Opinion
No. 29614/2006.
04-15-2015
Grace SIEBOR, Plaintiff, v. John SIEBOR, Jr., Defendant.
Judy E. Lukose, Esq., Law Offices of Judy E. Lukose, Jericho, NY, Attorney for Plaintiff. Robert A. Ugelow, Esq., Robert A. Ugelow, PC, Brooklyn, NY, Attorney for Defendant.
Judy E. Lukose, Esq., Law Offices of Judy E. Lukose, Jericho, NY, Attorney for Plaintiff.
Robert A. Ugelow, Esq., Robert A. Ugelow, PC, Brooklyn, NY, Attorney for Defendant.
Opinion
JEFFREY S. SUNSHINE, J.
Defendant John Siebor, Jr. moves by order to show cause [motion sequence No.2] for an order declaring the following: 1) Directing that the six family building located at 128 Eagle Street, Brooklyn, New York jointly owned by the parties be placed upon the open market for the sale with a multiple listing broker to obtain the highest sale price and that the Net Proceeds of sale be divided; 2) Re-appraisal of the property located at 130 Eagle Street, Brooklyn, New York, a two family house; 3) Termination of the Receivership of Grace Siebor in both properties, dissolving 128 EAGLE, LLC, upon sale of the building located at 128 Eagle Street, Brooklyn, New York; 4) Directing the plaintiff to pay the defendant at the closing of the sale at 128 Eagle Street, Brooklyn, New York any monies that plaintiff owes to the defendant as a result of the accounting for receivership; 5) a. Declaring the provisions of the Judgment of Divorce dated June 5, 2008 relating to the payment of child support, to be invalid and unenforceable; 5) b. If the child support enforcement petition having (Dkt. No. F–10697–14/14A) pending in the Family Court is not dismissed by that Court and a petition for downward modification of child support having (Dkt. No. F–10697–14/14B) has not been withdrawn, then removing both petitions to Supreme Court for dismissal of the enforcement petition and withdrawal of the modification petition; and 6) Awarding such other, further, different and additional relief as this Court may deem just, proper and equitable in the premises. Plaintiff filed opposition dated December 15, 2014. Defendant filed a reply dated January 7, 2015.
Facts and Procedural Background
The parties were married on January 29, 1998 and have two children, a daughter who is sixteen (16) years old and a daughter who is nine (9) years old. The plaintiff lives with the parties' children at 130 Eagle Street, Brooklyn, New York. During the marriage in August 1999, the parties purchased a two family house for $265,000.00 with a mortgage of $150,000.00 located at 130 Eagle Street, Brooklyn, New York which included an adjacent lot with garages on it having the address of 128 Eagle Street, Brooklyn, New York. The parties refinanced the mortgage on 130 Eagle Street, Brooklyn, New York in the year 2003 paying off the old mortgage and obtaining a new one for about $265,000.00 and later used the net proceeds to help with construction of a building on the adjacent lot. The parties built a six family building with a garage on the lot of 128 Eagle Street, Brooklyn, N.Y. 11222. The parties separated at the end of the year 2005 after marital difficulties.
The divorce was settled based on a number of agreements between the parties placed on the record at different dates, addressing the grounds for divorce and all ancillary issues. A stipulation dated December 20, 2006 appointed plaintiff temporary receiver of both of the real properties, including 128 Eagle, LLC which was to manage 128 Eagle Street, Brooklyn, New York when it was built, and as a temporary receiver of 130 Eagle Street, Brooklyn, New York. Said stipulation appointed plaintiff, “... pendente lite receiver, without compensation and without bond for all purposes of the parties company known as Eagle Street, LLC, without limitation, the exclusive powers to issue and enforce leases for the rental units and usage of the garage, to collect rents, disburse sums for expenses including without limitation mortgage payments and taxes, to manage and care for the property and the accounts for Eagle Street, LLC, to apply for a certificate of occupancy for the premise; and to exercise all other statutory power of a Receiver.”
The parties further stipulated on December 20, 2006, “Defendant shall, without compensation for his labor, complete all work on 128 Eagle Street, under plaintiff's supervision as Receiver including as to the cost and quality of the work and materials, that is required so as to prepare the property for application for a certificate of occupancy. Defendant represents and warrants that he is physically and professionally able to and that he will complete this work expeditiously.”
