Pending Amendment to Maintenance

6 July 2010

The Senate and Assembly have passed radical changes to the Domestic Relations Law which change how maintenance is calculated, the enactment of no fault as grounds, and revising pendente lite awards of counsel fees. 

S7740A is the Senate version of the amendment to the maintenance provision of DRL 236 B(6).

 It replaces the existing statutory factors now used to determine maintenance and replaces it with a mathematical formula.

In sum, bill provides that maintenance will be mandatory when one spouse’s income is 2/3 or less than the income of the other spouse. Once that threshold is met, then the amount of maintenance will be calculated using two formulas. Whichever formula gives the smaller award is the one which will be used.

The first formula is to take 30% of the higher spouse’s income, and from that subtract 20% of the lower’s spouse’s income. For the mathematically inclined, that’s M = .3H – .2L.

The second formula is to take 40% of the combined income of both spouses, and from that subtract the lower spouse’s income. Expressed as a formula, that comes to M = .4(H +L) – L.

The duration of the maintenance will be set by a formula too.

I’m playing with these formulas. But what I don’t see in the proposed amendment is any adjustment for a distributive award of future income under O’Brien. Assuming O’Brien remains good law in the near future, this new formula will result in grossly unfair awards to both ends of the spectrum; the spouses with the higher income will pay twice on the same income stream, and lower income spouses who take steps to become self sufficient before starting a divorce will suffer financially.

In addition, with specific cutoffs for maintenance awards, I expect to see quite a bit more pre-divorce planning designed reduce financial awards to the other spouse.

Stay tuned.

Graev v. Graev & Termination of Maintenance: The Court of Appeals Changes the Rules

7 December 2008

Graev v. Graev is one of those cases where once standard language is turned on its head by the courts, creating a sea of uncertainty it what was assumed to be a fairly straightforward provision of most divorce agreements.

In order to understand Graev, some background is necessary.

Spousal maintenance may be set either by the court or by agreement. Domestic Relations Law Section 248 gives the default conditions on which maintenance may be terminated. DRL 248 provides as follows:

§ 248. Modification of judgment or order in action for divorce or annulment. Where an action for divorce or for annulment or for a declaration of the nullity of a void marriage is brought by a husband or wife, and a final judgment of divorce or a final judgment annulling the marriage or declaring its nullity has been rendered, the court, by order upon the application of the husband on notice, and on proof of the marriage of the wife after such final judgment, must modify such final judgment and any orders made with respect thereto by annulling the provisions of such final judgment or orders, or of both, directing payments of money for the support of the wife. The court in its discretion upon application of the husband on notice, upon proof that the wife is habitually living with another man and holding herself out as his wife, although not married to such man, may modify such final judgment and any orders made with respect thereto by annulling the provisions of such final judgment or orders or of both, directing payment of money for the support of such wife.

The bold text is added.

Thus, if a wife who is receiving maintenance lives with her boyfriend, there shall be no termination of maintenance unless is “holding herself out as his wife.”

Ignoring the gender wording of this statute, which is a holdover from a bygone era, parties are free to stipulate to a different set of conditions under which maintenance will be terminated. One of the most common agreed upon conditions is to provide that maintenance will terminate when the wife cohabitates with an unrelated male or adult. The intent here of course, was to provide for a termination event when the former wife does not marry her live in significant other.

With this background in place, Graev v. Graev can be understood.

The facts in Graev are simple. When the Graevs divorced, their settlement agreement provided that Mrs. Graev’s maintenance would terminate upon her “cohabitation of the Wife with an unrelated adult for a period of sixty (60) substantially consecutive days.” The agreement was silent, as are most agreements, as to the definition of “cohabitation.”

Following the divorce, Mrs. Graev lived with an unrelated adult male, and Mr. Graev stopped paying maintenance. Mrs. Graev filed a motion to enforce the agreement, and Mr. Graev filed a cross motion to terminate his maintenance.

Following a hearing, the Supreme Court found in favor of Mrs. Graevs, holding that “an essential element of cohabitation is a shared residence with shared household expenses” and that Mrs. Graev did not function as an economic unit with her new boyfriend.

Mr. Graev appealed, and the Appellate Division affirmed in favor of Mrs. Graevs, holding the word “cohabitation” meant more than a romantic relationship, and required a sharing of finances or an economic relationship. In affirming, the Appellate Division found that Mrs. Graev and her boyfriend living together for sixty days in 2004, and were romantically involved in 2003 did not constitute “cohabitation.”

Mr. Graev appealed to the Court of Appeals, which reversed, holding the term “cohabitation” does not have a plain meaning, and that extrinsic evidence of the parties’ intent was necessary to determine what they meant in their stipulation of settlement. Therefore, the reversal required the case to be sent back to the Supreme Court for a hearing to determine what the parties meant by cohabitation.

In closing, Footnote 4 of the main opinion notes that

The wisest rule, of course, is for parties in the future to make their intention clear by more careful drafting.

The result now will be a new section in divorce agreements which define the term cohabitation in greater detail.

Annulling a marriage does not preclude ancillary relief

8 July 2008

The difference between a divorce and an annulment seems pretty straightforward; a divorce terminates a marriage as of the date of the judgment of divorce, while an annulment treats the marriage as if it never occurred. However, when an annulment is granted, the court may still distribute the marital property under Domestic Relations Law 236B(5), children born during an annulled marriage are presumed to be legitimate, counsel fees may be awarded under DRL 237, and spousal maintenance under DRL 236(B)(6) may be granted.

The latter is exactly what happened in LeMieux v. LeMieux. In LeMieux, the plaintiff husband commenced an action to annul the marriage based on fraud, and won at trial. The Supreme Court then awarded the defendant wife maintenance at $300 per week until the age of 66, death, remarriage, or cohabitation. The plaintiff husband appealed.

The Appellate Division affirmed the Supreme Court’s award of maintenance, finding the court had the authority to make such an award under DRL 236(B)(2), which provides:

2. Matrimonial actions.
Except as provided in subdivision five of this part, the provisions of this part shall be applicable to actions for an annulment or dissolution of a marriage, for a divorce, for a separation, for a declaration of the nullity of a void marriage, for a declaration of the validity or nullity of a foreign judgment of divorce, for a declaration of the validity or nullity of a marriage, and to proceedings to obtain maintenance or a distribution of marital property following a foreign judgment of divorce, commenced on and after the effective date of this part. Any application which seeks a modification of a judgment, order or decree made in an action commenced prior to the effective date of this part shall be heard and determined in accordance with the provisions of part A of this section.

The lesson here is that no rights are lost or gained by filing an annulment as opposed to an action for a divorce.