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Smart Summary

Kirshenbaum v. Kirshenbaum — Appellate Division, Second Department (April 25, 1994)

Factual and Procedural Background

This is an appeal from a judgment of the Supreme Court, Nassau County (Kohn, J.), in a matrimonial action between William Kirshenbaum (Respondent‑Appellant) and Susan Kirshenbaum (Appellant‑Respondent). The Appellate Division modified the judgment by deleting specified decretal paragraphs concerning equitable distribution and the valuation of certain margin account liabilities as of the commencement of trial, remitted the matter for a hearing to determine the value of those margin accounts as of the commencement of the matrimonial action and, if necessary, for a redistribution of marital property, and otherwise affirmed the judgment insofar as appealed and cross‑appealed from, without costs or disbursements.

Legal Issues Presented

  1. Whether the trial court properly selected valuation dates for marital assets and liabilities (i.e., commencement of the action versus time of trial).
  2. Whether 9,750 disputed shares of New Plan Realty Trust were marital property or the husband's separate property given alleged commingling.
  3. Whether the husband's margin account liabilities related to the New Plan Realty Trust stock should be valued as of the commencement of the trial or as of the commencement of the matrimonial action.
  4. Whether the trial court's awards of maintenance and child support should be disturbed.
  5. Whether the husband established the elements of malicious prosecution in the consolidated damages action.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Siegel v Siegel, 132 A.D.2d 247 Trial court's broad discretion in selecting valuation dates for marital assets. Supported the proposition that different valuation dates for different assets may be appropriate and that the trial court's selections were within its discretion.
Wegman v Wegman, 123 A.D.2d 220 Illustration of discretion in fixing valuation dates for assets. Used with Siegel to justify the court's valuation choices for different assets.
Greenwald v Greenwald, 164 A.D.2d 706 Appropriate to fix different valuation dates for different assets; principle that debt associated with an asset should be valued consistent with the asset's valuation date. Supported the court's differing valuation dates for assets and the appellate court's conclusion that margin liabilities should be valued as of the commencement of the divorce action when the related stock was so valued.
Pullman v Pullman, 176 A.D.2d 113 Presumption that commingling funds converts property to marital property unless rebutted. Supported treating the 9,750 New Plan Realty Trust shares as marital property because the husband failed to rebut the presumption arising from commingling.
Lischynsky v Lischynsky, 120 A.D.2d 824 Authority concerning commingling and characterization of property. Applied alongside Pullman to uphold classification of the disputed shares as marital property.
Savage v Savage, 155 A.D.2d 336 Trial court's latitude in setting valuation dates for marital debts and liabilities. Cited to acknowledge the trial court's general discretion over valuation dates for liabilities, though the court found error in this case regarding margin liabilities.
Ducharme v Ducharme, 145 A.D.2d 737, 740 Support for valuing debt in accordance with the valuation date applied to the associated asset. Relied upon to conclude that the margin-account debt tied to the New Plan Realty Trust stock should be valued as of the commencement of the matrimonial action.
Loeb v Teitelbaum, 77 A.D.2d 92 Elements required to establish a cause of action for malicious prosecution. Referenced to conclude the husband adduced sufficient evidence to establish the requisite elements of malicious prosecution.
Levine v Gurney, 149 A.D.2d 473 General authority regarding malicious prosecution claims. Used as general support for the sufficiency of the husband's malicious prosecution claim.
Colon v City of New York, 60 N.Y.2d 78 Comparative authority (cf.) in the context of malicious prosecution or related proof issues. Cited by way of comparison; the court treated the husband's malicious prosecution proof as sufficient and the damages award as not against the weight of the evidence.

Court's Reasoning and Analysis

The court began with the well‑settled principle that trial courts have broad discretion to select valuation dates for marital assets and may fix different dates for different assets depending on circumstances. It found no abuse of discretion in the trial court's valuing some assets as of the commencement of the divorce action and others as of the time of trial.

The court held that 9,750 disputed shares of New Plan Realty Trust were marital property because the husband commingled funds used to purchase the shares and failed to rebut the presumption arising from that commingling.

However, the court determined the trial court erred in valuing the husband's margin account liabilities for the New Plan Realty Trust stock as of the commencement of the trial. Because the stock was an active asset appropriately valued as of the commencement of the divorce action, the associated acquisition debt should also be valued as of that date. Accordingly, the matter was remitted for a hearing to determine the amount of the husband's liabilities as of the commencement of the action and the portion constituting marital debt, and the equitable distribution award was vacated to permit redistribution if necessary based on the new valuation.

