E.R.S. v B.C.S.
Annotate this CaseDecided on March 31, 2016
Supreme Court, Westchester County
E.R.S., Plaintiff,
against
B.C.S., Defendant
XX/16
Stephen R. Lewis, Esq.
Attorney for the Plaintiff
Stephens, Baroni, Reilly & Lewis, LLP
175 Main Street, Suite 800
White Plains, New York 10601
Via Facsimile - 914-761-0995
John C. Guttridge, Esq.
Attorney for the Defendant
Guttridge & Cambareri, P.C.
222 Bloomingdale Road, Suite 301
White Plains, New York 10605
Via Facsimile - 914-631-6644
Linda Christopher, J.
But for the fact that this case has no hero, it manifests many similarities to a Greek tragedy. The wife in this case exhibits the classic "tragic flaw", similar to some of the Greek tragic heros; namely "rashness". Unfortunately, however, she has not risen from the ashes to restore peace and harmony to her family. Her acts of impulse led to her downfall and were never more apparent than when this case first appeared before the Court by an Order to Show Cause presented on March 3, 2014. Defendant sought to set aside a "So-Ordered Stipulation of Custody" after not seeing her children for three months. She originally signed this "So-Ordered Stipulation of Custody and Parental Access" document on December 23, 2013. (Tr. Ex. E) While represented by an attorney, this stay at home mother of three elementary aged girls gave up almost all rights to her children and agreed as follows:
CUSTODY OF THE MINOR CHILDREN
2. The parents agree that the Father shall have sole legal and residential custody of their minor children, with the Mother giving up all rights to decision making (except for the control she may have of the children's college funds) and visitation with the parties' children L. A. S., K. [*2]R. S. and J. J. S. (bold added)[FN1]
The reason she proffered to the Court for having signed this Agreement was that she was suffering from Post Traumatic Stress Disorder at the time that she signed it. However, the evidence leads this Court to conclude that she was acting impetuously after her husband moved out of the marital residence in July, 2013 and commenced this divorce action. The Order to Show Cause was ultimately resolved by agreement of the parties (Order of Custody and Parental Access dated March 20, 2014) and over time, the Court granted defendant therapeutic and supervised access with her children. (Tr. Ex. 33)
Defendant filed a second Order to Show Cause on October 6, 2014, returnable November 14, 2014 whereby she sought to discharge the children's Court-Ordered Therapeutic Supervisor and the children's attorney Kathleen Hannon, as well as to reassess financial responsibility for payment of the foregoing. The Court rendered a decision on December 1, 2014 wherein the Attorney for the Children was relieved, as custody was resolved, while the therapist was continued as needed and the responsibility for payment continued, as previously ordered.
On March 31, 2015, defendant filed yet a third Order to Show Cause, seeking to modify the prior Order of Custody and Parental Access dated March 20, 2014 (the "Second Stipulation") to give defendant sole, or in the alternative, joint custody of the minor children. This application cited defendant's use of Ambien during the time prior to signing the initial custody agreement as the basis to set aside the prior agreement and orders relating to custody. On June 26, 2015, the Court ordered a forensic investigation to be done by Dr. Dominic Ferro, M.D., a forensic psychiatrist. Because this was the third Order To Show Cause within a short time period that defendant filed and because defendant had access to over $700,000 at the commencement of this action, the Court ordered defendant to pay for the forensic evaluation, subject to reallocation at trial. On July 14, 2015, defendant's attorney wrote to the Court seeking to withdraw her application. Hence, the defendant's claims of PTSD and Ambien induced psychosis were never explored by the Court with assistance from a forensic psychiatrist and no hearing ever held to determine the validity of defendant's claims. At the time of the trial, defendant was exercising liberal access with the children.
On August 5, 2015, defendant's attorneys Guttridge and Cambareri sought to be relieved citing differences with their client. Upon appearing in court and discussing the matter with their client, they agreed to continue as her attorneys.
On October 16, 2015, this matter appeared before the Court for a non-jury trial to hear and determine the financial issues of the parties. The Court granted plaintiff a divorce based upon DRL §170(7), pending the hearing and determination of the ancillary issues. The matter continued to October 19, 30, December 12, 15, 16, 17, 21, 22 and January 4 and 5. There was a hiatus between October and December trial dates primarily due to plaintiff's attorney's prior engagement in Federal Criminal Court. The final Post Trial Memoranda, and attorney fee submissions were submitted on January 25, 2015.
While the claim might be made that the custody issues should play no part in the ensuing [*3]financial issues, they are an inextricable part of this case. The defendant has continued to remain in an expensive hotel suite rather than obtain more affordable housing. Defendant claims she has done this because she is waiting to return to the marital residence as she assumed custody of the children would be given to her.
Background
This case primarily involves issues of tracing of separate property, allocation between marital and separate property, dissipation of assets and support.
The parties were married on — &mdash, 1998.
This divorce action commenced on — &mdash, 2013 after the plaintiff left the marital residence. This is a 15 year marriage. The parties have three (3) children L. A. S., born in 2002 (13 years old); K. R. S., born in 2004 (11 years old); and J. J. S., born in 2006 (9 years old). The plaintiff is 51 years old, born in 1965 and defendant is 49 years old, born in 1967.
Plaintiff is a freelance television camera operator who works mostly for a major television show. He has a B. S. in Electronics and a M. A. in Fine Arts. He and the three children reside in a cottage on the marital property where a larger house, currently uninhabitable, is also located. The marital residence and property are located in Westchester County, New York, and the deed is in joint names. The parties purchased the property in 2002 for $660,000. (Tr. Ex. 12). Defendant claims the funds used for this purchase came from her separate property. Plaintiff claims the property is marital for many reasons including that it is titled in joint names, was purchased at least in part with marital funds, and it benefitted from his sweat equity. He argues that he should receive $225,000 for his interest. Lane Appraisers, a court ordered neutral appraiser, valued the property at $590,000. (Tr. Ex. 26) There is no mortgage. There are real estate tax liens of $28,486 as of August 3, 2015 and $42,749 as of December 5, 2015.
Defendant has a B. S. in Computer Science and Mathematics and a M. F. A. in Communications. She does not work and claims she is disabled. She received the sum of $834,252 as a beneficiary of her mother's life insurance policy with Guardian Assurance Company when her mother died in 2010. On the date of commencement of this action on July 30, 2013, the balance of these funds was $718,752. (Tr. Ex. 30) As of completion of the trial, the funds were less than $200,000. The premiums paid on this policy in excess of $23,000 were paid yearly throughout the marriage until defendant's mother's death in 2010.
Defendant texted her husband in December, 2013 as follows: "Just to make sure we are having no communication issues, I am never planning to come back. This isn't about a short-term vacation from them. I want no communication. They will depend solely on you." (Deposition Transcript continued p. 9 and Tr. Ex. 21) The evidence shows that defendant was referring to her children when she wrote that she was never planning to come back to "them."
She had written earlier, on November 24, 2013, as follows:
Monday morning I will be calling my attorney and having him draw up papers that will turn full custody over to you with no visitation from me. I will ask that you let me wait to turn them over to you until December 17 so I can get K. thru the weekend of Nutcracker. The 2 days after will give me time to move out. You can find out from your attorney how much child support your non-working, disabled soon to be ex-wife has to pay you in child support and I will agree to it. I will also write you a check for however much more of my money you want. (Tr. Ex. 15)
Defendant took up residence in the Danbury Hilton in January, 2014 at the cost of $3600 - $3800 each month. (Trial, reading from Deposition Transcript January 7, 2015 pp 6 - 8) Defendant explained that she rented hotel accommodations at the rate of $3600 - $3800 monthly, because she planned on returning to her house and assumed she would be getting the kids back. As to why she texted the complete opposite to her husband, that she never planned on coming back, she claimed she "wasn't ok during that time." (Trial, reading from January 7, 2015 Deposition Transcripts p 9) Mrs. S. also blames Mr. S. because during the early stages of the litigation, he told her that he did not want the children running into her where they would be faced with the reality of their mother being around but essentially abandoning them. Hence, her hotel accommodations in Danbury are plaintiff's fault, she claims. However, despite the fact that the Court, plaintiff's lawyer and the children's lawyer all agreed to set down for a hearing, the matter of the issues raised by defendant that she, "wasn't ok", when she wrote this text to plaintiff and signed off on her custodial and access rights, defendant withdrew her request for the hearing that was scheduled prior to this trial. The Court is left with the facts and the record as it stands.
Plaintiff has a business that he operated with defendant by the name of S. I., Inc. Defendant was also involved some with the business.