An oral Stipulation dated May 22, 2007 before Honorable Jeffrey S. Sunshine addressed the issues of Custody of the children, Equitable Distribution of Martial Property and the Inquest of Divorce, and oral Stipulation dated September 27, 2007 before a Referee addressed the issues of child support including a “... final order of child support paid by defendant to the plaintiff in the sum of $400.00 weekly through the Child Support Collection Unit. The sum is based on 25% of the defendant's adjusted gross income.” Further, defendant was to provide medical insurance through his employer for the children, and the parties were to share fifty-fifty in the unreimbursed health costs. Additionally, the child support provision was inclusive of all child care and activity costs.
The language of the Stipulation transcript dated September 25, 2007 was incorporated but not merged into the Judgment of Divorce, signed on June 5, 2008 and entered on June 11, 2008. Provisions of other Stipulations were also incorporated but not merged into the Judgment of Divorce and stated in separate Findings of Fact and Conclusions of Fact also signed on June 5, 2008 and entered on June 11, 2008.
Defendant's Contentions
In support of his position, defendant argues for the sale of 128 Eagle Street, a six-family building, and an appraisal of the building to determine the fair market value of the building. In support of this position defendant states the parties provided for this relief in an agreement which they placed upon the record at the time of divorce by oral stipulation on May 22, 2007. Further, the parties agreed to sell the property when the certificate of occupancy was obtained. According to the defendant a Certificate of Occupancy was issued for the building located at 128 Eagle Street in September 2009. Defendant further claims in the Order to Show Cause that the Certificate of Occupancy was obtained in 2010. Additionally, the defendant argues the appraisal and fair market of the building located on 128 Eagle Street must be determined so it can be listed with a multiple listing broker to be sold at the highest possible price.
Defendant further argues for the re-appraisal of 130 Eagle Street, the two family house, due to a change in circumstances which were not anticipated by the parties when they agreed on the value for that building so that defendant could receive his appropriate share of value of that building. Defendant argues that eight years has elapsed since the entering of the stipulation, 2006 to 2014, thus the present value of the property at 130 Eagle Street must be determined.
Defendant also asserts for the termination of the receivership of Grace Siebor in both properties because it is no longer needed. Defendant argues before this Court, to direct the plaintiff to account for all monies received and disbursed by individually and as principal of 128 Eagle, LLC and as receivership of the partnership and the properties located at 128 Eagle Street and 130 Eagle Street. Defendant further contends that he wants his income that he was supposed to receive from the plaintiff from both properties in excess of the expenses to be determined and paid to defendant. Defendant alleges that in order to determine what expenses the rental monies are being used for and if there are any excess of those monies to which defendant is entitled to his share of those funds, plaintiff must produce accounting and that plaintiff must pay defendant 50% of what defendant is owed from the receivership monies. Defendant contends that plaintiff pay the defendant at the closing of the sale of 128 Eagle Street, any monies that plaintiff owes to the defendant as a result of the accounting of receivership.
Defendant also alleges the provision of the Judgment of Divorce dated June 5, 2008 relating to the payment of child support that were entered into before the Referee to be invalid and unenforceable. Specifically, defendant contends the provision fails to contain the language required by the Child Support Standards Act set forth in the Domestic Relations Law which provides that all agreements between the parties relating to the payment of the child support must state the following: a) that the parties have been advised of the provisions of the C.S.S.A relating to the calculation of the child support; b) that the basic child support obligation provided would be presumptively result in the correct amount of child support to be awarded; c) in the event that the child support awarded deviates from the basic child support obligation the agreement must state the amount that the child support obligation would have been and the reasons why such agreement does not provide for the payment of that amount; and d) the language of the C.S.S.A also provides provisions of the statute may not be waived by either counsel or parties.
