SURVIVOR'S LAW PROJECT'S FAMILY AND MATRIMONIAL LAW
CLE PROGRAM - March 18, 2004
Kathleen Donelli, President of the Westchester Women's Bar Association (www.wwbany.com)
McCarthy Fingar, L.L.P (www.mccarthyfingar.com)
11 Martine Avenue
White Plains, New York 10606
Table of Contents
I. Initial Interview …………………………………………………………………………… 2
II. Factors In Determining Spouse's "Equitable Share"
1) Statutory …………………………………………………………………………… 3
2) Egregious Fault …………………………………………………………………… 7
III. Marital v. Separate Property
1) Definitions …………………………………………………………………………. 9
2) Burden of Proof …………………………………………………………………… 9
3) Commingling and Transmutation
A. Financial Accounts ………………………………………………….. 10
B. Marital Residence …………………………………………………… 13
4) Active v. Passive Appreciation …………………………………………………. 16
5) Debts ……………………………………………………………………………… 19
IV. Date of Valuation ……………………………………………………………………….. 19
V. Retirement Benefits
1) Defined Benefit v. Lump Sum ………………………………………………….. 20
2) Qualified Domestic Relations Orders …………………………………………. 20
3) Disability Pensions ……………………………………………………………… 20
VI. Licenses and Degrees ………………………………………………………………… 21
- The Hougie Issue: "Exceptional Earnings Capacity" Not Resulting
From A Degree or License…………………………………………………….…...... 22
VIII. Expert Valuations ……………………………………………………………………… 24
1) Real Property
IX. Tax Impacting …………………………………………………………………………… 25
X. Tort Actions …………………………………………………………………………….. 25
I. Initial Interview: Obtain Information, Develop Strategy and Establish Realistic Expectations
1) Client Information Sheet (Ex. A)
2) Statement of Client's Rights and Responsibilities
3) Client's Immediate Concerns:
a) domestic violence
b) temporary custody
c) pendente lite support
d) exclusive occupancy
e) minimizing risks: credit cards, lines of credit, safeguarding personal property and important documents (e.g., financial, passports, diaries, computer e-mails)
f) insurance: health, life, homeowners, car
Tanvir (Ex. B). Wife is entitled to summary judgment awarding her a divorce because the Family Court's findings in issuing an order of protection based on verbal abuse, "coupled with thinly disguised written death threats," are entitled to collateral estoppel effect establishing cruel and inhuman treatment as a matter of law.
5) Preliminary Conference Requirements
a) Documents - 22 NYCRR 202.16(f) (Ex. C)
b) Statement of Net Worth
· estimate monthly expenses by using 12-month average
· keep documents used to estimate monthly expenses and to list assets and liabilities (e.g. value as of date of last statement that you should keep)
· footnote relevant information and information you and/or your client "may" forget
ü education - date of degrees and licenses
ü health - spouses and children's special needs: juvenile diabetes; past and future operations; physical handicaps; learning disabilities
ü expense is for marital residence, temporary residence, vacation residence, anticipated future residence after divorce
ü anticipated expenses after divorce (e.g. Wife's health insurance)
ü past expenses that are currently unaffordable (clothing, tutors, gym, vacations, recreation, gifts)
· identify separate property: date of acquisition; source of funds to acquire; trace separate property in a footnote
· identify "purpose" for debt (living expenses, gambling debts, other spouse's unknown purpose)
· fill in transfers, child support, maintenance, legal fees and need for expert fees to value assets
6) Settlement Agreement v. Litigated Divorce Judgment
"Best" and "Worst" Case Scenarios
7) Retainer Agreement
II. Factors In Determining Spouse's "Equitable" Distribution
RULE: The court in deciding equitable distribution must set forth the factors it considered in its decision and such requirement may not be waived by either party or counsel. (DRL §236(B)(5)(g)). The court must set forth these factors in a clear and comprehensive manner. Dunne v. Dunne, 172 A.D.2d 482, 567 N.Y.S.2d 838 (2d Dep’t 1991).
1. The specific factors found in DRL §236 (B) (5) (d) are as follows:
(1) The income and property of each party at the time of the marriage and at the time of the commencement of the action.
(i) An unequal award of equitable distribution was justified in view of the parties' respective financial circumstances, including the husband's substantial separate property assets. Glasberg v. Glasberg, 162 A.D.2d 586, 556 N.Y.S.2d 772 (2d Dep’t 1990).
(2) Duration of the marriage and the age and health of both parties.
(i) Wife awarded eighty percent of the proceeds from the sale of the marital residence where the wife was forty-two years old, lacked any formal education and had an inability to achieve financial independence. Pagan v. Pagan, 138 A.D.2d 685, 526 N.Y.S.2d 498 (2d Dep’t 1988).
(3) Need of the custodial parent to occupy or own the marital residence and to use or own its household effects.
(i) Ordinarily there is a preference to award the custodial parent exclusive use and occupancy of the marital residence. Leabo v. Leabo, 203 A.D.2d 254, 610 N.Y.S.2d 274 (2d Dep’t 1994).
(ii) The preference that the custodial parent remain in the marital residence may be overcome by proof that alternate housing is available in the general area at a more affordable cost, or the party to remain is incapable of maintaining the home or that either party is in immediate need of the sale proceeds. Kalisch v. Kalisch, 184 A.D.2d 751, 585 N.Y.S.2d 476 (2d Dep’t 1992); Waldmann v. Waldmann, 231 A.D.2d 710, 647 N.Y.S.2d 827 (2d Dep’t 1996).
(iii) Even where a husband has substantial income, if it would be unduly burdensome to force him to bear the cost of maintaining the marital residence in the face of financial obligations and his child support obligations, it should be sold. In essence, the need of the custodial parent to occupy the marital residence is outweighed by the financial need of the parties to sell the house. Lauer v. Lauer, 145 A.D.2d 470, 535 N.Y.S.2d 427 (2d Dep’t 1988).
(iv) Sale of the marital residence was directed where immediate and paramount concerns of providing for the children's college education outweighed the preference for continuing occupancy. Ricciardi v. Ricciardi, 173 A.D.2d 807,571 N.Y.S.2d 41 (2d Dep’t 1991).
(4) The loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution.
(5) Any award of maintenance under DRL §236 (B) (6) (a).
(6) 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 and career potential of the other party.
