STIPULATION REDUCING CHILD SUPPORT ARREARS SET ASIDE

MATTER OF MICHELLE B. v. THOMAS Y., 2022 NY Slip Op 50020 - Kings Co. Family Court 2022:

"It is well-settled that the Family Court has continuing jurisdiction over support proceedings and is empowered to determine applications to modify or enforce judgments and orders of support (see Matter of Saratoga County Support Collection Unit v. Hubert, 160 AD3d 1071 [3rd Dept. 2018]). Pursuant to FCA § 453, proceedings under this part "shall be originated by the filing of a petition containing an allegation that the respondent has failed to obey a lawful court order" (Matter of Pudvah v Pudvah, 172 AD3d 1475 [3rd Dept. 2019; see Matter of Messick v Mesick, 71 AD2d 737 [3rd Dept. 1979]). Generally, stipulations of settlement settling those petitions "are favored by the courts and a stipulation made on the record in open court will not be set aside absent a showing that it was the result of fraud, overreaching, mistake or duress" (Matter of Abidi v Antohi, 64 AD3d 772, 773 [2nd Dept. 2009]; see Matter of Blackstock v. Price, 51 AD3d 914 [2nd Dept. 2008]). However, the law is also quite clear that the court shall not reduce or annul child support arrears prior to the making of an application (see Family Court Act § 451[1]; Matter of Dox v Tynon, 90 NY2d 166 [1997]). Failure to file a petition for the vacatur or reduction of arrears renders the Family Court without subject matter jurisdiction to hear the matter (see Matter of Pudvah, 172 AD3d at 1476; Matter of Sheehan v Sheehan, 221 AD2d 897, 898 [3rd Dept. 1995]).

Applying these principles to the case at bar, the Mother's Objections must be granted. The record reflects that the Mother properly initiated an enforcement proceeding alleging that Father had not paid arrears owing on the Support Order amounting to $206,055.44, for the subject Child. Although the Father's obligation to pay current child support ended when the Child was emancipated on November 15, 2013, he remained obligated to pay those arrears and she had every right to seek enforcement for those outstanding arrears from the Father (see Beckmann v Beckmann, 160 AD3d 799, 800 [2nd Dept. 2018]). After several appearances, on August 3, 2020, the Mother consented to vacate the arrears beyond the amount due to Father by NYCERS in exchange for a lump sum payment.

Nevertheless, the Court of Appeals and the Appellate Division have reminded us that "a court has no discretion to reduce or cancel arrears of child support which accrue before an application for a downward modification of the child support obligation" (Beckmann v Beckmann, 160 AD3d at 800, quoting Matter of Gardner v Maddine, 112 AD3d 926, 927 [2nd Dept. 2013]; see Matter of Dox v Tynon, 90 NY2d at 175-176). Of course, an exception to that rule exists where there is an agreement by the parties to vacate accumulated arrears under a proper petition. This Court acknowledges that the parties may enter into a valid agreement to vacate arrears, but, in this case, neither party has filed the jurisdictionally required petition to vacate, adjust arrears or downwardly modify the child support arrears owed by the Father (see e.g. Matter of Essex County Child Support Enforcement Unit v Crammond, 185 AD3d 1190, 1191 [3rd Dept. 2020] [mother's petition to terminate father's child support and forgive arrears permitted court to issue consent order terminating support obligation and vacating arrears]). In the absence of a such a petition, this Court finds that the Magistrate did not have subject matter jurisdiction to accept the parties' Agreement while adjusting the significant arrears owed by the Father.

Even if there was valid petition pending before the Magistrate, this Court concludes that the Agreement fails due to unconscionability and mutual mistake. When the parties entered into the Agreement, it was unclear whether a QDRO could be set up with NYCERS to facilitate the Mother's receipt of the lump sum payment. The Magistrate informed the parties that it was a complicated process thereby advising the Mother to seek legal representation to assist her with the process. This case was adjourned for several court appearances where the Magistrate herself received updates on the progression of the QDRO. It becomes apparent that the parties should have completed the exploration and investigation into the QDRO before an Agreement could be knowingly and voluntarily reached. Moreover, prior to rendering a decision on the Motion, the record reflects that the Magistrate learned the following: that Mother did not qualify for a QDRO because she is not a former spouse; that she would only be entitled to monthly allotments under an Income Execution Order; and that as of April 11, 2019, Father had an outstanding loan in the amount of $55,736.88, which served to reduce his retirement allowance. Given his prior willful violation and his recalcitrant failure to pay accumulated child support arrears, there is a very slim possibility that the Father would pay the NYCERS loan prior to his retirement date.