Defendant testified that she worked as a TV producer and writer before becoming disabled from the myriad of injuries she has sustained over the years. However, she provided no expert testimony or certified medical evidence of her disability and she is not receiving social security disability nor any other disability payments at this time, although she has received workers compensation payments in the past. She has not looked for employment because she claims that she is disabled and unable to work. (Trial, reading from January 7, 2015 Deposition Transcript p 28)
This Tragedy, Part Two
Defendant apparently enjoyed a close relationship with her mother for most of her life. She testified that her mother and father never married and that she had no siblings. Her mother worked as secretary to her father. He was not free to marry her mother as he was still married to his wife. However, her father upon his death when defendant was seven (7) years old left his trucking business to her mother. He had also given the property, where defendant and her mother lived, to defendant's mother. In 2002 defendant's mother gave defendant a vacant parcel next to the home. Her mother was apparently a smart business woman because she continued to run the trucking company after B.'s father's death and amassed a significant estate. Prior to moving to Westchester, the parties resided in at a house on — &mdash, Long Island, New York with B. 's mother who suffered from various physical ailments. B. obtained her mother's power of attorney and she and her mother maintained several joint bank and stock accounts that contained the mother's money. After purchasing the marital residence in September 2002, the parties moved into the main house in Spring, 2003. B. 's mother moved in with them in October, 2003. Defendant claims that the funds for purchase of the marital residence came primarily from her joint accounts with her mother. The parties stipulated that the downpayment for the marital residence of $66,000 came from defendant and her mother on June 26, 2002 and remained in the parties' joint account for only a few days before being transmitted for the downpayment.. (See Trial Stipulation p 121 - 125, 383 - 386) Likewise, the parties stipulated that another $535,000 came [*4]from an account held jointly by defendant's mother and defendant and that approximately $87,000 came from the parties' joint account all of which totaled $688,000 used to purchase the marital residence.
Plaintiff seeks 50% of the marital residence and claims that by placing the residence in joint names, defendant evinced an interest to transform the character of the asset from separate to marital, citing to Geisel v. Geisel, 241 AD2d 442 (2nd Dept 1997). He also claims that monies to purchase the marital residence came from a joint account wherein he deposited his earnings and were comingled. He testified and presented evidence that the parties did approximately $200,000 of additional work for which he was the general contractor and provided significant sweat equity. (Tr Exs. 5, 6, 6A, and 7)
Defendant claims that the money to purchase the residence came primarily from her; anymonies from the parties' joint account used for purchase and renovations were basically from her separate funds as well because plaintiff made so little income that he could barely pay the family's living expenses. Besides, she argues, the house has gone down in value leaving less than the amount that emanated from her separate funds. Hence, she argues that she should be given the house with little or no credit to plaintiff.
Since plaintiff returned to the marital property in January, 2014, defendant has demanded that plaintiff not perform any repairs or maintenance to the marital property.
If this were all the evidence regarding the monies the parties paid to purchase the marital residence and additional work to the residence, the Court would have a relatively easy task. However, the parties' tragedy continued.
The Law Suit
The parties' testimony and evidence provided details that in December, 2005, Mrs. F. G. C., defendant's mother, asked her daughter for a check to give to a charity. Defendant testified that they were in the car on the way to a concert, she was tired and was going out for the first time in ages and, in one of her many rash moments, she told her mother that she was not giving her a check for the charity. Her mother said she would write her own check. Defendant responded, "With what money? All the money is in my account." Apparently this angered the mother so much that she went to the bank herself the next day where she discovered that her "checking and savings accounts had been depleted of hundreds of thousands of dollars." (Tr. Ex. 9) Defendant claims that there had been a process of financial planning by which her mother's assets had been sold and others transferred into joint accounts between defendant and her mother and other accounts were outright gifted to defendant.Defendant received a Power of Attorney and managed the assets. She was caring for her ailing mother. As she explained, "I'd had my whole life revolving around her." Defendant also testified that her mother had gifted these assets to her so that F. C. would be eligible for long term health care. She had been hospitalized and this was part of the planning. Plaintiff insinuated a more sinister motive, claiming defendant obtained her mother's power of attorney while she was hospitalized.
Defendant's mother moved out shortly after the above incident and on March 16, 2006 defendant's mother, F. V. G. C., commenced a lawsuit against her daughter, the defendant, herein, as well as against the plaintiff, herein, E. S. Hence, the relationship between B. and her mother was forever and hopelessly severed. (Not unlike B. C. S.'s attempt to sever her [*5]relationship with her own three (3) children which has thankfully been restored.) The causes of action brought by F. C. were for "Breach of Fiduciary Duty", "Conversion", "Fraud", "Unjust Enrichment", "Constructive Trust", "Equitable Lien", "Accounting", "Order of Attachment" and "Unauthorized Filings of Gift Tax Return". (Tr. Ex. 9)
The lawsuit was eventually settled and the parties memoralized their settlement of the lawsuit with F. G. C. by Stipulation of Settlement before Hon. Elizabeth H. Emerson, on September 6, 2006. (Tr. Ex. 10) The terms of the Stipulation, in essence required the defendants (the parties to the instant action) to pay over the sum of approximately $850,000 within 30 days of the date of the Stipulation. It was agreed that, "It is the mutual intention once again of the parties that this is the settlement of a claim of conversion and not the making of a gift and by the same token, it would constitute an acknowledgment by the co-defendants of it not having been a gift by the return of the monies that were allegedly converted." (Tr. Ex. GG at p 8 - 9)
Plaintiff claims that prior to the lawsuit, he thought the monies from F. C. were gifts. He argues that the resolution of the lawsuit is an admission by defendant of conversion (plaintiff was not present at the time the settlement was placed on the record). Defendant denies this. The Court finds this agreement is an admission that the funds that were given by F. C. were not a gift. There is not an affirmative statement that they were converted funds. This was a settlement.
At this point, the money "given" by defendant's mother to defendant and used to purchase the marital residence was returned to her mother. The tracing by this Court now turns to the money defendant used to repay her mother. Defendant argues that this money came from her separate property. Therefore, it is still her money, she claims. The question posed is, whether by virtue of the terms of the settlement does defendant have clean hands? If defendant had "unclean hands" when she first put money into the purchase of the marital residence, can she still claim a separate property interest?
But first, the Court will review the defendant's claim that she repaid her mother with her separate funds. In order to have the funds to repay her mother, she claims she first returned joint accounts with her mother to her mother. She essentially returned the corpus and retained the interest income. The Chase joint checking account between defendant and her mother with an approximate value of $288,000 was turned over to F. G. (Tr. Tr. 10/30/15 p 22, L 2 - p 54, L 15, and Tr. Tr. 12/14/15 p 62, L 1 - 19); the Bank of America stock account was transferred back to F. G. C. (Tr. Tr. 10/30/15 p 22, L 2 - p 54, L 15; Tr. Tr. 12/14/15 p 61, L 18 - 25) She then took out a loan from her Guardian Life Insurance policy to pay the balance of $300,000. (Tr. Ex. XX, YY, YY1; Tr. Tr. 10/30/15, p 22, L 2 - p 54, L 15, Tr. Tr. 12/14/15, p 62, L 20 - p 64, L 3) She claims this loan was ultimately repaid by selling a parcel of vacant land that came from her father to her mother then to her, located next to what had been her mother's residence. (Tr. Exs. YY, YY1, Tr. Tr. 10/30/15 p 22, L 2 - p 54, L 15, Tr. Tr. 12/14/15, p 61, L 18 - 25, and p 62, L 1 - p 64, L 3) She received $500,000 from the sale on December 28, 2007. She used the monies to repay the Guardian loan plus interest for a total of $331,000. (Tr. Exs. VV - YY) She also testified she used the proceeds to pay the capital gains tax due on the sale of the property.
Defendant argues that plaintiff could not possibly have contributed approximately $200,000 towards the renovation of the marital residence. She claims that his aggregate income from 2003 - 2006 was less than $300,000 (Tr. Tr. 12/14/15 p 31, L 20 - p 32, L 20), which was [*6]not enough to fund the renovation along with ordinary living expenses. These renovations were paid from her personal injury settlements and other personal assets, she claims. But query, why is it that her personal injury settlements and assets paid for the renovations but plaintiff's income paid for living expenses? Plaintiff also testified that he put sweat equity into the marital property by doing demolition work, roofing and rebuilding, sheetrocking, removal of cedar shakes to prepare for siding, and "a lot of work in the cottage". This information was compiled for use in the lawsuit with F. G. C. discussed above.
The Second Lawsuit
After the parties settled the lawsuit with F. C. regarding the monies she claimed the parties herein took from her without her knowledge or consent, the parties would not allow F. G. C. to visit their children. In 2007, F. C. commenced a lawsuit in Westchester Family Court for grandparent visitation. The parties spent $90,000 defending this lawsuit. Defendant has claimed that part of the reason she gave her children over to plaintiff was that she was still shell shocked from the lawsuit with her mother and did not want to involve her children in yet another court action. Of course, the Court was never able to test this claim because the matter never went to a hearing.
