Saturday, March 9, 2024

DIVORCE - IF THE HOUSE CAN'T BE SAVED, SELL IT


JH v. CH, 2024 NY Slip Op 50220 - NY: Supreme Court, Putnam 2024:

"It is ORDERED that the applications are disposed of as follows.

The applications before the Court compel a re-examination of Kahn v. Kahn, 43 NY2d 203 (1978). There, the Court of Appeals held that real property owned by spouses as tenants by the entirety may not be ordered sold prior to entry of a Judgment of Divorce, as the tenancy cannot be severed in the absence of a judgment. Although tenancies by the entirety remain a part of the real property law of New York (see, EPTL §6-2.2), the nature and legal incidents of the union of person in husband and wife in marriage—upon which tenancy by the entirety is founded—have over the course of time been fundamentally altered.[1] Moreover, the post-Khan adoption and evolution of the Equitable Distribution Law (DRL §236), "no fault" divorce (DRL §170[7]) and the Automatic Orders (DRL §236B[2][b]) have resulted in a significant adjustment of the legal criteria bearing upon the dissolution of marriage and its attendant economic ramifications. In consequence, the foundation on which Kahn v. Kahn rests has been significantly weakened if not destroyed.

FACTUAL BACKGROUND

The parties were married on July 12, 2003. They have two daughters, ages 14 and 8. The older child requires special attention due to medical conditions and learning disabilities. She will never be self-sufficient. For years, the parties enjoyed a relatively lavish lifestyle, maintaining an apartment in New York City in addition to a residence in Garrison, and sending their children to high-priced Manhattan schools. They did so based primarily on the income Defendant received from a manufacturing enterprise, and in part with financial assistance from Plaintiff's parents. Plaintiff opted to function as homemaker in part to provide care for the older child, although she is now employed in a sales position which affords her flexible hours and commission-based pay. Her 1099 Form for 2022 reflects compensation of $5,700. With the onset of the Covid pandemic the parties relinquished their Manhattan apartment, and they resided together with their children in the marital home in Garrison until the tension became too great. Plaintiff now lives with her parents and the children, and the parties share an access schedule. The marital home is occupied by Defendant. A foreclosure proceeding was commenced in 2019 and discontinued upon Defendant's payment of $40,000 in July 2019. However, Defendant having failed to make the August 2019 payment the mortgage is once again in default and foreclosure proceedings are once again pending.

Defendant thereafter sought a loan modification with Wells Fargo Bank. The proposed Modification Agreement lists both parties as "Borrowers."[2] Plaintiff would be obligated on the proposed forty (40) year Mortgage but not on the Promissory Note. The new principal balance would be $881,988.50, with monthly payments of principal, taxes, and insurance totaling $5,441.36.[3] The Bank's appraisal of the marital residence valued the property at $1,400,000. There is an outstanding mortgage with a current principal balance of approximately $900,000. Without mortgage payments for several years, the accrual of additional secured debt for past interest, property tax and insurance payments is substantial. In addition, there is a home equity line of credit in the amount of approximately $300,000 (as of June 2019), and substantial judgments exceeding $400,000 against Defendant including:

American Express (as of 4/9/21) $84,480.61
Cavalry SPV I, LLC, as assignee of Citibank (as of 9/28/20) $217,774.30
American Express (as of 1/11/23) $103,899.60

Although it is unknown whether any portion of the outstanding judgments has been satisfied, it is evident that the parties have little or no equity in the marital home. Defendant's Statement of Net Worth also lists credit card debts to Barclay's Bank in the amount of $108,046, to Bank of America in the amount of $99,049, to UBS Bank in the amount of $193,072, and to Wells Fargo in the amount of $49,747, but those debts, totaling $449,914, have not been reduced to judgment.

Defendant has been the primary source of family income during the marriage. However, there are open issues as to Defendant's income at the time of submission of this motion. He claimed a net income of $3,500 per week (i.e., $182,000 per annum), which suggests a gross annual income of approximately $250,000. There are a variety of issues arising from Defendant's business dealings and non-compliance with discovery issues. A forensic accounting has been ordered at an additional expense to the parties (see, NYSECF Docs. No. 271, 282). Defendant's Statement of Net Worth lists his monthly expenses as $25,263 (i.e., $303,156 per annum), an amount that exceeds his claimed income by approximately 100%. His monthly pendente lite maintenance payments have been sporadic in frequency and amount. There are child support arrears as well. He has been unemployed but claims "I am about to be hired in new employment and I expect I will be compensated at over 200K per year. I expect the job in the next 30 days. I just had my last interview" (NYSECF Doc # 289, ¶8). Although no details about his prospective employer, position, location, salary, or benefits were provided, Defendant now claims that he is employed at an annual salary of $150,000.

THE PENDING APPLICATIONS

Pending before the Court are Defendant's application for an Order directing Plaintiff to execute the proposed 40-year Mortgage and Plaintiff's application for inter alia an order directing the immediate sale of the marital residence. At the call of the calendar, the Court was prepared to set a briefing schedule, but as the deadline for acceptance of the mortgage modification was expiring, Defendant felt compelled to respond orally to the Plaintiff's motion. After Defendant and counsel were afforded the opportunity to review Plaintiff's papers the Court heard oral argument on both applications and reserved decision. There are two issues before the Court. First: May the Court, or should the Court, impose upon a divorcing couple a 40-year mortgage to preserve a marital asset that lacks any clear value? Second: May the Court in the face of Kahn v. Kahn order a sale of the marital residence held as tenants by the entirety in the absence of a Judgment of Divorce?

LEGAL ANALYSIS

I. The Circumstances Plainly Do Not Warrant A New 40-Year Mortgage

The Court is asked to compel Plaintiff to execute a mortgage in the hopes of saving an asset without value for a family with no known or apparent ability to afford additional debt. Defendant relies on the fact that Plaintiff was willing to do so in a prior foreclosure proceeding and claims that the circumstances are no different now. Defendant asserts such an order is necessary to prevent the dissipation "of the main asset of the marriage." Plaintiff's position is clear: "I do not want to have any financial ties with Defendant and his constant financial games and maneuvers" (NYSECF Doc. # 307, ¶6). Plaintiff further asserts she will be harmed by signing the Mortgage even without liability on the Note. The likelihood of a future default by Defendant will affect Plaintiff's credit and ability to secure housing for herself and her children, especially when Defendant is before the Court unemployed or recently employed, without income, and not paying child support. From counsel's statements, Defendant apparently anticipates that a new mortgage will take years to foreclose while he resides in the residence, leaving Plaintiff unable to move on with her life. It is difficult to find a cogent rational reason to support Defendant's request for a new 40-year mortgage on the marital home. The application is therefore denied.

II. The Pendente Lite Sale of the Marital Home: Revisiting Kahn v. Kahn

Any realistic assessment of the parties' situation would lead to the conclusion that the marital home must be sold to salvage any remaining equity or at least to reduce the financial loss. The equitable considerations supporting that conclusion were masterfully articulated by Justice Richard A. Dollinger in D.R.D. v. J.D.D., 74 Misc 3d 237 (Sup. Ct. Monroe Co. 2021) and in Harlan v. Harlan, 46 Misc 3d 1003 (Sup. Ct. Monroe Co. 2014). Per Kahn v. Kahn, however, the tenancy by the entirety arising from the parties' marriage impedes the Court from taking appropriate action pendente lite and prior to the entry of a Judgment of Divorce.

A. Kahn v. Kahn

In Kahn, the Court of Appeals addressed the question "whether, in a matrimonial action, a court may order the sale of real property held by the parties as tenants by the entirety, even though the marital relationship has not been legally altered." Id., 43 NY2d at 206. Concerning tenancies by the entirety, the Court observed:

In contemplation of the law, husband and wife were but one person. (Matter of Klatzl, 216 NY 83, 85). Thus, a conveyance to them by name was a conveyance to only one person. (Stelz v. Shreck, 128 NY 263, 266). Because of the marital relationship they were said to be seized of the estate in its entirety: each being seized of the whole rather than of any undivided portion. (Bertles v. Nunan, 92 NY 152, 156; Stelz v. Shreck, 128 NY, at p 266, supra; Hiles v. Fisher, 146 NY 306, 312). At death, the survivor took the estate not because of a right of survivorship, but because the survivor remained seized of the whole. (Bertles v. Nunan, 92 NY, at p 156, supra; Jackson v. McConnell, 19 Wend 175, 178; Stelz v. Shreck, 128 NY, at p 266, supra).

Kahn, 43 NY2d at 206-207. The Kahn Court continued, "[t]he common law soon recognized that in addition to death a legal dissolution of the unity of husband and wife would necessarily affect the continuing validity of a tenancy by the entirety." Id., at 207. The Court quoted this highly salient principle from Judge Peckham's opinion in Stelz v. Shreck, 128 NY 263 (1891):

When the idea upon which the creation of an estate by the entirety depends is considered, it seems to me much the more logical as well as plausible view to say that as the estate is founded upon the unity of husband and wife, and it never would exist in the first place but for such unity; anything that terminates the legal fiction of the unity of two separate persons ought to have an effect upon the estate whose creation depended upon such unity.

Kahn, 43 NY2d at 207 (quoting Stelz v. Shreck, 128 NY at 267) (emphasis added).

In Kahn, no legal alteration of the parties' marital status ever occurred: the wife's action for a separation was withdrawn and the husband's action for a divorce was denied. The Appellate Division nevertheless ordered a sale of the marital residence. Reversing, the Court of Appeals held that "unless a court alters the legal relationship of husband and wife by granting a divorce, an annulment, a separation or by declaring a void marriage a nullity, it has no authority to order the sale of a marital home owned by the parties as tenants by the entirety." Kahn, supra, 43 NY2d at 210. Interestingly, the Court distinguished Caplan v. Caplan, 38 AD2d 572, and Pearson v. Pearson, 34 AD2d 797, on the grounds that in each of those cases a separation had been granted, all the while recognizing that "a separation decree does not dissolve the marriage." See, Kahn, supra.

B. Tenancy By The Entirety and the Union of Person In Husband and Wife in Marriage

The grounding of the concept of tenancy by the entirety in the union of person in husband and wife in marriage was eloquently articulated by the Court of Appeals in Bertles v. Nunan, 92 NY 152 (1883):

By the common law, when land was conveyed to husband and wife they did not take as tenants in common, or as joint tenants, but each became seized of the entirety, per tout, et non per my, and upon the death of either the whole survived to the other. The survivor took the estate, not by right of survivorship simply, but by virtue of the grant which vested the entire estate in each grantee. During the joint lives the husband could, for his own benefit, use, possess and control the land, and take all the profits thereof, and he could mortgage and convey an estate to continue during their joint lives, but he could not make any disposition of the land that would prejudice the right of his wife if she survived him.
This rule is based upon the unity of husband and wife, and is very ancient. It must have had its origin in the archaic period of our race, and it colored all the relations of husband and wife to each other, to the law and to society. In 1 Blackst. Com. 442, the learned author says: "Upon this principle, of an union of person in husband and wife, depend all the legal rights, duties and disabilities that either of them acquired by the marriage. I speak not, at present, of the rights of property, but of such as are merely personal. For this reason a man cannot grant any thing to his wife or enter into covenant with her; for the grant would be to suppose her separate existence, and to covenant with her would be only to covenant with himself." They were not allowed to give evidence against each other, mainly because of the union of person, for if they were admitted to be witnesses for each other they could contradict one maxim of the law, nemo in propria causa testis esse debet; and if against each other they would contradict another maxim, nemo tenetur se ipsum accusare.

Bertles v. Nunan, supra, 92 NY at 156-157.[4]

As the Court of Appeals subsequently recognized in Hiles v. Fisher, 144 NY 306 (1895), the husband's common law right to full control of land held via tenancy by the entirety with his spouse is not incident to the concept of a tenancy by the entirety—which is governed by a principle of equality of estate as between husband and wife—but derives instead from "the general principle of the common law which vested in the husband jure uxoris the rents and profits of his wife's lands during their joint lives. (2 Kent Com. 130; Stewart on Husb. & Wife, §308)." See, id., 144 NY at 313-314. In other words, the common law doctrines of tenancy by the entirety and jure uxoris are conceptually distinct, such that with the legal demise of a husband's right to control his wife's property the Court of Appeals recognized, in Goldman v. Goldman, 95 NY2d 120 (2000), that "[a]s tenants by the entirety, both spouses enjoy an equal right to possession of and profits yielded by property." Id., at 122. However, the ongoing evolution of married women's rights to property and otherwise, grounded in a recognition of the wife's separate legal identity, has over the course of time fundamentally altered the nature and legal incidents of the union of person in husband and wife in marriage upon which the tenancy by the entirety is founded.

In the 19th century, by a series of statutes including the Married Woman's Property Acts of 1848 (ch. 200), 1849 (ch. 375), 1860 (ch. 90), and 1862 (chs. 72 and 172), New York altered "the union of person in husband and wife" by:

• In 1848, "secur[ing] to married women the enjoyment of their real and personal property which belonged to them at the time of their marriage, or which they might thereafter acquire by gift, grant or bequest from third persons, and [ ] abrogate[ing] the common-law right of the husband in and to the real and personal property of the wife." See, Hiles v. Fisher, supra, 144 NY at 314. See also, Darby v. Callaghan, 16 NY 71, 75-76 (1857).
• In 1849, giving married women express authority "to grant or dispose of her property." See, Bertles v. Nunan, supra, 92 NY at 159. See also, Darby v. Callaghan, supra.
• In 1860, "empower[ing] a married woman to perform labor and to carry on business on her separate account; to enter into contracts in reference to her separate real estate; to sue and be sued in all matters having relation to her property, and to maintain actions for injuries to her person." See, Bertles v. Nunan, supra.
• In 1867, providing that "husband and wife could, in civil actions, be compelled to give evidence for or against each other." See, id., 92 NY at 160.
• In 1876, providing that "they could, in criminal proceedings, be witnesses for and against each other." See, id.

