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Recent Posts in Child Support & Custody Category
| May 12, 2010 |
| Chutzpah in Marital Jurisprudence |
| Posted By Brian D. Perskin |
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In a recent decision by Judicial Hearing Officer Stanley Gartenstein, the Court strongly considered the believability of a party's poverty claim in its award of maintenance and child support. In New York matrimonial and family law cases, it is essential to remember that Judges will examine an individual's expenses and lifestyle in determining maintenance, child support, and equitable distribution. Below find the text of the decision.
Judicial Hearing Officer Stanley Gartenstein
NASSAU COUNTY Supreme Court
Judicial Hearing Officer Gartenstein
DECISION
J 1 's efforts to beat the system represent a new zenith in chutzpah. 2
After a long and bitterly contested trial, this complex litigation may best be summed up as a well crafted but legally bankrupt claim of "sudden poverty", a disease which seems to infect matrimonial litigants with particular frequency. Apart from the time, effort and expense to which J has put his wife to penetrate the smoke screen he has so skillfully created-and we must begrudgingly give him credit for that-his schemes are a house of cards constructed by a self-indulgent individual intent upon his own gratification at the expense of all those innocent persons who have given of themselves to him and who had a right to expect more.
THE MARRIAGE
The parties ("N' and 'J") were married in 1980 in a religious ceremony. There are three children, A, born XXXX; S, born XXXX; and E, born XXXX. A is past the age of emancipation; S will reach that age in less than a half year; E has XXXXX and XXXXX traits. She has undergone surgery for XXXXX.
JURISDICTION
This action was commenced on September 26, 2005. It has tortuously wound its way through the Court and been referred to the undersigned, a Judicial Hearing Officer, who conducted the trial upon a hear and determine stipulation. The trial commenced on June 1, 2009 and concluded on October 28, 2009. Closing submissions are now complete.
CHUTZPAH/CREDIBILITY
Because the "sudden poverty" defense makes credibility the central issue in any matrimonial action, we are called upon to assess the motives of the respective parties and their incentive or lack of it to color the truth or lie outright. Our insight into J must therefore, at least to some extent, be governed by the chutzpah he has demonstrated.
It doesn't take chutzpah to cheat on one's spouse. But J didn't just cheat on N. He diverted marital income to take his girlfriend on luxury vacations which he charged to a credit card knowing that the bill would necessarily come to his home and be opened by N. He refused to give up this meretricious affair or leave the marital home even after this action was commenced, insisting instead on humiliating N by carrying it on openly and notoriously while living under the same roof with her and the children.
Nor does it take chutzpah to claim poverty while bedecking oneself in $5,300 designer jeans from Tyrone's in Roslyn Village. But J's "explanation" would have the Court believe that these designer jeans in particular were purchased solely to comply with a one day per week dress-down code allegedly prevailing in his new work environment.
It doesn't take chutzpah to devise a scenario of "sudden poverty'. But J closed down one of New York's premier stationery stores on the eve of trial, thereby putting 24 faithful employees on the unemployment lines.
Nor does it take chutzpah to steal from one's own father. But J plundered his dying father's estate as he suffered from Parkinson's disease and lacked the physical and mental capacity to "lend" the money J claims to have "borrowed". And when caught by his father's executor with his hand in the cookie jar, J brazenly advanced the interesting proposition that N of all people should shoulder part of the responsibility to make restitution.
It doesn't take chutzpah to demand custody of the children. But J litigated for custody of two estranged sons who barely speak to him and as he was about to face cross-examination, his demand mysteriously evaporated.
Nor does it take chutzpah not to get along with one's in-laws. But J hired a detective to dig up actual or imagined dirt on his 84 year old father-in-law. This at the same time he was scheming to avoid paying maintenance by claiming that N's father, the very same 84 year old father he was trying to discredit, would obtain employment for her thereby taking him "off the hook".
It doesn't take chutzpah to claim poverty while maintaining membership in the exclusive Muttontown Golf Club. But J maintained his membership first; then took a leave of absence conveniently timed for his application for downward modification; then, after its denial, reinstated himself until the eve of trial; and then conveniently "canceled" so that he could again claim poverty.
These acts raise the bar. They establish a new standard in chutzpah, even for matrimonial actions.
AS
The issues of this litigation are so intimately interwoven with J's alter-ego business entity that the Court's ultimate decision will necessarily center on its assessment of that entity's inner structure. For this reason, detailed analysis of AS, J's alter ego, must constitute a required threshold to any decision addressed to the financial equities between the parties.
AS, a thriving retail and wholesale office supply on Madison Avenue and 40th Street in New York City, was founded by defendant's grandfather. It was then owned and operated by his father, B. J, representing the third generation, worked there, effectively assuming control during years in which his father grew old. He forced his brother S out of the business on one day's notice over some personal issue. He and his sister, J, now effectively own all the assets of AS in whatever form they now exist; J's husband and J now operate what remains of AS.
In view of J's pained outcry that AS is worthless, it is interesting that, "poverty" and all, he recently purchased his brother's 16 percent share of AS for $350,000
On the eve of trial, J, claiming that AS had suffered devastating losses which mandated that he close the store, reinvented the business with an elaborate structure which basically, notwithstanding his claims to being destitute, kept his flow of income intact while showing an illusory business decline. He accomplished this by closing his Madison Avenue store, making his business an independent contractor of one of the country's largest buying offices, WLG, into whose office he physically moved. In so doing, he took advantage of the tremendous discounts generated by WLG's purchasing volume while virtually eliminating overhead expenses.
J's new corporation is known as GM, LLC. He owns 51 percent thereof. He is also the owner of 50 percent of AS and 50 percent of ABC, a separate entity created to fill customers' demand for coffee and bottled water. It is claimed that AS's only income is from a licensing agreement with GM, the net effect of which provides that GM make certain payments for the good will, name, phone number, etc. of AS.
As pointed out in plaintiff's closing argument, J had certain concerns on the eve of trial:
1. He and his sister J were liable for a line of credit with HSBC in the sum of $250,000;
2. If his new business arrangement with WLG did not succeed, he would then be compelled to resume business with his former supplier, UN, to which AS had a running remaining balance of $474,480;
3. A $205,000 shareholder's "loan" which he could "repay" by distributing to himself and his sister tax free;
4. AS's $2,428,000 loss carry forward which would allow it to write off income, to the extent of this loss.
J's incorporation of GM was immediately followed by an independent contractor's agreement on its behalf with WLG on September 25, 2008 which provided that GM would purchase supplies through WLG which offered substantial purchase discounts. The contract provided that GM and WLG would divide gross sales revenues forty (40 percent ) percent to GM and sixty (60 percent ) percent to WLG. Additionally, for the first three years, GM is paid an additional bonus by WLG equal to ten (10 percent ) percent of the gross profit. WLG assumed payment for GM's staff salaries up to $35,000 per year for each million dollars of GM's gross annual sales. The contract with WLG provides that for the first year (October 1, 2008 through September 30, 2009) this amount would be based on $5 million of sales or $175,000 of salary paid to the GM staff. Thereafter, it is to be adjusted pro rata in accordance with the actual gross sales of GM.
GM, J, J, and a small staff then physically moved in with WLG and now operate from there.
Following execution of the contract, AS then delivered a promissory note (November 12, 2008) to its former supplier UN Stationers in the aggregate sum of $474,480. By its terms, as of February, 2010 the balance due thereon is $158,160. Although not required to do so, on November 15, 2008, three days following execution of the promissory note by AS, J personally guaranteed payment of it.
This assumption of personal liabilities furthered J's scheme to preserve the valuable assets remaining in AS, including the shareholder's loans and loss carry forward as well as the ability to structure other tax and business benefits.
On September 24, 2008, AS entered into a "Licensing Agreement" with GM (both totally controlled and dominated by J wherein GM agreed to pay $26,200 per month ($314,400 per year) to AS for the use of AS's name, telephone number, website and customer list. J admitted under oath that this sum was determined solely by him and that it was based upon AS's debt. 3
D, CPA, a respected evaluator, testified that the licensing fee of $26,200 per month was obviously established to enable GM to reduce its taxable income by deducting this so-called "fee" paid to AS as a business expense. AS could then offset this income from GM against its $2,428,000 loss carry forward. This results in a double deduction for D's related companies, and enables him to manipulate the taxable income of both entities in violation of IRS Code Section 1201.
