Opinion
XX-10.
Decided May 17, 2010.
Anthony C. Emengo, Esq., Attorney for Plaintiff, Williamsburg, New York.
Wendy A. Harris, Esq., Attorney for Defendant, Richards Kibbe Orbe, LLP, New York, New York.
Amanda Norejko, Esq., Sactuary for Families, Inc., Center for Battered Women's Legal Services, New York, New York.
Violetta G. Watson, Esq., Wilmer Cutler Pickering Hale Dorr, LLP, New York, New York.
The financial aspects in this matrimonial action of the parties were tried over six (6) days; June 12, 2009, June 23, 2009, June 26, 2009, July 9, 2009, July 10, 2009, and July 28, 2009. The matter was thereafter adjourned for submission of post trial memoranda and summation.
The husband initially commenced a divorce proceedings in Albania. The Albanian court declined to hear the matter since the parties' children are United States citizens. The husband thereafter commenced the within divorce action on December 14, 2007. An extensive decision after trial was issued on custody and visitation on August 15, 2008 ( see G.K. v. L.K., 20 Misc 3d 1138(A), 872 NYS2d 690 [N.Y.Sup., 2008]). An interlocutory judgment on the issue of custody and visitation was signed on January 22, 2009. The parties each brought post judgment applications which resulted in a hearing on the issues of custody and visitation that is currently proceeding before this court.
Findings of Fact
The parties were married on January 15, 1993, in Albania. The husband is 44 years of age and the wife is 37 years of age. The parties have five (5) children. All of the children are unemancipated. Their ages are 13 (November, 1996), 8 (January, 2002), 7 (April, 2003), 5 (October, 2004) and 4 (March, 2006). At present, the four (4) youngest children reside with the mother at a shelter which has a confidential address, while the eldest child resides with the father at the marital residence, a rented apartment in Brooklyn, New York. The parties are each in good health. An Albanian interpreter was provided for the wife throughout this litigation since she does not speak English. Although the husband testified in English during the custody and visitation trial, he requested the use of an interpreter for the financial trial. The husband's former attorney, Deborah Fiss, was relieved as counsel for the husband shortly after the custody and visitation decision was rendered. Counsel was substituted by Anthony C. Emango, Esq.
During the marriage, the husband worked in the construction industry which enabled him to financially support the family and send funds to Albania. The wife is as a stay-at-home mother as established during the custody trial. On or about August 2, 2005, the parties and their children traveled to Albania. The husband returned to the United States after two (2) weeks, however, the wife and children were left in Albania at the husband's parents house from August 2005 until July 2007. In July 2007, the wife and youngest child left the husband's parents' home and went to live with the wife's family in a nearby village over the objections of the husband and his family while the four (4) eldest children remained with the husband's parents. Thereafter, the marriage fractured. Starting in July 2007 through October 2007, the husband returned to Albania to bring the four (4) eldest children back to the United States. The wife and youngest child returned to the United States in October 2007 and moved directly into a domestic violence shelter, where the wife and the four (4) youngest children presently reside. The events of the parties life in Albania and their return to New York are the subject of this court's extensive custody and visitation decision dated August 15, 2008.
Grounds
The husband testified to grounds for divorce on June 12, 2009. He testified that on or about January 2006 the wife ceased having sexual relations with him. The abandonment took place at the marital residence located in Brooklyn, New York. The husband further testified that he has not had sexual relations with his wife since that time and he has requested that the wife resume sexual relations with him. He testified that the wife had no cause or justification for her actions and that there are no physical impairments to him having sexual relations with the wife. He did not condone or consent to her actions. The parties were married in a civil ceremony, therefore, there is no barrier to remarry. The wife remained silent, neither admitting nor denying the husband's testimony. This court reserved its judgment pending the resolution of the ancillary issues.
Custody and Visitation
Pursuant to the decision after trial dated August 15, 2008, the wife was awarded custody of the parties five (5) children. This court temporarily stayed the transfer of the eldest child who is 13 years of age. Presently, this court is hearing multiple applications for modification by each of the parties on these issues.
Standard of Living
The husband's employment history prior to the marriage is not stated in the record. During the marriage, the parties' sole source of income was the husband's employment in the construction industry. The husband filed tax returns as married filing separately for the years 2006 and 2007. At the time the trial testimony concluded, he had yet to file a tax return for the year 2008. In 2006, the husband's adjusted gross income, as reported on his tax return, was $20,000.00. His reported adjusted gross income on his 2007 tax return was $15,000.00. However, it is undisputed that the husband used funds from his business, (W.C.S.) Corporation (WCS Corp.) to pay for many, if not all, family and personal expenses during the marriage.
This court takes the step to use initials of the business in an effort to protect the privacy of the individuals involved due to the great detail and highly sensitive issue of domestic violence discussed herein and in the custody and visitation decision ( see G.K. v. L.K., 20 Misc 3d 1138(A), 872 NYS2d 690 [N.Y.Sup.,2008]).
In 2002, he incorporated his construction company, WCS Corp. The husband claims that he held only a 25% ownership interest in WCS Corp. from its formation, for which he contributed $10,000.00 of initial capital. He further testified that his friend and business partner B.A. held a 75% ownership interest, for which he contributed $40,000.00. The wife claims that the husband has always been the sole owner of WCS Corp., and that he made an initial capital investment of $40,000.00 to the corporation.
The husband also claims that in October 2008, during the pendency of this action, he forfeited his 25% equity interest in WCS Corp. to his business partner B.A. as a result of his mounting indebtedness to the company attributable to his personal use of corporate funds. The husband's updated affidavit of net worth dated December 8, 2008, states that the husband ". . . is UNEMPLOYED at this time since 10/2/08". In his testimony, the husband stated that he has been collecting unemployment benefits in the amount of $409.00 each week since January 1, 2009.
The wife has no means of income. Throughout the duration of the parties marriage, she has been a stay at home mother. She and the four (4) younger children are residents at a shelter with a confidential address. The wife refutes the husband's testimony regarding WCS Corp. She avers that the husband is, and has always been, the sole owner of the business and he continues to own and operate WCS Corp. at present. The wife contends that the husband is under reporting his income and ownership interest in his business.
Pursuant to the husband's updated affidavit of net worth dated December 8, 2008, his monthly expenses were as follows: (1) housing rent, $1,085.00; (2) utilities (gas electric and telephone), $188.00; (3) food, $100.00; (4) clothing $0; (5) laundry, $5.00; (6) insurance $0; (7) unreimbursed medical $0; (8) household maintenance $0; (9) educational $0; (10) recreational $0; (11) income taxes $ [blank]; (12) barber, $10.00; (6) child support, $1,032.00, which is child support at $240.00 per week. The updated statement of net worth lists the total monthly expenses as $1,350.00, however, the court calculates the total of the expenses listed above at $2,420.00. Although the husband's affidavit states his child support obligation is $240 each week, the actual child support obligation is $165 each week. The initial pendente lite child support payment, $100 each week to be paid by the husband to the wife is stated in a temporary order of protection dated January 2, 2007. Thereafter, as the mother's parenting time increased, the pendente lite child support award pursuant to the order of this court dated June 30, 2008, was increased an additional $65 each week making the child support payments $165 each week. The pendente lite maintenance obligation is $75 each week pursuant to this court's pendente lite oral decision dated March 20, 2008. The total pendente lite child support and maintenance award is $240 ($165 + $75 = $240). Despite the husband listing child support as an expense, he conceded that he has made no support payments since February 1, 2009.
The "TOTAL:" listed on the husband's affidavit of net worth stated the total expenses of $2,420.00 under "section (o), other." The court regards this entry as a clerical error and did not include that amount in its calculation of the total monthly expenses. Immediately thereafter, the "TOTAL EXPENSES" is listed at $1,350.00.
Upon the court's request to all counsel for clarification as to the pendente lite amounts ordered, the husband proffered a statement which appears to be sent to the husband's employer. This statement is a notice to the employer that their employee, the husband, is the obligor and the Commission of Social Services is the obligee. Monthly support in the amount of $50 is to be withheld ". . .based upon an order of support issued by the Suprme Court or Family Court of the State of New York, New York County". However this court has no information of an extant order in another county.
The husband's first affidavit of net worth dated, December 13, 2007, included the following expenses: (1) housing rent, $1,011.75; (2) utilities (including telephones, internet, cable, and cellular service), $584.00; (3) food, $1,425.00; (4) clothing, $633.00; (5) laundry, $172.00; (6) automotive insurance, $208.23; (7) automotive, $505.00; (8) educational, $16.00; (9) recreational, $107.50; and (10) miscellaneous (barber, beauty aides, gifts and charitable contributions), $252.00. His total monthly expenses are $4,914.48 which is $58,973.76 annually. The husband's "TOTAL INCOME" in this initial affidavit of net worth is $58,610.00. The affidavit also states under section "III. "GROSS INCOME"(a) Salary or wages: . . . Deponent is the owner of WCS Corp. Construction, Inc. and draws a salary of about $50,000 gross yearly". The following is a chart which is an analysis and comparison of the husband's various renditions of his expenses:
ExpenseHusband's Testimony at Trial12/8/08 Affidavit of Net Worth12/13/07 Affidavit of Net Worth
Rent$1,175$1,085$1,011.75
Utilitiesson's cell phone and a house phone$188$584
Food$650$100$1,425
Clothing$0$633
Laundry$5$172
Insurance$0$208.23
Unreimbursed Medical$0$0
Household Maintenance$0$0
Household Help$0$0
Automotive$0$505
Educational$0$16
Recreational$0$107.50
Income Taxes$[blank]"See tax returns attached"
Miscellaneous$1,042 $252
Husband states that his child support payments are at a rate of $240 each week. However the current child support order, pendent lite, is $165 and the maintenance payment is $75.
Other$2,420$0
Total Monthly Expenses$1,350.00
Although the husband lists his total expenses as $1,350, the actual total of the itemized expenses is $2,420.
[actual monthly expenses $2,420; annual total $29,040]$4,914.48
[$58,973.76 annually]
Pursuant to the wife's updated affidavit of net worth dated June 9, 2009, her monthly expenses are $2,306.00, comprised of the following: (1) rent $0; (2) utilities (telephone), $40.00; (3) food, $1,000.0; (4) clothing, $260.00; (5) laundry, $140.00; (6) insurance $0; (7) unreimbursed medical, $100.00; (8) household maintenance $95.00 (9) household help, $150.00; (10) automotive $0; (11) education, $80.00; (12) recreation, $100.00; (13) income taxes, $ [blank]; and (14) miscellaneous, $341.00. The wife did not file tax returns during the marriage because she had no income. Pursuant to the wife's affidavit of net worth dated June 10, 2009, her gross income is $1,478.00 per month which is $17,736.00 annually. The wife's total gross income is comprised of public assistance benefits of $238.00 per month in cash assistance and $675.00 per month in food stamps, and an unstated amount contributed by nonprofit organization toward basic household needs.
Although the wife listed her total income o her affidavit of net worth at $1,478.00 it is unclear how that number was derived. The itemizes $660.00 for pendente lite child support, $300 for pendente lite maintenance, $238 from a cash assistance program and $675 in food stamps. This totals $1,873.00. However, this court can only consider $238 from a cash assistance program and $675 in food stamps which bring her income to $913 each month.
Maintenance
The husband is 44 years of age and the wife is 37 years of age. The wife seeks maintenance in the amount of $75.00 per week for a period of at least nine (9) years. The husband contends that the wife is not entitled to any maintenance award. However, the husband requests that any maintenance awarded terminate after 12 months or sooner if allowable under the Domestic Relations Law.
The parties are married for over 17 years, and during this marriage, five (5) children were born. The wife was and continues to be a stay-at-home parent. She has no work experience outside of the home. Her formal education is limited to a high school diploma attained in Albania. She speaks Albanian and very limited English. The husband's education is similarly limited to eight years of primary school education in Albania. However, the husband has substantial work experience in the construction industry, as a laborer, supervisor and owner. Additionally, the husband has substantial business experience from the formation, ownership, and operation of his construction business from 2002 through at least 2008. During the marriage, the husband was the sole wage earner and managed all of the family's financial affairs.
As a requirement of receiving the public assistance benefits listed above, the wife is also engaging in English as a Second Language classes and workfare assignments while serving as the primary care-giver to the four (4) youngest of the five (5) marital children. Additionally, the wife asks the court to consider its finding in the custody trial decision that the wife was the victim of physical abuse by the husband during the marriage in its determination of maintenance under Domestic Relations Law section 236 (B) (6) (a) (11).
