Stefano Zito,
Plaintiff,
against
Valerie Zito, Defendant.
|
53468/2011
John R. Sandleitner, Esq.
Sandleitner & Sandleitner
Attonery for the Plaintiff
5941 Main Street
Tannersville, New York 12485
Deanna Lucci, Esq.
DiMascio & Associates
Attorney for the Defendant
300 Garden City Plaza, Suite 306
Garden City, New York 11530
Anthony J. Auciello, Esq.
Auciello Law Group, P.C.
Attorney for the Intervenor
26 Court Street, 11th Floor
Brooklyn, New York 11242
Jeffrey S. Sunshine, J.
Introduction
Upon the foregoing papers, motion sequence numbers 2 and 3 are
consolidated for disposition. Defendant Valerie Zito moves for an order: (1) directing
plaintiff Stefano Zito to pay, pendente lite, all of the carrying charges and
monthly expenses in connection with the former marital residence, located on Bay Ridge
Parkway in Brooklyn, including but not limited to the mortgage, real estate taxes,
homeowners insurance, flood insurance and utilities, along with the private school tuition
for the parties' two children and the automobile insurance on her vehicle; (2) directing
plaintiff to pay for the unreimbursed medical, pharmaceutical, psychiatric, psychological,
hospital, optical and therapeutic expenses incurred in connection with the diagnosis or
treatment of her and the children, with plaintiff to reimburse her within seven (7) days of
receipt of proof of payment; (3) directing plaintiff to pay her $2,680 per month for
non-taxable pendente lite spousal maintenance; (4) directing plaintiff to pay her
$3,446.08 per month for pendente lite child support for the unemancipated
children of the marriage; (5) directing plaintiff to maintain medical insurance for her and
the parties' children; (6) awarding defendant counsel fees in the amount of $25,000, with
leave to renew, and directing plaintiff to pay said amount directly to her counsel.
Non-party Smiling Pizza Corp. (the Pizzeria) moves for an order granting it permission
to intervene in the instant action and declaring that plaintiff's father, Santo Zito, is the
sole owner of the Pizzeria, so that it is not a marital asset subject to equitable distribution
herein.
Facts and Procedural Background
Plaintiff commenced this action seeking a judgment of divorce and other
ancillary relief on June 7, 2011. The parties were married on July 8, 2001 and have two
children, a daughter born on October 24, 2005 and a son, born on April 7, 2008. During
the marriage, the parties lived in a three-floor home that plaintiff purchased from his
parents before the marriage; plaintiff vacated the premises in January 2013.
Plaintiff works at the family owned Pizzeria, the ownership of which is in
issue herein. Defendant is a licensed pharmacist; she claims that she has been a full time
[*2]homemaker and caretaker for the children since they
were born. The children attend private school and participate in piano lessons, art classes,
Tae Kwon Do and soccer.
By order dated November 29, 2012, this court, on consent, appointed
Brisbane Consulting Corp. (Brisbane) to appraise the value of the Pizzeria and the
normalization of earnings. Subsequent thereto, by order dated November 19, 2013,
issued on consent of the parties, Brisbane was authorized to conduct a life style
analysis.
On September 17 and 18, 2013, this court held a hearing to determine the
parties' income and expenses in order to set the amount of pendente lite
maintenance and child support that plaintiff would be ordered to pay pending
determination of the instant motion. Following the hearing, plaintiff was ordered to
continue paying the household expenses that he testified he had been paying; the
children's expenses; automobile insurance for defendant's vehicle; and $550 per week in
unallocated child support and maintenance. Plaintiff was ordered to make payment by
check or money order on Friday of each week. Both parties were also enjoined from
selling, withdrawing, transferring, encumbering, concealing or otherwise disposing of
property, whether individually or jointly owned.
Smiling Pizzeria
The court will first address Smiling Pizzeria's motion to intervene, since
plaintiff's relationship to that business is also relevant to the determination of the amount
of pendente lite spousal and child support that he will be ordered to pay.
Smiling Pizzeria's Contentions
Smiling Pizzeria argues that it should be granted leave to intervene in this
action pursuant to CPLR 1013 because there are common questions of law and fact,
since it is seeking to establish that the business belongs to Santo Zito, the plaintiff's
father, and is accordingly not subject to equitable distribution. Smiling Pizzeria further
asserts that defendant will not be prejudiced by such relief, since she is claiming that
plaintiff is an owner of Smiling Pizzeria and has been in possession of corporate
documents, tax returns, and stock certificates for well over a year. Further, allowing
Smiling Pizzeria to intervene will not delay the action, since its accountant has already
been deposed.
Turning to the merits, Smiling Pizzeria argues that the shareholder's
agreement that defendant is relying on to argue that plaintiff owns the business is not
signed and does not bear the corporate seal. Counsel for Smiling Pizzeria explains that
plaintiff's father and his uncle, Giovani Caruso, went into the pizza business and formally
incorporated in 1984. Further, Smiling Pizzeria is authorized to issue only 200 shares of
stock. 100 were issued to Santo Zito and 100 were issued to the uncle. In 1986, Santo
Zito purchased all of the uncles's shares in the business and has been the sole shareholder
since; at that time, the uncle's shares were cancelled and have never been reissued , as is
established by copies of the Stock Certificates and the Stock Transfer Ledger. Counsel
further avers that the fact that Smiling Pizzeria is owned by Santo Zito is supported by
copies of income tax returns for 2007 to 2012.
Santo Zito and plaintiff submit affidavits in which each reiterates the claims
made by counsel. Plaintiff emphasizes that he is not now, nor has he ever been, an owner
of Smiling Pizzeria.
