Marcus v. Marcus

• Decision Date: 22 February 1988
• Citation: 135 A.D.2d 216,525 N.Y.S.2d 238
• Parties: , 137 A.D.2d 131 Harriet MARCUS, Respondent-Appellant, v. Harold MARCUS, et al., Appellants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 238

525 N.Y.S.2d 238

135 A.D.2d 216, 137 A.D.2d 131

Harriet MARCUS, Respondent-Appellant, v. Harold MARCUS, et al., Appellants-Respondents.

Supreme Court, Appellate Division Second Department.

Feb. 22, 1988.

As Amended May 26, 1988.

Paul Martin Weltz, New York City, for appellants-respondents.

Golden, Wienshienk & Mandel, New York City (Philip Mandel, Bernard Rothman and Marc Owen Mandel, of counsel), for respondent-appellant.

Before MOLLEN, P.J., and THOMPSON, BRACKEN and BROWN, JJ.

MOLLEN, Presiding Justice.

The instant appeal and cross appeal present several challenges to the trial court's resolution of the equitable distribution of the marital assets of the plaintiff wife and the defendant husband, including the trial court's categorization, valuation and ultimate distribution of those assets. Since the portions of the judgment which have been appealed from do not affect Elizabeth Atwood Metz, her appeal is dismissed on the ground that she is not aggrieved thereby (see, CPLR 5511). For the reasons that follow, we modify the judgment from which the parties appeal.

The record reveals that immediately following their marriage in Chicago in 1948, the plaintiff was employed as a full-time social worker and contributed her earnings to the marital household while the defendant husband (hereinafter the defendant) attended medical school. The defendant graduated in 1950 and eventually built up a successful private psychiatric practice in New York. He also became an avid and knowledgeable investor and acquired many lucrative investments. The plaintiff ceased working in 1951 following the birth of the first of their three children, and thereafter devoted herself to taking care of the children, maintaining the household, and socially entertaining the defendant's business associates and colleagues. The plaintiff engaged in part-time employment infrequently during the marriage and at the time of trial was studying to obtain a certificate in psychoanalytic therapy.

The marital relationship began to deteriorate in the late 1970's, when the defendant and a former patient began to see each other socially and subsequently developed an intimate relationship. On July 18, 1980, the day preceding the effective date of equitable distribution in New York, while still living in the marital residence with the plaintiff, the defendant commenced an action for divorce by service of a summons. That action, however, was dismissed in October 1980 for failure to serve a complaint. The defendant suffered a heart attack in September 1980 and returned to the marital residence and to the care of the plaintiff following his release from the hospital, but continued the extramarital relationship with his former patient. He also continued to practice psychiatry on an allegedly reduced schedule, although his earnings from his practice steadily increased. The marital problems continued, and the plaintiff commenced the present divorce action on January 8, 1982. After a lengthy trial in the Supreme Court, Westchester County, the court granted a divorce to the plaintiff and distributed the marital assets. This distribution forms the basis for the appeal and cross appeal from stated portions of the judgment of divorce.

In the first instance, both parties challenge the propriety of the trial court's overall distribution of the marital assets. Under the facts of this case, we find the distribution to be appropriate. It is well settled that the Equitable Distribution Law contemplates--precisely as denoted--an equitable distribution of the marital property ( see, Kobylack v. Kobylack, 111 A.D.2d 221, 489 N.Y.S.2d 257; Sementilli v. Sementilli, 102 A.D.2d 78, 477 N.Y.S.2d 626; Ackley v. Ackley, 100 A.D.2d 153, 472 N.Y.S.2d 804, lv. dismissed 63 N.Y.2d 605, 772, 481 N.Y.S.2d 1023, 471 N.E.2d 462). The record demonstrates that while the defendant is responsible for the major share of economic contributions to the marriage, the plaintiff's comparatively small financial contributions were significant because they were made early in the marria and helped enable the defendant to pursue a medical education and career. Moreover, her noneconomic contributions as a full-time parent, spouse and homemaker were also substantial throughout the parties' lengthy marriage. Hence, in view of their respective contributions to the lengthy marital partnership, we discern no error in the overall percentage distributions by the court (see, Domestic Relations Law § 236[B][5][d][6]; see generally, Neumark v. Neumark, 120 A.D.2d 502, 501 N.Y.S.2d 704, lv. dismissed 69 N.Y.2d 899, 514 N.Y.S.2d 1027, 507 N.E.2d 1091; Griffin v. Griffin, 115 A.D.2d 587, 496 N.Y.S.2d 249).

