Supreme Court, Richmond County, July 19, 2022

Port & Sava, Lynbrook (Gary Burton Port of counsel), for defendant.

Kuharski, Levitz & Giovinazzo, Staten Island (Michael J. Kuharski of counsel), for plaintiff.

Murgolo & Rutigliano, Staten Island (Nicholas James Murgolo of counsel), Attorney for the Children.

On consideration of oral argument conducted on June 1, 2022, motion sequence Nos. 005, 006, 007, and 008 are resolved and therefore, it is hereby: Ordered that defendant's request for a determination that the plaintiff's military disability pay, and VA financial compensation are subject to equitable distribution and to credit defendant on plaintiff's interest in his retirement assets for the value of the plaintiff's disability retirement pay, and VA financial compensation is denied. Ordered that defendant's request for plaintiff to pay the full cost of the forensic report issued by Dr. Stephen P. Herman is denied. Ordered that defendant's request for preclusion of plaintiff from using the forensic report at trial is denied. Ordered that defendant's request to set aside the existing pendente lite custody agreement is denied, and the ultimate issue{**77 Misc 3d at 229} as to custody and parenting time is referred to the trial court. Ordered that defendant's request for the court to issue an adverse inference as to the timeliness of plaintiff's production of the findings of the Coast Guard medical evaluation is denied. Ordered that plaintiff's request for a determination that the plaintiff is entitled to 50% of the defendant's 401(k) subject to equitable distribution is denied and referred to the trial court. Ordered that plaintiff's request for interim counsel fees with respect to the within motion practice is denied, without prejudice to renew. Ordered that plaintiff's request for sanctions for systematic and continuous acts of bad faith is denied. Ordered that the Clerk of the Court shall enter judgment accordingly.

Statement of Facts

Plaintiff B.C. and defendant M.C. were married on May 9, 2009. There are two children of the marriage, to wit: J.P.C., born XXXX XX, 2021, and A.J.C., born XXXX XX, 2016. The plaintiff commenced this action for divorce on or about May 20, 2020.

On April 14, 2022, defendant filed motion sequence No. 005 by notice of motion. The defendant seeks a determination that plaintiff's military disability pay is subject to equitable distribution and to credit defendant with an offset to plaintiff's interest in his retirement assets equal to the value of the plaintiff's disability retirement pay and VA financial compensation.

Defendant also filed motion sequence No. 006 by notice of motion on April 14, 2022, seeking (a) plaintiff to pay the full cost of the forensic report issued by Dr. Stephen P. Herman; (b) preclusion of the forensic report by the plaintiff; (c) legal and physical custody of the children, pendente lite; and (d) an adverse inference that the plaintiff's concealment of the findings of the Coast Guard medical evaluation were designed to thwart the honest appraisal of the plaintiff's mental condition and fitness as a custodial parent.

On May 6, 2022, plaintiff filed cross motion sequence No. 007 and opposition to motion sequence No. 005 by notice of cross motion seeking (a) 50% of defendant's 401(k) subject to equitable distribution; (b) defendant to pay $5,000 in plaintiff's attorney fees incurred by defendant's motions; and (c) sanctions against the defendant in the amount of $10,000 as and [*2]for counsel's systematic and continuous acts of bad faith including but not limited to the filing of frivolous motions. Plaintiff opposes defendant's motion sequence No. 005.{**77 Misc 3d at 230}

On May 6, 2022, plaintiff filed cross motion sequence No. 008 and opposition to motion sequence No. 006 by notice of cross motion seeking defendant to pay $5,000 in plaintiff's attorney fees incurred by defendant's motions and sanctions against the defendant in the amount of $10,000 as and for counsel's systematic and continuous acts of bad faith including but not limited to the filing of frivolous motions. Plaintiff opposes defendant's motion sequence No. 006.

On May 18, 2022, the AFC (Attorney for the Children) filed opposition to motion sequence No. 006 opposing the requested change in custody, pendente lite. On May 25, 2022, defendant filed reply to motion sequence No. 005 and opposition to cross motion No. 007. Defendant filed reply to motion sequence No. 006 and opposition to cross motion No. 008 on May 25, 2022. Plaintiff filed reply to cross motion sequence No. 007 on June 1, 2022.