In getting from Point A to Point B, AS suddenly changed the method of preparation of its December 2008 financial statement from a "review" standard, which requires investigation and verification of all financial information provided, to a "compilation" standard for the last financial statement dated December 31 2008. This latter standard is based solely upon J's representations concerning his financial transactions. He never produced a "reviewed", much less "audited", financial statement for December, 2008, the only six month period in which AS reported a "loss". 4
D prepared an analysis of cash flow of GM and AS. In the first year of operation, GM received $508,266 in commissions, plus a bonus of $132,465. Thus, its total income for the first year of operation was $640,733. After various deductions including deducting the so-called "licensing fee" paid to AS, the resulting total cash flow was $549,933. Fifty percent of this figure, viz, $274,966 would reasonably flow as income to J for the first year of operation based upon the assumption that the UN note would be paid in full. Plaintiff urges that this is the appropriate income to be imputed to J as the basis for her claim for maintenance and child support. She asserts no claim in equitable distribution to any part of this business, whatever format is in current use. Her closing argument points out that the balance due on the UN note is $158,160. J's own filings outline his tax refunds of $248,280 received (or shortly to be received) pursuant to his filings in the Fall of 2009. Accordingly, after payment in full of J's share of the HSBC line of credit ($125,000) being held pursuant to this Court's Order), he will have available, by reason of tax refunds, an additional $113,848, a sum more than sufficient to fully satisfy his obligations to UN. This would make available to his business entity a full line of credit which has been unavailable for years.
Assuming arguendo that J continues paying the so-called "licensing fee", he will then have the wherewithal to repay himself and his sister the outstanding shareholder's loans of $205,000 tax free any time he so desires. This will reduce the tax liability of GM by having it make payments to AS which bear no proportionate relationship to AS's assets and will artificially reduce GM's income so that AS will receive tax free income by deducting it against its $2,428,000 loss carryover. All this rests in J's uncontrolled discretion. He is in effect taking money from one pocket and putting it in another. He has masterfully manipulated the shadow entities created at his direction to present an illusion of legitimacy. Thus everything which has or will happen boils down to J and only J.
In the face of J's "sudden poverty" claim that his business has been in a downward spiral first because of 9-11, second because of competition from Staples, it is appropriate to note the amounts reported as business income on his tax returns as follows:
2000 $214,960
2001 $206,052
2002 $206,967
2003 $210,475
2004 $214,310
2005 $227,864
2006 $239,476
2007 $241,388
J's companies have also consistently logged increasing gross profits in the face of his claim that business was dramatically declining. The evidence shows that reported gross profits were:
2001 32.45 percent
2002 36.25 percent
2006 35.9 percent
2007 36.13 percent
2008 33 percent
During GM's first year of operation gross profit percentages were shown to be consistent with AS's as follows:
October 2008 32 percent
November 2008 34 percent
December 2008 30 percent
January 2009 32 percent
February 2009 32 percent
March 2009 32 percent
April 2009 30 percent
May 2009 31 percent
It is also painfully clear from the evidence that virtually all personal expenses, credit cards, bills, groceries, life insurance, disability insurance, cell phone, automobile, long term care, and commutation expenses for J have been paid through these business entities in a total expenditure which dwarfs his declared earnings.
The totality of the evidence paints a picture of J's undiminished wealth and an almost obsessive single-mindedness on his part to do N, his long-term wife and mother of his children, out of her just entitlement. His testimony, obviously contrived for the trial, was pedantic, often condescending. J made sure to lecture the Court about how his elderly father-in-law, as he tells it, the source of all his problems, ruined his life in some vague and unspecified manner. The Court was often called upon to strike his gratuitous remarks and cut off seemingly endless monologues. At one point, it became necessary to call a recess and instruct him to leave the courtroom temporarily and return "without the attitude".
It is indeed rare that a court is presented with a tissue of ready-made fabrications so extensive and far reaching that it literally mandates disbelief of a witness' entire testimony.
LIFESTYLE
Where, as here, the transcendent issue is maintenance, it is appropriate that the lifestyle of the parties be considered first. In this connection, it is relevant to point out that in the original enactment of DRL §236, et seq., the standard of living of the parties while married was listed as one of the enumerated factors to be considered by the trial court. The Legislature, later finding that consideration of lifestyle as one factor among many was "feminizing poverty', removed it as one of the in seriatum factors and inserted it in the preamble of subsection 6 thus granting it transcendent effect.
N's evidence of lifestyle was not effectively contraverted at the trial or in defendant's closing memorandum. Indeed, the thrust of J's closing argument once again disingenuously postulates without basis that the parties always lived beyond their means during their marriage. J's flow of income absolutely belies this. We therefore track herein plaintiff's recitation of the evidence as set forth in her closing argument.
At the time they were married, N and J moved to an apartment in New York. They immediately obtained full golf memberships at the Muttontown Country Club where they dined on weekends and where J would play golf. They also regularly dined at expensive New York City restaurants. On their many vacation trips, they hired private tour guides and routinely shopped at exclusive stores (Armani, Bottega Venetta, Gucci, Fendi, etc.).
N worked for her father in his jewelry business until their first child, A, was born on XXXX. Thereafter, she managed a Tiffany account part-time on recommendation from her father. She earned between $35,000 and $45,000 in 1989 and 1990 solely from commissions without relationship to time actually worked.
In 1988, N and J purchased a home and moved to Roslyn. The down payment came from proceeds of the sale of their New York City apartment and from gifts totaling $75,000 from N's parents and grandmother. N asserts no separate property claim for these monies.
In 1989, the parties gutted their home, adding 1,500 square feet (new kitchen, master bedroom and bath; windows and siding; new heating system; hot water heater and additional air conditioning zone) at an approximate cost of $300,000. In addition to the Muttontown membership, they also joined Pines Pool Club and the Atlantic Beach Club.
J and N employed a live-in housekeeper and sent the children to exclusive day and sleep-away camps. They also took lavish vacations-Vail, Colorado (rental of house and skiing); Lion's Head (approximately $12,000); Venetian Resort and Spa, Scottsdale, Arizona, ($10,000); Beaver Creek, ($12,000); Boca Raton, (numerous occasions); Disney World (numerous occasions); Sandy Lane, Barbados (five star hotel $12,000); Las Vegas, Ritz Carlton ($17,000); Italy: Hassler Hotel, Rome; Lugano Hotel, Florence; Bauer Hotel, Venice, ($18,500 hotels alone); Hawaii, Four Seasons Hotel ($11,500); Blacombe, Canada, Whistler Hotel, ($22,000); Anguilla ($22,000).
In May, 2005 N and J traveled to London twice to see a rock and roll group, purchasing tickets costing $800 each, (total concert cost $3,200, total with hotel, $15,000).
Needless to point out, J also took numerous trips with "friends," without N, including: Greece (with girl friend); Brandon Dune, Oregon; South Carolina (twice); Las Vegas, Bellagio Hotel (with girlfriend); Miravel Spa, Arizona (with girlfriend); Cancun; Sandy Hill, Nebraska; Miami (with girlfriend); South Carolina (golf trip). Numerous additional golf trips were elicited during trial.
N was primary caretaker of the children, responsible for the household's functioning. She was active in the children's education and sustained them in their medical issues which included A's XXXXX disorders, S's XXXXX and L's XXXXX, XXXXX and XXXXX.
N is 51 and in good health. J is 52.
Immediately prior to commencement, J entered into contracts and obtained estimates for additional renovation of the marital residence in an approximate sum of $100,000, to include the boys' bedrooms, new furniture, redoing the master bath and bedroom and redesigning the front entrance. He retained an architect (Spring, 2005) to carry these forth, while advancing a claim to the Court in bad faith that his business was failing. Indeed, when N learned of his extramarital affair, and upon his refusal to end it, it was N who stopped the work on the house and commenced this action.
N demands spousal maintenance of $5,416.67 per month ($65,000 per year) for fifteen years (citing DRL §236(B)(6)(a); DiBlasi v. DiBlasi, 48 AD3d 403), emphasizing her long-term marriage (cf. Chalif v. Chalif, 298 AD2d 348) and the luxurious standard of living enjoyed by the parties during marriage (Hartog v. Hartog, 85 NY2d 36 (1995)..
An award of maintenance, amount and duration thereof, is an issue vested in the sound discretion of the trial court.
In Hartog v. Hartog, supra, the parties, as here, were married for twenty years and were substantially the same age as N and J. Mrs. Hartog received substantial equitable distribution in excess of that which N's ultimate award will be here. The Court of Appeals reversed the Appellate Division's grant of non-durational maintenance to Mrs. Hartog, citing Domestic Relations Law §236, et seq. which required that the Court give special consideration to the marital standard of living. It reinstated the trial court's decision calling for non-durational maintenance owing to Mrs. Hartog's inability to become self-supporting at a level commensurate with the marital standard of living. Holding that the legislative history of the statute unequivocally demonstrated the legislature's intent with regard to the pre-separation standard of living, Hartog emphasized that
"…the Wife's ability to become self-supporting with respect to some standard of living in no way obviates the need for the court to consider the pre-divorce standard of living, and does not create a per se bar to lifetime maintenance."
To be sure, N is capable of earning some money now. She currently works in a clerical capacity in a doctor's office earning minimal income ($12 per hour). Her claimed 'contacts" in the jewelry industry, stemmed primarily from her aged father and have dried up. She is untrained and uncredentialed. N will never have the capacity to earn sufficiently to resume her pre-separation standard of living. In the face of N's testimony that she might be capable of becoming self supporting in a lesser period of time, we respectfully believe her estimate to be overly optimistic and not supported by reality.
The Court declines to follow the conclusions of defendant's vocational expert who testified at the trial which were speculative and apparently tailored to minimize an appropriate award of maintenance to N.
