T.F. v N.F.

[*1] T.F. v N.F. 2006 NY Slip Op 51243(U) [12 Misc 3d 1176(A)] Decided on June 22, 2006 Supreme Court, Suffolk County Pastoressa, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 22, 2006
Supreme Court, Suffolk County

T. F., Plaintiff,

against

N. F., Defendant.



04-00158

Joseph C. Pastoressa, J.

In this action for divorce, the parties settled, prior to trial, all questions regarding the custody and visitation of their child, and the plaintiff's grounds for divorce were established at an inquest on consent. The court thereafter conducted a full trial on the remaining contested issues of equitable distribution, child support, and maintenance.

On the basis of the credible evidence adduced at trial, the court makes the following findings of fact and conclusions of law:

The parties, TF and NF (hereafter referred to as the plaintiff and defendant, respectively), were married on May 15, 1993 and have one child together, born in 1993 (now 12 years old). This divorce action was commenced on January 9, 2004, and transferred to this court at a later date when the prior assigned Justice recused himself from the case.

The parties have lived together in the marital residence with their child up until November 2003 when plaintiff moved into separate living quarters in an attached apartment at the marital residence, and then subsequently left the marital residence altogether. The parties income and property at the time of their marriage was equivalent and negligible. The parties are both in good health.

The court heard from essentially only two substantive witnesses during the trial, the plaintiff, and the defendant, with one other witness, a representative from Bank of America, testifying briefly for the sole purpose of authenticating certain bank records. The court having observed the demeanor of the witnesses as they testified and having considered the substance of their testimony as well as all of the exhibits introduced into evidence reconciles the parties conflicting testimony as follows (see, Eschbach v. Eschbach, 56 NY2d 167, 173; Griffen v. Scott, 303 AD2d 504).

The plaintiff has been employed as an airline pilot with A-Star Air Cargo(formerly "DHL")(hereinafter A-Star) since 1994. He currently earns an hourly rate of $113.59 per hour with a guaranteed minimum of 64 hours a month, a maximum of 85 hours a month, and an average of 80 hours per month at regular pay. Additionally, the plaintiff receives a $2 an hour daily stipend to cover his meals, which amounts to approximately $400 a month. In 2005 the plaintiff earned $133,086 as reflected on his final year paystub and W-2. The plaintiff also works a second job as a helicopter and private jet pilot for JG, an executive at Lehman Brothers, being [*2]paid $750 per day. The plaintiff began flying for JG in 2005 and, according to the year 2005 paystubs submitted to the court by the plaintiff, he earned $3000 in February, $2250 in March, $2625 in April, $750 in August, $3750 in November, and $750 in December, with no paystubs for January, June, July, or October because, according to the plaintiff, he did not fly these months. Prior to flying for JG, the plaintiff flew for financier Ted Ammon, and as a contract pilot for Cablevision executives. The employment by Mr. Ammon ended suddenly when Mr. Ammon was murdered, and the employment by Cablevision slowed to a halt when Cablevision went to a staff of in -house company pilots rather than hiring contract pilots for their executives.

The plaintiff began his career as a pilot prior to the marriage, first attending helicopter school in 1988 and completing his schooling in 1991. The plaintiff did continue with additional training and schooling during the course of the marriage to obtain his "flight engineers ticket" and "fixed wing" license necessary to fly as a jet pilot, but there is no claim for enhanced earning capacity being asserted by the defendant.

The defendant was and is the primary care giver for the parties child, and currently works part-time as a teacher's assistant in the Mount Sinai School District earning $10 per hour for a gross income of $10,000 in 2005. Prior to joining the Mount Sinai School district in 2000, the defendant worked as a customer support representative earning approximately $35,000 per year. The defendant briefly stopped working when their child was born, but returned to her job as a customer service representative when the child turned 10 months old, holding the job for approximately three and a half years and transferring her job to a Massachusetts branch office when the plaintiff was transferred on his job to Massachusetts. The defendant stopped working as a customer service representative when the plaintiff was transferred back to New York 10 months later. The defendant had been offered an equivalent paying position with her company in New York, opening a new branch office in Syosset, but the plaintiff told her not to take the job because they did not need the money. In addition to her work at the school, the defendant obtained a teaching certification as a yoga instructor in 2004, and has taught sporadically to date for nominal wages.