The Judgment of Divorce dated June 5, 2008 states, “Ordered and Adjudged, that the defendant shall pay to the plaintiff the sum of child support as required pursuant to the parties' Stipulation made on September 25, 2007 to wit: 1. Defendant shall pay to the plaintiff through the Support Collection Unit, the sum of $400 weekly, which includes all child care and extra-curricular activities, based on 25% of defendant's adjusted gross income.” The stipulation further states, “2. Defendant shall continue to provide health insurance through his employer for the Children's health care coverage. 3. Defendant shall pay 50% of all unreimbursed health care costs of the Children, upon presentation of invoices by plaintiff to defendant.” See defendant's Order to Show Cause Exhibit D pg. 5.
Defendant further supports his application by citing Courts of this State that have held that agreements between parties relating to the payment of child support must contain language as set forth in the C.S.S.A, and if it does not the agreements are invalid and unenforceable.[Cheruvu v. Cheruvu, 59 AD3d 876 (3rd Dept.2009) ; Baranak v. Baranak, 54 AD3d 789 (2nd Dept.2008) ; McColl v. McColl, 6A.D.3d 794 (3rd Dept.2004), Fessenden v. Fessenden, 307 A.D.2d 444 3rd Dept.2003); Tartaglia v. Tartaglia, 260 A.D.2d 628 (2nd Dept.199) ; Matter of Sievers v. Estelle, 211 A.D.2d 173 (3rd Dept. 19980;].
Defendant goes on to assert that there is no way to determine how the amount of child support was calculated, whether it deviates from the basic support obligation or what the incomes of the parties were at the time that child support was fixed. Defendant further argues that except for a reference to the amount to be paid of $400.00 per week based upon 25% of the defendant's adjusted gross income, none of the language required by the statute and case law, was included in the agreement for the payment of child support.
Plaintiff's Contentions
Plaintiff argues the oral Stipulation dated September 25, 2007 was incorporated and merged into the Judgment of Divorce entered into on June 5, 2008. Plaintiff then alleges that the Child support provision from the oral stipulation dated September 25, 2007 is valid and enforceable by the court. The plaintiff argues that both parties were advised of their rights relating to the calculation of child support under provisions under the Child Support Standards Act, C.S.S.A, and their rights under the Domestic Relations Law § 240. Plaintiff cites defendant's Order to Show Cause Exhibit C, page 12 of the oral Stipulation (page 11 as written by defendant) to confirm that both parties were advised of the rights under the DRL § 240 and C.S.S.A. The plaintiff quotes the following from the transcript,
“Have you been advised of your rights under the Child Support Standards Act under Section 236(b)(7) and 240 of the Domestic Relations Law, as amended, including the availability of the Support Collection Unit Services.”
Plaintiff further supports her application by citing the defendant responded to the Court by stating “Yes”. Defendant was represented by counsel and he was clearly allocuted on his rights under both of the statutes.
Plaintiff further asserts that the language of the C.S.S.A does not require the exact language to be used regarding the presumptive amount of child support. Plaintiff argues the transcript clearly states the defendant's obligation is based on 25% of his adjusted gross income for two children. Plaintiff further argues that there was no deviation in child support obligation as agreed upon by the parties. Thus, there was no need to place language of deviation of child support obligation on the record.
Plaintiff also argues that even if the Court deems the child support provision invalid, the only other remedy would be to recalculate the child support obligation using the parties income at that time. Plaintiff claims that defendant incorrectly cites Chevuru to support the declaration for the agreement as invalid. In Chevuru, the Appellate Division stated, “... since the stipulation here fails to set forth the reasons for the deviation, the child support issue must be considered de novo.” Chevuru, 59 AD3d at 879. The court did not state this failure automatically invalidates the agreement.
Plaintiff further argues that defendant does not provide any legal justification to have the property located on 130 Eagle Street reappraised. Simply, stating that eight years have passed since the last appraisal is not a valid reason. Regarding the property located on 128 Eagle Street, plaintiff does not object to selling this property. Additionally, plaintiff asserts that she has kept an accounting for all monies spent. Plaintiff claims that much of defendant's expenses were paid using the monies as defendant claims that he did not receive any part of the proceeds. Plaintiff asserts that defendant's back taxes were paid using these funds. Plaintiff provided documentation, such as proof of accounting for money spent, paid expenses of defendant, and payment of defendant's taxes from the receivership account, in her Affirmation In Opposition Exhibit's C through I.
