Szypula v. Szypula

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: Reynolds Fitzgerald, J.
• Citation: Szypula v. Szypula, 211 A.D.3d 156, 178 N.Y.S.3d 290 (N.Y. App. Div. 2022)
• Decision Date: 23 November 2022
• Docket Number: 533729
• Parties: Meredith SZYPULA, Respondent, v. John SZYPULA, Appellant.

211 A.D.3d 156

178 N.Y.S.3d 290

Meredith SZYPULA, Respondent,

v.John SZYPULA, Appellant.

533729

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

Calendar Date: October 12, 2022

Decided and Entered: November 23, 2022

The Lama Law Firm, LLP, Ithaca (Ciano J. Lama of counsel), for appellant.

Miller Mayer, LLP, Ithaca (R. James Miller of counsel), for respondent.

Before: Lynch, J.P., Aarons, Reynolds Fitzgerald, Fisher and McShan, JJ.

OPINION AND ORDER

Reynolds Fitzgerald, J.

Appeal from a judgment of the Supreme Court (Joseph A. McBride, J.), entered July 9, 2021 in Tompkins County, ordering, among other things, equitable distribution of the parties’ marital property, upon a decision of the court.

Plaintiff (hereinafter the wife) and defendant (hereinafter the husband) were married in 1996 and have two unemancipated children (born in 2006 and 2008). The husband was employed by the United States Navy from 1987 until 1998, earning 11 years of unvested pension credits. In 2012, the husband began employment with the United States Department of State. Attendant to this employment, the husband was given the option of "buy[ing] back" the pension benefit credits earned for his previous military service. He did so, utilizing marital funds for the purchase. In 2019, the wife commenced this action for divorce. At issue is whether the Navy pension credits earned prior to the marriage, but acquired during the marriage, are marital or separate property. After a nonjury trial, Supreme Court, relying on ( Burke v. Burke, 175 A.D.3d 458, 109 N.Y.S.3d 54 [2d Dept. 2019] ), deemed said credits marital in nature and included them in its calculation of the wife's award of the husband's pension. The husband appeals.

The husband's sole contention on appeal is that Supreme Court erred in classifying that portion of the Navy pension credits earned prior to the marriage as marital property. We agree. "Whether a particular asset is marital or separate property is a question of law that a trial court must initially address to ascertain the marital estate" ( Mack v. Mack, 169 A.D.3d 1214, 1215, 94 N.Y.S.3d 683 [3d Dept. 2019] [internal quotation marks and citations omitted]; see Giannuzzi v. Kearney, 160 A.D.3d 1079, 1080, 74 N.Y.S.3d 123 [3d Dept. 2018] ). "[W]hile the method of equitable distribution of marital property is properly a matter within the trial court's discretion, the initial determination of whether a particular asset is marital or separate property is a question of law, subject to plenary review on appeal" ( DeJesus v. DeJesus, 90 N.Y.2d 643, 647, 665 N.Y.S.2d 36, 687 N.E.2d 1319 [1997] ; see Smith v. Smith, 152 A.D.3d 847, 848, 57 N.Y.S.3d 769 [3d Dept. 2017] ). Domestic Relations Law § 236(B)(1)(c) defines marital property as "all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action." Thus, Domestic Relations Law § 236 creates a statutory presumption that all property acquired during the marriage is marital. The burden then rests with the party asserting the separate property claim to rebut the presumption (see Fields v. Fields, 15 N.Y.3d 158, 163, 905 N.Y.S.2d 783, 931 N.E.2d 1039 [2010] ; Saia v. Saia, 91 A.D.3d 1110, 1110, 937 N.Y.S.2d 352 [3d Dept. 2012] ).

The case before us concerns pension credits, an area of extensive discussion and analysis throughout the years since New York became an equitable distribution state. "[A] pension benefit is, in essence, a form of deferred compensation derived from employment and an asset of the marriage that both spouses expect to enjoy at a future date" ( Dolan v. Dolan, 78 N.Y.2d 463, 466, 577 N.Y.S.2d 195, 583 N.E.2d 908 [1991] ). "Even though workers are unable to gain access to the money until retirement, their right to it accrues incrementally during the years of employment. Thus, that portion of a pension based on years of employment during the marriage is marital property" ( Olivo v. Olivo, 82 N.Y.2d 202, 207, 604 N.Y.S.2d 23, 624 N.E.2d 151 [1993] ). In effecting the intent of Domestic Relations Law § 236(B), the Court of Appeals held that "these post-divorce benefits were marital property to the extent that they were compensation for past services rendered during the marriage " ( DeLuca v. DeLuca, 97 N.Y.2d 139, 145, 736 N.Y.S.2d 651, 762 N.E.2d 337 [2001] [emphasis added]). Accordingly, "it becomes evident that an employee's interest in such a plan, except to the extent that it is earned before marriage or after commencement of a matrimonial action, is marital property" ( Majauskas v. Majauskas, 61 N.Y.2d 481, 490, 474 N.Y.S.2d 699, 463 N.E.2d 15 [1984] [emphasis added]).

Applying this rationale to the purchase of pension benefit credits, "[w]hether and to what extent a pension benefit is marital or separate property is determined by the time period in which the credit for the pension was earned" ( Valachovic v. Valachovic, 9 A.D.3d 659, 660, 780 N.Y.S.2d 222 [3d Dept. 2004] ). Here, as nine of the 11 years of credits purchased "were admittedly earned prior to the marriage, they remain [defendant's] separate property" ( id. ).

This reasoning is in accord with "the well-settled statutory presumption that all property acquired by either spouse during the marriage, unless clearly separate, is deemed marital property" ( Fields v. Fields, 15 N.Y.3d at 165, 905 N.Y.S.2d 783, 931 N.E.2d 1039 [emphasis added]; see DeJesus v. DeJesus, 90 N.Y.2d at 652, 665 N.Y.S.2d 36, 687 N.E.2d 1319 ). The Legislature enacted the marital property presumption "to recognize the direct and indirect contributions of each spouse" to...