Opinion
02203472
Decided May 17, 2005.
There are three motions before the Court. T.S. (hereafter wife) moves for an award of counsel fees in the action commenced under index number 02-203472 (hereafter matrimonial action) for costs incurred incident to her defense of a post judgment application heretofore brought by T.S. (hereafter husband) submitted on November 12, 2004 and denied, in large part, by order dated December 6, 2004. She also moves for an order pursuant to CPLR 3211, 3212, 3042(d) and 3126 (3) striking and or dismissing the complaint in the action commenced under index number 04-202859 (hereafter plenary action). The husband cross moves in the plenary action for an order denying the wife's motion and granting him summary judgment pursuant to CPLR 3212 vacating and setting aside the provisions of the parties' judgment of divorce pertaining to child support.
The parties were married on May 13, 1995. There are two children of the marriage, F. born April 6, 1998 and G. born September 28, 1999. The parties were divorced pursuant to a judgment dated June 30, 2003 which incorporated a stipulation of settlement, dated April 3, 2003, that did not merge in the judgement.
On November 12, 2004, the husband submitted a post-judgment application in the matrimonial action for an order 1) terminating his obligation to pay maintenance on the ground that the wife was cohabiting with another man; 2) modifying the visitation provisions of the judgment of divorce dated June 30, 2003; 4) enforcing the provisions of the judgment requiring the wife to pay 20% of the cost of her health insurance and requiring her to obtain same if available through her employment at a lower cost than available through the husband's employer; 4) modifying the judgment so as to require the wife to obtain health insurance for the parties' children through her employer at the husband's expense if same is less expensive than coverage available through his employment; and 5) consolidating the plenary action with his post-judgment application in the matrimonial action. The motion was decided by an order dated December 6, 2004 denying his application with regard to maintenance and visitation and setting the issues relating to health insurance down for a conference on January 10, 2005. The portion of the motion seeking consolidation was denied as no request for judicial intervention had been filed in the plenary action as of the date of the submission of the motion.
The plenary action was commenced on or about September 29, 2004. The complaint in said action sets forth four causes of action. The first three causes of action seek a judgment setting aside and vacating the child support provisions of the parties' stipulation of settlement and judgment of divorce. The fourth cause of action seeks a judgment granting the husband a downward modification of his obligation to pay child support based upon an alleged unanticipated substantial change in circumstances.
A conference on the aforesaid health insurance issues was held on January 10, 2005. A preliminary conference was also held in the plenary action on that date. The Court scheduled depositions and set dates for the service of written discovery demands and responses. No formal preliminary conference order was prepared with regard to the plenary action and the requirement for such an order is waived.
Based upon all of the foregoing, the motions are decided as follows:
DRL 240(1-b) (h) permits the parties to a matrimonial action to voluntarily enter into a stipulation which deviates from child support guidelines provided that said stipulation meets the following criteria which cannot be waived by either party or counsel: 1) the stipulation must include a provision stating that the parties have been advised of the provisions of the CSSA; 2) the stipulation must include a provision stating that the basic child support obligation provided for by the CSSA would "presumptively result in the right amount of child support awarded;" and 3) in the event the stipulation deviates from the basic child support obligation, it "must specify the amount that such basic child support obligation would have been and the reason or reasons that such agreement or stipulation does not provide for the payment of that amount."
Absent an accurate recitation in a stipulation of settlement, of the presumptively correct amount of child support pursuant to the CSSA, a party is deprived of the ability to knowingly agree to deviate from CSSA guidelines and the child support provisions of the stipulation and judgment incorporating same must be set aside ( see, Warnecke v. Warnecke, 12 AD3d 502; Campbell v. Campbell, 282 AD2d 492; Mauriello v. Mauriello, 301 AD2d 505; Seda v. Seda, 270 AD2d 475).
The stipulation herein does state that the parties have been advised of the provisions of the CSSA and have been further advised that the application of the CSSA guidelines would result in the presumptively correct amount of child support. At issue herein is whether the stipulation deviates from CSSA guidelines and if so, whether it correctly recites what the child support obligation would have been if such guidelines had been applied.
The parties' stipulation of settlement recites that the husband's gross income, including "perks" is $75,000.00 a year and the wife's gross income is $8000.00 a year. Said agreement further states that ". . . if the court were to apply the 'child support percentage' to the husband's entire income over $80,000.00, the amount would be $20,750.00 a year. If the Court were to apportion the parties' joint gross income for child support purposes, then the husband's portion would be $18,675.00 per year while the wife's portion of child support would be $2075.00 per year." Such recitation is misleading and erroneous, as the sum of $20,750.00 is 25% of both parties' joint gross income of $83,000.00, and the sum of $18,750.00 is 25% of the plaintiff's gross income of $75,000.00.
