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Real Property Purchased by Husband Prior to the Marriage Cannot Be Transformed Into Marital Property, Despite’s Wife’s Contribution of Her Own Funds ($30,000) to the Purchase/Wife Entitled to Equitable Distribution of the Appreciation of the Property After Marriage But No Proof On that Topic Was Offered Here/Wife Entitled to Recoup Mortgage Payments Made by Her

The Third Department, in a full-fledged opinion by Justice Stein, over a dissent, determined that real property purchased prior to marriage cannot be transformed into marital property by contributions made by the non-titled spouse, although the appreciation in value of the property attributable to the efforts of the non-titled spouse could be the subject of equitable distribution (there was a failure of proof on that issue here), and funds paid toward the mortgage by the non-titled spouse could be recouped:

“‘[W]hether a particular asset is marital or separate property is a question of law'” … . Marital property is defined as “all property acquired by either or both spouses during the marriage” (Domestic Relations Law § 236 [B] [1] [c] [emphasis added]), while “property acquired before marriage” is separate property (Domestic Relations Law § 236 [B] [1] [d] [1] [emphasis added]). 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, she did not attend the closing and the husband took title to the property in his name alone. The record reflects that the wife thereafter paid the mortgage for more than two years prior to the marriage, as well as after the parties were married through 2003, when a satisfaction of mortgage was issued, notwithstanding a principal balance remaining of approximately $52,000. Supreme Court determined that the wife’s contributions transformed the residence from the husband’s separate property into marital property, which was subject to equitable distribution. …[W]e disagree. * * *

…[W]hile Supreme Court’s finding that the wife made certain substantial contributions of money and effort toward the acquisition and maintenance of the marital residence is amply supported by the record, the effect of such contributions by the wife — particularly those she made before the marriage — is not to transform the husband’s premarital, separate property into marital property … . *  *  *

We note, however, that separate property contributions by a nontitled spouse could result in an appreciation of the value of the titled spouse’s separate property during the marriage, which appreciation would be subject to equitable distribution … . Here, inasmuch as the wife failed to prove the value of the residence at the time the parties were married, the amount of the property’s appreciation during the marriage — and, hence, the wife’s equitable share thereof — cannot be ascertained …, and no award may be made on this basis … .

We agree, however, with the wife’s alternative argument that she is entitled to recoup her equitable share of marital funds paid toward the mortgage. It is well settled that, in determining the “equitable distribution of marital property, a court has the authority to effectively recoup marital funds applied to the reduction of one party’s separate indebtedness” … . Here, the wife testified that she paid the mortgage on the marital residence from the date of the marriage until a satisfaction of mortgage was issued. Although it is not evident from the record what funds were used to make these payments, it can be presumed that marital funds were used (see Carr v Carr, 291 AD2d 672, 676 [2002]). Thus, the wife is entitled to an equitable share of the marital funds that were used to pay the husband’s separate indebtedness — the mortgage — during the marriage… . Ceravolo v DeSantis, 2015 NY Slip OP 00266, 3rd Dept 1-8-15

 

Property Purchased by Husband Upon Which a “Shell” of a House Was Constructed Prior to Marriage Should Not Have Been Deemed Marital Property/Husband’s Failure to Affirmatively Prove What Portion of His Savings Account Was Separate Property Justified Dividing It Equally/Wife’s Failure to Prove How She Contributed to the Appreciation of the Marital Residence Precluded the Award of Any Appreciation in Value to Her

The Third Department determined Supreme Court was correct in some instances but erred in other instances in its findings re: separate and marital property. The marital residence was not subject to equitable distribution because the husband purchased the land and erected a “shell” of a house prior to marriage. The property cannot thereafter be transformed into marital property by virtue of the improvements made to it.  The decision is notable for pointing out the results of failures of proof.  The husband failed to prove what portion of his savings plan was separate property, so the court correctly divided it equally.  The wife failed to prove what portion of the improvements to the husband’s separate property (their residence) was attributable to her, she therefore was not entitled to any portion of the property’s appreciation in value:

