| Gallagher v Gallagher |
| 2012 NY Slip Op 02209 [93 AD3d 1311] |
| March 23, 2012 |
| Appellate Division, Fourth Department |
| Ellen J. Gallagher, Respondent-Appellant, v Edward R. Gallagher,Appellant-Respondent. (Appeal No. 1.) |
—[*1] Getnick, Livingston, Atkinson & Priore, LLP, Utica (Thomas L. Atkinson of counsel), forplaintiff-respondent-appellant.
Appeal and cross appeal from an amended judgment of the Supreme Court, Oneida County(David A. Murad, J.), entered May 26, 2011 in a divorce action. The amended judgment, amongother things, dissolved the marriage between the parties and determined the equitable distributionof the marital assets.
It is hereby ordered that the amended judgment so appealed from is unanimously modified onthe law by reducing the distributive award in the amount of $586,065 set forth in the 3rd decretalparagraph to $543,227 and reducing the lump sum partial distributive award in the amount of$260,000 set forth in the 4th, 5th, and 10th decretal paragraphs to $217,162, and as modified theamended judgment is affirmed without costs.
Memorandum: Plaintiff wife commenced this divorce action in August 2007 seeking, interalia, equitable distribution of the marital property and child support. In appeal No. 1, defendanthusband appeals and the wife cross-appeals from an amended judgment following a trial and, inappeal No. 2, the husband appeals from a subsequent order that, inter alia, restricted him fromentering into contracts for real property. The parties have owned and operated a dairy farm since1983. The parties' second oldest son (hereafter, son) started working full-time on the farm inearly 2002, at approximately the same time that the wife no longer had any involvement in thefarm. The husband and son proceeded to expand the farm by increasing the size of the cattle herdand acquiring additional real property, some of which was titled in the son's name. In August2008, the son commenced an action against the parties seeking an interest in the farm, and theactions were consolidated for a joint trial. At the conclusion of testimony with respect to the son'saction, Supreme Court concluded that the son and the husband had not formed a partnership anddismissed the son's complaint.
With respect to the amended judgment in appeal No. 1, the husband contends on appeal that,in determining the value of the farm for equitable distribution purposes, the court should not haveincluded the value of the real property that was titled in the son's name. Contrary to the [*2]wife's contention on her cross appeal, the husband is not collaterallyestopped from raising that contention inasmuch as the order dismissing the son's complaint didnot address his entitlement to possession of real property that was titled in his name (see Zayatz v Collins, 48 AD3d1287, 1290 [2008]). We conclude, however, that the husband's contention is without merit.Pursuant to Domestic Relations Law § 236 (B) (5) (d) (13), a court may consider "anytransfer or encumbrance made in contemplation of a matrimonial action without fairconsideration" when making its equitable distribution determination. Here, the court properlydetermined that the value of the real property that was titled in the son's name constituted maritalproperty inasmuch as that property was purchased using farm income (see Niland vNiland, 291 AD2d 876, 876-877 [2002]). The record supports the court's determination thatthe purchases of property titled in the name of the son were part of the husband's scheme todivest the wife of her interest in the farm.
Contrary to the husband's further contention on appeal in appeal No. 1, the court did notabuse its discretion in denying that part of his motion to retain and offer testimony from differentexpert witnesses than those he had listed in his expert disclosure. The court properly determinedthat the husband failed to demonstrate "good cause" for the late disclosure, which was not madeuntil the middle of the trial, and that permitting the late disclosure would be prejudicial to thewife (CPLR 3101 [d] [1] [i]; seeCaccioppoli v City of New York, 50 AD3d 1079, 1080 [2008]; see also Saggese vMadison Mut. Ins. Co., 294 AD2d 900, 901 [2002]; cf. Peck v Tired Iron Transp.,209 AD2d 979, 979 [1994]). Contrary to the husband's contention, "[t]he court did not err infailing to take into account the tax impacts of the distributive award because there was noevidence that any assets would have to be sold" (Atwal v Atwal [appeal No. 2], 270AD2d 799, 799 [2000], lv denied 95 NY2d 761 [2000]; see Kudela v Kudela,277 AD2d 1015, 1015 [2000]).