The Court of Appeals in Summer v. Summer, 85 NY2d 114 (1995), reversing an appellate reduction of non-durational to durational maintenance and reinstating the trial court's decision held that "because Supreme Court's determination that the wife is incapable of becoming self-supporting at a level roughly commensurate with the marital standard of living comports with the weight of the evidence, we reinstate its judgment insofar as it awarded the wife permanent maintenance."
In Phillips v. Phillips, 182 AD2d 746, the Appellate Division in this Department affirmed an award of non-durational maintenance to a forty-nine year old wife based on a twenty-nine year marriage in which, the wife served as homemaker and sacrificed her career to care for three children. The husband, an attorney, earned between $100,000 and $200,000, the wife $15,400 with little apparent likelihood that her salary would increase to a point where she could become self-supporting. This holding closely approximates the facts before us.
In Bogannam v. Bogannam, 60 AD3d 985, the Second Department awarded ten years' maintenance following a twenty year marriage (husband's earnings $200,000).
Finally, in Kriftcher v. Kriftcher, 59 AD3d 392 the Second Department held that
"…although the wife earned a teaching license during the course of the marriage, she is, at present, primarily a homemaker, who works only part-time as a substitute teacher earning approximately $10,000 per year…. Considering, among other factors, the standard of living of the parties during the marriage, the distribution of marital property, the health of the parties, the present and future earning capacity of both parties and the ability of the party seeking maintenance to be self-supporting…a maintenance award…for ten years is appropriate."
J's affidavit of Net Worth as of commencement, received in evidence listed the parties' monthly expenses at $28,521. On the eve of trial, his updated Net Worth Statement as of December, 2008 acknowledged "after-tax" monthly expenses of $20,341.34 ($244,092 per year). It included no expense for medical insurance, an additional cost to N to follow this divorce. DRL §236(B)(6)(11) as amended effective September 14, 2009, now requires the Court to consider "the loss of medical insurance" as a factor in awarding maintenance. 5
The Court has considered the mandatory factors made relevant by DRL §236, et seq. to the extent set forth without adhering to a slavish repetition thereof. N is awarded $65,000 per year as demanded based upon her needs and expenses as conceded by J in both sworn net worth statements. The parties' home has been sold. N has moved to an apartment with the children. Her rent and expenses while deviating from those listed in connection with the house by J in his net worth statement, do not appreciably alter her need for the award as requested.
Notwithstanding the request for 15 years of maintenance, N will reach the age of full eligibility for Social Security in 14 years on her 65th birthday. The duration of our maintenance award to her differs slightly from her request in that our award runs to her 65th birthday, no later.
While maintenance is usually taxable to the wife unless stated to the contrary by the Court, the Appellate Division in this Department has ruled that any award relieving the recipient spouse of taxable liability for it must articulate a reason (cf. Grumet v. Grumet, 37 AD3d 534). The award of maintenance herein to the wife shall be tax free to her. We rely here upon the testimony of D to the effect that J's scheme with reference to "goodwill" payments to ASs is illegal under the Internal Revenue Code. We believe it inconsistent with public policy to provide him with yet another outlet to minimize the entitlement of the taxpayers to their fair share of his earned income. We do not perceive the morality of rewarding him for this dubious practice by providing yet another opportunity for him to manipulate his funds to the detriment of the taxpayers.
J's true income as projected by D is $274,966 less FICA and Medicare totaling $10,311. Deducting $65,000 awarded herein for maintenance from J's base salary for CSSA purposes, yields a total of $199,655. It is conceded that both boys are emancipated leaving L as the only child requiring an order of support. The statutory percentage of 17 percent is applied to the CSSA net income (less maintenance) of $199,655 yielding a total figure for child support of $34,000 per annum. We respectfully believe it appropriate to apply this percentage, notwithstanding the statutory "cap', to the total base figure in view of L's special needs. All applications to impute income to N for purposes of computation are denied as being without basis in fact or law.
We reiterate here that which we have indicated during trial that from a review of the credible evidence, D's figure is a conservative estimate not approaching our own estimate of J's actual income. Nevertheless, we are bound by propriety not to exceed the demand on record, lacking any showing that the demanded amount is inadequate to meet L's needs.
AUXILIARY DIRECTIVES
All monies now being held by J's attorneys in escrow or otherwise shall be transferred into custodial accounts and earmarked for college for S and L with N as custodian pursuant to stipulation dated August 21, 2009. Should these funds be inadequate to pay tuition, room and board in accordance with standards prevailing at SUNY (Binghamton campus), all additional funds shall be paid by the parties on a 90/10 allocation basis. This order is effective retroactive to the Fall, 2009 semester.
J is directed to obtain and keep in effect a life insurance policy of $4,000,000 to secure maintenance and child support payments. Duplicate premium notices addressed to N shall be arranged for by J.
J shall maintain medical and dental coverage for the unemancipated child and be responsible for 90 percent of all unreimbursed expenditures. To the extent feasible by law, no out-of-network providers shall be used without J's or, in the alternative, the court's approval.
J is ordered to pay the overdue sum of $18,250 to Doctor S for N's dental work. Failing same, the Court will direct entry of judgment against him upon appropriate application.
The funds now held by Oppenheimer representing an IRA of approximately $30,000 and a 401K in AS/GM of approximately $64,000 shall be divided equally. This directive shall be implemented by retention of Lexington consultants to draw appropriate QDRO orders with fees for same split equally between the parties.
N is awarded $60,699.50 representing 50 percent of the marital Madoff funds taken by J (cf. Exhibit 11) for his own purposes.
Counsel for defendant now holds $155,410 in escrow pursuant to written stipulation dated March 16, 2009. The husband's share of this escrow fund has been properly disbursed in accordance with this stipulation. The balance thereof belongs to N and shall be distributed accordingly.
During the trial, J moved for downward modification in the face of a "so ordered" stipulation to the effect that the applicable standard for modification would be "extreme hardship" and the further fact that he had already unsuccessfully moved for this relief once. This second motion which had been referred to the trial by the undersigned is denied.
The parties have disposed of the marital domicile by sale. A stipulation dealing with distribution of various sums of money not necessarily pertaining to the sale itself has been executed by the parties and is approved.
COUNSEL FEES
Plaintiff's application for counsel fees to the firm of B and R in the sum of $340,000 is granted based upon the equities of the case (O'Shea v. O'Shea, 83 NY2d 187); the relative circumstances of both parties (Charpie v. Charpie, 271 AD2d 169); the added burden imposed upon counsel by unreasonable and groundless claims (Brancoveanu v. Brancoveanu, 177 AD2d 614); the presence of imputed or hidden income (Steinberg v. Steinberg, 59 AD2d 702); the unnecessary prolongation of litigation by one party (Ventimiglia v. Ventimiglia, 36 AD2d 899); and attempts by one party to frustrate, discourage and otherwise intimidate the other (Schussler v. Schussler, 109 AD2d 875; Lowinger v. Lowinger, 245 AD2d 490). Counsel has fully complied with the appropriate rules promulgated by the Office of Court Administration. We find that counsel possesses the stature, ability, reputation and respect appropriate for these fees. The time charges claimed for performance of counsel's duties are reasonable, even conservative.
All claims, if any, for arrears or for retroactive effect to be extended to any order herein shall be brought on by motion in writing with supporting affidavits computing same with specificity prior to submission of final judgment.
Stipulations between the parties resolving a number of issues as presented with final submissions are approved. All issues addressed in the final submissions unresolved as of that time are now deemed fully resolved.
All prayers for relief by either party not addressed by this decision are hereby denied.
The foregoing constitutes the decision and order of this Court.
Settle final judgment on notice.
The Clerk shall retain all exhibits pending expiration of time to appeal.
1. Removed.
2. "Chutzpah (Yiddish)-unbelievable gall; insolence; audacity; cheekiness, impertinence, impudence, crust, gall, the trait of being rude and impertinent, inclined to take liberties."
Collins English Dictionary-6th edition, 2003
The Court of Appeals has encountered the necessity of expressing itself with this metaphor (cf. People v. Campbell, 97 NY2d 532).
3. D, CPA, an expert witness who evaluated those entities prior to trial, citing IRS Code Section 482, testified that the only legal method to determine the value of a licensing fee is upon an arm's length transaction for the value of the licensed assets, a proposition whose validity was acknowledged by J's own bankruptcy expert witness SP, Esq. Thus, if J is to be believed that AS "went out of business" or had "no value" as of the Fall of 2008, there could be no "fair market value" for the Licensing Agreement and certainly no consideration for it. Furthermore, the "Licensing Agreement" permitted the parties thereto, AS and GM, both alter egos of J, to change the licensing fee at will.
4. AS's "reviewed" financial statements from 2000 through June 30, 2008 have been received in evidence.
5. In addition to any monetary award, J is directed to fully cooperate in N's attempts to obtain COBRA coverage. ¦
SUPREMECourt
J.H.O. Gartenstein
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| April 29, 2010 |
| Sandra Bullock and Jesse James’ Divorce Begets the Issue of Child Custody |
| Posted By Brian D. Perskin |
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Sandra Bullock has filed for divorce from her husband Jesse James, which raises an important question: What about the children?
