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Sykes v. Sykes

Supreme Court of New York, New York County

October 10, 2013

George SYKES, Plaintiff,
Amanda Ann Crider SYKES, Defendant.

[973 N.Y.S.2d 909] Mayerson Abramowitz & Kahn, LLP, New York City, for the Plaintiff.

Cohen Clair Lans Greifer & Thorpe LLP, New York City, for the Defendant.


This is one of those all-consuming divorce cases involving very wealthy parties, each of whom has a team of lawyers and a retinue of expert witnesses. The amount of counsel and expert fees generated so far have been astounding, even in the world of " high-end" matrimonials. Not surprisingly, the issue of who will pay these fees as the case moves forward is now before the court.

From the commencement of the action in December 2010 until February 2013, a period during which the parties were largely engaged in discovery and motion practice, the plaintiff-husband, the owner of a successful hedge fund, paid all of the counsel and expert fees that both he and the defendant-wife incurred. That sum was close to $1 million. In March 2013, just prior to trial, the wife's attorneys billed the husband $238,196 for their services rendered that month. He paid that bill in full. In April 2013, during which the first eight days of trial took place, the wife's attorneys billed the husband $355,329 for their services. In addition, the husband was billed $74,853 for the wife's experts' services. At that point, in [973 N.Y.S.2d 910] the midst of a financial trial [1] that had only just begun and having been billed a total of $668,378 for the wife's fees for March and April alone, to say nothing of his own counsel fees, the husband decided he could no longer foot the litigation costs for both sides. Accordingly, the husband declined to pay the April 2013 bills or any subsequent bills incurred by the wife for her attorneys' or experts' services absent further order of the court.

Pointing to the fact that the wife receives $75,000 a month in combined temporary child and spousal support and that she stands to walk away from the marriage with somewhere in the vicinity of $10 million in equitable distribution, the husband asserts that it is time for the wife to assume some of the burden for the cost of the litigation. In so doing, he invokes a phrase that might not be found in a legal dictionary or used in any reported case, but is heard frequently in the context of matrimonial proceedings. The phrase is " skin in the game," and it refers to the belief that the best way to insure that a party to a divorce will litigate reasonably and responsibly is to require the party to share in the cost of the litigation.[2]

The husband has now moved for an order authorizing him to release $2 million from marital funds and evenly share that amount with the wife so that each party can pay his or her own interim litigation expenses.[3] He argues that not only has his income and personal funds significantly declined over the last two years ago, but that permitting the wife to proceed without " skin in the game" will enable her to push forward with the litigation without any concern for its cost or any eye towards settlement.

The wife opposes the release of the money for the payment of counsel and expert fees. She maintains that she has " skin in the game" by virtue of having to travel from France to make periodic court appearances and that she is every bit as motivated as the husband to reach a fair resolution of the case. Moreover, the wife argues that because she has no income other than the $75,000 monthly support payments, she must be considered the nonmonied spouse and therefore entitled under statutory and case law to have the husband, the monied spouse, pay her interim legal fees. She further contends that the law is clear that these payments must come from the husband's income and separate funds rather than marital funds so as not to deplete her assets.

New York has long sought to prevent wealthy litigants from gaining an advantage in divorce proceedings simply by being able to spend more on representation than their less well-to-do spouses. In discussing the counsel fees provision of the Domestic Relations Law as it existed before its amendment, the Appellate Division, First Department, stated the following as to its purpose and effect:

[973 N.Y.S.2d 911] The intent of the provision is to ensure a just resolution of the issues by creating a more level playing field with respect to the parties' respective abilities to pay counsel, " to make sure that marital litigation is shaped not by the power of the bankroll but by the power of the evidence." Therefore, where the parties' respective financial positions gives one of them a distinct advantage over the other, the court may direct the monied spouse to pay counsel fees to the lawyer of the nonmonied spouse. Domestic Relations Law § 237(a) (other citations omitted).

Silverman v. Silverman, 304 A.D.2d 41, 48, 756 N.Y.S.2d 14 (1st Dept. 2003). The legislature made the fees provision even stronger in 2010 when it amended Domestic Relations Law (" DRL" ) § 237(a). Where previously the statute had merely given courts the power to direct the payment of interim counsel fees " as, in the court's discretion, justice requires," the 2010 amendment is clear that such discretion should ordinarily be exercised in favor of awarding fees. It states:

There shall be a rebuttable presumption that counsel fees shall be awarded to the less monied spouse. In exercising the court's discretion, the court shall assure that each party shall be adequately represented and that where fees and expenses are to be awarded, they shall be awarded on a timely basis, pendente lite, so as to enable adequate representation.

DRL § 237(a).

Fees are particularly important in divorces because a wide gap in the parties' abilities to retain counsel will make the playing field decidedly uneven and will result in the wealthy spouse gaining a sizeable advantage in the case. As one court has observed, absent an award of counsel fees " a wealthy husband could obtain the services of a highly paid (and presumably seasoned and superior) matrimonial counsel, while the indigent wife, essentially, would be relegated to counsel willing to take her case on a poverty basis." Sassower v. Barone, 85 A.D.2d 81, 89, 447 N.Y.S.2d 966 (2d Dept. 1982). Without the infusion of funds from the monied spouse, the nonmonied spouse would be unable " to prevent the more affluent spouse from wearing down or financially punishing the opposition by recalcitrance or by prolonging the litigation." O'Shea v. O'Shea, 93 N.Y.2d 187, 193, 689 N.Y.S.2d 8, 711 N.E.2d 193 (1999). As a result, it is incumbent on courts " to see to it that the matrimonial scales of justice are not unbalanced by the weight of the wealthier litigant's wallet." Id. at 190, 689 N.Y.S.2d 8, 711 N.E.2d 193.

In this case, there is nothing to indicate that the husband has sought to use his financial resources to make the playing field uneven or the scales of justice unbalanced. There has been no evidence of recalcitrance on his part nor any suggestion that he has attempted to unnecessarily prolong the litigation; to the contrary, the husband has consistently shown himself to be eager to move the case forward to a resolution. Nor is there any disparity between the seasoning and quality of the parties' legal teams; both are represented by firms at the apex of the New York matrimonial lawyer hierarchy. And any fear of the wife being " relegated to counsel willing to take her case ...

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