With respect to the equitable distribution of the farm, the husband contends on appeal inappeal No. 1 that the court improperly calculated the value thereof, and the wife contends on hercross appeal that the court erred in its valuation date. In addition, both parties contend that thecourt's determination to award the wife 45% of that asset was inequitable. First, we conclude thatthe court did not abuse its discretion in valuing the farm as of the date of the commencement ofthe action (see George v George, 237 AD2d 894, 894 [1997]). As the court noted, thefarm "had not undergone the type of radical alteration subsequent to the commencement of theaction that would warrant a valuation of the [farm] at the time of trial" (Grunfeld vGrunfeld, 94 NY2d 696, 708 [2000]). Second, we reject the husband's contention that thecourt erred in its valuation of the real property of the farm, but we agree with the husband that thecourt erred in failing to decrease that amount by a debt on a portion of the real property in theamount of $46,201 (see Loria vLoria, 46 AD3d 768, 770 [2007]). We further agree with the husband that the value ofthe farm should be decreased by the amount of the open accounts, which was $48,995. It wasundisputed that the wife's expert appraised the farm personalty on a liquidation basis, which thecourt adopted, and a liquidation of the business would apply the debts on those open accounts.We therefore modify the amended judgment by reducing the distributive award to the wife in theamount of $586,065 set forth in the 3rd decretal paragraph to $543,227 and reducing the lumpsum partial distributive award in the amount of $260,000 set forth in the 4th, 5th, and 10thdecretal paragraphs to $217,162. We further conclude that the court did not abuse its discretionin awarding the wife 45% of the value of the farm (see generally Oliver v Oliver, 70 AD3d 1428, 1428-1429 [2010]).Contrary to the husband's contention, "the relevant factors were taken into consideration by thecourt and the reasons for its decision are articulated" (Butler v Butler, 256 AD2d 1041,1042 [1998], lv denied 93 NY2d 805 [1999]).
We reject the husband's further contention on appeal in appeal No. 1 that the court abused itsdiscretion in awarding him 15% of the value of the wife's enhanced earnings from teaching basedon her attainment of a master's degree (see Martinson v Martinson, 32 AD3d 1276, 1277 [2006]). "'[W]here only modest contributions are made by the nontitled spouse toward the [*3]other spouse's attainment of a degree . . . and theattainment is more directly the result of the titled spouse's own ability, tenacity, perseverance andhard work, it is appropriate for courts to limit the distributed amount of that enhanced earningcapacity' " (Higgins v Higgins, 50AD3d 852, 853 [2008]). Contrary to the contentions of the husband on appeal and the wifeon her cross appeal, the court did not abuse its discretion in awarding the wife $40,000 in counselfees, which was less than half the amount she was seeking (see Blake v Blake [appealNo. 1], 83 AD3d 1509 [2011]). The court properly considered, inter alia, "the financialcircumstances of both parties . . . [and] the existence of any dilatory orobstructionist conduct" (id.; seeJohnson v Chapin, 12 NY3d 461, 467 [2009], rearg denied 13 NY3d 888[2009]). Although the wife had the financial ability to pay for her own counsel fees, the husbandhad engaged in some obstructionist conduct during the trial. We have considered the parties'remaining contentions in appeal No. 1 and conclude that they are without merit.
With respect to the order in appeal No. 2, we agree with the husband that the court erred inrestricting him from entering into or closing on any real property contracts inasmuch as the wifedid not seek that relief in her order to show cause (cf. Tirado v Miller, 75 AD3d 153, 158 [2010]). We thereforemodify the order in appeal No. 2 by vacating the fifth ordering paragraph.Present—Centra, J.P., Carni, Lindley, Sconiers and Martoche, JJ.