                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: January 7, 2016                   521100
________________________________

LORI FERMON,
                    Respondent-
                    Appellant,
     v                                      MEMORANDUM AND ORDER

IVAN FERMON,
                    Appellant-
                    Respondent.
________________________________


Calendar Date:   November 24, 2015

Before:   Garry, J.P., Rose, Lynch, Devine and Clark, JJ.

                             __________


      Friedman and Molinsek, PC, Delmar (Stephen L. Molinsek of
counsel), for appellant-respondent.

     Melody A. Mackenzie, Troy, for respondent-appellant.

     Tracey A. Brown, Clifton Park, attorney for the children.

                             __________


Devine, J.

      Cross appeal from an order of the Supreme Court (Elliott
III, J.), entered December 3, 2014 in Rensselaer County, which,
among other things, granted plaintiff's motion to modify the
parties' judgment of divorce.

      Plaintiff (hereinafter the wife) and defendant (hereinafter
the husband) were married in 2000 and have two sons (born in 2002
and 2006). The parties divorced in 2012 and, pursuant to a
written stipulation of settlement that was incorporated but not
merged with the judgment of divorce, they retained joint custody
of the children and waived application of the Child Support
                              -2-                521100

Standards Act (see Domestic Relations Law § 240 [1-b]) to provide
for no payments of basic child support. The stipulation also
resolved issues of equitable distribution by, among other things,
directing the husband to transfer a portion of his individual
retirement account to the wife.

      Extensive motion practice ensued, with the wife seeking a
variety of relief that included modification of the custody and
child support provisions of the judgment, an assessment as to
whether the husband committed fraud in the negotiations that led
to the execution of the stipulation and an award of counsel fees
to the wife. Supreme Court conducted a hearing on the motions,
after which it modified the provisions of the judgment to grant
the wife sole legal custody of the children and directed the
husband to pay the wife basic child support, arrearages and
various add-ons. Supreme Court further directed the husband to
pay an additional $11,500 to the wife due to his alleged fraud in
misrepresenting the value of his individual retirement account,
and awarded the wife $35,000 in counsel fees. The husband
appeals and the wife cross-appeals.

      We are initially unpersuaded by the husband's contention
that Supreme Court erred in granting sole legal custody and
primary physical placement of the children to the wife. A
custody arrangement may be modified where it is established that
"a change in circumstances has occurred since the entry thereof
that is sufficient to warrant the court undertaking a best
interests analysis" (Matter of Menhennett v Bixby, 132 AD3d 1177,
1179 [2015]; see Matter of Kiernan v Kiernan, 114 AD3d 1045, 1046
[2014]). The parties have become unable to collaborate in a
reasonable manner with regard to the children, an inability that
is amply demonstrated by incidents such as the husband summoning
the police to take the children from the wife's home while they
were eating dinner, his berating the wife in front of one of the
children over a seemingly minor dispute, his arguing that the
children should spend Christmas with him in contravention of the
custody arrangement, and his ongoing refusal to honor the wife's
"right of first refusal" to care for the children if he was
unable to do so during his custodial time. A psychologist who
prepared an evaluation at the behest of Supreme Court opined that
it was "exceedingly difficult [for the parties] to directly
                              -3-                521100

interact with each other civilly" and, indeed, both parties
acknowledged that the breakdown in communication had reached the
point where regular collaboration was no longer advisable. The
foregoing demonstrates a change in circumstances since the entry
of the divorce judgment that rendered joint custody inappropriate
and triggered a best interests inquiry (see Matter of Zahuranec v
Zahuranec, 132 AD3d 1175, 1176 [2015]; Heather B. v Daniel B.,
125 AD3d 1157, 1159-1160 [2015]; Matter of Sherwood v Barrows,
124 AD3d 940, 941 [2015]).