Defendant's Contentions
Defendant argues that plaintiff always referred to Smiling Pizzeria as "his"
since she first met him in 1994. Further, he had complete control over the operation of
the business, including but not limited to hiring and firing employees, doing the payroll,
signing documents, writing checks and ordering products. The wife avers that her
father-in-law, Santo Zito, was involved in the business, but only "on a semi-retired,
part-time basis." Defendant explains that at her deposition, she testified that plaintiff
acquired his interest in the business in 2008 or later because she found unsigned
Shareholders Agreements indicating that plaintiff owned 80 shares, his father owned 80
shares and his cousin owned 40.
Defendant further asserts that plaintiff himself swore to his ownership of
Smiling Pizzeria in his two (2) affidavits of net worth dated September 16, 2010 and
November 20, 2012. In addition, it is uncontroverted that he testified under oath at his
deposition on June 10, 2013, that he was an owner of the business. Plaintiff also
consented to have Brisbane do a forensic evaluation of the business and he himself paid
the retainer, as ordered.
Defendant also relies upon a stock certificate dated April 1, 1999, which
indicates that plaintiff is the owner of 100 shares of the stock of Smiling Pizzeria, along
with other documents that establish that he was elected the Director, Vice-President and
Secretary and that Santo Zito was resigning; she asserts that these documents were
provided to her attorney by plaintiff's former counsel.[FN1]
Plaintiff also began saving cash register receipts for the business, as requested by
Brisbane Consulting Corp. Defendant further contends that New York Life issued a life
insurance policy insuring plaintiff, in the amount of $500,000, with Smiling Pizzeria as
the beneficiary; she argues that this policy supports her assertion that plaintiff is an
owner of the business. Defendant thus concludes that since it was not until plaintiff
retained new counsel that he changed his position, he should not now be permitted to
renounce his claim that he owns 50% of Smiling Pizzeria. At oral argument, plaintiff's
present counsel conceded that he was paid $10,000.00 by the defendant's father Frank
Zito and prior counsel received $40,000.00.
Plaintiff's Contentions
Plaintiff alleges that Smiling Pizzeria is an S corporation owned by his
father. He further argues that this was corroborated by the testimony of the accountant
for Smiling Pizzeria wherein he testified at a deposition that plaintiff's father received the
K-1 tax forms regarding the corporation and that no shares of the business were ever
[*3]passed to plaintiff.
Smiling Pizzeria's Reply
In reply, Smiling Pizzeria argues that defendant is asserting, in effect, that
plaintiff is an owner of the business because he so stated in his affidavit of net worth and
so testified at his deposition. Counsel for the Pizzeria asserts, however, that these
representations cannot serve to create an ownership interest. Smiling Pizzeria again
argues that the stock certificates upon which defendant relies are not signed and do not
bear the corporation's seal. Further, the 2007 documents that defendant relies upon were
prepared for a transaction that was never consummated. Finally, counsel emphasizes that
the tax returns filed by Smiling Pizzeria have always indicated that Santo Zito was the
sole owner.
Discussion
In view of plaintiff's continuing representation that he owned a 50% interest
in Smiling Pizzeria in the two (2) affidavit's of net worth that he prepared with counsel;
in his deposition testimony; in his conduct in agreeing that Brisbane would value his
interest in the business and in paying the appraiser; and in supplying his former attorneys
with documents that evidence his ownership interest, which documents were provided to
defendant in discovery, plaintiff will not now be permitted to change his position and
argue that Smiling Pizzeria is solely owned by his father. In this regard, the court holds
that such conduct is not permitted pursuant to the doctrine of judicial estoppel.
" Under the doctrine of judicial estoppel, or estoppel against inconsistent
positions, a party is precluded from inequitably adopting a position directly contrary to or
inconsistent with an earlier assumed position in the same proceeding'" (Nestor v
Britt, 270 AD2d 192, 193, 707 NYS2d 11 [1 Dept., 2000], quoting Maas v
Cornell Univ., 253 AD2d 1, 5, 683 NYS2d 634 [3 Dept., 1999], affd 94
NY2d 87, 699 NYS2d 716 [1999]). In Neumann v Metropolitan Medical Group, P.
C., the court has explained that:
" It is a well-settled principle of law in this State that a party who assumes a certain
position in a legal proceeding may not thereafter, simply because his interests have
changed, assume a contrary position. (See Matter of Martin v C.A. Prods. Co., 8
NY2d 226, 231, 203 NYS2d 845 [1960]; Houghton v Thomas, 220 AppDiv 415,
423, 221 NYS 630 [1st Dept 1927], affd 248 NY 523 [1928]). Invocation of the
doctrine of estoppel is required in such circumstances lest a mockery be made of the
search for truth.' (Karasik v Bird, 104 AD2d 758, 480 NYS2d 491 [1st Dept
1984]). Indeed, having charted their own course, the plaintiffs cannot now be heard to
complain of the result (cf., Orens v Secofsky, 60 AD2d 866, 867, 401
NYS2d 259 [2d Dept 1978])."
(Neumann v Metropolitan Medical Group, P. C., 153 AD2d 888,
889, 545 NYS2d 592 [2 [*4]Dept., 1989]).
