| Hymowitz v Hymowitz |
| 2014 NY Slip Op 05306 [119 AD3d 736] |
| July 16, 2014 |
| Appellate Division, Second Department |
[*1]
| 1 Ira Hymowitz, Respondent, v EllenHymowitz, Appellant. |
Wand, Powers & Goody, LLP, Huntington, N.Y. (Carl F. Wand and Jennifer H.Goody of counsel), for appellant.
Glenn S. Koopersmith, Garden City, N.Y., for respondent.
In an action for a divorce and ancillary relief, the defendant appeals, as limited by herbrief, from stated portions of an amended judgment of the Supreme Court, NassauCounty (Diamond, J.), entered March 21, 2012, which, upon a decision of the same courtdated September 1, 2011, as amended January 9, 2012, made after a nonjury trial, and anorder of the same court dated October 24, 2011, inter alia, (1) awarded her child supportin the sum of only $147.12 per week, (2) awarded her maintenance for only seven years,(3) failed to direct the plaintiff to obtain and maintain a life insurance policy to securechild support and maintenance payments, (4) determined that the plaintiff's interest inWeinstein & Holtzman, Inc., was his separate property and awarded the defendantthe sum of only $69,900, representing 15% of the increase in the value of the plaintiff'sinterest in that business, (5) determined that the plaintiff's one-third interest in BSH ParkRow, LLC, was his separate property and awarded the defendant the sum of only$184,950, representing her 15% share of the value of that business, (6) failed to equitablydistribute a share of the plaintiff's interest in HGH Family, LLC, by awarding thedefendant only 50% of the net profit distributions that the plaintiff receives from HGHFamily, LLC, until the defendant's 66th birthday, (7) valued the parties' financial andretirement accounts "as of the date of the signing of the Judgment of Divorce," (8)awarded the plaintiff a credit against the proceeds of the sale of the marital residence for100% of the payments he made to reduce the principal balance of the mortgage on themarital residence, and (9) awarded her an attorney's fee in the sum of only $115,000 andan expert fee in the sum of only $20,500.
Ordered that the amended judgment is modified, on the law, on the facts, and in theexercise of discretion, (1) by deleting the provision thereof awarding the defendant thesum of $69,900, representing 15% of the increase in value of the plaintiff's interest inWeinstein & Holtzman, Inc., and substituting therefor a provision awarding thedefendant the sum of $116,500, representing 25% of the increase in value of theplaintiff's interest in that business, (2) by deleting the provision thereof awarding thedefendant the sum of $184,950 as her separate property interest in BSH Park Row, LLC,representing 15% of the value of the plaintiff's interest in that business, and [*2]substituting therefor a provision determining that theplaintiff's one-third interest in BSH Park Row, LLC, is marital property subject toequitable distribution, and awarding the defendant the sum of $308,250, representing25% of the value of the plaintiff's interest in that business, (3) by deleting the provisionthereof awarding the defendant 50% of the net profit distributions that the plaintiffreceives from HGH Family, LLC, until her 66th birthday, and substituting therefor aprovision directing that the plaintiff's interest in HGH Family, LLC, is marital propertysubject to equitable distribution, and awarding the defendant distributions from herequitable share of the plaintiff's interest in HGH Family, LLC, retroactive to the date ofthe commencement of the action, in an amount to be calculated by the Supreme Court,representing 40% of the value of the plaintiff's interest in that business, (4) by deletingthe provision thereof awarding the plaintiff a credit against the proceeds of the sale of themarital residence for 100% of the payments he made to reduce the principal balance ofthe mortgage on the marital residence during the divorce proceedings, and substitutingtherefor a provision awarding the plaintiff a credit for 50% of the payments he made toreduce the principal balance of the mortgage on the marital residence during the divorceproceedings, (5) by adding a provision thereto awarding the defendant a credit againstthe proceeds of the sale of the marital residence for the amount the plaintiff withdrewfrom the parties' home equity line of credit account to pay his attorney's and expert fees,(6) by adding a provision thereto distributing to each party 50% of the shares of each ofthe stocks acquired during the marriage, (7) by adding a provision thereto awarding thedefendant a credit in the sum of $1,911.97, representing 50% of the marital portion of theparties' tax refund for tax year 2008, (8) by deleting the provision thereof valuing theparties' financial and retirement accounts "as of the date of the signing of the Judgmentof Divorce," and substituting therefor a provision valuing the parties' financial andretirement accounts as of January 1, 2011, (9) by deleting the provision thereof awardingchild support based only upon the first $130,000 of combined parental income, andsubstituting therefor a provision awarding child support based upon the first $175,000 ofcombined parental income, (10) by deleting the provision thereof awarding the defendantmaintenance in the sum of $6,250 per month, commencing with the 49th month after thesigning of the amended judgment and continuing for 36 months thereafter, andsubstituting therefor a provision awarding her maintenance in the sum of $6,250 permonth, commencing with the 49th month from the signing of the amended judgment andcontinuing until the earliest date of her remarriage, her attainment of age 66, or the deathof either party, and (11) by adding a provision thereto directing the plaintiff to maintain alife insurance policy for the benefit of the defendant until payment of the distributiveaward and maintenance is completed; as so modified, the amended judgment is affirmedinsofar as appealed from, without costs or disbursements, and the matter is remitted tothe Supreme Court, Nassau County, for further proceedings in accordance herewith, andfor the entry of an appropriate second amended judgment thereafter.
