Morille-Hinds v Hinds (2014 NY Slip Op 50269(U))

Morille-Hinds v Hinds

2014 NY Slip Op 50269(U) [42 Misc 3d 1230(A)]

Decided on January 31, 2014

Supreme Court, Queens County

Brown, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

BACKGROUND

The Plaintiff/wife (hereinafter "Plaintiff"), commenced this action on September 27, 2007, by Summons with Notice seeking an absolute divorce and ancillary relief. The Court notes that no Complaint or Answer was filed. This Case was tried before a Judicial Hearing Officer. A memorandum decision was filed on October 22, 2009 and a Judgment of Divorce was entered June 4, 2010. Defendant filed a notice of appeal on July 13, 2010.By Order dated August 2, 2011, the Appellate Division, Second Department reversed the decision of the Judicial Hearing Officer and sent back the case for a retrial on the issues of equitable distribution and child support.

A retrial was held on the ancillary matters of equitable distribution of [*2]assets, determination of child support and attorney fees. Plaintiff and Defendant testified and introduced documents into evidence. There were no other witnesses. Plaintiff did not comply with the discovery demands served by Defendant nor did she produce those documents at trial.

The Court makes the following findings of fact and conclusions of law based on the credible testimony and lack of relevant documents by Plaintiff.

The facts of the case did not differ from what was adduced during the first trial with the respect to the assets acquired during the marriage and income of the parties. Although, the Appellate Division held that the findings by the prior trial court were patently unfair to Defendant, Plaintiff did not differ from her position that Defendant should not receive an equal equitable share because, as she testified, Defendant waslazy and did odd jobs. Plaintiff and Defendant were married on August 28, 1993. Both Plaintiff and Defendant are 54 years old. Plaintiff is a microbiologist and Defendant is a handyman contractor. Plaintiff is the monied spouse. However, the parties lived a shared economic partnership consisting of Plaintiff working at her full time employment as a microbiologist and Defendant taking care of the marital home, caring for the parties' child, finding and fixing real property for investment. He was a "fixer upper" involved with searching for buildings and renovating them for resale on the real estate market. The martial residence and all real property were acquired during the marriage. The properties were renovated and resold on the market by Defendant.The marital residence was converted by Defendant from a one level ranch home into a three level bungalow home with a rental unit.

Plaintiff testified she provided 80% of the financial contribution and does not consider Defendant's non-economic contribution as marital contribution. The parties lived together three or four years prior to marriage and were married August 28, 1993. Prior to and throughout the marriage, Defendant's work pattern remained the same. Defendant has always sporadically worked as a handy person fixing people's homes, bathrooms, kitchens, plumbing, tiling and electrical repairs. Defendants' first official job was in 2001. By both parties' testimony, Defendant's highest annual income throughout the marriage was $18,570.00.Notably, both sides agree that throughout the marriage they filed joint tax returns and never reported any income for Defendant. By Plaintiff's own testimony, she agreed that the marital lifestyle was built on Plaintiff working professionally as a microbiologist and Defendant as a handyman. Defendant principally did the buying, renovating and selling of investment properties. The economic partnership was Plaintiff money and Defendant's labor. All income acquired during the marriage came from Plaintiff's income, rental from investment properties and Defendant's handyman work which were pooled toward in the parties' real estate investments.Although Plaintiff stayed steadfast with her belief that her income was the sole source of [*3]the parties' investments, the evidence show that Defendant's non-economic contribution significantly improved the parties' lavish lifestyle and helped fostered Plaintiff's successful promotion.

Imputed Income

Plaintiff seeks to have income imputed to Defendant which she claims Defendant is capable of earning. "A court need not rely upon a party's own account of his finances, but may impute income based upon the party's past income or demonstrated future potential earnings. The court may impute income to a party based on his or her employment history, future earning capacity, educational background, or money received from friends and relatives. Where a party's account is not believable, the court may impute a true or potential income higher than alleged (Duffy v Duffy, 84 AD3d 1151-1551-1152 [2d Dept 2011] quoting Steinberg v Steinberg, 59 AD3d 702, 705 [2d Dept 2009] Wesche v Wesche, 77 AD3d 921, 923 [2d 2010] Lilikakis v Lilikakis, 308 AD2d 435, 436 [2d Dept 2003]).

