Opinion
50***/2016
11-27-2019
N.B., Plaintiff, v. J.M., Defendant.
For Plaintiff Wife, Michael Coscia Esq., Abrams, Fensterman, Fensterman, Esiman, Formato, Ferrara, Wolf & Carone, LLP, 1 MetroTech Center, Suite 1701, Brooklyn, NY 11201 For Defendant Husband, Adelola Sheralynn Dow Esq., Law Offices of Sheralynn Dow, 1000 South Avenue LL1, Staten Island, NY 10314
For Plaintiff Wife, Michael Coscia Esq., Abrams, Fensterman, Fensterman, Esiman, Formato, Ferrara, Wolf & Carone, LLP, 1 MetroTech Center, Suite 1701, Brooklyn, NY 11201
For Defendant Husband, Adelola Sheralynn Dow Esq., Law Offices of Sheralynn Dow, 1000 South Avenue LL1, Staten Island, NY 10314
Catherine M. DiDomenico, J.
Procedural History
Plaintiff N.B. ("Wife") commenced this action for divorce against Defendant J.M. ("Husband") by Summons and Verified Complaint filed on September 7, 2016. Husband filed a Verified Answer including Counterclaims on March 15, 2017. A Preliminary Conference was held on April 24, 2017. The parties were married on August 19, 2000. There are no children of this marriage. This was Husband's second marriage and the first marriage for Wife. Each party has adult children from prior relationships.
Plaintiff Wife was represented at all times by Michael Coscia, Esquire of Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara Wolf & Carbone, LLP. Defendant Husband was represented at all times by Ms. Adelola Sheralynn Dow, Esquire. On December 8, 2016, the parties agreed that Plaintiff would be granted a divorce on the ground that the parties' marriage broke down irretrievably for a period of at least six months pursuant to Domestic Relations Law § 170(7).
The Separation Agreement
The parties in this action were married on August 19, 2000. In or around 2002 the parties began to argue and the conditions in the home deteriorated. Soon thereafter the parties decided to live separate and apart. After a brief period of separation, the parties began working on repairing their relationship. As a precondition to their attempted reconciliation, Wife hired an attorney, Thomas McNulty Esquire, to draft a formal Separation Agreement. This agreement was signed on October 18, 2003. Despite the fact that it was drafted by her attorney, at her direction, Wife claims that she never actually read the contract.
Husband credibly testified that as Wife wanted this agreement before she would agree to any reconciliation, and he was eager to repair their relationship, he signed the document without argument or negotiation. The parties do not dispute that this nuptial agreement was duly executed and signed before a notary and was never vacated, amended or modified in writing. The initials of each party appear at the bottom of each page of the agreement.
During trial, Wife accused Husband of falsifying or surreptitiously adding certain provisions to the Separation Agreement. Specifically, Wife alleges that after she signed and delivered the document to Husband, he inserted certain type-written clauses which appear in a different font. These questionable paragraphs appear on pages 5 and 6 of the agreement and address the party's waiver of rights to real estate and the effect of any subsequent reconciliation, respectively, as follows:
In addition, each party waives and renounces all claims or rights to any real estate purchased by the other party (Pg. 5).
* * * * *
This Agreement shall not be invalidated or otherwise affected by a reconciliation between the parties hereto, or a resumption of marital relations between them (Pg. 6).
Mr. McNulty, the attorney who drafted the Separation Agreement, was not called by either party as a trial witness. Wife admits that she has no actual proof that Husband surreptitiously inserted these provisions into the document as she alleges. However, she believes he "did it" because of other devious things he has done to her. For example, he forged her name to certain loan documents regarding their Florida Avenue property (discussed below) which she did not discover until after this action was commenced. She testified that Husband's actions over the years, including putting nearly all the properties solely in his name, were designed to dupe her out of her equitable distribution rights.