A Multitude of Litigation
Neither defendant nor her mother were strangers to lawsuits. In 2001, they recovered $315,800 on April 24, 2001 and $25,500 on June 25, 2001 as a result of a lawsuit against the stock company NASD. (Tr. Ex. NN1) Defendant claims this settlement, with her mother as Plaintiffs against NASD was the source of the funds used to purchase the marital property.
The Guardian Life Insurance Policy
Prior to the marriage, defendant took out a policy on her mother's life and paid the premiums. Her mother was gifting money to defendant and, according to defendant, her first husband as well, to pay for the premiums on the policy. After marriage to plaintiff, defendant's mother was gifting both plaintiff and defendant the maximum permitted under the federal gift tax allowance. F. C. gifted $10,000 to each of the parties by check with a notation of "gift". Checks to E. S. were given on November 3, 2000 by certified check of $10,000, on January 23, 2001, by check to E. S. of $10,000 with the notation "gift", on January 8, 2002, by check dated January 10, 2003 of $11,000 with the notation "gift 2003" on the check, by check dated January, 2005 for $11,000 to E. S. with the notation "2005 gift" on the check. (Tr. Ex's. 20, 39, and 40) Plaintiff testified he also received a check in 1999 of $7,500 and on January 10, 2004 of $11,000 from F. C. to him. (Tr Exs. "20" and "000") Defendant received similar checks from her mother. They were deposited in the parties' joint checking account. The parties then paid the yearly premium of $23,747 per year. (Tr. Ex. 20) The total gifted to plaintiff over the years was $70,500. He then, in turn, used the money to help pay the premium on the Guardian Life Insurance policy along with defendant. However, beginning in 2006, the premiums were paid from the policy.
Defendant claims that the insurance policy and its proceeds are her separate property. She argues that she purchased the policy in 1992 before her marriage to plaintiff in 1998, and that her mother's gifts to plaintiff were conditional, with no donative intent, made to plaintiff for the express purpose of paying the life insurance premiums.
In the case, In the Matter of the Estate of Szabo, 10 NY2d 94, 98 (1961), the Court of [*7]Appeals set out the requisites for a valid gift inter vivos,
"there must be an intent on the part of a donor to give; there must be a delivery of the property given pursuant to such intent; and there must be acceptance on the part of the donee (Matter of Van Alstyne, 207 NY 298, 306). The delivery required must be such as to vest the donee with control and dominion over the property but this requirement must be tailored to suit the circumstances of the case. This court has said: The delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit; there must be a change of dominion and ownership; intention or mere words cannot supply the place of an actual surrender of control and authority over the thing intended to be given.' (Vincent v. Rix, 248 N.Y. 76, 83).In another matter, the Surrogate Court found that even after receipt of a passbook account, and then opening an account in trust for the donor, this act "could create several inferences and in and of itself is not sufficient to negate the intention of the decedent to make a gift to respondent." In re Cafarelli's Will, 224 NYS2d 377 (Sur. Ct., Nassau Cty., 1962)
In reviewing the cases propounded by defendant, the Court finds they are inapposite.
In the case before it, the Court finds that while plaintiff's mother-in-law may have intended for her gift to fund her life insurance policy, no evidence of this alleged condition for the gift was ever proven. By giving the funds to plaintiff, he had dominion and control over the funds that he placed in the parties' joint bank account. He then used the monies to assist in paying the life insurance premiums. Plaintiff has a valid claim for an interest in the life insurance proceeds.
The question left for the Court to determine is whether defendant's borrowing against the Guardian policy has a marital component and creates a claim by plaintiff for not only a portion of the pay-out of the policy but also for a portion of the marital residence by virtue of defendant's obtaining a loan from an asset that was also partially plaintiff's. Would this alter the character of the separate property credit of the marital residence?
Tragic History of Accidents
Defendant presented a litany of testimony and evidence of her history of accidents. There was some confusion regarding dates but there was general agreement as to the multitude of accidents that befell the defendant. In 1991 - 1992, prior to marriage, defendant was in a car accident. She was in a car going 45 mph that was hit from the rear. She was in physical therapy for six (6) months and testified of injuries to her neck. In 1991 she suffered a tennis injury to her back. In 1996 she worked for a company called Chamber of Chills, at the Arizona Biltmore for a period of 10 to 11 weeks. Her position was as production manager on sight for the "Haunted House". An armoire came down on her and smashed her shoulder. Defendant testified that this accident exacerbated her Reflex and Sympathetic Disorder disease. She suffered damage to her neck and lower back. From 1996 for six (6) years, she was under the care of an orthopedist, a neurologist, a spinal specialist, a pain management center, an acupuncturist, a chiropractor and a nutritionist. Between 1996 - 2005, defendant received workers compensation payments of $560 weekly and some lump sum payments. In March, 2001, she received $18,000 as a result of her injuries. On May 12, 1999, she received $25,975 from CNA Casualty Company as a result of the [*8]Chamber of Chills lawsuit. On March 11, 2005, she received $29,359 as a result of the Chamber of Chills injury. In 2003, she received a settlement of $81,600 from CNA as a result of her injuries from Chamber of Chills employment. In January, 2005 she settled her case against the Arizona Biltmore for $90,000 and received $75,000 after paying legal fees as a result of her injuries from Chamber of Chills. In 1999 - 2000, she was working in a different capacity, making sure people brought their audio and video equipment needed for the conference they were speaking at. An employee of the hotel smashed into her right hip and pushed her into the wall.[FN2] On — &mdash, 2007, the whole family was in a car on the Saw Mill River Parkway and were rear ended. Defendant was under the care of a physician for problems to her right hip. She went to physical therapy. In 2008, she fell backwards down three (3) small steps and was in physical therapy for several months. On December 24, 2012, she fell down the bottom half of a set of stairs and smashed her head into a wall. She saw about seven (7) doctors. Defendant is currently under a doctor's care. She is going to physical therapy and testified that she is trying to avoid surgery. She had appendix surgery in 2014, and she had knee surgery in April, 2015. She testified to pain throughout her body as well as problems sitting, standing, working at a computer, writing and driving. However, the Court notes that defendant testified that she spends a great deal on gasoline for her car due to the extensive amount of driving she does transporting her children to their various activities when she has them on Tuesdays, Thursdays and alternate weekends. She complained of swelling to her hands, and neck problems, headaches, and inability to focus. She said she might be able to perform a job part time driving kids around or walking around but not showing up every day.
The Law
DISCUSSION AND ANALYSIS
Caselaw and Statutory Law
Equitable Distribution
The premise of the equitable distribution law is that "a marriage is, among other things, an economic partnership to which both parties contribute as spouse, parent, wage earner or homemaker." O'Brien v. O'Brien, 66 NY2d 576, 585 (1985). "The Equitable Distribution
Law reflects an awareness that the economic success of the partnership depends not only upon the respective financial contributions of the partners, but also on a wide range of nonremunerated services to the joint enterprise, such as homemaking, raising children, and providing the emotional and moral support necessary to sustain the other spouse in coping with the vicissitudes
of life outside the home (citations omitted)."' Price v. Price, 69 NY2d 8, 14 (1986).
Although equitable distribution does not necessarily mean equal distribution, the general rule calls for an equal distribution of the marital assets, unless the equities of an individual case require an unequal distribution. See, Conner v. Conner, 97 AD2d 88, 96 (2nd Dept. 1983). The basic premise of equitable distribution is that
modern marriage should be viewed as a partnership of co-equals. Upon the dissolution of a marriage there should be an equitable distribution of all family assets accumulated [*9]during the marriage and maintenance should rest on the economic basis of reasonable needs and the ability to pay. From this point of view, the contributions of each partner to the marriage should ordinarily be regarded as equal, and there should be an equal division of family assets, unless such a division would be inequitable under the circumstances of the particular case.'Conner, 97 AD2d at 96, citing, 11C Zett-Kaufman-Kraut, N.Y.Civ,Prac., Appendix B, p.8
Although in a marriage of long duration, where both parties have made significant contributions to the marriage, a division of marital assets should be made as equal as possible (citation omitted), there is no requirement that the distribution of each item of marital property be made on an equal basis (citations omitted).
Chalif v. Chalif, 298 AD2d 348, 349 (2nd Dept. 2002); see, also, Adjmi v. Adjmi, 8 AD3d 411,
412 (2nd Dept. 2004).
Marital property is defined in Domestic Relations Law §236 B(1)(c) as "all property acquired by either or both spouses during the marriage...and before...the commencement of the matrimonial action, regardless of the form in which title is held." Separate property is defined, in part, as " property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse...". DRL§236 B(1)(d)(1). Under the law of equitable distribution, there is a presumption that all property acquired by either spouse during the marriage is marital property. See, DRL§236 B(1)(c). Separate property also includes "property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse." DRL§236 B(1)(d)(3).