(i) An equal distribution of assets was proper where the husband was essentially the sole wage earner in the course of a nineteen year marriage and the wife was a full-time parent, spouse and homemaker. Dawson v. Dawson,152 A.D.2d 717, 544 N.Y.S.2d 172 (2d Dep’t 1989).
(ii) Wife's comparatively small financial contributions earlier in the marriage were held to be very significant since they enabled the husband to pursue his own education and career opportunities. Anderson v. Anderson, 153 A.D.2d 823, 545 N.Y.S.2d 335 (2d Dep’t 1989).
(7) The liquid or non-liquid character of all marital property.
(i) It was error to award virtually all liquid assets to one spouse while leaving the other spouse with only pension interests, the full value of which was not subject to immediate realization. Petrie v. Petrie, 143 A.D.2d 258, 532 N.Y.S.2d 283 (2d Dep’t 1988).
(ii) It was also error to award virtually all marital property to one spouse while leaving the other spouse with merely a distributive award, the full value of which would not be immediately received and which might not be received in the future. Filax v. Filax, 176 A.D.2d 1194, 576 N.Y.S.2d 692 (4th Dep’t 1991).
(8) Probable future financial circumstances of each party.
(i) A distribution in excess of fifty percent was justified upon consideration of all the statutory factors, particularly the probable future financial circumstances of the parties. The likelihood that the husband would continue prosperous growth in his medical practice was compared to the wife's modest financial prospects. Megally v. Megally, 142 A.D.2d 721, 531 N.Y.S.2d 301 (2d Dep’t 1988).
(9) Impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party.
(10) The tax consequences to each party.
(i) Where husband failed to present any evidence of tax consequences of distribution, equitable distribution without consideration of tax consequences was appropriate. Malin v. Malin, 172 A.D.2d 721, 569 N.Y.S.2d 743 (2d Dep’t 1991).
(ii) However, where no evidence of taxable consequences was presented at trial and was only raised in post-trial memos, the Appellate Division, as a matter of discretion, considered the taxable consequences of the equitable distribution since to refuse to do so would have resulted in a fundamental injustice. Teitler v. Teitler, 156 A.D.2d 314, 549 N.Y.S.2d 13 (1st Dep’t 1989).
(iii) Tax Impact: Where husband paid taxes in connection with sale of stock, wife was entitled to fifty percent of the net proceeds after taxes. Hackett v. Hackett, 147 A.D.2d 611, 538 N.Y.S.2d 20 (2d Dep’t 1989).
(iv) Failure to Sign Joint Tax Return: Any adverse financial consequences of a party's refusal to sign a joint and/or amended tax return proffered by the other spouse can be taken into account in distributing the marital property. Teich v. Teich, 240 A.D.2d 258, 658 N.Y.S.2d 599 (1st Dep’t 1997).
See, IX. "Tax Impacting" and Tax Indemnification Letter (Ex. D).
(11) The wasteful dissipation of assets by either spouse.
(i) Where a wife dissipated marital assets and attempted to conceal same, at least a portion of the amounts she dissipated should be charged against her share of the marital assets. Lenczycki v. Lenczycki, 152 A.D.2d 621, 543 N.Y.S.2d 724 (2d Dep’t 1989).
(ii) Where a spouse transferred assets to trusts and other corporations which were, in essence, his alter ego, a distributive award was necessary to achieve an equitable result in the distribution of property. Goldberg v. Goldberg, 172 A.D.2d 316, 568 N.Y.S.2d 394 (1st Dep’t 1991).
(iii) The shared liability caused by a spouse's failure to properly report income to the taxing authorities. Moody v. Moody, 172 A.D.2d 730, 569 N.Y.S.2d 116 (2d Dep’t 1991).
(iv) Wife awarded seventy percent of the marital property where husband had tangled financial records, dissipated marital assets through gambling, was evasive and attempted to secrete moneys. Conceiaco v. Conceiaco, 203 A.D.2d 877,611 N.Y.S.2d 318 (3d Dep’t 1994).
(v) Wife awarded sixty percent of the marital assets where husband refused to obtain employment for a two year period prior to trial and withdrew large sums of cash for his expenses. Southwick v. Southwick, 202 A.D.2d 996, 612 N.Y.S. 2d 704 (4th Dep’t 1994).
(vi) Wife awarded sixty-five percent of the marital property where husband secreted assets into foreign bank accounts and squandered sizable sums on luxury items and admitted adulterous affairs. Maharam v. Maharam, 245 A.D.2d 94, 666 N.Y.S.2d 129 (1st Dep’t 1997).
(vii) Wife awarded seventy-five percent of the value of the marital residence where husband wastefully dissipated marital assets. Ferdinando v. Ferdinando, 236 A.D.2d 585, 654 N.Y.S.2d 652 (2d Dep’t 1997).
(12) Any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration.
(13) Any other factor which the court shall expressly find to be just and proper.
2) "Egregious Fault"
A) Domestic Violence Cases Awarding Victim/Spouse More Than 50%
1. Havell v. Islam, 301 A.D.2d 339, 751 N.Y.S.2d 449 (1st Dep’t 2002).
Wife was awarded 95% of the marital assets which had a value of approximately 20 million dollars, where the Husband broke into the Wife's room, pinned her to the bed with his knee and beat her viciously with the barbell on her face, neck and hands. Her screams brought the parties' three daughters into the room and the oldest called 911, which resulted in the Husband renewing his attack with a pipe. The Wife's injuries were severe and in addition to facial and dental surgeries, she suffered pain, dizziness, headaches, nightmares, sleeplessness and post-traumatic stress syndrome.
The Husband's contention that egregious fault requires interference with the spouse's ability to be or to become self-supporting was wrong. Impairment of economic independence is not a requirement of a finding of egregious fault. There is a requirement that the conduct grievously injures some highly valued social principle.
2. Brancoueanu v. Brancoveanu, 145 A.D.2d 395, 535 N.Y.S.2d 86 (2d Dep't 1988).
Wife was awarded 60% of the net proceeds of the marital residence because the Husband's attempt to hire a person to murder the Wife constituted "particularly egregious and shocking" marital misconduct.
The court also held that a "great injustice would result if the Husband, who unsuccessfully contrived to have his Wife murdered" were to be awarded a portion of the value of the Wife's dental practice.
3. Wenzel v. Wenzel, 120 Misc.2d 1001, 472 N.Y.S.2d 830 (Sup. Ct. Suffolk Co. 1984).
Wife was awarded 100% of the marital residence and the Husband's police pension, taking "into consideration" the Husband's vicious attack and "partly to compensate the Wife for child support and maintenance, which were uncollectible due to the Husband's incarceration."
