Zirinsky v. Zirinsky

Citation529 N.Y.S.2d 298,138 A.D.2d 43
PartiesHelen ZIRINSKY, Plaintiff-Respondent, v. Lawrence ZIRINSKY, Defendant-Appellant.
Decision Date09 June 1988
CourtNew York Supreme Court Appellate Division

Myrna Felder, of counsel (Jeanne Wilmot Carter with her on the brief, Raoul Lionel Felder, New York City, attorney), for plaintiff-respondent.

William C. Herman, of counsel (Allan D. Mantel and Frederic J. Siegel with him on the brief, Rosenthal, Herman & Mantel, P.C., New York City, attorneys), for defendant-appellant.

Before SULLIVAN, J.P., and CARRO, ASCH, KASSAL and WALLACH, JJ.

SULLIVAN, Justice Presiding.

This appeal presents the issue of whether a court has the power in a matrimonial action to appoint an independent appraiser to value marital property and to apportion the appraiser's fees between the parties. We hold that it does and, accordingly, affirm the order appealed.

The parties have been married for over forty-three years and are the parents of four adult children. The husband is a real estate developer and investor with substantial holdings throughout New Jersey and Florida. His personal worth has been estimated by one source at $300,000,000. All of the assets were acquired during the marriage and are thus, by definition, presumed to be marital property. The husband has filed a sixty-two page financial statement showing a net worth of $10,943,520 as of December 31, 1986. As is obvious from a review of this document, the husband has extremely complex and substantial interests in over thirty partnerships and "S" corporations. In an unaudited statement as of December 31, 1985 he showed net assets of over $39,000,000. He is currently involved in a joint venture in a $150,000,000 development of a corporate park in West Palm Beach. His wife's statement shows a total net worth of $3,490,165.40. The value of her share in the various real estate partnerships and "S" corporations, from which she has received some distributions sent to her by the husband, is unknown.

After the service of the husband's net worth statement, the wife moved for the appointment of an appraiser to determine the value of his various holdings and for a pro rata apportionment of the appraiser's fees. In support of her application she submitted an accountant's affidavit challenging, on the ground of its lack of clarity, the husband's use of "equity value", rather than fair market value, in evaluating his holdings. The accountant further challenged the husband's reduction of his net worth by a $3,000,000 "illiquidity discount" which, the accountant claimed, the husband took twice. Also cited was the husband's dubious use of a tax impact factor in calculating his net worth. In light of the paper losses he is able to generate, the accountant argued, the husband probably did not pay taxes in the past and was not likely to do so in the future. For instance, in 1986, the husband showed an adjusted gross income of "minus $8,510,072". Thus, the accountant claimed, the husband's net worth was substantially understated because of the imposition of an artificial tax. The wife also questioned the valuation in the husband's statement of net worth of a seventy-five acre site in New Jersey, which she refers to as "Kudon House", an estate, and he characterizes as a "modest house." The site appears in the net worth statement as "undeveloped land."

The husband opposed the appointment of an independent appraiser as unnecessary and duplicative in light of his own exhaustive and detailed exposition of his holdings. He also argued that the court lacked statutory as well as inherent authority to make such an appointment. Citing the "extremely complex valuation issues herein", the court granted the motion and directed the appointment of J. Clarence Davies Realty Co., Inc., whose retainer was to be borne equally by the parties, with the remainder of the fee, if any, to be apportioned by the court at the time of trial. (138 Misc.2d 775, 776, 525 N.Y.S.2d 464).

Domestic Relations Law § 236(B)(5) mandates that the court provide for an equitable distribution of the marital property of the parties in the final judgment of divorce. Obviously, an evaluation of the marital property is essential in carrying out that mandate. When the Equitable Distribution Law (L.1980, c. 281) was originally enacted, effective July 19, 1980, Domestic Relations Law § 237(a), which provides for the award of counsel fees and expenses in matrimonial actions, did not contain any explicit authority to direct one spouse to pay all or part of the cost of the other's experts. The statute only provided that in any of the specified matrimonial actions "the court may direct either spouse ... to pay such sum or sums of money directly to the attorney of the other spouse to enable that spouse to carry on or defend the action or proceeding as, in the court's discretion, justice requires, having regard to the circumstances of the case and of the respective parties." Section 237 was not amended until almost three years later to add subdivision (d), effective June 9, 1983, which expressly provides that the term "expenses" as used in subdivisions (a) and (b) of the section shall include appraisal fees, accountant fees and actuarial fees.

Notwithstanding the absence of an explicit statutory provisi therefor in the intervening years, courts routinely awarded funds to one spouse for the retention of an accountant or appraiser to examine the other spouse's records in order to evaluate them for the purposes of equitable distribution. ( See, e.g., Ahern v. Ahern, 94 A.D.2d 53, 463 N.Y.S.2d 238; Hubbard v. Hubbard, 113 Misc.2d 763, 449 N.Y.S.2d 899; Fay v. Fay, 108 Misc.2d 373, 437 N.Y.S.2d 601; Gueli v. Gueli, 106 Misc.2d 877, 435 N.Y.S.2d 537.) In Gueli, for instance, the court found in Domestic Relations Law § 236(B)(5)'s mandate to make an equitable distribution of the marital property of the parties in the final judgment, and section 237's authorization to compel one spouse to pay for the other spouse's prosecution or defense of a matrimonial action, the inherent authority to appoint its own expert, whose charges would ultimately be borne by one or both of the parties.