The crux of the parties factual disputes in this litigation centers on the actual earnings and earning power of the plaintiff, and the disposition of certain concededly marital funds obtained from regular savings, tax deferred savings, and home equity loans and lines of credit. Turning to the issue of the plaintiff's earnings and earning power first, while counsel for both sides expended much time and fought vociferously over this issue, the admissible and credible evidence adduced at trial was fairly straightforward, and with the overwhelming bulk of plaintiff's earnings concededly generated by A-Star, a W-2 issuing employer, the issue cannot be characterized as arcane under any view. The plaintiff earned $133,086 from A-Star in 2005, and according to his testimony, and the paystubs he provided from his second job as a contract pilot, additional income bringing his yearly gross to $146,049.05. In 2002, based on similar documentary evidence before the court, and the plaintiff's own admission, he earned $ 162,514. In the summer of 2003, the plaintiff and defendant, who had been living a comfortable middle to upper middle class lifestyle, saw their financial fortunes take a dramatic turn for the worse, when the plaintiff made the unilateral decision to take an unpaid leave of absence from his job at A-Star to start a healthy gourmet home delivery service called "Body Chef". The business turned out to be an abject failure placing a tremendous strain on the parties financial resources by virtue of both the lost income from the plaintiff's decision to leave his job, and the cash infusions into the business which included tuition loans for culinary school for the plaintiff, and other capital expenditures for cooking equipment and other business expenses, much of which capital was provided by tapping into the built up equity in the marital residence via a cash out refinance. The end result of the plaintiff's unilateral business foray was bankruptcy court where there is a bankruptcy proceeding presently pending. As a concomitant result, the couple's assets available for distribution are negligible, and subject to any superseding order or direction from the bankruptcy court.

On the factual question of the plaintiff's earnings and earning power, the court having [*3]observed the demeanor of the witnesses as they testified and having considered the substance of their testimony, as well as the documentary evidence introduced into evidence, finds that the plaintiff's version of what he has been earning and can presently earn is not entirely accurate or creditworthy, although the court cannot impute the level of income suggested and argued for by the defendant based on the evidence profferred at trial, because to do so would be to engage in sheer speculation without a suitable evidentiary basis in fact(see, Petek v. Petek, 239 AD2d 327). The plaintiff's behavior in this litigation was indisputably obstructionist, either intentionally or through laxity. He clearly has failed to put forth earnest and good faith efforts to comply with his disclosure obligations, and considering the belated disclosure of his current employment with JG, the court simply cannot credit that the paystubs plaintiff provided from that employer represent the sum total of his additional compensation. This is particularly so given the subpoenaed bank records submitted by the defendant, showing deposits in excess of the additional income reported by the plaintiff, and for which he failed to provide paystubs or otherwise satisfactorily explain; and particularly so given the plaintiff's convenient failure to advise anyone until the eve of trial that his lost income flying for Cablevision, had been replaced via a new position flying for JG. This omission took place despite a specific interrogatory in May 2005 asking plaintiff to name any company or individual from whom he received compensation in the past five years. The plaintiff listed "Corporate Aviators" which was the paying entity for Cablevision, but failed to name JG for whom he had been flying since at least February 2005. It is worth noting that the plaintiff, at the time of his memory lapse about his new employment, was subject to an income execution against his A-Star, and Corporate Aviators paychecks. Nonetheless, it is clear that the plaintiff's income fluctuates greatly from year to year, and as afore stated, the defendant's evidence, even when aided by the appropriate adverse inferences drawn against the plaintiff as a result of his discovery lapses, does not warrant imputation of the level of income argued for by the defendant(see, Petek v. Petek, supra).

