Cohen v. Porat, 277

BARRY J. COHEN, v. LIZA R. PORAT

No. 277

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2019

March 23, 2021

Circuit Court for Montgomery County

Case No. 75453-FL

UNREPORTED

Berger, Friedman, Kenney, James A., III (Senior Judge, Specially Assigned), JJ.

Opinion by Kenney, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

This appeal arises out of post-divorce judgment proceedings in the Circuit Court for Montgomery County and the terms of the Voluntary Separation Agreement ("Agreement") between appellant, Dr. Barry Cohen, and appellee, Liza Porat. The rulings at issue relate to money owed to Ms. Porat by Dr. Cohen for attorney's fees, unpaid spousal support, and pre-judgment interest. Dr. Cohen asks three questions which we have slightly rephrased:

I. Did the circuit court err in granting advanced attorney's fees to Ms. Porat?

II. Did the circuit court err by not crediting Dr. Cohen for payments he allegedly made for the second trust on the Yeatman property in 2010 and 2011?

III. Did the circuit court err by awarding Ms. Porat pre-judgment interest on the arrearages?¹

For reasons that follow, we affirm the judgments of the circuit court.²

FACTUAL AND PROCEDURAL BACKGROUND

Dr. Cohen and Ms. Porat were married on November 6, 1993. They had five children, four of whom had reached the age of majority at the time of the proceedings.³ While Ms. Porat is a lawyer by training, she has never practiced. When the children were in school, Ms. Porat was a part-time teacher's aide at Kemp Hill Montessori school, earning between $15,000 and $24,000. Dr. Cohen is a Board-certified plastic and reconstructive surgeon and a co-owner of a lucrative plastic surgery practice.

They separated in August of 2008 and, on November 22, 2011, a Judgment of Limited Divorce was entered.⁴ Their June 22, 2010 Voluntary Separation Agreement was incorporated, but not merged in the Judgment.

The Agreement provided for indefinite alimony to Ms. Porat in the amount of $6,500 per month. Upon a material change in circumstances, that amount was modifiable with a floor of $3,900 and a ceiling of $8,100 per month. Dr. Cohen was to pay Ms. Porat $7,000 per month for child support for the children, all of whom were minors at the time.⁵ Paragraph 16 of the Agreement provided that "six (6) months prior to any childbecoming emancipated that they shall mediate the amount of child support to be paid by Husband to Wife except for [their oldest son], if [he] primarily resides with Husband at that time."

The parties owned several properties together. Under the Agreement, the property located at 11618 Yeatman Terrace, Silver Spring, Maryland ("the Yeatman property") was to go to Ms. Porat. The property was encumbered by a first deed of trust and a "second position home equity loan on credit." Ms. Porat was responsible for the payments on those encumbrances. If she failed to make the payments, the Agreement stated that "Husband shall make said payments and Wife authorizes Husband to deduct the monies paid from the alimony due Wife." Dr. Cohen testified that he had been making payments on the second trust since August 2010 and had reduced his alimony obligations accordingly.

Over eight years, numerous disagreements regarding the Agreement arose without litigation or mediation. Dr. Cohen's payments to Ms. Porat were inconsistent; he underpayed some months and overpayed others. Without submitting the child supportissue to mediation before the first two children reached the age of majority in 2014, Dr. Cohen unilaterally reduced the child support payments by one-fifth. Unilateral support reduction without mediation continued until the third child graduated high school in February 2018.⁶ When the parties were unable to reach an agreement on support, Dr. Cohen filed a complaint seeking a reduction in child support, alimony, and other relief, including enforcement of the parties' Separation Agreement. He alleged as "a material change in circumstance" a substantial decrease in his income and the emancipation of three of the five children.⁷ Ms. Porat opposed the requested relief and filed a Petition for Contempt and Specific Enforcement of the Separation Agreement.

On October 1, 2018, Ms. Porat filed a Petition for Advanced Attorney's Fees to litigate both her Petition for Contempt and Specific Enforcement and Dr. Cohen's Amended Complaint for Modification of Child Support, Alimony, and Other Relief. Dr. Cohen opposed the petition, citing a lack of contractual or statutory basis to grant attorney's fees. A Motions Hearing⁸ was held on January 18, 2019, and, on February 4, 2019, Dr. Cohen was ordered to pay Ms. Porat $70,000 for advanced attorney's fees.

