Opinion
36856/03.
Decided September 28, 2004.
Upon the foregoing papers in this marital dissolution action, plaintiff Clara Torres moves for an order, pursuant to CPLR 3212, granting partial summary judgment on her complaint against defendant Rafael Torres Tobar and declaring the shares of a certain cooperative apartment to be plaintiff's separate property and not marital property subject to equitable distribution or, in the alternative, for an order declaring that defendant's equitable share of this marital property is zero percent. Defendant cross-moves for costs and fees.
Relevant Factual Background
Plaintiff and defendant, both natives of the Republic of Colombia, were married in August 1965 and are the parents of three children. Plaintiff's action seeks a judgment of divorce on the ground of constructive abandonment. The property presently at issue is the shares of a cooperative apartment, number 9M, located at 240 East 76th Street in New York County (the apartment).
Between 1966 and 1974, and 1981 and 1988, defendant lived and traveled intermittently between Colombia and the United States, and between Florida and New York. In 1981 and prior thereto, defendant, while in New York, frequently stayed at the apartment, which, at the time, was the leased residence of defendant's brother. Defendant's brother died in 1981, at which point, defendant assumed the lease on the apartment, and made the monthly rental payments thereon.
In 1982, plaintiff and defendant sold their residence in Colombia and moved, with their children, to Florida. Plaintiff asserts that $55,000 from the proceeds of the sale of the home in Colombia were deposited by her, in cash, into a safe deposit box, and that an additional $30,000 of those proceeds were used by her to purchase a certificate of deposit.
Defendant claims that the proceeds from the sale of the home in Colombia were fully spent on repaying his outstanding debts in Colombia and on a family vacation. He contends that the $30,000 certificate of deposit was acquired with cash, from an unspecified source, given to plaintiff by him. The certificate of deposit was subsequently used as collateral on a bank loan made to plaintiff, and the loan proceeds used by defendant to purchase a second, $30,000, certificate of deposit.
After moving to the United States, defendant continued his travels between Florida and New York and, while in New York, continued to reside at the apartment. In April 1988, he successfully defended an action seeking his eviction therefrom. According to plaintiff, defendant's purpose in continuing to use the apartment was dual, (1) as a place to live while conducting his business in New York, and (2) as a means of positioning himself and plaintiff to purchase the apartment if and when it was converted into a cooperative. Defendant claims to have used substantial funds to renovate the subject apartment while it was still a rental property.
Defendant was arrested in July 1988, prior to the apartment's conversion into a cooperative. He was indicted on August 18, 1988 in the United States District Court, Eastern District of Pennsylvania (docket number 88-330-01); charged with several federal drug trafficking violations (conspiracy to distribute cocaine, possession with intent to distribute cocaine, and aiding and abetting); and, following a jury trial, convicted of those charges.
On March 22, 1989, defendant was sentenced to three concurrent determinate terms of imprisonment of two hundred and ninety three months (approximately 25 years) and fined in excess of 4 million dollars. As a result of his arrest and conviction on federal charges, and pursuant to federal statute, defendant's declared and/or known assets, including the $30,000 certificate of deposit, were seized by the government. The seizure of the certificate of deposit was allegedly subsequently and successfully challenged by plaintiff, and the certificate returned to plaintiff's possession.
On December 18, 1993, following deportation proceedings held pursuant to 8 USC § 1101, et seq., an immigration judge ordered that defendant be deported to Colombia. It appears that said deportation will occur immediately prior to or upon defendant's release from federal incarceration, or approximately nine years from now.
In February 1989, during a pre-sentence interview before the U.S. Department of Probation, defendant claimed assets totaling $73,800 (including, but not limited to, a bank account in the sum of $3,800 and the $30,000 certificate of deposit) and liabilities totaling $68,820.
In October or November 1988, plaintiff and the children moved from Florida to New York, and into the subject apartment, to be closer to defendant during his incarceration. In 1990, plaintiff successfully defended an action seeking her eviction from the subject apartment and entered into a rental agreement listing her as the apartment's sole lessee. Also in 1990, plaintiff repaid the aforementioned bank loan, causing the $30,000 certificate of deposit to be released as collateral.