With respect to maintenance and child support, the court found no basis to disturb the trial court's awards, noting appropriate statutory factors were considered and the awards are supported by the record.

In the consolidated malicious prosecution action, the court concluded the husband presented sufficient evidence to establish the required elements of malicious prosecution and that the trial court's decision in his favor and the damages awarded were not against the weight of the evidence.

Holding and Implications

The Appellate Division modified the judgment: it deleted specified decretal paragraphs concerning equitable distribution and margin-account liability valuation as of the commencement of trial, remitted the matter for a hearing to determine the value of the margin accounts as of the commencement of the matrimonial action and, if necessary, for redistribution of marital property; as so modified the judgment was affirmed insofar as appealed and cross‑appealed from, without costs or disbursements.

Consequences for the parties: the Supreme Court, Nassau County, must determine the husband's margin liabilities as of the commencement of the divorce action and the marital portion thereof; the equitable distribution award was vacated to permit redistribution consistent with that determination; awards of maintenance and child support remain intact; the husband's malicious prosecution judgment and damages are sustained. The opinion does not announce any new broader legal rule beyond applying existing precedent.

WILLIAM KIRSHENBAUM, Respondent-Appellant, v. SUSAN KIRSHENBAUM, Appellant-Respondent.

Ordered that the judgment is modified, on the law, by deleting therefrom the fourth, fifth, sixth, seventh, eighth, ninth, tenth, and eleventh decretal paragraphs thereof concerning the equitable distribution of the marital property and the valuation of liabilities consisting of certain margin accounts as of the date of the commencement of the trial, and the matter is remitted to the Supreme Court, Nassau County, for a hearing to determine the value of the margin accounts as of the date of the commencement of the matrimonial action and, to the extent necessary, for a redistribution of the marital property in accordance therewith; as so modified, the judgment is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

It is well settled that the trial court has broad discretion in selecting the dates for the valuation of marital assets and, depending on the particular circumstances of the case, may appropriately fix different valuation dates for different assets (see, Siegel v Siegel, 132 A.D.2d 247; Wegman v Wegman, 123 A.D.2d 220). In this case, we discern no improvident exercise of discretion in the court's valuation of some assets as of the commencement of the divorce action, and its valuation of other assets as of the time of trial (see, Greenwald v Greenwald, 164 A.D.2d 706). Furthermore, the Supreme Court properly considered 9,750 disputed shares of stock in New Plan Realty Trust as marital property rather than as the husband's separate property, since the husband failed to rebut the presumption which arose from his commingling of the funds used to purchase these shares with other marital funds (see, Pullman v Pullman, 176 A.D.2d 113; Lischynsky v Lischynsky, 120 A.D.2d 824).

However, while the trial court also enjoys wide latitude in setting the valuation dates for marital debts and liabilities (see, Savage v Savage, 155 A.D.2d 336), we find that the court acted improperly in fixing the value of the husband's margin account liabilities for the New Plan Realty Trust stock as of the commencement of the trial. Since this particular stock constituted an active asset which was appropriately valued as of the date of the commencement of the divorce action, the debt incurred in its acquisition should similarly be valued as of that date (see, Greenwald v Greenwald, 164 A.D.2d 706, supra; Ducharme v Ducharme, 145 A.D.2d 737, 740). Accordingly, we remit the matter to the Supreme Court, Nassau County, for a determination of the amount of the husband's liabilities as of the date of commencement of the divorce action and the portion of that amount which constitutes marital debt. In view of the foregoing, we vacate the trial court's equitable distribution award so that, to the extent the Supreme Court finds it necessary and appropriate, the marital assets may be redistributed in accordance with the court's new determination as to valuation.

We discern no basis for disturbing any aspect of the trial court's awards with respect to maintenance and child support, since the court took the appropriate statutory factors into account and the awards are supported by the record.

Turning to the consolidated action to recover damages for malicious prosecution, we find that the husband adduced sufficient evidence to establish the requisite elements of his cause of action (see, e.g., Loeb v Teitelbaum, 77 A.D.2d 92; see generally, Levine v Gurney, 149 A.D.2d 473; cf., Colon v City of New York, 60 N.Y.2d 78), and that the trial court's decision in favor of the husband and the damages awarded are not against the weight of the evidence.

We have considered the parties' remaining contentions and find them to be without merit. Sullivan, J.P., O'Brien, Goldstein and Florio, JJ., concur.

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KIRSHENBAUM v. KIRSHENBAUM
(Apr 25, 1994)