On the basis of the foregoing, and the credible evidence before it, as well as a consideration of the fluctuations in plaintiff's income, the court finds the plaintiff's earnings to be $150,000 per year (see, Miller v. Pipia, 297 AD2d 362,364 ; Varga v. Varga, 288 AD2d 210, 211 ;Darema - Rogers v. Rogers, 199 AD2d 456, 457).

Turning now to the issues regarding dissipation of the parties assets, the plaintiff acknowledges that he unilaterally liquidated a Vertis-Putnam 401 k account which he had from his employment by Ted Ammon, with net proceeds thereof of approximately $1,183; and that he unilaterally liquidated his son's college trust fund account, with proceeds of $10,361.94; unilaterally liquidated approximately $30,000 in the form of a loan taken against his 401 k account with A-Star; and finally that he transferred approximately $20,000 from a cash out refinance of the marital residence to his Body Chef business in a check dated July 3, 2003 . When asked to explain the disposition of all of these proceeds, the plaintiff conclusorily testified that other than the refinance proceeds that went toward the Body Chef business, he used the money to pay bills for the house, car, and credit cards. There was, in fact, only scant evidence of any such payments made before the court, and it is uncontroverted that the vast majority of the couple's financial debts and obligations were in default, with utilities being cut off at one point, the marital residence in foreclosure, and all credit card obligations in default status. Similarly, the plaintiff's Sallie Mae student loan in the amount of $20,000 which he used to pay his culinary school tuition for the Body Chef business, remains outstanding and in default status, and it is clear on this record that virtually all of the financial expenditures for the Body Chef business were done without the defendant's consent or approval.

Domestic Relations Law §236 (B)(1) provides that outstanding financial obligations incurred during the marriage which are not solely the liability of either spouse may be deemed marital obligations as to which the spouse who incurred such obligations may offset them against the total marital assets to be distributed(see, Troiano v. Troiano, 87 AD2d 588). In the instant matter there was a clear failure of proof by the husband that these aforementioned debts were in fact such marital obligations(see, Reiner v. Reiner, 100 AD2d 872). He offered no documentary [*4]evidence to substantiate his claims. Accordingly, the defendant wife shall receive a credit for one half of these monies. On the other hand, as to the $19,850.11 taken from a Wells Fargo home equity line of credit, which the defendant argues should also be the sole responsibility of the plaintiff husband, the defendant's rebuttal proof is entirely deficient and lacking in support of her claim that she should receive a full credit thereof. In response to the plaintiff's testimony that this was marital debt, the defendant wife admitted at trial that she signed the bank documents establishing the line of credit, and that the money could have been used for the couple's household expenses exactly as the plaintiff husband testified, and that she had no proof, documentary or otherwise, to the contrary. The defendant wife admitted the plaintiff husband spent money on big screen televisions, high end electronics, high end stainless steel kitchen appliances and other creature comforts for their home, all of which was presumably enjoyed by the defendant wife as well as her husband. Under these circumstances and on this proof, the home equity line of credit debt must be considered marital debt for which both parties remain responsible(see, Phillips v. Phillips, 249 AD2d 527; Feldman v. Feldman, 204 AD2d 268). Contrary to the defendant's contentions, the court finds that the sale of the parties Harley Davidson motorcycle produced no appreciable proceeds after satisfaction of the lien against it, and therefore no monies to distribute. The furniture currently owned by the parties is of negligible value, and given the fact that the plaintiff has already established an alternative furnished residence, and that the defendant is living with the existing furniture with the couple's young son, the court will not force its sale as requested by the plaintiff, but instead will allow the defendant to retain it for use in their new residence. The parties shall each keep their own motor vehicles, and be individually responsible for any payments related thereto. There are no checking or regular savings accounts available to distribute.

