Court of Appeals Update: 2008

As it does each year, New York's Court of Appeals issued some significant family-law related decisions in 2008. As the new year begins, it's a good time to look back on the important decisions of last year that every New York matrimonial law practitioner should be aware of.

Spencer v. Spencer

The parties in Spencer v. Spencer, 10 NY3d 60 (N.Y., 2/14/08), married in Connecticut in 1986 and had three children. The parties separated in 1994, when the mother and children moved to New York while the father stayed in Connecticut.

The Connecticut divorce court ordered the father to pay $250 per week per child and $600 per week in “alimony” (reduced to $500 per week) until Dec. 31, 2004. In 2004, the eldest son turned 18 and the father's support obligation for him ended under Connecticut law. The alimony obligation also ended in December 2004.

In 2005, the mother filed in Albany County for a de novo child support determination for the oldest child. The father moved to dismiss for lack of subject matter jurisdiction. The father's motion was denied and he was ordered to pay $350 per week retroactive for the oldest child, and 75% of medical insurance, medical expenses and college.

The Court of Appeals reversed, holding that the New York State order was a modification of the Connecticut order, even though the petition was filed after the Connecticut order expired, and New York State lacked subject matter jurisdiction over the child support petition. Under the Uniform Interstate Family Support Act of 1996 (UIFSA) and Full Faith and Credit for Child Support Orders Act (FFCCSOA) the issuing state retains continuing exclusive jurisdiction so long as one litigant resides therein.

The Court of Appeals rejected the “expired order” concept because: 1) A subsequent child support is a modification under FFCCSOA, a federal statute, and, under the Supremacy Clause, that law must take priority; 2) Under UIFSA, New York State cannot modify a child support order that may not be modified under the law of the issuing state; and 3) To promote the principle of comity in FFCCSOA and UIFSA and secure the one-order child support system.

Johna M.S. v. Russell E.S.

The parties in Johna M.S. v. Russell E.S., 10 NY3d 364 (N.Y., 4/29/08), were married in 1982, had three children, physically separated in 1999 and executed a separation agreement in 2003. Neither party started a divorce action. Under the separation agreement, the wife received $100 per week in spousal support and $250 per week in child support. Also, the separation agreement stated that maintenance was resolved for the “present time,” but that the wife would “not be foreclosed from seeking additional maintenance ' in a court ' for a modification of the present provisions,” and that such application would be treated as “de novo.” The Support Magistrate dismissed the wife's application for lack of jurisdiction, noting that no proof was offered that the wife was likely to become a public charge and thus fit under the FCA ' 463 exception. The Family Court and the Appellate Court affirmed, with two justices dissenting.

The Court of Appeals held that: 1) the Family Court lacked subject matter jurisdiction to entertain the wife's application for increased spousal maintenance; 2) the language in the separation agreement allowing the Family Court to treat the application as de novo cannot confer jurisdiction upon Family Court; and 3) because the wife was seeking modification of a provision of the separation agreement, Family Court lacked jurisdiction.

One justice dissented, stating that the wife was seeking relief expressly permitted by the separation agreement, which expressed a clear intention not to displace Family Court's jurisdiction. The parties' error was in calling the proceeding a modification, which would require a court of equity. By focusing on the word “modification” and not on the substance of the separation agreement, the dissent asserted the majority reached an unjust result.

Hauzinger v. Hauzinger (Memorandum Decision)

The Court of Appeals held in Hauzinger v. Hauzinger, 10 NY3d 923 (N.Y., 6/26/08), that where the husband signed a waiver releasing the non-party mediator from maintaining confidentiality, the mediator's claim of privilege was without merit, and the courts below were correct in ordering disclosure.