The divorce is complicated because of the issue of child custody and visitation regarding the three children James and Bullock have from James' first marriage. Bullock has a major caretaking role with them. Bullock also has a three-and-a-half month old adopted son, Louis. Joanna Grossman of Findlaw delves into the case of Sunny, the youngest, with whom Bullock has formed a maternal relationship since her birth in 2004:
Another issue is the custody of Louis, the 4-month-old son Bullock has just adopted. Joanna Molloy of USA Today writes:
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| Continue reading "Sandra Bullock and Jesse James’ Divorce Begets the Issue of Child Custody" » |
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| April 02, 2010 |
| The Exception to the Rule |
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In the extraordinary case below, the Family Court of New York upheld a denial of child support arrears, in a case that spanned the globe. In this case the Petitioner forced the Respondent to chase her from Singapore to New York to Indiana, to win custody. The court found that because of the worldwide search involved, that it was in the interest of justice to deny the arrears.
SOSA-L1NTNER, J.:
Before the Court is an Objection by Carisa Carlton (hereinafter "Petitioner") asserting that Support Magistrate Ann Marie Loughlin erred as a matter of law in denying that part of the Petitioner's Violation Petition which sought to enforce Steven Heller's (hereinafter "Respondent) support obligation for the months of April 2009 and May 2009. The Petitioner maintains that there are no exceptions to the general rule that precludes annulments of child support arrears. FCA § 451. The Respondent rebuts that there is a case law bacM framework for exceptions to the general rule and that his situation merits an exception. He asserts that the reason he did not pay support for April and May 2009 is because the Petitioner's violations of several court orders forced him to pursue her across three countries and forced him to initiate legal actions against her in several jurisdictions.
Section 451 of the Family Court Act is clear that the court shall not reduce or annul child support arrears. However, the Courts have slowly moved towards creating a case law exception
to Section 451. In the Matter of Commissioner of Social Services v. Luis Alonso, 7 A.D.3d 388,
although the First Dept overturned the lower court's vacatur of arrears, the Court acknowledged an exception to Section 451 based on rare circumstances. "This is not one of those rare circumstances where an overly strict application of Section 451 of the FCA, which prohibits reductions of accrued child support arrears, would result in grievous injustice to respondent..."
The present matter began in Singapore in November 2008 when the Respondent turned to the Court for help because he had been denied access to the Subject Child. Eventually the Singapore Court issued an Order precluding the Petitioner from taking the child outside of Singapore. Nevertheless, the Singapore Court considered granting her permission to take the child to Bali on vacation upon the posting of a $10,000 bond. She left with the child without posting bond and did not return. The Respondent pursued them from Singapore to Bali and then to New York. The Respondent located them in New York and on April 3, 2009 the Hon. Laura E. Drager granted an Order to Show Cause giving the Respondent temporary custody of the child. The Petitioner failed to turn over the child and the Respondent was directed by New York Supreme Court to obtain an order of custody from Singapore in order to continue the matter under emergency jurisdiction status. On April 14, 2009 the Respondent was issued an order of custody from the Singapore Court but by this time the Petitioner had taken the child to Indiana. Through a second Order to Show Cause brought before Judge Drager the Respondent was granted his request for law enforcement assistance in securing the child. The Indiana Sheriff's office honored that request and the Respondent returned the child to New York where he had to defend himself against Petitioner's cross motion challenging jurisdiction. On April 29th Judge Drager directed the Respondent to return the child to Singapore which he did. Litigation continued in Singapore while the Respondent enrolled the child in school and generally cared for the child. Upon the completion of the custody trial the Respondent was awarded custody of the child and the Petitioner was given limited access. On June 3' the Respondent filed for termination of the New York support order.
The question is whether the present situation constitutes a "rare circumstance" and whether ordering the payment of arrears would result in "grievous injustice" to the Respondent. Alonso, id This Court finds that the Magistrate did not abuse her discretion by annulling the arrears. Section 451 was partially designed to protect deserving parents and not to unjustly enrich parents who act outside of the law. It is undisputed that the Respondent paid his support in full up until April 3, 2009 when the Petitioner's actions led the Respondent on a worldwide searchfor the child and forced him to engage in legal battles on several fronts. Taking these extraordinary circumstances into consideration the Magistrate's finding that the Respondent had good cause for not filing a termination petition in April or May is not an abuse of her discretion as the trier of fact. In addition the Magistrate did not err in law because unlike the Petitioner's position that child support arrears can never be annulled the First Department in Alonzo acknowledged that under rare circumstances the arrears can and should be annulled.
Therefore the Petitioner's objection is denied.
Notify Support Magistrate Ann Marie Loughlin, attorneys and parties.
PURSUANT TO SECTION 1113 OF THE FAMILY COURT, AN APPEAL FROM THIS ORDER MUST BE TAKEN WITHIN 30 DAYS OF RECEIPT' OF THE ORDER BY APPELLANT IN COURT, 35 DAYS
FROM THE DATE OF MAILING THE ORDER TO APPELLANT BY THE CLERK OF COURT OR 30 DAYS AFTER SERVICE BY A PARTY OR
1 LAW GUARDIAN UPON APPELLANT, WHICHEVER IS EARLIEST.
ENTER:
Hon. Gloria Sosa-Lintner Judge of Family Court |
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| January 18, 2007 |
| College Education |
| Posted By Brian Perskin |
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In New York, a custodial parent can force the non custodial parent tp pay for the cost of college. Many lawyers do not know this. The following case from the second department limits a parents contribution to the SUNY cap.
65.5.81 - - - Holliday
Holliday v. Holliday, --- A.D.3d ---, --- N.Y.S.2d --- (Second Dept. 2006)(2006 WL 3525313)(Dec. 05, 2006):
Supreme Court, Appellate Division, Second Department, New York.
In the Matter of Catherine Holliday, respondent,
v.
Robert Holliday, appellant.
Dec. 5, 2006
Jordan E. Trager, Sayville, N.Y., for appellant.Christine Malafi, County Attorney, Central Islip, N.Y. (Barbara Barton of counsel), for respondent.
THOMAS A. ADAMS, J.P. GLORIA GOLDSTEIN STEVEN W. FISHER ROBERT A. LIFSON, JJ.
DECISION & ORDER
In a child support proceeding pursuant to Family Court Act article 4, the father appeals, as limited by his brief, (1) from so much of an order of the Family Court, Suffolk County (Simeone, J.), dated January 20, 2006, as (a), in effect, denied his objection to so much of an order of the same court (Orlando, S.M.) dated December 1, 2005, as, after a hearing, granted that branch of the petition which was to direct him to pay 50% of the cost of his child's education at a private university, and (b) directed him to contribute the sum of $10,952 per year towards the cost of such education, and (2) from so much of an order of the same court (Orlando, S.M.) dated February 14, 2006, as, after a hearing and upon a decision dated December 1, 2005, granted that branch of the petition which was to direct him to pay increased child support in the amount of $290.45 per week.
ORDERED that the order dated January 20, 2006, is reversed insofar as appealed from, on the facts and as a matter of discretion, without costs or disbursements, the objection is sustained, so much of the order dated December 1, 2005, as granted that branch of the petition which was to direct the father to pay 50% of the cost of his child's education at a private university is vacated, the father is directed to pay 50% of the cost of his child's education at a college in the State University of New York (SUNY) system, and the matter is remitted to the Family Court, Suffolk County, for a new calculation of the amount of the father's contribution to his child's college education in accordance herewith; and it is further,
ORDERED that the appeal from the order dated February 14, 2006, is dismissed, without costs or disbursements.
Pursuant to Domestic Relations Law ? 240(1-b)(c)(7), the court may direct a parent to contribute to a child's education, even in the absence of special circumstances or a voluntary agreement of the parties, as long as the court's discretion is not improvidently exercised in that regard (see Chan v. Chan, 267 A.D.2d 413, 414; Matter of Cassano v. Cassano, 203 A.D.2d 563, affd on other grounds by 85 N.Y.2d 649; Manno v. Manno, 196 A.D.2d 488). "In determining whether to award educational expenses, the court must consider the circumstances of the case, the circumstances of the respective parties, the best interests of the children, and the requirements of justice" (Chan v. Chan, supra at 414, quoting Manno v. Manno, supra at 491; see Cohen v. Cohen, 21 AD3d 341).
In the instant case, the Family Court improvidently exercised its discretion in requiring the father to pay approximately 50% of the cost of his daughter's education at a private university, which amounted to a payment obligation in the sum of $10,952 per year. Under the circumstances presented here, the father's contribution should have been limited to 50% of what it would annually cost to send his daughter to a college in the State University of New York (hereinafter SUNY) system (see Matter of Cassano v. Cassano, supra ). Since the annual cost of a attending a college in the SUNY system cannot be discerned from the record before us, we remit this matter to the Family Court for a new calculation regarding the amount of the father's contribution.
