Angelo v. Angelo

• Decision Date: 12 May 1980
• Citation: 428 N.Y.S.2d 14,74 A.D.2d 327
• Parties: Frances ANGELO, Respondent, v. Carl M. ANGELO, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 14

428 N.Y.S.2d 14

74 A.D.2d 327

Frances ANGELO, Respondent, v. Carl M. ANGELO, Appellant.

Supreme Court, Appellate Division, Second Department.

May 12, 1980.

Stanley E. Kooper, Brooklyn (Clara Gonzalez Schwabe, Brooklyn, on brief), for appellant.

Pirrotti & Imperato, Brooklyn (Gerard A. Imperato, Brooklyn, of counsel), for respondent.

Before HOPKINS, J. P., and TITONE, LANZER and GIBBONS, JJ.

HOPKINS, Justice Presiding.

From the judgment of divorce granted to the plaintiff wife the defendant husband appeals, seeking review of the provisions distributing certain property and awarding alimony, child support and counsel fees. Although we conclude that Special Term's judgment should be affirmed insofar as appealed from, and that extended discussion of all of the issues raised by the defendant is not required, we treat at length that provision of the judgment which directs the equal division of joint bank accounts and the refund of income taxes arising from a joint return filed by the parties, though the earnings reported were attributed solely to the defendant.

We hold that Special Term is empowered to decide the manner of the division of these assets. Under the circumstances of this case, we find that Special Term properly determined that the plaintiff was entitled to share equally in the division of the joint bank accounts and the refund.

I

The plaintiff and defendant were married on May 21, 1966. Three children, now aged 12, 10 and 8, were born of the marriage. The parties separated in April, 1978, and this action for divorce was commenced by the plaintiff. The defendant in his answer counterclaimed for divorce. The plaintiff's motion for temporary alimony and child support was granted; Special Term further ordered that the defendant pay the carrying charges on the jointly owned marital residence.

At the trial the defendant withdrew his answer and the plaintiff proceeded by inquest to establish grounds for divorce. Relegated to Special Term for decision were issues of permanent alimony and child support, the possession of the marital home, the payment of counsel fees, the apportionment of personal property, and the arrears of temporary alimony and child support. Special Term, after hearing the evidence, made the following determinations:

1. The plaintiff was awarded $750 monthly as alimony and child support, out of which she was to make all payments to maintain the marital home.

2. Exclusive possession of the martial home was granted to the plaintiff, until the majority or emancipation of the youngest child, or the remarriage of the plaintiff, or her cohabitation with a male not her relative.

3. The plaintiff was given $4,000 for counsel fees.

4. The plaintiff was awarded the sum of$3,500 as her share of joint bank accounts and the income tax refund arising from a joint tax return filed by the parties.

5. The defendant was directed to pay $750 as arrears in temporary alimony and child support.

On this appeal the defendant contests all of these determinations. We see no reason to set out in detail the defendant's contentions on all of the issues. We have reviewed the evidence before Special Term and see no cause to interfere with its discretion in fixing permanent alimony, child support and counsel fees, in granting exclusive possession of the marital home under the conditions stipulated, and in directing the payment of the arrears under the temporary order of alimony and child support.

The issue of the division of the bank accounts and income tax refund is not so easily resolved, and the evidence and applicable law require fuller examination.

II

Prior to July, 1977 the defendant was employed by the New York City Fire Department, earning a salary of $300 weekly. At that time the parties had one joint bank account, having a balance of about $8,000; in addition, they held a second bank account, having a balance of $592 as of December 31, 1977.

In July, 1977 the defendant was placed on sick disability status by the Fire Department; and in May, 1978 he received a lump sum payment of $7,000 from the Fire Department. His pension based on his departmental service was set at $1,250 monthly.

The defendant argues that the plaintiff is not entitled to any part of the bank accounts, because all deposits into the accounts were derived from his funds and there was no intention to vest an interest on behalf of the plaintiff in the accounts. This view, however, ignores entirely the effect of subdivision (b) of section 675 of the Banking Law, prescribing that in respect to a joint deposit the "making of such deposit * * * shall * * * be prima facie evidence * * * of the intention of both depositors * * * to create a joint tenancy".