The only other assets remaining available for possible equitable distribution, subject to the bankruptcy court's rulings, are the marital residence, and the plaintiff's 401k plan with A-Star. The marital residence is presently up for sale for approximately $550,000, with encumbrances of mortgage debt totaling approximately $479,000, and outstanding tax liens totaling approximately $32,000. The equity will be divided equally between the parties with credit given to the defendant wife for her separate property contribution thereto in the amount of $6,692 established at trial(see, Price v. Price, 69 NY2d 8; McAlpine v. McAlpine, 176 AD2d 285). The actual cash proceeds from the sale will be turned over in their entirety to the defendant wife, given the fact that the net will be deminimus, and given the extraordinary amounts owed to her by the plaintiff pursuant to the above stated obligations, as well as the significant amounts of arrearage owed under the court's pendente lite order which went largely unsatisfied. The plaintiff will receive a credit for one- half of the total of his payments of principal on the mortgage for that property during the pendency of the action, to wit one half of $6,130, the total paid(see, Mesholam v. Mesholam, 25 AD3d 670). However, the vast majority of mortgage payments which were due and owing during the pendency of this action went unpaid, and the mortgage was brought current only recently when the parties, relying on money loaned to them by relatives, repaid all arrears. The defendant contributed $14,700 and the plaintiff contributed $12,000, and also agreed to bear the cost of any and all fees associated with the redemption. Accordingly, each party will receive their appropriate credits, which were previously stipulated thereto.

Insofar as the defendant seeks to financially punish the plaintiff for the dissipation of the parties assets as a result of the failed Body Chef business, this court must note and draw a distinction between a spouse who undertakes a bona fide business venture with good, if misplaced, intentions to increase the couple's income and assets, and a spouse who egregiously dissipates assets perniciously or through nefarious activities or simply pursuant to a scorched earth policy endeavoring to leave nothing left available for equitable distribution. Here, while the plaintiff's Body Chef endeavor more closely resembled a get rich quick scheme, rather than a sensible business venture with a solid business plan, the evidence at trial unquestionably supports the conclusion that it was undertaken in good faith and with great efforts on the part of [*5]the plaintiff. While the defendant is clearly entitled to redress, this ameliorative fact should be considered, at the very least, as a matter of degree, in considering the disposition of this case. It is incumbent upon the courts to make distributive awards equitably between the parties, giving consideration to all of the particular and unique circumstances of the case and of the respective parties(see, Domestic Relations Law § 236[B] [5][c]).

The court will not, as the defendant has asked, hold the plaintiff in contempt for his laxity in complying with his discovery obligations. The defendant's application to punish the plaintiff for contempt for discovery violations at this late stage will not vindicate either the court's power or authority, nor serve any further useful purpose for the defendant, given the previously granted requests for adverse inferences already drawn against the plaintiff as a result of his noncompliance, the previously granted request for imputation of income, and the previous implementation of wage garnishments. The plaintiff's transgressions have been adequately addressed and a further finding of contempt, on the record before the court, would be an improvident exercise of discretion(see, Department of Housing Preservation and Development Corporation of the City of New York, 208 AD2d 37; see also, Bickwid v. Deutsch, 87 NY2d 862 [Court of Appeals noting the enduring consequences of a contempt finding including potential jeopardy to the contemner's means of earning a living] ).

The only other remaining asset, the A-Star 401k account had a pre-commencement total value of $65,156.73 and a net value of approximately $36,232.70 after deducting for the outstanding loan amounts drawn down off of the account. That account has an approximate present value of $72,963.31 and a present net value of approximately $17,018.21 after deducting the outstanding loan amounts. To incur the penalties and tax liabilities which a cash-out would trigger would be a waste of the parties limited retirement resources, and , accordingly, in lieu thereof, the account shall be equally divided between the parties by means of a qualified domestic relations order pursuant to the Majauskas formula which shall include pre-survivor benefits(see, Majauskas v. Majauskas, 61 NY2d 481). The plaintiff is directed to prepare and submit a qualified domestic relations order necessary to effectuate the transfer no later than thirty days after entry of judgment.

