Schwartz v Schwartz

[*1] Schwartz v Schwartz 2004 NY Slip Op 51661(U) Decided on October 22, 2004 Supreme Court, Nassau County Diamond, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 22, 2004
Supreme Court, Nassau County

DONALD SCHWARTZ, Plaintiff,

against

HELEN SCHWARTZ, Defendant.



200467/2003



Attorney for Defendant

MORAN, BRODRICK & ELLIOT

Robert H. Brodrick, Esq.

300 Garden City Plaza

Garden City, NY 11530

Attorney for Plaintiff

Gilbert L. Balanoff, Esq.

1539 Franklin Avenue

Mineola, NY 11501-4806

Arthur M. Diamond, J.

This is a decision on two related applications, the first is defendant (hereafter wife's) Order to Show Cause seeking to set aside the order of preclusion stemming from her default in the matrimonial action; and secondly, plaintiff (hereafter husband's) motion to quash several subpoenas served on him prior to a scheduled equitable distribution hearing at which the defendant has been precluded from offering any evidence by previous order of this Court. For the following reasons, the motions are denied in part and granted in part.

The procedural history here is not at issue. The husband commenced the action on February 28, 2003 by the filing of a summons with notice. A preliminary conference was held on March 14, 2003 with both parties represented by counsel. The husband was directed to serve his complaint on or before April 7, 2003. He did not do so until May 7, 2003. Discovery demands were to be exchanged by May 21, 2003. The wife did not comply. The wife never filed an answer. In June, 2003 the wife was hospitalized for what she describes as a suicide attempt in her moving papers. Thereafter, on July 29, 2003, a Court conference was held wherein the parties entered into a stipulation to extend the discovery deadlines. The wife did not comply with this new discovery schedule. By December of 2003 the wife's counsel was moving to be relieved as her counsel due to the wife's refusal to communicate with him. Counsel's application was granted by this Court (Woodard J.) without opposition on December 12, 2003. Said decision stayed the action for 30 days.

This case first appeared on my calendar January 15, 2004, upon my assignment to Part 31 of the Supreme Court, Matrimonial Center. The wife did not appear, nor did any counsel appear on her behalf. Several preclusion applications were previously made by the husband. On January 22, 2004 the wife appeared pro se and this Court granted the applications for preclusion without opposition.

The wife now moves to vacate the preclusion order but not the default in connection with the divorce. In support of her application, she claims that pursuant to Maillard v Maillard, 243 AD2d 448 (2d Dept 1997) the applicable standard to be applied is that the court must, prior to [*2]default, determine that the offender's lack of cooperation was wilful, deliberate and contumacious. As proof that her behavior was not wilful she raises the issue of her apparent mental instability as evidenced by her attempt at suicide soon after being served with the divorce papers. While the Court does not in any way mean to make light of her mental state at the time, it finds that argument unpersuasive. First, the wife was represented by extremely competent counsel who not once raised that issue on her behalf, nor was it ever once raised before this Court by the defendant when she appeared pro se. Additionally, she was given ample opportunity to speak on the record, which she did on several occasions

The relevant statute, CPLR Section 5015, reads as follows: Relief from judgment or order(a) On motion. The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of:1. excusable default, if such motion is made within one year after service of a copy of the judgment or order with written notice of its entry upon the moving party, or, if the moving party has entered the judgment or order, within one year after such entry; or2. newly-discovered evidence which, if introduced at the trial, would probably have produced a different result and which could not have been discovered in time to move for a new trial under section 4404; or3. fraud, misrepresentation, or other misconduct of an adverse party; or4. lack of jurisdiction to render the judgment or order; or5. reversal, modification or vacatur of a prior judgment or order upon which it is based.

Based upon the moving papers, the Court finds that the wife has not met her burden under this statute. The evidence of her mental condition is not new, nor is there any affidavit from a medical professional explaining her condition. Likewise, the wife has been given almost six months by this Court (Woodard J. and Diamond J.) to participate and cooperate with the previous orders and rulings of this Court. From the time she first appeared before me January 15, 2004, I implored her to obtain counsel and begin to participate in the case. It took her almost eight months to comply. The case appeared on the Court's calendar ten times during that period, not counting dates for motion practice. In the interim, while the wife appeared pro se and long after the husband's obligation to do so had lapsed, the Court ordered the husband to have his own license and law practice valued, at his expense, in order to protect what the Court believes may be a valuable asset of the wife's. The wife has recently retained new counsel. She now appears [*3]with counsel at the stage in the proceeding where an inquest on equitable distribution is presently scheduled. The Court must now balance her rights at the inquest against her refusal to comply with various Court orders. There has not been distribution of any asset of the marriage. Further, the Court is mindful that this is a court of equity, and equitable distribution cannot as a matter of law and principle be done based upon the evidence presented by one side when both sides are present.

This is a near thirty year marriage and the distribution of assets is a significant undertaking for both parties. It is not a process carried out by calculator but rather the application of the principles of law by an impartial judicial officer whose job is not to be mathematically precise, but rather to be fair in all of the circumstances to each party as an individual (see Cappiello v Cappiello, 110 AD2d 608, aff'd 66 NY2d 107).

Furthermore, the Domestic Relations Law establishes that in determining equitable distribution, there are certain factors that MUST be considered by a court in making its determination and likewise the court MUST refer to each factor in the decision.

