Matrimonial CaseLaw
CHILD SUPPORT AWARDS IN HIGH INCOME CASES:
THIRD DEPARTMENT MUDDIES THE WATERS
by Robert H. Brodrick and Thomas A. Elliot
The recent Third Department decision in Gluckman v. Qua, N.Y.L.J.
April 7, 1999, p.25, col.3, serves to illustrate the various issues courts, in
determining child support in high income cases, continue to struggle
with in applying the provisions of the Child Support Standards Act
(“CSSA”) as interpreted by the Court of Appeals in the seminal case of
Cassano v. Cassano, 85 N.Y.2d 649, 628 N.Y.S.2d 10 (1995).
The parties in Gluckman were divorced in 1985 after a two-year
marriage. At the time of the divorce, the noncustodial father’s support
obligation for the parties’ two children was set at $100 per week, which
was increased to $210 per week in 1990. In 1996 the mother, who had
remarried, filed a petition in family court for an upward modification of
child support alleging a change in circumstances. The mother claimed,
among other things, that the father’s income had increased significantly
from approximately $43,000 to $260,000 as a result of his success as a
restauranteur.
In Gluckman, a family court Hearing Examiner ultimately
determined that the annual incomes of the mother and father were
$37,794.50 and $332,764.36 respectively, resulting in combined parental
income of $370,558.86. The Hearing Examiner, finding that the father
failed to establish any reason for variance from application of the CSSA
formula, determined that it was in the children’s best interests to apply
the CSSA percentage of 25% to the entire combined parental income,
including income over $80,000. This resulted in a child support
obligation of the father of $83,200 per year, or $1,600 per week. The
father filed objections to the child support order, contending that the
Hearing Examiner erred in calculating his income and failed to articulate
the reasons for applying the CSSA percentage to the combined parental
income over $80,000. The family court denied the father’s objections
and he appealed.
On appeal, the Appellate Division, Third Department, held, among
other things, that the hearing examiner improperly included in the
father’s annual income the sum of $87,937 representing the increased
value of his stock portfolio. In addition, the Appellate Division agreed
with the father’s contention that the Hearing Examiner failed to
sufficiently articulate the reasons for applying the statutory formula to
the combined parental income in excess of $80,000. It found, after
reviewing the statutory factors under Family Court Act §413(1)(f), that
application of the statutory 25 percent to the income above $80,000 was
an abuse of discretion and resulted in a child support award that was
excessive. It concluded that a reduced percentage of 15 percent to the
income in excess of $80,000 was appropriate. This resulted in a child
support obligation of $843.12 per week.
THE RECORD ARTICULATION REQUIRED
In determining child support with respect to combined parental
income in excess of $80,000, F.C.A. §413(1)(c)(3) provides as follows:
“Where the combined parental income exceeds the
dollar amount set forth in subparagraph two of this
paragraph, the court shall determine the amount of child
support for the amount of the combined parental income in excess of such dollar amount through consideration of the factors set forth in paragraph (f) of this
subdivision and/or the child support percentage.”
Pursuant to the Court of Appeals holding in Cassano, the language
of F.C.A. §413(1)(c)(3) should be read to afford courts the discretion to
apply the “paragraph (f)” factors, or to apply the statutory percentages,
or to apply both in fixing the basic child support obligation on parental
income over $80,000. However, according to Cassano, when a court
chooses to apply the statutory percentage to combined parental income
in excess of $80,000, it is required to provide “some record articulation”
of its reasons.
In Gluckman, the Appellate Division stated that in addition to
providing a record articulation for deviating or not deviating from the
statutory formula with respect to parental income exceeding $80,000, a
court must relate that record articulation to the “paragraph (f)” factors.
This is an important development. Under Gluckman, a court must
include in its record articulation consideration of the “paragraph (f)”
factors when it decides to apply the statutory percentages to the
combined parental income in excess of $80,000 in determining basic
child support. Accordingly, the Third Department determined that the
lower court’s statement that in was in the children’s best interest to apply
the statutory percentage to the combined income in excess of $80,000
was insufficient to meet the record articulation requirement of Cassano.
Thus, pursuant to the holding in Gluckman, the statutory factors become
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controlling in high income cases and the court is divested of its
discretion to apply the statutory percentages unless the decision to do so
can be justified based on the “paragraph (f)” factors. This ruling ignores
the plain language of the statute which provides that a court may
determine child support on the combined parental income in excess of
$80,000 by applying the statutory percentages and/or the “paragraph (f)”
factors. The ruling in Gluckman reads the word “or” out of the statute
and is contrary to the specific language of Cassano, wherein the Court
stated as follows:
In that legislative purpose, not linguistic perfection,
guides our determination, we must seek to give meaning to the term “and/or,” in the context of the statute’s
over-all objective. Defendant’s insistence on an elaboration of needs-based reasons reads the work “or” out
of the section and rolls back the calendar to pre-1989
law, In our view, “and/or” should be read to afford
courts the discretion to apply the “paragraph (f)” factors, or to apply the statutory percentages, or to apply
both in fixing the basic child support obligation on
parental income over $80,000. That interpretation is
consistent with the language of the section and with the
objectives of the Child Support Standards Act.
