Law News

Perelman Prevails in Child Support War

By Daniel Wise
New York Law Journal
December 9, 1999

Revlon magnate Ronald Perelman does not have to pay a level of support for his 4-year-old daughter that mirrors his own "opulent" lifestyle, which only someone with an annual income of $50 million could afford, a State Supreme Court justice in Manhattan ruled yesterday.

Rather, Justice Franklin Weissberg wrote that the operative factor is how much the family has been spending on the daughter, Caleigh. Using that standard, he concluded in Anonymous v. Anonymous, Index No. 310754/96, that the monthly cost of her upkeep, including housing, was $13,500.

Following an unusually rancorous divorce, Justice Weissberg rejected a claim by Mr. Perelman's ex-wife, Patricia Duff, that she needed $1.3 million a year for their daughter's living and housing expenses so that she would not perceive a difference in her material circumstances when she is with her mother rather than her father.

Instead, given the huge disparity between the $50 million in annual income generated by Mr. Perelman, who is worth more than $5 billion, and the $2.4 million annual income for Ms. Duff, who is worth more than $30 million, Justice Weissberg allocated 95 percent of the responsibility for covering Caleigh's living expenses to Mr. Perelman. The net result: Mr. Perelman must pay Ms. Duff, $12,825 a month, or $153,900 a year, for housing and other living expenses.

That figure is very close to the $12,000 a month Mr. Perelman said he was prepared to pay. Under a preliminary support order, Mr. Perelman has been paying $12,000 a month to cover living and housing expenses since August 1998.

According to the opinion, Mr. Perelman had been spending about $213,000 a year to cover the cost of Caleigh's nannies, education, camp, extracurricular activities and tutoring. He will continue to be solely responsible for those additional costs under the terms of Justice Weissberg's order.

Justice Weissberg had conducted a six-day trial on support issues in September. A trial on the question of custody is scheduled to begin before Justice Eileen C. Bransten on Jan. 3. The custody and child support issues were separated, by order of Manhattan Administrative Judge Stephen G. Crane, after Justice Bransten referred the child support issues to a referee. At the moment, Caleigh spends about 60 percent of her time with her mother and 40 percent with her father.

There is no question, Justice Weissberg wrote, that Mr. Perelman's lifestyle is opulent. His main residence, which is in Manhattan, consists of three joined townhouses, which have a private screening room, a gym and "every conceivable amenity." It is serviced by a staff of 10 and "is spacious, magnificently furnished and decorated and contains many priceless works of art and antiques," according to the opinion.

Arguments Rebuffed

But Justice Weissberg exhibited little patience for Ms. Duff's arguments that Caleigh would be emotionally damaged if she were to experience a vast disparity in the degree of luxury in her father's and mother's homes. While Mr. Perelman has a right to "indulge" his daughter, it is not his "obligation" to do so, Justice Weissberg wrote. Ms. Duff could similarly indulge Caleigh and she "certainly has sufficient assets to be an indulgent parent if she so chooses."

In addition, under the couple's pre-nuptial agreement, Ms. Duff received a total of $5 million in lump sum payments, and annual maintenance payment of $1.1 million until the year 2011, unless she lives with a man for six months or more before then. She also received two adjoining properties in Southport, Conn., with two houses, a guest house, swimming pool, pond and tennis court on 43 acres, valued at $7.9 million.

Ms. Duff had contended that two of the nine factors in the State's 1989 Child Support Standards Act, Domestic Relations Law 240(-b), entitled her to a 10-room "top-end" apartment on the Upper East Side at a cost of between $4.5 million to $7.5 million to put Caleigh's experience in her home on a par with her experience in Mr. Perelman's.

Those standards require the court to consider, in setting support levels, the child's standard of living had the marriage not dissolved, and also the emotional health of the child.

Justice Weissberg dismissed Ms. Duff's arguments under the 1989 law. Ms. Duff already is paying $30,000 a month for a two-bedroom suite in the Waldorf Astoria Hotel. Her "extraordinary demand" for a "high-end" apartment, Justice Weissberg wrote, is nothing other than a "wish" to "elevate her own standard of living." To the extent that child support exceeds the reasonable cost of raising a child, he warned, it becomes "disguised alimony."

"It does not require a degree in psychiatry," he observed, to realize that Ms. Duff's claim that Caleigh would be emotionally damaged is "rubbish." Ms. Duff's lawyer Richard Emery, of Emery, Cuti, Brinckerhoff & Abady, said that Justice Weissberg had "ignored a very compelling record" that Caleigh's current living standards are "not close to the way she had lived" when Ms. Duff and Mr. Perelman were married.

Mr. Emery, who was the 22nd in a string of lawyers Ms. Duff has hired to represent her, said that he is no longer handling the matter because Ms. Duff had retained Barry Levin to handle her custody trial. Mr. Levin is representing Mr. Emery's former wife, the actress Lori Singer, in their divorce.

Mr. Emery referred inquiries about an appeal directly to Ms. Duff, who did not return requests for comment.

Unsettled Area

Matrimonial lawyers contacted yesterday said that the question of how to resolve support questions in cases involving two extremely wealthy parents remains unsettled.

William C. Herman, a divorce expert at Rosenthal & Herman, said that as a practical matter no judge will require an extremely wealthy spouse to continue to maintain a child in the same circumstance as before the marriage dissolved. "I have seen claims [for equalization] to a much lesser and more palatable degree than sought here rejected," he said. But Jane Bevans, a matrimonial special at Bevans & Kattan, said that the standards in the 1989 law were put there for a reason: "to avoid 'the stepchild syndrome' that father loves them more than me because they get much more."

Mr. Perelman and Ms. Duff, a major Democratic party fundraiser, separated in July 1996, 18 months after they were married. It was Mr. Perelman's third marriage and Ms. Duff's fourth. Caleigh is fifth child for Mr. Perelman, who is 55. Ms. Duff, 45, has no other children.

Mr. Perelman was represented by Adria S. Hillman.

Copyright 1999 NLP IP Company -- American Lawyer Media.