Public Hearing: - Spousal Maintenance Calculations - Focus on the Law Revision Commission Report Entitled "Maintenance Awards in Divorce Proceedings"

(Post-Divorce Maintenance 17 Standards Coalition) 18 Kate Wurmfeld, Esq. 79 113

Senior Attorney 19 New York Legal Assistance Group

Also, Co-Chair for Lawyers Committee 20 Against Domestic Violence 21 22 ---oOo--- 23 24 25 1 SENATOR BONACIC: Good morning. 2 My name is John Bonacic, and I chair 3 Senate Judiciary. 4 I'm joined by Senator Ruth Hassle-Thompson, 5 who's my ranker, by Senator Dilan, Senator Breslin. 6 We're here today to discuss whether or not 7 the maintenance provisions, with respect to the 8 no-fault divorce, should be revisited. 9 To many, it may not sound like a glitzy 10 subject, but for many people who have the pain of 11 going through a divorce, this subject is extremely 12 important. 13 Our first witness is the Law Revision 14 Commission, but before I call them up, I'd like to 15 welcome everyone to this public hearing. 16 Before I start, I'd like to share with you 17 some background. 18 In 2010, what is commonly known as the 19 "no-fault divorce" was signed into law in 20 New York State. 21 As many of you know, New York was the last 22 state to pass a no-fault divorce. 23 The state's Law Revision Commission was also 24 asked to submit a comprehensive report to the 25 Legislature on the state of spousal-maintenance 1 awards, both temporary awards, which are typically 2 in place during the pendency of a divorce, and final 3 maintenance awards for the period of time after the 4 divorce becomes final. 5 In May of this year, the 6 Law Revision Commission submitted their completed 7 report based on three years of data and input from 8 various organizations affected by spousal 9 maintenance, and matrimonial-law experts, from 10 across the state. 11 Today we'll hear testimony from members of 12 the Law Revision Commission who submitted the 13 report. 14 We'll also be hearing from organizations that 15 are interested in the subject matter of this report. 16 We'll discuss, among other things, the 17 existing standards for maintenance, the proposed 18 changes, the nature of judicial discretion for 19 higher-income earners, whether there should be 20 differing standards of fault based on divorce cases, 21 or whether the nature of judicial discretion 22 effectively addresses that. 23 I know it may not be in your prepared 24 remarks, but I read a "Law Journal" article a week 25 or two ago about the volume of no-fault divorces 1 being determined in New York County, specifically 2 Manhattan. 3 I know that a judge in Manhattan is proposing 4 different standards for venue in no-fault cases, and 5 would be interested in hearing comments on that. 6 My hope is that, based on the oral and 7 written testimony that is provided to this 8 Judiciary Committee, we can formulate a legislative 9 response to the issues surrounding maintenance 10 award. 11 At this time, I'd like to invite 12 Senator Thompson to make any comments that she would 13 like to make. 14 Senator. 15 SENATOR HASSELL-THOMPSON: Thank you. 16 You've never given me an open invitation to 17 make any comments I wanted before. 18 [Laughter.] 19 SENATOR HASSELL-THOMPSON: Thank you, 20 Chairman Bonacic. 21 And I want to thank you again for your 22 support in 2010 for the very same maintenance 23 statutes under review today, and for the historic 24 passage of no-fault divorce in New York State. 25 I think it is safe to say, that without your 1 support, this would not have happened. 2 Also, a great supporter of needed changes in 3 our domestic-relations and family court law is 4 Mr. Peter Kiernan, now chair of the 5 Law Revision Commission, and in the past, counsel to 6 Governor Paterson; and as such, a lawyer well 7 acquainted with the laws we will talk about today. 8 I join Chairman Bonacic in thanking all of 9 the commission members and staff. 10 Matrimonial litigation is a prolonged, 11 expensive, and painful experience for tens of 12 thousands of New Yorkers. 13 As noted in the commission's report, in 2009, 14 the most recent year for which records are available 15 in New York, 50,310 marriages ended in dissolution, 16 49,816 through a divorce proceeding. 17 Maintenance in a fundamental bone of 18 contention in many divorces. 19 In prior public hearings, we learned that 20 across New York, there were no consistent 21 applications of the law governing maintenance 22 awards. 23 We also learned that the law was so 24 subjective, that it was impossible for either party 25 to predict what would happen. 1 This unpredictability was believed to be the 2 cause of increased litigation and costly legal 3 bills; and, so, we created a formula that prompted 4 consistency and predictability for most litigants, 5 and if it could also reduce the cost of litigation, 6 we would be very pleased. 7 In 2010, we also directed the State Law 8 Review Commission to look at the practical effects 9 of the new law, and to report to us about how the 10 law is working, or not working; whether there's 11 anything we can do to make the laws even better. 12 I look forward to hearing from the 13 commission, and other leaders, about our maintenance 14 laws, and, thank you. 15 SENATOR BONACIC: Thank you, Ruth. 16 We're joined by Senator Betty Little. 17 The other three Senators that are here are 18 reserving their comments; they're here to listen. 19 And we're going to start with 20 Witness Number 1, which is, Rosemary Bailly, the 21 executive director of the New York State 22 Law Revision Commission, with Peter Kiernan, the 23 chair of that commission. 24 So we would ask you to come up and share your 25 thoughts with us. 1 ROSEMARY BAILLY, ESQ.: Good morning. 2 SENATOR BONACIC: Hi, Rosemary. Good 3 morning. 4 Peter, good morning. 5 PETER KIERNAN, ESQ.: Mr. Chairman, members 6 of the Committee, I'm Peter Kiernan. I'm Chair of 7 the Law Revision Commission. 8 And thank you for inviting us to testify on 9 our report that was issued in May of this year, as 10 indicated, as was requested and directed by the 11 Legislature. 12 I'm accompanied by Rosemary Bailly, who is 13 the executive director of the commission. 14 In 2010, as part of the no-fault-divorce 15 legislation, the commission was directed by the 16 Legislature to study maintenance laws, and to make 17 recommendations that would alleviate the problems of 18 inconsistency, unpredictability, of maintenance 19 awards; and, particularly, with respect to temporary 20 awards in pending divorce cases. 21 Inconsistency and unpredictability reduce the 22 likelihood of settlement; 23 They increase the cost of obtaining a 24 divorce; 25 They make a divorce proceeding, especially 1 for low-income families, very burdensome; 2 They strain the court system, which, as 3 Senator Thompson indicated, has over 50,000 divorce 4 actions annually. 5 Now, we found in our review that these valued 6 objectives were only partially achieved. 7 So today, with your indulgence, I would like 8 to discuss, just very briefly, the big ideas, the 9 big themes, in the 2010 legislation, and in our 10 report of this year. 11 Rosemary will discuss matters of very 12 important detail. 13 The biggest idea, other than "no fault," in 14 the 2010 package, was the adoption of a formulaic 15 approach to determining awards. 16 And as part of that package, 236(B) of the 17 Domestic Relations Law was amended. 18 They had a new section, that provided an 19 award of temporary maintenance would be based on the 20 application of a formula to the income of the 21 parties. 22 And that was up to $500,000 of the income of 23 the spouse with the higher income. 24 Now, this formulaic approach was an enormous 25 departure from prior law. 1 When the 2010 legislative no-fault-divorce 2 package was promulgated, as was mentioned, I was 3 serving as counsel to the Governor. 4 Parenthetically, I had no idea at the time 5 that I was going to be appointed as Chair of the 6 Law Revision Commission. 7 That was a goodbye gift that 8 Governor Paterson gave me on the way out the door. 9 But, as counsel, I was very aware of the 10 lobbying campaign that accompanied the legislation. 11 Now, the fundamental advocacy was for spousal 12 justice. Primarily, that was advocacy for women's 13 rights. 14 And there was no resistance to that goal, and 15 there was virtually no opposition to the 16 legislation, at least when it got to the Governor's 17 desk. 18 Many thought that a formulaic approach could 19 achieve the goals of the legislation, but since a 20 formula was such a huge departure from prior law, it 21 was wise of them, in my judgment, for the 22 Legislature to ask the Law Revision Commission to 23 review the implementation of this new law. 24 And after a thorough analysis, a data-driven 25 analysis; a non-ideological, non-partisan analysis, 1 which Ms. Bailly will describe, we found that, up to 2 a certain level of income, the formulaic approach to 3 determine temporary-maintenance awards works very, 4 very well. 5 In circumstances where there is little 6 marital income, not many marital assets, the formula 7 tends to produce quick decisions and awards, uses 8 court time very efficiently, keeps costs low, and 9 leads to rapid settlements of the entire underlying 10 divorce proceeding, but more importantly, it leads 11 to just results, and the empowerment of spouses, 12 usually women, who theretofore did not have 13 bargaining leverage, or the means to access judicial 14 relief; and, thus, were denied even the opportunity 15 for justice. 16 Now, whether the underlying issue was spousal 17 abuse, spousal domination, or spousal fear, the 18 surety that an impartial formula would be applied 19 quickly and inexpensively encouraged those who, 20 otherwise, would have forsaken their rights to 21 proceed and get relief. 22 Of this, there is no doubt, and we salute the 23 advocates of such spouses who, coincidentally, also 24 were the advocates -- primary advocates for the 25 legislation. 1 But the commission also found, that as the 2 level of marital income increased, and assets of the 3 marriage became greater and more varied, a formula 4 actually begins to lose effectiveness, and it 5 actually becomes counterproductive. 6 While greater income levels suggest there may 7 be equal access to lawyers, higher-education levels, 8 and enhanced bargaining leverage for both parties, 9 the more important fact is, that when assets are 10 complex, involving houses, investment vehicles, a 11 melange of debt inequity, often accompanied with tax 12 structuring and estate considerations -- 13 estate-planning considerations, a two-dimensional 14 formula simply is not apt. 15 Equally significant, domestic-relations 16 professionals and judges that we consulted with very 17 broadly, advised us that an inept formula makes 18 efficient settlements less likely and makes 19 litigation more likely. 20 Experienced professionals, experienced 21 judges, know how to settle complex financial 22 matters, and they should be encouraged to do so 23 without artificial restraint. 24 Now, we concluded that an income cap of up to 25 $500,000, below which the formula would apply, and 1 above which it would not, was neither realistic nor 2 helpful. 3 Based on data, we recommend, and recommended, 4 that the formula cap -- formula income cap be set at 5 the same level as the Child Safety [sic] Standards 6 Act, which level is indexed to the Consumer Price 7 Index and adjusted biannually. 8 If that were the case, there would be a 9 consistent formula for ascertaining both 10 child support and temporary maintenance, rather than 11 two different formulas being applied to the same 12 assets of the same family. 13 There also would be less forum shopping. 14 There would be no difference in the 15 application of the formula from the family court, 16 the civil court, the county court, or the 17 Supreme Court, and there were differences prior to 18 the legislation. 19 The objectives of consistency and 20 predictability, along with efficiency, would be 21 served. 22 Now, the data indicates, that we reviewed, 23 that about 78 percent of all joint-income tax filers 24 in New York State make less than the current 25 Child Safety [sic] Standards Act income cap, which, 1 today, is $136,000. 2 Accordingly, more than 75 percent of 3 taxpayers would remain subject to the formula. 4 And that would be consistent with the 5 Legislature's objective, when it announced, and 6 adopted, the Child Safety [sic] Standards Act. 7 The announced objective was, that it would 8 apply to the vast majority of New Yorkers. 9 That would be achieved. 10 Now, the commission also -- incidentally, 11 just with respect to data, there was some advocacy 12 that the cap be reduced to $200,000. 13 More than 95 percent of all taxpayers make 14 less than $200,000. 15 But we settled on a hundred and thirty-six, 16 because it was, as I said, 77, 78 percent, but the 17 level of complexity begins to very much change once 18 you get to the higher level. 19 The commission also applied the same 20 data-driven, non-ideological, non-partisan, 21 commonsensible approach to other issues, such as 22 duration-of-marriage factors, and whether judges 23 should be mandated to write elaborate explanations 24 whenever they decided to deviate from a formulaic 25 guideline. 1 I think, Senator, you mentioned in your 2 opening remark about some of the judges' reactions. 3 On the latter -- on that point, on the latter 4 point, we think judges should be judges, because we 5 saw evidence that if judges were forced to explain 6 in writing their every deviation from a formulaic 7 guideline, many would be inclined not to deviate, in 8 order just to avoid what they consider to be a 9 non-essential task, even though justice may require 10 that there be deviation. 11 Members of the Committee, the Legislature 12 made an important step when it embraced no-fault 13 divorce. 14 In doing so, it shed centuries of 15 arbitrariness and artificiality. 16 Courts are not the best place to sort out the 17 tangled, and sometimes tortured emotions, of human 18 nature, and of a marriage. 19 Formulas also can be artificial and 20 arbitrary, especially when the facts to which they 21 are applied are not linear; when numerical values 22 are a function of time frames, judgment, events, and 23 interconnections. 24 Emphatically, formulas are not driven by 25 ideology, and should not be applied to serve 1 ideology. 2 I'm going to yield to Rosemary, who's going 3 to cover some other points. 4 I'd be delighted to answer any questions you 5 may have about our approach, our report, our 6 findings. 7 SENATOR BONACIC: I would suggest that 8 Rosemary finish her testimony, and then we can 9 direct our questions to either one of you. 10 Thank you, Peter. 11 PETER KIERNAN, ESQ.: Mr. Chairman, thank 12 you. 13 And, Senators, thank you for inviting me to 14 appear with Peter today. 15 As Peter mentioned in his presentation, the 16 legislative package included a formula for the 17 determination of temporary maintenance. 18 And you may recall, actually, at that time, 19 the legislation had a formula for permanent 20 maintenance, but then there was some readjustments 21 that appeared in the temporary maintenance. 22 So the law, as it was passed in 2010, didn't 23 make any changes to maintenance awards in final -- 24 at a final determination of the divorce. 25 So as a consequence, we right now in New York 1 have two different approaches to maintenance: 2 In a temporary maintenance, we have a 3 formulaic approach designed to achieve consistency 4 and predictability; 5 And in the post-divorce maintenance, we have 6 a more nuanced approach, where a judge can look at a 7 set of factors and mold the determination based on 8 what it can glean from the particular case. 9 So the scope of our work included whether 10 to -- to consider whether to adopt a formula for 11 post-divorce awards. 