Price v. Price

• Decision Date: 19 December 1986
• Citation: 511 N.Y.S.2d 219,69 N.Y.2d 8,503 N.E.2d 684
• Parties: , 503 N.E.2d 684, 55 USLW 2399 Jacklynn N. PRICE, Respondent, v. Harold PRICE, Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 219

511 N.Y.S.2d 219

69 N.Y.2d 8, 503 N.E.2d 684, 55 USLW 2399

Jacklynn N. PRICE, Respondent, v. Harold PRICE, Appellant.

Court of Appeals of New York.

Dec. 19, 1986.

James H. Goodfriend, New York City, for appellant.

Isabelle C. Flaherty, Barry Leibowicz and Paul Morgenstern, New York City, for respondent.

OPINION OF THE COURT

HANCOCK, Judge.

We hold that under the Equitable Distribution Law an increase in the value of separate property of one spouse, occurring during the marriage and prior to the commencement of matrimonial proceedings, which is due in part to the indirect contributions or efforts of the other spouse as homemaker and parent, should be considered marital property (Domestic Relations Law § 236[B][1][d][3] ). Under the statute there are two categories of property: marital property which is subject to equitable distribution and separate property which is not (Domestic Relations Law § 236[B][1][c], [d] ). Marital property is broadly defined as "all property acquired by either or both spouses during the marriage" (Domestic Relations Law § 236[B][1][c] ). Separate property, which is specifically described as an exception to marital property, includes property "acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse" (Domestic Relations Law § 236[B][1][d][1] ). Separate property also includes "property acquired in exchange for or the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse " (Domestic Relations Law § 236[B][1][d][3]; emphasis supplied).

The narrow question of statutory construction before us is whether the terms "contributions or efforts", contained in the italicized phrase quoted above, are intended to incorporate contributions or efforts of the other spouse as homemaker and parent. Because we hold that increases in value due in part to such efforts or contributions are to be considered under section 236(B)(1)(d)(3), such increases are excepted from separate property and treated as marital property available for equitable distribution by the court pursuant to Domestic Relations Law § 236(B)(5).

I

The instant action, commenced in 1981, culminated in a judgment of divorce in April 1984. At issue is the treatment to be given under section 236(B)(1)(d)(3) to defendant's ownership interest in the Unity Stove Company (Unity), a family business engaged in the wholesale supply of kitchen parts and appliances. Defendant commenced his association with Unity several years before the parties were married in 1969. He acquired 25% of the outstanding stock of Unity by gift from his father in 1957 and another 25% by gift in 1972. After commencement of the divorce action but prior to the divorce judgment, defendant became sole owner of Unity when the outstanding shares of the corporation were redeemed. He also became the owner of a corporation which holds title to the real estate holdings of Unity.

Before the marriage plaintiff was employed as a registered nurse at Mount Sinai Hospital. After the marriage, for a period of six months, she worked full time at Unity and, for the next six months, part time as a private duty nurse. When the first of the parties' two children was born in 1972, plaintiff gave up her outside employment in order to devote her efforts to being a homemaker and parent. There is evidence that during the marriage she attended conventions with her husband and assisted him as hostess at various business-related social events.

Following trial of the divorce action, Supreme Court found that defendant's interests in Unity and the related company constituted "separate property" since plaintiff had acquired these stock interests as gifts (see, Domestic Relations Law § 236[B][1][d] ). The court rejected plaintiff's contention that the appreciation in value of defendant's separate property should be treated as marital property to the extent that any such increase was due, in part, to her contributions and efforts (Domestic Relations Law § 236[B][1][d][3] ). It found that whatever direct contributions she may have made to Unity were "minimal and inconsequential" and that her indirect contributions were "likewise insignificant".

In a comprehensive opinion, the Appellate Division unanimously modified on the law and the facts (113 A.D.2d 299, 496 N.Y.S.2d 455), concluding that plaintiff's indirect contributions as a homemaker and mother, as well as her direct contributions to the business, "however minimal", could warrant an award of a percentage of the appreciation of defendant's separate holdings in Unity and the related company (Domestic Relations Law § 236[B][1][d][3]; § 236[B][5] ). Accordingly, the Appellate Division remitted the matter to Supreme Court to determine the extent of the appreciation, if any, in defendant's separate property and the amount "of such appreciation to which plaintiff is entitled by virtue of her direct and indirect contributions."