In each of those measures the State recognized the separate personhood of husband and wife as opposed to "the union of person in husband and wife" as described in Bertles v. Nunan, supra. This process continued apace until, in 1980, the U.S. Supreme Court could state that "[n]owhere in the common-law world—indeed in any modern society" is a woman denied "a separate legal identity." See, Trammel v. United States, 445 U.S 40, 52 (1980) (abrogating spouses' common law testimonial privilege). Since 1977, when Khan v. Khan was decided, courts have continued to draw out the implications of spouses' separate legal personhood. In 1984, for example, the Court of Appeals—observing that New York had long ago rejected the common law doctrine that a married woman's legal existence is "incorporated and consolidated into that of the husband" (see, 1 Blackstone's Commentaries [1966 ed.], p. 430)—abrogated the husband's "marital exemption" from liability for rape. See, People v. Liberta, 64 NY2d 152, 164 (1984).

This dilution of the legal fiction of the union of person in husband and wife in marriage set the stage for a wholesale revision post-Khan of New York matrimonial law, including the Equitable Distribution Law (1980), "No Fault" divorce (2010), and the Automatic Orders (2009). To those we now turn.

C. The Impact of the Equitable Distribution Law, "No Fault" Divorce, and the Automatic Orders

1. The Equitable Distribution Law

"Chapter 281 of the Laws of 1980, enacted on June 19, 1980, achieved a major and dramatic overhaul of the New York statutes which govern the economic life of the family and measure the rights and obligations of family members upon dissolution of the family unit . . . With the enactment of the Equitable Distribution Law, the marriage relationship [is] viewed, more modernly, as an economic partnership. `Upon its dissolution, property accumulated during the marriage should be distributed in a manner which reflects the individual needs and circumstances of the parties regardless of the name in which such property is held.' (Governor's Memorandum of Approval, McKinney's 1980 Session Laws, p. 1863)." McKinney's Cons. Laws of NY, Vol. 14, DRL §236, Practice Commentaries (Scheinkman), p. 32 (2010).

Thus, the Equitable Distribution Law worked a sea-change in the legal status of the marital relationship. It defines the unity of husband and wife in marriage as consisting not in a "union of person" but rather in an "economic partnership"; and it relegates claims grounded in title to property to secondary status, providing instead for equitable distribution of the economic fruits of that partnership, that is, of what the statute calls "marital property":

The term "marital property" shall mean all property acquired by either or both spouses during the marriage and before . . . the commencement of a matrimonial action, regardless of the form in which title is held . . .

DRL §236B[1][c]. In other words, under the Equitable Distribution Law, that which constitutes the union of husband and wife in marriage—the economic partnership—is deemed to have ended upon commencement of a matrimonial action. Recalling Kahn, "anything that terminates the legal fiction of the unity of two separate persons ought to have an effect upon the estate [i.e., the tenancy by the entirety] whose creation depended upon such unity." Kahn, 43 NY2d at 207 (quoting Stelz v. Shreck, supra, 128 NY at 267). Commencement of a matrimonial action terminates the legal fiction of unity as defined by the Equitable Distribution Law. When the prevailing legal framework has so radically changed, why should ancient concepts of title continue to prevent a pendente lite court-ordered sale of marital premises to advance the goals of the Equitable Distribution Law? Per Khan itself, the continuing viability of a tenancy by the entirety post-commencement is seriously in question.

2. "No Fault" Divorce

The seeds of "no fault" divorce were first planted in New York in 1966. Upon a legislative determination that "dead marriages . . . should be terminated for the mutual protection and well being of the parties and, in most instances, their children," DRL §170 was amended to provide for "no-fault" dissolution of marriage upon the parties' living apart for a prescribed period pursuant to an agreement or a judgment of separation. See, Covington v. Walker, 3 NY3d 287, 290 (2004) (quoting 1966 Report of the Joint Leg. Comm. on Matrimonial and Family Laws); Gleason v. Gleason, 26 NY2d 28, 39 (1970); DRL §170, subd. 5 and 6. Although permitting divorce on a "no fault" basis, the 1966 reform respected the unity of spouses in marriage, as it required either (1) the agreement of both spouses that their marriage was no longer viable, and/or (2) objective evidence, i.e., the parties' living apart for a substantial period of time without reconciling, that the marriage was truly dead. This was the legal framework in place in 1977, when Khan v. Khan was decided.

On this score, too, a post-Khan sea-change in the law has occurred. In 2010, DRL §170 was again amended to provide for "no fault" dissolution of marriage where:

7. The relationship between husband and wife has broken down irretrievably for a period of at least six months, provided that one party has so stated under oath. No judgment of divorce shall be granted under this subdivision unless and until the economic issues of equitable distribution of marital property, the payment or waiver of spousal support, the payment of child support, the payment of counsel and experts' fees and expenses as well as the custody and visitation with the infant children of the marriage have been resolved by the parties, or determined by the court and incorporated into the judgment of divorce.

The plaintiff spouse's averment to an "irretrievable breakdown" is uncontestable and establishes the cause of action for divorce as a matter of law. See, Hoffer-Adou v. Adou, 121 AD3d 618, 619 (1st Dept. 2014); Palermo v. Palermo, 35 Misc 3d 1211(A) (Sup. Ct. Monroe Co. 2011), aff'd 100 AD3d 1453 (4th Dept. 2012).

The unity of spouses in marriage is brittle indeed if one spouse may unilaterally and by unchallengeable fiat declare that the marriage is at an end. In the absence of any defense to a DRL §170(7) cause of action, divorce is essentially automatic. Here, the Complaint contains the requisite assertion of irretrievable breakdown (NYSCEF Doc. # 2), and despite Defendant's denial thereof his counterclaim contains the exact same allegation (NYSCEF Doc. # 7, ¶ 4), which Plaintiff admitted in her Reply (NYSCEF Doc. # 79 ¶1). The parties have stipulated that grounds for divorce are resolved and that Plaintiff shall obtain a "no fault" divorce pursuant to DRL §170(7) (Preliminary Conference Stipulation, NYSCEF Doc. # 19, p.2). The divorce is all but inevitable, and the entry of a judgment of divorce pursuant to DRL §170(7) is a formality. Once again recalling Kahn, "anything that terminates the legal fiction of the unity of two separate persons ought to have an effect upon the estate [i.e., the tenancy by the entirety] whose creation depended upon such unity." Kahn, 43 NY2d at 207. The legal fiction of unity as defined by the Equitable Distribution Law having been shattered by commencement of a matrimonial action, and one party's uncontestable declaration that an irretrievable breakdown has occurred having rendered the marriage "dead" in the eyes of the "No Fault" divorce law and the divorce inevitable, the reasoning of Khan itself dictates that a tenancy by the entirety is at this juncture no longer viable.

On a further note, as the Court of Appeals observed in Kahn, a formal dissolution of the marriage bond is not necessarily required before a tenancy by the entirety may be severed: the Court acknowledged that a decree of separation was sufficient, all the while recognizing that "a separation decree does not dissolve the marriage." See id., 43 NY2d at 207. In other contexts, formal entry of judgment of divorce has been reduced to a ministerial act with no practical consequence on property rights. See, Cornell v. Cornell, 7 NY2d 164, 171 (1959) (permitting entry of divorce nunc pro tunc so long as rights vested in the interim are not affected). See also, Lynch v. Lynch, 13 NY2d 615 (1963); Brown v. Brown, 208 AD2d 485 (2d Dept. 1994); Van Pelt v. Van Pelt, 172 AD2d 659 (2d Dept. 1991). To be sure, the entry of judgment pursuant to DRL §170(7) may not be regarded as a pure formality, as the statute itself provides that judgment may not be granted on the grounds of "irretrievable breakdown" unless and until issues of equitable distribution, maintenance, child custody and visitation, child support, and counsel and expert fees have been resolved by the parties or determined by the court and incorporated in the judgment. See, id. Cf., Matter of Forgione, 237 AD2d 438 (2d Dept. 1997). The conclusion nevertheless obtains that, the parties having commenced divorce proceedings and stipulated to a "No Fault" divorce—thereby eviscerating the unity of person in husband and wife in marriage underlying a tenancy by the entirety, there would appear to be no reason to delay a legal severance of the tenancy where a balancing of the equities would dictate a sale of the marital residence pendente lite to avoid financial hardship for the family and/or to preserve marital assets for equitable distribution.

A few New York courts have already reached that very conclusion. See, D.R.D. v. J.D.D., supra, 74 Misc 3d 237 (Sup. Ct. Monroe Co. 2021); Stratton v. Stratton, 39 Misc 3d 1230(A) (Sup. Ct. Sullivan Co. 2013); St. Angelo v. St. Angelo, 130 Misc 2d 583 (Sup. Ct. Suffolk Co. 1985). For reasons shown above, this Court concurs with Justice Dollinger in D.R.D. v. J.D.D., supra, that "the facts underlying and justifying the decision in Kahn v. Kahn, are significantly undercut by the enactment of equitable distribution and no-fault divorce under [DRL] Section 170(7)." Id., 74 Misc 3d at 246. Justice Dollinger nevertheless struggled to evade the impact of Khan. He wrote:

[C]ontinued adherence to the Court of Appeals' directive in Khan v. Khan exposes an anomaly in New York marital law. Under Kahn v. Kahn, a trial court cannot balance the equities of all the family—children included—in deciding whether to sell the marital residence while a no-fault divorce is pending but the same court can balance the same equities in deciding exclusive use and possession of the property during the pendency[5] and can apply the same equitable factors in the judgment of divorce or any post-judgment decision.[6] It is illogical that the New York trial courts would have broad powers to balance the equities of a family to decide possession of property during a divorce, ownership of the property after the divorce but not have the power, when balancing the same equities, to order a sale during the pendency of the divorce. The equitable factors in play during the divorce—the cost of maintaining and staying in the house, the financial strain on either spouse or the family overall, the impact of mortgage and tax costs, the income tax consequences of keeping the house and who gets the tax benefits, the consequences to and need for stability for the children, the availability of reasonable alternative housing for any displaced spouse—are the same factors that New York matrimonial courts have weighed in the four decades since equitable distribution. Rather than straining to find an agreement in a long-delayed divorce—the case in Taglioni v. Garcia[7] —or await a ruinous foreclosure—the case in A.P. v. F.L.[8] —or pump family resources into a residence that is underwater and draining family finances—the case in this instance—New York matrimonial courts should have the power to balance the equities of a potential sale during the pendency of a no-fault divorce. This Court is not suggesting that the sluice gates for sales of marital property pendente lite be opened willy-nilly but, because the Legislature vested broad equitable powers to matrimonial judges under equitable distribution, those powers should permit a sale of a marital residence during the pendency if a balancing of well-known and often easily defined equities favor that result in the best interests of the family.

D.R.D. v. J.D.D., supra, 74 Misc 3d at 253-254.

This Court concurs with Justice Dollinger's analysis, so far as it goes, but further believes that his conclusion that a matrimonial court is empowered despite Khan to order the pendente lite sale of the marital home is substantially bolstered by the post-Khan enactment of the Automatic Orders in 2009. To that we now turn.

3. The Automatic Orders

In 2009, the Equitable Distribution Law was amended to incorporate "Automatic Orders" regulating the disposition of matrimonial litigants' property pendente lite. See, DRL §236B(2)(b)(1-5). Prior to 2009, the matrimonial court's authority to deal with property during the course of divorce proceedings and prior to judgment was located in DRL §234, which, per Khan v. Khan, does not permit the severance of a tenancy by the entirety pendente lite. See id., 43 NY2d at 208-210. In the pre-Equitable Distribution era this reading of DRL §234 served a salutary purpose. Husbands typically had a significant economic advantage over non-working wives, maintenance and child support guidelines did not exist, and the pre-judgment sale of a marital residence held by the spouses as tenants by the entirety could seriously jeopardize the economic security and well-being of the wife and children.

However, with the advent of the Equitable Distribution Law, as Judge Scheinkman has pointed out, the Automatic Orders have effectively superseded DRL §234: "the key statutory provision is no longer Section 234, the general authority for the matrimonial court to deal with property, but in the Equitable Distribution Law itself." See, McKinney's Cons. Laws of NY, Vol. 14, DRL §236, Practice Commentaries (Scheinkman), C236B:48, p. 328 (2010). The Automatic Orders impose serious restraints on the parties' pendente lite disposition of property so as "to prevent both parties from dissipating assets, [and] incurring unreasonable debts" (see, Memorandum in Support of Legislation). By the same token, the Orders afford the matrimonial court enhanced flexibility to deal with property prior to judgment to address those same issues and to promote the purposes of the Equitable Distribution Law. DRL §236B(2)(b)(1) provides:

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 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.

