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Saving Agreements with Defective or Missing Temporary Maintenance Recitals
New York's interim maintenance statute (2010 N.Y. Laws Ch. 371, ' 1, codified at Domestic Relations Law (DRL) ' 236, Part B, subd. 5-a.), which the Legislature enacted in 2010, has been widely criticized as overly formulaic ' and, because it requires judges to consider many factors in each decision, unduly cumbersome. See, e.g., Joel Stashenko, Maintenance Bill's Formulaic Approach Drew Opposition, NY Law Journal, July 7, 2014 (quoting members of the bench and bar, though some defend the use of formulas); Lee Rosenberg, Multiple Flaws Abound in New Interim Spousal Support Statute, NY Law Journal, Feb. 25, 2011.
Less discussed, but also potentially troubling, are the requirements that the statute imposes on agreements. Those regarding temporary maintenance, to be enforceable, must include a calculation of what would have been the level of temporary maintenance under the formula; a recitation that said “presumptive award” is “correct”; and, if the parties agreed to some other amount, a recitation of the reasons why. DRL ' 236B subd. 5-a(f). Those requirements should be familiar to the matrimonial bar, as the Legislature took them almost verbatim from the requirements for agreements about child support. Compare id . with ' 240 subd. 1-b(h). The Child Support Standards Act inserted identical recital requirements in that paragraph and in Family Court Act ' 413 subd. 1(h). For simplicity, this article cites only to the DRL.
Case History
The very few cases that apply the statute to agreements on temporary maintenance have taken a forgiving approach. The many cases interpreting nearly identical language in the Child Support Standards Act (the CSSA), however, make clear that incorrect or missing recitals can invalidate an agreement. See, e.g., Usenza v. Swift, 52 AD3d 876, 877-79 (3rd Dept. 2008) (holding an agreement unenforceable due to “omission of the[] statutory catechisms”). Sometimes, courts will even strike down an agreement as to maintenance and equitable distribution because the necessary recitals about child support were missing or incorrect. See Farca v. Farca , 271 AD2d 482, 483 (2nd Dept. 2000). Under the 2010 statute, any agreement with provisions about temporary maintenance faces the same threat.
It can at least be argued that the requirements apply to every pre-nuptial agreement, every post-nuptial agreement, and every marital settlement agreement. The text of the statute says only that they apply to agreements “between the parties ' presented to the court for incorporation in an order.” Logically, of course, they should only apply to agreements that relate to temporary maintenance.
Pre- and Post-Nuptial Agreements
Almost all agreements made before or during a marriage, however, could affect temporary maintenance in some way ' even agreements that do not provide for payments by that name. Typical pre-and post-nuptial agreements provide for maintenance, distributive payments, or other financial consequences before the signing of a judgment of divorce. Often, such consequences are triggered by the filing of a matrimonial action. (Many agreements provide for payment of maintenance or other financial consequences even sooner, such as upon the signing of a separation agreement or the service of a notice of intent to separate.) Those agreements thus contemplate a period of time during which the parties' financial arrangements are governed by the agreement and during which a matrimonial action is pending. During that time, temporary maintenance could be paid. The period of time during which temporary maintenance could be paid is likely to last multiple months, because even an uncontested divorce takes time to process.
Any agreement that provides for regular payments during such a period is setting a level of temporary maintenance. Any agreement that provides for some other form of support during such a period is at least implicitly waiving temporary maintenance. Either way, it could be argued that the recital requirements under DRL ' 236B subd. 5-a(f) apply. If they apply and are not satisfied, it can be argued that the agreement is invalid in part or even in its entirety.
In this month's newsletter, along with the following two, we will discuss nine ways in which counsel can defend the validity of agreements that do not satisfy the recital requirements for temporary maintenance, as well as attacks that could overcome those defenses. Some of the defenses have been endorsed by trial courts. Others are suggested by case law on the requirements for child support agreements or by the text of the temporary maintenance statute.
