Opinion
6435/2005.
10-30-2006
JOANN CANNISI, Plaintiff, v. MAUREEN WALSH, ASTORIA FEDERAL SAVINGS, and J.P. MORGAN CHASE MANHATTAN BANK, Defendants.
The Defendant, MAUREEN WALSH, (hereinafter "Defendant"), moved on March 14th, 2006, to compel Plaintiff, JOANN CANNISI, (hereinafter "Plaintiff"), to produce written responses and documents, in response to Defendant's Second Notice of Discovery and Inspection dated March 14th, 2006, and to further compel Plaintiff's appearance at a deposition.
The Plaintiff, JOANN CANNISI, cross-moves pursuant to CPLR §3103 issuing a protective order quashing document request "17" of Defendant's Second Notice of Discovery and Inspection dated March 14th, 2006, which demands production of records pertaining to Plaintiff's retirement assets; for the imposition of sanctions against the Defendant, MAUREEN WALSH, and her attorney, pursuant to 22 NYCRR §130-1; and for such other relief as the court deems just and proper.
Defendant's motion and that part of Plaintiff's cross-motion dealing with Plaintiff's appearance for a deposition, and production of documents other than Plaintiff's retirement assets was decided in a previous order of the court. Plaintiff's application for sanctions is dealt with in a separate decision.
Remaining before the court is Plaintiff's request for a protective order quashing Defendant's request for information regarding Plaintiff's retirement accounts.
Upon review and consideration of the Defendant's Notice of Motion, dated March 14th, 2006; Affirmation of Defendant's Attorney, Colleen M. Meenan, Esq., dated April 6th, 2006, and all exhibits annexed thereto; Plaintiff's Notice of Cross Motion dated May 4th, 2006, and all exhibits annexed thereto; Affirmation in Opposition of, Colleen M. Meenan, Esq., dated May 12th, 2006; Affirmation of Joseph P. DeSimone, Esq., dated May 15th, 2006; all exhibits annexed thereto; all the proceedings had herein and argument of counsel, and after due deliberation, the Defendant's motion to compel discovery is granted and the Plaintiff's cross-motion is denied for the reasons set forth below.
FACTS
The underlying action seeks partition of a property, located at 244 Bergen Street, Brooklyn, New York, (hereinafter "the property"), that was conveyed to the Plaintiff and Defendant as tenants in common on or about October 9th, 1996. The property was sold on or about September 22, 2005, with net sale proceeds of $1,171,182.00, (hereinafter "the proceeds"). The proceeds were placed in escrow with Plaintiff's former attorneys, Davidoff, Malito & Hutcher, LLP, pursuant to an agreement dated July 28th, 2005. On September 30, 2005 the Court ordered that $250,000.00 of the proceeds be distributed to each party.
The parties were formerly domestic partners. Their relationship spanned a period of some 18 or 19 years, during which time they conceived two children who are presently minors. The parties acquired the subject property during their relationship.
In her amended complaint dated April 4th, 2006, Plaintiff alleges she is entitled to the full proceeds arising from the sale of the property, minus the distribution of $500,000 directed by the Court.
Plaintiff asserts she paid for all closing and transfer costs, and all attorney fees. She states that she alone funded the purchase of the property, made all mortgage payments and that she paid for all repairs and renovations to the property. Defendant denies these assertions.
Defendant states that she and the Plaintiff agreed to "conceive and parent two children with the understanding and promise to each other that each would contribute emotional, financial and physical support" (for the children). Defendant maintains the parties agreed that Plaintiff would pay certain expenses related to the subject property in "consideration of the Defendant's care, custody and support of the parties' two minor children."
Defendant maintains she is entitled to more than half of the proceeds of the sale based on this understanding with the Plaintiff.
ARGUMENTS
Plaintiff asserts Defendant's document request number "17" in her Second Notice for Discovery and Inspection is overbroad and should be quashed. Document request "17" seeks:
a copy of all statements for each financial account or security account or banking account in which the Plaintiff had an ownership interest from 1992 until the present including all money market accounts, mutual fund accounts, pension accounts, IRA accounts, SEP accounts, 401k accounts and any and all tax deferred accounts."
Plaintiff argues that this action is a simple partition action, and that consideration should be made only of financial contributions, transactions and improvements, if any, related to the subject property. Plaintiff claims that Defendant is not entitled to any of the proceeds as she did not contribute to the purchase or maintenance of the subject property.
