So-Ordered Appellate Stipulations Moot Waived Divorce-Finance Issues, While Trust Transfers and Commingling Transmute Separate Property Into Marital Property

1. Introduction

Borzilleri v Borzilleri (2026 NY Slip Op 02814 [249 AD3d 665] [2d Dept May 6, 2026]) is a post-trial matrimonial appeal arising from a Suffolk County judgment of divorce (entered Dec. 2, 2020) resolving maintenance, child support, equitable distribution, and counsel fees.

The parties, John Borzilleri (plaintiff; appellant-respondent) and Sarah Boyce Borzilleri (defendant; respondent-appellant), married in 1999 and had two children who were emancipated by the time of appellate review. After trial, the Supreme Court awarded the defendant maintenance, child support, a distribution of marital assets, and $40,000 in attorneys’ fees. While the appeal and cross-appeal were pending, the parties executed a so-ordered stipulation (Aug. 16, 2021) resolving most financial issues but expressly reserving certain issues for appellate review.

The Appellate Division’s decision is significant for its practical treatment of (i) mootness (“academic” issues) created by an appellate stipulation, (ii) income imputation and designation of a noncustodial parent in equal-custody scenarios, (iii) transmutation and commingling doctrines in equitable distribution—especially when separate property is placed into a trust benefiting both spouses, and (iv) the less-monied spouse presumption for counsel fees and the role of litigation conduct in the fee amount.

2. Summary of the Opinion

  • The Court dismissed as academic those portions of the appeal/cross-appeal that the parties waived or resolved in the Aug. 16, 2021 so-ordered stipulation (maintenance; prospective child support after Aug. 16, 2021; and certain equitable-distribution items, including educational expenses, the defendant’s Charles Schwab account, and 2018 capital gains tax liability).
  • The Court affirmed the judgment insofar as reviewed, upholding:
    • imputation of income to both parties for child support purposes;
    • designation of the plaintiff as the noncustodial parent (despite equal parenting time) based on the greater pro rata share;
    • equitable distribution findings that treated the Cutchogue property as marital (after crediting the plaintiff for his premarital down payment), and denied a claimed separate-property credit tied to funds from the Brighton property;
    • an attorneys’ fee award to the defendant of $40,000 (rejecting defendant’s request for $100,000).

3. Analysis

A. Precedents Cited (and How They Shaped the Result)

1) Mootness / “Academic” Issues After a Stipulation

  • Aniqa Halal Live Poultry Corp. v Montague-Lee Ltd. Partnership, 110 AD3d 934 (2013):
    Cited for the proposition that where intervening events (here, a so-ordered stipulation) resolve the dispute, the appeal (or part of it) becomes academic. The Second Department used this to dismiss the issues the parties expressly waived/settled.
  • Smith v AJ Contr. Co., 277 AD2d 305 (2000):
    Used to distinguish issues that remain live when the parties expressly reserve them for appeal. This case anchors the Court’s refusal to dismiss the entire appeal: reservation language preserved appellate review for the remaining disputes.

2) Imputation of Income and Deference to Trial Credibility Findings

  • Bailey v Bailey, 232 AD3d 574 (2024) (quoting Tuchman v Tuchman, 201 AD3d 986 [2022]):
    These cases supply the governing standard: trial courts have “considerable discretion” to impute income; credibility determinations receive deference on appeal. The Court relied on this framework to uphold imputation based on trial evidence (including tax returns and earning capacity).
  • Diliberto v Diliberto, 230 AD3d 637 (2024):
    Cited for the breadth of permissible bases for imputation (past income, future potential, employment history, educational background, and even money from friends/relatives). This supported the legitimacy of imputing income beyond a party’s claimed present earnings.
  • Matter of Monti v DiBedendetto, 151 AD3d 864 (2017) and Matter of Mireille J. v Ernst F.J., 220 AD2d 503 (1995):
    Cited to reinforce that trial evidence such as tax returns and demonstrated earning capacity can justify imputation.
  • Cicale v Cicale, 231 AD3d 705 (2024) and Matter of Smisek v DeSantis, 209 AD3d 142 (2022):
    Cited for the rule that where custody is equal, a court may still identify a “noncustodial” parent for support purposes by looking to the parent with the higher pro rata share of the support obligation.
  • Volkerick v Volkerick, 153 AD3d 885 (2017):
    Used to support imputing income to a spouse with limited work history and health constraints—i.e., imputation can be calibrated to realistic capacity rather than assumed full-time earnings.