The plaintiff and the defendant were married on April 10, 1988, and have twochildren, who are now both over the age of 21. Following 20 years of marriage, theplaintiff commenced this action for a divorce and ancillary relief, and the matterproceeded to trial on the issues of equitable distribution of the marital property,maintenance, child support, attorney's fees, and expert fees.
Contrary to the defendant's contention, the record supports the Supreme Court'sconclusion that the transfer of a one-third interest in Weinstein & Holtzman, Inc.(hereinafter Weinstein & Holtzman), a family-owned hardware store, to the plaintifffrom his father and uncle which occurred during the marriage was tantamount to a "giftfrom a party other than the spouse" and, thus, was the separate property of the plaintiffnot subject to equitable distribution (Domestic Relations Law § 236 [B] [1][d] [1]). The determination as to whether the transfer was a gift to the plaintiff dependedupon the credibility of the witnesses at trial, and the credibility determinations made bythe Supreme Court are supported by the record (see Scher v Scher, 91 AD3d 842, 846 [2012]; Aloi v Simoni, 82 AD3d683, 685 [2011]; Schwartzv Schwartz, 67 AD3d 989, 990 [2009]; Ivani v Ivani, 303 AD2d 639,640 [2003]). However, we find that the Supreme Court should have awarded thedefendant a 25% share of the appreciation in the value of the plaintiff's interest inWeinstein & Holtzman (see Domestic Relations Law § 236 [B][5] [d] [6]; Price v Price, 69 NY2d 8, 18 [1986]; Formica v Formica, 101 AD3d805, 806 [2012]; Embury vEmbury, 49 AD3d 802, 804 [2008]; Imhof v Imhof, 259 AD2d 666, 667[1999]). Taking into consideration the circumstances of this case and of the respectiveparties, we find that an award to [*3]the defendant of a25% share of the appreciation in value of the plaintiff's interest in Weinstein &Holtzman will take into account the defendant's limited involvement in the plaintiff'sbusiness, while not ignoring the direct and indirect contributions she made as the primarycaretaker of the parties' children, as a homemaker, and as a social companion to theplaintiff, while foregoing her career (see Domestic Relations Law§ 236 [B] [5] [d] [6]; Price v Price, 69 NY2d at 11, 14; Ciampa v Ciampa, 47 AD3d745, 747 [2008]; Griggs vGriggs, 44 AD3d 710 [2007]). Contrary to the defendant's contention, theSupreme Court did not improvidently exercise its discretion in valuing the appreciationof the plaintiff's interest in Weinstein & Holtzman (see Burns v Burns, 84NY2d 369, 375 [1994]; Litman v Litman, 61 NY2d 918, 920 [1984]; Wasserman v Wasserman, 66AD3d 880, 882 [2009]).