In the seminal case of Price v. Price, 69 NY2d 8, 15 (1986), the Court of Appeals reaffirmed that "marital property" should be read as broadly as possible:
The Legislature, in defining this basic term "marital property", we have held, intended that the term should be construed broadly in order to give effect to the "economic partnership" concept of the marriage relationship recognized in the statute (see, Majauskas v. Majauskas, 61 NY2d 481, 489, 490). The term "separate property", on the other hand, which is described in the statute as an exception to marital property, we have stated, should be construed narrowly (Majauskas v. Majauskas, supra, at p. 489).
Id.
In keeping with this mandate, there is a strong and clear presumption in favor of classifying an asset as "marital" where, it was acquired during the marriage, and courts routinely reject separate property claims asserted over property acquired during the marriage. See, Raviv v. Raviv, 153 AD2d 932 (2nd Dept. 1989) (husband failed to overcome presumption that option to purchase property, acquired during the marriage, was marital property); Lischynsky v. Lischynsky, 120 AD2d 824 (3rd Dept. 1986) (real property purchased during marriage presumed to be marital, notwithstanding husband's claims to the contrary). A party seeking to show that property is separate must overcome the marital property presumption by clear and convincing evidence. [*10]In Parker v. Parker, 240 AD2d 554, 555 (2nd Dept. 1997), for example, the Second Department rejected the husband's claim that property inherited from a family member and property gifted to him by another family member were his separate property because his claims "were not established by clear and convincing evidence"(emphasis added). Id.
An asset acquired during the marriage, even if partially purchased with one of the spouse's separate funds, is still classified as marital property. See, Fields v. Fields, 15 NY3d 158 (2010). "There is no single template that directs how courts are to distribute a marital asset that was acquired, in part or in whole, with separate property funds." Id. at 167. Typically, in these cases, prior to determining how to equitably distribute the asset, the courts give the spouse who made the separate property contribution a credit for the separate property payment. Id. With regard to "distributing any appreciation in value, courts may consider any of the factors listed in Domestic Relations Law §236(B)(5)(d) or any other relevant considerations (citations omitted), including the respective contributions of each spouse and the effect of market forces." Id. at 168.
In Fields, during the parties' marriage, the husband purchased a one-half interest in a townhouse with his mother, with the intent that the parties would live there with their son, thus triggering the presumption that his interest in the property was marital. The fact that the husband used $30,000 of his separate property as a downpayment did not rebut the presumption, as the remaining $100,000 of the purchase price was paid through mortgages with funds that were commingled. The Second Department affirmed the trial court's award to the wife of 35% of the value of all of the marital assets including the husband's one half interest in the townhouse. In
making its award, the trial court "considered the spectrum and quantity of contributions made by each spouse to the management and maintenance of the townhouse and the extent to which market factors enhanced the value of the property." Id.
In Butler v. Butler, 171 AD2d 89 (2nd Dept. 1991), the Second Department found that notwithstanding that the downpayment on the marital residence (acquired during the marriage), was comprised of 86.2% of the wife's separate property and 13.8 % of the husband's separate property, it was appropriate that upon the sale of the marital residence, for each party to receive dollar for dollar credit equivalent to the amount of their original separate property contributions, with the remainder of the net proceeds to be distributed 75% to the wife and 25% to the husband. While the Court found that the wife should receive a larger portion of the net proceeds due to her larger separate property contribution, it did not agree with her that she should receive 86.2% of the net proceeds in accordance with her initial separate property contribution, nor did it agree with the husband that each party should receive 50% of the net proceeds after having credited each party with their initial contribution. The Court wrote that the husband's reasoning "runs contrary to the widely recognized rule that marital property need not always be distributed equally (citations omitted)," and the wife's reasoning "runs contrary to the rule that the appreciation in separate property during the course of a marriage can itself be considered marital property to the extent that it is attributable to the efforts of the other spouse." Id. at 92- 93. In making its award, the Court considered the wife's larger contribution to the downpayment and other financial contributions, her contributions as homemaker and caregiver for the child and the husband's contributions toward the improvement of the home, and noted that "the ultimate result must be viewed as equitable in light of all of the factors which the Legislature has defined as material (citation omitted) including any ***factor which the court shall expressly find to be just
and proper' (Domestic Relations Law §236[B][5][d][13])." Id. at 93.
With regard to separate property, "[a]ppreciation in the value of separate property is considered separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse' (citations omitted)." Bernholc v. Bornstein, 72 AD3d 625, 628 (2nd Dept. 2010). "When the nontitled spouse makes direct financial contributions to the property and/or direct nonfinancial contributions to the property such as by personally maintaining, making improvements to, or renovating a marital residence,' or the appreciation is the result of both parties' efforts, appreciation due to those efforts constitutes marital property subject to equitable distribution (citations omitted)." Id.
Also, "an increase in value of separate property of one spouse during the marriage, which is due in part to the indirect contributions or efforts of the other spouse as homemaker and parent, should be considered marital property (citation omitted)." Feldman v. Feldman, 194 AD2d 207, 217 (2nd Dept. 1993). "Whether the assistance of a nontitled spouse can be said to have contributed in part to the appreciation of an asset depends, however, primarily upon the nature of the asset and whether its appreciation was due in some measure to the time and efforts of the titled spouse' (citations omitted)." Id. "Where such appreciation is not due, in any part, to the efforts of the titled spouse but to the efforts of others or to unrelated factors including inflation or other market forces...the appreciation remains separate property, and the nontitled spouse has no claim to a share of the appreciation' (citation omitted)." Id.
Even when a party is unable to establish appreciation in value of the separate property of their spouse, there are circumstances when he or she may be entitled to a credit. When marital funds are used to reduce the indebtedness and pay for improvements on property that is the separate property of one spouse, the other spouse is entitled to a credit for his or her equitable share of marital funds that were used to reduce the indebtedness and pay for improvements. See, Markopoulos v. Markopoulos, 274 AD2d 457 (2nd Dept. 2000); Davidman v. Davidman, 97 AD3d 627 (2nd Dept. 2012); Linda D. v. Theo C., 96 AD3d 432 (1st Dept. 2012) (defendant received credit for 1/4 of the renovation costs for marital apartment that was plaintiff's separate property, notwithstanding that appraiser did not find renovations had any effect on the value of the apartment). "The reduction of indebtedness on separate property is not considered appreciation in the value of the separate property; rather, the credit is to remedy the inequity created by the expenditure of marital funds to pay off separate liabilities." Bernholc, 72 AD3d at 628.
The equitable distribution awards that are made to the nontitled spouse in connection with the titled spouse's separate property interest vary based on the facts of each case. In Johnson v. Chapin, 12 NY3d 461 (2009) the Court of Appeals found the Appellate Division did not abuse its discretion in reducing the wife's award in the appreciation of the husband's separate property from 50% to 25%, as the husband's income was the sole source of the funds expended on the property, and his involvement in the renovations were far more extensive than that of the wife. In Bernholc, 72 AD3d 625, the marital residence was the plaintiff's separate property. The Court found that both parties contributed to the appreciation of $35,000 resulting from the renovation of the residence; defendant had performed some of the work, and contributed to paying off the home equity loans used for the renovations. The court found that marital funds were used to pay $50,474.90 of the principal amount of the original mortgage during the marriage. Based on [*11]these facts, the Court determined that defendant was entitled to 40% of the sum of $85,474.90 ($35,000 plus $50,474.90) as her equitable share. In Markopoulos, 274 AD2d 457, the Court found the plaintiff was entitled to one half of the marital funds used to reduce the indebtedness and pay for improvements on defendant's separate property. In Jones v. Jones, 92 AD3d 845 (2nd Dept. 2012), the Second Department found the trial court's award of $37,500 to the plaintiff for her contribution to the appreciation of the marital residence which was defendant's separate property, to be insufficient and awarded her $290,000, which was 40% of the appreciation in value of the residence from the date of marriage to the date of trial. The Second Department considered plaintiff's contributions to the separate property, including her work on the horse farm. The Third Department, in Biagiotti v. Biagiotti, 97 AD3d 941 (3rd Dept. 2012), affirmed the Supreme Court's determination that plaintiff, the nontitled spouse, should receive 15% of the appreciation of the marital residence, which was defendant's separate property. The residence had increased in value $105,000 during the marriage, and the parties had spent $185,000 to improve the home. The renovations were paid for with marital funds and defendant was more involved with the renovations than was plaintiff. However, the renovations only accounted for $11,000 of the increase in value; most of the appreciation was passive based on market forces.As there is a presumption that property acquired during the marriage is marital, the spouse who claims a separate property interest in separate funds commingled with marital funds, has the burden to trace the source of funds with sufficient particularity to rebut the presumption that they are marital property. Massimi v. Massimi, 35 AD3d 400, 402 (2nd Dept. 2006); See, DeGroat v. DeGroat, 84 AD3d 1012 (2nd Dept. 2011) (entire proceeds in investment account found to be marital when separate and marital stock options were redeemed during marriage, the proceeds were commingled in a joint account, and defendant failed to demonstrate with sufficient particularity' that any funds in the investment account were directly traceable to stock options that were originally his separate property); Noble v. Noble, 78 AD3d 1386 (3rd Dept. 2010) (wife rebutted presumption that money gifted to her by her mother for the downpayment on the marital home and placed in joint account was marital property, as she proved the deposits were made as a matter of convenience, without intention of creating a beneficial interest; funds were only in account for 6 weeks in anticipation of the closing and this was the only account the wife readily had access to.).