The defendant also argues that the trial court erred in failing to treat the date upon which he commenced his divorce action (i.e., July 18, 1980) as the cut-off date for identifying and classifying the parties' assets for purposes of equitable distribution as opposed to the date of the commencement of the instant action which was utilized by the trial court. In support of his position, the defendant relies upon a literal reading of Domestic Relations Law § 236(B)(1)(c) which defines the term "marital property" as "all property acquired by either or both spouses during the marriage and before the * * * commencement of a matrimonial action" (emphasis supplied). The defendant therefore claims that his interest in his residence at Wilmot Road in New Rochelle, his half interest in a Manhattan cooperative office and an investment account at Sanford C. Bernstein & Co., all of which he acquired subsequent to the commencement of the first action, should have been deemed separate property not subject to equitable distribution. We disagree.

The defendant admitted at trial that he served a summons on the plaintiff on July 18, 1980, solely for the purpose of avoiding the application of the Equitable Distribution Law which became effective the following day, July 19, 1980 (Domestic Relations Law § 236). However, the defendant failed to serve a complaint in that action despite having ample opportunity to do so, and he did not seek to vacate or appeal from the order dismissing his action. Most significantly, however, the commencement of the first action did not signal the end of the parties' marital relationship; rather, the defendant continued to reside with the plaintiff and accepted the care of the plaintiff and the benefits of their marital relationship until 1982 when the plaintiff commenced the instant action ( cf., Lennon v. Lennon, 124 A.D.2d 788, 508 N.Y.S.2d 507; Muller v. Muller, 116 Misc.2d 660, 456 N.Y.S.2d 918; Seldon v. Seldon, NYLJ, June 21, 1984, at 11, col 2; but see, Wegman v. Wegman, 129 Misc.2d 968, 494 N.Y.S.2d 933, modified 123 A.D.2d 220, 509 N.Y.S.2d 342, remittitur amended 123 A.D.2d 238). In view of these facts, we conclude that to utilize July 18, 1980, as the cut-off date for the acquisition of marital property would be contrary to the fundamental policy underlying the Equitable Distribution Law. Such a result would permit a party to commence a baseless matrimonial action for the purpose of cutting off his or her spouse's right to a share in subsequently obtained property which would otherwise constitute marital property, while at the same time receiving the benefits of the parties' ongoing marital relationship.

In any event, even if we were to accept the defendant's interpretation of the statute, the defendant's New Rochelle residence, his one-half interest in an office cooperative and his investment portfolio would still be deemed marital property since the record clearly demonstrates that these assets were acquired with funds received from the liquidation of his interest in a limited partnership, which partnership was acquired during the marriage and prior to the commencement of the defendant's action. Accordingly, these assets constituted marital property as they were acquired through the sale or exchange of marital property ( cf., Lennon v. Lennon, supra, 124 A.D.2d at 790, 508 N.Y.S.2d 507).

Similarly unavailing is the defendant's argument that the trial court erred in classifying as marital property an account receivable which resulted from a purported loan made by him during the instant litigation to a trust fund for the parties' daughter. The record clearly demonstrates that the moneys loaned by the defendant had their source in income generated by investments he acquired during the parties' marriage and prior to the date the instant action was commenced. The defendant failed to produce any evidence at trial to establish that the income which was utilized to make the loan to the trust account was from earnings after the commencement of the instant action. Hence, the trial court was clearly entitled to conclude that the disputed funds arose from some or all of the investments acquired by the defendant during the parties' marriage and that those investments as well as their earnings constituted marital property ( see, Price v. Price, 69 N.Y.2d 8, 511 N.Y.S.2d 219, 503 N.E.2d 684; Nolan v. Nolan, 107 A.D.2d 190, 486 N.Y.S.2d 415).

Additionally, for the reasons previously stated, we find unpersuasive the defendant's contention that the valuation date for the marital assets should have been July 18, 1980, the date when the defendant's aborted action was commenced ( cf., Ward v. Ward, 94 A.D.2d 908, 463 N.Y.S.2d 634). The trial court's use of the date of trial (i.e., February 1985) in valuing the majority of the marital assets was proper as most of the assets appreciated significantly during the three-year hiatus between the commencement of the instant action and the trial, as the result of market influences (see, Wegman v. Wegman, supra, 123 A.D.2d, at 234-236, 509 N.Y.S.2d 342). Recognizing that "the [valuation] date chosen must be tailored to the particular facts involved in each case and must be reflective of the legislative mandate to provide for the equitable...