The father's remaining contention regarding the COLA calculation of his weekly child support obligation is not properly before this court. Specifically, his appeal from the order dated February 14, 2006, must be dismissed as no appeal lies from an order of a Support Magistrate where, as here, the appellant has not submitted objections to the order to a Family Court Judge (see Matter of Prill v. Mandell, 237 A.D.2d 445, 446; Matter of Werner v. Werner, 130 A.D.2d 754). |
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| November 01, 2006 |
| Am I entitled to the Federal Tax Deduction for Child Support? |
| Posted By Brian Perskin |
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IRS regs clearly state that a non custodial parent is only entitled to take the child deduction if they have written permission to do so from the custodial parent. However, some Judges in New York are awarding the tax deduction as part of divorce settlements. Whether it will hold up to an IRS audit is another story. However, a trial judge has the power to order the custodial parent to provide written consent to the non custodial parent.....
In a recent case in New York the appellate division agreed.
Supreme Court, Appellate Division, Second Department, New York.
John PACHOMSKI, respondent,
v.
Karen M. PACHOMSKI, appellant.
Sept. 26, 2006
FRED T. SANTUCCI, J.P., GABRIEL M. KRAUSMAN, WILLIAM F. MASTRO, and PETER B. SKELOS, JJ.
In an action for a divorce and ancillary relief, the defendant appeals, as limited by her notice of appeal and brief, from so much of a judgment of the Supreme Court, Suffolk County (Baisley, Jr., J.), dated February 15, 2005, as awarded the plaintiff the principal sum of $80,082.35, representing 50% of the defendant's enhanced earnings capacity as a licensed teacher, permitted the plaintiff to claim federal and state tax dependency exemptions for the parties' older child in odd years and their younger child in even years, and awarded the plaintiff credits in the sums of $1,200 for past rental income and $400 per month for future rental income beginning in November 2002 from an apartment in the marital residence.
ORDERED that the judgment is modified, on the law and the facts, by (1) deleting the 16th decretal paragraph thereof awarding the plaintiff the sum of $80,082.35, representing 50% of the defendant's enhanced earnings capacity and (2) deleting the 21st decretal paragraph thereof awarding the plaintiff credits in the sums of $1,200 for past rental income and $400 per month for future rental income beginning in November 2002 and substituting therefor a provision awarding the plaintiff a credit of $400 per month for future rental income beginning in November 2002 only for those months that the apartment is rented until such time that the marital residence is sold; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Suffolk County, for further proceedings consistent herewith.
The Supreme Court improvidently exercised its discretion in determining the marital portion of the defendant's teaching license. As the plaintiff concedes, to meet licensing requirements, the defendant was required, inter alia, to obtain a bachelor's degree and several additional teaching credits. When the parties were married in 1985, the defendant had already received her college degree. During the marriage, she completed the additional classes required for licensure and in 1998 she became licensed. In light of these circumstances, the court's decision to apply a 100% coverture factor in determining the marital portion of the teaching license is without proper support in the record. While the record does contain evidence to support a finding that some portion of the license constitutes marital property subject to equitable distribution since the plaintiff contributed both in economic and noneconomic terms to the defendant's attainment of the license (see McSparron v. McSparron, 87 N.Y.2d 275), the evidence does not justify the court's use of a coverture factor of 100% (see Holterman v. Holterman, 3 NY3d 1, 7 n 2; Shao Yun Liu v. Ming Jin Chen, 22 AD3d 555). Accordingly, we remit the matter to the Supreme Court, Suffolk County, for a new determination of the marital portion of the teaching license.
Furthermore, the parties stipulated to allow the defendant to retain the past rental income from an apartment in the marital residence as payment for repairs made to the marital residence. The court erred in awarding the plaintiff the sum of $1,200 of the past rental income rather than honoring the parties' stipulation (see generally Wilson v. Neppell, 253 A.D.2d 493; Torsiello v. Torsiello, 188 A.D.2d 523). Also, the court should have awarded the plaintiff a monthly $400 credit for future rental income only for those months the apartment in the marital residence is rented until such time that the marital residence is sold.
Contrary to the defendant's contention, the Supreme Court properly determined that the plaintiff was entitled to claim federal and state tax dependency exemptions for the parties' older child in odd years and their younger child in even years. Where a noncustodial parent meets all or a substantial part of a child's financial needs, a court may determine that the noncustodial parent is entitled to declare the child as a dependent (see Popelaski v. Popelaski, 22 AD3d 735; Junkins v. Junkins, 238 A.D.2d 480; Burns v. Burns, 193 A.D.2d 1104, affd 84 N.Y.2d 369). Here, both parents are wage earners, and each contribute toward the support of their two children. Accordingly, under the circumstances of this case, the plaintiff may claim their older child in odd years and their younger child in even years, while the defendant may claim their older child as a dependent in even years and their younger child in odd years (see Popelaski v. Popelaski, supra; Junkins v. Junkins, supra).
The defendant's remaining contentions are without merit.
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| October 18, 2006 |
| Can Custody be Change? |
| Posted By Brian Perskin |
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In New York, if two people agree in a written agreement or a child custody order is entered, it is not easy to change custody unless one parent has a good reason. People file petitions in family court all the time, and a good lawyer Supreme Court, Appellate Division, Second Department, New York.
Rule on these issues. Read the case below.
Supreme Court, Appellate Division, Second Department, New York.
In the Matter of Felicia Vasquez-WILLIAMS, respondent,
v.
Vincent WILLIAMS, appellant.
Sept. 12, 2006
ANITA R. FLORIO, J.P., GLORIA GOLDSTEIN, WILLIAM F. MASTRO, and STEVEN W. FISHER, JJ
In a custody proceeding pursuant to Family Court Act article 6, the father appeals from an order of the Family Court, Suffolk County (MacKenzie, J.), dated August 24, 2005, which, after a hearing, inter alia, granted the mother's petition to modify the custody provisions of the parties' judgment of divorce and awarded her sole custody of the subject children.
ORDERED that the order is affirmed, with costs.
A parent seeking a change in custody must make an initial evidentiary showing sufficient to warrant a hearing (see McNally v. McNally, 28 A.D.3d 526, 816 N.Y.S.2d 98; Smoczkiewicz v. Smoczkiewicz, 2 A.D.3d 705, 770 N.Y.S.2d 101; Corigliano v. Corigliano, 297 A.D.2d 328, 329, 746 N.Y.S.2d 313; Teuschler v. Teuschler, 242 A.D.2d 289, 660 N.Y.S.2d 744). Contrary to the father's contention, the mother's allegations that he imposed excessive and inappropriate discipline on the subject children, including corporal punishment, was sufficient to warrant a hearing.
"A change of custody should be made only if the totality of the circumstances warrants a modification" (Corigliano v. Corigliano, supra at 329, 746 N.Y.S.2d 313; see Friederwitzer v. Friederwitzer, 55 N.Y.2d 89, 95-96, 447 N.Y.S.2d 893, 432 N.E.2d 765). On this record, we discern no basis to disturb the Family Court's determination, made after a hearing and in camera interviews with the subject children (see Matter of Lincoln v. Lincoln, 24 N.Y.2d 270, 272, 299 N.Y.S.2d 842, 247 N.E.2d 659), that it was in their best interests to award custody to the mother (see Eschbach v. Eschbach, 56 N.Y.2d 167, 171, 451 N.Y.S.2d 658, 436 N.E.2d 1260; Friederwitzer v. Friederwitzer, supra at 93-95, 447 N.Y.S.2d 893, 432 N.E.2d 765).
The father's remaining contentions are without merit.
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| September 22, 2006 |
| Do I owe Support if I am not the Biological Father? |
| Posted By Brian Perskin |
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Most people and in fact many lawyers are amazed that a man who holds himself out as a childs father, either by fraud or mistake can be held accountable for child support. The theory in New York is called equitable estoppel. It means if you represent to the child and the world that you are in fact the father, you owe support. Even if you later learn that you are not the biological father. The Court of Appeals recently ruled on this issue. I suggest if you are in this situation, sit down and read the following case very carefully.....
Matter of Shondel J. v Mark D.
2006 NYSlipOp 05238
July 6, 2006
Rosenblatt, J.
Court of Appeals
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, September 06, 2006
[*1] In the Matter of Shondel J., Respondent,
v
Mark D., Appellant.
Argued May 11, 2006; decided July 6, 2006
Matter of Shondel J. v Mark D., 18 AD3d 551, affirmed.
OPINION OF THE COURT
Rosenblatt, J.
In this child support proceeding, we hold that a man who has mistakenly represented himself as a child's father may be estopped from denying paternity, and made to pay child support, when the child justifiably relied on the man's representation of paternity, to the [*2]child's detriment. We reach this conclusion based on the best interests of the child as set forth by the Legislature.
I.
In January 1996, Shondel J. gave birth to a daughter in Guyana, where she then resided, and in a birth registration document named Mark D. as the father. Shondel and Mark had dated the previous spring in Guyana and had sexual intercourse.
