2016-06-30
Ronald Perelman is not a nice man. But over the past three years, his ex-wife Patricia Duff has achieved the remarkable: she has transformed Perelman into the guy you root for. Duff, a prominent Democratic fund-raiser, went through 20 lawyers in the couple's protracted custody fight, which was finally resolved on December 7. Manhattan Supreme Court Justice Franklin Weissberg ordered Perelman, the chairman of Revlon and the richest man in New York, to pay $153,900 a year in child support--not the $1.3 million that Duff had asked for. Judge Weissberg's 22-page decision lacerated Duff's contentions with words like "absurd," "rubbish," and "not a shred of evidence in the record to support these conclusions." Here's an excerpt of the decision:

Plaintiff husband ("father") and defendant wife ("mother") were married January 20, 1995 and separated approximately eighteen months later. They were divorced on September 10, 1998. They have one child of the marriage, a daughter Caleigh born on December 13, 1994. The father has five other children from two previous marriages, four adults and a daughter named Samantha who is now eight years old. The wife has no other children from her three prior marriages. At the present time, Caleigh [spends]...[a]pproximately 60% of her time...with her mother and 40% with her father....

The issue to be decided herein is the appropriate amount of child support to be paid to the mother by the father Caleigh and the amount properly allocable to the mother.

The Pre-Nuptial Agreement

On December 22, 1994, nine days after the birth of their daughter, the father and mother entered into a pre-nuptial agreement.... Pursuant to that agreement, the father pays the mother $94,312 a month for maintenance, or $1,131,744 a year.... [T]he father also purchased for the mother two adjoining properties in Southport, Connecticut at a total cost, including renovations, furnishings and decorations, of $7.88 million. One property, called "Rock Meadow," consists of 20 acres, a 10,000 square foot main house, a separate guest house, a swimming pool, pond, tennis court and two greenhouses. The other property, called "Deer Meadow," consists of 23 acres, a 5,000 square foot house and a barn....

In addition to the payments pursuant to the pre-nuptial agreement, the father gave the mother substantial assets during their relationship. Between 1993 and 1996 the father made cash transfers to the mother in excess of $8 million, bought her jewelry worth almost $5 million and gave her art and rare books having a value in excess of $300,000, all of which she retained....

The Net Worth and Income of the Parties

At all relevant times, the father's net worth varied between $5 and $9 billion....

In her post-trial memorandum, the mother contends that her net worth is approximately $24 million. That is clearly understated. [It] does not include the $5 million received by the mother pursuant to the pre-nuptial agreement as set forth above. It also does not include jewelry, art, antiques and rare books totaling $7.5 million.... At trial the mother contended that her jewelry collection is worth between $1.7 and $2.2 million, relying upon a one-page letter from Sothebys dated September 7, 1999.... However, that letter only referred to part of her jewelry collection. An appraisal of her entire jewelry collection made in May, 1996 for insurance purposes valued it at $4,339,520.... She also testified that the $3 million figure for art, antiques and rare books must be a "typo."... The record establishes that the mother's net work is at least $30 million....

Contentions of the Parties

The mother contends that Caleigh is entitled as a matter of law to enjoy a lifestyle that approximates her father's lifestyle when she is with her mother. She also contends that if the huge disparity between her parent's lifestyle is not mitigated, Caleigh will suffer severe and permanent emotional damage. She seeks in excess of $1.3 million per year for Caleigh's living and housing expenses, plus a lump sum payment of approximately $2 million.

The father contends that Caleigh's standard of living has not been diminished since the parties separated; that the mother is seeking enormous amounts of additional tax-free maintenance in the guise of child support; that most of what the mother seeks represents categories that are not child support and that the mother is impermissibly focusing on the father's lifestyle rather than Caleigh's standard of living. He contends that he is currently spending approximately $30,000 per month, or $360,000 per year, supporting Caleigh and that an appropriate child support award is $5,000 per month for miscellaneous living expenses; up to $7,000 per month for housing expenses; 100% of Caleigh's education, medical and extracurricular expenses; and up to $60,000 per year for the salary of nannies.

Unquestionably, Caleigh has enjoyed a privileged and luxurious standard of living since her birth. Unarguably, she is entitled to continue to do so. What must be determined are the elements of that standard of living, the costs thereof and the proper allocation between her multi-billionaire father and her multi-millionaire mother....

