M.M. v D.M.
Annotate this CaseDecided on February 23, 2018
Supreme Court, Kings County
M.M., Plaintiff,
against
D.M., Defendant.
XXXXX/XXXX
Attorney for the plaintiff, M.M:
Wayne P. Stix, Esq.
333 Westchester Avenue — East Building
White Plains, NY 10604
(914) 285-1822
Attorney for the defendant, D.M.:
Walter J. Roesch, IV, Esq.
Goldberg & Cohn, LLP
16 Court Street, Suite 2304
Brooklyn, NY 11241
(718) 875-2400
Delores J. Thomas, J.
The following papers numbered 1 to 9 read herein:
Papers Numbered
Order to Show Cause/Cross Motion and Affidavits (Affirmations) Annexed 1, 2, 4
Answering Affidavits (Affirmations) 3, 5-7
Transcript of January 12, 2017 Oral Argument 8
Premarital Agreement dated February 20, 2004 9
Upon the foregoing cited papers, in this matrimonial action, the decision/order on these motions is as follows:
Defendant-Wife D.M. ("Wife") moves by order to show cause, for an order, pendente lite: (1) setting aside the parties' prenuptial agreement dated February 20, 2004; (2) directing Plaintiff-Husband M.M. ("Husband") to produce discovery pursuant to the notice for discovery and [*2]inspection and the demand for answers to interrogatories; (3) directing Husband to produce a statement of net worth pursuant to Domestic Relations Law ("DRL") § 236 and 22 NYCRR § 202.16,[FN1] (4) granting Wife an award of $4,450 per month as temporary maintenance, pursuant to DRL § 236 (B) (5-a); (5) directing Husband to return all funds to the parties' joint bank accounts, and to restore the parties' economic position to the status quo ante; (6) directing Husband to return Wife's personal property; (7) directing Husband to reopen all credit lines in the same amounts as they were before the commencement of this action; (8) granting Wife counsel fees, pursuant to DRL § 237 (a), in the amount of $25,000, with leave to reapply as necessary; and (9) directing Husband to deposit $25,000 into an escrow account maintained by Wife's attorneys, Goldberg & Cohn LLP ("Goldberg & Cohn"), for Wife's benefit, to pay for the valuation and appraisal of marital property by court-ordered appraisers (motion sequence no. 1).
Husband cross moves for an order: (1) denying Wife's motion for pendente lite relief pending this court's determination of the validity of the prenuptial agreement; (2) limiting discovery to issues relating to the validity of the prenuptial agreement; and (3) directing Wife to refrain from (a) acts of violence towards Husband, (b) insulting and verbally attacking Husband, and (c) screaming in the presence of the parties' children (motion sequence no. 2).
While those motions were sub judice, Wife moved by order to show cause seeking an order: (1) preliminarily enjoining Husband, or the legal entities that he has an interest in, from evicting Wife from the marital residence; (2) granting child support in an amount of $12,500 per month, retroactive to February 25, 2016; (3) permitting Wife to supplement motion sequence number one with the parties' 2015 tax returns; (4) striking Husband's statement of net worth dated April 28, 2016; (5) sanctioning Husband in the amount of $2,500 in counsel fees; (6) requiring Husband to service all of the parties' outstanding debt;[FN2] and (7) granting Wife interim counsel fees pursuant to DRL § 237 (a) in the amount of $35,000, with leave to reapply as necessary (motion sequence no. 3). Husband and Artmar Management LLC ("Artmar Management") oppose this motion.
FACTUAL AND PROCEDURAL BACKGROUND
The parties were married on February 21, 2004 in a religious ceremony in Greenlawn, New York. There are two children of the marriage, now thirteen and eleven years old, and no other children are expected.[FN3]
The parties executed a prenuptial agreement on February 20, 2004 at the Law Offices of Donald T. Rave. During the negotiations and execution of the prenuptial agreement, Husband was represented by Sanford B. Glatzer, Esq. from the office of Sanford B. Glatzer and Associates. Wife was represented by Donald T. Rave, Esq. from the Law Offices of Donald T. Rave.
The agreement's recitals set forth, in relevant part,
"each [party] desires to set forth and define their rights with respect to each other and to release, now and hereafter, specific marital property rights in the property earnings and [*3]estate of the other, which except for the operation of this [a]greement, each might acquire in the property, earnings and estate of the other as an incident of their contemplated marriage, whether the acquisition of such property, earnings and estate is prior to or during marriage; each party desires to retain all properties now owned or hereafter acquired as her or his sole separate property, together with all rents, income, profits, premiums and increases in value related thereto, free of the ownership, control, or management of the other, and free of any and all claims of the other, and free of any and all claims of the others creditors, heirs, and assigns."The prenuptial agreement contains mutual waivers of each party's statutory right to receive temporary and permanent spousal support, maintenance, alimony, and equitable distribution. The agreement further states that all assets listed in the annexed schedules are to remain the separate property of its respective owner. Any accrued interest, appreciation, or property substituted for the original assets in the annexed schedules are to be excluded from equitable distribution and after-acquired property.
Schedule A annexed to the agreement lists the following as Wife's separate assets as of January 1, 2004: one wedding band, anticipated; two diamond engagement rings; two diamond cross pendants; one tennis bracelet; one Rolex watch; one Movado watch; one snowflake pendant; one snowflake ring; one pair of baguette-cut earrings; one diamond necklace; two Greek key necklaces, one with diamonds; one omega necklace with diamond and onyx pendant; three bangle bracelets; a 1996 T-Bird automobile; a Roslyn savings account, worth approximately $500; a checking account, worth approximately $500; and savings bonds, "face amount approximately $8,000." Schedule B lists the following as Husband's separate assets as of January 1, 2004: a ten percent (10%) interest in MARTEM 1 Realty Co., LLC, valued at $265,000; an eighteen percent (18%) interest in Volmar Services Inc., valued at $630,000; and a sixteen percent (16%) interest in Volmar Realty, valued at $320,000. Husband's Schedule B indicates that he did not have securities, life insurance, or automobiles. Schedule B also states that Husband had nominal cash and his personal liabilities were "none or nominal."
The agreement states, "the contribution to the expense for the use or enjoyment of any separate property of the other party shall create no claim to such property in the event of the cessation of the marriage." Pursuant to Article XII, "any separate property of either party shall remain such party's separate property, regardless of the source of funds for the maintenance of such property, or the fact that each of the parties contribute funds in satisfaction of any expenses incurred for the utilization and enjoyment of such property."
The parties are directed under the agreement to "establish a bank account in both parties' names, to which all monies will be deposited, and from which the ordinary and necessary living expenses of the parties will be paid for a principal residence or a successor home." Upon the commencement of a divorce action, any non-titled personal property purchased during the marriage using funds in the parties' joint bank account would be divided by agreement of the parties or, in the absence of such an agreement, within 30 days of the commencement of an action.
With regards to child support, the agreement directs that any child support obligation shall be determined by the applicable child support guidelines, but in no event shall a total support obligation be less than $5,000 per month until the youngest child attains the age of 18 years old. Husband is "responsible for all educational expenses including college, and graduate school attended by the children. The choice of schools shall be made by mutual consent of [the parties]."
Under the title "attorney's fees," the agreement provides that in the event suit is brought or [*4]an attorney is retained "to enforce the terms of this Agreement or to collect any monies due hereunder, or to collect money damages for breach hereof" the prevailing party shall recover reasonable attorney's fees, court costs, and related expenses incurred.
During the marriage, the parties negotiated drafts of a postnuptial agreement; however, a postnuptial agreement was never executed.
Husband commenced this action by filing a summons with verified complaint on February 19, 2016. Husband's verified complaint seeks a divorce on the ground of irretrievable breakdown of the marriage, pursuant to DRL § 170 (7) and on the ground of cruel and inhuman treatment of the Husband by the Wife, pursuant to DRL § 170 (1). On March 16, 2016, Wife filed a verified answer and counterclaim alleging, as her affirmative defenses, that the prenuptial agreement was procured under duress or as a result of overreaching or other inequitable conduct, and was unconscionable and manifestly unfair. Her counterclaim seeks a divorce on the ground of irretrievable breakdown of the marriage and ancillary relief. Simultaneously with service of her verified answer and counterclaims Wife served her first notice of discovery and inspection and first set of interrogatories.
On April 5, 2016, Wife filed a request for judicial intervention and a motion to set aside the prenuptial agreement and for interim support (motion sequence no. 1). The parties first appeared before the court on May 5, 2016 for a preliminary conference ("PC"). At the PC, Husband was represented by Wayne P. Stix, Esq. ("Mr. Stix"). Wife was represented by Walter J. Roesch IV, Esq. ("Mr. Roesch") from the office of Goldberg & Cohn. The parties acknowledged that the issue of grounds is resolved, and that Husband will proceed on the ground of irretrievable breakdown of the marriage. The existence of the premarital agreement dated February 20, 2004 was also acknowledged. Custody and parenting time were marked as unresolved and the parties agreed to submit a proposed parenting plan no later than June 6, 2016. The PC order indicates that the ancillary issues of maintenance, child support, and equitable distribution were unresolved.