Turning now to the defendant's request for maintenance, maintenance is designed to give a spouse "economic independence"(see, O'Brien v. O'Brien, 66 NY2d 576, 585), and should continue only so long as is required to render the recipient self-supporting(see, Granade-Bastuck v. Bastuck, 249 AD2d 444). Here, the defendant is 50 years old, and holds a Bachelor of Arts degree in English, with limited business experience and no computer or clerical or typing skills. The defendant testified, and the court credits that testimony, that she was specifically dissuaded by the plaintiff from pursuing her long held career goal of becoming a teacher. She now will require 48 credit hours to receive her needed teaching certification, which, by attending school at night, while continuing as the primary caregiver for the parties son, as well as continuing to work in her present job at the Mount Sinai School District in the hopes that it will lead to a full time teaching position in that District, will take three years to complete. In light of the parties' ages, their lifestyle during the marriage, their respective financial circumstances at the time, the defendant's reasonable needs, her limited separate property, her limited present income, and the plaintiff's own current strained financial circumstances, an award of maintenance in the sum of $673.07 per week for a period of four years is appropriate (see, Domestic Relations Law§ 236[B][6]; Hartog v. Hartog, 85 NY2d 36, 50-52; Graves v. Graves, 307 AD2d 1022; O'Sullivan v. O'Sullivan , 247 AD2d 597; Feldman v. Feldman, 194 AD2d 207, 218). Such a durational limitation will afford the defendant a reasonable period of time as well as an incentive to obtain her teaching certification and gainful employment in the teaching profession(see, Love v. Love, 251 AD2d 631,632; Timperio v. Timperio, 232 AD2d 857, 860; Palumbo v. Palumbo, 10 AD3d 680).

In calculating the amount of child support pursuant to the Child Support Standards Act ( hereinafter CSSA) (see, Domestic Relations Law § 240 [1-6]), the husband shall pay to the wife, as and for child support, the sum of $351.07 per week. The above stated amount represents the [*6]husband's pro rata share of the basic child support obligation as determined in accordance with CSSA, calculated as follows:

(i) The child of the marriage entitled to receive parental support was born in 1993 (now 12 years old).

(ii) The gross income of the wife who is the custodial parent is ten thousand dollars ($10,000) per year minus FICA of seven hundred sixty five dollars ($765) for an adjusted gross income of nine thousand two hundred thirty five dollars ($9,235).

(iii) The gross income of the husband who is the non-custodial parent is one hundred fifty thousand dollars ($150,000) per year minus a deduction for maintenance of thirty five thousand dollars ($35,000) per year for an adjusted gross income of one hundred fifteen thousand dollars ($115,000) minus FICA of seven thousand five hundred seven dollars and ninety cents ($7,507.90) for a total adjusted gross income of one hundred seven thousand four hundred ninety two dollars and ten cents ($107,492.10).

(iv) The applicable child support percentage is 17%.

(v) The basic child support obligation is $381.60 per week.

(vii) The husband's pro rata share of the basic child support obligation is calculated as follows:

(1) $240.61 per week, representing 92% of the combined parental income under $80,000.00 per year; and

(2) $110.46 per week, representing 92% of the combined parental income over $80,000.00 per year.

Taking into consideration the factors set forth in paragraph (f) of Domestic Relations Law§240[1-b][c][1]-[3] including the financial resources of the parents and the child, the standard of living the child would have had if the marriage had not ended, nonmonetary contributions of the parents toward the child, educational needs of the parents, and the respective incomes and tax consequences of the award, the court believes that it would be neither unjust or inappropriate to apply the statutory formula to the plaintiff's entire income of $150,000 in this case. Specifically, there is an extraordinary disparity in income between the custodial and non-custodial parent, partially redressed by the court's maintenance award as to the parent, but not the child; the child was living in a middle class to upper middle class environment prior to the divorce; the custodial parent, as primary care giver, will be rendering considerable nonmonetary contributions to the child's well being, while at the same time be undertaking intensive course study to achieve financial self reliance. These considerations warrant application of the statutory formula in toto(see, Bast v. Rossoff, 91 NY2d 723; Matter of Cassano v. Cassano, 85 NY2d 649). Upon termination of the defendant's maintenance obligation, the child support obligation for the defendant shall be modified to the sum of $464.70 per week representing 94% of the parties combined parental income over $80,000. All child support and maintenance obligations in this case shall be collected through the Child Support Enforcement Bureau.

