| Beardslee v Beardslee |
| 2015 NY Slip Op 00270 [124 AD3d 969] |
| January 8, 2015 |
| Appellate Division, Third Department |
[*1]
| Melissa Beardslee, Respondent, v Calvin Beardslee,Appellant. |
Harlem & Jervis, Oneonta (Eric V. Jervis of counsel), for appellant.
Jackson Bergman, LLP, Binghamton (Benjamin K. Bergman of counsel), forrespondent.
McCarthy, J.P. Appeal from a judgment of the Supreme Court (Lambert, J.), enteredMay 17, 2013 in Delaware County, ordering, among other things, equitable distributionof the parties' marital property, upon a decision of the court.
Plaintiff (hereinafter the wife) commenced this divorce action against defendant(hereinafter the husband). Following a trial, Supreme Court found, as relevant here, thattwo parcels of real property were marital property, the one containing a business shouldbe sold with the proceeds equally divided after paying certain debts, and the other parcelcontaining a residence should be transferred to the husband once he paid the wife half ofthe property's equity and removed her name from the mortgage or, if those conditions didnot occur, the property should be sold with the net proceeds equally divided. Althoughthe court found that the husband's Delaware Bancshare stock, which he inherited fromhis father, was his separate property (see Domestic Relations Law§ 236 [B] [d] [1]), the court found that "the proof was not persuasive thatthe $39,786.60 worth of stock sold was used to pay off a marital debt." Accordingly, thecourt did not give the husband any credit for that amount. The husband appeals.
The husband was entitled to a credit for the value of his separate property used to paytoward the marital debt consisting of the mortgages. When one spouse contributesseparate property toward the purchase of a marital asset, such as a marital home, thecontributing spouse is generally entitled to a credit representing the amount of thatseparate property contribution (see Fields v Fields, 15 NY3d 158, 166 [2010]). The use ofseparate funds to purchase a marital asset does not mandate that a court give a credit,however; the court may consider the use of separate [*2]property when exercising its discretion in arriving at anequitable distribution of that asset (see Vertucci v Vertucci, 103 AD3d 999, 1003 [2013]; Murray v Murray, 101 AD3d1320, 1321 [2012], lv dismissed 20 NY3d 1085 [2013]). Here, SupremeCourt did not exercise its discretion in this regard, but made a determination that theproof was insufficient to show that separate property was applied toward the maritaldebt. We disagree with that determination and find that the husband is entitled to a creditof $39,786.60 (see Swett vSwett, 89 AD3d 1560, 1562 [2011]; Maczek v Maczek, 248 AD2d 835,837 [1998]; Lord v Lord, 124 AD2d 930, 932 [1986]).
It is undisputed that the two parcels were marital property, the mortgages weremarital debt and the stock was the husband's separate property. The husband testified thatthe mortgage on the residence was secured with the real property and his stock ascollateral, so the bank—which held the mortgages and issued thestock—initially would not allow him to sell any shares. He further testified thatwhen the parties were behind on their mortgage, the bank withheld the stock dividends tomake mortgage payments and permitted the husband to sell shares. As shown in thecertified bank records of the mortgage payment histories and the stock sales, as well as achart that was received into evidence correlating those numbers, payments were made onthe mortgages on the dates and in the amounts of the sales of the husband's stock. Thisconstitutes persuasive proof that the husband's separate property was used to pay off amarital debt. Thus, he is entitled to a credit of $39,786.60. If the property with theresidence is sold, this credit should be given to the husband before the remainder of thenet proceeds are evenly divided by the parties. If that property is not sold and thehusband retains possession, the credit should be deducted from the $191,310.60 inequity, for a total of $151,524. The husband must pay the wife one half of the latteramount, or $75,762, in exchange for the transfer of the property to him, along withremoving her name from the mortgage.
Garry, Lynch and Clark, JJ., concur. Ordered that the judgment is modified, on thelaw and the facts, without costs, by reversing so much thereof as denied defendant acredit for separate property contributed toward a marital debt; a credit of $39,786.60 isgranted to defendant toward the real property containing the residence, consistent withthis Court's decision; and, as so modified, affirmed.