Ciaffone v. Ciaffone

• Decision Date: 20 June 1996
• Citation: 645 N.Y.S.2d 549,228 A.D.2d 949
• Parties: Constantina M. CIAFFONE, Respondent-Appellant, v. Michael T. CIAFFONE, Appellant-Respondent, and Marc Burnett, as Trustee of the Trust made by Michael T. Ciaffone, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 549

645 N.Y.S.2d 549

228 A.D.2d 949

Constantina M. CIAFFONE, Respondent-Appellant, v. Michael T. CIAFFONE, Appellant-Respondent and Marc Burnett, as Trustee of the Trust made by Michael T Ciaffone, Respondent.

Supreme Court, Appellate Division,

Third Department.

June 20, 1996.

Sheila Callahan O'Donnell, Cornwall, for appellant-respondent.

Gellert & Cutler P.C. (Raina E. Maissel, of counsel), Poughkeepsie, for respondent-appellant.

Bloom & Bloom P.C. (Peter E. Bloom, of counsel), New Windsor, for respondent.

Before CARDONA, P.J., and MERCURE, WHITE, CASEY and SPAIN, JJ.

WHITE, Justice.

Cross appeals (transferred to this court by order of the Appellate Division, Second Department) from a judgment of the Supreme Court (Spindel, J.H.O.) ordering, inter alia, equitable distribution of the parties' marital property, entered August 30, 1994 in Orange County, upon a decision of the court.

Prior to the parties' marriage on August 23, 1986, defendant Michael T. Ciaffone (hereinafter defendant) had acquired a 75% interest in Algonquin Supply Corporation, which operates a True Value Hardware Store in the Town of Newburgh, Orange County, a 50% interest in MacNarry and Ciaffone Builders, a partnership engaged in the construction of residential homes, and a 33 1/3% in Scenic Hills Associates, an entity that purchased and developed a 38.8-acre parcel of property in the Town of Newburgh. Defendant also purchased a vacant lot in the Town of New Windsor, Orange County, and began construction of a home that eventually became the marital residence. During the marriage, and before the commencement of this action in April 1993, defendant purchased two additional properties which he placed in an irrevocable trust he created for the benefit of the parties' two children.

At the conclusion of a bench trial, ¹ Supreme Court determined that the parties' marital property consisted of the appreciated value of Algonquin, the marital residence, defendant's IRA, plus jewelry and the cash surrender value of an insurance policy. It then proceeded to distribute 40% of the marital estate to plaintiff in the form of a distributive award of $173,039.50. In addition, Supreme Court awarded the parties joint custody and directed defendant to pay maintenance in the sum of $200 per week for three years and child support of $300 per week. It also granted plaintiff exclusive possession of the marital residence for three years and directed defendant to pay the carrying charges for those three years. Both parties appeal. We shall first consider defendant's appeal.

The first issue we consider is whether Supreme Court abused its discretion in awarding plaintiff a 40% share of the marital property. Equitable distribution is designed to arrive at a fair distribution of the parties' marital property based upon the factors enumerated in Domestic Relations Law § 236(B)(5)(d) (see, Cappiello v. Cappiello, 110 A.D.2d 608, 609, 488 N.Y.S.2d 399, affd, 66 N.Y.2d 107, 495 N.Y.S.2d 318, 485 N.E.2d 983). In this instance, Supreme Court acknowledged the statutory factors, but only mentioned two as the basis for its decision: the short duration of the marriage and plaintiff's long history of mental stress and anxiety.

We recognize that it is not necessary for the trial court to analyze each statutory factor (see, Chasin v. Chasin, 182 A.D.2d 862, 864, 582 N.Y.S.2d 512); however, Supreme Court's brief reference to two factors was inadequate as it did not satisfy the purpose of Domestic Relations Law § 236(B)(5)(g): to prevent the arbitrary exercise of discretion and to provide the basis for appellate review where discretion is improvidently exercised (see, Otto v. Otto, 150 A.D.2d 57, 61, 545 N.Y.S.2d 321). We need not remit the matter because, with the full trial record before us, we have the authority to make the necessary findings (see, De Santis v. De Santis, 205 A.D.2d 928, 929, 613 N.Y.S.2d 737).