Less than three months after they executed the Separation Agreement, the parties began dating again. Husband began sleeping at Wife's apartment and sometime in August 2004 Wife moved into Husband's apartment. Sadly, the relationship once again deteriorated soon after the resumption of cohabitation. By Summons and Complaint filed on May 2005, Wife filed for a "conversion divorce" against Husband pursuant to Domestic Relations Law § 170(6). Mr. McNulty represented Wife in the divorce action. On Wife's behalf, he annexed the Separation Agreement (including the allegedly inserted provisions) to the Complaint and relied on it as a basis for the divorce. When asked at trial why she did not call attention to the allegedly falsified additions at that time, Wife testified that she still failed to read the document even as she was relying upon it as a ground for divorce.
Husband pleaded with Wife not to go forward with the 2005 divorce action. In November 2005, she agreed, and the parties reconciled for a second time. Wife and Husband went to the County Clerk's Office to "withdraw everything" as they were working on their marriage. They executed a Stipulation of Discontinuance to terminate the divorce proceeding. Wife testified that Husband assured her the Separation Agreement had been "withdrawn and cancelled" along with the divorce pleadings. Wife admits that she did not seek Mr. McNulty's counsel to determine whether the Separation Agreement had, in fact, been vacated. Rather, she trusted Husband's statement that it would be no longer in effect. Wife credibly testified that she was devastated to learn that Husband now relies on this agreement to limit her claims in this proceeding.
The Summary Judgment Motion
By Notice of Motion dated June 28, 2017 (seq. no. 001), Wife moved for an order setting aside the separation agreement on the ground that the parties' subsequent reconciliation deemed the nuptial contract null and void. Husband cross moved (seq. no. 002) for an order declaring the validity of the Separation Agreement. Husband argued that the agreement clearly indicated that neither reconciliation nor cohabitation would invalidate the agreement and that any modifications had to be in writing. He further argued that no party had cancelled, disavowed, amended or vacated the agreement, in writing or otherwise.
By Decision and Order dated December 29, 2017, this Court upheld the validity of the Separation Agreement. The contract has several terms which pertain to this divorce. For example, at page three of the agreement, the parties waived claims for "alimony/maintenance payments from the other at any time in the future" (p. 3). Moreover, each party further "waive[d] and release[d] and all claims or rights with respect to any pension or retirement plans of the other party" (p.3). These express terms of the contract preclude any award of maintenance or distribution of retirement benefits to either party.
The Separation Agreement also expressly waives any claims for equitable distribution, as follows:
The parties by execution of this Agreement have provided for the equitable distribution of all property belonging to the parties except pension plans, whether such property qualifies as separate property or as marital property within [ DRL § 236(B) ]....Each party waives and renounces all claims or rights to any equitable distribution of any separate or marital property owned by the other and any distributive award and all claims or rights for maintenance, counsel fees, suit money, or any similar claim except as expressly provided herein.
In addition, each party waives and renounces all claims or rights to any real property purchased by the other party. (Separation Agreement, p.5)
Although this Court upheld the validity of the Separation Agreement, Husband's application for summary judgment was denied without prejudice. In so ruling, the Court found that the motion record was insufficiently developed to identify the relevant assets, when they were purchased, or how they were titled at any relevant time period. In short, there was no way for this Court to identify what was allegedly owned by whom. To this point, while the Separation Agreement refers to a "Schedule of Assets," no such document was annexed to the agreement or made part of any record here.
Each party was authorized to make a subsequent summary judgment motion after the close of discovery. Neither party filed such a motion. Rather, each party elected to submit proof at trial as to what property was owned by the parties before the marriage, before the Separation Agreement was signed, and after its execution. At trial Wife also spent a considerable amount of time rehashing arguments regarding why she believed the agreement was invalid, however she failed to offer any facts or evidence sufficient for this Court to change its prior ruling regarding the validity of the agreement, which had become law of the case. See Pinapati v. Pagadala , 244 AD2d 676 (3rd Dept. 1997) ; See also E.M. v. T.M. , 666 N.Y.S.2d 187 (1st Dept. 1997) .
