Decisions of Interest

A mother who had her bankrupt ex-boyfriend arrested for failure to pay child support for their two daughters has been ordered by the bankruptcy court to pay him more than $12,000 for attorneys' fees and other damages incurred due to the arrest. In re Donald J. Jenkins Sr., 05-73127.

The father, Donald Jenkins, filed for Chapter 7 bankruptcy in 2005, and that proceeding remains ongoing. Northern District Bankruptcy Court Judge Diane Davis, who is overseeing his case, cited the mother and the Support Collection Unit of the Otsego County Department of Social Services for contempt in 2007 for attempting to collect pre-bankruptcy child support arrears during the bankruptcy-imposed stay of proceedings. Nevertheless, Family Court, Otsego County, issued an arrest warrant against him after finding, in September 2009, that Jenkins was as much as $8,000 behind in combined child support and medical support payments to the children. When Jenkins returned to New York in 2010 from his home state of Florida to attend his daughter's graduation and a bankruptcy creditors' meeting, the mother had him arrested for failing to pay child support. Jenkins spent 17 days in jail. He sued his ex-girlfriend, seeking compensation for several losses. Judge Davis concluded, “Debtor has satisfied his burden of proving that he was injured by [the mother's] actions and that there was a causal connection between those actions and the harm that ensued.” That harm included emotional distress, lost wages, attorney fees and court costs attributable to the jailing. Judge Davis therefore awarded Jenkins the means to pay the two attorneys who helped him gain his release, as well as $1,000 for emotional distress and $432 for wages lost while he was incarcerated.

Court Orders Huge Mortgage Payment Pendente Lite

A husband was ordered to pay half of a $3 million mortgage debt on the marital home even though he and his wife's divorce is still pending, as it was his deliberate or accidental neglect to work out a payment method with the bank that has now put the home in danger of foreclosure. Nederlander v. Nederlander, 2013 N.Y. App. Div. LEXIS 21 (1st Dept. 1/3/13) (Sweeny, J.P., Saxe, Richter, Abdus-Salaam and Rom'n, JJ.).

In April 2012, Judge Deborah A. Kaplan of Supreme Court, New York County, ordered a divorcing husband to pay 50% of the balances owed on the couple's marital residence if he was unable to refinance the mortgages or obtain extensions of the mortgage notes. The court had found that it was primarily the husband's fault that the home was in danger of foreclosure, as he failed to submit to the bank a requested application and other information that might have allowed the couple to refinance the mortgage that matured during the pendency of the divorce. The wife had timely submitted the documents requested of her. The husband appealed, saying the court was without authority to order him to take on such an obligation pendente lite.

The Appellate Division, First Department, affirmed. It noted that Domestic Relations Law (DRL) ' 234 gives the court the power to “make such direction, between the parties, concerning the possession of property, as in the court's discretion justice requires having regard to the circumstances of the case and of the respective parties.” Under this provision, courts have the power to order one party to turn property over to another, and also to order one or both of them not to transfer or dispose of marital property. “The power to issue preliminary injunctions affecting property in divorce actions stems from the recognition that while spouses have no legal or beneficial interest in marital property prior to a judgment of divorce, they nevertheless have an expectancy in that property,” stated the court. “Thus, in order to protect that expectancy pending equitable distribution, to maintain the status quo, and to prevent the dissipation of marital property, the court must be able to issue orders to ensure that such marital property is protected should it later become the subject of equitable distribution.”

The husband's argument that his income would not support such a large payment was also unavailing, as the First Department agreed that financial support the husband received from his father's company, possibly as a gift, could be treated as the husband's income.

Martha Stine of Cohen Rabin Stine Schumann, one of the wife's attorneys, notes the decision is important because it signals that judges may impute the value of assets to a divorcing party pendent lite, not just income. “There are many cases where income has been imputed to a party, but we were unable to find a case where substantial assets, meaning, financial resources, had been imputed to a party pendente lite, although the Domestic Relations Law contemplates that,” she said in an e-mail.

Little Contribution, No Award

A husband who contributed only very little to help his wife to attain her medical license was held not entitled to an award reflecting the enhanced earning capacity that license conferred on his wife. Sotnik v. Zavilyansky, 2012 N.Y. App. Div. LEXIS 9020 (2d Dept., 12/16/12) (Mastro, J.P, Lott, Austin and Cohen, JJ.).

Moneyed Spouse Not Eligible to Receive Attorneys' Fees

Supreme Court, Nassau County, has told a moneyed spouse that she cannot be awarded attorneys' fees under New York law, but must pay the reasonable attorneys' fees her husband requested that were adequately proven to the court. Gluck v. Gluck, 2013 N.Y. Misc. LEXIS 17 (Sup. Ct., Nassau Cty., 1/7/13) (Palmieri, J.).