      As for the issue of what custodial arrangement would be
appropriate, both parties are loving and capable parents, and
there are no concerns as to the ability of either to provide for
the well-being of the children. Supreme Court was properly
concerned, however, by the "numerous examples of [the husband]
not acting with the children's best interest in mind." Inasmuch
as the wife has continued to seek to foster a positive
relationship between the husband and the children, a sound and
substantial basis in the record supports the finding of Supreme
Court that the best interests of the children were served by
awarding her sole custody and primary physical placement (see
Matter of Zahuranec v Zahuranec, 132 AD3d at 1177; Matter of
Smith v O'Donnell, 107 AD3d 1311, 1313 [2013]).

      While we perceive no reason to disturb the award of sole
legal custody and primary physical placement to the wife, we do
find the absence of a sound and substantial basis in the record
to support the limited parenting time granted to the husband.
The stipulation detailed the amount of parenting time available
to the parties, but they later reached an informal agreement to
split parenting time on alternating weeks. Supreme Court
directed a clinical psychologist to evaluate the situation, and
she prepared an exhaustive report recommending that the parties
continue to exercise equal parenting time, albeit over the course
of a week as opposed to alternating weeks. The husband and the
attorney for the children expressed their preference for this
type of schedule at oral argument and, indeed, the wife testified
at the hearing in this matter that she viewed a split week
schedule as "the best that could happen for the" children and
that she was "[a]bsolutely" willing to adopt it. Despite this
seeming agreement, Supreme Court did not make an award of equal
                              -4-                521100

parenting time and gave no reason for its failure to do so. As
the attorney for the children advises us that a hearing will soon
be conducted on a proceeding brought by the husband to modify the
custody and visitation terms of the order on appeal, "we are
reluctant to attempt to adjust the visitation schedule on this
record" (Matter of Esterle v Dellay, 281 AD2d 722, 728 [2001]).
We accordingly deem it prudent to remit this matter to Supreme
Court so that an appropriate award of parenting time to the
husband may be fashioned, perhaps with a referral to Family Court
so that it may grapple with that issue at the same time as it
addresses the husband's application to modify the custody and
visitation provisions of the order (see Family Ct Act § 467 [a];
Matter of Rumpff v Schorpp, 133 AD3d 1109, 1113 [2015]; Matter of
Lattuca v Natale-Lattuca, 293 AD2d 805, 807 [2002]).

      Turning to the question of child support, "a party seeking
to modify a child support order arising out of an agreement or
stipulation must first establish that the stipulation was unfair
when entered into or that there has been an unanticipated and
unreasonable change in circumstances leading to an accompanying
need" (Matter of Watrous v Watrous, 295 AD2d 664, 666 [2002];
accord Matter of Hunt v Bartley, 85 AD3d 1275, 1276 [2011]).
While the husband presents strained arguments to the contrary,
the terms of the stipulation regarding basic child support were
unfair when they were entered into, as they were premised upon
his fraudulent misrepresentation that his annual income was
$136,106 when, as the wife belatedly discovered, he had accepted
a position that paid $170,000 a year plus bonuses (see Marlinski
v Marlinski, 111 AD3d 1268, 1270 [2013]; Chapin v Chapin, 12 AD3d
550, 551 [2004]). Supreme Court therefore acted appropriately in
modifying the award of child support. The husband complains of
certain terms in the modified award but, in that regard, Supreme
Court properly directed that the husband remit 25% of any future
bonuses as basic child support (see Quilty v Quilty, 169 AD2d
979, 981 [1991]). Supreme Court also acted appropriately in
leaving intact the commitments of the husband to pay a portion of
various add-on expenses, albeit with a share adjusted to reflect
his actual income (see e.g. Berretta v Berretta, 201 AD2d 886,
887 [1994]).
                              -5-                521100