The husband avers that the factors set forth in Domestic Relations Law section 236 (B) (6) do not support a maintenance award. The husband contends that the wife should be able to earn $16,640.00 annually based on minimum wage, an amount which husband claims is sufficient to meet the wife's reasonable needs and exceeds her share of the husband's purported version of his annual income of $20,000.00 to $25,000.00. The husband also contends that the parties co-habitated for only 4 (four) of the 12 years of marriage. The husband further contends that the wife made no contribution to his career by caring for the marital home and children while he worked in the construction industry because his business office was in the marital home, enabling him "to be with the family most of the time as a work from home dad.".
The wife disputes the husband's contention that his annual income during the marriage was between $20,000.00 and $25,000.00 and that he is currently unemployed since September 2008, earning no income. First, the wife argues that, in accordance with Article 18 of the Unemployment Insurance Law, the husband's testimony that he is currently receiving $409.00 per week in unemployment benefits suggests that he must have declared an annual income on his unemployment application of at least twice as much as $20,000.00. Second, the wife argues that the personal and family living expenses paid by WCS Corp. should be imputed to the husband as income. Specifically, the wife proffers that rent for the marital apartment is $14,000 annually. In the event the husband was paying his home rent with WCS Corp. funds, then $14,000.00 should be imputed to his income. The husband concedes that he, at times, paid for groceries using the WCS Corp. business account. The husband testified on June 12, 2009, that his monthly food expenses is about $600 a month which is an annual food expense of $7,200.00 each year although his updated affidavit of net worth states that his annual food expense is $1,200.00 each year and his initial affidavit of net worth stated his annual food expense is $17,100.00. The husband further testified that all of his household bills were paid by the business. Therefore, the wife requests that this court impute additional income to the husband of resulting in an income of approximately $58,000.00 annually.
Child Support
The wife requests an award of child support for the unemancipated children calculated pursuant to the Child Support Standard Guidelines. In calculating the parties' respective incomes, the wife contends that the court should utilize an imputed annual income of $58,000.00 for the husband (the amount which was listed in his first affidavit of net worth), less any maintenance award granted to the wife. The wife offers that her annual income in the form of public assistance is $10,956.00, plus any maintenance award granted by the court ($238/month in cash assistance x 12 = $2,856/year and $675 in food stamps x 12 = $8,100/year; $2,856 + $8,100 = $10,956.00).
The husband requests that the court consider that the eldest child is currently living with the husband and that the husband has lost his ownership interest in WCS Corp., as well as the many subsidies of his living expenses which the company previously paid.
Retroactivity
Neither party addressed the issue of retroactive support. However, the husband conceded at trial that he has made no child support payments since February 1, 2009.
WCS Corp.
It is undisputed that on September 26, 2002, the husband organized and incorporated WCS Corp. Stucco Corporation("WCS Corp."). The wife contends that the husband is the sole owner of WCS Corp. as stated in the husband's initial affidavit of net worth dated December 13, 2007. She further avers that his initial investment into WCS Corp. was $40,000.00, also as itemized on the husband's initial affidavit of net worth. The husband further stated in his affidavit of net worth that the source of the initial investment funds was a business loan.
There is some discrepancy, however, regarding WCS Corp.'s relationship to another business, AAS. During trial, the husband testified that he and Mr. B.A. also jointly owned AAS. The husband's 2006 W-2 lists AAS as his employer for that year. Additionally, the husband's 2006 W-2 lists his home address as the address of AAS. However, the court at this time has insufficient evidence to make any findings of fact regarding the husband's ownership of AAS, or its relationship to WCS Corp. 13
The husband contends that he was never the sole owner of WCS Corp. At trial the husband testified that his original affidavit of net worth was incorrect; he never owned more than 25% of WCS Corp., and that he made an initial investment to the company of only $10,000.00. In his memorandum of law, the husband argues that the source of funds for his initial investment was assets held in his savings accounts prior to the marriage. The husband contends that his friend and business partner, B.A., owned the remaining 75% of WCS Corp. and this has been the case since the business was established. The husband avers that the WCS Corp. shareholder agreement dated September 26, 2002 supports his testimony as to his ownership interest. The husband testified that he and his partner shared in the profits and losses at a rate of 60% to B.A. and 40% to the husband.
The wife argues in her memorandum of law that the WCS Corp. shareholder agreement is a falsified document. The husband testified that he signed the agreement on September 26, 2002, as it is dated. However, the wife avers that upon close examination, the notary stamp on the shareholder agreement states that the notary's commission expires on June 13, 2010. The wife argues that under New York's Public License, Executive Law section 130, a notary's commission lasts only for a term of four (4) years. Since the shareholder agreement is dated September 2002, and the notary's licence expires in 2010, the wife claims that the shareholder agreement could not have been notarized at any time prior to June 13, 2006. The wife contends that this is not a simple clerical error; the two other WCS Corp. documents, the Minutes of the Meeting of Board of Directors dated October 9, 2008, and the Meeting of Directors, Shareholders, and Officers dated September 26, 2002, also have the notary commission expiration date as June 13, 2010.
The wife also provides a voluminous amount of evidence in the form of bank statements, cancelled checks, as well as the husband's own testimony, which she alleges demonstrates that husband is the sole owner of WCS Corp. Specifically, the wife offered into evidence WCS Corp. bank statements and cancelled checks which were sent to the husband's home address from January 2005 through March 2009. These records establish that between at least January 2005 until, at minimum, January 2009, every WCS Corp. check was signed by the husband. These records further demonstrate that B.A. only first endorsed a WCS Corp. check in January 2009.
The husband testified that he used WCS Corp. funds to pay his personal expenses including rent, cell phone, household utilities and groceries. Indeed, from at least January 2005 until October 2008, there were no checks negotiated from the husband's individual checking account. During this same time period, however, the husband did make at least eight (8) transfers of funds between WCS Corp.'s checking account and his personal individual checking and savings accounts. Some transfers were in amounts as large as $50,000.00. The evidence clearly shows that the husband is the individual title holder of savings account number *****5947 and checking account number *****9608. In his memorandum of law, as in his testimony the husband does not dispute his personal use of WCS Corp. funds, but argues that his use of the WCS Corp. funds coupled with the present economic downturn lead to him no longer having any ownership of WCS Corp. since October 2008.
The husband proffered the minutes of the WCS Corp. board of directors meeting held October 10, 2008. The minutes state as follows:
[T]hat [the husband's] 25% share in [WCS] Corp is valued at $28,500 based on Company's assets as of 09/30/2008; that [the husband], who is currently 25% shareholder of [WCS] Corp agrees to sell his share to [B.A.] for $28,500 in exchange for personal debt he owes to [B.A.]; that effective immediately [B.A.] will be 100% shareholder of [WCS] Corp. . . .
(Minutes of Meeting of Board of Directors, Def.'s Ex. H.).
At trial on June 12, 2009, the husband testified that he forfeited his interest because "there was no more business from the company" and specifically not because of his unauthorized use of business funds. However, the husband later testified on June 23, 2009, that his ownership interest in WCS Corp. was lost due to "money reasons but there were other things.". Further, in an affidavit dated December 3, 2008, the husband describes the circumstances leading to his forfeiture of his interest in WCS Corp., "[m]y co-shareholder . . . accused me of overdrawing my share of the corporation's funds and charged that between the years 2007 and 2008, I made an unaccounted for' drawing on the company's account to the tune of $39,000.00.". In his affidavit, the husband further states that "[u]pon being discharged from the corporation, I ceased to be a signatory to its bank account. . . .".
In opposition to the husband's position that he lost his ownership interest in WCS Corp. in October 2008, the wife offers evidence which she contends demonstrates that the husband continues to own and operate WCS Corp. First, the wife introduced 20 minutes of clear and compelling undercover video surveillance taken of the husband on two (2) separate occasions, May 12, 2009, and May 20, 2009 while allegedly "unemployed". The recorded surveillance shows the husband repeatedly driving and parking a pick-up truck with the name WCS Corp. appearing on the vehicle, conversing, and apparently directing, supervising and working with construction workers, some of whom were wearing WCS Corp. shirts. The video shows the husband at construction sites where the husband was removing and transporting scaffolding and tarps. The husband was also shoveling dirt and debris at the work sites. It is evident that he was supervising workers at a multi-story building construction site and conducted an on site inspection. Throughout this time he was wearing a hard hat. The surveillance also shows the husband loading and transporting construction equipment. Second, the wife offers evidence that the husband continued to manage WCS Corp.'s finances after October 2008. Specifically, as discussed above, the wife introduced evidence demonstrating that WCS Corp. bank statements and WCS Corp. cancelled checks continued to come to the husband's address through March 2009, and that the husband continued to sign checks on behalf of WCS Corp. through January 2009. The husband refutes the wife's contention that the bank statements addressed to his home evinces his control and ownership in the business. He testified that his former business partner lives in the same building in Brooklyn, New York to explain why the statements are still sent to his home.
Finally, the husband argues that any interest this court finds he retains in WCS Corp. is his separate property because his initial investment into WCS Corp. was "acquired with funds which were earned and saved by [the husband] prior to the marriage with [the wife] and certainly prior to the time [she] joined him in the United States." The husband did not offer any documentary evidence to substantiate his claim. The wife does not directly address this issue.
Valuation of The Business
The court appointed an independent expert business appraiser, Dr. Joan Lipton (Lipton) of Lazar Lipton Valuation Services, to value WCS Corp. as of the date of the commencement of this action, December 14, 2007. Lipton prepared a report dated June 22, 2009, wherein she determined that the best approach to valuate WCS Corp. was the Excess Earnings method which is a hybrid Income approach. As stated in the valuation report:
[t]he Excess earnings method is based on Revenue code Ruling 68-609, and involves the determination of two components of value: net tangible assets and goodwill. [Lipton's] analysis assumes no net tangible asset value (since we [Lazar Lipton Valuation Services] have not been able to confirm WCS Corp.'s asset balances, the existence of actual loan obligations, or the amount of any receivables.
Goodwill is determined by calculating normalized excess earnings after allowing for a reasonable return on net tangible assets, and then applying an appropriate multiple to these excess earnings. To determine the goodwill value of WCS Corp., we have relied on the three-year weighted average adjusted income figure for the years 2005 through 2007 . . . Based upon the documentation produced to date, we [Lazar Lipton Valuation Services] have estimated a minimum value attributable to goodwill of $150,000 . . . Finally, we have calculated the value of Mr [GK]'s 25% ownership interest in WCS Corp. as of December 14, 2007 to be not less than $37,500.
Lipton testified that there were a number of documents or answers to questions that no response was received from the husband or the husband's accountant. The report specifies that the
. . . documents consist of (1) accounts receivable for the Company as of December 14, 2007; (2) a schedule of refunds that the Company made to various customers in 2006 and 2007 (which supposedly explain the shortfall of reports revenues on the tax returns compares to bank deposits); (3) ledgers or check registers from 2004 through 2007, in order to analyze purchases and other costs (included in cost of goods sold) and operating expenses; and (4) documentation to substantiate shareholder loans payable. Lipton further testified that, due to an insufficiency of the information provided by the husband, she was unable to test for unreported income in the form of customer cash payments, or assess issues such as accounts receivables and shareholder loans booked as company obligations.
The husband disputes the accuracy of the valuation conducted by Lipton.
He avers that the valuation incorrectly references to his original affidavit of net worth which lists the husband's income at $50,000 of income in the year 2007 despite the husband's W-2 which reflects income in the amount of $15,000. However, Lipton testified that at no time was she advised that the husband's (original) affidavit of net worth was in error. He further contends that the valuation incorrectly considered payments paid through the business. However, the husband himself testified to using business funds for payment of personal expenses. In cross examination of Lipton the husband's counsel asked if Lipton's valuation figures would require a slight adjustment since the business items such as the car or the corporate office were not for personal use by the husband Lipton testified
[n]o, not unless there was another section of Mr. [GK]'s net worth statement that was in error, because his net worth statement indicated that he earned approximately fifty thousand dollars a year. And by taking those additional expenses into account, I [Lipton] was assuming at least fifty thousand dollars a year.
