| Maddaloni v Maddaloni |
| 2016 NY Slip Op 05851 [142 AD3d 646] |
| August 24, 2016 |
| Appellate Division, Second Department |
[*1]
| Laura Maddaloni, Respondent, v LuigiMaddaloni, Appellant. (Appeal Nos. 1-4.) Laura Maddaloni, Appellant, v LuigiMaddaloni, Respondent. (Appeal No. 5.) |
Kenneth S. Sternberg, New York, NY, for appellant and appellant-respondent.
Castrovinci & Mady, Smithtown, NY (Philip J. Castrovinci, Katharine E.O'Dette, and Matthew Mady of counsel), for respondent and respondent-appellant.
Appeals by the defendant from four orders of the Supreme Court, Suffolk County(Carol MacKenzie, J.), dated October 1, 2013 (two orders), December 3, 2013, and May20, 2014, and appeal by the defendant and cross appeal by the plaintiff from statedportions of a judgment of divorce of that court entered May 19, 2014. The first orderdated October 1, 2013 granted the plaintiff's motion for an award of temporarymaintenance. The second order dated October 1, 2013 granted the plaintiff's motion foran award of counsel fees. The order dated December 3, 2013 granted the plaintiff'smotion for an award of additional counsel fees. The order dated May 20, 2014, insofar asappealed from, granted those branches of the plaintiff's motion which were to hold thedefendant in civil contempt and to award the plaintiff $2,500 in counsel fees pursuant toDomestic Relations Law § 237 (c). The judgment of divorce, upon adecision of that court dated February 6, 2014, made after a nonjury trial, inter alia,awarded the plaintiff the sum of $500,000, representing 25% of the appreciation of thedefendant's business known as Maddaloni Jewelers, and monthly maintenance for aperiod of 10 years, and distributed the parties' assets.
Ordered that the appeals from the two orders dated October 1, 2013, and the orderDecember 3, 2013, are dismissed, without costs or disbursements; and it is further,ordered that the order dated May 20, 2014 is reversed insofar as appealed from, on thelaw, without costs or disbursements, and those branches of the plaintiff's motion whichwere to hold the defendant in civil contempt and to award the plaintiff $2,500 in counselfees pursuant to Domestic Relations Law § 237 (c) are denied; and it isfurther, ordered that the judgment of divorce is affirmed insofar as appealed andcross-appealed from, without costs or disbursements.
The appeals from the two orders dated October 1, 2013, and the order datedDecember 3, 2013, must be dismissed because the right of direct appeal therefromterminated with the entry of the judgment of divorce (see Matter of Aho, 39NY2d 241, 248 [1976]; Anderson v Anderson, 50 AD3d 610, 610 [2008]). Thesethree orders, which awarded pendente lite maintenance and counsel fees to the plaintiff,are not reviewable on the appeal from the judgment of divorce under CPLR 5501because, if reversed or modified, they would not necessarily affect the judgment (seeAnderson v Anderson, 50 AD3d at 610; Mellen v Mellen, 260 AD2d 609,611 [1999]; Samuelsen v Samuelsen, 124 AD2d 650, 651 [1986]; cf. Oakes v Patel, 20 NY3d633, 643-645 [2013]). In any event, the financial circumstances of the parties werefully explored at trial, which is the appropriate remedy for any perceived inequity in apendente lite award of maintenance (see Anderson v Anderson, 50 AD3d at 610;Samuelsen v Samuelsen, 124 AD2d at 652; Zoda v Zoda, 121 AD2d 380[1986]).
The parties in this action for a divorce and ancillary relief were married in January1988. At the time of the marriage, the defendant owned several cars, a house, and ajewelry business, and he was in contract to buy a shopping center. On August 22, 1988,less than eight months after the parties were married, they experienced marital difficultiesand entered into a postnuptial agreement. Among other things, this agreement providedthat, in the event that the parties divorced after the first five years of marriage, theplaintiff agreed to accept the sum of $50,000, payable in five equal annual installmentsof $10,000, "in full satisfaction of any and all claims of whatsoever kind and nature shemay have at that time for past or future support or for distribution of assets."
Thereafter, the parties reconciled and remained married for more than 25 years. Theyhad two children, who were emancipated by the time of the trial.
