| Lago v Adrion |
| 2012 NY Slip Op 01800 [93 AD3d 697] |
| March 13, 2012 |
| Appellate Division, Second Department |
| Nancy Lago, Appellant, v Harold Lewis Adrion,Respondent. |
—[*1] Terry D. Horner, Poughkeepsie, N.Y., for respondent.
In an action for a divorce and ancillary relief, the plaintiff appeals, as limited by her brief,from so much of a judgment of the Supreme Court, Dutchess County (Dolan, J.), dated July 13,2010, as, upon findings of fact and conclusions of law dated May 5, 2010, and uponsupplemental findings of fact dated July 13, 2010, made after a nonjury trial, imputed annualincome of $80,000 to her, limited her child support award to $2,041 per month, provided that"should the Defendant lose his law license by suspension, revocation, or otherwise, and be unableto sustain his current level of income, such event shall constitute a sufficient change ofcircumstances warranting application for downward modification" of child support, and directedher to pay $234,238, constituting one half of the unpaid tax liabilities of the parties incurredduring the last two years of the marriage.
Ordered that the judgment is modified, on the law, on the facts, and in the exercise ofdiscretion, (1) by deleting the fourth decretal paragraph thereof, providing that "should theDefendant lose his law license by suspension, revocation, or otherwise, and be unable to sustainhis current level of income, such event shall constitute a sufficient change of circumstanceswarranting application for downward modification" of child support, and (2) by deleting theprovision thereof directing the plaintiff to pay $234,238, constituting one half of the unpaid taxliabilities of the parties incurred during the last two years of the marriage, and substitutingtherefor a provision directing the defendant to pay the total tax liability of $468,476; as somodified, the judgment is affirmed insofar as appealed from, without costs or disbursements.
The parties were married on September 10, 1995, and have one child, born October 28, 1996.The plaintiff wife commenced the instant action by filing a summons and complaint onSeptember 19, 2006, after 11 years of marriage. The parties agreed on joint custody of the childand the primary physical residence of the child with the plaintiff, and consented to a divorce onthe ground of constructive abandonment. In March 2010 the parties proceeded to a nonjury trialon certain financial issues.
At the conclusion of the trial, the Supreme Court found that the defendant was a tax [*2]attorney with a current income of $475,000 per year, that theplaintiff was not working, and that the plaintiff had a masters' degree in architecture fromHarvard University and performed some doctoral work at the Massachusetts Institute ofTechnology. Based upon her educational qualifications and experience, and expert testimony, theSupreme Court imputed income of $80,000 per year to the plaintiff. The Supreme Courtdetermined that the defendant was obligated to pay $2,041 per month in basic child supportbased on the plaintiff's imputed income of $80,000 per year, and a finding that the child supportpercentage should only be applied to the first $150,000 of the defendant's annual income. Thesupplemental findings of fact stated that "[t]o the extent that this court may have deviated fromthe guideline standards," it did so for the reasons that the child was "thriving" on the pendentelite child support of $2,041 per month, and the parties' standard of living during the marriage wasthat of a "middle-class" family. The judgment appealed from further provided that "should theDefendant lose his law license by suspension, revocation, or otherwise, and be unable to sustainhis current level of income, such event shall constitute a sufficient change of circumstanceswarranting application for downward modification" of child support.
With respect to the equitable distribution of property, the Supreme Court concluded that theparties incurred federal tax liability of $430,476 for 2005 and 2006 up until September 19, 2006,and New York State tax liability of $38,000 for that same period, which constituted a maritaldebt which should be divided equally between the parties. This tax liability included interest andpenalties. The Supreme Court held that the plaintiff's one-half share of that tax liability was$234,238.
