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Charpie v. Charpie

                       
            SUPREME COURT, APPELLATE DIVISION
            First Department, January 2000
            Ernst H. Rosenberger, J.P.
            Betty Weinberg Ellerin
            David B. Saxe
            John T. Buckley
            David Friedman, JJ.
            ________________________________________x
            Micheline Charpie_,
            Plaintiff-Appellant,
            -against-        19N
            Pierre Alain Lucien Charpie_,
            Defendant-Respondent.
            ________________________________________x
            Plaintiff appeals from an order of the Supreme Court, New York
            County (Laura Drager, J.), entered June 11, 1999, which, to the
            extent appealed from, denied her motion for an award of interim
            attorney’s fees.
            David A. Field, of counsel (Field, Lomenzo & Turret, P.C.,
            attorneys) for plaintiff-appellant.
            Joan L. Ellenbogen, of counsel (Ellenbogen & Goldstein, P.C.,
            attorneys) for defendant-respondent.
            SAXE, J.
            Much has been said about the post-divorce gender gap, in which men's
            standard of living increases and women's decreases after a divorce
            (see, e.g., Lenore Weitzman, The Economic Consequences of Divorce
            are Still Unequal, 61 Am Soc Rev 537 [1996]; Braver, The Gender Gap
            In Standard of Living After Divorce: Vanishing Small?, 33 Fam L Q
            111 [1999]). Recognizing the economic realities that women
            frequently earn less than their husbands, and that they often
            sacrifice their own career advancement, or any career at all, in the
            interests of caring for their husbands and children, our Domestic
            Relations Law appropriately provides numerous protections to women.
            Their non-economic contributions are taken into account in the
            context of equitable distribution of marital assets (Domestic
            Relations Law § 236[B][5][d][6]); their earning power in relation to
            that of their spouses, and any lost earning capacity resulting from
            foregoing educational or employment opportunity, must be considered
            in awarding spousal support (Domestic Relations Law § 236[B][6][3],
            [4], [5], [8]). And, recognizing that when divorcing spouses have
            vastly different access to funds, a spouse who lacks financial
            resources may not be able to obtain the necessary assistance so as
            to achieve a just resolution of the issues, the monied spouse may be
            directed to pay counsel fees to the lawyer of the non-monied spouse
            (Domestic Relations Law § 237[a]).
            The unusual circumstance of having one litigant pay the other side's
            counsel fees, even during the course of the litigation, while unique
            to matrimonial litigation, reflects the recognition of the unequal
            economic positions of men and women in a traditional marriage
            arrangement. Counsel fees are awarded "to make sure that marital
            litigation is shaped not by the power of the bankroll but by the
            power of the evidence" (Scheinkman, Practice Commentaries, McKinneys
            Cons Laws of NY, Book 14, Domestic Relations Law C237:1, at 6,
            citing O'Shea v O'Shea, 93 NY2d 187).
            Matrimonial litigation in New York is expensive. It has been
            repeatedly recognized that in a fiercely contested case, the costs
            of the litigation can consume the marital estate of even an affluent
            couple (see generally, Saxe, Reflections on Matrimonial Lawyers,
            Judges and Practice -- Part I, New York Law Journal, January 8,
            1993, p 2; City of New York, Department of Consumer Affairs, Women
            in Divorce: Lawyers, Ethics, Fees & Fairness, March 1992). Even
            women in possession of decent-sized financial resources have cause
            for concern when it becomes apparent that disputed issues will
            require litigation, because those resources can dissolve rapidly
            once a battle begins. Unless she continues to receive a substantial
            income, beyond that which she needs for living expenses, a woman in
            the midst of matrimonial litigation, even a formerly well-to-do
            woman, may wind up without funds and in debt.
            Recognizing this reality of litigation, the possibility that even a
            woman who had enjoyed an affluent lifestyle can end up in dire
            financial straits cannot be ignored. Ironically, the theoretical
            framework for the concept of the "feminization of poverty", normally
            applied to households headed by women with only limited or low-level
            employment opportunities, whose earnings and resources fall short of
            their families' basic needs (see, Rowe, The Feminization of Poverty:
            An Issue for the 90's, 4 Yale J L & Feminism 73, 74), becomes
            applicable to the affluent in this context. When a couple's
            affluence has been due to the earnings of the husband, and his
            wife's earnings are minimal in comparison with the family's
            lifestyle, their separation and their divorce proceedings can leave
            such a wife without funds and at the mercy of her ex-husband, whose
            cooperation in making support payments is the only thing keeping her
            and their children from a lifestyle of substantially reduced means.
            These considerations should be kept in mind on an application for
            counsel fees in a matrimonial litigation where a wife has assets
            that, although considerable, are finite, while her husband's wealth
            is far greater and his earnings continue to amass. When a wife's
            expected attorneys' fees will exhaust a large portion of her finite
            resources, while her husband will be able to pay his ongoing
            attorneys' fees without substantial impact on his estate, the court
            should not limit itself to inquiry into whether the wife is able to
            pay her attorney with the funds then in her possession.