Mesholam v. Mesholam

The parties in Mesholam v. Mesholam, 11 NY3d 24 (N.Y., 6/26/08), were married in 1968, and the wife commenced a divorce action in 1994, in which the husband did not counterclaim. In 1999, the wife's motion to discontinue the divorce action was granted. Immediately thereafter, the husband started a second divorce action. The Supreme Court, relying upon Domestic Relations Law (DRL) 236(B)(4)(b), held that the husband's pension must be valued as of the commencement date of the present action because the court was precluded from selecting a valuation date earlier than the commencement of the pending action. The Appellate Division, Second Department, held the valuation date should be the commencement date of the 1999 action.

The Court of Appeals modified and held that the valuation date must be between the date of commencement of the action and the date of trial. The court reasoned that the value of marital property cannot be determined by the commencement of an action for divorce that does not culminate in divorce, and permitting the commencement date of the prior, unsuccessful divorce action to govern the valuation of marital property for the later, successful action in which equitable distribution is available is inconsistent with the statutory scheme. However, the circumstances surrounding the commencement of the earlier action can and should be considered a factor by the trial court.

Note: The court pointed out that there was no evidence of wrongdoing or ill motive in the wife's election to discontinue the prior action. Query both whether evidence of an impure motive would alter the ultimate rule of law, and how a litigant would prove such an impure motive.

Warner v. Houghton (Memorandum Decision)

The court held in Warner v. Houghton,10 NY3d 913 (N.Y. 6/25/08), that Civil Practice Law and Rules (CPLR) ' 5511 (“An aggrieved party ' may appeal from any appealable judgment or order except one entered upon the default of the aggrieved party”) does not bar review of the equitable distribution components of a divorce judgment where the defendant was improperly precluded from contesting the awards.

Farkas v. Farkas

In Farkas v. Farkas, — N.E.2d —-, 2008 WL 4657794 (N.Y., 10/23/08), there was a 1996 divorce judgment and 1999 amended divorce judgment in which the husband was ordered to pay all sums due to Chemical Bank and deliver a satisfaction to the wife; or, alternatively, the husband was permitted to pay one-half the debt and deliver to the wife a discontinuance of the replevin action (i.e., the wrongful talking of goods) the husband's mother had brought against the wife. If the husband failed to comply with either option, the wife was entitled to enter a money judgment “without further order.” A 2000 order granted entry of a judgment for $984,401 representing the sum due Chemical Bank. In the June 2000 decision the court held the “wife may settle” the judgment thereon, but that the judgment may contain language staying execution pending determination of the bank foreclosure action.

The wife served notice of settlement in 2005 seeking a judgment against the husband of $750,000, the amount Chemical bank had settled for. The husband opposed entry, citing 22 New York Codes, Rules and Regulations (NYCRR) 202.48, which provides that proposed judgments must be settled within 60 days.

Supreme Court signed the order/judgment granting a money judgment in favor of the wife against the husband for $750,000. The Appellate Division, First Department, with two justices dissenting, reversed and vacated the judgment, dismissing the underlying action as abandoned under Rule 202.48 because the wife failed to explain her untimely submission.

The Court of Appeals held that because the 1996 and 1999 judgments stated that the wife was entitled to a monetary judgment “without further order,” it falls outside of Rule 202.48. The 2000 decision improperly invoked Rule 202.48, which the Court of Appeals holds cannot deprive a party of a judgment where it has been improperly or unnecessarily invoked in the first place.

One dissenting justice opined that Rule 202.48 should have caused the action to be deemed abandoned, but should not preclude the wife from renewing her motion or deprive her of a substantive victory or right to a judgment.

Graev v. Graev

The parties in Graev v. Graev, — N.E.2d —-, 2008 WL 4620698 (N.Y., 10/21/08), entered into a settlement agreement wherein Mr. Graev agreed to pay spousal support of $10,000 per month until the earlier of Aug. 10, 2009 or one of four termination events, including “cohabitation of wife with an unrelated adult for a period of sixty (60) substantially consecutive days.” In 2004, Mr. Graev invoked the termination clause and stopped payments. Mrs.Graev moved to enforce the settlement agreement and Mr. Graev cross-moved for summary judgment. Mr. Graev asserted that Mrs. Graev was cohabitating with MP because MP had stayed overnight at her residence for a least 60 continuous days, their relationship was akin to “lover and life partner,” and sex was not required to show cohabitation. Mrs. Graev claimed she did not cohabit with MP because their relationship, although initially sexual, had been platonic for many years.