12 And as Peter noted, the information that 13 we've gather seemed to indicate that both approaches 14 have merits, depending on the amount of assets and 15 the amount of income involved. 16 So what I want to just talk a little bit 17 about today is the work that the commission did that 18 led to its report. 19 It had basically three aspects: 20 The research, case law, and statutes in other 21 jurisdictions; 22 The collection, review, and analysis of both 23 statistical data gathered by the State Department of 24 Taxation and Finance, the census bureau in the 25 nine counties that we actually looked at; 1 And our own data that we attempted to collect 2 through the cooperation of the Office of Court 3 Administration. 4 And since this is the Judiciary Committee, 5 I feel it's important to note, we had extremely good 6 cooperation with the Office of Court Administration 7 on a task that took a number of years. 8 So I really appreciate, very much, their 9 efforts. 10 And we noted that in our report. 11 We also did a lot of outreach, both, 12 formally, informally, with judges around the state, 13 various practitioners who practice -- whose clients 14 are wealthy, who have middle-class clients, and who 15 have lower-income clients. 16 And I see a number of those individuals that 17 we had contact with present here today. 18 At the time we were considering our study, a 19 number of states had either -- either a number of 20 states or a number of counties within states had 21 adopted a formulaic approach to maintenance. 22 There were very few that were statutorily 23 enacted, but, it was clear from the literature that 24 the movement was towards formulas, although, as I'm 25 sure that you'll hear, a lot of people had some 1 objections to formulas, in general. 2 What the formulas all had in common, though, 3 whether they were adopted formally or informally, 4 was that they were developed by attorneys with 5 expertise in the nature and frequency of maintenance 6 awards in the jurisdiction, who used anecdotal 7 evidence and reported decisions to craft formulas, 8 including income caps, which would merit a range of 9 results they presumed would have an appropriate 10 starting point for negotiations for their clients. 11 And we actually talked to people in those 12 areas, jurisdictions, and where there were reports, 13 we read them as well, to understand how they came 14 about. 15 So, to the extent that they were based on 16 their own jurisdictions, they provided little in the 17 way of guidance, in terms of how we should approach 18 it; although, we saw the idea of a formula as having 19 some merit. 20 As part of our study, we collected, reviewed, 21 and analyzed data from over 7,000 divorce 22 proceedings in 9 counties across the state. 23 They were Albany, the Bronx, Erie, Jefferson, 24 Kings, Nassau, and New York, Onondaga, and 25 Westchester. 1 And I should say that, my colleague at the 2 time, Barbara Hancock, who has since retired, she 3 and I actually read every single questionnaire, and 4 it was informative, although, of limited value. 5 I mentioned that we had done this work with 6 the Office of Court Administration. 7 Because of the amount of information that we 8 were getting, but the lack of its completeness, we 9 were delayed in completing our report, because we 10 hoped to gather as much information as possible that 11 we could bring to bear on our conclusions. 12 We hoped to learn about the relationship 13 between any awards and the length of marriage, the 14 health of the parties, their respective incomes, and 15 the presence of unemancipated children. 16 And we also hoped to learn if there were any 17 differences between the amounts of awards, prior to, 18 and after, the enactment of the 19 temporary-maintenance formula. 20 And we had the assistance of a senior dean 21 and a professor of economics from Syracuse Maxwell 22 School in helping us to analyze this data. 23 Now, despite the large number of 24 questionnaires that we collected, and our thorough 25 review of the data, both, statistically analysis, as 1 well as, actually, hands-on review of the 2 questionnaires, the paucity of information provided 3 in these questionnaires made it difficult to draw 4 any statistically significant conclusions, but we 5 were able to report several things: 6 One, the awards appeared to be likely when 7 there were unemancipated children, the husband's 8 income was higher than that of his spouse, his 9 health was good, and the marriage was a lengthy one. 10 If a formula, like a temper [ph.] maintenance 11 formula, were used to calculate a final maintenance 12 award, 56 percent of the cases reporting no award, 13 where they reported income, would have benefited 14 from the [unintelligible] of a formula. 15 The responses that we saw from reading the 16 questionnaires revealed a pattern of low income, 17 service-industry jobs, and information that was 18 consistent with the statistical data from those 19 counties. 20 Over the course of our study, while we were 21 gathering all this data, we also, with our 22 commissioners together, and individually, and our 23 staff, then, two attorneys, conducted formal and 24 informal outreach to bar associations, judges, and 25 practitioners. 1 I've mentioned a few that we spoke with: 2 representatives from the American Academy of 3 Matrimonial Lawyers, the family-law section of the 4 New York State Bar, the Post-Marital Income 5 Coalition, the Women's Bar Association of the 6 State of New York, and other practitioners 7 representing parties with incomes of varying 8 amounts. 9 We also received written submissions from a 10 number of people, including the number that I just 11 mentioned, as well as the Suffolk County Bar 12 Association, the New York Legal Assistance Group, 13 and the Lawyers Committee Against Domestic Violence. 14 In October 2011, we hosted a roundtable 15 discussion at Albany Law School, where we heard from 16 various stakeholders, many of whom I have mentioned, 17 and they discussed maintenance awards, the problems 18 and concerns about the interpretation of the 19 temporary-maintenance statute, as well as the 20 post-divorce-maintenance statute, and suggestions 21 for change. 22 And as a conclusion, there appeared to be a 23 consensus on the broad outlines of the approach that 24 we were suggesting; namely, the application of a 25 formula on an income up to a certain level, and then 1 the application of statutory factors on income in 2 excess of that cap, or where the application of the 3 formula would lead to inappropriate results. 4 The commission's recommendations are detailed 5 in our report, as well as more information on the 6 data, that's contained in the appendices, but 7 I would like to conclude with just a few remarks on 8 the three aspects of the report: 9 The duration of the post-divorce-maintenance 10 awards, assuming that you have -- however you're 11 going to make that determination, how long should 12 the party receive the maintenance? 13 The increased earning capacity as a marital 14 asset, as a result of the O'Brien decision; 15 And Section 412 of the Family Court Act. 16 The duration of an award of post-divorce 17 maintenance, we looked at various sources to try to 18 determine how to approach that. 19 We looked at the appellate court decisions in 20 New York, as well as formulas in other 21 jurisdictions. 22 What we came away with, a conclusion that 23 neither offered a clear rationale for how to decide 24 the duration of an award. 25 The case law in New York did not necessarily 1 center on duration of the marriage, which seemed to 2 be a natural default provision that a number of 3 people would have suggested. 4 The formulas in other jurisdictions also 5 offered a variety of solutions. 6 Some of them were just blanket caps. It 7 didn't matter how long you were married, it was, 8 just, you got divorce maintenance for a certain 9 period of time; 10 Others, the length of the marriage. 11 Maricopa County in Arizona had a range for 12 duration of post-divorce award. 13 It discontinued it, based on its -- its 14 belief that it was unsatisfactory results. 15 And, the New Mexico Supreme Court, which has 16 had a formula for a fairly long period of time, as 17 to the amount, declined to adopt a duration formula, 18 as too arbitrary and lacking in consideration of 19 discrete facts. 20 So we concluded that there should be some 21 guidance for the court. 22 It didn't have to be a large list of 23 statutory factors; but, rather, just discrete ones 24 that focused on the period of time. 25 We concluded, the length of marriage; the 1 length of time necessary, the party seeking 2 maintenance, to acquire sufficient education or 3 training; the normal retirement age of each party; 4 and the availability of retirement benefits; and any 5 barriers that the party faced with regards to 6 obtaining employment because of child-care 7 responsibilities, health, or age. 8 As to the increased earning capacity as a 9 marital asset, we counted, virtually, unanimous 10 consensus that that should be eliminated as a 11 marital asset, and it should be considered, any 12 spousal contribution to a career or a potential 13 career of the other party should be addressed in the 14 award of post-divorce maintenance. 15 And, finally, spousal support under the 16 Family Court Act: 17 I understand that Professor Meril Sobie, who 18 writes the practice commentaries for the 19 Family Court Act, has submitted some 20 recommendations. 21 And he concludes, and we support that 22 conclusion, that any changes to the maintenance law 23 in Domestic Relations Law should merited in the 24 Family Court Act, because parties may choose to go 25 the family court route for particularly good 1 reasons, and there's no reason why the end result 2 shouldn't be different, although the facts and 3 circumstances of the parties might be identical. 4 So, I thank you for your time and your 5 patience. 6 SENATOR BONACIC: Thank you, Rosemary. 7 Does anyone have any questions of the 8 witnesses? 9 SENATOR HASSELL-THOMPSON: Yeah. 10 SENATOR BONACIC: Okay, Ruth, go ahead. 11 SENATOR HASSELL-THOMPSON: Again, thank you 12 both for coming this morning and for participating 13 in the hearing. 14 But I guess I got more confused than clear. 15 As I listened to you, Mr. Kiernan, talk about 16 the formulas, at one point, I thought were you 17 favoring it, and then, suddenly, you lost me, 18 because then you decided that the formulas didn't 19 work. 20 PETER KIERNAN, ESQ.: Hopefully, I was -- I'm 21 sorry. 22 Am I interrupting you? 23 SENATOR HASSELL-THOMPSON: No, it's okay. 24 PETER KIERNAN, ESQ.: Hopefully, I was clear 25 at least on one point; that, we found that the 1 formula worked very well up to a certain income 2 level, which we think is $136,000, because that's 3 the exact same level that the Child Safety [sic] 4 Standards Act -- 5 SENATOR HASSELL-THOMPSON: Okay, stop, stop 6 right there for a second. 7 It's interesting that, in the legislation, as 8 I remember it, it talks about the moneyed spouse 9 being the determining factor; and, yet, the 10 commission came up with the combined. 11 How did that happen? 12 PETER KIERNAN, ESQ.: That's what the data 13 were telling us. 14 I mean, Rosemary indicated we had close to 15 7,000 surveys -- or, one survey of 7,000 components. 16 And what we saw was, that in the overwhelming 17 majority of divorces, whether there was one income 18 or two incomes, the W-2 wage income, with very 19 little other assets, and, it was relatively easy to 20 apply a formula to something as linear as W-2 wages 21 and very few other assets, whether it was the 22 moneyed spouse or the non-moneyed spouse or they 23 both had income. 24 With respect to where -- let me say this: 25 As you go up the income line and it's close 1 to above 80 percent, you begin to see far more 2 sophisticated assets owned by both parties: 3 investments in joint names; varying accounts in 4 joint names; very frequently, dual incomes. 5 Also -- 6 SENATOR HASSELL-THOMPSON: You're saying that 7 was above $136,000? 8 PETER KIERNAN, ESQ.: It tended to be. 9 It's not exclusive. 10 SENATOR HASSELL-THOMPSON: Right. 11 PETER KIERNAN, ESQ.: It tended to be -- it 12 tended overwhelmingly to be. 13 So, that, we thought using joint income, 14 that's joint -- gross-adjusted joint income was the 15 easiest way to get a fair result. 16 Now, if one were to limit that to the moneyed 17 spouse's income exclusively, the level would 18 probably go lower than $136,000. 19 But we also -- consistency was one of the 20 objectives of the legislation. 21 And, we thought that there was a value in 22 having consistency with the Child Safety [sic] 23 Standards Act, because, as I testified, applying two 24 different formulae to the same assets, the same 25 income, of the same family leads to confusion, 1 rather than clarity, and certainly makes it 2 unpredictable, rather than predictable. 3 SENATOR HASSELL-THOMPSON: But don't you 4 think that $136,000 does not give credence to 5 mortgages, to college tuitions, to a lot of other 6 factors that come into play? 7 Because, as you say, you excluded a lot of 8 the, what you call "add-ons," because of the 9 child-support piece. 10 So I just think that, somehow, you're 11 mixing -- in the process of coming to this 12 determination, I just think that you're mixing 13 apples and oranges, and while they're both fruits, 14 they -- you know, they're not the same. 15 PETER KIERNAN, ESQ.: Well -- 16 SENATOR HASSELL-THOMPSON: Help me with this, 17 because -- 18 PETER KIERNAN, ESQ.: -- no, I understand 19 your line. 20 We didn't think we were doing that. 21 We were conscious of creating more confusion 22 than we could -- than could clarify, but, I don't 23 think we were throwing things away, like, as you 24 sort of suggest, that we weren't counting mortgages. 25 I mean, we were taking those into account, 1 and we would expect a court to take them into 2 account. 3 The formula applies, but, there are also 4 factors where the judge can deviate from those 5 formulas. 6 I mentioned that. 7 And even -- 8 SENATOR HASSELL-THOMPSON: Okay, yeah, 9 because that's where the confusion lies. 10 You seem to be inferring that a formula 11 disallows the court's discretion. 12 PETER KIERNAN, ESQ.: I'm saying that it has 13 the effect of doing that, particularly in upper 14 income, complex financial-assets circumstances. 15 SENATOR HASSELL-THOMPSON: Why? 16 PETER KIERNAN, ESQ.: Well, I think probably 17 the "why" lies in people getting what they perceive 18 to be just for them. 19 So, in a circumstance where you have 20 two parties, unhappily, going through a divorce, and 21 there's a fair amount of marital income and marital 22 assets, and they both have lawyers, what we found 23 from a lot of conversation, and as Rosemary sort of 24 outlined that, from groups and lots of 25 professionals, lots of judges, is that lawyers would 1 litigate, to try to escape the formula, claiming 2 that it was unjust. 3 Now, this is above the $136,000 threshold, 4 quite generally, but, quite obviously, from the 5 data. 6 And that, when I mentioned that, let judges 7 be judges, the judges sometimes would be presiding 8 over this litigation where people were trying to get 9 away from the formula, litigation, hopefully, the 10 Legislature wanted to avoid, and they would -- every 11 time they would deviate, they would have to write an 12 opinion on that particular point of deviation. 13 And all the judges complained about, that was 14 a useless task. 15 That they know how to settle these cases, 16 financial-driven cases, and the lawyers know how to 17 do it: Why litigate it when they could settle it? 18 So -- 19 SENATOR HASSELL-THOMPSON: But if that were 20 true, then why, then, prior to this legislation, 21 have we had so much litigation? 22 How come we have not had more judges making 23 settlement determinations? 24 Without that basis, it was all over the 25 place. 