CC v RC

Supreme Court, Richmond County

Decided on March 16, 2026

Index No. Redacted

Ronald Castorina, Jr., J.

I. Statement Pursuant to CPLR § 2219 [a]

The following papers were read and considered on defendant's motion seeking, inter alia, an Order directing the immediate release of funds presently held in escrow by plaintiff's counsel, and on plaintiff's cross-motion seeking, inter alia, a limited evidentiary hearing, application of alleged credits and offsets, continuation of escrow, and related relief: defendant's Notice of Motion; the affirmation of James R. Lambert, Esq.; the affirmation of defendant RC; the exhibits annexed thereto; plaintiff's Notice of Cross-Motion; the affidavit of plaintiff CK a/k/a CC; the affirmation of Adelola Sheralynn Dow, Esq., in opposition and in support of the cross-motion; the exhibits annexed thereto; plaintiff's reply submissions; and the prior pleadings, agreements, and orders referenced therein. Oral argument was conducted in person at the courthouse on March 16, 2026.

Upon the foregoing papers, the motion and cross-motion are determined as follows.

II. Findings of Fact

A. The Judgment of Divorce and the Parties' Financial Agreement

This dispute arises from financial provisions contained in the parties' matrimonial resolution. The record establishes that the parties' Judgment of Divorce was entered on November 6, 2013 and that it incorporated, but did not merge, a written Mediation Agreement resolving the financial issues arising from the dissolution of the marriage. The motion papers demonstrate, and neither side meaningfully disputes, that among the provisions of that agreement is a business-profit-sharing clause requiring plaintiff to pay defendant thirty percent of the profits of the business formerly known as RGI, later operated as CYOWl, LLC.

Defendant's motion (Motion Seq. #007) seeks enforcement of that provision. Plaintiff does not deny that such a contractual obligation exists. Rather, plaintiff disputes the methodology by which "profits" are to be determined and asserts that several payments, waivers, credits, and offsets must be applied before any final net amount may be determined. Accordingly, the Court finds at the outset that the existence of the underlying contractual obligation is established on this record, while the precise financial consequences of that obligation remain disputed.

B. The Escrowed Funds

The present motion practice concerns funds presently held in escrow in the amount of $275,754.49, representing proceeds from the sale of plaintiff's residence. The record reflects that by Order of this Court dated June 5, 2025 plaintiff's counsel was directed to hold those proceeds in escrow pending the outcome of a plenary action commenced by plaintiff on April 25, 2018 seeking to invalidate or rescind the provision of the Judgment of Divorce requiring payment to defendant of thirty percent of the business profits.

Defendant's motion papers further assert that the rescission action has now been dismissed after adjudication on the merits by Decision and Order dated January 5, 2026 (Marrazzo, J.). Plaintiff's submissions do not dispute that the rescission action has been dismissed. The Court therefore finds that the escrow was created as a provisional measure while the enforceability of the profit-sharing clause was under direct judicial challenge, and that the challenge giving rise to that restraint has now been resolved against plaintiff.

C. Defendant's Accounting Claim

Defendant's motion relies upon the work of Heidi Muckler, identified in the submissions [*2]as the forensic business evaluator appointed by the Court for the purpose of determining the profits of the business. According to defendant's papers, Ms. Muckler determined that the business generated profits totaling $1,451,465.09 during the years 2013 through 2017. Those profits are itemized as follows: $306,126.31 for 2013, $419,075.33 for 2014, $271,793.76 for 2015, $272,576.22 for 2016, and $181,893.47 for 2017.

Applying the contractual thirty-percent share to those figures, defendant calculates a principal amount due to him of $435,439.53. Defendant further calculates statutory interest pursuant to CPLR § 5004 through January 7, 2026 in the amount of $403,529.04, resulting in a claimed total amount due of $838,968.57, exclusive of additional per diem accrual thereafter. While the Court does not presently determine the ultimate propriety of the interest calculation, it is apparent from the record that defendant's claimed principal alone exceeds the escrowed funds by a substantial margin. Moreover, Plaintiff's counsel consented to the sum of $250,000.00 to be released from escrow, on consent, on the record during oral argument on March 16, 2026.

D. Plaintiff's Claimed Offsets and Accounting Challenges

Plaintiff's opposition raises several categories of alleged credit and offset. Plaintiff asserts that the Mediation Agreement included a waiver by defendant of his thirty-percent share of certain 2013 profits in the amount of $14,309.70. Plaintiff further alleges that defendant paid himself substantial sums from the business during 2013 totaling $61,030.39, that plaintiff personally paid defendant $10,000.00 in 2015 during settlement discussions, that defendant failed to complete a buy-out of plaintiff's interest in the former marital residence leaving a claimed balance of $35,250.00, and that defendant owes child support arrears of $25,056.00 which are presently held in defense counsel's IOLA account.

Plaintiff further challenges the forensic accounting itself, contending that the evaluator's work was preliminary and that the report was never finalized. Plaintiff's counsel asserts that the methodology used by the evaluator improperly calculated profits without deducting reasonable compensation and certain business expenses, and that the evaluator's written work product lacks sufficient detail to permit meaningful judicial review without testimony and cross-examination. Plaintiff therefore seeks an evidentiary hearing to determine the final accounting between the parties.

E. Nature of the Dispute

The Court finds that the record presents two analytically distinct issues. The first is whether defendant should receive the escrowed funds at this juncture as a partial distribution in light of the dismissal of plaintiff's rescission action and the magnitude of defendant's claimed principal entitlement. The second is what the final net accounting between the parties ultimately reveals after the alleged waiver, prior payments, accounting methodology disputes, buy-out obligation, child support arrears, and any other offsets are fully addressed.

