Opinion
No. 53468/2011.
06-04-2014
Stefano ZITO, Plaintiff, v. Valerie ZITO, Defendant.
John R. Sandleitner, Esq., Sandleitner & Sandleitner, Tannersville, Attonery for the Plaintiff. Deanna Lucci, Esq, DiMascio & Associates, Garden City, Attorney for the Defendant. Anthony J. Auciello, Esq., Auciello Law Group, P.C., Brooklyn, Attorney for the Intervenor.
John R. Sandleitner, Esq., Sandleitner & Sandleitner, Tannersville, Attonery for the Plaintiff.
Deanna Lucci, Esq, DiMascio & Associates, Garden City, Attorney for the Defendant.
Anthony J. Auciello, Esq., Auciello Law Group, P.C., Brooklyn, Attorney for the Intervenor.
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 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. 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.
The husband substituted the law firm of Caruso, Caruso & Branda for Sandleitner & Sandleitner on July 30, 2013.
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 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 A.D.2d 192, 193, 707 N.Y.S.2d 11 [1 Dept., 2000], quoting Maas v. Cornell Univ., 253 A.D.2d 1, 5, 683 N.Y.S.2d 634 [3 Dept., 1999], affd 94 N.Y.2d 87, 699 N.Y.S.2d 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 N.Y.2d 226, 231, 203 N.Y.S.2d 845 [1960];Houghton v. Thomas, 220 App.Div. 415, 423, 221 NYS 630 [1st Dept 1927], affd 248 N.Y. 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 A.D.2d 758, 480 N.Y.S.2d 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 A.D.2d 866, 867, 401 N.Y.S.2d 259 [2d Dept 1978] ).”
(Neumann v. Metropolitan Medical Group, P.C., 153 A.D.2d 888, 889, 545 N.Y.S.2d 592 [2 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 A.D.2d 394, 395, 618 N.Y.S.2d 108 [2 Dept., 1994], quoting Kimco v. Devon, 163 A.D.2d 573, 575, 558 N.Y.S.2d 630 [2 Dept., 1990], quoting Environmental Concern v. Larchwood Constr., 101 A.D.2d 591, 594, 476 N.Y.S.2d 175 [2 Dept., 1984] ; see generally Maas, 253 A.D.2d 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 A.D.2d 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 N.Y. 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 N.Y.2d 576, 589, 498 N.Y.S.2d 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 N.Y.S.2d 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 N.Y.S.2d 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 N.Y.S.2d 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 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 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.
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.
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 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 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 | ||
| $0 | |||
| Basic Calculation | |||
| 7. Calculation A | $23,400 | 30% of Payor's Income minus 20% of Payee's Income | |
| 6. Defendant | 8. Calculation B | $21,200 | 40% of Combined Income minus Payee's Income |
| 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:
| 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 ; gas $334; electricity $325; water $56; telephone $350, cable $150; and the wife's auto insurance $350 which equals $2,940
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.
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.
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 upon the party's past income or demonstrated earning potential” (Lennox v. Weberman, 109 AD3d 703, 703–704, 974 N.Y.S.2d 3 [1 Dept., 2013], citing Hickland v. Hickland, 39 N.Y.2d 1, 382 N.Y.S.2d 475 [1976],cert denied 429 U.S. 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 $391; gas $334; electricity $325; water $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: nursery school $292 and primary school $292, totaling $584.
Since real estate taxes appear to be included in the mortgage payment, this $391 is doubled.
It is noted that plaintiff, who pays this expense, lists it in his affidavit of net worth as being $56 per month.
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 N.Y.S.2d 439 [1 Dept., 2010] ; accord Davydova, 109 AD3d at 957;Maksoud v. Maksoud, 71 AD3d 643, 644, 896 N.Y.S.2d 387 [2 Dept., 2010] ; Otto v. Otto, 13 AD3d 503, 503, 787 N.Y.S.2d 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 A.D.2d 447, 447, 700 N.Y.S.2d 862 [2 Dept., 1999] ; Ryan v. Ryan, 186 A.D.2d 245, 246, 588 N.Y.S.2d 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 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. Furthermore, the amount ordered herein is consistent with what the husband was voluntarily paying prior to his retention of new counsel.
Neither party provides the court with any information that would establish the tax impact of any award made.
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 N.Y.S.2d 132 [2 Dept., 2013] ; see also Johnson v. Chapin, 12 NY3d 461, 467 [2009], 881 N.Y.S.2d 373, rearg. denied 13 NY3d 888, 893 N.Y.S.2d 834 [2009];DeCabrera v. Cabrera–Rosete, 70 N.Y.2d 879, 881 [1987];Dodson v. Dodson, 46 AD3d 305, 305, 524 N.Y.S.2d 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 N.Y.2d 187, 190, 524 N.Y.S.2d 176 [1999] ). An award of interim counsel fees is intended to ensure that the non-monied 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 N.Y.S.2d 667 [2 Dept., 2008] ; see also Coven v. Coven, 82 AD3d 1144, 1145, 919 N.Y.S.2d 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 A.D.2d 392, 393, 724 N.Y.S.2d 48 [1 Dept., 2001], quoting O'Shea, 93 N.Y.2d 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 N.Y.S.2d 596 [2 Dept., 2007] ; Wald v. Wald, 44 AD3d 848, 850, 844 N.Y.S.2d 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 N.Y.S.2d 541 [2 Dept., 2013], quoting Nicodemus v. Nicodemus, 98 AD3d 605, 607 949 N.Y.S.2d 741 [2 Dept., 2012] [internal quotation marks and citations omitted] ). “An award of interim counsel fees to the non-monied 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 N.Y.S.2d 725 [2 Dept., 2013] ; Khaira, 93 AD3d at 201;Palmeri v. Palmeri, 87 AD3d 572, 572, 929 N.Y.S.2d 153 [2 Dept., 2011] ; Penavic v. Penavic, 60 AD3d 1026, 1028, 877 N.Y.S.2d 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 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.