… [T]he husband’s Thrift Savings Plan … was established prior to the marriage and remains in the husband’s name. The uncontroverted proof demonstrated that contributions were also made to the plan during the marriage, so at least a portion of the plan constituted marital property. The husband did not offer any proof at trial regarding the value of the separate portion of the plan but, rather, merely indicated that the wife was ineligible to receive any portion of the plan because she had allegedly abandoned him. Inasmuch as the proof was insufficient to enable Supreme Court to determine which portion of the plan was separate and which was marital, the court was entitled to equitably distribute the entirety of the plan … .

…Supreme Court failed to properly consider what part, if any, of his pension was separate property. The record establishes the husband’s starting and ending dates of employment with the United State Postal Service and the date of the parties’ marriage, thereby allowing the court to determine which portion of the pension — a defined benefit plan — was earned prior to the marriage and is, therefore, the husband’s separate property … . Accordingly, we remit the matter to Supreme Court for a determination of the percentage of the pension that is marital property and, thus, may be equitably distributed… .

Supreme Court erred in finding that the marital residence was marital property and awarding the wife 50% of the home’s appraised value minus a $10,000 separate property credit to the husband for the purchase price of the land. Supreme Court credited the wife’s testimony that, although the husband purchased the land and constructed a “shell” of a house prior to the marriage, the construction of the residence was not complete until approximately four years after the marriage. The record demonstrates that the vast majority of the improvements occurred during the marriage due, in part, to the wife’s contributions of money, time and labor. Nevertheless, for the reasons set forth in Ceravolo v DeSantis (___ AD3d ___, ____ [decided herewith]), a parcel of real property that is separate property cannot be transformed or transmuted into marital property by the efforts and contributions of the nontitled spouse. Accordingly, the parcel was separate property (see Domestic Relations Law § 236 [B] [1] [d] [1]), which is not subject to equitable distribution … .

Appreciation in value of separate property, from the date of the marriage to the date of commencement of the divorce action, can be considered a marital asset subject to equitable distribution “if the appreciation is due to the contributions or efforts of the nontitled spouse” … . The wife, as the nontitled spouse here, bore the burden of proving that any increase in value of the husband’s separate property was at least partially due to her efforts … . The value of the parcel when the husband purchased it is irrelevant, considering that the parcel was vacant at that time but had the outer structure of a house before the marriage. Additionally, the property’s value could have increased due to market forces between the dates of purchase and marriage. Simply crediting the husband for the purchase price and dividing the remainder of the property’s value between the parties would improperly give the wife half of the value of the appreciation between the dates of purchase and marriage, despite that portion of the appreciation being separate property (see Domestic Relations Law § 236 [B] [1] [d] [3]). Although the wife could have been entitled to equitable distribution of a portion of the residence’s appreciation in value for her contributions of time, money and labor toward improving the property, she did not meet her burden by proving the real property’s increase in value, as she did not submit proof of the property’s value on the date of the marriage to compare it to the value at the time of commencement of this action … . Macaluso v Macaluso, 2015 NY Slip Op 00265, 3rd Dept 1-8-15

 

Relationship Between Mother and Father Had Not Deteriorated to the Extent that the Joint Custody Arrangement Should Have Been Modified to Award Sole Custody to Mother

The Third Department reversed Family Court’s award of sole custody to the mother in a modification proceeding:

“A parent seeking to modify an existing custody order bears the burden of demonstrating a sufficient change in circumstances since the entry of the prior order to warrant modification thereof in the child[]’s best interests” … . Although the requisite change in circumstances may be found to exist where “the parties’ relationship has deteriorated to a point where there is no meaningful communication or cooperation for the sake of the child” …, the record before us falls short of establishing that the mother and father’s relationship has become so acrimonious as to preclude an award of joint custody. * * *