The Supreme Court held that because cohabitation was not defined, its plain meaning had to be used, i.e., living together, as partners in life, usually with sexual relations. Accordingly, the court found in Mrs. Graev's favor. On appeal, the First Department affirmed, and injected the economic element into the mix. The appellate court held that although it was not disputed that Mrs. Graev and MP had spent 60 days together and their relationship had been romantic, there was no evidence that they shared household expenses or functioned as an economic unit, and, consequently, their relationship did not amount to cohabitation.

The Court of Appeals reversed, declining to take the position that cohabitation requires changed economic circumstances. The court held that without extrinsic evidence as to the parties' intent there was no way to assess what was meant by “cohabitation.” The case was remitted for a hearing as to the parties' intent.

The dissent in Graev opined that the proof of cohabitation Mr. Graev submitted was adequate to discontinue his maintenance obligation. Because the cohabitation provision includes a specific time period, Judge Graffeo believed the cohabitation clause was unambiguous and that the term cohabitation has a community-accepted core meaning: habitually living with an unrelated adult in the same residence while engaged in an intimate relationship without being legally married to that person. Setting a 60-day duration removed the ambiguity as to what is habitual, said the dissent.

(Note: What is the nature of the proof to be adduced at the hearing? Could not one predict that it will simply be a “he said/she said” dispute, with the husband asserting that cohabitation as included in the agreement was intended to mean living together as life partners and the wife asserting that cohabitation as included in the separation agreement was intended to mean living with a person with whom one has sexual relations?)

Marcy L. Wachtel, a member of this newsletter's Board of Editors, is a partner in the firm of Katsky, Korins, LLP.

As it does each year, New York's Court of Appeals issued some significant family-law related decisions in 2008. As the new year begins, it's a good time to look back on the important decisions of last year that every New York matrimonial law practitioner should be aware of.

Spencer v. Spencer

The parties in Spencer v. Spencer , 10 NY3d 60 (N.Y., 2/14/08), married in Connecticut in 1986 and had three children. The parties separated in 1994, when the mother and children moved to New York while the father stayed in Connecticut.

The Connecticut divorce court ordered the father to pay $250 per week per child and $600 per week in “alimony” (reduced to $500 per week) until Dec. 31, 2004. In 2004, the eldest son turned 18 and the father's support obligation for him ended under Connecticut law. The alimony obligation also ended in December 2004.

In 2005, the mother filed in Albany County for a de novo child support determination for the oldest child. The father moved to dismiss for lack of subject matter jurisdiction. The father's motion was denied and he was ordered to pay $350 per week retroactive for the oldest child, and 75% of medical insurance, medical expenses and college.

The Court of Appeals reversed, holding that the New York State order was a modification of the Connecticut order, even though the petition was filed after the Connecticut order expired, and New York State lacked subject matter jurisdiction over the child support petition. Under the Uniform Interstate Family Support Act of 1996 (UIFSA) and Full Faith and Credit for Child Support Orders Act (FFCCSOA) the issuing state retains continuing exclusive jurisdiction so long as one litigant resides therein.

The Court of Appeals rejected the “expired order” concept because: 1) A subsequent child support is a modification under FFCCSOA, a federal statute, and, under the Supremacy Clause, that law must take priority; 2) Under UIFSA, New York State cannot modify a child support order that may not be modified under the law of the issuing state; and 3) To promote the principle of comity in FFCCSOA and UIFSA and secure the one-order child support system.

Johna M.S. v. Russell E.S.