Husband stabbed the Wife numerous times and fled the marital residence "leaving her for dead." The Wife required extensive hospitalization, surgery and therapy. The Husband was arrested 5 months later, convicted of attempted murder and at the time of the decision was serving an 8-1/2 to 25-year prison term.
B) Husband's Refusal to Grant A GET
(1) By withholding a Get to extract economic concessions, the husband forfeited his right to a distributive award. Schwartz v. Schwartz, 235 A.D.2d 468, 652 N.Y.S.2d 616 (2d Dep’t 1996).
(2) The trial court properly awarded the Wife all property listed on the parties' statements of net worth if the husband did not grant her a Get within a specified time period. Pinto v. Pinto, 260 A.D.2d 622, 688 N.Y.S.2d 701 (2d Dep’t 1999).
C) Cases Rejecting "Egregious Fault" argument
1. Generally, marital fault is not a relevant consideration unless the conduct is so egregious that it shocks the conscience of the court. Blickstein v. Blickstein, 99 A.D.2d 287, 472 N.Y.S.2d 110 (2d Dep’t 1984.
(a) Wife's involvement in an adulterous relationship did not rise to the level of such egregious or uncivilized conduct as to warrant depriving her of an equal share of the marital assets. Lestrange v. Lestrange, 148 A.D.2d 587, 539 N.Y.S.2d 53 (2d Dep’t 1989).
(b) Husband's fraudulent promise to have children, resulting in Wife having passed the age of child bearing, did not constitute egregious marital fault. McCann v. McCann, 156 Misc.2d 540, 593 N.Y.S.2d 917 (Sup. Ct. N.Y. Co. 1993).
III. Marital v. Separate Property
"Marital Property" is defined in Domestic Relations Law ("DRL") §236[B](c) as follows:
"c. The term "marital property" shall mean 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, regardless of the form in which title is held, except as otherwise provided in agreement pursuant to subdivision three of this part. Marital property shall not include separate property as hereinafter defined."
"Separate Property" is defined in DRL §236[B](1)(d) as follows:
"d. The term separate property shall mean:
(1) property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse;
(2) compensation for personal injuries;
(3) 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);
(4) property described as separate property by written agreement of the parties pursuant to subdivision three of this part."
2) Burden of Proof
Judson v. Judson, 255 A.D.2d 656, 679 N.Y.S.2d 465 (3d Dep't 1998)
"Property acquired during the marriage is presumed to be marital property and the party seeking to overcome such presumption has the burden of proving that the property in dispute is separate property."
Pullman v. Pullman, 176 A.D.2d 113, 573 N.Y.S.2d (1st Dep't 1991). There is a presumption that assets commingled with other property acquired during the course of the marriage are marital property.
3) Commingling and Transmutation
A. Financial Accounts
While the act of depositing separate funds into a joint account creates a presumption of an intent to convert those funds into a marital asset, this presumption may be rebutted. The party claiming the funds to be separate bears the burden of rebutting the presumption. In order to rebut the presumption, the party seeking to have the asset classified as separate must prove, by clear and convincing evidence, that the commingling of funds was solely for his or her own convenience.
Failure To Rebut Presumption of Marital Property
Imhof v. Imhof, 259 A.D.2d 666, 686 N.Y.S.2d 825 (2d Dep't 1999) - "Separate property can be transmuted into marital property when the actions of the titled spouse demonstrate his intent to transform the character of the property from separate to marital [ . . . .] Here, there is every indication that the husband intended to commingle his funds by depositing the proceeds of the sale of his separate property into joint the accounts and by sharing the proceeds for family and business purposes."
Geisel v. Geisel, 241 AD.2d 442, 659 N.Y.S.2d 511 (2d Dep’t 1997) - By placing the assets in both parties' names as joint tenants with the right of survivorship, the husband demonstrated his intent to transform the character of the asset to marital."
Rosenkranse v. Rosenkranse, 290 A.D.2d 685, 736 N.Y.S.2d 453 (3d Dep’t 2002) –“While an inheritance acquired by one spouse during a marriage and retained separately from marital funds would be considered separate property, the transfer of these assets into a joint account raises a presumption that the funds are marital property to be disbursed among the parties according to the principles of equitable distribution. This presumption cast[s] the burden on defendant to establish, by clear and convincing proof, that the joint account was created only as a matter of convenience [citations omitted]. Defendant conceded that he placed his wife's name on the accounts with the express purpose of making those funds available to her, for her convenience, not his. Thus, Supreme Court properly held that defendant failed to rebut the presumption and we find no reason to disturb the court's determinations regarding the distribution of assets."
Gundlach v. Gundlach, 223 A.D.2d 942, 636 N.Y.S.2d 914 (3d Dep't 1996) - "Although compensation for personal injuries is, as defendant alleges, usually considered separate property, a presumption that each party was entitled to an equal share of the deposit arose when defendant deposited the settlement money into a joint account (see, Banking Law §675[b]; Krinsky v. Krinsky, 208 A.D.2d 599, 600, 618 N.Y.S.2d 36; Giuffre v. Giuffre, 204 A.D.2d 684, 685, 612 N.Y.S.2d 439). This presumption cast the burden on defendant to establish, by clear and convincing proof, that the joint account was created only as a matter of convenience (see, Krinsky v. Krinsky, supra; Giuffre v. Giuffre, supra). Defendant failed to meet this burden. The evidence of various transfers from the joint account into and out of other accounts confirms plaintiff's testimony that all of the parties' money was handled jointly, regardless of the source."
Diaco v. Diaco, 278 A.D.2d 358, 717 N.Y.S.2d 635 (2d Dep’t 2000) - "The Supreme Court properly found that the plaintiff commingled separate funds with marital funds, and that he failed to overcome the presumption that those assets available for distribution constituted marital property."
Chambers v. Chambers, 259 A.D.2d 807, 686 N.Y.S.2d 199 (3d Dep’t 1999) - "Defendant concedes that the amounts sought by him were placed in a joint account and then later placed in certificates of deposit or other accounts in his own name. In such instance, a party will not be credited for separate property if he fails to establish by clear and convincing evidence that the account was created only as a matter of convenience."
