Leibowits v. Leibowits

• Decision Date: 16 May 1983
• Parties: Bonnie LEIBOWITS, Respondent, v. Peter LEIBOWITS, Appellant, et al., Defendant.
• Court: New York Supreme Court — Appellate Division

Page 469

462 N.Y.S.2d 469

93 A.D.2d 535

Bonnie LEIBOWITS, Respondent, v. Peter LEIBOWITS, Appellant, et al., Defendant.

Supreme Court, Appellate Division,

Second Department.

May 16, 1983.

Marshall, Bratter, Greene, Allison & Tucker, New York City (Eleanor B. Alter, Susan L. Lesinski and Howard P. Roy, New York City, of counsel), for appellants.

Finkelstein & Robins, New York City (Miriam M. Robinson and Philip Sherwood Greenhaus, New York City, of counsel), for respondent.

Before LAZER, J.P., and MANGANO, O'CONNOR and BROWN, JJ.

PER CURIAM.

Section 234 of the Domestic Relations Law provides the authority for the issuance of an order restraining disposition of marital assets during the pendency of a divorce action. Therefore, compliance with the formalities and jurisprudential requirements of article 63 of the CPLR relative to preliminary injunctions is not a prerequisite to an order of restraint.

During the current action, the defendant husband moved for an order directing his wife to account for and turn over to him the contents of a safe deposit box which she controlled and which contained securities and other assets, some of which were jointly owned and others of which the husband owned individually. In opposition, the wife contended that while her husband was entitled to the return of his inherited property, the remaining assets constituted marital property to which he was not entitled. Special Term ordered the plaintiff to account for the assets in the box and give the husband his inherited assets. However, the court denied the turnover motion insofar as it related to marital property on condition that the wife not dispose of the property during the litigation. Despite the wife's failure to move for affirmative relief on her own behalf, the court also issued an order restraining the husband from disposing of marital property within his control. It is that directive which the husband now challenges as baseless in the absence of a motion for a preliminary injunction pursuant to article 63 of the CPLR.

We conclude that Special Term erred in its sua sponte restraint of the husband's However, the portion of the order that restrained the wife from disposing of marital property as a less drastic alternative to the requested turnover application was a proper exercise of discretion and authority under section 234 of the Domestic Relations Law. The pertinent portion of that section provides: "In any action for divorce * * * the court may * * * make such direction, between the parties, concerning the possession of property, as in the court's discretion justice requires having regard to the circumstances of the case and of the respective parties." The section derives from section 1164-a of the former Civil Practice Act which applied to actions for separation and was enacted to decide the right of possession of real property held by the husband and wife as tenants by the entirety. Recognizing that a separation judgment does not terminate a tenancy by the entirety, the Legislature adopted section 1164-a in an effort to prevent the harm that could be caused by a vindictive spouse who attempted to transfer or encumber his or her interest in such property so as to harass the other spouse (Kahn v. Kahn, 43 N.Y.2d 203, 208, 401 N.Y.S.2d 47, 371 N.E.2d 809; 1953 Report of N.Y.Law Rev.Comm., pp. 485-486).

disposition of marital property. Due process requires written notice from the moving spouse that he or she seeks possession of marital assets or a restraint on their disposition. Thus, the portion of the order restraining the husband from disposing of marital property should be deleted.

Section 234 of the Domestic Relations Law extended the judicial power over the possession of property to encompass both real and personal property. The power was clearly designed to be utilized without regard to the state of title (1963 Report of Joint Legislative Committee on Matrimonial and Family Law, N.Y.Legis.Doc., No. 34, pp. 81, 84-85; 2 Foster-Freed, Law & the Family, § 22.37, p. 103), and it gives the court "broad and flexible control" over the possession of property (1982-1983 Supplement, Siegel, Practice Commentary, McKinney's Cons. Laws of N.Y. Book 14, Domestic Relations Law, § 234, p. 33), by providing in-kind support through possession of real (Scampoli v. Scampoli, 37 A.D.2d 614, 323 N.Y.S.2d 627), or personal property (Troiano v. Troiano, 87 A.D.2d 588, 447 N.Y.S.2d 753; Silbert v. Silbert, 22 A.D.2d 893, 255 N.Y.S.2d 272, affd. 16 N.Y.2d 564, 260 N.Y.S.2d 838, 208 N.E.2d 783), by excluding one spouse from premises occupied by another (Minnus v. Minnus, 63 A.D.2d 966, 405 N.Y.S.2d 504), or by restraining transfers of property pendente lite (Zeeve v. Zeeve, 44 A.D.2d 838, 355 N.Y.S.2d 472; Weaver v. Weaver, 37 A.D.2d 614, 323 N.Y.S.2d 536).

