Rizzo v. Rizzo

• Court: New York Supreme Court — Appellate Division
• Citation: Rizzo v. Rizzo, 2014 NY Slip Op 6304, 120 AD3d 1400, 993 N.Y.S.2d 104 (N.Y. App. Div. 2014)
• Decision Date: 24 September 2014
• Docket Number: 2012-06646
• Parties: Joseph RIZZO, respondent, v. Traci RIZZO, appellant.

120 A.D.3d 1400

993 N.Y.S.2d 104

2014 N.Y. Slip Op. 06304

Joseph RIZZO, respondent

v.Traci RIZZO, appellant.

2012-06646

Supreme Court, Appellate Division, Second Department, New York.

Sept. 24, 2014.

Wolfson & Egitto, P.C., Poughkeepsie, N.Y. (Christopher P. Ragucci of counsel), for appellant.

Steven A. Nosonowitz, Pleasant Valley, N.Y., for respondent.

MARK C. DILLON, J.P., THOMAS A. DICKERSON, JEFFREY A. COHEN, and COLLEEN D. DUFFY, JJ.

Opinion

In an action for a divorce and ancillary relief, the defendant appeals, as limited by her brief, from so much of a judgment of the Supreme Court, Dutchess County (Sproat, J.), dated June 7, 2012, as incorporated by reference and directed the parties to comply with stated portions of an interlocutory judgment of the same court (Pagones, J.), dated May 15, 2012, which, after a nonjury trial on the issues of equitable distribution, maintenance, and attorney's fees, inter alia, awarded the plaintiff 100% of a certain annuity as his separate property, awarded the plaintiff 100% of his pension as his separate property, failed to award her an equitable share in the marital residence, required her to reimburse the plaintiff for certain credit card debt, and denied her application for an award of attorney's fees.

ORDERED that the judgment is modified, on the law and the facts, by deleting the provisions thereof incorporating by reference and directing the parties to comply with so much of the interlocutory judgment as awarded the plaintiff 100% of the annuity and 100% of the plaintiff's pension as his separate property, and substituting therefor a provision stating that the annuity constitutes marital property, that the plaintiff's equitable share is 90% of the monthly annuity payment and the defendant's equitable share is 10% of the monthly annuity payment, and that the surviving party shall receive the entire monthly annuity payment upon the death of the former spouse; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements, the provisions in the interlocutory judgment which awarded 100% of the annuity and the pension to the plaintiff are vacated, and the matter is remitted to the Supreme Court, Dutchess County, to determine what part, if any, of the plaintiff's pension constitutes marital property and thereafter for the entry of an appropriate amended judgment in accordance herewith.

In June 2012, the Supreme Court awarded a divorce to the plaintiff, on the defendant's consent, on the ground of constructive abandonment. The issues on this appeal concern the court's determination that certain property was the separate property of the plaintiff, the court's distribution of certain marital property and debt, and the defendant's entitlement to an award of an attorney's fee.

In reviewing a judgment rendered in a matrimonial action, this Court's power is as broad as that of the trial court (see

O'Brien v.

O'Brien, 66 N.Y.2d 576, 590, 498 N.Y.S.2d 743, 489 N.E.2d 712 ; Cappiello v. Cappiello, 66 N.Y.2d 107, 110, 495 N.Y.S.2d 318, 485 N.E.2d 983 ; Majauskas v. Majauskas, 61 N.Y.2d 481, 493–494, 474 N.Y.S.2d 699, 463 N.E.2d 15 ), and where, as here, the determination was made after a nonjury trial, the Court “may render the judgment it finds warranted by the facts” ( Northern Westchester Professional Park Assoc. v. Town of Bedford, 60 N.Y.2d 492, 499, 470 N.Y.S.2d 350, 458 N.E.2d 809 ; see Baba–Ali v. State of New York, 19 N.Y.3d 627, 640, 951 N.Y.S.2d 94, 975 N.E.2d 475 ; Miceli v. Miceli, 78 A.D.3d 1023, 1024–1025, 911 N.Y.S.2d 473 ).