The husband argues that there is no longer any marital asset to distribute since his ownership interest was forfeited in exchange for his indebtedness. Finally, the husband requests that if this court finds he has an ownership interest in WCS Corp. and it is a marital asset subject to equitable distribution, then it should grant only "minimal distribution" to the wife because, he contends, her contributions to the business were in the form of "overall contributions to the marriage" and the parties only co-habitated for four (4) of the 12 years of marriage.
The wife contends that the business valuation provided by Lipton is reasonable. She seeks an equitable distribution award in the amount of $75,000.00, which is 50% of the full, 100%, value of WCS Corp. In support of this distribution, the wife submits that she ran the household and cared for the parties' five (5) children, allowing the husband to operate WCS Corp. The wife also avers that her limited education and knowledge of the English language, her lack of employment history and inexperience handling financial affairs and her ongoing child care obligations to the parties' youngest four (4) children, all of whom are under the age of 18 (eighteen), as factors relevant to equitable distribution of marital assets under Domestic Relations Law section 236 (B) (5) (d). Additionally, in accordance with Domestic Relations Law section 236 (B) (5) (d) (13), the wife requests that the court consider the history of domestic violence perpetrated against her by the husband in its equitable distribution of the marital assets. Finally, the wife argues that if the court finds that the husband, in fact, lost his ownership interest in WCS Corp. due to his personal indebtedness to the company, then such circumstances would constitute wasteful dissipation of a marital asset under Domestic Relations Law section 236 (B) (5) (d) (11).
Additionally, and in accordance with an order of this court dated January 30, 2008, the wife seeks to recoup $1,750.00 for 50% of the $3,500.00 cost she incurred on behalf of both parties for the valuation services of Lipton.
Bank Accounts
The husband's updated statement of net worth dated December 8, 2008, lists the following accounts: (1) Roosevelt Savings Bank account number *****9608 with a balance of $2,520 and the source of funds is a loan; (2) Roosevelt Savings Bank account number *****5947, which is a savings account with a balance of $1,000.00 and the source of these funds was his employment. By comparison, the husband's initial affidavit of net worth dated December 13, 2007, lists the following accounts: (1) Roosevelt Savings Bank account number *****9608 with a balance of $1,000.00 and the source of funds is a salary [not a loan as indicated on the updated affidavit]; (2) Roosevelt Savings Bank account number *****8067 with a balance of $6,000.00 and the source of funds is a business; and (3) Roosevelt Savings Bank account number *****5917 [not *****5947 as listed in the husband's updated affidavit] which is a savings account with a balance of $5,000.00 and the source of these funds was his employment one year earlier has no loans or notes payable. At trial, the husband testified that he has a current bank balance of approximately $350 to $400.
The husband testified that he is a recipient of unemployment insurance at the rate of $409 each week, which is $1,758.70 a month or $21,104.40 per annum ($409 x 4.3 = $1,758.70 x 12 = $21,104.4). He further testified that he has been unemployed since September 2008 when his company WCS Corp. was liquidated. He testified that he submits approximately 10 job applications each month since his unemployment, to no avail. There was no supporting documentation to substantiate this testimony.
The wife's affidavit of net worth states that she has the following accounts: (1) Washington Mutual checking account number ******8633 opened in February 2008 after the commencement of this action. The balance of this account is $185.00 and the source of these funds are the child support and maintenance payment. Although the total checking is listed as $3,215.00 there is no other account listed; (2) Washington Mutual savings account ******7787 also opened in February 2008 after the commencement of this action. The account has a balance of $270.40 and again the source of funds is child support and maintenance payments. Although no other account is listed in the savings, the total savings is listed as $240.36.
Debt
The husband's updated affidavit of net worth lists the following liabilities: (1) note payable to [MC] incurred October 4, 2008, $10,000.00; (2) note payable to Manhattan CPA Services incurred date unknown, $7,500.00; (3) taxes payable incurred overdue, $1,600.00; (4) legal fees to Deborah Fiss (the husband's first counsel), $1,800.00. The total liabilities listed are $20,900.00. The husband's original affidavit of net worth does not itemize any liabilities.
Counsel Fees
Neither party made a request for counsel fees. The husband's attorney is a privately retained counsel and the wife's attorneys are serving pro bono.
The Law
Grounds
In accordance with Domestic Relations Law section 170, "[a]n action for divorce may be maintained by a husband or wife to procure a judgment divorcing the parties and dissolving the marriage on any of the following grounds: (2) The abandonment of the plaintiff by the defendant for a period of one or more years.". "[C]onstructive abandonment," . . . has been routinely defined as the refusal by a defendant spouse to engage in sexual relations with the plaintiff spouse for one or more years prior to the commencement of the action, when such refusal is unjustified, willful, and continual, and despite repeated requests for the resumption of sexual relations ( see Chellappan v. Murugan , 62 AD3d 929 , 882 NYS2d 122; Gulati v. Gulati , 50 AD3d 1095 , 1097, 857 NYS2d 643; Meccariello v. Meccariello , 46 AD3d 640 , 641, 847 NYS2d 618; Hathaway v. Hathaway , 16 AD3d 458 , 459, 791 NYS2d 631)." ( Davis v. Davis ,71 AD3d 13, 889 NYS2d 611 [2 Dept., 2009]).The Second Department has also held that "[t]he defendant's conduct in refusing to engage in sexual relations must have been unjustified and without the consent of the plaintiff in order for the plaintiff to have a cause of action pursuant to Domestic Relations Law § 170(2) ( see Schine v. Schine, 31 NY2d 113, 119, 335 NYS2d 58, 286 NE2d 449; Gulati v. Gulati , 60 AD3d 810 , 876 NYS2d 430)." ( Gianis v. Gianis , 67 AD3d 963 , 890 NYS2d 568 [2 Dept., 2009]).
In consideration of the husband's testimony and that the wife remained silent, neither admitting nor denying the testimony, the husband is awarded a judgment of divorce on the grounds of constructive abandonment pursuant to Domestic Relations Law section 170 (2).The parties were married in a civil ceremony, therefore, there is no barrier to the wife's ability to remarry.
Custody
The wife was awarded custody pursuant to this court's decision after trial dated August 18, 2008, wherein the wife was awarded custody of the parties' five (5) children. The post decision modification applications are the subject of a pending hearing and therefore, shall be by separate decision of this court. An interlocutory judgment was signed by this court on January 22, 2009. Initially this court stayed the transfer of custody of the eldest child to the wife pending her participation with that child in a therapeutic visitation program, and now the pending applications.
Credibility
"The trial court, which had the opportunity to view the demeanor of the witnesses, was in the best position to gauge their credibility" ( Peritore v. Peritore , 66 AD3d 750 , 888 NYS2d 72 [2 Dept., 2009]; see Varga v. Varga, 288 AD2d 210, 732 NYS2d 576 [2 Dept., 2001], citing Diaco v. Diaco, 278 AD2d 358, 717 NYS2d 635 [2 Dept., 2000]["Evaluating the credibility of the respective witnesses is primarily a matter committed to the sound discretion of the Supreme Court"]; Ferraro v. Ferraro, 257 AD2d 596257 AD2d 596, 684 NYS2d 274 [2 Dept., 1999]). The court's assessment of the credibility of witnesses is entitled to great weight ( see generally Wortman v. Wortman , 11 AD3d 604 , 783 NYS2d 631 [2 Dept., 2004]). "In a nonjury trial, evaluating the credibility of the respective witnesses and determining which of the proffered items of evidence are most credible are matters committed to the trial court's sound discretion" ( Ivani v. Ivani, 303 AD2d 639, 303 AD2d 639, 757 NYS2d 89 [2 Dept., 2003], citing L'Esperance v. L'Esperance, 243 AD2d 446, 663 NYS2d 95 [2 Dept., 1997]; accord Krutyansky v. Krutyansky, 289 AD2d 299, 733 NYS2d 920 [2 Dept., 2001]; see Schwartz v. Schwartz , 67 AD3d 989 , 890 NYS2d 71 [2 Dept.,2009]). The trial court's ". . . assessment of the credibility of witnesses and evidence is afforded great weight on appeal ( Schwartz v. Schwartz , 67 AD3d 989 , 890 NYS2d 71 [2 Dept., 2009]).
There is ample evidence in the record which indicates to the court that the husband repeatedly grossly skewed and obscured his true financial circumstances throughout this litigation, particularly with regard to WCS Corp. This court is simply unable to credit the testimony or documentary proof submitted by the husband. At times he appeared to just be making up answers as his testimony proceeded. He has two (2) conflicting affidavits of net worth, tailored testimony, corporate documents which carry a notary stamp stating the documents were sworn to in 2002 and another notary stamp which has an expiration date in 2010, an affidavit which he simply does not recall, a lack of cooperation with the court appointed business appraiser and the shockingly compelling video evidence directly refuting his proffer that he is no longer with WCS Corp. while collecting unemployment insurance! The business appraiser testified that due to the husband's lack of cooperation there was insufficient documentation produced for the appraiser to sufficiently determine the unreported income in the form of customer cash payments or assess issues such as accounts receivables and shareholder loans on the books as company obligations.
Evidence submitted in the case at bar demonstrates that the husband's contentions regarding his loss of WCS Corp. ownership are simply not credible. First, the husband's initial affidavit of net worth, signed by the husband and submitted to the court, states that he is the 100% owner of WCS Corp. yet his testimony and updated affidavit of net worth later state that his ownership interest was 25% — another example of the husband tailoring his testimony to shield his financial interest. Secondly, the wife proffered compelling video surveillance at trial. The video by an investigator hired by the wife's pro bono counsel was taken on May 12 and May 20, 2009, more than six (6) months after the date upon which the husband testified that he lost his ownership interest in, and income from employment and the liquidation of WCS Corp.; and yet the video surveillance clearly recorded the husband working on and supervising different construction sites. The husband drove a vehicle with the WCS Corp. name displayed, he supervised workers at the construction sites, he did work at the construction sites. He can be seen inspecting sites with others responding to him and his gestures. This video is unrefutted evidence that the husband was, at minimum, working at WCS Corp. construction site for at least 2 days during the period of time that he testified he no longer was affiliated with the company.
At trial, the husband testified that he never held more than a 25% ownership interest in WCS Corp and yet he claimed the profits and losses were divided on a 60 40% ratio. The husband testified that as of September 2008 or October 2008, he lost his ownership interest in WCS Corp. and it took until December 2008 to wind down the business, which implies that he did not simply loose his interest, but that the business is no longer in existence. He further testified that he has been unemployed and in receipt of no income aside from unemployment insurance benefits since that time.
Further documentary evidence proffered by the husband is questionable. First, in support of his argument that he no longer holds any interest in WCS Corp., the husband introduced the meeting minutes of the board of directors of WCS Corp. dated October 9, 2008. Although this document bears the signature and notary commission stamp of a Filoria B. Simonian, it lacks the notary stamp stating that the document was sworn before Ms. Simonian and more importantly, it fails to give the date upon which the document was notarized. There were two (2) additional WCS Corp. documents introduced by the husband in support of his proposition that he never owned more than 25% of WCS Corp. The first document is signed on August 22, 2002 and is entitled "MINUTES OF FIRST MEETING OF BOARD OF DIRECTIONS OF [WCS] CORP.". It bears two stamps; one stamp states "Sworn to before me Filora B. Simonian this 22 day of August 2002" and has no signature. The second stamp, which also belonged to Filora B. Simonian, included her notary license number, states that she is qualified in Queens County and that her commission expires in June 13, 2010. The second document also appears to be minutes of the meeting of the board of directors of WCS Corp. dated September 26, 2010. Similar to the August 22, 2002, document, it contains the same two stamps. The first stamp does not have the notary's signature or licence number and the second stamp by the same notary, expires eight years after the first stamp which is curious since the Executive Law section 130, states that a notary's commission is for a period of four (4) years. At that time the commission expires and requires renewal by the notary. Although these documents are dated in 2002, clearly they could not have been executed upon the dates alleged since the notary's commission expires in 2010, or they were not properly notarized in 2002 and someone tried to correct the error. Assuming the former, the earliest the documents could have been notarized given the expiration of the notary's commission in 2010 is in 2006 which is one (1) year prior to the commencement of this action. Assuming the latter, there is no testimony substantiating such a claim. The husband did not call the notary or the other signatory, either of which could have offered an explanation for the multiple stamps years apart or verified the authenticity of these documents.