…[W]e note that the father’s stated basis for seeking sole custody stemmed not from an expressed or demonstrated inability to get along with the mother but, rather, from his concerns regarding the mother’s stability in light of her documented — and undisputed — mental health and alcohol dependency issues. Similarly, although the mother — both in the context of her modification petition and during the course of her testimony at the hearing — requested that Family Court alter the physical custody arrangement, she did not ask that Family Court award her sole custody of the child … . Under these circumstances, and inasmuch as the parties otherwise failed to demonstrate a sufficient change in circumstances to warrant modification of the prior custody order, Family Court erred in awarding sole legal and physical custody to the mother … . Matter of Dornburgh v Yearry, 2015 NY Slip OP 00260, 3rd Dept 1-8-15

 

Mother’s Violations of Conditions of a Suspended Judgment, Under the Facts, Justified Termination of Parental Rights (Against the Wishes of the Child)

The Third Department determined Family Court, under the facts, properly terminated petitioner’s parental rights because of petitioner’s failure to comply with the conditions of a suspended judgment (against the express wishes of the child):

It is well settled that a suspended judgment gives a parent who is found to have neglected his or her child “a brief grace period within which to become a fit parent with whom the child can be safely reunited” … . Where, as here, it is established by a preponderance of the evidence that the parent has failed to comply with the terms and conditions of a suspended judgment, such judgment may be revoked and parental rights may be terminated … . Furthermore, “petitioner is not obligated to wait until the end of the period of suspended judgment to seek to revoke the suspended judgment” where the parent has repeatedly violated the judgment’s terms and conditions … . * * *

Although respondent’s breach of the express conditions of the suspended judgment “‘does not compel the termination of [his] parental rights, [it] is strong evidence that termination is, in fact, in the best interests of the child[]'” … . The child’s foster mother averred that he struggled emotionally when respondent’s visitation became inconsistent and that, despite being asked to become involved in the child’s athletic activities, respondent has failed to attend any games or practices. The child’s placement in his foster home has given him a safe, stable and caring environment in which he has bonded with his foster parents and siblings. Family Court, although obviously disheartened in resolving the instant petition contrary to the child’s express wishes, ultimately determined that his best interests would be served by terminating respondent’s parental rights and clearing the way for him to be permanently placed with the foster family. Inasmuch as Family Court’s determination has a sound and substantial basis in the record, it shall remain undisturbed … . Matter of Michael HH, 2015 NY Slip Op 00258, 1-8-15

 

Even Though Husband’s Funds Were Deposited in a Joint Account, the Portion of those Funds Used for a Down-Payment on the Marital Residence Was Properly Deemed Husband’s Separate Property; Supreme Court Abused Its Discretion In Ordering the Sale of the Marital Residence—Wife Entitled to Exclusive Possession Until Child Turns 18

The Third Department determined that the husband’s separate property, which had been deposited in a joint account before a portion of it  was used for a down-payment on the marital residence, was properly deemed the husband’s separate property to the extent it was used for the down-payment. The Third Department further determined Supreme Court had abused its discretion in ordering the marital residence sold. Under the facts, the mother was entitled to exclusive possession until the child turns 18:

Supreme Court erred in directing that the marital residence be listed for sale. Our case law reflects “‘a preference for allowing a custodial parent to remain in the marital residence until the youngest child becomes 18 unless such parent can obtain comparable housing at a lower cost or is financially incapable of maintaining the marital residence, or either spouse is in immediate need of his or her share of the sale proceeds'” … . Proof at trial established that the parties’ young children reside with the wife in the marital residence and, although she has the means to pay the mortgage, she is unable to refinance or purchase another residence. No evidence was adduced that the wife could obtain comparable housing at a lower cost or that either party is in immediate need to recoup their equitable share of the marital residence. Under these circumstances, we find that Supreme Court abused its discretion in directing that the marital residence should be listed for sale. Accordingly, the wife is entitled to exclusive possession of the residence until the youngest child reaches the age of 18 … . Albertalli v Albertalli, 2015 NY Slip OP 00257, 3rd Dept 1-8-15

