Harmon v. Harmon

• Decision Date: 07 January 1992
• Citation: 578 N.Y.S.2d 897,173 A.D.2d 98
• Parties: Barbara HARMON, Plaintiff-Respondent, v. Stephen HARMON, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 897

578 N.Y.S.2d 897

173 A.D.2d 98

Barbara HARMON, Plaintiff-Respondent, v. Stephen HARMON, Defendant-Appellant.

Supreme Court, Appellate Division First Department.

Jan. 7, 1992.

John E. Halpin, New York City, for plaintiff-respondent (Elizabeth M. Barnett, Brian Burns and Neil E. Sherman with him, on the brief).

Jerome Tarnoff, New York City, of counsel (Theodore S. Steingut and Ann R. Starer with him, on the brief; Berger Steingut Tarnoff & Stern, attorneys), for defendant-appellant.

Before SULLIVAN, J.P., and MILONAS, KUPFERMAN, ASCH and KASSAL, JJ.

SULLIVAN, Justice.

Married on June 19, 1966, when he was a third-year law student on scholarship and she, a speech and hearing therapist, was the sole support of the family, the parties came to a parting of the ways, leading to the June 19, 1984 commencement of this action for divorce. There are two children of the marriage, a daughter, born September 19, 1968 and now emancipated, and a son, born August 11, 1971, who, at age two, was diagnosed as "withdrawn" with "autistic features".

The wife is a highly educated, experienced and credentialed speech and hearing pathologist and educational administrator who, throughout the marriage, except for a short period of time when the children were extremely young, was employed, at least part time. She also holds a real estate salesperson's license and worked as a commissioned broker in the New York City commercial real estate market from mid-1981 through December of 1986. Her income in the years 1986 to 1990 was between $40,000 and $45,000 annually. She earned more than $52,000 in 1989. Although the wife had been the director of the Eden School in Staten Island and was capable of earning at least $65,000 per year, she thereafter decided to forego such employment in order to oversee the son's educational progress and coordinate the efforts to have him admitted to an appropriate post-secondary school.

After the husband's 1967 graduation from law school, he clerked in the New York Court of Appeals for two years before joining a prestigious New York City law firm, in which he has been a partner since 1977. His duties consist primarily of servicing the firm's clients and supervising younger associates in the litigation department. The husband earned $130,000 in 1984, $220,000 in 1989 and $127,324 in the fiscal year immediately preceding the commencement of this action. As a partner in the firm, he enjoys other perquisites.

After their marriage and with the help of gifts from their respective families, the parties bought a house in Baldwin, Long Island, where they lived until August 1978 when they moved to Manhattan better to provide for the son's special educational needs. They sold the Baldwin house and bought a cooperative apartment at 270 West End Avenue, enrolling their daughter at the Dalton School and obtaining full state funding for the son at The Gateway School, which was equipped to provide for his special needs. After the son's graduation from Gateway, the State of New York also fully funded his education at The Churchill School in New York and subsequently at the Community School in New Jersey, at both its Englewood Cliffs and Teaneck facilities. After two years, however, he was accepted into the Community School's high school program. His participation in this program, which was located at another site in New Jersey, would have entailed a one and one-half hour bus commute, each way, originating and terminating at the Port Authority Bus Terminal in Manhattan. Concerned that such a lengthy commute would be harmful to the son since one of his autistic features, i.e., talking to himself, would be aggravated by such a long trip, the wife, instead, enrolled him in the Winston Preparatory School in New York, which would not accept state funding. The husband refused to contribute to the cost of the Winston School and the wife alone bore the burden of the $46,750 tuition. The son graduated from the Winston School in June 1990 and is now attending college in Florida.

The husband's post-separation relationship with the children, as demonstrated by the record and found by the trial court, has been positive and consistent. Before the son left for college, he spent several nights each week with his father. They frequently attended sports events together and met for lunch. The husband paid the daughter's college tuition and has diligently complied with the IAS court's pendente lite orders awarding the wife $200 weekly in maintenance and the children $200 per week in support. At the time of these awards, the wife did not have an income and the husband was earning approximately $130,000 annually.