Following its determination, the Appellate Division denied the parties' reciprocal motions for reargument and granted defendant's motion for leave to appeal to this court pursuant to CPLR 5602(b). It has certified the following question to us: "Whether a nontitled spouse's 'contributions or efforts' (Domestic Relations Law § 236[B][1][d][3] ) as homemaker and parent are entitled to recognition by the court in awarding said spouse a share of the appreciated value of the titled spouses separate property which occurred during the parties' marriage". ¹

For reasons which will appear, the question should be answered in the affirmative and the order of the Appellate Division affirmed.

II

In construing Domestic Relations Law § 236(B)(1)(d)(3) and determining whether the Legislature intended that efforts of the nontitled spouse as homemaker and parent should be included, we must, of course, look to the particular words for their meaning, both as they are used in the section and in their context as part of the entire statute. But we must also look beyond the statutory language and consider the history leading to the adoption of the Equitable Distribution Law and the legislative purpose and policy considerations underlying this radical change in the Domestic Relations Law (L.1980, ch. 281, § 9) (see, Ferres v. City of New Rochelle, 68 N.Y.2d 446, 451, 510 N.Y.S.2d 57, 502 N.E.2d 972; New York State Bankers Assn. v. Albright, 38 N.Y.2d 430, 434, 436, 437, 381 N.Y.S.2d 17, 343 N.E.2d 735; McKinney's Cons.Laws of N.Y., Book 1, Statutes §§ 91, 92, 96, 124). For it is fundamental that in "the interpretation of statutes, the spirit and purpose of the act and the objects to be accomplished must be considered. The legislative intent is the great and controlling principle" (People v. Ryan, 274 N.Y. 149, 152, 8 N.E.2d 313; see, Matter of Petterson v. Daystrom Corp., 17 N.Y.2d 32, 38, 268 N.Y.S.2d 1, 215 N.E.2d 329).

As background for an analysis of the statute, it is helpful to review the policy considerations leading to the enactment of the Equitable Distribution Law and to restate the main purpose of the legislation. The major reform accomplished by the law was a radical alteration of the traditional method of distributing property on dissolution of marriage. As we explained in O'Brien v. O'Brien, 66 N.Y.2d 576, 585, 498 N.Y.S.2d 743, 489 N.E.2d 712, the Legislature replaced the existing system of distribution, which depended on the common-law rules of property and had led to unfair results, "with equitable distribution of marital property, an entirely new theory which considered all the circumstances of the case and of the respective parties to the marriage (Assembly Memorandum, 1980 N.Y.Legis.Ann., at 129-130). Equitable distribution was based on the premise that a marriage is, among other things, an economic partnership to which both parties contribute as spouse, parent, wage earner or homemaker" ( id., at p 585 [emphasis added]; see, Governor's Memorandum of Approval, 1980 McKinney's Session Laws of N.Y., at 1863; Assembly Memorandum, 1980 NY Legis Ann, at 129-130). The Equitable Distribution Law reflects an awareness that the economic success of the partnership depends "not only upon the respective financial contributions of the partners, but also on a wide range of nonremunerated services to the joint enterprise, such as homemaking, raising children and providing the emotional and moral support necessary to sustain the other spouse in coping with the vicissitudes of life outside the home (see, Governor's Memorandum, McKinney's Session Laws of N.Y., 1980, p. 1863; see, also, Litman v. Litman, 93 A.D.2d 695, 696, 463 N.Y.S.2d 241, app. dsmd. 60 N.Y.2d 586; Forcucci v. Forcucci, 83 A.D.2d 169, 171, 443 N.Y.S.2d 1013; Wood v. Wood, 119 Misc.2d 1076, 1079, 465 N.Y.S.2d 475)" (Brennan v. Brennan, 103 A.D.2d 48, 52, 479 N.Y.S.2d 877; see, Capasso v. Capasso, 119 A.D.2d 268, 506 N.Y.S.2d 686; Wegman v. Wegman, 123 A.D.2d 220, 509 N.Y.S.2d 342). This "economic partnership" concept of marriage and the recognition of the value of "non-remunerated services" such as homemaking are exhibited in two important provisions in the statute: (1) that in making an equitable distribution the court shall consider any "contributions and services as a spouse, parent * * * and homemaker" (§ 236[B][5][d][6] ); and (2) that in determining the amount and duration of maintenance the court shall consider "contributions and services of the party seeking maintenance as a spouse, parent * * * and homemaker" (§ 236[B][6][a][8] ).

For any court making an equitable distribution under the statute, the necessary starting point is the critical determination of what constitutes "marital property"--the designation of the particular assets which the court is to distribute equitably pursuant to section 236(B)(5). The Legislature, in defining this basic term "marital property", we have held, intended...