3) Equitable Distribution: Marital Presumption, Transmutation, Commingling, and Appellate Deference

  • Spera v Spera, 71 AD3d 661 (2010) (quoting Massimi v Massimi, 35 AD3d 400 [2006]):
    Provides two core principles applied here:
    1. Property acquired during marriage is presumed marital; the party claiming separate property bears the burden.
    2. Separate property can be transmuted into marital property by actions showing intent to change its character.
    The Court relied on Spera both to frame the burden and to treat the plaintiff’s trust-transfer conduct as evidence of intent to transform the Cutchogue property into marital property.
  • Hymowitz v Hymowitz, 119 AD3d 736 (2014):
    Cited for interpretive orientation: marital property is viewed broadly and separate property narrowly—supporting a cautious approach to separate-property claims.
  • Imhof v Imhof, 259 AD2d 666 (1999):
    Appears via quotation in the transmutation rule; reinforces that intent can be inferred from how title and beneficial interests are structured.
  • Lieberman-Massoni v Massoni, 215 AD3d 656 (2023) (quoting Kattan v Kattan, 202 AD3d 771 [2022]) and Santamaria v Santamaria, 177 AD3d 802 (2019):
    Supplies the appellate standard: equitable distribution is fact-laden and should not be disturbed absent improvident exercise of discretion.
  • Glessing v Glessing, 212 AD3d 783 (2023):
    Reinforces deference to trial credibility assessments after a nonjury trial—central to affirmance here.
  • Murphy v Murphy, 4 AD3d 460 (2004):
    Supports awarding a credit for a premarital down payment on property later treated in the marital estate—used to uphold the down-payment credit to the plaintiff for the Cutchogue property.
  • Sherman v Sherman, 304 AD2d 744 (2003):
    Supports the conclusion that transferring title in a manner that includes the other spouse’s interest can evidence intent to convert separate property into marital property.
  • Ospina-Cherner v Cherner, 178 AD3d 1059 (2019):
    Used to deny a claimed credit for appreciation because the plaintiff failed to prove the amount of appreciation by competent evidence at the relevant time—highlighting the evidentiary rigor required for valuation-based credits.
  • Szypula v Szypula, 42 NY3d 620 (2024):
    A Court of Appeals decision cited for a strong commingling rule: separate property commingled with marital property presumptively becomes marital property. This underpins the denial of the plaintiff’s claimed $268,000 separate credit tied to the Brighton proceeds once those funds were used for marital debt reduction and later mixed into an investment fund containing marital funds.
  • Mahoney-Buntzman v Buntzman, 12 NY3d 415 (2009):
    Cited for the restraint principle: courts should not second-guess economic decisions during marriage, but should equitably distribute what remains at the end—supporting a pragmatic, outcome-based distribution rather than reconstructing “should-have-kept-separate” narratives.
  • Loria v Loria, 46 AD3d 768 (2007):
    Supports denial of separate-property credits where conduct demonstrates an intent inconsistent with keeping proceeds separate (e.g., applying proceeds to jointly owned property).

4) Counsel Fees: Presumption, Amount, and Litigation Conduct

  • Marchese v Marchese, 185 AD3d 571 (2020):
    Central authority cited for: (i) the statutory rebuttable presumption that fees should be awarded to the less monied spouse (Domestic Relations Law § 237[a]); and (ii) the requirement to consider case circumstances, merits, and litigation conduct (including delay and unnecessary litigation). This case frames why fees were warranted and why conduct mattered.
  • Kaufman v Kaufman, 189 AD3d 31 (2020):
    Clarifies that while the statute presumes some fee award to the less affluent spouse, it does not dictate the amount—supporting the trial court’s discretion to award $40,000 rather than the $100,000 requested.
  • Caracciolo v Chodkowski, 90 AD3d 801 (2011):
    Reinforces that discretion over counsel fees is broad at both trial and appellate levels.
  • Ostrower v Ostrower, 148 AD3d 819 (2017) and Sutaria v Sutaria, 123 AD3d 908 (2014):
    Support weighing overall circumstances (including litigation conduct) to set a fair fee award. The Court used these principles to uphold a fee award based on the plaintiff’s delaying conduct, but to reject the defendant’s claim that the record required $100,000.

B. Legal Reasoning

1) What the so-ordered stipulation did to the appeal

The Court treated the Aug. 16, 2021 stipulation as a decisive procedural event. Where the stipulation resolved a subject (or where the parties waived arguments), the controversy ceased to exist and appellate review would be advisory—hence dismissal “as academic.” Conversely, issues explicitly reserved remained justiciable.

This portion of the opinion operates as a drafting-and-strategy lesson: what is waived or settled in a stipulation can eliminate appellate rights; what is reserved can preserve them.

2) Child support: imputing income and identifying the “noncustodial” parent under equal custody

The Court affirmed income imputation to the plaintiff based on trial evidence (including tax returns), past earnings, earning capacity, and educational background, emphasizing the trial court’s credibility determinations. It also affirmed imputing $35,000 to the defendant based on realistic limitations (age, inconsistent work history, and health).

