| Quarty v Quarty |
| 2012 NY Slip Op 05059 [96 AD3d 1274] |
| June 21, 2012 |
| Appellate Division, Third Department |
| Tanya J. Quarty, Appellant-Respondent, v Kenneth A. Quarty,Respondent-Appellant. |
[*1]
Stein, J. Cross appeals from an order of the Supreme Court (Burns, J.), entered March 30,2011 in Otsego County, ordering, among other things, equitable distribution of the parties'marital property, upon a decision of the court.
Plaintiff (hereinafter the wife) and defendant (hereinafter the husband) were married inSeptember 2000[FN1]and have a daughter (born in 2000). The wife also has a son (born in 1996) from a prior marriage.She has full custody of her son and does not receive support from the child's father. In 2009, theparties each commenced separate actions for divorce, which were subsequently consolidated. InMarch 2010, they entered into a stipulation in which they resolved, among other things, issues ofchild custody and visitation, as well as the division of certain personal property. After a nonjurytrial was held on the remaining issues including, as relevant here, equitable distribution andmaintenance, Supreme Court entered an order directing that the marital residence be sold and themarital debts be paid from the proceeds of said sale. [*2]Thecourt also awarded the husband spousal maintenance in the amount of $1,100 per month for 30months, a share of the wife's pension and a distributive award in the amount of$155,372—to be paid in 396 monthly installments—based on the wife's enhancedearnings as a nurse practitioner. A judgment of divorce was thereafter entered. The wife nowappeals and the husband cross-appeals.[FN2]
We begin with a review of Supreme Court's award of maintenance. "Maintenance is designedto provide temporary support while one spouse gains skills, education or experience necessary tobecome self-sufficient" (Burtchaell vBurtchaell, 42 AD3d 783, 785 [2007] [citation omitted]; see Roberto v Roberto, 90 AD3d1373, 1376 [2011]). The amount and duration of maintenance are generally within the trialcourt's discretion and we will not disturb the court's determination where, as here, the court hasconsidered the statutory factors and set forth its reasoning and such determination is supported bythe record (see Harrington vHarrington, 93 AD3d 1092, 1094 [2012]). Here, the wife contends that this Court shouldvacate the award of maintenance in its entirety because Supreme Court failed to sufficiently setforth the statutory factors it considered and failed to consider the parties' predivorce standard ofliving, and because the husband is capable of being self-supporting. Conversely, the husbandargues that the maintenance award should be nondurational because he is unable to beself-supporting due to his visual impairment.
At the time of their marriage, the husband was "legally blind" and he currently uses a guidedog, glasses and/or binoculars to assist him in certain tasks. At the time of the marriage, thehusband was performing various odd jobs such as snowplowing and mowing with a tractor, aswell as other types of property maintenance at a camp in exchange for free housing. When theparties first moved into the marital residence, the husband was responsible for maintenance ofthe exterior of the residence and assorted home improvement projects. The wife testified that thehusband was also capable of performing certain household chores during the marriage, but thatsome tasks were very time-consuming for him. Although the husband admitted that he previouslyhad employable skills, he claimed that his vision has since deteriorated,[FN3]rendering him unable to maintain employment.
The parties had been married for approximately 8½ years when the first action fordivorce was commenced. At the time of trial, the husband was 57 years old and the wife was 34years old. The husband was residing in a rented apartment and was receiving Social Security[*3]disability income of approximately $10,920 per year. Thewife was earning $92,000 per year[FN4] and was receiving Social Security benefits for the parties' daughter in the amount of $440 permonth.