Krinsky v. Krinsky, 208 A.D.2d 599, 618 N.Y.S.2d 36 (2d Dep’t 1994) - "As the wife correctly asserts, the husband's one-half interest in a joint account which he held with his father should be deemed a marital asset. It is well settled that both depositors named on a joint account presumptively have an undivided one-half property interest in the moneys deposited [.... ] That presumption may be refuted by direct proof or substantial circumstantial proof, which is clear and convincing and sufficient to support an inference that the joint account had been opened in that form only as a matter of convenience."
Presumption of Marital Property Rebutted Because Separate Property Placed In Joint Names Merely As A Matter of Convenience.
McGarrity v. McGarrity, 211 A.D.2d 669, 622 N.Y.S.2d 521 (2d Dep’t 1995) - "The husband testified at trial that he inherited in excess of $250,000 from his mother and his brother. The major portion of those inheritances was received subsequent to the parties' physical separation. The husband deposited certain of these funds into the parties' joint accounts. As a result, the wife argues, these funds were transmuted into marital property, of which she is entitled to her equitable share. The husband sufficiently traced the funds from his inheritances to deposits into the parties' joint bank accounts. Moreover, he established that he simply deposited the money into whatever bank account was most convenient, whether near his office in Manhattan, or near the marital residence. Significantly, the bulk of the inheritance money was not received by the husband until after the parties were living separately, thus demonstrating the absence of any donative intent by the husband despite the wife's continued access to the accounts."
Giuffre v. Giuffre, 204 A.D.2d 684, 612 N.Y.S.2d 439 (2d Dep’t 1994) - "Pursuant to Banking Law §675(b), when one spouse places separate property in a joint account, a presumption arises that the parties are entitled to equal shares of the account. See, Di Nardo v. Di Nardo, 144 A.D.2d 906, 534 N.Y.S.2d 25. However, this presumption may be overcome when a spouse creates a joint account as a matter of convenience, without the intention of creating a beneficial interest, and when the funds for the account came solely from that spouse's separate property."
Brugae v. Brugae, 245 A.D.2d 113, 667 N.Y.S.2d 180 (4th Dep’t 1997) - "The court did not err. .. in finding that money deposited by defendant in the parties' joint bank account constitutes her separate property. Defendant established that the joint account was used only as a conduit for the transfer of her capital interest from one business owned by her family to another, thus rebutting the presumption that, by depositing the funds into a joint account, separate property was transmuted into marital property."
The Mere Use by the Party of His or Her Separate Account or Funds To Pay Joint or Marital Expenses Does Not Itself Convert the Separate Account Into a Marital Asset.
Spencer v. Spencer, 230 A.D.2d 645, 646 N.Y.S.2d 674 (1st Dep’t 1996) - "The fact that the plaintiff may have made withdrawals from his separate account to pay marital expenses does not alter this conclusion, as there was insufficient evidence of commingling to conclude that this account was transmuted into marital property."
The Presumption of Marital Property not Extended to Subsequently-Received Inherited Funds Deposited into Individual Bank Accounts.
Feldman v. Feldman, 194 A.D.2d 207, 605 N.Y.S.2d 777 (2d Dep’t 1993) - ". . . the fact that a portion of the husband's inherited funds were deposited into a joint account does not support the further inference that the husband intended to treat all subsequently-received funds, which were placed in his individual bank accounts, as marital property."
B) Marital Residence
The presumption of marital property in financial accounts is sometimes similarly applied to real property. In the matter of Schmidlapp v. Schmidlapp, 220 A.D2d 571, 632 N.Y.S.2d 593 (2d Dep’t 1995), the court determined that the marital residence was fully transmuted to marital property when the wife transferred title to herself and her husband as tenants in the entirety, notwithstanding the fact that the unimproved lot was the wife's separate property prior to the marriage.
However, most cases involving a marital residence give a credit for separate property even if title is in joint names. When the transmuted asset is real property, the courts tend to unanimously factor into the calculation any separate contribution towards the attainment of that asset. That portion of a down payment, for example, which is comprised of separate assets, is typically backed out of the value of the property and returned to the party who contributed the separate asset, even where the property is deemed marital.
Diaco v. Diaco, 278 A.D.2d 358, 717 N.Y.S.2d 635 (2d Dep’t 2000) - "However, in the exercise of our factual review power, we modify the defendant's equitable share in the marital residence from $72,250 to $50,667 to properly reflect the plaintiff's contributions to that asset, and the parties' circumstances. We note that the house was purchased by the plaintiff and his father in 1966, and was placed in the parties' names in 1979. The plaintiff, by placing the marital residence in both names, changed the character of the property to marital property (see, Schmidlapp v. Schmidlapp, 220 A.D.2d 571, 632 N.Y.S.2d 593). However, each item of marital property need not be distributed on an equal basis (see, Coffey v. Coffey, 119 A.D.2d 620, 501 N.Y.S.2d 74). In view of the plaintiff's contributions of separate property, and the circumstances of the parties, an award to the defendant of one-third of its value is appropriate (see, Butler v. Butler, 171 A.D.2d 89, 574 N.Y.S.2d 387; Denholz v. Denholz, 147 A.D.2d 522, 537 N.Y.S.2d 607)."
Koehler v. Koehler, 285 A.D.2d 582, 727 N.Y.S.2d 913 (2d Dep’t 2001) - Where the parties took title to the marital residence as joint tenants before they were married, and where the wife paid for the house solely with her own funds, it was improper for the court to adjudge the property to be marital property and direct that it be sold. Nevertheless, any appreciation in the value of the property may be deemed marital property. In Koehler, the court determined that even where real property was titled jointly in the parties' names, the husband's lack of any contribution to the property precluded a distribution of the asset, and effectively returned to the wife her 100% investment of seed money into this marital asset.
Coffee v. Coffey, 119 A.D.2d 620, 501 N.Y.S.2d 74 (2d Dep’t 1986) - Where the husband conveyed the marital residence held as separate property to himself and his wife as tenants by the entirety, the husband was entitled to the value of such residence at time of conveyance as a credit for the contribution of his separate property to creation of residence as a marital asset, and the wife was entitled to one-half of increase in current value of house due to addition to house made after conveyance and to one-half of appreciation in value of original structure attributable to her efforts as homemaker and parent.
Carr v. Carr, 291 A.D.2d 672, 738 N.Y.S.2d 415 (3d Dep’t 2002) - Husband allowed $195,000 credit for down payment and payments on principal of mortgage made with non-marital funds.