Each of the accounts was established before the disagreement and separation of the parties. Absent clear evidence to the contrary, the opening of the accounts in the joint names of the husband and wife imply an intention, no matter from whom the funds were derived, that the spouses were jointly interested in the accounts. Again, absent clear evidence to the contrary, their interests may be presumed to be equal. In the event of the dissolution of the marriage, Special Term was empowered to direct the payment of some $2,000, representing the plaintiff's share, to the plaintiff (see Domestic Relations Law, § 234; cf. Tsavaris v. Tsavaris, 40 N.Y.2d 970, 390 N.Y.S.2d 820, 359 N.E.2d 331). We have previously enforced the provisions of section 675 of the Banking Law to apportion joint bank accounts between husband and wife (Markland v. Markland, 67 A.D.2d 940, 413 N.Y.S.2d 202; Parlato v. Parlato, 44 A.D.2d 720, 354 N.Y.S.2d 711).

We do not consider Matter of Kleinberg v. Heller, 38 N.Y.2d 836, 382 N.Y.S.2d 49, 345 N.E.2d 592, to hold the contrary. There, a niece of a decedent claimed a bank account opened by the decedent in the name of herself and the niece as joint tenants. The question before the court was whether the niece was entitled to ownership of the funds in the account upon the death of the decedent, who had contributed all of the money in the account. It appeared that the niece, for her own business purposes, had withdrawn all of the funds prior to the death of the decedent. Those circumstances present an issue quite apart from the case at bar.

Hence, we affirm the disposition made by Special Term with respect to the bank accounts.

III

The parties filed joint income tax returns, though the income was attributable solely to the salary of the defendant. The refunds were made payable by check to both parties. The defendant urges that, under our decision in Fritz v. Fritz, 61 A.D.2d 1007, 402 N.Y.S.2d 636, Special Term erred in directing the equal division of the refund between the plaintiff and the defendant.

We do not find that Fritz is controlling. In Fritz we said only that "(t)he record before us does not indicate * * * the portion, if any, of the refund check which was attributable to the plaintiff's earnings", and consequently we remanded the action to Special Term for a further hearing. The record in Fritz, though not disclosed by our memorandum, showed that the plaintiff wife and the defendant husband had filed individual State and Federal tax returns, and that each was entitled to a refund. The question thus became relevant as to the proper allocation of the refund check, since the record was silent whether the wife had received a refund on her own return. This, of course, is not the posture of the facts before us here.

There are, indeed, few decisions and scant comment on the issue of the proper allocation of tax refunds flowing from joint marital income tax returns. ^* The nature of the interests of the joint taxpayers must be considered in the light of the tax statutes, the common law, and the purposes of section 234 of the Domestic Relations Law, and our analysis of the plaintiff's and defendant's rights must be directed by their force and the circumstances of their marriage.

Here, the defendant was the wage earner, and his salary was of necessity subject to withholding by his employer. Doubtless the parties were swayed by the pecuniary advantage to the family as a whole to the decision to file a marital joint tax return, even though the plaintiff had earned no income (see U.S. Code, tit. 26, § 6013, subd. (a)). But where the advantages are taken, the burdens must also be accepted. The statute authorizing the filing of the marital joint return provides that upon filing, the liability of each spouse is joint and several (U.S. Code, tit. 26, § 6013, subd. (d), par. (3)). Hence, the plaintiff, in signing and filing the return became jointly liable with the defendant for the payment of the tax, which, in a sense, reflects the view of the Congress that the family should be considered as both a social and economic unit.

The issue with respect to the ownership of income tax refunds has arisen in various factual contexts. In bankruptcy proceedings, for example, it has been held that a tax refund payable under a joint marital return, but derived only from the husband's earnings, must be applied toward the satisfaction of the husband's creditors (Matter of Wetteroff v. Grand, 8 Cir., 453 F.2d 544; Matter of Boudreau, D.C., 350 F.Supp. 644; cf. Matter of Carson, 83 N.J.Super. 287, 199 A.2d 407; Matter of Trecker, 62 Wis.2d 446, 215...