The parties filed joint tax returns throughout the marriage and there is no reported income for Defendant to Internal Revenue Service. Plaintiff admitted that Defendant has always worked as a handyman throughout the marriage. She further testified that Defendant's highest annual income was $18,570.00.Defendant received his contractor's license to qualify for the renovation work on the marital residence. During the marriage, Defendant continued to work as an independent handyman contractor repairing, renovating and refurbishing buildings. Plaintiff has a Master's degree as a micro biologist. Defendant has a two-year college education.All income was used to invest in real estate properties. The earnings from the investment were used to sustain the parties' investment life style. There are no other indicia proven by Plaintiff to show that Defendant's future earning potential is something more than what was earned during the marriage.

Wasteful Dissipation

It is well-settled law that the wasteful dissipation of assets by either spouse is one of the factors which may be considered in determining equitable distribution of marital assets (O'Sullivan v O'Sullivan, 247 AD2d 597, [2d Dept 1998]). Money used to pay legitimate expenses is not wasteful dissipation. See, Gonzalez v Gonzalez, 291 AD2d 373 (2d Dept 2002). There is no proof to show that either party engaged in wasteful dissipation. The work history of Defendant remained constant and there was no other expectation by Plaintiff other that to have Defendant contribute his labor to the marital assets. The joint tax returns clearly show that the marriage was based on concealing income while the parties used the tax loopholes to receive credits from IRS. Whatever, money they received was used to invest into properties toward the greater benefit of the marital assets. There is no showing of waste attributed to Defendant.

Equitable Distribution

Marital property is defined in New York Domestic Relations Law (hereinafter referred to as "DRL") § 236(B)(1)(c) as "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." The statute provides that separate property is not included within the definition of marital property.

New York Domestic Relations Law Section 236(B)(1)(d) defines separate property as:

DRL §236(B)(5)(a) provides that in matrimonial proceedings, the court shall "determine the respective rights of the parties in their separate or marital property." While the statute provides that separate property shall remain as separate property, marital property shall be equitably distributed, considering the circumstances of the case and the parties. To determine an equitable distribution of the property, DRL §236(B)(5)(d) requires that the court shall consider:

Looking to DRL § 236(B)(1)(c), it is clear that all property acquired during a marriage by either spouse, with the exception of property in specifically delineated categories, is considered to be marital property. The Court of Appeals has held that marital property should be "construed broadly in order to give effect to the economic partnership' concept of the marriage relationship recognized in the statute" (Price v Price, 69 NY2d 8, 15 [1986]). On the contrary, separate property, "which is described in the statute as an exception to marital property . . . should be construed narrowly (Id at 15). Thus, the structure of DRL § 236, "creates a statutory presumption that all property, unless clearly separate, is deemed marital property' and the burden rests with the titled spouse to rebut that presumption" (Fields v Fields, 15 NY3d 158, 163 [2010], quoting DeJesus v DeJesus, 90 NY2d 643, 652 [1997]).

Contribution as defined by the Appellate Courts can be economic or non-economic. See, Morille-Hinds v Hinds, 87 AD3d 526, (App Div, 2nd Dept 2011) citing, Holterman v Holterman, 3 NY3d 1, 8 (2004).For equitable distribution, the burden rests on the evidence to show the contribution in credible testimony and/or documentary proof. Based on the credible record, the Court applied the factors that are relevant for its reasoning and determination to achieve fundamental fairness in accordance with the parties' life style.There is no proof that any of the properties acquired during the marriage are separate property. Although Plaintiff testified that her income by itself suffices for her burden to show that the assets acquired during the marriage are separate because of no financial contribution from Defendant, Plaintiff has failed to show by fact and law that her income alone was the determining fact for separate property. Plaintiff relies on the decision reached in her first trial and does not believe a different determination is warranted although the Appellate Division concluded differently in its decision. The Appellate Court concluded that factors outlined under DRL 236 [B][5][g] must be considered to achieve fundamental fairness in allocation of marital assets. [*5]Likewise, the Appellate Court referenced that Defendant's skilled labor, value to the parties' real property, child care responsibilities are all factors to be considered when fashing equitable distribution of the marital assets. See, Morille-Hinds v Hinds, 87 AD3d 526, (App Div, 2nd Dept 2011) and cases cited therein. The record is bereft of any proof from Plaintiff to support her abstinence from the clear credible facts and prevailing law.