Accordingly, the purpose of the trial was to determine the assets owned by each party, and how they related to the terms of the Agreement. Moreover, as Husband did not initially argue that Wife's claim for counsel fees was barred by the agreement (an argument he now makes at trial) the issue of counsel fees was also addressed at trial.
Family Court Litigation
On February 28, 2017, Husband filed a Family Offense Petition in Family Court alleging that Wife cursed at him and told him to get out of the house after she discovered surveillance pictures of herself on his iPad. On March 15, 2017, Wife filed a Family Offense Petition against Husband alleging, inter alia, that he was stalking her and leaving his licensed firearm around the home to frighten her. She also alleged that, as a private investigator, he used his connections to have her followed to Jamaica on her vacation. This investigator (admittedly retained and paid by Husband) secured a seat on the same flight, a room at the same resort, and followed Wife everywhere throughout her trip. He took videos and photos of Wife and relayed the same to Husband. Husband admits he gained no "useful evidence" against Wife through this intrusive exercise.
Temporary Orders of Protection were issued by the presiding Family Court Referee against each party. After a joint trial that spanned fifteen days and thirty-two appearances, Husband's Family Offense Petition against Wife was dismissed on February 6, 2018. The Temporary Order of Protection that had been pending against Wife for over a year was vacated.
A verdict was rendered against Husband on Wife's Petition. A one-year Final Order of Protection was issued in favor of Wife against Husband. He was ordered to stay away from her, her home, and her place of employment. He was further ordered not to contact her nor communicate with her and not use third parties to contact her. Husband was ordered to surrender all firearms in his possession. Husband appealed the verdict against him as well as the dismissal of his own Petition. That appeal was resolved by an Order of the Appellate Division dated January 9, 2019 which affirmed the Family Court's ruling.
During the present divorce trial, Wife testified that she has been forced to incur substantial and unnecessary legal fees in Family Court based on Husband's litigation abuse. She alleges Husband attempted to deplete her of the limited resources she needed litigate this divorce case against him. Husband denies that he caused any unnecessary legal fees to Wife and argues that any counsel fee award for fees incurred in Family Court or this Court is barred by law and/or by the express terms of their Separation Agreement.
The Trial
The issue of the applicability of the parties' Separation Agreement on equitable distribution, and counsel fees were tried before this Court on August 16, 2018, August 17, 2018, October 2, 2018, October 18, 2018, November 9, 2018, December 7, 2018, January 30, 2019, and March 4, 2019. Plaintiff testified on her own behalf and called the following witnesses: (a) Defendant; (b) Henry Salmon (real estate appraiser) and (c) Richard Picciochi (handwriting expert). She also introduced voluminous documents into evidence (Pl. 1-50). Defendant testified on his own behalf and called the following witnesses: (a) Plaintiff and (b) Christine Trimarche (notary public) as witness. He also introduced voluminous documents into evidence (Def. A-HH). Written summations were received from all counsel.
Factual Findings
Plaintiff was born on June 21, 1970. Defendant was born on August 12, 1961. The parties dated for a time and married on August 19, 2000. At the time they met, Husband was engaged in a highly contentious divorce. The litigation lasted several years. At the close of that litigation, Husband received full ownership of the home he owned with his former Wife located at * * * Regis Drive, Staten Island. There is no dispute in this case that * * * Regis Drive was owned by Husband prior to his marriage to Plaintiff here. The same is true of a Brooklyn property that had been in Husband's family for decades located at * * * 12th Street.