The parties were directed to exchange the mandatory financial disclosures for the three years prior to the commencement of this action within 45 days of the PC order. On or before June 20, 2016, the parties were instructed to inform the court of any documents not produced within the 45-day time frame. The parties also set forth a discovery schedule. All notices for discovery and inspection and interrogatories were to be served on the other party no later than June 6, 2016; party depositions were to be held no later than June 30, 2016; and third-party depositions were reserved. Expert valuations were also reserved pending a determination on the validity of the prenuptial agreement. The PC order directed the parties to file a note of issue no later than October 4, 2016.
The court, by separate order dated May 5, 2016, ordered Husband "to continue to cover all reasonable household expenses and all expenses related to the children of the marriage without prejudice to either party's future claim for support." The order was issued without prejudice to the parties' positions regarding the lease for Wife's vehicle. At the May 5, 2016 appearance, the court set a briefing schedule and scheduled oral arguments for June 2, 2016, in anticipation of Husband filing a cross motion. Husband filed the instant cross motion on May 24, 2016 (motion sequence no. 2).
On July 28, 2016, the court issued a compliance conference order on consent of the parties, which scheduled further discovery. The compliance conference order scheduled EBT's of Wife on September 27, 2016 at 10:00 a.m. and EBT's of Husband on September 28, 2016 at 10:00 a.m. All parties were to serve notices of discovery and inspection by July 28, 2016 and returnable on August 18, 2016. A pre-trial conference was scheduled for October 13, 2016.
On August 10, 2016, the court appointed Joel Borenstein, Esq. as attorney for the children [*5]("AFC") and ordered his fees to be paid 70% by Husband and 30% by Wife. After oral argument on August 10, 2016, the court ordered Wife to surrender the children's passports no later than 5:00 p.m. on August 11, 2016 to Wife's counsel until further order of the court or other disposition of this case. Also, on August 10, 2016, the court so-ordered a stipulation whereby the parties resolved interim parenting time.
Upon allegations of disorderly conduct, on October 11, 2016, Judge Jane C. Tully of the New York City Criminal Court, Kings County issued a temporary order of protection against Husband and in favor of Wife directing him to stay away from Wife and refrain from committing any criminal offenses against her, which expires on October 11, 2018. After oral argument, this court, by order dated October 25, 2016, modified the order of protection to allow the parties to attend a five-way settlement conference scheduled for October 31, 2016.
Under a separate order on October 25, 2016, the court ordered Husband to pay $500 per week for child support starting on October 31, 2016, without prejudice to either party's claims. Payments were ordered to be made each Monday until further order of the court or written agreement of the parties. The court postponed the filing of a note of issue to no later than December 23, 2016. The order stated that the parties may modify their August 10, 2016 visitation and parenting time schedule upon written agreement. The parties engaged in a five-way settlement conference on October 31, 2016 but were unable to reach a settlement.
Wife then filed a motion to enjoin Husband from evicting her from the marital residence and other relief on November 2, 2016 (motion sequence no. 3). On November 2, 2016, the parties appeared before the court. The court so-ordered a stipulation permitting the parties to supplement their discovery and support motions (motion sequence nos. 1 and 2) with the parties' 2015 joint income tax returns as an exhibit and to submit briefs regarding the significance of the parties' supplemental tax returns, thereby resolving that branch of motion sequence number three. The court also so-ordered a stipulation modifying the August 10, 2016 parenting schedule with a new temporary parental access schedule dated November 2, 2016. The temporary order of protection against Wife was modified to allow both parties to simultaneously attend the children's activities and to pick-up and drop-off the children.
On January 12, 2017, the parties appeared for oral argument on motion sequence number three, and the matter was adjourned for submission of the transcript.
Husband filed an emergency order to show cause on March 8, 2017 seeking sole interim custody of the children and ancillary relief (motion sequence no. 4). After oral argument, the court ordered that: (1) neither party shall consume alcohol while the children are in their custody; (2) if Wife is unavailable to care for the children, she shall offer Husband an opportunity to care for the children before seeking the services of a third-party; and (3) if neither party is available to care for the children at any given time, the parties shall share the cost of a caregiver equally, upon competent proof of costs and expenses. On March 9, 2017, the court ordered a forensic evaluation of the parties to be conducted within 90 days by Ellen C. Weld, Ph.D. By order dated March 23, 2017, the court denied Husband's order to show cause for interim custody as moot because the parties executed a final custody agreement. The parties agreed that they would share joint legal and physical custody, and the children's primary residence would be with Wife.
Pursuant to the court's March 9, 2017 order, Wife filed a note of issue and certificate of [*6]readiness for trial on March 17, 2017.[FN4]
DISCOVERY & DISCLOSURES
Wife's motion seeking responses to her notice for discovery and inspection and responses to interrogatories and Husband's cross motion to limit discovery to the issues related to the validity of the prenuptial agreement are denied as moot because the parties have already exchanged discovery and the note of issue and certificate of readiness have been filed.
Wife's application to direct Husband to produce a statement of net worth is similarly denied as moot.
The branch of Wife's motion for a court-appointed appraiser and costs to cover same is denied as moot because in the certificate of readiness, Wife indicated that appraisal reports are waived.
THE PRENUPTIAL AGREEMENT
Wife's Contentions
Wife moves to set aside the parties' prenuptial agreement alleging that it is "unconscionably skewed in Husband's favor, it was not negotiated equitably and was a product of a completely unequal bargaining power." Wife contends that Mr. Rave was retained on her behalf by Husband and she had no role in choosing Mr. Rave as her attorney. She concedes that Mr. Rave was previously retained as her grandmother's attorney; nevertheless, she claims she never had a relationship with Mr. Rave prior to executing the prenuptial agreement.
Wife insists that she did not review the document until a short meeting five days before the wedding. At no point in time, Wife asserts, was the agreement carefully reviewed with her — Mr. Rave did nothing more than a "cursory review." Wife's counsel asserts that the meeting was a mere "one-hour conversation." Wife insists that her attorney negotiated most of the agreement prior to speaking or meeting with her. Wife asserts that, despite having never been in contact with Mr. Rave and having never reviewed the prenuptial agreement until that meeting, both attorneys had engaged in negotiations and had exchanged several drafts for months prior to her review. Wife claims that Husband, Mr. Glatzer, and Husband's father, A.M. ("Father"), were the sole negotiators and drafters of the prenuptial agreement. Wife contends she "had no input in the document's creation, negotiation, or in the contents thereof." Wife insists that she was never involved in any negotiation and was unaware that she was able to have a say in the process at all.
Wife claims that Husband took advantage of her years of trust and confidence. Wife states that Husband was "extremely calculated in having [her] sign the agreement the day before the wedding" and Husband "put [her] in a position where [she] could not back out of signing." She argues that the circumstances around the execution of the prenuptial agreement did not enable her to make a meaningful choice, and that she signed an agreement that was manifestly unfair and "in diametric opposition to [her] best interests."
Wife also argues that the parties' attempts to create a postnuptial agreement further illustrate that Wife was never able to meaningfully negotiate the terms and conditions of the prenuptial agreement. Wife contends that the parties engaged in an eight-year postnuptial agreement negotiation. The parties and their respective attorneys engaged in multiple conferences and exchanged numerous drafts during that time. Wife argues that, had she actually been involved in [*7]the prenuptial agreement's negotiation process, a similarly lengthy negotiation and drafting process would have ensued, rather than a "cursory review" days before the wedding.
Husband's Contentions
Husband denies the prenuptial agreement is the result of any fraud or overreaching. Husband claims that when the parties began discussing the prenuptial agreement, they "simultaneously retained independent counsel to negotiate the agreement," and that Wife retained Mr. Rave because she was pleased with his prior representation of her grandmother. Husband contends that he had no part in Wife's selection of Mr. Rave, and claims that he "did not know him, did not speak to him or have any reason to suggest him." Husband does not recall paying Mr. Rave's bill for Wife, but argues that his paying the bill does not invalidate the prenuptial agreement or establish "evidence of a conflict of interest, collusions, other nefarious conduct, evil intent or Mr. Rave's negligence." Husband contends that Wife never stated that she was dissatisfied with Mr. Rave's services, and that, had she actually been dissatisfied, she could have discharged him and retained new counsel.
Husband further contends that the prenuptial agreement was properly and equally negotiated. Husband claims that the prenuptial agreement went through three drafts during the four months of extensive negotiating, and that Wife simply "fail[ed] to keep in touch with her attorney" during that time. Husband argues that the list of Wife's assets in Schedule A is proof that Wife did in fact partake in the negotiation process. Husband also contends that while he and Wife never discussed the specific terms of the agreement during that time, Wife "did not voice any objections." Husband argues that Wife's claims that she "did not want to cause any unnecessary strife between us or amongst our families" and that she "was concerned of what might transpire if [she] did not sign a prenuptial agreement" is an admission that she weighed the benefits and detriments of signing the agreement and decided to do so all the same. Husband asserts that these "thoughts and fears are endemic to the process and no different than any negotiation or settlement of a legal action."