Despite Plaintiff's firm position that contribution should only be considered as economic, the credible testimony show that the parties' wealth and lifestyle were garnered mostly from Defendant's insight to acquire lucrative buildings to exchange for financial gain. The monies came from sale of their investments, refinancing of properties, rental income and employment income.Defendant single handedly searched for buildings, renovated them and then sold them on the real estate market. Plaintiff does not account for the manual labor of Defendant that significantly increased the wealth for the family. Plaintiff did not produce any witnesses or documents to show that she contributed anything more that the money she earned. Similarly, Plaintiff has not shown any proof that her income was separate and was not pooled in the financial partnership during the marriage.

Plaintiff takes two contradictory positions. Notably, Plaintiff testified that there was an economic partnership which included money and labor but continues to belie the point and insist that Defendant earned nothing, paid nothing and therefore his distributive share should be no more than 15% as determined by the prior trial court. Plaintiff has not shown any evidence, by testimony or documents, of how the invested properties increased in value outside of Defendant's contribution. There is no proof that anyone else other than Defendant worked on all the properties. Interestingly, the marital residence located in Bayside was a one-level ranch style house with 900 square feet purchased at $140,000.00 and converted to a three-level 2600 square foot duplex house with an approximate value of $850,000. There is no other proof to show that Defendant was not the sole person who did the manual labor to increase the equity on this property. While Plaintiff earned most of the income, the manual contributions by Defendant increased the value of the assets. The life style of the parties remained the same from the beginning of the marriage to its end. There is no proof that Plaintiff had any other expectation from Defendant during the marriage.

Plaintiff's employment required her to work outside of the home traveling nationally and internationally as a microbiologist to ensure food quality and safety. Defendant was the stay at home parent caring for the parties' son, fixing their properties and doing handyman odd jobs. In addition, Defendant volunteered at their son's school. Plaintiff testified that Defendant was lazy and did not fed or cared for their son. Assuming this was credible, which this Court does not find, Plaintiff never altered her work pattern to care and feed their child. She continued to travel being away from the home for long periods to enhance her career. Admittedly, their child did receive substantial love and care from both parents and there is no evidence that the child was not [*6]cared for by Defendant.

In comparison to the community property theory, in which "mathematical precision is the guidepost," (Rodgers v Rodgers, 98 AD2d 386, 391 [2d Dept 1983]), under equitable distribution, property acquired during the marriage must be distributed "in a manner which reflects the individual needs and circumstances of the parties" (Id. at 391). The fundamental purpose of the Equitable Distribution Law is the recognition of marriage as an economic partnership in which "both parties contribute as spouse, parent, wage earner or homemaker" (Rodgers at 391). Under the equitable distribution theory, the Court "possesses flexibility and elasticity to mold an appropriate decree because what is fair and just in one circumstance may not be so in another" (Id. at 391). The investment properties were acquired with the financial assistance of Plaintiff coupled with Defendant manual labor. All the assets were during the marriage are deemed to be marital property with a fair distribution equal to both sides since each employed equally their resources either financially and manually. There is no evidence to show that any of the assets are separate.

With respect to the credibility, the Court finds that Defendant's argument is consistent with credible evidence and prevailing applicable law. The Court finds that Defendant is entitled to 50% share of equitable distribution of all the assets based on his substantial non-economic contribution and home and child care services. The evidence amply supports Defendant's claim to an award of equal equitable distribution. Notably, the cases Plaintiff relied upon to support her position that Defendant should receive any award greater than 15%, are inapposite and not analogous to the credible evidence in this case.