When the parties married in August 2000, Husband was a sergeant in the New York City Police Department. He retired in July 2004 and began receiving monthly pension disbursements as well as an annual variable supplement payment. After he retired, Husband began working as a Private Investigator, a Licensed Real Estate Broker and a Basketball Referee. In or around May of 2011 Defendant formed JS Homes of SI, LLC. ("JS Homes"). The sole purpose of this corporation was to hold various real estate interests. Husband credibly testified that JS Homes conducts no business aside from serving as a holding company. Husband co-owns JS Homes with his adult children. According to his 2017 tax return, Husband earned the gross sum of $61,058 from his various sources of income. Prior tax returns offered into evidence at trial indicated similar, if not slightly higher, incomes.
No claim is made by Wife regarding these retirement benefits based on the parties' mutual waiver of claims to "pension and retirement benefits" contained in the Separation Agreement.
When the parties met, Wife was working full time as an Administrative Assistant with ARK Asset management. However, in 2010, she left that employment and began a dog boarding and training business known as "Back 2 Basics Dog Training, Inc." In 2017, Plaintiff stopped working under this corporate entity but continued this work under the individual name "Back to Basics Training." She maintains this business to this day. According to Wife's 2016 W2 she earned the sum of $21,806 from her business.
In 2002, the parties purchased a home located at * * St. James Place, in Staten Island, New York. It was the only property acquired during the marriage that was titled solely in Wife's name. All additional properties purchased during the marriage were titled in Husband's name except for the property located at * * Florida Ave, in Staten Island which was titled in both parties' names. Wife credibly testified that they put St. James Place in her name to shield this asset from any claims by his then wife in Husband's first divorce.
Wife credibly testified that Husband controlled all the parties' finances during the marriage. She knew Husband bought and sold properties as a licensed real estate broker but did not know the details of the transactions. Even though Husband insisted they maintain separate bank accounts, Wife credibly testified that she contributed what she could to the household expenses. She gave Husband approximately $1,300 a month to help pay the mortgage, real estate taxes and homeowners fees on their home. Wife claimed any excess money from her contribution was saved for future real estate purchases. Husband denied this assertion. He testified that there was never "excess money" as the amount contributed by Wife barely paid her half of the parties' monthly living expenses.
(a) The Properties.
As indicated above, the intended purpose of the trial was to identify the various parcels of real property owned by the parties, so that those properties could be considered in light of the parties' Separation Agreement, which this Court previously deemed valid. Accordingly, at trial various properties were identified by the parties as follows.
(1) * * * Regis Drive.
Husband acquired full title and interest in this property as a result of divorce litigation with his prior Wife before his marriage to Plaintiff Wife herein. Defendant credibly testified that this is a rental property which generates little to no income based on the repairs and other maintenance costs associated with it. On November 12, 2002, Defendant mortgaged this property and obtained the sum of $95,000 . The mortgage was satisfied on or about November 15, 2005. Husband remains the titled owner of this property which was valued by Plaintiff's expert, Equity Valuation Associates. According to the valuation report offered into evidence * * * Regis was worth approximately $350,000 as of October 18, 2003 and $470,000 as of September 7, 2016.
(2) * * * Port Richmond Avenue .
This property was purchased on February 17, 2005 and was titled in Husband's name. At the time of purchase, Husband paid $389,000 for the property of which $289,000 was obtained from a mortgage which has since been fully satisfied. The property was purchased after the parties' Separation Agreement. Husband remains the titled owner of this property. It was attributed a value of $525,000 as of August 11, 2018 by Plaintiff's expert, Equity Valuation Associates (Pl. Ex. 45).
(3) * * Florida Avenue.
In February of 2006, the parties purchased real property located at * * Florida Avenue, Staten Island, New York. During their marriage the parties utilized this property as their residence. The parties agree that this is an asset that is jointly owned and thus subject to distribution at trial. Subsequent to purchase, this home was refinanced twice, once in 2006 and again in 2010. The circumstances surrounding these refinances were at issue during trial. Wife claims Husband forged her signature on the 2006 refinancing documents. In support of this Claim Wife offered the expert testimony of a handwriting expert who indicated that the signature on the refinance contract was not Wife's. However, it is undisputed that Wife signed the 2010 refinance, which assumed the remaining balance of the 2006 debt. This property was valued by a neutral Court appointed appraiser (Wonica Realtors) and attributed a value of $825,000 as of July 11, 2018 (Pl. Ex. 18). It had an outstanding mortgage principal balance of $430,965.22 as of March 12, 2018 (Pl. Ex. 43). Both parties ask this Court to direct the sale of this property with Husband seeking right of first refusal.