The husband testified to multiple reasons why he no longer has any interest in WCS Corp. and is not employed. Initially, it was due to the slow economy which resulted in there being little to no construction work. He later testified that when his partner in WCS Corp. discovered the husband's use of business funds for his personal expenses, the partner "took" the husband's 25% interest in the business. In essence, the husband avers that his indebtedness to the company outweighed the value of his ownership interest and, therefore, he forfeited his interest. However, the husband fails to substantiate his claim. Although he proffers an affidavit which describes the circumstances leading to the loss of his WCS Corp. ownership interest as, "[m]y co-shareholder . . . accused me of overdrawing my share of the corporation's funds and charged that between the years 2007 and 2008, I made an unaccounted for' drawing on the company's account to the tune of $39,000.00.". He contends that this withdrawal of funds during 2007 and 2008 led to him losing his ownership interest in 2009. However, at trial the husband first testified that he lost his interest because there was no more business, not because of his unauthorized use of business funds. Later, the husband testified that, indeed, he lost his business for "money reasons" among other things. The husband offered no explanation for the video surveillance showing him working at and supervising a WCS Corp. construction site. Thus, the husband's testimony does not offer a credible version of the events surrounding his alleged loss of his ownership interest in WCS Corp. Rather, it is apparent to this court that the husband is tailoring his testimony to shield his financial interests. Obviously, this court acknowledges the recession that this nation faces and the impact on businesses and peoples personal finances, however, it is clear to this court that the husband's financial difficulties directly coincide with this matrimonial action when coupled with the inconsistences and tailoring of the husband's testimony is suspect, to say the least, and can be clearly observed in the video surveillance.
Regarding the updated affidavit of net worth submitted by the husband, the court finds its contents likewise unreliable. As an initial matter, the updated affidavit of net worth does not list the husband's annual income, even though the husband admitted in his testimony that he had income in 2008. Instead, it simply states that the husband has had no employment or income since October 2, 2008. Additionally, the updated affidavit of net worth itemizes liabilities in the amount of $17,500.00 in the form of notes payable. Yet, no documents substantiating such loans were ever produced by the husband. Given the totality of the evidence introduced at bar, this court recognizes the dubiousness of the husband's claims regarding his financial and employment status as represented in his updated affidavit of net worth. Rather, the court fully credits the husband's initial affidavit of net worth dated December 13, 2007, prepared and certified while he was represented by his first attorney, as it is supported by the weight of the evidence.
In consideration of the inconsistencies in the husband's testimony, the incongruity in his documentary proof and his lack of cooperation with the business appraiser, it is evident to this court that the husband tailored his testimony and documentary proof in an attempt to shield his true financial status. This court finds the husband to be incredible. When considering each individual gap in credibility, standing alone, may not draw this court to this conclusion, however, the cumulative nature of the husband's acts, testimony and documentary evidence and the lack of credibility related thereto make it impracticable for the court to find his testimony credible.
Standard of Living
The husband initial affidavit of net worth lists the husband's total income as $58,610.00, his personal expenses at $4,914.48 per month, and his assets in cash accounts totaling $12,000.00. The husband's 2006 tax return, which is annexed to his original net worth statement, lists his income as $20,000.00 for that year.
This is supported by the evidence. At trial, the husband himself testified that many of his personal expenses, including, but not limited to his rent, "all bills for the apartment", and vehicle costs were paid with WCS Corp. funds.
Further, the court appointed neutral evaluator, Dr. Joan Lipton, Ph.D., testified that the estimated income the husband received through his use of WCS Corp. funds to pay his personal expenses was between $30,000.00 and $40,000.00 a year. Lipton's report, "Exhibit 5" "Analysis of Mr. [K]'s Personal Bills Paid Through the Business," provides an annualized total of the husband's personal expenses paid by the business. The analysis is based upon data from a WCS Corp. Roosevelt Savings bank, and includes only the husband's rent, cell phone, cable, vehicle insurance and maintenance expenses. Based upon those limited expenses, the appraiser concludes that WCS Corp. funds were used to pay $30,000.00 of the husband's personal expenses per year. However, it is clear to the court that the husband used WCS Corp. funds to pay additional personal expenses to those detailed in Lipton's report, "Exhibit 5". For example, at trial, the husband himself admitted in his testimony that WCS Corp. paid his grocery expenses at least some of the time.
Further, the husband testified at trial that he is receiving unemployment benefits in the amount of $409.00 each week which is approximately $21,104.40 annually. This court is particularly concerned by the wife's contention at trial that under Article 18 of the Unemployment Insurance Law, that the benefits received by the husband are more than double the amount allowable based upon his reported income of $20,000.00 per annum ( see Unemployment Insurance Law, Art. 18, Title 7, Sec. 590 [5]). Rather, the receipt of unemployment insurance at the rate of $409 each week suggests that the husband's reported income to the State of New York was significantly higher. Benefits are calculated in accordance with the New York Labor Law, Chapter 31 Article 31 Title 7 (Benefits and Claims) Section 590 (Right to Benefits) as follows: 5. Benefit rate. A claimant's weekly benefit amount shall be one twenty-sixth of the remuneration paid during the highest calendar quarter of the base period by employers, liable for contributions or payments in lieu of contributions under this article. However, for claimants whose high calendar quarter remuneration during the base period is three thousand five hundred seventy-five dollars or less, the benefit amount shall be one twenty-fifth of the remuneration paid during the highest calendar quarter of the base period by employers liable for contributions or payments in lieu of contributions under this article. Any claimant whose high calendar quarter remuneration during the base period is more than three thousand five hundred seventy-five dollars shall not have a weekly benefit amount less than one hundred forty-three dollars. The weekly benefit amount, so computed, that is not a multiple of one dollar shall be lowered to the next multiple of one dollar. On the first Monday of September, nineteen hundred ninety-eight the weekly benefit amount shall not exceed three hundred sixty-five dollars nor be less than forty dollars, until the first Monday of September, two thousand, at which time the maximum benefit payable pursuant to this subdivision shall equal one-half of the state average weekly wage for covered employment as calculated by the department no sooner than July first, two thousand and no later than August first, two thousand, rounded down to the lowest dollar.
Plaintiff testified that he receives $409.00 each week in benefits. Accordingly, for purposes of calculating his unemployment benefits, he claimed to have earned approximately $42,536 a year ($409 [unemployment benefits received] x 26 [claimant's weekly benefit amount shall be one twenty-sixth] = $10,634 [earned per quarter] x 4 [4 quarters in a calender year] = $42,536.00 [plaintiff's approximate reported annual income used to calculate his unemployment benefits]).
The wife avers that income should be imputed to the husband greater than the $40,000.00 in his application for unemployment benefits.
Imputation of Income
"The Supreme Court is not required to rely upon a party's account of his or her finances ( see Khaimova v. Mosheyev , 57 AD3d 737 , 871 NYS2d 212; Ivani v. Ivani, 303 AD2d 639, 757 NYS2d 89)" ( DeSouza-Brown v. Brown, 71 AD3d 946, 897 NYS2d 228 [2 Dept., 2010]; see Barnett v. Ruotolo , 49 AD3d 640 , 854 NYS2d 155 [2 Dept., 2008]). After hearing the testimony of the parties and in consideration of the lack of credibility of the husband's testimony based upon dramatic inconsistencies in his documentary evidence, testimony and the video tape of him working in his business while collecting unemployment benefits and after the business was allegedly defunct, this court determines that the husband lacks credibility. It is clearly evident that the husband concealed his true income ( see Parise v. Parise , 13 AD3d 504 , 787 NYS2d 360 [2 Dept., 2004] ["The Supreme Court properly determined that the plaintiff's testimony with respect to this income lacked credibility. A court is not bound by a party's account of his or her own finances, and where a party's account is not believable, the court is justified in finding a true or potential income higher than that claimed' [citations omitted]]; see also Steinberg v. Steinberg , 59 AD3d 702 , 874 NYS2d 230 [2 Dept., 2009]). Furthermore, it is clear from the bank records and admission of the husband that the business paid and extensive amount of personal expenses. The Appellate Division, Second Department recently held in Beroza v. Handler, ( 896 NYS2d 144, 2010 {71 AD3d 615} WL 733036 [2 Dept., 2010]) that the Supreme Court properly imputed an annual income. . . .based . . . on undisputed evidence that his businesses paid for virtually all of his personal expenses, so that his actual earnings greatly exceeded the amount of income which he reported on his tax returns".
In consideration of the life style of the parties and evidence of the use of business funds by the husband and this courts belief that he continues to maintain an interest in the business this court imputes additional income in the amount of $58,610.00 This decision is made based upon the parties tax returns, in which the husband was the only recipient of income, filed near the commencement of this action in consideration of the credibility of the parties and the lifestyle that they have lead and the husband's ability to pay the family expenses from the business account and his original affidavit of net worth. This court rejects the husband's contention that he no longer has any interest in WCS Corp. due to the fact that he used the business monies for personal expenses or that difficult financial crisis has resulted in there being no construction jobs for WCS Corp. The surveillance video entered into evidence unequivocally refutes the husband's position. Accordingly, this court finds that the husband's income of $58,610.00 listed on his own first affidavit, which he refutes, is a reasonable estimate of the husband's income. Such a decision to impute income is not entered lightly. However, this court had the ability to observe these parties and consider the totality of their testimony. In adjudging their credibility, this court reiterates the husband's perpetual purposeful intent to shield all financial assets from the wife's reach. This court notes that since the husband's employment income and his unemployment income earned at the same time would constitute an illegal act, the court cannot fix support based upon both sources.
The husband's expenses on his initial affidavit of net worth were $58,973.76 and his total income on his the same affidavit was $58,610.00.
Maintenance
It is well settled that "[t]he amount and duration of maintenance is a matter committed to the sound discretion of the trial court and every case must be determined on its unique facts" ( Monroe v. Monroe , 71 AD3d 647 , 895 NYS2d 827 [2 Dept., 2010]; citing DeVries v. DeVries , 35 AD3d 794 , 796, 828 NYS2d 142 [2 Dept., 2006]; Raynor v. Raynor , 68 AD3d 835 , 890 NYS2d 601 [2 Dept., 2009]; Zaretsky v. Zaretsky , 66 AD3d 885 , 888, 888 NYS2d 84 [2 Dept., 2009]; Wasserman v. Wasserman , 66 AD3d 880 , 888 NYS2d 90 [2 Dept., 2009] ; Brooks v. Brooks , 55 AD3d 520 , 521, 867 NYS2d 451 [2 Dept., 2008]). The amount and duration of maintenance is committed to the sound discretion of the trial court ( see e.g. Schultz v. Schultz, 309 AD2d 849, 766 NYS2d 76 [2 Dept., 2003]; Wilson v. Wilson, 308 AD2d 583, 764 NYS2d 828 [2 Dept., 2003]; Buchsbaum v. Buchsbaum, 292 AD2d 553, 740 NYS2d 359 [2 Dept., 2002]; Murray v. Murray, 269 AD2d 433, 703 NYS2d 402 [2 Dept., 2000]), and that every case must be determined on its own unique facts ( see e.g. Wortman v. Wortman , 11 AD3d 604 , 606, supra; Mazzone v. Mazzone, 290 AD2d 495, supra).
The court is to consider ". . . the relevant factors, including the long duration of the marriage, the plaintiff's role as a stay-at-home mother during most of the marriage, her extended absence from the workforce, her lack of formal advanced education and employment skills, the substantial disparity in the parties' income, and their pre-divorce standard of living . . . ( see Domestic Relations Law § 236[B][6][a]; see also Raynor v. Raynor, 68 AD3d 835,890 NYS2d 601 [2 Dept., 2009]; Zaretsky v. Zaretsky , 66 AD3d 885 , 888, 888 NYS2d 84 [2 Dept., 2009; 66 AD3d 880; 888 NYS2d 90 [2 Dept., 2009]; Bogannam v. Bogannam , 60 AD3d 985 , 986, 877 NYS2d 336 [2 Dept., 2009])." ( Monroe v. Monroe , 71 AD3d 647 , supra). [T]he court must consider the payor spouse's reasonable needs and the reasonable needs of the recipient spouse and the pre-separation standard of living in the context of the other factors enumerated in Domestic Relations Law § 236(B)(6)(a), and then, in [its] discretion, fashion a fair and equitable maintenance award accordingly' ( Hartog v. Hartog, 85 NY2d at 52, 623 NYS2d 537, 647 NE2d 749 {85 NY2d 36}; see Domestic Relations Law § 236[B][6][a]; Chalif v. Chalif, 298 AD2d at 348, 751 NYS2d 197)0." ( Griggs v. Griggs , 44 AD3d 710 , 844 NYS2d 351 [2 Dept., 2007]; see Appel v. Appel , 54 AD3d 786 , 864 NYS2d 92 [2 Dept., 2008]). The factors include ". . . the standard of living of the parties during the marriage, the income and property of the parties, the distribution of marital property, the duration of the marriage, the health of the parties, the present and future earning capacity of both parties, the ability of the party seeking maintenance to become self-supporting, and the reduced or lost lifetime earning capacity of the party seeking maintenance" ( Kret v. Kret, 222 AD2d 412, 634 NYS2d 719 [2 Dept., 1995] citing Domestic Relations Law 236 [B][6][a]). "[O]ne of the purposes of an award of maintenance is to encourage economic independence" ( Ventimiglia v. Ventimiglia, 307 AD2d 993, 763 NYS2d 486 [2 Dept., 2003] citing Chalif v. Chalif, 298 AD2d 348, supra; Unterreiner v. Unterreiner, 288 AD2d 463, 733 NYS2d 239 [2 Dept., 2001]).
