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Empire Justice Testimony on Economic Abuse as a Form of Domestic Abuse

The New York State Assembly Standing Committee on Codes & Standing Committee on Judiciary



December 5, 2012

 

Prepared by:

Good afternoon.  My name is Anne Erickson and I am the President and CEO of the Empire Justice Center. 

The Empire Justice Center is a statewide support center for legal services programs and the clients they serve. We provide research and training, act as an informational clearinghouse, and provide litigation backup to local programs.  We also undertake impact litigation and engage in legislative and administrative advocacy.  We currently have staff attorneys specializing in public benefits (cash assistance, child care, food stamps and child support issues), Health and Medicaid, Supplemental Security Income (SSI) and Social Security Disability (SSD) benefits, public and subsidized housing, legal issues affecting low income immigrants, consumer law and domestic violence. In addition to our offices in Albany and Rochester, we also have offices in Westchester County and on Long Island.

As the issue of economic abuse intersects with many substantive areas of law in which we work, I am delivering these organization-wide remarks on behalf of staff from our Domestic Violence, Immigration, and Consumer and Foreclosure law units. 

We sincerely appreciate the invitation and the unique opportunity to be here today to highlight these critical issues impacting victims of domestic violence and their families.  Before I begin, I want to be sure to thank Assembly members Weinstein and Lentol for their longstanding leadership on this and so many other issues and for hosting today’s hearing.  

While participants were invited to addresses numerous important issues that we also care about, my comments today will focus on:     

  1. How the courts are taking the economic consequences of domestic violence into consideration in family offense and custody/visitation cases.
  2. Foreclosure proceedings and special considerations involving victims of domestic violence.
  3. How the enactment of the Exempt Income Protection Act has been helpful in addressing economic abuse as a form of domestic violence. 
  4. Case studies reflecting the economic impact of domestic violence on immigrant victim clients. 
  5. Availability of resources to assist domestic violence victims contending with economic abuse


FAMILY OFFENSE PROCEEDINGS


In New York, family offense proceedings are one of the most commonly sought avenues of legal relief for victims of intimate partner violence.  Over the last decade, the Legislature has done an outstanding job improving access to civil orders of protection in these proceedings by:  expanding the definition of “family and household member” to include those in intimate relationships, increasing the duration of permanent orders and the ability to request extensions as needed, as well as adding additional enumerated family offenses that respond to the different abuses inflicted by batterers. 

Enumerated Family Offenses

While Article 8 of the Family Court Act provides the structure and authority for these civil proceedings, the Penal Law defines the enumerated family offenses.  Therefore, although there are many acts that fall within the power and control dynamics which constitute domestic violence, only crimes contained in the state’s penal law are actually actionable as family offenses.  Of those, only specifically designated family offenses provide the Family Court with jurisdiction.  Therefore, refusing to provide childcare that allows the victim to attend work or school is unquestionably economically abusive, but it is not criminal.  Existing enumerated family offenses address the more typical sex and stalking-related offenses, harassment, recklessness, disorderly conduct, and physical abuse. 

More recent addition of criminal mischief crimes, as well as later amendments to those crimes, helped to address some of the economic abuses endured by victims, such as destruction and disabling of property.  Additionally, courts may consider other financially or economically abusive acts as part of a course of conduct in harassment.  However, these protections are narrow and subject to judicial discretion.         

Given the limitations of the Article 8 framework, providing relief for all manner of economic abuse may prove challenging.  However, Empire Justice Center encourages the Legislature to consider including some of the existing crimes with economic impact commonly utilized by abusers, such as: criminal tampering, larceny, robbery, trespass, burglary, arson, misapplication of property, unauthorized use of a vehicle, forgery, and identity theft.                              

Child and Spousal Support 

In addition to issuing an order of protection in family offense proceedings, where there is no existing order of child support in place, a court may also issue an order for temporary child support “in an amount sufficient to meet the needs of the child without a showing of immediate or emergency need” and “notwithstanding that information with respect to income and assets of the respondent may be unavailable.”  FCA 842.  Immediate child support relief is critical for families, particularly where an abuser controls access to the family’s resources or may be inclined to retaliatorily withhold financial support. 