(4) * * * 12th Street Brooklyn.
This property remained in Husband's family for decades. The title was transferred between his name and his mother's name many times over the years. Ultimately this property was sold on January 14, 2011 for $849,000. At the time of sale the property was titled in Husband's name. This property was part of an Internal Revenue Code 1031 Exchange conducted by an attorney retained by Husband. The proceeds from the * * * 12th Street Property were utilized to purchase real property located at * * Rockwell Place in Staten Island.
(5) * * Rockwell Place
As part of the 1031 Exchange, Defendant purchased * * Rockwell Avenue on February 16, 2011. It was titled in his name at all times. This property was sold on March 12, 2013 for $495,000 .
The Applicable Law
The equitable distribution of marital property is governed by Domestic Relations Law Section 236(b). This section 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." DRL § 236(B)(1)(c) . Accordingly, the relevant time period for a determination of equitable distribution commences at the date of marriage and ends at the entry of a separation agreement or the commencement of a matrimonial action. See Burke v. Burke , 175 AD3d 458 (2d Dept. 2019) ; Eschemuller v. Eschemuller , 167 AD3d 983 (2d Dept. 2018) ; Zelnik v. Zelnik , 169 AD2d 317 (1st Dept. 1991) .
Thus, in this case, the relevant time period for the acquisition of "marital property" is between August 19, 2000 (date of marriage) and October 18, 2003 (execution of Separation Agreement). No properties were purchased by the parties during this relevant time period. However, two properties were acquired after the execution of the Separation Agreement on October 18, 2003. * * * Port Richmond Avenue was purchased in February of 2005 and * * Florida Avenue was purchased in 2006. These properties are not governed by the equitable distribution provisions of DRL§ 236 because the parties ceased acquiring "marital property" in October of 2003. Put another way, as of October 18, 2003, the parties were no longer "married' for equitable distribution purposes. Rather, they were legally separated pursuant to the terms of their agreement. As the Domestic Relations Law does not apply to these properties, their disposition is governed by the real property law and title. See Broadhurst v. Broadhurst , 50 AD2d 569 (2d Dept. 1975) ; See also Hendel v. Hendel , 44 AD2d 532 (1st Dept. 1974) ; RPAPL § 901 ; Novak v. Novak , 135 Misc 2d 909 (Sup. Ct. Dutchess Cty. 1987).
The parties made much of the purchase and sale of a property located at 34 Maplewood Place, Staten Island. However, this property was never owned by either of the parties here. At all times, it was titled in the names of Husband's sons, J.M. and S.M. respectively. In any event, it was purchased in 2008 and sold in 2013, both after execution of the Separation Agreement.
Wife does not specifically address the legal effect of the Separation Agreement on the applicability of the Domestic Relations Law. Rather, she argues, for a second time, that the Separation Agreement should be deemed invalid. As indicated above, this Court has already upheld the validity of this agreement, and that Decision was not appealed (See D & O 12/29/17). There is no basis for this Court to reconsider its prior ruling which has become law of the case.
Wife further argues that the Separation Agreement should somehow be construed as barring only equitable distribution claims that existed as of October 18, 2003, the date of execution. Relying on the language of the maintenance provision which waives claims "now and in the future," Wife argues that this "now and in the future" language is absent from the equitable distribution provision. Wife concludes that this omission is evidence that the parties did not intend to waive the equitable distribution of future property obtained by either party.