These factors must be evaluated along with the fact that "the overriding purpose of a maintenance award is to give the spouse economic independence" ( see Bains v. Bains, 308 AD2d 557, 764 NYS2d 721 [2 Dept., 2003]; see also O'Brien v. O'Brien, 66 NY2d 576 ; Abrams v. Abrams , 57 AD3d 809 , 870 NYS2d 401 [2 Dept., 2008]). In Bains, the Appellate Division, Second Department held that the Supreme Court "providently exercised its discretion in awarding the plaintiff maintenance in the sum of $3,000 per month for a period of five years.". Moreover, the court in Bains noted that "[s]pousal support should be awarded for a duration that would provide the recipient with enough time to become self-supporting" ( id.; see also Schenfeld v. Schenfeld, 289 AD2d 219, 734 NYS2d 465 [2 Dept., 2001]; Granade-Bastuck v. Bastuck, 249 AD2d 444). Similarly, in Comstock v. Comstock , ( 1 AD3d 307 , 766 NYS2d 220 [2 Dept., 2003]), the Second Department affirmed an award of maintenance even though the movant had a Masters Degree in Education and Social Work and there was a substantial distributive award of cash. The Appellate Division, Second Department has held that "[i]n light of the defendant's history of low earnings, her age and her health, as well as the length of the marriage, the Supreme Court properly found that it was not likely that she would become self-supporting, and consequently properly awarded her nondurational maintenance." ( Marino v. Marino , 52 AD3d 585 , 860 NYS2d 170 [2 Dept., 2008]; see also Brooks v. Brooks , 55 AD3d 520 , 867 NYS2d 451 [2 Dept., 2008] ["Considering all the relevant factors, including the plaintiff's total disability, the improbability of her being able to find gainful employment due to that disability, as well as the parties' pre-divorce standard of living, their disparity in income, and the plaintiff's lack of future earning potential, in this instance an award of $1,500 as monthly nondurational maintenance is appropriate"]). Recently, the Second Department decided on March 16, 2010, in Baron v. Baron , ( 71 AD3d 807 , 897 NYS2d 456 [2 Dept., 2010]) that,
"[T]he amount and duration of maintenance is a matter committed to the sound discretion of the trial court, and every case must be determined on its own unique facts" ( Wortman v Wortman , 11 AD3d 604 , 606; see Grumet v Grumet , 37 AD3d 534 , 535). The court must consider the factors enumerated in Domestic Relations Law § 236(B)(6)(a), which include the pre-divorce standard of living of the parties, the income and property of the parties, the distribution of property, the duration of the marriage, the present and future earning capacity of the parties, the ability of the party seeking maintenance to be self-supporting, and the reduced or lost earning capacity of the party seeking maintenance ( see Meccariello v Meccariello , 46 AD3d 640, 641-642; Griggs v Griggs, 44 AD3d at 711-712).
In the case at bar, the wife is approximately 37 years of age and in good health. The parties were married for 17 years. She has not maintained employment outside of the marital home since the time of the marriage. The wife was a full time homemaker; rasing the parties five (5) children, maintaining the home, cooking their meals, laundering their clothes, and attending to their medical and educational needs. There was a clear power imbalance in the parties marriage. The husband maintained the role of the financial provider, however he also took on the role of oppressor. During a majority of the parties marriage the wife's movements and actions were monitored and controlled. Although the husband contends that the parties lived together for only approximately four (4) years of their marriage it is clear to this court that the wife bore the responsibility of child rearing for the parties five (5) children. Furthermore, the time that she did not live with the husband was not a choice she made. Rather in an effort to further oppress the wife she was left in the parties home country in the husband's family home wherein contact with her own family was prohibited. When the wife was in the marital residence in New York with the husband similar control was maintained over her movement and relationships. In spite of the husband's long term control and oppression of the wife she was successful in her escape to a domestic violence shelter. However, she is at an extreme disadvantage; she does not speak or understand the English language, she has no work experience outside of the home and she has a severely limited support network.
Under the extant circumstances herein, the wife is be entitled to maintenance from the husband. In this long term marriage the wife has been a homemaker and primary parent from the time the five (5) children were born. Throughout the marriage, the husband's income was the sole source of financial support for the family. The wife, though, has limited earning potential in the short and long term. Even if the wife were able to work on a full time basis, her limited knowledge of the English language career opportunities do not compare to the skills of the husband. While the wife lacks sufficient income the husband has sufficient income, and monies available, to provide for her reasonable needs while maintaining his standard of living ( Poli v. Poli, 286 AD2d 720, 723 [2 Dept., 2001]; Salerno v. Salerno, 142 AD2d 670, 672 [2 Dept., 1988]; Aliano v. Aliano, 285 AD2d 522, 727 NYS2d 656 [2 Dept., 2001]; see generally, Domestic Relations Law 236 [B] [6] [a] [1-11]). For the husband to argue that the wife is capable of entering the work force when she has no work history and limited English language skills is without merit.
Under the circumstances of the parties' marital standard of living, their respective disparity in incomes, lack of employable skills, present and future earnings capacity, property, length of the marriage, age, physical and mental infirmities and the tax consequences to each party, an award of maintenance is warranted. Thus, applying the above discussed statutory considerations to the facts of this case and in consideration of the amount requested by the wife in her written summation, "$75.00 per week for at least 9 years", the court awards the wife taxable maintenance in the amount of $75.00 each week, which is $3,900.00 each year for an additional 10 years, retroactive to the date of first application ( see Domestic Relations Law 236 [B] [6][a]["Such order shall be effective as of the date of the application . . ."]; Dooley v. Dooley, 128 AD2d 669, 513 NYS2d 167 [2 Dept., 1987]). The maintenance shall be payable on the first of each month. The future payments shall terminate in the event of the wife's remarriage, her death or the husband's death. The payments shall be made payable to the Support Enforcement Unit since the wife resides at a shelter with a confidential address unless the wife requests payments be to any such other place as she designates in writing to the husband by certified mail, return receipt requested.
In making this decision to award maintenance the court is also aware of the fact that there will be tax consequences to the wife in that any income payments for tax purposes will be taxable to her and deductible to the husband to the extent permitted by law. Any maintenance shall cease upon the death of either party or the remarriage of the wife.
Health Benefits and Cash Medical Support
Pursuant to Domestic Relations Law section 255, both parties are on notice ". . . that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party's health insurance plan, depending on the terms of the plan." (DRL 255).
In the event that either party maintains health insurance for the benefit of their spouse, the other party may be entitled to health insurance through a COBRA option, or otherwise may be required to secure their own health insurance. The court cannot award a party to pay the other party's unreimbursed medical expenses ( see Bains v. Bains, 308 AD2d 557, 308 AD2d 557, 764 NYS2d 721 [2 Dept., 2003] "[j]udgments of divorce which direct a parent to pay the other parent's unreimbursed health care expenses are in the nature of open-ended obligations which this Court has consistently disfavored . . . [o]rdinary or routine unreimbursed medical expenses should be considered as included in a maintenance award, and extraordinary unreimbursed medical expenses cannot be awarded prospectively in unfixed amounts' ( Gulotta v. Gulotta, 215 AD2d 724, 627 NYS2d 428 [2 Dept., 1995]; Zabin v. Zabin, 176 AD2d 262, 574 NYS2d 75 [2 Dept., 1991]"). There was no testimony at trial as either party having private health insurance or the cost of COBRA benefits and therefore, this court cannot consider an award for this expense at this time.
The wife is not employed, at this time. She and the children are, at present, recipients of Medicaid benefits, and is a recipient of public assistance. The husband testified that he is unemployed. He offered no testimony as to health benefits from his business WCS Corp. which he now claims he is no longer associated with. Thus this court believes that health care benefits are not offered through an employer or organization. The custodial parent, shall continue the child(ren) in the New York State "Child Health Plus Program" and the New York State Medical Assistance Program or the publicly funded health insurance program in the State where the custodial parent resides.
Domestic Relation law section 240 (g) states that "[w]hen the court issues an order of child support or combined child and spousal support on behalf of persons in receipt of public assistance and care or in receipt of services pursuant to section one hundred eleven-g of the social services law, such order shall further direct that the provision of health care benefits shall be immediately enforced pursuant to section fifty-two hundred forty-one of the civil practice law and rules.". Furthermore, if health insurance benefits for the children, not available at the present time, becomes available in the future to the legally-responsible relative(s), such relative(s) shall enroll the dependent(s) who are eligible for such benefits immediately and without regard to seasonal enrollment restrictions and shall maintain such benefits so long as they remain available ( see DRL 240 (f)). The legally responsible relative(s) shall immediately notify the other party and the Support Collection Unit of any change in health insurance benefits, including any termination of benefits, change in the health insurance benefit carrier or premium, or extent and availability of existing or new benefits ( see DRL 240 (d)).
Child Support
Section 240 of the Domestic Relations Law of New York provides guidelines by the Child Support Standards Act ("CSSA") which must be considered in ascertaining child support. "[T]he CSSA provides a precisely articulated, three-step method for determining child support.' [ citing Matter of Cassano, 85 NY2d 649, 652 (1995] The first step requires the computation of combined parental income' (Domestic Relations Law § 240 [1-b] [b] [4]; [c] [1]). The amount of income' attributed to each parent is derived by adding gross income, as reported on the most recent Federal tax return, and, to the extent not included as gross income, investment income, imputed income and other income received' by the parent from eight enumerated sources' ( Matter of Graby v. Graby, 87 NY2d 605, 609-610, citing Family Ct Act § 413 [b] [5].
After computing statutory income, a limited number of deductions are allowable under Domestic Relations Law § 240 (1-b). The CSSA provides for eight categories of deductions from income, which includes maintenance payments and Federal Insurance Contributions Act (FICA) taxes paid (see Domestic Relations Law § 240[1-b] [b] [5] [vii] [A] — [H]. Significantly, receipt of a distributive award payments is not a statutory category of income, nor is the payment of a distributive award a recognized deduction.
The court next multiplies the combined parental income figure, up to a ceiling of $80,000, by a designated percentage based on the number of children to be supported, and then allocates that amount between the parents, applying each parent's respective portion of the total income to reach the amount of each parents support obligation (Domestic Relations Law § 240 [1-b] [b] [3]; [c] [2]. In the final step, where combined parental income exceeds $80,000, the court shall determine the amount of child support for the amount of the combined parental income in excess of such dollar amount through consideration of the factors set forth in paragraph (f) of [Domestic Relations Law § (1-b] and/or the child support percentage' (Domestic Relations Law § 240 [1-b] [c] [3]).
( Holterman v. Holterman, 3 NY3d 1, 814 NE2d 765).
However, the New York State legislature recently amended the Domestic Relations Law and thereby, the CSSA formula. Effective January 31, 2010,"[t]he court shall multiply the combined parental income up to the amount set forth in 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." (DRL 240 1-b (c) (2)). The Social Services law states that
[t]he combined parental income amount to be reported in the child support standards chart and utilized in calculating orders of child support in accordance with subparagraph two of paragraph (c) of subdivision one of section four hundred thirteen of the family court act and subparagraph two of paragraph (c) of subdivision one-b of section two hundred forty of the domestic relations law shall be one hundred thirty thousand dollars; provided, however, beginning January thirty-first, two thousand twelve and every two years thereafter, the combined parental income amount shall increase by the product of the average annual percentage changes in the consumer price index for all urban consumers (CPIU) as published by the United States department of labor bureau of labor statistics for the two year period rounded to the nearest one thousand dollars.
