Kaufman v. Kaufman
| Decision Date | 14 October 2020 |
| Docket Number | Index No. 4893/11,2016–02329,2016–07969 |
| Citation | 189 A.D.3d 31,133 N.Y.S.3d 54 |
| Parties | Kim A. KAUFMAN, respondent-appellant, v. Glenn B. KAUFMAN, appellant-respondent. |
| Court | New York Supreme Court — Appellate Division |
These appeals and cross appeal, as well as the two other appeals in the same case also decided today, are a graphic illustration of the prolixity that may ensue when a complicated matrimonial case is cabined into constituent parts which are heard and decided piecemeal by the Supreme Court. The court bifurcated the trial into phases but, in the end, only conducted one of the two promised phases of the trial. Because some of the issues did not lend themselves to a neat division, the issues, and the court's seriatim determination of them, overlap. As a consequence of the incremental approach to the serial determination of the significant issues raised, which were followed by sequential appeals and cross appeals from the various orders and the final judgment, which appeals are prosecuted on voluminous appendices and supplemental appendices, this Court has not been provided with either a clear, comprehensible, and accessible record or a unified, comprehensive analysis by each party as to what determinations were made by the Supreme Court and which of those decisions each party accepts or challenges. Moreover, with respect to equitable distribution of the parties' substantial investment assets, the judgment of divorce entered by the court merely incorporated by reference its prior decisions, without specifying what is actually ordered, adjudged, and decreed, except that it set forth certain deviations from those prior decisions. Since the decisions conflict with each other in important respects, it is unclear what the court actually directed as to the equitable distribution of major and valuable assets.
Most significantly, while the Supreme Court initially divided the trial into phases, it ultimately conducted only the first phase of the trial and rendered one posttrial decision; the other phase of the trial was short-circuited, with decisions being rendered on the basis of the record in the first trial, supplemented by what the court gleaned from conferences and from motion practice. The court's failure to conduct a trial on all contested issues, in contravention of the court's own established ground rules for this case, is a fundamental error that would ordinarily, by itself, require reversal of those aspects of the court's determinations which are contested by the parties and were made without affording them the opportunity to submit their evidence. However, on those issues where the parties seek review but do not request a further hearing, we have evaluated their positions on the basis of the record as it stands.
We take this opportunity to remind the matrimonial courts of their fundamental obligations to conduct a trial on the contested financial issues, to develop a clear trial record, to render a comprehensive decision which covers all of the issues in dispute, and to issue a comprehensive judgment which clearly and definitively sets forth the parties' rights and obligations. While it is within the discretion of the courts to bifurcate the financial issues to be tried, the courts should refrain from issuing piecemeal decisions. The issues of equitable distribution, maintenance, child support, and counsel fees are intertwined. Indeed, equitable distribution sub-issues such as the characterization, value, and distribution percentage of the parties' property are also interconnected. A holistic and comprehensive review of the parties' finances is required in order to provide a just and equitable resolution of the parties' rights and obligations. Moreover, it should not be necessary to emphasize, as we do here, that the court's decision after trial should be based on the evidence admitted at the trial and the parties should have a full and fair opportunity to tender admissible evidence relevant to all of the issues in dispute.
The parties were married in 2000, and have two children, born in 2002 and 2003. The Supreme Court in some, but not all, of its decisions below referred to the parties by initials only due to unspecified "privacy" concerns. Since no motion was made or granted to provide for an anonymous caption, we refer to the parties as they are identified in the caption of the action. Indeed, it would be anomalous to do otherwise since the actual names of the parties are used in the caption of the order appealed from, and on the briefs on the companion appeals decided herewith.
In 2011, Kim A. Kaufman (hereinafter the plaintiff) commenced this action for a divorce and ancillary relief against Glenn B. Kaufman (hereinafter the defendant) in the Supreme Court, Westchester County. In June 2011, the parties entered into a so-ordered stipulation which provided for the sale of the marital residence, custody of the children, interim support and maintenance, advances on equitable distribution, and counsel fees.
There is no disagreement between the parties and the Supreme Court that the trial was to be bifurcated, at least to some degree. There is no dispute that the court held a 21–day trial and that not all the issues were the subject of the trial. Despite the extensive pretrial conferences that were conducted and the 21–day trial that was held over the course of two months, the parties and the court are at odds as to what the issues were to be, and were, tried. The parties and the court disagree as to what was bifurcated and how the bifurcation came to be.
At a conference on February 4, 2013, the Supreme Court embarked upon a process pursuant to which the trial of the action was to be bifurcated. After hearing from counsel on whether date of trial valuations of assets should be pursued, the court stated that it would first take testimony on whether the assets in question were active or passive. As the court said: "If I make a determination that they're passive, then I'll have to decide that as part of the case and if we need those additional valuations we'll get them and adjourn the trial for that purpose." After further discussion, the court repeated the procedure it would follow: While no objection was expressed by either party to this "ruling," it cannot be said that the parties stipulated to this procedure; it can be said that they acquiesced to the court's approach.
On appeal, the plaintiff characterizes the first phase of the trial as a "mini-hearing" on the classification of assets which thereafter "mushroomed" into a lengthy trial that included every issue, other than the plaintiff's request for a final counsel fee award and the valuation of illiquid investment accounts. In support of this version of events, the plaintiff cites the ruling made on February 4, 2013, and a colloquy held on June 4, 2013, after the conclusion of the first phase of the trial. While the "ruling" of February 4, 2013, tends to confirm the plaintiff's assertion, the discussion held on June 4, 2013, tends to contradict the plaintiff's present characterization of the first phase as having mushroomed out of control. In that June conference, the Supreme Court expressed that there was a "hiatus" so that neutral appraisals could be conducted as to assets not considered at the trial. The plaintiff's counsel proceeded to confirm that the first phase of the trial was focused on identification and classification of assets and that a trial was yet to be held on valuations, arrears, and counsel fees, among other issues. The parties discussed a date for posttrial submissions on the issues that had been tried. The court also stated that it would hold off on a hearing on counsel fees pending the determination to be made after consideration of the parties' submissions.
For his part, the defendant characterizes the bifurcation as having been brought about by stipulation as well as by court directive. According to the defendant, all of the issues were to be the subject of the trial, except for the valuation of certain illiquid assets, counsel fees, and the defendant's request for sanctions. Thus, while the defendant attributes the bifurcation at least partly to a stipulation, the defendant's understanding of the issues being tried and those having been reserved for a later stage is not significantly different from that of the plaintiff. However, the Supreme Court's view is remarkably different.
As set forth in the decision rendered at the end of the first phase of the trial, the Supreme Court perceived that, by stipulation, the trial was bifurcated with the first phase to focus on the classification of assets as being either marital or separate, on whether marital property was active or passive in nature, and on the percentage of each marital asset to be distributed to each party. A second phase was to follow with respect to the valuation of the marital assets, together with the issues of maintenance, child support, counsel fees, contempt, and sanctions.
In any event, a trial was held over the course of 21 days in April and May 2013. In May 2013, a valuation report was prepared by a neutral expert firm. This report was not admitted into evidence during the first phase of the trial and the parties reserved the right to engage their own appraisers.
By decision and order dated April 4, 2014, the Supreme Court denied the plaintiff's motion for an award of $1.2 million in interim counsel fees but, by order dated July 7, 2014, made upon reargument, the court awarded the plaintiff $750,000 in interim counsel fees "without prejudice, to be paid from assets controlled by defendant...
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