While framed in the negative as a restriction on the parties, Section 236B(2)(b)(1) plainly contemplates the admissibility of a court order directing the sale pendente lite of real property jointly held by the spouses. The Legislature was presumably aware of Kahn v. Kahn when it enacted the Automatic Orders in 2009 yet did not exempt tenancies by the entirety and indeed placed no restriction on the kinds of estates in real property potentially subject to court-ordered sale pursuant to Section 236B(2)(b)(1). To construe the Automatic Orders as a liberation from the constraints of Kahn v. Kahn would assist the matrimonial court in mitigating the financial exigencies encountered by families enmeshed in divorce litigation, often for a period of years, and promote the salutary goals of the Equitable Distribution Law.

In this case, the mortgage on the marital residence is not being paid and if matters are allowed simply to take their course a foreclosure and the loss of whatever equity the parties may have in their home is inevitable. A sale pendente lite is needed to prevent the ongoing dissipation of assets and accumulation of unreasonable debt, and to preserve marital property—the equity in the home—for equitable distribution. The Court has the authority to determine whether the terms of a proposed sale are appropriate, to direct the disposition of the proceeds of sale in the best interest of the parties, and to take steps to alleviate any hardship resulting from the pre-judgment severance of the tenancy by the entirety and loss of the marital home.

D. Conclusion

The Court invokes its authority under DRL §236B(2)(b)(1) and orders a sale of the marital residence based on the circumstances presented and the needs of the parties. The property shall be listed for sale with a broker who participates in a Multiple Listing Service, and the parties shall accept any offer within ten (10%) percent of the asking price. Both parties shall cooperate with the broker and the house shall be maintained as ready for sale. The net proceeds of sale, after payment of the usual and customary expenses and closing costs, shall be escrowed pending further order of the Court.

In view of Kahn v. Kahn the Court does not adopt this course of action lightly. However, inasmuch as the exigencies as they exist militate strongly in favor of a prompt sale, the Court declines to stay its Decision and Order pending application, if any, to the Appellate Division.

IT IS SO ORDERED.

[1] It must be stressed from the outset that the Court addresses itself only to the "legal fiction" of the union of person in husband and wife in marriage.

[2] Although the Loan Modification required an acceptance on or before a specific date, now passed, the Court was advised that the deadline had been extended. The Court in any event does not view the issue as moot as it is readily capable of repetition.

[3] The moving papers do not explain how the unemployed Defendant, who owes arrears in child support and maintenance, will be able to pay $5,441.36 per month, nor is there any explanation why a bank would enter into a loan agreement with a borrower without apparent means to repay. The Court declines to speculate, but notes that while the motion has been sub judice Defendant became employed at an annual salary of $150,000. He recently submitted a projected net income for 2024 of $114,139, and projected expenses for 2024 of $106,774 exclusive of income or property taxes. It remains improbable that he could carry the proposed mortgage.

[4] Sir William Blackstone cited a 15th century definition of tenancy by the entirety from Sir Thomas Littleton:

[I]f and estate be given to a man and his wife, they are neither properly joint-tenants, nor tenants in common: for husband and wife being considered as one person in law, they cannot take the estate by moieties, but both are seised of the entirety per tout et non per my [by the whole and not by a share, moiety, or divisible part]; the consequence of which is, that neither the husband nor the wife can dispose of any part without the assent of the other, but the whole must remain to the survivor.

2 William Blackstone, Commentaries on the Laws of England 181 (1765), quoted in Richard R. Powell, The Law of Real Property ¶620 (1991).

[5] Pursuant to DRL §§ 234 and 236B(5)(f), the court is specifically authorized to direct the use and occupancy of the marital home pendente lite "without regard to the form of ownership of such property."

[6] Pursuant to DRL §236B(5)(a, c, d), the court is specifically authorized to distribute marital property (including the marital home) equitably between the parties and to provide for the disposition thereof in the final judgment.

[7] 200 AD3d 44 (1st Dept. 2021).

[8] 57 Misc 3d 1223(A) (Sup. Ct. Queens Co. 2017)."

Monday, February 26, 2024

DIVISION SPLIT ON PRIVATE CAUSE OF ACTION UNDER LABOR LAW 198


Grant v. GLOBAL AIRCRAFT DISPATCH, INC., 2024 NY Slip Op 183 - NY: Appellate Div., 2nd Dept. 2024:

"In Vega v CM & Assoc. Constr. Mgt., LLC (175 AD3d 1144), the Appellate Division, First Department, considered the question now before this Court—whether Labor Law § 198(1-a) expressly provides a private right of action for a manual worker paid on a biweekly basis in violation of Labor Law § 191(1)(a) to recover liquidated damages, interest, and attorneys' fees. The First Department determined that such a private right of action exists, concluding that the "wage claim[s]" to which section 198 refers include not only instances of nonpayment or partial payment of wages, but also late payment of wages (see Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1145-1146). The First Department reasoned that "[t]he moment that an employer fails to pay wages in compliance with section 191(1)(a), the employer pays less than what is required," thereby permitting recovery for underpayment under section 198(1-a) (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1145). The First Department, as the plaintiff does here, equated the biweekly pay schedule with a violation and cure, the cure serving merely as an affirmative defense, which could not "eviscerate the employee's statutory remedies" (id.).

We respectfully disagree with the reasoning of Vega and decline to follow it. The plain language of Labor Law § 198(1-a) supports the conclusion that this statute is addressed to nonpayment and underpayment of wages, as distinct from the frequency of payment (see Gutierrez v Bactolac Pharm., Inc., 210 AD3d 746, 747), and we do not agree that payment of full wages on the regular biweekly payday constitutes nonpayment or underpayment.

The first sentence of Labor Law § 198(1-a) refers to an employee being "paid less than the wage to which he or she is entitled" (emphasis added). "Wages" is defined as "the earnings of an employee for labor or services rendered" (id. § 190[1]). The natural import of this phrase, as well as the later, related reference to an employee recovering "the full amount of any underpayment" (id. § 198[1-a] [emphasis added]), is that an employee has received a lesser amount of earnings than agreed upon, not that the employee received the agreed-upon amount one week later, on the regular payday.

Moreover, acknowledging that he was paid his wages in full, the plaintiff here seeks only liquidated damages (as well as interest and attorneys' fees). However, section 198(1-a) provides for liquidated damages as an "additional amount," clearly contemplating recovery of an underpayment as the primary, foundational remedy. In other words, under the statute as written, the recovery of liquidated damages is dependent upon the recovery of an underpayment. Thus, absent an underpayment or nonpayment, liquidated damages are not available. While we agree with the proposition set forth by our dissenting colleague that "[m]oney later is not the same as money now" (Georgiou v Harmon Stores, Inc., 2023 WL 112805, *1, 2022 US Dist LEXIS 234643, *3 [ED NY, No. 2:22-cv-02861-BMC] [internal quotation marks omitted]), or, in other words, that late payment is injurious to workers, we nevertheless are bound to "give effect to the plain meaning of [the] words used" in the statute and may not "legislate under the guise of interpretation" (People v Finnegan, 85 NY2d 53, 58 [internal quotation marks omitted]).

The First Department's reasoning that the "moment an employer fails to pay wages in compliance with section 191(1)(a), the employer pays less than what is required" (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1145), seems to be based upon the premise that a payment was due after the first week of the biweekly pay period and that the employer therefore failed to pay the wages due after that first week. However, where an employer uses a regular biweekly pay schedule, that employer's payment of wages is due, under the employment agreement between the employer and an employee, every two weeks. Such an agreed-upon pay schedule between an employer and a manual worker violates the frequency of payments requirement (see Labor Law § 191[2]), but is not equivalent, in our view, with a nonpayment or underpayment of wages subject to collection with an additional assessment of liquidated damages. The employer's payment of full wages on the regular payday is crucial and distinguishes this case from federal cases under the Fair Labor Standards Act in which courts have concluded that employers were liable for liquidated damages for violating the prompt payment requirement implied in that law by, for example, paying overtime compensation two years after it was earned (see Brooklyn Savings Bank v O'Neil, 324 US 697, 700, 707-708), or failing to pay on the regular payday (see Biggs v Wilson, 1 F3d 1537, 1538 [9th Cir]; cf. Rogers v City of Troy, N.Y., 148 F3d 52, 55-57 [2d Cir]).

As to the string of federal cases relied upon by our dissenting colleague to support the conclusion that Labor Law § 198(1-a) provides an express private right of action for a violation of section 191, those cases merely adopted the holding of Vega as the only appellate-level state law on point (see e.g. Georgiou v Harmon Stores, Inc., 2023 WL 112805, *6, 2022 US Dist LEXIS 234643, *14; Confusione v Autozoners, LLC, 2022 WL 17585879, 2022 US Dist LEXIS 223438 [ED NY, No. 21-CV-00001 (JMA) (AYS)]; Mabe v Wal-Mart Assoc., Inc., 2022 WL 874311, *1, 2022 US Dist LEXIS 53492, *3 [ND NY, No. 1:20-cv-00591] ["As a federal court applying state law, we are generally obliged to follow the state law decisions of state intermediate appellate courts . . . in the absence of any contrary New York authority or other persuasive data establishing that the highest court of the state would decide otherwise" (internal quotation marks omitted)]). Thus, these federal decisions provide little substantive support for the reasoning and determination set forth in Vega. Indeed, while concluding that they were bound to adopt Vega, some of these courts expressed doubt as to the correctness of that decision (see Georgiou v Harmon Stores, Inc., 2023 WL 112805, *4-6, 2022 US Dist LEXIS 234643, *10-14; Espinal v Sephora USA, Inc., 2022 WL 16973328, *5-6, 2022 US Dist LEXIS 208400, *11-14 [SD NY, No. 22 Civ. 03034 (PAE) (GWG)], report and recommendation adopted by 2023 WL 2136392, 2023 US Dist LEXIS 28661 [SD NY, No. 22 Civ. 03034 (PAE) (GWG)]; Harris v Old Navy, LLC, 2022 WL 16941712, *7, 2022 US Dist LEXIS 206664, *18 [SD NY, No. 21 Civ. 9946 (GHW) (GWG)], report and recommendation adopted by 2023 WL 2139688, 2023 US Dist LEXIS 28419 [SD NY, No. 1:21-cv-9946-GHW]).

Notably, after the First Department decided Vega, the Court of Appeals decided Konkur v Utica Academy of Science Charter Sch. (38 NY3d 38), in which it declined to conclude that an employer's violation of the prohibition against requesting or demanding a "return, donation or contribution" of any part of an employees' wages (i.e., kickbacks) (Labor Law § 198-b[2]) constituted a wage claim within the meaning of Labor Law § 198(1-a) (see Konkur v Utica Academy of Science Charter Sch., 38 NY3d at 44). Thus, the mere fact that a violation of the Labor Law had the effect of reducing employees' wages (even permanently) did not bring that Labor Law violation under the auspices of Labor Law § 198(1-a), which covers nonpayment and partial payment of wages.[1]

Interpreting Labor Law § 198(1-a) as covering nonpayment and partial payment of wages, as distinct from the frequency-of-pay violation alleged here, is consonant with its legislative history. Subdivision 1 of section 198—permitting an additional award of costs, above ordinary costs, in an action instituted upon a wage claim by an employee or the Commissioner—was added in 1937, along with provisions allowing employees to assign wage claims to the Commissioner (see L 1937, ch 500). The legislation was aimed at easing the burden on and expense to employees (as well as the Legal Aid Society, which often represented them) of instituting actions to collect on small wage claims (see Letter from George Lion Cohen, Bill Jacket, L 1937, ch 500 at 4-5). It essentially empowered the Commissioner to take assignment of private causes of action (alleging breach of contract) already possessed by the employees, not created by statute.

In 1967, section 1-a was added, allowing an employee or the Commissioner to obtain reasonable attorneys' fees in wage collection actions and requiring employers to pay an additional amount of liquidated damages if the employer's failure to pay the wage was willful (see L 1967, ch 310). As explained at the time of its enactment: "A failure or refusal to pay any employee his wages and to put him to the trouble of hiring an attorney to pursue the payment of wages or to impose upon the public to pursue this type of claim through the courts is action that can only merit public condemnation" (Rep of Comm on Labor Law, Bill Jacket, L 1967, ch 310 at 10). The fact that recovery was limited to "the amount of such underpayment," without liquidated damages, was deemed to have encouraged employers "to violate the statute in the expectation that if they [were] caught, their sole obligation [would] be to pay the back wages without interest" (Mem of Industrial Commissioner, Bill Jacket, L 1967, ch 310 at 4).

The willfulness requirement for liquidated damages was replaced in 2009 so as to place the burden upon employers to show good faith, and the Commissioner was given the authority "to bring a court action or administrative proceeding to collect wage underpayments" (Assembly Mem in Support, Bill Jacket, L 2009, ch 372 at 5). The purpose of those amendments was to benefit "low-wage workers struggling to support their families on the minimum wage" in the "many cases" in which "employers [had] failed for years to pay even the well-publicized minimum wage rate" (id. at 6). Finally, Labor Law § 198(1-a) was further amended in 2010, as part of the Wage Theft Prevention Act, to increase the amount of liquidated damages and to require courts to allow employees "to recover the full amount of any underpayment" (L 2010, ch 564, § 7). The bill was necessary, the New York State Department of Labor explained, because "[c]urrent penalties for wage theft [were] so low that there [was] a financial incentive to underpay workers . . . [,] creat[ing] an environment in which a large number of employees in the state [were] earning less than minimum wage . . . while others [were] paid less than their agreed-upon wage" (Letter from NY St Dept of Labor, Bill Jacket, L 2010, ch 564 at 9).