Plaintiff's and Defendant's equitable share is determined as follows:

Marital Residence

The marital residence is located at 209-49 45th Road, Bayside, NY was purchased on December 7, 1995, approximately two years and three months after the marriage. This property was purchased as a single family ranch style unit for $145,000. It is now renovated to a three level bungalow with one or more rental units. In about 2008, this property had an approximate value of $850,000.00. Although titled in Plaintiff's name, this property was purchased with marital funds. Currently, both parties do not reside in this property.In or about 2009, Defendant was removed from the marital residence by a prior Court Order. In or about 2011, Plaintiff vacated the marital residence and relocated with the child on consent. Since 2011, this property is occupied by Plaintiff's sister and a renter. Plaintiff has refinanced this property and encumbered it for additional mortgage debt of $31,550.00. There is no proof how the encumbered sum was used. Notably, Plaintiff has failed to comply with discovery demands and subpoenas duly served to produce documents for this property.

This property shall immediately be sold at the current value by an agreed to Broker. The equity shall be split equally 50% each after closing costs. Plaintiff has [*7]failed to show she is entitled to any credit. Defendant shall receive a credit of one-half of the $31,550.00 in the sum of $15,775.00 after all closing costs from Plaintiff's sale of the proceeds.

Properties held in St. Lucia, WI

During the marriage, the parties purchased several properties in St. Lucia and are deemed to be marital. Plaintiff claims that these properties are separate because of her income and the title on these properties. Although these properties are titled in Plaintiff's name, these properties were purchased during the marriage with marital funds that were transferred from the marital account in New York to St. Lucia. Defendant made contributions by renovating and improving these properties which include vacant lands and vacation rentals. Plaintiff receives rental income from these properties. Plaintiff has failed to provide any proof with respect to management of these properties, actual sale, or the distribution of the proceeds of the sale. Plaintiff has failed to comply with discovery demands and subpoena to produce documents for these properties. There is no evidence to show how these properties were maintained other than from the rental income they generated. One of these properties was sold by Plaintiff for an approximate sum of $33,333.00 and there was no distribution to Defendant. The only evidence is Plaintiff's admission that the land was sold for $33, 333.00.

Therefore, Defendant shall receive one-half of the $33,333.00 in the sum of $16,666.50 to be distributed from Plaintiff's proceeds after sale of the marital property.

The remaining properties shall be sold within six months from the date of entry of the Order. Defendant shall have 50% share of the sale proceeds less any closing costs at the time of sale. Plaintiff must provide notice of sale no less than 30 days prior to sale and all documents with respect to sale of these properties within 10 days after sale. If Plaintiff is seeking any credits, she must show competent proof of all income and expenses incurred by her directly. If Plaintiff fails to comply, Defendant may seek relief by a proper application before this Court.

Automobile

Defendant makes mention of the BMW automobile purchased by Plaintiff with marital funds in 2006 for a sum of $40,000.00. However, Defendant does not seek any distribution.

Quorum Federal Credit Union

This account is marital and Defendant is awarded a 50% share of the value of the account as of the date of commencement plus any yield in value of the marital share.

Defined Benefit Pension Plan (Kraft Corporation)

This asset is marital. Defendant shall receive 50% share of this plan from the date of marriage until the date of commencement of this action plus cost of living and other increases. A Qualified Domestic Relations Order must be submitted to the Court for distribution pursuant to the Majauskas v Majauskas formula for Defendant's equitable distributive 50% share including all cost of living or other increases.

[*8]Kraft Foods Group, Inc. Thrifty Plan administered by Fidelity

The asset is marital. There is no proof that any part of this plan is separate property. Defendant's post trial memorandum is consistent with the credible evidence. As of the time of commencement of this action, this plan had a value in the sum of $346,666.46.A Qualified Domestic Relations Order (hereinafter "QDRO") must be submitted to the Court for distribution pursuant to the Majauskas v Majauskas formula for Defendant to receive 50% equitable share of this plan from the date of marriage to the date of commencement of this action including any interests, gains or loses.

IRA and Annuity accounts

Plaintiff has an IRA with a value of $20,756.24 and Defendant has an Annuity with a value of $7,257.18. Both of these accounts are marital assets to be divided equally.

Plaintiff shall receive a 50% share of Defendant's Annuity with a value of $7,257.18.

Defendant shall receive a 50% share of Plaintiff's IRA with a value of $20,756.24.