The husband moved pursuant to Domestic Relations Law (DRL) ' 237 for an award of $125,000 in legal fees that he owed to two attorneys. The wife cross-moved for counsel fees of $200,000. She also sought sanctions against the husband because, she claimed, he had employed obstructionist tactics and made unreasonable demands, forcing the case to go to trial. These actions, the wife said, unnecessarily prolonged the action, causing her to incur avoidable legal fees. Neither party alleged that the other's attorneys' fees were excessive.

The court noted that the husband's income is approximately one quarter of the wife's ($89,695 vs. $365,287), meaning that he is the non-moneyed spouse. As such, he is entitled to seek from the wife attorney fees that were needed to pursue his rights in the divorce proceeding.

The court concluded that the fact that the husband refused to settle could not be used as evidence that he had improperly obstructed the course of the proceedings. See Johnson v. Chapin, 12 NY3d 461 (2009), modifying 49 AD3d 348 (1st Dept. 2008), and Baron v. Baron, 71 AD3d 807 (2d Dept. 2010). As there was no other real evidence of obstructionist behavior, this argument failed.

The court also declined to consider the wife's request for attorneys' fees, finding, in accordance with Silverman v. Silverman, 304 AD2d 41 (1st Dept. 2003), that “[w]hile it is conceivable that a counsel fee award to a nonmonied spouse could be reduced, based on frivolous or wasteful conduct, it is improper to require the nonmonied spouse to pay a portion of the fees of the monied spouse.” Thus, apparently, even if the wife had proven that the husband had been at fault for unreasonably running up legal bills, she would not have been eligible to seek any part of her attorney costs.

The $125,000 award the husband sought was reduced, however, because he submitted only a retainer agreement and billing statements from one of his attorneys and did not accompany these with the attorney's affidavit in support of the rates billed, the time expended on the case, the reasons that time was expended and the goals achieved. Those bills and that retainer agreement were deemed inadmissible hearsay, so no award could be made as to that attorney's fees.

U.S. Supreme Court to Hear Windsor Appeal in March

The U.S. Supreme Court has set March 27 as the date for arguments in United States v. Windsor, the New York case challenging the constitutionality of the federal Defense of Marriage Act (DOMA). Edith Windsor was forced to pay federal inheritance taxes on assets left to her by her lawfully married wife because DOMA prohibits the federal government from recognizing same-sex marriages.

Bankruptcy Trumps Child Support Arrears, So Mother Must Pay

A mother who had her bankrupt ex-boyfriend arrested for failure to pay child support for their two daughters has been ordered by the bankruptcy court to pay him more than $12,000 for attorneys' fees and other damages incurred due to the arrest. In re Donald J. Jenkins Sr., 05-73127.

The father, Donald Jenkins, filed for Chapter 7 bankruptcy in 2005, and that proceeding remains ongoing. Northern District Bankruptcy Court Judge Diane Davis, who is overseeing his case, cited the mother and the Support Collection Unit of the Otsego County Department of Social Services for contempt in 2007 for attempting to collect pre-bankruptcy child support arrears during the bankruptcy-imposed stay of proceedings. Nevertheless, Family Court, Otsego County, issued an arrest warrant against him after finding, in September 2009, that Jenkins was as much as $8,000 behind in combined child support and medical support payments to the children. When Jenkins returned to New York in 2010 from his home state of Florida to attend his daughter's graduation and a bankruptcy creditors' meeting, the mother had him arrested for failing to pay child support. Jenkins spent 17 days in jail. He sued his ex-girlfriend, seeking compensation for several losses. Judge Davis concluded, “Debtor has satisfied his burden of proving that he was injured by [the mother's] actions and that there was a causal connection between those actions and the harm that ensued.” That harm included emotional distress, lost wages, attorney fees and court costs attributable to the jailing. Judge Davis therefore awarded Jenkins the means to pay the two attorneys who helped him gain his release, as well as $1,000 for emotional distress and $432 for wages lost while he was incarcerated.

Court Orders Huge Mortgage Payment Pendente Lite

A husband was ordered to pay half of a $3 million mortgage debt on the marital home even though he and his wife's divorce is still pending, as it was his deliberate or accidental neglect to work out a payment method with the bank that has now put the home in danger of foreclosure. Nederlander v. Nederlander , 2013 N.Y. App. Div. LEXIS 21 (1st Dept. 1/3/13) (Sweeny, J.P., Saxe, Richter, Abdus-Salaam and Rom'n, JJ.).