The plaintiff commenced this divorce action on March 16, 2011. A hearing withregard to the validity of the 1988 postnuptial agreement commenced on August 9, 2011,but the parties agreed to adjourn the matter so that they could pursue reconciliation.Shortly thereafter, on September 28, 2011, the parties executed an amendment to the1988 postnuptial agreement. On December 5, 2012, well over a year later, the hearingwith regard to the validity of the 1988 postnuptial agreement resumed. The validity of the2011 amendment to the postnuptial agreement was not addressed at the hearing; thatissue was later referred to trial. After the hearing, the Supreme Court upheld the separateproperty provisions of the 1988 postnuptial agreement. However, the court determinedthat the $50,000 maintenance provision in that agreement, which purported to be in fullsatisfaction of all claims, was unenforceable on the ground that it wasunconscionable.
Thereafter, the Supreme Court conducted a nonjury trial, which commenced onSeptember 11, 2013 and concluded on October 25, 2013. Following the trial, the courtissued a 31-page decision dated February 6, 2014, which was denominated an "order."The court determined that the 2011 amendment to the postnuptial agreement was invalidand of no force and effect because, among other reasons, the amendment lackedconsideration and the defendant and his counsel engaged in unethical overreaching whenthe defendant delivered the 2011 amendment directly to the plaintiff rather than hercounsel. The court further found, among other things, that the plaintiff's testimony wascredible, but the defendant's testimony and documentary evidence lacked credibility.Significantly, the court concluded that the defendant's real income was greater than whatwas claimed on his tax returns, and imputed income to the defendant of "at least$600,000 per year." With regard to the appreciation of Maddaloni Jewelers, one of thedefendant's businesses, the court found that the 1988 postnuptial agreement was silent asto equitable distribution of the appreciation of the business, and that the plaintiffestablished that she made significant direct and indirect contributions to the value ofMaddaloni Jewelers during the marriage.
After the Supreme Court issued its decision after trial, which was denominated an"order," the plaintiff moved, inter alia, to hold the husband in contempt for his failure tocomply with certain provisions of the decision. The defendant opposed the motion,arguing that the paper dated [*2]February 6, 2014 was adecision, not an order, and thus the plaintiff's contempt motion was premature.
Based on its findings in the decision dated February 6, 2014, the Supreme Courtentered a judgment of divorce that, among other things, awarded the plaintiff the sum of$500,000, representing 25% of the appreciation of Maddaloni Jewelers, and monthlymaintenance for a period of 10 years.
One day after the judgment of divorce was entered, in an order dated May 20, 2014,the Supreme Court granted the plaintiff's motion to hold the defendant in contempt,finding that the paper dated February 6, 2014 was indeed an order, and that the defendantfailed to comply with its specific directives.
The defendant appeals, and the plaintiff cross-appeals, from stated portions of thejudgment of divorce. The defendant also appeals from so much of the order dated May20, 2014 as granted those branches of the plaintiff's motion which were to hold him incivil contempt and to award the plaintiff $2,500 in counsel fees. We affirm the judgmentof divorce insofar as appealed and cross-appealed from, and reverse the order dated May20, 2014, insofar as appealed from.
The 1988 Postnuptial Agreement and the2011 Amendment
Domestic Relations Law § 236 (B) (3) provides that "[a]n agreement bythe parties, made before or during the marriage, shall be valid and enforceable in amatrimonial action if such agreement is in writing, subscribed by the parties, andacknowledged or proven in the manner required to entitle a deed to be recorded." Suchan agreement may include, inter alia, a "provision for the amount and duration ofmaintenance or other terms and conditions of the marriage relationship . . .provided that such terms were fair and reasonable at the time of the making of theagreement and are not unconscionable at the time of entry of final judgment" (DomesticRelations Law § 236 [B] [3]). "An unconscionable bargain is one which noperson in his or her senses and not under delusion would make on the one hand, and nohonest and fair person would accept on the other, the inequality being so strong andmanifest as to shock the conscience and confound the judgment of any person ofcommon sense" (Morad vMorad, 27 AD3d 626, 627 [2006]; see Christian v Christian, 42 NY2d63, 71 [1977]; Label vLabel, 70 AD3d 898, 899 [2010]).