Qualified Domestic Relations Order

Based on the court's findings above, the incredible testimony of Plaintiff, the following language shall be included in the QDRO as stated in Defendant's memorandum and hereby adopted in substance in this Order as follows:

The parties opened a "529" account for college expense for the benefit of their child. Notably, the child has commenced college in the Fall 2013. This account shall be maintained for the benefit of the parties' child's college expenses. Plaintiff has not provided any documents as demanded to show how this account is maintained or its [*9]value.

Plaintiff must provide all monthly statements for each month from commencement to the current month within 30 days of receipt of the Order served with notice of entry.Thereafter, Plaintiff must provide all future monthly statements to Defendant within 5 days of receipt of such statements. This account shall only be used for the benefit of the child's college expense and shall not be used of any other purpose unless by consent in writing signed by the parties. If Plaintiff fails to comply with this Order, Defendant may seek relief of the Court.

565 Christopher Street Property

This property is separate property acquired from inheritance. Plaintiff does not seek any contribution but testified that its value should be used to calculate child support for the parties' child.There is no proof from Plaintiff that the value of this property should be imputed as income or that there is any realized value to Defendant after expenses. Notably, a foreclosure proceeding is pending against this property.

Based on all the above and lack of proof by Plaintiff, this property shall not be used to impute income to Defendant.

Child Support

The applicable incomes shown in the parties' tax returns for the respective years shall be used to compute child support to be paid by Defendant from date of commencement of this action until the age of emancipation. It should be noted, as previously determined by this Court, these parties throughout their marriage have engaged in a scheme whereby all incomes were not reported in their tax returns. For unexplained reasons, the rental income from investment properties and the marital property was not reported, the incomes of Defendant's odd jobs were not reported. There is no record shown for monies and income transfer in and out of the United States to and from the St. Lucia properties. There is no proof from Plaintiff of monies transferred from and between accounts.

This case was commenced in 2007. The reported income to IRS shall be used to calculate 17% of Defendant's income as and for child support. Plaintiff has failed to proof that any other income should be imputed to Defendant. Defendant shall receive a credit for all child support payments. All arrears shall be offset from Defendant's share of equitable distribution.

All add-on expenses shall be paid pro rata by both Parents as of the date of entry of this Order. Plaintiff has not shown that they are any outstanding expenses.

Plaintiff who is the residential custodial parent shall be responsible for the medical coverage of the child. All out of pocket and unreimbursed medical expenses shall be paid for pro rata as of the date of entry of this Order. Plaintiff has not shown there are any outstanding medical expenses.

Costs and Attorney fees

Plaintiff shall pay $4,862.67 plus interest from date of entry of the Appellate [*10]Division's Order as and for the bill of costs for the Appeal to Defendant as determined by the Appellate Division in its July 14, 2011 Order.This sum shall be deducted from Plaintiff's equitable distributive share.

DRL § 237 provides that in an action for a divorce the court may award counsel fees "to enable that spouse to carry on or defend the action or proceeding as, in the court's discretion, justice requires, having regard to the circumstances of the case and the respective parties." See, Prichep v Prichep, 52 AD3d 61 [2d Dept 2008]. Indigence is not a prerequisite to an award of counsel fees pursuant to DRL § 237. See, DeCabrera v Cabrera-Rosete, 70 NY2d 879 [1987].In considering an application for an award of counsel fees, the court shall consider the "equities and circumstances" of the case before it (Basile v Basile, 122 AD2d 759 [2d Dept 1986]). Plaintiff is the monied spouse in this case with an income as of the last joint tax return in 2008 of $134,989. Plaintiff testified that her income has increased through the years thereafter.Defendant income was approximately $18,570.00 for one year and fell well below that sum for all the other years.

Based on the findings above of Plaintiff's failure to produce documents and dilatory tactics, Plaintiff' incredible evidence and lack of foresight regarding the relevant applicable case law and her being the monied spouse, Defendant is awarded reasonable attorney fees.

This case is set down for a hearing on reasonable attorney fees unless the parties agree to submit the application on papers. Counsels shall inform the court by stipulation of their choice for a hearing or determination on papers with 60 days of the date of entry of this Order.

The above constitutes the Decision and Order of the Court. Settle judgment in accordance with this Decision and Order together with the applicable CSSA guidelines' worksheet for judgment of divorce.

SO ORDERED,

Dated: January 31, 2014

Queens, New YorkPam Jackman Brown, J.S.C.