Although Mark was in New York when the child was born, he provided financial support for the child and returned to Guyana later in the year to see her. In a sworn statement, notarized by the Guyana Consul-General in New York in January 1996, Mark declared that he was "convinced" that he was the child's father and accepted "all paternal responsibilities including child support." In 1998 he signed a Guyana registry, stating that he was her father and authorizing the change of her last name to his. Mark named the child the primary beneficiary on his life insurance policy, identifying her as his daughter. He also sent Shondel money monthly for the child's support from her birth until June 1999 and then less regularly through the summer of 2000.
In August 2000, Shondel commenced a Family Court Act article 5 proceeding alleging that Mark is the father and seeking orders of filiation and support. Initially, Mark did not contest paternity. On the contrary, in September 2000, when the child was 4½ years old, Mark commenced a Family Court Act article 6 proceeding, seeking visitation. In his petition, he stated that he was the child's father, and that he loved her and wished to "spend quality time with her on a regularly scheduled basis."
In October 2000, however, when appearing before a Family Court hearing examiner to answer Shondel's petition, Mark requested DNA testing. The hearing examiner ordered genetic marker tests, which revealed that Mark is not the child's biological father. The hearing examiner then dismissed Shondel's paternity petition, and Mark abandoned his petition for visitation, having severed his relationship with the child. Shondel objected to the hearing examiner's order, expressing doubts about the laboratory tests and stating that she would be able to show that Mark had always recognized the child as his. Realizing that the hearing examiner had exceeded her authority in dismissing Shondel's petition, Family Court sustained her objection and appointed a law guardian for the child.
In October 2001, the Law Guardian reported that Mark had acted as the father of the child, who in turn considered him her father. Family Court set the matter down for a trial on equitable estoppel and ordered another set of tests. A blood genetic marker test confirmed that Mark is not the child's biological father. [*3]
At the estoppel trial, Family Court heard widely diverging testimony from Shondel and Mark. According to Shondel's testimony, Mark spent time with her and the child when they traveled to the United States in 1996 and 1997, seeing them "every day" for about six weeks in the summer of 1997 in New York; continued to visit the child and take her out after his relationship with Shondel soured in 1998; bought the child toys, clothes and other gifts; took the child to meet his parents; told his family that she was his daughter; regularly spoke with the child by telephone; referred to himself as "daddy" when talking with the child; and visited the child "almost every other day" in August 1999 and "almost every other day" between the time Shondel and the child moved to New York in January 2000 and the commencement of this litigation.
Mark denied all of this, asserting that he had seen the child only four times since her birth; that he had not acknowledged the child as his; that he had not introduced the child to his family or friends as his child; that he had not sent the child birthday or Christmas gifts; and that he had never visited her. Mark testified that he twice asked Shondel to submit to a blood test to determine whether he was the father of her child. Shondel insisted that he did not.
Family Court believed Shondel "entirely" and found Mark's testimony incredible. It ruled that Mark "held himself out as [the] child's father, and behaved in every way as if he was the father, albeit a father who didn't reside for a good part of the child's life, in the same country." These affirmed findings of Family Court have support in the record and are binding on this Court.
Family Court entered an order of filiation and awarded child support retroactive to the date Shondel commenced the Family Court proceeding. The Appellate Division affirmed, concluding that "Family Court properly determined that it was in the best interests of the subject child to equitably estop [Mark] from denying paternity" (6 AD3d 437 [2004]).[FN1] We agree, based on our precedents, the affirmed findings of fact and the legislative recognition of paternity by estoppel.
II.
The purpose of equitable estoppel is to preclude a person from asserting a right after having led another to form the reasonable belief that the right would not be asserted, and loss or prejudice to the other would result if the right were asserted. The law imposes the doctrine as a matter of fairness. Its purpose is to prevent someone from enforcing rights that would work injustice on the person against whom enforcement is sought and who, while justifiably relying on the opposing party's actions, has been misled into a detrimental change of [*4]position (see generally Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 184 [1982]).
New York courts have long applied the doctrine of estoppel in paternity and support proceedings. Our reason has been and continues to be the best interests of the child (Jean Maby H. v Joseph H., 246 AD2d 282, 285 [2d Dept 1998]; see generally Matter of L. Pamela P. v Frank S., 59 NY2d 1, 5 [1983]).
Although it originated in case law, paternity by estoppel is now secured by statute in New York (see Family Ct Act § 418 [a]; § 532 [a]). For that reason, and contrary to Mark's assertions, it is not for us to decide whether the doctrine has a rightful place in New York law. Clearly it does, in the absence of legislative repeal or a determination of unconstitutionality. Mark argues for the first time in this appeal that sections 418 (a) and 532 (a) are unconstitutional and deprive him of due process. As this claim was not raised in the courts below, we do not entertain it.
Equitable estoppel is gender neutral. In Matter of Sharon GG. v Duane HH. (63 NY2d 859 [1984], affg 95 AD2d 466 [3d Dept 1983]), we affirmed an order of the Appellate Division dismissing a paternity petition in which a mother sought to compel her husband to submit to a blood test as a means of challenging his paternity. We agreed with the Appellate Division that the mother should be estopped. As that Court pointed out, the mother expressed no question about her child's paternity until some 2½ years after the child's birth. She had held the child out as her husband's, accepted his support for the child while she and her husband lived together and after they separated, and permitted her husband and child to form strong ties together.
Estoppel may also preclude a man who claims to be a child's biological father from asserting his paternity when he acquiesced in the establishment of a strong parent-child bond between the child and another man. The rationale is that the child would be harmed by a determination that someone else is the biological father. For example, in Purificati v Paricos (154 AD2d 360 [2d Dept 1989]), a boy's biological father who did not seek to establish his paternity until more than three years after the child's birth, and who acquiesced as a relationship flourished between the boy and his mother's former husband, was estopped from claiming paternity. The courts "impose equitable estoppel to protect the status interests of a child in an already recognized and operative parent-child relationship" (Matter of Baby Boy C., 84 NY2d 91, 102 n [1994]).
Finally, the Appellate Division has repeatedly concluded that a man who has held himself out to be the father of a child, so that a parent-child relationship developed between the [*5]two, may be estopped from denying paternity.[FN2] Where a child justifiably relies on the representations of a man that he is her father with the result that she will be harmed by the man's denial of paternity, the man may be estopped from asserting that denial.[FN3]
III.
Mark represented that he was the father of the child, and she justifiably relied on this representation, changing her position by forming a bond with him, to her ultimate detriment. He is therefore estopped from denying paternity.
Mark expressly represented that he was the father of Shondel's child in the notarized sworn statement and in the Guyana registry in which he gave the child his name, as well as in the visitation petition filed with Family Court. Further, Mark held himself out as the child's father, and behaved in every way as if he was the father. Mark and the child had a close relationship, in which he referred to himself as her "daddy," and which involved regular telephone conversations, frequent visits when she and Mark were in the same city, and contact with his parents. Moreover, Mark named the child as the primary beneficiary on his life insurance policy and sent money monthly for the child's support until June 1999 and then less regularly through the summer of 2000.
The record also establishes that the child justifiably relied on Mark's representations, accepting and treating him as her father. The Law Guardian's October 2001 oral report to Family Court on her interview with the child (conducted when she was 5½ years old) concluded that she
"considers Mark [D.] to be her father. She enjoys spending time with him, she knew his name, she described what he looks like, different things about his appearance, she talked about some of the things they did together, she enjoyed the visits a lot, he brought her presents in the past, he took her out without the mother sometimes, [*6]there's a picture album with pictures of [Mark] in it and she wanted me to express that she misses him and she wants to know when he's going to come back to see her."
In the best interests of the child, Family Court properly applied estoppel, to impose support obligations on Mark, after he left the child with the detrimental effects of a relationship in which she was misled into believing that he was her father. A mother who had perfect foresight and knew that her child's relationship with a father figure would be severed when the child was 4½ might well choose never to inform him of her child's birth.
IV.
Mark attacks the statutory basis for the application of paternity by estoppel. In 1990, the Legislature amended Family Court Act § 418 (a), which governs the procedures related to scientific testing of biological paternity in support proceedings, so as to read, in pertinent part:
"The court, on its own motion or motion of any party, when paternity is contested, shall order the mother, the child and the alleged father to submit to one or more genetic marker or DNA marker tests . . . to aid in the determination of whether the alleged father is or is not the father of the child. No such test shall be ordered, however, upon a written finding by the court that it is not in the best interests of the child on the basis of res judicata, equitable estoppel or the presumption of legitimacy of a child born to a married woman." (Family Ct Act § 418 [a] [emphasis supplied]; see L 1990, ch 818, § 12.)
Arguing that the statute is self-contradictory, Mark asserts that the law mandates scientific testing of biological paternity in support proceedings and then in the next sentence makes such tests discretionary. We view the statute differently.
