Home » Publications & Outlines » Dolores Gebhardt, White Plains Divorce Lawyer, Awards of Attorney’s Fees: Call a Spade a Spade, and You May Get Paid - 4-03

Awards of Attorney’s Fees: Call a Spade a Spade, and You May Get Paid

AWARDS OF ATTORNEY’S FEES: CALL A SPADE A SPADE, AND YOU

By: Dolores Gebhardt, Esq.

McCarthy, Fingar, Donovan, Drazen & Smith, LLP

MAY GET PAID

Imagine this scenario: You represent the defendant in a complicated and protracted divorce action. Your adversary and the plaintiff insist that your client has hidden marital assets overseas, and compel your client to expend tens of thousands of dollars on litigating this issue through trial. Plaintiff is unable to prove that your client has hidden assets, so your client is off the hook…except that your client owes you $200,000 in attorney’s fees largely as a result of plaintiff’s wild goose chase for the imaginary hidden assets. Your client cannot afford to pay you, there are insufficient assets to sell…and your client was the moneyed spouse. How can you get your money?

In the recent case of Silverman v. Silverman, New York Law Journal, February 25, 2003, p. 18, the First Department provided the answer by demonstrating how

In 1987, following the stock market crash, Joel began to suffer a series of professional and personal financial setbacks. Rather than altering their lifestyle according to financial reality, the Silvermans instead systematically spent down

not to get paid. The parties, Joel and Linda Silverman, were married in 1971. Joel was an investment manager; Linda left her position as a vice-president and director of the contemporary art department at Sotheby’s to raise the parties’ children. The Silvermans enjoyed a lavish lifestyle during the marriage, complete with an antiques-filled Manhattan apartment, a house in Southampton, and extensive travel.

their liquid assets, mortgaged their Southampton home, and leveraged other assets to the point that very little remained by the time the divorce action commenced.

During the divorce proceedings and at trial, Linda Silverman and her attorney insisted that Joel had hidden marital assets in an offshore account. Tens of thousands of dollars in attorney’s fees were spent pursuing the alleged assets, but Linda was unable to prove their existence at trial. Linda’s trial counsel also apparently engaged in other unspecified tactics that the trial court found to be "improper and unnecessarily time-wasting."

By the end of the trial, Joel’s legal fees had ballooned to $200,000. Joel’s attorney sought an award of counsel fees pursuant to Domestic Relations Law (DRL) §237, which provides in relevant part:

"a) In any action or proceeding brought …for a divorce, … the court may direct either spouse…to pay such sum or sums of money directly to the attorney of the other spouse to enable that spouse to carry on or defend the action or proceeding, as, in the court’s discretion, justice requires, having regard to the circumstances of the case and of the respective parties."

On its face, the forgoing language suggests that because Joel’s counsel fees were inflated due to the "improper and unnecessarily time-wasting" tactics of Linda and her attorney, counsel fees pursuant to DRL §237 would be awarded to Joel "as, in the court’s discretion, justice requires."

The Supreme Court, New York County (Marilyn Diamond, J.), did exactly that. After trial, the court awarded $50,000 in counsel fees to Joel, based specifically on the frivolous conduct of Linda and her trial counsel.

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On appeal, the First Department reversed the counsel fee award, holding that "it is improper to direct the non-monied spouse to pay a portion of the other’s fees under Domestic Relations Law 237."

As the court pointed out, the purpose of DRL §237 is to enable the less affluent spouse to effectively prosecute or defend a matrimonial action by allowing the court to make the other spouse financially responsible for the non-monied spouse’s counsel and expert fees. Although otter factors may be considered, the primary focus is on the respective financial circumstances of the parties.

The court continued that although the parties’ assets had been equally divided pursuant to equitable distribution, Joel’s

The court continued that punitive awards are available not under DRL §237, but under 22 NYCRR 130-1.1(c), which authorizes awards of costs, including "reasonable attorney’s fees, resulting from frivolous conduct." Conduct is frivolous under Part 130 if it is completely without merit and is unsupported in law, if it is undertaken primarily to delay the litigation or to harass another, or if it

future ability to earn a living in accordance with the marital lifestyle was "substantially higher than Linda’s." To the court, Joel was the monied spouse and therefore had a financial advantage over Linda. Under these circumstances, the court concluded that an award of counsel fees to Joel could only be viewed as a punishment to Linda for her frivolous litigation conduct, and not an attempt to level the playing field in litigation between the monied and the non-monied spouse.

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asserts material factual statements that are false. Awards under Part 130 may be made either on motion, or upon the court’s own initiative, after a hearing.

The result of my analysis of the cases awarding counsel fees pursuant to DRL §237 was the same as that of the Silverman court: in no case was an award of counsel fees made to the monied spouse pursuant to DRL §237, even though dilatory conduct was considered as a factor warranting an award. Thus, caselaw suggests that the monied spouse can never recover attorney’s fees pursuant to DRL §237, regardless of the circumstances.

The lesson the Silverman court wanted to impart is that if your adversary is engaging in frivolous conduct, the proper vehicle to request an award of attorney’s fees is Part 130, not DRL §237. I submit, however, that the decision was based more on Joel’s status as the monied spouse than on Linda’s dilatory tactics. Had Joel been the dilatory party, Linda almost certainly would have been awarded attorney’s fees pursuant to DRL §237 simply because she was the non-monied spouse;

Notice also that Part 130 allows the court to award attorney’s fees on its own motion. Although the trial court’s decision was not available for review, one can only assume that because attorney’s fees of $50,000 were awarded after trial, that the issue of such fees was tried as well. Presumably, the Appellate Division could have awarded Joel counsel fees pursuant to Part 130, or could have remanded that issue to the Supreme Court. It did neither. Thus, although see Walker v. Walker

the court found that Linda and her attorney’s conduct was frivolous, Linda got away with it because Joel was awarded nothing. Was that what justice required?