Jeruchimowitz v. Jeruchimowitz
| Decision Date | 28 June 1985 |
| Citation | 128 Misc.2d 888,491 N.Y.S.2d 576 |
| Parties | Barbara Z. JERUCHIMOWITZ, Plaintiff, v. Steven JERUCHIMOWITZ, Defendant. |
| Court | New York Supreme Court |
Mulligan & Jacobson, New York City (William G. Mulligan, Sandra W. Jacobson, Hadassah R. Shapiro and Peter C. Langenus, New York City, of counsel), for plaintiff.
Ritter, Nagler & Neufeld, New York City (Burton Ritter, New York City, of Counsel), for defendant.
Decision
In this divorce proceeding, the testimony taken of the plaintiff-wife on March 13, 1985 established her cause of action for a constructive abandonment against defendant-husband. The plaintiff-wife is granted a judgment of divorce in accordance with § 170, subd. (2) of the Domestic Relations Law. The issues as to distribution of tangible personal property, pension rights, Individual Retirement Act and Keogh Plan accounts were settled by stipulation of the parties entered into on the record on February 15, 1985.
These questions remain: (1) what distribution, if any, there is to be of the marital residence--a co-operative apartment located on the upper Eastside of Manhattan; (2) whether plaintiff-wife is entitled to reimbursement of her share of the couple's 1983 joint tax return refunds which she alleges her husband, without her permission, appropriated for his personal use; and, (3) whether the wife is entitled to an award of counsel fees.
The facts are found as follows:
The Co-operative Apartment
The wife entered into the lease on the apartment in question on January 1, 1978. The parties were married on November 9, 1979. The apartment was the marital residence. The lease for the apartment was at all times in the name of the wife. Renewal occurred at least twice during the course of this marriage. On November 14, 1983, an offering plan for co-operative ownership of the apartment was served on all tenants. The parties attended tenants' meetings together as to this conversion and had numerous conversations on the subject. A check was drawn on a joint bank account of the parties to the tenants' committee for legal fees. The wife subscribed to the apartment in her name. It is her contention that she always intended to acquire ownership in her name solely. The funding necessary for this purchase was obtained by the wife through a mortgage in her name from Manhattan Savings Bank in the amount of $20,000 and funds furnished by her father in the amount of $5,234. The total purchase price of the apartment was $24,688.35 not including the cost of securing the mortgage, closing costs, etc. The closing on the purchase took place on April 12, 1984 after commencement of this action. Both parties remained in residence. The parties stipulated in open court that, in any event, whether this court determined that the subject apartment was marital or separate property, the defendant-husband would vacate the apartment by June 30, 1985. If the apartment was found subject to distribution payment would be deferred for 3 years. A determination as to the time for distribution and the period during which the wife might enjoy use and occupancy are rendered unnecessary (See: § 236, Part B, 5(f) D.R.L.).
General Business Law § 352-eeee in pertinent part reads:
(ix) The tenants in occupancy on the date the attorney general accepts the plan for filing shall have the exclusive right to purchase their dwelling units or the shares allocated thereto for ninety days after the plan is accepted for filing by the attorney general....
The plaintiff-wife relies on Burns v. Burns, 113 Misc.2d 229, 450 N.Y.S.2d 942, aff'd 90 A.D.2d 706, 455 N.Y.S.2d 742, aff'd 59 N.Y.2d 784, 464 N.Y.S.2d 728, 451 N.E.2d 475, in support of her position that her husband is not entitled to any distribution with regard to this apartment. Burns, supra, defining "tenants in occupancy" holds that a spouse, who alone signed the lease and pays the rent, is solely entitled to purchase the shares allocated to the apartment under the plan for conversion to cooperative ownership. In this case, the non-lessee is the husband. In many marriages, there is still adherence to the principle that the husband as "breadwinner" should hold the assets in his name. In most other cases, it would be the wife who would be affected by an adverse precedent. This is not the spirit and intent of Equitable Distribution.