(Social Services Law § 111-I [b]).
DRL section 240 1-b (b) (5) (iii) further defines gross income. "[T]o the extent not already included in gross income in clauses (i) and (ii) of this subparagraph, the amount of income or compensation voluntarily deferred and income received, if any, from the following sources:
(A) workers' compensation,
(B) disability benefits,
(C) unemployment insurance benefits,
(D) social security benefits,
(E) veterans benefits,
(F) pensions and retirement benefits,
(G) fellowships and stipends, and
(H) annuity payments;"
Unlike maintenance, child support is governed by a precise formula in the CSSA, which simply does not authorize a court to deduct a distributive award from the titled spouse's income ( id.). For purposes of child support prior to any imputation, the wife's annual income is $10,968.00. She receives $675.00 per month, or $8,100 each year, in food stamps and $239.00 per month, or $2,868.00 each year, in cash assistance. ($8,100 + $2,868.00 = $10,968.00). Since the wife's income level does not warrant the filing of taxes, there is no FICA or New York City local tax to be subtracted.
Furthermore, the Appellate Division, Second Department has held that in an initial determination of maintenance and child support the maintenance award is not considered income for purposes of the wife's child support income ( see Harrison v. Harrison, 255 AD2d 490, 680 NYS2d 624 [2 Dept., 1998]; see also Lee v. Lee, 18 AD3d 508, 795 NYS2d 283 [2 Dept., 2005]; Krukenkamp v. Krukenkamp , 54 AD3d 345 , 862 NYS2d 571 [2 Dept., 2008] ["Since, . . ., the total income reported on the mother's most recently filed tax return included the maintenance payments she had received from the father that year, in the amount of $100,000, that sum was improperly excluded from her income for the purpose of calculating her child support obligation [citations omitted]]"; see also Lueker v. Lurker ___ NYS2d ___, 2010 WL 1379917[2 Dept., 2010]). The Second Department recently held that ". . . maintenance payments received and reported on a party's most recently filed income tax return should be included as income for purposes of calculating child support ( see Domestic Relations Law § 240[1-b][b][5] [I]; [citations omitted]"). In this case, the wife was not in receipt of maintenance payments which were or should have been reported on her tax return, therefore, the maintenance payments are not considered income to the wife, in this case, in calculating child support.
If this court were to rely on the husband's tax return, then his income was $15,000.00 pursuant to his 2007 tax return which is the most recent tax return submitted into evidence, less FICA $1,147.50, New York City local tax $91.44, less annual maintenance payments of $5,200.00 each year, the husband's income for child support purposes is $9,891.06 ($15,000.00 — $1,147.50 — $91.44 — $5,200.00 = $9,891.06). Since the wife's income level does not warrant the filing of taxes, there is no FICA or New York City local tax to be subtracted. The combined parental income is $20,829.06. There are four (4) unemancipated children with the mother. In accordance with the CSSA formula when there are four (4) children 31% shall be applied. Accordingly, the husband's pro rata share, 47%, for child support would be $6,457.01 annually; or $254.74 each month without any imputation of income. Although the wife at this time has custody of the parties five (5) children, the eldest child was not transitioned into the mother's care. Therefore, the above calculation only took into consideration the four (4) children physically in the mother's custody. Since mother's income is currently below the poverty guidelines there is no order of support to the father for the eldest child in his care, at this time.
However, "[i]n determining a party's child support obligation, a court need not rely upon the party's own account of his or her finances, but may impute income based upon the parties' past income or demonstrated earning potential ( see Genender v. Genender , 40 AD3d 994 , 836 NYS2d 291 [2 Dept 2007]; Westenberger v. Westenberger 23 AD3d 571 [2 Dept., 2005]; Rocanello v. Rocanello, 254 AD2d 269, 678 NYS2d 385 [2 Dept., 1998]). This is particularly true where the record supports a finding that husband's reported income on his tax return is suspect "( Ivani v. Ivani, 303 AD2d 639, 757 NYS2d 89 [2 Dept., 2003] see Maharaj-Ellis v. Laroche , 54 AD3d 677 , 863 NYS2d 258 [2 Dept., 2008]; Matter of Graves v. Smith, 284 AD2d 332, 725 NYS2d 367 [2 Dept., 2001]).The Appellate Division, Second Department has held that "[s]ince the plaintiff presented insufficient and incredible evidence to establish his income, the Supreme Court properly awarded child support based on the needs of the child ( see Domestic Relations Law § 240[1-b][k]" ( Evans v. Evans , 57 AD3d 718 , 870 NYS2d 394 [2 Dept., 2008]).
DRL 240 1-b (b) (5) (iv) states that ". . . at the discretion of the court, the court may attribute or impute income from, such other resources as may be available to the parent, including, but not limited to:
(A) non-income producing assets,
(B) meals, lodging, memberships, automobiles or other perquisites that are provided as part of compensation for employment to the extent that such perquisites constitute expenditures for personal use, or which expenditures directly or indirectly . . . confer personal economic benefits,
(C) fringe benefits provided as part of compensation for employment, and
(D) money, goods, or services provided by relatives and friends;
DRL section 240 1-b (b) (5) (v) permits "an amount imputed as 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"
Although the husband's 2007 tax return indicates income in the amount of $15,000.00, he concedes to using corporate funds for personal expenses; he receives unemployment benefits which are not commensurate with his reported income; the business appraiser report, stated that the husband's total compensation including salary and personal expenses paid by the business is $50,000.00; and, significantly, his original affidavit of net worth, certified by his prior attorney pursuant to 22 NYCRR 202.16 listed $58,973.76 as his income. For the reasons stated above and in consideration that there is no evidence of any efforts by the husband to seek additional employment outside of his incredible testimony that he applies for 10 jobs each month and the courts specific rejection of his other contentions related to his loss of income, this court shall impute income to the husband ( see Mongelli v. Mongelli, 68 AD3d 1070, 892 NYS2d 471 [ 2 Dept., 2009]; see also DeSouza-Brown v. Brown , 71 AD3d 946 , 897 NYS2d 228 [2 Dept.,2010]). This court believes that the husband's alleged surrender of the business is a sham for purposes of hiding his income or he is purposely not working to avoid his financial obligations. The video surveillance shown in open court once viewed could not lead an observer to conclude that the husband no longer has an association with WCS, Corp. Furthermore, in determining child support the court must not only look at the income of the parties but must also consider the amounts of monies that are available to the payor spouse so that party may meet their reasonable needs.
Accordingly, the total income attributed and imputed to the husband is $58,973.76 less FICA $1,147.50, New York City local tax $91.44, less annual maintenance payments of $3,900.00 each year, the husband's income for child support purposes is $58,973.76 ($58,973.76 — $1,147.50 — $91.44 — $3,900.00 = $53,834.82). The wife's annual income is $10,968.00 ($8,100.00 each year in food stamps and $2,868.00 each year in cash assistance [$8,100 + $2,868.00 = $10,968.00]). Since the wife's income level does not warrant the filing of taxes, there is no FICA or New York City local tax to be subtracted. The combined parental income is $64,802.87 ($53,834.82 + $10,968.00 = $64,802.87). In accordance with CSSA 31% of the combined parental income shall be applied. Accordingly, the husband's pro rata share, 83%, for child support shall be $16,688.79 annually; which is $1,390.73 a month.
Since the maintenance payments are for 10 years, the payments will cease on May 17, 2020. At that time the husband's income shall be adjusted to include $3,900.00 as income. At the cessation of the maintenance payments the child support shall remain 31% of the combined parental income. Accordingly, the husband's income for child support purposes is $57,734.82 ($53,834.82 + $3,900.00 = $57,734.82). The wife's income for child support purposes is $10,968.00.
In 2020 when the maintenance ceases, the total combined income for child support is $68,702.82. The husband's pro rata share, 84%, for child support for the four (4) children which is $17,897.79 annually, or $1,491.48 monthly until the parties child born on January 26, 2002, is 21 years of age or emancipated whichever is earlier.
Thereafter; in accordance with the CSSA 29% of the combined parental income for three (3) children, the husband's pro rata share for child support shall be $16,743.10 annually which is $1,395.26 each month until the parties child born on April 18, 2003, is 21 years of age or emancipated whichever is earlier. Thereafter, in accordance with the CSSA 25% of the combined parental income for two (2) children shall be the husband's pro rata share for child support shall be $14,433.71 annually which is $1,202.81 monthly until the parties child born on October 18, 2004, is 21 years of age or emancipated whichever is earlier. Thereafter in accordance with the CSSA 17% of the combined parental income for one child, the husband's pro rata share for child support shall be $9,814.92 annually which is $817.91 each month until the parties youngest child born on March 8, 2006, is 21 years of age or emancipated whichever is earlier ( see Lee v. Lee , 18 AD3d 508 , 795 NYS2d 283 [2 Dept., 2005]). Payment shall be due on the first of every month ( see generally Lee v. Lee , 18 AD3d 508 , 795 NYS2d 283 [2 Dept 2005]). Furthermore, in accordance with the wife's request, payment shall be made through the support collection unit.
Retroactivity
". . . [T]he amount of retroactive child support should be calculated from
. . ., the date of the defendant's answer containing her request for child support" ( Elimelech v. Elimelech , 58 AD3d 672 , 874 NYS2d 490 [2 Dept., 2009]; see Evans v. Evans , 57 AD3d 718 , 870 NYS2d 394 [2 Dept., 2008]). The court determines that maintenance and child support shall be retroactive to December 4, 2006, the date of first application ( see DRL 240; see also Dooley v. Dooley, 128 AD2d 669, 513 NYS2d 167) with a credit for any payments made by the husband directly to the wife pursuant to the court's pendente lite order. "Courts have continuing jurisdiction to modify or vacate support orders until they are completely satisfied, except that they have no discretion to reduce or cancel arrears of child support which accrue before an application for downward modification of the child support obligation' ( Hasegawa v. Hasegawa, 290 AD2d 488, 490, 736 NYS2d 398 [2 Dept., 2002]; see Matter of Dox v. Tynon, 90 NY2d 166, 659 NYS2d 231, 681 NE2d 398; Matter of Jenkins v. McKinney , 21 AD3d 558 , 799 NYS2d 904 [2 Dept., 2005]; Matter of Miller v. Miller, 308 AD2d 541, 764 NYS2d 850 [2 Dept., 2003]; Howfield v. Howfield, 250 AD2d 573, 574, 671 NYS2d 988 [2 Dept., 1998]; Domestic Relations Law §§ 236 [B] [9] [b], 244)." ( Dembitzer v. Rindenow , 35 AD3d 791 , 828 NYS2d 139 [2 Dept.,2006]). Any payments due for retroactive payments for underpayment of child support shall be made within 45 days of entry of the judgment ( see Katz v. Katz , 55 AD3d 680 , 867 NYS2d 100 [2 Dept., 2008] [". . . there is a strong public policy against restitution or recoupment of any overpayment]).
Equitable Distribution
In recognizing a marriage as an economic partnership, the Domestic Relations Law mandates that the equitable distribution of marital assets be based on the circumstances of the particular case and directs the trial court to consider a number of statutory factors listed in Domestic Relations Law 236 [B] [5] [d], as follows:
(1) the income and property of each party at the time of marriage, and at the time of the commencement of the action;
(2) the duration of the marriage and the age and health of both parties;
(3) the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;
(4) the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution;
(5) the loss of health insurance benefits upon dissolution of the marriage;
(6) any award of maintenance under subdivision six of this part;
(7) any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;
(8) the liquid or non-liquid character of all marital property;
(9) the probable future financial circumstances of each party;
(10) the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;
(11) the tax consequences to each party;
(12) the wasteful dissipation of assets by either spouse;
(13) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;
(14) any other factor which the court shall expressly find to be just and proper.