The Law
According to Domestic Relations Law § 240(1–b)(a), “The Court shall make its award for child support pursuant to the provisions of this subdivision.” The subdivision defines, child support percentage applicable to this case as, “... (ii) twenty-five percent of the combined parental income for two children.” Domestic Relations Law § 240(1–b)(b)(3)(ii). Further, the subdivision defines combined parental income as, “... the income of both parents.” Domestic Relations Law § 240(1–b)(b)(4).
Further Domestic Relations Law § 240(1–b)(c) states how the amount of the basic child support obligation will be determined. The court first determines the combined parental income. Then “the court shall multiply the combined parental income up to the amount set forth in the paragraph (b) of subdivision two of section one hundred eleven-i of the social services law by the appropriate child support percentage and such amount shall be prorated in the same proportion as each parent's income is to the combined parental income.” Domestic Relations Law § 240(1–b)(c)(2).
Additionally, according to the Domestic Relations Law § 240(1–b)(h), a valid stipulation is defined as, “... voluntarily entered into between the parties after the effective date of this subdivision presented to the court for incorporation in an order or judgment shall include a provision stating that the parties have been advised of the provisions of this subdivision, and that the basic child support obligation provided for therein would presumptively result in the correct amount of child support to be awarded. In the event that such agreement or stipulation deviates from the basic child support obligation, the agreement or stipulation 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 payment of that amount. Such provision may not be waived by either party or counsel. Nothing contained in this subdivision shall be construed to alter the rights of the parties to voluntarily enter into validly executed agreements or stipulations which deviate from the basic child support obligation provided such agreements or stipulations comply with the provisions of this paragraph. The court shall, however, retain discretion with respect to child support pursuant to this section. Any court order or judgment incorporating a validly executed agreement or stipulation which deviates from the basic child support obligation shall set forth the court's reasons for such deviation.” Domestic Relations Law 240(1–b)(h).
Further, failure to state the reason for the deviation from the presumptively correct child support pursuant to the C.S.S.A of the parties' stipulation are invalid and unenforceable. Cheruvu 59 AD3d at 879 ; See also McColl 6 AD3d at 795 ; Tartaglia 260 A.D.2d at 629 ; Fessenden 307 A.D.2d at 445. In Cheruvu, the Appellate Division, Third Department, also held that the failure to state a reason for the deviation causes the stipulation to be invalid. As a result, the court order for the child support had to be considered de novo. Cheruvu 59 AD3d at 879.
Discussion
In this case, defendant makes a sufficient showing that would warrant the provisions of the Judgment of Divorce dated June 5, 2008 relating to the payment of child support to be invalid and unenforceable. Domestic Relations Law § 240(1–b)(c) states child support must be determined from the combined income of both parents. This was not done in this case. From the transcript of the oral Stipulation dated September 27, 2007 before the Referee, “... the final order of child support to be paid by the defendant to the plaintiff in the sum of $400.00 was based on 25% of the defendant's gross income” , but the court does not know what defendant's adjusted gross income is. The court also does not know what plaintiff's income is per year. Further, the stipulation is not based upon the parties combined parental income as defined by the C.S.S.A. Also, from the documents provided by defendant in his Order to Show Cause, he does not clarify what his adjusted gross income is for 2013. From the 2013 1065 tax form item 29a, the court only knows that defendant's Partner's Share of N.Y. Gross income from 128 Eagle, LLC is $56,154.00. The court does not know if he derives income from any other source. Additionally, the Stipulation states that the defendant is to provide medical insurance through his employer for the children and the parties were to share fifty-fifty in the unreimbursed health cost. The court does not know if the $400.00 weekly amount is based on the defendant's adjusted gross income plus the add-ons for the medical insurance and the unreimbursed health costs, or if the $400.00 amount includes the add-ons in the total amount of child support. There is no indication of what the plaintiff's income was for the purposes of the recalculation. The court simply does not know where the amount agreed upon derived. There is too much ambiguity for the court to speculate about the combined income of both parents. Thus, under the Domestic Relations Law § 240(1–b)(c) the child support order is invalid and unenforceable.
See defendant's Order to Show Cause Exhibit C, transcript of court dated September 27, 2007 pgs 3.
