Chew v. Chew

• Court: New York Supreme Court
• Writing for the Court: JACQUELINE W. SILBERMANN; Sondra Miller
• Citation: Chew v. Chew, 596 N.Y.S.2d 950, 157 Misc.2d 322 (N.Y. Sup. Ct. 1992)
• Decision Date: 23 December 1992
• Parties: Susan Davidson CHEW, Plaintiff, v. Ralph CHEW, Defendant.

Page 950

596 N.Y.S.2d 950

157 Misc.2d 322

Susan Davidson CHEW, Plaintiff, v. Ralph CHEW, Defendant.

Supreme Court, New York County.

Dec. 23, 1992.

Stanford G. Lotwin, Tenzer, Greenblatt, Fallon and Kaplan, P.C., New York City, for plaintiff.

Geoffrey Potter, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, New York City, for defendant.

JACQUELINE W. SILBERMANN, Justice.

The plaintiff, Susan Davidson Chew (hereinafter "Wife"), commenced this action for divorce against defendant, Ralph Chew (hereinafter "Husband"), on August 29, 1989. The husband counterclaimed on the grounds of abandonment. The parties stipulated to an uncontested divorce on the grounds of abandonment.

Thereafter a trial was held on February 13, 1992, March 19, 1992 and September 29, 1992 to resolve the ancillary issues of the divorce.

Statement of Facts

The parties were married on April 14, 1975. At the time of the marriage the Wife was twenty-five and was completing one semester of course work and writing a dissertation for her Master's Degree in Business Administration. She had no other assets. During the years of the marriage she has continued to work in her chosen career achieving her present income of $180,000 per year.

When the parties were married the Husband was forty-seven; was the sole owner of A.E. Chew & Co., Inc.; had an interest in its pension plan; and also had a half interest in a house with his first wife. In the year following the marriage, the Wife worked part-time while completing the requirement of the Master's Degree. Within a year she was employed full-time for International Paper Company as an Assistant Products Manager, a trainee position earning $19,000 per year.

In 1979 she obtained employment with Bloomingdales Department Stores as an assistant buyer earning $25,000 per year where she worked until 1982 at which time she had achieved the position of a group buyer. In 1982, she left Bloomingdales and commenced working for Regent Industries and ran a division called Kasper Weekend Wear at a salary of $65,000 per year. This position ended in less than a year due to the fact that the company went out of business. After being unemployed for about three months she went to work for Federated Department Stores, the parent company of Bloomingdales where she stayed for one year. As the result of the intervention of a head hunter she became Divisional Manager of ladies sportswear for a company called Batus which owned Saks, Marshal Fields and Gimbels at a starting salary of $85,000 per year. She remained there for three years and was thereafter hired by Leslie Faye Corporation as the President of a new division, Breckenridge Blouses at a starting salary of $90,000 per year where she stayed for one year.

At the end of that time, the same head hunter got her a job with Bernard Chaus, Inc., a women's apparel company as President of Josephine Blouse Division at a starting salary of $125,000 per year. Each year she received salary increments of $25,000 per year so that in 1991 she was earning $200,000 per year and has been promoted to President of the Chaus Division which was the largest division of the Company. In December 1991 as a result of a management change she was terminated and received $50,000 severance.

After several months of unemployment, the Wife is now employed by Fashion Overseas Bureau at a salary of $180,000 per year.

The Husband throughout the marriage was employed in his Company, A.E. Chew & Co., Inc., an export sales company. In 1987 the company began having serious financial problems and in 1988, the company was liquidated by its creditors. The Husband then was employed by Pan American Trade Development for one year until that Company went bankrupt. Thereafter he was employed by Bascom Corporation, a food import company setting up an export division. His employment at Bascom was terminated in March 1992. At present he has started an export business out of his house which he runs as a personal proprietorship. He uses no separate business bank account and thus his checking account contains all transactions of the business. His current income is erratic and difficult to calculate.

When the parties married, they lived in a sublet on Gramercy Park, then they moved to an apartment at 39 Fifth Avenue, where they lived until April 1977. On April 1, 1977 they rented Apartment 8E at 43 Fifth Avenue, a rent stabilized apartment where the Husband continues to reside with his adult handicapped son paying rent at $1409.65. When 43 Fifth Avenue was converted to cooperative apartments through a non-eviction plan on or about 1979, the parties decided not to purchase the apartment despite the Wife's urging. The Wife believed it to be a good investment but the Husband thought the cost of maintenance and the cost of purchase would exceed the rent.