By providing a limited "best interests of the child" exception to mandatory biological tests of disputed paternity, the statute requires Family Court to justify its refusal to order biological tests when paternity is in issue. Before the amendment, Family Court was authorized, but not required, to order biological tests, and the court did not have to justify its refusal to do so. Now, in a support proceeding in which paternity is disputed, Family Court must explain why it denies a motion for biological paternity testing. The court may deny testing based on "res judicata, equitable estoppel or the presumption of legitimacy of a child born to a married woman," if denial is in the best interests of the child.
It is true that a child in a support proceeding has an interest in finding out the identity of her biological father. But in many instances a child also has an interest--no less powerful--in maintaining her relationship with the man who led her to believe that he is her [*7]father. The 1990 amendment to Family Court Act § 418 (a) appropriately balances these interests in accordance with the primary purpose of the Family Court Act--to protect and promote the best interests of children.
The procedure contemplated by section 418 (a) is that Family Court should consider paternity by estoppel before it decides whether to test for biological paternity. Here, the process was inverted early in the proceeding. Instead of referring the matter to a Family Court judge, the hearing examiner ordered genetic marker tests of paternity when the parties appeared in October 2000. As a result, the child's biological paternity had been addressed before Family Court conducted its trial on the issue of estoppel. Nevertheless, even though the tests had been conducted, Family Court was authorized to decide the estoppel issue.
V.
In allowing a court to declare paternity irrespective of biological fatherhood, the Legislature made a deliberate policy choice that speaks directly to the case before us. The potential damage to a child's psyche caused by suddenly ending established parental support need only be stated to be appreciated. Cutting off that support, whether emotional or financial, may leave the child in a worse position than if that support had never been given. Situations vary, and the question whether extinguishing the relationship and its attendant obligations will disserve the child is one for Family Court based on the facts in each case. Here, Family Court found it to be in the best interests of the child that Mark be declared her father and the Appellate Division properly affirmed.
Asserting that the equities are with Mark, our dissenting colleagues argue that we do not acknowledge the fraud or misrepresentation exception to the doctrine of equitable estoppel. This argument is misplaced for three reasons. To begin with, the child is the party in whose favor estoppel is being applied and there can be no claim here that she was guilty of fraud or misrepresentation. Secondly, to the extent that it matters, we note that there is no evidence of fraud or willful misrepresentation even on Shondel's part. It is not likely that she would have initiated paternity proceedings, with the predictable prospect of biological testing, if she expected tests to rule him out as the father. There is every reason to believe that she thought Mark was the biological father and that the tests would confirm her belief. Finally, the issue does not involve the equities between the two adults; the case turns exclusively on the best interests of the child.
We appreciate the dissenters' concern over applying estoppel to a case in which, as between Mark and Shondel, it was she who misrepresented Mark to be the father (even though she may have earnestly believed he was). The dissenters' position, however, appears not to recognize that fatherhood by estoppel does not contemplate a contest between two adults to [*8]see who is the more innocent. The child is entirely innocent and by statute the party whose interests are paramount.
To the child, Mark represented himself as her father. The Legislature did not create an exception for men who take on the role of fatherhood based on the mother's misrepresentation. That would eviscerate the statute and, with it, the child's best interests. Under the enactment, the mother's motivation and honesty are irrelevant; the only issue for the court is how the interests of the child are best served.
Here, Family Court found, and the Appellate Division affirmed, that Mark represented himself to be the father and that the child's best interests would be served by a declaration of fatherhood. Under our decisional law, and contrary to the dissenters' suggestion, equitable estoppel does not require that Mark, to be estopped, necessarily knew that his representation was false. A party who, like Mark, does not realize that his representation was factually inaccurate may yet be estopped from denying that representation when someone else--here the child--justifiably relied on it to her detriment (see Romano v Metropolitan Life Ins. Co., 271 NY 288, 293-294 [1936]; Triple Cities Constr. Co. v Maryland Cas. Co., 4 NY2d 443, 448 [1958]).
The dissenters cite Simcuski v Saeli (44 NY2d 442 [1978]), which holds that a defendant may be estopped to plead the statute of limitations after having wrongfully induced the plaintiff to refrain from filing a timely suit. Simcuski prevents defendants from profiting from their misconduct. It does not bear on estoppel as between a man and the child with whom he has formed a father-daughter relationship.
Our dissenting colleagues point out that Mark has renounced fatherhood and now has no relationship with the child. This state of affairs, however, does not preclude the application of estoppel. If it did, a man could defeat the statute simply by severing all ties with the child.
Given the statute recognizing paternity by estoppel, a man who harbors doubts about his biological paternity of a child has a choice to make. He may either put the doubts aside and initiate a parental relationship with the child, or insist on a scientific test of paternity before initiating a parental relationship. A possible result of the first option is paternity by estoppel; the other course creates the risk of damage to the relationship with the woman. It is not an easy choice, but at times, the law intersects with the province of personal relationships and some strain is inevitable. This should not be allowed to distract the Family Court from its principal purpose in paternity and support proceedings--to serve the best interests of the child.
Accordingly, the order of the Appellate Division should be affirmed, without costs.
G.B. Smith, J. (dissenting). The issue in this case is whether an individual nonspouse who was falsely told he was the biological father of a child and who DNA tests show could not be the biological father can be equitably estopped from denying paternity. A man or woman is and should be responsible for the financial support of his or her own offspring. In some instances, this responsibility may be placed upon a nonbiological parent. The facts in this case do not justify such a result. Because the "best interests of the child" require more than financial support, and equitable estoppel should be applicable only to someone who engages in false conduct, I dissent.
In 1995, while on a trip to Georgetown, Guyana, respondent Mark D. met and engaged in sexual intercourse with the petitioner, Shondel J. Following his return to the United States, Shondel J. told respondent she was pregnant and he began financially supporting petitioner. In 1996, respondent signed documents submitted to the Guyanese Consul that declared him to be the father of the child. He claims that he did this in order for petitioner to travel to the United States and submit to a paternity test. Between 1996 and 2000, when petitioner moved to New York, Mark D. saw the child multiple times during two visits to Guyana and a visit to Chicago. In 1997, he named the child as a beneficiary on his life insurance policy.
In 2000, Shondel J. commenced a Family Court proceeding in New York to declare Mark D. the child's father and to obtain an order of support. Family Court ordered DNA tests at Mark D.'s request and the DNA saliva swab test excluded paternity. In 2001, Family Court dismissed Shondel J.'s petition and she filed objections to the order of dismissal, alleging that the DNA test was erroneous. In November 2001, the results of a new blood test showed respondent was not the biological father. On August 8, 2002, in Family Court, Kings County, respondent was declared the child's father on the verified petition originally filed by petitioner. The court stated:
"The essence of the paternity trial was really one of equitable estoppel, should [Mark D.] be estopped from denying paternity. . . . I do find the Petitioner to have been entirely credible, and with all due respect, except in one regard, [Mark D.] entirely incredible.
"I do believe that he had doubts, however, he didn't act on them in the appropriate fashion, and as a result he held himself out as this child's father, and behaved in every way as if he was the father, albeit a father who didn't reside for a good part of the child's life, in the same country.
"However, it's clear to me that these families were involved with each other, involved with this child, that his parents and probably other friends and relatives and church members were [*9]aware of this relationship, were aware of this child . . . .
"I would assume that for the best--and hope that for the best interests of the child, that he could pick up where he left off, and accept this child wholeheartedly into his life, because the child certainly wants that, and really, what's paramount here is what the child needs."
On April 5, 2004, the Appellate Division, Second Department affirmed the Family Court's order of filiation. On May 9, 2005, the Second Department dismissed respondent's appeal from a Family Court order of retroactive child support, and affirmed an order of support against him.
The question here is not, as the majority suggests, whether equitable estoppel "has a rightful place in New York law" (majority op at 326) or in paternity proceedings. The statute makes clear that it does. The question is whether the elements of estoppel are present in this case. Equitable estoppel is a "defensive doctrine preventing one party from taking unfair advantage of another when, through false language or conduct, the person to be estopped had induced another person to act in a certain way, with the result that the other person has been injured in some way" (Black's Law Dictionary 571 [7th ed 1999]; see also Simcuski v Saeli, 44 NY2d 442, 449 [1978] [stating defendant may be equitably estopped "where plaintiff was induced by fraud, misrepresentations or deception to refrain from filing a timely action" and plaintiff demonstrates reasonable reliance on defendant's misrepresentations]). Once a party makes a prima facie showing of facts sufficient to support equitable estoppel in the paternity context, the opponent of equitable estoppel must demonstrate why estoppel should not be applied in the best interests of the child (see Matter of Sharon GG. v Duane HH., 95 AD2d 466 [3d Dept 1983], affd 63 NY2d 859 [1984]).
