Wednesday, April 12, 2017

TO MEDIATE WITHOUT SEPARATE COUNSEL



Recently, I had a conversation with an individual who sought a divorce through mediation but did want separate counsel.

This was one of the problems in Massari v. Massari, 2017 NY Slip Op 50412 - NY: Supreme Court 2017 which was decided about 8 days ago. It was a long term marriage of about 40 years. The husband - defendant "consulted an attorney and was referred to a mediator...on the belief that a mediated outcome would be less costly than a divorce trial. Plaintiff assented to the choice of [the mediator], and the parties entered into a mediation agreement with her. [The mediator] provided mediation services between March 2012 and September 2012. In July 2012, after approximately six or eight sessions, the parties executed a Separation Agreement. Then, in September 2012, they executed a Modification Agreement."

However the wife did obtain separate counsel and waived her right to maintenance:

"Prior to the July Agreement, Plaintiff requested maintenance. The mediator advised her that she was entitled to it. Defendant opposed to paying Plaintiff maintenance and to giving her one half of his 401-k. According to Plaintiff, Defendant was willing to do one or the other, but not both. The parties discussed the issue of maintenance, and Plaintiff told the mediator she thought it was "unfair". She claimed she was unaware she was entitled to seek and obtain the advice of counsel, despite the Agreement's express language that states, in part:
"The Parties acknowledge that the terms of this Agreement have been mediated through the efforts of Melissa Goodstein, Esq. The Parties acknowledge that they have each had the opportunity, and have been advised by their mediator on several occasions to obtain independent counsel of their own selection prior to entering into this Agreement. The Parties acknowledge that they have not consulted with nor retained an attorney with respect to this Agreement although they have strongly been advised to do so. They agree that this should in no way affect the legality or enforceability of this Agreement and that they have each chosen not to use an attorney on their own accord."
(Article XV, §3)"

The court set aside the waiver of maintenance:

"Here, the parties' freedom to enter into an enforceable agreement is conditioned on the statutory requirements that such agreement is "subject to the provisions of Section 5-311 of the General Obligations Law, and provided that such terms were fair and reasonable at the time of the making of the agreement and are not unconscionable at the time of entry of final judgment." DRL §236(B)(3). The Court heard the parties' testimony and found the agreement was fair and reasonable at the time of the making. That finding is consistent with the requirements of Christian v. Christian, 42 NY2d 63, 72-73 (1977), where the threshold focus is on the procedural components forming the agreement. See also Levine v. Levine, 56 NY2d 42, 47 (1982). Insofar as DRL §236(B)(3) requires the court to conclude the terms of the agreement "are not unconscionable at the time of entry of final judgment," a separate examination is required — the court must consider changes to a spouse's economic status including the possibility that a spouse may become a public charge. Certainly, a Judgment incorporating an Agreement, which deprives a party of income after a forty-year-marriage, raises the possibility of unconscionability.

As Justice Ecker observed, the severability of the maintenance provision in the Agreement allows for the preservation of the remaining provisions. Consequently, the Court need not disturb the provisions which equally distribute the marital estate. The Court has no intention of re-writing the Agreement. Cappello v. Cappello, 286 AD2d 360 (2d Dept. 2001). It is unnecessary to do so. The Complaint seeks not only to set aside the Agreement but also an award of non-durational spousal maintenance to the Plaintiff. The trial testimony included some evidence of the parties' financial status and current Statements of Net Worth. Plaintiff's Statement of Net Worth reflects a gross income of $11,352.00 per year ($10,526.00 net) from her part-time employment as a receptionist in a hair salon. The interest income on her 401-k funds is unknown. Her claimed expenses are $3,414.00/month, inclusive of a claimed housing expense of $1,500.00/month, without any indication of payments to her daughter. Her limited housing costs are due to her residing in her daughter's basement apartment. Once the Judgment is entered, Plaintiff will have an additional — albeit unknown — expense for health insurance, which will be paid from her distributive award, depleting it rapidly.[11] The 2016 federal poverty guidelines for a single person household is $11,880.00. In 2017, that figure rises to $12,060.00.[12] Defendant's income is $76,608.00/year, exclusive of overtime or a second job, but consistent with his income during the marriage, which provided the parties' marital standard of living. His monthly gross income is $6,099.58 (net is $4,019.94). He also has a significant housing cost of $2,024.00 inclusive of mortgage and taxes, arising from his refinance of the marital residence to purchase Plaintiff's interest. His Statement of Net Worth indicates a monthly condominium cost, which may assist the parties' younger daughter, or may be a timeshare expense, but it is not otherwise identified. He can still contribute $1,039.00/month to his 401-k and he budgets $208.00/month for vacations. While marital assets were distributed equitably, Defendant remains in a position to significantly improve his comfortable standard of living. The Court concludes there is a manifest unfairness in enabling Defendant to maintain a comfortable standard of living, while relegating Plaintiff to a poverty level lifestyle. Christian v. Christian, supra. Accordingly, the Court awards maintenance to the Plaintiff in the amount of $1,000.00 per month, commencing on the entry of Judgment herein and continuing until Defendant reaches the age of 66 and he is eligible for full Social Security benefits, at which time Plaintiff will be eligible for her full Social Security benefits based on her contributions, and her marriage to Defendant. Consequently, Defendant shall continue to maintain his life insurance as set forth in Article XIII of the Agreement.

[11] Given Plaintiff's health history, it is unknown if she will be able to obtain insurance, even if she has "access" to it, especially with the proposed radical changes to the Affordable Care Act.
[12] See https://aspe.hhs.gov./poverty guidelines. The Court takes judicial notice of this information."

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