Cudar v. Cudar

• Decision Date: 20 June 2012
• Citation: 946 N.Y.S.2d 630,2012 N.Y. Slip Op. 04965,98 A.D.3d 27
• Parties: Elizabeth CUDAR, respondent, v. Frank CUDAR, appellant.
• Court: New York Supreme Court — Appellate Division

98 A.D.3d 27

946 N.Y.S.2d 630

2012 N.Y. Slip Op. 04965

Elizabeth CUDAR, respondent,

v.Frank CUDAR, appellant.

Supreme Court, Appellate Division, Second Department, New York.

June 20, 2012.

Anthony A. Caronna, Brooklyn, N.Y. (Nichole E. Lee of counsel), for appellant.

Philip J. Kaplan, Staten Island, N.Y., for respondent.

REINALDO E. RIVERA, J.P., JOHN M. LEVENTHAL, ARIEL E. BELEN, and SHERI S. ROMAN, JJ.

LEVENTHAL, J.

The principal issue raised on this appeal is whether the subject former marital residence—a rental apartment subject to rent control—constitutes either marital or separate property pursuant to the Domestic Relations Law, or neither separate property nor marital property. For the reasons discussed below, we conclude that the leasehold constituting the former marital residence is not property distributable pursuant to Domestic Relations Law § 236(B)(1). In addition, we are required to determine whether the Supreme Court has the authority to decide which party in a matrimonial action is entitled to possess nondistributable property. We answer this question in the affirmative.

The defendant, Frank Cudar, resided in the subject rent-controlled apartment ¹ (hereinafter the apartment), located in Richmond County, commencing in 1960. In 1969 the plaintiff, Elizabeth Cudar (née O'Shea, now again known as Elizabeth O'Shea), moved into the apartment when the parties were married. The parties resided together in the apartment until August 2004, when the defendant was required to vacate the premises by court order after he was arrested and subsequently convicted of harassment in the second degree and criminal possession of a weapon in the fourth degree. A final order of protection issued by the Criminal Court, and dated February 1, 2006, required the defendant to stay away from the plaintiff until January 31, 2009. Since 2004, the plaintiff has continued to reside in the apartment and to pay the rent. After the expiration of the final order of protection, the defendant voluntarily absented himself from the apartment.

In the course of this matrimonial action, but prior to the finalization of the divorce, the defendant specifically requested the Supreme Court to make a determination as to which party was entitled to possession of the apartment. In response, the Supreme Court concluded that, since the apartment leasehold was not a marital asset, it lacked the authority to make a determination as to the possession of the apartment. The Supreme Court indicated that the resolution of that issue could be made in a landlord-tenant proceeding.

Thereafter, the parties were divorced by judgment entered on December 21, 2006. Neither the judgment of divorce, nor an oral stipulation made on the record in open court, which was incorporated into the judgment of divorce, addressed the issue of who was entitled to possession of the apartment or ownership of the apartment leasehold.

Meanwhile, in April 2007, the defendant commenced a summary holdover proceeding against the plaintiff and her son in the Civil Court to evict them from the apartment (hereinafter the holdover proceeding). On an appeal in the holdover proceeding, this Court, by decision and order dated November 30, 2010, held that there was no landlord-tenant relationship between the defendant and the plaintiff and, thus, the defendant was not entitled to a judgment of possession ( see Matter of Cudar v. O'Shea, 78 A.D.3d 1177, 912 N.Y.S.2d 275).

In January 2011 the defendant moved by order to show cause in this matrimonial action, inter alia, in effect, for a determination that the leasehold interest in the former marital residence was his separate property, and for an award of sole possession of the apartment. The defendant, who was 71 years old at the time he made the motion, asserted that the apartment was not marital property, and that the plaintiff had improperly refused to allow him to return to the apartment. In opposition, the plaintiff, who was 78 years old at the time of the motion, contended that the defendant's motion with respect to the apartment was barred by the doctrines of collateral estoppel and res judicata.

In the order appealed from, the Supreme Court, among other things, denied those branches of the defendant's motion which were, in effect, for a determination that the apartment constituted his separate property and for an award of sole possession of the apartment. The Supreme Court indicated that the defendant's contentions could no longer be considered and that it could not award the defendant sole possession of the apartment in light of the decision and order of this Court in the holdover proceeding.