The Court further finds that the second issue cannot be definitively resolved on the present motion papers alone.

III. Conclusions of Law

A. Interim Distribution of the Escrow

The Court concludes that defendant has demonstrated entitlement to the release of the escrowed funds as a partial distribution.

The parties' incorporated but unmerged Mediation Agreement remains operative. [*3]Plaintiff directly challenged the validity of the profit-sharing provision through a plenary rescission action, and the record demonstrates that the rescission action has been dismissed. Once the challenge to the validity of the contractual obligation failed, the equitable justification for continuing to immobilize the escrow diminished substantially.

The Court further observes that defendant's claimed principal entitlement exceeds the escrowed amount, and plaintiff has not presented a competing accounting demonstrating that the escrow belongs to her or that defendant's entitlement is necessarily less than the escrow. Accordingly, continued restraint of the funds is not warranted.

B. Necessity of Further Proceedings

At the same time, the Court does not conclude that the present record permits a final determination of the parties' financial obligations. Plaintiff's submissions raise legitimate factual disputes concerning the methodology of the forensic accounting and the existence and amount of several alleged credits and offsets.

Where expert analysis and accounting methodology are meaningfully contested, courts may require evidentiary development to resolve those issues (Kaufman v Kaufman, 189 AD2d 31 [1st Dept 1993]; Zafran v Zafran, 306 AD2d 468 [2d Dept 2003]). CPLR 2218 likewise authorizes the Court to direct a hearing where triable issues of fact are raised by motion. On this record, the Court concludes that a final net accounting should not be fixed solely on the motion papers.

C. Judicial Preference for Resolution Without Protracted Litigation

The Court also finds it appropriate to emphasize that the accounting issues presented in the motion papers, although vigorously contested, are not inherently incapable of resolution without extended litigation. The disputes described by the parties involve financial records, calculations, and the application of specific credits and offsets. Such issues may often be narrowed, clarified, or resolved through structured review of the relevant financial documentation.

The Court is strongly of the view that the parties would be best served by resolving as many of these issues as possible through cooperative efforts before resorting to an evidentiary hearing. Such hearings frequently require extensive attorney preparation, expert testimony, and significant expense. The Court would prefer that the parties avoid incurring substantial additional counsel fees and the burdens of protracted litigation if the issues can reasonably be resolved through a settlement conference.

Accordingly, the Court will require the parties and their counsel to conduct a four-way settlement conference within thirty days of service of this Decision and Order. During that conference the parties shall exchange and review the financial documentation and calculations underlying their respective positions and attempt in good faith to resolve the accounting disputes identified in the motion papers.

D. Framed-Issue Hearing if Necessary

If the parties are unable to resolve all issues through that process, the Court will schedule a framed-issue evidentiary hearing limited strictly to the accounting issues that remain unresolved.

The Court emphasizes that any such hearing will not constitute a reopening of the parties' Judgment of Divorce or a general accounting of every financial matter arising from the parties' [*4]marital relationship. The doctrines of finality and res judicata require that matters previously adjudicated or resolved by the Judgment of Divorce remain undisturbed absent an appropriate procedural basis not presently before the Court.

The hearing, if necessary, will therefore be confined to the narrow accounting issues framed by the Court following submission of proposed framed issues by counsel.

IV. Conclusion and Decretal Paragraphs

For all the foregoing reasons, the Court concludes that defendant has demonstrated entitlement to the escrowed funds as a partial distribution, but that the final net accounting between the parties remains unresolved. The Court further concludes that the parties should first attempt to resolve their accounting disputes through a structured settlement conference before resorting to further litigation.

The escrow will therefore be released to defendant as a partial payment, the parties will be directed to conduct a four-way settlement conference within thirty days, and the matter will be set down for a framed-issue evidentiary hearing only to the extent that the parties cannot resolve the accounting issues themselves.

Accordingly, it is hereby:

ORDERED that defendant's motion (Motion Sequence No. 007) is granted to the extent that plaintiff's counsel shall release forthwith to defendant the escrowed sum of $275,754.49 as a partial distribution; and it is further

ORDERED that said sum shall be credited against any final determination of amounts owed to defendant after further proceedings; and it is further

ORDERED that the parties and their counsel shall conduct a four-way settlement conference within thirty (30) days of service of this Decision and Order with notice of entry for the purpose of attempting to resolve the accounting issues raised in the motion papers; and it is further

ORDERED that the parties shall exchange and review any financial documentation reasonably necessary to evaluate their respective calculations during that conference; and it is further

ORDERED that if the parties are unable to resolve all accounting issues, counsel shall submit to the Court on consent a proposed list of framed issues identifying with specificity the disputes to be determined at a hearing; and it is further

ORDERED that the submission shall identify those issues upon which the parties agree and any additional issues upon which they cannot agree, in which event each party may set forth its proposed framed issues for the Court's determination; and it is further

ORDERED that any evidentiary hearing conducted pursuant to this Decision and Order shall be strictly limited to the accounting issues framed by the Court and shall not constitute a reopening of the parties' Judgment of Divorce or a general accounting of all financial matters arising from the marriage; and it is further

ORDERED that following such hearing, if required, the Court shall render a final determination of the parties' financial obligations, crediting the escrow previously released against any final award.

ORDERED that counsel are to report back to the Court within sixty (60) days from Notice of Entry to advise as to the requirement of a framed issue hearing, and if necessary, the Court shall schedule same at that time.

This constitutes the Decision and Order of the Court.

Dated: March 16, 2026

Staten Island, New York

HON. RONALD CASTORINA, JR.

JUSTICE OF THE SUPREME COURT