Domestic Relations Law section 236, Part B (5) provides as follows:

Disposition of property in certain matrimonial actions.

a. Except where the parties have provided in an agreement for the disposition of their property pursuant to subdivision three of this part, the court, in an action wherein all or part of the relief granted is divorce, or the dissolution, annulment or declaration of the nullity of a marriage, and in proceedings to obtain a distribution of marital property following a foreign judgment of divorce, shall determine the respective rights of the parties in their separate or marital property, and shall provide for the disposition thereof in the final judgment.

b. Separate property shall remain such.

c. Marital property shall be distributed equitably between the parties, considering the circumstances of the case and of the respective parties.

d. In determining an equitable disposition of property under paragraph c, the court shall consider:

(1) the income and property of each party at the time of marriage, and at the time of the commencement of the action;

(2) the duration of the marriage and the age and health of both parties;

(3) the need of a custodial parent to occupy or own the marital residence and to use or own its household effects;

(4) the loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution; [*4]

(5) any award of maintenance under subdivision six of this part;

(6) any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;

(7) the liquid or non-liquid character of all marital property;

(8) the probable future financial circumstances of each party;

(9) the impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party;

(10) the tax consequences to each party;

(11) the wasteful dissipation of assets by either spouse;

(12) any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;

(13) any other factor which the court shall expressly find to be just and proper.

In fact, so strong is the resistance to the idea of forfeiture or default within the context of equitable distribution, the statute makes no distinction between defaults or fully contested actions in terms of requiring that courts explain the considerations they have given to the way they distributed assets. Time after time the appellate courts have returned cases to trial terms directing them to hold hearings and allow the defaulting party to present evidence and cross examine witnesses on their behalf. The is illustrated in the case of Orlan as quoted by the Appellate Division, Second Department in Otto: "This court holds, insofar as is necessary to reach the issue here presented, that such issues as equitable distribution of marital property, maintenance and child support,... are not traversable and upon a default of one party the defaulting party is entitled to participate in the inquest for the purpose of assisting the court in making a proper determination on the economic issues" (see, Otto v Otto, 150 AD2d 57 at 67 quoting Orlan v Orlan, NYLJ, June 11, 1982, at 17, col 6)

The Otto case is without question the leading authority on the issue raised by defendant herein, and so an in-depth look at the facts of that case is helpful. The plaintiff wife had obtained a divorce in Queens county without the defendant husband appearing. The Supreme Court signed the judgment of divorce, findings of fact, and conclusions of law on default. Contained therein were directives setting maintenance for plaintiff's lifetime, child support and transferring title of the marital residence and a second piece of property from defendant to plaintiff. Subsequently, the defendant failed to comply with any of the economic provisions of the divorce and plaintiff [*5]made several ex parte motions to enforce the agreements, including the transfer of title to the two properties. These motions finally spurred the defendant to obtain new counsel who then moved for a hearing, not on the divorce, but "to reassess the economic and equitable distribution portions of the case" (Otto v Otto, 150 AD2d 57 at 60). Interestingly, the defendant raised the issue of physical and mental health, including reactions to thyroid medications that caused memory loss and depression. The Supreme Court denied the motion for a hearing. The Appellate Division reversed and remanded, holding " that a defaulting party who appears at the inquest should ordinarily be entitled to fully participate therein by presenting his or her own witnesses and evidence, and cross-examining the other side's witnesses, unless, of course, the defaulting party has been previously precluded from doing in which case the court may, in its discretion, limit the defaulting spouse's participation to the cross-examination of witnesses. (See Otto v Otto, 150 AD2d 57, at 69 citing Grande v Grande, 129 AD2d 612; Napolitano v Branks, 128 AD2d 686; Reed v Reed, 93 AD2d 105 [emphasis added]). The trial court may also attach any other conditions to the inquest as it deems appropriate, such as requiring examinations before trial and the filing of financial statements (see, Otto supra, citing Ayala v Boss, 120 Misc 2d 430).

The Court notes that in our case, the wife does have an order of preclusion against her, and so, under Otto, she should be limited to cross examination of witnesses at the inquest. As Otto also makes clear, it is completely within the trial courts discretion to determine what evidence the defaulter shall be permitted to offer and to what extent they be allowed to participate. The Court finds that the answer to that question is "What information does the Court need from the defaulting party in order to make an equitable decision, complete enough to satisfy the requirements of DRL 236 and the established case law?"

Based upon the foregoing, it is the Court's order that the wife will not be entitled to open the discovery process at this late date. All subpoenas presented by her are quashed. The discovery presented by the husband is sufficient for the wife to proceed at inquest. The husband is ordered to provide to the wife personal income tax returns for the years 2000, 2001, 2002 and 2003 if he has not already done so.

At the hearing, the husband will have the burden of going forward, and the order of proof shall be determined by his Statement of Proposed Disposition. He will state which assets he believes to be separate property and which he believes to be marital property. He shall produce whatever financial statements or data he has to support his position. The wife will be allowed to cross examine the husband completely and freely under the rules of evidence. The wife must present a Statement of Proposed Disposition as well. The Court will also expand the limitations set forth in Otto and permit the wife to testify on her own behalf, produce documents presently in her possession and take any position on any asset that she sees fit. Any further document production request will be determined by the Court as the hearing progresses. The distribution of all marital assets, including the husband's law practice and maintenance for the wife are the subject matter for the hearing.

Counsel for the defendant, wife, is directed to schedule a conference call with opposing counsel and the Court, within seven days from the date of this order, for the purpose of selecting a mutually agreed upon hearing date.

E N T E R

[*6]

DATED:October 22, 2004 _________________________________

HON. ARTHUR M. DIAMOND

J.S.C.

TO:

Attorney for Defendant

MORAN, BRODRICK & ELLIOT

Robert H. Brodrick, Esq.

300 Garden City Plaza

Garden City, NY 11530

Attorney for Plaintiff

Gilbert L. Balanoff, Esq.

1539 Franklin Avenue

Mineola, NY 11501-4806