The wife, in June 1985, after the commencement of this action, left the marital home with the two children, subletting for the first several months and then leasing an apartment off Central Park West. Pursuant to the parties' agreement, the cooperative apartment, their second since moving from Baldwin, was sold in December 1985 for $517,500, from which each received approximately $225,000. Thus, by the time the case proceeded to trial in September 1989, the bulk of the parties' marital assets, i.e., the proceeds from the sale of their cooperative apartment, had already been divided equally between them. The only asset remaining for equitable distribution was the husband's partnership interest in the law firm; the distribution of certain outstanding marital debts was also at issue.

At trial, the husband withdrew his answer and counterclaim and the wife was granted a divorce on the ground of abandonment. Judgment was withheld pending resolution of the financial issues, which, in addition to equitable distribution, included maintenance and child support. After hearing testimony over five days and taking post-trial submissions, the court awarded the wife lifetime maintenance of $400 per week retroactive to January 1986, terminable upon remarriage or death. The court also directed that the husband maintain a $100,000 life insurance policy or alternative death benefit for the wife for as long as he is required to provide maintenance.

The court applied Domestic Relations Law § 240(1-b), the Child Support Standards Act (CSSA), which took effect during trial, in calculating support for the son for the period beginning with the effective date of the statute. Finding that the wife was the primary caretaker of the children after the separation and that the daughter had been fully emancipated since September 1989, the court compared the respective earnings of the parties and granted retroactive child support for the daughter to the time she left home for college, after which she was supported by the husband. Retroactive support, which was to continue through his college years, was also awarded with respect to the son. The husband was also directed to pay 100% of the son's uninsured medical costs as well as 75% of his tuition and college costs; the wife was to pay 25% of the tuition and related costs. In addition, the court ordered reimbursement to her of the cost of the son's high school education.

After considering the expert testimony and reviewing various provisions of the husband's partnership agreement, the court found the value of the husband's partnership interest to be the sum of his capital account ($84,693) plus 175% of his average earnings for three years, for a total of $292,870. After determining that two notes totalling $33,800 relating to tax shelter investments were a marital liability, and crediting the husband accordingly, the court found the marriage to have been a true economic partnership and divided the assets and liabilities on a 50-50 basis. The wife was awarded $129,535 as her distributive share.

On appeal, the husband, inter alia, argues that his only realizable interest in the law firm as of the commencement of this action was his capital account and that the court should have credited all of his debts as marital before making a distributive award. He also challenges the award of lifetime maintenance and the application of CSSA to this matter as well as the award of retroactive maintenance and child support, which he claims is punitive. He argues that it was error to require him to reimburse the wife for the son's private high school tuition, which he claims was unnecessary. Finally, the husband contends that the court should have allowed him a reasonable period of time to pay any distributive award.

Section 11(b) of the husband's partnership agreement, labelled "Return of Capital", provides for various terms of payment to a partner of his capital account depending on whether he or she retires, becomes disabled or withdraws. While other provisions provide for retirement and disability income, this provision, whatever the reason for leaving, provides for no payment other than from the capital account. Section 18(c) states that a withdrawing partner has no interest in "work in process, uncollected accounts, good will or any other matter or cause." Since, on the basis of these two clauses, no provision is made to compensate a withdrawing partner for receivables, unbilled time, furniture, fixtures, equipment or good will, the husband argues that the interest of a withdrawing partner is limited to the only other asset of the firm, i.e., the capital account.

Section 18 of the agreement, covering voluntary and involuntary withdrawal from the firm, provides that any partner who withdraws and engages in private practice shall be liable to the firm for an amount equal to 12 1/2% of the firm's profits allocable to him or her for the two fiscal years prior to withdrawal, unless the amount allocable to the partner was less than $85,000 and said partner does not render services to clients of the firm for the two-year period after withdrawal. A partner terminated without cause is entitled to six months' salary and is not subject to the 12 1/2% penalty; there is no provision for the return of the capital...