The Supreme Court improperly classified the plaintiff's one-third interest in BSHPark Row, LLC (hereinafter BSH), a holding company whose sole asset is a buildinglocated at 29 Park Row in lower Manhattan in which the hardware store is situated, as hisseparate property not subject to equitable distribution. "Property acquired during themarriage is presumed to be marital property and the party seeking to overcome suchpresumption has the burden of proving that the property in dispute is separate property"(Judson v Judson, 255 AD2d 656, 657 [1998]; see Steinberg v Steinberg, 59AD3d 702, 704 [2009]; D'Angelo v D'Angelo, 14 AD3d 476, 477 [2005]; Farag v Farag, 4 AD3d502, 503 [2004]). Here, BSH was formed and the building was acquired during themarriage, and the plaintiff failed to meet his burden of tracing the use of claimed separatefunds to establish that they were used for the purchase of his portion of the property'sacquisition costs (see Steinberg v Steinberg, 59 AD3d at 704; D'Angelo vD'Angelo, 14 AD3d at 477; Capasso v Capasso, 119 AD2d 268, 272 [1986]).Marital property is to be viewed broadly, while separate property is to be viewednarrowly (see Price v Price, 69 NY2d at 15; Saasto v Saasto, 211 AD2d708, 709 [1995]). Where, as here, a party fails to trace sources of money claimed to beseparate property, a court may treat it as marital property (see Saasto v Saasto,211 AD2d at 709; Sarafian v Sarafian, 140 AD2d 801, 804 [1988]; cf.Lischynsky v Lischynsky, 120 AD2d 824 [1986]). Here, the Supreme Court shouldhave awarded the defendant a 25% share of the plaintiff's interest in BSH (seeDomestic Relations Law § 236 [B] [5] [d] [6]; Price v Price, 69NY2d at 18; Formica v Formica, 101 AD3d at 806; Embury v Embury,49 AD3d at 804; Imhof v Imhof, 259 AD2d at 667). However, contrary to thedefendant's contention, the record supports the Supreme Court's determination as to thevalue of the plaintiff's interest in BSH (see Burns v Burns, 84 NY2d at 375;Litman v Litman, 61 NY2d at 920; Wasserman v Wasserman, 66 AD3d at882).
The Supreme Court erred when it failed to equitably distribute a share of theplaintiff's interest in HGH Family, LLC (hereinafter HGH). On April 5, 2011, after thecommencement of trial, the parties entered into an oral stipulation of settlement in opencourt concerning the issue of the equitable distribution of the parties' 12.9% interest inHGH, which operates an MRI facility in Westchester County. Although the 12.9%interest was held in the plaintiff's name, the parties stipulated that the entire interest wasmarital property, subject to the trial court's determination after trial of the defendant'sequitable share. However, instead of awarding the defendant an equitable share of thismarital property in accordance with the terms of the parties' open court stipulation, theSupreme Court merely awarded the defendant 50% of the plaintiff's share of the annualdistributions from HGH until her 66th birthday.
It is well settled that stipulations of settlement, especially those whose terms areplaced upon the record in open court, are judicially favored. Absent a showing of fraud,overreaching, mistake, or duress, the stipulation should not be disturbed by the court(see Matter of Woods v Velez-Shanahan, 308 AD2d 593, 594 [2003];Lafferty v Lafferty, 256 AD2d 445, 446 [1998]; Wieners v Wieners, 239AD2d 493, 494 [1997]; Ruxton v Ruxton, 181 AD2d 876 [1992]). No suchshowing has been made here. Thus, the Supreme Court should have incorporated theparties' stipulation into the amended judgment (see Matter of Woods vVelez-Shanahan, 308 AD2d at 594; Lafferty v Lafferty, 256 AD2d at 446;Wieners v Wieners, 239 AD2d at 494; Ruxton v Ruxton, 181 AD2d 876[1992]). Further, based on the record and the relative contributions made by the partiesthroughout the marriage, the defendant should receive a 40% share of the marital interestin HGH. In addition, the defendant should be awarded distributions from her equitableshare of the plaintiff's interest in HGH, retroactive to the date of commencement of theaction (see Mesholam vMesholam, 11 NY3d 24, 28 [2008]; Anglin v Anglin, 80 NY2d 553, 556[1992]). Accordingly, we remit the matter to the Supreme Court, Nassau County, torecalculate the defendant's equitable share of the plaintiff's interest in HGH in conformitywith the [*4]terms of the parties' April 5, 2011,stipulation, and this decision and order.
The Supreme Court erred in failing to distribute to each of the parties 50% of theshares of each of the stocks acquired during the marriage. The plaintiff admitted thatthese stocks were acquired by him during the marriage, and were subject to equitabledistribution (see Dellafiora vDellafiora, 38 AD3d 825, 826-827 [2007]).
