New York Divorce Law Blog : New York Divorce Lawyer & Attorney : Law Offices of David A. Gabay, PC : Serving New York City, Long Island, Suffolk County, Nassau County

I recently came across an interesting decision in a case which highlights the problems and liabilities which arise from inept or ill-advised divorce planning by business owners and their families.

The case comes from the Nassau County Supreme Court and was reported in the New York Law Journal on January 8, 2008.

The parties were married in 1996. In 2001, the wife’s father sold her all of his stock in an automobile dealership he owned  for $1.4 million. The wife made a down payment of $150,000.00, using funds provided to her by her husband, and executed promissory notes for the balance.   The husband claimed he paid a total of $785,000.00 to the wife’s father on account of the notes, and that he and his wife agreed that the shares in the dealership and certain other assets would be jointly owned by them.

Six months before filing for divorce, the wife defaulted on the notes and then transferred the shares in the dealership to her father. In the divorce action, the wife claimed she had no interest in the dealership.

The husband brought multiple claims against the wife, her father, and various corporations owned by the father and the wife. The claim which survived the defendants’ motion to dismiss was for a fraudulent conveyance in violation of Debtor and Creditor Law 276-a transfer made with actual intent to defraud a creditor.

The Court found that the plaintiff’s claims regarding the wife’s intentional default on the notes six months before commencing a divorce action, the surrender of the shares to her father were sufficient to defeat a motion to dismiss the complaint.

I wonder what advice the wife received, if any, and from whom. It appears from the decision that the planning for the divorce was clumsy at best. This case is an excellent example of the need for sound and professional divorce planning by business owners and their families.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

A recent New York Law Journal article I read reported that the average caseload for a matrimonial judge in Suffolk County was 500 cases. Since most of my current matrimonial caseload is in Suffolk County, I found that statistic interesting but not surprising. I have been counseling my clients for years on the operating assumption that a matrimonial judge has a caseload of over 350 cases. The heavy caseload of a matrimonial judge has very real and meaningful implications for litigants in the Suffolk County Supreme Court. Here are the four (4) most important tactical and strategic points which are affected by the fact that a matrimonial judge has approximately 500 cases at any given time:

1. FIRST IMPRESSSIONS ARE CRITICAL The Court will form a first impressionof you and your case. It will do so extremely quickly because it has to given the sheer number of cases it has to deal with. Once that impression is made, it will most likely remain fixed in the Court’s mind for a very long period of time. Therefore, you and your attorney must very carefully plan and consider how and under what circumstances you will initially present yourself to the Court.

2. PRIORITIZE ISSUES The Court’s caseload limits its ability to focus intently on every facet of every case. It simply does not have the time to engage in an extensive analysis of every issue, and therefore it will spend the most time on what to the Court is most important. In my experience, serious issues regarding minor children receive the Court’s undivided attention. At the other end of the Court’s attention span are cases in which there are no minor children and the only issues concern finances. In order to successfully move your case through the Court system, you must prioritize the issues in your case and focus on the most important ones.

3. APPEAR REASONABLE: Because the Court does not have the time to cover every issue in depth, it will almost always look to avoid a conflict (which takes time to resolve) in favor of a negotiated arrangement. The more a party appears to the Court to be reasonable and willing to avoid open conflict, the more favorably the Court is disposed to look kindly upon that party when it makes its decisions on matters that must be litigated.

4. BE PREPARED: Having the right information at the right time is critical to the success of your case in a Court with a very heavy caseload. The ability to quickly and accurately respond to questions from the Court and from the other side can and does influence the Court’s decision making process.

• Email This
• Print
• Comments
• Trackbacks
• Share Link