Opinion
No. 2008/12040.
2012-12-5
C.M.S., Plaintiff, v. W.T.S., Defendant.
Joan de R. O'Bryne, Esq., Rochester, for Plaintiff. Karen Smith Callanan, Esq., Rochester, for Defendant.
Joan de R. O'Bryne, Esq., Rochester, for Plaintiff. Karen Smith Callanan, Esq., Rochester, for Defendant.
RICHARD A. DOLLINGER, J.
Trials sometimes resemble Haiku poems: they can be abbreviated, not cluttered with complex documents or tangled legal issues and leave a lot to the interpretation of the reader or, in the case of this matrimonial trial, a lot for the trial judge to ponder.
The couple in this case have been separated since 2007 and their divorce action has lingered since 2008. The attempts at settlement stalled, numerous pretrial conferences elicited seeming indifference by the parties, despite the best efforts of their counsel. When the trial came, the husband and wife each testified. Neither side introduced any pertinent documents, not even the statements of net worth. The wife, as plaintiff, simply called her husband to testify and the husband called the wife. The wife's counsel called the wife again as a rebuttal witness, but the testimony was short and uncomplicated, consisting of less than a dozen questions. The court now ventures to resolve the issues of support and equitable distribution.
The only document before the court is the verified complaint, admitted by stipulation.
The wife amended her complaint to assert a claim under Section 170(7) of the Domestic Relations Law and testified that her marriage had been irretrievably broken down for a period in excess of six months. Based on that declaration, the court determined that the grounds under DRL § 170(7) had been established. See G.C. v. G.C., 35 Misc.3d 1211A, 951 N.Y.S.2d 85 (Sup.Ct. Monroe Cty.2012).
The facts establish that the couple has one unemancipated college-aged daughter. Before establishing support, this court must identify the primary custodial parent based upon the “reality of the situation” or who has physical custody of the children for a “majority of the time.” Matter of Borowicz v. Mancini, 256 A.D.2d 713, 681 N.Y.S.2d 125 (3rd Dept.1998).
There is no direct testimony that the child was spending time with either parent. There was no evidence of where she spent her time prior to leaving for college or where she resided when home from college. Given the absence of these seemingly obvious and easily proven facts, it is difficult for the court to make a determination, but there is information that can be inferred. The husband acknowledges having paid child support to his wife which raises an inference that he concedes that the wife is the primary residential parent. In addition, the husband admits that he has had virtually no communication with the his unemancipated daughter. While this court cannot explain the absence of direct testimonial proof regarding the wife's status as the primary residential parent, this court concludes, based on these circumstantial facts, that the wife is the primary residential parent for the unemancipated daughter, triggering the husband's obligation to pay child support.
The husband's income has been in flux, as he has changed jobs several times. The wife asks this court to impute income to him for child support purposes. DRL § 240(1–b)(b)(5)(v) specifically permits this court to impute “income based upon the parent's former resources or income, if the court determines that a parent has reduced resources or income in order to reduce or avoid the parent's obligation for child support.” Furthermore, in determining the husband's child support obligation, this court need not rely upon the husband's own account of his finances, but may impute income based upon his past income or demonstrated earning potential. Curran v. Curran, 2 A.D.3d 391, 392, 767 N.Y.S.2d 852 (2nd Dept.2003); Maddiwar v. Maddiwar, 2012 N.Y. Slip Op 52155U Sup.Ct. Queens Cty.2012).
The proof of the husband's income was sparse: no tax returns were produced, no W–2 wage forms, or federal tax Form 1099 for any time during the last five years were offered at trial. The husband testified that he was a contract engineer for an area software design firm and paid $75,000 over an 18–month period from January 2010 to May 2012 (which translates into a $50,000 annual salary). There was no evidence that he paid social security taxes or medicare taxes from that amount. Mojdeh M. v. Jamshid A., 36 Misc.3d 1209A (Sup.Ct. Kings Cty 2012) (no reduction of income for payment of FICA unless proof it was paid). The court declines to infer that such taxes were paid. Based on this evidence, the court concludes that the husband had an annual income of $50,000 during most of the last two years and given his experience, his past income, his lengthy history of employment at a local college, his testimony regarding his skills while working for family business during the period of his marriage, and as his possession of two advanced degrees, this court imputes an annual income of $50,000 to the husband.