Husband contends that Wife's alleged failure to "carefully" read the agreement or participate in negotiations are not grounds to set it aside. Husband asserts that Wife was of sound mind during the negotiation and execution of the prenuptial agreement. He asserts she was no less capable of signing the agreement than himself, as both parties "were similarly situated on February 20, 2004 in terms of [their] age, education, worldliness, and experience."
Husband argues that the postnuptial negotiation process demonstrates the validity of the prenuptial agreement. Husband contends that neither of Wife's retained attorneys questioned the validity of the prenuptial agreement during the eight-year postnuptial negotiation process. Husband asserts that throughout the entire marriage, this is the first time Wife is challenging the validity of the prenuptial agreement, which further indicates that the agreement is fair and valid.
Wife's Reply and Opposition
In reply and opposition, Wife contends that she "did not discuss the terms in any significant details." Wife further asserts, for the first time, that she "do[es] not believe [she] met privately with Mr. Rave, although there is a charge for a conference on the bill."
Regarding Wife's ability to understand the terms of the agreement, she concedes that she was of "healthy and sound mind," but argues that she was not "well versed in interpreting or reviewing legal documents." Wife asserts that the agreement was written entirely in Husband's favor and she "had only [her] attorney, who [she] trusted blindly."
Discussion
Domestic Relations Law § 236 (B) (3) provides that "[a]n agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such [*8]agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded." New York maintains a strong public policy that favors parties deciding their own interests through premarital contracts, and a duly executed prenuptial agreement is given the same presumption of legality as any other contract (Bloomfield v Bloomfield, 97 NY2d 188 [2001]). Considering this presumption, parties to a prenuptial agreement begin on an equal plane. In other words, the agreement is presumed valid and the terms within control. Courts closely scrutinize a contested prenuptial agreement and it may be set aside upon a showing that it is unconscionable, or the result of fraud, or upon a showing that it is manifestly unfair to one spouse because of overreaching on the part of the other spouse (Lombardi v Lombardi, 127 AD3d 1038, 1041 [2d Dept 2015], quoting Bibeau v Sudick, 122 AD3d 652, 654—655 [2d Dept 2014]).
"The general rule with respect to prenuptial agreements places no special evidentiary or other burden on the party who seeks to sustain the agreement" (In re Barabash, 84 AD3d 1363, 1364 [2d Dept 2011], quoting Matter of Sunshine, 40 NY2d 875, 876 [1976]). The spouse opposing the agreement "bears the burden to establish a fact-based, particularized inequality before a proponent of a prenuptial agreement suffers the shift in burden" to disprove fraud, duress, or overreaching (Matter of Greiff, 92 NY2d 341, 346 [1998]). If the contesting spouse satisfies this initial burden, then the proponent of the agreement bears the burden of disproving fraud, overreaching or other inequitable conduct (Petracca v Petracca, 101 AD3d 695, 698 [2d Dept 2012]). However, in the absence of facts from which concealment or imposition may reasonably be inferred, fraud will not be presumed (Forsberg v Forsberg, 219 AD2d 615, 616 [2d Dept 1995]).
After a careful review of each of Wife's principal contentions, Wife has not met her burden in showing that the agreement should be vitiated on the basis of unconscionability, fraud, duress, or inequitable conduct generally.
Prenuptial agreements often include, inter alia, provisions regarding distribution of marital assets and the amount and duration of maintenance, provided that such terms were fair and reasonable at the time of the making of the agreement and are not unconscionable at the time of entry of final judgment (DRL § 236 [B] [3]; Maddaloni v Maddaloni, 142 AD3d 646, 649 [2d Dept 2016]). "An unconscionable bargain is one which no person in his or her senses and not under delusion would make on the one hand, and no honest and fair person would accept on the other, the inequality being so strong and manifest as to shock the conscience and confound the judgment of any person of common sense" (Maddaloni, 142 AD3d at 649 [2d Dept 2016]; Hof v Hof, 131 AD3d 579, 580 [2d Dept 2015]). However, a prenuptial agreement will not be overturned as unconscionable merely because, in retrospect, some of its terms are improvident or one-sided, because the marital assets were divided unequally, because one party gave away more than they might have been legally required to do, or because the decision to approve the agreement might have been unwise (Maddaloni, 142 AD3d at 649; Cosh v Cosh, 45 AD3d 798, 800 [2d Dept 2007]; 47A NY Jur 2d, Domestic Relations § 1968).
The motivating factor for execution of a premarital agreement generally is the preservation of the wealthier spouse's separate assets rather than an equitable division of such (see Van Kipnis v Van Kipnis, 11 NY3d 573, 578 [2008] (finding that the law contemplates two types of prenuptial agreements: in the first, the parties waive or opt out of the statutory scheme governing equitable distribution of property; in the second, the parties designate as separate property assets that would ordinarily be defined as marital property)).
In this case, the parties entered into the agreement with a significant financial disparity. At the time of execution, Husband was a minority owner in several family businesses, and maintains [*9]such ownership as of the filing of this motion. The prenuptial agreement, in essence, sought to preserve Husband's business interests as his separate assets. The very purpose of the agreement as evidenced in the recitals indicates that the parties intended to release statutory rights to equitable distribution and declare what they consider to be each party's separate assets. The desire to preserve as separate property each parties' assets titled in his or her own name cannot serve as the basis for Wife's unconscionability and overreaching claim, as the law contemplates such an agreement. Wife does not argue that she was unaware of Husband's superior financial position or that he failed to fully disclose relevant financial information. To the contrary, Wife concedes that she was fully aware of Husband's financial circumstances. Moreover, despite the fact that Wife was unemployed at the time the agreement was executed and dependent on Husband's support, there is no evidence that Husband leveraged his wealth to coerce or compel Wife to sign the agreement.
Furthermore, the terms of the agreement are not manifestly unfair as Wife contends. Contrary to Wife's assertions, she is entitled to receive some benefits. Under the terms of the agreement, Wife is entitled to half of the proceeds from the sale of the parties' jointly titled personal and real property and all non-titled personal property purchased during the marriage with the parties' joint bank account. The agreement also provides for child support despite Wife's argument that she would be unable to provide for her children under the agreement. It states in bold, capital letters that "ANY CHILD SUPPORT OBLIGATION SHALL BE DETERMINED BY THE THEN APPLICABLE CHILD SUPPORT GUIDELINES OF THE STATE OF NEW YORK, BUT IN NO EVENT SHALL A TOTAL SUPPORT OBLIGATION . . . BE LESS THAN $5,000.00 PER MONTH UNTIL THE YOUNGEST OF SAID CHILDREN SHALL ATTAIN THE AGE OF EIGHTEEN" (Wife's Exhibit C at 20, emphasis in original). It further requires Husband to bear "ALL THE EDUCATIONAL EXPENSES INCLUDING COLLEGE, AND GRADUATE SCHOOL ATTENDED BY THE CHILDREN" (id.).
Wife's argument that she was unable to appreciate and understand the legal impact of the agreement is also untenable. Wife, in pertinent part, attests, "the year [Husband] and I married, I was twenty-two years old. I had barely completed an Associate's Degree [sic]. I have not completed it to date. I had no experience whatsoever with reviewing legally binding contracts." She further states, "[Husband] took advantage of my innocence and lack of experience and coerced me into signing an [a]greement which was extremely detrimental to me." Aside from these conclusory statements regarding her inability to appreciate the terms of a "legally binding contract," Wife failed to submit any proof of a mental or physical deficiency that would prevent her from having the capacity to contract. Additionally, Husband submits, and Wife concedes, that the parties "were similarly situated in ages and education." At the time of entering into the prenuptial agreement, both parties had a high school level of education and the agreement was written in plain language. Under these facts, there is no basis to find that Wife was legally incompetent or otherwise unable to understand the contract, nor that Husband had or abused a superior bargaining power.
Wife's arguments as they relate to setting aside the agreement for lack of independent legal representation are similarly meritless. It is well settled that absence of independent legal representation, without more, is insufficient to set aside a prenuptial agreement (see Forsberg, 219 AD2d at 616 [2d Dept 1995] (holding "absence of legal representation, without more, does not establish overreaching or require an automatic nullification of the agreement"); see also Panossian v Panossian, 172 AD2d 811, 813 [2d Dept 1991]; Beutel v Beutel, 55 NY2d 957, 958 [1982]). Assuming, without concluding, that Husband secured Mr. Rave and paid all legal fees on Wife's behalf, this fact alone would not be adequate to set aside the agreement (see e.g., Barocas v. Barocas, [*10]94 AD3d 551 [1st Dept 2012] (finding no duress or overreaching where husband's attorney recommended wife's counsel and paid her counsel fees).