On appeal, the defendant argues that he is entitled to a determination deeming the apartment leasehold to be his separate property, evicting the plaintiff from the apartment, and awarding him sole possession of the apartment. He notes that, prior to the divorce, the Supreme Court either implied or indicated that the apartment leasehold was his separate property, but failed to include that determination in the judgment of divorce as required by Domestic Relations Law § 236(B)(5)(g). The defendant requests that this Court grant the relief he seeks or, in the alternative, that the matter be remitted to the Supreme Court for the award of that relief.

The plaintiff responds that while the defendant is the “tenant of record of the apartment,” since the parties elected not to litigate the issue of the occupancy of the apartment in connection with either the stipulation of settlement or the judgment of divorce, the principles of res judicata and collateral estoppel required a denial of the defendant's motion as it related to the apartment. The plaintiff also argues that there are issues as to whether the defendant's right to occupy the apartment has been vitiated by his objectionable conduct against her.

The Defendant's Contentions Are Not Barred

Initially, the defendant's arguments are not barred by the doctrine of collateral estoppel or res judicata. “[F]or collateral estoppel to apply * * * three criteria must be met: (1) the issue must actually have been litigated and determined by a valid and final judgment in a separate action, (2) that determination must have been essential to the judgment, and (3) either the party to be precluded had a full and fair opportunity to litigate the issue in the prior proceeding or other circumstances do not justify affording him an opportunity to relitigate it” ( Braunstein v. Braunstein, 114 A.D.2d 46, 52–53, 497 N.Y.S.2d 58 [concluding that collateral estoppel did not preclude the granting of a distributive award, because the issue of equitable distribution “was never raised by either party nor did the (Swedish) court resolve or allude to that issue in the final divorce decree”] [internal quotation marks and emphasis omitted]; see Nikrooz v. Nikrooz, 167 A.D.2d 334, 334–335, 561 N.Y.S.2d 301;see also Lester v. New York State Off. of Parks Recreation, & Historic Preserv., 87 A.D.3d 561, 928 N.Y.S.2d 325).

“Res judicata serves to preclude the renewal of issues actually litigated and resolved in a prior proceeding as well as claims for different relief which arise out of the same ‘factual grouping’ or ‘transaction,’ and which should have or could have been resolved in the prior proceeding ” ( Braunstein v. Braunstein, 114 A.D.2d at 53, 497 N.Y.S.2d 58 [emphasis added]; see Union St. Tower, LLC v. Richmond, 84 A.D.3d 784, 785, 922 N.Y.S.2d 503). Indeed, in the context of a matrimonial action, the Court of Appeals has “recognized that a final judgment of divorce settles the parties' rights pertaining not only to those issues that were actually litigated, but also to those that could have been litigated” ( Xiao Yang Chen v. Fischer, 6 N.Y.3d 94, 100, 810 N.Y.S.2d 96, 843 N.E.2d 723).

There is no merit to the Supreme Court's determination that collateral estoppel or res judicata bars that branch of the defendant'smotion which was for an award of sole possession of the apartment. In the course of the matrimonial action, the Supreme Court expressly stated that it had no authority to decide who was to possess the apartment. The Supreme Court suggested that a determination as to the possession of the apartment would have to be made in the Housing Part of the Civil Court. Under these circumstances, since the issue of the possession of the apartment was raised by the defendant, and the Supreme Court stated that it could not decide which party was entitled to the apartment, neither collateral estoppel nor res judicata can bar the defendant's instant contention with respect to possession of the apartment ( see Frischknecht v. Novaes, 85 A.D.3d 722, 924 N.Y.S.2d 814 [where parties obtained a divorce in Brazil, the plaintiff's claim, in a second action in New York, for the distribution of the marital residence and other assets was not barred by the doctrines of res judicata and collateral estoppel, since the Brazilian court expressly declined to adjudicate the issue after it was raised by the parties] ).

Classification of the Apartment

We now turn to the defendant's contention that the apartment leasehold should have been deemed his separate property by the Supreme Court. The defendant argues that since the Supreme Court stated that the apartment leasehold was not marital property, it must have determined that the apartment leasehold was his separate property. Similarly, the defendant contends that because he resided in the rent-controlled apartment prior to the marriage, the apartment leasehold is his separate property and, therefore, cannot be marital property and cannot be subject to equitable distribution.

Section 236 of the Domestic Relations Law provides, in relevant part, that “[e]xcept where the parties have provided in an agreement for the disposition of their property ... the court, in an action wherein all or part of the relief granted is divorce ... shall determine the respective rights of the...