Kay v. Kay

• Decision Date: 30 October 1975
• Citation: 339 N.E.2d 143,376 N.Y.S.2d 443,37 N.Y.2d 632
• Parties: , 339 N.E.2d 143 Jacqueline KAY, Respondent, v. Sidney G. KAY, Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 443

376 N.Y.S.2d 443

37 N.Y.2d 632, 339 N.E.2d 143

Jacqueline KAY, Respondent, v. Sidney G. KAY, Appellant.

Court of Appeals of New York.

Oct. 30, 1975.

Frank H. Connelly, Jr., New Rochelle, for appellant.

Mitchell Salem Fisher and Rona Shays, New York City, for respondent.

FUCHSBERG, Judge.

In this action for divorce against a husband, Special Term granted his wife and children permanent alimony and child support totaling $18,000 plus the family residence. The Appellate Division (45 A.D.2d 1018, 358 N.Y.S.2d 186) modified by increasing that sum to $31,000 on the grounds that Special Term's award failed to reflect adequately the predivorce standard of living. The husband now appeals, raising questions as to whether permanent alimony and support awarded against a husband may exceed his income, whether his capital resources may be considered in fixing such amounts and whether the wife should be compelled to seek employment to help support herself and the children.

The parties before us had been married 23 years when the husband abandoned his wife. At the time of their wedding, she was twenty years old. They have five children, four of whom are under 21 years of age. The husband is a salesman. He also owns real estate and securities estimated at the time of the trial to have a value of nearly a million dollars. Two thirds of it consists of IBM stock, which he received from his father at the time of his marriage. Because of the well-known emphasis of that company on growth, the dividends have been only about $10,000 per year. Most of his investments in real estate and real estate partnerships had originally been financed by the use of the stock as collateral. In effect, the position the husband painted is one of being 'property poor'.

During the marriage, the husband led his wife to believe that his salary as a salesman was his only source of income and replied to her requests for many basic household expenditures with the statement that he could not afford them. Photographs of the family home, produced at trial, indicated an extensive state of disrepair. Nevertheless, the husband testified that, during the last three years prior to the divorce, he expended some $28,000 per year for the support of himself and his family. There was also testimony indicating that his employer supplied him with fringe benefits, such as a car, which were of use to him and his family in a personal capacity, and which indirectly contributed to the family's standard of living.

The husband testified that his net income after taxes was $28,000 per year, precisely the amount he personally had been expending on his family and himself. His gross income, however, appeared to be much higher, somewhere in the neighborhood of $67,000. He presented complicated testimony at trial in an effort to explain away much of this income as spent on business needs. Some of it appears to have been expended on payments related to the acquisition of real estate and other capital assets. At least one item of $1o,000, listed as a business expense for tax purposes, was described by the husband as necessary 'gratuities' connected with his job as a salesman. When questioned further on this item, he invoked his privileges against self incrimination.

The trial court granted the divorce to the wife on grounds of cruelty and abandonment and awarded her custody of the children. In addition, she received the family home and a $10,000 fund with which to repair it; the husband did not challenge this item on appeal. Holding itself bound by the husband's reported net income of $28,000 per year, however, the court awarded alimony and child support payments totaling some $18,000 per year, thus allowing the husband to keep the balance of his reported net income for his own support.

It is, of course, the law that a wife has no absolute right to a share in her husband's resources as such, and that the marital standard of living, assuming the husband is financially able to maintain it, provides the standard for permanent alimony payments. (Tirrell v. Tirrell, 232 N.Y. 224, 133 N.E. 569; Hearst v. Hearst, 3 A.D.2d 706, 159 N.Y.S.2d 753, affd. 3 N.Y.2d 967, 169 N.Y.S.2d 36, 146 N.E.2d 792; Hunter v. Hunter, 10 A.D.2d 291, 198 N.Y.S.2d 1008; Bittson v. Bittson, 138 N.Y.S.2d 294, affd. 285 App.Div. 1061, 139 N.Y.S.2d 704; Rose v. Rose, 3 Misc.2d 753, 117 N.Y.S.2d 32.) In this case there was ample evidence presented below to justify the awards made by the Appellate Division.

The husband's own testimony indicates that maintenance of the marital standard of living consumed some $28,000 plus incidental benefits supplied by the employer. The evidence also justified a finding that the husband's true income was much higher than his reported $28,000 per year, at least for purposes of awarding alimony and child support. And, while he was entitled to plead his self incrimination privileges when asked about deductions he labeled gratuities, the court was not obliged to allow the deduction. For, faced with a husband's presentation of evidence which tends to obscure rather than clarify his true economic status, a court is entitled to make an award based upon the wife's proof of her needs. (Orenstein v. Orenstein, 26 A.D.2d 928, 275 N.Y.S.2d 33, aff'd. 21 N.Y.2d 892, 289 N.Y.S.2d 409, 236 N.E.2d 638; Zy v. Zy, 13 N.Y.S.2d 415.)

Moreover, the modifications included substantial increases in the amount of child support the husband is required to provide. Such support provision for a child is to be made 'out of the property of either or both of its parents' and 'as, in the court's discretion, justice requires, having regard to the circumstances of the case and of the respective parties and to the best interests of the child.' (Domestic Relations Law, § 240.) Obviously, the father's resources rather than his net income are the limit upon such child support provision where he can afford more than he earns, and the interests of the child justify the award. (Swanton v. Curley, 273 N.Y. 325, 7 N.E.2d 250; Vought v. Vought, 22 Misc.2d 356, 195 N.Y.S.2d 521; Zellermayer v. Zellermayer, 36 A.D.2d 636, 319 N.Y.S.2d 147.)

Indeed, as to alimony and child support both, if it were necessary for the husband here to utilize his capital or other assets, they would not be exempt from the requirement that he maintain the marital standard of living simply because he voluntarily maintains his finances in a form that limits the income they produce. (See Rosenzweig v. Rosenzweig, 145 N.Y.S.2d 810, affd. 3 A.D.2d 732, 160 N.Y.S.2d 817; Rose v. Rose, supra; Turecamo v. Turecamo, 15 Misc.2d 923, 186 N.Y.S.2d 318.)

The case here is readily distinguishable from those in which the courts have held that, when a couple live beyond their means during marriage by consuming capital, the wife is not necessarily entitled to maintain such a standard of living after divorce. (Orenstein v. Orenstein, supra; Vanderkloot v. Vanderkloot, 36 A.D.2d 594, 318 N.Y.S.2d 411; Berlin v. Berlin, 36 A.D.2d 763, 321 N.Y.S.2d 511.) The husband's means allow maintenance of the marital standard, which was itself based on income.

Interesting and closer in point are those cases wherein our courts have...