Noteworthy in determining whether the courts had inherent power to appoint appraisers at a party's expense prior to the 1983 amendment of Domestic Relations Law § 237 is the legislative message which accompanied the amendment. In relevant part the memorandum stated, "This bill will expand the granting of pendente lite awards in matrimonial actions and is basically a codification of the court's recent interpretation of section 237." (Memorandum of Assemblyman Gordon W. Burrows, ch. 86, p. 60, 1983 New York State Legislative Annual.) The amendment was not viewed as necessary to correct an oversight or to empower the judiciary with authority it did not previously possess. Rather, the legislation was essentially a housekeeping measure designed to eliminate any confusion about the extent of powers the courts were already exercising. Nothing in the legislative history indicates that the courts' prior awarding of appraisers' fees was considered extraordinary.

The husband, citing Samuelsen v. Samuelsen, 124 A.D.2d 650, 508 N.Y.S.2d 36, argues that the Second Department has rejected the notion that courts have the inherent power to appoint an independent appraiser. The husband misinterprets Samuelsen. The court was not objecting to the appointment of an appraiser but, rather, to the submission of the appraiser's report directly to the trial court, which adopted his figures, without affording the parties the opportunity to review the report or cross-examine the appraiser. The husband also argues that the Court of Appeals in Northrup v. Northrup, 43 N.Y.2d 566, 402 N.Y.S.2d 997, 373 N.E.2d 1221, clearly reaffirmed the restricted authority of courts in matrimonial matters. There, the court, in interpreting Domestic Relations Law §...

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4 cases
  • Match v. Match
    • United States
    • United States State Supreme Court (New York)
    • March 22, 1990
    ...decision in Zirinsky v. Zirinsky, 138 Misc.2d 775, 525 N.Y.S.2d 464 (S.Ct.N.Y.Co.1987) was appealed and affirmed 138 A.D.2d 43, 529 N.Y.S.2d 298 (1st Dept.1988). Designation of experts in all fields in accordance with Zirinsky is now standard practice in matrimonial Like the court's selecti......
  • Kaplowitz by Katz v. Borden, Inc.
    • United States
    • New York Supreme Court Appellate Division
    • March 11, 1993
    ...medical expert. Therefore, we remand the matter to the trial court for the appointment of a medical expert (see, Zirinsky v. Zirinsky, 138 A.D.2d 43, 529 N.Y.S.2d 298) to review, in camera, all the medical records pertaining to the plaintiff mother's subsequent pregnancies 1 and to render a......
  • Klein Liebman & Gresen LLC v. Suhu, CV–032892–11.
    • United States
    • New York District Court
    • June 12, 2012
    ...court appointed appraiser's fees between the parties. See Naimollah v. De Ugarte, 18 AD3d 268, 271 (1st Dept 2005); Zirinsky v. Zirinsky, 138 A.D.2d 43, 46–49 (1st Dept 1988). Since the issue of apportionment of the fees for plaintiff's services ultimately rests within the Supreme Court's j......
  • Haymes v. Haymes
    • United States
    • New York Supreme Court Appellate Division
    • January 16, 1990
    ...affirmed, without costs. While clearly the Supreme Court has the power to appoint an independent appraiser, Zirinsky v. Zirinsky, 138 A.D.2d 43, 529 N.Y.S.2d 298, Uniform Rules for Trial Courts 22 NYCRR 202.18, nevertheless the denial of such relief under the circumstances of this case, did......
16 books & journal articles
  • Summation
    • United States
    • James Publishing Practical Law Books Archive New York Objections - 2018 Contents
    • August 2, 2018
    ...issue, or in a contract action in which there is an issue of fact as to a party’s ability to fulill the contract. Zirinsky v. Zirinsky , 138 A.D.2d 43, 529 N.Y.S.2d 298 (1st Dept. 1988). A party’s inancial status may also be relevant in the punitive damages phase of a trial. Suozzi v. Paren......
  • Expert witnesses
    • United States
    • James Publishing Practical Law Books Archive New York Objections - 2018 Contents
    • August 2, 2018
    ...upon in the ield of economics. (Note: court also held that failure to object rendered this issue unpreserved.) Zirinsky v. Zirinsky , 138 A.D.2d 43, 529 N.Y.S.2d 298 (1st Dept. 1988). In a matrimonial action, the trial court may appoint an independent expert appraiser to testify concerning ......
  • Summation
    • United States
    • James Publishing Practical Law Books Archive New York Objections - 2020 Contents
    • August 2, 2020
    ...issue, or in a contract action in which there is an issue of fact as to a party’s ability to fulill the contract. Zirinsky v. Zirinsky , 138 A.D.2d 43, 529 N.Y.S.2d 298 (1st Dept. 1988). A party’s inancial status may also be relevant in the punitive damages phase of a trial. Suozzi v. Paren......
  • Expert witnesses
    • United States
    • James Publishing Practical Law Books Archive New York Objections - 2020 Contents
    • August 2, 2020
    ...upon in the ield of economics. (Note: court also held that failure to object rendered this issue unpreserved.) Zirinsky v. Zirinsky , 138 A.D.2d 43, 529 N.Y.S.2d 298 (1st Dept. 1988). In a matrimonial action, the trial court may appoint an independent expert appraiser to testify concerning ......
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