In sum, this legislative history reveals that Labor Law § 198(1-a) was aimed at remedying employers' failure to pay the amount of wages required by contract or law. There is no reference in the legislative history of Labor Law § 198 to the frequency or timing of wage payments, and nothing to suggest that the statute was meant to address circumstances in which an employer pays full wages pursuant to an agreed-upon, biweekly pay schedule that nevertheless does not conform to the frequency of payments provision of law.

Accordingly, we conclude that Labor Law § 198 does not expressly provide for a private right of action to recover liquidated damages, prejudgment interest, and attorneys' fees where a manual worker is paid all of his or her wages biweekly, rather than weekly, in violation of Labor Law § 191(1)(a).

To the extent that the plaintiff contends that such a private right of action should be implied, we reject that contention. A private right of action cannot be implied from the statutory provisions and their legislative history unless, among other factors, "creation of such a right would be consistent with the legislative scheme" (Konkur v Utica Academy of Science Charter Sch., 38 NY3d at 41 [internal quotation marks omitted]). In Konkur, the Court of Appeals concluded that a private right of action to recover damages for a violation of Labor Law § 198-b, prohibiting kickbacks, could not be implied because the statutory scheme "expressly provide[d] two robust enforcement mechanisms, `indicating that the legislature considered how best to effectuate its intent and provided the avenues for relief it deemed warranted'" (Konkur v Utica Academy of Science Charter Sch., 38 NY3d at 43, quoting Cruz v TD Bank, N.A., 22 NY3d 61, 71). In other words, the Court determined that, "in the face of significant enforcement mechanisms provided for in the statute," a private right of action would not be consistent with the legislative scheme (Konkur v Utica Academy of Science Charter Sch., 38 NY3d at 42). Since multiple official enforcement mechanisms for violations of Labor Law § 191 are similarly provided, we conclude that, under Konkur, a private right of action cannot be implied (see Konkur v Utica Academy of Science Charter Sch., 38 NY3d at 43).

Consequently, the Supreme Court properly granted that branch of the defendant's motion which was to dismiss the first cause of action.

In light of our determination, we need not reach the parties' remaining contentions.

IANNACCI, J.P., CHAMBERS and WARHIT, JJ., concur.

CHRISTOPHER, J., concurs in part and dissents in part, and votes to modify the order, on the law, by deleting the provision thereof granting those branches of the defendant's motion which were pursuant to CPLR 3211(a)(7) to dismiss the first cause of action insofar as asserted by the plaintiff individually and so much of the first cause of action as sought to recover interest on behalf of others similarly situated, and substituting therefor a provision denying those branches of the motion, and, as so modified, to affirm the order insofar as appealed from, with the following memorandum:

I respectfully disagree with the conclusions reached by my colleagues in the majority to affirm the order insofar as appealed from. In my view, that branch of the defendant's motion which was pursuant to CPLR 3211(a)(7) to dismiss the first cause of action insofar as asserted by the plaintiff individually should have been denied, as Labor Law § 198(1-a) expressly provides a private right of action for a violation of Labor Law § 191, which right may also be implied.

Labor Law § 191, entitled "Frequency of payments," provides, in pertinent part, that "[a] manual worker shall be paid weekly and not later than seven calendar days after the end of the week in which the wages are earned" (id. § 191[1][a][i]). Labor Law § 198(1-a) provides that: "In any action instituted in the courts upon a wage claim by an employee or the commissioner in which the employee prevails, the court shall allow such employee to recover the full amount of any underpayment, all reasonable attorney's fees, prejudgment interest as required under the civil practice law and rules, and, unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law, an additional amount as liquidated damages equal to one hundred percent of the total amount of the wages found to be due" (emphasis added).

This appeal presents the question of whether Labor Law § 198(1-a) expressly provides a private right of action for a manual worker paid on a biweekly basis in violation of Labor Law § 191(1)(a) to recover liquidated damages, interest, and attorneys' fees. The Appellate Division, First Department, considered this question in Vega v CM & Assoc. Constr. Mgt., LLC (175 AD3d 1144) and concluded that such a private right of action exists, and that the actionable "wage claim[s]" to which Labor Law § 198 refers include not only instances of nonpayment or partial payment of wages, but also the late payment of wages (see Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1145-1146). The First Department determined that, contrary to the defendant employer's argument that Labor Law § 198 provides remedies only in the event of nonpayment or partial payment of wages, "the plain language of [Labor Law § 198(1-a)] indicates that individuals may bring suit for any `wage claim' against an employer" (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1145). Further, the First Department concluded that "[t]he remedies provided by section 198(1-a) apply to violations of article 6, and section 191(1)(a) is a part of article 6" (id. [citation and internal quotation marks omitted]).

The Vega court reasoned that "[t]he moment that an employer fails to pay wages in compliance with section 191(1)(a), the employer pays less than what is required" (id.). Thus, "the term underpayment [in section 198(1-a)] encompasses the instances where an employer violates the frequency requirements of section 191(1)(a) but pays all wages due before the commencement of an action" (id.). Further, an employer may not attempt "to cure a violation and evade the statute by paying the wages that are due before the commencement of an action" (id.). While an "employer may assert an affirmative defense of payment if there are no wages for the `employee to recover' (Labor Law § 198[1-a])," the fact that an employee was paid all the wages he or she earned "does not eviscerate the employee's statutory remedies" (id.).

The majority declines to follow the Vega decision and determines that Labor Law § 198 does not expressly provide a right of action for a violation of Labor Law § 191(1)(a). Contrary to the Vega decision, the majority reasons that where an employer uses a regular biweekly pay schedule, such an agreed-upon pay schedule between an employer and a manual worker violates the frequency of payments requirement under Labor Law § 191(2), but is not equivalent to a nonpayment or underpayment of wages permitting recovery under Labor Law § 198(1-a).

I respectfully disagree. In my view, the late payment of wages is tantamount to a nonpayment or underpayment of wages, which permits recovery under Labor Law § 198(1-a). "`Money later is not the same as money now'" (Georgiou v Harmon Stores, Inc., 2023 WL 112805, *1, 2022 US Dist LEXIS 234643, *3 [ED NY, No. 2:22-cv-02861-BMC], quoting Stephens v U.S. Airways Group, Inc., 644 F3d 437, 442 [DC Cir, Kavanaugh, J., concurring]). "The delay in receiving wages stripped [the] plaintiff[ ] of the opportunity to use funds to which [he was] legally entitled resulting in an injury sufficiently analogous to harms traditionally recognized at common law" (Georgiou v Harmon Stores, Inc., 2023 WL 112805, *1, 2022 US Dist LEXIS 234643, *3 [internal quotation marks omitted]). "Not having money you're supposed to have means that the time value of money has decreased" (Georgiou v Harmon Stores, Inc., 2023 WL 112805, *2, 2022 US Dist LEXIS 234643, *4).

To the extent that the majority cites to this Court's decision in Gutierrez v Bactolac Pharm., Inc. (210 AD3d 746) to support the conclusion that Labor Law § 198(1-a) is addressed to nonpayment and underpayment of wages, as distinct from the frequency of payment, such reliance is misplaced. In Gutierrez, this Court affirmed so much of an order as directed dismissal of a cause of action alleging violations of Labor Law § 191, wherein the plaintiff was not claiming a violation regarding frequency of pay, but rather was seeking to recover damages for unpaid wages. Gutierrez did not determine that a violation of Labor Law § 191(1)(a) does not result in unpaid wages or underpaid wages for purposes of whether a private right of action exists under Labor Law § 198(1-a).

The majority also relies upon the Court of Appeals' decision in Konkur v Utica Academy of Science Charter Sch. (38 NY3d 38) to support its conclusion that Labor Law § 198(1-a) does not expressly provide for a private right of action for a violation of Labor Law § 191. In Konkur, the Court of Appeals held that a private right of action was unavailable for Labor Law § 198-b claims concerning wage kickbacks. The Court found that the statute did not provide an express private right of action, and "no such freestanding private right of action was intended by the legislature" (Konkur v Utica Academy of Science Charter Sch., 38 NY3d at 39). The majority deduces from Konkur that "the mere fact that a violation of the Labor Law had the effect of reducing employees' wages (even permanently) did not bring that Labor Law violation under the auspices of Labor Law § 198(1-a), which covers nonpayment and partial payment of wages."

I find instructive the reasoning in several federal decisions. "Although the reasoning of Konkur does echo issues raised" in the instant case, Konkur involved a different and unrelated statute (Espinal v Sephora USA, Inc., 2022 WL 16973328, *9, 2022 US Dist LEXIS 208400, *22 [SD NY, No. 22 Civ. 03034 (PAE) (GWG)], report and recommendation adopted by 2023 WL 2136392, 2023 US Dist LEXIS 28661 [SD NY, No. 22 Civ. 03034 (PAE) (GWG)]). "On its face, Konkur does not stand for the propositions that the late payment of wages is not the underpayment of wages, or that the late payment of wages is not a wage claim privately actionable under Section 198(1-a). Thus, Konkur does not directly contradict the Vega Court's determination that the late payment of wages is an underpayment of wages" (Mabe v Wal-Mart Assoc., Inc., 2022 WL 874311, *6, 2022 US Dist LEXIS 53492, *17 [ND NY, No. 1:20-cv-00591]; see Rosario v Icon Burger Acquisition LLC, 2022 WL 17553319, *5, 2022 US Dist LEXIS 222321, *11-12 [ED NY, No. 21-CV-4313 (JS) (ST)]).

Following the Court of Appeals' decision in Konkur, many federal district courts have addressed the instant issue of whether Labor Law § 198(1-a) provides a private right of action for a violation of Labor Law § 191. These courts have considered Vega in light of Konkur, but have adopted Vega's determination that the late payment of wages constitutes an underpayment of wages, and that Labor Law § 198(1-a) provides a private right of action for violations of Labor Law § 191 (see Georgiou v Harmon Stores, Inc., 2023 WL 112805, *2-6, 2022 US Dist LEXIS 234643, *5-14; Confusione v Autozoners, LLC, 2022 WL 17585879, *1, 2022 US Dist LEXIS 223438, *3-4 [ED NY, No. 21-CV-00001 (JMA) (AYS)]; Rosario v Icon Burger Acquisition LLC, 2022 WL 17553319, *4-5, 2022 US Dist LEXIS 222321, *10-15; Day v Tractor Supply Co., 2022 WL 19078129, *4-7, 2022 US Dist LEXIS 217201, *10-19 [WD NY, No. 22-CV-489-JLS-MJR], report and recommendation adopted by 2023 WL 2560907, 2023 US Dist LEXIS 45489 [WD NY, No. 22-CV-489 (JLS) (MJR)]; Rath v Jo-Ann Stores, LLC, 2022 WL 17324842, *3-8, 2022 US Dist LEXIS 214798, *6-19 [WD NY, No. 21-CV-791S]; Espinal v Sephora USA, Inc., 2022 WL 16973328, *5-9, 2022 US Dist LEXIS 208400, *11-23; Harris v Old Navy, LLC, 2022 WL 16941712, *5-10, 2022 US Dist LEXIS 206664, *14-27 [SD NY, No. 21 Civ. 9946 (GHW) (GWG)], report and recommendation adopted by 2023 WL 2139688, 2023 US Dist LEXIS [SD NY, No. 1:21-cv-9946-GHW]; Levy v Endeavor Air Inc., 638 F Supp 3d 324, 331-332 [ED NY]; Mabe v Wal-Mart Assoc., Inc., 2022 WL 874311, *8, 2022 US Dist LEXIS 53492, *20).

The majority also concludes that a private right of action under Labor Law § 198(1-a) may not be implied because "multiple official enforcement mechanisms for violations of Labor Law § 191 are [already] provided" for. The majority further cites to Konkur to support this conclusion. However, I conclude, as Justice Rivera opined in her dissenting opinion in Konkur regarding Labor Law § 198-b, that in the instant matter, the fact that other enforcement mechanisms are available to the plaintiff for violations of Labor Law § 191 "does not mean that the legislature foreclosed a private right of action [for this section] or that recognizing such a right would be at odds with the statutory scheme" (Konkur v Utica Academy of Science Charter Sch., 38 NY3d at 52 [Rivera, J., dissenting]).

In my view, just as the First Department concluded in Vega, even if Labor Law § 198 does not expressly authorize a private right of action for a violation of the requirements of Labor Law § 191, a remedy may be implied, as the "plaintiff is one of the class for whose particular benefit the statute was enacted, the recognition of a private right of action would promote the legislative purpose of the statute and the creation of such a right would be consistent with the legislative scheme" (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1146). The plaintiff is a "manual worker," as defined by the statute, and allowing him to bring suit would promote the legislative purpose of section 191, which is to protect workers who are generally "dependent upon their wages for sustenance" (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1146 [internal quotation marks omitted]; see People v Vetri, 309 NY 401, 405), and section 198, "which was enacted to deter abuses and violations of the labor laws" (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1146; see P & L Group v Garfinkel, 150 AD2d 663, 664). The creation of such a right would also be consistent with the legislative scheme, as section 198 "explicitly provides that individuals may bring suit against an employer for violations of the labor laws, even if the Commissioner chooses not to do so" (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1147; see AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d 6, 15).

Accordingly, I respectfully disagree with my colleagues in the majority, and would determine that Labor Law § 198(1-a) provides a private right of action for a violation of Labor Law § 191, and, in addition, a private right of action may also be implied (see Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1146-1147).

