Mark P. v. Teresa P.

• Decision Date: 10 September 2012
• Citation: 951 N.Y.S.2d 362,2012 N.Y. Slip Op. 22253,37 Misc.3d 685
• Parties: MARK P., Plaintiff, v. TERESA P., Defendant.
• Court: New York Supreme Court

37 Misc.3d 685

951 N.Y.S.2d 362

2012 N.Y. Slip Op. 22253

MARK P., Plaintiff,

v.TERESA P., Defendant.

Supreme Court, Westchester County, New York.

Sept. 10, 2012.

Danziger & Mangold, LLP, Christopher L. Mangold, Esq., White Plains, Attorney for Defendant.

Jerry Kugelmas, Esq., White Plains, Attorney for Plaintiff.

JOHN P. COLANGELO, J.

In this post-judgment matrimonial action, Plaintiff Mark P. (“Plaintiff”) moves by Order to Show Cause for a downward modification of his maintenance and child support required to be paid to the Defendant Teresa P. (“Defendant”). Defendant opposes the motion and has interposed a cross-motion to dismiss and for attorney's fees.

Background

The parties were married in April 1987. They entered into the Stipulation of Settlement on October 7, 2004 (the “Stipulation”). The Stipulation was incorporated but not merged into the divorce judgment filed and entered on November 17, 2004 (the “Judgment”). The Stipulation, by its terms, calls for Plaintiff to pay spousal maintenance to Defendant in the annual amount of $250,000.00 until 2017, and annual child support of $140,000.00; the amount of child support is to decrease as the parties' children become emancipated (collectively the “Support Payments”).

Plaintiff's motion centers around one provision of the Stipulation. Paragraph XIX (2) of the Stipulation (hereinafter “Paragraph 2”) pertains to the modification of Defendant's Support Payment obligations and provides as follows:

“2. Anything herein to the contrary notwithstanding, in the event of an involuntary, substantial, adverse change in the Husband's income, including income produced by his assets (such as involuntary loss of employment), he shall have the right to make application to a court of competent jurisdiction, which must include a sworn statement of net worth, for an appropriate modification of child-related support and/or spousal maintenance obligations hereunder, and if granted, the parties' Agreement shall be deemed amended to the extent of any relief afforded on such application. In the event that the Husband is granted a downward modification and the Husband's income thereafter improve, the Wife shall have the right to make application to a court of competent jurisdiction for an upward modification of child support and/or maintenance, however, in no event shall the Husband be required to pay more than the amounts set forth in this Agreement.” (Emphasis added).

At the time the Stipulation was signed in 2004, Plaintiff was a securities trader with annual income of $3.3 million dollars. At the time of this motion, Plaintiff was and remains employed as a securities trader; however, according to Plaintiff, his compensation decreased to $651,000.00 in 2011, including capital gains, and Plaintiff states that he anticipates earning no more than $251,000.00 in 2012. Plaintiff maintains that the decline in his annual compensation is due to changes in the securities industry, the economy and a general decline in securities' sales volume, not to any lack of effort on his part.

By his motion, Plaintiff contends, in essence, that under Paragraph 2, as long as he shows that he has suffered “an involuntary, substantial, adverse change in ... income”, he may not only apply for, but is entitled to, a reduction in Support Payments, which would then be recalculated based upon his current income. That is, Plaintiff maintains that under Paragraph 2, the parties have provided a standard different from those set forth in the statute and case law to govern when and under what circumstances Plaintiff may apply for and receive a reduction in Support Payments, and the Court is bound by the parties' imposed standard. Relying on Glass v. Glass, 16 A.D.3d 120, 791 N.Y.S.2d 15 (1st Dept.2005), Plaintiff argues that to read Paragraph 2 as limited to affording Plaintiff no more then an opportunity to apply for Support Payment relief would impermissibly render Paragraph 2 a nullity, since under the Domestic Relations Law and case authority, any party has the right to, at the very least, petition a court for support payment modification, be it in the nature of an increase or a decrease.