"Equitable distribution presents matters of fact to be resolved by the trial court, and its distribution of the parties' marital property should not be disturbed unless it can be shown that the court improvidently exercised its discretion in so doing'" ( Johnson v. Johnson, 261 AD2d 439, 690 NYS2d 92 [2 Dept., 1999], quoting Oster v. Goldberg, 226 AD2d 515, 640 NYS2d 814 [2 Dept., 1996], appeal denied 88 NY2d 811; see Jones-Betrand v. Bertrand, 59 AD3d 391, 874 NYS2d 152 [2 Dept., 2009]; see also Grasso v Grasso , 47 AD3d 762 , 764 [2 Dept., 2008]). "Moreover, trial courts are vested with broad discretion in determining distributive awards (see Saleh v Saleh, 40 AD3d 617, 618 [ 2 Dept., 2007]; Shifer v Shifer , 27 AD3d 549; Sebag v Sebag, 294 AD2d 560; Oster v Goldberg, 226 AD2d 515)." ( Jones-Bertrand v. Bertrand , 59 AD3d 391 , supra [2 Dept., 2009]).
Marital v. Separate Property
Domestic Relations Law section 236 (B) [1] [c] defines marital property as "all property acquired by either or both spouses during the marriage and before . . . the commencement of a matrimonial action, regardless of the form in which title is held" ( see Seidman v. Seidman, 226 AD2d 1011, 1012). Separate property, on the other hand, is defined, in part, as "property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse" (Domestic Relations Law 236 [B] [1] [d] [1]). It must also be recognized, however, that the term "marital property" is to be broadly construed, while the phrase "separate property" is to be narrowly construed ( see e.g. Judson v. Judson, 255 AD2d 656, 679 NYS2d 465 [3 Dept., 1998], citing Price v. Price, 69 NY2d 8, 511 NYS2d 219). Separate property, an exception to marital property, is to be narrowly construed ( see Farag v. Farag , 4 AD3d 502 , 772 NYS2d 368 [2 Dept., 2004]). Hence, the law favors the inclusion of property within the marital estate ( compare Domestic Relations Law 236 [B] [1] [c] and [d]; see Burns v. Burns, 84 NY2d 369, 374; Majauskas v. Majauskas, 61 NY2d 481, 474 NYS2d 699), and, accordingly, "the party seeking to establish that a particular item is indeed separate property bears the burden of proof" ( LeRoy v. LeRoy, 274 AD2d 362, 712 NYS2d 33 [1 Dept., 2000], citing Seidman, 226 AD2d at 1012; Heine v. Heine, 176 AD2d 77, 580 NYS2d 231 [1 Dept., 1992], lv denied 80 NY2d 753). When a party commingles separate funds with marital funds and assets ( see Hartog v. Hartog, 85 NY2d 36, 623 NYS2d 537, 647 NE2d 749; Lynch v. King, 284 AD2d 309, 725 NYS2d 391 [2 Dept., 2001]), it is that parties burden to trace the source of the funds with sufficient particularity to rebut the presumption that they were marital property ( Massimi v. Massimi , 35 AD3d 400 , 825 NYS2d 262 [2 Dept., 2006]; see also Bennett v. Bennett , 13 AD3d 1080 , 790 NYS2d 334 [4 Dept., 2004]). Furthermore, the Court of Appeals has recently ruled that
. . . during the life of any marriage, many payments are made, whether of debts old or new, or simply current expenses. If courts were to consider financial activities that occur and end during the course of a marriage, the result would be parties to a marriage seeking review of every debit and credit incurred. As a general rule, where the payments are made before either party is anticipating the end of the marriage, and there is no fraud or concealment, courts should not look back and try to compensate for the fact that the net effect of the payments may, in some cases, have resulted in the reduction of marital assets. Nor should courts attempt to adjust for the fact that payments out of separate property may have benefitted both parties, or even the non-titled spouse exclusively. The parties' choice of how to spend funds during the course of the marriage should ordinarily be respected. Courts should not second-guess the economic decisions made during the course of a marriage, but rather should equitably distribute the assets and obligations remaining once the relationship is at an end.
( Mahoney-Buntzman v Buntzman , 12 NY3d 415 , 881 NYS2d 369).
Valuing an Asset
The party seeking the distribution of an asset has the burden of establishing its value ( see e.g. Vainchenker v. Vainchenker, 242 AD2d 620, 662 NYS2d 545 [2 Dept., 1997]; Amisson v. Amisson, 251 AD2d 274, 672 NYS2d 801 [2 Dept., 1998]; Harris v. Harris, 242 AD2d 558, 662 NYS2d 532 [2 Dept., 1997]; Iwahara v., Iwahara, 226 AD2d 346, 640 NYS2d 217 [2 Dept., 1996]; Kaye v. Kaye, 192 AD2d 365, 596 NYS2d 33 [1 Dept., 1993]; Vogel v. Vogel, 156 AD2d 671, 549 NYS2d 438 [2 Dept., 1989]).
"There is no uniform method of fixing the value of an ongoing business for equitable distribution purposes and valuation is properly within the fact-finding power of the trial court" ( Levine v. Levine , 37 AD3d 550 , 830 N.Y.S 2d 252 [2 Dept., 2007]; see Wasserman v. Wasserman , 66 AD3d 880 , supra; see also Bricker v. Bricker , 69 AD3d 546 , 893 NYS2d 128 [2 Dept., 2010]; L'Esperance v. L'Esperance, 243 AD2d 446, 663 NYS2d 95 [2 Dept., 1997]; Tayar v. Tayar, 250 AD2d 757, 673 NYS2d 179 [2 Dept., 1998]; Miness v. Miness, 229 AD2d 520, 645 NYS2d 838 [2 Dept., 1996]; Daddino v. Daddino , 37 AD3d 518 , 830 NYS2d 278 [2 Dept., 2007]). "The determination of a fact-finder as to the value of a business, if it is within the range of the testimony presented, will not be disturbed on appeal where valuation of the business rested primarily on the credibility of expert witnesses and their valuation techniques" ( Ferraro v. Ferraro, 257 AD2d 596, 684 NYS2d 274 [2 Dept., 1999], quoting Dempster v. Dempster, 236 AD2d 582, 654 NYS2d 653 [2 Dept., 1997], appeal denied 90 NY2d 806, quoting Matter of Penepent Corp., 198 AD2d 782, 783; accord L'Esperance, 243 AD2d 446 at 447, 663 NYS2d 95 [2 Dept., 1997]; Wasserman v. Wasserman , 66 AD3d 880 , supra).
The Business
During the parties' marriage, in 2000, plaintiff opened his construction corporation. The husband contends that his initial business investment, which he avers was $10,000.00, was separate funds that the husband saved prior to the marriage and therefore the business is separate property. He also contends that although the business was started during the time of the marriage, the wife was not living in the United States with him at that time therefore the business is a separate asset. However, the husband failed to meet his burden. His failed to substantiate his separate property contribution with documentary evidence ( see Steinberg v. Steinberg, 59 AD3d 702, 874 NYS2d 230 [2 Dept., 2009] ["Property acquired during the marriage is presumed to be marital property and the party seeking to overcome such presumption has the burden of proving that the property in dispute is separate property [citations omitted]"). This court will not consider the husband's testimony alone given the severe credibility issues and findings herein ( see LeRoy v. LeRoy, 274 AD2d 362, supra). Dr. Joan Lipton (Lipton) of Lazar Lipton Valuation Services was appointed, on consent, as the neutral appraiser pursuant to the court order dated January 30, 2008. Neither party called an independent appraiser to testify.
Lipton testified that the value of the husband's alleged 25% of WCS Corp. was valued at ". . . not less than $37,500.". Accordingly, the business is valued at, no less than $150,000.00. Lipton ". . . compared bank deposits to reported revenues in 2006 and 2007 and concluded that deposits exceeded the reported revenues in both years . . .". Lipton next ". . . analyzed the charge card statements and estimated that substantial amounts represents non-business expenses. Many of the expenses were charged by [AK], Mr. [K]'s brother, who apparently did not work for WCS Corp.". The next step ". . .estimated . . . The person expenses paid by WCS Corp. . . .". Lastly, Lipton interviewed the parties and the accountant.
In applying the income approach to value the business, Lipton relied on the excess earning method. The excess earning method is based on the IRS Revenue Ruling 68-609, and involves the determination of two components of value: net tangible assets and goodwill. Consistent with I.R.S. Revenue Ruling 68-609, goodwill is determined by calculating normalized excess earnings after allowing for a reasonable return on net tangible assets, and then applying an appropriate multiple to these excess earnings. Lipton defines the excess earning method in the report as "the determination of two components of value: net tangible assets and good will". She further explains that the net tangible asset value assumes no net tangible since she was ". . .unable to confirm WCS Corp.'s asset balance, the existence of actual loan obligations, or the amount of any receivables.". The good will value of WCS Corp. was estimated at a minimum value of $150,000.00. Lipton in the report calculated the value of the husband's ". . . 25% ownership interest in WCS Corp. as of December 14, 2007 to be not less than $37,500.00".
In the wife's summation she requests a 50% division of this asset for purposes of equitable distribution. This request is based upon the long duration of the parties marriage, the wife's contribution during the marriage, the financial need of the wife and the sever and egregious abuse inflicted upon the wife by the husband during the marriage.
The husband requests by way of summation that ". . . in determining an equitable distribution of this assets, firstly he no longer has an ownership interest in the business. Secondly, when he did own the business his interest was only 25%. Thirdly, the asset is a separate asset since the start funds were his separate property.
This court rejects the husband's contention that he no longer has an ownership interest in WCS Corp. and that his interest was limited to 25% of WCS Corp. This determination is premised upon his lack of credibility, inconsistent testimony, conflicting affidavits of net worth, his failure to be forthright with discovery in this litigation and the disreputable corporate documents that the husband submitted in support of his position and the video surveillance of the husband overseeing and conducting work for WCS Corp. on two separate occasions while unemployed. Accordingly, this court shall equitably distribute the good will value of WCS Corp., in accordance with Lipton's evaluation utilizing the revenue methodology, was estimated at a minimum value of $150,000.00. The husband was and is a 100% owner of the corporation. The notion that [BA] is a business partner is not credible nor is the husband's contention that he is unemployed. His testimony and documentary proof were not credible. This court found the wife to be a credible witness. This court notes that even assuming for argument sake that the husband no longer has an interest in WCS, such loss in his interest would warrant this court considering it a wasteful dissipation.
Furthermore, the husband failed to meet his burden to prove that the business is a separate asset. There is a statutory presumption that all property, unless clearly separate, is deemed marital property and the titled spouse has the burden to rebut that presumption ( see Steinberg v. Steinberg , 59 AD3d 702 , supra; see also DeJesus v. DeJesus, 90 NY2d 643, 665 NYS2d 36; Farag v. Farag , 4 AD3d 502 , 772 NYS2d 368 [2 Dept., 2004]). The appellate courts have repeatedly held that separate property, an exception to marital property, is to be narrowly construed. The burden was upon the husband to prove start up money for WCS Corp. was his separate property, which he failed to do ( see Farag v. Farag , 4 AD3d 502 , supra).
After hearing the testimony of the parties, this court determines that the wife made a substantial contribution toward the marriage that allowed the husband's business to flourish. She was the sole caretaker and homemaker for the parties five children. During the period of the marriage were the husband did not abandon the wife in Albania she provided for all of his needs in the home, including laundering his clothes, shopping for and preparing his meals, attending to the children and thereby enabling the husband to devote his attention to the business. This is a long term marriage wherein the wife was the primary caretaker for the parties five (5) children. The wife maintained the household thereby enabling the husband the time to develop WCS Corp. The wife was not permitted to leave the household without permission of the husband, let alone maintain employment. It is evident to this court that the wife has a less advantageous financial future than the husband, given her lack of experience outside the home and her minimal understanding of the English language.
The Appellate Division, Second Department recently held in Baron v. Baron ( 71 AD3d 807, 897 NYS2d 456 [2 Dept., 2010]) that
[c]ontrary to the plaintiff's contentions, the Supreme Court providently exercised its discretion in awarding the plaintiff a 20% share of the defendant's company. "Although in a marriage of long duration, where both parties have made significant contributions to the marriage, a division of marital assets should be made as equal as possible . . . there is no requirement that the distribution of each item of marital property be made on an equal basis" ( Griggs v Griggs , 44 AD3d 710 , 713, quoting Chalif v Chalif, 298 AD2d 348, 349). Here, the 20% share takes into account the plaintiff's minimal direct and indirect involvement in the defendant's company, while not ignoring her contributions as the primary caretaker for the parties' children, which allowed the defendant to focus on his business ( see Ventimiglia v Ventimiglia, 307 AD2d 993, 994; Wagner v Dunetz, 299 AD2d 347, 349; Chalif v Chalif, 298 AD2d at 349; Granade-Bastuck v Bastuck, 249 AD2d 444, 445). Furthermore, this court must consider the severe abuse inflicted upon the wife during their marriage as discussed in this court's custody decision. The wife testified at that trial to multiple incidents of domestic violence. The court notes its prior findings on the issue of domestic violence:
In or about November 1999, plaintiff had the oldest child circumcised when he was almost three (3) years old. At that time, defendant and the children were living with plaintiff's parents, his brother and the brother's wife and their two (2) children. Defendant testified that due to the circumcision, the child wanted to make frequent visits to the bathroom, which was located outside of the home where the parties were living. She testified that plaintiff told her not to take their son to the bathroom because the son was lying about his need to use the bathroom. Despite plaintiff's warning, defendant took the child to the bathroom and plaintiff became very angry and, in front of their child, smashed her head into a wall. She alleges that this incident resulted in a black eye and hearing problems and bruises that lasted for two (2) to three (3) weeks. Defendant did not seek medical attention, averring that she wanted to keep the nature of her relationship with plaintiff private and that she was embarrassed, not wanting people to know. . . .