Accordingly, " [t]he doctrine is invoked to estop parties from adopting such
contrary positions because the judicial system "cannot tolerate this playing fast and loose
with the courts'"'" (Prudential Home Mort. v Neildan Constr., 209 AD2d 394,
395, 618 NYS2d 108 [2 Dept., 1994], quoting Kimco v Devon, 163 AD2d 573,
575, 558 NYS2d 630 [2 Dept., 1990], quoting Environmental Concern v Larchwood
Constr., 101 AD2d 591, 594, 476 NYS2d 175 [2 Dept., 1984]; see generally
Maas, 253 AD2d at 5 [the doctrine of judicial estoppel, or estoppel against
inconsistent positions, precluded plaintiff from seeking to convert an action into an
article 78 proceeding, since plaintiff strenuously opposed such conversion when a
request was made by defendant in the context of its CPLR 3211 motion to dismiss];
Karasik, 104 AD2d 758 [the surviving husband was estopped from adding a new
claim when he was awarded a new trial on appeal, i.e., that defendant psychiatrist and her
employee failed to diagnose his wife as suffering from alcoholism, since during the trial,
he denied that his wife was even a moderate drinker, so that the new claim was totally at
odds with his position at all prior stages of the eight year litigation and was highly
prejudicial to defendants]; see also Fixler v Reisman, 2014 NY Slip Op 30590(U)
(Sup Ct, New York County 2014] [because plaintiff did not list the subject funds in her
affidavit of net worth in her divorce action, she was barred from "taking one position in a
court proceeding and subsequently taking an inconsistent position in a second
proceeding"]). Accordingly, for the purpose of equitable distribution, plaintiff is found to
be the owner of 50% of Smiling Pizzeria, as he has consistently represented throughout
this action until he discharged his prior counsel and retained new counsel.
This conclusion, however, does not compel the court to grant the business'
motion to intervene in order to protect its interests. In this regard, Brisbane will put forth
an evaluation on the dollar value of plaintiff's one-half interest in Smiling Pizzeria. The
court can then, after trial considering any testimony and evidence, including expert
reports, distribute a dollar amount when addressing the issue of equitable distribution of
the parties' marital assets, as is done in distributing any license or business, without
affecting the ownership or operation of the business (see generally O'Brien v
O'Brien, 66 NY2d 576, 589, 498 NYS2d 743 [1985] [the court retains the discretion
to make a distributive award in lieu of an actual distribution of the value of the
professional spouse's license]; Giokas v Giokas, 73 AD3d 688, 690, 900 NYS2d 370 [2
Dept., 2010) [the court properly awarded defendant-wife 10% of the value of the
plaintiff-husband's business interests]; Wasserman v Wasserman, 66 AD3d 880, 882, 888 NYS2d
90 [2 Dept., 2009] [the trial court properly awarded the wife 50% of the value of the
businesses]; Quinn v Quinn,
61 AD3d 1067, 1069, 876 NYS2d 720 [3 Dept., 2009] [court properly awarded
plaintiff 30% of the value of defendant's interest in the medical business]).
Accordingly, since the court at first instance will consider the dollar amount
of plaintiff's interest in Smiling Pizzeria, and is not required to make an award that gives
[*5]defendant an ownership interest in the business,
Smiling Pizzeria has no interests to protect that would warrant an order permitting it to
intervene in this matrimonial action. Its motion is accordingly denied in its entirety; to
hold otherwise would open the floodgates to party owned businesses become a third
litigant in matrimonial litigation.
Pendente Lite Support
Defendant's Contentions
In support of her motion, defendant alleges that a few weeks before she
made the instant motion, plaintiff retained a new attorney and drastically reduced the
amount of support that he was providing for her and the children from $800 to $250 per
week, leaving her unable to meet the families' expenses. Defendant claims that during the
marriage, the family enjoyed a lavish life style with the money earned by plaintiff from
Smiling Pizzeria, alleging that plaintiff worked long hours, including weekend shifts, for
more than 20 years. She further asserts that plaintiff brought home at least $3,500 per
week in cash when they first married, which she believes has increased over the past 12
years; she claims that he kept large amounts of money in a backpack in their attic.
Defendant claims that plaintiff nonetheless stated that he earned only $78,860 in his
affidavit of net worth for 2011 and $70,451 for 2010. Moreover, at his deposition,
plaintiff asserted his Fifth Amendment rights on at least 37 occasions, i.e., whenever he
was asked about his income or the operation of Smiling Pizzeria.
Defendant further alleges that at his deposition, Smiling Pizzeria's
accountant, Pio Andreotti, testified that he prepared tax returns for the business based
upon the information reported to him by plaintiff's father and mother. Defendant thus
concludes that plaintiff is attempting to hide his income and is denying his ownership
interest in Smiling Pizzeria.
Defendant goes on to argue that based upon the parties' standard of living
during the marriage, the court should impute income in the amount of $250,000 per year
to plaintiff. To substantiate her claim, defendant alleges that the parties employed a
housekeeper who cleaned the former marital residence at least once a week, they
regularly vacationed in the Bahamas, dined out at nice restaurants, drove luxury vehicles
and gave generous gifts to their family and friends.
Defendant further asserts that she "had a keen interest in fashion and love for
luxury clothing and accessories" and shopped using cash and credit cards; when the
credit card bill became due, plaintiff would make a deposit into the parties' joint
checking account and she would pay the bill in full. By way of example, defendant states
that in 2012 she spent $42,025.47 at Elie Tahari; in 2011, she spent $15,192 at retailers;
in 2010, she spent $18,046; in 2009, she spent $4,839; in 2008, she spent $10,250 at
Neiman Marcus, $2,871 at Macy's and $712 at Bloomingdales's. Defendant goes on to
assert that in 2011, she charged $18,055 on her Bank of America Upromise credit card
for miscellaneous family expenses and clothes; she and plaintiff paid $19,125 towards
this card during the year. In 2012, she charged $4,219. She also charged $13,089 for
[*6]shopping on a Chase Sapphire credit card in 2011
and $6,524 in 2012; in 2010, they paid $28,333 on that card. Defendant also charged
$1,012 on an Amex Starwood credit card in 2011 and $9,576 in 2012; they paid $6,863
on this card between November 2011 and September 2012. She also charged $3,169 on
an Amex Costco credit card in 2011 and $7,010 in 2012. She charged $3,383 on a
Disney Visa credit card in 2012, $1,373 on her Nordstorm credit card and $906 on her
Neiman Marcus credit card. She also charged $3,068 in 2009, $10,836 in 2010 and
$5,614 in 2011 on three Bloomingdale's credit cards. Defendant also claims that some of
the parties' expenses were paid in cash, which is not reflected in the above amounts. She
also points out that plaintiff recently hosted an elaborate First Holy Communion party for
their eldest daughter, which cost $23,600.