A cautious practitioner, of course, will include the recitals in every agreement. But sometimes that is not possible, for several reasons. Given the complicated definition of “income” upon which the formula rests, even the most careful attorney might misstate the formula amount of maintenance. (One Family Court justice remarked that “only some lawyers and few judges fully comprehend” the CSSA formula, which uses the same definition of “income” as the temporary maintenance statute. Gannon v. Usenza, 23 Misc.3d 1126(A), No. F-2808-00, 2009 WL 1363045, *1 (Fam. Ct. Albany County May 15, 2009).) Sometimes, a practitioner must defend (or attack) an agreement drafted by a predecessor. The requirements may even apply to agreements signed before their passage, when not even the most prudent drafter could have anticipated them.
Defenses
1. If the agreement sets maintenance at the guideline level, the lack of recitals probably will not matter.
Although subdivision 5-a(f) of DRL ' 236B purports to require recitals about the guidelines in any agreement “presented to the court for incorporation in an order,” courts will probably overlook those requirements if the agreement sets temporary support at the guideline level. The same language appears in the CSSA recital requirement, but the Second Department has held repeatedly that it does not apply when child support is set at substantially the guideline level and the parties are not “opting out” of the statute in any other way. See, e.g., Fasano v. Fasano , 43 AD3d 988, 989-90 (2007). In such a situation, neither party is waiving a right that the CSSA protects, and so there is no need to confirm that they know what rights they are waiving. The same reasoning should apply to agreements about temporary maintenance.
2. The agreement may be saved by arguing it does not provide for the payment of maintenance.
In one of the first cases on the recital requirements, a trial court enforced a financial agreement between spouses during the pendency of a divorce proceeding in J.L. v. D.J-L., even though the agreement lacked recitals. (Sup. Ct. Nassau County May 12, 2014, NYLJ 1202655590652 (reported May 19, 2014) (Goodstein, J.). The court redacted its docket number and other identifying details.) Those parties were married in 2000 and signed a temporary separation agreement in 2012. Under that agreement, the husband moved out of the marital residence but retained access to the parties' two children. The parties further agreed to handle their finances as they had during the marriage: Each would deposit all of his or her income into one of two joint accounts, and “[a]ll household expenses and usual living expenses” would “be paid through these accounts.” Id . at *2-*3. After the husband sued for divorce, each party accused the other of violating the agreement by not depositing all of his or her income into the joint accounts. The wife moved to enforce the agreement, and the husband cross-moved to terminate the agreement and order pendente lite support to the wife. Id . at *1, *9 (noting a “divorce proceeding”). Among other things, the husband claimed that the agreement was invalid because it did not include the required recitals about the amount of temporary maintenance. Id' at *6.
The Nassau County Supreme Court rejected his argument, first because “the Agreement does not provide for the payment of maintenance.” Id. In a strictly literal sense, that appears true. DRL ' 236B defines “maintenance” as “payments provided for in a valid agreement between the parties or awarded by the court in accordance with the provisions of subdivisions five-a and six of this part, to be paid at fixed intervals for a definite or indefinite period of time ' .” Although the agreement in J.L. did provide for payments, they were to flow from each party to the joint accounts, not from one party to the other as is typical with maintenance. Furthermore, the parties did not agree to make payments at “fixed intervals,” but only if and when they received income. (The decision does not disclose how regularly either party received income, but it suggests that they did not receive it at entirely fixed intervals.
The husband was an attorney with his own practice and the agreement specifically included his “paycheck, draw, commission, and bonus checks” as income. The wife was a banker, and the agreement included her “paycheck, commission, and bonus checks” as income. Id. at *2. Although “paychecks” might be regular, the timing of commissions generally depends on when deals are closed, and the husband could presumably control when he took a “draw” from his own firm.)
Case law under the CSSA, however, gives the opposite result. An agreement under which no child support at all is to be paid cannot be enforced unless it includes the recitals required by the CSSA. Sievers v. Estelle, 211 A.D.2d 173, 174-76 (3rd Dept. 1995). (Interestingly, an express waiver of child support (as distinct from a modification agreement) can survive even without those recitals. Williams v. Chapman, 22 A.D.3d 1015, 1016-17 (3rd Dept. 2012).)