Although the majority did not reach the issue of whether the plaintiff can seek liquidated damages on behalf of the putative class members, in my view, he cannot. Pursuant to CPLR 901(b), "[u]nless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action." Liquidated damages have been viewed as a penalty (see Carter v Frito-Lay, Inc., 74 AD2d 550, 551, affd 52 NY2d 994; see also Griffin v Gregorys Coffee Mgt. LLC, 2019 NY Slip Op 31125[U] [Sup Ct, NY County]), and Labor Law § 198(1-a) does not specifically authorize that liquidated damages are recoverable in a class action. Accordingly, I would conclude that while the plaintiff is entitled to proceed on his claim for liquidated damages in his individual capacity, pursuant to CPLR 901(b), he may not seek to recover liquidated damages on behalf of the putative class members, although he may seek to recover interest on behalf of the putative class members (see id.; see generally Borden v 400 E. 55th St. Assoc., L.P., 24 NY3d 382, 397; Brown v Mahdessian, 206 AD3d 511, 511).

[1] We recognize that the federal case law cited in the preceding paragraph determined that Konkur did not abrogate Vega's determination regarding an express private right of action (see e.g. Georgiou v Harmon Stores, Inc., 2023 WL 112805, *4-6, 2022 US Dist LEXIS 234643, *10-14). We do not suggest otherwise, as Konkur concerned an implied private right of action under a different provision of the Labor Law. Rather, we conclude that Konkur raises doubt as to the reasoning underlying the First Department's decision in Vega, in the manner just described."

Thursday, February 22, 2024

EMOTIONAL TOLL NOT DURESS TO SET ASIDE STIPULATION


NJL v. CAL, 2024 NY Slip Op 50140 - Nassau Co. Sup. Court 2024:

"This case presents a sad and unfortunate set of facts. The important fact central to this application is not in dispute. The parties' underlying matrimonial action was commenced on December 7, 2020. After two-and-a-half years of litigation, which included twelve (12) motions, family offense petitions, the issuance of order(s) of protection, and the start of a trial, these parties resolved their matrimonial action. During the trial, the parties resolved the issues of custody and parenting time by a Stipulation which was spread on the Record in open Court on March 28, 2023 (hereinafter referred to as the "Custody Stipulation"),[1] and the remaining issues were thereupon resolved by a Stipulation which was also spread on the Record in open Court on March 29, 2023 (hereinafter referred to as the "Financial Stipulation").[2]

During the parties' trial, however, something unfortunate occurred. These parties have three (3) children: C III, C A and CH A. The parties daughter, CH A, threatened self-harm. She expressed her pain to her parents, and told them that she did not wish to live because of the fighting between her parents. The police arrived on-scene. An ambulance was called. CH A spent the night at the hospital under evaluation. There is, of course, a presumption that natural bonds of affection lead parents to act in the best interests of their children. Troxel v. Granville, 530 U.S. 57, 87 (2000) (Stevens, J., dissenting). The history and culture of Western civilization reflect a strong tradition of parental concern for the nurture and upbringing of their children. Tatel v. Mt. Lebanon Sch. Dist., 637 F. Supp. 3d 295 (D. Penn. 2022). A parent's love for a child can be described as a cohesive bond which serves to anchor the material, financial and emotional support that are vital to the well-being of that child. M.H.B. v. H.T.B., 100 N.J. 567 (Supreme Court of New Jersey 1985). There can be no doubt that CH A's threat of self-harm took an emotional toll on these parties.

Now, months later, the Defendant seeks to set aside the Custody Stipulation and the Financial Stipulation, based upon duress and, in effect, unconscionability. The principal issue of this application is a sensitive one, and it is whether or not a child's threat of self-harm and her subsequent hospitalization for that threat constitutes duress and is a sufficient basis to vitiate two (2) Stipulations (see supra) on that basis. This Court finds, for the reasons that follow in this Decision and Order, that the child's threat of self-harm and subsequent hospitalization for same does not constitute duress.

PRELIMINARY STATEMENT

The Defendant moves by Order to Show Cause dated October 25, 2023 (Motion Sequence No.: 016), seeking an Order: (1) Vacating the terms and provisions of the Stipulation of Settlement dictated in open court on March 28, 2023 and the Stipulation of Settlement dictated in open court on March 29, 2023 on the grounds that the terms and provisions of said Stipulations were both the product of duress and are manifestly unfair; (2) Staying the within proceedings including but not limited to the entry of a proposed Judgment of Divorce pending determination of the within motion; (3) Granting defendant, C.A.L., II, full residential custody of the child, CH A, born XX XX, 2012; (4) Granting defendant such other and further relief as to this Court may seem just, proper and equitable.

The Plaintiff cross-moves by Notice of Cross-Motion dated January 10, 2024 (Motion Sequence No.: 108) seeking an Order: (1) Sanctioning Defendant pursuant to Pursuant to [sic] 22 NYCRR 130-1.1 by granting Krauss Shaknes Tallentire & Messeri LLP the reasonable costs and attorney's fees incurred by Plaintiff in opposing Defendant's frivolous Order to Show Cause; and (2) Directing such other and further relief as the Court deem just and proper.

The Plaintiff moves by Order to Show Cause for Contempt dated December 20, 2023 (Motion Sequence No.: 017) seeking an Order: (a) Pursuant to Judiciary Law 750(A)(3) and 753(A)(3), adjudging Defendant, C.A.L., II ("Defendant"), to be in criminal and civil contempt of court for failure to pay the school tuition for the parties three Children in violations [sic] of the so-Order Stipulations of Settlement dated March 28, 2023 ("March 28th Stipulation" Exhibit B) May 29, 2023 (March 29th [sic] Stipulation Exhibit C); (b) Pursuant to Judiciary Law 750(A)(3) and 753(A)(3), adjudging Defendant, C.A.L., II ("Defendant"), to be in criminal and civil contempt of court for failure to pay child support based on his refusal to reimburse the Plaintiff for his share of the Children's add on expenses in violations [sic] of the March 28th Stipulation and March 29th Stipulation; (c) Directing Defendant to immediately pay of [sic] the sum of $13,691.44 to the Rectory School for his share of CH A's tuition through the end of the 2023-2024 school year, $8,874 to Hebron Academy for his share of C A's tuition through the end of the 2023-2024 school year, and $9,422.67 to the Hyde School for his share of C III's tuition through the end of the 2023-2024 school year; (d) Directing Defendant to immediately reimburse Plaintiff the amount of $4,140 for his share of the Children's tutoring expenses, $4,325 for his share of the children's 2023 summer camp costs, $2,619.73 for his share of the Children's extracurricular activity expenses, and $5,012.56 for his share of the Children's unreimbursed medical expenses; (e) Pursuant to Domestic Relations Law 237(b) and 238 and/or Judiciary Law 773 awarding Plaintiff the sum of $20,000 in counsel fees for the costs and fees incurred as a result of having to bring this application due to Defendant's failure to comply with this Court's orders; and (f) For such other and further relief as the Court may deem necessary.

BACKGROUND

These parties were married on August 17, 2007. There are three (3) children of this marriage: C III, born XX XX, 2008, C A, born XX XX, 2010 and CH A, born XX XX, 2012. The parties' matrimonial action was commenced on December 7, 2020 by the filing of a Summons with Notice and Verified Complaint with the Nassau County Clerk's Office. During the underlying matrimonial action, the Plaintiff was represented by the firm of Krauss Shaknes Tallentire & Messeri, LLP. The Defendant was represented by The Maiaklovsky Law Firm, PLLC. By Order Appointing Attorney for the Children dated January 21, 2021, this Court appointed Brynde Berkowitz, Esq. (hereinafter referred to as the "AFC"), to represent the subject children.

The parties' underlying matrimonial action proceeded to trial. The parties settled this matter during trial, and spread on the record in open Court the Custody Stipulation on March 28, 2023 and the Financial Stipulation on March 29, 2023.[3] On March 29, 2023, this Court issued an Order Directing Submission of Findings of Fact, Conclusions of Law, and Judgment of Divorce (hereinafter referred to as the "Judgment Submission Order"). The contested-settled judgment packet was submitted to the Clerk's Office through NYSCEF on June 29, 2023. To date, the proposed Judgment of Divorce remains unsigned.

On September 11, 2023, the Defendant executed a Consent to Change Attorney form, substituting Eugene W. Bechtle, Jr. Esq., in place and stead of the Maiaklovsky Law Firm, PLLC. On the presentment date of the Defendant's Order to Show Cause, this Court denied the proposed preliminary relief sought by the Defendant which was for a stay of all proceedings including a stay of entry of the proposed Judgment of Divorce.

On the presentment date of the Plaintiff's Order to Show Cause for Contempt, the Court (Hon. Stacy D. Bennett, J.S.C.),[4] granted the following interim relief:

ORDERED, that, pending determination of this motion, within 48 hours, Defendant shall pay the sums of $9,800.00 to the Rectory School for his share of CH A's tuition through the end of the 2023-2024 school year, $6,655.00 to Hebron Academy for his share of C A's tuition through the end of the 2023-2024 school year, and $2,770.00 for the Hyde School for his share of C III's tuition through the end of the 2023-2024 school year.

THE PARTIES' CONTENTIONS

Defendant's Contentions (Motion Sequence No.: 016):

The Defendant argues that the impetus for his participation and verbal consent to the Stipulation(s) was extreme duress and that the terms of both of the aforesaid are manifestly unfair. He argues that the Plaintiff has accused him of abusing the children and that his interaction with the children was interfered with by the Plaintiff. He argues that the Plaintiff has made five (5) complaints to CPS, all of which were determined to be unfounded.[5] He argues that during the matrimonial action, there was extreme anxiety imposed upon the children, and that the Plaintiff employed one of the parties' sons to falsely accuse him of abuse. He argues that CH A is "daddy's little girl" who suffered the most during the divorce as she is the most "vulnerable". He argues that his counsel during the divorce case was too "passive" in representing his interests, but he concedes that he was "becoming desperate to resolve this case". He argues that in March, 2023, CH A's health was seriously declining and that she would cry to him to bring an end to the divorce case. He sets forth that on March 27, 2023, CH A threatened suicide and that because of this, in effect, he had to get the case "over", as he needed to bring peace and stability to CH A's life. He therefore argues that, in light of this and in effect, he "went along with whatever was dictated on the Record the next day and the day after" and that he was only "half listening". He argues that, on October 9, 2023, CH A called him from her boarding school and told him that she was so upset that she was going to commit suicide and that she had cut herself. He argues that he should have never consented to give-up custody of CH A. He sets forth that his gross salary is $128,892.64, but his monthly expenses are $27,908, including sharing the cost of boarding school for all three children, his share of which totals $31,266.00. He argues that he also has to share the cost of summer camp, with his share totaling $4,325.00.

Plaintiff's Contentions (Motion Sequence No: 017):

The Plaintiff argues that when she commenced the underlying matrimonial action, the Defendant consistently failed to pay child support and he refused to pay the children's add-on expenses. She argues that the children have been attending private independent schools since before the divorce action and, in effect, the Defendant changed his position about private school when the divorce action was commenced. She argues that the Defendant has failed to pay his portion of the children's tuition and failed to reimburse her for over $20,000 in add-on expenses. She argues that she sought the Defendant's payment of the children's tuition, but the children's schools are threatening to expel them for the Spring 2024 semester. She argues that the Defendant is in arrears $31,988.11 for school tuition, $495 for school application fees, $4,140 for tutoring expenses, $4,325 for summer camp expenses, $2,619.73 for extracurricular activity expenses, and $5,012.56 for medical co-payment expenses.

Affirmation of Attorney for the Children (Motion Sequence Nos.: 016 & 017):

The AFC sets forth that she contacted two of the children's schools in December, 2023, and confirmed that the Defendant had not paid his share of tuition. The AFC sets forth that she met with the children on December 27, 2023, and the children advised her that each of them are "thriving" at their current boarding schools and that they each would like to remain there. The AFC sets forth that each school, however, advised her that the children would not be allowed back after the Christmas holiday unless each school received the tuition due. The AFC reiterates that the children each wish to continue attending their respective schools and that it is in the best interests of the children that the Defendant pay his share of the tuition that is due. The AFC sets forth that the parties were engaged in an acrimonious litigation during the underlying divorce and waged war against each other and sought police intervention in front of the children. The AFC sets forth that the underlying divorce was resolved in the best interests of the children. The AFC sets forth that the Plaintiff filed a Family Offense Petition was settled on consent with no admission and a final Order of Protection.[6] The AFC sets forth that C III wants everything to remain as status quo and that he does not wish to have contact with the Defendant, that C A would like to speak with the Defendant on the phone, and that CH A wishes to maintain the status quo. She sets forth that CH A, while she was previously unhappy at her Boarding School (which included an incident of self-harm), she has adjusted and is happy now and that when CH A is home from Boarding School, she wishes to continue to live with the Plaintiff and visit with the Defendant, as she enjoys the current schedule. The AFC sets forth that CH A has, in the past, witnessed the Defendant engage in "extreme" corporal punishment" by the Defendant upon her brothers.

Plaintiff's Contentions & Opposition (Motion Sequence Nos.: 016 & 018):

The Plaintiff reiterates that the Defendant is in arrears with respect to many of his court-ordered obligations. She argues that she accepted less than the statutorily amount for child support and less than her equitable share of the Defendant's pension at Vanguard. She argues that the Defendant agreed to equally cover the costs of private schooling and the Defendant knew that the only educational options were private boarding schools. She argues that the Defendant continues to allocate funds for litigation instead of complying with the Stipulation(s). She argues that there has been no change in circumstances as it relates to CH A and that it is in the best interests of CH A to remain in her care. She argues that the Defendant has a short temper and that this resulted in the two boys refusing visitation with him. She argues that the Defendant physically assaulted C A. She argues that C A recorded the Defendant threatening and abusing C A and making comments about his sexuality, and that CH A was present during this "episode".