The Appropriate Standard of
Living for the Child

The core dispute between the parties revolves around the interpretation of...the standard of living the child would have enjoyed had the marriage not been dissolved. The mother...argues that Caleigh is...entitled to a New York residence and a Hamptons vacation home, frequent luxurious vacations and a myriad of other comforts. She introduced evidence of what it would cost to purchase, furnish and maintain a home in New York City which would constitute a typical residence for a wealthy New York child [and claims that] the minimum amount necessary to create a lifestyle that approximates that of a wealthy child in New York City are $30,098 per month. The mother also introduced evidence that the cost of purchasing, establishing and maintaining a vacation home in the Hamptons would require, with initial capital expenditures, a monthly amount of between $24,687 and $18,242. Finally, she claims that Caleigh needs $9,9953 per month for travel and vacations and $10,000 per month for "other expenses."...
Child support...is not designed to fulfill the mother's "wish list."... Otherwise, child support becomes adult support.

Essentially, the mother argues that Caleigh's standard of living should be determined by reference to her father's lifestyle. For example, she argues that, while with her, Caleigh must enjoy "some reasonable facsimile of the husband's lifestyle."... The flaw in that argument is that the manner in which her father chooses to spend his vast resources is not directly relevant to maintaining a proper standard of living for Caleigh. Whether the father chooses to live lavishly or frugally is not determinative of child support....

[In] high income cases a child support award must rest on an estimate of the amount that is required for the child to live an appropriate lifestyle, as opposed to a percentage of the parents' income or assets.... Child support may not serve primarily to benefit one of the parties rather than to pay the expenses related to raising a child since child support that exceeds the reasonable costs to raise a child in an appropriate lifestyle in disguised alimony. A child support award is not designed to fulfill the mother's "wish list"; no matter how vast the father's income, the award must relate to the actual needs of the child. Otherwise, child support becomes adult support. When examined in that light, the mother's enormous demands are unsupportable.

Since the parties' separation, the mother has spent between $20,000 and $30,000 per month for luxury housing in Manhattan. For $20,000 a month she was able to rent a six-room luxury apartment on Park Avenue. Obviously, if she chooses to leave the Waldorf Astoria, where she is spending $30,000 a month, she can obtain an even larger Manhattan luxury apartment. She nevertheless claims to be entitled to a ten-room apartment in a "top end" building on the Upper East Side, at an estimated cost of between $4.5 to $7.5 million.... There is nothing in the record to support this extraordinary demand other than the mother's "wish" to elevate her own standard of living.

Although the mother has a large and luxurious estate in Southport, Connecticut at which she and the child spend considerable time, she argues that the father should be required to fund a residence in the Hamptons for the child's recreational use. Although she submitted no evidence concerning the cost of such a house, she asks that the father pay between $18,242 and $24,687 each month for "recurring costs" for such a house, including a mortgage for the full purchase price of between $2.5 and $4 million. Presumably, the mother would sell her Connecticut estate before purchasing a house in the Hamptons. Nevertheless, she apparently feels that she should not have to apply any of the proceeds of such sale toward the purchase of a home in the Hamptons or to the purchase of a home in Manhattan, should she choose to buy one. The rationale advanced in support thereof is that since the father's vacation residence is in the Hamptons, Caleigh should also have a vacation residence there. That contention is simply absurd.
Although the mother has a large and luxurious estate in Southport, Connecticut..., she argues that the father should be required to fund a residence in the Hamptons.

According to her post-trial memorandum..., the mother's Southport estates provides a very positive experience for Caleigh:

"On alternate weekends, Caleigh's mother drives to Connecticut with her daughter and the nanny. In Connecticut, as this Court has heard, Caleigh spends her time in a country house that her mother received as part of a pre-nuptial waiver of her equitable distribution rights with her former husband. This country home is in a warm, picturesque setting in the town of Southport. At that house, Caleigh has her own room and access to many other play areas. There are pool and tennis court facilities, which are functional, but in disrepair. The outdoor areas of the house are extensive and attractive, but much in need of upkeep. The house is staffed with Caleigh's same nanny and one household helper.

"While in Connecticut, Caleigh sees many other kids and has a wonderful social life with her mother's friends and their families. There is shopping, playdates, sports activities, parties, and holiday activities at the...home in Connecticut. Caleigh's access to Connecticut every other weekend and during the holidays and summer when she is not with her father, is the portion of her life that most replicates the childhood her mother planned for Caleigh during the marriage and after the separation...."

