Kilkenny v. Kilkenny

54 A.D.3d 816, 863 N.Y.S.2d 807
CourtAppellate Division of the Supreme Court of the State of New York
DecidedSeptember 16, 2008
StatusPublished
Cited by25 cases

This text of 54 A.D.3d 816 (Kilkenny v. Kilkenny) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kilkenny v. Kilkenny, 54 A.D.3d 816, 863 N.Y.S.2d 807 (N.Y. Ct. App. 2008).

Opinion

In an action for a divorce and ancillary relief, the plaintiff appeals, as limited by her brief, from stated portions of a judg[817]*817ment of the Supreme Court, Nassau County (Gartenstein, J.H.O.), entered April 3, 2007, which, upon a decision of the same court dated November 1, 2006, made after a nonjury trial, inter alia, imposed a constructive trust on the marital residence, directed the sale of the marital residence, awarded her durational maintenance in the sum of only $200 per week from January 1, 2007 until September 1, 2007, determined that the balance of a loan taken by the defendant to finance a portion of the college education of his daughter from a prior marriage was marital debt, failed to award her any portion of the defendant’s 401k, individual retirement, or cash management accounts, and did not award her an additional attorney’s fee.

Ordered that the judgment is modified, on the law, on the facts, and in the exercise of discretion, (1) by deleting the provision thereof directing the sale of the marital residence, (2) by deleting the provision thereof specifying the sum of $480,678 as the net increase in the value of the marital residence to be equitably distributed and substituting therefor a provision specifying the sum of $420,139 as the net increase in the value of the marital residence to be equitably distributed, (3) by deleting the provision thereof awarding the plaintiff maintenance in the sum of $200 per week from January 1, 2007 until September 1, 2007, and substituting therefor a provision awarding the plaintiff maintenance in the sum of $200 per week, retroactive to May 2, 2005, until the earlier of February 1, 2012, the death of either party, or the remarriage of the plaintiff, (4) by adding a provision thereto awarding the plaintiff the sum of $51,654, representing 50% of the marital portion of the defendant’s 401k, individual retirement, and cash management accounts, (5) by deleting the provision thereof awarding the defendant a credit equal to 50% of the reduction of the principal balance due on the mortgage loan referable to the marital residence, representing mortgage payments of principal and interest made by the defendant from May 2, 2005 until December 31, 2006, and substituting therefor a provision awarding the defendant a credit, against any obligation created by the retroactive modification of the maintenance award, for all mortgage payments of principal only and real property tax payments he made after May 2, 2005, and (6) by deleting the provision thereof specifying the sum of $69,675 as the marital debt to be paid by the parties in equal shares and substituting therefor a provision specifying the sum of $37,675 as the marital debt to be paid by the parties in equal shares; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County, for the determination of a method of payment and a [818]*818schedule of payment of the defendant’s equitable share of marital property and the entry of an appropriate amended judgment thereafter.

The marital residence was the separate property of the wife at the time of the parties’ marriage, with a stipulated fair market value of $282,500, and was encumbered by a mortgage. The parties stipulated that the fair market value of the residence at the time of trial was $700,000, and that it was encumbered with a small remaining mortgage debt.

After a nonjury trial, the Supreme Court found that the parties’ conduct had transmuted that separate property into marital property. The court determined that the elements necessary to establish the existence of a constructive trust were present and, on that basis, also concluded that the marital residence was marital property, with the increase in its value over the course of the marriage subject to equitable distribution.

The increase in value of the marital residence is subject to equitable distribution, but not for the reasons articulated by the Supreme Court. A constructive trust may be imposed “ ‘[wjhen property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest’ ” (Sharp v Kosmalski, 40 NY2d 119, 121 [1976] [citations omitted]; see A.G. Homes, LLC v Gerstein, 52 AD3d 546 [2008]; Osborne v Tooker, 36 AD3d 778 [2007]). “The elements of a constructive trust are a confidential or fiduciary relationship, a promise, a transfer in reliance thereon, and unjust enrichment” (Williams v Eason, 49 AD3d 866, 868 [2008] [citations omitted]). The record does not support the Supreme Court’s finding that all of those elements existed in this case (see Williams v Eason, 49 AD3d 866 [2008]; Schwartz v Schwartz, 36 AD3d 604 [2007]; Doria v Masucci, 230 AD2d 764 [1996]). Moreover, and contrary to the Supreme Court’s conclusion, the marital residence is the separate property of the wife, and remained her separate property. Since that residence is the wife’s separate property, and not subject to the imposition of a constructive trust, there was no authority to order its sale for the purpose of equitably distributing the proceeds.

The husband is nonetheless entitled to an equitable share in the increase in the value of the marital residence over the course of the marriage, notwithstanding that the residence is the separate property of the wife. The increase in the value of separate property remains separate property “except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse” (Domestic Relations Law § 236 [B] [1] [d] [3]; see Price v Price, 69 NY2d 8 [1986]), at which point the [819]*819increase in value becomes marital property, in accordance with the rule that the definition of marital property is to be broadly construed, given the principle that a marriage is an economic partnership (see Mesholam v Mesholam, 11 NY3d 24 [2008]; Price v Price, 69 NY2d 8 [1986]). The record establishes that the appreciation in the value of the marital residence was attributable to the joint efforts of the parties. The defendant is thus entitled to share equitably in that increased value (see Michelini v Michelini, 47 AD3d 902 [2008]; Massimi v Massimi, 35 AD3d 400, 402 [2006]; Falgoust v Falgoust, 15 AD3d 612 [2005]). Accordingly, the Supreme Court providently exercised its discretion in awarding the parties equal shares in the increase in the value of the marital residence.

The Supreme Court arrived at the amount by which the marital residence increased in value by subtracting the stipulated net value of the residence (i.e., the fair market value less the outstanding principal balance of the mortgage loan) at the time of the commencement of the marriage, or $195,346, from the stipulated net value at the time of the trial, or $676,024, to arrive at a figure of $480,678. However, the Supreme Court also determined the husband was entitled to an award of $30,269.50, representing his 50% share of the reduction in the principal of the mortgage obligation referable to the residence, until May 2, 2005, the date of the commencement of the action. That calculation was unchallenged by the wife on appeal and was correct in any event (see O’Donnell v O’Donnell, 41 AD3d 447 [2007]; Massimi v Massimi, 35 AD3d 400 [2006]; Palumbo v Palumbo, 10 AD3d 680 [2004]).

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Bluebook (online)
54 A.D.3d 816, 863 N.Y.S.2d 807, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kilkenny-v-kilkenny-nyappdiv-2008.