What happens on divorce when during the marriage, the marital residence that had been owned by one spouse prior to the marriage is conveyed during the marriage to the parties jointly? That was the issue addressed by the Appellate Division, Second Department, in its decision this month in Spencer-Forrest v. Forrest.

The parties were married on March 31, 1984. There were no children of the marriage, but children from each of the parties’ prior marriages resided with the parties in the marital residence during the children’s respective minorities. Both parties were employed for the majority of the marriage, and the wife provided care for the husband’s children, who were younger and resided in the marital residence longer than her children.

The husband had purchased the marital residence prior to the marriage, and transferred the property to himself and the wife as joint tenants in 1989. Other than the marital residence, the parties’ assets were held in their respective names. Both parties contributed to the household expenses, although the husband contributed a larger sum to household expenses and maintenance of the marital residence, and the wife ceased financial contributions in 2006 or 2007, after she retired.

In August, 2012, the wife commenced this action for a divorce and ancillary relief. The wife was 68 years old and the husband was 67 years old at the time of trial.

Except for the marital residence, Nassau County Supreme Court Justice Stacy D. Bennett divided the marital property) equally (other than the vehicles and personal items) regardless of the party holding title. As to the residence, Justice Bennett awarded the wife 20% of the appreciation in the value of the marital residence from 1989 (when the husband conveyed the home to the parties jointly) through the date of the commencement of the action, an award amounting to $30,000. The court declined to award the parties credits sought for assets allegedly secreted or wasted by the other party and denied the wife an award of maintenance.


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In its August 24, 2016 decision in Maddaloni v. Maddaloni, the Appellate Division, Second Department, upheld the rulings of Supreme Court Suffolk County Justice Justice Carol Mackenzie that invalidated the all-but-complete maintenance waiver contained in a 23-year-old postnuptial agreement, awarding the wife maintenance for 10 years. The appellate court also upheld Justice Mackenzie’s award to the wife of 25% of the $2,000,000 appreciation during the marriage in the value of the husband’s pre-marital business, Maddaloni Jewelers of Huntington.

The Maddalonis were married in January, 1988. At the time of the marriage, the husband owned several cars, a house, and a jewelry 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 difficulties and entered into a postnuptial agreement. Among other things, this agreement provided that, in the event that the parties divorced after the first five years of marriage, the wife agreed to accept the sum of $50,000, payable in five equal annual installments of $10,000, “in full satisfaction of any and all claims of whatsoever kind and nature she may have at that time for past or future support or for distribution of assets.”


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The ever-changing landscape of Equitable Distribution case law makes it difficult, if not impossible, to rely on the “law.” A parent cannot (or rather, should not) make a gift to a married child without bringing the lawyers into it.

Take the April, 2016 decision of the Appellate Division, Second Department in Mistretta v. Mistretta. There, the parties had been married in 1991. During their marriage they lived in a home, at first owned by the husband’s mother, and deeded to the husband in 1996.

At the trial of this 2010 divorce action, the husband claimed that the residence was a gift from his mother, and therefore constituted separate property. However, he acknowledged that for many years, he paid his mother $500 per month “rent” (the opinion does not state whether rent was paid after the property was deeded to the husband). The husband and his sister both acknowledged that rental income from the subject premises was paid to the husband’s mother pursuant to the written agreement between the husband and his mother that was introduced into evidence.

Supreme Court, Suffolk County Justice Joseph Santorelli held that the home was marital property subject to equitable distribution. He directed the sale of the premises, with the parties to share equally in any net proceeds or deficiency from such sale.


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What do you do upon divorce when the home purchased during the marriage and titled in one spouse’s name was purchased using the proceeds from the sale of the home owned at the date of marriage solely in the name of that same spouse?

The Appellate Division, Second Department, in its March 2, 2016 decision in Ahearn v. Ahearn, applied well-established equitable distribution principles to affirm the determination of now-retired Suffolk County Supreme Court Justice William J. Kent, III, and hold that the home purchased during the marriage was marital property even though titled in only the one spouse’s name. Moreover, the titled spouse was entitled to a dollar-for-dollar separate property credit against the equity in the marital-property home for the use of the first home’s net sales proceeds.

