Court Opinion

ID: 5865462
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:31:36.78152+00
Date Added: 2024-06-11T08:44:33.931248
License: Public Domain

Kassal, J.,
dissents in part in a memorandum as follows: The parties were married in 1939. At that time, the wife was a successful singer and actress, earning more than $500 per week, which enabled her also to. support her handicapped sister and two brothers. At the husband’s insistence, she gave up her promising career to become a full-time wife, homemaker and eventually, mother of four sons. At the time the couple married, the husband’s income was only $50 per week, which he received from a family corporation formed in 1938. They lived together until late 1972 or 1973, when the husband left to move in with his then paramour, now his wife. The parties had been married for 41 years at the time the case came on for trial in 1980. During the marriage, the husband concentrated on the family business, achieving extraordinary financial success. The wife’s contributions were also exceptional, although noneconomic in nature. After a lengthy trial, in a very comprehensive and painstaking opinion, the trial court concluded: “the wife’s contributions and services are considered and they were substantial as a homemaker, spouse, mother of four sons, and manager of the households, both here and abroad. Her faithful devotion, her social companionship, intelligence, charm, friendships with the wives of his business contacts and linguistic fluency were all of importance to the husband in his worldwide social circles and in his career. (Domestic Relations Law, § 236, part B, subd 6, par a, cl [8].) This marriage was one in which the woman relinquished a budding career, to raise a family and to be totally supported and dependent upon her husband in accordance with his wishes.” (111 Misc 2d 965, 990.) I fully agree. However, where appropriate, the wife’s contributions and services should be considered, not only with respect to marital assets, but also with regard to separate property. On that basis, I find that, by reason of her indirect contributions to the increase in his separate property, the wife should receive the full ownership of the parties’ residence at Avenue Foch in Paris, where she has been living for some time. As to the background, the wife did play a role in assisting the husband to increase his stock interest in Diamond Distributors, Inc. (D.D.I.), a family-owned business which had been formed one year before the marriage. This stock interest is by far the largest asset in his estate, concededly separate property, which the trial court declined to consider or otherwise make provision for in its plan for equitable distribution. The most significant element in valuing plaintiff’s stock interest in D.D.I. is corporate retained earnings which, in a relatively short period from December, 1977 to September, 1980, increased plaintiff’s stock equity from $2,261,056 to $3,273,242. The trial court termed defendant’s contributions as “primarily indirect and speculative”. (111 Misc 2d, at p 979.) It was held that the increase in value was attributable to market factors, the worldwide management of D.D.I., the personal, social and business associations and relationships of the husband *695and his family and “ ‘diamond fever’ (111 Misc 2d, at p 980.) I recognize that there exist significant valid reasons which militate against any distribution by the corporation of retained earnings, including, inter alia, any outstanding stockholder agreement, the contractual rights of lenders, and resultant tax consequences of any such distribution. Nevertheless, the fact that retained earnings were accumulated during the term of the marriage, during which time the wife made significant indirect contributions to such increased valuation, cannot be wholly ignored. Obviously, if such sums had not been retained but, instead, had been paid out as earnings, as is normally the case, the net after-tax amount received by the husband as a stockholder would have added substantially to their marital estate and would have been a proper subject for distribution. Thus, although distribution of retained earnings cannot be compelled, it does appear inequitable to disregard the fact, that, if this corporation had adhered to customary business practice in regard to the payment of earnings as salary or dividends, undoubtedly the husband’s income and his estate would have been greater, thereby entitling the wife to participation therein as part of the equitable distribution of marital assets. The trial court, in formulating a plan of equitable distribution divided the marital property, which in great measure was comprised of real estate. The husband received several real estate properties, including an apartment in New York City, a studio apartment in Paris, and a farm, Green Meadow, in Dutchess County, New York. The court granted to the wife, for a three-year period, exclusive personal use and occupancy of the Avenue Foch co-operative apartment in Paris, where defendant currently resides and which was the primary marital home of the family for over 25 years. Thereafter, the apartment was to be treated as marital property and sold, with the proceeds divided on the basis of a formula of 55% to the husband and 45% to the wife. In my view, this is unfair. Under the circumstances of this case, the wife should not be forced to vacate her home and submit to mandatory sale of the apartment. The entire ownership should be conveyed immediately to defendant for her sole use, occupancy and disposition, in recognition of the various other residences owned by the parties which now remain with plaintiff and as appropriate compensation for her indirect contributions to the increase in his stock in D.D.I. In so concluding, I have taken into account the statutory factors to be considered in determining an equitable distribution of marital property under section 236 (part B, subd 5, par d, els [1]-[10]) of the Domestic Relations Law and, in particular, subdivision 5 (par d, cl [6]), which directs the court to take into consideration “any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party”. (Emphasis added.) I disagree with the determination of the majority, which has approved the finding by the Trial Justice that the omission of similar language in section 236 (part B, subd 1, par d, cl [3]), defining “separate property” precludes consideration of the spouse’s “contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party”. I do not believe that the omission of such language in subdivision 1 (par d, cl [3]) leads to that determination. To the contrary, the statute in clause (3) of paragraph d of that subdivision defines “separate property” as “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”. (Emphasis added.) Essentially, the majority recognizes that there is discretion to take into account the spousal contributions to separate property, but finds this to be an inappropriate case for such consideration. I disagree. This is a *696case which poses proper circumstances for the exercise of discretion since the wife’s contributions to the husband’s separate property were substantial. I base my conclusion upon the very factors outlined by the trial court in determining the wife’s maintenance award (111 Misc 2d, at p 990). It is illogical and inconsistent, on the one hand, to describe a wife’s contributions to her family’s well-being in such strong and unequivocal terms when making an award of maintenance and, on the other hand, to characterize the very same sterling qualities as having an “indirect and speculative” effect on the increase in value of the corporate stock. I find it difficult to reconcile the court’s conclusion that the wife was a devoted homemaker, thereby enabling the husband to concentrate on amassing a large separate estate, with the ultimate determination that, in regard to his separate property, these same factors should be totally ignored as an equitable consideration under section 236 (part B, subd 1, par d, cl [3]). While it is true that the wife, now 67 years of age, is not infirm, it would be unfair in three years to compel her, then a 70-year-old woman, to seek another home after having lived in the same apartment for more than 25 years of the 41-year marriage. Absent the most compelling financial or other similar circumstances on the part of the husband — which have not been demonstrated or even claimed — such a directive would be inequitable. I reach this determination with full awareness of the fact that, upon the husband’s demise, the award of maintenance will terminate and that the wife, at that time, will be entitled to certain other lesser benefits, in the form of insurance, certain stock benefits, a share in his pension and profit-sharing plans. Nevertheless, by a direction granting to the wife exclusive ownership of the Avenue Foch apartment, she would receive some additional assurance that she will be financially functional and be able to solve partially the several inevitable problems which she faces in the future. In fairness to both parties and under the circumstances of this case, I would modify the judgment to the extent of directing that the Avenue Foch apartment be immediately conveyed to the wife as her sole and exclusive property in consideration of the various statutory factors enumerated and, except, as so modified, the judgment should be affirmed.