At the time of the commencement of this action plaintiff had no income, while in 1992 defendant's adjusted gross income was $110,378. It does appear that plaintiff has the ability to become self-supporting within three years when she obtains her Master's degree in elementary education. While she only worked at Algonquin for a short time, she maintained the marital residence and was the children's primary caregiver. It further appears that she is no longer a legatee under defendant's last will and testament nor is she entitled to any distributions from the trust defendant created. When these factors along with those mentioned by Supreme Court are considered, a 40% distribution of the value of the marital property to plaintiff is fair (see, Orofino v. Orofino, 215 A.D.2d 997, 998, 627 N.Y.S.2d 460, lv. denied, 86 N.Y.2d 706, 632 N.Y.S.2d 500, 656 N.E.2d 599).

As it is well settled that the weight to be attributed to expert testimony is left to the trier of fact (see, Ducharme v. Ducharme, 145 A.D.2d 737, 739, 535 N.Y.S.2d 474, lv. denied, 73 N.Y.2d 708, 540 N.Y.S.2d 1003, 538 N.E.2d 355; Wilbur v. Wilbur, 116 A.D.2d 953, 498 N.Y.S.2d 525), we reject defendant's argument that Supreme Court should not have accepted the opinion of plaintiff's expert as to the appreciated value of Algonquin; the opinion was based on an acceptable method of determining the value of a closely held business, i.e., the discounted cash flow method (11B Zett-Edmonds, Schwartz, NYCivPrac § 41.04[4], at 41-37).

The opinion of plaintiff's expert is that Algonquin's appreciated value was $300,000. Supreme Court apparently utilized this figure in its calculations, but arrived at a valuation figure of $214,000. We find no support in the record for this figure. Therefore, employing the correct value of $300,000, the value of plaintiff's distributive award in this asset is $120,000 ($300,000 X 40%). ²

Supreme Court also miscalculated the credit defendant was entitled to receive for the investment of his premarital funds in the marital residence. Instead of $22,000, the correct sum is $33,718 ³ which reduces the valuation of this asset to $156,282 ($190,000 - $33,718). We reject defendant's argument that he should be given an additional credit of $99,784 because, even though these funds may have been separate property, defendant deposited them in a joint account with plaintiff and failed to establish, by clear and convincing evidence, that the joint account was created only as a matter of convenience (see, Dunn v. Dunn, 224 A.D.2d 888, ----, 638 N.Y.S.2d 238, 240; Gundlach v. Gundlach, 223 A.D.2d 942, ----, 636 N.Y.S.2d 914, 915). Lastly, Supreme Court did not err in disallowing the $80,000 home equity loan defendant placed on the marital residence as there is no indication that the proceeds were utilized in the marital partnership.

Defendant's argument that Supreme Court should not have distributed a portion of his IRA to plaintiff lacks substance since contributions made to a retirement trust or plan during marriage are treated as marital property (see, Elmaleh v. Elmaleh, 184 A.D.2d 544, 545, 584 N.Y.S.2d 857).

Defendant next draws our attention to the child support award and Supreme Court's direction that he pay the carrying charges on the marital residence. In the absence of an explanation, the imposition of these dual obligations is erroneous as it results in child support payments in excess of the statutory guidelines because shelter costs are inherent in the basic child support obligation set forth in Domestic Relations Law § 240(1-b) (see, Ryan v. Ryan, 186 A.D.2d 245, 246, 588 N.Y.S.2d 341). The proper procedure under these circumstances is to subtract the amount of the annual carrying charges from the parties' gross income before applying the statutory percentages (see, Linda R.H. v. Richard E.H., 205 A.D.2d 498, 500, 612 N.Y.S.2d 656). Because the record does not permit us to make this calculation, we shall remit this issue to Supreme Court to recalculate child support or to articulate its reasons for the child support ordered (see, Polychronopoulos v. Polychronopoulos, 226 A.D.2d 354, ----, 640 N.Y.S.2d 256, 257). Also, on remittal, Supreme Court should reduce defendant's income by the amount of the maintenance to be paid to plaintiff prior to determining his child support obligation (see, Tarascio v. Tarascio, 183 A.D.2d 890, 891, 585 N.Y.S.2d 59).

Supreme Court's maintenance award is appropriate for the reasons set forth in its decision and for the additional reason that it will enable plaintiff to maintain her predivorce standard of living until she becomes self-supporting (see, White v. White, 204 A.D.2d 825, 828, 611 N.Y.S.2d 951, lv. dismissed 84 N.Y.2d 977, 622 N.Y.S.2d 916, 647 N.E.2d 122).

In the absence of evidence...