If plaintiff's income is $0.00 per year then this should have been noted in the stipulations to clear any confusion. According, to the 2013 1054 tax returns of 128 Eagle, LLC, provided by defendant in his Order to Show Cause, Exhibit G, item 29a, plaintiff's Partner's Share of N.Y. Gross Income is $54,154.00. This along with any other income plaintiff may have from other sources should have been combined with defendant's income to determine the total parental combined income for child support amounts, as per Domestic Relations Law § 240(1–b)(b)(4) and § 240(1–b)(c)(1) but it was not.
Additionally, failure to calculate both parental incomes when determining child support amount and instead using only one parental income is improper. Groh v. Groh, 248 A.D.2d 354, 355 (2nd Dept.1998). In Groh, the Appellate Division found the trial court erred in only using the defendant's income when determining the child support amount, in accordance with Domestic Relations Law § 240(1–b)(b)(4). Further, the Appellate Court found the trial court erred in making no specific findings of the plaintiff's income or imputed income. Groh, 248 A.D.2d at 355. The Appellate Court remanded the case to the trial court to recalculate the child support amount based on the combined parental income.
Furthermore, the oral Stipulation dated September 27, 2007, states that the defendant shall pay to plaintiff the sum of $400.00 weekly, which includes all childcare and extra-curricular activities, as based on 25% of defendant's adjusted gross income. This appears to be a downward deviation from the standard child support amount that the defendant is to pay the plaintiff. According to Domestic Relations Law § 240(1–b)(h), any deviation from the standard child support obligation must be explained. The statute states, “in the event that such agreement of stipulation deviates from the basic child support obligation, the agreement or stipulation must specify the amount that such basic child support obligation, the agreement or stipulation 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 payment of that amount.”
Nowhere in the stipulation is the deviation explained, as the statute requires. Additionally Pursuant to Domestic Relations Law § 240(1–b)(c)(4), (6), “... a non-custodial parent may be required to pay his ... proportionate share of child expenses as a supplement to basic child support obligation ... if the custodial parent is attending school receiving training seeking employment, or working and, as a result incurs child care expenses.” McBride v. McBride, 238 A.D.2d 320, 321 (2nd Dept.1997).
The court does not know if the custodian parent, the plaintiff, is engaged in any of the activities described in the statute. The court also does not know if any child care expenses were actually incurred. Having the defendant to continue to pay for these possible “... nonexistent expenses is contrary to the intent of the C.S.S.A. Id. Thus, under Domestic Relations Law § 240(1–b)(h) the child support order is invalid and unenforceable and requires a hearing de novo to set child support retroactive to the date of the first application.
Additionally, defendant makes a sufficient showing that would warrant the sale of 128 Eagle Street, the six family building, with each party receiving 50% of the net proceeds. Both parties agreed to this relief upon the record at the time of divorce by oral Stipulation dated May 22, 2007. The parties agreed to sell the property located at 128 Eagle Street as soon as the certificate of occupancy was obtained. The defendant states in his Order to Show Cause dated October 1, 2014 that he was issued the Certificate of Occupancy in September 2009 and obtained it in 2010. Further, appraisal and fair market value of the building located on 128 Eagle Street must be determined so it can be listed with a multiple listing broker to be sold at the highest possible price. If the defendant can produce proof that the certificate of occupancy was obtained then, the Court orders that the six family building located on 128 Eagle Street be sold for the highest price possible by multiple listing broker, in accordance with the Stipulation dated May 22, 2007.
See defendant's Order to Show Cause Exhibit B, transcript of court dated May 22, 2007 pgs 3–4.