Gonzalez v. Gonzalez, 291 A.D.2d 373, 737 N.Y.S.2d 111 (2d Dep’t 2002) - "The record indicates that the appellant contributed $54,000 in separate property to the purchase of the residence. The Supreme Court thus erred in failing to give her a credit for that amount prior to the equitable distribution of the asset."
Robertson v. Robertson, 186 A.D.2d 124, 588 N.Y.S.2d 43 (2d Dep’t 1992) - "The marital residence, an apartment, was purchased after the parties' marriage and was therefore subject to equitable distribution. It is undisputed that the wife contributed $45,633.75 in separate property toward the purchase of the apartment. The trial court thus erred in failing to give her a credit for that amount prior to the equitable distribution of the asset."
In Alessi v. Alessi, the court declined to award any portion of an increase in value in real property, finding that there was no transmutation of the asset, but did indicate that the non-titled spouse was entitled to a return of her share of marital funds contributed towards the mortgage on the property.
Alessi v. Alessi, 289 A.D.2d 782, 734 N.Y.S.2d 665 (3d Dep’t 2001) (citations omitted) - ". . . plaintiff offered no competent evidence and Supreme Court made no findings concerning any enhancement of the value of this property as a result of plaintiff's efforts during the marriage. Under the circumstances, plaintiff's interest in that property is limited to her equitable share of the marital funds applied toward repayment of the mortgage on the residence, which we determine to be 12 payments of $290 or $3,480."
Mica v. Mica, 275 A.D.2d 765, 713 N.Y.S.2d 545 (2d Dep’t 2000) - "The Supreme Court also properly credited the plaintiff in the amount of $4,050 for his separate contribution to renovations on the marital residence prior to the marriage, since the defendant also received a credit for her separate contribution towards the purchase of the marital residence."
Barnes v. Barnes, 106 A.D.2d 535, 483 N.Y.S.2d 358 (2d Dep’t 1984) - "the facts of this case strongly oppose granting the husband any share in the marital premises or household furnishings therein. At best, defendant's contributions and efforts, both economic and noneconomic, to the acquisition, maintenance and appreciation in value of the marital residence were minimal."
Butler v. Butler, 171 A.D.2d 89, 574 N.Y.S.2d 387 (2d Dep’t 1991) - Where wife's separate property constituted approximately 86% of down payment for marital residence and husband's separate property constituted approximately 14% of down payment, it was appropriate, upon the sale of marital residence after eighteenth birthday of parties' child, for each party to receive a dollar-for- dollar credit equivalent to amount of their original contribution of separate property, with remainder of proceeds being divided, after satisfaction off mortgage, 75% to wife and 25% to husband.
Friederich v. Savaae, 138 A.D.2d 955, 526 N.Y.S.2d 411 (4th Dep’t 1988) - "the trial court correctly determined that the original value of the marital residence ($55,000), purchased by the parties as joint tenants prior to their marriage, is separate property. Thus the sum of $55,000 is to be divided equally between the parties and the remainder is to be distributed in accordance with the formula established in the judgment."
Varga v. Varga, 288 A.D.2d 210, 732 N.Y.S.2d 576 (2d Dep’t 2001) "Subtracting the outstanding mortgage balance of $69,000 from the appraised value of the home of $124,800 leaves $55,800 in total equity. The defendant's $50,000 separate contribution towards the purchase price of the marital residence is to be subtracted from this amount, resulting in the sum of $5,800. The plaintiff is then entitled to a one-half interest in this sum, amounting to an award of $2,900."
Burgio v. Burgio, 278 A.D.2d 767, 717 N.Y.S.2d 769 (3d Dep’t 2000) - ". . . the residence was constructed prior to the marriage, and evidence that defendant assisted in the cleanup of the property and that payments were made on plaintiff's mortgage during the marriage will not support a transformation of the marital residence into marital property. Defendant's interest in such property is therefore limited to her equitable share of (1) the moneys received by the parties as wedding gifts and used to repay plaintiff's separate debt of $2,000 to his siblings, and (2) the marital funds used to pay the mortgage on the residence."
4) Active v. Passive Appreciation
The Appreciation in Value of a Separate Asset May Also Become Marital Property if the Increase Was Due to the Direct Efforts of the Titled Spouse (and the Indirect Efforts of the Non-Titled Spouse).
Separate property may increase in value during the marriage. This increase in value may itself be considered a marital asset subject to equitable distribution between the parties. The long-standing law in connection with this concept was first elaborated by the Court of Appeals in Price v. Price. The court held that an increase in value of a separate asset may become marital property if that increase was due, in some part, to the direct or indirect efforts of the non-titled spouse.
Price v. Price, 69 N.Y.2d 8, 511 N.Y.S.2d 219 (1986) - "an increase in the value of separate property of one spouse, occurring during the marriage and prior to the commencement of matrimonial proceedings, which is due in part to the indirect contributions or efforts of the other spouse as homemaker and parent, should be considered marital property."
Hartog v. Hartog, 85 N.Y.2d 36, 623 N.Y.S.2d 537 (1995) - "In Price v. Price, this Court set forth the (active/passive) test, which established the guidelines for determining whether the appreciation in a titled spouse's separate property has been transmuted into marital property based on the indirect contributions of the nontitled spouse (69 N.Y.2d 8, 511 N.Y.S.2d 219, 503 N.E.2d 684, supra; Domestic Relations Law §236[B][d]; [d] )."
The Court of Appeals in Price and Hartog established what has since become known as an "active/passive test" in determining whether the increase in value should be considered a marital asset. In short, this test requires the non-titled spouse seeking distribution of the increase in value to demonstrate that the increase occurred as a result of some active contribution, either directly or indirectly, to that increase in value, and that it did not occur as a result of "passive" market forces. However, even active contribution, must be demonstrated to have had a direct causal link to the increase in value.
Zielinski v. Zielinski, 289 A.D.2d 1017, 735 N.Y.S.2d 302 (4th Dep’t 2001) - "The court properly concluded that one half of the appreciation of plaintiff's interests in the businesses during the marriage was attributable to plaintiff's efforts, not to unrelated factors such as inflation or other market forces, and thus constituted marital property."