The section 234 power to direct one party to deliver possession to the other necessarily includes the power to prevent a party from frustrating such delivery by improper disposition of assets. In these days, that power of restraint is vital to meaningful enforcement of the equitable distribution statute. Not only is this conclusion consistent with the new law's recognition of the parties' "economic partnership" (Governor's Approval Memorandum, 1980 McKinney's Session Laws of N.Y., p. 1863), but it has support in the State's abiding interest in family relationships (Fearon v. Treanor, 272 N.Y. 268, 5 N.E.2d 815; Di Lorenzo v. Di Lorenzo, 174 N.Y. 467, 67 N.E. 63), especially in allocating the economic burdens so that members of the former family group are not "destroyed by crushing economic and psychological pressures" (Phillips v. Phillips, 1 A.D.2d 393, 397, 150 N.Y.S.2d 646, affd. 2 N.Y.2d 742, 157 N.Y.S.2d 378, 138 N.E.2d 738). Absent the authority provided in section 234 of the Domestic Relations Law, a spouse who seeks to prevent the dissipation of marital assets would be compelled to obtain a preliminary injunction pursuant to article 63 of the CPLR. Such injunctive relief would, in turn, require the moving party to post an undertaking and establish the probability of success. Considering the often great disparity between the financial capacities of spouses, the need to comply with article 63 would chill the efforts of the relatively impoverished to prevent the more affluent from frustrating justice by disposing of marital assets.

Accordingly, the order should be modified by deleting the provision restraining the husband from disposing of marital property during the litigation. As so modified, the order should be affirmed insofar as appealed from.

O'CONNOR, Justice (concurring).

Defendant husband questions Special Term's authority to issue a restraining order in protecting marital property pending equitable distribution in an action to dissolve his marriage to plaintiff. I conclude that section 234 of the Domestic Relations Law, which provides for pendente lite orders changing possession of property as between spouses, empowers the court in certain circumstances to restrain acts prejudicial to a spouse's equitable distribution expectancy without strict compliance with the procedural requirements for injunctive relief under CPLR article 63. In reaching this conclusion, however, I believe it is appropriate to comment further on the nature of equitable distribution and the availability of certain provisional remedies under this new law.

THE FACTS

In this action for divorce the husband (hereafter defendant) moved at Special Term, by notice of motion dated March 23, 1981, for an order directing plaintiff wife to account for and to turn over to him the contents of a safe deposit box that was allegedly held jointly but was under her sole control. The box allegedly contained securities, commercial paper and passbooks, which were particularly identified in his affidavit. Some of the papers were in his name alone, and some were in their joint names. Some of these papers allegedly represented property inherited from his mother. Defendant sought possession of all the papers pending judgment on the ground that plaintiff's refusal of access to, or information about, the property had been unreasonable and demonstrated her unfitness to act as custodian of such property. He also stated that he had lost income when plaintiff had refused to reinvest a certificate of deposit in their joint names because she wanted the account divided equally, and that her net worth statement filed in this action demonstrated that she had transferred assets from their joint accounts into her own accounts.

Plaintiff opposed the application but sought no affirmative relief of any sort. In her affidavit, she stated that she had turned over that portion of the contents of the safe deposit box that she believed constituted inherited and therefore "separate" property as defined in section 236 (Part B, subd. 1, par. d) of the Domestic Relations Law, to which she had no rights under the equitable distribution amendments to that statute (L.1980, ch. 281, § 9). Plaintiff refused, however, to turn over the remainder of the contents on the ground that it was "marital" property under the new law (Domestic Relations Law, § 236, Part B, subd. 1, par. c). She alleged that the bulk of the marital property was under defendant's sole control and that it was worth several million dollars, including real estate ventures; her own net worth statement indicated that she controlled more than a quarter million dollars in liquid assets. Plaintiff also argued that defendant had ceased supporting her and that he had lent substantial sums of money out of the marital property to a woman named in this action as "co-respondent". Defendant replied that until judgment plaintiff had neither a claim to nor a vested right in assets in his sole name, and that plaintiff failed in her papers to state any ground authorizing interference with his use of such assets.

Special Term directed plaintiff to account to defendant for the assets or...