Opinion
E2019010912
08-01-2020
Lisa M. RAPP, Plaintiff, v. Mark J. RAPP, Defendant.
Lisa Morris, Esq., Rochester, New York, Attorney for Plaintiff Inclima Law Firm, PLLC, Nicole S. Lewis, Esq., Rochester, New York, Attorney for Defendant
Lisa Morris, Esq., Rochester, New York, Attorney for Plaintiff
Inclima Law Firm, PLLC, Nicole S. Lewis, Esq., Rochester, New York, Attorney for Defendant
Richard A. Dollinger, J.
In 2015, the New York State Legislature established guidelines for awarding temporary maintenance in an attempt to create some statewide uniformity in such awards. But, sometimes, as here, the guidelines run into the reality of income shifting for divorcing parents and the Legislature prudently left an escape hatch to allow judges to deviate from the guidelines if just and proper to do so.
This dispute is one of those instances.
In this matter, the court needs to resolve both temporary child support and temporary maintenance for this couple. The child support is easy: this court applies the Child Support Standards Act ("CSSA") to the husband's $110,021 annual salary (adding together his income from Walmart and his current employer). In a review of the papers before the court, the wife's counsel concludes that the child support under that formula is $1,890.14 per month.
The more pressing question involves maintenance. Under the maintenance guidelines in the Domestic Relations Law, the wife claims the maintenance should be $1,367.57 per month or $16,404 annually. The husband argues for a lesser amount, seeking to depart from the state-mandated guidelines because the wife now lives in a house, bought by her parents and in which, he claims, she lives at reduced cost and further because the change in the tax-deductibility of maintenance at the federal level should justify a deviation from the same guidelines.
First, the court will not tinker with the child support: CSSA governs. Applied to the husband's income, the child support for two children is—without considering maintenance—is according to the wife's calculation $1890.14 per month or $22,680 annually.
Second, this court must consider the temporary maintenance guidelines. DRL § 236B (5-a) (h) (1). The purpose of the temporary maintenance guidelines is to assure that the reasonable needs of a dependant spouse are met during the litigation, and "should reflect an accommodation between the reasonable needs of the moving spouse and the financial ability of the other spouse with due regard for the parties' pre-separation standard of living." Khaira v. Khaira , 93 AD3d 194 (1st Dept. 2012), cited in Ayash v. Chieffallo , 2018 NYLJ LEXIS 4346 (Sup. Ct. Westechester Cty 2019). The list of factors is significant and requires a court to survey numerous variables in the couple's financial circumstances before making an award.
For this court, the bottom line is simple: to meet the "just and proper" overall standard—set forth in the (m) factor in the Guideline—the court must determine how the award of temporary maintenance divides the couple's available—or potential—income, after a parent has paid their employment and income taxes and, the non-residential parent has paid the sums necessary, as a matter of law, for the support of their children. If, as here, the CSSA dictates an amount for child support to be paid by the father, then this court has routinely followed a "net available resources" analysis to determine an appropriate amount of temporary maintenance to be paid to his spouse. Cooper v. Cooper , 37 NYS3d 206 (Sup. Ct. Monroe County 2016) (Dollinger, J.); Harlan v. Harlan , 46 Misc 3d 1003 (Sup. Ct. Monroe Cty 2014) (Dollinger, J.). As this court said in Harlan v. Harlan :
Under this analysis, the court attempts to calculate the tax consequences and other costs for each party and to equitably divide the party's "net income available for expenses" during the pendency of the action. When utilized, the net available resources analysis focuses on the true cash position of the parties and their evident needs.
Harlan v. Harlan , 46 Misc 3d at 1018. The husband starts—in rough numbers—with $110,000 in income. He pays social security and medicare taxes ($8,400), leaving him with an estimated $101,600 in pre-income-tax cash. He then pays his income taxes of roughly (without taking into account substantial deductions), $17,600 in federal taxes and $6,000 in state taxes and, after paying these through paycheck deductions, he has about $78,000 in available unencumbered cash left. He pays his child support—the CSSA mandated-amount $22,680—and he has $55,400 in net available cash after paying his taxes and his child support, but before considering maintenance.
In reviewing the father's W-2 statements, it appears that he only paid approximately $11,000 in federal income tax withholding in 2019. He paid approximately $6,000 in state withholding taxes. Therefore, his real tax cost in 2019 was approximately $17,000 rather than the $23,000 estimated in the pro forma utilized by the Court. However, by filing jointly with his wife and utilizing exemptions and other standard deductions, the father's income tax cost was reduced in 2019. As a single parent after the divorce, he may not have access to those tax offsets and he may easily find that his total tax is closer to the pro forma generated $23,000 than the $17,000 in actual taxes that he paid in 2019 through withholding. If the Court accepts $20,000 in tax liability for the father in 2020, after loss of access to the tax deductions as a married spouse, the pro forma calculation of his "net available resources" is largely unchanged, as the difference is only $3,000. As noted below, that aspect of the final maintenance award can be worked out through negotiation or trial.