The Supreme Court properly imputed $80,000 in annual income to the plaintiff based uponher education and experience, and the testimony of the defendant's expert. "In determining a childsupport obligation, a court need not rely on a party's own account of his or her finances" (Bellv Bell, 277 AD2d 411, 412 [2000]), but may, in the exercise of its considerable discretion(see Matter of Julianska vMajewski, 78 AD3d 1182, 1183 [2010]), impute income to a party based upon his or heremployment history, future earning capacity, and educational background (Matter of Bouie v Joseph, 91 AD3d641 [2012]; see Brown v Brown, 239 AD2d 535 [1997]), and what he or she iscapable of earning, based upon prevailing market conditions and prevailing salaries paid toindividuals with the party's credentials in his or her chosen field (see Matter of Gebaide v McGoldrick,74 AD3d 966, 967 [2010]; Matterof Perry v Pica, 22 AD3d 903, 904-905 [2005]). Further, imputation of income may bebased upon the testimony of an expert regarding a party's ability to earn an income (see Matter of Strella v Ferro, 42 AD3d544, 546 [2007]). Here, the Supreme Court's imputation of income was supported byunrefuted expert testimony and testimony regarding the plaintiff's education and experience.
Effective January 31, 2010, the Child Support Standards Act provides that the applicablechild support percentage should be applied to the first $130,000 of combined parental income(see Domestic Relations Law § 240 [1-b] [c] [2]; Social Services Law §111-i [2] [b]; L 2009, ch 343; Vanyo vVanyo, 79 AD3d 1751, 1752 [2010]). Where the parents' income exceeds the incomecap, as in this case, the amount of child support in excess of the income cap is determined basedupon a consideration of factors set forth in Domestic Relations Law § 240 (1-b) (f) "and/orthe child support percentage" (Domestic Relations Law § 240 [1-b] [c] [3]; see Matter of Freeman v Freeman, 71AD3d 1143, 1144 [2010]). The factors set forth in Domestic Relations Law § 240(1-b) (f) include, in pertinent part, the financial resources of both parents, the needs of the child,the standard of living the child would have enjoyed had the marriage not been dissolved,nonmonetary contribution that the parents will make to the care and well-being of the child, andany other factor which the court determines to be relevant to the case. Here, the evidence at thetrial supported the Supreme Court's conclusion that, during the marriage, the child enjoyed a"middle-class" lifestyle, and her needs were met by the pendente lite child support award of$2,041 per month. The application of the child support percentage to the first $150,000 of thedefendant's annual income, and the amount of child support awarded, was supported by therecord (see Lee v Lee, 18 AD3d508 [2005]).
As the defendant correctly concedes, the provision of the judgment of divorce which statesthat, "should the Defendant lose his law license by suspension, revocation, or otherwise, and beunable to sustain his current level of income, such event shall constitute a sufficient change ofcircumstances warranting application for downward modification" of child support, wasimproper (see Matter of Knights v Knights, 71 NY2d 865, 867 [1988]). Accordingly, thisprovision of the judgment must be deleted.
The income tax liability of the parties was subject to equitable distribution (see Conway v Conway, 29 AD3d725, 725-726 [2006]; Capasso v Capasso, 129 AD2d 267, 293 [1987]), but equitabledistribution does not necessarily mean equal distribution (see Auriemmo v Auriemmo, 87 AD3d 1090, 1091 [2011]; Michaelessi v Michaelessi, 59 AD3d688, 689 [2009]). A spouse is generally obligated to pay his or her 50% share of income taxliability during the marriage if the spouse benefits from use of the funds (see Moyal v Moyal, 85 AD3d 614,615 [2011]), or the delay in paying the tax liability (see Conway v Conway, 29 AD3d at725-726). However, if one spouse makes the financial decisions regarding the income tax return,and earned virtually 100% of the parties' income during the period, the court, in its discretion,may direct that spouse to pay the entire tax liability (see Costello v Costello, 304 AD2d517, 519 [2003]).
Here, the defendant acknowledged that he handled all tax matters for the parties during themarriage, and attributes his inability to pay his taxes from his current income to the fact that hisexpenses were too high, in part because he had to maintain a rented home for his family while theparties' house in Pawling was being renovated. However, the evidence adduced at trial indicatedthat it was his decision to move the parties' full-time residence to the house in Pawling, despitethe fact that the house was in "bad shape." Further, under the circumstances of this case, it cannotbe said that the plaintiff derived a benefit from the defendant's failure to pay the taxes (cf.Conway v Conway, 29 AD3d at 726). Accordingly, the Supreme Court, in its discretion,should have directed the defendant to pay the entire tax liability (see Costello v Costello,304 AD2d at 519).
The parties' remaining contentions either are without merit or need not be addressed in lightof our determination. Skelos, J.P., Dickerson, Belen and Miller, JJ., concur.