In addition, defendant states that $133,399 was deposited into the parties'
joint checking account at Sovereign Bank during 2010 and $134,233 was withdrawn;
$87,095 was deposited and $92,822 was withdrawn in 2011; and $79,047 was deposited
and $78,427 was withdrawn in 2009. Defendant thus concludes that in view of the
history of their spending, their income is far higher than that reported on their income tax
returns. She contends that this conclusion is further supported because they were able to
save more than $140,000, purchase a time share that cost $38,000 and was paid off in
one year and only carried minimal balances on their credit cards. Further, plaintiff
withdrew $100,000 from their Ridgewood Savings Bank account in May 2010, which he
placed in various accounts; when defendant learned of this withdrawal, she claims she
withdrew $40,000 from that account to protect against the possibility of further
withdrawals by plaintiff.
Defendant thus concludes that the above discussed purchases establish that
she spent an average of $33,779 annually from 2009 through 2011, or $2,814 per month.
Further, in her affidavit of net worth, dated December 18, 2012, defendant calculates that
the parties had annual expenses of $162,384, or monthly expenses of $13,532.[FN2]
Defendant lists monthly expenses as including: mortgage $1,375; real estate
taxes $391; gas $334; electricity $ 325; telephone 350; water $90; groceries $1,400;
dining out $250; coffee $100; wife's clothing $2,000; children's clothing $500; laundry
$200; dry cleaning $200; automobile insurance $350; wife's therapist $860;
gardening/landscaping $150; exterminating $130; baby sitter $200; domestic help $480;
car payment $395; gas/oil for wife's car $570; parking and tolls $140; nursery school
$292; primary school $292; vacations $292; summer camp $166; health club for wife
$69; hobbies/art $42; music lessons $100; sports lessons - Tae Kwon Do $330; birthday
parties $129; beauty parlor $156; beauty aids $200; gifts $250; charitable contributions
$25. The total expenses are $11,367 monthly which is $136,404 annually.
Defendant further contends that in the plaintiff's affidavit of net worth, dated
November 20, 2012, plaintiff erroneously fails to include many of the expenses incurred
by the parties, including the cost of clothing for her and the children, her gym,
unreimbursed medical expenses, landscaping and real estate taxes. She argues that he
understates other expenses, so that the parties' expenses, as listed on his affidavit of net
worth, total only $6,161 per month, or $73,943 per year. A review of his affidavit of net
worth indicated that his expenses include: mortgage $1,375; gas $334; electricity $325;
groceries $500; telephone $100; water $56; clothes for husband $200; dry cleaning $50;
life insurance $138; automobile insurance $308; maid $480; car payments $395; gas
$100; exterminating $60; school $630; school supplies $20; summer camp $66;
vacations $318; theater/ballet $90; cable television $156; birthday parties $83; barber
$30; charitable contributions $83; cell phone $220. The total expenses he itemizes are
$6,117 per month which is $73,494 per year.
Defendant thus concludes that based upon the money that they spent, the
court should impute income in the amount of $250,000 per year to plaintiff and calculate
his support obligations based on this amount. She goes on to argue that because plaintiff
has now reduced the amount of support he is willing to provide, he should be ordered to
directly pay the mortgage on the former marital residence, $1,375; gas, $334; electricity,
$325; water $56; telephone, $350; cable, $150; tuition for the children, $630; and
insurance for her automobile, $350. In addition, he should be ordered to continue to
provide health and dental insurance coverage, at his sole expense, and to pay 100% of all
unreimbursed medical expenses. Defendant further asserts plaintiff should also be
ordered to pay her $2,680 per month in pendente lite maintenance and $3,446 in
pendente lite child support.
Plaintiff's Contentions
In opposition to defendant's motion, plaintiff alleges that he is employed as
the manager of Smiling Pizzeria, which is owned by his father; he earns approximately
$78,000 per year, as is reflected in his 2011 W-2 Form. Plaintiff also asserts that since
the beginning of the marriage, defendant has worked as a licensed pharmacist at a
pharmacy in Brooklyn, earning $65 per hour. He claims that she used whatever money
she earned to meet her personal expenses. Moreover, he alleges that during her testimony
at the hearing held before this court in September 2013, she admitted that she worked off
the books at the pharmacy for $50 per hour, and that she never reported any of her
earnings to the Internal Revenue Service. He further asserts that defendant has always
used her earnings to pay for her credit card expenses, health club, housekeeper,
landscaping, children's extracurricular activities, beauty parlor, cosmetics and gifts. He
thus concludes that defendant's claim that the family lived a lavish lifestyle because of
the exorbitant amount of money he brought home from Smiling Pizzeria is simply not
true.
