| McCaffrey v McCaffrey |
| 2013 NY Slip Op 04079 [107 AD3d 1106] |
| June 6, 2013 |
| Appellate Division, Third Department |
| John J. McCaffrey Jr., Appellant-Respondent, v CarolynMcCaffrey, Respondent-Appellant. |
—[*1] Friedman & Molinsek, PC, Delmar (Michael P. Friedman of counsel), forrespondent-appellant.
Spain, J. Cross appeals from a judgment of the Supreme Court (Teresi, J.), enteredFebruary 17, 2012 in Albany County, ordering, among other things, equitabledistribution of the parties' marital property, upon a decision of the court.
The parties were married in 1999. In late 2010, plaintiff (hereinafter the husband)commenced the instant action and the parties subsequently consented to a no-faultdivorce. The parties stipulated to the value of the marital home and the division of certainmarital property and the action proceeded to a nonjury trial for resolution of theremaining maintenance and equitable distribution issues. Following trial, Supreme Court,among other things, distributed the parties' marital debt to the husband, awardeddefendant (hereinafter the wife) maintenance and a portion of the husband's enhancedearnings attributable to his college degrees, and ordered the wife to reimburse thehusband for certain mortgage payments that accrued during the pendency of the action.The husband now appeals and the wife cross-appeals.
The husband first argues that Supreme Court abused its discretion by awarding thewife maintenance, which he contends is excessive and unwarranted in light of the wife'sability to be self-supporting and because, he argues, the court improperly found that hehad wastefully dissipated marital assets. Viewing the record in its totality, we agree."[T]he primary purpose of [*2]maintenance is toencourage self-sufficiency by the recipient" (Quinn v Quinn, 61 AD3d 1067, 1071 [2009]; accord Biagiotti v Biagiotti, 97AD3d 941, 942 [2012]), and "[m]aintenance is appropriate where . . .the marriage is of long duration, the recipient spouse has been out of the work force for anumber of years, has sacrificed her or his own career development or has madesubstantial noneconomic contributions to the household or to the career of the payor" (Ndulo v Ndulo, 66 AD3d1263, 1265 [2009]; seeWilliams v Williams, 99 AD3d 1094, 1095 [2012]). Here, the parties' marriagewas not of particularly long duration (12 years), and they had no children together. Whenthis action was commenced, the husband was 52 years old and the wife was 42 years old.Both parties were in good health and were gainfully employed, with the husband earningan annual salary of approximately $113,000 and the wife earning an annual salary of$65,000 (compare Williams v Williams, 99 AD3d at 1095-1096). In addition, thewife had separate property consisting of $66,000 in a trust account and $27,000 insavings bonds, both of which she testified were in her name but had been set aside by herparents for their elder care. Supreme Court found that both parties were self-supporting,and they stipulated to an equal division of their retirement and deferred compensationplans and neither party lost health insurance as a result of the divorce.
The wife correctly notes that "[t]he fact that [she] has the ability to be self-supportingby some standard of living does not mean that she is self-supporting in the context of themarital standard of living" (Ndulo v Ndulo, 66 AD3d at 1265; see Williams vWilliams, 99 AD3d at 1096). However, "[t]he determination of an appropriatemaintenance award requires[, among other things,] a delicate balanc[e] of each party'sneeds and means [or ability to pay]" (Mairs v Mairs, 61 AD3d 1204, 1208 [2009] [internalquotation marks and citation omitted]; see Domestic Relations Law § 236[B] [6] [a]; McAuliffe vMcAuliffe, 70 AD3d 1129, 1134 [2010]; Lorenz v Lorenz, 63 AD3d 1361, 1363 [2009]; Gagliov Molnar-Gaglio, 300 AD2d 934, 939 [2002]). The record demonstrates that theparties' relatively high predivorce standard of living would not have been sustainablewithout the significant credit card debt. Indeed, the parties refinanced the maritalresidence, relying on much of its equity to reduce their debt. In our view, Supreme Courtgave inadequate consideration to the balancing of the wife's needs—for which herown salary should provide adequate support—with the husband's ability to pay(see Domestic Relations Law § 236 [B] [6] [a]).