In Wegman v. Wegman, 123 A.D.2d 220, 509 N.Y.S.2d 342 (2d Dep’t 1986) the wife was awarded a share of the increase in value of her husband's separate 25% ownership interest in the business. The evidence presented was that the value of the husband's interest appreciated considerably during the parties' marriage, that wife "contributed to the appreciation of that interest and she is therefore entitled to an award of a percentage of the appreciation of that separate asset, having shown that her direct and indirect contributions to the marital relationship were causally related to the enhancement in value of the business." The court reasoned that the wife "was required to totally support her husband and herself until January 1949 and always contributed all of her earnings toward the expenses of the household. She claimed she had suggested new products to be sold and sought out new employees, including her cousin's husband, who had worked in a medical laboratory. She also stated that she entertained large numbers of business guests on an average of twice per month, doing all of the planning, preparing, and cooking herself. She testified that she obtained investors from among her acquaintances and became active in civic affairs in order to meet people who might be helpful to her husband in his business." The court found this to be a significant contribution towards the growth of the husband's business interests and the increase in value thereof.
In the matter of Spencer v. Spencer, 230 A.D.2d 645, 646 N.Y.S.2d 674 (1st Dep’t 1996) the court held that the wife's indirect contribution as housewife and homemaker were a sufficient indirect contribution to the appreciation of brokerage account, which the husband had inherited. The court held that "the appreciation of this account, due to the plaintiff's management during the marriage, must be credited to the defendant, who is entitled to a fifty percent share of such appreciated value during the marriage as part of the marital estate. [. . . . ] Here, the plaintiff used his experience in accounting and taxation to manage the investments in the inheritance accounts with his son. Since the defendant indirectly contributed to the appreciation of this asset by handling the household matters, thereby permitting her husband the freedom to devote energy to his financial endeavors (Price, supra, at 16, 511 N.Y.S.2d 219, 503 N.E.2d 684), her contribution should be given consideration in the distribution of the appreciated value of this asset."
A Non-Titled Spouse's Active Management of a Separate Asset Does Not Always Result in Any Increase in the Value being Deemed Marital Property Because The Non-Titled Spouse Made No Direct Or Indirect Contribution or Failed to Demonstrate a Nexus.
In the matter of Elmaleh v. Elmaleh, 184 A.D.2d 544, 584 N.Y.S.2d 857 (2d Dep’t 1992), where the husband claimed that the value of the wife's interests in real property increased during the marriage, and where he had managed the properties on a full-time basis for nearly 20 years, he was denied distribution of any portion of the increase in value as he failed to demonstrate the manner in which his contributions resulted in the increase in value and the amount of the increase which was attributable to his efforts. The evidence at trial established that the increase in value was caused by an upturn in the real estate market.
A Titled Spouse's Active Management of a Separate Asset does not always Result in the Appreciation being Deemed Marital Property.
Lawson v. Lawson, 288 A.D.2d 795, 732 N.Y.S.2d 753 (3d Dep’t 2001) - Husband's interest in two real estate holding companies, owned by himself and relatives, was passive, allowing for exclusion of increase in value of husband's interest during marriage as marital property for equitable distribution purposes, despite claim that husband did some bookkeeping, prepared estate succession computer program involving one company, developed computer data base, and discussed business matters regarding companies with his mother from time to time.
The Court Sometimes Suggests that the Increase in Value Is Presumed Marital from the Date the Separate Asset Is Transmuted To A Marital Asset.
Rugen v. Rugen, 289 A.D.2d 218, 734 N.Y.S.2d 465 (2d Dep’t 2001) - "Contrary to the plaintiff's contentions, the Supreme Court properly applied the relevant factors of Domestic Relations Law §236(B)(5)(d) when it awarded her 50% of the appreciation in the marital residence from May 2, 1990, the date that the residence was transformed from the defendant's separate property into marital property, through January 21, 2000, the date of the trial."
Marriage is viewed as an economic partnership where spouses share in profits and assets of the partnership as well as in the losses and liabilities incurred in pursuit of marital wealth. (Gelb v. Brown, 163 A.D.2d 189, 558 N.Y.S.2d 934).
Liabilities, as well as assets, are valued and allocated between the spouses. Savage v. Savage, 155 A.D.2d 336, 547 N.Y.S.2d 306; see, e.g., Cook v. Cook, 237 A.D.2d 891, 656 N.Y.S.2d 1000.
IV. Date of Valuation
BASIC RULE (that's never followed): As soon as practicable after a matrimonial action has been commenced, the court shall set the date or dates the parties shall use for the valuation of each asset. The valuation date or dates may be anytime from the date of commencement of the action to the date of trial. (DRL §236 (B) (4) (b)).
The court has wide discretion and flexibility in selecting appropriate valuation dates. (Maddelina v. Maddelena, 217 A.D.2d 606, 629 N.Y.S.2d 463). Generally, passive assets, whose values are affected by outside influences such as inflation or market forces, should be valued as of date of trial and active assets, whose values are affected by participation of the titled spouse, should be valued as of date of commencement. (Heine v. Heine, 176 A.D.2d 77, 580 N.Y.S.2d 2311.) However, such formulations should only be regarded as helpful guideposts and not immutable rules of law. (McSparron v. McSparron, 87 N.Y.2d 275, 639 N.Y.S.2d 265 (1994)).
· Pensions are valued as of the date of the commencement of the action. Cohn v. Cohn, 155 A.D.2d 412, 547 N.Y.S.2d 85 (2d Dep’t 1989).
· Marital Residence is generally valued as of the trial date. Lerardi v. Lerardi, 151 A.D.2d 548, 542 N.Y.S.2d 322 (2d Dep’t 1989).
V. Retirement Benefits
1) Defined Benefit v. Lump Sum
Need to either "present value" the defined benefit plan or transfer 50% of the portion that accumulated during the marriage pursuant to a QDRO using the formula set forth in Majauskas, 61 N.Y.2d 481 (1984).
2) Statutory Requirements of QDRO's - IRC (414)(p)
a. Name and address of participant and Alternate Payee,
b. Amount or percentage of benefits payable to Alternate Payee,
c. Number of payments or period for which payments are required,
d. Each plan to which Order applies,
e. Must not alter form of benefit and
f. Same benefits only to one Alternate Payee: the one who files the QDRO first.
You do not need a QDRO to rollover IRA's but you do need a divorce judgment.
3) Disability Pensions
The issue to be determined in the case of disability pensions is to what extent these payments represent deferred compensation or compensation for personal injuries. Deferred compensation is marital property and compensation for personal injuries is separate property. (Mylett v. Mylett, 163 A.D.2d 463, 558 N.Y.S.2d 160).
