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E.G.R. v J.K.R. (2004 NY Slip Op 51091(U))
[*1]


Decided on September 28, 2004
Supreme Court, Nassau County

04-202063
Anthony J. Falanga, J.
This is a motion by the wife for an order restraining the husband, during the pendency of the action, from making any disposition of assets acquired during the marriage, including the sum of $386,328.00 received by the husband from the September 11th Victims' Compensation Fund.
The parties were married on March 9, 2002. There is one child of the marriage, A. born November 27, 2002. The wife is 41 years old and the husband is 44 years old. The wife has a daughter named C. G. born March 6, 2000. In or about May 2002, the wife purchased a marital residence in Manhasset for $649,000.00, putting $168,000.00 down and taking a mortgage for the balance.
The wife is a college graduate. She is employed by Verizon as a database manager earning approximately $72,000.00 a year. She started a business during the marriage, AR Pillow, Inc. The
E.G.R. v J.K.R. (2004 NY Slip Op 51091(U))
husband contends she has earned $4000.00 in profits, but the wife states the business has not produced any profit.
The husband is an attorney. For the six years prior to February 2004, he was employed as a senior vice president of Aon Risk Services.
The husband sustained injuries as a result of the September 11, 2001 attack at the World Trade Center. Within a month after the attack, the husband's employer set up temporary offices. The husband did not lose any time from work and he was paid continuously until his employment was terminated in February 2004. At the time of said termination he was earning $250,000.00 a year plus an annual bonus of $100,000.00 and perquisites.
In 2002, the husband filed a claim with the September 11th Victim's Compensation Fund. In support of his claim, he retained a forensic accountant who prepared a report that concluded that as a result of post traumatic injuries, the husband would not be able to continuing working as an attorney after his contract with Aon Risk Services expired in 2006, but that he could pursue alternative employment as an educator, resulting in a work life economic loss of [*2]almost three million dollars gross.
In December 2003, the husband's employer transferred him to Houston, Texas. The parties purchased a house in Houston. The husband's employer advanced funds to facilitate the relocation. The wife and children intended to join the husband in Texas at a later date.
The husband entered the Memorial Herman Rehabilitation and Recovery Center in Houston as an inpatient from mid January 2004 until on or about February 22, 2004. He was terminated by his employer in February 2004. The wife alleges that the husband was terminated as the result of a 12 day "bender" during which he charged over $20,000.00 on a colleague's business credit card for "partying." The husband remained in Houston and attended out patient therapy into March 2004. He returned to New York and resided at the marital residence between March 2004 and May 2004. As best as can be gleaned from the papers herein, it appears that the husband returned to Houston to sell the residence there; obtained $125,000.00 in sale proceeds; went on what the wife describes as a "ten day bender;" checked himself into Christus St. Joseph for detoxification; then Memorial Herman; and later Silver Hill Rehabilitation in Connecticut. Thereafter, he moved into his mother's home in Wayne, New Jersey. The wife alleges that the husband went on additional "binges" in July and August 2004.
E.G.R. v J.K.R. (2004 NY Slip Op 51091(U))
The $125,000.00 from the sale of the Houston house was placed in a joint account and later transferred by the wife into an account in her own name. The husband states that his former employer has claims against him that he intended to satisfy with these funds. The wife recently sold the marital residence in Manhasset for $800,000.00 and received net sale proceeds of $130,000.00.
On April 20, 2004, the Victim Compensation Fund determined that the husband was eligible to receive an award for "obstructive disease and asthma." His claimed injuries of face, neck and arm burns; post traumatic stress disorder; right knee injury and exacerbation of lumbar spine injury were held not compensable. A hearing to establish damages was conducted on May 12, 2004. According to the husband, he did not submit or present the forensic accountant's report or any other proof of lost wages at the hearing. On or about July 7, 2004, he received a check for $386,328.00 from the Victim's Compensation Fund. The check was deposited into the escrow account of the attorney representing him in this action.
