Does Spouse With Money Pay Fee For Divorce Mediation Ny
How Divorce Law in New York State Favors the Spouse With the Fiscal Advantage
two.3.2021
In theory, divorcing couples in New York State accept access to equal justice under the law, regardless of how much, or how fiddling, coin each spouse has. This principle is clear in both statutory and case law in all 4 appellate departments. However, coin talks. The monied spouse tin beget not only to hire the best legal talent but also to pay the legal costs of extending the litigation in hopes of gaining a favorable event in the case. While New York has enacted statutes designed to ensure an even economical playing field, the statutes – DRL § 237 and CPLR 5519(a)(2) and (3) – clash with ane another, ofttimes to the detriment of the not-monied spouse. We believe this disharmonism was an unintended consequence of an otherwise admirable attempt by the Legislature to clinch spousal parity. We also believe it is time, by time really, for the Legislature to correct this imbalance.
This article examines the factors that led to the clash between DRL § 237 and CPLR 5519(a)(2) and (3), what the consequences have been for divorcing couples, and what the Legislature might do to finish the conflict.
The Competing Provisions of DRL § 237(a) and CPLR 5519(a)
DRL § 237(a) mandates an accolade of interim counsel fees by a monied spouse to a non-monied spouse. The purpose of the statute, as explained past the Court of Appeals in O'Shea v. O'Shea, is "to redress the economical disparity between the monied spouse and the non-monied spouse. Recognizing that the financial force of matrimonial litigants is oftentimes unequal – working more typically confronting the wife – the Legislature afforded trial judges with discretion to compel more flush spouses to pay legal expenses of the needier i [so that] the betrothed scales of justice are not unbalanced by the weight of the wealthier spouse's wallet." [ane]
Public policy dictates less-monied spouses should not be disadvantaged in their divorce litigations as seen in the often-cited cases of Charpie 5. Charpie [2] and Prichep v. Prichep. [3] In Charpie, the Appellate Partition, First Department, held that courts must consider the relative financial circumstances of both parties when deciding acting fee applications to prevent the titled spouse from using resources against the non-titled spouse in a manner that affects the action'south equitable outcome.[four] In Prichep, the Appellate Sectionalization, Second Section, noted that while counsel fee awards should be controlled by the equities of each particular case, pregnant disparities in the parties' financial circumstances generally warrant an award of acting counsel fees to the non-monied spouse rather than deferring the award of professional fees to trial.[5] The state Legislature clearly understood, as DRL § 237(a) was amended in 2010 to create a "rebuttable presumption" that interim counsel fees be awarded to the less monied spouse on a timely and ongoing footing subject to the court's discretion and the circumstances of the case (Fifty.2010, c. 239, sec ane).
Undermining the public policy goals of DRL § 237 in certain cases is CPLR 5519(a)(two), permitting a political party, ordered to pay a sum of money, to obtain an automatic stay of that obligation by posting an undertaking in the corporeality of the sum owed, pending appeal of the order. Similarly, where an order directs the payment of money in fixed installments, a stay may be awarded upon posting an undertaking in a sum ready by the court, awaiting appeal (run across CPLR 5519(a)(iii)). While CPLR 5519 has obvious utility to parties aggrieved past trial judgments pending appeal and secures those judgments by the posting undertakings, the use of CPLR 5519'southward stay provisions against the payment of interim matrimonial counsel fee awards causes actual prejudice to non-monied spouses, depriving them of much needed resource for whom DRL 237 was designed to assure. This is particularly true currently, during which an increase in appeals coupled with judicial vacancies at each of our Appellate Departments is at its superlative. The appellate procedure is protracted. In circuitous matrimonial litigation, both spouses need competent counsel, and attorneys cannot afford to correspond non-monied litigants without bounty.
Relevant Legislative History
CPLR 5519 was enacted in 1962 as part of the motorcoach conversion of our state's do statutes from the onetime Civil Exercise Deed (CPA) to the CPLR. The predecessor statutes relevant here, primarily CPA §§ 594 through 598-a, were enacted in 1945.[6] CPA § 594, which permitted the stay of an order pending appeal upon the posting of an undertaking, expressly excluded appeals of "temporary alimony orders" from the procedure.[7] Interim maintenance and interim counsel fees, while singled-out from one another, are nevertheless equally related to the fiscal needs of the less-monied spouse during matrimonial litigations. Arguably, no rationale exists for staying acting maintenance or interim counsel fees, both designed to allow the non-monied spouse to survive pendente low-cal.