Defendant asserts the retirement assets are relevant to these proceedings as they are part of the assets of their relationship. Defendant argues the "only way a fact finder may ultimately determine the partition of the property and the equitable distribution of sales proceeds is to examine and understand the assets of the parties during their nineteen (19) year relationship". Defendant argues that the retirement account information sought will reveal information relevant to understanding the "financial interdependence of the parties", and she states if this were "a traditional divorce", Plaintiff's retirement accounts would be subject to disclosure. Defendant asserts Plaintiff's "entire financial history" during and after the relationship is relevant to deciding how the proceeds from the property should be divided.
Plaintiff has not denied the nature of the relationship, nor the agreement, but maintains that the relationship is not relevant to the partition. Plaintiff argues that because the State of New York does not recognize same sex marriage, the Court must consider the partition of a property of a same sex couple without regard to their domestic relationship.
ANALYSIS
The issue before this Court is whether the scope of discovery should be limited to information related to the property which is the subject of this partition action, or include other assets held by the parties during their relationship.
It is clear that had the parties been able to marry and had married Plaintiff's retirement accounts would be discoverable because the partition of the property would not have been decided apart from the rest of the marital assets.
It is also clear that had the parties entered into an express separation agreement that dealt with the assets of their relationship, such agreement would be enforceable even though it was a same-sex domestic partnership. Silver v. Starrett, 176 Misc 2d 511, 674 NYS2d 915 (Sup. Ct., NY 1998).
In the present case, Defendant alleges that the parties agreed to a division of responsibilities in their relationship, namely that Plaintiff would assume responsibility for the property, in consideration for Defendant's assuming custodial responsibility for the two minor children. Defendant asserts that she and Plaintiff agreed to "conceive and parent two children with the understanding and promise to each other that each would equitably contribute emotional, financial and physical support" for the children and that the parties agreed Plaintiff would pay certain expenses related to the subject property in "consideration of the Defendant's care, custody and support of the parties' two minor children".
While Defendant's allegations do not constitute an express agreement on how to distribute assets acquired by the parties during their relationship, they do delineate an agreement of distinct roles to be held by each of the parties for the benefit of the family unit.
The Supreme Court of California held in Marvin v. Marvin, 18 Cal. 3d 660 (1976), that the distribution of property acquired in a non martial relationship is "subject solely to judicial decision, the courts should enforce express contracts between the parties and where no agreement is found, it will examine the conduct of the parties to determine whether that conduct demonstrates an implied contract, agreement of partnership or joint venture, or some other tacit understanding between the parties, and that courts may also employ the doctrine of quantum meruit, or equitable remedies such as constructive or resulting trusts, when warranted by the facts of the case ", supra at 683.
However, unlike the California courts, New York courts have refused to imply an agreement based non-marital relationships where no express agreement exists. Morone v. Morone, 50 NY2d 481, 429 NYS2d 592 (1980).
While New York courts will not imply an agreement between unmarried domestic partners based on the nature of their relationship, they have imposed constructive trusts on assets of a relationship of unmarried partners in certain situations.
The four elements needed to impose a constructive trust are: the existence of a confidential or fiduciary relationship, a promise, a transfer in reliance thereon, and an unjust enrichment.
The Appellate Division Second Department, has held that an unmarried domestic partner may assert a cause of action for a constructive trust over property acquired during the relationship, to prevent unjust enrichment. Artache v. Goldin, 133 AD2d 596, 519 NYS2d 702 (2nd Dept 1987). That case involved a plaintiff who had cohabited with the defendant for 14 years and with whom she had four children, and who claimed a right to a share of defendant's property based on an agreement during the relationship. The court held that plaintiff had the burden of proving that the claimed agreement was an express agreement, citing Morone v. Morone, supra . However, the court upheld a separate cause of action in which plaintiff asserted a constructive trust over certain of defendants assets, including the family residence.
In Lester v. Zimmer, 147 AD2d 340, 542 NYS2d 855, (3rd Dept. 1989), the Third Department held that third element of a constructive trust, a transfer in reliance of a promise, can be shown by contributions of funds, time, and effort, by a domestic partner in reliance on a promise to share the results of their joint efforts.
Here, Defendant has asserted that she made contributions of time and effort on behalf of the family unit in reliance on Plaintiff's promise to contribute to the support of the family unit. She also asserts that Plaintiff would be unjustly enriched if those contributions are ignored and the proceeds of the partition are divided based only on the financial contributions made toward the subject property.