Furthermore, refusing to apply the recitation requirements to agreements like the one in J.L. exalts form over substance. Such agreements are intended to provide for the needs of the less monied party. The J.L . court refused to set temporary maintenance in part because it found there was an enforceable agreement between the parties. J.L. at *8 (quoting Fixler v. Fixler , 290 AD2d 482 (2nd Dep't 2000) for the principle that “a 'claim for pendente lite relief is barred by the existence of the facially-valid separation agreement.'”). In other words, by signing the “Temporary Separation Agreement,” the husband and the wife had each waived their right to have a court set temporary maintenance. But the purpose of the recitations is to ensure that parties understand that very right, so they can intelligently decide whether or not to waive it.
Additionally, the agreement in J.L. explicitly stated the parties' intention that “usual living expenses” be paid as they had been. That would mean the wife would maintain her marital standard of living despite having a substantially smaller income ' which is, of course, one of the goals of temporary maintenance. Finally, the recital requirements clearly apply to an agreement to pay $100,000 per month or to an agreement to pay $1 per month. It seems odd, therefore, to say they do not apply to an agreement with no payments at all, which is in effect an agreement to pay $0 per month.
In sum, arguing that the recital requirements do not apply to agreements like the one in J.L., which do not require direct payments from one party to the other, is consistent with the letter of the statute but defies the intent of those requirements and, arguably, case law. This discussion continues in next month's issue.
Less discussed, but also potentially troubling, are the requirements that the statute imposes on agreements. Those regarding temporary maintenance, to be enforceable, must include a calculation of what would have been the level of temporary maintenance under the formula; a recitation that said “presumptive award” is “correct”; and, if the parties agreed to some other amount, a recitation of the reasons why. DRL ' 236B subd. 5-a(f). Those requirements should be familiar to the matrimonial bar, as the Legislature took them almost verbatim from the requirements for agreements about child support. Compare id . with ' 240 subd. 1-b(h). The Child Support Standards Act inserted identical recital requirements in that paragraph and in Family Court Act ' 413 subd. 1(h). For simplicity, this article cites only to the DRL.
Case History
The very few cases that apply the statute to agreements on temporary maintenance have taken a forgiving approach. The many cases interpreting nearly identical language in the Child Support Standards Act (the CSSA), however, make clear that incorrect or missing recitals can invalidate an agreement. See, e.g.,
It can at least be argued that the requirements apply to every pre-nuptial agreement, every post-nuptial agreement, and every marital settlement agreement. The text of the statute says only that they apply to agreements “between the parties ' presented to the court for incorporation in an order.” Logically, of course, they should only apply to agreements that relate to temporary maintenance.
Pre- and Post-Nuptial Agreements
Almost all agreements made before or during a marriage, however, could affect temporary maintenance in some way ' even agreements that do not provide for payments by that name. Typical pre-and post-nuptial agreements provide for maintenance, distributive payments, or other financial consequences before the signing of a judgment of divorce. Often, such consequences are triggered by the filing of a matrimonial action. (Many agreements provide for payment of maintenance or other financial consequences even sooner, such as upon the signing of a separation agreement or the service of a notice of intent to separate.) Those agreements thus contemplate a period of time during which the parties' financial arrangements are governed by the agreement and during which a matrimonial action is pending. During that time, temporary maintenance could be paid. The period of time during which temporary maintenance could be paid is likely to last multiple months, because even an uncontested divorce takes time to process.
Any agreement that provides for regular payments during such a period is setting a level of temporary maintenance. Any agreement that provides for some other form of support during such a period is at least implicitly waiving temporary maintenance. Either way, it could be argued that the recital requirements under DRL ' 236B subd. 5-a(f) apply. If they apply and are not satisfied, it can be argued that the agreement is invalid in part or even in its entirety.
In this month's newsletter, along with the following two, we will discuss nine ways in which counsel can defend the validity of agreements that do not satisfy the recital requirements for temporary maintenance, as well as attacks that could overcome those defenses. Some of the defenses have been endorsed by trial courts. Others are suggested by case law on the requirements for child support agreements or by the text of the temporary maintenance statute.