Here, the Supreme Court properly determined that the maintenance provision of the1988 postnuptial agreement, which provided the plaintiff with only $50,000 in fullsatisfaction of all claims, would be unconscionable by the time a final judgment wouldbe entered in this action. At the time that the parties executed the 1988 postnuptialagreement, the defendant owned, among other things, a jewelry business worth at least$3 million, and he was in contract to buy a shopping center. Thereafter, during more than25 years of marriage, the defendant's jewelry business underwent tremendous growthwhile the plaintiff worked there, and the parties lived what can easily be described as alavish lifestyle. Among other things, they owned numerous high-end automobiles andtook numerous international vacations. For a time, they traveled regularly to the Bahamason the defendant's yacht. Under all the circumstances, the court properly determined thatthe maintenance provision in the 1988 agreement was unconscionable and, thus,unenforceable (see Libert vLibert, 78 AD3d 790, 792 [2010]; see also Smith v Smith, 129 AD3d 934, 935 [2015]; cf. Gottlieb v Gottlieb, 138AD3d 30, 47 [2016]; Label v Label, 70 AD3d at 899).
Further, the Supreme Court properly determined that the 2011 amendment wasmanifestly unfair to the plaintiff due to the nature and magnitude of the rights that shewaived and the vast disparity in the parties' income and net worth (see Petracca v Petracca, 101AD3d 695 [2012]; O'Malley v O'Malley, 41 AD3d 449, 451 [2007]; Siclariv Siclari, 291 AD2d 392, 392-393 [2002]), and the defendant's overreaching inpresenting the amendment directly to the plaintiff for execution during the pendency ofthis action notwithstanding that she was represented by counsel (see Smith vSmith, 129 AD3d at 935). Accordingly, the court properly set aside the 2011amendment (see Christian v Christian, 42 NY2d 63, 72-73 [1977]; Barchella v Barchella, 44AD3d 696, 697 [2007]).
[*3]EquitableDistribution
Contrary to the defendant's contention, the Supreme Court properly awarded theplaintiff the sum of $500,000, representing 25% of the appreciation of MaddaloniJewelers during the course of the marriage. An increase in the value of separate propertyis considered separate property "except to the extent that such appreciation is due in partto the contributions or efforts of the other spouse" (Domestic Relations Law§ 236 [B] [1] [d] [3]; see Domestic Relations Law§ 236 [B] [3]). While spouses are free to opt out of that general rule, "theintent to override the rules of equitable distribution—whether by express waiver,or by specifically designating as separate property assets that would otherwise beconsidered marital property under New York law—must be clearly evidenced bythe writing" (Tietjen vTietjen, 48 AD3d 789, 791 [2008]; see Strong v Dubin, 75 AD3d 66, 68 [2010]).
Here, pursuant to the operative provisions of the 1988 postnuptial agreement, theplaintiff waived her right to the defendant's separate property. However, the agreementneither expressly nor implicitly refers to a waiver of her right to an increase in value ofthe defendant's separate property, including Maddaloni Jewelers, to the extent that suchappreciation was due to her contributions (see Domestic Relations Law§ 236 [B] [1] [d] [3]). Moreover, the agreement did not effect a mutualwaiver of the parties' equitable distribution rights generally (cf. Vendome v Vendome, 41AD3d 837 [2007]). Accordingly, the Supreme Court properly determined that theincrease in value of Maddaloni Jewelers during the marriage, which was due in part tocontributions by the plaintiff, was marital property subject to equitable distribution(see Tietjen v Tietjen, 48 AD3d at 791; Siclari v Siclari, 291 AD2d at393).
"A trial court is vested with broad discretion in making an equitable distribution ofmarital property, and unless it can be shown that the court improvidently exercised thatdiscretion, its determination should not be disturbed" (Schwartz v Schwartz, 67 AD3d989, 990 [2009] [internal quotation marks omitted]; see Scher v Scher, 91 AD3d842, 846-847 [2012]; Aloiv Simoni, 82 AD3d 683, 685 [2011]). "Moreover, where the determination as toequitable distribution has been made after a nonjury trial, the trial court's assessment ofthe credibility of witnesses is afforded great weight on appeal" (Aloi v Simoni, 82AD3d at 685; see Scher v Scher, 91 AD3d at 847). Here, contrary to thedefendant's contention, the evidence at trial supported the Supreme Court's determinationthat the plaintiff made substantial direct and indirect contributions to the appreciation invalue of Maddaloni Jewelers. Among other things, there was testimony that the plaintiffworked at Maddaloni Jewelers four or five days a week for more than 20 years,performed all of the administrative tasks, set up the bookkeeping and advertisingdepartments, and organized about 12 trunk shows per year. Moreover, the defendant'stestimony demonstrated that the value of Maddaloni Jewelers increased by at least $2million during the course of the marriage. Accordingly, the court providently exercisedits discretion in determining that the plaintiff was entitled to 25% of the appreciation ofMaddaloni Jewelers, and in awarding her the sum of $500,000 (see DomesticRelations Law § 236 [B] [1] [c]; Price v Price, 69 NY2d 8, 17-18[1986]).