The parties in Johna M.S. v. Russell E.S. , 10 NY3d 364 (N.Y., 4/29/08), were married in 1982, had three children, physically separated in 1999 and executed a separation agreement in 2003. Neither party started a divorce action. Under the separation agreement, the wife received $100 per week in spousal support and $250 per week in child support. Also, the separation agreement stated that maintenance was resolved for the “present time,” but that the wife would “not be foreclosed from seeking additional maintenance ' in a court ' for a modification of the present provisions,” and that such application would be treated as “de novo.” The Support Magistrate dismissed the wife's application for lack of jurisdiction, noting that no proof was offered that the wife was likely to become a public charge and thus fit under the FCA ' 463 exception. The Family Court and the Appellate Court affirmed, with two justices dissenting.

The Court of Appeals held that: 1) the Family Court lacked subject matter jurisdiction to entertain the wife's application for increased spousal maintenance; 2) the language in the separation agreement allowing the Family Court to treat the application as de novo cannot confer jurisdiction upon Family Court; and 3) because the wife was seeking modification of a provision of the separation agreement, Family Court lacked jurisdiction.

One justice dissented, stating that the wife was seeking relief expressly permitted by the separation agreement, which expressed a clear intention not to displace Family Court's jurisdiction. The parties' error was in calling the proceeding a modification, which would require a court of equity. By focusing on the word “modification” and not on the substance of the separation agreement, the dissent asserted the majority reached an unjust result.

Hauzinger v. Hauzinger (Memorandum Decision)

The Court of Appeals held in Hauzinger v. Hauzinger , 10 NY3d 923 (N.Y., 6/26/08), that where the husband signed a waiver releasing the non-party mediator from maintaining confidentiality, the mediator's claim of privilege was without merit, and the courts below were correct in ordering disclosure.

Mesholam v. Mesholam

The parties in Mesholam v. Mesholam , 11 NY3d 24 (N.Y., 6/26/08), were married in 1968, and the wife commenced a divorce action in 1994, in which the husband did not counterclaim. In 1999, the wife's motion to discontinue the divorce action was granted. Immediately thereafter, the husband started a second divorce action. The Supreme Court, relying upon Domestic Relations Law (DRL) 236(B)(4)(b), held that the husband's pension must be valued as of the commencement date of the present action because the court was precluded from selecting a valuation date earlier than the commencement of the pending action. The Appellate Division, Second Department, held the valuation date should be the commencement date of the 1999 action.

The Court of Appeals modified and held that the valuation date must be between the date of commencement of the action and the date of trial. The court reasoned that the value of marital property cannot be determined by the commencement of an action for divorce that does not culminate in divorce, and permitting the commencement date of the prior, unsuccessful divorce action to govern the valuation of marital property for the later, successful action in which equitable distribution is available is inconsistent with the statutory scheme. However, the circumstances surrounding the commencement of the earlier action can and should be considered a factor by the trial court.

Note: The court pointed out that there was no evidence of wrongdoing or ill motive in the wife's election to discontinue the prior action. Query both whether evidence of an impure motive would alter the ultimate rule of law, and how a litigant would prove such an impure motive.

Warner v. Houghton (Memorandum Decision)

The court held in Warner v. Houghton,10 NY3d 913 (N.Y. 6/25/08), that Civil Practice Law and Rules (CPLR) ' 5511 (“An aggrieved party ' may appeal from any appealable judgment or order except one entered upon the default of the aggrieved party”) does not bar review of the equitable distribution components of a divorce judgment where the defendant was improperly precluded from contesting the awards.

Farkas v. Farkas

In Farkas v. Farkas, — N.E.2d —-, 2008 WL 4657794 (N.Y., 10/23/08), there was a 1996 divorce judgment and 1999 amended divorce judgment in which the husband was ordered to pay all sums due to Chemical Bank and deliver a satisfaction to the wife; or, alternatively, the husband was permitted to pay one-half the debt and deliver to the wife a discontinuance of the replevin action (i.e., the wrongful talking of goods) the husband's mother had brought against the wife. If the husband failed to comply with either option, the wife was entitled to enter a money judgment “without further order.” A 2000 order granted entry of a judgment for $984,401 representing the sum due Chemical Bank. In the June 2000 decision the court held the “wife may settle” the judgment thereon, but that the judgment may contain language staying execution pending determination of the bank foreclosure action.