Pursuant to the stipulation the husband is required to pay maintenance of $16,800.00 a year until September 30, 2003 and $15,600.00 a year between October 1, 2003 and November 30, 2006. His child support obligation is $24,000.00 a year. He is also required to pay 100% of the cost of the wife's medical insurance for one year after entry of the judgment of divorce and 80% for two years thereafter; his pro rata share of unspecified costs of day care and camp; provide medical insurance for the children; and pay 75% of their health expenses. The wife is required to pay 100% of the cost of parochial school attendance in the event she elects to enroll the children in parochial school.
The stipulation states that "(t)he basic child support obligation provided for in this stipulation does not deviate from the CSSA, but, rather, the Father is paying somewhat more than the guidelines in consideration of the Mother paying for parochial school and the Father's desire to have the children remain in the marital residence until their emancipation."
Despite the language to the effect that the stipulation does not deviate from CSSA guidelines, the requirement that the husband pay child support of $24,000.00 a year clearly constitutes a substantial deviation from CSSA guidelines, and accordingly, said stipulation was required to comply with DRL 240 (1-b) (h) by accurately setting forth what his child support obligation would have been if the guidelines had been applied.
The Court finds that the recitation in the stipulation advising the parties that the husband would have been required to pay child support of $20,750.00 or $18,675.00 annually pursuant to the CSSA was incorrect in that neither FICA taxes nor the husband's obligation to pay maintenance were deducted from his gross income before the applicable percentage for two children of 25% was applied.
Pursuant to DRL 240(1-b) (b) (5) (vii) (H), FICA taxes, actually paid, must be deducted from gross income prior to the determination of combined parental income and the percentage of each parent's obligation to pay child support ( see, Harrison v. Harrison, 255 AD2d 490; see also, Frankel v. Frankel, 287 AD2d 686; Haas v. Hass, 265 AD2d 887). Although it appears that each party was a W-2 employee in 2002, the Court cannot determine the FICA taxes actually paid by each party in that year. Assuming the husband paid FICA of $5738.00 on $75,000.00 gross income, his income for determining combined parental income would have been $69,262.00 and the wife's income net of FICA would have been $7388.00, making their combined parental income $76,650.00. Their combined child support obligation would have been $19,162.50 a year, and the husband would have been obligated to pay 90.36% thereof or $17,316.00 a year.
Under different circumstances, the failure to deduct FICA from gross income in calculating combined parental income, resulting in an overstating of the husband's obligation to pay child support by only $1359.00 a year, ($18,650.00 less $17,316.00 = $1359.00) might not constitute a material failure to comply with DRL 240 (1-b) (h) ( see, Baker v. Baker, 291 AD2d 751 [3rd Dept 2002]). In the instant case, however, in view of the significant financial obligations imposed upon the husband by the stipulation, said overstatement is material and substantial and is sufficient to vitiate the child support provisions of the stipulation.
In addition, the Court finds that in order to comply with DRL 240 (1-b) (h), the stipulation should have disclosed what the husband's child support obligation would have been pursuant to the CSSA if his maintenance obligation had been deducted from his gross income.
Pursuant to DRL 240 (1-b) (b) (5) (vii) (C), prospective maintenance actually paid or to be paid to a party pursuant to an order, agreement or stipulation, must be deducted from the payor spouse's gross income in determining the amount of combined parental income, provided the order, agreement or stipulation provides that child support will increase concomitantly upon the cessation of maintenance. There are a plethora of appellate cases holding a trial court's failure to deduct maintenance in its calculation of child support to be reversible error ( see, e.g., Schmidt v. Schmidt, 264 AD2d 770; Goldman v. Goldman, 248 AD2d 590; Frei v. Pearson, 244 AD2d 454).
DRL 240(1-b) (h), however, clearly permits parties to stipulate that a payor's maintenance obligation will not be deducted from his or her income in fixing child support and the instant stipulation does not provide for any increase in child support upon the cessation of maintenance. Nevertheless, the Court holds that in order for parties to knowingly and intentionally deviate from the CSSA, their stipulation must recite what the amount of the combined parental income would have been if the parties had opted to deduct the payor's maintenance obligation and provide for a concomitant increase in child support ( see, Schmidt v. Schmidt, supra). (The Court notes prospective maintenance to be paid to the wife is not to be included in her income for purposes of establishing combined parental income or each party's percentage thereof [ see, DRL 240[1-b][5][I]; Lee v. Lee, 2005 WL 1107377; Harrison v. Harrison, supra; Huber v. Huber, 229 AD2d 904; see also, Holterman v. Holterman, 3 NY3d 1]).