Contrary to the defendant's contention, the Supreme Court properly directed that themarital residence, titled in the name of both parties, be sold, and that the net proceeds beequally divided, as the postnuptial agreement provided that marital property included realproperty acquired after the marriage in the event that both parties' names appeared on thedeed or title. Further, the court properly determined that, pursuant to the 1988 postnuptialagreement, a certain parcel of vacant land, a Ferrari, and a Mercedes SL550 werepartially purchased with joint funds, and thus constituted marital property subject toequitable distribution.
The defendant's contention that he was entitled to a separate property credit for hiscontributions to the marital residence, the parcel of vacant land, the Ferrari, and theMercedes SL550 is without merit. Although a party is generally entitled to a credit forany contribution of separate property utilized toward the purchase of a marital asset, thepartial use of separate funds to acquire a marital asset does not mandate that a credit forseparate funds be given (seeBeardslee v Beardslee, 124 AD3d 969, 969 [2015]; Vertucci v Vertucci, 103 AD3d999, 1003 [2013]; see alsoFields v Fields, 15 NY3d 158, 166-168 [2010]). Moreover, where separateproperty has been commingled with marital property, [*4]there is a presumption that the commingled funds constitutemarital property (see Scher v Scher, 91 AD3d at 846; Massimi v Massimi, 35 AD3d400, 402 [2006]). Here, the defendant's separate property was, to some extent, usedto purchase the subject real property and vehicles. However, the evidence at trial clearlydemonstrated that, with respect to these items, the defendant's separate property had beencommingled with marital property. Among other things, the Supreme Court correctlydetermined that the purchase of the vacant land and Ferrari was accomplished usingmoney from a home equity line of credit taken against the marital residence. Thedefendant failed to present sufficient evidence tracing the source of any funds used topurchase the assets at issue to his separate property (see Robinson v Robinson, 133 AD3d 1185 [2015]). In anyevent, under all the circumstances presented, the court providently exercised itsdiscretion in declining to award the defendant a credit for any separate propertycontributions with respect to these assets (see Fields v Fields, 15 NY3d at167-168; Murray v Murray,101 AD3d 1320, 1321 [2012]; Fehring v Fehring, 58 AD3d 1061, 1063[2009]).
Contrary to the defendant's contention, the Supreme Court did not err with respect tothe distribution of certain items of jewelry. Gifts from one spouse to the other are maritalproperty subject to equitable distribution (see Smithie v Smithie, 122 AD3d 719, 720 [2014];Ferina v Ferina, 286 AD2d 472, 474 [2001]; Chase v Chase, 208 AD2d883, 884 [1994]). Here, based in part on its credibility determinations, the court properlydetermined that certain items of jewelry were gifts to the plaintiff during the marriageand, thus, this jewelry was marital property subject to equitable distribution. Further, thecourt providently exercised its discretion in awarding each of the parties a one-halfinterest in this jewelry.
Contrary to the defendant's contention, the Supreme Court providently exercised itsdiscretion in determining that the plaintiff was entitled to retain a pendant which utilizeddiamonds from her mother's and grandmother's engagement rings, as well as a diamondfrom the defendant.
Contrary to the plaintiff's contention on her cross appeal, the Supreme Court did noterr in declining to award her a one-half interest in certain accounts that were solely in thedefendant's name, because the evidence at trial supported a determination that theseaccounts were funded with his separate property (cf. Signorile v Signorile, 102 AD3d 949, 950 [2013]).Moreover, the court properly determined that, pursuant to the operative provisions of thepostnuptial agreement, a 2008 Bentley motorcar and a 60-foot yacht were the defendant'sseparate property and, thus, not subject to equitable distribution. Contrary to theplaintiff's contention, the evidence at trial supported the court's determination that theBentley and the yacht were purchased with the defendant's separatefunds.