In our view, while the record evidence pertaining to the husband's medical conditions andability to become self-supporting is sparse, the award of spousal maintenance to the husband of$1,100 per month for 30 months is adequately supported by the record and is not an improvidentexercise of Supreme Court's discretion. Supreme Court properly listed the statutory factors andspecified the ones it considered (see Domestic Relations Law § 236 [B] [6]).Moreover, the record reveals that the parties' predivorce standard of living was modest and themaintenance award is a reflection of that standard (see Burtchaell v Burtchaell, 42 AD3dat 785; Carman v Carman, 22 AD3d1004, 1008-1009 [2005]). In addition, according due deference to Supreme Court'scredibility assessments, we discern no basis to disturb that court's implicit finding that thehusband failed to convincingly demonstrate that he lacks the ability to work in some capacity.Accordingly, in our view, the determination to award durational maintenance was a properexercise of Supreme Court's discretion (see Burtchaell v Burtchaell, 42 AD3d at 785) andprovided a reasonable period of time to enable the husband to re-enter the work force andbecome self-sufficient.
We turn next to Supreme Court's determination that the husband was entitled to a distributiveaward of the wife's enhanced earnings resulting from the degrees and licenses she obtainedduring the marriage culminating in a nurse practitioner's license. Although the wife concedes thatsuch enhanced earnings constitute marital property, she contends that the husband is not entitledto a share of their value because he failed to demonstrate that he made a significant contributionto her acquisition thereof and, alternatively, that the court's valuation was in error. The husbandargues only that Supreme Court should have required that the distributive award be paid over ashorter period of time.
It is well established that "[a] nontitled spouse seeking a portion of the enhanced earningpotential attributable to a professional license or degree of a titled spouse is required to establishthat a substantial contribution was made to the acquisition of the degree or license" (Esposito-Shea v Shea, 94 AD3d1215, 1217 [2012] [internal quotation marks and citations omitted]). In determining whethera nontitled spouse's contributions were substantial, we consider, among other things, whether thatspouse altered his or her schedule and/or took on additional household duties that he or shewould not have otherwise performed, in order to enable the titled spouse to obtain the license ordegree (see id.; Carman v Carman, 22 AD3d at 1006-1007; Farrell vCleary-Farrell, 306 AD2d 597, 599-600 [2003]). Where the attainment of the license ordegree is more directly attributable to the efforts of the titled spouse, it is appropriate to limit thenontitled spouse's share of the enhanced earning capacity (see Esposito-Shea v Shea, 94AD3d at 1217; Evans v Evans, 55AD3d 1079, 1080-1081 [2008]; Farrell v Cleary-Farrell, 306 AD2d at 599).[*4]
Here, the wife testified that she obtained two Associate'sdegrees prior to the marriage, in connection with which she had outstanding loans in the amountof approximately $32,000 at the time of trial. She began pursuing her nursing degree in January2000 and obtained a Bachelor's degree and R.N. certification in 2003. Throughout her schooling,the wife worked at least part time and often full time. She also earned merit scholarships andincurred additional student loans to pay for tuition and household expenses. In 2004, the wifebegan a part-time graduate program, while continuing to work full time as a nurse. She beganattending graduate school full time in 2005, took the board exams in the fall of 2007 and, afterobtaining her license, began working full time as a nurse practitioner in 2008. The wife testifiedthat the husband did not assist her with her school work or clinicals. She further testified that thefamily's sources of income were generally derived from her employment and the Social Securitybenefits of the husband and their daughter. She alleged that she requested the husband to obtainemployment, which he denies.
According to the wife, she performed a myriad of household duties throughout her schooling.Among other things, because the husband was unable to drive, she did all the grocery shopping,transported both children to their activities and appointments and transported the husband's guidedog to veterinarian appointments. She acknowledged that, at various times, the husband wasresponsible for significant child-care responsibilities and household duties, including outdoorhome maintenance. In addition, the husband used his Social Security disability funds to pay themortgage on their home for some periods of time. The husband similarly testified that he caredfor the parties' daughter and the wife's son while the wife attended school, prepared the childrenfor school, assisted with their homework and prepared meals for them. He also took care of thechildren during the summer and on weekends, except when they were with their grandparents.