The husband was apparently self-employed and testified that he received no benefits. Under the Internal Revenue Code, the husband would have paid his social security taxes at the self-employed rate, which is higher than the rate for a wage earner. Chapman v. Apfel, 236 F.3d 480, 482 (9th Cir.2000) (an individual who is self-employed must file a personal income tax return Form 1040 with a Schedule SE [self-employment] and a Schedule C [business profits and loss statement], and pay his own social security taxes at twice the rate for an employee). See Lindenburg v. Lindenburg, 2006 Conn.Super. LEXIS 3728 (Sup.Ct.Conn.2006). New York courts have allowed a self-employed child support payor to reduce his income by his higher rate social security taxes before calculating child support. Griggs v. Griggs, 234 NYLJ 70 (Sup.Ct. Westchester Cty.2005). The husband here may have been entitled to a significant reduction from the $50,000 to calculate child support, but having heard no proof on that question, the court declines to grant any credit for the payment of any of the husband's self-employment social security taxes.
In seeking to rebut this conclusion, the husband testified that he was currently unemployed and seeking work. He testified that he suffered a heart attack in May 2012, which delayed his active return to seeking employment. He testified that he had sent out “numerous resumes” in the last three months, but had done nothing else to obtain employment. He testified that he was currently living on accrued savings. However, the trial proof fails to substantiate a reduction in the imputed income. The husband failed to produce a copy of his current resume. There is no evidence of any distribution of the resume, no letters from employers acknowledging receipt of the resume, or any other corroborative evidence of the husband's employment search. The husband testified that, after recovering from heart attack in 2012, he sent resumes to prospective employers and “registered on job finding websites” and had even looked for employment out of New York State. However, no documentary evidence was presented to support these job-searching assertions: no proof of enrollment on websites, no copies of resumes or cover letters, and no evidence of the exact dates in which the supposed search occurred. See Matter of Virginia S. v. Thomas S., 58 A.D.3d 441, 870 N.Y.S.2d 322 (1st Dept.2009) (lack of tax returns or verification that husband was receiving public assistance or any evidence of good faith efforts to obtain employment commensurate with his experience and qualifications as factors in determining that party failed to meet their burden of proof to rebut imputation of income).
Given these facts, the court declines to alter the income imputed to the husband because of his alleged job search efforts. The court reiterates that the husband, knowing that the case was going to trial, did not bring to trial his 2011 tax return, his 1009 tax form for 2011, or any other documents to support his income assertions. His apparent nonchalance in failing to produce corroborative evidence at trial-or to produce any supporting documents-undercuts his credibility in seeking to avoid an imputation of income. He has failed to meet his burden of proof to establish a lesser income for child support purposes. Butler v. Torrellas, 251 A.D.2d 326, 674 N.Y.S.2d 70 (2nd Dept.1998) (burden of going forward and the burden of proof falls on the objector to prove his or her objections to a proposed adjusted order of child support).
Consistent with the Child Support Standards Act (“CSSA”), the husband's annual child support for a single child, based on the $50,000 in imputed annual income, is $8,500 or $163.46 per week. The court notes that neither party testified to the criteria set forth in the CSSA to establish the appropriate support for the child. Even though this testimony is not before the court, the court finds that this amount is consistent with the CSSA. The wife, as recipient, never suggested any higher figure was necessary for the support of the child and the husband, as the payor, never set forth any rational to depart from the guideline. Since neither party objected to this “by-the-book” calculation, this court, mindful of its obligations under the CSSA to provide adequate support for the child, awards child support in the amount of $163.46 per week.
The husband admitted that he had not paid child support since July 2011, a period of 16 months or 65 weeks. There is no evidence of any offset payments made by the husband to reduce the arrears. S.B. v. W.A., 37 Misc.3d 1204A (Sup.Ct. Westchester Cty.2012) (party seeking to deny arrears has the burden of proof to establish why arrears are not appropriate). The court therefore awards the wife $10,624.90 in child support arrears for the period from July 1, 2011 through October 31, 2012.
This court also considered contributions to college expenses. In determining whether to award educational expenses as part of the support for the child, the court must consider the circumstances of the case, the circumstances of the respective parties, the best interests of the children, and the requirements of justice. Matter of Paccione v. Paccione, 57 A.D.3d 900, 870 N.Y.S.2d 430 (2nd Dept.2008). Here too, there is very little proof on which to make a determination. There was some testimony regarding the husband's making an anonymous gift to his daughter for her college expenses, but there was no evidence of the size of the child's college expenses, the child's ability to contribute, or the need to continue any parental contribution to those expenses. As a result, this court declines to require either parent to contribute any sums for the college expenses for their daughter. There is simply insufficient proof to draw any conclusions regarding these factors. This court finds that the wife failed to meet her burden of proof to seek a contribution from the husband for the child's college expenses.