In view of the foregoing language in Cassano, and notwithstanding
the holding in Gluckman, any record articulation, whether or not same
indicates a consideration of the “paragraph (f)” factors, should be
sufficient, provided that some reason is given for the court’s decision to
apply the statutory percentage to the combined parental income in excess
of $80,000 and the record articulation provided is sufficient to facilitate
appellate review. However, as a practical matter, the practitioner seeking
an award of child support in a high income case based on application of
the statutory factors should, in any event, attempt to justify such an
award utilizing the enumerated statutory factors.
THE BURDEN OF PROOF
In Gluckman, the Hearing Examiner found that the father failed to
establish any reason for variance from the application of the statutory
percentage of 25 percent to income in excess of $80,000. It is apparent
that the Hearing Examiner determined that it was the father’s burden to
come forward with evidence to demonstrate why application of the
statutory percentage would be “unjust and inappropriate.” The lower
court’s decision to apply the statutory percentage in the absence of a
showing by the father why the statutory percentage should not be applied
seems to comport with the holding in Cassano, wherein the Court of
Appeals, while acknowledging that courts have discretion with respect to
parental income exceeding $80,000, stated as follows:
Whenever the basic child support obligation derived by
application of the formula would be “unjust and inappropriate,” the court must consider the “paragraph (f)”
factors. That is so whether parental income is above or
below $80,000 (Family Ct.Act §413[1][b][1]; [c][2],[3].
The Court in Cassano also stated as follows:
The Appellate Division was satisfied, as are we, that
there was sufficient record indication that no extraordinary circumstances were present, and application of the
statutory 17% to the $19,214 income above $80,000
was therefore justified and not an abuse of discretion.
At least one commentator has interpreted the foregoing language in
Cassano as establishing a presumption in favor of application of the
statutory percentages to combined parental income in excess of $80,000,
thus requiring the non-custodial parent to demonstrate extraordinary
circumstances and to come forward with reasons why the statutory
percentages should not be applied to excess income. See 1 Tippens, New
York Matrimonial Law and Practice §5A:20 (Cum. Supp. 1998).
However, in Gluckman, the Appellate Division did not address the issues
of the burden of proof or extraordinary circumstances in determining that
application of the statutory percentage to the combined parental income
in excess of $80,000 was not appropriate in the case. Consequently, in
view of the decision in Gluckman, the issue of whether there is a
presumption in favor of application of the statutory percentage to
parental income in excess of $80,000 remains unresolved.
NEEDS VERSUS STANDARD OF LIVING
Another significant aspect of the decision in Gluckman is the
Appellate Division’s reliance on a needs based analysis. The issue of the
role the child’s needs in determining child support was also addressed by
the Court in Cassano. In Cassano, the non-custodial father asserted that
the decision whether or not to award child support based on combined
parental income in excess of $80,000 should be based on the child’s
needs. The Court of Appeals rejected the father’s position, indicating
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that the emphasis of the CSSA was to shift from a balancing of the
expressed needs of the child and the total income available to the parents
after expenses to the total income available to the parents and the
standard of living that should be shared with the child.
In Gluckman, the Third Department, citing Cassano, noted that
children must generally be permitted to share in a noncustodial parent’s
enhanced standard of living and that a court is not permitted to make an
award based solely on their actual needs. However, despite the shift
away from a needs based analysis as indicated by the Court in Cassano,
the Third Department, following the lead of the Second Department in
Granade-Bastuck v. Bastuck, 249 A.D.2d 444, 671 N.Y.S.2d 512 (1998),
held that a child’s needs are an appropriate factor to be considered when
determining an award of child support on income in excess of $80,000.
The needs based analysis employed by the Third Department in
Gluckman included a finding that the lower court’s child support award
was more than all of the mother’s household expenses as indicated on
her financial statement. The Appellate Division noted that the mother
had testified that she had no idea how she would spend the increased
child support. The court also noted, citing the “paragraph (f)” factors,
that the mother had certain financial resources at her disposal, including
rental property, investments, a catering business and a spouse who
earned $48,000 per year. Furthermore, it noted that the children did not
have any special needs and that the mother did not have any educational
needs of her own. The Appellate Division also found relevant, citing the
catch-all provision of F.C.A. §413(1)(f)(10), that the increased income of
the father over the years was not based on a windfall but rather the direct
result of his personal efforts to succeed in the highly restaurant business.