The Merits Hearing began on April 10 and ended on April 12, 2019. On June 21, 2019, the merits court entered an order that granted in part and denied in part Ms. Porat'sPetition for Contempt and Specific Performance; denied Dr. Cohen's Motion to Modify Alimony; and granted Dr. Cohen's Motion to Modify Child Support. The merits court found:

that the "income" listed in [Dr. Cohen's] financial statement is not credible, and the court disbelieves [Dr. Cohen's] testimony regarding his income. . . . [His] trial testimony regarding his finances, assets, and debt simply was not credible, and on more than one occasion, [his] testimony was inconsistent with the documentary evidence presented during trial.

The court found several inconsistencies in [Dr. Cohen's] financial statement. [He] testified that he has ownership in Montrose Oaks, LLC, which owns a building worth $3,000,000, that he did not list this asset on the financial statement. Although [Dr. Cohen] did not list it as an asset either, any material omission from a financial statement leads to questions about its validity. Further, [he] incorrectly stated that he pays his housekeeper $3,800 per month, however, the W-2 wage form indicates that [he] pays the housekeeper $4,333.00 per month. [Dr. Cohen] also incorrectly stated that he paid $2,286.00 per month for health insurance when he actually pays $3,315.08. Although [he] underestimated these expenses on the financial statement, the multiple variances undermine the statement's overall credibility.

[He] testified that in the last couple of years, he only goes on one significant vacation a year. However, just in 2016, according to [Dr. Cohen's] Facebook photographs, he visited Puerto Rico, St. Martin, Netherlands, Florida, North Carolina, Las Vegas, Israel, and New York. [He] contends that some of the trips were purely business trips, purchased on frequent flyer miles. The court, in reviewing the documentary evidence, finds that the majority of the trips were not purely business, but for pleasure, and disbelieves [his] financial statement asserting he spends only $600.00 on vacation.

[Dr. Cohen] claimed that 2016 was a "down year" for tax accounting purposes. Yet, his oldest son's credit card statement for September 2016 and October 2016 reflect payments made by [Dr. Cohen] of $65,069.54, and $79,883.83, and charges of $76,607.45 and $89,998.51. Understanding that some of these charges were for [his] business, and that [he] did not pay [Ms. Porat's] portion of the credit card bill, the court disbelieves [his] testimony that he struggled financially based, in part, on the substantialnon-business charges [he] pays for on the account. As evidenced by the credit card statements, despite [his] contention of having a "down year" in 2016, he had the luxury of paying for the recreational expenses for [the three oldest children], two of whom were emancipated at the time.

[Dr. Cohen] also testified that he was having difficulty making ends meet for 2019, therefore, his support payments should be decreased. However, upon review of [his] February and March 2019 American Express statements, [he] is still living comfortably. For those months, [he] spent over $3,000 on wine, and approximately $3,4000 on airline tickets for himself and another person.

The merits court found that between August 2010 and April 2019, Dr. Cohen owed Ms. Porat $1,429,500 in combined child support and alimony but paid only $1,211,891; the resulting deficit was $217,609. In reaching its decision, the court credited Dr. Cohen for payments on the Yeatman property between 2012 and 2019, but denied credit for 2010 and 2011. In addition, the court awarded Ms. Porat prejudgment interest at 6% in the amount of $42,283.16.

Further facts will be added in the discussion of the questions presented.

DISCUSSION

I.Advanced Attorney's Fees

On October 1, 2018, Ms. Porat filed a petition for advanced attorney's fees to defend against Dr. Cohen's request to reduce child support and alimony. In opposition to the petition, Dr. Cohen asserted that "due to a downturn in economy" his medical practice had "suffered several years of declining revenue through no fault of his own" and that hehad "almost filed bankruptcy," and that Paragraph 15⁹ of the Agreement precluded the award of advanced attorney's fees. It was Dr. Cohen's position that, because the "Agreement makes no provision for the payment of advance attorneys' fees," it left "no room for the [c]ourt to read that clause into the Agreement." In addition, his counsel argued:

If Your Honor is going to enforce the contract that these people voluntarily entered into, they waived then, their statutory rights to whatever relief they could have received under the Family Law Article when they reached this agreement that has an attorney fee clause that triggers in the event of a prevailing party.

* * *

This [c]ourt should not take on a measure right now to provide [Ms. Porat] with advanced legal fees when we have a hearing in three months, and the [c]ourt can, at that time, determine the prevailing party and decide, at that time, whether or not fees are

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