1 Every judge, you know, from all the -- the 2 townships that you named in Upstate New York, you 3 know, the judges, the brother of the guy who comes 4 before him, and so that, you know, he wants to be -- 5 he wants to be fair to his brother, and to make sure 6 that -- you know, that she doesn't take him to the 7 cleaners. 8 And so, you know, what we're trying to do, is 9 take as much of the arbitrary out of this as 10 possible, even for judges -- 11 PETER KIERNAN, ESQ.: Well, I think -- 12 SENATOR HASSELL-THOMPSON: -- as possible, 13 creating a formula that says: 14 A woman marries the guy. 15 He's got a trillion dollars. 16 And they're been married to two years and 17 she's entitled to half. 18 I don't think that's appropriate. 19 I don't think that's fair. 20 So we're saying that, with the formula, it 21 makes a certain determination, at least about, 22 somewhere in the aspects of reasonableness, what the 23 entitlement ought to be. 24 And it could be a man who marries a woman 25 with a trillion dollars. 1 So, it really doesn't matter. 2 What we're saying is, we're trying to reach 3 fairness. 4 And, if you deviate from the formula, you go 5 back to me, to a lot of the arbitrary that we were 6 trying to get rid of before. 7 That's -- you know, just very quickly, 8 because I know other people have questions, but, to 9 me, this is the basis of the legislation in the 10 first place: to try to come up with something that 11 everybody could take a look at. 12 And, you know, I hope I never come before any 13 judge that's sitting here, or possible judge, when 14 I make this statement, but, I think that, if, in 15 fact, there is a deviation, I think an opinion is 16 appropriate. 17 Any other court, when you deviate from -- 18 when you have a panel of judges, there's always a 19 majority opinion and there is a minority opinion. 20 You have to do -- you know, that's a part of 21 what you do, in terms of making this kind of 22 determination. 23 And, I'm sorry, I don't feel sorry that the 24 judges have to do this as a part of their work. 25 But, again, I'm trying to strive for fairness 1 for both parties. 2 And, number one, I think that the maintenance 3 level is too low. 4 If you're going to combine both incomes, 5 I would be pushing hard for you to come up a lot 6 closer to 300,000. 7 Perhaps five hundred may have been way over 8 the moon. 9 But, when I look at how people live 10 check-to-check, very realistically, there's not a 11 lot of money here to get for either one when they're 12 making that kind of income. 13 But, there is some leeway, when they're 14 making somewhere between 136,000 and 300,000. 15 And I think your threshold is much too low. 16 PETER KIERNAN, ESQ.: [Unintelligible.] 17 SENATOR HASSELL-THOMPSON: And I'm very 18 concerned about the fact that you don't believe that 19 this really gives the judges the discretion that's 20 necessary. 21 I do want to ask a question about litigation, 22 but I'll let that go for now. 23 PETER KIERNAN, ESQ.: Well, there's a couple 24 different strains of thoughts there, but, I think, 25 Senator, even though you're being very skeptical 1 about what we're saying, we are here -- 2 SENATOR HASSELL-THOMPSON: I learned to be a 3 skeptic in this business. 4 PETER KIERNAN, ESQ.: Yeah, I understand. 5 You're entitled. 6 -- we're here to say, essentially, 7 congratulations. 8 That, you really set out some ambitious 9 goals, and you very largely met them. 10 And what we are saying is, that the formula 11 that you put into law, works, and it's working for 12 78 percent of the people that are applying for 13 divorce, and it is having a very palliative effect, 14 and serving the goals of consistency and 15 predictability and fairness; and, that it arrives at 16 a point where it doesn't. 17 And on the point of deviation, you may be 18 right, we're not going to eliminate arbitrariness 19 entirely. 20 I mean, someone is always going to favor 21 their brother-in-law, or something like that. 22 It's just the way life is. 23 But, we're simply saying, let judges announce 24 a deviation orally, but don't promote litigation 25 over factors, where attorneys are trying to escape a 1 certain stricture. 2 Now, I think what we're really saying as 3 well, and maybe I should try to make this more 4 clear, is that, once you hit a threshold, which will 5 move, it will be adjusted according to the 6 Consumer Price Index, the formula then becomes a 7 guideline, not a formula. 8 It would still be, if someone is making -- 9 the marital income is $500,000, and the moneyed 10 spouse has a $500,000 income, the court can still 11 use the formula, and the parties can still use the 12 formula, as a guideline, as they do in other 13 jurisdictions, to inform negotiations, and to limit 14 the ranges, and so forth, but, that we wouldn't get 15 litigation over the application of the formula when 16 it's not -- it doesn't really apply when you have 17 complicated assets. 18 You mentioned 300,000. 19 And there was a bill that we were asked to 20 comment on last spring, from one of your colleagues 21 from -- sponsored by one of your colleagues from 22 Westchester County, and argued the $300,000 limit. 23 Now, we're not advocates, we're not taking 24 sides. That's not the role of the Law Revision 25 Commission. 1 And, we didn't want to speak publicly. We 2 were happy to provide our opinions, privately. 3 And we just looked at the data, and the 4 argument was, well, in Westchester County, 300,000 5 is not a lot of money, and it should be at least 6 300,000. 7 The median family income in 8 Westchester County was $79,000. 9 So if you're going to take a data-driven 10 approach, I think you asked us to look at the data 11 and be objective. You don't ask us to give you an 12 argument. 13 And, so, that's what we did. 14 And that kind of data, when applied to 15 Westchester County, tells you a story. 16 When you apply it to Onondaga County, a 17 slightly different one. 18 And then there are, obviously, pockets in 19 this state where there's great wealth. 20 But, generally, as I've said a number times, 21 I mean, the vast majority of taxpayers in the state 22 are under that threshold that I mentioned: 136,000. 23 SENATOR HASSELL-THOMPSON: All right, 24 basically, then, it just feels like we have a law 25 for the rich, and one for working people. 1 And it just sounds like a uniform rule is 2 impossible or undesired, and if we do that, we're 3 intruding on the rich. 4 I -- and that's -- 5 PETER KIERNAN, ESQ.: Well, I wouldn't -- 6 SENATOR HASSELL-THOMPSON: Well -- 7 PETER KIERNAN, ESQ.: -- you may be -- one 8 may see it as intruding on the rich. 9 Another may see it as, you're asking the rich 10 to litigate, and tie up court time, and incur 11 expenses. 12 And you're trying to avoid that. 13 So I think, you know, it's a -- there's a 14 pyramid of values, a hierarchy of values. 15 You choose. 16 I mean, you're in the business of choosing, 17 and whatever you do is all right with me. 18 SENATOR BONACIC: Senator Little has a 19 question. 20 SENATOR LITTLE: Thank you. 21 The question isn't exactly on the report of 22 the commission, except, some of the things in it 23 brought the question to mind, which is: 24 When you talk about the consistency with the 25 child-support formula, and all, I wondered if, in 1 your data, you had any information in regard to, 2 there are a few counties who do family court and 3 civil divorce court all together. 4 If the person -- which I've always wondered 5 why that wasn't more workable, to be in the same 6 court instead of in two courts, although, I'm not an 7 attorney. 8 I just wondered if the data maybe showed, if 9 you saw anything, where it worked better, where they 10 were in one court doing custody and the civil 11 divorce proceedings by the same judge in the same 12 court. 13 PETER KIERNAN, ESQ.: I don't believe that 14 the data showed that, but Rosemary may know about 15 that. 16 ROSEMARY BAILLY, ESQ.: No, we didn't do any 17 survey -- we didn't -- our survey that we did was on 18 the Office of Court Administration's UCS-111, which 19 is the child-support data-gathering document, that 20 was, for purposes of those nine counties, amended to 21 include some maintenance questions. 22 But, for reasons involving the document 23 itself, the questions were very narrowly shaped, to 24 gather the information solely with respect to the 25 results in the particular proceeding, not which 1 court was involved. 2 And, so, we don't have any information about 3 family court. 4 SENATOR LITTLE: I was just curious. 5 PETER KIERNAN, ESQ.: But that's why we 6 proposed, that the formula works in any court. 7 You don't have one court applying the 8 child-safety [sic] formula, another court applying a 9 different formula, because then you may get very 10 disparate results, and just defeat the purpose of 11 predictability. 12 SENATOR LITTLE: Okay. 13 Thank you. 14 SENATOR BONACIC: Yeah, thank you for your 15 work. 16 Let me just kick around a couple of thoughts 17 that I have. 18 I have done extensive contested matrimonial 19 actions in the '80s. 20 An awful lot. More than I'd like to admit 21 to. 22 And it was "a fault" at that time. 23 Just -- and I've been away from it awhile. 24 In temporary-maintenance awards, usually, 25 those decisions were made on paper. 1 And if it was still contested, the post 2 divorce was, basically, a trial and witnesses. 3 And in any of your data, did you find a 4 deviation from the paper award by a judge as opposed 5 to a trial award? 6 Was there much discrepancy? 7 PETER KIERNAN, ESQ.: Well, what we -- 8 I don't know if I can answer that as directly as 9 you're asking. 10 What we did find, was that, by virtue of 11 applying the formula to temporary maintenance, that 12 created a template for settling post maintenance. 13 SENATOR BONACIC: Right. 14 PETER KIERNAN, ESQ.: And that happened a 15 lot, so that, what was decided as temporary became 16 what -- what was determined for final. 17 And that's where a lot of litigation was 18 avoided. 19 So, I guess, to put it in the way you framed 20 the question, the answer would probably be yes. 21 SENATOR BONACIC: Okay. 22 As I understand a lot of your testimony, 23 basically, we resolve things quickly for the 24 parties, for the judges, 78 percent of those 25 divorces, if we're dealing with the maintenance, 1 joint income of $136,000. 2 The other 22 percent is where the courts get 3 bogged down, because of the complexity of the 4 assets, the value of the assets, and then, throw in 5 the emotion of the parties. 6 And no one's ever happy as they're going 7 through this process. 8 And there are many reasons for delays, 9 because of that emotion. 10 Okay? 11 So far, so good? 12 PETER KIERNAN, ESQ.: Yes. 13 SENATOR BONACIC: In your data, did you break 14 down further of the 22 percent? 15 In other words, if that income threshold was 16 higher, as Senator Thompson has suggested, if you 17 went to -- 18 And I'm just making this up, but, if you have 19 the data, it would be helpful if we try to reach a 20 conclusion with, you know, a majority of our 21 members. 22 -- if you went to $200,000, do you know how 23 many of the 22 percent you get rid of? 24 PETER KIERNAN, ESQ.: Well, as I -- I don't 25 have all the data. 1 SENATOR BONACIC: No, but, I mean, do you 2 think that data's available? 3 PETER KIERNAN, ESQ.: Well, the tax data 4 shows, you know, this will -- this gets adjusted 5 every year. 6 SENATOR BONACIC: Yeah, sure. 7 PETER KIERNAN, ESQ.: We have new data; we 8 have fresh data. 9 But, that -- 95 percent of filers in 10 New York State make less than 200,000. 11 And, so, if we go on the guideline, 12 78-plus percent make under one thirty-six, and then 13 that remaining twenty-two, they're pretty much all 14 under ninety-five -- excuse me -- 15 two hundred thousand. 16 And the other thing -- just two other quick 17 points: 18 I think when you get to the top 20 percent of 19 filers in New York State, you get away from W-2s. 20 In fact, they don't have W-2s. 21 And when you get away from W-2s, of course, 22 then you're really getting into complexity -- 23 dividend income, 1099s, K-1s, and that sort of 24 thing, partnership-income returns -- so that it 25 really is, that 80 percent threshold is -- seems to 1 be the break between simplicity and complexity. 2 I had another thought, but it's -- 3 SENATOR BONACIC: Save that thought. 4 Let's stay with the subject matter of the 5 question. 6 Of the 22 percent, roughly, of that data, do 7 you have a sense of the timeline it took, from soup 8 to nuts, for those divorces to get done? 9 PETER KIERNAN, ESQ.: No. 10 SENATOR BONACIC: Okay. 11 PETER KIERNAN, ESQ.: But I think we had a 12 belief, that it was more based on anecdotal 13 evidence, not hard evidence, just from all the 14 discussions we were having, that having the formula, 15 not as a formula, but as a guideline -- 16 SENATOR BONACIC: No, I heard that. 17 I think that's an excellent -- 18 PETER KIERNAN, ESQ.: -- the guideline does 19 tend to reduce the litigation, because not 20 everyone's at sea, coming in to fight. They have a 21 parameter. 22 So -- but that's more anecdotal then -- 23 SENATOR BONACIC: Okay. 24 And the last thing I've been puzzled about, 25 there have been instances where the female made more 1 money than the male, and the male was engaging in 2 inappropriate conduct, whether it was adultery, or 3 something else. 4 So, in a no-fault-divorce application, the 5 issue of fault has no effect on maintenance, unless 6 we kick it to judicial discretion, to the extent of 7 diminishing the maintenance award that the wife 8 would have to pay to the guilty husband. 9 Is that -- did I summarize that correctly? 10 PETER KIERNAN, ESQ.: I believe that's 11 correct, yeah. 12 SENATOR BONACIC: Yeah, okay. 13 PETER KIERNAN, ESQ.: I mean, you're not 14 going to get rid of anomalies, but -- 15 SENATOR BONACIC: No, I understand. 16 So if I could sum it up: 17 If we're at that 136,000 threshold, we get 18 rid of 80 percent of the divorces in a quick way, 19 and nobody's happy, but we get rid of them, it's 20 less expensive, it doesn't burden the court. 21 If we have guidelines -- not a formula, not a 22 permanent formula -- but guidelines for judicial 23 discretion, and they're allowed to deviate from 24 those guidelines based on the facts, you think, 25 then, that that would be a solution that would help 1 the courts and would expedite marital settlements? 2 PETER KIERNAN, ESQ.: Yes. 3 And I think you're already mostly there, 4 because the formula is in place, and it is, with 5 respect to, somewhere between 75 and 80 percent of 6 contested actions, it's having a very good effect. 7 And as I said, it's bringing some people into 8 court to get relief that, otherwise, may never have 9 gone to court. 10 And that's very important. 11 SENATOR BONACIC: Okay, thank you, Peter. 12 Thank you both. 13 Does anyone else have any questions? 14 Thank you very much for your testimony. 15 It has been very helpful. 16 Our next witness, from the New York State Bar 17 Association, Judge Matthew Cooper, which is the 18 Supreme Court, the Civil Branch, of New York County; 19 and, Allen Mayefsky, who's a partner in Aronson, 20 Mayefsky & Sloan. 21 Gentlemen, make yourself comfortable. 22 Almost good afternoon, but it's still a 23 minute to the morning, I think. 24 Welcome. 25 ALLEN E. MAYEFSKY, ESQ.: Thank you, 1 Mr. Chairman. 2 My name -- and members of the Committee. 3 My name is Allen Mayefsky. 4 I'm a member of the New York Bar Association, 5 and also a member of the executive committee of the 6 family-law section of the New York State Bar 7 Association. 8 And, we took the liberty of sending, as part 9 of our materials, a proposal. 10 That proposal was a -- basically, a redlined 11 version of the bill submitted by 12 Assemblywoman Paulin recently. 13 And what it did is, adapted much of what the 14 Law Revision Commission had put in its report, and 15 we did a redlined version, as the family-law 16 section's proposal, as to what we would like to see 17 be enacted. 