Additionally, the defendant states that he and the plaintiff spoke about selling the building located at 128 Eagle Street after the divorce judgment, but the market was bad at the time. The parties decided not to sell the building at that time and instead use the proceeds from the tenants to pay certain personal expenses of the parties, not all expenses, as well as expenses for both buildings. This is not enough of a change in circumstance to warrant a hearing to determine the re-appraisal of 130 Eagle Street. The amount for the property located at 130 Eagle Street was agreed upon in the stipulation dated May 22, 2007, without any language for modification due to change in the market. Furthermore, in Wasserman v. Wasserman, 103 AD3d 793 (2nd Dept.2013) the Appellate Division, Second Department held that, “while the law permits modification of child support and maintenance awards (see Domestic Relations Law § 236(B)(9)(b) ), there is no comparable provision allowing modification of equitable distribution awards. Thus, a distributive award pursuant to Domestic Relations Law § 236(B)(5)(e), once made, is not subject to change' (O'Brien v. O'Brien, 66 N,.Y.2d 576, 591 (2nd Dept.2014). Indeed, permitting the modification of the equitable distribution provisions of a judgment of divorce would effectively undermine the finality of judgment in matrimonial [orders]”. “Wasserman v. Wasserman, 103 AD3d 793 (2nd Dept.2013) ; See also Welsh v. Lawler, 282 A.D.2d 977, 979 (3rd Dept.2001).
Recently in Pelgrim v. Pelgrim, 2015 N.Y. Slip Op. 02738 (2nd Dept.2015), the Appellate Division upheld the Supreme Court's decision instructing the plaintiff wife, “... to reimburse the defendant [husband], for the real estate taxes he paid on the marital residence” modifying the stipulation agreed upon by both parties on March 5, 2010. The judgment incorporating the parties' stipulation said that the plaintiff would reside in the marital home with the parties children for two years and be responsible for all charges on the marital residence, including taxes. Id. The plaintiff interfered and delayed the defendant's timely efforts to sell the marital home, resulting in a sale one year later from the time considered. The Appellate Division held that, “under these circumstances, and consistent with the meaning and expectations of the parties' stipulation, the defendant was entitled to reimbursement of the taxes that accrued on the property in the later part of 2012 and early part of 2013.” Id.
Pelgrim is distinguishable from the present case because neither party has done anything to interfere or delay with the plans to sell the house located on 130 Eagle Street. Further, no taxes have accrued on the property located on 130 Eagle Street because of a failure to sell the property by a certain date. The property located on 130 Eagle Street has not been sold yet because neither party acted to do so and only when this dispute arose as to how the proceeds were to be divided did either party seek judicial review. Thus, the circumstances discussed by the Appellate Division in Pelgrim, are distinguishable from the case at bar. Additionally, both parties agreed to the amount for the property located 130 Eagle Street. Thus, the agreed amount for the property located at 130 Eagle Street should not be re-appraised but remain the amount stated upon in the stipulation dated May 22, 2007.
Certainly defendant would not argue to sell the property located at 130 Eagle Street at a lower price than the agreed upon amount in the stipulation dated May 22, 2007 if the housing market had declined.
Furthermore, the defendant does not make a sufficient showing that would warrant the re-appraisal of 130 Eagle Street because the defendant does not give a legal basis for this request. Defendant asserts a change in circumstances which were not anticipated by the parties when the parties agreed on the value for that building, but he does not explain what the change in circumstances are other than it might be worth more money. The parties agreed by oral stipulation dated May 22, 2007, to the following regarding equitable distribution, “... as to the property 130, ... the plaintiff will continue to reside there with the children. And, she will purchase the interest of the defendant in that property in the following way. The appraised price of the property at 130 Eagle Street is $870,000.00. The mortgage on that property is $375,000.00. Thus the equity is $495,000.00. The plaintiff will purchase the defendant's interest, which by paying to him one half of the equity, the sum of $247,500.00 and that payment will be made at the time of the sale of 128 Eagle Street, from the proceeds of that sale. And in addition, at that sale, the parties shall pay from the gross proceeds, transfer taxes, brokers fees, attorneys fees for one lawyer and other including costs.”
See defendant's Order to Show Cause, Exhibit B, transcript of court dated May 22, 2007 pgs 3–4.
Additionally, during the oral stipulation placed on the record dated May 22, 2007, the court questioned and then reiterated the proceeds amount each party would receive and how the amounts would be distributed from the sale of the building located at 128 Eagle Street. Morever, the defendant was released from any and all obligations with regard to the mortgage of the property located at 130 Eagle Street. Plaintiff was solely responsible for the mortgage on the property located at 130 Eagle Street. The transcript of the oral stipulation dated May 22, 2007 reads as follows,
See defendant's Order to Show Cause, Exhibit B, transcript of court dated May 22, 2007 pgs 4–6.
