| Wechsler v Wechsler |
| Motion No: M-6021 |
| Slip Opinion No: 2009 NYSlipOp 67347(U) |
| Decided on March 24, 2009 |
| Appellate Division, First Department, Motion Decision |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This motion is uncorrected and is not subject to publication in the Official Reports. |
March 24, 2009
Wechsler v Wechsler
Leave to appeal to the Court of Appeals granted, as indicated. All concur except McGuire, J., who dissents as follows:
I dissent from the majority�s determination to grant the wife�s application for leave to appeal to the Court of Appeals from our order modifying the judgment of divorce (58 AD3d 62 [2008]). In addition to the extensive modifications we directed, on the law and the facts, we remanded for further proceedings, including a hearing. As our order did not finally dispose of the appeal, the wife�s application is for leave to pursue an interlocutory appeal to the Court of Appeals. Accordingly, only this Court, not the Court of Appeals, is empowered to grant leave to appeal (see CPLR 5602[a][1][i]; [b][1]).
The wife�s application is premised on the �novel� nature of the question of the proper methodology for valuing the investment holding corporation owned by the husband in light of taxes embedded in the corporation�s assets. A novel and important issue would be presented if we had been asked to decide between the valuation approach adopted by the majority of the Eleventh Circuit in Matter of Jelke v Commissioner of Internal Revenue (507 F3d 1317 [2007], cert denied ___US___, 129 S Ct 168 [2008]) �- the same approach adopted by the Fifth Circuit in Matter of Dunn v Commissioner of Internal Revenue (301 F3d 339 [2002]) �- or the valuation approach adopted by Judge Carnes in his dissenting opinion in Jelke (507 F3d at 1333) �- the one espoused in Jelke by the Internal Revenue Service. That choice, however, was not before us and it was not before Supreme Court. Indeed, we expressly stated that �[t]his appeal ... does not require us to reach a conclusion about which of the two approaches is preferable with respect to the issue of embedded taxes� (58 AD3d at 68-69). We could not have been clearer in holding that as between the Jelke/Dunn methodology proposed by both the neutral expert and the husband�s expert, and the methodology proposed by the wife�s expert, which is not the one Judge Carnes would have adopted but instead is one without any precedential support, Supreme Court should have chosen the former.
Our authority in this regard is as broad as that of Supreme Court (see Majauskas v Majauskas, 61 NY2d 481, 493-494 [1984]). What also is of decisive significance is that we set forth at some length the particular fact-bound reasons supporting both our determination that �under all the factual circumstances of th[e] case� (58 AD3d at 71-72) the approach proposed by the neutral expert and the husband�s expert was the more appropriate one (id. at 68-73) and our determination that we would not remand for what would amount to another valuation trial even if we were of the view that the approach Judge Carnes would have adopted is more appropriate in a matrimonial action (id. at 72 n 7).
Under these circumstances I am at a loss to understand how the Court of Appeals could review our order for anything but an abuse of discretion (cf. Majauskas, 61 NY2d at 493-494 [reviewing equitable distribution award and noting that �[t]he authority of the Appellate Division is ... as broad as that of the Trial Judge, and absent an exercise of discretion on its part so egregious that it can be characterized as an abuse as a matter of law, its exercise of discretion is not reviewable by us�] [citation omitted]). Notably, in her reply submission in support of her motion the wife does not provide any reason for concluding that the Court of Appeals could review these aspects of our order on a broader basis. Furthermore, even the dissenter in this Court, who also votes to grant the wife�s application for leave to appeal, did not contend that we had abused our broad discretion.
If I am right about the limited scope of review of our order, a subject that the majority chooses not to discuss, granting leave will not result in a decision from the Court of Appeals resolving any broad question of law regarding the appropriate valuation methodology for corporations like the one owned by the husband. Granting leave, however, will have decidedly adverse consequences, as discussed below, not the least of which is that the Court of Appeals will be burdened with reviewing an order that is essentially beyond its review powers.
But on the assumption that I am wrong and the Court of Appeals can exercise some review power broader than abuse of discretion, leave to appeal still should not be granted. Unless there is a settlement, a consummation devoutly to be wished but one that is undermined by the majority�s decision to grant leave, this case will be coming back to this Court following our remand and the entry of a final judgment. When the next appeal to this Court is resolved we can grant leave (CPLR 5602[a][1][i]; [b][1]) and, assuming we do not again remand, so could the Court of Appeals (CPLR 5602[a][1][i]). The wife provides no reason at all for supposing that she will be prejudiced if review by the Court of Appeals occurs after final judgment rather than now.
This bitter and protracted action was commenced in 2001. We expressly recognized that expedition was necessary in this case given, among other things, �the passage of more than seven years since the commencement of this action and the enormous litigation costs incurred by the parties� (58 AD3d at 77). For these same reasons, moreover, we directed that the hearing we ordered �take place as expeditiously as possible and, in the event of another appeal, encourage[d] either party to move this Court for an order expediting the appeal� (id. at 90).
Inexplicably, the two other members of the majority who agreed with the necessity for expedition nonetheless cast their votes in favor of an interlocutory appeal to the Court of Appeals.
In contrast to New York law, federal appellate procedure permits interlocutory appeals only under narrow circumstances (see generally Cunningham v Hamilton County, Ohio, 527 US 198, 203-204 [1999]; id. at 203 [�an appeal ordinarily will not lie until after final judgment has been entered in a case�]). The general prohibition against taking an appeal before final judgment �serves several salutary purposes� (id.), including �avoid[ing] the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals� and �the important purpose of promoting efficient judicial administration� (id. at 203-204 [internal quotation marks omitted; brackets in original]). Although New York law broadly permits appeals to intermediate appellate courts, it furthers those same salutary purposes when it comes to interlocutory appeals to the Court of Appeals in civil cases. They are allowed, after all, only when leave to appeal is granted by the Appellate Division (CPLR 5602[b]). We vindicate those purposes only if we are most circumspect about exercising the authority entrusted to us. If this were a novel question of law presenting an issue of state-wide significance, it might be appropriate now to grant leave. But this appeal lies at the opposite end of the spectrum. The fact-bound nature of our resolution of the valuation issue is evident and undeniable; the very fact that no matrimonial action previously has arisen in which this valuation issue has been addressed is proof enough of the absence of any issue of state-wide significance.
If this case presents a valuation issue that is appropriate for review by the Court of Appeals, that review should occur after a final judgment has been entered, when the Court of Appeals also may review all issues of law we previously decided and all issues of law we may decide when the case comes back before us following remand. Instead, the majority guarantees further delays and further costs on top of the extensive delays and enormous costs that already have been incurred.
I respectfully submit that the majority's decision to grant an interlocutory appeal at this juncture is profligate as well as unreasonable.
Before: Friedman, J.P., Gonzalez, Sweeny, McGuire, JJ.
Motion No. M-6021