18 The reason for that, was that we very much 19 support what the Law Revision Commission did. 20 We believe that the report -- that the 21 commission properly eliminated the O'Brien rule, 22 which Ms. Bailly referred to earlier. 23 It has universal acceptance to be eliminated 24 on enhanced earning capacity. 25 But, also, on a number of key points, which 1 are in our proposed bill, acted, we believe, fairly, 2 to try to reach the appropriate balance for the 3 goals that were being sought by the Legislature, as 4 well as the bar; and that is, with respect to 5 guidelines, there was a lot of debate among the bar 6 about guidelines. 7 I'm sure everyone is aware of that. 8 But, we have come to the conclusion that, at 9 the 136,000 combined, which is consistent with the 10 Child Support Standards Act, which we believe has 11 worked well in New York, that applying those 12 guidelines would be appropriate to -- as the 13 commission has said, to achieve the goal of 14 efficiency for people who are within those income 15 constraints, as well as providing, above that, 16 four factors and guidelines to deal with those 17 people who have more assets and income, not because 18 we were looking for a different system between the 19 rich and the poor, but for the purpose of getting to 20 the right result. 21 And we believe that, once you get to those 22 income levels, a formula does not get you to the 23 right result automatically. 24 It might, in certain instances, in which 25 case, people might look at it for guidance, and say, 1 Here's how the formula might work; but, generally, 2 it doesn't. 3 You have assets, people who are more likely 4 to be professionals with different earning 5 capacities. 6 You have too many other factors, that I have 7 found, we have found, in our experience in handling 8 many of these divorces, that the judges do a very 9 good job in balancing, and coming to good results, 10 and settling cases, so that most of those cases 11 never do get litigated. 12 With a formula for incomes over those levels, 13 you are going to have people who are empowered by 14 taking that formula, no matter what, and we're going 15 to end up with more litigation, because then the 16 other side is going to end up fighting for a 17 deviation. 18 And to some extent, that has happened with 19 the temporary-maintenance guidelines up to this 20 point. 21 And it certainly would happen with the 22 permanent-maintenance guidelines, or even temporary, 23 if it goes above that level. 24 So we are very much in favor of having that 25 cap applied consistently with the Child Support 1 Standards Act. 2 And, above that, using -- not using the 3 formula approach, but, as was stated before, a 4 guideline approach. 5 There are some specific pieces in our 6 proposal that I can point out, such things as, 7 temporary maintenance should not go beyond the 8 length of the marriage, and things like that, but, 9 it's in our proposal, and I'll only address those if 10 someone would like me to. 11 The next main point I would like to address, 12 is the formula for duration. 13 Once again, the commission's report rejected 14 the use of a formula for the duration of 15 maintenance, in favor of certain specific factors 16 that a court would take into account. 17 And we agree with that. 18 The problem with the formula for duration is, 19 length of the marriage is a factor, certainly. 20 And that is one of the factors in the 21 commission's report to be taken into account. 22 It is not the only factor. 23 There are many other factors that come into 24 play when you're talking about duration, 25 particularly, when you go into higher-income cases, 1 but you're talking about people who can come off -- 2 leave a marriage after a certain number of years, 3 with large assets, but the other party has more 4 income; go off and marry someone else, and under the 5 Paulin bill, end up still getting maintenance. 6 And that is a completely, in our view, 7 inappropriate result, and it should not occur. 8 One of the things that I'd like to point out 9 on that end, and really conclude on, it is important 10 that the maintenance terminate on remarriage. 11 The commission report alluded to it, talked 12 about the issue, but did not really come to a 13 conclusion on it. 14 The bill by Assemblywoman Paulin puts in a 15 provision that eliminates the termination of 16 maintenance on remarriage, but leaves the parties to 17 fighting about it later, as a substantial change of 18 circumstances, or a potential change of 19 circumstances, if the spouse receiving income 20 happens to get remarried. 21 And what that leaves you open to is, 22 litigation for sure, every time someone gets 23 remarried, and pulling in, now, a new spouse for 24 that litigation, to determine what their income and 25 assets are, to see if we have a substantial change 1 of circumstances to change the maintenance. 2 You also end up with something of an anomaly, 3 in that you will have two people who are responsible 4 for support for the same person: the new spouse and 5 the old spouse. 6 Under the law, each spouse is responsible for 7 support of the other. 8 So in our proposed bill, we have eliminated 9 those provisions, in favor of having the maintenance 10 cease on remarriage, as it has before. 11 SENATOR BONACIC: Thank you. 12 ALLEN E. MAYEFSKY, ESQ.: Thank you. 13 SENATOR BONACIC: Your Honor. 14 JUDGE MATTHEW F. COOPER: Good morning, 15 Senators. 16 It is an honor to be heard on the important 17 issue of statutory maintenance. 18 My name is Matthew Cooper, and I'm a 19 New York State Supreme Court Justice. 20 For the last four years, I have sat in a 21 matrimonial part in New York County hearing only 22 divorces. 23 I was very happy to hear Senator Bonacic 24 mention the front-page article that appeared in the 25 "New York Law Journal" on September 10, 2013, an 1 article which revealed that New York County, with 2 only 8 percent of the state's population, handles 3 almost 30 percent of the divorces filed in 4 New York State. 5 We have, by far, the largest volume of cases 6 statewide, cases which often involve parties who 7 live in boroughs outside of Manhattan and counties 8 outside of New York City. 9 Thus, my colleagues and I have been able to 10 see, with great clarity, the impact that the 11 temporary-maintenance statute has had on matrimonial 12 practice and our ability to be fair, effective 13 judges. 14 Moreover, I believe that the experience 15 I have had dealing on a daily basis with the formula 16 gives me an excellent vantage point from which to 17 evaluate the proposed bill that you are now 18 considering, which, among other things, will, by and 19 large, apply the temporary-maintenance formula to 20 final maintenance awards. 21 I fully realize that the Legislature had the 22 best of intentions when it enacted the 23 temporary-maintenance statute. 24 The concern, quite admirably, was making sure 25 that a divorcing spouse, generally assumed to be the 1 wife and the parent who has or had primary 2 responsibility for the care and raising of the 3 children, would receive adequate support from her 4 husband, the spouse more often thought of as having 5 the higher income and being the non-custodial 6 parent. 7 Unfortunately, the temporary-maintenance 8 statute has failed in many aspects of its mission. 9 Instead of leading to consistent, 10 predictable, equitable, and fair outcomes, it has 11 only resulted in interminable litigation, especially 12 in higher-income cases, where courts have had to 13 struggle mightily with the statute, so as to avoid 14 making temporary-maintenance awards that are 15 unequitable, unfair, and, in fact illogical. 16 What might be surprising to hear, is that in 17 a good percentage of the temporary-maintenance cases 18 that have come before me, the party demanding 19 support is the husband. 20 In many of these cases, the husband, who, 21 without good reason, has worked on a limited basis, 22 and has contributed little to the household during 23 the course of the marriage, either financially or as 24 a homemaker, is the one invoking the statute as 25 giving him the right to collect thousands of dollars 1 in monthly temporary maintenance from his wife. 2 In one particularly memorable case, the 3 husband, a retired dentist, had left his wife of 4 more than 30 years, a practicing doctor, to live 5 with his girlfriend, who happened to be the 6 much-younger daughter of his wife's best friend. 7 Relying on the formula, the husband's 8 attorney insisted that the plain language of the law 9 required the wife, the moneyed spouse, to pay the 10 husband, the non-moneyed spouse, $7,000 a month in 11 temporary maintenance, regardless of the fact that 12 the money would be used to finance the husband's new 13 life with his live-in girlfriend. 14 Because chutzpah is not one of the 19 factors 15 to be considered -- 16 [Laughter.] 17 JUDGE MATTHEW F. COOPER: -- when deviating 18 from the guidelines, I had no reason legal reason to 19 deny the husband's application. 20 It was only by focusing on the shamelessness 21 of his behavior that I was able to convince the 22 husband to back off from his claim. 23 Similarly, there was a case where the 24 husband, with a master's in business administration, 25 "MBA," decided that, rather than work in finance, 1 he'd prefer to volunteer in a yoga studio. 2 He, too, when you applied the formula, would 3 be entitled to a huge amount of temporary 4 maintenance from his hard-working wife, under the 5 statutory formula, even if common sense tells us he 6 deserves little or nothing. 7 Even where the wife is the non-moneyed 8 spouse, the financial circumstances of the parties 9 are often such that it's impossible to apply a 10 formula to the situation. 11 As the appellate division's decision in 12 Carra versus Carra [ph.] makes clear, the obligation 13 to pay for schooling, mortgages, medical expenses, 14 and the like, makes it extremely difficult to be 15 constrained by a calculation when an individualized, 16 customized solution is needed. 17 The fact is that, maintenance, both temporary 18 and permanent, is far more complicated, nuanced, and 19 dependent on personal factors than child support. 20 Child support is always necessary and 21 appropriate no matter what the financial or personal 22 circumstances. 23 Maintenance is not; yet, the formula laid in 24 statutes makes it a presumption that maintenance 25 must be paid in some predetermined-formula fixed 1 amount, simply because one spouse has more income 2 than the other. 3 The end result, Senators, is that judges like 4 me are required to spend hours upon hours, 5 especially in high-income and complex financial 6 cases, writing 10-, 15-, 20-page decisions to 7 justify deviating from the formula so as to reach an 8 amount that is fair and sensible. 9 These are valuable hours that could be far 10 better spent dealing with the myriad of pressing 11 problems, whether those involving agonizing issues 12 involved with raising children in the context of 13 divorce, or those involving financial matters, like, 14 equitable distribution, that matrimonial judges 15 struggle to make time to hear. 16 Senators, I urge to you give serious 17 consideration to the May 15, 2013, New York State 18 Law Revision Commission final report on maintenance 19 awards. 20 As a judge who witnesses every day the 21 difficulties inherent with the temporary-maintenance 22 statute, and who can readily foresee the problems 23 that will be created by extending the formula to 24 permanent maintenance, I am in complete agreement 25 with almost all of the commission's sensible and 1 realistic recommendations, including capping the 2 formula at $136,000, the current cap for child 3 support. 4 That would be a great starting point for 5 turning well-intentioned but highly-flawed 6 legislation into a truly workable tool that will 7 benefit the judicial process and the litigants the 8 courts exist to serve. 9 Thank you. 10 SENATOR BONACIC: Thank you, Your Honor. 11 We're joined by Senator Lanza. 12 Senator Lanza, do you have a question? 13 SENATOR LANZA: Yes. 14 Thank you, Chairman. 15 Judge Cooper, I noticed in your testimony 16 that you pointed out, in both of the examples you 17 mentioned to this Panel, where you saw problems, 18 both were in terms of husbands. 19 And I'm wondering whether -- or, why gender 20 is of -- you know, is of significance to you in 21 these cases? 22 And is it your belief that the shortcomings 23 of the temporary-maintenance system manifests itself 24 only in terms of which -- you know, in terms of when 25 one gender, as opposed to the other, is bringing the 1 case? 2 JUDGE MATTHEW F. COOPER: No, absolutely not, 3 Senator. 4 And this is, of course, gender-neutral. 5 The reason I brought that up is, often, 6 I think it's within connection, because I understood 7 lots of the discussion that went on when the 8 temporary-maintenance statute was adopted, a focus 9 was put on women who would be -- who were the 10 homemakers, who raised children, who then ended up 11 with very little at the end of the divorce. 12 So, that's the reason why I mentioned that, 13 but this holds true both ways. 14 And those two examples were simply to show 15 it's not always -- it's not always the -- sometimes 16 there's a perception that it's always women who are 17 coming forward seeking maintenance. 18 Not at all the case. It works totally both 19 ways. 20 SENATOR LARKIN: I certainly don't share that 21 perception. 22 I just -- the perception of your testimony 23 led me to believe that, perhaps, it was husbands 24 that were exploiting the shortcomings of the 25 temporary maintenance more than women. 1 JUDGE MATTHEW F. COOPER: No, but I think -- 2 SENATOR LANZA: Do you find it more 3 egregious -- 4 JUDGE MATTHEW F. COOPER: No, but -- 5 SENATOR LANZA: -- or is it more egregious -- 6 are there more egregious cases of husbands, as 7 opposed to wives, for instance? 8 JUDGE MATTHEW F. COOPER: Well, the two cases 9 I cited were pretty egregious, so those were two, 10 and it just happened to be husbands. 11 But I think it can be equal opportunity, 12 let's say, taking advantage of the statute. 13 But, as I said, we do have cases where -- and 14 we have cases -- and I've seen cases where, and this 15 is when the wife abandoned the family as well, 20 -- 16 years and years ago, comes back now, does the 17 divorce, and says, Now I'm entitled to maintenance, 18 because that's what the statute provides. 19 And it's, simply, what I'm talking about is 20 not what gender, what -- whether it's husband or 21 wife. 22 It's the fact that there's this statute with 23 a strict formula, that results in a result that, not 24 only courts, but I think regular people, everyone, 25 our citizens, would say, That's not right. That 1 doesn't make sense. That's wrong. 2 And that's what I'm talking about. 3 SENATOR LANZA: Thank you, Judge. 4 JUDGE MATTHEW F. COOPER: Thank you. 5 SENATOR LANZA: Thank you, Chairman. 6 Anybody else have any questions? 7 Thank you, gentlemen, very much. 8 Appreciate you coming. 9 JUDGE MATTHEW F. COOPER: Thank you. 10 SENATOR BONACIC: The next group of witnesses 11 is the Women's Bar Association, and, Donna Frosco, 12 who is the president of the Women's Bar Association; 13 and, Dolores Gebhardt is a partner in McCarthy and 14 Fingar. 15 Good afternoon, ladies. 16 DONNA FROSCO, ESQ.: Good afternoon, Senator. 17 SENATOR BONACIC: Who is starting first? 18 DONNA FROSCO, ESQ.: That would be me, 19 Senator. 20 SENATOR BONACIC: We're ready for you. 21 DONNA FROSCO, ESQ.: Mr. Chairman, and 22 members of the Committee, my name is Donna Frosco. 23 I'm an attorney in White Plains, New York, and 24 president of the Women's Bar Association of the 25 State of New York. 1 And accompanying me is Dolores Gebhardt, who 2 is a partner in the law firm of McCarthy Fingar, 3 also in White Plains, who is also co-chair of the 4 Family and Matrimonial [unintelligible] Law 5 Committee of WBASNY. 