The Court: Each party is going to receive one half the net proceeds from that sale; is that correct?
Ms. Joseph: Yes, I am just getting there. Correct.
Ms. Zawisny: Yes.
The Court: From the wife's share of her net proceeds from the sale of the investment property, she's going to pay the husband for her half interest in the net proceeds of the property that she resides in with the children, correct?
Ms. Zawisny: Correct.
Ms. Joseph: Half of the equity, which is his half of that equity, she pays him by using her share of the 128 Eagle Street property sale.
The Court: But, it is her share of the investment property?
Ms. Joseph: Yes.
(Discussion of the record. The discussion of the record concluded and the following occurred in open court)
Ms. Joseph: The payment that the plaintiff will make of the $247,500 will be from her share of the gross proceeds of the sale of 128 Eagle Street, which is 50% of the net proceeds and the net proceeds or net proceeds of transfer taxes, broker fees, attorneys fees and other closing costs. Thank you for the clarification. Your Honor. Once other point that the parties have agreed upon, is that for the year 2007; they'll file joint tax returns and so that they'll claim capital gains taxes on those joint tax returns, subject to available exemptions.
Ms. Zawisny: If I just may add, with reference to 130 Eagle Street, the wife Ms. Grace Siebor, will be responsible for the mortgage on that premises and she is hereby releasing him from any and all obligations with regard to that mortgage.”
Further, in denying the re-appraisal of the property located on 130 Eagle Street, defendant will still obtain his 50% share of said property at the time that 128 Eagle Street is sold, as agreed upon by both parties. The property located at 128 Eagle Street needs to be appraised to know the fair market value of the property and then placed on the market to be sold. As of today, to the court's knowledge, there is no appraisal price for the house located at 128 Eagle Street.
Additionally, the oral Stipulation dated May 22, 2007, is silent on the matter of an appreciation or depreciation in value of the property located at 130 Eagle Street. Nowhere within the oral stipulation is an increase or decrease in value of the property taken into consideration by either party when entering into the agreement of equitable distribution. This court cannot add or subtract a term to the agreement. An “... agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms. A court may not, in the guise of interpreting, a contract, add or excise terms or distort the meaning of those used. Since [this] agreement is not ambiguous it must be enforced according to its terms.” Buckingham v. Buckingham, 2015 N.Y. Slip Op. 02190 (1st Dept.2015).
Moreover, “... courts will not set aside an agreement on the ground of unconscionability simply because it might have been improvident.” Etzion v. Etzion, 62 AD3d 646, 654 (2nd Dept.2009). Furthermore, no exceptional circumstances exist to allow for the reformation or recession of the agreement. See Simkin v. Blank, 19 NY3d 46 (N.Y.2012).
Additionally, “parol evidence ... is admissible only if a court finds an ambiguity in the contract.” Schron v. Troutman Sander, LLP, 20 NY3d 430, 436 (2013). In the present case, the stipulation is clear and complete as to the price of the property located at 130 Eagle Street. The use of, “... extrinsic evidence is inadmissible to alter or add a provision to a written agreement.” Id. Defendant's request for re-appraisal of the property located at 130 Eagle Street, a two family building is denied. The proper remedy for the parties was to enter into a new agreement once the Certificate of Occupancy was obtained. Having failed to do so does not create a right for the court to do so.
Defendant does not make a sufficient showing regarding the termination of the receivership of Grace Siebor in both properties. Defendant asserts that the receivership is no longer needed but he does not explain why this is so. Defendant again does not give a legal basis for this request, thus it is denied.
Defendant does make a sufficient showing regarding the plaintiff to provide financial papers, such as an account for all monies received and disbursed by her individually and as a principal of 128 Eagle Street, LLC and as a receivership of the partnership of both properties located at 128 Eagle Street and130 Eagle Street to determine income and expenses. Plaintiff has provided, in her Affidavit in Opposition, bank statements from CitiBank and Apple Bank, checks deposited from 128 Eagle Street, LLC II, and Con Edison. The markings made by plaintiff on said financial papers are confusing and hard to understand and offer no proof as to who spent money and/or who made payments with the money.