      We next agree with the husband that Supreme Court erred in
modifying the agreed-upon division of assets in his individual
retirement account. The husband did not preserve his objection
to the wife raising this issue in a motion rather than a plenary
action and, in any event, "a court's alteration of a stipulation
absent a plenary action is not fatal" (MacDonald v Guttman, 72
AD3d 1452, 1455 [2010]; see CPLR 2001; Banker v Banker, 56 AD3d
1105, 1107 n 2 [2008]). Nonetheless, while a stipulation "will
be more closely scrutinized by the courts than ordinary contracts
given the fiduciary relationship between husband and wife, such
an agreement will not be set aside unless there is evidence of
'overreaching, fraud, duress or a bargain so inequitable that no
reasonable and competent person would have consented to it'"
(Empie v Empie, 46 AD3d 1008, 1009 [2007], quoting Curtis v
Curtis, 20 AD3d 653, 654 [2005]). The parties agreed to
distribute the husband's individual retirement account based upon
its December 2011 value, the point at which the most recent
account statement had been issued. The account had grown
considerably by the time the stipulation was executed in March
2012, but the husband admittedly made no effort to learn the
value of the account at that time and did not know that the
appreciation had occurred. It is well settled "that
nondisclosure is not the equivalent of fraud" and, given that the
wife acknowledged in the stipulation that she did not require
further information from the husband in order to knowingly
proceed, Supreme Court erred in setting aside that part of the
stipulation dealing with equitable distribution of the husband's
individual retirement account (Paul v Paul, 177 AD2d 901, 901
[1991], lv denied 79 NY2d 756 [1992]; see Empie v Empie, 46 AD3d
at 1009).

      Both parties challenge the award of counsel fees, with the
husband arguing that no award was appropriate and the wife
asserting that the award was too low. The wife requested an
award of counsel fees resulting from the various violations of
the stipulation committed by the husband, which were allowed
under the terms of the stipulation as well as Domestic Relations
Law §§ 237 and 238, and the parties submitted written
applications for counsel fees after the hearing in this matter
                                -6-                521100

had concluded.1 "An award of counsel fees requires that an
evidentiary basis be established as to two elements: the parties'
respective financial circumstances and the value of the legal
services rendered" (Curley v Curley, 125 AD3d 1227, 1231 [2015];
see Yarinsky v Yarinsky, 2 AD3d 1108, 1110 [2003]). Counsel for
the wife submitted her retainer agreement and billing statements
from September 2012 to October 2014, from which Supreme Court
calculated that the wife had incurred over $77,000 in counsel
fees. Supreme Court found that the amount of work performed by
counsel was appropriate given the myriad issues created by the
conduct of the husband and noted that, while the wife had
significant financial resources of her own, she was nonetheless
the less monied spouse. Supreme Court accordingly awarded the
wife $35,000 in counsel fees, and we perceive no abuse of
discretion in its decision to do so (see Lowe v Lowe, 123 AD3d
1207, 1211 [2014]; Howard v Howard, 45 AD3d 944, 945-946 [2007]).

      The parties' remaining arguments, to the extent that they
are properly before us, have been examined and found to be
lacking in merit.

        Garry, J.P., Rose, Lynch and Clark, JJ., concur.




    1
        The stipulation purports to direct an award of "any and
all" counsel fees incurred by a party forced to pursue legal
remedies for its breach, but Supreme Court was not bound to make
such an award and retained its "inherent authority to determine
reasonable attorneys' fees" (Orix Credit Alliance v Grace Indus.,
261 AD2d 521, 521-522 [1999], lv denied 93 NY2d 818 [1999]; see
Matter of Stortecky v Mazzone, 85 NY2d 518, 525 [1995]; Fackelman
v Fackelman, 71 AD3d 724, 726-727 [2010]).
                              -7-                  521100

      ORDERED that the order is modified, on the law, without
costs, by reversing so much thereof as set a visitation schedule
for defendant and directed defendant to pay $11,500 for a portion
of his individual retirement account; matter remitted to the
Supreme Court for further proceedings not inconsistent with this
Court's decision and, pending said proceedings, the terms of said
order with regard to visitation shall remain in effect on a
temporary basis; and, as so modified, affirmed.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