The Supreme Court's Maintenance Award
As set forth above, the Supreme Court properly determined that the maintenanceprovision in the 1988 agreement was unenforceable. Pursuant to the provisions ofDomestic Relations Law § 236 (B) (6) (a) that were in effect at the time ofthe parties' divorce, except where there is a valid agreement with respect to maintenance,the court may order maintenance "in such amount as justice requires" (DomesticRelations Law former § 236 [B] [6] [a]). The amount and duration ofmaintenance is a matter committed to the sound discretion of the trial court, and everycase must be determined on its own unique facts (see Perdios v Perdios, 135 AD3d 840, 842 [2016]; Hannan v Hannan, 116 AD3d660, 661 [2014]; Levitt vLevitt, 97 AD3d 543, 544 [2012]). In setting the amount and duration ofmaintenance, the court should consider, among other things, "the standard of living ofthe parties, the income and property of the parties, the distribution of property, theduration of the marriage, the health of the parties, the present and future earning capacityof the parties, the ability of the party seeking maintenance to be self-supporting, [and] thereduced or lost earning capacity of the party seeking maintenance" (Gordon v Gordon, 113 AD3d654, 654-655 [2014]; seeGillman v Gillman, 139 AD3d 667 [2016]). "In general, an award ofmaintenance should be of a duration sufficient to permit the recipient to achieveeconomic independence" (Gillman v Gillman, 139 AD3d at 670, citingO'Brien v O'Brien, 66 NY2d 576, 585 [1985]).
Here, contrary to the defendant's contention, the Supreme Court considered therelevant statutory factors, including the income and assets of the parties, the longduration of the [*5]marriage, the plaintiff's extendedabsence from the work force outside of her employment at Maddaloni Jewelers, and theparties' predivorce standard of living, and providently exercised its discretion inawarding maintenance to the plaintiff for a period of 10 years (see DomesticRelations Law former § 236 [B] [6] [a]; Hartog v Hartog, 85 NY2d36, 50-52 [1995]; Levitt v Levitt, 97 AD3d at 544; cf. D'Iorio v D'Iorio, 135AD3d 693, 696 [2016]). In light of its credibility determinations, which we find noreason to disturb, the court providently exercised its discretion in imputing income to thedefendant in the sum of at least $600,000 per year (see Dochter v Dochter, 118 AD3d 665, 665 [2014]; DiPalma v DiPalma, 112AD3d 663, 664-665 [2013]).
The defendant's remaining contentions with respect to the judgment of divorce arewithout merit.
Accordingly, we affirm the judgment of divorce insofar as appealed andcross-appealed from.
The Contempt Finding
In matrimonial actions, Domestic Relations Law § 245 grants the courtauthority to punish a party for civil contempt pursuant to Judiciary Law§ 756 where the party defaults "in paying any sum of money" required by ajudgment or order, "and it appears presumptively, to the satisfaction of the court, thatpayment cannot be enforced" pursuant to the enforcement mechanisms provided inDomestic Relations Law §§ 243 and 244 and CPLR 5241 and 5242(see Rhodes v Rhodes, 137AD3d 890, 891 [2016]; El-Dehdan v El-Dehdan, 114 AD3d 4, 22-23 [2013],affd 26 NY3d 19 [2015]). To prevail on the motion, the movant mustdemonstrate by clear and convincing evidence that the party charged with contemptdisobeyed a clear and unequivocal court order, of which the party had knowledge, andthat the movant was prejudiced thereby (see Judiciary Law § 753[A] [3]; El-Dehdan v El-Dehdan, 26 NY3d at 28-29; Cutroneo v Cutroneo, 140AD3d 1006 [2016]). Under the circumstances of this case, the Supreme Court erredin holding the defendant in contempt of its "order" dated February 6, 2014, which was, infact, the decision after trial, upon which the judgment of divorce was based (cf. Matter of Vernon D. [TarahF.], 119 AD3d 784, 784 [2014]; Matter of North Tonawanda First v City of N. Tonawanda, 94AD3d 1537, 1538 [2012]). Thus, the court should have denied those branches of theplaintiff's motion which were to hold the defendant in contempt and to award her $2,500in counsel fees pursuant to Domestic Relations Law § 237 (c). Mastro, J.P.,Dillon, Hinds-Radix and Maltese, JJ., concur.