SPOUSAL MAINTENANCE INCLUDED IN INCOME FOR CHILD SUPPORT PURPOSES

Was this a drafting error or the actual intention of the parties? Note that the remand appears to require a hearing on the intention of the parties as the Supreme Court's determination was "as a matter of law".

Toscano v Toscano, 2017 NY Slip Op 06674, Decided on September 27, 2017, Appellate Division, Second Department:

"The parties, who have two children together, entered into a separation agreement dated September 9, 2011, which was incorporated, but not merged, into their subsequent judgment of divorce. In relevant part, the agreement provided that the plaintiff (hereinafter the mother) would pay the defendant (hereinafter the father) $4,000 per month in spousal support for 36 months, at which point the mother's spousal support obligation would decrease to $2,083.33 per month for 24 months, and then cease altogether.

The agreement also provided that, given the father's lack of any income in the year preceding separation, his child support obligation would be set at $25 per month. However, the agreement further provided that, upon the happening of any "adjustment circumstances" outlined in the agreement, the amount of the father's child support obligation would be adjusted using the statutory formula set forth in the Child Support Standards Act. Those circumstances were defined as: "(i) December 31st of any year in which the Father's earned income exceeds $25,000; (ii) December 31st of any year in which the Father's gross income from all sources exceeds $45,000; (iii) The date on which each child becomes emancipated." The agreement noted, however, that a court could modify any order of child support, including an order incorporating without merging an agreement or stipulation of the parties, upon a showing of (i) a substantial change of circumstances; (ii) three years having passed since the order was entered, last modified, or adjusted; or (iii) a change in either party's gross income by 15% or more since the order was entered, last modified, or adjusted.

By an order to show cause dated January 13, 2015, the mother moved, inter alia, to modify the father's child support obligation. In her supporting affidavit, the mother averred that, during the 2012 calendar year, she paid $48,000 in spousal support to the father, and thus, for that year, the father's "gross income from all sources" exceeded $45,000, triggering a mandatory adjustment of the father's basic child support obligation. The father, in opposition, contended that there was no indication in the agreement that the spousal support paid to him was intended to be included in the calculation of his child support obligation and that it was illogical that he would accept spousal support from the mother, only to immediately pay her back with her own money.

The Supreme Court concluded that the parties' agreement did not intend for child support to be paid back to the mother by the father from the spousal support she paid to him. The court stated that, if such was the parties' intention, the agreement would have clearly so stated, but that the court could not now construe the agreement as providing that the spousal support was to be considered income for child support purposes. In light of this determination, the court denied that branch of the mother's motion which was to modify the father's child support obligation. The mother appeals from so much of the order as denied that branch of her motion. We reverse the order insofar as appealed from.

A stipulation of settlement entered into by parties to a divorce proceeding constitutes a contract between them subject to the principles of contract interpretation (see Matter of Miller v Fitzpatrick, 147 AD3d 845; Ayers v Ayers, 92 AD3d 623, 624; De Luca v De Luca, 300 AD2d 342). Where the intention of the parties is clearly and unambiguously set forth, effect must be given to the intent as indicated by the language used (see Slatt v Slatt, 64 NY2d 966, 967; Matter of Miller v Fitzpatrick, 147 AD3d at 847; Ayers v Ayers, 92 AD3d at 624). "A court may not write into a contract conditions the parties did not insert by adding or excising terms under the guise of construction, and it may not construe the language in such a way as would distort the contract's apparent meaning" (Cohen-Davidson v Davidson, 291 AD2d 474, 475; see Matter of Scalabrini v Scalabrini, 242 AD2d 725, 726).