Moreover, the husband's alleged wasteful dissipation of marital assets as a ground forawarding maintenance is not supported by the record. The husband's minor legalexpenses (around $1,100) associated with his defense of a criminal charge did notconstitute wasteful dissipation of marital assets (see Kohl v Kohl, 24 AD3d 219, 219 [2005]). The recordalso demonstrates that the husband's expenditures on his paramour and theirchild—who was conceived during the husband's marriage to the wife and bornwhile this action was pending—were incurred after the date of commencement.Furthermore, the record reflects that the husband gambled only a few times during theparties' marriage, spent no more than $2,000 and broke even on all accounts, which doesnot rise to the level of wasteful dissipation (see Treffiletti v Treffiletti, 252 AD2d635, 636-637 [1998]; compareBurnett v Burnett, 101 AD3d 1417, 1419 [2012]). Although the wife accusedthe husband of incurring significant credit card debt without her knowledge, he testifiedthat all of the charges—including those on his personal credit cards—weremade for marital, household and work-related expenses. The wife did not rebut thistestimony and, thus, the parties' credit card debt, including that charged on the husband'scredit cards, was marital debt rather than wasteful dissipation of marital assets (seeBiagiotti v Biagiotti, 97 AD3d at 943-944; Evans v Evans, 55 AD3d 1079, 1081 [2008]).[*3]
While "[t]he amount and duration of [amaintenance] award are addressed to the sound discretion of the trial court" (Murray v Murray, 101 AD3d1320, 1322 [2012], lv dismissed 20 NY3d 1085 [2013]; seeDomestic Relations Law § 236 [B] [6] [a]), "this Court's authority is as broad asSupreme Court's in resolving questions of maintenance" (Quinn v Quinn, 61AD3d at 1071 [internal quotation marks and citations omitted]). Accordingly, we findthat under the circumstances of this case—where the marriage was not ofparticularly long duration, the parties had no children, the wife has stable employmentthat provides her a significant salary, the wife is not losing retirement or health benefitsand the parties' predivorce standard of living was falsely inflated by overextended linesof credit—the statutory factors do not support an award of maintenance(see Domestic Relations Law § 236 [B] [6] [a] [1]-[20]; Gandhi vGandhi, 283 AD2d 782, 786 [2001]).
We further agree with the husband that Supreme Court erred by ordering him to paythe wife $37,110—half of the money that the parties borrowed against their equityin their marital residence. In 2010, the parties refinanced the marital residence andborrowed approximately $74,000 against that equity to pay their outstanding credit cardbalances. While the wife denied knowledge of or complicity in the extent of the parties'credit card debt, she admitted that the husband discussed the refinance with her, shesigned the refinance application and agreement—which listed the balances owedon each card—and she agreed to refinance in order to pay off their credit cards.Supreme Court found that the husband took the proceeds of this refinance and spent itentirely on personal expenses, gambling and his paramour and, as a result, it ordered himto pay the wife half of the refinance proceeds. However, the parties' credit cardstatements establish—and the wife does not dispute—that the refinancingproceeds were actually used by the husband to pay off the outstanding marital credit cardbalances.[FN1] Accordingly, the court's award of 50% of the monies used by the husband to pay off theparties' credit card debt to the wife—debt that was actually no longerowed[FN2]—was error (see Biagiotti v Biagiotti, 97 AD3d at 943-944; Corbett v Corbett, 6 AD3d766, 768 [2004]; Spenello v Spenello, 274 AD2d 822, 825 [2000]).
We discern no error in Supreme Court's distribution of the enhanced earning capacitycreated by the husband's two college degrees, and reject the husband's arguments that thewife failed to prove that the degrees resulted in enhanced earnings or that shesubstantially contributed to their attainment.[FN3] To be entitled to a share of the value of the husband's degrees, the wife[*4]"must demonstrate that the degree[s] enhanced [thehusband's] earning capacity and that she, in a meaningful and substantial way,contributed to his efforts in obtaining [them]" (Evans v Evans, 55 AD3d at 1080;see McAuliffe v McAuliffe, 70 AD3d at 1136). During the marriage, thehusband earned an Associate's degree in telecommunications and a Bachelor's degree inbusiness administration with a minor in accounting. He received numerous promotionsthroughout the marriage, eventually holding the title of director of a department relevantto his degrees; the husband argues that these promotions were not attributable to hisdegrees and that Supreme Court should have found that the degrees did not enhance hisearnings at all.
Richard Jones, a jointly retained consultant, opined that the value of the enhancedearnings attributable to the husband's degrees at the date of commencement was$204,000. Supreme Court found that 25% ($51,000) of that value constituted separateproperty and, further, that only 50% ($76,500) of the husband's enhanced earningpotential was traceable to his degrees. The court awarded the wife 15% of that amount,totaling $11,475. In addition to Jones' expert opinion, evidence of the enhanced earningsincluded an evaluation in his personnel file that remarked on the beneficial effect that hisdegrees had on his employment and the fact that he included his degrees on everypromotion application. Although two witnesses from the husband's employment testifiedthat his degrees were not required for his promotions and that his promotions weremostly attributable to his superior job performance, neither witness testified that hisdegrees were not a factor in his promotions (compare Evans v Evans, 55 AD3d at1080). Accordingly, Supreme Court "arrive[d] at [a] determination[ ] that w[as]supported by the credible evidence introduced at trial" (McAuliffe v McAuliffe,70 AD3d at 1137 [internal quotation marks and citation omitted]).
