| Keil v Keil |
| 2011 NY Slip Op 04562 [85 AD3d 1233] |
| June 2, 2011 |
| Appellate Division, Third Department |
| Deborah A. Keil, Appellant, v Edwin A. Keil,Respondent. |
—[*1] Friedman & Molinsek, P.C., Delmar (Nicole R. Redmond of counsel), forrespondent.
Spain, J. Appeal from a judgment of the Supreme Court (Lynch, J.), entered April 22, 2010in Columbia County, ordering, among other things, equitable distribution of the parties' maritalproperty, upon a decision of the court.
The parties were married in 1980 and had no children. Plaintiff commenced this divorceaction in 2006; the parties thereafter agreed to a divorce in favor of defendant and the issues ofequitable distribution and maintenance were heard at a bench trial. Given the length of themarriage and the contributions of each of the parties to the marriage and to the family businessholdings, Supreme Court generally distributed the marital property on a 50/50 basis, awardedplaintiff nondurational maintenance and denied her request for counsel fees. Plaintiff nowappeals.
Plaintiff first contends that Supreme Court failed to equitably distribute certain maritalassets. A trial court's determination of equitable distribution is discretionary, based on the uniquecircumstances of each case, and such determinations will not be overturned on review unless theyfail to properly account for the guiding statutory factors enumerated in Domestic Relations Law§ 236 (B) (5) (d) (see Fields vFields, 15 NY3d 158, 170 [2010]; Mairs v Mairs, 61 AD3d 1204, 1206 [2009]; Altieri v Altieri, 35 AD3d 1093,1094 [2006]). This Court, however, has the "authority to conduct a broad review of any suchaward" (Mairs v Mairs, 61 AD3d at 1206; see Majauskas v Majauskas, 61 NY2d481, 493-494 [1984]).[*2]
It is well settled that property obtained prior to marriageis generally separate property (see Domestic Relations Law § 236 [B] [1] [d] [1];Lewis v Lewis, 6 AD3d 837,838 [2004]; Zanger v Zanger, 1AD3d 865, 866-867 [2003]). On the other hand, there is a presumption that propertyacquired during a marriage is marital property, and the burden of demonstrating that it is separateproperty is on the party making that assertion (see Domestic Relations Law § 236[B] [1] [c]; Fields v Fields, 15 NY3d at 163; Stahl v Stahl, 80 AD3d 932, 932 [2011]; Cease v Cease, 72 AD3d 1450,1451 [2010]). Moreover, "[c]ommingling separate property with marital property funds can resultin separate property becoming marital property" (Armstrong v Armstrong, 72 AD3d 1409, 1415 [2010]).
With respect to the marital home, the residence was acquired by defendant before themarriage and he never added plaintiff's name to the deed. As such, it is defendant's separateproperty (see Domestic Relations Law § 236 [B] [1] [d] [1]; Albanese v Albanese, 69 AD3d1005, 1005 [2010]). " 'However, any appreciation in value of such separate property may besubject to distribution if there is a nexus between the titled spouse's efforts and the increase invalue and those efforts were aided or facilitated by the nontitled spouse' " (Albanese vAlbanese, 69 AD3d at 1006, quoting Van Dyke v Van Dyke, 273 AD2d 589, 592[2000]). The court must be able to discern the value of such separate property as of the date ofthe marriage, and the value of the same at the end of the marriage, in order to make an accuratedistributive award. Notably, the nontitled spouse bears the burden of establishing the maritalcomponent of separate property (see id.).
As to the value of the marital interest, the record reflects that defendant purchased theproperty in 1966 for $8,500. However, neither plaintiff nor defendant presented any experttestimony to demonstrate the value of the property at the start or at the end of the marriage. Theparties testified to the value of improvements to the marital residence, including defendant'sconcession that those improvements cost a total of approximately $75,000 during the marriage.As Supreme Court awarded plaintiff $57,500 or the greater share of the $75,000 inimprovements, we cannot agree with plaintiff that the court abused its discretion in making suchaward given the limited record evidence before it.