The Supreme Court erred in concluding that the parties did not intend to include the spousal support paid by the mother to the father as part of the father's gross income from all sources used to determine whether his child support obligation should be modified. The use of the terms "gross income from all sources," each of which have a clear and plain meaning in and of themselves, coupled with the fact that the agreement distinguished between "earned income" and "gross income from all sources," established that the parties contemplated a clear distinction between income the father earned and monies the father obtained from any sources, including spousal support, to support himself. Moreover, by concluding as it did, the court failed to acknowledge that the agreement specifically stated that the father would be required to report the spousal support as income on his tax returns, which, in fact, he did. The Child Support Standards Act requires the court to establish the parties' basic child support obligation as a function of the "gross (total) income" that is, or should have been, reflected on the most recently filed income tax return (Family Ct Act § 413[1][b][5][i]; see Matter of Krukenkamp v Krukenkamp, 54 AD3d 345; Miller v Miller, 18 AD3d 629, 631; Bains v Bains, 308 AD2d 557, 559; McNally v McNally, 251 AD2d 302, 303). Thus, the parties knew or should have known that the spousal support would be considered income to the father by any court called upon to modify his child support obligation. Ultimately, given the precise language utilized in the agreement, the court erred in concluding that the parties did not intend to include the father's spousal support in his gross income from all sources as a matter of law.

Accordingly, the order must reversed insofar as appealed from and the matter remitted to the Supreme Court, Suffolk County, for a new determination of that branch of the mother's motion which was to modify the father's child support obligation that includes spousal support received by the father in the calculation of his gross income from all sources."

CHILD SUPPORT AGREEMENTS - WHERE AMOUNT VARIES WITH INCOME

Decker v. Decker, 2017 NY Slip Op 1614 - NY: Appellate Div., 3rd Dept. 2017:

"Plaintiff (hereinafter the mother) and defendant (hereinafter the father) are the divorced parents of a daughter (born in 1995) and a son (born in 1998). In 2005, the parties stipulated to a separation agreement that was incorporated but not merged into the judgement of divorce. The agreement set forth the father's child support obligation based upon his then-current income of just under $50,000 and provided that the father's income would be subject to reevaluation each year. To facilitate the yearly reevaluation, the agreement provided that the parties would exchange their "proper and complete" income tax returns each year, and the father's child support obligation would "rise or fall" based upon his annual income in accordance with the Child Support Standards Act (see Domestic Relations Law § 240 [1-b]). In November 2014, the mother moved to enforce the agreement, alleging, among other things, that the father had failed to provide her with a copy of his tax returns for several years and, as a result, he had underpaid his child support obligation. The father then moved for, among other things, an order terminating the tax exchange provision of the agreement. Following a hearing, Supreme Court granted the mother's motion, calculated the arrears owed by the father for 2011, 2012, 2013 and 2014, set the father's monthly child support obligation going forward and denied the father's motion. The father now appeals.

Despite the father's efforts to limit any increases in his child support obligation by entering into a series of post-judgment oral agreements with the mother, she did not waive her right to collect the child support contemplated by their separation agreement. Although a parent can expressly waive his or her right to unpaid child support, such a waiver must evince a "voluntary and intentional abandonment of a known right" (Matter of Williams v Chapman, 22 AD3d 1015, 1017 [2005] [internal quotation marks and citations omitted]; accord Matter of Hastie v Tokle, 122 AD3d 1129, 1129-1130 [2014]). Here, although the record establishes that the father negotiated child support increases with the mother in 2009, 2012 and 2013, he readily acknowledged that he consistently failed to provide the mother with a copy of his annual income tax returns and, therefore, she was unaware that his annual income eventually exceeded $350,000. Significantly, the father testified that the mother did, in fact, request "more information" than what he verbally provided to her, but he told her that he did not "have to give [her his] full and complete tax returns because the law is supportive of that." According to the mother, she requested a copy of the father's tax returns each year, but he refused to comply, telling her that they were too complicated for her to understand and, because he was no longer residing in New York, he was not subject to the Child Support Standards Act. In light of the father's efforts to conceal the true extent of his income, we agree with Supreme Court that the mother did not voluntarily and intentionally waive her right to any unpaid child support (see Matter of Hastie v Tokle, 122 AD3d at 1130; compare Hannigan v Hannigan, 104 AD3d 732, 734-735 [2013], lv denied 21 NY3d 858 [2013]; Matter of O'Connor v Curcio, 281 AD2d 100, 105 [2001]).
.......
Finally, we find no merit to the father's assertion that the tax return exchange provision is unworkable, and we cannot agree that Supreme Court erred in denying his request to terminate it. In our view, this provision is the only practical means by which the parties can determine the appropriate amount of child support without the court's annual intervention. To the extent that the father is concerned about the privacy of the Social Security numbers of his wife and their children, those numbers can be redacted. The father's remaining contentions have been considered and determined to be lacking in merit."