Upon the enactment of CPLR 5519 in 1962, the language excepting interim maintenance awards from the statutory stay provisions was omitted for reasons that are unexplained by a review of the statute's Bill Jackets annotating the legislative history and basis for statutory modification. Decisional authorities withal carried forrad the dominion that CPLR 5519(a)(two) and (three) could not exist used to stay the payment of acting maintenance or child support.[8] The looser language of CPLR 5519(a)(2) and (3), in making no exception for interim maintenance, dissimilar its predecessor, preceded the appellate pronouncements of O'Shea, Charpie and Prichep, and other similar reported cases, as well as the language of DRL § 237(a), that interim counsel fees be presumptively awarded. In other words, the purpose to be served by DRL § 237(a) of infusing not-monied spouses with interim counsel fees was not yet considered when enacting the broad language of CPLR 5519(a)(ii) and (3) permitting stays of interlocutory payments pending appeal, in exchange for a mere undertaking. As a consequence, there is currently a disconnect between the well-purposed public policy of DRL § 237(a) that presumptively favors the payment of interim counsel fees to non-monied spouses and CPLR 5519'southward procedures permitting monied spouses to post an undertaking, appeal the guild, avoid paying counsel fees pending appeal, and thereby perpetuate the ongoing economical imbalance between monied and non-monied spouses to the detriment of not-monied litigants.
The Impact Upon Non-monied Spouses
The affect of this incongruity is clear in both high net worth as well as more minor matrimonial litigations. Often, i spouse typically controls the finances and may hold title to the vast majority of the family unit'south assets. A dynamic is created where, although the non-titled spouse has an "equitable interest" in the assets acquired during the marriage, a non-titled spouse has no access to those resources during the pendency of the divorce. Under those circumstances, unless the titled spouse voluntarily advances funds for counsel fees and litigation expenses, such as valuation experts, appraisers, and accountants, non-titled spouses are required to make expensive and ofttimes time-consuming applications to the Supreme Courtroom for orders directing transfers of funds for those costs. In many instances, the legal costs incurred in this motion exercise can be as expensive as the ultimate awards. Yet, attorney fees and litigation costs are often advanced "without prejudice and subject to reallocation" at the conclusion of the example, which specifically advises the not-monied spouse that he or she might ultimately be charged with those fees and expenses. This has been referred to by some courts as having "skin in the game."[nine] Neither party is prejudiced past the awards of counsel fees pendente lite when subject to afterward reallocation. These awards depend upon the sound discretion of the trial courts and the size of the marital estate being divided.
Even non-monied spouses in high net-worth matrimonial actions are adversely affected. DRL § 237(a) provides no specific definition for the "less-monied spouse," and the concept is not necessarily limited to marital estates of modest or boilerplate value. A multimillion-dollar marital estate, in which both parties would retain millions of dollars by way of equitable distribution, for case, would typically issue in each party paying its ain fees, absent extraordinary reasons to assign fees to a party engaged in overly ambitious or unnecessarily protracted litigation tactics.[x]
It is articulate, however, that when ane spouse has free and unbridled access to substantial financial resources, often multiple millions of dollars when the bulk of the marital estate is titled to one spouse, and the other spouse has comparatively minimal admission, the latter is at a cognizable disadvantage and, arguably, should be considered a "less-monied spouse." The titled spouse has no impediments to hiring and paying prominent experienced attorneys from prestigious and expensive constabulary firms, and forensic experts, private investigators, valuation consultants, economists, vocational experts, existent manor appraisers and others, costing hundreds of thousands and even millions of dollars, without affecting lifestyle one iota. The non-titled spouse may non share that same luxury. Former Presiding Justice Gail Prudenti of the Second Department said information technology best in Prichep:
"When an activeness for a divorce is commenced, it is often the example that most of the marital assets available for the payment of legal fees are possessed or controlled past 1 of the spouses, usually the husband. In gild to ensure that the parties will have equal admission to skilled legal representation, the Domestic Relations Law authorizes awards of interim counsel fees to the nonmonied spouse during the form of the litigation. Because of the importance of such awards to the fundamental fairness of the proceedings, we agree that an awarding for interim counsel fees to the nonmonied spouse in a divorce action should not exist denied – or deferred until after the trial, which functions as a denial – without good cause, articulated by a courtroom in a written decision."[11]