The Marital Residence
In the case before the Court, defendant has shown by clear and convincing evidence that she contributed significant separate property towards the purchase of the marital residence. In addition to the monies already discussed, the parties spent a fortune ($238,433) in repairs and maintenance to the Westchester County main house and $51,930 in repairs, maintenance and taxes for the cottage. They also had multiple architectural drawings prepared. The monies that came from defendant and her mother and were transferred into a joint account with plaintiff are determined to be for convenience and did not convert into joint funds. Noble, 78 AD3d 1386. The fact that the property was placed into joint names does not deny defendant the right to the return of her separate assets. Wade v. Steinfeld, 15 AD3d 390 (2nd Dept. 2005); McGarrity v. McGarrity, 211 AD2d 669 (2nd Dept. 1995); Signorile v. Signorile, 102 AD3d 949 (2nd Dept. 2013); Noble, 78 AD3d 1386. However, the parties did use some joint funds, $87,000 from a joint account towards the purchase of the marital property. The Court cannot go back in time and [*12]determine that plaintiff's earnings were for support of the family and defendant's separate monies were the funds in the joint account that were used to purchase the marital property. See, Mahoney-Buntzman v. Buntzman, 12 NY3d 415 (2009). Unlike the $66,000 or the $535,000 of separate funds, the $87,000 from the joint account did not sit for a couple of days in a joint account for convenience only. The funds were amassed from a variety of sources, including plaintiff's earnings.
It is not possible to tease out of the foregoing scenario a precise number that each party is entitled to receive from this joint asset. Especially given the facts that the initial monies were eventually returned back to F. C., in part with a loan taken from the Guardian Life Insurance policy into which plaintiff contributed funds and which loan was repaid from the sale of defendant's vacant lot which was her separate property, as well as the fact that plaintiff contributed to repairs and renovations of the property, and that monies to purchase the marital residence came from a joint account into which plaintiff had deposited monies from his earnings. Rather, it is the Court's determination that plaintiff is entitled to 20% and defendant 80% of the proceeds of the marital residence upon sale after payment of expenses of sale, (including broker's commission, attorney's fee and usual and customary closing costs), and existing liens for real estate taxes and other directions by the Court as set forth below. This determination is based upon defendant's significant contribution from her separate property but recognizing the parties' joint ownership since 2002, joint contributions from joint accounts, plaintiff's sweat equity, the return of defendant's "separate assets" to defendant's mother that were agreed were not "gifts" from defendant's mother as a result of a law suit that claimed they were converted funds, the borrowing against an asset that was funded from monies that included gifts given specifically to plaintiff, and the payment of joint taxes on income received from rental of the cottage located on the marital property and used to pay real estate taxes. (However, this is not based on payment of taxes on the capital gains resulting from the sale of defendant's separate property, on the parties' joint tax returns, as defendant proved these taxes were paid from her separate assets.) While it is true that plaintiff has failed to pay real estate taxes while living at the marital residence with the children, defendant has paid no child support during this period. There was significant testimony that this father and three children are residing together in the two (2) bedroom cottage located on the marital property. The marital residence is currently uninhabitable because the parties began to deconstruct the house to make alterations, the pipes burst between 2010 - 2013, and it will take an unknown amount of money to render it habitable. In another move that was not the best decision, the parties relocated out of the main house, into the cottage in 2013. Previously, the cottage had been rented in an amount that covered the real estate tax expense. By moving into the cottage, they lost this income. This may also have caused them to lose their variance that allowed the cottage rental. The cottage is also problematic. The roof requires repairs. It is so small that plaintiff is sleeping in the living room. The best course of action is for sale of the property. The property shall be listed with Multiple Listing Service within 30 days from the entry of the Judgment of Divorce at $590,000 or any price the parties can agree upon in writing. If the parties cannot agree on a broker, each shall select a broker, both of whom will select a third broker, who will list the residence for sale. The parties shall accept any offer within 10% of the asking price. If the residence does not sell within 90 days, the sales price shall be reduced by 5%. Thereafter, the sales price shall be reduced by 5% every 60 days, for a total of 3 price reductions [*13]within 210 days. If the parties cannot agree on any further reductions in the listing price, then either party may apply to a court of competent jurisdiction for a determination of this issue. Notwithstanding the foregoing, if the parties agree, the wife may buy out the husband's interest after deducting the amount provided for in this decision and crediting him with 20% of the net proceeds after payment as set forth.
Distribution of the Guardian Life Insurance Proceeds
Plaintiff argued that he was also a beneficiary of the Guardian Life Insurance policy that insured the life of F. C. based on the fact that he is listed as a party on the policy. This Court does not find this argument to be persuasive. He is a secondary beneficiary and all proceeds were paid out to defendant, the primary beneficiary.
"Financial contributions by a spouse during a marriage are treated as marital property, unless the party making the contributions can trace the source of the contributions to separate property (citations omitted.). Bernholc, 72 AD3d at 629. In this case, plaintiff contributed his separate property directly to assist in paying for the Guardian Life Insurance.
Based on the foregoing, the Court determines that plaintiff shall receive the sum of $70,500 as the sum of his separate property by virtue of gifts to him from his mother-in-law that he used to help fund the policy. Defendant received the bulk of the $834,252 payment from the payment on the policy. A distribution to plaintiff, returning this, the monies he was gifted, is appropriate. Defendant is directed to pay $70,500 to plaintiff within 30 days of the entry of the Judgment of Divorce for his share of the Guardian Life Insurance proceeds as she has had complete control over the funds paid out to defendant.
Bank Accounts
Each party shall retain the funds, in bank accounts in their individual names.
Stocks
The wife shall retain all stock and investment accounts in her individual name.
The Boat and Trailer
The parties purchased a 1996 Proline 201 Stalker boat and trailer during the marriage. It is in plaintiff's name. Defendant claims that the boat was purchased the same year she received $25,975 as a result of the Chamber of Chills accident. She points out that the parties' joint tax return for this year showed $51,524 in income for the year. The defendant claimed it was her separate property that funded the purchase of the boat. She failed to trace this funding directly to the purchase (Tr. Ex. 19) by clear and convincing evidence. The boat and trailer shall be sold and the proceeds divided equally between the parties.
S. I., Inc.
This business is jointly owned. However, in the past several years, defendant has not been working in the business much, if at all. There is no evidence of its value. No evidence was presented, other than vague references to various equipment owned by the business, without values. It appears to be a one person operation by plaintiff that he plans to close. The Court awards plaintiff the business along with its debt, which is the credit cards associated with the business.
Automobiles
Plaintiff drives a 2005 Suburban with approximately 160,000 miles. His Net Worth Statement claims it is worth $8,177. He recently spent $600 to get the vehicle running. He shall [*14]pay defendant ½ the value, less $600, $3,788 or he may sell it and give defendant ½ the proceeds, less $600 deducted from the gross sales price. The parties owned a 1999 Ford Expedition during the marriage, titled in plaintiff's name. It does not run and is sitting in the driveway. He sold a 2002 Mountaineer for about $300. It was marital property. Plaintiff shall pay defendant $150 as her share of this asset. These cars shall be awarded to plaintiff. Defendant testified the vehicle she used was no longer working and she purchased a 2011 Yukon Denali for $39,335. She shall be entitled to retain this vehicle as it was purchased from the funds that were the proceeds from the Guardian Life Insurance policy.
Pension and Annuity Benefits
Plaintiff has the following retirement assets as of date of commencement:
Plaintiff's MPI Pension - Value unknown; Plaintiff's CWA Annuity 401k (from which he took a $6,500 loan)- $200; Plaintiff's Dreyfus Roth IRA (from which he took a $13,000 loan) - $5,400 (after loan); Plaintiff's MPI Annuity - $17,221.
