Unintended Results in Divorce Law

In Johnson v. Chapin, 49 AD3d 348 (1st Dept. 2008), the First Department, intending to do equity, held that the wife was entitled to credit for 50% of marital funds used to pay the husband's separate obligations to his previous wife. While the justification for this credit with regard to the use of marital funds to pay the husband's equitable distribution obligation to his former wife is more obvious, when it comes to the continuing maintenance obligation, the Johnson logic promotes the notion that any payment by a spouse from marital income for obligations pre-existing the marriage, or that benefit only that spouse, should entitle the other spouse to reimbursement.

This logic supports an unprecedented marital expense accounting that will make cases far more complex, contentious and expensive, by opening the door to a legion of possible new avenues for proof and discovery. For example:

• Reimbursement to the wife for all marital earnings a husband used to benefit his children not of that marriage, whether by court order or moral obligation;
• An accounting by a wife to her current husband for everything he spent on her child from a prior marriage, when her child support payments didn't cover all of her child's expenses under her current husband's lifestyle; and
• Reimbursement for marital income used for nursing home costs for one spouse's parent.

Such marital expense accounting pits spouses against each other economically from the moment of marriage, and especially at divorce.

Shortly after the Johnson decision, the Second Department, in Mahoney-Buntzman v. Buntzman, 51 AD3d 732 (2d Dept. 2008), without citing Johnson, adopted the same marital accounting proposition with regard to maintenance being paid to the first wife. Taking the principle one step further, the court also awarded the plaintiff wife 50% of a loan taken out as well as paid back during this second marriage, which loan represented the cost of a doctoral degree obtained by defendant. The rationale for this holding rested upon the fact that, at the time of trial, the doctoral degree represented zero enhanced earnings (as stipulated by the parties) and consequently, the obtaining of the degree was solely for the defendant's benefit.

In addition to the foregoing, the Second Department affirmed, without comment, the lower court's holding that Second Department authority required proof that the post-commencement contribution of the titleholder of marital property was the only cause of the appreciation of that property in order to treat the appreciation as “active” and thereby to be valued at the time of commencement; this holding, which the lower court held it was constrained to follow, is in contrast to the authority of the other appellate departments, which requires a showing that the titleholder's contribution to the appreciation in value was a substantial cause therefor. Of course, the Second Department's holding appears paradoxical in light of the overwhelming authority that the merest contribution of the non-titleholder during marriage renders the appreciation active and therefore marital.

The recent Court of Appeals decision in Graev v. Graev, 11 NY3d 262 (2008), also impedes settlement by exacerbating a classic, negotiation “hot-button issue,” the termination of maintenance on cohabitation. Graev tells practitioners that we can't rely on the common-sense, accepted wisdom definition of the word “cohabitation” in an agreement.

By requiring a detailed cohabitation definition in every agreement, Graev aggravates parties' sensitivities and derails settlement. Since, by statute, courts can't terminate maintenance on cohabitation, Graev also unintentionally but squarely promotes litigation.

On the Legislative Front

Well-intentioned, recently enacted and proposed legislation also impedes divorce resolution.

The new Domestic Relations Law ' 240 amendment prohibits courts from signing custody orders before they check registries, to which they may not have access. New Domestic Relations Law ' 177 prohibits courts from signing divorce judgments incorporating agreements that don't contain newly required health insurance language, nullifying, for divorce purposes, previously valid agreements. The proposed “maintenance guidelines” legislation will further hinder settlement.

On the other hand, Assemblyman Adam Bradley's proposed no-fault divorce bill would reduce the inordinate cost of divorce to both litigants and courts. The bill eliminates the need to prove fault, an anachronistic requirement particular to New York, alone among all states. The proposed bill is welcomed by both bench and bar members who, for many years, have supported such essential reform.

Ronnie P. Gouz is Chair of the Family Law Section Section of the New York State Bar Association (NYSBA)

The matrimonial bench and bar and the legislature espouse the common goal of reducing divorce expense, time and litigation, which drain the resources of litigants and courts. Nevertheless, with the best intentions, the courts and legislature sometimes ' and recently ' have issued decisions and enacted statutes that undermine the goal of streamlining divorce. This development is especially troubling in our current, strained economy.