It is difficult to understand why the Southport estate is "in disrepair" and "much in need of upkeep" in view of the mother's substantial assets and the $150,000 per year that the father contributes to its maintenance pursuant to the pre-nuptial agreement. In any event, considering Caleigh's admittedly idyllic lifestyle in Southport, there can be no possible need for a vacation home in the Hamptons other than the mother's "wish" to be there at the father's expense.

It is clear that there has been no diminution in Caleigh's lifestyle since her parents separated. It is true that she spends less time in private jets, helicopters and private limousines than she used to. It is true that when traveling with her mother, she "only" flies first-class. It is true that she does not have as many original works of art and expensive furnishings in her mother's houses as she does in her father's. It is true that there is a smaller staff available to her when she is with her mother. It is also true that when she is with her mother, Caleigh is "deprived" of the use of a private screening room. However, when one examines the elements of Caleigh's standard of living, it remains essentially unchanged. Had the marriage not dissolved, Caleigh would have:

  • attended a first-rate New York private school. She continues to attend a first-rate private school at her father's expense and is assured of all the quality education she desires, paid for by her father.

  • received the finest of medial care. That is still provided for her by her father.
  • Had the additional care of a full-time nanny while with her parents. Now, Caleigh has a full-time nanny while with her mother and a full-time nanny while with her father, both paid by the father.
  • lived with both parents in the father's home on the Upper East Side, and would have spent time on the weekends and during summers at her mother's estate in Southport, and at her father's estates in East Hampton and Palm Beach. Now, Caleigh spends time at her father's homes in New York, East Hampton and Palm Beach when with her father; when with her mother, she spends time at the Southport estate, a luxury apartment in the Waldorf-Astoria and summer homes in the Hamptons.
  • taken trips to destinations such as Florida, California, and Sun Valley. After the separation, Caleigh has visited Florida, California, Sun Valley, Martha's Vineyard, Cape Cod and Washington, D.C., among other places.
  • participated in organized summer activities without regard to cost. Caleigh still does so now, all paid in full by her father.
  • Thus, in every significant aspect of her life, Caleigh now enjoys the same opportunities and high standard of living as she would have if the marriage had not dissolved.

    An alternative argument is advance by the mother[:]...

    "To Caleigh, her father's palpable power is visible and obvious, just as much in his home as it is to the outside world in his professional life. It is a dramatic contrast in Caleigh's eyes to her mother's limited power and influence, observed and experienced by Caleigh on a daily basis in her mother's residences....

    "The Creeks, Palm Beach, the New York townhouses, the helicopter, the plane, the yachts, the obsequious staff and pandering guests, for Caleigh, are the unforgettable manifestations of the father's enormous influence. Caleigh knows, and will be increasingly aware, that her father is the seat of inordinate power simply because he controls enormous wealth."...

    "...as Caleigh approaches the age of majority and grows into her teen years, her perception and the effect of the disparities between her father and mother's lifestyle will markedly increase and likely affect her self image and psychological well-being...."

    There is not a shred of evidence in the record to support these conclusions. What little there is is to the contrary. For example, the mother's own witness, Sarah Nesbitt, when asked if Caleigh would feel comfortable using a $20,000 antique desk, candidly replied: "I think five-year-olds don't know the difference between $20,000 and $500."...

    The mother's argument assumes that only material things matter in the life of a child and that if Caleigh is denied any imaginable luxury, she will be emotionally damaged. It does not require a degree in psychiatry to know that this assumption is rubbish. There are far more important things in the life of a young child than private jets, yachts, obsequious staffs and pandering guests. The reality is that Caleigh will never suffer a shortage of material comforts. Hopefully, her parents will raise her to understand and appreciate that there are other more important values in life than material luxuries and will teach her to value people for who they are, not what they have.
    The mother's argument assumes that...if Caleigh is denied any imaginable luxury, she
    will be emotionally damaged.

    Wealthy parents are, of course, free to indulge their children to their heart's content if they wish to do so. However, parental indulgence is very different from child support. No child no matter how wealthy her parents, is entitled as a matter of law to every luxury that money can buy. Caleigh's father is obviously very indulgent where she is concerned. That is his right, but not his obligation. If the mother believes that such parental indulgences are good for Caleigh when they are together, she has the right to supply them at her expense. With a net worth of at least $30 million and an annual income of about $2.4 million, the mother certainly has certainly has sufficient assets to be an indulgent parent if she so chooses.