If the husband's FICA taxes and maintenance obligation had been deducted from his actual gross income of $75,000.00, the husband's net income would have been $52,462.00 and the parties' combined parental income would have been $59,850.00. Annual child support would have been set at $14,962.50 and the husband would have been required to pay 88% thereof or $13,167.00 a year.
In fact, in view of the maintenance obligation herein, the husband would had to have been earning $122,800.00 annually for his child support obligation to have been $24,000.00 a year pursuant to guideline's calculations. ($122,800.00 gross less FICA of approximately $10,000.00 = $112,800.00, less maintenance of $16,800.00 = $96,000.00 times 25% = $24,000.00).
The Court notes further that not only is the husband required to pay child support at the rate of a non-custodial parent earning $122,800.00 a year, but pursuant to the stipulation, commencing January 2007, he is also required to pay as additional child support, 25% of all income over $80,000.00, again without consideration of any deduction for FICA taxes. (The stipulation states, as an example, that if he earns $90,000.00 a year gross, he must pay an additional $2500.00 a year in child support above the $24,000.00.)
In addition, the law is well settled that DRL 240(1-b) (h) applies to child support "add-ons" such as child care, camp, and health expenses. The stipulation herein does not comply with said statute in that it does not set forth the parties' pro rata percentages nor any reason or reasons for the deviation with regard to the payment of health expenses ( see, Cardinal v. Cardinal, 275 AD2d 276; Vernon v. Vernon, 239 AD2d 108).
Accordingly, the husband's cross motion for summary judgment is granted. The provisions of the stipulation pertaining to child support, medical insurance for the children, and their health, child care, camp and parochial school expenses are stricken from the stipulation of settlement and vacated from the judgment of divorce.
If the stipulation herein had deducted maintenance from the husband's gross income in determining child support, and if the issue before the Court was the inadequacy of the contractual child support, there would be no need to set aside the maintenance provisions of the stipulation and judgment ( see, e.g., Warnecke v. Warnecke, supra; Lepore v. Lepore, 276 AD2d 677; Farca v. Farca, 271 AD2d 482; Toussaint v. Toissaint, 270 AD2d 338). In the instant action, where the stipulation requires the husband to pay substantially more than CSSA guidelines, it is arguable that the parties would have provided for greater spousal maintenance, if they had agreed to fix the husband's child support using CSSA guidelines. Although the complaint in the plenary action does not seek such relief, the Court finds that maintenance and child support provisions are so intertwined as to require that the provisions relating to maintenance as well as health insurance for the wife also be set aside.
The aforesaid issues relating to child and spousal support must be decided at a de novo trial retroactive to the date the wife first sought such relief in the matrimonial action ( see, DRL236B; see, e.g., Luisi v. Luisi, 6 AD3d 398).
The wife's motion in the plenary action for an order pursuant to CPLR 3211 and 3212 dismissing the first three causes of action is denied. Her motion for an order dismissing the complaint pursuant to CPLR 3042(d) and 3126(3) is denied as moot, as the husband served a bill of particulars with his cross motion.
The wife's motion in the plenary action for an order pursuant to CPLR 3212 granting her summary judgment dismissing the husband's fourth cause of action seeking a downward modification is granted as the husband has failed to demonstrate that there are genuine issues of fact entitling him to a trial on this cause of action ( see, Zuckerman v. City of New York, 49 NY2d 557). His affidavit in support of his cross motion makes no reference at all to this cause of action. Further, as the Court has vacated the child support provisions of the stipulation and judgment of divorce, his application for a downward modification is moot.
In addition, the husband's application in the matrimonial action for an order enforcing and modifying the medical insurance provisions of the stipulation and judgment, heretofore set down for a conference on January 10, 2005 and adjourned to June 10, 2005, is denied as moot.
With regard to the motion brought by the wife in the matrimonial action for counsel fees, she is clearly contractually entitled to an award of same with regard to her successful defense of the portions of the husband's application in said action relating to visitation and cohabitation. Said award shall be determined at a hearing unless the parties elect in writing to waive same and submit the issue on papers.
A conference on the issue of the wife's entitlement to an award of counsel fees and the child and spousal support issues to be determined de novo is hereby calendared for June 10, 2005 at 9:30 a.m. The parties shall produce their 2002, 2003 and 2004 W2s and income tax returns and net worth affidavits setting forth their financial circumstances as of December 31, 2002; December 31, 2003; December 31, 2004 and their current financial circumstances at the conference.
This constitutes the decision and order of the Court.