Based on the totality of the circumstances, we cannot say that Supreme Court's award to thehusband of 25% of the value of the wife's enhanced earning capacity was an abuse of itssubstantial discretion (see Esposito-Shea v Shea, 94 AD3d at 1217; Farrell vCleary-Farrell, 306 AD2d at 599-600). However, we find that Supreme Court erred in itsvaluation thereof. The experts who testified on each party's behalf differed significantly in theircalculations—with the husband's expert arriving at a value of $841,383 and the wife'sexpert opining the value to be $108,000. Thus, we must review the record, weigh the experts'testimony and reports and determine which valuation is properly supported by the evidencepresented (see Esposito-Shea v Shea, 94 AD3d at 1217; Cozza v Colangelo, 298AD2d 914, 915-916 [2002]).
Here, the husband's expert, William Blanchfield, premised his calculations on baselineearnings of $11,290 per year (the wife's actual earnings from part-time employment in 2002), a"topline" (post-license) income of $70,000 (as set forth in the wife's statement of networth)[FN5] and a work life expectancy of approximately 28 years (until the wife reached age 62).Blanchfield [*5]also applied a 4% discount rate, an additional33% discount rate for taxes and a 2% annual enhancement increase.
The wife's expert, T. Kevin Fahey, submitted a lengthy and detailed report. Fahey usedbaseline earnings of $46,000 in order to reflect the average income of an individual, like the wife,with a high school degree and two Associate's degrees working full time. Fahey—likeBlanchfield in his report—used $70,000 as the wife's topline income. In addition, heapplied a discount rate of 7% and an unspecified discount for taxes and assumed a work lifeexpectancy of 33 years (until the wife reached the age of 67). Fahey also factored in the wife'sprobability of survival and of being employed for each year up to the age of 67.
In valuing the wife's enhanced earnings, Supreme Court appears to have adopted all of theassumptions used by Fahey in his calculations, except the topline income figure, which the courtdetermined to be $92,000 based on the evidence of the wife's anticipated actual earnings in 2010.After deducting the balance of the wife's student loans (in an amount which Supreme Court didnot articulate), the court calculated one half of the total value of the wife's enhanced earnings tobe $376,744[FN6]and awarded the husband one half of that amount, less the total amount of the maintenanceaward, resulting in a net distributive award to the husband in the sum of $155,372, to be paid atthe rate of $392.35 per month for 396 months.
In our view, Supreme Court improperly valued the wife's license by using $92,000 as hertopline income. To begin with, neither expert used that amount in calculating the value of suchasset (compare Esposito-Shea v Shea, 94 AD3d at 1216-1217), nor was there any experttestimony that it would be appropriate to do so or, even if appropriate, specifically how it wouldaffect the present value of the wife's license. Moreover, enhanced earnings are generally valuedas of the date of commencement of a matrimonial action (see Bean v Bean, 53 AD3d 718, 720 [2008]; Farrell vCleary-Farrell, 306 AD2d at 598), which in this case was 2009. In 2009, the wife earnedapproximately $68,000. Even using the wife's base salary for 2010, the year in which the trialwas primarily conducted, the amount would have been $70,000, the amount used by both expertsin their reports.
Inasmuch as Supreme Court relied primarily on all of the other assumptions underlyingFahey's valuation including, among other things, the discount rate, the wife's baseline earningsand her work-life expectancy—all of which have ample support in the record—weconclude that the court should have valued the wife's enhanced earnings at $108,000. Ourindependent review of the record reveals that the total outstanding balance of the student loanincurred by the wife during the marriage was $45,165.52, which must be deducted from the totalvalue, leaving the amount of $62,834.48 subject to equitable distribution. Finding no basis tovary from Supreme Court's award to the husband of 25%, the distributive award shall be reducedto $15,708.62.[FN7][*6]Given this reduced award, we also find it appropriate tomodify the term of the wife's payments to the husband therefor. Accordingly, the distributiveaward shall be payable at the rate of $400 per month until the termination of the wife'smaintenance obligation to the husband and, thereafter, at the rate of $1,000 per month until paidin full.