On July 20, 2004, the wife obtained an ex parte order from this Court temporarily restraining the husband from making any disposition of assets, including the Victim's Compensation Fund proceeds, except in the ordinary course of business or living. Counsel for the husband disbursed approximately $25,000.00 to the husband between July 7, 2004 and August 19, 2004, plus $5000.00 for counsel fees and $649.00 for disbursements. The husband contends the $25,000.00 was for ordinary living expenses. He advises the Court that he has been turning his unemployment benefits of $1600.00 a month over to the wife as and for child support. The wife points out that the husband lives rent free with his mother; she contends that the husband spent substantial sums, not on ordinary living expenses, but on drinking binges in July [*3]and August 2004.
The husband contends that the Victim Compensation Funds are in the nature of a personal injury recovery and therefore constitute separate property. The wife points to Victim's Compensation Fund literature that states that at a damages hearing a Special Master will consider loss of earnings or other benefits related to employment, medical expense loss, replacement services loss, and loss of business or employment opportunity, to determine a victim's economic loss. She notes any portion of the award that included compensation for medical expenses incurred or wages lost during the marriage would be a marital asset. She further contends that the Court has the authority to restrain separate assets to secure the payment of child support.
Based upon all of the foregoing, the motion is decided as follows:
The husband has not provided the Court with a transcript of the May 12, 2004 hearing or a
E.G.R. v J.K.R. (2004 NY Slip Op 51091(U))
copy of any decision rendered by the Special Master after the hearing conducted on May 12, 2004, leaving the Court unable to ascertain whether any portion of the award constituted damages for medical expenses incurred or income lost during the marriage. Accordingly, the husband has not met the burden of demonstrating that the award is solely separate property (see, Farag v Farag, 4 AD3d 502).
Further, separate assets may be considered as a factor in calculating child support (see, Boyette v Wilson, 291 AD2d 908; Cody v Evans-Cody, 291 AD2d 27), and pursuant to DRL 234, the Court has the authority to restrain the disposition of separate assets to secure the payment of child support.
The ex parte order dated July 20, 2004, restraining the husband from disposing of assets except in the ordinary course of business or living, has not adequately preserved the Victim Compensation Funds in issue, as it is clear that the husband did not incur $25,000.00 in ordinary living expenses between July 7, 2004 and August 19, 2004. Although the preliminary conference order requires that both parties file net worth statements on or before September 1, 2004, to date, neither party has complied, leaving the Court unable to assess the husband's reasonable interim needs. The papers submitted herein indicate that he incurs approximately $700.00 a month for student loan repayment and $200.00 a month for storage. All his other expenditures of the Victim Compensation Funds are attributed to repayment of debts to relatives, travel for visitation, hotels in New York City, entertainment and personal expenses, cell phone, gym membership, babysitters and miscellaneous expenses.
Pending further order, the husband, his attorneys, agents and assigns are restrained from making any disposition of assets except in the ordinary course of business or living. Commencing October 1, 2004, the husband's attorney is enjoined from releasing any Victim's Compensation Funds in excess of $4000.00 a month to the husband, except upon the written consent of both parties and their respective attorneys. The husband's counsel shall not disburse any monies to the husband between the date of this order and October 1, 2004. The husband [*4]shall continue to pay child support of $1600.00 a month by turning his unemployment checks over to the wife. Upon the cessation of said benefits, the husband's attorney shall pay the wife child support of $1600.00 a month from the Victim's Compensation Funds in his escrow account.
This constitutes the decision and order of the Court. Any relief not specifically addressed is denied. The parties shall file net worth affidavits and retainer statements within ten days of the date of this order. The parties and counsel shall appear for a certification conference on November 18, 2004 at 9:30a.m. It is expected that all discovery will be completed by that date.
E.G.R. v J.K.R. (2004 NY Slip Op 51091(U))
E N T E R:
Anthony J. Falanga, Justice
Supreme Court, Nassau County

Dated: September 28, 2004
Mineola, NY

Download 2004_51091.pdf

New York Law