Oral argument was heard on motion sequence Nos. 005, 006, 007, and 008 on June 1, 2022. This is a decision and order on all four motions.

Discussion

Military Disability Retirement Pay and VA Financial Compensation and Equitable Distribution

Defendant seeks an order directing that the plaintiff's military disability retirement pay, and VA financial compensation are subject to equitable distribution for the purpose of calculating offsets to plaintiff's interest in defendant's retirement assets.

Defendant provided NYSCEF (New York State Courts Electronic Filing) Document No. 185, motion sequence No. 005, an exhibit entitled, "Findings of Medical Evaluation Board." This document describes in specific detail the extent of the plaintiff's disability and the Coast Guard's determination to grant "Permanent Disability Retirement." In NYSCEF Document No. 189, defendant further espouses his perceived seriousness of the plaintiff's disability and seeks this court to order an immediate change in the legal and physical custody of the parties' children.

Based upon the credible evidence provided to the court, plaintiff has medical issues that have rendered her permanently disabled, entitling her to disability retirement benefits from the United States Coast Guard. This finding is acknowledged by the defendant. This is not an instance where a party{**77 Misc 3d at 231} to a matrimonial action sought retirement benefits calculated on the percentage of a disability in lieu of calculation of years of service, to simply shelter assets from the grasp of a spouse.

Defendant's exhibit NYSCEF Document No. 185, a Coast Guard memorandum to the plaintiff dated January 7, 2021, states, "The Commander, Coast Guard Personnel Service Center, approved the findings of the Informal Physical Evaluation Board that your [plaintiff's] current conditions are unfitting and that you shall be permanently retired with a 70% disability rating."

"Department of Defense Financial Management Regulation, Volume 7B . . . addresses and explains the retired pay system[.] Pursuant to § 290701 (C) (5) if the percentage of disability is chosen, then it is not part of disposable retirement pay." (See NYSCEF Doc No. 183, defendant's mem of law.)

The Uniformed Services Former Spouses' Protection Act (10 USC § 1408 [a] [4] [A] [iii]) defines disposable retired pay as

"the total monthly retired pay to which a member is entitled less amounts which . . . in the case of a member entitled to retired pay under chapter 61 of this title [10 USC § 1201 et seq.], are equal to the amount of retired pay of the member under that [*3]chapter computed using the percentage of the member's disability on the date when the member was retired (or the date on which the member's name was placed on the temporary disability retired list)."

In 1982 Congress passed

"the Uniformed Services Former Spouses' Protection Act, 10 U. S. C. § 1408. Congress wrote that a State may treat veterans' 'disposable retired pay' as divisible property, i.e., community property divisible upon divorce . . . [However,] the new Act expressly excluded from its definition of 'disposable retired pay' amounts deducted from that pay 'as a result of a waiver . . . required by law in order to receive' disability benefits." (See Howell v Howell, 581 US 214, 217 [2017].)

The Appellate Division, Second Department, has not yet ruled regarding veteran's disability retirement pay or VA financial compensation as subject to equitable distribution. Nevertheless, the issue has been addressed to the same result by the Appellate Division, Third Department, and the Appellate{**77 Misc 3d at 232} Division, Fourth Department. In the absence of contradictory Second Department precedent, the Third and Fourth Department holdings are binding on this court (see Mountain View Coach Lines v Storms, 102 AD2d 663 [2d Dept 1984]).

The Third Department acknowledged "that a court in an action for divorce or separation cannot order as spousal maintenance the allocation of compensation received by a veteran derived from military pay waived in order for the retiree to receive veterans' disability benefits." (See Hoskins v Skojec, 265 AD2d 706, 707 [3d Dept 1999]; Mills v Mills, 22 AD3d 1003 [3d Dept 2005].)

VA benefits are awarded based solely on a disability that has resulted from injury or disease contracted in the line of duty and as such these benefits are separate property and are "not subject to equitable distribution." (See Murphy v Murphy, 126 AD3d 1443, 1446 [4th Dept 2015].)

Congress has chosen in its legislative discretion to omit disability income from the definition of disposable income in the Uniformed Services Former Spouses' Protection Act. This court will not find an inclusion where Congress has in its prerogative chosen not to include one.