Defendant has the following retirement assets as of date of commencement:
RS Investments IRA Account xx $42,673; RS Investments Mutual Fund Account xx $12,330;
Dreyfus Roth IRA Account xx $21,880; Guardian Roth IRA Account xx $2,349.
The marital share (from date of marriage to date of commencement) of plaintiff's MPI Pension shall be equally divided between the parties and shall be effectuated via a qualified Domestic Relations Order or Domestic Relations Order, if applicable.
The martial portion (from the date of marriage to date of commencement) of the plaintiff's CWA Annuity, Dreyfus Roth IRA and MPI Annuity shall be equally divided with defendant entitled to her share, pre-tax, upon which she will be responsible for any taxes due upon withdrawal. Plaintiff shall be responsible for any loans he took out against these assets. The parties shall equally share the cost of any qualified Domestic Relations Order or Domestic Relations Order required to effectuate that.
The parties stipulated that plaintiff is waiving any interest he may have in defendant's retirement funds set forth above and they shall remain defendant's.
Personal Property
The plaintiff shall be entitled to take the children's bedroom furniture and furnishings as well as his personal belongings and effects. Although the defendant claimed the children's furnishings were purchased by her from her separate property, they were purchased for the children who shall be entitled to take their furnishings with them. She resides in a hotel. The defendant shall be entitled to receive her personal belongings and effects as well as the patio furniture that she purchased after commencement of the action for $14,000. Each party may also take any furniture and personalty that they may have brought into the marriage from prior to the marriage. All other furniture, furnishings and personal property shall be equally divided. If the parties cannot agree, the property shall be sold and the proceeds equally divided.
Life Insurance
Plaintiff's Life Insurance
Plaintiff's Guardian Whole Life Insurance policy (from which he took a $13,000 loan). Defendant shall be entitled to one-half the value as of date of commencement. (½ of $9,672)
Defendant's Life Insurance
The defendant has Guardian Life Insurance policies totaling face value of $100,000. The cash value of these policies are in the amounts of $48,631, $32,203 and $8,803, totaling $89,636.
These policies were purchased prior to marriage and are separate property as shown by clear and convincing evidence. There was insufficient proof of a marital component. These are awarded to defendant.
Debt
Plaintiff2013Date of Trial
Pension and Annuity debt listed above$19,500
Life Insurance Policy13000
Income Taxes4600
Chase Sapphire VISA$ 8,565
Advantage Citi Master Card Acct. No.—56117230
Capital One Master Card Acct. #—1500434
Chase Slate Acct. #—55964340
Citicard Simplicity30716867
Kohl's Acct. #—-0-213
J. C. Penney393
Lowe's11901306
Home Depot17391853
Defendant2013Date of Trial
Liability-0- Listed on NWS
Care Card DentalUnknown
Citigold AAdvantage Hilton #—$16,556$12,075
Chase Sapphire #—108599228
Joint
Real Estate Taxes$42,749 as of 12/5/2015
(Tr. Ex. 47)
Citicard VISA4915$ 6,000
Chase VISA6000
The debts shall be paid as follows: The husband shall be responsible for payment of the Chase Slate account used for business with $4,340 balance due, AAdvantage Citi Master Card used for S. I. with $7,230 balance, Capital One Master Card used for business with $434 balance because he was awarded the business, S. I. with its assets, so he is also responsible for its liabilities; he shall also be responsible for payment of the Citicard Simplicity balance of $6,867, which was for his and the children's personal use and Kohl's with a balance of $213 because it was for expenses for plaintiff and the children and defendant will be paying child support; he shall also be responsible for his pension and annuity debt and his debt on his life insurance policy. The wife shall be responsible for payment of Citigold AAdvantage Hilton account #— as the card is in her name, she has been using the card and has benefitted from the points, using them for hotel stays; the card was at -0- on March 25, 2013. The Chase Sapphire VISA debt in [*15]joint names with a balance of approximately $9,228 as well as the Home Depot and Lowes cards with balances of $1,853 and $1,300 respectively, and real estate taxes shall be paid from the proceeds of the sale of the marital residence, prior to distribution of the proceeds to the parties because these were joint debts and takes into account the equities including plaintiff's income and defendant's assets.
Any other debts not specifically allocated herein shall be the responsibility of the party in whose name the debt is held, and if jointly held, shall be paid from the proceeds of the sale of the marital residence, prior to distribution of the proceeds to the parties.
Support
Plaintiff is a camera operator mostly working on a major television show. He has union provided health insurance. In order to qualify, he must work at least 400 hours every six (6) months. The major television show typically provides him these hours. He generally works 80 shows for 10 hours a day, usually August through May on Mondays and Fridays. Plaintiff is the custodial parent. He agreed to modify a prior agreement to enable defendant to have access with the children on Tuesdays and Thursdays after school until 8:30 p.m. and alternating weekends from Friday after school to Sundays at 6:00 p.m. and designated holidays. (Tr. Ex. 33.) Plaintiff testified that although he had consistently offered additional time to defendant, she did not often avail herself of the time. In fact, she usually did not respond to his offers. Due to his work schedule, which often goes late into the night, he must provide child care for the children at his sole cost and expense. Defendant has contributed nothing towards his child care costs of approximately $1,200 monthly which Mr. S. pays by check at the rate of $15.00 per hour. (Although defendant has provided some extras for the children.) Many times, plaintiff has had to refuse work because it came at the last minute and he was unable to get child care. This has caused his income to decrease while his childcare expenses have gone up. At some point previously, the defendant was seeing the children more than her allotted time. However, during the months leading up to the trial, she had stopped exercising any time other than the time specified in the parties' agreement.
Plaintiff has been living pay check to pay check, borrowing money from retirement funds to help pay living expenses and legal fees and unable to pay the real estate taxes of about $18,000 per year. The property taxes have not been paid for two years, since July, 2013 and the entire amount due must be paid on or before July 1, 2016.
Plaintiff made $101,722 in 2014. (See Tr Ex. 27 and 28) The mother is not working but as of date of commencement of the divorce, defendant had over $700,000 in assets from payout of the Guardian Life Insurance policy. Defendant will receive 80% of the proceeds from the sale of the marital residence. She had over $90,000 in cash value of life insurance in her name. She also has retirement assets of approximately $80,000 as well as a vehicle valued at $39,335.
MAINTENANCE
" The amount and duration of maintenance is a matter committed to the sound discretion of the trial court, and every case must be determined on its own unique facts'. The overriding purpose of a maintenance award is to give the spouse economic independence, and it should be awarded for a duration that would provide the recipient with enough time to become self-supporting.'" Kilkenny v. Kilkenny, 54 AD3d 816, 820 (2nd Dept. 2008) "In fixing the amount of [*16]a maintenance award, a court must consider the financial circumstances of both parties, including their reasonable needs and means, the payor spouse's present and anticipated income, the benefitting spouse's present and future earning capacity, and both parties' standard of living (citation omitted)." Morrissey v. Morrissey, 259 AD2d 472, 473 (2nd Dept. 1999). "The main purpose of a maintenance award is to give the nonmonied spouse economic independence (citation omitted)." Giokas v. Giokas, 73 AD3d 688, 689 (2nd Dept. 2010).
In determining the appropriate amount and duration of maintenance, the Court is required to consider the following factors as enumerated in Domestic Relations Law §236(B)(6):
1. the income and property of the respective parties including marital property distributed pursuant to subdivision five of DRL §236; 2. the length of the marriage;3. the age and health of both parties;4. the present and future earning capacity of both parties;5. the need of one party to incur education or training expenses; 6. the existence and duration of a pre-marital joint household or a pre-divorce separate household;7. acts by one party against another that have inhibited or continue to inhibit a party's earning capacity or ability to obtain meaningful employment. Such acts include but are not limited to acts of domestic violence as provided in section four hundred fifty-nine-a of the social services law;8. the ability of the party seeking maintenance to become self-supporting and, if applicable, the period of time and training necessary therefor;9.reduced or lost lifetime earning capacity of the party seeking maintenance as a result of having foregone or delayed education, training, employment, or career opportunities during the marriage;10. the presence of children of the marriage in the respective homes of the parties;11. the care of the children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws that has inhibited or continues to inhibit a party's earning capacity;12. the inability of one party to obtain meaningful employment due to age or absence from the workforce;13. the need to pay for exceptional additional expenses for the child/children, including but not limited to, schooling, day care and medical treatment;14. the tax consequences to each party;15. the equitable distribution of marital property;16. contributions and services of the party seeking maintenance as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party;17. the wasteful dissipation of marital property by either spouse;18. the transfer or encumbrance made in contemplation of a matrimonial action without fair consideration;19. the loss of health insurance benefits upon dissolution of the marriage, and the availability and cost of medical insurance for the parties; and20. any other factor which the Court shall expressly find to be just and proper.In addition to these enumerated factors, the parties' pre-divorce standard of living is an essential component of evaluating and properly determining the duration and amount of the maintenance award to be accorded a spouse. Hartog v. Hartog, 85 NY2d 36, 50-51 (1995).