In the Courts

Recent First and Second Department cases denote a significant shift away from the marital economic partnership concept underlying equitable distribution law, which simplified property distribution.

In Johnson v. Chapin , 49 AD3d 348 (1st Dept. 2008), the First Department, intending to do equity, held that the wife was entitled to credit for 50% of marital funds used to pay the husband's separate obligations to his previous wife. While the justification for this credit with regard to the use of marital funds to pay the husband's equitable distribution obligation to his former wife is more obvious, when it comes to the continuing maintenance obligation, the Johnson logic promotes the notion that any payment by a spouse from marital income for obligations pre-existing the marriage, or that benefit only that spouse, should entitle the other spouse to reimbursement.

This logic supports an unprecedented marital expense accounting that will make cases far more complex, contentious and expensive, by opening the door to a legion of possible new avenues for proof and discovery. For example:

• Reimbursement to the wife for all marital earnings a husband used to benefit his children not of that marriage, whether by court order or moral obligation;
• An accounting by a wife to her current husband for everything he spent on her child from a prior marriage, when her child support payments didn't cover all of her child's expenses under her current husband's lifestyle; and
• Reimbursement for marital income used for nursing home costs for one spouse's parent.

Such marital expense accounting pits spouses against each other economically from the moment of marriage, and especially at divorce.

Shortly after the Johnson decision, the Second Department, in Mahoney-Buntzman v. Buntzman , 51 AD3d 732 (2d Dept. 2008), without citing Johnson , adopted the same marital accounting proposition with regard to maintenance being paid to the first wife. Taking the principle one step further, the court also awarded the plaintiff wife 50% of a loan taken out as well as paid back during this second marriage, which loan represented the cost of a doctoral degree obtained by defendant. The rationale for this holding rested upon the fact that, at the time of trial, the doctoral degree represented zero enhanced earnings (as stipulated by the parties) and consequently, the obtaining of the degree was solely for the defendant's benefit.

In addition to the foregoing, the Second Department affirmed, without comment, the lower court's holding that Second Department authority required proof that the post-commencement contribution of the titleholder of marital property was the only cause of the appreciation of that property in order to treat the appreciation as “active” and thereby to be valued at the time of commencement; this holding, which the lower court held it was constrained to follow, is in contrast to the authority of the other appellate departments, which requires a showing that the titleholder's contribution to the appreciation in value was a substantial cause therefor. Of course, the Second Department's holding appears paradoxical in light of the overwhelming authority that the merest contribution of the non-titleholder during marriage renders the appreciation active and therefore marital.

The recent Court of Appeals decision in Graev v. Graev , 11 NY3d 262 (2008), also impedes settlement by exacerbating a classic, negotiation “hot-button issue,” the termination of maintenance on cohabitation. Graev tells practitioners that we can't rely on the common-sense, accepted wisdom definition of the word “cohabitation” in an agreement.

By requiring a detailed cohabitation definition in every agreement, Graev aggravates parties' sensitivities and derails settlement. Since, by statute, courts can't terminate maintenance on cohabitation, Graev also unintentionally but squarely promotes litigation.

On the Legislative Front

Well-intentioned, recently enacted and proposed legislation also impedes divorce resolution.

The new Domestic Relations Law ' 240 amendment prohibits courts from signing custody orders before they check registries, to which they may not have access. New Domestic Relations Law ' 177 prohibits courts from signing divorce judgments incorporating agreements that don't contain newly required health insurance language, nullifying, for divorce purposes, previously valid agreements. The proposed “maintenance guidelines” legislation will further hinder settlement.

On the other hand, Assemblyman Adam Bradley's proposed no-fault divorce bill would reduce the inordinate cost of divorce to both litigants and courts. The bill eliminates the need to prove fault, an anachronistic requirement particular to New York, alone among all states. The proposed bill is welcomed by both bench and bar members who, for many years, have supported such essential reform.

Ronnie P. Gouz is Chair of the Family Law Section Section of the New York State Bar Association (NYSBA)