There was no proof of the cost of health insurance for the unemancipated daughter or who provides such insurance currently. In the absence of such proof, this court orders the wife, who works as a teacher, to procure health insurance for the unemancipated daughter to the extent permitted by federal or state law. Because there was no substantiated proof of the wife's income to establish respective pro rata contributions by the parents and no documentary evidence of the cost of insuring the child, this court declines to award the wife any proportionate contribution from the husband for the cost of the daughter's health insurance. She has failed to meet her burden of proof to establish her entitlement to a contribution from her husband.
There was no claim by either parent for the tax exemption for the child, but if the husband's support is current-ongoing and arrears-by December 31, 2012, he will be entitled to claim the child as his dependent if permitted to do so by federal and state law. Thereafter, the exemption shall alternate annually until exhausted. Neither side requested maintenance and the court finds none is required by the proof.
Property acquired during marriage is presumed to be marital property, and the party seeking to establish that particular property is separate property bears the burden of proof. DeJesus v. DeJesus, 90 N.Y.2d 643, 652, 665 N.Y.S.2d 36, 687 N.E.2d 1319 (1997); Fields v. Fields, 65 A.D.3d 297, 308, 882 N.Y.S.2d 67 (1st Dept.2009); DRL § 236(B)(1)(c). Both parties testified, obliquely and without corroborative documentation, to the existence of certain retirement accounts. The husband acknowledged that he had a 403(b) deferred compensation account, an IRA, and a pension from a prior employer now overseen by the Pension Benefit Guaranty Corporation. The husband never testified that these accounts were acquired during the marriage, although given it's 27–year duration, this court is tempted to conclude that the accounts were created during the marriage and constitute marital property, subject to equitable distribution. However, given the lack of proof in this case, this court declines to do so.
There was no evidence of the value of these accounts on the date of commencement, no evidence of their appreciation, or the exact nature or extent of any withdrawals by the husband, either during the marriage or after commencement. There were no documents admitted at trial to show the nature of the accounts or their values at any time. Therefore, the court concludes that the wife has failed to meet her burden of proof to establish her exact marital share of these accounts. The court declines to award her any marital share of them. Singh v. Singh, 36 Misc.3d 1218A (Sup.Ct. Queens Cty.2012) (equitable distribution denied because there was is no evidentiary showing of the marital nature of the property, the value of this property at time of purchase and at time of sale). Titled solely in the husband's name, they remain his assets freed from claims by his wife.
The wife testified that she had been employed as a teacher in the Rochester City School District, had a teacher's pension, a deferred compensation account, and other retirement investments. She acknowledged that these accounts were acquired during the marriage. However, the wife's mere acknowledgment does little to assist this court in deciding what, if any, portion of these assets are subject to the husband's equitable distribution claims. Again, there is no evidence of their value on the date of commencement, no evidence of their appreciation since the date of commencement, and no proof before the court on how to divide these assets. There are no documents admitted in evidence to prove the existence of the accounts or their values at any time. There was no demonstration that the husband ever sought to require the various account holders to produce evidence of the value of the accounts through subpoena or otherwise. The court concludes that the husband has similarly failed to meet his burden of proof to establish the exact nature of the assets and the exact nature of his marital share. There is also no proof before this court regarding the coverture faction or other method for apportioning any of the wife's-or for that matter, the husband's-retirement accounts. While the parties may have anticipated leaving this task-the calculation of the marital share of retirement assets-to the court, this court declines to engage in that exercise. There is simply no competent proof of the retirement assets of either party. To the extent that they may be marital as a matter of law, the accounts shall remain the property of the currently titled spouse. Neither party introduced any competent evidence to justify any distribution other than an award of the assets to the currently titled holder of those assets.
The coverture fraction is a method of allocating marital shares of retirement assets dervied from Majauskas v. Majauskas, 61 N.Y.2d 481, 474 N.Y.S.2d 699, 463 N.E.2d 15 (1984); see also Rodriguez v. Rodriguez, 70 A.D.3d 799, 894 N.Y.S.2d 147 (2nd Dept.2010).
