| Smith v Winter |
| 2009 NY Slip Op 05812 [64 AD3d 1218] |
| July 10, 2009 |
| Appellate Division, Fourth Department |
| James W. Smith, Respondent, v Dana Winter,Appellant. |
—[*1] Harris Beach PLLC, Buffalo (Richard T. Sullivan of counsel), forplaintiff-respondent.
Appeal from a supplemental judgment of the Supreme Court, Erie County (Paula L.Feroleto, J.), entered March 18, 2008 in a divorce action. The supplemental judgment, inter alia,distributed the parties' marital assets.
It is hereby ordered that the supplemental judgment so appealed from is unanimouslymodified on the law by providing that plaintiff's personal checking accounts at Evans NationalBank and HSBC Bank are marital property and directing plaintiff to pay defendant $11,330.15for her marital interest in those accounts and by granting defendant interest on the netdistributive award at the rate of 9% per annum commencing January 24, 2008 and as modifiedthe supplemental judgment is affirmed without costs.
Memorandum: Defendant appeals from a supplemental judgment issued in a divorce actionthat, inter alia, distributed marital assets and ordered plaintiff to pay maintenance to defendant.The parties were married in 1996 and had no children. Prior to the marriage, plaintiff was thesole shareholder, chief executive officer, and president of American Wire Tie, Inc. (AmericanWire), which acquired 100% of the stock in Permanban North America (PNA). The evidenceadduced at trial established that, during the marriage, plaintiff was substantially responsible forthe day-to-day management and operation of American Wire. He had no involvement in theday-to-day operations of PNA. With respect to American Wire, Supreme Court found that thevalue of the company did not change during the course of the marriage. The court further found,however, that plaintiff's American Wire 401K had appreciated in value during the marriage, andthus the court awarded defendant half of the value of that appreciation by way of a qualifieddomestic relations order. With respect to PNA, the court found that the value of PNA appreciatedby $20 million during the course of the marriage but that the increase in value attributable toplaintiff was minimal when compared to the increase attributable to those hired by plaintiff torun the company. The court thus determined that only 10% of the appreciation in value of PNAwas marital property subject to equitable distribution and that defendant was entitled to 40% ofthe appreciated value based on her contributions as a homemaker. The court made additionalawards with respect to, inter alia, life insurance policies, an art collection, and bank accounts,resulting in a total distributive award to defendant of $556,611.82. Finally, the court awardeddefendant $1,700 per week as maintenance for a period of approximately 17 months.[*2]
We conclude that the court properly determined that only10% of the appreciation of the value of PNA, a wholly owned subsidiary of American Wire, wasmarital property subject to distribution. It is undisputed that plaintiff was the sole shareholder ofAmerican Wire prior to the marriage, and thus American Wire remained plaintiff's separateproperty. It is further undisputed that PNA appreciated in value by over $20 million during thecourse of the marriage but that plaintiff's contributions to that appreciation were minimal. It iswell settled that "an increase in the value of separate property of one spouse, occurring duringthe marriage and prior to the commencement of matrimonial proceedings, which is due in part tothe indirect contributions or efforts of the other spouse as homemaker . . . should beconsidered marital property" (Price v Price, 69 NY2d 8, 11 [1986]). "When a nontitledspouse's claim to appreciation and the other spouse's separate property is predicated solely on thenontitled spouse's indirect contributions, [however,] some nexus between the titledspouse's active efforts and the appreciation in the separate property is required" (Hartog vHartog, 85 NY2d 36, 46 [1995]). Here, the court properly considered the "active efforts ofothers and any additional passive or active factors" in determining the percentage of totalappreciation that constitutes marital property subject to distribution (see id. at 48).
Contrary to defendant's contention, the court properly determined that there was no evidencewith respect to the appreciation of the life insurance policies, and thus there was no basis for thecourt to distribute such alleged appreciation as marital property (see LaBarre v LaBarre,251 AD2d 1008, 1008-1009 [1998]; Turner v Turner, 145 AD2d 752, 753 [1988]). Alsocontrary to defendant's contention, the court did not abuse its discretion in distributing theartwork acquired by the parties during the marriage (see McPheeters v McPheeters, 284AD2d 968 [2001]). The parties failed to have the artwork appraised and provided the court withonly the acquisition costs of the artwork and the parties' preferences for certain pieces of art.
We conclude that the court's award of maintenance was not an abuse of discretion inasmuchas the court properly considered the factors set forth in Domestic Relations Law § 236 (B)(6) (a) (see Mayle v Mayle, 299 AD2d 869 [2002]). In determining the amount andduration of maintenance, the court took into consideration the marital standard of living, theability of defendant to be self-supporting, the length of the marriage and the significantdistributive award made to defendant, as well as other factors (see generally Gulisano vGulisano, 214 AD2d 999 [1995]).
We agree with defendant, however, that the court erred in failing to identify and classify thepersonal checking accounts of plaintiff at Evans National Bank and HSBC Bank. It is undisputedthat plaintiff deposited his earnings into the accounts during the marriage, and thus the accountsare marital property subject to distribution (see generally LeRoy v LeRoy, 274 AD2d362 [2000]). We value the accounts based on their respective balances as of the date ofcommencement of the action and, based on the record before us, we conclude that the EvansNational Bank account is valued at $17,808.98 and the HSBC account is valued at $4,851.32. Anequal division of the accounts results in an award to defendant in the amount of $11,330.15. Wetherefore modify the supplemental judgment accordingly. In addition, the court erred infailing to grant defendant interest on her net distributive award at the statutory rate commencingfrom the date of the court's decision (see Singh v Singh, 51 AD3d 1379 [2008]; see also CPLR5002; see generally Grunfeld v Grunfeld, 255 AD2d 12, 22 [1999], mod on othergrounds 94 NY2d 696 [2000]). We therefore further modify the supplemental judgmentaccordingly.
We have considered defendant's remaining contentions and conclude that they are withoutmerit. Present—Martoche, J.P., Smith, Centra, Fahey and Pine, JJ.