Plaintiff further alleges that in addition to withdrawing $60,000 from the
parties' joint account, defendant withdrew another $47,000 from a joint account [*7]maintained with her father to "support her ridiculous
shopping sprees." Moreover, defendant testified at her deposition that she transferred
money from her account to pay her credit card bills if there was not enough money in the
parties' Sovereign Bank account. He goes on to assert that defendant maintains $50,000
in her individual accounts. Plaintiff also alleges that despite defendant's assertions that
her standard of living has changed, she continues to maintain her gym membership, she
has her nails and hair done at a local salon and she recently spent $5,000 for an eyebrow
replacement, so that she is living in the same style as she was prior to their
separation.
Plaintiff goes on to explain that prior to the marriage, he purchased the
former marital residence in which the family resided from his parents for $300,000; there
is an outstanding mortgage of approximately $168,000, with a monthly payment of
approximately $1,375. He further avers that despite defendant's allegations to the
contrary, throughout this proceedings, he has continued to pay the household expenses,
including the mortgage, real estate taxes, homeowner's insurance, electric, gas, water,
cable TV, internet, telephone and routine maintenance. For example, he had a new
washing machine installed two years ago when the old one broke and last summer he
purchased a new air conditioner and had it installed so that his family would be
comfortable. In addition, he continues to provide medical insurance for the entire family,
which he receives through his employment at no cost; he avers that although defendant
has not given him any medical bills or receipts, he is willing to share any unreimbursed
costs on a pro rata basis. Plaintiff advises the court that he is making payments in
compliance with the Preliminary Conference Order, pursuant to which he agreed to
maintain the status quo. Thus, he has been paying approximately $3,200 per month in
household expenses and has given defendant $250 per week for other expenses, which
he claims results in her having more disposable income than he has.
Plaintiff also argues that the court should impute income to defendant. In
support of this request, plaintiff argues that defendant is currently working as a
pharmacist while she attempts to find other employment. He alleges that the national
average salary for a full time pharmacist is $150,000 per year. He further avers that he
cannot afford to maintain defendant's lavish lifestyle and that she was able to live in the
manner in which she did by drawing down the parties' savings accounts, accounts held
with her father and by using the money that she earned. He further avers that at this point
in time, he has over $20,000 in credit card debt.
Defendant's Reply
In reply, defendant argues that it is not true that he has paid her $250 a week
for temporary support since he left the former marital residence in January 2013 and
argues that he had, in fact, paid $800 until he retained new counsel and then the
payments were unilaterally reduced, as is illustrated by letters exchanges between counsel
and annexed to her papers. She further avers that plaintiff falsely states that she was able
to support herself because she regularly worked as pharmacist, which is not true. In [*8]addition, she has only $126 on deposit in Chase, since she
used the rest of the money that she withdrew from the parties' account to cover the
shortfall in expenses because plaintiff failed to maintain the status quo.
Temporary Maintenance
Pursuant to the spousal maintenance guidelines, plaintiff's support obligation
would be $23,400 per year, based upon an income of $78,000, as reported in the parties'
most recent income tax return:
I. ADJUSTED GROSS INCOME AS DEFINED BY THE CSSA:
Income Up to $543,000
1. Plaintiff$78,000
2. Defendant$0
II. CALCULATIONS:
|
Income Up to $543,000
|
|
5. Plaintiff
|
$78,000
|
|
6. Defendant
|
$0
|
|
Basic Calculation
|
|
|
7. Calculation A
|
|
$23,400
|
|
30% of Payor's Income minus 20% of Payee's Income
|
|
|
8. Calculation B
|
|
$21,200
|
|
40% of Combined Income minus Payee's Income
|
|
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9. Guideline Amount
|
|
$23,400
|
|
Where the guideline amount would reduce the Payor's Income below the self-support
reserve ($15,512.00), the award is the Payor's income minus the self support reserve. If
Line 11 equals Zero, there is no adjustment for low income.
|
|
III AWARD:
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PAYOR
|
plaintiff
|
|
10. Annual Amount
|
$23,400
|
|
11. Monthly Payment
|
$1,950
|
It should be noted that plaintiff asserts in his papers, however, that he has
always paid the costs associated with the upkeep the former marital residence, plus cost
of insurance for plaintiff's car; mortgage $1,375 [FN3]
; gas $334; electricity $325; water $56; telephone $350, cable $150; and the wife's auto
insurance $350 which equals $2,940 [FN4]
The presumptive amount of spousal maintenance, $1,950 monthly, as
calculated pursuant to the guidelines, is far less than the $2,940 that plaintiff admittedly
spent for basic upkeep and carrying costs on the former marital residence, without
including any other expenses. These are costs that the husband claims he is directly
paying each month. The court must note that this amount cannot be looked at in a
vacuum. The husband professes to earn $78,000 a year in cash income while at the same
time he claims expenses in his affidavit of net worth totaling $73,404 per year. While at
an evidentiary hearing held in the context of obtaining sworn testimony related to income
it was established that the wife sporadically worked at a pharmacy. There was no
evidence presented that she earned income on a regular basis to support the lifestyle she
or even the husband admits to spending on a monthly basis. To assert that you spend
94% of your gross income before taxes defies realty, particularly when you are paid in
cash and control the proverbial purse strings.
From this it follows that plaintiff's maintenance obligation cannot be
premised upon the guidelines. In doing so the court must view the representation of the
plaintiff's income as somewhat circumspect, to say the least. His representations as to his
ownership of Smiling Pizzeria, his initial declarations of his Fifth Amendment right
(which he now recants), attempted retraction of his admission of ownership interest,
sudden and abrupt decrease in voluntary support all in the context of a change of counsel
paid for by the husband's father who then seeks to intervene in the divorce action.