Despite specific statutory authority and demonstrated need, practitioners continue to report that some courts in the state are not inclined to make temporary child support awards pursuant to this section.  While relief under this provision is certainly a stop gap measure until further proceedings are heard, its importance cannot be underemphasized.  While the monetary support is significant, it also allows victims to preserve their support filing date as the date of filing of the order of protection.  Those victims required to commence a separate action to obtain this relief can, and often does, delay filing for days or even weeks.  Victims around the state would welcome strengthening the use of this relief, whether by court administrators or the legislature.          

Family Court Act 817 provides that a court, on its own motion and at any time during a family offense proceeding, may direct the filing of a proceeding under Family Court Act Article 4.  Article 4 includes both child and spousal support proceedings.  While this section is most frequently utilized for the commencement of child support proceedings, strengthening this provision to encourage courts to direct filing of petitions for spousal support, where warranted and appropriate, would be of use statewide.        

Additionally, while the courts have the authority to issue a temporary order of child support as part of an order of protection, no similar temporary relief exists under FCA 842 for a temporary order of spousal support.  While Empire Justice Center recognizes that such relief would not be applicable to the community of victims who are not in a spousal relationship with their abusers, it would, at least, provide some measure of immediate relief to many others in need of assistance.                   

Under FCA 842(h), courts may hold a respondent financially responsible for the victim’s medical care and treatment arising from the incidents forming the basis of the order and the law allows this to be provided directly or through medical or health insurance.  While the cost of an immediate medical intervention (such as an emergency room visit) can be relatively straightforward, the domestic violence field is only just beginning to understand the long-term physical and psychological health consequences attributable to domestic violence, including chronic pain, sleep disorders, traumatic brain injuries, depression and anxiety, and more.  While calculating such longer-term costs may prove challenging in a family offense proceeding, the direct economic impact of these injuries radiate out beyond the victim and the victim’s children, to their employers, as well as the health and welfare systems.                                    

Under FCA 842(j) a court is authorized to direct a respondent to observe “such other conditions as are necessary to further the purposes of protection.”  Most frequently, these more customized provisions are handled under the catch-all “paragraph 99” in the order of protection’s terms and conditions.  Courts looking minimize the impact of financial abuse can use this provision to provide victims and children with economic relief.  Courts should be encouraged to use this provision to direct payment of rent and mortgage expenses, direct payment of insurance or utilities payments, order the return or detail who may have possession of certain property (such as a vehicle, benefits cards, immigration-related or other personal documents).   

At disposition, FCA 841(e) authorizes courts to direct respondents to pay restitution up to $10,000.  Practitioners report this provision is under-utilized.  Relief under this provision could include:  lost earnings, repair and replacement costs of personal items or property taken or damaged by the respondent, coverage of alternative housing costs or relocation expenses where the victim was forced to move for safety reasons, replacement costs for locks, and more.   

Given the widespread use of family offense proceedings, strengthening this tool has the potential to effectively reduce the impact of economic abuse.  

CUSTODY

Pursuant to Domestic Relations Law Section 240 (1)(a) the Legislature mandates that in custody and visitation cases “the court must consider the effect of …domestic violence upon the best interest of the child.” While the term “domestic violence” is not specifically defined in the Domestic Relations Law, the legislative findings indicate that the term is not limited only to acts constituting physical abuse and harm. 

In the 1996 custody case of JD v. ND, 170 Misc.2d 877, (West.) Co Fam. Ct 1996), the court stated


Compelling proof of an unmistakable pattern of power and control exerted by the Petitioner against the Respondent emerged at this trial. Economic, verbal and sexual abuse, coupled with regular and frequent threats and intimidation, while more subtle in nature, are no less damaging than a physical blow. This panoply of factors is omnipresent in the case at bar. When taken together, they form the profile of a Respondent whose body may appear intact, but whose spirit has been pummeled and eroded by her husband's verbal aggression and psychological terror. They also help to explain many of her actions during their relationship.  ….. The overwhelming evidence of psychological and other forms of abuse inflicted by Petitioner upon the Respondent, the mother of his child, shows that it would not be in the child's best interests to place him in Petitioner's care and custody. (emphasis added)

In the seminal 2002 case of Wissink v. Wissink, 301 AD2d 36 (2d Dept. 2002), the Second Department  reversed the trial court and, in so doing, advised that the trial court should have considered evidence of certain abusive behavior that was relevant.  In its holding the Appellate Division referred to two acts it considered would “clearly be relevant to the court’s custody determination”-- the abusive father’s failure to pay child support in violation of the trial court’s order, as well as his intentional termination of the utilities in the marital residence where the mother and child remained living after he was ordered to stay away.  While the Wissink court did not specifically label these acts as “economic abuse” per se, it did note that statutes and case law require courts to order support for children, as well as consideration of parent’s relative financial circumstances in its best interests determination.  