            Rather, when considering an application for interim counsel fees,
            the court must consider the relative financial circumstances of both
            parties (Domestic Relations Law § 237[a]). This direction is
            intended not only to permit determination of one side's need and the
            other's ability to pay; it is also to ensure that a spouse with
            substantially greater financial resources cannot use those resources
            against the less powerful spouse to obtain the outcome he desires.
            "The courts are to see to it that the matrimonial scales of justice
            are not unbalanced by the weight of the wealthier litigant's wallet"
            (O'Shea v O'Shea, 93 NY2d 187, 190).
            At one time this Court espoused the rule that counsel fees were
            precluded any time the spouse making the application had already
            paid her attorney, thus demonstrating the ability to pay (see, e.g.,
            Kann v Kann, 38 AD2d 545). However, it has since been held that her
            possession of assets, and her use of some of those assets to pay
            counsel, does not preclude the court from awarding counsel fees
            (see, DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881).
            The oft-repeated rule that "[i]ndigency is not a prerequisite to an
            award of counsel fees" (DeCabrera v Cabrera-Rosete, 70 NY2d 879,
            881), while true, should not be understood to imply that a spouse's
            assets must be spent down to near-indigency before a counsel fee
            application will be entertained. A party who has finite assets and a
            small income should not be required to spend down a substantial
            portion of those assets in order to qualify for such an award, where
            her spouse appears to have much more extensive assets and income,
            with the concomitant ability to conduct legal battles over any
            contested issue. This holds especially true if, in addition, there
            are indications that the spouse with the financial clout may intend
            to assert his will over such issues of mutual concern as the
            children's care and custody, prepared to take unilateral action, and
            to conduct a legal battle if his wife disagrees.
            All of the foregoing observations come into play in the present
            case. The parties and their four children, ranging in age from 9 to
            14, are citizens of Switzerland who moved to New York in 1994. In
            order to do so, plaintiff wife, who had been working as a
            pediatrician, gave up and sold her medical practice in Switzerland.
            Defendant husband is a European-trained attorney and businessman
            with an international law practice. The apartment they now reside in
            was purchased for $1,200,000. The children attend the Lycee
            Francais, take music lessons at the French American Conservatory,
            and the two daughters take ballet lessons. Family vacation travel
            has included such destinations as Bali, Hawaii, New Zealand and
            Australia. According to plaintiff, the family's living expenses are
            over $300,000 per year.
            The assets plaintiff has in her possession, $160,000, consist
            primarily of the proceeds of the sale of her practice. Her current
            income, derived from her employment with the French American
            Conservatory, a not-for-profit music school attended by their
            children, is approximately $24,000 per year, before taxes. In
            denying plaintiff's application for counsel fees, the motion court
            took particular note that defendant is paying $2,000 per week for
            spousal maintenance and child support, as well as making direct
            payment for private school tuition, the children’s extra-curricular
            activities, domestic help, and medical and life insurance. The court
            also noted that plaintiff has already paid a $25,000 retainer to her
            counsel; defendant asserts that he paid a retainer of $20,000. What
            the motion court did not note is that in view of the parties'
            pre-nuptial agreement, the plaintiff will receive no distributive
            award; whatever sums she is forced to spend on this action will not
            be replenished at its conclusion.
            The court apparently gave no consideration at all to the extent of
            defendant's resources. Defendant asserts that his annual income is
            $183,000; however, plaintiff provides substantial basis for her
            assertion that it is actually far greater, in view of their
            lifestyle during the marriage. Defendant's statement of net worth
            does not report the total value of his estate, marital and separate,
            inasmuch as the numerous businesses he owns have not been valued;
            those assets whose value he acknowledges total approximately
            $300,000. Inasmuch as defendant's statement of net worth is
            incomplete, it is appropriate to apply an adverse inference on the
            issue of his finances (see, Wildenstein v Wildenstein, 251 AD2d 189,
            190). Certainly, there is good reason to acknowledge the possibility
            that plaintiff defendant's wealth is substantial, far in excess of
            the funds to which plaintiff has access.
            Given the large discrepancy in the parties' respective incomes and
            the assets at their disposal, as well as the nature of the issues in
            dispute, concerning child support and custody, we conclude that it
            was an improvident exercise of discretion to deny the plaintiff
            wife's application for an award of interim counsel fees on the
            ground that she is financially able to meet that cost herself.
            The case of Fisher v Fisher (208 AD2d 433) does not require a
            contrary result. In Fisher, the wife could expect to receive a
            substantial distributive award. Here, it is undisputed that once
            plaintiff depletes her assets she will have no source from which to
            replenish any savings she must spend.
            For the foregoing reasons, we reverse and remand for further
            consideration.
            Accordingly, the order of the Supreme Court, New York County (Laura
            Drager, J.), entered June 11, 1999, which, to the extent appealed
            from, denied plaintiff’s motion for an award of interim attorney’s
            fees, should be reversed, on the law, the facts, and in the exercise
            of discretion, without costs, and the matter remanded for further
            proceedings consistent with the Opinion herein.
            All concur.
            THIS CONSTITUTES THE DECISION AND ORDER
            OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
            ENTERED: JULY 13, 2000
            _______________________
            CLERK