With respect to the marital furnishings, as no proof was offered by either side as to theirvalue, we cannot say that Supreme Court abused its discretion in distributing the bulk of themarital furnishings to defendant in conjunction with its award to him of the marital residence(see Butler v Butler, 256 AD2d 1041, 1045-1046 [1998], lv denied 93 NY2d 805[1999]).
We agree with plaintiff that Supreme Court erred in distributing as marital property the fundsof a Smith Barney account (No. xxx-xxxxx-10) funded by her with premarital earnings. Plaintifftestified—without contradiction—that she acquired this particular account in hername prior to the parties' marriage and that she made no contributions or withdrawals during themarriage. Accordingly, this account, worth about $6,900 at the end of 2006, is plaintiff's separateproperty and not subject to equitable distribution (see London v London, 21 AD3d 602, 603 [2005]).
Regarding the farm property, evidence that property obtained during a marriage was a gift toonly one spouse, if unrebutted, can satisfy the donee's burden to prove that it is separate property(see Chiotti v Chiotti, 12 AD3d995, 996 [2004]; Zanger v Zanger, 1 AD3d at 866-867; Allen v Allen, 263AD2d 691, 692 [1999]; compare Daisernia v Daisernia, 188 AD2d 944, 945 [1992]).However, evidence that a spouse's separate property was substantially improved [*3]through economic and/or noneconomic contributions of the otherspouse can strip the property of its character as separate property (see Domestic RelationsLaw § 236 [B] [1] [d] [3]; Dashnaw v Dashnaw, 11 AD3d 732, 733 [2004]; Seidman vSeidman, 226 AD2d 1011, 1012 [1996]; Verrilli v Verrilli, 172 AD2d 990, 991[1991], lv denied 78 NY2d 863 [1991]).
Here, defendant's father deeded the farm to defendant and his brother, as tenants in common,for no consideration shortly after the parties were married. In 1998, defendant purchased hisbrother's interest in the farm for $50,000, paying his brother a monthly sum, until defendantreceived a disability settlement of $27,000, which he used to pay the balance due. Further, duringthe marriage, the parties improved the farm by remodeling the main house and adding apartmentsto the property. The record supports the conclusion that these improvements were paid for withmarital funds as well as with rents collected from the property, and defendant confirmed thatplaintiff made noneconomic contributions to the improvement and development of the farm.Based on the foregoing, Supreme Court found the farm to be separate property, however, due tothe use of marital funds to purchase a portion of the brother's interest and to improve theproperty, the court found 15% of the farm to be marital property.
On our review of the record, keeping in mind plaintiff's economic contributions towards thepurchase of half of the farm, as well as her economic and noneconomic contributions towardsimproving the property, we conclude that 50% of the farm was marital property, of whichplaintiff is entitled to one half (compare Dashnaw v Dashnaw, 11 AD3d at 733;Seidman v Seidman, 226 AD2d at 1012). Accordingly, based on the uncontradictedappraisal of the farm completed by defendant's expert, plaintiff's distributive award for the farmshould be increased to $122,500, or 25% of its full value ($490,000) less the $27,000 of separateproperty (disability proceeds) used by defendant to pay the balance due for his brother's interestor a total award of $95,500 (see Domestic Relations Law § 236 [B] [1] [d] [2], [3];compare Carr v Carr, 291 AD2d 672, 676-677 [2002]; Verrilli v Verrilli, 172AD2d at 991).
Next, we also find merit to plaintiff's claim that Supreme Court erred in reducing her expert'sassessment of the fair market value of Keil's Pools. Plaintiff argues that because her expert hadalready factored into his conclusions a reduced multiple accounting for, among other things,defendant's key role in the business, there was no basis upon which the court could further reducethe value of the business on that same ground.