Under the facts of this case, the annuity at issue, which was purchased pursuant to the terms of a settlement agreement in a civil action commenced jointly by the parties, constitutes marital property. In 2001, following an on-the-job accident that rendered the plaintiff unable to work, the parties together commenced an action in the Supreme Court, New York County, entitled Rizzo v. Triborough Bridge and Tunnel Auth., under Index No. 115962/01, to recover damages for the plaintiff's personal injuries and for loss of consortium to the defendant. Both parties were named plaintiffs in the action, and the settlement agreement that was reached by the parties expressly provided that it was for full settlement, release, and discharge of all claims in the complaint, including loss of consortium. The settlement provided for a lump-sum payment in a certain amount and periodic monthly payments of $3,235 guaranteed for 30 years, then continuing for the life of either or both of the parties. The settlement agreement was silent as to the allocation of funds awarded for the plaintiff's personal injury cause of action and the defendant's cause of action for loss of consortium. Following the assignment of the obligor's duty under the settlement agreement, an annuity was created to effectuate the periodic monthly payments for 30 years, and thereafter for the life of either or both of the parties, as required by the settlement agreement. The annuity named the plaintiff and the defendant as joint payees with rights of survivorship.

Under the facts presented here, the Supreme Court erred in determining that the annuity constitutes the plaintiff's separate property. Although a settlement award emanating from a personal injury action commenced by the parties is partially the separate property of each party named in such action (see Miceli v. Miceli, 78 A.D.3d at 1025, 911 N.Y.S.2d 473 ; Domestic Relations Law § 236[B][1][d][2] ), here, the parties' conduct converted the separate property of the settlement into marital property. Specifically, the parties' agreement to a settlement term that allowed the obligor or its successors to purchase an annuity, which provided for a right of survivorship to each party, to effectuate the terms of the settlement, manifests the parties' intent to transfer the character of the property of each arising out of that settlement from separate to marital. The annuity that was purchased names both parties as joint payees and, by its terms, provides a right of survivorship to each payee upon the death of the other. In addition, the parties do not dispute that they treated past payments made to them from the annuity as marital property, that those monthly payments were direct-deposited into a joint bank account bearing both parties' names, and that those funds were thereafter immediately transferred into a joint checking account set up to pay household and living expenses (see Crescimanno v. Crescimanno, 33 A.D.3d 649, 649–650, 822 N.Y.S.2d 310 ; Garner v. Garner, 307 A.D.2d 510, 512, 761 N.Y.S.2d 414 ). Consequently, the annuity constitutes marital property that must be equitably distributed (see Garner v. Garner, 307 A.D.2d at 512, 761 N.Y.S.2d 414 ; Geisel v. Geisel, 241 A.D.2d 442, 443, 659 N.Y.S.2d 511 ; Schmidlapp v. Schmidlapp, 220 A.D.2d 571, 572, 632 N.Y.S.2d 593 ).

With respect to the equitable distribution of this marital asset, “it is important to note that there is no requirement that the distribution of each item of marital property be on an equal basis” ( Coffey v. Coffey, 119 A.D.2d 620, 622, 501 N.Y.S.2d 74 ). Here, equity dictates that the plaintiff should receive most of the annuity, as he is permanently disabled and unable to earn an income now or in the future, whereas the defendant is employed and has future income earning capacity. Taking into account the circumstances of this case and of each of the parties, the allocation of 90% of the monthly annuity payment to the plaintiff and 10% to the defendant would be equitable (see Domestic Relations Law § 236[B][5][c] ; Garner v. Garner, 307 A.D.2d at 512, 761 N.Y.S.2d 414 ). However, as the annuity provides for a right of survivorship, the parties should retain their respective proportional interests in the annuity while both are living, with the surviving party receiving increased benefits upon the death of the former spouse (see Munson v. Munson, 250 A.D.2d 1004, 672 N.Y.S.2d 968 ). Accordingly, the plaintiff is entitled to 90% and the defendant is entitled to 10%, respectively, of each monthly annuity payment, and, upon the death of one of the parties, the surviving party is entitled to receive the entire monthly annuity payment, inclusive of both parties' share, and the matter must be remitted to the Supreme Court, Dutchess County, for the entry of an appropriate amended judgment providing for such allocation.

The Supreme Court also erred in finding that the plaintiff's pension payments constituted separate property not subject to equitable distribution (cf. Domestic Relations Law § 236[B][5][b] ). In New York, “pension benefits or vested rights to those benefits, except to the extent that they are earned or acquired before marriage or after commencement of a matrimonial action, constitute marital property” (Dolan v. Dolan, 78 N.Y.2d 463, 466, 577 N.Y.S.2d 195, 583 N.E.2d 908 ; see Olivo v. Olivo, 82...