"Additionally, when a court is unable to perform the calculation established by Domestic
Relations Law § 236(B)(5-a)(c) as a result of being presented with insufficient
evidence to determine gross income, the court shall order the temporary maintenance
award based upon the needs of the payee or the standard of living of the parties prior to
commencement of the divorce action, whichever is greater'" (Davydova, 109
AD3d at 956-957, quoting Domestic Relations Law § 236[B][5-a][g]). Similarly,
"[a] court need not rely upon the party's own account of his or her finances, but may
impute income based [*9]upon the party's past income or
demonstrated earning potential" (Lennox v Weberman, 109 AD3d 703, 703-704, 974
NYS2d 3 [1 Dept., 2013], citing Hickland v Hickland, 39 NY2d 1, 382 NYS2d
475 [1976], cert denied 429 US 941, 97 S Ct 357 [1976]). Stated differently, in a
case such as this, where plaintiff's evidence of his gross income is insufficient and cannot
be reconciled with his prior spending habits or the parties' standard of living, the court
can properly award temporary maintenance based upon defendant's needs and the
standard of living of the parties prior to commencement of the divorce action
(Fini, 107 AD3d at 758, citing Domestic Relations Law § 236[B][5-a][g]).
Finally, in determining the appropriate amount that plaintiff should be ordered to pay as
temporary maintenance, the court must also be cognizant of the fact that the formula
adopted by the new maintenance provision is intended to cover all of the payee's basic
living expenses, including housing costs (Francis, 111 AD3d at 455, citing
Khaira, 93 AD3d at 200; see also Fini, 107 AD3d at 758;
Woodford, 100 AD3d at 877).
It must be concluded that the parties earn more in income than they admit. In
determining the amount of pendente lite maintenance that plaintiff will be
ordered to pay, it is therefore necessary for the court to review the expenses listed by
each. In so doing, the court notes that at trial, Brisbane will have completed its lifestyle
analysis, so that durational maintenance, if found to be appropriate, can be based upon a
more accurate estimation of the parties' income and living expenses.
In determining the amount of pendente lite maintenance that plaintiff
will be ordered to pay, the court also notes that plaintiff alleges that he used the $100,000
that he withdrew from the parties' joint bank account in May 2010 and defendant alleges
that she used the $40,000 that she withdrew from the same amount to meet their
expenses. Thus, if the court were to consider the parties' respective budgets, as proposed,
they are inflated by at least $140,000, since both spent down savings accumulated over
the course of the marriage that cannot be expected to recur. In addition, although
defendant does not put a dollar value on the money she earns from her employment, nor
does she apprise the court of how much she withdrew from accounts that she maintains
with her father, it appears that she also used these funds to support her lifestyle in recent
years.
In addressing defendant's expenses, as listed on her affidavit of net worth,
the court first notes that many of the expenses listed are the expenses that she seeks to
have plaintiff pay directly: mortgage $1,375; real estate taxes [FN5]
$391; gas $334; electricity $325; water [FN6]
$90; telephone $350; cable $150; wife's auto insurance $350 totaling $3,365. The court
next finds that other expenses listed by defendant pertain to child support and thus are
not properly considered in determining an appropriate amount of spousal support: [*10]nursery school $292 and primary school $292, totaling
$584.
In awarding pendente lite maintenance, however, it is also necessary
that the court considers plaintiff's monthly expenses, which total $6,161 on his affidavit
of net worth, since plaintiff must also have sufficient funds to meet his reasonable
expenses. These expenses include the payments that defendant requests that he pays
directly to support her and the children: mortgage $ 1,375; gas $334; electricity $325;
water $56; telephone $350; cable $150 totaling $2,590. It appears that plaintiff does not
include the cost of defendant's car insurance in his monthly expenses, since she claims
the cost is $350 and he list $308, which the court will assume insures his vehicle.
Other expenses listed are for the support of the children, which should not be
considered in determining plaintiff's expenses but are part of any child support
obligation: school $630; School supplies $20; summer camp $66, totaling $716.
Child Support
The Child Support Standards Act (hereinafter CSSA) provides the formula to be
applied to the parties' income and the factors to be considered in determining a final
award of child support (see Domestic Relations Law § 240[1-b]). "Courts
considering applications for pendente lite child support may, in their discretion,
apply the CSSA standards and guidelines, but they are not required to do so" (Rubin v Della Salla, 78 AD3d
504, 505, 910 NYS2d 439 [1 Dept., 2010]; accord Davydova, 109 AD3d at
957; Maksoud v Maksoud,
71 AD3d 643, 644, 896 NYS2d 387 [2 Dept., 2010]; Otto v Otto, 13 AD3d 503,
503, 787 NYS2d 375 [2 Dept., 2004]). Accordingly, the determination of whether to
apply the CSSA to an application for temporary child support is left to the provident
exercise of the court's discretion (see Ryder v Ryder, 267 AD2d 447, 447, 700
NYS2d 862 [2 Dept., 1999]; Ryan v Ryan, 186 AD2d 245, 246, 588 NYS2d 341
[2 Dept., 1992]).
Under the circumstances of this case, where the court is unable to determine
either the income or the expenses of the parties based upon their tax returns, affidavits of
net worth and testimony during the hearing held to determine the temporary support that
plaintiff would be ordered to pay pending the issuance of a decision on the motion, the
court finds that it would not be appropriate to calculate child support in reliance upon the
CSSA. Further, since plaintiff has been ordered to pay the carrying costs associated with
the former marital residence directly, and defendant is not entitled to a double shelter,
applying the CSSA would be inappropriate (see Maksoud, 71 AD3d at 644; Paul v Paul, 67 AD3d 757,
758 [2 Dept., 2009]; Otto, 13 AD3d at 503).
