Ceravolo v. DeSantis

125 A.D.3d 113, 1 N.Y.S.3d 468
Appellate Division of the Supreme Court of the State of New York·Decided January 8, 2015·Published·Cited by 26 cases

Opinions

OPINION OF THE COURT

Stein, J.P.

The parties were married in July 1996 and have a daughter (born in 2001). Plaintiff (hereinafter the wife) commenced this action for divorce in June 2010. After a bench trial, Supreme Court determined, among other things, that the marital residence, which had been purchased by defendant (hereinafter the husband) prior to the marriage, was marital property and awarded the wife, among other things, half of its value. In addition, the court awarded the wife durational spousal support and child support. The husband now appeals.

Initially, we agree with the husband that Supreme Court erred in classifying the marital residence as marital property. “ ‘[W]hether a particular asset is marital or separate property is a question of law5 55 (Fields v Fields, 15 NY3d 158, 161 [2010], quoting DeJesus v DeJesus, 90 NY2d 643, 647 [1997]; accord Whitaker v Case, 122 AD3d 1015, 1016 [2014]; Owens v Owens, 107 AD3d 1171, 1173 [2013]). Marital property is defined as “all property acquired by either or both spouses during the marriage” (Domestic Relations Law § 236 [B] [1] [c] [emphasis added]), while “property acquired before marriage” is separate property (Domestic Relations Law § 236 [B] [1] [d] [1] [emphasis added]). Here, the husband purchased the marital residence in January 1994 — 2V2 years prior to the parties’ marriage — paying $130,000 of his own funds and borrowing an additional $100,000 from his father, secured by a note and mortgage. Although the wife contributed $30,000 of her separate funds to the initial purchase of the residence, she did not attend the closing and the husband took title to the property in his name alone. The record reflects that the wife thereafter paid the mortgage for more than two years prior to the marriage, as well as after the parties were married through 2003, when a satisfaction of mortgage was issued, notwithstanding a principal balance remaining of approximately $52,000. Supreme Court determined that the wife’s contributions transformed the residence from the husband’s separate property into marital property, which was subject to equitable distribution. For the reasons that follow, we disagree.

[116] Notably, the entire basis for the Equitable Distribution Law (Domestic Relations Law § 236 [B]) derives from the concept that marriage is an economic partnership and, therefore, that marital property should be divided equitably without regard to the title in which that property is held (see Fields v Fields, 15 NY3d at 162; Price v Price, 69 NY2d 8, 14-15 [1986]; Alan D. Scheinkman, Practice Commentaries, McKinney’s Cons Laws of NY, Book 14, Domestic Relations Law § 236 Part B, C236B:4 at 72). However, “[t]he economic partnership created by marriage cannot exist until marriage has occurred. If non-marital cohabitants wish to form an economic partnership, they may do so; but the partnership can be created only by agreement, not by operation of law” (Alan D. Scheinkman, Practice Commentaries, McKinney’s Cons Laws of NY, Book 14, Part 1, Domestic Relations Law § 236 Part B, C236B:4 at 75). Indeed, “the Equitable Distribution Law ‘recognizes that spouses have an equitable claim to things of value arising out of the marital relationship and classifies them as subject to distribution by focusing on the marital status of the parties at the time of acquisition’ ” (Fields v Fields, 15 NY3d at 162, quoting O’Brien v O’Brien, 66 NY2d 576, 583 [1985] [emphasis added]). Accordingly, the Equitable Distribution Law does not purport to address financial transactions between persons prior to their marriage, which “cannot be considered to have been the product of the marital enterprise” (Brennan v Brennan, 103 AD2d 48, 52 [1984]).1 Therefore, while Supreme Court’s finding that the wife made certain substantial contributions of money and effort toward the acquisition and maintenance of the marital residence is amply supported by the record, the effect of such contributions by the wife — particularly those she made before the marriage — is not to transform the husband’s premarital, separate property into marital property (see generally Keil v [117] Keil, 85 AD3d 1233, 1235 [2011]; Embury v Embury, 49 AD3d 802, 804 [2008]; Burgio v Burgio, 278 AD2d 767, 769 [2000]).

The wife and the dissent rely on Matwijczuk v Matwijczuk (261 AD2d 784 [1999]) for the proposition that real property obtained prior to marriage can be transformed into marital property. In that case, we held—citing Ciaffone v Ciaffone (228 AD2d 949 [1996] )2—that the use of marital funds, together with the nontitled spouse’s efforts and contributions of separate funds toward the construction of the marital residence (which began before the marriage on land purchased by the titled spouse a few months earlier) “in furtherance of the marital partnership” were sufficient to transform the residence, including the land, into marital property (Matwijczuk v Matwijczuk, 261 AD2d at 786). To the extent that Matwijczuk and Ciaffone can be read as holding that separate property contributions made by a nontitled spouse toward the acquisition or improvement of premarital property can serve to transform such property into a marital asset, they should no longer be followed.

We note, however, that separate property contributions by a nontitled spouse could result in an appreciation of the value of the titled spouse’s separate property during the marriage, which appreciation would be subject to equitable distribution (see Domestic Relations Law § 236 [B] [1] [d] [3]; Keil v Keil, 85 AD3d at 1235).3 Here, inasmuch as the wife failed to prove the value of the residence at the time the parties were married, the amount of the property’s appreciation during the marriage — and, hence, the wife’s equitable share thereof — cannot be ascertained (see Burgio v Burgio, 278 AD2d at 769), and no award may be made on this basis (see Hartog v Hartog, 85 NY2d 36, 46 [1995]; Albanese v Albanese, 69 AD3d 1005, 1006 [2010]; Bonanno v Bonanno, 57 AD3d 1260, 1261 [2008]; Golub v Ganz, 22 AD3d 919, 922-923 [2005]). Indeed, the wife [118] conceded at oral argument that she was not seeking equitable distribution of the property’s value based upon its appreciation.

The dissent’s conclusion that our determination unduly emphasizes the fact that the husband took sole title to the property ignores that, while property acquired during the marriage is statutorily deemed marital “regardless of the form in which title is held” (Domestic Relations Law § 236 [B] [1] [c]), title is a critical consideration in identifying the nature of real property acquired before the marriage. Therefore, in our view, the circumstances surrounding the purchase of the residence and the parties’ intent relative thereto are irrelevant to the legal classification of the residence as separate or marital property. Indeed, even the dissent apparently agrees that, at the time of the marriage, the residence was the husband’s separate property (see e.g. Owens v Owens, 107 AD3d at 1173), as there would otherwise be no need for the dissent to deem it transformed into marital property thereafter.

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Ceravolo v. DeSantis, 125 A.D.3d 113, 1 N.Y.S.3d 468 (N.Y. Ct. App. 2015).

125 A.D.3d 113 (Ceravolo v. DeSantis) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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