Letter From New York
by Jeremy D. Morley
This Article appears in the Autumn 2012 edition of "Australian Family Lawyer"
New York’s No-Fault Law
New York has finally enacted a no-fault divorce law. It was the last American state to do so and legal practitioners are still absorbing the changes. Proponents of the new law were required to pay a political price by agreeing to the simultaneous enactment of some new financial rules.
While the no-fault element of the new legislation grabbed all of the headlines, it is the new financial rules that have had the most impact. These changes relate to temporary spousal maintenance, modification of child support orders and counsel fees.
No more grounds trials in New York divorce cases
The new law adds "irretrievable breakdown of the marriage" for a period of at least six months as a seventh ground for divorce in New York. It may be asserted by only one spouse, even over the objection of the other.
Previously a defendant could delay or even block a divorce case by contesting the divorce grounds, thereby requiring a “grounds trial” before any of the economic or custody issues could be heard, let alone finally resolved. The opportunity to pursue such tactics has now disappeared. Indeed, New York courts have since ruled that there can be no trial of the issue of whether the marriage has, in fact, “irretrievably” broken down.
This means, much to the chagrin of a legion of Brooklyn gumshoes, that divorce lawyers in New York no longer need to routinely prove that the defendant was guilty of “cruel and inhuman treatment” of such severity that medical attention was required on two separate occasions or on-the-scene evidence of adultery witnessed by a third party.
Spouses who are desperate to be freed from the bonds of matrimony (just so that they become so bound once again) need no longer move from New York to the New Jersey shore for a year in order to satisfy the New Jersey jurisdictional law. Nor must they use financial resources to persuade their soon-to-be-ex-spouses to accept the allegations of cruelty, abandonment or adultery in a New York divorce petition.
Now New York has a distinction that it usually works very hard to avoid. It’s basically just like the rest of America! – but only as far as the grounds for divorce are concerned.
Temporary or interim maintenance
The new legislation completely changes temporary spousal support in New York, while leaving permanent support untouched. It establishes a new formula to determine the amount of interim spousal maintenance (“temporary alimony”) for the period during which a divorce case is pending.
The old law merely provided a laundry list of factors that a court should consider when determining temporary spousal support. This provided little predictability and encouraged heavy and expensive motion practice. The new law provides the courts with a mathematical standard that they should presumptively apply in every case.
The old law was focused primarily on the needs of the parties, especially the party in need. The new law changes this completely. Interim spousal support is now intended to reduce the gap between the incomes of the respective spouses, rather than merely address a spouse’s needs. It was certainly the hope and the expectation of women’s groups that this would create more generous awards.
Simply put, under the new law a spouse who has less than two-thirds of the income of the other spouse is automatically entitled to monthly interim spousal support to reduce the income gap between the two spouses. Specifically, the statute requires the court to set temporary maintenance as either (i) 30% of the moneyed spouse's income less 20 percent of the non-moneyed spouse's income or (ii) 40% of the couple's combined income less the non-moneyed spouse's income, whichever is lower.
The court may deviate from the formula if the result would be “unjust and inappropriate” but only if the court explains its reasons in writing and makes specific reference to a “laundry list” of 17 factors that it must consider in doing so. The authors of the statute seem to have intended to appeal to the natural inclination of busy judges to apply the arithmetical formula in most cases rather than writing lengthy opinions that might then be subject to appellate review.
This creates a significant problem because the statutory formula is extremely simple while the real life of families is invariably far more complex. The formula does not factor in child support issues or the payment of household expenses. It is not integrated with the statutory provisions for child support. It makes no provision for medical insurance or housing. It operates independently of the division of marital property which does not take place in New York until the conclusion of a divorce case.
The unfairness of a purely arithmetical approach is well illustrated by one early case. The husband earned $156,000 a year and the wife only earned $33,000.The statutory formula for temporary spousal support on top of the husband’s obligation for child support would have left the husband with income of only one-half of his wife’s and he would have been unable to maintain the matrimonial residence. The trial judge chose to deviate from the statutory formula to avoid what he perceived as an unfair result but he was required to explain his reasons for doing so in substantial detail. Given the volume of cases before the courts the question arises as to how many judges will, indeed, do so. Certainly the number of reported cases of such deviations has been extremely modest.
The statutory calculation applies only on the first $500,000 of income. For income above that the court is required to consider the 17 factors in the above-referenced “laundry list” plus two additional special factors. Whether all of this will help or hurt the spouse of a very high earner remains to be seen.One might think that the impact of the new law will be minor because it covers interim support but not permanent support. Logically that should be the case. However, New York has a tradition that the temporary becomes the permanent. Again, time will tell.
Counsel and expert fees in New York divorce cases
The new law also creates a rebuttable presumption that both counsel fees and expert fees should be awarded to the less affluent spouse. Previously such awards were discretionary and unpredictable. They also required lawyers to spend considerable (billable) time preparing the fee applications.
The new legislation is intended to make such awards far more common and thereby to level the playing field. Each attorney must now submit his retainer agreement to the court. The fact that a party has already paid a retainer to a lawyer cannot defeat the party’s application for a counsel fee award. The statute also permits more than one application from time to time as may be required. The law also encourages the payment on a timely basis of fees that are needed to engage the services of accountants to value businesses and other experts on a timely basis as required for the conduct of divorce litigation.
These provisions have been generally well received by the New York bar!
Modification of child support in New York
Finally, the new legislation reforms the standard for modifying child support.
The new law provides a new threshold that must be met before an application to modify child support may be entertained. Now child support can be modified if, since an order was entered, last modified, or adjusted, either three years have passed or there has been a 15% change in either party's income. If a parent seeks a reduction in child support based upon a 15% decrease in his or her own income, the parent must prove that the decrease in income was involuntary and that he or she has made diligent attempts to secure appropriate employment.
The statute has, in fact, made it far easier to seek to modify child support agreements, since such applications previously required satisfaction of a far tougher threshold.