The factors set forth in the Domestic Relations Law which this court should consider before awarding equitable distribution to this couple were not seriously referenced during the testimony. There is no evidence of the health of the parties-other than the husband's reference to a recent heart attack and he admitted he was capable of returning to work at the time of trial. Neither side suggested the duration of the marriage should be a factor in equitable distribution. Neither side presented any proof regarding the loss of inheritance or pension rights, the loss of health insurance, their contributions as a spouse to the acquiring or appreciation of martial assets, the liquid or non-liquid character of the property, the probable future financial circumstances of either party, or any other factor under the statute. DRL § 236(B)(5)(d). While the statute requires this court to consider these factors-and others-there is insufficient proof before the court to accord any weight to any of these factors in resolving equitable distribution of this couple's marital assets.
The husband and wife did agree on one asset: there is some amount held in escrow regarding the sale of a jointly held resort property. The court was given no exact evidence of the amount of these proceeds. There is no evidence of any separate property claims for these proceeds. Because both sides testified that these funds were marital funds, this court awards each party 50% of the escrowed funds.
The wife testified about the sale of two assets, a boat and trailer. She testified that she sold these assets after commencement of this action and that the proceeds were deposited in the same account as the resort property sale proceeds. Neither party produced documentary evidence of this transaction. In the absence of further proof, this court declines to require the wife to account any further for these funds.
During the wife's testimony, the wife mentioned that the couple had, during the marriage, acquired shares of Paychex Corp. stock. There is no evidence of the value of these shares or who is the titled owner. The shares are marital assets and they shall be sold within 10 days of the order of this court and the proceeds equally divided between the husband and wife.
Both parties acquired advanced degrees during the marriage: the husband earned a bachelors and a master's degree and the wife earned a master's degree and a teaching certificate. There was no evidence of the present value of these advanced degrees, even though they are marital assets. The husband, in a single question, was asked whether he agreed with an expert's report on the valuation fo the degrees, but the report was never offered as an exhibit and its valuation of the degrees never referenced by either witness. In the absence of such proof, the court declines to award either party any share of the enhanced earnings from these degrees, despite their apparent palpable value as income generating assets. Murtari v. Murtari, 249 A.D.2d 960, 673 N.Y.S.2d 278 (4th Dept.1998) (court properly declined to make a distributive award to defendant of the value of plaintiff's enhanced earning capacity attributable to the master's degree earned during the marriage because defendant failed to offer proof of its value or that he made a substantial contribution to it). Finally, there is no evidence of any marital debts and no allocation of any debts is required.
The litigants' strategic approach in this case appears to mirror that of the couple in N.H. v. S.H., 28 Misc.3d 1217A (Sup.Ct. Nassau Cty 2010). In that case, the court noted, in detail that:
... neither plaintiff nor defendant established to the satisfaction of this court their past and current assets, the value of their past and current assets, and whether their past and current assets are separate or marital property. The testimony of both plaintiff and defendant was scattered and incomplete as to what if any assets they had and whether the assets currently exist. No tax returns were submitted to the court by either plaintiff or defendant. No current Statement of Net Worth was submitted to the court by either plaintiff or defendant. There was a passing reference by both plaintiff and defendant to the other receiving and using past tax refunds. Similarly, there was a passing reference by both plaintiff and defendant about the existence of nondescript furniture, pictures, household items, miscellaneous jewelry, and a diamond engagement ring. No specific information about these items was provided to the court. No value regarding these items was properly established to the court. The court is left to speculate about what assets the parties previously had and what assets currently exist .... neither party covered, in any detail, the relevant financial issues necessary for this court to make an equitable distribution determination as set forth in DRL § 236(B)(5)(d).
In light of the parties' complete failure to satisfy their respective burdens of proof regarding the parties' separate or marital assets, this court is unable to direct any specific distribution of assets. The Appellate Division has held that in a matrimonial action, where there is an absence of proof regarding the value of property or the reasons for treating property as marital property, the court may refuse to consider any equitable distribution of those assets.
Id. at 35. The same lack of proof disected in N.H. v. S.H., compels the same conclusion here: there is insufficient proof to require distribution of any of the couple's assets-with the minor exceptions noted herein-and the assets titled in their respective names remain their property, freed from claims of equitable distribution.
The court found sufficient evidence to establish the grounds for a judgment of divorce under Section 170(7) of the Domestic Relations Law. The court has equitably divided all the marital assets proven at trial. The wife is entitled to a judgment of divorce as a matter of law and fact.
Or, to complete the Haiku metaphor:
Because the proof's slim and trial short,
The verdict's of a different sort
In this divorce court.