Case Summary: In the Matter of Patrick Coleman v. Cheryl Coleman (App. Div. 3d Dep't, Nov. 26, 2003)

Factual and Procedural Background

This appeal concerns petitioner Patrick Coleman’s challenge to an order of the Family Court of Albany County dismissing his application to modify a prior child support order.

The parties were married in 1976, separated in 1997 and divorced in 2001. They have an autistic child born in 1993. Their separation agreement (incorporated but not merged into the divorce judgment) provided that respondent Cheryl Coleman have custody while petitioner pay child support equal to 17% of his income, or $1,449 per month.

After the divorce, respondent placed the child in full-time, year-round residential care at public expense — a placement petitioner had wanted but respondent initially rejected. Petitioner filed a petition seeking termination of child support. The Hearing Examiner found insufficient evidence of a substantial change in circumstances and dismissed the petition "without prejudice," and Family Court affirmed that dismissal.

Petitioner then filed a second petition (later amended) asserting that the child's residence at public expense outside respondent's home and a nearly 100% increase in respondent's income warranted modification of child support. The Hearing Examiner held the second petition sought to relitigate matters that were or could have been raised earlier. Family Court agreed and dismissed the second petition on res judicata grounds. Petitioner appealed to the Appellate Division.

Legal Issues Presented

Whether a prior dismissal expressly labeled "without prejudice" can be given res judicata effect so as to bar a subsequent petition asserting the same or related claims.
Whether the Family Court erred by failing to require respondent to provide the financial disclosure mandated by Family Court Act § 424-a, which the court describes as a non-waivable statutory requirement.
Whether, on remand, Family Court must assess the child's financial resources, the financial impact of residential care upon respondent, and respondent's increased income in determining whether a substantial change in circumstances has occurred and, if so, how any modification of support should be calculated (including a pro rata share and reasoned deviation from the guidelines where appropriate).

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343	The proposition that an order of dismissal is entitled to res judicata effect when it is on the merits or is with prejudice, and conversely that an order dismissing "without prejudice" does not bar reassertion of the same claim or issue.	The court relied on Parker to conclude that because the initial dismissal was expressly "without prejudice," res judicata could not bar petitioner's second petition (although collateral estoppel might bar relitigation of a particular issue).
Vinci v. Northside Parnership, 250 A.D.2d 965	That a dismissal may have res judicata effect if it plainly is on the merits or with prejudice to relitigation.	Used to support the general rule about when dismissals are entitled to res judicata effect; applied to reject the Family Court's treatment of the "without prejudice" dismissal as preclusive.
Miller Mfg. Co. v. Zeiler, 45 N.Y.2d 956	The stated rule that where a court specifies a dismissal is without prejudice, res judicata does not preclude assertion of the same claim or issue in a later proceeding.	Cited to reinforce that the first dismissal's "without prejudice" label precluded treating it as a bar to the second petition.
Brandenberg v. Primus Assoc., 304 A.D.2d 694	Similarly recognizes that dismissal without prejudice does not preclude relitigation of the same claim or issue.	Relied upon as additional support for the proposition that the earlier "without prejudice" dismissal did not have preclusive res judicata effect.
Matter of Stacy O. v. Donald P., 137 A.D.2d 965	Another expression of the rule that dismissals without prejudice do not preclude asserting the same claim in a subsequent proceeding.	Cited to buttress the court's conclusion that res judicata did not bar the petitioner's second petition given the prior "without prejudice" dismissal.
Matter of Mezz v. Hitchcock, 252 A.D.2d 633	Guidance concerning calculating a party's pro rata share of combined parental income and reasoned deviations from child support guidelines, especially where an obligor's income exceeds $80,000.	The court directed that on remand Family Court should calculate any change in petitioner's pro rata share and an appropriate reduction in child support as a reasoned deviation from the guidelines, particularly as to amounts by which petitioner's income exceeds $80,000, citing Mezz for that approach.

Court's Reasoning and Analysis

The Appellate Division's analysis proceeded in several discrete steps that track the statutory and decisional law cited in the opinion:

The court examined the procedural posture of the first proceeding and emphasized that the Hearing Examiner's initial dismissal of petitioner's first petition was expressly "without prejudice" and that Family Court confirmed that characterization. Under the cited precedents, an order labelled "without prejudice" does not carry res judicata effect to bar subsequent litigation of the same claim or issue.
Accordingly, the court held that the Hearing Examiner and Family Court erred by treating the second petition as precluded by res judicata. The court acknowledged the narrow possibility that collateral estoppel might bar relitigation of the discrete factual question whether the child's placement alone constituted a substantial change in circumstances, but concluded that collateral estoppel did not prevent petitioner’s second petition because that petition sought modification (not termination) and asserted additional grounds (the child’s residence at public expense plus respondent’s nearly 100% income increase) that could, when assessed in terms of their financial impact, constitute a substantial change in circumstances.
The court further found that Family Court failed to require respondent to provide the financial disclosure mandated by Family Court Act § 424-a, noting that such disclosure is required and cannot be waived. Because the required disclosure was not obtained, the record was inadequate for a proper determination of whether a substantial change in circumstances had occurred and, if so, how child support should be recalculated.
Based on those errors (misapplication of res judicata and the failure to obtain mandated financial disclosure), the court determined that reversal and remittal were necessary. The court specified that on remand Family Court must explicitly assess the child's financial resources, the financial impact of the child's residential care on respondent, and respondent's increased income; determine whether these factors together constitute a substantial change in circumstances; and, if so, compute petitioner's pro rata share of combined parental income and any appropriate reduction in child support as a reasoned deviation from the guidelines (with particular attention to petitioner's income exceeding $80,000, per the Mezz decision).