Legislatures have sought to protect the "other" spouse. Spouses in possession along with the lessee are afforded certain rights in various instances: (1) a surviving spouse has a right to continue in occupancy whether or not named as the lessee ( § 56, subd. a of the City Rent Regulations; Cale Development Co., Inc. v. Conciliation and Appeals Board, 94 A.D.2d 229, 463 N.Y.S.2d 814,affirmed 61 N.Y.2d 976, 475 N.Y.S.2d 278, 463 N.E.2d 619; Herzog v. Joy, 74 A.D.2d 372, 375-376, 428 N.Y.S.2d 1); (2) where one spouse is over 62 years old and the other is the named lessee, both can enjoy possession under a non-eviction plan ( § 352-eeee, General Business Law; Belmont East Company v. Abrams, 123 Misc.2d 404, 473 N.Y.S.2d 676); and, (3) a married taxpayer 55 years or older or his/her spouse can receive a one time exclusion (of capital gain) upon the sale of their co-operative apartment under certain circumstances (I.R.C. § 121(d)(2)). A marriage and a subsequent separation agreement can affect the literal interpretation of § 352-eeee 2(d)(ix) of the General Business Law regarding the exclusive right to purchase co-operative shares (Hohenstein v. Hohenstein, 127 Misc.2d 53, 485 N.Y.S.2d 170). It must be remembered also that the court "(i)n addition to the disposition of property ... may make such order regarding the use and occupancy of the marital home and its household effects as provided in section two hundred thirty-four of this chapter, without regard to the form of ownership of such property" ( § 236, Part B, subd. 5f. D.R.L.).
The Burns, case is not controlling as it was pre-Equitable Distribution ( § 236, Part B, D.R.L.). Judge Kupferman, in his dissent addressed this at 90 A.D.2d 706, 706-707, 455 N.Y.S.2d 742, saying, 1
While the law on equitable distribution, which became effective July 19, 1980 (Domestic Relations Law, § 236), does not apply to this matter, it must be deemed to have some impact on the approach here (cf. Foster and Freed, Family Laws, 33 Syracuse L.Rev. 285, 328). A technical tenancy should not determine the disposition of the only real asset of the marriage. I would modify to declare that the husband holds the property in trust for himself and his wife as tenants in common, subject to a determination in the matrimonial action.
The instant case under the present law requires a different ruling. The Governor's Memorandum on Equitable Distribution is definitive:
The bill realizes that the marriage relationship is also an economic partnership. Upon its dissolution property accumulated during the marriage should be distributed in a manner which reflects the individual needs and circumstances of the parties regardless of the name in which such property is held (Memorandum of Governor Carey, 1980 McKinney's Session Laws, p. 1863, emphasis added).
In Komlosi v. Komlosi, N.Y.L.J., April 19, 1985, p. 12, col. 4 (S.Ct., New York County), Justice Kirschenbaum in pertinent part said,
... Although exclusive possession of the apartment is hereby granted to the plaintiff Olga Komlosi, the court does not intend to permit her to obtain the full benefit of cooperative conversion. Such a result would be unwarranted in view of the equal contributions of the parties over a number of years toward the maintenance of the apartment as a marital residence.
The judgment to be settled hereon shall include a provision requiring the plaintiff to promptly notify the defendant of any proposed cooperative conversion plans for 1235 Park Avenue, to permit the defendant to participate in the financing of the purchase of the apartment if the parties determine that such a purchase is feasible or advisable.
The parties in this case at the start of their union (a second marriage for both) were faced with a choice. Where would they live? The choices were the wife's abode, the husband's or a new abode. They chose hers and have lived there for over five years. At the time of the marriage, the apartment was a nonassignable leasehold interest. It was only upon receipt of the "red herring" (offering plan for co-op conversion) that the right of possession became valuable property. In effect, it became an inchoate property right.
It is common knowledge that there is approximately a less than 2% vacancy rate in rental housing in New York City. Coordinately, the increase in value of co-operative apartments has accelerated at a rate of approximately 10% per year. A tenant in possession of an apartment under a co-operative offeri plan possesses a readily marketable asset. A windfall invariably occurs when the tenant sells the apartment immediately after conversion. Since this inchoate property right was "... acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held ..." ( § 236, Part B, subd. 1 c. D.R.L.), the court finds it is marital property. Any other result would be inequitable.
Had there been a "good" relationship between the parties at the time of conversion, they probably would have opted to purchase jointly or to forego the opportunity and remain as tenants. Financing was readily available. In a viable marriage the wife's decision to retain sole ownership in her name would have undoubtedly lead to strife. The wife's forecasting the impending end of the relationship and taking steps to better her interests are not the determinative factors as to whether there should be distribution as to this co-operative apartment.
Distribution of marital property, § 236, Part B, subd. 5 d(6)...
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Chew v. Chew
...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......