The wife served notice of settlement in 2005 seeking a judgment against the husband of $750,000, the amount Chemical bank had settled for. The husband opposed entry, citing 22 New York Codes, Rules and Regulations (NYCRR) 202.48, which provides that proposed judgments must be settled within 60 days.

Supreme Court signed the order/judgment granting a money judgment in favor of the wife against the husband for $750,000. The Appellate Division, First Department, with two justices dissenting, reversed and vacated the judgment, dismissing the underlying action as abandoned under Rule 202.48 because the wife failed to explain her untimely submission.

The Court of Appeals held that because the 1996 and 1999 judgments stated that the wife was entitled to a monetary judgment “without further order,” it falls outside of Rule 202.48. The 2000 decision improperly invoked Rule 202.48, which the Court of Appeals holds cannot deprive a party of a judgment where it has been improperly or unnecessarily invoked in the first place.

One dissenting justice opined that Rule 202.48 should have caused the action to be deemed abandoned, but should not preclude the wife from renewing her motion or deprive her of a substantive victory or right to a judgment.

Graev v. Graev

The parties in Graev v. Graev, — N.E.2d —-, 2008 WL 4620698 (N.Y., 10/21/08), entered into a settlement agreement wherein Mr. Graev agreed to pay spousal support of $10,000 per month until the earlier of Aug. 10, 2009 or one of four termination events, including “cohabitation of wife with an unrelated adult for a period of sixty (60) substantially consecutive days.” In 2004, Mr. Graev invoked the termination clause and stopped payments. Mrs.Graev moved to enforce the settlement agreement and Mr. Graev cross-moved for summary judgment. Mr. Graev asserted that Mrs. Graev was cohabitating with MP because MP had stayed overnight at her residence for a least 60 continuous days, their relationship was akin to “lover and life partner,” and sex was not required to show cohabitation. Mrs. Graev claimed she did not cohabit with MP because their relationship, although initially sexual, had been platonic for many years.

The Supreme Court held that because cohabitation was not defined, its plain meaning had to be used, i.e., living together, as partners in life, usually with sexual relations. Accordingly, the court found in Mrs. Graev's favor. On appeal, the First Department affirmed, and injected the economic element into the mix. The appellate court held that although it was not disputed that Mrs. Graev and MP had spent 60 days together and their relationship had been romantic, there was no evidence that they shared household expenses or functioned as an economic unit, and, consequently, their relationship did not amount to cohabitation.

The Court of Appeals reversed, declining to take the position that cohabitation requires changed economic circumstances. The court held that without extrinsic evidence as to the parties' intent there was no way to assess what was meant by “cohabitation.” The case was remitted for a hearing as to the parties' intent.

The dissent in Graev opined that the proof of cohabitation Mr. Graev submitted was adequate to discontinue his maintenance obligation. Because the cohabitation provision includes a specific time period, Judge Graffeo believed the cohabitation clause was unambiguous and that the term cohabitation has a community-accepted core meaning: habitually living with an unrelated adult in the same residence while engaged in an intimate relationship without being legally married to that person. Setting a 60-day duration removed the ambiguity as to what is habitual, said the dissent.

(Note: What is the nature of the proof to be adduced at the hearing? Could not one predict that it will simply be a “he said/she said” dispute, with the husband asserting that cohabitation as included in the agreement was intended to mean living together as life partners and the wife asserting that cohabitation as included in the separation agreement was intended to mean living with a person with whom one has sexual relations?)

Marcy L. Wachtel, a member of this newsletter's Board of Editors, is a partner in the firm of Katsky, Korins, LLP.