Wife's conclusory assertions that she never had a serious opportunity to review or negotiate the prenuptial agreement are unsupported by her own papers. Her moving papers reveal that "a one-hour conversation" took place where Mr. Rave reviewed the agreement with Wife (affirmation of defendant's counsel ¶ 4). Several days after this conversation with Mr. Rave, Wife signed the agreement at her attorney's office, in her attorney's presence, and her attorney signed as a witness. The second page of the agreement (excluding the cover page and table of contents) states in plain language,
"[Wife] warrant[s] and represent[s] that [she] retained and conferred with independent counsel of [her] own choosing. [Wife's] counsel, [Mr.] Rave assisted and represented [Wife] in negotiating terms and conditions of this [a]greement. He read, interpreted, evaluated and fully explained to [Wife] the expressed and unexpressed legal implications of the terms and conditions of this [a]greement. [Wife] is and will be represented by independent counsel of her own choosing at the time of the execution of this Agreement"(Wife's Exhibit C, Article III). Furthermore, the attorney certification annexed to the agreement itself recites that Mr. Rave "advised and consulted with [Wife]" and "fully explained to her the legal effect" of the agreement. Mr. Rave's certification acknowledges that after being fully advised, Wife "acknowledged that she understood the legal effect" of the agreement and "executed the [a]greement freely and voluntarily" (cf. Cioffi-Petrakis v Petrakis, 72 AD3d 868, 869 [2d Dept 2010] (rejecting wife's request to set aside agreement where wife's attorney signed as a witness and wife acknowledged agreement was entered into freely, voluntarily and with full knowledge of all circumstances)).
To the extent that Wife sought a "careful review" of the agreement, the time to do so has long passed. The agreement cannot be set aside today solely because Wife's decision to sign appears imprudent in hindsight. Wife admits that she "did not read the agreement carefully until [the parties] were married for several years" (Wife's Reply Aff at ¶ 7) (emphasis added). Instead, Wife expressly consented to the terms of the agreement. Wife failed to set forth any other facts that would tend to show that Mr. Rave or the Husband misrepresented the terms of the agreement, concealed any portion thereof, or engaged in inequitable conduct.
Although Wife also alleges coercion and duress in the rushed nature of the circumstances surrounding the procurement of the agreement, her moving papers fail to support such a contention. Executing a prenuptial agreement because "the wedding date was rapidly approaching" and wanting to avoid "unnecessary strife between [the parties] or amongst [their] families," without more, is not a basis to set aside a prenuptial agreement (see e.g., Barocas v. Barocas, 94 AD3d 551, [1st Dept 2012] (finding no duress when spouse believed that the wedding would be cancelled if she did not sign the agreement, that the wedding was only two weeks away, and that the wedding plans had been made)). In light of the foregoing, Wife has failed to sustain her very high burden of establishing grounds for setting aside what is clearly a valid and enforceable prenuptial agreement.
TEMPORARY SPOUSAL MAINTENANCE
Wife's Contentions
Wife seeks an award of temporary maintenance pursuant to Domestic Relations Law § 236 (B) (5-a). Wife argues that temporary support is necessary to continue the affluent lifestyle that she and the children have become accustomed to during the marriage. Wife claims that the parties vacationed frequently at destinations such as Antigua, Turks and Caicos, Germany, Puerto Rico, and [*11]Universal Studios in Orlando Florida. She insists that any one vacation would cost approximately $40,000.
Wife also lists numerous expenses to illustrate the lifestyle she was afforded during the marriage, including: dining at top-rated restaurants, such as Le Bernardin and Caviar Rose; high-end retail shopping at Neiman Marcus, Saks, Net-a-Porter, and the Short Hills Mall in New Jersey; ownership of luxury cars, such as Mercedes-Benz GL 63, Mercedes-Benz GL 550, BMW X5 M, and BMW 5 Series; a staff, which included a personal driver whenever needed and two live-in nannies for the children; spending at least $5,000 per birthday for the children; dental procedures for Wife, costing approximately $80,000; installation of a pool at the marital residence, costing approximately $100,000; and hiring an interior designer to renovate the marital residence, costing approximately $100,000.
Wife asserts that Husband has been "incredibly successful in business" and provided her with the ability to stay at home and raise the children. Wife directs this court to the parties' 2011 and 2012 joint tax returns which reflect a total income of $1,077,864 and $1,245,446, respectively (Wife's Exhibits K-L). During the marriage, Wife claims that she had unfettered access to the joint bank accounts and credit cards. She also claims Husband issued her an allowance and relied on her to pay the household staff, and to purchase groceries, clothing, and the family's necessities.
Husband's Contentions
Husband opposes Wife's motion for temporary support and argues that Wife "unambiguously and categorically waived her right to apply for and receive temporary maintenance." Husband cites Article XII of the agreement which provides, in relevant part, "each of the parties waives any and all rights she or he may otherwise have to receive spousal support, maintenance or alimony from the other, on either a temporary or permanent basis."
Husband further contends that Wife has not demonstrated an immediate need for temporary maintenance. Husband claims that he pays a significant portion of her current expenses and supports Wife generously. On April 21, 2016, Husband leased a 2016 Toyota Sienna Minivan to replace Wife's 2013 Mercedes-Benz GL 63. He claims the exchange was undertaken to provide the Wife with a new car and save $1,000 on monthly lease payments. Husband also claims that he is solely responsible for the costs associated with the car's maintenance, such as insurance, gas, oil, and E-ZPass. Along with car maintenance expenses, Husband alleges that he fully supports the children and ensures Wife has full health care insurance through UnitedHealthcare.
He argues that he cannot afford Wife's expensive lifestyle, although Husband concedes that he allowed Wife to spend lavishly during the marriage. Husband asserts that Wife's spending habits prevented him from paying rent and income tax obligations. Husband states that he borrowed $100,800 from his father and more from banks to pay income taxes, credit card debt, and household expenses.
Discussion
New York's Domestic Relations Law provides for a formula-based approach to the award of temporary maintenance, except where the parties have entered into a marital agreement (DRL § 236 [B] [5-a] [a]). DRL § 236 (B) (5-a) (a) states that, "except where the parties have entered into an agreement providing for maintenance in any matrimonial action the court, upon application by a party, shall make its award for temporary maintenance pursuant to the provisions of this subdivision." A waiver of temporary maintenance will be enforced when the parties' intent is clearly evidenced in a valid and enforceable prenuptial agreement (Vendome v Vendome, 41 AD3d 837 [2d Dept 2007]; compare Maddaloni v Maddaloni, 142 AD3d 646, 651 [2d Dept 2016]).
In this case, the clear language and intent of the parties as evidenced in the prenuptial agreement precludes Wife from receiving an award of temporary maintenance. Article XII (Dissolution of Marriage; Waiver of Spousal Maintenance) of the prenuptial agreement provides, in pertinent part:
"Pursuant to the provisions of the Domestic Relations Law and any other law or statute, each of the parties waives any and all rights she or he may otherwise have to receive spousal support, maintenance or alimony from the other, on either a temporary basis after the commencement of an action, and/or to receive spousal support, maintenance or alimony after the termination of the marriage by the entry of a Decree."(emphasis added). First, the heading, "waiver of spousal maintenance," is a clear signal that each party intended to opt out of the statutory provisions for temporary maintenance. Second, the agreement unequivocally and plainly states that each party "waives any and all rights she or he may otherwise have to receive spousal support, maintenance, or alimony" on "a temporary basis after the commencement of an action." Thus, Wife's request for an award of temporary maintenance is denied. Consequently, the branch of the court's May 5, 2016 order which required Husband to cover all reasonable household expenses is hereby vacated.
JOINT BANK ACCOUNTS & LINES OF CREDIT
Wife's Contentions
Wife seeks an order directing the Husband to return all funds to the parties' joint bank accounts in the same amounts as they were before the commencement of this action. She alleges that Husband drained the checking accounts and then commenced the instant action. Wife also asserts that Husband wrongfully withdrew $4,000 from the parties' joint account on March 10, 2016.[FN5] Since the commencement of this action, Wife asserts that Husband ordered dinner for her and the children in an attempt to diminish funds which would otherwise be available to her. Wife alleges that Husband provided her with access to large sums of money and credit lines during the marriage, and that she should have access to the same during the pendency of this action.
Husband's Contentions
Husband admits to withdrawing funds from the joint bank accounts, but contends that the withdraws were "in the ordinary course of [the] family business." Husband concedes that he paid $50,800 to the Internal Revenue Service ("IRS") to settle the parties' 2014 federal tax liability and $15,425.06 to the New York State Department of Taxation to settle the parties' 2014 state tax liability. Husband asserts that the $50,800 federal tax liability was paid with funds personally loaned by his father. Husband contends that the personal loan was necessary as the IRS was about to foreclose on the tax lien. In support, he attaches the federal and state tax notices along with copies of the payments for each. The payments reflect that the federal tax obligation of $50,800.11 was paid directly to the United States Treasury from Husband's parents' joint account by check dated February 17, 2016. The state tax obligation of $15,425.06 was paid from Husband's Investors Bank account to the "Commissioner of Taxation and Finance" by check dated February 22, 2016. He further asserts that the account was nearly depleted as a result of settling the parties' outstanding credit card bills and a $15,000 retainer to Mr. Stix. It is Husband's position that he did not make improper withdrawals prior to or after the commencement of the action.
Husband asserts that Wife has enough cash. At her disposal, he alleges, is her own American Express credit card with a $35,000 credit limit, her own Citibank Mastercard with an $18,000 credit limit, her own "Chase United Bank Mastercard" with a $30,000 line of credit; use of the parties' joint HSBC debit card, and use of the parties' joint Investors Bank debit card. Husband insists that he pays the charges on each of these accounts.