Defendant's Opposition, Opposition & Reply (Motion Sequence Nos.: 016, 017 & 018):

The Defendant argues that the TRO's issued by Justice Bennett have been satisfied as he put together the $19,280.33 ordered by borrowing the maximum from his 401(k), borrowing from a friend, and his year-end bonus. He argues that three lawyers (the Plaintiff, the Plaintiff's counsel and the AFC) out-maneuvered and "bulldozed" his lawyer who was "not capable of standing up for me". He argues that the Stipulation(s) are one-sided. He argues that he is unable to comply with the Stipulation(s), as he has $27,908.00 in monthly expenses which leaves him with a monthly deficit of $6,973.07. He avers that his monthly income, after deductions, is $3,152.76. He argues that he cannot pay his prior attorney and cannot pay his student loans. He argues that over his objection, the Plaintiff placed the children in out-of-state boarding schools, and he never consented to those placements. He argues that he cannot be held in contempt for decisions made over his objections and that the Plaintiff denigrates his role as the father of the children. He argues that the AFC's contentions that the children are enjoying their current schools is "besides the point" as the children were manipulated during the divorce. He argues that the Stipulation(s) are deficient in that it is unusual for the children to be shipped-off to Boarding School and sleep-away camps, and that provisions for the payment of private school prior to college are unusual. He argues that "caps" should have been placed in the Stipulation(s).

DISCUSSION + ANALYSIS

VACATUR OF CUSTODY & FINANCIAL STIPULATION

Stipulations of settlement are favored by the courts and are not lightly set aside. Sabowitz v. Sabowitz, 123 AD3d 794 (2d Dept. 2014); see also Campione v. Alberti, 98 AD3d 706 (2d Dept. 2012).[7] Judicial review is to be exercised sparingly, with a goal of encouraging parties to settle their differences on their own. Doukas v. Doukas, 47 AD3d 753 (2d Dept. 2008); see also Brennan-Duffy v. Duffy, 22 AD3d 699 (2d Dept. 2005); see also Kojovic v. Goldman, 35 AD3d 65 (1st Dept. 2006) (a stipulation of settlement in a divorce action, competently entered into, is entitled to the recognition accorded any other contract, and judicial review is to be exercised circumspectly, sparingly and with a persisting view to the encouragement of parties settling their own differences in connection with the negotiation of property settlement provisions). Courts have thrown their cloak of protection over separation agreements and made it their business, when confronted, to see to it that they are arrived at fairly and equitably, in a manner so as to be free from the taint of fraud and duress, and to set aside or refuse to enforce those born of and subsisting in inequity. Jon v. Jon, 123 AD3d 979 (2d Dept. 2014).

A separation agreement or stipulation of settlement which is fair on its face will be enforced according to its terms unless there is proof of fraud, duress, overreaching, or unconscionability. However, because of the fiduciary relationship existing between spouses, a marital agreement should be closely scrutinized and may be set aside upon a showing that it is unconscionable or the result of fraud or where it is shown to be manifestly unjust because of the other spouse's overreaching. Eichholz v. Panzer-Eichholz, 188 AD3d 820 (2d Dept. 2020). When there has been full disclosure between the parties, not only of all relevant facts but also of their contextual significance, and there has been an absence of inequitable conduct or other infirmity which might vitiate the execution of the agreement, courts should not intrude so as to redesign the bargain arrived at by the parties on the ground that judicial wisdom in retrospect would view one or more of the specific provisions as improvident or one-sided. Mizrahi v. Mizrahi, 171 AD3d 1161 (2d Dept. 2019). Indeed, there is a long-standing public policy in favor of settlements in divorce action. Keller-Goldman v. Goldman, 149 AD3d 422 (1st Dept. 2017) (Andrias, J., dissenting).

Duress

A contract is voidable on the ground of duress when it is established that the party making the claim was forced to agree to it by means of a wrongful threat precluding the exercise of his or her free will. Heinemann v. Heinemann, 189 AD3d 1553 (2d Dept. 2020); see also Shah v. Mitra, 171 AD3d 971 (2d Dept. 2019); see also Forman v. Forman, 211 AD3d 698 (2d Dept. 2022). Generally, the aggrieved party must demonstrate that threats of an unlawful act compelled his or her performance of an act which he or she had the legal right to abstain from performing. Polito v. Polito, 121 AD2d 614 (2d Dept. 1986). The threat must be such as to deprive the party of the exercise of free will. Cavalli v. Cavalli, 226 AD2d 666 (2d Dept. 1996). In order to form an element of duress, the threat must be wrongful. Podmore v. Our Lady of Victory Infant Home, 82 AD2d 48 (4th Dept. 1981). A crucial element of duress is lack of free choice. Podmore, 82 AD2d at 51. A threat to do that which one has the legal right to do does not constitute duress (see Bachorik v. Allied Control Co., 34 AD2d 940 (1st Dept. 1970)), and generalized contentions that a party felt pressured are insufficient (see Desantis v. Ariens Co., 17 AD3d 311 (2d Dept. 2005)).

As a guidepost, and aside from established case-law, the Court looks to secondary authority, such as the Restatement of Contracts. The Restatement (Second) of Contracts § 175, entitled When Duress by Threat Makes a Contract Voidable, provides:

(1) If a party's manifestation of assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is voidable by the victim.
(2) If a party's manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the duress either gives value or relies materially on the transaction.

(emphasis added).

But what constitutes an improper threat? The Restatement (Second) of Contracts § 176, entitled When a Threat Is Improper, provides:

(1) A threat is improper if
(a) what is threatened is a crime or a tort, or the threat itself would be a crime or a tort if it resulted in obtaining property,
(b) what is threatened is a criminal prosecution,
(c) what is threatened is the use of civil process and the threat is made in bad faith, or
(d) the threat is a breach of the duty of good faith and fair dealing under a contract with the recipient.
(2) A threat is improper if the resulting exchange is not on fair terms, and
(a) the threatened act would harm the recipient and would not significantly benefit the party making the threat,
(b) the effectiveness of the threat in inducing the manifestation of assent is significantly increased by prior unfair dealing by the party making the threat, or
(c) what is threatened is otherwise a use of power for illegitimate ends.

The genesis of the Defendant of duress is that, in effect, he was forced to agree to the terms of the Stipulation(s) because CH A threatened self-harm. The Defendant's application founders. CH A's threat of self-harm is not an improper threat made by the other party (see Restatement (Second) of Contracts § 175(1)). CH A, the parties' child, is not the other party. In this vein, the Defendant has not established that his manifestation of assent to enter into the Stipulation(s) was induced by a wrongful threat made by the Plaintiff. In fact, the Defendant has not even alleged that the Plaintiff threatened him in a wrongful way so as to induce his assent to the Stipulation(s) (see Restatement (Second) of Contracts § 175(1)). To this point, the Defendant has not alleged that the Plaintiff threatened a crime or a tort, nor has he alleged that the Plaintiff threatened the Defendant's criminal prosecution if he did not consent to the Stipulation(s) (see Restatement (Second) of Contracts § 176(1)(b)). Additionally, the Defendant has not alleged that what was threatened and what forced him to enter into the Stipulation(s) was the use of civil process in bad faith (see Restatement (Second) of Contracts § 176(1)(c)), or that the Plaintiff breached the duty of good faith and fair dealing (see Restatement (Second) of Contracts § 176(1)(d)). The Court does not find that the Defendant's manifestation of assent to enter into the Stipulation(s) was induced by one who is not a party to the transaction, namely, CH A (see Restatement (Second) of Contracts § 175(2)) as the Defendant himself acknowledged on the Record, under oath, that he was entering into the Stipulation(s) freely and voluntarily.[8]

There is nothing in this Record that alleges and/or demonstrates that the Plaintiff engaged in an unlawful act which compelled the Defendant's performance of an act that he had a legal right to abstain from. Namely, the allegations of duress propounded by the Defendant centers around CH A's mental state during the parties' matrimonial action. But what the Defendant fails to do is provide this Court with a sufficient nexus as to how CH A's mental state effectively forced him and left him with no other choice but to enter into the Stipulation(s). CH A's mental state did not deprive the Defendant of his free will not to agree to the terms of the Stipulation(s).

Additionally, the Court does not find that the Defendant was not without a reasonable alternative (see Restatement (Second) of Contracts § 175(1)), as the Defendant could have elected to continue with the ongoing trial of the matrimonial matter, which the Court does not find to be an unreasonable alternative. Moreover, the Court finds that the Defendant had another alternative: seek or request an adjournment of the underlying matrimonial trial in light of the child's threat of self-harm. The Defendant, in fact, concedes that "...I never should have consented to give up custody of CH A..." (see C.A.L., II, Affidavit ¶ 12), which the Court finds to be an acknowledgment that the Defendant had a reasonable alternative: to continue with the trial and pursue custody of CH A.

The Court has another consideration: the Stipulation(s) speak for themselves. The relevant portions of the Custody Stipulation read:

THE COURT: Okay, thank you.
Ms. L's and Mr. L's, did you hear the stipulation read into the record?
MR. L: Yes.
MS. L: Yes, your Honor.
THE COURT: Did you both understand it?
MR. L: Yes.
MS. L: Yes, your Honor.
THE COURT: Do you both agree to be bound by the Stipulation that was read into the record?
MS. L: Yes, your Honor.
MR. L: Yes.
THE COURT: Are you both entering into this agreement freely and voluntarily?
MS. L: Yes, your Honor.
MR. L: Yes.
* * *
THE COURT: Do you understand that if you did not come into this agreement on custody and parenting time you had the right to continue the trial with regard to those matters?
MS. L: Yes, your Honor.
MR. L: Yes.

(see Custody Stipulation, pages 10-11) (emphasis added).

The relevant portions of the Financial Stipulation provide:

THE COURT: So Ms. L, Mr. L, the same questions as yesterday. Did you both hear the stipulation read into the record?
MS. L: Yes, your Honor.
MR. L: Yes.
THE COURT: Did you both understand it?
MR. L: Yes.
MS. L: Yes, your Honor.
THE COURT: Do you both agree to it?
MS. L: Yes, your Honor.
MR. L: Yes.
THE COURT: Are you both entering into this agreement freely and voluntarily?
MS. L: Yes, your Honor.
MR. L: Yes.
* * *
THE COURT: Do you understand that you had the right to proceed to trial
MS. L: Yes, your Honor.
MR. L: Yes.
THE COURT: —over these issues?
MS. L: Yes, your Honor.
MR. L: Yes.

Here, both Stipulation(s) contain express acknowledgments — by the Defendant himself — that they were entered into freely and voluntarily. See generally Sabowitz v. Sabowitz, 123 AD3d 794 (2d Dept. 2014) (party not entitled to set aside stipulation where, among other things, stipulation contained an express representation that it was not a product of fraud or duress); see also Schultz v. Schultz, 58 AD3d 616 (2d Dept. 2009) (application for summary judgment seeking declaration that postnuptial agreement is unenforceable denied where, among other things, agreement itself recites that the party entered into it freely and voluntarily). In the instant action, those express acknowledgments — in two separate stipulations — deflate the Defendant's claim that the Stipulation(s) were the product of duress and that he had no choice but to enter into those agreements.[9]

Accordingly, and for all of the aforesaid reasons, it is hereby:

ORDERED, that so much of Branch (1) of the Defendant's Order to Show Cause dated October 25, 2023 which seeks to set aside the Custody Stipulation and the Financial Stipulation on the ground of duress be and the same is hereby DENIED.

Manifestly Unfair/Unconscionability

The Defendant avers that both Stipulation(s) are "manifestly unfair", which the Court understands to be arguments asserting unconscionability. A party seeking to vacate a stipulation of settlement has the burden of proof. See generally Johnson v. Ranger, 216 AD3d 925 (2d Dept. 2023). A stipulation which is fair on its face will be enforced according to its terms unless there is proof of fraud, duress, overreaching, or unconscionability. Rubin v. Rubin, 33 AD3d. 983 (2d Dept. 2006); see also Lazar v. Lazar, 88 AD3d 852 (2d Dept. 2011). A stipulation, however, will not be vacated simply because a party, after the fact, believes that the agreement was improvident in some respect or that it constituted a bad bargain (see Cohen v. Cohen, 170 AD3d 948 (2d Dept. 2023)), and a stipulation of settlement is not unconscionable simply because it might have been improvident or one-sided (see O'Hanlon v. O'Hanlon, 114 AD3d 915 (2d Dept. 2014)). The determination of unconscionability is a matter of law for the court to decide. See generally Industralease Automated & Scientific Equipment Corp. v. R.M.E. Enterprises, Inc., 58 AD2d 482 (2d Dept. 1977). In determining the conscionability of a contract, no set weight is to be given any one factor; each case must be decided on its own facts. David v. #1 Mktg. Serv., Inc., 113 AD3d 810 (2d Dept. 2014).

As the Court of Appeals has written:

It is well settled that an unconscionable contract is generally defined as one which is so grossly unreasonable as to be [unenforceable according to its literal terms] because of an absence of meaningful choice on the part of one of the parties [procedural unconscionability] together with contract terms which are unreasonably favorable to the other party [substantive unconscionability].

