The financial knowledge you received from your CFL course helps you adapt to the challenges of divorce mediation regularly. Among the potential roadblocks in settlements is the issue of how to handle debt. If it’s not done properly before a couple goes to court, it can affect the outcome.
One such case, O’Brien v. O’Brien, went to The New York Supreme Court, Appellate Division for resolution. Among the debts the court considered, the ex-wife sought repayment for medical expenses accrued at a substance abuse clinic. But she testified that at the time, she didn’t suffer from an addiction. She really entered treatment to hide an extramarital affair.
The Facts of the Case
William and Deborah O’Brien married in 1992 and bore three children in 1997, 1998, and 2004. In November 2012, William filed for divorce and for financial or ancillary relief.
The New York Supreme Court (trial division) ruled in 2015 that Deborah must pay $1,383.60 in child support monthly, together with $30,434 in back child support. She also needed to maintain a life insurance policy of $200,000 to secure her child support obligation. The court didn’t award her maintenance.
Deborah’s parents had given the couple $60,000, which the court decided was a gift, not a loan.
The ruling awarded the ex-husband an equitable distribution credit in the sum of $3,700 for rental income Deborah wrongfully retained. The court denied Deborah’s application for an award of counsel fees and for repayment of medical expenses she incurred at a substance abuse treatment facility to hide her extramarital affair. Her insurance company had already paid her back for her doctors’ bills. The court relieved William from paying his ex-wife’s medical bills, nor did he have to cover her outstanding credit card debt.
Unswayed, Deborah appealed the rulings on maintenance, child support, and equitable distribution.
New York Supreme Court, Appellate Division Decision
The Appellate Division found that the prior child support ruling had assigned Deborah the wrong annual income amount. The Supreme Court had incorrectly imputed her income as $66,000 per year. Based on her educational background, work history, and the monthly income from her mother, the appeals court ruled it should have been $30,000 per year. “…There was no evidence that the defendant’s past income or demonstrated future potential earnings amounted to $66,000 or any amount close to that figure.”
On the issue of maintenance, the appeals court upheld the denial. It also confirmed that Deborah must get life insurance to secure her child support obligation. But, based on the revised $1,034.56 monthly child support commitment, she needed to get a policy in the amount of $98,822.32 instead.
The appeals court also found that the Supreme Court was just in determining that she pay back child support, however, it erred in the amount required. Instead, she should pay $24,846.
Regarding the $60,000 the couple received, the appellate court agreed that it was a gift; Deborah didn’t provide enough evidence that it was a loan.
The Supreme Court had properly awarded William credit for his half of a down payment Deborah made toward the purchase of a 2008 Audi because she bought it during the marriage. The court found that the Supreme Court erred in its calculation of the equitable distribution credit due to William for rental income Deborah wrongfully retained.
As a result of a 2013 pendente lite order, the appeals court required William to pay Deborah temporary spousal maintenance of $150 bi-weekly. Deborah had to turn over to William a $400 monthly rental payment from her mother who was a tenant in the marital residence.
The appeals court also upheld the Supreme Court’s decision to deny Deborah’s request for reimbursement of her medical bills and her plea that William pay half of her credit card debt because she didn’t document her credit card payments.
Finally, it determined that “The defendant’s remaining contentions are without merit.”
The CFL Certification helps you with these and other trying matters involving debt in a divorce. Plus, you’ll gain more knowledge and experience in other financial areas and get to network with fellow attorneys at the top of their game. Find out more in our free information packet today!
Justia Law. (2019). O’Brien v O’Brien. [online] Available at: https://law.justia.com/cases/new-york/appellate-division-second-department/2018/2015-11714.html [Accessed 2 Aug. 2019].