    The mother also argues that Caleigh's emotional health will be damaged unless this court makes an award of child support sufficient to permit her to enjoy a standard of living on a par with that of her half-sister Samantha. The [law] does not contemplate basing an award of child support upon the standard of living enjoyed by another child of another mother living in a separate home. Nor should it. Children of different ages living in different family structures with different resources available to them have different needs. It is not the responsibility of a "common parent" in such circumstances to equalize resources among his children....

    Amounts Previously Spent
    on Child Support
    are the Best Measure of Actual Need

    The amounts previously spent by the parties to support the child are the most reliable measure of her actual needs since they reflect the parents' judgments as to what expenditures are appropriate....

    Beginning January, 1998, the father commenced making voluntary child support payments of $8,000 per month to the mother. On August 3, 1998 the father was ordered to pay pendente lite child support of $12,000 per month to the mother and was also ordered to pay 100% of all the child's medical, dental, educational, camp, extracurricular lessons or activities and up to $60,000 per year towards the mother's nanny cost.... The father contends that out of this amount, the mother spent no more than $5,000 a month on Caleigh's living expenses, exclusive of housing. Despite the court's repeated requests that the mother provide documentation establishing how she spent the monthly amounts paid to her by the father, she never supplied it. Since the mother tracks all of her expenses using Quicken financial software...and has retained several accountants in connection with this litigation, her failure to do so was obviously deliberate and creates a very strong inference that she did not do so because she cannot credibly challenge the father's contention.

    By contrast, the father provided very detailed records with respect to how much he has spent to sustain Caleigh's standard of living.... This evidence supports the father's contention that the mother spent no more than $5,000 a month on Caleigh's living expenses, exclusive of housing.

    The father has admitted that his calculations do not include certain expenses such as dining out and travel on the father's private airplane or helicopter.... Therefore, it is reasonable to award the mother another $1,000 per month to cover travel expenses for Caleigh's vacations. The court finds that $6,000 a month is the appropriate amount to cover that portion of Caleigh's expenses paid for by the mother, exclusive of housing.
    It is reasonable to conclude that $30,000 per month is the appropriate amount of New York City housing for Caleigh
    and her mother.

    There is no dispute that the mother is entitled to a reasonable housing allowance for the cost of Caleigh's housing in New York City.... The father does not challenge the propriety of such a housing allowance and suggests that up to $7,000 a month is appropriate.

    As previously noted, after the parties' separation, the mother initially spent $20,000 a month to rent a Park Avenue apartment. Since September, 1998, she has been paying $30,000 a month for a suite at the Waldorf Astoria. Therefore, it is reasonable to conclude that $30,000 per month is the appropriate amount of New York City housing for Caleigh and her mother....

    The court finds that $13,500 per month represents a reasonable amount of child support to cover Caleigh's expenses while she is with her mother--$6,000 for direct expenses paid by the mother and $7,500 for a New York City housing allowance.

    It is not, however, appropriate for the father to pay 100% of that amount.... The fundamental premise of the [law] is that both parents have an obligation to contribute to the support of their children....

    The father's annual income varies between approximately $40 mill and $60 million. The mother's annual income is approximately $2.4 million. Assuming the father's annual income average $50 million, the mother's income is approximately 4.5% of the combined parental income. However, since the father is paying and will continue to pay all of Caleigh's educational, medical, extracurricular and camp costs as well as up to $60,000 a year for nannies while the child is with the mother, allocating 5%, or $675 a month, of the basic child support costs to the mother is appropriate on this record. Therefore, the father's net child support obligation is fixed at $12,825 per month....

    Since the parties' separation, the father has paid all of Caleigh's educational, medical, extracurricular and camp costs without any contribution from the mother.... In view of his willingness to pay for all these activities and because the mother's gross income is substantially less than the father's gross income..., it is appropriate for him to pay 100% of the expenses in those categories, and he is ordered to continue to do so....

    [B]ecause, the mother utilizes the services of nannies, and the father has agreed to continue to pay to $60,000 per year for nannies employed by the mother, he is ordered to continue to pay such amounts....

    The foregoing constitutes the decision and order of the court.



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