| Moyal v Moyal |
| 2011 NY Slip Op 05406 [85 AD3d 614] |
| June 23, 2011 |
| Appellate Division, First Department |
| Dany Moyal, Respondent-Appellant, v Marc Moyal,Appellant-Respondent. |
—[*1] Sheresky Aronson Mayefsky & Sloan, LLP, New York (Lawrence B. Trachtenberg ofcounsel), for respondent-appellant.
Judgment, Supreme Court, New York County (Marilyn B. Dershowitz, Special Ref.), enteredJanuary 6, 2010, valuing and including certain marital assets in the distributive award, awardingplaintiff wife maintenance, counsel fees and expert fees, and holding the wife liable for 50% ofthe parties' tax liability, unanimously modified, on the law and in the exercise of discretion, tothe extent of vacating the valuations of Marcotex and of the parties' condominium in Israel andremanding for a determination of their values, including defendant husband's loan receivable inthe marital estate, awarding the husband a credit against the distributive award in the amount of$182,382 for payments he made during the pendency of the action, and awarding the wifepost-decision interest on the distributive award, and otherwise affirmed, without costs. Appealsfrom orders, same court and Special Referee, entered August 25, 2009 and October 13, 2009,unanimously dismissed, without costs, as subsumed in the appeal from the judgment.
While "[t]here is no uniform rule for fixing the value of a business for the purpose ofequitable distribution" (Wasserman vWasserman, 66 AD3d 880, 882 [2009]), the Special Referee did not sufficiently explainher basic concurrence in the valuation of the husband's business by the wife's appraiser (seeCapasso v Capasso, 119 AD2d 268, 272 [1986]) despite the numerous recognized flaws inhis report, including, among other things, the insufficient examination and murky explanation ofits accounts receivable, the unclear rationale for the particular earnings multiple chosen, theinadequate explanation for the application of a gross profit margin, unsubstantiated assumptionsregarding personal use of business credit cards and the consideration of industry trends withoutadequate basis. The husband's $1.2 million loan receivable should have been included as part ofthe marital estate, since he did not carry his burden to show that he did not use marital funds tomake the loan (see Sagarin v Sagarin, 251 AD2d 396 [1998]). We note, however, that ourdetermination with respect to this receivable, owed to the husband on account of his business, iswithout prejudice to any arguments the parties may make concerning the effect of the debt on thevalue of the business. In light of a [*2]substantially higher offerand appraisals, it was an improvident exercise of discretion to value the parties' condominium inIsrael based on the price of the husband's sale to a childhood friend in a transaction that was notdocumented in any way (see Terico v Terico, 222 AD2d 219 [1995]), the proceeds ofwhich were reduced by the amount of an undocumented loan the husband claimed to have madeto the friend. The wife is entitled to post-decision interest on the distributive award, which ismandatory (see CPLR 5002; Wallach v Wallach, 204 AD2d 211, 212 [1994]).
The wife failed to prove the value of the husband's interests in Merryson and Royal Textiles(see Davis v Davis, 128 AD2d 470, 476 [1987]) or rebut his testimony regarding thedepressed state and lack of value of these businesses at the time of trial. The marital apartmentwas properly valued based on the factual testimony of an experienced broker with knowledge ofprices in the same building (see Matter of Semple School for Girls v Boyland, 308 NY382, 388 [1955]). The duration and amount of maintenance awarded, to a wife in her 50s in along-term marriage, who lacked business experience or a degree and had not been in the workforce for years while raising children, was properly based on the relevant factors and evidence(see Naimollah v De Ugarte, 18AD3d 268, 271 [2005]). The wife was properly assessed 50% of the parties' tax liability forunderreporting income. She clearly benefitted from the use of the funds and the circumstances ofthis case are unlike those involving a failure to file returns with an innocent spouse not on noticeof any wrongdoing (cf. Frey v Frey,68 AD3d 1052 [2009]; Costello v Costello, 304 AD2d 517, 519 [2003]).
The Special Referee clearly and reasonably linked the award of $5,000 in maintenance for 15years to the distributive award and we reject the husband's claim that he is entitled to a creditagainst the award because the monthly pendente lite maintenance exceeded the amountultimately awarded (see Wechsler vWechsler, 58 AD3d 62, 84 [2008], appeal dismissed 12 NY3d 883 [2009]). Weagree with the husband's claim that he is entitled to such a credit for payments he made duringthe pendency of the action relating to the marital real estate (i.e., mortgage, maintenance, and realestate taxes) and for tax counsel and accountant fees (Johnson v Chapin, 49 AD3d 348, 360 [2008], mod 12NY3d 461 [2009]). The wife argues that no such credit should be awarded because the husbandagreed to make the payments pursuant to a stipulation which did not recite that he could seek acredit against any distributive award on account of the payments. Nor, of course, does thestipulation purport to disavow the right he otherwise would have to seek such a credit. Thisargument, which essentially asks us to hold that the husband thereby waived that right, ismeritless. The stipulation is silent on the subject and we note that acceptance of the wife'sargument would discourage parties in matrimonial actions from voluntarily entering into suchstipulations.
In a thoughtful, written opinion, the Special Referee awarded the wife an additional $65,000in counsel fees, substantially less than the total amount requested ($161,972.50, an amount thatincluded a prior award of $25,000). In support of her decision to award less than the amountrequested, the Special Referee took into account, inter alia, the substantial equitable distributionaward, the $5,000 maintenance award, the fact that the wife "[p]lainly . . . has moreliquid assets than the husband," that numerous motions by the wife were "soundly defeated" andthat "certain litigation strategy by the wife's counsel was nonproductive." The Special Refereenoted the failure of the wife's counsel to comply with 22 NYCRR 1400.2, which entitles theclient "to receive a written, itemized bill on a regular basis, at least every 60 days." The SpecialReferee also noted that counsel had provided a "mere four bills" over a 26-month period of therepresentation. As the husband argues, the bills "lumped together multiple legal services [*3]rendered and [a] total amount for . . . all of thoseservices." Indeed, one such bill lumped together dozens of separate services counsel providedand stated the total number of hours (136) for all the services. To be sure, a computer printoutproviding considerably more specificity concerning the number of hours spent on each day thatservices were provided was admitted into evidence at the hearing. But for that printout andcounsel's testimony that the daily entries were prepared either contemporaneously or shortlythereafter, we would direct an additional reduction in the fee award. Without impugningcounsel's integrity in the slightest, we think it plain that the printout is not an adequate substitutefor the itemized bills required by 22 NYCRR 1400.2. We agree with the Special Referee that"where there is a different individual to be charged by the court there should be an availablehigher level of scrutiny." Nonetheless, it appears that the Special Referee reduced the award onaccount of counsel's failure to comply with this requirement of 22 NYCRR 1400.2, one of therules "promulgated to address abuses in the practice of matrimonial law" (Julien vMachson, 245 AD2d 122 [1997]). Under all the circumstances of this case, we decline toexercise our discretion to further reduce the amount of the award.
We have considered the parties' other claims for affirmative relief and find them unavailing.Concur—Andrias, J.P., Friedman, McGuire, Acosta and DeGrasse, JJ.