(Stuart v. Stuart, 140 Misc.2d 494, 531 N.Y.S.2d 194): For equitable distribution purposes, a veteran's disability pension constituted separate property.
Dolan v. Dolan, 78 NY2d 463, 577 NYS2d 195, (1991): Portion of ordinary disability pension which represents deferred compensation related to length of employment occurring during marriage constitutes marital property subject to equitable distribution.
Dolan v. Dolan, 167 AD2d 654, 562 NYS2d 875, 877-878 (3d Dep't 1990): Because husband's disability benefits, payable under NYC Administrative Code, were partially compensation for his years of service, as evidenced by fact that one must have been employed for at least 10 years to qualify for same, trial court properly determined that the portion attributable to compensation for personal injury, i.e. the disability portion, was husband's separate property, but that the portion attributable to deferred compensation was marital property in which wife entitled to share.
VI. Licenses and Degrees
1. A professional license acquired during the marriage is a marital asset subject to equitable distribution. O'Brien v. O'Brien, 66 N.Y.2d 576, 498 N.Y.S.2d 743.
2. Other types of licenses:
(a) License as practical nurse held marital property. Morales v. Morales, 230 A.D.2d 895,646 N.Y.S.2d 884 (2d Dep’t 1996).
(b) License as school guidance counselor also held to be marital property. Holihan v. Holihan, 159 A.D.2d 685, 553 N.Y.S.2d 434 (2d Dep’t 1990).
(c) However, uncompleted studies that might lead to a license in the future are not to be treated as marital property. Kyle v. Kyle, 156 A.D.2d 508, 548 N.Y.S.2d 781 (2d Dep’t 1989).
(d) Physician's assistant and certification as a physician's assistant is marital property. Morimando v. Morimando, 145 A.D.2d 609, 536 N.Y.S.2d 701 (2d Dep’t 1988).
(e) Fellowship in the Society of Actuaries earned during the marriage and any corresponding enhanced earning capacity is marital property. McAlpine v. McAlpine, 176 A.D.2d 285, 574 N.Y.S.2d 385 (2d Dep’t 1991).
3. An academic degree is marital property to the extent that it has been earned through a course of study undertaken during the marriage. McGowan v. McGowan, 142 A.D.2d 355, 535 N.Y.S.2d 990 (2d Dep’t 1988).
(a) Bachelor's degree in Technology Computer Science Program earned during the marriage is a marital asset, which a share of the enhanced earning capacity resulting therefrom should be distributed to the spouse without such degree. Smith v. Smith, 227 A.D.2d 891, 643 N.Y.S.2d 274 (4th Dep’t 1996).
(b) Master's in Business Administration deemed marital property, of which the enhanced earning capacity attributable to same should be valued for purposes of equitable distribution. Miyake v. Miyake, N.Y.L.J., Oct. 5, 1998, at 29.
Board certification in internal medicine held to be marital property. Savasta v. Savasta, 146 Misc.2d 101, 549 N.Y.S.2d 544 (Sup. Ct. Nassau Co. 1989).
Certification as a Chartered Financial Analyst (CFA) acquired during the marriage is a marital asset. Murtha v. Murtha, 264 A.D.2d 552, 694 N.Y.S.2d 382 (1st Dep’t).
Police officer's two degrees and successful completion of civil service examinations for promotions up to Lieutenant enhanced his earning capacity is and should be marital property. Alloco v. Alloco, 152 Misc.2d 529, 578 N.Y.S.2d 995 (Sup. Ct. N.Y. Co. 1991).
However, a police officer's promotion to Sergeant without obtaining an educational degree in the process did not constitute an ascertainable asset to which an enhanced earning capacity could be attached. Bystricky v. Bystricky, 177 Misc.2d 914, 677 N.Y.S.2d 443 (Sup. C. Nassau Co. 1998).
THE HOUGIE ISSUE: Is "Exceptional Earnings Capacity" Not Resulting from a Degree or License Marital Property?
The First Department has held that enhanced earning capacity as an investment banker is subject to equitable distribution regardless of whether such career requires a license. Hougie v. Hougie, 261 A.D.2d 161, 689 N.Y.S.2d 490 (1st Dep’t 1999).
The career and celebrity status of a well known opera singer is marital property, where the non-celebrity spouse contributed. Elkus v. Elkus, 169 A.D.2d 134, 572 N.Y.S.2d 901 (1st Dep’t).
Enhancement of a medical license by emergency room employment, without a formal certification for this specialty, is marital property. Madori v. Madori, 151 Misc.2d 737, 573 N.Y.S.2d 553, aff'd on other grounds, 201 A.D.2d 859, 608 N.Y.S.2d 331 (3d Dep’t 1994).
The skills of an artisan, actor, professional athlete or any person whose expertise has enabled them to become an exceptional wage earner should be valued as marital property subject to equitable distribution. Golub v. Golub, 139 Misc.2d 440, 527 N.Y.S.2d 946 (Sup. Ct. N.Y. Co. 1988).
Absent a degree or license, attendance at the Harvard Advance School for Banking did not constitute marital property subject to equitable distribution. West v. West, 213 A.D.2d 1025, 625 N.Y.S.2d 116 (4th Dep't 1995).
In Spence v. Spence, 287 A.D.2d 447 (2d Dep't 2001), the Second Department rejected Hougie, plainly stating: "The husband's enhanced earning capacity as an investment banker is not marital property subject to equitable distribution. The husband earned his MBA, Series 7 license, and Series 63 license four years before the marriage. Accordingly, his increased earning capacity is not attributable to a professional license or degree acquired during the marriage (citing O'Brien, McSparron and West). To the extent that the decision of the Appellate Division, First Department in Hougie v Hougie (261 A.D.2d 161), holds to the contrary, we decline to follow it."
In Halaby v. Halaby, 289 A.D.2d 657 (3d Dep't 2001), the Third Department cites Hougie, but found insufficient evidence to conclude that the Husband's postdoctoral fellowship earned during the marriage increased his earning capacity.
In J.C. v. S.C., N.Y.L.J., Oct. 31, 2003, at 20 (Sup. Ct. NY Co., Drager, J.), the Supreme Court rejected the wife's contention that the husband's "exceptional earning capacity" from being an assistant controller to chief financial officer constituted marital property.
In Moll v. Moll, 187 Misc.2d 770 (S. Ct. Monroe Co. 2001, Lunn, J.), the court held that the husband's book of business or personal goodwill inherent in his career as a stock broker or financial advisor was a marital asset subject to equitable distribution. The court "distinguished" West because, unlike Mr. West (a 54-year old banking executive with no "book of business"), Mr. Moll was a 40-year old financial advisor with Morgan Stanley Dean Witter with a "book of business."