In April 1990, following the announcement that the subject building was to be converted into a cooperative, plaintiff filed a "Subscription Agreement" and remitted an initial $1,000 down payment, indicating her intent to purchase the shares of the subject apartment at a price of $117,600. In October 1991, plaintiff completed the purchase of the apartment shares, making a $35,000 cash down payment and obtaining a mortgage in the amount of $82,600. Title to the shares was acquired solely in plaintiff's name.
Defendant has been incarcerated for more than 16 years, since his July 1988 arrest to present. Plaintiff, apparently up to and until her commencement of the instant divorce proceeding in September 2003, regularly visited defendant at his place of incarceration and sent him monthly money orders or checks in the sums of $150. No separation proceedings were commenced prior to the instant action.
Plaintiff asserts in her moving papers that an overwhelming portion of the $55,000 allegedly received as proceeds of the sale of the house in Colombia, and placed into a safe deposit box by her, was used to pay for defendant's criminal defense and that of a person arrested with him, and that no portion of that money remains. She submits a net worth statement and 1994-2001 federal and state tax returns wherein she purports to have little property or income other than the apartment. The record is unclear as to whether plaintiff is still in possession of or has expended the proceeds of the $30,000 certificate of deposit.
Discussion
Plaintiff, by the instant motion, seeks partial summary judgment and an order declaring that the cooperative apartment shares in question are not marital property subject to equitable distribution or, in the alternative, that defendant's equitable share of said marital property is zero percent.
To grant summary judgment, it must clearly appear that there are no material issues of fact ( Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395, 404).
"[T]he courts have consistently held that the Legislature intended in defining marital property for the term to be construed broadly to give effect to the economic partnership concept of the marriage relationship . . . In contrast, separate property is an exception to marital property and should be construed narrowly" ( Viviano v. Allard, 197 AD2d 210, 212, citing Price v. Price, 69 NY2d 8 and Majauskas v. Majauskas, 61 NY2d 481; see also Spencer v. Spencer, 230 AD2d 645, 646-647; Saasto v. Saasto, 211 AD2d 708, 709; Pullman v. Pullman, 176 AD2d 113, 114).
There is, moreover, a presumption that property acquired during marriage is marital property, and a party who claims otherwise has the burden of so proving ( see Farag v. Farag, 4 AD3d 502, citing Barone v. Barone, 292 AD2d 481; Cerretani v. Cerretani, 221 AD2d 814, 815; Pullman, 176 AD2d at 114; Lischynsky v. Lischynsky, 120 AD2d 824, 826).
Plaintiff's counsel asserts — initially, in the moving papers — that the at-issue apartment should be considered plaintiff's separate property, (1) since it was allegedly acquired solely through plaintiff's efforts, through the use of her personal savings and with monetary gifts from her children, other family and friends, made solely to her and not to defendant, and (2) because defendant purportedly did not, financially or otherwise, contribute to the apartment's purchase, mortgage, maintenance or upkeep.
However, plaintiff's own sworn affidavit states, as to $16,000 of the $35,000 used as a down payment on the cooperative apartment purchase ($8,000 from plaintiff's personal savings and $8,000 allegedly gifted to plaintiff by defendant's sister), only that "some or all" of these monies "may" have been used to assist with the down payment. Such an equivocal statement as to the source of a large portion of the down payment monies is insufficient to carry plaintiff's burden ( see Saasto, 211 AD2d at 709 ["A court is not bound by a party's own account of his or her finances, and where a party fails to trace the sources of money claimed to be separate property, the court is justified in treating it as marital property"]).
Further, defendant's opposition papers include an affidavit from his sister denying that she ever made an $8,000 gift to plaintiff. Plaintiff, in reply, fails to materially dispute the veracity of said opposing affidavit and, in fact, acknowledges that, to the extent the apartment was not acquired by her through the use of monetary gifts, it does not meet the "technical definition" of separate property.