We find no merit to the wife's contention that she is entitled to a credit for her payment of thecarrying costs of the marital residence—in which she has resided with her boyfriend andthe two children—since September 2010. Under the particular circumstances of this caseand giving due deference to Supreme Court's assessment of the evidence, we discern no abuse ofthe court's discretion and decline to disturb its determination (see Soles v Soles, 41 AD3d 904, 906 [2007]; Chambers vChambers, 259 AD2d 807, 808 [1999]). Based upon the husband's unrefuted testimony thatthe wife acquiesced in his retention of certain Social Security payments received for the benefitof the parties' daughter during the pendency of this action, we likewise find no error in SupremeCourt's refusal to credit the wife for such payments.
We do agree, however, that Supreme Court failed to properly determine each party'sproportionate share of the wife's pension. Although the court directed that the pension be "splitpursuant to the Majauskas formula," it did not provide any further guidance as toapportionment, as required (see Chambers v Chambers, 259 AD2d at 807). Thus, thismatter must be remitted to Supreme Court for a determination of each party's proportionate sharethereof (see id.; Church v Church, 169 AD2d 851, 852 [1991]; Parks vParks, 159 AD2d 841, 842 [1990]). Supreme Court also failed to address the wife's requestin her complaint for an award of child support. Accordingly, we must also remit this matter to thecourt for a determination of the parties' respective obligations, if any, therefor.
We have examined the parties' remaining contentions and find them to be without merit.
Spain, J.P., Kavanagh, McCarthy and Egan Jr., JJ., concur. Ordered that the order ismodified, on the law and the facts, without costs, by reducing Supreme Court's distributive awardto defendant to $15,708.62, payable at the rate of $400 per month until the termination ofplaintiff's maintenance obligation and, thereafter, at the rate of $1,000 per month until paid infull; matter remitted to the Supreme Court for further proceedings not inconsistent with thisCourt's decision; and, as so modified, affirmed.
Footnote 1: Although the husband'scomplaint indicates that the marriage was in June 2000, Supreme Court has apparently adoptedthe date set forth in the wife's complaint.
Footnote 2: Although both parties haveappealed only from the decision and order, we exercise "our discretion to treat such a prematurenotice of appeal as valid" (Alessi v Alessi, 289 AD2d 782, 782-783 [2001]; seeHunter v Hunter, 206 AD2d 700, 701 n [1994]).
Footnote 3: The husband testified that, inSeptember 2009, a "piece of calcium broke off from the aorta and went up into the back of theeye," blocking blood flow to his eyes. He further testified that he has bulging discs in his backand an unidentified problem with the arches of his feet. He offered no medical evidence tosupport these contentions, nor did he testify regarding what efforts he made, if any, to obtainemployment.
Footnote 4: The wife testified that her basesalary at the time of trial was $70,000 per year and that she voluntarily worked additional"on-call" hours, which would increase her annual income to approximately $92,000. The wifefurther testified that the amount of on-call hours fluctuated according to her employer's needs andher availability.
Footnote 5: Although Blanchfield initiallyutilized this amount in his report and trial testimony, he later testified in rebuttal that a nursepractitioner working in central New York can earn $88,000 per year. However, as pointed out bythe wife's expert on rebuttal, Blanchfield provided no new valuation using this amount of incomeas the topline number.
Footnote 6: Supreme Court did nototherwise specify how it ultimately arrived at that particular value.
Footnote 7: In our view, it is not necessaryto deduct the wife's maintenance payments to the husband from this award in order to avoidimpermissible "double dipping" on the enhanced earnings derived from the wife's professionallicense (see Grunfeld v Grunfeld, 94 NY2d 696, 704 [2000]). This is because we haveconcluded that the amount of maintenance awarded is reasonable based upon the wife'sprelicense income of $46,000, combined with the $22,000 difference between the $70,000topline earnings used in our determination of the value of the license and the $92,000 annualincome to which plaintiff testified at trial. Thus, the amount of enhanced earnings used tocalculate the value of the wife's license (the difference between the $46,000 baseline income andthe $70,000 topline income) has not been considered in the maintenance award.