Among other errors the Appellate Division, Second Department, addressed in its May 6, 2015 decision in Sawin v. Sawin, was the award to the wife of an $8,000 credit for her post-divorce action assumption of a $16,000 credit card debt. At trial, the wife testified that she incurred this debt over a two-year period
Distinguishing the 2009 Court of Appeals decision in Mahoney–Buntzman v. Buntzman, the Second Department, in its October 24, 2012 decision in Levenstein v. Levenstein, has held that if marital funds are used to pay pre-marital support arrears, the non-obligated spouse may be awarded a credit towards equitable distribution.
In 1995, before the current marriage, Mr. Levenstein was convicted in the United States District Court for the Eastern District of Virginia, for the failure to pay child support (see 18 USC § 228). Incident to the criminal conviction, he was directed to pay arrears of $132,718.49 to his first wife by July 13, 1995. Mr. Levenstein failed to fully satisfy that obligation by that deadline.
Thereafter, the husband remarried twice. The second remarriage took place four years after the criminal conviction, but before the husband secured a divorce from his second wife. During the purported third marriage, the husband paid the remainder of his criminal restitution obligation, and made additional child support payments to his first wife that became due during the purported marriage.
In 2006, the third wife sought an annulment for bigamy. In 2008, grounds were established and a trial was held to determine the apportionment of the putative marital debt. In a decision dated February 25, 2009, now-retired Rockland County Supreme Court Justice Alfred J. Weiner awarded the wife a credit of 50% of the marital funds used to satisfy premarital maintenance and child support obligations that the defendant had paid to his first wife, including the amounts due under the criminal judgment. A judgment of annulment was entered in April, 2009.
One month later, in May, 2009, the Court of Appeals held in Mahoney–Buntzman v. Buntzman (12 N.Y.3d 415) that a spouse is not entitled to a credit for marital funds paid to a former spouse or a child pursuant to an order of maintenance or child support.
Based on Mahoney–Buntzman, Mr. Levenstein moved for a reconsideration of the decision which had granted the 50% credit. Justice Weiner granted the husband’s motion and denied the credit. The putative marital debt was reapportioned accordingly.
On appeal, the Second Department reinstated the credit. The appellate court noted that in Mahoney–Buntzman, the wife had sought credit for maintenance payments made to the husband’s former spouse that had become due and were paid during the marriage. In holding that such payments were not subject to recoupment by the wife, the Court of Appeals reasoned that maintenance obligations to a former spouse and to children pursuant to a support order “are obligations that do not enure solely to the benefit of one spouse.” Nevertheless, the Court of Appeals cautioned:
This is not to say that every expenditure of marital funds during the course of the marriage may not be considered in an equitable distribution calculation. … There may be circumstances where equity requires a credit to one spouse for marital property used to pay off the separate debt of one spouse or add to the value of one spouse’s separate property.”