6 Thank you for inviting us to present 7 testimony today. 8 On behalf of the almost 4,000 members of 9 WBASNY, again, I thank you for the opportunity to 10 present testimony on the "spousal maintenance 11 calculation" statue and the Law Revision Commission 12 report. 13 WBASNY's members come from 18 chapters across 14 the state of New York, and they include men and 15 women -- our members are both men and women, who are 16 private practitioners, public-interest attorneys, 17 state and federal judges, and law professors. 18 And since our formation in 1980, it has been 19 the mission of the Women's Bar Association of the 20 State of New York, and it continues to be, for the 21 advancement of women in society, and women in the 22 legal profession, and, also, equal administration of 23 justice, with a particular emphasis on issues 24 important to women, children, and families. 25 And it is with that background that we review 1 proposed legislation, and that we've reviewed the 2 Law Revision Commission report, and the issue of 3 maintenance guidelines. 4 A significant number of our members are 5 leading attorneys in the field of matrimonial and 6 family law. 7 Previously, on March 16, 2011, WBASNY issued 8 its official report to the Law Revision Commission, 9 regarding both temporary- and post-judgment 10 maintenance guidelines. 11 And a copy of that report is attached to the 12 written testimony that I've submitted to you today. 13 As we've discussed, on May 15th of this year, 14 the commission issued its final report on the 15 maintenance awards in divorce proceedings. 16 And, WBASNY appreciates the significant time 17 and effort that was required in this task. 18 It commends the commission on well-reasoned 19 and thoughtful recommendations concerning 20 pre-divorce temporary and post-divorce maintenance. 21 And WBASNY further notes the commission's 22 efforts in meeting with stakeholders, to learn and 23 listen to the bench and bar about these guidelines. 24 After reviewing the commission report, WBASNY 25 has concluded that it adheres to the positions it 1 previously expressed in the March 16, 2011, WBASNY 2 report submitted to the commission. 3 Those positions concur with the commission 4 report in several respects; however, on other 5 points, we do differ from what the commission has 6 recommended. 7 Now, I have submitted written copies of my 8 full testimony in the interest of time. 9 I and Ms. Gebhardt will limit comments to an 10 abbreviated summary of those positions. 11 As a first matter, the existing 12 temporary-maintenance guidelines provided by 13 Domestic Relations Law, Section 236(B)(5-a), 14 should -- we believe should be repealed and replaced 15 by the prior language of the former statute, which 16 provided that temporary-maintenance awards, if any, 17 should be based upon the parties' marital standard 18 of living. 19 In this respect, WBASNY does disagree with 20 the recommendations of the commission's report. 21 WBASNY's rationale is based on case law which 22 has consistently held that temporary maintenance 23 should maintain the financial status quo while the 24 parties work, with the Court's assistance, to 25 permanently resolve their marital dispute. 1 The temporary award, therefore, if any, 2 should consider the reasonable needs of both 3 parties, and, children, if any. 4 Those needs are determined by each party's 5 respective sworn statement of net worth, which, 6 pursuant to court rules, must be completed and 7 exchanged before the preliminary conference. 8 This approach is based on each family's 9 economic reality, and because each family's 10 resources and expenses are unique, each family's 11 temporary-maintenance award will be uniquely tied to 12 those resources and expenses. 13 In contrast, the current statute and the 14 commission's recommendation compelled courts to 15 apply a mathematical formula to the parties' 16 respective incomes. 17 Rather than considering the financial 18 resources and expenses unique to each family, this 19 approach income-shifts without regard to what each 20 party may actually need or what other financial 21 resources the family may actually have. 22 This approach also fails to consider that the 23 parties' true incomes may be difficult to determine 24 at a very early point in the matrimonial action. 25 Also, application of the mathematical formula 1 in all cases can lead to unfair results. 2 In lower-income cases, the payor spouse may 3 be left with insufficient funds to meet his on her 4 own needs. 5 In higher-income cases, particularly those in 6 areas of the state where the cost of living is 7 significantly higher, application of the formula can 8 lead to the payee spouse being unable to pay his or 9 her rent. 10 It is for those reasons that WBASNY 11 respectfully disagrees with the recommendation of 12 the commission. 13 However, WBASNY does concur with the 14 commission report, to the extent, that if a formula 15 is to be applied, the income cap should mirror that 16 of the Child Support Standards Act, which is 17 currently $136,000 of combined parental income, as 18 has been discussed by prior witnesses. 19 The cap in the 200 -- 2010 statute is 20 500,000 of the payor's income only. 21 It does not say state a justification for 22 this or for any income cap that exceeds the 23 $136,000. 24 And as previously stated, the actual incomes 25 of parties are often very difficult to determine 1 early in the case. 2 Further, use of such a high cap fails to 3 consider the reasonable needs of the payor and the 4 payee. 5 As noted by my colleague from the 6 New York State Bar Association, the commission 7 report and the New York State Bar Association report 8 noted, in 2008, that almost 95 percent of individual 9 income-tax-return filers, including those filing 10 jointly, reported income of less than $200,000. 11 Therefore, we fail to see the logical reason 12 to apply a cap of $500,000, particularly when the 13 purported reason for the cap is to protect low- and 14 middle-income families. 15 On a third point, WBASNY believes, that with 16 regard to post-divorce maintenance, application of a 17 formula should be advisory. 18 In this regard, WBASNY again does not agree 19 with the commission's recommendation. 20 While the mandatory application of the 21 Child Support Standards Act formula, to combine 22 parental income, generally, has resulted in 23 reasonable and equitable child-support awards, the 24 same reasoning and rationale does not apply to 25 spousal maintenance. 1 This is because, simply, children do not 2 work. 3 Most parents, on the other hand, are capable 4 of contributing to their own support; and, 5 therefore, the formula applied in Child Support 6 Standards differs from that in matrimonial actions. 7 I will yield to Ms. Gebhardt for the 8 remainder of the points that we would like to 9 discuss today. 10 SENATOR BONACIC: Thank you. 11 DOLORES GEBHARDT, ESQ.: WBASNY believes, 12 that in determining post-divorce maintenance awards, 13 the court should continue to retain discretion to 14 consider the reasonable needs and the earning 15 capacities of both spouses. 16 The rigid application of the formula, even 17 one where the income cap is $136,000 of combined 18 income, may very well lead to inequitable and 19 unwanted results. 20 I can offer some anecdotal evidence. 21 One of them is a published decision, a 2002 22 decision of the Appellate Division, 23 First Department, Havell versus Islam. 24 It's a very famous case. 25 In that case, in response to his wife's 1 request for a divorce, Mr. Islam beat Ms. Havell 2 nearly to death with a barbell in the presence of 3 three of their six children. 4 After trial, due to his egregious act, 5 Mr. Islam was awarded only 4.5 percent of the 6 parties' $13 million marital estate, and the trial 7 judge's decision in that regard definitely implies 8 that the Court was not happy about awarding even 9 that. 10 While the major issue in Havell versus Islam 11 was the propriety of an equitable distribution award 12 in the face of unimaginable domestic violence, 13 Mr. Islam was unemployed, and Ms. Havell's income 14 exceeded $830,000. 15 Under the current statutory framework for 16 temporary maintenance, Ms. Havell, the moneyed 17 spouse, would have to pay Mr. Islam $150,000 per 18 year in temporary maintenance. 19 Under the commission's recommendation for 20 post-divorce maintenance, Ms. Havell would be 21 required to pay maintenance to the man who tried to 22 murder her, on income up to $136,000; or, at least 23 $3,400 per month. 24 Is there anyone who thinks that that's a just 25 result? 1 Another example is a case in which the 2 non-custodial parent is capable of working, but 3 refuses to do so. 4 And our colleague Judge Cooper mentioned that 5 before. 6 Under the current and suggested maintenance 7 guidelines, the custodial parent not only bears most 8 of the responsibility for child-bearing, but must 9 also work to pay maintenance to a former spouse, 10 simply because the law requires it, not because it 11 is the just thing to do; thus, leaving fewer 12 financial resources available for the children's 13 needs. 14 The non-custodial spouse in such cases has 15 little incentive to return to the workforce. 16 I can give you another anecdotal example, a 17 case that I handled personally myself. 18 I was pro bono counsel to a woman who was the 19 wife in an arranged marriage. She was brought to 20 this country and abused by her husband and by his 21 family. 22 The husband was employed by his wealthy 23 family, so, obviously, his income could be 24 manipulated. 25 The marriage lasted a very, very short time; 1 about a year and a half. 2 After my client gave birth to a child, the 3 husband gave her a one-way ticket back to her home 4 country. 5 He then immediately went to Supreme Court and 6 got a temporary order of protection, claiming that 7 the wife had abused the child and abandoned it. 8 By the time I was appointed to represent this 9 person, she had not seen her child in nearly 10 two years. 11 Under the current statutory framework, and 12 under the recommended guidelines, this woman would 13 get very little, if anything, because the marriage 14 was of an extremely brief duration, and the 15 husband's income was manipulated to be a ridiculous 16 level of $12,000 per year. 17 Because I had a caring judge, one who 18 understood the financial realities in this case, and 19 one who had compassion for my client, the victim of 20 domestic violence, we were able to settle the case. 21 This woman is going to get maintenance for 22 nine years. 23 These are the types of cases that 24 practitioners deal with every day. 25 Judges must have discretion and flexibility 1 to right the wrongs. 2 A rigid formula, sadly, is not the way to do 3 it, Senators. 4 WBASNY also believes that if there is to be a 5 formula for calculating maintenance, that formula 6 should be applied to the non-custodial 7 payor-parent's income after deducting that parent's 8 child-support obligation. 9 We are talking about the same stream of 10 income, and, if we're going to apply a formula 11 that's akin to that of the Child Support 12 Standards Act, you can't double-dip. 13 The current statute provides that maintenance 14 is deducted before calculating child support. 15 WBASNY feels that it should be the other way 16 around; we should deduct maintenance after deducting 17 the child-support obligation. 18 WBASNY agrees with the commission's report, 19 that in determining the duration of maintenance, the 20 court should consider, not only the length of the 21 marriage, but the parties' reasonable retirement 22 ages and financial resources, including retirement 23 benefits. 24 In many marriages, one of the largest assets 25 is often the parties' retirement benefits. 1 If these are equally divided in equitable 2 distribution, the parties will have nearly identical 3 incomes, post retirement; and, thus, little or no 4 need for an award of spousal maintenance. 5 Our last point, is that WBASNY agrees with 6 the Law Revision Commission report, that the 7 consideration and distribution as a marital asset of 8 a party's enhanced earning capacity, as a result of 9 licenses and degrees earned during the marriage, 10 should be abolished. 11 The treatment of enhanced earning capacity as 12 a marital asset was established in the 1985 case of 13 O'Brien versus O'Brien. 14 Anyone familiar with the facts will know that 15 that was a perfect example of good facts making very 16 bad law. 17 The O'Brien case has led to costly litigation 18 and inequitable results, since the parties enhanced 19 earning capacity is intangible, and its valuation is 20 often speculative. 21 New York is only the state in the union that 22 considers enhanced earning capacity to be a marital 23 asset. 24 Instead, WBASNY agrees with the commission 25 that the contributions of a spouse to the other 1 spouse's career should be considered in an award of 2 post-divorce maintenance. 3 Thank you for your time today, and for 4 providing us with this opportunity to assist you in 5 your work. 6 SENATOR BONACIC: Does anyone have any 7 questions? 8 Okay. 9 Senator Thompson. 10 SENATOR HASSELL-THOMPSON: Thank you. 11 I had a couple of questions. 12 I just want to ask this one particular 13 question: 14 The way you frame it, it gives me the 15 impression that you don't believe that the law 16 authorizes the court to abandon the guidelines where 17 the facts require abandonment of these guidelines, 18 and where the application should -- would be 19 inappropriate or unfair. 20 DOLORES GEBHARDT, ESQ.: I'm sorry that you 21 got that impression, Senator. 22 It is our impression, on the other hand, that 23 if there is -- 24 SENATOR HASSELL-THOMPSON: But you gave me 25 that impression. 1 DOLORES GEBHARDT, ESQ.: And I apologize for 2 doing that. 3 I think that the courts always should have a 4 discretion. 5 We believe that formulas should be advisory, 6 right, and should not be rigidly adhered to, because 7 the facts of every case are different. 8 It was our impression, from reading the 9 commission report, and from reviewing anecdotal 10 cases, that -- and, in particular, current statute, 11 that the main thrust is, Let's apply a formula 12 first, and then maybe we'll have a deviation from 13 it. 14 What wound up happening in Child Support 15 Standards Act cases, where there is formula, and 16 everyone, I think, recognizes that it works fairly 17 well, but, what's happened is, on combined incomes 18 in excess of the cap, which, currently, is $136,000, 19 what the courts are doing is, often, they're simply 20 applying formula to greater income levels. 21 That's what we don't want to have happen 22 here. 23 They don't have to do that, but that's what 24 they're doing. 25 That's what we do not want. 1 SENATOR HASSELL-THOMPSON: I agree that, 2 initially, you said that you thought that the 3 child support should be first, and that, then, the 4 cap should be set after. 5 Which is, in part, why, when you asked the 6 question, "What's the justification?" perhaps the 7 justification for 500,000 was high. 8 But, it was a cap. 9 It is not where you begin the process, or -- 10 but, you know, for incomes up to 500,000 is the way 11 in which the law is written, so -- and was written 12 deliberately, because we felt that, regardless as to 13 the numbers of what the income was, there is still a 14 large number of people who fit in that category 15 between 136,000 and 500,000, that we thought that 16 the formula should be applied to. 17 And the formula, by way, is not as rigid as 18 everybody seems to be inferring, but it is a 19 guideline. 20 And I think that the courts have chosen to 21 use it as a guideline. 22 And it was very interesting to hear, almost 23 contradictory testimony, some testimony said that 24 they thought that the law began to -- to create 25 predictability and consistency; and, yet, I heard in 1 some of the testimony, that it was grossly in error. 