Moreover, the existence of a mutual mistake may permit vacatur of an Agreement when "the mistake existed at the time the stipulation was entered into and that it was so substantial that the stipulation failed to represent a true meeting of the parties' minds" (Wit Capital, Ltd. v Obigor, 33 AD3d 859 [2nd Dept. 2006]; see Mahon v New York City Health & Hosps. Corp., 303 AD2d 725 [2nd Dept. 2003]). Here, a mutual mistake was made when there was an assumption that upon the execution of that QDRO, the Mother would be entitled to receive $67,674.36 in a lumpsum payment from Father's NYCERS account. Based on this record, the Court finds that the Magistrate should not have allocuted the parties prior to the filing of an appropriate petition and the completion of the investigation into the QDRO. As such, the Magistrate erred when she denied the Mother's motion to vacate the August 3, 2020 Agreement between the parties.

In accordance with the foregoing, the Court grants the Mother's Objections in their entirety and the matter is hereby remanded to Part 29 for the Magistrate to vacate the Agreement placed on the record on August 3, 2020, restore the Violation Petition to the calendar, and reinstate all outstanding arrears by the Father. The parties and counsel shall appear at a date to be scheduled by the Magistrate. This constitutes the decision and order of the Court.

[1] The Mother attached a letter dated April 11, 2019 from NYCERS to Father, which described various options available to Father at retirement. Only Scharon Y. is listed as a beneficiary. The letter also indicates that the Father has an outstanding loan in the amount of $55,736.58, and the loan would reduce Father's maximum retirement allowance by $3,947.63 per year."

CHILD SUPPORT ARREARS - WHEN SEEKING TO CAP

MATTER OF TONER v. SURLIS, 191 AD 3d 992 - NY: Appellate Div., 2nd Dept. 2021:

"The father and the mother, who have one child, were divorced in December 2006. The father's child support obligation was set at the sum of $1,500 per month.

In the instant proceedings, the mother petitioned to recover child support arrears, and the father petitioned for a downward modification of his child support obligation. After a hearing on the parties' petitions, the Support Magistrate determined that the father willfully failed to pay child support, and calculated the amount of child support arrears to be the sum of $39,225.59 as of November 13, 2019. The Support Magistrate also granted the father's petition for a downward modification of his child support obligation, and set a new obligation of $978 per month.

The father filed objections to the Support Magistrate's orders on the ground that his child support arrears should have been capped at the sum of $500 because his income fell below the poverty income guidelines for a single person as reported by the United States Department of Health and Human Services (see Family Ct Act § 413[1][g]). The mother, inter alia, objected to the downward modification of the father's child support obligation. In the order appealed from, the Family Court, among other things, denied the father's objections, granted certain of the mother's objections, denied the father's petition for a downward modification of his child support obligation, and directed entry of a money judgment in favor of the mother and against the father in the principal sum of $40,327 for child support arrears. The father appeals.

As the Family Court correctly found, the father earned a sufficient amount during 2016 so that the $500 limitation on child support arrears provided by Family Court Act § 413(1)(g) does not apply (see Matter of Giordano v Giordano, 259 AD2d 701 [1999]). The record demonstrated that the father's characterization of the monies he received from the child's paternal grandfather as loans was incredible, and the paternal grandfather's testimony contradicted the father's claim that he fell 994*994 below the poverty income guidelines in 2016 (see Matter of Martin v Cooper, 96 AD3d 849 [2012]).

In 2017, the father worked part-time as a store clerk, and part-time as a commercial real estate agent, and maintained a real estate license held by a commercial real estate broker. At the hearing, the father first testified that he was able to pay his living expenses through the commissions he received, but later testified that he was able to pay his living expenses through money he received from the child's paternal grandfather. The Family Court noted the inconsistencies in the father's testimony, and concluded that he had "no credibility." Accordingly, the evidence failed to establish that the father's income fell below the poverty level in 2017, and there was an insufficient basis to cap his support arrears at $500 (see Family Ct Act § 413[1][g])."