Summary of Opinion: Judson v. Judson

Factual and Procedural Background

The parties were married in 1982 and have no children. In November 1994 plaintiff (William C. Judson) commenced an action for divorce based upon defendant's alleged abandonment; defendant answered and counterclaimed for divorce based upon plaintiff's alleged cruel and inhuman behavior. The parties stipulated that plaintiff would proceed to obtain a divorce on the grounds set forth in his complaint and defendant would withdraw her answer and counterclaim. Supreme Court held a nonjury trial on equitable distribution and maintenance. At marriage plaintiff earned about $16,000 per year and owned CDs totaling about $70,000 and an IRA of $15,000. During the marriage defendant worked alongside plaintiff stocking vending machines for limited compensation. Plaintiff contributed $26,000 of his separate funds to purchase the marital residence (including a trailer and lot and improvements) and later transferred most of his remaining separate assets into various joint accounts. Supreme Court found the marital estate worth $174,500, awarded plaintiff 60% ($104,700) and defendant 40% ($69,800), deemed a savings account held jointly by plaintiff and his mother and a trailer in Pennsylvania to be plaintiff's separate property, and ordered plaintiff to pay defendant maintenance of $80 per month for three years. Plaintiff appealed. The Appellate Division modified the judgment by crediting plaintiff $26,000 toward the marital residence and, as so modified, affirmed.

Legal Issues Presented

Whether plaintiff is entitled to a credit for his separate $26,000 contribution toward the purchase of the marital residence.
Whether savings accounts, IRAs and CDs held during the marriage constitute marital property or separate property.
Whether the maintenance award of $80 per month for three years was proper.
Whether any award of counsel fees to defendant was made and is reviewable.

Arguments of the Parties

Appellant's Arguments

Plaintiff contended that certain savings accounts, IRAs and CDs should be treated as his separate property rather than marital property.
Plaintiff asserted he never intended to create joint marital accounts and therefore the funds should remain separate.
Plaintiff argued Supreme Court erred by awarding defendant counsel fees.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Maczek v. Maczek, 248 A.D.2d 835	Authority supporting credit for separate contribution toward marital residence.	Used to support awarding plaintiff a credit of $26,000 for his separate funds applied to the marital residence.
Ramsey v. Ramsey, 226 A.D.2d 989	Supporting precedent for crediting separate contributions to marital property.	Relied upon to justify plaintiff's credit for his $26,000 contribution.
Zurner v. Zurner, 213 A.D.2d 906, lv denied 87 N.Y.2d 802	Supporting authority on treatment of separate contributions to marital assets.	Applied to sustain awarding a credit to plaintiff for his separate contribution to the home.
McSparron v. McSparron, 190 A.D.2d 74, 77	Property acquired during the marriage is presumed marital; cited for maintenance analysis as well.	Used to affirm presumption that assets acquired during marriage are marital and to support the maintenance award analysis.
Price v. Price, 69 N.Y.2d 8, 15	Marital property is to be broadly construed; separate property narrowly construed.	Applied to reject plaintiff's attempt to classify accounts as separate when acquired/commingled during marriage.
Carney v. Carney, 202 A.D.2d 907, 908	Once separate property is commingled with marital funds it becomes marital property.	Relied upon to conclude plaintiff's commingling transformed separate assets into marital property.
Glazer v. Glazer, 190 A.D.2d 951, 953	Commingling doctrine converting separate property into marital property.	Applied to support the conclusion that plaintiff commingled funds and thus the accounts are marital.
Di Nardo v. Di Nardo, 144 A.D.2d 906, 907	Authority on commingling and characterization of assets as marital.	Used to bolster the finding that commingled accounts constituted marital property.
Ughetta v. Barile, 210 A.D.2d 562, 563, lv denied 85 N.Y.2d 805	Principle that an issue is not reviewable if the record contains no such award.	Applied to dismiss plaintiff's counsel-fee contention because the record contains no counsel-fee award.

Court's Reasoning and Analysis

The court first observed that the marital residence, purchased after the marriage, is marital property under Domestic Relations Law § 236 (B) (1) (c), but the record supports that plaintiff contributed $26,000 of separate funds toward acquisition and is therefore entitled to a credit for that amount (citing Maczek, Ramsey, Zurner).

On the characterization of savings accounts, IRAs and CDs, the court applied the presumption that property acquired during marriage is marital and noted the party asserting separateness bears the burden of proof (citing McSparron). The court emphasized that "marital property" is construed broadly and "separate property" narrowly (citing Price) and that commingling of separate property with marital funds converts it into marital property (citing Carney). The record showed plaintiff opened numerous accounts, many in joint names, admitted commingling, placed a substantial portion of vending income into savings/IRAs/CDs, and failed to document transfers or rebut defendant's possible sweat-equity contributions; accordingly the court affirmed characterization of those accounts as marital (citing Glazer, Di Nardo).

Regarding maintenance, the court noted defendant had limited employment history during the marriage, medical problems, and would require counseling and job training. Considering the parties' employability and defendant's health, the court held the $80 per month for three years award fell within Supreme Court's discretion (citing McSparron).

On counsel fees, the court found the record contained no award of counsel fees and therefore the contention was not reviewable (citing Ughetta).

The Appellate Division concluded the judgment should be modified by crediting plaintiff $26,000 toward the marital residence and, as modified, affirmed the judgment.