2 So, you know, it's just kind of interesting 3 to have such a wide deviation and opinions about the 4 same law; and, yet, everybody agrees there needs to 5 be something, but everybody wants to go back to the 6 old way. 7 And we have -- we have determined that the 8 old way is absolutely not where we need to be, based 9 upon the length of litigation, based upon how 10 lawyers are the ones who make the money, and who, 11 many times, children's scholarship funds and 12 everything have been eaten up while the courts 13 deliberate and deliberate. 14 So, thank you for your testimony. 15 But I -- maybe it's just an interpretation of 16 how you see the law. 17 And since this is your forte, I may have to 18 bend, but I won't bow to it. 19 SENATOR BONACIC: I'd like to ask 20 Ms. Gebhardt a question. 21 I just want to make sure I was clear, when 22 you gave the instant of the woman that came from 23 another country, was abused, the marriage was 24 two years. 25 Are you saying that the formula, up to 1 136,000, should not be rigid? 2 That there should be judicial discretion if 3 the judge finds fault or manipulation, or can pierce 4 the veil of manipulation, that they don't have to 5 adhere to that formula, up to 136,000? 6 Were you suggesting that? 7 DOLORES GEBHARDT, ESQ.: I think that judges 8 should have discretion. 9 SENATOR BONACIC: Okay. 10 DOLORES GEBHARDT, ESQ.: I'm sorry. 11 It is WBASNY's position that courts should 12 have discretion in all cases -- 13 SENATOR BONACIC: Okay. I -- 14 DOLORES GEBHARDT, ESQ.: -- because of the 15 anecdote that I gave you. 16 SENATOR BONACIC: Okay, I just wanted to make 17 sure. 18 DOLORES GEBHARDT, ESQ.: That was for 19 illustrative-purposes only. 20 SENATOR BONACIC: Okay, thank you. 21 Anyone have any other questions? 22 We thank you very much for coming. 23 DONNA FROSCO, ESQ.: Thank you, Senator. 24 DOLORES GEBHARDT, ESQ.: Thank you very much. 25 1 SENATOR BONACIC: Sure. 2 Our last witness of the day -- witnesses, 3 I should say, is Post Marital Income Coalition, 4 which is Emily Reuben. She's the attorney in charge 5 of the Legal Aid Society, Civil Practice; 6 And we're also joined by the New York Legal 7 Assistance Group, Kate Wurmfeld, senior attorney for 8 New York Legal Assistance Group. 9 Welcome, and thank you for being here today. 10 EMILY RUBEN, ESQ.: Thank you so much for 11 inviting us. 12 I really, we both really, appreciate this 13 opportunity. 14 So I'm here today, sort of with two hats on: 15 both, my Legal Aid Society hat, and, also, what we 16 had called the "Post Marital Income Coalition." 17 We've changed our name to mirror the name of 18 the statute, so we're calling ourselves the 19 "Post Divorce Maintenance Standards Coalition" these 20 days. 21 So let me just tell you a little bit about 22 the Legal Aid Society, and how I come to this work. 23 The Legal Aid Society is the oldest and 24 largest provider of legal assistance to low-income 25 families and individuals in the whole United States. 1 Our family-law and domestic-violence practice 2 provides legal representation to over 1,000 cases a 3 year. 4 We work closely with different community 5 groups, representing low and poor New York City 6 residents. 7 Members of the family-law and 8 domestic violence practice at the Legal Aid Society 9 have played a leadership role over the years in the 10 Lawyers Committee Against Domestic Violence, which 11 is a statewide coalition of over 100 lawyers who 12 work to support victims of domestic violence. 13 Members of the Legal Aid Society's family-law 14 and domestic-violence practices also founded the 15 New York State Maintenance Standards Coalition 16 Group, and came up with the idea of maintenance 17 standards many, many years ago, in an effort -- when 18 we were approached and asked about our position on 19 no-faults. 20 And when many of us representing low-income 21 women, especially women who are victims of domestic 22 violence, were bemoaning the fact that our clients, 23 and, nationally, this is true, even though 24 Judge Cooper talks about men who are the 25 lesser-earning parties, still, the overwhelming -- 1 if you look at statistics, the overwhelming number 2 of -- the overwhelming number of families in this 3 country, and in this state, it's women who are the 4 lesser-earning spouses, for all sorts of reasons. 5 And we were seeing that our clients were 6 getting inconsistent and unfair, and, often, very 7 low maintenance awards, if any maintenance awards at 8 all. 9 And we started thinking about, there has to 10 be a fairer way, if we're going to get rid of 11 grounds divorce, to secure low-income families, 12 women and children mostly, after divorce. 13 So, we're really, really grateful for this 14 opportunity to testify. 15 I wanted to just introduce some -- or, 16 mention some other people who are in the audience, 17 representing other organizations who are part of 18 this coalition. 19 There is someone here from Sanctuary For 20 Families, and I commend to you her written 21 testimony, Sanctuary's written testimony, that was 22 put in today, which is really a point-by-point 23 reputation of what the women's bar just testified 24 to, and it's very effective, and I recommend you 25 reading that. 1 There's also someone here from the 2 Legal Project in Albany. I think two people here 3 from the Legal Project in Albany. 4 Other members of the Legal Aid Society. 5 And, so, I just wanted to make sure that you 6 knew that we're a large group representing, a lot of 7 women, a lot of low-income litigants. 8 The Law Revision Commission's report, 9 I commend their work. They worked very hard. 10 I had a lot of communication with 11 Rosemary Bailly, which I really appreciate. 12 While they were still deliberating, a bill 13 was introduced into the New York Assembly. There 14 was a same-as bill in the Senate. 15 The Assembly bill was, later in the session 16 last year, amended. It's A6728B, and I commend that 17 bill to you. 18 This is a bill that we support, the Legal Aid 19 Society and all of the groups of who are members of 20 the Post Divorce Maintenance Standards Coalition. 21 The final report of the Law Review 22 Commission, like the bill introduced into the 23 Legislature, adopts the concept of standards, not 24 just for temporary maintenance, which has been part 25 of New York State law since 2010, but it, also, 1 the -- but, also, for post-divorce maintenance. 2 First, I want to give a nod to how effective 3 the law has been for low-income and middle-income 4 clients in New York. 5 The establishment of interim-maintenance 6 standards dramatically improved the landscape for 7 divorcing couples within litigated cases in 8 New York State. 9 Lawyers representing low- and moderate-income 10 clients report that clients who, in spite of great 11 need, would have been unable to undertake the 12 litigation -- the cost of the litigation for interim 13 maintenance awards, under the vague provisions of 14 the previous law, had been receiving temporary 15 maintenance. 16 And, as Exhibit B to my -- Exhibit A to my 17 testimony, there is a list of stories that the 18 lawyers' committee case scenarios -- actual case 19 scenarios that the Lawyers Committee Against 20 Domestic Violence gathered in 2011, to aid the 21 Law Revision Commission in their work, which really 22 shows, and I don't have time to go into each of the 23 many stories in that exhibit, but I commend that to 24 you as well, what a positive effect the law has had 25 on litigating interim-maintenance issues. 1 So, the proposed bill, along with the 2 temporary-maintenance standard enacted in 2010, 3 provides for a statutory structure necessary to make 4 the ideals of the statute work. 5 An essential feature of the bill that we 6 support, is a method for calculating the presumptive 7 amount of award, including, both, the standards for 8 the amount of the award, and standards for the 9 duration of the award. 10 I was very gratified to hear Peter Kiernan 11 talk about how important predictability and 12 consistency are, and how that was really the 13 cornerstone of their recommendation in their report 14 for a guideline for, or a standard for, amounts. 15 But then that, illogically -- then, 16 illogically, the -- a standard for duration is 17 thrown out the window. 18 What we're concerned with, in the vast 19 majority of divorces in New York State, are not 20 litigated divorces. 21 I think, sort of, something like 75 percent 22 of the divorces in New York State are cases where 23 both parties goes to a mediator, or they go to a 24 family lawyer together. 25 There's a home health-aid worker who makes 1 $15,000 a year; and her husband makes $75,000 a 2 year, or $90,000 a year, working for New York City 3 Transit. 4 And they go to a mediator, and the mediator 5 says, Okay, well, here's what the equitable 6 distribution of the pension is going to be, or, one 7 lawyer, Here's what that equitable distribution of 8 his pension will be. You'll each get 50 percent. 9 Here's what child support's gonna be under 10 the Child Support Standards. 11 Now, if the recommendations of the 12 Law Revision Commission are adopted, the mediator 13 will be able to say, Well, here's the appropriate 14 amount of maintenance. But, you guys have been 15 married for 20 years. I don't know, maybe you 16 should have maintenance for a year, maybe you should 17 have maintenance for 25 years. 18 There's nothing to -- that -- to allow them 19 to come to a conclusion without litigating. 20 And the $15,000-a-year home health aid is not 21 going to be able to afford to litigate. 22 I think what one of the things that the Law 23 Revision Commission data showed, when they looked at 24 all of these cases, many of which were uncontested 25 divorce cases, is that there were no awards of 1 maintenance at all in the vast majority of cases. 2 "No awards of maintenance at all." 3 Well, that's just not possible, because we 4 know there are disparities of income, or, that's not 5 right. 6 It's possible that's what happens, because 7 people can't afford to litigate post-divorce 8 maintenance awards. 9 And what these guidelines do, is provide a 10 standard, just like there's a standard for 11 child support, so that no longer involves costly 12 litigation. 13 And that's one of the reasons that we're so 14 in favor of this legislation. 15 In addition, yes, it's true, not everyone has 16 W-2 income. 17 In the example given by the Women's Bar 18 Association, about the domestic-violence victim, 19 where the husband had unreported income and showed 20 $12,000 a year. 21 Well, we have that all the time. 22 The definition of "income" provided in the 23 bill that was in Assembly, and that's -- and the 24 definition of "income" that's in the current 25 "interim-maintenance guidelines" bill, mirrors the 1 definition of "income" in the Child Support 2 Standards Act. 3 And that definition includes the right or the 4 ability for a judge to impute income. 5 That's the hard part of a judge's job. It's 6 much easier when everyone has two W-2 employees. 7 But to impute income to someone who has 8 family income, but it's only showing up as $12,000 9 in family-business income. 10 So, that doesn't change with guidelines or 11 without guidelines. 12 We also strongly favor the part of the 13 proposed legislation which would -- which would not 14 require that maintenance ends on remarriage. 15 Now, why is this? 16 This is sort of a radical notion, but when 17 you think about it, it's really not. 18 The portions of the Domestic Relations Law 19 which provide for termination of maintenance on a 20 payee's remarriage really should be repealed. 21 They're from another era. From, really, an 22 archaic era in our country. 23 DRL 245, which provides for a termination of 24 a wife's support if she remarries -- it talks about 25 husbands and wives -- is a vestige of repudiated 1 ideas about marriage. 2 Until the twentieth century, marriage, 3 legally, was a union of unequals: a subservient 4 wife, or, the wife was the chattel, without the 5 right to property; and a husband, with an obligation 6 to support his dependent wife, or, his chattel. 7 In contrast, New York law now views marriage 8 as an economic partnership. 9 Alimony, available only to a wife, and only 10 if she was not the fault party in the divorce, has 11 evolved into maintenance that is available to either 12 spouse without regard to fault. 13 It is illogical and inconsistent to 14 circumscribe a payee's life choices with a rule that 15 eliminates maintenance on remarriage. 16 Maintenance, under the bill that we support, 17 like equitable distribution, is awarded as a way of 18 resolving the financial issues at the break up of a 19 marital partnership. 20 Like equitable distribution, maintenance 21 should be available without strings that restrict a 22 payee's ability to start new relationships and 23 create new families. 24 Individuals currently leave marriages with 25 assets attributable, in some way, to a former spouse 1 that may help to support a new spouse. 2 A cash award of marital assets can be used to 3 buy a house that becomes a new marital residence. 4 An equitable distribution award of a portion 5 of a pension that is available on retirement of a 6 former spouse, is paid whether or not the recipient 7 has remarried. 8 Enhanced-earning-capacity awards may be paid 9 in installments, and those payments do not cease if 10 the recipient remarries. 11 Similarly, social security benefits on a 12 marriage that has ended continue after remarriage of 13 the beneficiary. 14 Retirement is far too speculative and vague a 15 concept to use as a termination point for 16 maintenance. 17 Similarly, using retirement, or, worse, the 18 normal full retirement age as defined by federal 19 law, as a factor in setting the duration of 20 maintenance, ignores the reality of retirement 21 today. 22 Retirement is an increasingly murky concept. 23 When people begin to collect social security 24 or pensions, they may continue to work at a job 25 they've had for many years; or, a new job, either 1 full- or part-time. 2 Some people with sufficient assets may find 3 little or no diminution in income as they age, even 4 when they leave the workforce. 5 Reaching full social security retirement age, 6 which is now between 67 and 66, depending on 7 birthdate, changes the income of only a limited 8 number of people, and it may well increase the 9 income of a payor. 10 Few variables that will determine when, and 11 how, income shifts as people age are known or 12 predictable at the time of a divorce. 13 And current law, realistically and wisely, 14 provides for modifications of awards when incomes 15 actually change. 16 Exhibit B to my testimony is a one-page 17 information sheet that was prepared by the 18 New York State Coalition on Maintenance Standards, 19 which I think is particularly -- which goes to the 20 issue of retirement, and has some statistics about 21 how unpredictable it really is. 22 The treatment of increased earning capacity 23 in O'Brien: 24 You've heard many people say today that, 25 universally, everyone agrees we should get rid of 1 O'Brien. 2 Well, that's not exactly true. 3 The Maintenance Standards Coalition and 4 [unintelligible] advocates and organizations who 5 represent low-income people throughout the state, 6 see the problems with O'Brien. 7 But, O'Brien, although much maligned, was an 8 example of a court finding an equitable solution to 9 a problem that was created by a gap in existing 10 remedies under the Domestic Relations Law. 11 The most important asset of a marital 12 partnership is, often, the future flow of income. 13 And under O'Brien, spouses who sacrifice 14 their career opportunities to build their spouse's 15 earning capacity can tap into that future income. 