According to Family Court Act § 532 (a), which is substantially similar in language to Family Court Act § 418 (a):
"The court shall advise the parties of their right to one or more genetic marker tests or DNA tests and, on the court's own motion or the motion of any party, shall order the mother, her child and the alleged father to submit to one or more genetic marker or DNA tests of a type generally acknowledged as reliable by an accreditation body designated by the secretary of the federal department of health and human services and performed by a laboratory approved by such an accreditation body and by the commissioner of health or by a duly qualified physician to aid in the determination of whether the alleged father is or is not the father of the child. No such test shall be ordered, however, upon a written finding by the court that it is not in the best interests of the child on the basis of res [*10]judicata, equitable estoppel, or the presumption of legitimacy of a child born to a married woman. The record or report of the results of any such genetic marker or DNA test ordered pursuant to this section or pursuant to section one hundred eleven-k of the social services law shall be received in evidence by the court pursuant to subdivision (e) of rule forty-five hundred eighteen of the civil practice law and rules where no timely objection in writing has been made thereto and that if such timely objections are not made, they shall be deemed waived and shall not be heard by the court. If the record or report of the results of any such genetic marker or DNA test or tests indicate at least a ninety-five percent probability of paternity, the admission of such record or report shall create a rebuttable presumption of paternity, and shall establish, if unrebutted, the paternity of and liability for the support of a child pursuant to this article and article four of this act" (emphasis added).[FN1]
The majority posits that once Shondel J. claimed Mark D. was the father and made a showing (visits, support, sworn statements), it was respondent's burden to show equitable estoppel should not be applied since it would not be in the best interests of the child. The facts are not sufficient to support equitable estoppel. While Mark D. financially supported the child and made time to visit her, he has not (in the language of Black's Law Dictionary) "tak[e]n unfair advantage" or been guilty of "false language or conduct"; he has not (in the language of our decision in Simcuski) committed any "fraud, misrepresentations or deception." Thus an essential element of equitable estoppel does not exist.
The record is clear that Shondel J. misrepresented the paternity of the child for years and Mark D. relied on this information in good faith. There is no evidence that Mark D. gained any advantage from holding himself out as the child's father. Thus the majority's decision applies estoppel against a completely innocent litigant who gained no benefit from the conduct on which the estoppel is based--a holding without precedent, in the research undertaken here, in this Court's decisions. Mark D. is being required to support this child through payments of $12,858 in arrearage (as of October 2003) and $78 per week, in lieu of providing that support to his own children and his wife.
Moreover, this is a poor case for abandoning the traditional elements of estoppel. The balance of equities is in Mark D.'s favor. Contrary to the majority's view (majority op at 330), [*11]there is strong evidence of "fraud or willful misrepresentation" by Shondel J. She not only told Mark D. that the child was his, she swore in Family Court that she had sexual relations with no other man during the relevant time period--testimony proven by DNA tests to be false. Perhaps more important, this is not a case where a child lived for years with, and was brought up by, a man she had always thought was her father (cf. Matter of Diana E. v Angel M., 20 AD3d 370 [2005]). At the time of the paternity proceeding, the child had lived most of her life in a different country from Mark D., and their relationship was primarily on the telephone. This is a case in which this Court should remember "the rightful reluctance of courts in a society valuing freedom of association to impose a personal relationship upon an unwilling party," a consideration that applies with special force to "the power of the State to force a parent-child relationship" (Matter of Baby Boy C., 84 NY2d 91, 101, 102 [1994]).
The majority's ruling allows disestablishment of paternity if a presumed father acts promptly but does not allow for an exception for those who have acted in reliance on a misrepresentation or a fraud. The balance of equities should rarely favor continuing such misrepresentation or fraud. To hold as the majority does would reward a presumed father who takes no role in a child's life until a DNA test makes it official or a mother who obtains paternal obligations through fraud. As the Massachusetts Supreme Judicial Court wrote in A.R. v C.R.:
"We would proceed with caution, as other courts have, in imposing a duty of support on a person who has not adopted a child, is not the child's natural parent, but has undertaken voluntarily to support the child and to act as a parent. In most instances, such conduct should be encouraged as a matter of public policy. The obligation to support a child primarily rests with the natural parents, and one who undertakes that task without any duty to do so generally should not be punished if he or she should abandon it. On the other hand, a husband who for years acts as a father to a child born to the wife, supports that child, and holds himself out as the father to the child and to the world, may be obliged to continue to support the child when he, for the first time, renounces his apparent paternity in an attempt to avoid court-imposed support obligations. It may be relevant, in deciding whether reliance was detrimental, to know whether there once was an opportunity to pursue the natural father that is now lost" (411 Mass 570, 575, 583 NE2d 840, 843-844 [1992] [citations omitted and emphasis added]).
With this decision, this Court supports a public policy that says a man should [*12]never take on a parental role unless he wants to be unconditionally responsible for the child's financial support.
Finally, it is not in the best interests of the child in this matter that the order of filiation and order of support be affirmed. The Law Guardian concedes that Mark D.'s contributions to this child's life will only be financial. He has had no contact with the child since March 2000. Unlike Matter of Sharon GG., where an estranged husband fought to keep his parental rights, in this matter we have a man fighting to divorce his financial interests from petitioner and her child. While it was in the best interests of the child in Sharon GG. to maintain a relationship with an estranged husband who had filled the role of father in every way, it should not be said here that it is in the best interests of a child to have an order of filiation declare respondent to be her father, a man, who in addition to having no biological tie, has no interest in continuing a relationship with her or her mother.[FN2
Accordingly, I dissent.
Chief Judge Kaye and Judges Ciparick, Graffeo and Read concur with Judge Rosenblatt; Judge G.B. Smith dissents in a separate opinion in which Judge R.S. Smith concurs.
Order affirmed, without costs.
Footnotes
Footnote 1: This Appellate Division order is brought up for review here by Mark's appeal of a later Appellate Division order dismissing his objections to the child support order (18 AD3d 551 [2005]).
Footnote 2: Mancinelli v Mancinelli, 203 AD2d 634 (3d Dept 1994); Matter of Commissioner of Social Servs. of Tompkins County v Gregory B., 211 AD2d 956 (3d Dept 1995); Brian B. v Dionne B., 267 AD2d 188 (2d Dept 1999); Matter of Jennifer W. v Steven X., 268 AD2d 800 (3d Dept 2000); Ocasio v Ocasio, 276 AD2d 680 (2d Dept 2000); Matter of Sarah S. v James T., 299 AD2d 785 (3d Dept 2002); Matter of Diana E. v Angel M., 20 AD3d 370 (1st Dept 2005).
Footnote 3: As one court put it, "[t]he law is not so insensitive as to countenance the breach of an obligation in so vital and deep a relation, undertaken, partially fulfilled, and suddenly sundered." (Clevenger v Clevenger, 189 Cal App 2d 658, 674, 11 Cal Rptr 707, 716 [Ct App 1961]; accord Pietros v Pietros, 638 A2d 545, 548 [RI 1994].)
Footnote 1: It is arguable that because DNA and other tests were ordered prior to any decision on equitable estoppel, the said doctrine should not apply here at all.
Footnote 2: Respondent argues that his constitutional rights are being violated since he is being deprived of his property in violation of the due process clauses of the federal and state constitutions. We do not address this argument because of the view taken with respect to equitable estoppel.
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| September 19, 2006 |
| Father's Rights... Do they Exist? |
| Posted By Brian Perskin |
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Many women feel that they can prevent the father of their children from seeing thier child or children. The women feel that the father is a bum, that he will not properly supervise them, that he will teach the children the wrong things, etc. In New York, the Courts try to work towards resolving all custody disputes...
If the mother has legitimate concerns, like physical violence. or if the father has a drug problem, etc. The Courts can direct the father into the appropriate programs. However, all fathers will get some type of visitation with their children, and as long as the father stays with the recommendations of the Court, he will eventually have his children on a regular basis. Just becaseu a mother makes complaints does not mean that the Courts are going to listen.
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| September 13, 2006 |
| Failure to Pay Any Support |
| Posted By Brian Perskin |
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I recently was in Court, arguing my contempt motion in New York Supreme Court and a wealthy business man who owns a number of bakerys and he told the Judge he makes no money.....
He has not paid any child support or maintenance in over a year and is facing a stiff jail sentence if he does not provide child support for his children and maintenace for his wife. The Judge originally ordered combined temporary support in the amount of Fifteen Thousand Dollars per month. The husbands strategy was to cry poverty and he did not pay a dime for over a year. His stupidity lies in the fact that he paid no money for over a year. He should have sent partial payments, or at least made his best efforts. This particular litigant has alienated the divorce Judge and will loss everything at his trial.
If your want to be win your divorce case in New York, do not do things to get a Supreme Court Judge in New York mad a you. You can be rude to dry cleaner, but not to a Judge who is deciding your case. You would think this advice is obvious, however, you would be surprised at how many people act without any thought during their divorce case in NY.
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| August 27, 2006 |
| Who Pays for Summer Camp? |
| Posted By Brian Perskin |
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Should I be paying my share of Summer Camp?
In New York, the Courts will require that you pay your pro rata share of summer camp if the summer camp is for child child while the custodial parent is at work. The appellate division in Maolica recently ruled that the non custodial parent must pay his pro rata share of summer camp expenses. http://www.nycourts.gov/reporter/3dseries/2006/2006_05021.htm
It is important in NY, to be specific in all child support agreements. Many lawyers forget about the small points and litigants are disappointed years later when one of the parties sues for these expenses.
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