The plaintiff shall be entitled to declare the parties' child as a dependent on his tax return for fours years coterminous with his maintenance obligation of four years, since he will be the significant wage earner of the parties for this period (see, Junkins v. Junkins, 238 AD2d 480; Burns v. Burns, 193 AD2d 1104). Thereafter, the parties shall alternate the deduction (see, 26 USC §71[b][1][B]).

Additionally, the parties shall maintain in effect any currently existing health care insurance for the benefit of the child including dental, orthodontia, psychiatric, and psychological mental health coverage; and the plaintiff shall be responsible for his pro rata share referenced above, for future unreimbursed health care expenses for which medical insurance is available, but payment is excluded by the insurer as a co-payment or deductible. The plaintiff shall obtain or maintain a life insurance policy for the defendant's benefit with a face value commensurate with the collective sum of the maintenance payments required under this order and coterminous with the period of maintenance(see, Domestic Relations Law § 236 [B][8][a]; Hartog v. Hartog, supra; Penna v. Penna, __ AD3d __, [Appellate Division, Second Department, May 30, 2006]), and [*7]additional life insurance coverage with a minimum face value of $200,000 naming the child as beneficiary with the defendant as trustee until his child support obligation terminates(see, Corless v. Corless, 18 AD3d 493; Comstock v. Comstock, 1 AD3d 307, 308; Fogarty v. Fogarty, 284 AD2d 300, 301-302). The plaintiff is also directed to pay his pro rata share of reasonable child care expenses(Domestic Relations Law, §240[1-b][c][4]; Lauria v. Lauria, 187 AD2d 888, 889-890), and his pro rata share of future college tuition and expenses not covered by loans or grants, and limited to the cost at a school in the State University of New York System, with the plaintiff receiving a deduction from his child support obligation for duplicative room and board expenses at the child's school while the child is away from home (see, Chalif v. Chalif, 298 AD2d 348; Rohrs v. Rohrs, 297 AD2d 317; Sheridan v. Sperber, 269 AD2d 439, 440; Imhof v. Imhof, 259 AD2d 666, 667).

Finally, the questions of arrearage owed under the court's pendente lite order, and the defendant's request for counsel fees were, at the request of the parties, taken on submission. On the basis of those uncontroverted submissions, the court awards the defendant the sum of $13,060.13 as compensation for child support and maintenance arrearage(see, Fogarty v. Fogarty, supra; Markopoulos v.Markopoulos, 274 AD2d 457; Mogollon v. Mogollon, 259 AD2d 678). Insofar as the defendant's request for counsel fees is concerned, a review of the hourly billing statements submitted by counsel for the defendant reflects hourly charges related to bankruptcy proceedings and related to the sale of the marital residence. Counsel fees are not recoverable for services rendered in connection with nonmatrimonial matters( see, Domestic Relations Law § 237; Skinner v. Skinner, 271 AD2d 679; Lucci v. Lucci, 227 AD2d 387,389; Sandel v. Sandel, 96 AD2d 584). In the court's discretion, after removing all fees for nonmatrimonial work, and taking into consideration the economic disparity between the spouses, the plaintiff's role in protracting this litigation through discovery delays, and two changes of counsel due to his failure to communicate or cooperate with counsel, as well as a review of the actual legal work done, and what this court finds to be reasonable compensation for said work, awards $40,000 in additional counsel fees(see, O'Shea v. O'Shea, 93 NY2d 187; Popelaski v. Popelaski, 22 AD3d 735; Suydam v. Suydam, 203 AD2d 806).

The plaintiff shall pay all outstanding balances of monies owed to the defendant and her counsel within 90 days after the sale of the marital residence, with proceeds realized after all appropriate credits as set forth heretofore. In the event that said sums are not paid, the defendant and counsel may settle money judgments on notice in said amounts owed.

Settle judgment on notice.

Dated: June 22, 2006

Central Islip, New York

HON. JOSEPH C. PASTORESSA

J.S.C.