In any event, Domestic Relations Law (DRL) § 236 (1) (b), Part B, defines "marital property" 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".
Here, the property in question was admittedly acquired during the marriage and prior to the execution of a qualifying separation agreement or commencement of the instant divorce proceeding ( Schmitt v. Schmitt, 123 AD2d 617, 618; Brabaw v. Brabaw, 108 AD2d 1006). Nor has plaintiff demonstrated that the property falls within the statutory exception outlined in DRL § 236 (1) (d) (1), Part B, asserting, instead, that she used a portion of her personal funds earned during the marriage ( i.e., marital assets) to purchase the property.
Defining "separate property" as "property acquired before marriage or property acquired by bequest, devise, or descent, or gift from a party other than the spouse".
Because plaintiff has failed to overcome the presumption and to otherwise meet her burden on summary judgment, so much of plaintiff's motion as seeks an order declaring the subject apartment shares to be her separate property, and not marital property, is denied.
Plaintiff moves, in the alternative, for an order declaring defendant's equitable share of this marital property to be zero percent. She contends that defendant has, through his criminal activities, conviction and alleged resultant failure to make any financial contributions of any kind to plaintiff, their children or the household, forfeited any right he may have had to equitable distribution of the apartment.
Pursuant to DRL § 236 (5) (c), Part B — marital property "shall be distributed equitably between parties, considering the circumstances of the case and of the respective parties". Subsection (5) (d) goes on to list thirteen (13) factors relating to the parties' individual needs and circumstances that the court should consider in determining an equitable distribution of property. The relative weight to be accorded each factor in a particular case is left to the determination of the court ( Holterman v. Holterman, 3 NY3d 1 ["Trial courts that examine the statutory factors are granted substantial discretion in determining the extent to which the distribution of marital property . . . will be equitable"]).
Under the circumstances herein, and on the limited but, nevertheless, contradictory record, the court finds itself presently unable to conduct an adequate analysis of each of the enumerated factors or to render a determination as to the proper and equitable distribution of the marital property at issue.
Despite plaintiff's allegation of defendant's complete forfeiture of his equitable right to a share of the property, the facts of this case, and those affecting the court's consideration of the 13 enumerated factors, are neither clear nor uncontroverted and there remain legitimate questions of fact as to, inter alia, the source of the funds used for the apartment's purchase and upkeep and defendant's contribution to said purchase. The court, moreover, does not share plaintiff's opinion that the source of these monies is irrelevant.
On the record before the court, it appears that, even after they ceased living together, plaintiff and defendant continued to enjoy some sort of an economic and social partnership ( see Reichers v. Reichers, 178 Misc 2d 170, 172; Douglas v. Douglas, 132 Misc 2d 203, 204), and it cannot be determined without further evidence whether and to what extent defendant, directly or indirectly, contributed to the apartment's purchase and whether he may have forfeited his right to an equitable share of the apartment.
Notably, plaintiff herself alleges that the apartment, while still a rental property, was retained by defendant with the expectation that it would be converted into a cooperative and thereafter purchased by defendant and plaintiff as a marital asset. Plaintiff further admits that she regularly kept one or more safe deposit boxes and that, following defendant's incarceration and until her recent commencement of the instant divorce proceedings, she contributed to defendant's legal defense, regularly visited him in jail and sent him money on a monthly basis.
Plaintiff entered into a Subscription Agreement to purchase the apartment less than two years after defendant's incarceration. According to defendant's sworn affidavit in opposition, the intangible aspects of the marital relationship, including companionship and support, continued despite his incarceration; he fully expected the marital union to continue upon his release from incarceration; and he continued to financially contribute to the marital estate through monies left by him in plaintiff's care and for her use.
In support of his claim that he continued to provide financial support even following his incarceration, defendant alleges that, although plaintiff was never directly involved in his illegal drug trafficking activities, plaintiff assisted defendant by depositing large amounts of cash (some or most of which originated from defendant's illegal activities) into various safe deposit boxes kept by plaintiff. Some of those monies were, even prior to defendant's incarceration, used to pay household bills and other marital expenses.