The Supreme Court should have valued the parties' financial and retirement accountsas of January 1, 2011, which is the date set forth in the parties' August 2011 "so-ordered"stipulation and is the date closest to the date of trial (see Domestic Relations Law§ 236 [B] [4] [b]; Price v Price, 113 AD2d 299, 307-308 [1985],affd 69 NY2d 8 [1986]; Harrington v Harrington, 300 AD2d 861, 864[2002]; Soule v Soule, 252 AD2d 768, 771 [1998]; Heine v Heine, 176AD2d 77, 87 [1992]; Wegman v Wegman, 123 AD2d 220, 234 [1986]).
The Supreme Court improvidently exercised its discretion in awarding the plaintiff acredit against the proceeds of the sale of the marital residence for 100% of the paymentshe made to reduce the principal balance of the mortgage during the divorce proceedings(see Le v Le, 82 AD3d845, 845-846 [2011]; Mesholam v Mesholam, 25 AD3d 670, 671-672 [2006],mod 11 NY3d 24 [2008]; Litman v Litman, 280 AD2d 520, 522 [2001];Palumbo v Palumbo, 10AD3d 680, 682 [2004]). The plaintiff was entitled to a credit of only 50% of thereduction in mortgage principal because "[g]enerally, it is the responsibility of bothparties to maintain the marital residence . . . during the pendency of amatrimonial action" (Judge vJudge, 48 AD3d 424, 425-426 [2008] [internal quotation marks omitted]; seeLe v Le, 82 AD3d at 845-846; Palumbo v Palumbo, 10 AD3d at 682).Accordingly, we remit the matter for a determination of the amount the plaintiffexpended in order to reduce the principal balance of the mortgage on the maritalresidence during the divorce proceedings.
The Supreme Court should have awarded the defendant a credit against the proceedsof the sale of the marital residence for the amount of money the plaintiff withdrew fromthe parties' home equity line of credit account (hereinafter HELOC) to pay his attorney'sfees and expert's fees. This effectively made the defendant, the nonmonied spouse, pay asubstantial portion of the counsel fees of the monied spouse, the plaintiff, in violation ofDomestic Relations Law § 237 and, therefore, was improper (seegenerally O'Shea v O'Shea, 93 NY2d 187 [1999]; Hathaway v Hathaway, 16AD3d 458 [2005]; Charpié v Charpié, 271 AD2d 169 [2000];Matwijczuk v Matwijczuk, 261 AD2d 784 [1999]; Steinmetz vSteinmetz, 98 AD2d 657 [1983]). Upon remittal, the Supreme Court should awardthe defendant a credit against the proceeds of the sale of the marital residence for theamount of money the plaintiff withdrew from the HELOC to pay his attorney's fees andexpert's fees.
The parties received a tax refund for tax year 2008 in the amount of $4,652, whichwas placed in escrow. Since the matrimonial action was commenced on October 27,2008, 82.2% of the refund is marital property (see Lueker v Lueker, 72 AD3d 655, 657 [2010]). Thedistribution should be 50% to each party. Therefore, the defendant was entitled to acredit in the sum of $1,911.97.
The Supreme Court improvidently exercised its discretion in fixing the duration ofmaintenance awarded to the defendant (see Domestic Relations Law§ 236 [B] [6] [a]; Hartog v Hartog, 85 NY2d 36, 50-52 [1995]; Marley v Marley, 106 AD3d961, 962 [2013]). In light of the parties' ages and their lifestyle during the marriage,as well as their financial circumstances, the Supreme Court should have awarded thedefendant maintenance until the earliest of her eligibility for full Social Security benefitsat the age of 66, her remarriage, or the death of either party (see Giokas v Giokas, 73 AD3d688, 689 [2010]; Hamroff vHamroff, 35 AD3d 365, 366 [2006]; Penna v Penna, 29 AD3d 970, 972 [2006]).
