgments against him.

By notice of settlement dated May 2, 2005, plaintiff sought to settle a judgment against defendant in the amount of $750,000 with interest from August 6, 2003, for the balance due to Chemical Bank pursuant to stipulation. Defendant's attorney submitted an affirmation in opposition, arguing that the motion must be deemed abandoned pursuant to 22 NYCRR 202.48(b) due to the nearly five-year delay in settling the judgment as directed in the October 13, 2000 order. In response, plaintiff's counsel explained the foregoing litigation history between the parties, and added that while plaintiff had previously been unable to locate defendant, who had fled the jurisdiction, in April 2005 legal action was taken to enforce the outstanding New York money judgments in the Miami-Dade Circuit Court in Florida, where Mr. Farkas had taken up residence. The IAS court, well aware of the full history of the litigation, rejected defendant's position and signed the judgment for entry, necessarily finding that good cause for the delay had been shown.

Initially, to characterize the length of the delay as "nearly five years," as defendant does, fails to acknowledge that during much of the time, between October 13, 2000 and August 6, 2003, plaintiff was actively attempting to reduce the amount Chemical Bank would accept in settlement of its claim. Indeed, the majority concedes that there was arguably good cause to refrain from settling the contemplated money judgment from October 13, 2000 through August 6, 2003.

But, even after the Chemical Bank litigation was finally settled, plaintiff was left with the greater problem of remaining unable to successfully enforce against defendant the numerous money judgments she already possessed. Entitlement to yet another money judgment against defendant was of less paramount concern than successfully enforcing those she already had, and finding the means to pay her former counsel.

Although the majority sees no relevance in the parties' long and tortured litigation history, focusing only on the question of whether plaintiff or her attorney was actually prevented from settling the judgment as directed, to my mind, the foregoing portrait of strenuous legal battles fought simultaneously on a variety of fronts in an effort to achieve real rather than illusory relief, satisfactorily explains counsel's failure to settle a judgment within 60 days of either the underlying order or the settlement of the Chemical Bank foreclosure action. Counsel's efforts were properly focused on enforcing long-outstanding money judgments against a defendant who secreted assets and fled the jurisdiction, particularly since the process of entering yet another money judgment would have been an empty gesture under the circumstances.

To the extent that the failure to settle the judgment can be deemed law office failure, Brill and its progeny do not support the majority's assertion that "law office failure clearly does not constitute good cause' for delay within the meaning of 22 NYCRR 202.48."

Law office failure is relied upon in numerous contexts to excuse delays and defaults. CPLR 2005 was enacted expressly to authorize courts to exercise discretion to excuse delay or default resulting from law office failure when considering applications to extend time to appear or plead under CPLR 3012 or to vacate a default 5015(a). CPLR 2004, which vests courts with discretion to "extend the time fixed by any statute rule or order for doing any act, upon such terms as may be just and upon good cause shown" [emphasis added], was successfully relied upon where the excuse given for the untimeliness in filing a CPLR 3406(a) notice "amount[ed] to little more than law office failure" (see Tewari v Tsoutsouras, 75 NY2d 1, 12 [1989]; see also Tak Kuen Nagi v Sze Jing Chan (159 AD2d 278 [1990]). Indeed, neglect specifically [*9]characterized as law office failure has been accepted by the Second Department as good cause for a short delay in submitting an order in accordance with 22 NYCRR 202.48 (see Levine v Levine, 179 AD2d 625, 626 [1992]).

The rule itself is not absolute; it allows for an extension of time for good cause shown. CPLR 2004, which expressly allows for such an extension even after a rule's time limit has expired, is to the same effect. Unlike Brill and Miceli, an explanation for the delay was proffered here. Simple law office failure, and counsel's understandable preoccupation with other, more practical and useful aspects of enforcing plaintiff's rights, explain why counsel neglected to enter a $750,000 money judgment in accordance with the dictates of 22 NYCRR 202.48. Whether this explanation satisfies the "good cause" requirement is a question that calls for an exercise of discretion. The majority's insistence that it is constrained to hold against plaintiff here as a matter of law fails to acknowledge all this.

In these circumstances, I would affirm the judgment challenged here.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MAY 1, 2007

CLERK

Footnotes

Footnote 1:Subdivision (a) of 22 NYCRR 202.48 provides: "Proposed orders or judgments, with proof of service on all parties where the order is directed to be settled or submitted on notice, must be submitted for signature, unless otherwise directed by the court, within 60 days after the signing and filing of the decision directing that the order be settled or submitted."

Footnote 2:Subdivision (b) of 22 NYCRR 202.48 provides: "Failure to submit the order or judgment timely shall be deemed an abandonment of the motion or action, unless for good cause shown."

Footnote 3:Since the IAS court, in signing the judgment, did not make any finding that "good cause" for the delay had been shown (indeed, the judgment it signed did not include even a conclusory recitation to that effect), there is not, contrary to the dissent's view, any "good cause" finding to which we owe deference. Even if we were to accept the dissent's view that the IAS court should be deemed to have made such a finding by necessary implication, sub silentio, the Court of Appeals' jurisprudence in this area establishes that, in certain cases, "good cause" for delay may be absent as a matter of law. As discussed below, we believe that this is such a case.

Footnote 4:The dissent, in suggesting that Brill and Miceli are distinguishable in that "no excuse for the delay was offered" in those cases, overlooks that here, too, the only "excuse" established by the record for the last 21 months of plaintiff's failure to submit a judgment is her lawyers' "oversight." Again, if law office failure constituted "good cause" for granting relief from the consequences of untimeliness, an excuse for the delay would exist in every case. The dissent's apparent view that discretion invariably exists to deem law office failure to constitute good cause is inconsistent with the holding of Brill and Miceli that, where the only explanation for the delay is law office failure, good cause is absent as a matter of law.

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