Lawrence v. Miller, 11 NY3d 588 (2008); see also Cilento v. Cilento, 186 AD3d 556 (2d Dept. 2020 (in order to find a marital contract unconscionable, two elements must be shown: procedural unconscionability, which requires a lack of meaningful choice on the part of one of the parties, and substantive unconscionability, which requires contract terms which are unreasonably favorable to the other party). 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. Hughes v. Hughes, 131 AD3d 1207 (2d Dept. 2015). Procedural and substantive unconscionability operate on a sliding scale. Simar Holding Corp. v. GSC, 87 AD3d 688 (2d Dept. 2011).

In defining, in part, what makes a contract unconscionable, the Court of Appeals has opined:

[A]n unconscionable bargain has been regarded as one such as no person in his or her senses and not under delusion would make on the one hand, and as 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.

Christian v. Christian, 42 NY2d 63 (1977); see also Shah v. Mitra, 171 AD3d 971 (2d Dept. 2019). A reviewing court examining a challenge to an agreement will view the agreement in its entirety and under the totality of the circumstances. Mizrahi v. Mizrahi, 171 AD3d 1161 (2d Dept. 2019).

A. The Financial Stipulation

i. Procedural Unconscionability

The procedural element of unconscionability requires an examination of the contract formation process. Gillman v. Chase Manhattan Bank, 73 NY2d 1 (1988). Evidence of procedural unconscionability may include high-pressure tactics or a lack of meaningful choice. Green v. 119 W. 138th St. LLC, 142 AD3d 805 (1st Dept. 2016) (Tom, J., dissenting). Such evidence may also include whether deceptive tactics were used and whether or not there was a disparity in bargaining power. Gillman, 73 NY2d at 10. Additionally, the Court can consider an imbalance in the understanding and acumen of the parties. Emigrant Mtge. Co., Inc., v. Fitzpatrick, 95 AD3d 1169 (2d Dept. 2012).

While the Defendant claims that "... I found myself struggling to survive in a process where 3 attorneys (my wife, my wife's attorney, and the attorney for the children) essentially outmaneuvered and bulldozed my attorney who was clearly not capable for standing up for me..." (see C.A.L., II, Reply Affidavit ¶ 4), the Defendant fails to provide this Court, other than that generalized and conclusory claim, any specifics are to what "high pressure" tactics were employed.[10] In fact, his principal moving Affidavit effectively contradicts that nonspecific claim, wherein he admits that "... [t]he possibility that CH A, at her age, would be in so much pain that she would contemplate taking her own life was overwhelming to me and I felt that as a parent I had absolutely no choice but to do whatever I could to bring contentious litigation to an end and try to bring some peace and stability to my younger daughter..." (see C.A.L., II, Affidavit ¶ 9). In other words, the Defendant allegedly agreed to resolve the case because of what was transpiring with CH A, not because of any specific high pressure tactics employed by the Plaintiff. Moreover, the Court does not find the absence of any meaningful choice; the Defendant could have proceeded with the ongoing trial, sought an adjournment of the trial in light of CH A's threat of self-harm, or attempted to negotiate different terms of the Financial Stipulation.

The Defendant likewise does not allege that the Plaintiff engaged in any deceptive tactics in order to induce him into agreeing to the terms of the Financial Stipulation. The Court, on this Record, does not find a disparity in the bargaining-power of the parties; the Court notes that both parties were represented by counsel, and if the Defendant felt as if his attorney was not effectively advocating for him or being bulldozed, he could have done exactly what he did right before he filed this motion: executed a consent to change attorney form and retained a different attorney. There is likewise insufficient evidence that there was an imbalance in the understanding and acumen of the parties, as both parties acknowledged, on the Record, that they understood the terms of the Financial Stipulation.

ii. Substantive Unconscionability

The substantive element of unconscionability requires, in sum and substance, a showing that one or more of the key terms of the contract that are unreasonably favorable to the other party. See generally Long Is. Minimally Invasive Surgery, P.C. v. Outsource Mktg. Solutions, Inc., 33 Misc 3d 1228(A) (Supreme Court Nassau County 2011). Substantive elements of unconscionability appear in the content of the contract per se. See generally Wells Fargo Bank, N.A. v. Weekes, 46 Misc 3d 1205(A) (Supreme Court Kings County 2014).

The Court has examined whether or not the terms of the Financial Stipulation are unreasonably favorable to the Plaintiff by reading the Financial Stipulation in toto. The Court does not find that they are. First, the Court notes that the presumptive amount of child support for the three (3) children is $2,132.95 per month (see Financial Stipulation, page 10), and the Plaintiff agreed to accept a downward deviation of the presumptive amount of child support in the amount of $1,700.00 per month (see Financial Stipulation, pages 3-4), a more than $400.00 per month reduction in said obligation. That inures to the benefit of the Defendant. Second, the Court notes that the Financial Stipulation acknowledges that the Plaintiff's adjusted gross income for CSSA purposes is $97,819.48 and the Defendant's adjusted gross income for CSSA purposes is $115,514.48, making the combined parental income to be $213,333.76 (see Financial Stipulation, pages 9-10), with the Plaintiff's pro rata share of the CPI being 46% and the Defendant's pro rata share of the CPI being 54% (see Financial Stipulation, page 10). The Court notes that the parties agreed that instead of allocating the add-one expenses of the children on a pro rata basis, the parties agreed to equally share the cost of agreed-upon extracurricular activities, unreimbursed medical, dental, orthodontia and optical expenses, and the educational expenses, such as private school tuition, applications and tutoring, notwithstanding that the Defendant has a greater share of the combined parental income. That insures to the benefit of the Defendant.

Third, the Court notes that the Plaintiff waived her right to reimbursement of add-on expenses of the children paid by her retroactive to the date of commencement of the action, except for the costs of C III's braces and the children's therapy expenses (see Financial Stipulation, page 5). That is a benefit to the Defendant. Fourth, the Court notes that the parties combined parental income is $213,333.76 (see supra), and the downward deviation agreed-to was calculated only on the first $163,000.00 of combined parental income (see Financial Stipulation, page 9) and not the total combined parental income in excess of the statutory cap, which would have made the Defendant's basic child support obligation higher. That inures to the benefit of the Defendant.

Fifth, the Court notes that the Financial Stipulation provides, in sum and substance, that the Plaintiff would retain the property located at XXXXX, Hempstead, New York and the Defendant would retain the property located at YYYYY, Hempstead, New York (see Financial Stipulation, page 11). In effect, the Court finds that the parties agreed that each of them would retain one parcel of property. The Court does not find this agreed-upon equitable distribution of real property to be manifestly unfair or so as to shock the conscience of the Court. Both parties, in effect, received an equal benefit of the retention of one parcel of real estate. Sixth, the Court notes that the parties agreed that the Plaintiff would only receive forty (40%) percent (and not fifty (50%) percent or some other percentage over forty (40%) percent) of the Defendant's 401(k) at Vanguard. That inures to the benefit of the Defendant.

Seventh, the Court finds that the agreed-upon life insurance policy of $225,000 to secure his child support obligation (see Financial Stipulation, page 14) to be in-line with the remaining amount of his child support obligation until the emancipation of the youngest child.[11] In fact, the $225,000.00 face amount of his life insurance policy sufficiently covers only his basic child support obligation extrapolated over the remaining years until the youngest child emancipates, and provides, in effect, no financial security for the Defendant's fifty (50%) percent share of his obligation to the add-on expenses of the children. That inures to the benefit of the Defendant inasmuch as a policy with a higher face value may have increased the cost of the policy premium. Eighth, it appears that the parties agreed to each be responsible for 100% of the debt in his or her respective names (see Financial Stipulation, page 15). Inasmuch as no detail was set forth in the Financial Stipulation as to the amount of the debt each party was retaining, the Court sees nothing improvident or manifestly unfair about the allocation of the debt.

Ninth, it also appears that the parties agreed to remove their personal property from the other's residence (see Financial Stipulation, page 15). Inasmuch as the parties did not specifically allocate the actual personalty that each was retaining, or the value thereof, the Court sees nothing manifestly unfair about that agreement. Tenth, each party agreed to pay his or her own counsel fees (see Financial Stipulation, page 16). The Court finds nothing manifestly unfair about each party paying his or her own counsel fees in light of the substantial comparability of the parties' respective incomes (see supra).

As a final point, the Defendant acknowledges that "... [m]y financial circumstances are essentially what they were in March 2023..." (see C.A.L., II, Affidavit ¶ 13). The Court has not found that any of the provisions of the Financial Stipulation to be so one-sided or manifestly unfair. The fact that there may not be any "caps" in the Financial Stipulation with respect to certain add-on expenses, as argued by the Defendant, is unpersuasive. Parties to a contract are basically free to make whatever agreement they wish. See generally Deutsche Bank Natl. Trust Co. V. Flagstar Capital Mkts., 32 NY3d 139 (2018). The Defendant has not provided this Court with any statutory authority, established case-law, and/or any persuasive authority that mandates a "cap" on educational expenses. The failure to place a "cap" in the Financial Stipulation is not a violative of any law, nor is it a transgression of public policy. Likewise, the fact that the parties agreed to pay for private school (not college) is not a basis to vitiate the Stipulation, especially since the Defendant does not deny that the children were historically, even before the divorce, attending private school. The Defendant's argument that the children should be in public school instead of private school is not a basis to vitiate the Financial Stipulation. In this respect, if the Defendant is alleging that the Plaintiff violated the Custody Stipulation, then he has remedies; but vitiation of the Financial Stipulation is not one of them.

B. The Custody Stipulation

i. Procedural Unconscionability

The Court does not find any evidence of high-pressure tactics employed by either the AFC or the Plaintiff. Both parties were represented by independent counsel of their own choosing, and the Defendant acknowledged, on the Record, that he was agreeing to the terms of the Custody Stipulation "freely and voluntarily". Likewise, the Court does not find that the Defendant had a lack of meaningful choice before agreeing to the terms of the Custody Stipulation inasmuch as he could have proceeded with the ongoing trial or sought an adjournment of same in light of CH A's threat of self-harm. Or, alternatively, the Defendant could have sought an adjournment of the trial.[12] In other words, the Defendant was not forced by the Plaintiff to agree to the terms of the Custody Stipulation, and he had other options; he voluntarily chose not to exercise those other options. Furthermore, there was no "disparity" in the bargaining power of the parties inasmuch as both parties were represented by independent counsel of their own choosing, and the Defendant himself acknowledged that he was satisfied with the services of his counsel. Lastly, the Court does not find any imbalance in the understanding and acumen of the parties, as the Defendant expressly acknowledged, on the Record, that they understood the terms of the Custody Stipulation.

ii. Substantive Unconscionability[13]

First, while the Custody Stipulation confers residential custody of the children to the Plaintiff, it confers joint legal custody upon the parties (see Custody Stipulation, page 3). The Court does not find that one parent being designated as the residential parent of the children to be a term that is manifestly unfair to one party. Second, with respect to medical decision-making, in sum and substance, the parties agreed that if there is a disagreement, the parties would follow the recommendation of the child's pediatrician, but that either party had a right to seek court intervention if they did not agree with the decision (see Custody Stipulation, page 4). The Court does not find that provision to be manifestly unfair to either party. Third, with respect to extracurricular activities, the parties, in sum and substance, agreed that each child shall be entitled to participate in one extracurricular activity with the cost being shared on a "50/50" basis, with consent being required in order to trigger a financial responsibility for same. The Court does not find this provision to be unconscionable or manifestly unfair to one parties inasmuch as the Plaintiff had the lower share of the parties' combined parental income and agreed to split the cost on an equal basis and inasmuch as consent is required to trigger a financial responsibility for same. Likewise, the parties effectively conferred upon themselves joint decision-making with respect to the area of extracurricular activities. There is nothing unfair about that agreement.

Fourth, the parties agreed to each of them would create a music production space for C III in their basement and that they would each pay for one session per month of C III's music production studio activity until they have a studio. The Court does not find this provision to be manifestly unfair or unconscionable inasmuch as the parties agreed to provide a space for C III in order to save on costs of this activity, the parties both agreed to this, effectively providing them with joint decision-making over this issue, and that the Plaintiff has the lower share of the parties' combined parental income. Fifth, the parties agreed that to send the children to summer camp and split the cost of same on a "50/50" basis (see Custody Stipulation, page 5). The Court does not find this provision to be manifestly unfair inasmuch as the agreement to send the children to camp was a joint decision and inasmuch as they are equally splitting the cost of same.The parties also agreed to an additional protection that if there is going to be a change in camp, the party seeking the change must obtain the agreement of the other before the nonrequesting is obligated to pay his or her 50% of same.

Sixth, with respect to schooling, the parties agreed that C III and C A would attend a boarding school and that CH A would attend a different independent school. The parties also agreed that with respect to the actual choice of school, the parties would discuss same, could then meet an educational consultant if they disagreed with the other, with the Plaintiff having final decision-making authority in the event of a further disagreement, without prejudice to the Defendant's right to petition a court of competent jurisdiction. The Court does not find this to be manifestly unfair or unconscionable inasmuch as the parties agreed to send one child to an independent school and two other children to boarding school. While the Defendant complains that the children should be in public school, that is contrary to their agreement that the children attend either an independent school or boarding school, and, in any event, the Defendant had a remedy if he disagreed with the decision: petition a court for relief.

Accordingly, and for all of the aforesaid reasons, it is hereby:

ORDERED, that so much of Branch (1) of the Defendant's Order to Show Cause dated October 25, 2023 which seeks to set aside the Custody Stipulation and the Financial Stipulation on the ground of unconscionability be and the same is hereby DENIED.