A cautious practitioner, of course, will include the recitals in every agreement. But sometimes that is not possible, for several reasons. Given the complicated definition of “income” upon which the formula rests, even the most careful attorney might misstate the formula amount of maintenance. (One Family Court justice remarked that “only some lawyers and few judges fully comprehend” the CSSA formula, which uses the same definition of “income” as the temporary maintenance statute.
Defenses
1. If the agreement sets maintenance at the guideline level, the lack of recitals probably will not matter.
Although subdivision 5-a(f) of DRL ' 236B purports to require recitals about the guidelines in any agreement “presented to the court for incorporation in an order,” courts will probably overlook those requirements if the agreement sets temporary support at the guideline level. The same language appears in the CSSA recital requirement, but the Second Department has held repeatedly that it does not apply when child support is set at substantially the guideline level and the parties are not “opting out” of the statute in any other way. See, e.g.,
2. The agreement may be saved by arguing it does not provide for the payment of maintenance.
In one of the first cases on the recital requirements, a trial court enforced a financial agreement between spouses during the pendency of a divorce proceeding in J.L. v. D.J-L., even though the agreement lacked recitals. (Sup. Ct. Nassau County May 12, 2014, NYLJ 1202655590652 (reported May 19, 2014) (Goodstein, J.). The court redacted its docket number and other identifying details.) Those parties were married in 2000 and signed a temporary separation agreement in 2012. Under that agreement, the husband moved out of the marital residence but retained access to the parties' two children. The parties further agreed to handle their finances as they had during the marriage: Each would deposit all of his or her income into one of two joint accounts, and “[a]ll household expenses and usual living expenses” would “be paid through these accounts.” Id . at *2-*3. After the husband sued for divorce, each party accused the other of violating the agreement by not depositing all of his or her income into the joint accounts. The wife moved to enforce the agreement, and the husband cross-moved to terminate the agreement and order pendente lite support to the wife. Id . at *1, *9 (noting a “divorce proceeding”). Among other things, the husband claimed that the agreement was invalid because it did not include the required recitals about the amount of temporary maintenance. Id' at *6.
The Nassau County Supreme Court rejected his argument, first because “the Agreement does not provide for the payment of maintenance.” Id. In a strictly literal sense, that appears true. DRL ' 236B defines “maintenance” as “payments provided for in a valid agreement between the parties or awarded by the court in accordance with the provisions of subdivisions five-a and six of this part, to be paid at fixed intervals for a definite or indefinite period of time ' .” Although the agreement in J.L. did provide for payments, they were to flow from each party to the joint accounts, not from one party to the other as is typical with maintenance. Furthermore, the parties did not agree to make payments at “fixed intervals,” but only if and when they received income. (The decision does not disclose how regularly either party received income, but it suggests that they did not receive it at entirely fixed intervals.
The husband was an attorney with his own practice and the agreement specifically included his “paycheck, draw, commission, and bonus checks” as income. The wife was a banker, and the agreement included her “paycheck, commission, and bonus checks” as income. Id. at *2. Although “paychecks” might be regular, the timing of commissions generally depends on when deals are closed, and the husband could presumably control when he took a “draw” from his own firm.)
Case law under the CSSA, however, gives the opposite result. An agreement under which no child support at all is to be paid cannot be enforced unless it includes the recitals required by the
Furthermore, refusing to apply the recitation requirements to agreements like the one in J.L. exalts form over substance. Such agreements are intended to provide for the needs of the less monied party. The J.L . court refused to set temporary maintenance in part because it found there was an enforceable agreement between the parties. J.L . at *8 (quoting
Additionally, the agreement in J.L. explicitly stated the parties' intention that “usual living expenses” be paid as they had been. That would mean the wife would maintain her marital standard of living despite having a substantially smaller income ' which is, of course, one of the goals of temporary maintenance. Finally, the recital requirements clearly apply to an agreement to pay $100,000 per month or to an agreement to pay $1 per month. It seems odd, therefore, to say they do not apply to an agreement with no payments at all, which is in effect an agreement to pay $0 per month.
In sum, arguing that the recital requirements do not apply to agreements like the one in J.L., which do not require direct payments from one party to the other, is consistent with the letter of the statute but defies the intent of those requirements and, arguably, case law. This discussion continues in next month's issue.
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