This is a 15 year marriage. Plaintiff is 51 years old and defendant is 49 years old. The plaintiff is in good health. Defendant claims to be in poor health. The plaintiff will most likely continue to earn an amount similar to his current earnings. He has responsibility for the three (3) children that will most likely continue to inhibit his earning capacity. His earnings are just about $101,722 (2014). (They had been $120,000 in 2013.) Defendant has no income and has not sought employment. She claims she is disabled but produced no expert testimony in support of this nor any certified medical records that would support this position. However, she presented a compelling case for being unable to engage in many types of employment, her lack of medical evidence, notwithstanding. This Court found her testimony in this regard credible. What she failed to prove was that she could not engage in any employment. Her future earning capacity is, therefore, uncertain. There was no testimony that either party had the need for future training or education. The defendant has been residing outside the marital home since January, 2014, in a hotel suite. There were no acts of domestic violence alleged in this case or any other acts that would inhibit a party's earning capacity other than the allegations that defendant was less than helpful to plaintiff when asked to care for the children to enable him to work. Plaintiff believes defendant can work. Defendant testified to a litany of physical complaints that keep her from being able to work. She cannot stand for very long periods, cannot work at a computer for long periods and cannot engage in her prior production work, according to defendant. Plaintiff claims defendant was horseback riding not long ago and could work. However, similar to the custody issue, defendant has not given the Court an opportunity to examine her medical records, nor provided an expert on her behalf, subject to cross-examination. During the litigation, plaintiff served defendant with requests for documentation and/or authorizations to obtain defendant's medical records. Specifically, plaintiff requested on the first Discovery and Inspection Notice of December 18, 2013:
30. If the defendant claims inability to work, part time or full time, because of any health related issue, all documentation including but not limited to medical reports on social security or workers compensation findings regarding said health issues.
Defendant responded on September 12, 2014, "Response to Request No. 30 - " and on November 3, 2014, it was also left blank. On October 30, 2014 defendant submitted a response, referring to Exhibit 94, 96, 97, and 111 (which were not provided to the Court).
One day before the trial, plaintiff received defendant's witness list that included four (4) doctors. Plaintiff had also requested releases to be signed by defendant regarding her medical records. She never complied. (Tr. Tr. p 21 - 22) Defense counsel argued he was prepared to call them as fact witnesses only.
On December 16, defense counsel proposed to call Drs. Sorrell and Mennick. Plaintiff's counsel objected and sought preclusion. He placed on the record that he sought authorizations from defendant at the time of her deposition in early January, 2015. This was in addition to the D & I Notices.
In addition, defendant subpoened medical records pursuant to a Subpoena Duces Tecum [*17]from Dr. Albert Z. Szabo. However, plaintiff alleged and defendant did not rebut that this was the first time he was being given these records and that the defendant never provided medical authorizations. This appeared to be trial by ambush. On December 17, 2015, this Court precluded defendant from producing evidence from doctors at trial as she had failed to comply with requested discovery and inspection notices and requests for authorizations sent initially on December 18, 2013; again on January 23, 2015 and a follow-up reminder letter on June 19, 2015. (Tr. Ex. 42, 43 and 44) Defendant had no reasonable excuse for her failure to comply. As a result, the Court granted plaintiff's motion to preclude. (Tr. Tr. p 238 - 273) The burden was upon her to show she was incapable of performing any work. She failed to meet this burden.
Defendant will receive approximately $400,000 from the sale of the marital property. She had over $700,000 in assets at the commencement of this action. She claims she has only $100,000 - $125,000 remaining. Her wasteful dissipation of this asset does not allow her to claim a lack of assets. She should have been more judicious in her expenditures. According to her Net Worth Statement signed on April 17, 2014, her monthly expenditures included $1,615 for vacation, $634 for dining out, $816 for entertainment for the children and $3,833 for hotel expenses. She attached a chart of yearly expenses that included $9,793 entertainment expenses for the children, $3,731 for groceries on top of $7,611 for dining out, $19,389 for vacations, $5,654 for automobile rental and $46,003 for hotel. Defendant admitted to trips to Puerto Rico, the Bahamas, California four (4) times, Maine, Rhode Island, Pennsylvania and Nashville, Tennessee over the past four (4) years. This does not include $69,901 for a lawyer as of April, 2014. (Tr. Ex. 6X(A)) With these expenditures, how does one merit receiving maintenance from a man who makes little over $100,000 yearly and is supporting three children in Westchester? The answer is, she does not. While it is true that she was home from the time the first child was born, she has resources available to her that in balance, the plaintiff does not have.
While normally a party would not be required to use their assets alone to support themselves, in this case, if defendant is disabled, she should have applied for disability income to assist her. Otherwise, there is insufficient evidence of defendant's disability and the Court finds she is capable of working. In addition, the Court has imputed income to defendant of $25,000 yearly as more fully set forth below.
There was no testimony that there were exceptional additional expenses for the children although K. only has one kidney.
Defendant will be required to pay approximately $1,500 monthly for COBRA coverage.
Based on the foregoing, the Court declines to award defendant maintenance.
Child Support
This Court, pursuant to Domestic Relations Law §240(1-b), has considered the calculations delineated in Domestic Relations Law §240(1-b)(c) as well as the factors set forth in Domestic Relations Law §240(1-b)(f).
The paragraph (f) factors include:1) The financial resources of the custodial and non-custodial parent, and those of the child; (2) The physical and emotional health of the child and his/her special needs and aptitudes; (3) The standard of living the child would have enjoyed had the marriage or household not been dissolved;
(4) The tax consequences to the parties; [*18](5) The non-monetary contributions that the parents will make toward the care and well-being of the child;(6) The educational needs of either parent;
(7) A determination that the gross income of one parent is substantially less than the other parent's gross income; (8) The needs of the children of the non-custodial parent for whom the non-custodial parent is providing support who are not subject to the instant action and whose support has not been deducted from income pursuant to subclause (D) of clause (vii) of subparagraph five of paragraph (b) of this subdivision, and the financial resources of any person obligated to support such children, provided, however, that this factor may apply only if the resources available to support such children are less than the resources available to support the children who are subject to the instant action; (9) Provided that the child is not on public assistance (i) extraordinary expenses incurred by the non-custodial parent in exercising visitation, or (ii) expenses incurred by the non-custodial parent in extended visitation provided that the custodial parent's expenses are substantially reduced as a result thereof; and (10) Any other factors the court determines are relevant.The Court has considered these factors and discussed many of these issues in the Maintenance section above, particularly the financial resources of each party. There was no testimony that any of the children has special needs, despite the oldest child having only one (1) kidney. If the marriage had not dissolved, the children would have enjoyed a lifestyle that would have included a home on several acres in northern Westchester, many extracurricular activities and vacations to resorts. Child support is nontaxable to the payee and non-deductable to the payor. Defendant has testified that she volunteers in assisting with the girls' activities and transporting them to and from their various extracurricular events. Neither parent has testified to the need for additional education. The defendant has no earnings but the Court is imputing income to her. It is significantly less than plaintiff's income. Factor (8) does not apply. There are no extraordinary access expenses. Based upon the facts and circumstances of this matter, including the lifestyle and standard of living of the parties and the children established during the marriage, the standard of living the children would have enjoyed had the marriage not ended, the plaintiff's modest income and the parties' modest resources, the Court finds that applying the guidelines to income up to $143,000, is appropriate and would result in a just and appropriate award for child support.
Plaintiff's income for support purposes is in the sum of $93,376(gross income less FICA).Defendant's income for support purposes is in the sum of $25,000. The Court reached this amount by using a reasonable sum of $450,000 in assets credited to defendant. The Court is granting her a credit of $100,000 yearly plus some modest amount for legal fees. She should have at least $450,000 remaining from the $700,000 she started with at the time of commencement. If she has less, it is due to her own actions of wasteful dissipation. She was actively involved in managing her and her mother's securities. She is an educated woman who is financially savy. Instead of recognizing her responsibility to her children, she wastefully dissipated monies on an expensive hotel suite ($46,003), car rental ($5,664), vacations ($19,389), [*19]dining out ($7,611), books ($1,049), miscellaneous ($7,629), and kids entertainment ($9,793). (Tr. Ex. 6X(A)) Based on these wasteful extravagances, the Court is imputing $25,000 yearly income to defendant. The youngest child is 9 years old. She will require support for another 12 years. The defendant could have paid actual support of $25,000 yearly for 12 years and still have $100,000 left. This Court is not requiring this. Only that she have income imputed to her in the amount of $25,000 yearly. There is also some evidence that defendant earned $25,000 in interest at one time. The combined parental income is $118,376. The defendant's pro-rata share of the combined parental income is 21% and the plaintiff's pro-rata share of the combined parental income is 79%. Applying the CSSA percentage of 29% for three children on combined income of $118,376, the joint child support obligation is $34,329 per year. The non-custodial parent's pro- rata share is $7,209 per year or $601 monthly, and the custodial parent's pro-rata share (79%) of the basic child obligation is $118,376 X 29% X 79% or $27,120 per year.