 

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Petitions to Relocate Are Not Subject to a “Change in Circumstances” Analysis But Rather a “Best Interests of the Child Analysis;” the “Lincoln” Hearing Was Improperly Held In the Presence of Parents’ Counsel and the Transcribed Proceedings Were Improperly Left Unsealed and Included in the Record on Appeal; An Article 10 Hearing, Where Counsel for the Parents Are Allowed to Be Present, Should Not Be Confused with an Article 6 Hearing, Where They Are Not

In affirming Family Court’s denial of mother’s petition to relocate, the Third Department noted that Family Court wrongly used “change in circumstances” as the criteria for analyzing the petition when it should have used “the best interests of the child” as the sole criterium.  The Third Department exercised its power to make its own factual analysis.  The court further noted that the Lincoln hearing in which the children testified was improperly conducted because counsel for mother and father were present and the transcribed proceedings were not sealed.  The court explained that the procedure used for Article 10 hearings, where counsel for the parties are present, should not be confused with the procedure for Article 6 hearings, where confidentiality is paramount:

As the mother contends, Family Court applied the incorrect standard in dismissing the relocation petition on the ground that the mother had failed to show a sufficient change in circumstances to warrant modification. No change in circumstances must be established to support a relocation petition, as the planned move itself is accepted as such … . Instead, the parent who wishes to relocate bears the burden of establishing that the proposed move is in the best interests of the children, a determination based upon such factors as the parents’ reasons for seeking or opposing relocation, the quality of the children’s relationships with each parent, the feasibility of developing a visitation schedule that will permit the children to retain meaningful relationships with the parent who does not move, the degree to which the move may offer economic, emotional and educational benefits for the relocating parent and the children, and the effect of the relocation on extended family relationships … . Although that analysis was not conducted here, this Court’s authority is as broad as that of Family Court, and the record is sufficiently complete to permit us to make the relocation determination based upon our independent review … . * * *

…[W]e note that Family Court conducted what was described as a “modified” Lincoln hearing, in which counsel for both parents were permitted to be present during the court’s interview with the children. The transcript of the interview was not sealed, and was included in full in the appellate record. Neither the presence of counsel other than the attorney for the children during the interview nor the failure to seal the transcript was proper. We reiterate that the right to confidentiality during a Lincoln hearing belongs to the child and is superior to the rights or preferences of the parents … . A child who is explaining the reasons for his or her preference in custody or visitation proceedings “should not be placed in the position of having [his or her] relationship with either parent further jeopardized by having to publicly relate [his or her] difficulties with them or be required to openly choose between them” … . We address this issue recognizing that, in the course of practice, confusion may have resulted from the different procedure followed during Family Ct Act article 10 proceedings, in which the presence of the parties’ counsel during an in camera interview with a child may be permissible due to the fundamental right of litigants in such proceedings to confront their accusers. Although these interviews have sometimes been inaccurately referred to as Lincoln hearings, they are conducted for entirely different purposes than the confidential interviews conducted during custody and visitation proceedings … . For the court to fulfill its primary responsibility of protecting the welfare and interests of a child in the context of a Family Ct Act article 6 proceeding, protecting the child’s right to confidentiality remains a paramount obligation … . Matter of Julie E v David E, 2015 NY Slip OP 00254, 3rd Dept 1-8-15

 

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Defendant’s Motion to Vacate a Default Judgment of Divorce Should Have Been Granted Even Though Defendant First Appeared and Then Withdrew

The Fourth Department defendant’s motion to vacate a default judgment of divorce should have been granted, even though the defendant had appeared in the action and then withdrew.  The court noted that a default judgment cannot be appealed and the only remedy is therefore a motion to vacate:

We reject plaintiff’s contention that defendant could not move to vacate the judgment based on excusable default pursuant to CPLR 5015 (a) (1) because he appeared and then withdrew his appearance on the record. Regardless of the fact that defendant appeared initially, the judgment was entered upon defendant’s default. Defendant therefore could not appeal from the judgment of divorce (see CPLR 5511) and, indeed, his only remedy was to move to vacate the judgment of divorce pursuant to CPLR 5015 (a) (1) … .