The fact pattern was straightforward. In June 1996, the wife-to-be purchased a house on Salem Street in Patchogue. Approximately nine months later, the parties were married and lived together in the Salem Street house. In December 2004, the wife sold the Salem Street house and used the $143,000 in net proceeds from that sale toward the purchase, in March 2005, of a house in Holbrook. Only the wife’s name was on the Holbrook deed, but, at the time of trial, both parties were listed on the mortgage.


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Once again, it has been made clear that where either or both spouses have assets or liabilities at the date of marriage, it is foolhardy (or at least imprudent) to enter the marriage without a prenuptial agreement and/or the assembly of proof of the extent, nature and value of those assets or liabilities.

Take the January 8, 2015 decision of the Appellate Division, Third Depatrtment, in Ceravolo v. DeSantis. In that case, the parties were married in July, 1996. The wife commenced the action for divorce in June, 2010. Acting Albany Supreme Court Justice Kimberly O’Connor determined, among other things, that the marital residence, which had been purchased by the husband prior to the marriage, was marital property and awarded the wife, among other things, half of its value. The husband appealed.

The Third Department agreed with the husband that Justice O’Connor erred in classifying the marital residence as marital property. Marital property is defined as “all property acquired by either or both spouses during the marriage” (Domestic Relations Law §236[B][1][c]), while “property acquired before marriage” is separate property (D.R.L. §236[B][1][d][1]).

Title is a critical consideration in identifying the nature of real property acquired before the marriage. The circumstances surrounding the purchase of the residence and the parties’ intent relative thereto are irrelevant to the legal classification of the residence as separate or marital property.

Here, the husband purchased the marital residence in January 1994 — 2½ years prior to the parties’ marriage — paying $130,000 of his own funds and borrowing an additional $100,000 from his father, secured by a note and mortgage. Although the wife contributed $30,000 of her separate funds to the initial purchase of the residence, the husband took title to the property in his name alone.


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The August 21, 2013 decision of the Appellate Division, Second Department in Patete v. Rodriguez may have expanded the credits available to the non-titled spouse when marital funds are expended on a separate-property asset.

When New York adopted its Equitable Distribution Law in 1980, courts were now longer bound by which spouse held title to an asset generated during the marriage. Upon divorce, the non-titled spouse could be awarded an equitable share.

Not all property of parties getting divorced, however, is “marital property” subject to Equitable Distribution. The law recognizes as “separate property,” assets owned by one of the spouses either before the marriage, or acquired through inheritance, or by gift from someone other than the other spouse, etc. The appreciation in the value of separate property is also separate property, subject to a claim that such appreciation is due to the contributions or efforts of the non-titled spouse.

Determining what is or should be marital and separate property, and each spouse’s equitable share of marital property is not always clear. Indeed, the rules and guidelines are not free from doubt.

Take last week’s decision in Patete, for example. This divorce was the second time around for these parties. They married for the first time in 1978. Incident to their first divorce in 1981, the wife conveyed her interest in the 68th Street, Maspeth, Queens marital residence to the husband.

The parties married again in 1985. At that time the husband still owned the 68th Street home. Again it was used as the marital residence. As the home was the husband’s property before the second marriage, it was deemed his separate property when the second marriage here ended in divorce.

In 1987, two years into the second marriage, however, the husband sold the 68th Street property. $125,000 of the proceeds were used to purchase the parties’ jointly-owned new marital residence on 64th Street in Maspeth.

The appellate court acknowledged that the 68th Street property remained the husband’s separate property until its sale in 1987. Thus, the $125,000 in sales proceeds used to purchase the jointly-owned 68th Street home was also his separate property. The husband was entitled to a separate property credit for his use of separate funds to purchase the 68th Street home.

However, between the date of the second marriage and the sale of the 68th Street home, marital funds were used to pay the mortgage on the husband’s separate-property 68th Street home. As a result, the Second Department held:

The [wife] should receive a credit for one-half of the marital funds used to the pay this mortgage on the plaintiff’s separate property.

The Court reported that the total amount of marital funds used for this purpose was $7,338.94.The Court did not state that this was the amount by which the principal amount due on the mortgage was reduced, just that such was the amount used to pay the mortgage.


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house upside down.jpgIt should have been a dead giveaway.  Court of Appeals Judge Victoria Graffeo warned us that in Fields v Fields (PDF), New York’s highest court was about to apply public policy principles to “unique facts.”  The result: a decision likely to keep Equitable Distribution litigators busy for years to come.

8 years into the Fields’