The Wissink court may have also been particularly aware of the economic abuse dynamics in this case because of the father’s flagrant use of his financial resources to manipulate his daughter.  The court noted, “He provides her with material benefits — a television set, clothing, a horse, a trip to Europe … She is his ‘princess,’ his ‘best girl.’”  

Despite the prevalence of economic abuse in domestic violence cases and its impact on families, the case law does not appear to reflect widespread recognition of this issue as a factor in custody and visitation cases.  A quick review of published case law resulted in just a handful of cases explicitly recognizing this abuse and its consequences in the custody and visitation context:  Rocano v. Rocano, 12 Misc.3d 1169(A) (NY Co. Supreme Ct. 2006); Joanne M. v. Carlos M., 4/28/2006 NYLJ 20 (col.1); Robert C. v. Martha C.B., 1/26/2004 N.Y.L.J. 19 (col. 1) (Bronx Co, Supreme Ct. 2004).

CASE STUDIES ADDRESSING THE IMPACT ON IMMIGRANT VICTIMS OF DOMESTIC VIOLENCE

As this body has already heard, immigrant victims of domestic violence are at significant risk of devastating economic abuse.  We wanted to share several recent stories:    

From our White Plain Office:

Our office represented an immigrant client who filed a self-petition under the Violence Against Women Act. Her abusive citizen spouse used a variety of tactics (including economic abuse) which were calculated to seriously impair the mental health and quality of life of our client. The couple had two young children when they separated. On several occasions, the abusive spouse would use his economic position to punish our client. When the couple separated in 2009, the abusive spouse stopped providing monetary support for his wife, which left his wife and their babies, without enough money to cover basic housing and food expenses.  The mother struggled to find ways to pay for her family’s necessities.  

On one occasion, after they had separated, the husband attempted to coerce our client into sexual relations in exchange for him paying rent and providing for their children. She declined.  However, she shared with us that his “offer” hurt her deeply and she could hardly believe that the father of her children would ask something like that. 

This client was luckier than others.  Ultimately, her parents who live overseas, were able to help her financially.

From our Long Island Office:

  1. A client recently stated, “The feeling of indigence is like no other. It makes you feel like an outcast.” She described to how her husband would remove the license plates from the family car so that she could not drive anywhere. She had to walk miles in the snow to get to work and worried because the children were with him and she could not get back to them quickly.  She said that, because she was undocumented and had no Social Security number, he used this as a means of controlling her. He used her money to buy their house but put it only in his name. 
  2. The parties were married for six years.  The husband is a citizen but he never petitioned for her to obtain legal status in this country.  When they married, she opened a cleaning services business and he asked her to put everything in his name because she did not have legal status. For all these years, she worked very hard to build this company, but the husband did not work at all. He said to her all the time that he is “legal” and the only one that can administrate the business and keep the money.  After years of abuse, she reported him to the police and got an order of protection.  As soon as she did this, he took the cars from her, the business’s customer list, cleaning tools--everything on which she subsisted. He did not provide child support. She is still working in the company.   He does with the money whatever he wants and still doesn’t give her what she really deserves. She cannot commence a divorce because she cannot afford counsel.  
  3. In one case, the abuser stole the victim’s green card. She needed a tremendous amount of documentation and $700 to replace it.
  4. In another case the abuser made allegations to immigration authorities that caused the discontinuance of her application for residency.  On her attorney’s advice, the victim withdrew a subsequent Family Court petition to modify custody because she feared that the judge would report her to immigration authorities because she did not have immigration status. 


EXEMPT INCOME PROTECTION ACT

There are many reasons why a victim of domestic violence may end up with a judgment against them for a debt.  Financial exploitation and abuse is a common form of domestic violence.  A debt may have been obtained fraudulently by an abuser who stole their identity or obligated them on a debt either through false statements or coercion. In other instances, the debt may be legitimate but the victim cannot pay because of their situation.  There are also complications for victims in filing defenses to a lawsuit including never being served properly because service is hidden by the abuser, or because they have moved to an undisclosed location for protection.  In many cases, the first time folks realize that a lawsuit has been filed against them and a default judgment has been entered is when their bank account is retrained for collection of that debt.   