We conclude that defendant demonstrated both a reasonable excuse for the default and a meritorious defense …, and that he is entitled to vacatur of those parts of the judgment of divorce distributing the parties’ assets …, the only parts of the judgment challenged by defendant on appeal … . Defendant averred that he informed his attorney that he disagreed with the proposed resolution of the parties’ retirement accounts and did not want to finalize the judgment on those terms, but that he was subsequently unable to contact his attorney, and a default judgment of divorce was entered without his knowledge. Furthermore, the judgment of divorce failed to resolve the outstanding issues regarding distribution of the retirement accounts, the home equity loan, and defendant’s enhanced earning capacity, which issues the parties expressly acknowledged remained to be resolved and were dependent upon, at least in part, the forthcoming report. Marshall v Marshall, 2015 NY Slip Op 00059, 4th Dept 1-2-15

 

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Appeal Dismissed Pursuant to Fugitive Disentitlement Doctrine Reinstated Upon Posting of a Bond

The Fourth Department, which had previously dismissed respondent’s appeal pursuant to the fugitive disentitlement doctrine, reinstated the appeal upon respondent’s posting a $25,000 bond:

We previously dismissed respondent’s appeal from an “order of dismissal” entered by Family Court upon declining to sign an order to show cause seeking to vacate two orders entered on respondent’s default. One of the orders determined that respondent was in willful violation of a child support order, and the other order committed him to a term of six months of incarceration … . The court also issued a warrant for respondent’s arrest … . We determined that the fugitive disentitlement theory applied both to respondent’s order to show cause to vacate the default orders and to the subsequent appeal … . We nevertheless granted respondent leave to move to reinstate his appeal upon the posting of an undertaking in the amount of $25,000 with the court within 60 days of service of our order with notice of entry … . Respondent timely posted the undertaking and his motion to reinstate the appeal was granted by this Court.

“The principal rationales for the doctrine [of fugitive disentitlement] include: (1) assuring the enforceability of any decision that may be rendered against the fugitive; (2) imposing a penalty for flouting the judicial process; (3) discouraging flights from justice and promoting the efficient operation of the courts; and (4) avoiding prejudice to the nonfugitive party”… . By posting an undertaking in the amount of the child support arrears, we conclude that respondent has demonstrated that he is not flouting the judicial process and has provided a means of enforcement of the court’s order determining the amount of child support arrears in the event that the court’s determination is unchanged (see Family Ct Act § 471; CPLR 2502 [c]). We conclude that the fugitive disentitlement theory no longer applies to respondent … , and thus we reverse the order insofar as appealed from and remit the matter to Family Court to determine respondent’s application to vacate the orders entered on his default and the warrant for his arrest. Matter of Shehatou v Louka, 2015 NY Slip Op 00086, 4th Dept 1-2-15

 

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Robbery Petition Jurisdictionally Defective—No Nonhearsay Identification of Respondent As the Perpetrator

The Third Department determined the petition charging respondent with the equivalent of robbery in the second degree and petit larceny was jurisdictionally defective and must be dismissed, even though respondent admitted to the charged acts and did not seek dismissal of the petition.  Although the petition was supplemented by a video showing the person alleged to have committed the robbery and a letter identifying the respondent as that person, the letter was unsworn and unsigned:

A juvenile delinquency petition must contain “a plain and concise factual statement in each count which, without allegations of an evidentiary nature, asserts facts supporting every element of the crime charged and the respondent's commission thereof” (Family Ct Act § 311.1 [3] [h]…). “A juvenile delinquency petition that fails to contain non-hearsay allegations . . . establish[ing] . . . every element of each crime charged and the respondent's commission thereof is both legally insufficient and jurisdictionally defective” … . Finally, notwithstanding respondent's admission to the charged acts in Family Court and his failure to seek the dismissal of the petition, his assertion that the petition is facially insufficient can be considered for the first time on appeal as such claim regards a nonwaiveable jurisdictional defect … .