The Third Department concluded that application of a reduced
percentage of 15% to the combined parental income in excess of $80,000
was appropriate and would enable the children of the parties to enjoy an
appropriately enhanced standard of living.
The approach taken by the Appellate Division in Gluckman is
problematic for several reasons. First, although the court applied the
“paragraph (f)” factors to justify its decision not to apply the statutory
percentage of 25% to income in excess of $80,000, it failed to utilize
these same factors in determining an appropriate level of support. In
fact, the court failed to give any reason whatsoever to support
application of 15 percent to the combined parental income in excess of
$80,000, other than its conclusion that the child support awarded would
permit the children to enjoy an “appropriately enhanced standard of
living.” The Appellate Division did not define what this enhanced
standard of living is, nor did it draw a corollary between the amount of
child support actually awarded and the children’s standard of living. In
essence, the Third Department in Gluckman abdicated its responsibility
pursuant to Cassano and the CSSA articulate the reasons for the amount
of child support awarded on parental income in excess of $80,000.
Another area which is problematic in Gluckman is the court’s
reliance on the fact that the amount of child support awarded by the
lower court exceeded the total of the mother’s expenses listed on her
financial statement. In Gluckman, the income of the noncustodial father
increased dramatically long after the parties’ divorce in 1985, prompting
the mother’s application for an increase in child support. Consequently,
the mother’s expenses for the children as listed on her net worth
statement probably did not reflect the standard of living which the father
was capable of providing for the children at the time of the wife’s
application. Thus, the court’s reliance on the children’s needs to
determine an appropriate level of support essentially puts the cart before
the horse, so to speak.
The problem with the Appellate Division’s reliance upon the
children’s needs rather than a prospective standard of living is
demonstrated if one considers the decision as applied to a slightly
different fact pattern. Suppose the parties in Gluckman had remained
together as the father’s income had increased. If this were the case, in all
likelihood the children’s standard of living would have increased
accordingly and the mother’s financial statement at the time of her
application would have reflected expenses, such as those incurred for a
larger home, more expensive clothing and more extravagant vacations,
associated with this increased standard of living. Presumably in this
situation the mother would have been entitled to an award of child
support, perhaps in accordance with the applicable statutory percentage,
which would enable her to meet there expenses. This was precisely the
finding of the Appellate Division, Second Department, in Zaremba v.
Zaremba, 237 A.D.2d 351, 654 N.Y.S.2d 176 (1997). In Zaremba the
Second Department affirmed an award of child support based upon
application of the statutory percentages to the parties’ combined parental
income in excess of $80,000, stating as follows:
The court further found that in spite of the divorce, the
children remain entitled to share in the standard of
living the parents are capable of providing. A child
support award based on all of the parties’ income
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affords the children an adequate amount of support and
will allow them to remain in the home they have lived
in since early childhood, to attend the same schools,
and to engage in the same activities as before their
parents divorced. We find that ‘no extraordinary circumstances were present, and application of the statutory [percentage] to the *** income above $80,000 was
therefore justified and not an abuse of discretion’
(Cassano v. Cassano, 85 N.Y.2d 649, 628 N.Y.S.2d 10,
651 N.E.2d 878).
The foregoing illustrates the problem associated with the utilization
of a needs based analysis in determining child support in high income
cases, especially where the income of the noncustodial parent has
increased dramatically subsequent to the parties’ separation and the
needs of the children do not reflect the standard of living which the
noncustodial parent is capable of providing.
Finally, the Third Department’s reliance in Gluckman on the fact
that the father’s income had increased over the years as a result of his
personal efforts to succeed and not as a result of a windfall appears to be
misplaced. In Cassano, the Court of Appeals made it clear that one of
objectives of the CSSA is to ensure that children share in the standard of
living enjoyed by their parents. Thus, whether the non-custodial parent’s
increased income is the result of personal efforts or a windfall should be
irrelevant under the statutory scheme.
CONCLUSION
As illustrated by Gluckman, Courts on both the trial and appellate
level have continued to struggle with application of the principles set
forth by the Court of Appeals in Cassano v. Cassano with respect to
child support awards in high income cases. Since Cassano was decided
in 1995, numerous appellate and trial court decisions have come down,
with very little consensus on the applicable standards to be applied. The
Third Department’s decision in Gluckman v. Qua illustrates the
difficulties which continue to arise and the need for clarification by the
Court of Appeals or the Legislature in this area.
ROBERT H. BRODRICK is a partner in the firm of MORAN &
BRODRICK, Garden City, New York, and specializes in matrimonial
and custody matters.
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