Assuming, Defendant's allegations to be true, she has articulated a colorable claim for a constructive trust on the proceeds of the sale of the subject property. The contributions of the parties to the relationship, both financial and otherwise, including Plaintiff's retirement funds are relevant to Defendant's claim.
This Court is aware of the recent decision in Hernandez v. Robles, where the Court of Appeals held that the New York Constitution did not compel the recognition of same sex marriages. Hernandez v. Robles, 7 NY.3d 338 (2006). However, in so ruling, the Court specifically limited the scope of its decision to how the Legislature could find a rational basis for limiting marriage to opposite sex couples. The Court refused to address the merits, propriety or consequences of limiting marriage to opposite sex couples, stating, "[I]t is not for us to say whether same sex marriage is right or wrong. We have presented some (though not all) of the arguments against same-sex marriages because our duty to defer to the Legislature requires us to do so." 7 NY.3d 338, 366.
Although the Court of Appeals decision has significant implications for same sex couples, it is not determinative of the issue here. The Court of Appeals held that the State Constitution does not compel recognition of same sex relationships. However, the holding does not negate the existence of same sex relationships, nor the reality that some same sex relationships dissolve, and the courts are called upon the resolve disputes regarding the distribution of assets of such relationships.
The reality for the litigants at bar and other same sex families is that there is no uniform framework for equitably dissolving their relationships and for safeguarding their interests and those of their minor children.
The decision Hernandez v. Robles, does not require the court to treat a relationship between unmarried same sex partnerships differently from unmarried heterosexual partners, when it is presented with a dispute over the distribution of the assets of the relationship.
In the end, Partition is an equitable remedy, and the Supreme Court has the authority to adjust the rights of the parties so that each receives his or her proper share of the property and its benefits." Hunt v. Hunt, 13 AD3d 1041, 788 NYS2d 219 (3rd Dept. 2004). The Court is empowered to consider what facts are relevant to determining how the rights of the parties must be adjusted in determining what the proper shares between the parties should be, and it may compel the parties to do equity between themselves when adjusting the distribution of the proceeds of the sale. McKinney's RPAPL §901 et seq.; Freigang v. Freigang, 256 AD2d 539, 682 NYS2d 466 (2nd Dept. 1998).
Although it has been held that in "partitioning [the] property, the courts should consider the separate contributions to the acquisition and improvement of the property, this must be considered within the context of all relevant facts related to asset distribution and the acquisition and improvement of all common interests of the parties. Novak v. Novak, 135 Misc 2d 909, 516 NYS2d 878 (NY Sup. 1987).
The Legislature has failed to create a mechanism to ensure the welfare of dependent children of separating same sex couples. Although the Legislature has yet to act, it is antithetical to public policy and inconsistent with existing legislation to believe the Legislature intends that the interests of the minor children of a same sex relationship should not be considered in dividing the assets of the couple.
Notwithstanding the absence of a clear directive from the Legislature, the Court must fashion a remedy to deal with the dispute before it. In determining, what would be equitable in dividing the proceeds of the sale, the respective roles the parties assumed in the relationship, as well as any understandings by the parties regarding support of the children of the relationship must be considered.
It is appropriate and necessary in determining how to divide the proceeds of the sale equitably, to take into consideration the intentions of the parties in deciding to raise a family, in addition to the contributions made to this particular property.
The question at present, however, is not how the proceeds shall be divided; rather it is to decide whether information regarding Plaintiff's retirement account is relevant to determining how the proceeds should be divided. Broad discovery will provide the parties an opportunity to fully develop their arguments, ensuring thorough consideration of all of the facts relevant to equitably distributing the proceeds. This is especially indicated where, the interests of two minor children are impacted and there is no undue prejudice to either party.
There is no undue prejudice to Plaintiff in producing her retirement accounts as the parties lived as a family for years and their financial lives were intertwined on some level. Production of these records is necessary to allow the Defendant an opportunity to make her arguments as to how the proceeds from the sale property should be equitably distributed. She is entitled to their disclosure.
WHEREFORE, the Court grants Defendant's motion to compel production of the documents in request "17" of Defendant's Second Notice of Discovery and Inspection dated March 14th, 2006 and denies Plaintiff's motion for a protective order for the reasons aforesaid. This shall constitute the decision and order of this Court.