On custody classification, the Court accepted that even with equal parenting time, the parent with the greater pro rata share may be treated as “noncustodial” for support-calculation purposes, aligning support responsibility with comparative income rather than time allocation alone.

3) Equitable distribution: separate property credits, transmutation via trust transfer, and commingling of proceeds

The Court’s equitable distribution analysis proceeds in three steps:

  1. Credit where separate contribution is proven: The plaintiff proved a premarital down payment for the Cutchogue property, so a credit was appropriate.
  2. Transmutation where intent is shown: The Cutchogue property’s separate character did not persist because title was transferred to a trust where both spouses served as trustees and held beneficial interests—conduct the Court read as intent to treat the asset as marital.
  3. No valuation-based credit without competent proof: The plaintiff’s claim for a pre-transmutation appreciation credit failed because he did not establish the property’s appreciation value at the relevant time with competent evidence.

For the Brighton proceeds, the Court treated the plaintiff’s narrative as inconsistent with separateness: using purported separate proceeds to pay down a mortgage on jointly owned marital property and later placing sale proceeds into an investment fund containing marital funds supported a conclusion of commingling and intent to treat the funds as marital—defeating the requested $268,000 separate credit.

4) Counsel fees: entitlement vs. amount

Applying Domestic Relations Law § 237(a), the Court affirmed that the defendant—being less monied—was entitled to a fee award, reinforced by findings that the plaintiff unnecessarily delayed litigation. However, it also affirmed that the record did not compel a higher award, rejecting the cross-appeal seeking $100,000 and leaving the trial court’s $40,000 figure intact as a discretionary determination.

C. Impact

1) Appellate practice in matrimonial cases: stipulations can moot issues with precision

The decision underscores that a so-ordered stipulation during a pending appeal can partially dismantle appellate jurisdiction over resolved topics while preserving review for expressly reserved issues. Future litigants should expect appellate courts to parse stipulations closely and dismiss waived portions as academic.

2) Support litigation: imputation remains a credibility-driven, evidence-based determination

The opinion reinforces the difficulty of overturning imputation findings on appeal, especially where tax returns and earning capacity evidence exist and the trial judge made explicit credibility determinations.

3) Property characterization: trust structuring and marital use of proceeds can be dispositive

The Court’s treatment of the Cutchogue trust transfer and the Brighton-to-Hingham-to-investment path illustrates how easily separate-property claims can be weakened by (i) placing property into structures that give the other spouse beneficial interests, and (ii) deploying separate proceeds to benefit jointly titled marital assets, followed by commingling in accounts containing marital funds.

4) Counsel fees: conduct matters, but documentation still drives the number

Even where entitlement is supported by the less-monied spouse presumption and delay tactics, the amount remains fact-specific. Parties seeking higher awards should expect scrutiny of billing proof, reasonableness, and proportionality to the case record.

4. Complex Concepts Simplified

  • “Academic” (moot) appeal: An appellate issue is “academic” when events after the judgment (like a settlement) mean the court’s decision would no longer affect the parties’ rights.
  • Imputation of income: The court may assign (“impute”) an income level to a party that differs from what the party claims to earn, based on evidence of earning capacity, history, and credibility.
  • Noncustodial parent in equal custody: Even with equal time, support statutes still require a payor/payee structure; courts may treat the higher-income parent as the “noncustodial” parent for calculation purposes.
  • Marital vs. separate property: Marital property generally includes assets acquired during marriage; separate property generally includes premarital assets and certain specified categories—yet the claiming party must prove separateness.
  • Transmutation: Separate property can become marital if the owner’s actions show intent to treat it as shared (e.g., changing title/beneficial interests to include the spouse).
  • Commingling: Mixing separate funds with marital funds (or using separate funds for joint marital purposes) can cause separate funds to be treated as marital.
  • Counsel fees presumption (DRL § 237[a]): There is a rebuttable presumption favoring an attorney-fee award to the less monied spouse, aimed at leveling litigation power.

5. Conclusion

Borzilleri v Borzilleri delivers a practical set of rules for matrimonial litigants and counsel:

  1. A so-ordered stipulation can render large portions of an appeal academic—but only as to what is truly resolved or waived; express reservation language matters.
  2. Income imputation will be upheld where grounded in documentary proof and credibility findings, and equal parenting time does not preclude identifying a payor based on pro rata shares.
  3. Separate-property claims are vulnerable to transmutation (e.g., trust transfers benefiting both spouses) and commingling (e.g., paying down joint debt and mixing proceeds), and valuation-based credits fail without competent proof.
  4. Attorneys’ fees are guided by the less-monied spouse presumption and litigation conduct, but the amount remains a discretionary, record-driven determination.

In the broader legal context, the opinion reinforces appellate deference to trial-level factfinding in support and equitable distribution, while highlighting how post-judgment settlements reshape appellate review through mootness doctrine.