In Empire Justice Center’s opinion, the Exempt Income Protection Act (“EIPA”) has had a tremendously positive impact on low-income New Yorkers, including victims of domestic violence.  Effective January 1, 2009, EIPA preserves the first $2,500 in an account containing directly deposited exempt funds from being restrained, and the first $1,740 in all other accounts. 

Prior to EIPA, N allowed judgment creditors to restrain an account containing exempt funds and maintain the restraint until the accountholder was able to prove – typically with bank statements and award letters – that money in the account was exempt.  Getting restraints lifted could take days, even weeks, under the best circumstances.  For victims of domestic violence providing such proof could be even more difficult where they lack safe or easy access to such records. 

Also prior to EIPA, until a restraint was lifted, the account holder was left with no money to live on or pay bills and outstanding checks would often bounce or the account would be hit with significant nonsufficient fund fees.  Even where all the money in the account was found to be exempt and the restraint lifted, banks could still charge a restraining notice fee to the account holder, often $100 or more.  If proof could not be provided, all of the money in the account would eventually be turned over to the judgment holder. 

This important protection ensures that persons who rely solely on the money in their bank accounts now have money to meet basic living expenses. 

FORECLOSURE

For some victims, the long-term financial impact of domestic violence continues, despite ending the relationship.  Our Foreclosure Unit in Rochester wanted to share one recent startling case:    

Miss A. is a 58-year old divorced woman.  In 1997, Mr. and Mrs. A. purchased a home together, and were both listed on the Mortgage and the Note.  Mr. A. transferred all rights in the property over to Miss A. in December 2001 via a quitclaim deed, and the couple was divorced in April 2002.  However, because they did not refinance the property, Mr. A. remains on the Mortgage and the Note.

Throughout their relationship, Mr. A. was both physically and verbally abusive towards Miss A.   In the Divorce Findings of Fact and Law (the “Findings”), it was stated  “[t]hat from the time shortly after the marriage of the parties and on various and numerous occasions…Defendant has embarked upon an almost continuous course of conduct in which Plaintiff, without provocation on the part of Plaintiff, degraded, ridiculed, humiliated, belittled, berated and embarrassed the Plaintiff, by using vile, profane, abusive and degrading words and insults to the Plaintiff, in regard to her function as a wife, and person.”

In addition, per the Findings “[t]here have been numerous arguments and fights…over martial finances.  Specifically the Defendant refuses to work or hold a steady job so that he could contribute financially to the support of his family, his home and his four children. The Defendant has in fact constructively abandoned the Plaintiff and the children of the parties in that he refuses to socialize with them since the parties were married in 1989.  The Defendant has absolutely no source of income whatsoever, and refuses to do any work to bring money into the marital residence while the Plaintiff holds one and sometimes two jobs to support the marriage….The since the parties purchased their home, the Defendant has not contributed any money whatsoever towards the purchase of the home by contributing to the mortgage payment, and by not contributing anything whatsoever to the maintenance and upkeep of the marital residence….The Defendant is presently unemployed but has no physical impairment to be self-sufficient or self-supporting.”

Since 2002, Ms. A. has continued to work one or two jobs to support her children and maintain her house.  Due to a reduction in hours in 2011, she fell behind on her mortgage and was referred to Empire Justice Center for assistance. 

In attempting to get her mortgage modified, the mortgage lender, Wells Fargo, has continually maintained that Mr. A. would have to sign off on any loan modification offer made to Mrs. A.  This is despite the fact that Mr. A. has been found by a court of law to have been economically, physically, and emotionally abusive to the homeowner throughout the marriage and he remains unemployed to this day. 

When asked if he was willing to sign off on any loan modification documents, Mr. A abusively attempted to extort money from Mrs. A. by conditioning his sign off only if she paid him a significant amount of money.  She cannot do this.     

Despite submitting the Divorce Decree and Divorce Findings of Fact and Law, Wells Fargo has refused to allow Mrs. A. to move forward on any loan modification unless Mr. A. also sign off on them.  This is despite the fact that Wells Fargo, per the Mortgage Note and Servicing Agreement, retains full discretion to move forward on a loan modification without need for Mr. A’s sign off.  They have elected not to exercise this discretion, even in the face of proof of a history of violence and abuse.         

At this point, the matter remains unresolved, but it appears likely that Miss A. will lose her home in the near future as a result of this injustice at the hands of both her abuser and the mortgage lender. 