Defendant further asserts that, as a result of his illegal drug and other activities, he "earned" approximately $1 million during the one year period preceding his arrest. He claims to have given plaintiff $150,000 in cash two to three months prior to his arrest, and $100,000 in cash just one week prior to his arrest; monies allegedly subsequently secreted by plaintiff into one or more safe deposit boxes. Defendant claims that, at the time of his arrest, plaintiff, in addition to certain bank accounts, had cash assets of at least $300,000 in one or more safe deposit boxes, and that, following his arrest, plaintiff used those assets to, inter alia, pay household expenses and to purchase the subject apartment.
Plaintiff, in reply, again fails to unequivocally deny that these cash assets (in particular, the sum of $300,000) were derived from defendant's illegal activities; given into her possession by defendant; secreted by her into one or more safe deposit boxes; and expended by her following defendant's incarceration. Instead, plaintiff merely replies that any such cash assets, if they existed, were fully expended prior to the apartment's purchase, for defendant's criminal defense, the family's household expenses, and to support the children.
On this record, there is some question as to whether the purchase of the apartment shares in question can be traced either to marital funds that were allegedly secreted by plaintiff into a safe deposit box, to the aforementioned $30,000 certificate of deposit, and/or to other marital property. It is unclear if plaintiff used some or all of one marital asset (the secreted funds and/or certificate of deposit) to acquire another contested marital asset, the apartment.
The court notes that these secreted assets, if they existed and perhaps because they derived, at least in part, from defendant's illegal drug activity, were not declared by defendant during his pre-sentence interview with the United States Department of Probation; were apparently not discovered by the U.S. Attorney's Office or any other federal agency; and are admitted to have existed for the first time in the instant divorce proceeding. There is also no evidence that these secreted assets, if they existed and whether or not actually used by plaintiff to pay for defendant's criminal defense, were declared by plaintiff as assets. Thus, plaintiff has not adequately demonstrated her claim that the interests of all parties would be best suited by an award granting her 100 percent of the equitable property, insofar as that claim is grounded upon the assertion that an award to plaintiff would result in more favorable tax consequences and would not result in the property's seizure.
There is, in fact, no admissible, non-conclusory evidence that the contested property consisting of the shares of a cooperative apartment is not still subject to seizure by the U.S. Attorney's Office, or by the Internal Revenue Service or some other federal agency, either due to the fine imposed upon defendant as a result of his criminal activities and conviction or because the funds used to purchase this property were derived from defendant's illegal "earnings," improperly secreted and unreported by plaintiff.
In sum, on this record, triable issues exist as to whether the economic, social and other aspects of the marital relationship continued even after defendant's incarceration and at the time the subject property was purchased; whether there was any or a complete forfeiture by defendant of his equitable right to any distributive award of the marital property in question; and, should defendant be entitled to a distributive award, as to the proper percentage of his equitable share.
Plaintiff's request for alternative relief is, accordingly, denied. The court has considered plaintiff's additional arguments, including her assertion that defendant's opposition is based merely upon speculation and conjecture, and rejected them as being without merit. Upon its thorough review, the court finds that defendant has sufficiently opposed the instant summary judgment motion with allegations purportedly based upon his personal knowledge and with other evidence in admissible form, which evidence raises one or more questions of fact requiring a trial of this matter.
Defendant's cross motion seeking an award of attorney's fees and costs incurred by defendant in opposing the instant motion is denied. In bringing her motion, neither plaintiff nor her counsel have engaged in such "frivolous conduct" as to warrant the imposition of the requested relief ( see Colbert v. Rank America, Inc., 295 AD2d 300; Gorenstein v. Debralaurie Realty Co., Inc., 280 AD2d 642).
Conclusion
Based upon the foregoing, plaintiff's motion for partial summary judgment is denied in its entirety.
Defendant's cross motion is also denied.
A copy of this decision is to be forwarded to the U.S. Attorney's Office for the Eastern District of Pennsylvania.
The foregoing constitutes the decision and order of this court.