Wife's Reply and Opposition
Wife contends that Husband refuses to pay the credit card bills despite having done so for more than ten years. She claims that every card Husband claims she has at her disposal is "at or within a few thousand dollars of the limit." Wife admits that Husband gives her and the children money, but contends that Husband adds to the joint account "whatever amount of money he thinks is necessary, with no basis in reality or needs." Wife also believes that Husband settled the parties' 2014 tax obligations in bad faith and only to drain the account. Wife bases this belief on the fact that Husband paid the parties' 2014 tax arrears after the commencement of this action.
Discussion
Automatic orders in matrimonial actions enjoin the parties from improperly dissipating marital assets. Automatic orders are binding upon the plaintiff immediately upon the filing of the summons and complaint and upon defendant immediately upon the service of the automatic orders with summons (DRL § 236 B [2] [b]). These automatic orders are only terminated by order of the court or upon written agreement between the parties (id.).
The automatic orders state, in relevant part:
"(1) Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or by order of the court, any property (including, but not limited to, real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats) individually or jointly held by the parties, except in the usual course of business, for customary and usual household expenses or for reasonable attorney's fees in connection with this action(DRL § 236 B [2] [b] [1], [3]). Automatic orders constitute "lawful mandates of the court" and any violation of such should be redressed by the same remedies available for violations of any order signed by a judge (DRL § 236 [B] [2] [b]; 22 NYCRR § 202.16—a; Sykes v Sykes, 35 Misc 3d 591, 595 [Sup Ct, NY County 2012]; quoting P.S. v R.O., 31 Misc 3d 373, 916 N.Y.S.2d 755 (Sup Ct, NY County 2011); see also Reliastar Life Ins. Co. of New York v Cristando, 129 AD3d 701, 702 [2d Dept 2015]). Generally, contempt of court or injunctive relief is sought when a party has violated or is attempting to circumvent a lawful mandate of the court.
Here, it is undisputed that the parties' joint accounts are subject to the automatic orders, but Wife failed to sufficiently allege a violation of the automatic orders. Wife's allegations are contradictory, conclusory, unsupported by documentary evidence, and do not create a triable issue with regards to improper use of funds from the parties' joint bank account.
In one instance, Wife states that $4,000 was improperly deducted from the joint account on March 10, 2016, but attaches joint account statements for periods between January 2016 and February 2016 (Wife's Exhibit O). In another instance, Wife asserts that Husband's use of the joint account to purchase food for her and the children proves he intended to diminish funds that would otherwise be available to her. Later, Wife argues that payments to the federal and state tax authorities for the parties' tax obligations should be deemed an improper withdrawal. However, paying for food and eliminating a tax liability that would otherwise jeopardize the marital assets falls under the "usual course of business or for customary or usual household expenses" exception to the [*12]automatic orders. Accordingly, Wife's request for an order directing the Husband to return all funds to the parties' joint bank accounts in the same amounts as they were before the commencement of this action is denied.
With respect to the lines of credit, the automatic orders contemplate the preservation of marital assets and not the increase of marital debt throughout the course of the litigation. Specifically, the automatic orders state that
Neither party shall incur unreasonable debts hereafter, including, but not limited to further borrowing against any credit line secured by the family residence, further encumbrancing any assets, or unreasonably using credit cards or cash advances against credit cards, except in the usual course of business or for customary or usual household expenses, or for reasonable attorney's fees in connection with this action.(DRL § 236 [B] [2] [b] [3]). Furthermore, any debt incurred by Wife during the pendency of this action would be her own separate liability and not subject to equitable distribution. To the extent Wife has claimed that she lacks the resources to care for herself, it certainly would be counterintuitive to grant her the ability to incur additional credit card debt that she has no means of repaying. Therefore, this branch of Wife's motion is also denied.
ABUSIVE CONDUCT
Husband's Contentions
Husband cross moves for an order directing Wife to refrain from "assaulting, abusing and threatening" Husband during the pendency of this action. Husband contends that since informing Wife of his intent to commence a divorce action, Wife has been "extremely abusive." Husband alleges that Wife "threatened to accuse [Husband] of being a violent drug addict and alcoholic to get [him] thrown out of the house and not allow[ed] to see [their] children." He alleges, "[w]hen I ask her to help around the house or cut back on expenses she throws a temper tantrum throwing plates, cups of coffee, utensils, TV remotes and other things in reach at me." Husband claims Wife, without provocation, insults him by mentioning sexual encounters she has with another man and by calling Husband "impotent" and "not a man." Husband contends that Wife's alleged outbursts "are frequently in the presence of [the] children or in their earshot."
Wife's Contentions
Wife generally opposes Husband contentions, but sets forth no facts in opposition.
Discussion
This court has the authority to issue order of protections to limit harmful and threatening behavior by one spouse directed at the other spouse (DRL § 242). Generally, an order of protection may direct the offending spouse not to injure, threaten or harass the other spouse, his or her family, or any other person listed in the order. Article 8 of the Family Court Act is the primary statutory authority governing family offense proceedings. Family Court Act § 812 enumerates numerous offenses which constitute a family offense.
Here, Husband alleges abusive conduct without identifying which family offenses have been allegedly committed by Wife. Further, Husband's counsel failed to set forth any legal argument whatsoever with regards to Husband's request for an "injunction on abusive conduct." A family offense petition must be pleaded with more particularity than provided in Husband's papers. The court will not infer which offense, if any, aligns with the asserted facts to provide the requested relief. Notwithstanding, the court admonishes both parties to refrain from disparaging, or otherwise verbally or physically harming, each other in all circumstances, especially in the presence of the children.
EVICTION FROM THE MARITAL RESIDENCE
Wife's Contentions
Wife moved by emergency order to show cause seeking a preliminary injunction barring Husband, or the legal entities that he has an interest in, from evicting Wife from the marital residence pursuant to CPLR § 6301. Wife received a "thirty (30) day notice of termination" dated September 13, 2016 from Artmar Management. The notice states that "unless you remove from the said premises on October 31, 2016 the day on which your term expires, the landlord [Artmar Management] will commence summary proceedings . . . to remove you from said premises" (Wife's Exhibit A). The notice is signed by Father, the managing member of Artmar Management.
Wife contends that throughout the marriage, she believed Husband and Father owned the martial residence through Artmar Management. The parties' joint tax returns for the years 2011, 2012, 2013, 2014, and 2015 indicate Husband has claimed an equity interest in Artmar Management (Wife's Exhibits D-H). Wife argues that Husband is now attempting to evict her from a residence that he currently owns, in violation of the automatic orders.
Wife contends that Husband plans to evict her and move back into the marital residence himself. The lease agreement attached to Wife's papers lists Artmar Management as landlord and Husband as tenant. The lease commenced on January 1, 2006 and ended January 1, 2008, for a monthly rent of $2,200 (Wife's Exhibit I). Wife ultimately seeks a stay of the eviction proceedings.
Husband's Contentions
Husband contends that his 5% interest in Artmar Management was a gift from his parents, who formed the company to purchase the residence which served as the parties' marital home. Husband argues that a 5% interest in the company is not equivalent to owning the property, as he is a "minority, silent partner without control and without the ability to sell [his] interest."
Artmar Management's Opposition
Father, as managing member of Artmar Management, submitted an affidavit in opposition to Wife's order to show cause, insofar as Wife seeks injunctive relief from an eviction suit. Artmar Management asserts that Father owns 50% of the shares of Artmar Management, Husband's mother ("Mother") owns 45%, and Husband owns 5%. Because of Husband's minority shares, Artmar Management argues that Husband has no control over corporate actions.
With regard to rent payments, Artmar Management asserts that it has not received a rent payment from the parties since December 2014. By notice of past due rent dated April 20, 2016, Artmar Management advised the parties that rent was past due in the amount of $48,400 and demanded immediate payment by certified check. If payment was not rendered, the parties were directed to vacate the premises within 30 days (Artmar Management's Exhibit C). Mother signed the April 20, 2016 notice on behalf of Artmar Management. After the April 2016 payment demand, Artmar Management mailed the 30-day notice of termination dated September 13, 2016.
Artmar Management maintains that it commenced eviction proceedings against both parties and not solely against the Wife. It further asserts that Husband had no part in making this decision and even if he tried, Husband lacks sufficient ownership interest to make any decisions on behalf of the company. Artmar Management argues that it is being unjustly denied the use of its asset as it wishes since the company has no intention of renewing the expired lease. The company contends that 95% of its ownership should not be deprived of the use and enjoyment of their asset simply because a 5% shareholder is going through a divorce.
Discussion
"CPLR 6301 provides, in relevant part, that a plaintiff may obtain a preliminary injunction [*13]in any action where it appears that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff's rights respecting the subject of the action" (Lynn v Sterling Nat. Bank, 151 AD3d 1049 [2d Dept 2017]). To establish the right to a preliminary injunction, the movant must demonstrate (1) a likelihood of ultimate success on the merits, (2) irreparable injury absent the grant of an injunction, and (3) that the equities balance in his or her favor (CPLR § 6301; Braunstein v Hodges, 66 NYS3d 914, 915 [2d Dept 2018]).