Conversely, Defendant contends that Paragraph 2 should be limited to what its terms expressly provide: a standard to determine when Plaintiff may apply for, but not necessarily obtain, a Support Payment reduction. Since Paragraph 2 is silent as to how the judicial determination of whether the payments should be reduced, and if so by how much, that standard may only be supplied by well recognized and prevailing law: in the case of child support, the amounts set forth in a Stipulation must be paid unless such provision was unreasonable or inequitable when entered into—a situation which is not at issue herein—or if an unanticipated and unreasonable change in circumstances has occurred. Boden v. Boden, 42 N.Y.2d 210, 397 N.Y.S.2d 701, 366 N.E.2d 791 (1977), Merl v. Merl, 67 N.Y.2d 359, 502 N.Y.S.2d 712, 493 N.E.2d 936 (1986). In the case of maintenance, in order to alter such payment terms, there must be a showing that extreme hardship would result should the originally agreed upon amounts remain in effect. See DRL § 236, Part B(9)(b); Alice C. v. Bernard G. C., 193 A.D.2d 97, 602 N.Y.S.2d 623 (2d Dept.1993). Defendant argues that to interpret Paragraph 2 in the manner Plaintiff suggests would improperly import into the Stipulation terms to which the parties never agreed. Defendant further maintains that the fact that such an interpretation may render the clause a dead letter is of no moment; parties are always free to agree upon terms that merely echo, but do not alter, the general practice.

Upon review of the extensive submissions, including learned memoranda submitted by both counsel, the Court concludes that Defendant has the better of the argument, and that Plaintiff's motion should be denied.

Discussion and Conclusions

The law is clear that, as a general rule, parties in a matrimonial action may agree to a less restrictive standard than that provided by prevailing law to govern the determination of whether support payments—be they child support or maintenance—may be reduced. See e.g., Heller v. Heller, 43 A.D.3d 999, 842 N.Y.S.2d 512 (2d Dept.2007); Glass v. Glass, 16 A.D.3d 120, 791 N.Y.S.2d 15 (1st Dept.2005). By their Stipulation, the parties herein sought to do so, but to an extent more circumscribedthan Plaintiff would have the Court hold. In the instant case, the Stipulation does provide that should Plaintiff's income decline in the manner described in Paragraph 2, he would have the “right to make application to a court” for a Support Payment modification. However, conspicuous by its absence in the Stipulation is any standard to apply once the stated threshold sanctioning the application for a reduction has been met. As Defendant maintains, this gap should only be filled by the standard generally invoked by the courts in assessing whether to deviate from the support payment regimen established by the parties' agreement. The case law supports this approach.

For example, in Heller v. Heller, 43 A.D.3d 999, 842 N.Y.S.2d 512 (2d Dept.2007), the Second Department analyzed the reach of a stipulation provision that, similar to Paragraph 2 herein, permitted the application for a reduction in child support, but was silent as to the standard to use to determine whether such an application should be granted. The Court held that while parties are generally “free ... to agree to different terms triggering a change in the obligations of the payor spouse,” unless such an alternative standard is clearly spelled out in the agreement, the Court will make that determination itself, using well established principles of whether a reduction in amount is warranted. Accordingly, a stipulation provision sanctioning only an application to the Court should be limited to its terms.

As the Second Department held:

“The parties are free, however, to agree to different terms triggering a change in the obligations of the payer spouse, including the application of a standard other than substantial unanticipated and unreasonable change in circumstances as the basis for determining a modification application, provided that, in the case of child support the children's personal right to receive adequate support is not adversely affected and the public policy is not offended. The parties may, in doing so, establish a threshold which the payor spouse must meet before seeking such a reduction.”

* * * *

“Here, the stipulation of settlement did not entitle the plaintiff to a reduction in his obligations if his income fell below the monetary threshold. The language of the stipulation and particularly the hand written interlineation of the words “apply for,” make it clear that his entitlement in such circumstances is merely to request such relief and that absent an agreement by the parties the amount of such relief, if any, would be determined by the court. Since the stipulation does not vary the standard by which that application is to be determined, the plaintiff was obligated, even upon satisfying the monetary threshold, to demonstrate a substantial unanticipated and unreasonable change in circumstances in order to establish his entitlement to a reduction.” (Citation omitted;emphasis added).

See also, e.g., Walsh v. Walsh, 207 A.D.2d 394, 395, 615 N.Y.S.2d 717 (2d Dept.1994) (“[t]he provision in the settlement which provided for renegotiation of the settlement's support provisions in the event that the former husband's earnings fell below $40,000.00 per year is nothing more than a triggering mechanism to occasion a review of the alimony award, and does not mandate an automatic reduction of the award”); Studenroth v. Phillips, 230 A.D.2d 247, 248, 657 N.Y.S.2d 257 (3d Dept.1997); Colyer v. Colyer, 309 A.D.2d 9, 763 N.Y.S.2d 249 (1st Dept.2003).

Indeed, even cases cited by Plaintiff tend to support this interpretation by making clear that...