Similarly, CPLR 5519 should not function to deny necessary pendente low-cal counsel fees in betrothed litigation to spouses with less access to funding than the titled spouse. Fifty-fifty though the not-titled spouse may be living an flush lifestyle, keeping pace with litigation strategies against a spouse with virtually infinite resources can evidence virtually impossible. The less-monied spouse is non required to exhaust finite avails before receiving periodic infusions of pendente lite professional fees from the more monied spouse.[12]
Recognition of the Problem in Wechsler v. Wechsler and Karg five. Kern
Some courts have recognized the detached bug posed by CPLR 5519 stays of acting counsel fee awards. The not-monied spouse, faced with an automated or discretionary stay of an interim counsel fee award, may move in the trial court to vacate the stay, equally in Wechsler 5. Wechsler.[13] There, Justice Judith Gische, while so presiding in the Matrimonial Part of the Supreme Courtroom, New York Canton, noted that the husband had filed 2 post-stay applications for additional experts to value an asset based on dissimilar valuation dates, never challenge that he could non afford the expense. Meanwhile, his CPLR 5519(a) stay of the wife's pendente lite counsel fee honor restricted her power to pay her own professionals, raising business concern that "the outcome of [the] divorce litigation [exist] influenced by one party's greater ability to bankroll it"[14] The court vacated the stay equally unnecessary to protect the husband's rights, fifty-fifty were he to succeed on appeal. Following precedent of the Courtroom of Appeals in Frankel v. Frankel,[15] Gober v. Gober, [16] Charpie v. Charpie, supra, and others, Justice Gische concluded:
"By highly-seasoned a determination awarding a non-monied spouse interim counsel fees, and then bonding the honour to stay enforcement pending appeal, a monied spouse can compromise a nonmonied spouse's ability to litigate the ongoing case proceeding at the trial level. The effect of the stay is to preclude the non-monied spouse from receiving money to pay professionals as the case continues. Thus, the monied spouse achieves indirectly what it could not practice direct, depriving the nonmonied spouse of the ability to pay for representation while the case is ongoing. Since appeals need not be perfected for up to nine months in the Beginning Section (22 NYCRR § 600.11), this strategy may be used to obtain an unfair litigation advantage that the underlying acting accolade was intended to prevent in the first identify."
Ten years after, in Karg v. Kern, [17] the First Department affirmed the vacatur of an automatic stay of acting matrimonial counsel fees. The court held that the CPLR 5519 stay "foreclose[ed] an even playing field in the litigation"[18] and that the defendant could potentially recoup the award from the plaintiff's eventual share of equitable distribution. Karg made clear the precedent of the Starting time Department – that enforcement of pendente lite counsel fees should non be stayed awaiting appeal pursuant to CPLR 5519.
The Second, Third and Fourth Departments have no reported decisions that meaningfully examine the interplay between the DRL § 237(a) and CPLR 5519(a)(2) and (3) and, unlike the First Department, accept non discussed how or why interim counsel fee awards continue to be stayed pending entreatment.
The Impact Upon Retaining Counsel
A significant public policy impact is spawned from the tension between DRL § 237(a) and CPLR 5519(a). Stays of acting counsel fee awards frustrates non-monied spouses retaining and maintaining representation by attorneys of comparable caliber to those representing monied spouses. The more significant the marital estate, the more incentive for a titled spouse to protract the instance. The delays of successive rounds of motions, adjournments, discovery, trials and appeals can span years during which non-titled spouses are without a share of the marital estate. Attorneys are ofttimes disinclined to represent clients without access to funds even in loftier net-worth matrimonial actions. This is peculiarly concerning when litigation promises to be complicated, protracted, and expensive, while creating the potential for boggling and mounting accounts receivable that plague a firm'due south balance sheet, and, in farthermost cases, claiming a pocket-size firm's continued viability.[19] As noted in Justice Scheinkman's Practice Commentaries, "The concern is that attorneys and other needed experts would not elect to represent spouses who could not afford to pay for their services absent the power of the courtroom to accuse the agin party with the responsibleness for payment."[20] This concern is heightened if CPLR 5519(a) continues as a tactic to deprive non-monied spouses of funds needed to compete with the demands of a protracted matrimonial litigation.
Solutions
In 2017, and again in 2020, the NYSBA Committee on the CPLR was presented with a legislative solution to the conundrum discussed in this commodity. An amendment was proposed to slightly alter CPLR 5519 in matters to add together the words "Except in actions brought pursuant to the DRL and FCA." In betrothed and family police force matters this modification makes sense regarding pendente lite applications. The CPLR Committee suggested the proposed amendment be examined by the NYSBA Family Police Section instead (even though the proposed amendment would be to the CPLR). Since COVID-19 in spring 2020, no farther efforts take been fabricated to improve the statute. Those efforts should be addressed.