Further, the Supreme Court failed to properly calculate child support pursuant to theChild Support Standards Act (see Domestic Relations Law § 240[1-b] [hereinafter the CSSA]) for the period of time before each child reached the age of21. The CSSA sets forth a formula for calculating child support by applying a designatedstatutory percentage, based upon the number of children to be supported, to combinedparental income up to the statutory cap that is in effect at the time of the judgment (see Holterman v Holterman, 3NY3d 1, 11 [2004]; Matter of Cassano v Cassano, 85 NY2d 649, 653-654[1995]), here, $130,000 (see Social Services Law § 111-i [2] [b]).With respect to [*5]combined parental income exceedingthat amount, the court has the discretion to apply the statutory child support percentage,or to apply the factors set forth in Domestic Relations Law § 240 (1-b) (f)(see Matter of Cassano v Cassano, 85 NY2d at 654; McCoy v McCoy, 107 AD3d857, 858 [2013]; Matter ofByrne v Byrne, 46 AD3d 812, 814 [2007]), or to utilize "some combination ofth[ose] two" methods (Poli v Poli, 286 AD2d 720, 723 [2001]; see Jordan v Jordan, 8 AD3d444, 445 [2004]). The court must " 'articulate its reason or reasons for [thatdetermination], which should reflect a careful consideration of the stated basis for itsexercise of discretion, the parties' circumstances, and its reasoning why there [should or]should not be a departure from the prescribed percentage' " (Wagner vDunetz, 299 AD2d 347, 350-351 [2002], quoting Matter of Schmitt vBerwitz, 228 AD2d 604, 605 [1996]; see Matter of Cassano v Cassano, 85NY2d at 655; Matter of Wienands v Hedlund, 305 AD2d 692, 693 [2003]).
There was no basis under the circumstances of this case to limit the child supportaward to the statutory cap of the first $130,000 of combined parental income. In view ofthe standard of living enjoyed by the parties' children during the marriage, and theearnings and assets of the parties, the child support award should be based upon$175,000 of combined parental income (see Holterman v Holterman, 3 NY3d at10; Heymann v Heymann,102 AD3d 832, 834 [2013]; Lago v Adrion, 93 AD3d 697, 699 [2012]). The SupremeCourt also erred in failing to direct that the plaintiff contribute his pro rata share of theyounger child's unreimbursed reasonable health care expenses (see DomesticRelations Law § 240 [1-b] [c] [5]; Griggs v Griggs, 44 AD3d 710, 713-714 [2007];Granade-Bastuck v Bastuck, 249 AD2d 444, 446 [1998]; Wilson vWilson, 203 AD2d 558 [1994]). Furthermore, the Supreme Court erred in refusing toaward the defendant retroactive child support for the periods of time when the older childresided with her prior to the older child's emancipation and when the younger childresided with her. By statute, child support should be awarded retroactive to the date anapplication for such support was made, which, in this case, was the date upon which thedefendant served her motion for pendente lite child support (see DomesticRelations Law § 236 [B] [7] [a]; Wallach v Wallach, 37 AD3d 707, 709 [2007]; Poli vPoli, 286 AD2d at 723; Gezelter v Shoshani, 283 AD2d 455, 456 [2001];Solomon v Solomon, 282 AD2d 666, 667 [2001]; Crane v Crane, 264AD2d 749, 752 [1999]). We note that in calculating the plaintiff's retroactive supportobligation, the court should determine the amount of payments made by him on behalf ofthe defendant and children under the pendente lite order, which required him to pay thecarrying charges for the marital residence. To the extent that these payments canappropriately be allocated to temporary child support rather than temporary maintenance,the plaintiff should be permitted to offset such payments against accrued arrears (seeCrane v Crane, 264 AD2d at 752; Mellen v Mellen, 260 AD2d 609, 610[1999]; Grossman v Merke-Grossman, 248 AD2d 670, 670-671 [1998]).
We agree with the defendant's contention that the Supreme Court should havedirected the plaintiff to maintain life insurance in her favor to secure his obligation to paythe maintenance and distributive award (see Domestic Relations Law§ 236 [B] [8] [a]; Hartog v Hartog, 85 NY2d 36 [1995]; Miceli v Miceli, 78 AD3d1023, 1026 [2010]).
Given the equities and circumstances of the case, the Supreme Court did notimprovidently exercise its discretion in rendering its award of attorney's fees and expertfees (see DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881 [1987]; Ciampa vCiampa, 47 AD3d at 748; Prichep v Prichep, 52 AD3d 61, 64 [2008]; Timpone v Timpone, 28 AD3d646 [2006]; Morrissey v Morrissey, 259 AD2d 472, 473 [1999]; Walkerv Walker, 255 AD2d 375, 376 [1998]).
The defendant's remaining contentions are without merit. Skelos, J.P., Lott, Romanand Cohen, JJ., concur.