As to the first requirement, the movant must demonstrate a clear right to relief such that any issues of fact do not subvert the movant's likelihood of success (Advanced Digital Sec. Sols., Inc. v Samsung Techwin Co., Ltd., 53 AD3d 612, 613 [2d Dept 2008]; Milbrandt & Co., Inc. v Griffin, 1 AD3d 327, 328 [2d Dept 2003]). The second prong requires a case-specific inquiry into whether an adequate remedy at law is available to the movant. Thus, "to deprive a [movant] of the aid of equity by injunction it must also appear that the remedy at law is plain and adequate; in other words, that it is as practical and efficient to secure the ends of justice and its proper and prompt administration as is the remedy in equity" (Lesron Jr., Inc. v Feinberg, 13 AD2d 90, 93 [1st Dept 1961]). With respect to the balancing of equities, the harm to the movant absent injunctive relief must outweigh the harm to the non-movant if injunctive relief is granted. Here, Wife has established her entitlement to a preliminary injunction.
First, Wife has shown a likelihood of success on the merits. The lease agreement dated January 1, 2006 is between ARTMAR Management LLC as landlord and Husband as tenant. As Wife is not named on the lease, she is a licensee. Accordingly, Artmar Management seeks to commence eviction proceedings against Wife as a licensee pursuant to Real Property Actions and Proceedings Law ("RPAPL") § 713 (7) during the pendency of this action. New York's real property law permits a special proceeding after a ten-day notice to quit has been served where the defendant is a licensee of the person entitled to possession of the property at the time of the license, and (a) his license has expired, or (b) his license has been revoked by the licensor, or (c) the licensor is no longer entitled to possession of the property" (RPAPL § 713 [7]).
Over the years, courts have routinely held that a "family member" is afforded rights beyond that of a mere licensee, and thus may not be evicted in a licensee holdover proceeding (see e.g., Minors v Tyler, 137 Misc 2d 505 [Civ Ct, Bronx County 1987]). A "family member" ordinarily encompassed a spousal relationship, but has been expanded to include stepchildren (Nagle v Di Paola, 134 Misc 2d 753 [Nassau Dist Ct 1987]), adult lifetime partners (Braschi v Stahl Assoc. Co., 74 NY2d 201, [1989]), adult children (Sirota v Sirota, 164 Misc 2d 966 [Civ Ct, Kings County 1995]), an ex-girlfriend and minor children of the relationship (DeJesus v Rodriguez, 196 Misc 2d 881 [Civ Ct, Richmond County 2003]), adult grandchildren (Williams v Williams, 13 Misc 3d 395 [Civ Ct, NY County 2006]), and a sister-in-law (Kakwani v Kakwani, 40 Misc 3d 627 [Nassau Dist Ct 2013]).
Rosenstiel v Rosenstiel, the seminal case regarding summary proceedings against family members, provides that absent any legal modification to the marital (or familial) relationship, a spouse (or family member) may not be evicted in a summary licensee holdover proceeding (20 AD2d 71, 76 [1st Dept 1963]). A wife's possession of the premises exists because of "special rights incidental to the marriage contract and [familial] relationship" and not by virtue of the permission of the husband or under a revocable privilege extended by him (id.).
Notwithstanding RPAPL § 713 (7), DRL § 236 (B) (5) (f) grants courts in divorce actions to "make such order regarding the use and occupancy of the marital home and its household effects ... without regard to the form of ownership of such property." "The law is clear — when a [*14]matrimonial action is pending, regardless whether husband or wife is the owner of the marital premises, the other may not be evicted by summary proceedings and possession of the marital home should be determined in the matrimonial proceeding" (Wildenstein v Nineteen E. Sixty-Fourth St. Corp., 177 Misc 2d 517, 519 [NY Sup Ct 1998], citing Rosenstiel, 20 AD2d at 71).
In this case, Wife is a family member as Husband's spouse and daughter-in-law to Mother and Father (each an owner of the subject premises). As a family member, Wife is afforded greater rights than those of a mere licensee. Artmar Management's reliance on Wildenstein to support a ruling in its favor is misguided.
The Wildenstein court held that the husband retained control or influence over the family-run corporation that owned the home and, accordingly, a stay was warranted. The court inferred the husband's control despite the lack of actual, direct ownership based on the following: (1) the company was strictly owned by the husband's family; (2) no evidence suggested that any non-family member was under the employ of the company, had any interest, control, or decision with respect to the company; and (3) the company failed to seek the husband's eviction. Similarly, Artmar Management is a company owned and managed exclusively by the Husband's family — father, mother, and son. Nothing in the record suggests any non-family member influences, controls, or directs Artmar Management. Further, while Artmar Management asserts it is seeking to evict both parties equally, this position is contradicted by Husband's recently filed motion whereby he seeks "immediate, exclusive, use and occupancy of the marital home currently occupied by Wife" (motion sequence no. 5). In light of the foregoing, Wife has demonstrated a likelihood of success as a spouse is afforded rights superior to those of a mere licensee under these circumstances.
With regards to the second prong, neither non-party Artmar Management nor Husband argued that a separate and adequate remedy at law is available to the Wife. Third, the harm to the movant significantly outweighs any harm to Artmar Management or Husband. The clear harm to Artmar Management and Husband is loss of rental income by an inability to rent at the prevailing market rate. On the other hand, absent a preliminary injunction, the children would be forced to go through the "tumults of having to couch surf with their mother" (tr at 23). Moreover, Wife was fully dependent on Husband during the marriage and is likely to face extreme hardship with finding new housing (tr at 24).
In light of the foregoing, Artmar Management is enjoined from evicting Wife during the pendency of this proceeding. As Husband has effectively been excluded from the marital residence due to the temporary order of protection issued by the Kings County Criminal Court, Wife shall be responsible for making ongoing rent payments to Artmar Management, as well as paying utilities and all expenses in connection with maintaining the residence in habitable condition.
The preliminary injunction shall terminate upon final disposition in this action, written agreement of the parties, or further order of the court. Wife is cautioned that a stay of the summary proceedings is temporary, and she should actively seek alternative housing suitable for her and the children.
TEMPORARY CHILD SUPPORT
Wife's Contentions
Wife moves for an award of child support pursuant to the Child Support Standards Act ("CSSA") in an amount of $12,500 per month. Wife contends that in order to maintain a lifestyle the children are accustomed to living, she will need significant monetary assistance from Husband. Wife attaches an updated statement of net worth which estimates monthly expenses in the amount of $16,133.33 for Wife to live on her own with the children (Wife's Exhibit P). The statement of [*15]net worth lists rent averaging $3,500 per month and $11,000 in monthly miscellaneous expenses. Wife argues that the children lived "a very affluent lifestyle" and the children should retain the same. During the marriage, Wife contends the parties would "eat out with the children, all the time, [and] would take the children on expensive vacations."
Husband's Contentions
Husband argues that any amount above the $5,000 provided for in the prenuptial agreement is unwarranted since $5,000 exceeds childcare costs. Husband adds that he currently pays the following expenses for the children: $60,000 for private school tuition, $15,000 for health insurance, $12,000 for physiologist sessions, $7,000 for summer camp, uninsured medical expenses, and other expenses. Husband alleges that he expends $94,000 a year (or $7,833.33 per month) for the children.
Discussion
Domestic Relations Law § 236 (B) (7) (a) authorizes the court in matrimonial matters to order either or both parties to pay temporary child support. Domestic Relations Law § 240 (1-b) outlines the way the court shall determine a party's child support obligation, whereby the court calculates the combined parental income and multiplies it by the appropriate coefficient based on the number of children eligible for child support pursuant to the statute. For purposes of calculating the combined parental income, the court must determine each party's income pursuant to Domestic Relations Law § 240 (1-b) (b) (5) (i) through (vi), less certain specified deductions, like FICA and local taxes and maintenance paid, pursuant to Domestic Relations Law § 240 (1-b) (b) (5) (vii). On a motion for pendente lite child support, the court is not bound to apply the CSSA, but in choosing not to, the court must explicitly set forth its reasoning.
Domestic Relations Law § 240 (1-b) (5) (i) directs the court to use the parties' gross income as was or should have been reported on their most recently filed federal income tax returns, less FICA and local city taxes, to calculate the presumptive child support award. If each spouse files his or her federal income tax return as a married person filing jointly, that spouse shall be required to prepare a form, sworn to under penalty of law, disclosing his/her gross income individually (DRL § 240 [1-b] [5] [i]). Once the court has determined the parties' income, the court must then make the appropriate calculation based upon the payee's and payor's income up to the initial cap of $143,000.
As the motion was filed in November 2016, the parties' 2015 income is used to calculate support. The parties' 2015 tax return was filed jointly; however, Husband and Wife both concede that Wife was unemployed during the marriage and earned no income. Therefore, the amounts listed in the parties' 2015 tax return will be attributed solely to Husband. Based on the 2015 tax returns, Husband's gross annual income was $1,291,328, New York City tax was $55,510, and Medicare tax was $14,726 (Husband's Exhibit B). Husband and his accountant both claim that Husband's social security tax liability was $22,073, but failed to attach copies of Husband's W-2(s) or other proof of social security tax actually paid; therefore, it shall not be deducted.