Obviously, the best fashion to address the unintended issue created by the conflict between these two statutes is for the Legislature to examine whether the current language of CPLR 5519(a)(ii) and (a)(iii) accordingly fits inside the context of family law matters, given clear judicial precedents and legislative intent to vest not-monied spouses with sufficient resources to defend costly and often imbalanced matrimonial litigations. The authors hither submit that the dictates of CPLR 5519 were never intended to use to pendente calorie-free professional fee applications in betrothed/family police force matters. The prejudice engendered by a stay of pendente low-cal counsel fees to non-monied spouses is far too great and is in stark dissimilarity to the clear body of New York Country case police and statutory authority in the DRL. Failing that, non-monied spouses unable to endure the consequence of appellate stays must unfortunately rely upon motions to vacate the stays awaiting entreatment, and the willingness of courts to grant them when grounds exist for doing so. A 2d solution is that trial courts create parity more freely when awarding pendente calorie-free counsel fees in matrimonial litigation when one spouse is quite clearly in a far superior economic position, exerting control over the process simply because that spouse can beget to do so. All else existence equal, the provisions of CPLR 5519(a), which are of full general applicability, should peradventure yield to the more specific provisions of DRL § 237(a) when deciding the vacatur motions, lifting such stays of enforcement of counsel fee awards in matrimonial action.
Neil Due east. Kozek is a partner at the law firm of Kramer Kozek in White Plains, N.Y. concentrating in matrimonial litigation, collaborative divorce, and mediation. He is a Fellow of both the New York Affiliate of the American Academy of Matrimonial Lawyers and International University of Family Lawyers.
Mark C. Dillon is a Justice of the New York Supreme Court, Appellate Sectionalisation, Second Section, an adjunct professor of New York practise at Fordham Law School, and a contributing author of CPLR Practice Commentaries published in McKinney's Consolidated Laws of NY Annotated.
[one] O'Shea v. O'Shea, 93 N.Y.2d 187, 190 (1999).
[two] 271 A.D.2nd 169 (1st Dep't 2000).
[3] 52 A.D.3d 61 (2d Dep't 2008).
[iv] Encounter Charpie, 271 A.D.second at 271–72.
[5] See Prichep, 52 A.D.3d at 65.
[half-dozen] Southee 11 North.Y. Jud. Quango Rep. 273-93 (1945).
[7] Run across Finkelstein v. Finkelstein, 286 A.D. 965 (1st Dep't 1955).
[eight] Run into Du Jack v. Du Jack, 243 A.D.2d 908 (3d Dep't 1997); McKiernan v. McKiernan, 223 A.D.2d 917 (3d Dep't 1996); Greene v. Greene, 71 Misc. 2d 708 (Sup. Ct. Westchester Co. 1972).
[9] See Sykes v. Sykes, 41 Misc. 3d 1061, 1063 (Sup. Ct. NY Co. 2013).
[x] Encounter Wyser-Pratte v. Wyser-Pratte, 68 A.D.3d 624 (1st Dep't 2009) [upholding deprival of asking for counsel fees since equitable distribution volition provide wife with adequate funds to pay her attorney); Grumet v. Grumet, 37 A.D.3d 534 (2d Dep't 2007) (reducing the award of counsel fees to wife by half in lite of the wife's receipt of a large distributive award and the fact that she possesses substantial avails sufficient to enable her to pay a significant portion of her litigation expenses); Meshholam five. Mesholam, 25 A.D.3d 670, 672 (2d Dep't 2006) (overturning counsel fee award to wife as an abuse of discretion in role due to wife's "significant resources resulting from the equitable distribution of marital property"); Sykes v. Sykes, 41 Misc. 3d 1061 (ordering the release of marital funds to pay counsel fees where the wife would receive approximately $10 million every bit her share of equitable distribution and despite the husband'south greater earnings, finding that the fiscal circumstances of the parties were not disparate enough to justify married man paying a portion of married woman's fees).
[11] See Prichep five. Prichep, 52 A.D.3d at 62.
[12] See id. at 66.
[xiii] 8 Misc.3d 328 (Sup. Ct., N.Y. Co. 2005).
[14] Id., viii at 332.
[fifteen] two Northward.Y.3d 601 (2004).
[xvi] 282 A.D.2d 392 (1st Dep't 2001).
[17] 125 A.D.3d 527 (1st Dep't 2015).
[18] I d. at 529.
[19] See Frankel 5. Frankel, 2 N.Y.3d 601, 605, n. 1.
[20] Come across Alan D. Scheinkman, Practice Commentaries, McKinney'due south Cons. Laws of NY, Book xiv, DRL 237:1 at 9 (2010).
Source: https://nysba.org/non-payment-of-interim-counsel-fees-in-matrimonial-actions-addressing-the-loophole-between-drl%C2%A7-237-and-cplr-5519/
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