Accordingly, the plaintiff is awarded and the defendant is directed to pay the sum of $601 per month as and for child support, directly to plaintiff, commencing on April 1, 2016, and on the first of each month thereafter retroactive to date of commencement. Upon emancipation of each child, child support shall be recalculated. The defendant shall receive a dollar for dollar credit against the retroactive child support due for defendant's payment of real estate tax liens to avoid giving plaintiff a double shelter allowance. See, Bandler v. Bandler, 58 AD3d 774 (2nd Dept 2009). The retroactive child support owed by defendant to plaintiff from August 1, 2013 (date of commencement was July 30, 2013) through March 31, 2016 is in the sum of $19,232. However, defendant shall be entitled to a credit in the amount of one half of the real estate tax liens paid at closing of sale of the marital residence, or at transfer of title of the marital residence, against the retroactive support that is due. The retroactive support less the credit for the real estate tax shall be paid from defendant's share at the time of the closing or the transfer of title of the marital residence.
Health Insurance
Plaintiff shall maintain in effect health care insurance for the benefit of the children until their emancipation. Defendant shall pay her pro-rata share of the health insurance premium attributable to the children.
Add-Ons
Plaintiff is directed to pay 79% and defendant 21% of all the children's future unreimbursed health care expenses for which health insurance is available, but payment is excluded by the insurer as a co-payment or deductible. Plaintiff shall use in network providers unless otherwise agreed to in writing by the parties, or in the case of an emergency. Defendant shall pay 21% of other statutory add-ons including child care retroactive to date of commencement and plaintiff shall pay 79%.
Counsel Fees
Plaintiff retained Mr. Lewis as counsel on May 17, 2013. Between May 17, 2013 and January 5, 2016, the final day of the 12 day trial of this matter, plaintiff incurred counsel fees in the sum of $79,752, of which $32,806 has been paid and $46,945 is due and owing. Fees were billed at a reduced rate of $300 per hour.
Guttridge & Cambareri, P.C were defendant's third counsel and were retained on April 17, 2014. As of October 12, 2016 defendant had paid counsel $100,500 and owed $12,006. [*20]Defendant's counsel also asserts that these fees do not include the fees for more than 50 hours of time, that were incurred in connection with the 12 day trial spanning October 16, 2015 to January 5, 2016.
Also submitted on consent were invoices in connection with counsel fees in the amount of $31,946 incurred by defendant during the time period from July 31, 2014 through September 16, 2015 for services rendered by John A. Goodman, Esq. The engagement letter from Mr. Goodman dated August 2, 2014 provides for Mr. Goodman to assist defendant with legal mediation consulting and equitable law advice in connection with her marital and custody dispute. The Court notes that no affidavit from Mr. Goodman was provided to the Court.
Defendant testified that she incurred fees to Patricia Bisesto of $32,000. She incurred fees of $31,946 to Mr. Goodman. She incurred fees to Mr. Walker of $16,073. (Tr. Ex. 8) She incurred fees of $30,000 to Patrick Butler, an accountant to assist with the financial issues. This is a total of over $220,000 in legal expenses.
The court may, in its discretion, award reasonable counsel fees, as justice requires, having regard for the circumstances of the case and of the respective parties. DRL § 237(a); see, DeCabrera v. Cabrera-Rosette, 70 NY2d 879 (1987); Morrissey v. Morrissey, 259 AD2d 472 (2nd Dept. 1999).In exercising its discretionary power to award counsel fees, a court should review the financial circumstances of both parties together with all the circumstances of the case. DeCabrera, 70 NY2d 879.
The Court finds that both counsel's fees are reasonable for the services rendered by each of them. However, based on the parties' financial circumstances, the Court declines to make an award of counsel fees to either party. While plaintiff is earning an income, he is only earning approximately $100,000 and he has been and will continue to provide the majority of support for the parties' 3 children. Plaintiff also received a smaller equitable distribution award than defendant based on the consideration of defendant's separate property contributions. Although defendant has not worked outside the home during the parties' marriage, she did have significant separate property with an approximate value of over $700,000 from the Guardian Life Insurance in addition to her retirement and her own life insurance assets at the date of commencement. That defendant chose to spend down her separate property, as more fully explained hereinabove, is not reason to burden plaintiff with an obligation of counsel fees that he cannot afford to pay. However, inasmuch as defendant is not earning income and has not worked during the marriage she is not in a position to pay counsel fees to plaintiff.
The apportionment of payment for the children's attorney shall remain as previously ordered.
The Children's Accounts
Plaintiff has requested that the Court rule upon defendant's role as Trustee of the children's accounts that were funded by her mother. There is a 529 account for L. in the amount of $116,598 and a 529 account for K. in the amount of $76,481. There is also a claim that defendant's mother left the bulk of her estate in trust for her grandchildren. Defendant is not the named Trustee. (Tr. Ex. 58.) Whether defendant becomes Trustee of these monies is not an issue before this Court. However, plaintiff, as sole custodian of the parties' three (3) children, shall have control over their 529 accounts. Defendant shall turn over control of all 529 accounts for the parties' three children to plaintiff within 30 days of entry of the Judgment of Divorce.
32Tax Returns and Waste
Plaintiff alleged that he was forced to file a married, filing separately tax return because defendant refused to file a joint return. As a result, he incurred a tax liability of $10,000 instead of a tax refund of $2,000. The parties had filed jointly for 15 years. Plaintiff entered into a payment plan with the IRS and still owes $4,600. He is claiming defendant owes him $6,000 due to her refusal to file jointly with him.
Plaintiff also claimed defendant spent money in a wasteful fashion, renting vehicles when she did not need to and then purchasing a Yukon Denali for over $39,000.
Plaintiff claims defendant has spent money excessively on vacations to California, Puerto Rico, Disney and Nashville, Tennessee.
He also claims defendant spent money in wasteful fashion by bringing on the last Order To Show Cause that she eventually withdrew.
If plaintiff were claiming that defendant spent marital funds wastefully, he may have had a claim for wasteful dissipation. However, defendant spent these funds from her separate assets. The Court notes that at this time, defendant has spent most of the life insurance policy proceeds. This is unfortunate and was foolish on her part and she has been held accountable when considering the issues of maintenance and child support.
Defendant failed to defeat plaintiff's claim that her refusal to file a joint income tax return with her was anything but wasteful. In accordance with the law, Levitt v. Levitt, 97 AD3d 543 (2nd Dept. 2012), defendant is given the opportunity to file an amended return with plaintiff on or before April 15, 2016 for the tax year 2014 and the parties shall share equally the return, giving plaintiff a credit for the sums he paid in excess of the approximately $2,000 expected return. However, if defendant fails and refuses to file an amended joint 2014 tax return with plaintiff, she shall pay plaintiff the sum of $6,000. (50% of the amount of the refund they would have received plus 50% of the tax liability plaintiff incurred by filing separately.)
Life Insurance
Each party shall maintain the life insurance as it existed at the time of commencement of the action with the children as irrevocable beneficiaries of said policies until each child emancipates.
Each shall provide proof of same upon request within 60 days of the Judgment of Divorce and annually thereafter, if requested in writing.
Dependency Exemption
Plaintiff shall be entitled to claim the dependency exemption for the three (3) children.
Conclusion
The Court has based its decision on a preponderance of the evidence except for those issues where clear and convincing evidence is required.
The Court has considered the additional contentions of the parties not specifically addressed herein and finds them to be without merit. Those matters, other than those stipulated to, not specifically addressed are denied in the Court's discretion.
Both parties are on notice pursuant to domestic Relations Law §255 "...that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party's health insurance plan, depending on the terms of the plan."
Plaintiff's counsel is directed to settle proposed Findings of Fact and Judgment of [*21]Divorce, in accordance with this Decision, and including the usual and customary language not specifically contained herein, within 30 days of the date of this decision.
The forgoing constitutes the Decision of this Court.
ENTER
Dated: March 31 , 2016
White Plains, New York
HON. LINDA CHRISTOPHER, J.S.C. Footnotes
Footnote 1:The children's full names were redacted by the Court and substituted with initials pursuant to 22 NYCRR §202.16(m).
Footnote 2:The Court heard several different dates for the accident. It seems to have occurred sometime between 1996 - 2000.
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