Defendant alleges that during the summer of 2001, in Albania, the oldest child tore a letter that had arrived in the mail and that when asked about it by plaintiff, defendant said that she tore the letter in order to keep the blame away from their son. She posits that she took the blame for the torn letter because she was afraid that plaintiff would "scream" at their son. She alleges that plaintiff, in front of their young son, grabbed her by the hair and pushed her so that she hit a wall and table as she fell. Defendant was six (6) months pregnant at the time of this alleged incident. Defendant further testified that several members of plaintiff's immediate family witnessed the incident and did nothing. . .
Defendant gave tearful testimony that she did not seek medical treatment because she was not allowed to leave the home without plaintiff's permission or unaccompanied by a member of plaintiff's family. Plaintiff conceded at trial that, as part of his practice of Albanian tradition, he relied on his family to keep track of defendant's whereabouts when she lived with them while he lived in the United States. He also concedes that she was required to get permission before she was allowed to leave the house; however, he testified that he had no knowledge that his family ever denied defendant permission to leave the house. Defendant testified that she did not tell anyone about plaintiff's violent behavior because she was ashamed for people to know the true nature of her relationship with plaintiff. . . .
Defendant testified that none of the "daughters-in-law" living in her husband's parents' house were allowed to go out without permission, but she avers that the other wives were often granted permission to go out when she was not allowed to go.
Defendant avers that throughout the course of the parties' marriage she was not allowed to leave the parties home, either in Albania or in New York, without the express permission of plaintiff and that when he did give her permission he always required that she be accompanied by a member of his family or by someone that he selected and that the same held true for when she went for obstetrician visits. Plaintiff does not deny that defendant was always accompanied when she went to doctors visits; however, he alleged that it was usually a family relative, not merely a member of the community . . .
Defendant testified that she was always accompanied to the obstetrician visits by women whom she met through plaintiff and that she was never allowed to visit the doctor alone. She further alleges that she allowed these women to accompany her because they would help translate for her because the obstetrician did not speak Albanian.
Defendant concedes that she was allowed to drop the oldest child off at school without being accompanied, but stated that it was only because the school was very close to where the parties and their children lived at the time.
Defendant testified about an incident that allegedly happened in early 2002 when she accidentally dropped a dish cover. Defendant avers that because the lid made a loud sound when it hit the floor that plaintiff kicked her with his leg in the lower part of her leg "below the knee" and she testified that because he kicked her with "great force" she experienced "a lot of pain for a few days" and that her "leg felt numb for a few days". Defendant contends that this incident happened very close to where the parties' young children were sleeping. Plaintiff denies that this incident ever occurred. . .
[The husband] took their passports, documents and green cards with him and that he threatened to beat her up or to kill her and her family if she attempted to get replacement documents from the United States embassy in Albania. Plaintiff testified at trial that he only took his own passport when he returned to the United States and that defendant's and children's passports and green cards were in defendant's purse when he left Albania. Defendant avers that plaintiff left her in Albania because he accused her of having an affair with another man while the parties were living in New York, which defendant adamantly denies. Plaintiff contends that he telephoned defendant at the end of August to find out how the preparations were coming for her return with the children and that it was only then that he learned that defendant would not be returning to the United States. . .
Defendant alleges that at this time, plaintiff said that he would get another house in Detroit or Florida and that he would then return to Albania and take defendant and their children back to the United States.
Defendant further contends that plaintiff accused her of taking drugs while in the United States and made allegations that she had been drugged by the people that she knew and that they had sexual relations with her.
[The wife] alleges that [the husband] was resistant to her visiting the doctor during most of her pregnancies. She alleges that during one pregnancy she only visited the doctor in the eighth month and that in another she was not allowed to visit the doctor until she gave birth because plaintiff said that women used to give birth without going to see doctors. She contends that only during one of the pregnancies did she have semi-routine prenatal visits that took place every two (2) to three (3) months and then about every two (2) weeks during the last weeks of the pregnancy. Plaintiff alleges that she received "excellent" prenatal care during all of her pregnancies; however, testimony at trial established that plaintiff had no personal knowledge of defendant's prenatal care during her first pregnancy . . .
At one time when the husband returned to Albania "[the wife] avers that when she attempted to see [the husband] he spat in her face and told her to go away and that he called her a "b — '". . . .
A few days after this encounter with plaintiff, in January 2006, defendant alleges she was preparing to go to bed in a room that she was sharing with one of her young sons when plaintiff suddenly opened the door and again accused her of having an affair with another man when the parties were still living in New York. She claims he grabbed her by her throat with one hand and started hitting her on her shoulder with his other hand. She testified that she started screaming for help and that the parties' young son, who was in the room throughout the alleged incident, woke up and saw what was going on and started to cry. Defendant alleges that plaintiff instructed her to go calm the child but that she could not because she was "very, very upset" because she saw plaintiff put his hand on his pocket and she feared that he had a knife or a gun and that he was going to kill her. At that time, she testified, that plaintiff's brother came into the room and took plaintiff outside, at which point she went to the room where plaintiff's parents, sister and the sister's two (2) children were sleeping along with the parties' oldest child. She testified that plaintiff's parents locked the door so that plaintiff could not get in, but that plaintiff continued to scream and curse and to bang his hand on the locked door throughout the night.
( see G.K. v. L.K., 20 Misc 3d 1138(A), 872 NYS2d 690 [N.Y.Sup.,2008], supra).
The Appellate Division Second Department has held that
[the] Domestic Relations Law § 236(B)(5)(d) provides that marital fault may be taken into consideration pursuant to the statute's catchall provision, which allows consideration of "any other factor" which may be "just and proper" ( O'Brien v. O'Brien, 66 NY2d 576, 589, 498 NYS2d 743, 489 NE2d 712). "The marital misconduct [must be] so egregious or uncivilized as to bespeak of a blatant disregard of the marital relationship — misconduct that 'shocks the conscience' of the court thereby compelling it to invoke its equitable power to do justice between the parties" ( Blickstein v. Blickstein, 99 AD2d 287, 292, 472 NYS2d 110; see Havell v. Islam, 301 AD2d 339, 344, 751 NYS2d 449; McMahan v. McMahan, 100 AD2d 826, 826-827, 474 NYS2d 974)"
( Levi v. Levi , 46 AD3d 520 , 848 NYS2d 225 [2 Dept.,2007]).
The Court of Appeals recently held in Howard S. v Lillian S. ( 2010 NY Slip Op 03474 [2010]) that
At a minimum, in order to have any significance at all, egregious conduct must consist of behavior that falls well outside the bounds of the basis for an ordinary divorce action. This is not to say that there can never be a situation where grounds for divorce and egregious conduct will overlap. However, it should be only a truly exceptional situation, due to outrageous or conscience-shocking conduct on the part of one spouse, that will require the court to consider whether to adjust the equitable distribution of the assets ( see e.g. Levi v Levi , 46 AD3d 520 [2d Dept 2007] [attempted bribery of trial judge]; Havell v Islam, 301 AD2d 339 [1st Dept 2002] [vicious assault of spouse in presence of children])[FN2]. Absent these types of extreme circumstances, courts are not in the business of regulating how spouses treat one another.
Although this court finds that the manner in which the wife herein was treated throughout the parties marriage is appalling, this court finds that the facts and circumstances herein do not rise to the level of severe and egregious conduct to warrant this court to invoke its equitable power in accordance with Domestic Relations Law 236 B as defined in this State. The facts of this case do not rise to the level of ". . .a truly exceptional situation, due to outrageous or conscience-shocking conduct on the part of one spouse, that will require the court to consider whether to adjust the equitable distribution of the assets" ( Howard S. v Lillian S., 2010 NY Slip Op 03474 [2010], supra). This court cannot create an additional factor to the Domestic Relations Law wherein domestic violence, in and if itself, is a separate factor in considered when determing equitable distribution, that must be left to the legislature.
In consideration of the wife's contributions and efforts for the family all the facts recited herein, this court awards the wife 33.33% as her equitable share of the husband's share of the value of WCS Corp which is $50,000.00 as a distributive award. This award shall be paid in three (3) installments, to wit: $16,666 on or before June 22, 2010, $16,666 on or before June 22, 2011 and $16,668 on or before June 22, 2012 ( see Wasserman v. Wasserman , 66 AD3d 880 , supra ["Considering the circumstances of the case, the Supreme Court providently exercised its discretion in awarding the defendant 50% of the value of the plaintiff's businesses"]).
Bank Accounts
The monies in the parties bank accounts at the time of the commencement of this action, December 14, 2007, shall be divided equally.
Retirement Benefits
There is no testimony or documentary evidence indicating that either party has any retirements benefits.
Life Insurance Policies
Neither party requested life insurance policies for the purpose of insuring the child support or the maintenance award nor is there any testimony as to any existing life insurance policies. There was no testimony that the parties have life insurance policies, or the cost to maintain life insurance policies and there was no request by the wife for the husband to maintain life insurance for the purposes of insuring the maintenance or child support award. This court cannot award relief which was not requested ( see Barany v. Barany, 2010 NY Slip Op 1750 [2 Dept., 2010]); see also Matter of Alexander v. Alexander , 62 AD3d 866 [2 Dept., 2009]); Rose v. Rose , 47 AD3d 790 [2 Dept., 2008]; Matter of Smith v. Wood , ( 38 AD3d 561, 562 [2 Dept., 2007]).
Debt
Although the husband's testimony reflects monies taken from WCS Corp. for his personal use and reiterates his indebtedness to WCS Corp., he fails to substantiate the existence of these loans with any documents, checks, notes or any other writings. This court finds that the husband's testimony is not credible. Accordingly, this court shall not equitably distribute these debts.
Counsel Fees
Neither party testified to the issue of counsel fees, nor was there an agreement for counsel fees to be determined on submission of papers. Accordingly, there is no award of counsel fees provided herein.
Conclusion
This is a marriage of almost 17 years wherein the parties have 5 children. The husband is 44 years of age and the wife is 37 years of age. The probable future circumstances of the husband, who is a construction worker, supervisor and an owner of a business far outreach that of the wife. She does not speak the English language, is and has always been a full time home maker and has no work experience outside of the home, was a victim of domestic violence at the hand of the husband and has lived in a shelter since the commencement of this action. Furthermore, the husband provided sketchy financial information. His testimony was typically inconsistent. There was no testimony as to the tax consequences to the parties.
Judgment of divorce is granted to the husband on the grounds of constructive abandonment. Custody is awarded to the mother in accordance with the decision of this court dated August 18, 2008, and the interlocutory judgment dated January 22, 2009, subject to the modification applications that are subject to the hearing presently before this court. Equitable distribution shall be effectuated and the payment of maintenance and child support as is directed in this trial decision. The Family Court shall have concurrent jurisdiction with regard to maintenance, child support, custody and visitation. The children are recipients of Child Health Plus and there was no testimony as to unreimbursed expenses. The wife shall have the right to continue to use her maiden name if she so chooses.
This court reiterates that pursuant to Domestic Relations Law section 255,
both parties are on notice ". . . that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party's health insurance plan, depending on the terms of the plan." (DRL 255). In the event that either party maintains health insurance for the benefit of their spouse, the other party may be entitled to health insurance through a COBRA option, or otherwise may be required to secure their own health insurance.
Either party may settle separate findings of fact and conclusions of law and judgment of divorce, together with the minutes of any stipulations and inquest and a copy of this decision and the minutes of June 12, 2009, within 60 days.