MODIFICATION OF CUSTODY

The standard for modification of an existing custody or parental access order is well-known. In order to modify an existing court-sanctioned custody arrangement, there must be a showing of a subsequent change in circumstances so that modification is required to protect the best interests of the child. Matter of Newton v. McFarlane, 174 AD3d 67 (2d Dept. 2019); Henrie v. Henrie, 163 AD3d 927 (2d Dept. 2018); Matter of Feliciano v. King, 160 AD3d 854 (2d Dept. 2018); Matter of Miller v. Shaw, 160 AD3d 743 (2d Dept. 2018). Not only must the moving party demonstrate that a change of circumstances has occurred, but the moving party must also demonstrate that modification is necessary to ensure the children's (or child's) best interests. See generally Matter of Chris X. V. Jeanette Y., 124 AD3d 1013 (3d Dept. 2015). See also Grayson v. Fenton, 13 AD3d 914 (3rd Dept. 2004).

It is well-settled that the primary consideration in all custody disputes is the best interest of the child. See Keating v Keating, 147 AD2d 675 (2d Dept. 1989). It is further established that as a general rule, it is error as a matter of law to make an order respecting custody based on controverted allegations without having had the benefit of a full hearing (see Biagi v. Biagi, 124 AD2d 770 (2d Dept. 1986); see also Colley v. Colley, 200 AD2d 839 (3d Dept. 1994)), and custody determinations should generally be made only after a full and plenary hearing. Palazzola v. Palazzola, 188 AD3d 1081 (2d Dept. 2020); see also Trazzera v. Trazzera, 199 AD3d 855 (2d Dept. 2021). A noncustodial parent seeking a change in custody is not automatically entitled to a hearing, but must make an evidentiary showing sufficient to warrant a hearing (see McNally v McNally, 28 AD3d 526, 527, 816 NYS2d 98 [2006]; Matter of Simmons v Budney, 5 AD3d 389, 390, 772 NYS2d 543 [2004]; Corigliano v Corigliano, 297 AD2d 328, 329, 746 NYS2d 313 [2002]; DiVittorio v DiVittorio, 283 AD2d 390, 390-391, 723 NYS2d 863 [2001]). DiVittorio v. DiVittorio, 36 AD3d 848 (2d Dep't 2007). However, while the general right to a hearing in custody and visitation cases is not absolute, where facts material to the best interest analysis, and the circumstances surrounding such facts, remain in dispute, a hearing is required. See Palazzola v Palazzola, supra; see also Trazzera v. Trazzera, supra. See also Stolzenberg v. Stolzenberg, 209 AD3d 688 (2d Dept. 2022). The Court of Appeals has made clear:

Given the goals of stability and permanency, as well as the weight of the interests at stake, the societal cost of even an occasional error in a custody proceeding is sizeable. Custody determinations therefore require a careful and comprehensive evaluation of the material facts and circumstances in order to permit the court to ascertain the optimal result for the child. The value of a plenary hearing is particularly pronounced in custody cases in light of the subjective factors—such as the credibility and sincerity of the witnesses, and the character and temperament of the parents—that are often critical to the court's determination.

S.L. v. J.R., 27 NY3d 558 (2016).

Here, the Court finds that there are sufficient facts in dispute to warrant a hearing on the Defendant's application seeking to modify the parties' Custody Stipulation with respect to CH A. While some of the Defendant's allegations predate the date of the Custody Stipulation (and the Court has not considered those herein), the Court notes that the Defendant has alleged that the Plaintiff has twice had CPS called on him since the date of the Custody Stipulation. The Court notes that, without contradiction, that the Plaintiff made a CPS complaint against the Defendant on April 12, 2023 and that she filed a Family Offense Petition on August 7, 2023 alleging that the Defendant abuses the children. The Court cannot simply ignore or cast there allegations aside. See generally Matter of Honeywell v. Honeywell, 29 AD3d 857 (2d Dept. 2007) (repeated and unfounded allegations of abuse may constitute conduct inconsistent with the best interests of the children). The Court has considered that CH A is now eleven (11) years old, and while her wishes and desires may be some indication of her best interests (see generally Silverman v. Silverman, 186 AD3d 123 (2d Dept. 2020)), a child's preference is not determinative (see generally Matter of Ceballos v. Leon, 134 AD3d 931 (2d Dept. 2015)).

Additionally, the Court has considered the unrefuted allegation of the AFC that CH A has witnessed the Defendant use extreme corporal punishment on her brothers. However, the Court has also considered that there was an incident — after the Custody Stipulation — where CH A (again) attempted self-harm (confirmed by the AFC). While the Court is unsure what the impetus was for that self-harm, the Court cannot ignore that undisputed fact, and the Court must take live testimony from the parties to ascertain how CH A was impacted (if at all), and whether or not the existing custodial arrangement remains in the best interests of CH A. This Court would effectively be abdicating its duty to this child if it did not take live testimony from the parties, given the seriousness of the allegations proffered by both parties. Furthermore, since the Defendant's application only seeks a transfer of custody of CH A, and not her two brothers, this Court must consider the effect such a transfer would have on CH A and well as on her two brothers, as sibling relationships should be not disrupted unless there is some overwhelming need to do so. See generally White v. White, 209 AD2d 949 (4th Dept. 1994). Since custody determinations depend to a great extent upon the court's assessment of the credibility of the witnesses, as well as the parties' character, temperament and sincerity (see Matter of Brass v. Otero, 40 AD3d 752 (2d Dept. 2007), it is hereby:

ORDERED, that Branch (3) of the Defendant's Order to Show Cause dated October 26, 2023, be and the same is hereby REFERRED TO A HEARING.

CONTEMPT OF COURT

Contempt is a drastic remedy which should not be granted absent a clear right to the relief. Pinto v. Pinto, 120 AD2d 337 (1st Dept. 1986) (emphasis added); see also Board of Mgrs. of the Empire Condominium v. Attwood, 2014 NY Misc. LEXIS 2265 (Supreme Court New York County 2014); see also Usina Costa Pinto SA v. Sanco Sav Co. Ltd., 174 AD2d 487 (1st Dept. 1991). Contempt is a drastic remedy which necessitates strict compliance with procedural requirements. Loeber v. Teresi, 256 AD2d 747 (3d Dept. 1998) (emphasis added); see also C.M. v. E.M., 2023 NY Misc. LEXIS 22693 (Supreme Court Nassau County 2023); see also S.P. v. M.P., 210 AD3d 1439 (4th Dept. 2022).

Pursuant to Judiciary Law § 753(A)(3):

"A court of record has power to punish, by fine and imprisonment, or either, a neglect or violation of duty, or other misconduct, by which a right or remedy of a party to a civil action or special proceeding, pending in the court may be defeated, impaired, impeded, or prejudiced, in any of the following cases:
* * *
"3. A party to the action or special proceeding, an attorney, counsellor, or other person, for the non-payment of a sum of money, ordered or adjudged by the court to be paid, in a case where by law execution can not be awarded for the collection of such sum except as otherwise specifically provided by the civil practice law and rules; or for any other disobedience to a lawful mandate of the court."

School Tuition

The Plaintiff does not dispute the Defendant's claims that the TRO's with respect to the payment of the Rectory School, Hebron Academy and the Hyde School have been paid. The Plaintiff does not submit any evidence that any additional tuition fees are due beyond the parameters of the TRO's. Accordingly, it is hereby:

ORDERED, that Branches (a) and (c) of the Plaintiff's Order to Show Cause for Contempt dated December 20, 2023 be and the same are all hereby deemed MOOT.

Other Add-On Expenses

The Financial Stipulation provides:

The parties shall equally divide the cost of the children's add-on expenses, including their agreed upon extracurricular activities, their unreimbursed medical, dental, orthdontia and optical expenses, their educational expenses such as: Private school tuition, applications, tutoring.
The parties shall continue to use Our Family Wizard and equally share the cost of same. All invoices and receipts in connection with add-on expenses for the children must be uploaded into Our Family Wizard within 30 days of incurring such debt, and reimbursement to the parent that paid the cost must be made within 15 days of presentation with the receipt/invoice.
The parties agree that with respect to tuition for the children's private school education, the father shall pay his 50 percent of the children's tuition cost directly to the mother via Zelle or some other ACH payment, and that the mother shall remit the full payment of the tuition to the school. The mother shall provide the father with all invoices and receipts in connection with the tuition in a timely fashion so that he knows when to make such payment and that the payment has been made.

(see Financial Stipulation, page 4) (emphasis added).

Here, the Court is constrained to deny the Plaintiff's application for contempt without prejudice and with leave to renew upon the submission of proper papers. While it would appear that some of the Our Family Wizard entries, themselves, are appended to the Plaintiff's moving papers, the Plaintiff fails to append the actual invoice and proof of payment to her moving papers with respect to some of those expenses, such as camp and some of the tuition invoices. Without the actual invoice and proof of payment, this Court is unable to grant the Plaintiff the drastic remedy of contempt at this time, as that evidence should have been before the Court. It also appears from the Plaintiff's moving papers that there are invoices or receipts from her "gmail" account, but the Court is unsure, based on this Record, as to whether or not those were posted to Our Family Wizard, as mandated by the parties' Financial Stipulation. Rather than deny the request outright, since these expenses are for the benefit of the parties' children, the Court grants the Plaintiff leave of Court to re-file the application with the appropriate proof appended thereto. Accordingly, it is hereby:

ORDERED, that Branches (b) and (d) of the Plaintiff's Order to Show Cause for Contempt dated December 20, 2023 be and the same are all hereby DENIED WITHOUT PREJUDICE and with leave to renew upon the submission of proper papers insofar as indicated herein.

COUNSEL FEES/SANCTIONS

The Plaintiff seeks both sanctions and counsel fees. The Court has carefully reviewed the invoices appended to the Plaintiff's moving papers (see NYSCEF Document No.: 334) and cross-moving papers (see NYSCEF Document No.: 353). The Court notes that both sets of invoices contain charges dating back to 2021, which was before the parties agreed to the terms of the Stipulation(s), and that there appears to be charges related to Family Court matters. The Court is unable to ascertain what time charges were incurred after the parties entered into both Stipulation(s), and, even if they do post-date the Stipulation(s), whether or not those charges pertain the family court matters or these matters inasmuch as those times charges are not isolated with enough specificity. The Court therefore denies the Plaintiff's application for sanctions and/or counsel fees without prejudice to her right to re-file the application with the time charges incurred in connection herewith isolated, indicated or specifically denoted on her invoices. Accordingly, it is hereby:

ORDERED, that Branch (e) of the Plaintiff's Order to Show Cause for Contempt dated December 20, 2023 and Branch (1) of the Plaintiff's Notice of Cross-Motion dated January 10, 2024 be and the same are all hereby DENIED WITHOUT PREJUDICE and with leave to renew/refiling upon the submission of proper papers insofar as indicated herein.

Any other relief requested not specifically addressed herewith is hereby DENIED.

All parties and counsel and the attorney for the children are hereby directed to appear in the Supreme Court, Nassau County, before the undersigned Justice at the Matrimonial Center in IAS/Matrimonial Part 11 on March 26, 2024 at 10:00 a.m. for a PRE-HEARING CONFERENCE and to select a hearing date.

The foregoing constitutes the DECISION & ORDER of this Court.

[1] The Custody Stipulation was so ordered by the undersigned Justice on April 12, 2023.

[2] The Financial Stipulation was so ordered by the undersigned Justice on April 12, 2023.

[3] At times hereinafter in this Decision and Order, the Custody Stipulation and the Financial Stipulation may be collectively referred to as the "Stipulation(s)".

[4] In the absence of the undersigned Justice.

[5] He sets forth that the complaints were made as follows: November 24, 2020, determined as unfounded on March 25, 2021; November 14, 2022, determined unfounded on May 1, 2023; February 2, 2023, determined to be unfounded on May 1, 2023; April 12, 2023, determined to be unfounded on May 1, 2023; and August 7, 2023, determined to be unfounded on August 25, 2023.

[6] The AFC sets forth that the Final Order of Protection, in sum and substance, requires the Defendant to stay away from the Plaintiff, C III and C A, and directs the Defendant to refrain from communication with the Plaintiff, C III and C A, except for parenting or the well-being of the children, as well as directing the Defendant to refrain from committing any hazardous acts with respect to all three children.

[7] The Second Department has also emphasized that stipulations are not to be lightly case aside especially where the party seeking to vacate the stipulation was represented by counsel. Kelly v. Chavez, 33 AD3d 590 (2d Dept. 2006).

[8] See Custody Stipulation, page 10, lines 16-19; see Financial Stipulation, page 20, lines 8-11.

[9] In both the Custody Stipulation and Financial Stipulation, this Court wishes to punctuate that it specifically told the parties that they had the right to proceed to trial with respect to the issues that they agreed to settle.

[10] The Court also notes that the Financial Stipulation itself provides the following:

THE COURT: Are you each satisfied with the representation you have received?

MS. L: Yes.

MR. L: Yes.

The Court finds that the Defendant's on the Record acknowledgment that he was satisfied with the representation he received from his counsel defeats his claim that his attorney was "bulldozed".

[11] $1,700.00 per month × 12 (monthly per year) × 11 (approximate years remaining on his child support obligation) = $224,400.00.

[12] The Defendant does not allege that he made an application to adjourn the trial and was denied this request.

[13] It does not appear to the Court that the Defendant claims that the parental access schedule, both regular and holiday and summer, to be unconscionable or manifestly unfair. Therefore, those provisions of the Custody Stipulation are not discussed herein."