D.R., Plaintiff, v. B.K., Defendant. (2022)

The following e-filed documents, listed by NYSCEF document number (Motion 002) 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103 were read on this motion to/for CHILD SUPPORT.

Upon the foregoing documents, it is

In this motion for pendente lite relief, Defendant-Wife seeks an award of pendente lite child support in the amount of $10,000 per month, spousal maintenance in the amount of $5,000 per month, and counsel fees in the amount of $200,000. Defendant also requests the court direct Plaintiff to pay 100% of the Children's school tuition and supervision costs incurred during his access time, 75% of their children's add-on expenses, and to pay down the line of credit secured by Defendant's #XXXX investment account. In addition, Defendant asks the court to direct Plaintiff to produce all records relating to litigation in which he is a party and those records he has not produced in response to the November 2, 2021 discovery request. Defendant moves for Plaintiff to deposit any Judgement Proceeds from Plaintiff's litigation with his father into a joint escrow account and refrain from any other actions or activity with the proceeds.

In his opposition, Plaintiff claims that his annual earnings are $370,000 and that he is in debt. He has submitted no proof of income, with the explanation that he has been unable to file tax returns ever since 2017, when he commenced a lawsuit against his father and former accountant. Plaintiff was defrauded out of millions of dollars that caused the halting of his tax returns until the matter resolved. Plaintiff has yet to receive any money owed to him, and indeed it is possible he might never receive any of the proceeds as his father is now undergoing bankruptcy proceedings.

TEMPORARY MAINTENANCE

Pursuant to DRL § 236(B)(5-a), courts must arrive at a presumptive award of temporary maintenance by first determining the parties’ incomes, based on the parties’ most recently filed tax returns and in accordance with the definition of income set forth in the Child Support Standards Act (see DRL § 240[1-b][b][5]). After this determination is made, the court must then perform a series of calculations using those figures. The final number that is derived through this process is the presumptive award. Deviation from the presumptive award, whereby a court orders the higher-income spouse to pay the lower-income spouse a greater or lesser amount, must be done according to a series of factors.

It is the Plaintiff's obligation to provide proof of income, which he has failed to do. Even if unable to present tax returns, there must be some evidence addressing the amount earned from his real estate properties. Plaintiff asserted he would provide an accountant's statement that was never submitted. In this circumstance, the court has no choice but to attribute Plaintiff's income based on the documents produced by Defendant. Plaintiff spent $1,400,000 last year, supporting Defendant's claim that he makes significantly more than the $370,000 he alleged. Thus, the figure the court will use for Plaintiff's income is $1,400,000, based on a review of his historical spending.

In accordance with DRL § 236B(5-a)(c)(1), the presumptive award of temporary maintenance is calculated as follows: 25% of the payor's income up to the cap of $203,000 (which is $60,900) minus 20% of the payee's income which is 0.¹ The result is therefore $40,600 or $3,383 per month. However, the court may raise the cap at its discretion. The Court next considers whether upon review of the statutory factors awarding the guideline temporary maintenance would be unjust and inappropriate (see DRL § 236 (B) (5-a)(h)(1)). Defendant has not been employed full time since 2017 where she was employed by her father's company—the [Redacted] Foundation—and needs spousal support so that she can enter the workforce and begin supporting herself. Moreover, the Court considers the standard of living during the marriage and the difference between the parties’ present and future earning capacities.

Based upon the above stated factors, the Court will consider income above the statutory cap up to a total income of $500,000. Courts do not have to follow the statutory formula when they deviate from the statutory cap (see Warshaw v. Warshaw, 173 AD3d 582, 583-584 1st Dept 2019 [“calculation of maintenance award over the income cap is not based on an ‘automatic formula but is based upon a set factors’ enunciated in DRL 236 (b) (5-a) (h) (1)”]). However, Defendant moves for an award of only $5,000 per month in maintenance.

Even utilizing the Plaintiff's figure of $370,000 for purposes of the calculation, it results in $68,069.06 annually ($5,672.42 per month), which remains higher than Defendant's request for $5,000. Thus, the court determines it reasonable for Plaintiff to pay maintenance to Defendant in the amount of $5,000 per month.

CHILD SUPPORT

In awarding temporary child support, the Court can but is not required to consider the CSSA guidelines (see DRL 240 [1-b][c]; Rubin v. Salla, 78 AD3d 504, 505 [1st Dept 2010]). Pursuant to the CSSA, to calculate the presumptive award of child support, the Court must first determine the combined parental income. Defendant has not earned any income since 2018. Here, the Plaintiff's annual income for child support purposes, adjusted for maintenance, will be $1,246,217.48 and the Defendant's is $60,000. The presumptive amount of basic child support obtained by calculating the statutory percentage for 2 children (25%) of the combined parental income cap of $163,000 results in child support of $40,750 per year. The Plaintiff's pro rata share of that sum is $38,878.18 or $3,239.85 per month.

In determining a temporary child support award, the Court also considers the payor spouse's substantial income and the Children's accustomed standard of living. Upon consideration of these factors, the Court determines it inappropriate to award the guideline support only up to the cap. However, in consideration of the circumstances that Defendant is individually wealthy and Plaintiff's true income is unknown, the Court declines to award child support based on all of the Defendant's income but instead will utilize an adjusted cap.