Husband's adjusted CSSA income is $1,221,092. Wife was unemployed during the marriage and accordingly, her CSSA income is $0. The parties share joint custody; therefore, because Husband is the more monied spouse, he is the de jure non-custodial parent for the purposes of child support. The parties have two children so the appropriate child support percentage is twenty-five percent (see DRL § 240 [1-b] [c] [2]). Temporary child support pursuant to the CSSA is calculated as follows:
[*16]Husband-HusbandWife-Wife
Adjusted CSSA Income$1,221,092$0
Combined Parental Income up to the statutory cap$143,000
Applicable Child Support Percentage for 2 children25%
Combined Parental Child Support Obligation up to the Statutory Cap$35,750
Pro Rata Share of Combined Parental Income100%0%
Pro Rata Share of Child Support Obligation$35,750 annually
OR
$2,979.17 monthly$0 annually
OR
$0 monthlyWife's presumptive child support award is $2,979.17 per month. If combined parental income exceeds the $143,000 cap — as it does in this case — the court must consider certain statutory factors for any child support awarded based on income in excess of the statutory cap (DRL § 240 [1-b] [c] [3], [f]). The court has the discretion to apply the statutory factors or apply the statutory percentages, or to apply both (DRL § 240 [1-b] [c] [3]; Cassano v Cassano, 85 NY2d 649 [1995]; Peddycoart v MacKay, 145 AD3d 1081, 1083—1084 [2d Dept 2016]). Those factors include, but are not limited to, the financial resources of the parties and the children; the standard of living the children would have enjoyed had the marriage or household not been dissolved; a determination that the gross income of one parent is substantially less than the other parent's gross income; the educational needs of the parents; tax consequences; and any other factors the court determines are relevant in each case (DRL § 240 [1-b] [f]). In high income cases, the appropriate determination of child support should be based on "the child[ren]'s actual needs and the amount required for the child to live an appropriate lifestyle, rather than the wealth of one or both parties (Levesque v Levesque, 73 AD3d 990, 990 [2d Dept 2010]).
In this case, the parties' prenuptial agreement necessitates an upward deviation to $5,000 per month (or $60,000 per year). The court finds a further upward deviation of $1,500 is warranted to cover the children's rental expenses. The court has considered the financial resources of the parties, the standard of living the children would have enjoyed had the marriage continued, and gross income.
At the outset, Wife failed to articulate a clear basis to award $12,500 per month in child support. While Wife claims that there are "numerous costs associated with [the] children that are not specifically planned for," Wife failed to articulate the actual needs of the children that warrant an additional upward modification, except for expenses related to housing costs. The record reveals that the children have always enjoyed an affluent lifestyle with extravagant vacations, attended private school and summer camps. Husband has even acknowledged that during the marriage, he would spend approximately $7,800 per month on the children. Wife's award of $5,000 is sufficient to cover her portion of the children's usual and customary expenses.
Notwithstanding, Husband has always paid all household and recreational expenses for the children. As Wife will soon be compelled to leave the marital residence and find a place of suitable size and character for her and the children, Husband's obligation to pay these expenses on behalf of the children shall continue. Husband shall be responsible for rent attributable to the children portion of rent and two-thirds (2/3) of the utilities expense associated with Wife's residence. As the parties rented an apartment pre-commencement for $2,200 per month, Husband's obligation shall be $1,500 for the children's rent contributions (or approximately two-thirds of the pre-commencement monthly rent). Husband shall pay two-thirds (2/3) of the [*17]monthly utilities expense associated with the children's residence.
Accordingly, Wife is awarded $6,500 per month in temporary child support retroactive to the date of first application, March 16, 2016. Husband shall be credited with any payments voluntarily paid during this period for which he has credible proof or for payments that are acknowledged by Wife. Any amounts that have accrued since the date of the first application are considered past due arrears. Arrears, if any, are to be paid at the rate of $1,000 per month until fully paid. The first payment of child support and arrears shall be made on March 16, 2018 and shall continue the first day of each month thereafter until further order of the court or written agreement of the parties.
Husband shall be responsible for all the educational expenses of the children in accordance with the prenuptial agreement. Husband shall be responsible for 100% of any statutory add-on expenses such as health insurance, unreimbursed medical expenses and child care. Husband shall be responsible for two-thirds (2/3) of the monthly utilities expense associated with the children's primary residence. Since no proof of any of those expenses were presented, Wife shall notify Husband of any claimed expenses for these add-ons and utilities within 10 days of incurring such expenses in writing. Husband must pay his pro rata share of such expenses, unless objected to in writing, within 10 days of receipt of notice of these expenses.
SANCTIONS
Wife's Contentions
Wife seeks an order for sanctions against Husband pursuant to 22 NYCRR § 130-1.1 (a). Wife argues Husband should be sanctioned in the amount of $2,500 for "lying to the [c]ourt about his income and about his ownership of Artmar Management." First, Wife argues that Husband lied when he asserted that he had no equity interest in Artmar Management. Wife claims to have learned of this discrepancy upon receipt of the parties' joint tax returns, which indicate Husband claimed a taxable loss as an owner of Artmar Management for the past five years. Second, Wife argues that Husband understated his income by more than one million dollars in his statement of net worth. Wife claims that the income in the parties' joint tax returns reflect significantly higher income streams than Husband initially alleged.
Wife contends that Husband's incorrect assertions regarding income and business ownership were made to interfere with the court's determination of her applications for support. Wife further contends that she has suffered prejudice since she was operating under the assumption that the income provided in this matter was accurate when in fact, the economic situation as previously asserted by Husband "bore no resemblance to reality."
Husband's Contentions
Husband argues that he signed his statement of net worth on April 28, 2016 indicating that it was accurate as of March 1, 2016. Husband avers that he "completed this form as best and as honestly as [he] could with the information available."
Husband argues that his omission to include his 5% interest in Artmar Management on his statement of net worth was a mere oversight. Husband contends that his 5% interest is insignificant, obtained only as a gift from his parents and not by any contribution from him. Regarding his income, Husband contends that his gross income is actually $741,850. This figure reflects Husband's gross income, as reported on his tax returns, less profits retained by the companies as undistributed corporate profits. Thus, Husband alleges that his $603,517 tax obligation reduces his net income to $138,333.
In further support, Husband attaches an affidavit from Louis C. Grassi, certified public account [*18]and certified fraud examiner ("Mr. Grassi") (Husband's Exhibit C). Mr. Grassi asserts that Husband, as shareholder in Volmar Construction, Inc. (a Subchapter S corporation), is required to report his percentage share of income and pay taxes on the reported amount, but does not receive the income unless corporate management decides to make a distribution of part or all of the profits. Mr. Grassi asserts that Volmar Construction, Inc. did not make a distribution of profits in 2015. Similarly, Husband has ownership interests in other limited liability companies from which he did not receive any distribution, but was nonetheless required to report his percentage of profits and losses on his tax returns.
Discussion
Pursuant to 22 NYCRR § 130-1.1 (a), the court, in its discretion, may impose financial sanctions upon any party or attorney who engages in frivolous conduct. Conduct is frivolous if it is (1) "completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;" (2) "undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another;" or (3) "asserts material factual statements that are false" (22 NYCRR § 130-1.1 [c]). To avoid sanctions, at the least, the conduct must have a good faith basis (Dank v Sears Holding Mgt. Corp., 69 AD3d 557, 558 [2d Dept 2010]).
Under the circumstances at hand, Wife's application for sanctions is denied. Husband's omission of his interest in Artmar Management in his statement of net worth has a minimal impact in light of its disclosure in each of the parties' joint tax returns and admitted at oral argument on the motion. Further, although Husband's reasoning for the income listed in his statement of net worth was incorrect, his actions were not frivolous as there was a good faith basis for reporting those figures, as indicated by both Husband and Mr. Grassi. Husband's reduced income figures were based upon his own understanding of "income" in light of his high earnings, financial obligations, and somewhat intricate financial holdings.
COUNSEL FEES
Wife's Contentions
Wife moves under motion sequence number one for counsel fees in the sum of $25,000 and under motion sequence number three for counsel fees in the sum of $35,000, which total $60,000. Wife retained Goldberg & Cohn on February 25, 2016. Wife has annexed a copy of her retainer agreement with Goldberg & Cohn (Wife's Exhibit W).
The retainer agreement requires an initial retainer of $15,000. Wife is billed at hourly rates of $425 for work done by Steven D. Cohn, Esq. ("Mr. Cohn") or other partners of the firm; no more than $325 for work done by senior associates; no more than $200 for work done by junior associates; and "other miscellaneous parties, including paralegals, are billed at rates not to exceed $150."
Wife, under motion sequence number one, asserts that she does not have any funds to pay her attorneys for representation in this action. Mr. Cohn's affirmation insists that Husband should be ordered to pay Wife at least $25,000 to put the parties on an even playing field for litigation. Wife's affidavit suggests that the $25,000 will be placed in escrow to pay for appraisals. Wife in her first motion annexed invoices from Goldberg & Cohn which indicate an outstanding balance of $3,190.45.