Nor do we agree with the husband that the wife failed to prove that she contributedin a substantial way to his attainment of the degrees, which depends on whether she"altered . . . her schedule and/or took on additional household duties that. . . she would not have otherwise performed, in order to enable [thehusband] to obtain the . . . degree[s]" (Quarty v Quarty, 96 AD3d 1274, 1277 [2012]; see Sadaghiani v Ghayoori, 83AD3d 1309, 1310 [2011]). The wife testified that while the husband was in school,she rearranged her schedule, transported him to and from classes, and assumed a greatershare of the household responsibilities, and she averred that part of the husband's tuitionwas paid for by marital funds. Accordingly, we cannot say that Supreme Court abused itsdiscretion in finding that the wife contributed to the husband's degrees (seeSadaghiani v Ghayoori, 83 AD3d at 1311; Carman v Carman, 22 AD3d 1004, 1007 [2005]).
The wife's assertion that Supreme Court erroneously distributed to her only a limitedpercentage of the husband's enhanced earning value is likewise without merit. "[W]hereonly modest contributions are made by the nontitled spouse toward the other spouse'sattainment of a degree . . . and the attainment is more directly the result ofthe titled spouse's own ability, tenacity, perseverance and hard work, it is appropriate forcourts to limit the distributed amount of that enhanced earning capacity" (Esposito-Shea v Shea, 94AD3d 1215, 1217 [2012] [internal quotation marks and citation omitted]). Thehusband expended significant effort in obtaining his degrees; he attended night classeswhile working full time, and occasionally at a part-time second job. Moreover, much ofhis professional success was attributable to his superior job performance. Thus, SupremeCourt's limited distribution to the wife of only 15% of the enhanced earnings was wellwithin its discretion (see Esposito-Shea v Shea, 94 AD3d at 1217; Sadaghianiv Ghayoori, 83 AD3d at 1311; Carman v Carman, 22 AD3d at 1006).
Regarding the mortgage payments, it was error to order the wife to reimburse the[*5]husband for the full amount of the monthly mortgagepayments through the pendency of this action. The wife moved out of the residence inlate November 2010, prior to the commencement of this action; from that point on, thehusband, his paramour and their child together had exclusive use and occupancy of thehome. Accordingly, the husband should only be reimbursed for "one half of the amountby which the mortgage principal has been reduced" (Redgrave v Redgrave, 13 AD3d 1015, 1018 [2004]; see Le v Le, 82 AD3d845, 846 [2011]; Arnold v Arnold, 309 AD2d 1043, 1045 [2003]).
Additionally, the parties' 180,000 American Express reward points that wereaccumulated during the marriage should have been distributed equally between them(see Domestic Relations Law § 236 [B] [5] [c]; Hale v Hale, 16 AD3d231, 235 [2005]). Finally, in light of our other findings, the wife now may beentitled to counsel fees (see Domestic Relations Law § 237 [a]), whichSupreme Court denied. We therefore remit to Supreme Court for reconsideration ofwhether such an award would be appropriate.
The parties' remaining contentions have been examined and we find that furthermodification is not warranted.
Rose, J.P., Lahtinen and Garry, JJ., concur. Ordered that the judgment is modified,on the law and the facts, without costs, by reversing so much thereof as (1) awardeddefendant maintenance, (2) awarded defendant $37,100 as reimbursement for therefinancing proceeds, and (3) awarded plaintiff a credit for the mortgage payments of$1,710 per month between December 2010 and February 2012; award plaintiff only onehalf of the amount by which the mortgage principal was reduced between December2010 and February 2012 and award defendant one half of the American Express rewardpoints, and matter remitted to the Supreme Court for further proceedings not inconsistentwith this Court's decision; and, as so modified, affirmed.
Footnote 1: The husband appliedthe proceeds of the refinancing to the balances of the credit cards as follows: (1) $4,966to one account; (2) $27,617.14 to another; (3) $15,600 to another; and (4) $24,079.18 toanother.
Footnote 2: The parties eachaccrued additional credit card debt after the commencement of this action that does notqualify as marital debt and is not subject to equitable distribution (see DomesticRelations Law § 236 [B] [1] [c]; Zwickel v Szajer, 45 AD3d 1222, 1224 [2007]).
Footnote 3: In light of ourelimination of the maintenance award, we need not address the husband's arguments withrespect to whether Supreme Court erred under Grunfeld v Grunfeld (94 NY2d696 [2000]) by failing to conduct a double dipping analysis.