Utilizing a $500,000 adjusted cap results in temporary support of $119,258 annually, or $9,938.19 per month, paid by Plaintiff. The court finds this reasonable given their expenses. If the court accepted the lower amount of $370,000, which it does not, without the cap Plaintiff would still owe a total payment of $11,344 per month in combined maintenance and child support. This amount is close to the net payment of $14,938.19 per month, as would be the case if the court utilized $500,000 when calculating child support. Thus, the court finds that an award of temporary child support in the sum of $9,938.19 per month just and appropriate.

The basic child support obligation does not include the children's add-ons. Given the history of Plaintiff paying 100% of the Children's school tuition, the court finds it reasonable to uphold that status quo. Additionally, since Plaintiff's pro rata share of income is 95%, it is reasonable to grant Plaintiff's request that Defendant pay 100% of supervision costs incurred during his access time with the children and 75% of the children's add-on expenses including uninsured medical, dental, and health-related expenses, therapy, tutoring, extracurricular activities, school-related costs, excepting tuition, and summer camp.

COUNSEL FEES

In matrimonial actions, the Court has discretion to direct one party to pay counsel fees for the opposing party (Domestic Relations Law [“DRL”] § 237). There is a rebuttable presumption that fees are awarded to the less monied spouse.

In some sense, it could be viewed as unjust for Plaintiff to be responsible for the Defendant's counsel fees when he is already responsible for significant legal fees in a separate case in which he was defrauded by his father. However, it is notable that the Defendant took out a $467,000 loan to assist Plaintiff in paying off said legal fees.

In considering an award of counsel fees, the Court considers the significant assets of both parties, including Defendant's inheritance, as well as her property assets. The Court also considers the great disparity in the parties’ income. The Court further notes that many of the fees were incurred due to Plaintiff's failure to comply with his discovery obligations and his refusal to resolve various issues without motion practice.

The Court takes the various factors above into consideration and finds it reasonable to award Defendant pendente lite counsel fees in the amount of $86,000.00, without prejudice to further application as appropriate. This sum is based on the $86,033.74 Defendant currently owes in legal fees, as her attorney's affirmation states.

DISCOVERY, LINE OF CREDIT, AND INJUNCTIVE RELIEF

Upon consent, Plaintiff agrees to continue making monthly interest payments on Defendant's line of credit each month in the amount of approximately $1,507.50. He also agrees to be responsible for paying the balance of this credit line.

Regarding discovery, there is no question that Plaintiff must comply with his discovery obligations in this action. The Preliminary Conference Order issued on October 15, 2021 provided various deadlines for discovery responses. Those deadlines have long since passed. Plaintiff must produce all records relating to litigation in which he is a party, including the Bankruptcy case in the Southern District, and those records he has not produced in response to the November 2, 2021 discovery request on or before August 31, 2022.

Defendant also moves for Plaintiff to deposit any Judgement Proceeds from Plaintiff's litigation with his father into a joint escrow account and refrain from any other actions or activity with the proceeds. The judgment proceeds are likely marital and even if this is disputed, they should be preserved for purposes of this litigation and the claims and rights of the parties in this case. Further, Defendant raises significant concerns about Plaintiff's tremendous waste of marital assets.

While both parties recognize the bankruptcy judgement may never come to fruition, if it is resolved, the Court finds it appropriate for the proceeds to be deposited in an escrow account without interference from either party. Accordingly, Plaintiff shall immediately notify Defendant if the proceeds are received and such proceeds if received shall be placed in an escrow account held by attorneys for the parties as co-escrow agents. Further, Plaintiff is enjoined from disposing of such proceeds without a further Order of this Court or agreement of the parties.

Accordingly, it is

ORDERED that the motion is granted in part; and it is further

ORDERED that commencing on August 1, 2022 and on the first of each month thereafter Plaintiff shall pay interim maintenance in the amount of $5,000 to Defendant monthly; and it is further

ORDERED that commencing on August 1, 2022 and on the first of each month thereafter Plaintiff shall pay interim child support in the amount of $9,938.19 to Defendant monthly; and it is further

ORDERED that Plaintiff shall pay 75% of the Children's add-on expenses and Defendant 25% of add-on expenses; and it is further

ORDERED that Plaintiff shall pay 100% of the Children's tuition and supervision costs during his access time; and it is further

ORDERED that if Plaintiff receives the money owed to him from his father (judgment proceeds), he will immediately notify Defendant and deposit the judgement proceeds into an escrow account with attorneys for the parties acting as co-escrow agents; and it is further

ORDERED that Plaintiff is enjoined and restrained from transferring, selling, hypothecating, pledging, encumbering, refinancing, concealing, assigning, removing, or in any way disposing of the Settlement Payments absent further Order of the Court or written agreement of the parties, other than to deposit the Settlement Payments into the joint escrow account provided for in this Order; and it is further

ORDERED that Plaintiff shall pay $86,000 in pendente lite counsel fees directly to Defendant's counsel, with a first payment of $43,000 to be paid on or before August 29, 2022 and a second payment of $43,000 to be paid on or before October 3, 2022; and it is further

ORDERED that Plaintiff shall pay the monthly interest payments on the line of credit on Defendant's investment account with Bank of America (with principal amount of $467,000); and it is further

ORDERED that on or before August 31, 2022 Plaintiff shall produce all records relating to litigation in which he is a party and those records he has not produced in response to the November 2, 2021 discovery request.

This constitutes the Decision and Order of the Court.

FOOTNOTES

1.   The Court declines to impute income to Defendant as she has not been employed full-time since 2017 and has never rented out her Amagansett home.

Ariel D. Chesler, J.