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The wife has $21,730 in annual income. She pays payroll taxes that drop her net income, before income taxes, to approximately $20,000. She pays virtually no state or federal income taxes, but she is paid $22,680 in child support, boosting her available resources annually to $42,680. Thus, the $90,000 disparity in gross income between father and mother ($110,000 to $21,000), after paying taxes and child support, is reduced to approximately $13,000 in net available resources, before calculation of maintenance.
One other calculation is required before discerning the amount of maintenance. This court would decree that the unreimbursed medical expenses and the cost of health insurance be divided in a pro rata fashion, which means the husband would bear 80 percent of those costs. If we assume that the cost of those extra expenses is $3000 annually, then the father pays $2,400 of that cost and the wife pays $600. If we apply those pro ratas to those expenses, then the father available resources drops to approximately $53,000 and the wife's net available resources total $42,000. Under this scenario, the disparity is only $11,000. If college costs were figured in this calculation, the disparity would easily disappear, as the father, paying 80 percent of the net college cost, would find that he has fewer resources than the mother, at least during the period of paying maintenance—which, given a 17-year-marriage, would be for at least half a decade—and covering child support and college costs.
This court notes that if wife's proposed child support and guideline maintenance were ordered, the father would have only approximately $39,600 in net available resources ($110,000 minus FICA—$8,400—minus income taxes—$23,600—minus $39,000 in maintenance and child support) before allocating healthcare costs and the wife would have $59,000 ($21,000 in income minus FICA and income taxes plus $39,000 in support and maintenance). Under this scenario, the wife, who has the status of the lesser moneyed spouse as a matter of law based on gross income, becomes the "more available resources" spouse as a matter of fact to the tune of approximately $20,000 in additional annual resources. The award of maintenance in the amount advocated by the wife - drastically shifting the income allocation in favor of the wife - would be unjust and inappropriate under DRL § 236B (5-a) (h) (1).
Under this backhand method of calculating maintenance, it seems that the amount of temporary maintenance should be no more than enough to create a relative parity in net available resources. This court, in an exercise of discretion, determines the temporary maintenance amount to $500 per month or $6,000 annually. The allocation of that amount does not create a perfect parity in net available resources, but it comes close to equally dividing the couple's net incomes. Under the scenario discussed above, the husband will have an estimated $47,800 in net available resources and the wife will have an estimated $48,200, a rough equivalence that seems to be fair and reasonable under all the circumstances.
In reaching this conclusion, the court has considered the factors for temporary maintenance awards in the Domestic Relations Law. In applying DRL § 236B (5-a) (h) (a)-(m), the court notes that there is no evidence, at this stage in this proceeding, to conclude that the wife needs additional training or education, no dissipation of assets, no domestic violence or daycare issues. The court notes that the parties have no health difficulties that would impede employment. The mother has been a stay-at-home mother and the court acknowledges the limitations on her income as a consequence, but the court, in dividing the available income in nearly equal shares for the duration of the maintenance has provided that both parents will have nearly identical resources for themselves and their children. By nearly equally sharing the available income between two people who have lived together as a couple for more than 17 years, this court is satisfied that the award of maintenance here, on a temporary basis, is consistent with the intentions of the maintenance guidelines and just and proper. DRL § 236B (5-a) (h) (1) (m)
In reaching this conclusion, the father has pressed to have the mother's income imputed upward because the mother lives in a home purchased by her parents without paying rent. The wife has produced a lease which indicates she is accruing $1,500 per month in rent. This court is well aware that a lease—standing alone—is not demonstration that payments are actually made by the wife on the lease. Kind grandparents can simply forego collecting the rent or gift the rental payments back to their daughter. However, at this stage of the proceeding, the court cannot calculate whether this purchased home represents a gift or other emolument to the wife. See G.R.P. v. L.B.P. , 36 Misc 3d 1217(A)(Sup.Ct. Monroe Cty 2012) (Dollinger, J.). If proof at trial establishes that the wife has not paid rent or otherwise been rebated or re-gifted rent, then this court can—and will—reconsider the issue. In addition, the Court acknowledges that the distribution of tax benefits for the children and other deductions may alter the net after-tax incomes of both parents. The final equitable distribution is another factor that may impact an award of final maintenance. But, those issues need further refinement at trial before the final maintenance award is derived.
This court also declines to consider any tax impact reduction in the father's maintenance obligation as a result of changes in the federal Internal Revenue Code. Having constructed the obligation under the broad discretion available under the (m) factor in Section 236B (5-a) of the Domestic Relations Law, the court need not consider the tax question posed by the father at this stage.