The Wife moved out of the marital apartment on October 10, 1987. She currently resides in a loft at 82 Greene Street with Jaime Phillips and has done so since May 1988.

Master's Degree

During the course of the parties' marriage the Wife obtained her Master's Degree in Business Administration, which has enabled her to launch into a high paying career as a fashion industry executive.

The law is well settled that a degree earned during marriage is marital property subject to equitable distribution. In McGowan v. McGowan, 142 A.D.2d 355, 535 N.Y.S.2d 990 (2nd Dept.1988), the Wife similarly earned her Master's Degree during the course of the marriage. The court held therein that: "In the present case, in fact, the plaintiff wife forthrightly admits that her earning capacity increased as the result of her having obtained the Master's Degree. It makes little sense to construe the Domestic Relations Law in such a way as to exempt from equitable distribution an MBA from the Harvard School of Business, which in real terms could be worth hundreds of thousands of dollars, and yet to subject to equitable distribution a license to operate a junk yard (see, General Business Law § 60), upon the theory that the latter instrument, but not the former, entitles its holder to engage in a particular trade or profession," at 359-60, 535 N.Y.S.2d 990.

The Husband contends, citing Elkus v. Elkus, 169 A.D.2d 134, 572 N.Y.S.2d 901 (1st Dept.1991), that the Wife's career is a thing of value which was obtained during the marriage and is accordingly subject to equitable distribution. He concedes that he would not be entitled to an award for both the Wife's degree and her career concluding that for valuation purposes her degree has merged with her career (citing Marcus v. Marcus, 137 A.D.2d 131, 525 N.Y.S.2d 238 (2nd Dept.1988)).

The Wife disputes the Husband's argument raised for the first time in the brief that her degree or career is marital property entitling him to a distributive award. First, she asserts there is no competent proof in the record as to the value of either her degree or career since both sides rested without reservation and without any expert proof being offered on the subject. The Wife contends that despite the fact that part of the degree was earned prior to the marriage, there was no attempt to calculate that portion which is separate property from that portion which is marital property (citing McAlpine v. McApline, 176 A.D.2d 285, 574 N.Y.S.2d 385 (2nd Dept.1991)). She also argues that her degree no longer has a distributive value, as the defendant argued in Parlow v. Parlow, 145 Misc.2d 850, 548 N.Y.S.2d 373 (Sup.Ct. Westchester Co. 1989), since it has merged into her career.

The court is in accord with the arguments raised by the Wife's counsel. The Husband failed to adduce any expert proof at trial despite a full opportunity to do so and therefore, has waived any claim to a distributive award based upon the value of the Master's Degree. The failure to adduce expert testimony at trial is fatal to a claim for equitable distribution which was first made in defendant's attorney's post trial brief and which set forth, for the first time, calculations as to value. (See Pulitzer v. Pulitzer, 134 A.D.2d 84, 89, 523 N.Y.S.2d 508 (1st Dept.1988); Vogel v. Vogel, 156 A.D.2d 671, 672, 549 N.Y.S.2d 438 (2nd Dept.1989); Gluck v. Gluck, 134 A.D.2d 237, 239 (2nd Dept.1987).) Parenthetically, this court will be awarding the Husband maintenance based on the Wife's income stream and thus separately valuing this degree based on this same income stream might indeed be "double dipping". (See Parlow, supra ).

43 Fifth Avenue

The marital residence, Apartment 8E, is a rent stabilized apartment. In 1980 the building went cooperative pursuant to a non-eviction plan.

As tenants in occupancy the parties, according to the offering plan, were originally able to purchase the apartment at $89,000. Although the Wife wished to purchase it, they never did. In part this was due to the Husband's realistic belief that the costs of maintenance and a mortgage would exceed the rental they were paying.

Although the initial plan has expired along with the original "insiders" offering price, the evidence at trial reveals that if the Husband opted to buy the apartment today there still would be a difference between the price he could purchase it at from the sponsor and the fair market value.

The Wife argues that this difference between the price at which the Husband could purchase the apartment and its current market value according to her expert's testimony is marital property which should be divided pursuant to equitable distribution.

There is no doubt that a person in possession of an apartment which is under a cooperative offering plan possesses a marketable asset as the Wife herein asserts. (Jeruchimowitz v. Jeruchimowitz, 128 Misc.2d 888, 491 N.Y.S.2d 576 [Sup.Ct.N.Y.Co.1985]. This is still true albeit to a lesser extent due to the present state of the cooperative market in New York.

The Husband contends that the rent stabilized apartment is neither marital nor separate...