Sadly, this is not the only case of this type experienced by Empire Justice Center’s Foreclosure Unit.  Additionally, we are aware of other similar instances in other jurisdictions.        

FUNDING

Over the past several years New York and the nation have suffered the devastating long term effects of the financial services melt down and the subsequent recession. The recession has impacted the human and legal services sectors in two primary ways.  An amalgam of stagnant funding and cuts in funding from government sources at every level and reductions in foundation giving and private donations due in large part to historically low interest rates, has led to loss of staff and services in particular service areas such as domestic violence, disability advocacy for many programs across the state.  At the same time, the recession has had a similar negative impact on the personal finances of New York’s families. Job loss, reduction of hours and pay cuts have brought new faces to our doors, on top of those who were in need long before the recession hit.  Unfortunately, these two factors combined have meant that the need for assistance is all too often is far beyond what available resources can support. 

Specifically in relationship to legal services, through the work of Chief Judge Jonathon Lippmann’s Task Force to Expand Access to Civil Legal Services in NY, the so called Justice Gap – the percentage of New Yorkers’ legal needs that go unmet - has been estimated at 20% and has held steady despite recent funding investments made through the Office of Court Administration (OCA) budget. [1]  These funds, targeted at providing legal assistance in the “essentials of life”, can be used by legal services programs to work with domestic violence victims and to address consumer debt issues.  However, given funding reductions and flat funding in other key areas, including Interest on Lawyers Account (IOLA), Legal Services Corporation (LSC), Violence Against Women Act (VAWA), Assembly Civil Legal Services and Assembly Domestic Violence Legal Services funding, as well as the loss of member items as a critical source of funding for not for profits, the OCA funds have served to “staunch the bleeding and stabilized the current intolerable situation in which the Task Force has found that, at best, 20 percent of the legal needs of low income New Yorkers involving the essentials of life are being met.” [2]      

In addition, the squeeze on Temporary Assistance to Needy Families (TANF) dollars – which are now largely going toward cash assistance, child care assistance and the Flexible Fund for Family Services block grant to counties, has virtually eliminated funding for programs that had been funded with TANF dollars by the legislature as legislative initiatives.  In particular, critical domestic violence non-residential services have suffered reductions over the past several years and, thanks to your efforts, were funded at $1.5 million using general fund dollars this year – down from what had been for many years, steady funding at $3 million in TANF funds. 

We so appreciate the steadfast support of the Assembly Majority over the past several decades in supporting both legal and domestic violence services – and particularly the leadership of the Codes and Judiciary Chairs.  And we understand the tightening of resources available to the legislature for creating and funding programs, but clearly, the ability of legal services providers to address economic abuse issues encountered by domestic violence victims across New York State is hindered by lack of financial resources.

In addition to the basic question of adequate funding to focus on newly identified issues, there is also the question of adequate expertise.  Non mortgage consumer and consumer debt issues are being raised increasingly in the legal services context.  However, outside of New York City, only a handful of providers currently employ staff that have the expertise that would allow them to represent clients in these matters. 

To develop the staff expertise necessary to appropriately address the wide variety of economic abuse issues encountered by domestic violence victims either within one program or in partnership with another legal services provider or domestic violence shelter, additional and targeted resources would be necessary to provide training and technical assistance to support the development of both non mortgage consumer expertise and a domestic violence overlay to ensure that attorneys assisting economic abuse victims are skilled in working with clients simultaneously dealing with domestic violence. 

This model worked successfully at the advent of the Foreclosure Prevention Services Program, initiated by the Assembly Majority in 2009 and implemented by NY Homes and Community Renewal.  At that point in time, there were very few attorneys outside of New York City doing foreclosure prevention work.  The vision of providing resources to train a new cadre of attorneys in this field and simultaneously create a statewide network of advocates who could support each other on an ongoing basis has provided New York with one of the strongest foreclosure prevention programs in the country.

Finally, programs outside of New York City that are interested in exploring ways to serve the needs of clients who face economic abuse would benefit greatly from hearing about the models and best practices that have already been developed.  It would be helpful to explore ways that that information can be shared and potentially replicated in other parts of the state, possibly through a round table or conference held by OPDV. 

Thank you once again for the opportunity to testify here today and for all that you do.

End Notes:
 [1] Task Force to Expand Access to Civil Legal Services in NY, Report to the Chief Judge, 2012, p.14
 [2] IBID