[1] Based upon the foregoing, defendant's request for an order determining that the plaintiff's military disability retirement pay, and VA financial compensation are subject to equitable distribution for the purpose of calculating offsets to plaintiff's interest in defendant's retirement assets is denied.

Cost of the Forensic Report

There is insufficient evidence to warrant the reallocation of the costs related to the forensic report at this time and as such, the requested relief is denied without prejudice to renew at trial.

Preclusion of Forensic Report

There is insufficient evidence proffered by defendant to preclude plaintiff from using the forensic report at trial. Therefore, the requested relief is denied.

Pendente Lite Custody

Defendant states in his affirmation in support of motion sequence No. 006, NYSCEF Document No. 188, that on January 14, 2020, the parties held a four-way settlement meeting and agreed to an interim custodial arrangement for the children. "Plaintiff has parenting time 4 days, followed by 3 days for the Defendant, followed by 3 days by the Plaintiff and then{**77 Misc 3d at 233} 4 days by the Defendant. The pattern recycles." This arrangement was explained to the Honorable Barbara I. Panepinto, Justice of the Supreme Court, at the preliminary conference on July 22, 2020, and [*4]Justice Panepinto decided not to alter the parenting time arrangement.^[FN*]

The AFC has interviewed the children, J.P.C. and A.J.C., on three occasions. On November 13, 2021, the defendant produced the children at the AFC's office for interview, on February 9, 2022, plaintiff produced the children at the AFC's office for interview, and on May 11, 2022, the children were interviewed virtually at the home of the plaintiff. The AFC found the children to be cooperative and easy to engage on all subject matters. The AFC further states in his Attorney for the Children's affirmation in opposition to the defendant father's order to show cause seeking pendente lite custody (NYSCEF Doc No. 200), "Each of the children report being well-cared for by each of their parents and express their love and affection for each of their parents equally. The children express being comfortable living with each of their parents, and articulate being safe in both homes."

The AFC further states, "The children have never expressed anything that would resemble a safety concern." The AFC does not support a change in pendente lite custody and, upon review, does not believe that the U.S. Coast Guard evaluation, dated March 25, 2020, warrants a change in the existing parenting time arrangement.

[2] Where parents enter into an agreement concerning custody, it will not be set aside unless there is a sufficient change in circumstances since the time of the stipulation and unless the modification of the custody agreement is in the best interests of the children (see Stock v Stock, 108 AD3d 663 [2d Dept 2013]). This court does not believe that setting aside the agreement would be in the best interests of the children, under these facts, and at the eve of trial.

Accordingly, the defendant's request for relief in the form of an order to set aside the existing pendente lite custody agreement is denied, and the ultimate issue regarding custody and parenting time will be adjudicated by the court at trial.

Adverse Inference

Defendant's request for an adverse inference against plaintiff for her alleged delay in the production of the findings of the{**77 Misc 3d at 234} Coast Guard medical evaluation is denied, as there is insufficient evidence in the record for the court to make a finding that said conduct was purposeful, and/or designed to thwart the appraisal of plaintiff's mental condition and fitness as a custodial parent.

Defendant's 401(k)

The issue of equitable distribution of the defendant's 401(k) is presently denied, and the issue is referred to the trial court.

Pendente Lite Counsel Fees

The parties' requests for counsel fees on the instant motions are denied.

Sanctions

The request for sanctions is denied, as there is insufficient evidence for the court to make a finding that counsel's motion practice was frivolous. However, this court hereby cautions the parties from engaging in any further motion practice, without first contacting the court for a conference on the issue. Moreover, this matter is scheduled for trial on August 9, 2022, and August 10, 2022. The only motions expected at this juncture are in limine motions, which must be brought no later than August 1, 2022. The court will not entertain any in limine [*5]motions filed after August 1, 2022, and the parties are to be guided accordingly.

Decretal Paragraphs

Ordered that the relief sought by M.C. in motion sequence No. 005 is denied. Ordered that the relief sought by M.C. in motion sequence No. 006 is denied. Ordered that the relief sought by B.C. in motion sequence No. 007 is denied. Ordered that the relief sought by B.C. in motion sequence No. 008 is denied. Any relief requested, and not specifically addressed in this decision and order is referred to the trial court. Ordered that the Clerk of the Court shall enter judgment accordingly.