Hon. David B. Saxe Co-Authors Article in New York Law Journal Examining ‘Clawback’ Remedy in Custody Disputes

Morrison Cohen Partner Hon. David B. Saxe (Ret.) and Jordan Messeri, founding partner at matrimonial firm Krauss Shaknes Tallentine & Messeri, co-authored an article in New York Law Journal, in which they explore an unusual question raised by a recent custody case in New York: Can courts force attorneys to return (“claw back”) legal fees paid by a wealthy parent, in order to help fund unpaid legal fees for the less wealthy parent?

The issue arose in a case captioned KG v. CH, where the monied party spent substantial amounts on her legal representation while the non-monied party’s attorneys worked on the matter largely without compensation. Justice Frank Nervo (Supreme Court, New York County) argued this undermines the purpose of New York law (Domestic Relations Law §237), which is to level the legal playing field between parties with different financial means. He issued a sua sponte order requiring the wealthier party’s current and former counsel to justify why they shouldn’t have to return one-half of their fees to compensate the unpaid attorneys.

Although the order was stayed on appeal and ultimately rendered moot by settlement, the authors argue that the underlying issue is far from resolved. As courts continue to grapple with financial disparities in contentious custody and divorce proceedings, the idea of fee disgorgement may resurface in future cases.

The authors ask: “Is Justice Nervo’s vision as reflected in his order a prophecy for future action and might some ambitious legislator or activist judge assigned to a Matrimonial Part in the future see a need to revisit this issue?”

New York Law Journal subscribers may read the full article here.