Holding and Implications

MODIFIED AND AFFIRMED. The Appellate Division modified the judgment by crediting plaintiff $26,000 for his separate contribution toward establishing the marital residence, and, as so modified, affirmed the judgment without costs.

Direct consequences: plaintiff receives a $26,000 credit against the marital residence; savings accounts, IRAs and CDs held during the marriage were treated as marital property due to commingling and plaintiff's failure to prove separateness; maintenance of $80 per month for three years to defendant was upheld; the counsel-fee contention was deemed not reviewable because no such award appears in the record. The opinion does not announce or rely upon any newly established legal doctrine beyond application of existing precedents.

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WILLIAM C. JUDSON, Appellant, v. PAMELA J. JUDSON, Respondent.

The parties were married in 1982 and have no children. In November 1994 plaintiff commenced this action for divorce based upon defendant's alleged abandonment; defendant answered and counterclaimed for divorce based upon plaintiff's alleged cruel and inhuman behavior. The parties eventually stipulated that plaintiff would proceed to obtain a divorce on grounds set forth in his complaint and defendant would withdraw her answer and counterclaim. Thereafter, Supreme Court held a nonjury trial on the issues of equitable distribution and maintenance. The record reveals that at the time of the marriage plaintiff was earning approximately $16,000 per year and had certificates of deposit (hereinafter CDs) totaling approximately $70,000 and an individual retirement account (hereinafter IRA) in the amount of $15,000. During the marriage defendant worked alongside plaintiff stocking vending machines but received limited financial compensation.

The record further reveals that following the marriage, plaintiff contributed $26,000 of his separate funds to purchase the marital residence; the amount included the purchase of a trailer and lot and the costs of improvements to the land. During the marriage plaintiff transferred the majority of his remaining separate assets into various joint accounts. Plaintiff testified that he transferred his assets into joint accounts in order to ensure that his wife would be taken care of in the event of his death and in order to take advantage of the tax benefits. Following trial, Supreme Court determined that the marital estate, including the marital residence, was worth $174,500 and awarded plaintiff 60% ($104,700) and defendant 40% ($69,800). The court also deemed a savings account held jointly by plaintiff and his mother and a trailer purchased by plaintiff located in Pennsylvania to be plaintiff's separate property. Finally, Supreme Court ordered plaintiff to pay maintenance to defendant for three years in the amount of $80 per month. Plaintiff appeals.

Initially, although Supreme Court properly determined the marital residence to be marital property, inasmuch as it was purchased after the marriage ( see, Domestic Relations Law § 236 [B] [1] [c]), the evidence in the record supports the conclusion that plaintiff contributed $26,000 of his separate funds toward the creation of this marital asset and is therefore entitled to a credit in that amount ( see, Maczek v. Maczek, 248 A.D.2d 835; Ramsey v. Ramsey, 226 A.D.2d 989; Zurner v. Zurner, 213 A.D.2d 906, lv denied 87 N.Y.2d 802).

We do, however, reject plaintiff's contention that Supreme Court erred in determining that the savings accounts, IRAs and CDs were marital property. 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 ( see, McSparron v. McSparron, 190 A.D.2d 74, 77). The term "marital property" is to be broadly construed while the phrase "separate property" is to be narrowly construed ( see, Price v. Price, 69 N.Y.2d 8, 15). Significantly, once separate property is commingled with marital funds it becomes marital property ( see, Carney v. Carney, 202 A.D.2d 907, 908).

Here, the record amply supports Supreme Court's conclusion that plaintiffs' actions, clearly indicated his intention to convert his separate property into marital property. Following the marriage, plaintiff opened numerous bank accounts, CDs and IRAs, many in joint names. Plaintiff's assertion that the moneys contained in various accounts should be considered separate property and not marital property, because he never intended to create joint marital accounts, is belied by the record. By his own admission plaintiff commingled separate assets with marital assets, thereby transforming them into marital property ( see, Glazer v. Glazer, 190 A.D.2d 951, 953; Di Nardo v. Di Nardo, 144 A.D.2d 906, 907). Further, the evidence also showed that during the duration of the marriage, between one half and three quarters of the money earned from the vending business was placed in savings accounts, IRAs and CDs. Plaintiff failed to provide documentation of how the funds were transferred from one account to the next or provide proof that defendant did not contribute substantially to the funds invested through her sweat equity in the vending business.

Next, we conclude that Supreme Court did not err in granting defendant maintenance. The record reveals that defendant had no history of employment during the marriage other than working alongside plaintiff where she received limited compensation, has a history of medical problems and will require counseling and job training in order to become self-supporting. In our view, a maintenance award of $80 per month for a three-year period following the divorce was well within Supreme Court's discretion based upon the employability of the parties and the health concerns of defendant ( see, McSparron v. McSparron, supra).

Finally, we note that although plaintiff contends that Supreme Court erred by awarding defendant counsel fees, the record is devoid of any such award. Therefore, this issue is not reviewable ( see, Ughetta v. Barile, 210 A.D.2d 562, 563, lv denied 85 N.Y.2d 805).

Mikoll, J. P., Crew III, White and Yesawich Jr., JJ., concur.

Ordered that the judgment is modified, on the law and the facts, without costs, by crediting plaintiff for his separate contribution toward establishing the marital residence in the amount of $26,000, and, as so modified, affirmed.

JUDSON v. JUDSON