In April 2012, Judge Deborah A. Kaplan of Supreme Court, New York County, ordered a divorcing husband to pay 50% of the balances owed on the couple's marital residence if he was unable to refinance the mortgages or obtain extensions of the mortgage notes. The court had found that it was primarily the husband's fault that the home was in danger of foreclosure, as he failed to submit to the bank a requested application and other information that might have allowed the couple to refinance the mortgage that matured during the pendency of the divorce. The wife had timely submitted the documents requested of her. The husband appealed, saying the court was without authority to order him to take on such an obligation pendente lite.

The Appellate Division, First Department, affirmed. It noted that Domestic Relations Law (DRL) ' 234 gives the court the power to “make such direction, between the parties, concerning the possession of property, as in the court's discretion justice requires having regard to the circumstances of the case and of the respective parties.” Under this provision, courts have the power to order one party to turn property over to another, and also to order one or both of them not to transfer or dispose of marital property. “The power to issue preliminary injunctions affecting property in divorce actions stems from the recognition that while spouses have no legal or beneficial interest in marital property prior to a judgment of divorce, they nevertheless have an expectancy in that property,” stated the court. “Thus, in order to protect that expectancy pending equitable distribution, to maintain the status quo, and to prevent the dissipation of marital property, the court must be able to issue orders to ensure that such marital property is protected should it later become the subject of equitable distribution.”

The husband's argument that his income would not support such a large payment was also unavailing, as the First Department agreed that financial support the husband received from his father's company, possibly as a gift, could be treated as the husband's income.

Martha Stine of Cohen Rabin Stine Schumann, one of the wife's attorneys, notes the decision is important because it signals that judges may impute the value of assets to a divorcing party pendent lite, not just income. “There are many cases where income has been imputed to a party, but we were unable to find a case where substantial assets, meaning, financial resources, had been imputed to a party pendente lite, although the Domestic Relations Law contemplates that,” she said in an e-mail.

Little Contribution, No Award

A husband who contributed only very little to help his wife to attain her medical license was held not entitled to an award reflecting the enhanced earning capacity that license conferred on his wife. Sotnik v. Zavilyansky , 2012 N.Y. App. Div. LEXIS 9020 (2d Dept., 12/16/12) (Mastro, J.P, Lott, Austin and Cohen, JJ.).

Moneyed Spouse Not Eligible to Receive Attorneys' Fees

Supreme Court, Nassau County, has told a moneyed spouse that she cannot be awarded attorneys' fees under New York law, but must pay the reasonable attorneys' fees her husband requested that were adequately proven to the court. Gluck v. Gluck, 2013 N.Y. Misc. LEXIS 17 (Sup. Ct., Nassau Cty., 1/7/13) (Palmieri, J.).

The husband moved pursuant to Domestic Relations Law (DRL) ' 237 for an award of $125,000 in legal fees that he owed to two attorneys. The wife cross-moved for counsel fees of $200,000. She also sought sanctions against the husband because, she claimed, he had employed obstructionist tactics and made unreasonable demands, forcing the case to go to trial. These actions, the wife said, unnecessarily prolonged the action, causing her to incur avoidable legal fees. Neither party alleged that the other's attorneys' fees were excessive.

The court noted that the husband's income is approximately one quarter of the wife's ($89,695 vs. $365,287), meaning that he is the non-moneyed spouse. As such, he is entitled to seek from the wife attorney fees that were needed to pursue his rights in the divorce proceeding.

The court concluded that the fact that the husband refused to settle could not be used as evidence that he had improperly obstructed the course of the proceedings. See Johnson v. Chapin , 12 NY3d 461 (2009), modifying 49 AD3d 348 (1st Dept. 2008), and Baron v. Baron , 71 AD3d 807 (2d Dept. 2010). As there was no other real evidence of obstructionist behavior, this argument failed.

The court also declined to consider the wife's request for attorneys' fees, finding, in accordance with Silverman v. Silverman , 304 AD2d 41 (1st Dept. 2003), that “[w]hile it is conceivable that a counsel fee award to a nonmonied spouse could be reduced, based on frivolous or wasteful conduct, it is improper to require the nonmonied spouse to pay a portion of the fees of the monied spouse.” Thus, apparently, even if the wife had proven that the husband had been at fault for unreasonably running up legal bills, she would not have been eligible to seek any part of her attorney costs.

The $125,000 award the husband sought was reduced, however, because he submitted only a retainer agreement and billing statements from one of his attorneys and did not accompany these with the attorney's affidavit in support of the rates billed, the time expended on the case, the reasons that time was expended and the goals achieved. Those bills and that retainer agreement were deemed inadmissible hearsay, so no award could be made as to that attorney's fees.