Under motion sequence three, Wife attests that her outstanding balance, as of the date of filing, is $21,993.85 (Wife's Exhibit T). An invoice dated October 31, 2016 reflects accrued fees of $21,993.85 for work done between April 2016 and October 2016 (64.7 hours). The annexed [*19]statements indicate that prior to the issuance of the October 31, 2016 invoice, Wife had a credit of $4,809.55. A second invoice dated November 1, 2016 reflects fees in the sum of $4,325 for work done on October 31, 2016 to November 1, 2016 (14.5 hours). The invoices actually reflect an outstanding balance $21,509.30.
In support of both motions, Mr. Cohn sets forth his qualifications as an experienced matrimonial attorney, who has been practicing matrimonial and family law since 1974. He further states that he was admitted to the bar of the State of New York in 1974 and that he has appeared in numerous matrimonial actions since.
Both of Wife's motions end with the CPLR § 2217 statement affirming that "no prior application for the relief requested herein, or similar relief, has previously been made in this or any other court."
Husband's Contentions
Husband contends that Wife paid Goldberg & Cohn a $15,000 retainer from joint property just as he paid his attorney. Husband, in his cross motion, requests an order reserving his right to move for counsel fees in accordance with the prenuptial agreement.
Discussion
Domestic Relations Law § 237 (a) authorizes the court to direct either spouse to pay counsel fees in order to enable the other spouse "to carry on or defend the action . . . as, in the court's discretion, justice requires, having regard to the circumstances of the case and of the respective parties" (see Johnson v Chapin, 12 NY3d 461, 467 [2009]; DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881 [1987]; A.K. v T.K., 150 AD3d 1091, 1094 [2d Dept 2017]; Dodson v Dodson, 46 AD3d 305, 305 [1st Dept 2007]). Domestic Relations Law § 237 (a), as amended in 2010, creates "a rebuttable presumption that counsel fees shall be awarded to the less monied spouse." Interim counsel fees are awarded to level the playing field and "'prevent the more affluent spouse from wearing down or financially punishing the opposition by recalcitrance, or by prolonging the litigation'" (Gober v Gober, 282 AD2d 392, 393 [1st Dept 2001], quoting O'Shea v O'Shea, 93 NY2d 187, 193 [1999]; see also Prichep v Prichep, 52 AD3d 61, 65 [2d Dept 2008]). "An award of interim counsel fees is designed to create parity in divorce litigation by enabling the nonmonied spouse to litigate the action on equal footing with the monied spouse" (Palmeri v Palmeri, 87 AD3d 572, 572 [2d Dept 2011]). Thus, interim fees are generally warranted "where there is a significant disparity in the financial circumstances of the parties" (Prichep, 52 AD3d at 65; see also DelDuca v DelDuca, 304 AD2d 610, 611 [2d Dept 2003]; Celauro v Celauro, 257 AD2d 588, 589 [2d Dept 1999]). An award of counsel fees lies in the sound discretion of the court, after it has taken into account the equities and circumstances of the case, including the respective financial circumstances of each party (see Domestic Relations Law § 237 [a]; Carr-Harris, 98 AD3d at 552; Cusumano v Cusumano, 96 AD3d 988, 990 [2d Dept 2012]; Gagstetter v Gagstetter, 283 AD2d 393, 395 [2d Dept 2001]).
"'An appropriate award of attorney's fees should take into account the parties' ability to pay, the nature and extent of the services rendered, the complexity of the issues involved, and the reasonableness of the fees under all of the circumstances'" (DiBlasi v DiBlasi, 48 AD3d 403, 405 [2d Dept 2008], lv denied 10 NY3d 716 [2008], quoting Grumet v Grumet, 37 AD3d 534, 536 [2d Dept 2007], lv denied 9 NY3d 818 [2008]). "[U]nlike a final award of counsel fees, a detailed inquiry or evidentiary hearing is not required prior to the award of interim counsel fees" (Isaacs v Isaacs, 71 AD3d 951, 951 [2d Dept 2010]; see also Prichep, 52 AD3d at 65; Singer v Singer, 16 AD3d 666, 667 [2d Dept 2005]; Flach v Flach, 114 AD2d 929, 929 [2d Dept 1985]).
However, 22 NYCRR § 202.16 (k) provides in relevant part:
No motion for counsel fees and expenses shall be heard unless the moving papers also include the affidavit of the movant's attorney stating the moneys, if any, received on account of such attorney's fee from the movant or any other person on behalf of the movant, the hourly amount charged by the attorney, the amounts paid, or to be paid, to counsel and any experts, and any additional costs, disbursements or expenses, and the money such attorney has been promised by, or the agreement made with, the movant or other persons on behalf of the movant, concerning or in payment of the fee.Although Mr. Cohn's affirmation indicates his professional qualifications, the hourly charges, and the amounts to be paid, it fails to comply with the requirements set forth in 22 NYCRR § 202.16 (k). The annexed affirmations do not indicate what money, if any, was received from Wife or other persons on her behalf for the payment of legal fees. Additionally, there is nothing in the affirmation or attached to the moving papers that allows the court to determine if counsel has complied with the requirement of 22 NYCRR § 1400.2 which requires regular itemized bills be sent to the client no less than every 60 days. Therefore, Wife's application for interim counsel fees is denied as defective without prejudice to renewal on proper papers. Husband may move for an award of counsel fees pursuant to the prenuptial agreement.
CONCLUSION
For the foregoing reasons, it is hereby ORDERED that Wife's application for responses to her discovery demands and related relief is denied as moot; and it is further
ORDERED that Wife's motion, insofar as it seeks an order setting aside the prenuptial agreement dated February 20, 2004, is denied; the prenuptial agreement is valid and enforceable upon the parties; and it is further
ORDERED that Wife's motion for an award of temporary spousal maintenance is denied for the reasons set forth in this decision; and it is further
ORDERED that Wife's motion, insofar as it seeks an order directing Husband to return all funds to the parties' joint bank accounts and to reopen the lines of credit, is denied for the reasons set forth herein; and it is further
ORDERED that Wife's motion, insofar as it seeks responses to her notice for discovery and inspection and responses to interrogatories, is denied as moot; and it is further
ORDERED that Wife's application to direct Husband to produce a statement of net worth is denied as moot; and it is further
ORDERED that the branch of Wife's motion for a court-appointed appraiser and costs to cover same is denied as moot; and it is further
ORDERED that Wife's motion, insofar as it seeks a preliminary injunction preventing Husband and Artmar Management from commencing proceedings to evict Wife from the martial residence, is granted pending a final determination in this action; and it is further
ORDERED that Wife's motion for an award of temporary child support is granted. Husband shall pay $6,500 per month in temporary child support retroactive to the date of first application. Arrears, if any, are to be paid at the rate of $1,000 per month until fully paid. The first payment of child support and arrears shall be made on March 16, 2018, and shall be paid on the first day of each month thereafter until further order of this court or written agreement of the parties. Husband shall also pay 100% of the statutory add-on expenses pending further order of the court or written agreement of the parties; and it is further
ORDERED that Wife's motion, insofar as it seeks an order for sanctions against Husband, is [*20]denied; and it is further
ORDERED that Wife's applications for interim counsel fees are denied as defective with leave to renew on proper papers; and it is further
ORDERED that Husband's motion for an order directing Wife to refrain from abusive conduct is denied; and it is further
ORDERED that Husband's cross motion, insofar as it seeks an order limiting discovery to the issues related to the validity of the prenuptial agreement, is denied as moot; and it is further
ORDERED that Husband's motion, insofar as it seeks an order reserving his right to move for counsel fees pursuant to the prenuptial agreement, is granted.
Any issue raised and not specifically addressed by this decision and order is denied.
The parties shall appear for a status conference and oral argument on Husband's motion to compel Wife to sign the parties' 2016 joint tax returns, exclusive use and occupancy of the marital residence, and other relief (motion sequence no. 5).[FN6]
This constitutes the decision and order of the court.
E N T E R :
HON. DELORES J. THOMAS, J.S.C. Footnotes
Footnote 1:In her order to show cause, Wife seeks an order "directing plaintiff to produce a statement of net worth pursuant to DRL § 236 and NYCRR § 202.17"; however, this court acknowledges that this is a typo, and that Defend00.0ant is moving pursuant to 22 NYCRR § 202.16.
Footnote 2:Wife's application for an order directing Husband to pay all outstanding debt is denied as moot as Husband was previously ordered, on consent, to make all outstanding arrears current by order dated November 30, 2017.
Footnote 3:The names of the children have been redacted in accordance with 22 NYCRR § 202.16 (m) (1) (iii).
Footnote 4:The note of issue indicates that it was filed by Husband's attorney; however, it is clear that this is in error. Mr. Roesch, attorney for Wife, filed the note of issue and certificate of readiness.
Footnote 5:To support her contention that Husband withdrew $4,000 on March 10, 2016, Wife attaches account statements which cover the period of January 2016 to February 2016 (Wife's Exhibit O).
Footnote 6:The date of oral argument has been redacted for privacy reasons.
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