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PLAINTIFF HUSBAND WAS ENTITLED TO 15% OF THE APPRECIATON OF THE WIFE’S PREMARITAL ART-GALLERY BUSINESS IN THIS DIVORCE PROCEEDING REQUIRING THE DISTRIBUTION OF A NUMBER OF SUBSTANTIAL ASSETS (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Gesmer, modified some of some of Supreme Court’s distribution of marital assets in this divorce action. The opinion is too detailed, and addressed too many substantial assets to be fairly summarized here. With respect to the valuation of the husband’s portion of the appreciation of the wife’s art gallery, AWI, founded before the marriage, the First Department wrote:

… [P]laintiff met his burden to show that the appreciation in value of defendant’s pre-marital business, AWI, during the marriage constituted marital property subject to distribution … . …

An award to plaintiff of significantly less than half of the marital portion of AWI is justified by the following facts: defendant started her business years before she met plaintiff; plaintiff was not involved with defendant’s acquisition or sale of art; plaintiff’s conduct was at times problematic and even a hindrance to defendant’s business success; plaintiff’s contributions to the marriage diminished over time; and defendant will bear substantial tax consequences when she sells art to pay plaintiff a distributive award (see Domestic Relations Law § 236[B][5][d][7], [8], [11]; see also Cotton, 170 AD3d at 596). * * * Considering all of the circumstances, we find that plaintiff’s share of AWI’s appreciation during the marriage should be 15%, or $3,486,821 … . Culman v Boesky, 2022 NY Slip Op 03440, First Dept 5-26-22

Practice Point: In this complex divorce action involving may substantial assets, based upon the husband’s limited participation in the wife’s pre-marital art-gallery business, the husband was entitled to 15% of the appreciation of the business during the marriage.

 

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