In addition, plaintiff has been paying tuition and other school costs for the
children in the amount of $650 per month and indicates that he intends to continue to do
so in the future.
Summary
Based upon a review of the parties' pre-separation lifestyle, as indicated by
their affidavits of net worth, as adjusted above, the court determines that an award of
[*11]pendente lite maintenance in the amount of
$400 per week, is appropriate, in addition to directing plaintiff to continue to pay the
carrying costs and costs of utilities in the amount of $2,590.00 per month, plus the wife's
car insurance in the amount of $350 per month ($400 + $2,590 + $350 = $3,340 per
month). The temporary maintenance award, $3,340, shall be tax deductible to plaintiff
and taxable to defendant to the extent permitted by law. The court finds this to be an
appropriate amount of pendente lite maintenance. In so holding, as discussed
above, the court relies primarily upon the standard of living of the parties established
during the marriage (Domestic Relations Law § 236[B][5-a][e][1][a]). Incumbent in
this decision is also a consideration of the age and health of the parties (Domestic
Relations Law § 236[B][5-a][e][1][b]; the earning capacity of the parties (Domestic
Relations Law § 236[B][5-a][e][1][c]); the fact that both parties appropriated
money that was held in a joint bank to meet his and her expenses (Domestic Relations
Law § 236[B][5-a][e][1][f]); that plaintiff receives medical insurance from his
employment, without any cost to him (Domestic Relations Law §
236[B][5-a][e][1][i]); and the fact that defendant stopped working full time to care for
the parties' children when they were born (Domestic Relations Law §
236[B][5-a][e][1][o]).
Based on the prior lifestyle of the partes' and the standard of living
established during the marriage, plaintiff is also directed to continue to pay the children's
tuition and schools costs directly to the school, in the amount $650 per month, or $7,800
per year, plus child support in the amount of $1,200 per month, or $276.92 per week or
$14,400 per year, to meet the other needs of the children, which includes the cost of the
children's extracurricular activities.
Plaintiff is accordingly ordered to pay defendant $770.77 per week in
spousal support ($3,340 [monthly] x 12 [months] = $40,080 / 52 [weeks] = $770.77
[weekly]), plus $276.92 per week in child support ($1,200 [monthly] x 12 [months] =
$14,400 [annually] / 52 [weeks] = $276.92 [weekly]), for a total of $1,047.69 per week.
Plaintiff is further ordered to make payment by check or money order on Friday of each
week. Plaintiff is also ordered, pendente lite, to continue to cover defendant and
the children under his medical insurance plan and to pay 100% unreimbursed cost of all
necessary treatments; the wife is directed to use plan providers whenever possible.
In so holding, the court notes that after including the expenses incurred by
the parties, their income would be approximately $115,000. Given the information now
available to the court, $115,000 is found to be more appropriate to meet the expenses that
the parties incurred prior to their separation. This Court finds the parties' reported income
of $78,000.00 to be incredible, and imputes income in the amount necessary for them to
meet their expenses.[FN7]
Furthermore, the amount ordered herein is consistent with what the husband was
voluntarily paying prior to his retention of new counsel.
[*12]Interim Attorneys'
Fees
Defendant's Contentions
In support of her request for an award of interim attorneys' fees in the
amount of $25,000, defendant alleges that when she retained her attorneys on June 23,
2010, she paid a retainer of $7,500 using funds withdrawn from a joint money market
account maintained at Chase Bank. She further asserts that she has no current income and
only limited assets of her own. In addition, plaintiff paid $12, 500 towards the
defendant's attorneys' fees. After these payments are taken into account, she alleges that
she has an outstanding bill of more than $27,000. Defendant also notes that plaintiff
testified at his deposition that he does not owe any money to his former attorneys and that
his father paid a $10,000 retainer to substituted counsel. The retainer agreement filed by
the husband's prior attorney, Caruso, Caruso & Branda indicates an initial retainer
on the amount of $5,000 in June 2010 but admitted on the record to payment in the
amount of $40,000.
Accordingly, defendant argues that she needs an award of interim attorneys'
fees in the amount of $25,000 to level the playing field.
Plaintiff's Contentions
In opposition, plaintiff argues that defendant has sufficient funds to pay her
own attorney. He also points out that she paid her attorneys $10,000 and that he already
paid them $12,500. Moreover, plaintiff argues that excessive fees have been incurred
because defendant insisted on protracted discovery in an effort to prove that he holds an
ownership interest in Smiling Pizzeria. Plaintiff also testified during the hearing held on
September 18, 2013 that he paid his prior attorney between $30,000 and $40,000.
Discussion
"Domestic Relations Law § 237 provides that in any action for a
divorce, the court may direct either spouse to pay counsel fees directly to the attorney of
the other spouse to enable the other party to carry on or defend the action as, in the
court's discretion, justice requires, having regard to the circumstances of the case and of
the respective parties" (Falcone
v Falcone, 109 AD3d 787, 788, 971 NYS2d 132 [2 Dept., 2013]; see also Johnson v Chapin, 12
NY3d 461, 467 [2009], 881 NYS2d 373, rearg denied 13 NY3d 888, 893
NYS2d 834 [2009]; DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881 [1987]; Dodson v Dodson, 46 AD3d
305, 305, 524 NYS2d 176 [1 Dept., 2007]). Domestic Relations Law § 237 (a),
as amended in 2010, creates "a rebuttable presumption that counsel fees shall be awarded
to the less monied spouse."