" '[T]he valuation of [a] business for equitable distribution purposes [is] an exercise[properly] within Supreme Court's fact-finding power to be guided by expert testimony' " (Nissen v Nissen, 17 AD3d 819,821 [2005], quoting Hiatt vTremper-Hiatt, 6 AD3d 1014, 1015 [2004]; see Sieger v Sieger, 51 AD3d 1004, 1004 [2008], appealdismissed 14 NY3d 750 [2010], lv denied 14 NY3d 711 [2010]). Furthermore,"[w]here the determination as to the value of a business is within the range of the testimonypresented, it will not be disturbed on appeal if it rests primarily on the credibility of expertwitnesses and their valuation techniques" (Sieger v Sieger, 51 AD3d at 1004; seeTayar v Tayar, 250 AD2d 757, 757-758 [1998]). Here, plaintiff's expert testified regardingdifferent valuation methods, arriving at a value for the business of $437,000 as of April 12, 2006,the commencement date. Significantly, defendant did not present any expert testimony as to thevalue of the business. Supreme Court accepted the methodologies, findings, conclusions and thevalue determined by plaintiff's expert, but further reduced that value by 20% due to the fact thatthe business is heavily tied to defendant who was 67 years old at the time of the trial and hashealth concerns, concluding that his ability to continue to run the business is "uncertain." Giventhat plaintiff's expert had already reduced the value of Keil's Pools based on [*4]defendant's key role in the business, and additionally factored in thedownturn in the economy after the date of commencement, the court, in our view, erred in furtherreducing the value of the business (compare Nissen v Nissen, 17 AD3d at 821; Hiattv Tremper-Hiatt, 6 AD3d at 1015; Tayar v Tayar, 250 AD2d at 757-758;Beckerman v Beckerman, 126 AD2d 591, 592 [1987]). The court gave no explanation asto how defendant's age or health negatively impacted the market value of the business as of April2006. Further, there is no medical proof in this record that defendant's reported ailments wouldlimit his ability to continue to run the business for the long haul or to sell it. Accordingly,plaintiff's distributive award for her share of Keil's Pools should be increased to $218,500, or50% of $437,000.
We next reject plaintiff's assertion that Supreme Court erred in awarding her nondurationalmaintenance in the amount of $1,000 per month. "The amount and duration of maintenance aregenerally left to the trial court's discretion as long as the court considers the statutory factors andprovides a basis for its conclusion" (Blay v Blay, 51 AD3d 1189, 1191-1192 [2008] [citations omitted];see Domestic Relations Law § 236 [B] [6] [a]; Armstrong v Armstrong, 72 AD3d 1409, 1415 [2010],supra; Burtchaell v Burtchaell,42 AD3d 783, 784-785 [2007]), and Supreme Court's judgment will not be disturbed onappeal absent an abuse of discretion (see Blay v Blay, 51 AD3d at 1191-1192). Here,Supreme Court noted the fact that plaintiff received a substantial distribution of marital propertyincluding an award for her share of Keil's Pools—amounts which have been increasedherein—and that plaintiff was awarded her share of defendant's pension benefits. Given thecourt's consideration of the statutory factors in its analysis and its stated basis for the award, wecannot conclude that $1,000 per month in nondurational maintenance was an abuse of discretion(see Domestic Relations Law § 236 [B] [6] [a]; Blay v Blay, 51 AD3d at1191-1192).
Finally, plaintiff contends that Supreme Court erred in denying her request for counsel fees.Supreme Court's decision will not be found to be "an abuse of discretion . . .without a showing that [the party seeking counsel fees] was in need" (DeCabrera vCabrera-Rosete, 70 NY2d 879, 881 [1987]; see Howard v Howard, 45 AD3d 944, 945-946 [2007]; Redgrave v Redgrave, 22 AD3d913, 914-915 [2005]). In light of the generous equitable distribution and maintenanceawards to plaintiff, we discern no abuse of discretion in denying this request (compareArmstrong v Armstrong, 72 AD3d at 1416; Webber v Webber, 30 AD3d 723, 724 [2006]).
We have considered plaintiff's remaining contentions and find them unpersuasive.
Peters, J.P., Rose and Stein, JJ., concur. Ordered that the judgment is modified, on the lawand the facts, without costs, by reversing so much thereof as (1) ordered equitable distribution ofplaintiff's Smith Barney account No. xxx-xxxxx-10, (2) awarded plaintiff 15% of the value of thefarm, and (3) reduced the value of the family business by 20%; the Smith Barney account isplaintiff's separate property, plaintiff is entitled to 25% of the value of the farm or $122,500subject to a credit to defendant of $27,000, and plaintiff is entitled to 50% of the expert'sappraised value of the business or $218,500; and, as so modified, affirmed.