Holding and Implications

HOLDING: The Appellate Division reversed the Family Court's order (reversing the dismissal of petitioner's second petition on res judicata grounds), and remitted the matter to Family Court for further proceedings consistent with the opinion. The reversal was ordered "on the law, without costs."

Implications:

Direct effect on the parties: The second petition is not barred by the earlier "without prejudice" dismissal; the matter is returned to Family Court for further proceedings. Family Court must obtain the financial disclosure required by Family Court Act § 424-a and explicitly evaluate the child's financial resources, the financial impact of residential care on respondent, and respondent's increased income.
On remand, if Family Court finds a substantial change in circumstances, it must calculate any modification to petitioner's obligation by determining petitioner's pro rata share of combined parental income and articulating any reasoned deviation from the child support guidelines (with attention to amounts by which petitioner's income exceeds $80,000).
The opinion applies existing res judicata principles (and statutory disclosure requirements) rather than announcing a novel rule; its primary consequence is to correct the Family Court's misapplication of res judicata and to enforce statutory disclosure obligations in the context of a child support modification proceeding.

Order: Reversed on the law, without costs, and the matter remitted to Family Court of Albany County for further proceedings not inconsistent with this decision.

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IN THE MATTER OF PATRICK COLEMAN, Appellant, v. CHERYL COLEMAN, Respondent.

MEMORANDUM AND ORDER

Rose, J.

The parties, who were married in 1976, separated in 1997 and divorced in 2001, are the parents of an autistic child who was born in 1993. Their separation agreement, which was incorporated but not merged in the divorce judgment, provided that respondent was to have custody of the child while petitioner was to pay child support in the amount of 17% of his income or $1,449 per month. Soon after the divorce, respondent placed the child in full-time, year-round residential care at public expense, a placement which petitioner had desired and respondent had previously rejected. In response, petitioner filed a petition seeking termination of child support. Despite proof that the child's room, board and tuition were being paid from public funds, the Hearing Examiner found insufficient evidence of a substantial change in circumstances, dismissed the petition "without prejudice" and Family Court affirmed.

Petitioner then filed a second petition, later amended, asserting that the child's residence at public expense outside respondent's home and a nearly 100% increase in respondent's income warranted modification of child support. The Hearing Examiner held that the second petition sought to relitigate issues that were raised, or could have been raised, in the earlier proceeding. Family Court agreed that res judicata barred the second petition and rejected petitioner's objections. Petitioner now appeals.

As we find merit in petitioner's argument that the original dismissal without prejudice precluded the Hearing Examiner and Family Court from dismissing his second petition on res judicata grounds, we reverse. An order of dismissal is entitled to res judicata effect where the circumstances evince that it is on the merits or with prejudice to relitigation of the earlier claim (see Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 347; Vinci v. Northside Parnership, 250 A.D.2d 965, 965-966). However, where the court specifies that the dismissal is without prejudice, res judicata does not preclude assertion of the same claim or issue in a second proceeding (see Parker v. Blauvelt Volunteer Fire Co., supra at 349; Miller Mfg. Co. v. Zeiler, 45 N.Y.2d 956, 958; Brandenberg v. Primus Assoc., 304 A.D.2d 694, 695; see also Matter of Stacy O. v. Donald P., 137 A.D.2d 965, 965-966).

Here, the Hearing Examiner's first order of dismissal expressly states that the dismissal is without prejudice and this was later confirmed by Family Court. Thus, even if this order collaterally estops petitioner from relitigating whether the child's placement alone constitutes a substantial change in circumstances (see Parker v. Blauvelt Volunteer Fire Co., supra at 349-350), it does not preclude his second petition, which seeks modification rather than termination and cites additional grounds that, when considered in terms of their financial impact on petitioner's child support obligation, could constitute a substantial change in circumstances.

Accordingly, misapplication of res judicata and the failure to require respondent to make the financial disclosure mandated by Family Ct Act § 424-a, a requirement that cannot be waived (see Family Ct Act § 424-a [a]), require reversal and remittal. Family Court should explicitly assess the child's financial resources, the financial impact of his residential care upon respondent and respondent's increased income in determining whether a substantial change has occurred and, if so, calculate any change in petitioner's pro rata share of combined parental income and an appropriate reduction in child support as a reasoned deviation from the child support guidelines, particularly as to the amount by which petitioner's income exceeds $80,000 (see Matter of Mezz v. Hitchcock, 252 A.D.2d 633, 634).

Mercure, J.P., Peters, Spain and Carpinello, JJ., concur.

ORDERED that the order is reversed, on the law, without costs, and matter remitted to the Family Court of Albany County for further proceedings not inconsistent with this Court's decision.

MATTER OF COLEMAN v. COLEMAN