Before the recent decision of Fisch v. Davidson, 2022 NY Slip Op 01442 (2d Dep't, 2022), matrimonial practitioners representing affluent clients who owned multiple homes in different counties of this state, often raced to be the first to file the divorce action in the venue they believed would be the most advantageous for their client. For the reasons discussed below, winning or losing this race could have an enormous financial impact. This gamesmanship displeased judges for many years and would often spur litigation before the substance of the case even began. But with the Fisch decision, this forum shopping has been curtailed and likely marks the demise of the destination divorce in New York.
Forum shopping has been commonplace for some time. Article 5 of the Civil Practice Law and Rules (CPLR) provides that the plaintiff chooses the venue, and in matrimonial cases, the venue must be in the “county in which one of the parties resided.” CPLR 503(a). Although a party may have multiple residences in different counties, missing from the language in the statute is a definition of the crucial word “resided.”
Among the many reasons one might prefer a particular venue over another is that despite the standardization of certain aspects of divorce by statute, judges retain significant discretion in how they weigh the statutory factors. This creates strategic planning opportunities and concerns, especially when one party has assumed the role of homemaker and the other the breadwinner. One venue may have the reputation of awarding longer periods, or greater amounts, of spousal support, or may place a higher value on the indirect and direct contributions of the non-titled spouse and thus award that spouse a larger percentage of the value of the titled spouse's business or partnership interest. Another venue may have a history of awarding less in counsel fees to the non-monied spouse.
Often, forum shopping is used to intentionally inconvenience the other spouse; a form of gameplay for which judges of this state have demonstrated their clear disdain. Opining on the “destination divorce,” now retired Supreme Court Justice of New York County, Matthew Cooper, recognized that defendants in foreign counties are more likely to default or settle instead of assuming expensive and time-consuming travel costs to the court. Statewide Coordinating Judge for Matrimonial cases, Justice Jeffrey Sunshine of Kings County, labeled these destination divorces as a “major problem,” a “drain [on] the limited judicial resources,” and often used to “deny access to justice.” (Matrimonial Practice Advisory and Rules Committee, “Report to the Chief Administrative Judge of the Courts of the State of New York,” (January 2020), at pp. 47-53, www.nycourts.gov/LegacyPDFS/IP/judiciaryslegislative/pdfs/Matrimonial-MPARCReport2020.pdf.)
On March 9, 2022, the Second Department issued an opinion in Fisch v. Davidson, which held that a “seasonal and temporary” residence in Suffolk County didn't meet the venue requirements under CPLR 503(a) and ruled that the case must be transferred to New York County where the parties had primary residency. In addition, the court found that sheltering in place during the COVID-19 pandemic hadn't created a sufficient degree of permanence to establish residency in Suffolk County for venue purposes.
In this case, Mark Fisch, was a real estate developer and his wife, Rachel Davidson, was a retired Newark Superior Court Judge. They were married for 35 years and had three adult children. During their marriage, they amassed a significant marital estate, which included a residence in Manhattan and another in Southampton. At the start of the COVID-19 pandemic, Rachel quarantined at the Southampton home with the parties' pregnant and immunocompromised daughter. In August 2020, Mark filed for divorce in Suffolk County. Rachel sought to transfer the case to New York County alleging Suffolk County was an improper venue. The lower court rejected her request and held that the venue was proper in Suffolk County. Rachel appealed.
The Appellate Division overturned the lower court's decision and found that the parties primarily resided in New York County, the proper venue for this divorce. The court focused on many factors evidencing the parties' residency, including that New York County was where the parties' significant art collection was located; Mark maintained an office; Rachel was registered to vote; and the Manhattan address was listed on their income tax return, their automobile registrations, their bank statements and Rachel's driver license.
In addressing whether the parties were residents of Suffolk County for venue purposes, the court applied the definition of “residency” used in Yaniveth R. v. LTD Realty Co, 27 N.Y.3d 186 (2016). In that case, the Court of Appeals held residency was “for some length of time” and that the party must “have the bona fide intent to retain the place as a residence with at least some degree of permanency.” Taking that definition into account, the Second Department ruled that the parties' “seasonal and temporary” use of the Southampton house only on weekends in the summer, and a few days over the 2018 Christmas holiday break, hadn't made either party a resident of Suffolk County. Additionally, the court found Rachel's decision to shelter in place at the Southampton house hadn't made her a resident of Suffolk County as it was “undisputed” that her stay was temporary and for the purpose of assisting her daughter.
What should now be very clear to the tempted tourist is that a seasonal and temporary stay at a vacation home and sheltering in place during the pandemic in another county won't establish residency for venue purposes. A party may have multiple residences according to the venue statute, but the Fisch v. Davidson decision indicates courts will look to particular factors to determine whether that residence is “primary” or permanent. Considering the concerns judges have been raising in this state for years, Fisch v. Davidson marks the future trajectory of venue laws. To those forum shopping in New York, the closed sign is now on. Buyer beware.
This article was originally published on WealthManagement.com. Please see the full article linked below.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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