16 The proposed legislation on post-divorce 17 maintenance standards builds this into its structure 18 so that, enacting -- only if comprehensive 19 maintenance standards are enacted, should O'Brien be 20 overruled by the legislation. 21 Under the current law, the remarriage of the 22 former spouse receiving maintenance, as we 23 discussed, cuts off their right to future payments. 24 If maintenance awards are to be a substitute 25 for equitable distribution of the marital assets 1 identified in O'Brien, maintenance awards, too, must 2 continue regardless of the marital status of the 3 payee. 4 We also strongly support an income cap that's 5 higher than $136,000. 6 I will leave that to my colleague Kate to 7 discuss with you, because I'm running out of time. 8 And I wanted to -- I very much wanted to talk 9 to you a little bit about a specific example, and 10 this is actually an example of a client who called 11 me several years ago. 12 I'm going to use a false name, 'cause, for 13 confidentiality reasons. 14 But, "Sarah Allen" telephoned Legal Aid, 15 seeking advice about a possible divorce. 16 She was 24 years old, and had been married 17 for six years. 18 She was the victim of very severe domestic 19 violence. 20 Her husband, "Martin Allen," was considerably 21 older than she. 22 She had not graduated from high school. 23 He had a college education, and worked for 24 the board of education, earning an adjusted gross 25 income, at that time, of $60,000 a year. 1 The couple had two young children: a 2 4-year-old and a 2-year-old. 3 He had been physically violent to her, and 4 she really wanted to leave him, but she was 5 terrified about how she was going to support herself 6 and the children. 7 The Allens lived in a two-bedroom apartment 8 that rented for $1600 a month. 9 They had no marital property to speak of. 10 Ms Allen called to get advice about, what 11 would happen if she filed for divorce? 12 Her biggest concern was financial. 13 When I explained to her that she would get 14 child support of, approximately, $15,000 a year, 15 based on her husband's income, but that there was no 16 way to predict how much or for how long she would 17 get post-divorce maintenance, she decided against 18 filing for a divorce. 19 She was just too afraid she would not be able 20 to pay the rent and support the children. 21 Had the legislation that we support existed, 22 post-marital divorce standards -- maintenance 23 standards, and post-divorce maintenance standards, 24 I would have been able to tell Ms. Allen that she 25 would have been able to receive, approximately, 1 $18,000 a year in maintenance; 2 Her child support -- 3 Because the way the statute is written now, 4 has maintenance coming first, and child support 5 coming second. We don't really -- we're kind of 6 agnostic on that point, which comes first and which 7 comes second. 8 -- but as it is written now, she would have 9 been getting $875 a month in child support; or, 10 $10,500. 11 And on page, I think, 14 of my testimony -- 12 is -- are the numbers, if it's easier for you to 13 follow that way. 14 She would also know that she was going to be 15 getting maintenance, based on the duration of her 16 marriage, for 2 1/2 years. 17 That would have been long enough for her to 18 get a GED, and, to get an associate's degree. 19 And I really believe, after having this 20 conversation, that had I been able to tell her that, 21 and give her that assurance, This is what we 22 think -- well, not -- you know, there are deviation 23 factors, and all that, but, pretty much, I can 24 predict, This is what I think we'll be able to get 25 for you if we make the pendente lite motion -- 1 I mean, if we go through with the divorce, this is 2 how long I think your maintenance will last, 3 I believe she would have gone through with it, 4 instead of deciding that she was just going to have 5 to live with the domestic violence for longer. 6 So, thank you very, very much. 7 SENATOR BONACIC: Let me jump in here on your 8 example. 9 What's being proposed by the Law Revision 10 Commission, would be guidelines; so, this would be 11 all under 136,000. 12 EMILY RUBEN, ESQ.: Yes. 13 SENATOR BONACIC: So, in terms of temporary 14 alimony, and post-divorce maintenance, as a 15 practical matter, does the Legal Aid do 16 judge-shopping? 17 Do you go to a judge that you think is more 18 favorable to a female or a male, or -- 19 EMILY RUBEN, ESQ.: We can't. 20 SENATOR BONACIC: You don't have that -- 21 EMILY RUBEN, ESQ.: There's no ability. 22 SENATOR BONACIC: You don't have that 23 discretion? 24 It's -- 25 EMILY RUBEN, ESQ.: Well, the way the 1 court -- the way the Office of Court Administration 2 works now, like, you go in -- when you file papers, 3 it goes into a wheel. 4 It's not like someone's sitting, at this 5 time, or that time -- 6 SENATOR BONACIC: You can't choose, is what 7 you're saying? 8 EMILY RUBEN, ESQ.: We can choose. 9 SENATOR BONACIC: You're bound by whoever 10 decides -- 11 EMILY RUBEN, ESQ.: Absolutely. 12 SENATOR BONACIC: Okay. 13 EMILY RUBEN, ESQ.: And I also -- 14 SENATOR BONACIC: Now, could you have advised 15 this woman based on guidelines? 16 EMILY RUBEN, ESQ.: I could have, if there 17 are -- I could have advised this woman, if there 18 were guidelines for duration, you mean -- 19 SENATOR BONACIC: Yes. 20 EMILY RUBEN, ESQ.: -- as opposed to 21 standards? 22 SENATOR BONACIC: Yes. 23 EMILY RUBEN, ESQ.: Yes, although, it's not 24 clear to me exactly what the difference, because 25 I think, no matter the -- as 1 Senator Hassell-Thompson pointed out before, these 2 are not rigid, "you must apply these guidelines." 3 SENATOR BONACIC: They're not in stone. 4 EMILY RUBEN, ESQ.: These are guidelines that 5 have factors that allow judges to deviate and make 6 adjustments, for all sorts of reasons. 7 SENATOR BONACIC: Okay. 8 EMILY RUBEN, ESQ.: Also, I just wanted to 9 say that the Legal Aid Society and the coalition 10 very, very strongly supports the commission's 11 recommendation that the 12 interim-maintenance-standards law be mirrored in the 13 Family Court Act support -- spousal support 14 provisions as well. 15 SENATOR BONACIC: Okay. Thank you very much, 16 Mrs. Reuben. 17 We're gonna hear from Kate Wurmfeld now. 18 KATE WURMFELD, ESQ.: Yes. 19 SENATOR BONACIC: Kate, you ready to go? 20 KATE WURMFELD, ESQ.: Yes. 21 Good afternoon -- 22 SENATOR BONACIC: Good afternoon. 23 KATE WURMFELD, ESQ.: -- and thank you for 24 having us, and giving us this opportunity. 25 I am here representing NYLAG. 1 I'm also the co-chair for the 2 Lawyers Committee Against Domestic Violence. 3 And, NYLAG strongly supports the maintenance 4 standards proposed in A6728B, hereinafter 5 "the bill," as I'll explain. 6 NYLAG was founded in 1990. 7 Just a little bit about us: 8 NYLAG is a non-profit law office providing 9 comprehensive free legal services to low-income 10 New Yorkers who would otherwise be unable to afford 11 or receive legal help. 12 We provide services to individuals with 13 issues, ranging from family matrimonial actions, 14 public benefits, immigration, home care, 15 health care, elder abuse, advanced directives, 16 eviction and foreclosure prevention, consumer law, 17 and special education, to name a few. 18 NYLAG employs over 210 paid professionals, as 19 well as leverages the services of over 20 1,000 volunteer attorneys and law-student interns. 21 In addition to our main office in Manhattan, 22 NYLAG sees clients at 76 intake sites located in 23 courts, hospitals, community-based organizations, 24 throughout New York City, Westchester, and 25 Long Island. 1 NYLAG also has longstanding mutual referral 2 relationships with almost 300 health and 3 human-service organizations citywide. 4 Through these partnerships, the agency served 5 over 60,000 people last year alone. 6 The matrimonial and family-law unit provides 7 free legal service on a myriad of family-law issues 8 including -- 9 Excuse me, my eye is tearing. 10 -- including divorces, contested and 11 uncontested; orders of protection; child custody and 12 visitation; spousal and child support, and 13 paternity. 14 We prioritize victims of domestic violence, 15 who have more complex legal needs than other 16 litigation. 17 In addition to direct representation, we also 18 provide free legal consultations. 19 In the past year, NYLAG provided direct legal 20 services to 6,530-family law clients alone. 21 Excuse me. My -- I have an eye -- like a 22 tearing eye. 23 SENATOR BONACIC: That's okay. Take your 24 time. Take your time. 25 KATE WURMFELD, ESQ.: Dry eyes. 1 It's not the subject matter that's making me 2 teary. 3 Just a little bit about NYLAG's clients: 4 Most of the NYLAG's family-law clients are 5 victims of domestic violence. 6 Because the agency does not accept federal 7 funding, it is able to serve, not only abject-poor 8 domestic-violence victims, but also lower- and 9 middle-class and working-poor victims who cannot 10 afford private attorneys, as well as undocumented 11 victims. 12 For example, a mother of two children who 13 earns $42,000 per year, which is $2,940 above 14 200 percent of the federal poverty guidelines, and 15 owns a house with her husband, an illiquid asset, 16 would qualify for assistance from federally-funded 17 agencies -- would not quality for assistance from 18 federally-funded agencies, but would be eligible for 19 NYLAG services. 20 So as a result, we're able to see some 21 higher-income cases, but, still, people who would 22 benefit from this litigation -- from this 23 legislation. 24 According to the Mayor's Office To Combat 25 Domestic Violence, 36 percent of the population in 1 New York City is foreign-born. 2 NYLAG's family and matrimonial practice 3 reflects this number, and that one-third of our 4 clients are immigrants. 5 These clients face great challenges, as many 6 speak little or no English, have minimal formal 7 education, face significant hurdles to finding 8 employment; and, thus, need the financial support of 9 their moneyed spouse. 10 The following case example illustrates the 11 importance of a few of the points that we have heard 12 discussed today: 13 Extending and applying the current formula 14 used to calculate temporary awards to final awards; 15 A formula for duration, which doesn't 16 automatically end at retirement; 17 And an income cap that's at least $300,000 of 18 the payor's income. 19 Mr. and Mrs. X were married in a Caribbean 20 country in 1988. 21 A year later, Mr. X moved to the 22 United States, when Miss X was almost due with their 23 second child. 24 She and their children came to the U.S. a 25 year later. 1 Mr. X obtained immigration status, and 2 worked, first, as a security guard, before 3 eventually becoming a bus driver with the MTA, 4 earning up to $90,000 per year, with overtime, and 5 the security of a pension. 6 Miss X took care of the children, and 7 maintained the home, working off the books 8 occasionally, and then, for a short time, as a home 9 health aide, earning $20,000 per year. 10 Throughout their 23-year-long marriage, 11 Mr. X repeatedly physically assaulted his wife, 12 and had her committed involuntarily to a mental 13 hospital -- 14 Something that we actually see with relative 15 frequency in these types of relationships. 16 -- based on fabricated allegations. 17 The hospital released her after a few days, 18 stating she didn't suffer from any mental illness. 19 At the same time, Mr. X refused to sponsor 20 her for immigration status, allowing him to maintain 21 further power and control. 22 Miss X's situation was further complicated 23 when she injured her back as a result of a fall, 24 making it impossible to lift patients as her job 25 required. 1 While she could perform other less 2 physically-challenging jobs, most of these positions 3 require a minimum level of education, and Miss X did 4 not have a high school diploma. 5 A 55-year-old immigrant, with no formal 6 education, who also suffers from diabetes and 7 thyroid issues and other health issues, in addition 8 to wearing a back brace, is unlikely to find 9 meaningful employment. 10 As a result, maintenance from her moneyed 11 husband was even more critical to her very survival. 12 A few months after her fall, Miss X became 13 homeless and had no money to support herself. 14 Soon after the divorce started, with NYLAG as 15 counsel, the judge ordered temporary maintenance 16 pursuant to the formula. 17 Before temporary maintenance was passed, it 18 would have been near impossible for her to argue for 19 and obtain this award on her own. 20 Now, even without an attorney, she still 21 could obtain a temporary-maintenance award by filing 22 a motion on her own. 23 When arguing over the final award, NYLAG 24 requested the Court apply the temporary formula of 25 $1900 per month, for 23 years, which is the length 1 of their marriage, which is what the bill would 2 provide. 3 Mr. X proposed $500 per month, for 5 years. 4 The discrepancy of their positions highlights 5 the necessity of a uniform standard. 6 Two years, and a trial later, Miss X received 7 a maintenance award for the exact amount as the 8 temporary award, which was $1900 per month, but, for 9 only 10 years. 10 In addition to providing formula for the 11 amount of maintenance, the bill also provides for a 12 formula to determine the duration. 13 This is critical to promoting the consistency 14 and predictability, as well as a fair result. 15 The formula relies on the length of the 16 marriage as the guiding factor, which is the factor 17 most considered by courts in fashioning awards, 18 based on the current law. 19 The reason for this, is that the longer the 20 marriage, the greater the economic partnership. 21 In most families, the only asset to divide is 22 the stream of income of the moneyed spouse, which 23 was obtained with the support of the spouse who took 24 care of the home and the children. 25 Like other aspects of equitable distribution, 1 the bill provides for durational awards that reflect 2 the contributions made during the marriage. 3 The other factors currently considered by the 4 courts in determining duration, such as education 5 and work experience, are strongly correlated to the 6 length of the marriage. 7 In our case, Miss X had been the primary 8 caregiver of the parties' children, and took care of 9 the home for 23 years of marriage, while her husband 10 was able to cultivate a successful career. 11 Miss X's inability to support herself after 12 the marriage ended was directly related to the 13 length of time she was neither in school nor working 14 outside of the home. 15 Without the formula for duration contained in 16 the bill, the Court awarded only 10 years of 17 maintenance for Miss X. 18 As a result, and here are the stark numbers, 19 when the maintenance ends, Miss X will have to 20 survive on $12,000 per year, which is what she'll 21 receive in social security benefits, through her 22 husband, which is the equivalent of, approximately, 23 half of his benefits. 24 It doesn't take away from his benefits, but 25 that's the amount she'll receive. 1 Since she did not work long enough to 2 contribute sufficiently to her own social security, 3 what she will receive is barely above the federal 4 poverty guidelines of $11,490 per year. 5 By contrast, her husband will receive $25,000 6 per year in social security benefits, as estimated 7 online on the Social Security Administration 8 website, as well as $37,500 per year in pension 9 benefits -- this is based on the NYCRR's projection 10 website -- for a total of $62,500 per year. 11 He'll also have the ability to work for a 12 private entity, such as a security company, or drive 13 a bus, a private charter bus, or anything like that, 14 after his retirement. 15 After 23 years of contributions to her 16 marriage, Miss X deserves better than this result. 17 In addition, the portion of the bill 18 addressing retirement is correct, in that the 19 duration of a final maintenance award should not 20 automatically terminate at retirement age; rather, 21 the issue should be determined in a subsequent 22 modification, based on an actual change of 23 circumstances. 