In Fanelli v. Fanelli, 191 Misc.2d 123, 2002 Westlaw 764589, N.Y.L.J., Apr. 23, 2002 (S. Ct. Westchester Co., Spolzino, J., Mar. 20, 2002), on a pre-trial motion for partial summary judgment, the enhanced earnings enjoyed by the husband due to his engineering license (parties married in 1973 and license was earned in 1978) were valued (by Gary Karlitz) at $18,400, based upon the husband's actual earnings history, as opposed to a theoretical value of $296,000. The husband had various jobs between 1978 and 1999, none of which required his engineering license. It was undisputed that the husband "never entered into a true professional engineering practice or otherwise obtained any meaningful remuneration from the direct use of his license."
Maintenance and child support are not dischargeable in a bankruptcy proceeding. A distributive award (i.e. property award) is dischargeable in bankruptcy. However, the characterization of an award "by the divorce court or the parties is not by itself, dispositive." "Distributive awards" under New York law can be found to be in the nature of support, and an award labeled as maintenance, may be found to be a "dischargeable property settlement." In Re Bonheur, 148 B.R. 379, 1992; Bank v. Lexis, 2019 (E.D.N.Y. 1992). Practice Tip: In Separation Agreement or Stipulation of Settlement, state that the obligation is not dischargeable in bankruptcy.
Finfer v. Finfer, NYLJ May 3, 1994 at 22, col. 3. Having failed to disclose assets in Bankruptcy Court, the husband was precluded from recovering the same in a matrimonial action.
VIII. Expert Valuations
Licenses and Degrees
· Enhanced earnings is defined as the after tax, actuarially adjusted incremental difference in annual income which results from the skills and experience acquired during the marriage
· Finding a nexus between license and enhanced earnings (Fanelli).
Variables in the Valuation of Enhanced Earnings
· Estimate of Base Line Earnings: earnings before license and/or degree based on education, training and other attributes
· Estimate of Top Line Earnings: earnings as a result of license and/or degree)
Estimate of Work Life
· Work life tables
· LPE method
· Employment studies
Estimate of Discount Rate
· The 3%: If job stability is risky, should be 9% or 12%
· Real Cost of Capital
IX. Tax Impacting
· Income Tax (e.g., deferred compensation)
· Capital Gains Tax (e.g., marital residence, stocks, businesses, etc.)
X. Tort Actions
· One year Statute of Limitations for Intentional Tort
· There is no requirement in New York that actions for tort occurring during marriage be joined with a divorce action. However, the "court, noting that there was no New York case authority addressing the joinder of tort claims in a matrimonial action, ruled that plaintiff's tort claims would be tried together with the equitable distribution and support issues ancillary to the matrimonial action.” Maharam v. Maharam, 177 A.D.2d 262, 575 N.Y.S.2d 846 (1st Dep’t 1991) (where a wife sued her husband following his alleged transmittal of a venereal disease to her). The court in Mahara also held that where tort claims are joined with divorce actions,
the issues are to be tried jointly, the jury shall first render a verdict upon plaintiff's tort claims, and the court shall thereafter determine the plaintiff's equitable distribution and support claims. We recognize that if plaintiff is successful in her tort action, the defendant would be paying damages to the plaintiff with funds that later may be determined to have been, in part, marital property. However, as a joint trial has been ordered, the court will have the opportunity to take this factor into account when rendering an equitable distribution award.
Id. at 847-8.
The court in Maharam reasoned that success on the part of the injured spouse [in the tort action] would significantly affect the parties' future financial situations, which would in turn affect the maintenance and distribution decisions.
In Talmour v. Talmour, 185 Misc. 2d 293, 297, 712 N.Y.S.2d 833 (Sup. Ct. Nassau Co. 2000), the court held that there were “… strong public policy considerations which militate against allowing the maintenance of a tort action between a husband and wife embroiled in a matrimonial action.”
In an unpublished 1998 Connecticut decision, a wife that sustained “permanent and disabling injuries at the hands of her husband” was awarded $40,000. Leggon v. L.T. Machinery Sales, Inc., 1998 Conn. Super. LEXIS 2105, 34 (1998) (where three independent cases, including an action for divorce and the tort of battery, were tried together because of the similarity of the facts involved). Despite the award and the fact that the claims were tried together, the court noted that “it is generally a better policy not to join marital tort claims with a marital dissolution action, as the purposes for relief differ. [However, the husband] has not asked the court to strike the [wife’s] claim for monetary damages, and both parties have expressed a desire to have all financial issues between them decided as part of this combined hearing.” Id. at 34-35. See also, Clare Dalton, Domestic Violence, Domestic Torts and Divorce: Constraints and Possibilities, 31 New Eng. L. Rev. 319, 378 (1997), citing Kemp v. Kemp, 723 S.W.2d 138, 139-40 (Tenn. Ct. App. 1986).
· Equitable Estoppel Effect of Prior Criminal Conviction
“Where a criminal conviction is based upon facts identical to those in issue in a related civil action, the Plaintiff in the civil action can successfully invoke the doctrine of collateral estoppel to bar the convicted Defendant from re-litigating the issue of his liability.” McDonald v. McDonald, 193 A.D.2d 590, 590, 597 N.Y.S.2d 159 (2d Dep’t 1993) (in a wrongful death suit where the husband was convicted for the murder of his wife, he is barred from re-litigating).
“Two requirements must be satisfied before a party can invoke collateral estoppel: (1) there must be an identity of issues that were necessarily decided in a prior action, and (2) the party precluded from re-litigating the issue must have had a full and fair opportunity to contest the prior determination.” Andre v. Schenectady Co., 1997 U.S. Dist. LEXIS 4209, 7 (N.D.N.Y. 1997), see also Wagman v. Kandekore, 243 A.D.2d 628, 663 N.Y.S.2d 227 (2d Dep’t 1997), Lili B. v. Henry F., 235 A.D.2d 512, 653 N.Y.S.2d 34 (2d Dep’t 1997).
A custody trial settled when the neutral forensic psychologist, who had recommended changing custody of three boys from the mother (who had custody of them for ten years) to the father (who had been convicted of rape after a jury trial 10 years ago) when the expert testified he didn't "believe" the father raped anyone.