Commodities Trading, Wife Beating Lawyers and the Forms Goddess

“I never expected to get rich as a judge, but I never expected to get poor either,” Robert A. Spolzino, Former Associate Justice Appellate Division Second Department, partner at Wilson Elser
“A lot of people have asked me how short I am. Since my last divorce, I think I'm about $100,000 short.” Mickey Rooney

For many years I have called The Appellate Division, Third Department my Favorite Appellate Division. The Sages of State Street never failed to explain the facts of each case and provide us with their reasoning, unlike the terse First and Second Departments with their myriad affirmances based on the unknown decisions of the court below. The Fourth is somewhat better although often cryptic and sententious. Well, they are my favorites no more, ever since they senselessly declared that lap dances are subject to sales tax on June 9, 2011, ignoring persuasive expert testimony that such endeavors constituted dramatic or musical arts. Shame on them. They did extract a little redemption from me by deciding one of the earliest cases involving the Temporary Maintenance Guidelines of the new Domestic Relations Law Section 236B(5-a). You know that one, otherwise known as the High Wage Earner Instant Despondency Act of 2010. Not being content to come up with some simplistic formula for support of a spouse based on needs or judicial discretion, our state based temporary maintenance on a definition of income that takes one’s breath away compared to every other state (Gross income less FICA) and pounds a litigant for usually 30% of that sum less 20% of the income of the poor “spouse with the lower income.” The Third Department in Ingersoll held that such temporary maintenance guidelines apply only to cases started after October 12, 2010 and therefore not applicable to Mr. Ingersoll. Much to his relief, they then reduced his temporary support obligation from $677.44 per month to $450 per month or about $227 per month. I am guessing that the filing, printing and legal fees for the appeal were a lot more than the support that was saved, but that is why I love matrimonial practice. Reminds me of the quip from George Sauders, “Irony is just honesty with the volume cranked up.”
Remember the guy who was denied the ability to practice in New York because of his failure to pay his student loans? He was denied twice by the Appellate Division, Third Department, finding that, “His recalcitrance in dealing with the lenders has been and continues to be incompatible with a lawyer's duties and responsibilities as a member of the bar.” Of course they have never disbarred a lawyer who walks out on his or her financial obligations by seeking bankruptcy protection after becoming a lawyer. Just hard times I guess. So what if you beat up your wife so badly that you have to plead guilty to assault and then three years later beat her up so badly that you plead to felony unlawful wounding and get sentenced to three years in jail of which you have to serve 12 months. Well, I guess that is not incompatible with a lawyer’s duties as a member of the bar, because this lawyer, one Peter H. Jacoby, was suspended for 36 months by the First Department and then he will be allowed to practice law again. Makes no sense to me. They affirmed a Hearing Panel’s findings of mitigation in that the wife started the fight and Mr. Jacoby suffering from “intermittent explosive syndrome” for which he is being treated. A lovely view of domestic violence perpetrated by one of our own.
So with the Dog Days of Summer upon us the App Divs have slowed the pace of matrimonial wisdom making us look for such love in all the wrong places. This led me to a commodity trading case in the Court of Appeals decided at the end of June. Although they were answering an inquiry from the United States Court of Appeals for the Second Circuit in a case entitled Commodities Futures Trading Commission v. Walsh, this case is chock full of matrimonial gems. I kid you not. You see Mr. Walsh made a boatload of money by allegedly misappropriating $550 million from various funds that he managed with a partner. In 2006 he divorced his wife and gave her over $31 million in real estate, cash and a distributive award to be paid over time. So the Commodities Futures Trading Commission wants the money back, claiming it is the proceeds of fraud. The ex-wife of Mr. Walsh of course knew nothing about the fraud and she wants to keep the money. So the Second Circuit asked the Court of Appeals to resolve two questions: (a) Are the proceeds of fraud subject to equitable distribution? (b) Does a spouse pay fair consideration in a divorce settlement agreement when she relinquishes a good faith claim to the marital estate where all or part thereof is the proceeds of fraud? The answers are (a) yes and (b) yes, which allows Mr. Walsh’s ex-wife to keep every dime of his allegedly ill begotten gains. As Judge Graffeo wrote, “Ex-spouses have a reasonable expectation that, once their marriage has been dissolved and their property divided, they will be free to move on with their lives.” The Court of Appeals even states that custody and visitation concessions could be considered fair consideration. You see, matrimonial law is everywhere, even in the Second Circuit Court of Appeals.
What else is new? Apparently believing that marital counseling works and dammit we can order it to work, the Third Department affirmed a custodial determination except to direct “that the parents choose a new
therapist and that both parents actively participate and fully cooperate in family counseling.” Good luck with that one. As thought that wasn’t enough, they directed the Family Court to “craft an order that includes provisions for said counseling, and parenting education and short-term monitoring by the court, where necessary, to insure the success of the counseling process.” Ah yes, 2011, the Year of No Therapist Left Behind. I often tell clients that no court can make the other parent be a good parent. Apparently the Third Department thinks otherwise.
Finally what would a new season be without another dumb form courtesy of the Forms Goddess? Not content to torture us by mandating that we compile statistics on our clients that have nothing to do with anything, we now have Administrative Order 471/11 which requires a new eight page Preliminary Conference Stipulation Order be completed and signed by the litigants, the attorneys and the judge at a preliminary conference. Why? Beats me. Experienced jurists and matrimonial counsel can shepherd our clients though the misery of divorce without this stuff, but I guess we are not be trusted so we now have to charge our clients to prepare a new lengthy form that asks if a translator is needed, the names of children even in childless marriages, and the “nature” of any agreements whatever that is. “Judge, the nature of the agreement is paper with ink on it.” The form has three separate questions on custody (custody, parenting time and decision making), as though they were separate issues. The Third Department says you cannot have joint custody without joint decision making, but I guess OCA thinks you can. The form requires parental education information even though the New York Parent Education & Awareness Program has been eliminated, and a specific acknowledgment of knowledge of alternative dispute resolution methods, maybe like the Jacoby Intermittent Explosive Syndrome Dispute Resolution Method, supra. It also prevents every litigant from deleting e-mails, EVEN ONES NOT RELATED TO THE DIVORCE, such as spam. There’s lots more, but you get the gist. This thing makes me sick, but the good news is that it has yet to hit the website of the Unified Court System and maybe we can just ignore it for the benefit of our clients and the sanity of our staffs. One can only hope.
Happy International Civility Month