Although the statements in the victim's deposition constitute nonhearsay allegations establishing that property was forcibly stolen from him, the deposition does not establish that respondent was the individual who committed such acts. Nor do the video image and … letter identifying respondent as the individual wearing the blue jacket depicted therein cure the evidentiary deficiencies that render the petition invalid. In particular, the video image shows, among other things, a male wearing a blue jacket with a white-striped sleeve that matches the description provided in the victim's report; however, the image itself does nothing to connect respondent to the robbery. Moreover, as [the] letter to the investigating police officer identifying respondent as the person wearing a blue jacket with white stripes on the sleeve was unsigned and unsworn, it does not constitute a nonhearsay identification of respondent as the person who committed the charged acts, thereby rendering the petition facially invalid … . Matter of Jayquan Vv, 2014 NY Slip Op 09086, 3rd Dept 12-31-14


 

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Prior Ties to New York Sufficient to Justify Jurisdiction of New York Courts over Custody Proceedings Brought by the Child’s Grandmother Two Months After the Child and Mother Moved to Florida

The Second Department determined New York did not have jurisdiction over the custody matter by virtue of Domestic Relations Law 76 (1)(a) but did have jurisdiction pursuant to Domestic Relations Law 76 (1)(b) ( Unified Child Custody Jurisdiction and Enforcement Act [UCCJEA]).  Respondent mother had moved from New York to Florida with the child two months before the custody proceedings were commenced by petitioner, the child's grandmother (who lives in New York).  The mother argued the New York courts did not have jurisdiction:

UCCJEA provides the jurisdictional grounds for a court of this state to hear an initial custody dispute, including when “this state is the home state of the child on the date of the commencement of the proceeding, or was the home state of the child within six months before the commencement of the proceeding and the child is absent from this state but a parent or person acting as a parent continues to live in this state” (Domestic Relations Law § 76 [1] [a]…).

It is not disputed that New York was the home state of the child within six months prior to the time that petitioner commenced this proceeding. Because the child moved to Florida approximately two months prior to the commencement of the proceeding, the question presented is whether Family Court properly concluded that petitioner was a “person acting as a parent” for the purposes of the UCCJEA. A “person acting as a parent” is one who “(a) has physical custody of the child or has had physical custody for a period of six consecutive months . . . within one year immediately before the commencement of a child custody proceeding; and (b) has been awarded legal custody by a court or claims a right to legal custody under the law of this state” (Domestic Relations Law § 75-a [13]). …[B]ecause petitioner neither claims a right to legal custody nor has been awarded legal custody of the child, Family Court erred when it determined that petitioner was a “person acting as a parent” pursuant to Domestic Relations Law § 76 (1) (a).

…Having found that petitioner was not a “person acting as a parent,” it follows that, at the time this proceeding was commenced, the child, who had been living in Florida for fewer than six months, did not have a home state for purposes of the UCCJEA … . In such a case, a New York court may exercise jurisdiction if “(i) the child [and the parent] . . . have a significant connection with this state other than mere physical presence; and (ii) substantial evidence is available in this state concerning the child's care, protection, training, and personal relationships” (Domestic Relations Law § 76 [1] [b]).

* * * … [W]e find that the record supports a finding that, at the time that the petition was filed, the child and respondent had a significant connection with New York and that “substantial evidence regarding her present and future welfare” existed in New York … . Accordingly, we find that Family Court had subject matter jurisdiction to entertain the petition. Matter of Breselor v Arciniega, 2014 NY Slip Op 09084, 3rd Dept 12-31-14


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