24 Often, the courts end maintenance payments at 25 social security retirement age, assuming that the 1 pair will stop working at the time -- at that time, 2 and his or her income will decrease. 3 However, people like Mr. X often receive, 4 and other New York City municipal employees receive, 5 generous pensions after 20 year of service, and then 6 are employed by private entities, earning more -- 7 even more than before they're retired. 8 Therefore, the decision to end maintenance 9 should be made when we actually know the 10 circumstances of the payor's retirement. 11 Finally, in calculating a final maintenance 12 award, we strongly support the use of the 13 $300,000 cap contained in the bill, which should 14 address the needs of middle- and low-income families 15 who would benefit from the consistency and 16 predictability the standards provide, and who's 17 financial circumstances are straightforward enough 18 to work well within this framework. 19 The Law Revision Commission suggests that the 20 cap should be the same as for child support, but 21 child support is an obligation that both parents 22 share; while maintenance, by definition, is the 23 support that the more-moneyed spouse pays to the 24 less-moneyed spouse. 25 Furthermore, the reason to apply the formula 1 up to $300,000, is that, even at that level of 2 income, many people are W-2 wage-earners with few 3 assets, other than a home, a pension, and a 4 retirement account. 5 Those couples are ideally situated to utilize 6 the formula for calculating the amount and duration 7 of a maintenance award. 8 Finally, couples with $300,000 or less will 9 be unable to cover the costs of counsel fees without 10 sacrificing income that could otherwise be used to 11 maintain the two households, child-care costs, full 12 tuition, or their retirement. 13 As explained above, NYLAG represents and 14 counsels clients who are above the poverty 15 guidelines, and sees higher-income cases as a 16 result, including cases where the moneyed spouse may 17 have significant income, but the non-moneyed spouse 18 has no access to it post separation. 19 So, we're seeing a huge gap in services here. 20 In one such case example, where NYLAG 21 consulted, and where a divorce action has yet to be 22 commenced, Mr. S works as a consultant for a 23 financial-services corporation and earns, 24 approximately, $280,000 a year, on the books. 25 Miss S came to the United States from Russia, 1 has no extended family, and stayed home to raise the 2 couple's four children. 3 Mr. S was emotionally abusive to Miss S 4 throughout their 20-year marriage, regularly 5 threatening that if she ever left him, she would be 6 destitute, and he would take the children away from 7 her because she is not a citizen. 8 Thanks to the current maintenance standards, 9 Miss S will be able to obtain a temporary award. 10 However, without standards for final 11 maintenance, Miss S will not be able to litigate at 12 all without a free attorney. 13 This will render her unable to support her 14 new household, which includes four children, except 15 with whatever Mr. S is willing to agree to as part 16 of the settlement. 17 Even if Miss S is able to find counsel, the 18 couple's -- and that lawyer is willing to make a 19 motion for fees -- 20 Which we -- and we're seeing a gap here, 21 because lawyers are reluctant to take cases like 22 this. First of all, they're gonna require a high 23 retainer, which, if she has no access to the 24 parties' funds, she's not going be able to afford. 25 And, also, because they don't want to rely on 1 the moneyed spouse to collect their fees, because 2 it's hard enough to collect fees from your client, 3 let alone from an adverse party. 4 So, lawyers are often very reluctant to take 5 these cases. 6 And something that we try to do, on behalf of 7 these clients, and I'm trying to do on behalf of 8 this client, because we wouldn't necessarily take 9 her case, is try to find her a lawyer who will make 10 a motion for fees. And it's extremely difficult. 11 -- the couple -- but even if she's able to 12 find counsel, the couple's income will be 13 substantially depleted to cover the costs of the 14 litigation, greatly impacting Mr. S's ability to 15 cover the maintenance award, let alone the cost of 16 health insurance for the whole family, child support 17 for the younger children, and school tuition for the 18 older children. 19 In terms of this cap, and why it's so 20 important that it be as much as $300,000, is that, 21 that's not a lot of money when you're living in 22 New York and you have all of these expenses. 23 And if parties are now having to litigate 24 for, two years, as shown in the previous case 25 example, there's just not going to be the money left 1 over to cover all of these costs. 2 Most importantly, the unpredictability may 3 prevent Miss S from being able to make the decision 4 to leave her abusive marriage, exposing her and her 5 children to further harm. 6 Unfortunately, most people in New York do not 7 receive free counsel. 8 New York State does not provide a right to 9 paid counsel in divorces, child-support maintenance, 10 and equitable-distribution cases. 11 Almost all of the funding available to free 12 legal-services organizations for family-law matters 13 is given to represent victims of domestic violence, 14 but this is not sufficient to represent all those in 15 need. 16 If there's no domestic violence, the chances 17 of being represented for free are almost 18 nonexistent. 19 Attorneys in corporate firms who want to do 20 pro bono work shy away from contested divorces for a 21 simple reason: they're incredibly time-consuming. 22 Although the law currently allows the Court 23 to order a party to pay the attorney's fees of the 24 non-moneyed spouse, this remedy is often elusive in 25 practice. 1 Many New Yorkers, by contrast, fall into the 2 category described in Miss S's case, where there is 3 significant income, and a house, an illiquid asset, 4 which are not accessible to her. 5 This couple would benefit from the 6 maintenance standards contained in the bill, and 7 avoid the need to engage in prohibitively expensive 8 litigation. 9 In cases where the income is up to $300,000 10 and the financial circumstances are more complex, 11 such as, where there are multiple sources of income, 12 hidden income, or substantial assets, the courts are 13 still free to deviate to craft a more appropriate 14 award than the standards might otherwise provide. 15 Temporary-maintenance guidelines have largely 16 archived the consistency and predictability in 17 temporary awards, resulting in the ability to settle 18 cases and secure critical financial support for our 19 clients. 20 Extending those guidelines to final awards, 21 as well as applying the formula for duration and 22 raising the cap to $300,000, is essential to promote 23 that same consistency to final awards for the 24 majority of New Yorkers. 25 Thank you. 1 SENATOR BONACIC: Okay, Kate. 2 I think -- do we have any questions? 3 I think Senator -- 4 SENATOR LITTLE: I just have one quick 5 question. 6 SENATOR BONACIC: Okay. Senator Little, then 7 Senator Hassell-Thompson. 8 SENATOR LITTLE: In your experience, when 9 they're using the formula, and everything, there's 10 nothing in there that treats pension distribution? 11 KATE WURMFELD, ESQ.: There is -- under 12 equitable distribution, a spouse is able to obtain a 13 portion of the spouse's pension, yes. 14 In the case example that I mentioned, the 15 husband had only begun working and contributing to 16 his pension a few years before the marriage 17 dissolved; and, so, she wouldn't be able to access 18 much of his pension. 19 So that was the reason in that case example. 20 SENATOR LITTLE: Okay. Thank you. 21 SENATOR BONACIC: Senator Thompson. 22 SENATOR HASSELL-THOMPSON: Just a quick 23 question. 24 We've heard a lot about litigation today, but 25 nobody's, kind of, given us parameters. 1 And what I'd like to hear is, what is the 2 cost of litigation? 3 What's about the average cost of litigating 4 these cases? 5 SENATOR BONACIC: Depends on where you are; 6 different counties, different costs. 7 EMILY RUBEN, ESQ.: So, lawyers in 8 New York State will charge anything, from $250 an 9 hour, to, I think some of the lawyers who testified 10 today, probably upwards of $800,000 per hour -- 11 I mean, $800 an hour. 12 SENATOR BONACIC: I want that job. 13 SENATOR LITTLE: I want that job too. 14 SENATOR HASSELL-THOMPSON: I do too. I mean, 15 what are we doing here, John? 16 EMILY RUBEN, ESQ.: 400 to 800 dollars an 17 hour, to litigate a maintenance case -- 18 SENATOR HASSELL-THOMPSON: No, no, no. 19 Say the corrected numbers again. 20 EMILY RUBEN, ESQ.: 250 -- 200 to 250,000 -- 21 200 or 250 dollars an hour, to upwards of $800 an 22 hour. 23 SENATOR HASSELL-THOMPSON: All right -- 24 EMILY RUBEN, ESQ.: So let's just take, sort 25 of, the low -- 1 SENATOR HASSELL-THOMPSON: But you did mean, 2 up to $800 an hour? 3 EMILY RUBEN, ESQ.: I did mean up to $800 an 4 hour. 5 But let's take the lower end, like, say, 6 $300 an hour, and, say, a maintenance trial lasts, 7 conservatively, 2 court days, so -- which might be 8 6 hours and 6 hours of testimony; so that's 12 hours 9 of testimony. And, conservatively, we say 3 hours 10 of office prep time for every hour of testimony. 11 So that's, 36 -- 48 hours times $300. 12 If you can do that math for me, Laura? 13 LAURA: About a hundred and fifty. 14 KATE WURMFELD, ESQ.: A hundred and fifty...? 15 LAURA: 150,000. 16 EMILY RUBEN, ESQ.: About $150,000. 17 SENATOR BONACIC: No, no, I don't think 18 that's -- 19 EMILY RUBEN, ESQ.: That's not right. 20 SENATOR HASSELL-THOMPSON: No, that's not 21 right -- well, that's not mathematically right. 22 KATE WURMFELD, ESQ.: Well, I actually have 23 some of that math. It's a little bit different, but 24 I have: 25 So in the case example that I mentioned, with 1 the MTA employee and the home health aide, it was, 2 we spent -- there was over a dozen court 3 appearances, three days of depositions, five days of 4 trial. 5 And if you look at $250 an hour, because we 6 didn't -- you know, we weren't charging her -- it 7 would -- it was -- and we spent around 100 hours. 8 And if the husband had to pay both fees, it 9 would have been 200 -- let's just say, 200 hours, 10 and that would have been $50,000 to litigate. 11 SENATOR HASSELL-THOMPSON: All right, so your 12 case, the example that you gave, really comes out to 13 14,000, though. 14 EMILY RUBEN, ESQ.: 14,000, yeah. 15 $14,000 for one side. 16 And then you have to double it. 17 SENATOR HASSELL-THOMPSON: Yeah, 14,000 for 18 one side. And that's assuming two days. 19 EMILY RUBEN, ESQ.: That's assuming two days. 20 That was not assuming depositions. 21 That was just assuming, preparing for the 22 two days of trials. 23 That wasn't including, like, the discovery 24 that would have happened prior to that. 25 Which I think you did in your example. 1 KATE WURMFELD, ESQ.: Right, and so in my 2 case example. 3 EMILY RUBEN, ESQ.: So I'm doing it in a more 4 limited way; so, even more conservatively. 5 SENATOR HASSELL-THOMPSON: Sure, but anywhere 6 between, the $14,000 that you cited, and the 7 $50,000, that culmination of both sides. 8 EMILY RUBEN, ESQ.: Yeah, uh-huh. 9 And for people earning 200,000, 10 300,000 dollars, a year, especially in 11 New York City, but, throughout the state, that's -- 12 that's money that would otherwise be going to 13 college savings or retirement savings. 14 SENATOR HASSELL-THOMPSON: Well, that was my 15 point earlier, when I said, many times, college 16 tuitions and any savings is usually eaten up just 17 litigating these things. 18 EMILY RUBEN, ESQ.: I mean, the rationale for 19 the cap in child-support standards is different than 20 the rationale for a cap in maintenance. 21 And if what we're going for in maintenance is 22 predictability and consistency, and the need not to 23 litigate and not to incur the cost of litigation, 24 then it makes sense to look at the $300,000 cap, as 25 opposed to the $136,000 cap, understanding that the 1 very complicated finances that I think some of our 2 colleagues were talking about this morning, really, 3 I think, kick in at much higher income levels than 4 $300,000. 5 Many, many people at that level don't have 6 stock options and K-1s and complicated business, 7 financial lives. 8 SENATOR HASSELL-THOMPSON: Okay. 9 SENATOR BONACIC: Okay, ladies, thank you 10 very much for your testimony. 11 We appreciate it. 12 KATE WURMFELD, ESQ.: Thank you. 13 EMILY RUBEN, ESQ.: Thank you so much. 14 SENATOR BONACIC: That concludes the 15 Judiciary meeting. 16 Does anyone have any remarks, to finalize? 17 SENATOR HASSELL-THOMPSON: Yeah, of course. 18 SENATOR BONACIC: Ruth? 19 Go ahead. 20 Senator Thompson would like to make closing 21 remarks. 22 SENATOR HASSELL-THOMPSON: No, I would just 23 like to add my thanks to yours, for everyone who 24 came to testify today. 25 It becomes very important that we hear from 1 all sides whenever we're looking at any form of 2 legislation. 3 And, just, you know, the reason I wanted to 4 have these closing remarks, it took us almost 5 two years to -- between here -- between public 6 hearings and, whatever, and meeting with groups, to 7 put the original legislation together. 8 And it was very clear, also, that we did not 9 have the time that was appropriate to spend putting 10 a PMI together. 11 But we had made a commitment, that if we did 12 the legislation, all three pieces of this 13 legislation would be done together. 14 And we needed that in order to get the 15 support for it. 16 We do thank the commission, even though 17 I don't agree with some of their findings. 18 We do thank them for their deliberation, and 19 looking at this issue much more carefully than we 20 were able to do. 21 I also found it very interesting that there 22 were no women on the commission. 23 I don't know that portends, but, I just 24 wanted to make that as an observation for the 25 record. 1 And, again, I thank everyone for 2 participating. 3 And, certainly, for my colleague 4 John Bonacic, again, for his help and support in 5 2010, and, for calling this commission -- this 6 commission's report review, so that we would have an 7 opportunity to explore, Where do we go from here? 8 SENATOR BONACIC: Thank you, Ruth. 9 To me, I want to thank, also, everyone who 10 testified. 11 I thought much of the testimony was 12 enlightening. 13 And, I think it will help us, when we review 14 it, to see if we can come up with some legislation 15 that bring more families to the system. 16 But, as people spoke, and they gave examples 17 of some outrageous cases, it strikes me that, we're 18 never going to come up with legislation that's 19 perfect. 20 And I do think that we can move forward with 21 a better product than we did back two years ago, and 22 move the ball forward to bring fairness and balance 23 and equity between spouses that are splitting up, on 24 the maintenance issue. 25 And we can revisit it again, once we do 1 something else. 2 But I think, to me, I think what the 3 Law Revision suggested, about a threshold, and 4 alleviating much of the caseload, is something, 5 another step forward. And we could tinker with some 6 of the things that were said today. 7 But it's -- I could tell you that it's very 8 helpful, what we heard. 9 We thank you for, all, taking the time. 10 And I want to thank all the Senators that are 11 here, and those that had to leave before, other 12 commitments. 13 That will end our Senate Judiciary at 14 1:20 today. We started at 11:10. 15 We'll now call the Committee meeting 16 adjourned. 17 Thank you very much. 18 (Whereupon, at approximately 1:20 p.m., 19 the public hearing held before the New York State 20 Senate Standing Committee on Judiciary concluded, 21 and adjourned.) 22 23 ---oOo--- 24 25