Additionally, in the stipulation dated December 20, 2006, plaintiff was “... appointed pendente lite receiver ... to exercise all other statutory powers of a receiver.” According to N.Y. CPLR § 6404, Accounts, states a temporary receiver plaintiff, “... shall keep written accounts itemizing receipts and expenditures, and describing the property and naming the depository of receivership funds, which shall be open to inspection by any person having an apparent interest in the property.”
The plaintiff was to continue to act as pendente lite receiver as referenced in both the Judgment of Divorce dated June 5, 2008 (see defendant's Order to Show Cause, Exhibit D, pg. 5) and Findings of Facts and Conclusions of Law dated June 5, 2008 (see defendant's Order to Show Cause, Exhibit E, pg. 4).
In the present case, plaintiff was appointed receiver and as such should have kept written accounts of the properties for defendant, an interested person in the property as both a partner in Eagle LLC and a joint owner in both properties, to inspect. See also Saline v. Saline, 260 AD3d 345, 346 (2nd Dept.1999).
Further, the Appellate Division remitted a case to the Supreme Court
“... for the purposes of conducting a hearing requiring the respondent to account for money obtained during the receivership, that is accounting as to the assets, income, and expenses as to ascertain whether surplus have been realized ...” Gabbay v. Gabbay, 260 A.D.2d 345, 346 (2nd Dept.1999).
In Gabbay, the respondent was appointed the receiver of all of her husband's commercial property, while the appellant was incarcerated, although the respondent was not required to account for all the monies collected during her receivership. Id. Similarly to the present case, there is no language in any of the various stipulations that directs plaintiff to account for all monies she collected during the receivership, but in accordance to CPLR, she is required to do so.
Thus, as in Gabbay, this matter was remitted to the Supreme Court to conduct a hearing requiring the plaintiff to account for all monies obtained during the receivership. This applies to all accounting for assets, income and expenses to determine if a surplus has been realized. This court as such orders, that all financial records of 128 Eagle Street, LLC, 128 Eagle Street LLC II, tax records, W2 forms, bank statements including personal and business accounts, credit card statements, and receipts of purchases and expenses made on behalf of either properties be produced by both plaintiff and defendant and whatever discovery is necessary to determine what the appropriate child support order should have been. It is the plaintiff's and defendant's burden to produce all of the books, records, tax statements and receipts from the date of the first application for child support by May 12, 2015 by certified mail.
Lastly, defendant's request for the removal of the child support enforcement petition having (Dkt. No. F–10697–14/14A) and a petition for downward modification of child support having (Dkt. No. F–10697–14/14B) to Supreme Court King was so ordered on November 18, 2014 by this court on consent.
Conclusion
Accordingly, for the above discussed reasons, defendant's application to declare the provision of child support order unenforceable and invalid is granted. The defendant's request for plaintiff's accounting records from the receivership monies from both properties is granted. Defendant's request for the sale of 128 Eagle Street, a six family building, with multiple listing for the highest price is granted. The defendant's other requests, such as the re-appraisal of 130 Eagle Street, termination of the receivership of Grace Siebor for both properties and for plaintiff to pay defendant any monies that is owed to defendant from the receivership is denied at this time.
Additionally, it is ordered that financial records of 128 Eagle Street, LLC, 128 Eagle Street LLC II, tax records, W2 forms, bank statements including personal and business accounts, credit card statements, and receipts of purchases and expenses made on behalf of either properties be produced by both plaintiff and defendant to recalculate the correct child care support and determine if any, monies are owed to either party including the three years prior to the oral stipulation dated September 27, 2007 by May 12, 2015 by certified mail.
Thus, this Court must have all the necessary discovery three years prior to the date of the oral stipulation on September 22, 2007 before a Referee up to and including the present date from both parties to re-calculate the proper child support amount from the effective date of the said oral stipulation. Lastly, it must be recognized that the recoupment of any overpayments in child support is against public policy. Baraby v. Baraby, 250 A.D.2d 201, 205 (3rd Dept.1998).
Parties and counsel to appear on May 14, 2015 to select a date for an evidentiary hearing, if necessary.
Motion sequence # 2 is granted to the extent indicated herein.
This shall constitute the decision and order of this Court.