The purpose of Domestic Relations Law § 237 (a) is to "redress the
economic disparity between the monied spouse and the non-monied spouse" (O'Shea
v O'Shea, 93 NY2d 187, 190, 524 NYS2d 176 [1999]). An award of interim counsel
fees is intended to ensure that the nonmonied spouse "will be able to litigate the action,
and do so on equal footing with the monied spouse" (Prichep v Prichep, 52 AD3d 61, 65, 858 NYS2d 667 [2
Dept., 2008]; see also Coven v
Coven, 82 AD3d 1144, 1145, 919 NYS2d [*13]866 [2 Dept., 2011]). In addition, interim counsel fees are
awarded to level the playing field and " prevent the more affluent spouse from wearing
down or financially punishing the opposition by recalcitrance, or by prolonging the
litigation'" (Gober v Gober, 282 AD2d 392, 393, 724 NYS2d 48 [1 Dept., 2001],
quoting O'Shea, 93 NY2d 187,193 [1999]; see also Prichep, 52 AD3d at
65).
A determination of an application for interim counsel fees is committed to
the sound discretion of the trial court, and "[t]he issue of interim counsel fees is
controlled by the equities of the case and the financial circumstances of the parties"
(Falcone, 109 AD3d at 788; see also Silver v Silver, 46 AD3d 667, 669, 847 NYS2d
596 [2 Dept., 2007]; Wald v
Wald, 44 AD3d 848, 850, 844 NYS2d 86 [2 Dept., 2007]). " [T]he court must
consider the relative merits of the parties' positions and their respective financial
positions in determining whether an award is appropriate'" (Gilliam v Gilliam, 109 AD3d
871, 873. 971 NYS2d 541 [2 Dept., 2013], quoting Nicodemus v Nicodemus, 98
AD3d 605, 607 949 NYS2d 741 [2 Dept., 2012] [internal quotation marks and
citations omitted]). "An award of interim counsel fees to the nonmonied spouse will
generally be warranted where there is a significant disparity in the financial
circumstances of the parties" (Falcone, 109 AD3d at 788; see also Kaminash
v Levi, 102 AD3d 837, 838, 958 NYS2d 725 [2 Dept., 2013]; Khaira, 93
AD3d at 201; Palmeri v Palmeri, 87 AD3d 572, 572, 929 NYS2d 153 [2 Dept.,
2011]; Penavic v Penavic,
60 AD3d 1026, 1028, 877 NYS2d 118 [2 Dept., 2009]; Prichep, 52 AD3d at
65).
Discussion
Under the circumstances of this case, where plaintiff is the monied spouse
and has paid his attorneys in full, defendant is awarded interim attorneys' fees in the
amount $20,000, with leave granted to seek an additional award of interim attorneys'
fees, if so advised, and subject to reallocation at trial. In making this award, the court
also notes that in view of the above finding that plaintiff shall be judicially estopped
from denying that he is a 50% owner of Smiling Pizzeria, his assertion that defendant has
incurred unnecessary legal fees in seeking to prove his ownership interest is without
merit. This award is to be paid within 30 days from the date of this decision and order. If
plaintiff fails to make payment, defendant may enter judgment with the clerk of the court
without the need for further judicial intervention for said sum together with costs and
interest upon 10 days' written notice to plaintiff's counsel by certified mail.
Conclusion
Defendant's motion seeking pendente lite maintenance and child
support is granted to the extent of ordering plaintiff to continue directly paying the
carrying costs and costs of utilities on the former marital residence, as discussed above;
directly paying defendant's automobile insurance; directly paying the children's tuition
and schools costs; and paying defendant $597 per week in spousal support and $277 per
week in child support by check or money order on Friday of each week. In the even that
the wife elects to receive payment through the Support Collection Unit, then she shall
notify the defendant in [*14]writing when she has opened
an account. The pendente lite maintenance paid shall be tax deductible to plaintiff
and taxable to defendant. Plaintiff is also ordered to continue to cover defendant and the
children under his medical insurance plan and to pay the unreimbursed cost of all
necessary treatments; the wife is directed to use plan providers whenever possible.
Defendant is granted also an award in interim attorneys' fees in the amount $20,000, at
this time. Clearly, the husband is the monied spouse and there is a disparity in income.
This award is to be paid within 30 days from the date of this decision and order. If
plaintiff fails to make payment, defendant may enter judgment with the clerk of the court
without the need for further judicial intervention for said sum together with costs and
interest upon 10 days' written notice to plaintiff by certified mail.
All other relief requested is denied.
The foregoing constitutes that order and decision of this court.
E N T E R:
Hon. Jeffrey S. Sunshine
J.S.C.
Footnotes
Footnote 1:The husband substituted
the law firm of Caruso, Caruso & Branda for Sandleitner & Sandleitner on July
30, 2013.
Footnote 2:In discussing the
affidavit of net worth defendant prepared by both parties, this decision will not address
the expenses that are not significant in amount or that appear reasonable on their fact.
Footnote 3:For purposes of
calculating pendente lite maintenance, the court shall treat the $1,375 that
plaintiff claims that he pays towards the former marital residence as including real estate
taxes and home owner's insurance, since he alleges that these expenses are being paid,
but does not list the costs separately.
Footnote 4:Although plaintiff also
alleges that he has paid and continues to pay for tuition and school expenses for his
children, that expense cannot be considered to be an element of spousal maintenance.
Footnote 5:Since real estate taxes
appear to be included in the mortgage payment, this $391 is doubled.
Footnote 6:It is noted that plaintiff,
who pays this expense, lists it in his affidavit of net worth as being $56 per month.
Footnote 7:Neither party provides
the court with any information that would establish the tax impact of any award made.