This Court is not persuaded by Wife's argument. The Separation Agreement's terms are clear and unambiguous and thus this Court need not search for the intent of the parties. See RMP Capital Corp. v. Victory Jet, LLC , 139 AD3d 836 (2d Dept. 2016) . Moreover, Wife's argument ignores the basic principle stated above, that the execution of the parties' Separation Agreement ended the accumulation of marital assets as a matter of law. If the parties intended to share in the ownership of properties purchased after the execution of the agreement, they would have had to jointly title the property, or enter into a subsequent agreement. Accordingly, any claims of equitable distribution based upon the Domestic Relations Law asserted by Wife for property acquired after October 18, 2003 are barred. Roth v. Roth , 115 AD2d 975 (4th Dep't. 1985) .
Distribution of Property
a. Property Purchased Prior to Marriage.
At trial, it was established that Husband owned two parcels of real property prior to the date of marriage, * * * 12th Street in Brooklyn, and * * * Regis Drive in Staten Island. The 12th Street property was sold in 2011 and thus is beyond the purview of this Decision. * * * Regis Drive is still owned by Husband. * * * Regis was mortgaged in 2002 for $95,000 . The mortgage was fully satisfied in November 2005. As it is undisputed that Regis Drive was purchased before the marriage, it is Husband's separate property before even considering the effect of the Separation Agreement. See Sheehan v. Sheehan , 161 AD3d 912 (2d Dept. 2018) .
During trial Wife called a real estate appraiser, Mr. Henry Salmon, who testified that the Regis Drive property increased in value in the amount of $120,000 from the date of the Separation Agreement (Oct 18, 2003) to the date of commencement of this action (Sept 7, 2016). This date range suggests that Wife is asserting a separate property contribution claim to a portion of that increase in value. See Johnson v. Chapin , 49 AD3d 348 (1st Dept. 2008) . Generally, the increase in value of separate property remains separate unless the appreciation is due in part to the contributions or efforts of the other spouse. See Burgio v. Burgio , 278 AD2d 767 (3rd Dept. 2000) ; See also Ceravolo v. DeSantis , 125 AD3d 113 (3rd Dept. 2015) .
Here, any claims for contribution from the date of marriage to the date of the Separation Agreement were resolved by the terms of that agreement. The contract's clear terms indicate that it was intended to "provide for the equitable distribution of all property" (Pl. Ex. 3, Pg. 5). Accordingly, it necessarily addressed any claim that Wife could have made for direct or indirect contribution at that time. Moreover, any claim relying upon principles of equitable distribution subsequent to the entry of the Separation Agreement fails as the entry of that agreement ended the period in which the parties accumulated marital assets. Finally, the express terms of the Separation Agreement also contain a complete waiver of equitable distribution "whether such property qualifies as ‘separate property’ or as ‘marital property" (Pl. Ex. 3 pg. 5).
However, even if the Court were to consider Wife's claim to be viable under domestic relations law, common-law, or real property principles, her claim would still fail. At trial Wife failed to prove how her efforts, if any, contributed to the increased value of Husband's separate property. See Mahlab v. Mahlab , 143 AD2d 116 (2d Dept. 1988) ; See also Morales v. Inzerra , 98 AD3d 484 (2d Dept. 2012) . To the contrary, Wife credibly testified that Husband would not allow her to participate in any of his business dealings and deliberately concealed them from her. Accordingly, there was no proof of direct contribution. As for claims of indirect contribution, these were also not substantiated by Wife. These parties separated and reconciled so frequently during their short and tumultuous relationship that it is impossible for this Court to somehow isolate a distinct period of time in an effort to consider Wife's claim. Indeed, these parties could not even agree on when they reconciled, or where they lived when they cohabitated. Between their claimed lack of recollection and lack of knowledge, the testimony from both parties was less than helpful to say the least. After considering her testimony, this Court finds that Wife failed to satisfy her burden of establishing, with any specificity, the supportive steps she took as a spouse to enable Husband to increase the value of his property. See Fields v. Fields , 65 AD3d 297 (1st Dept. 2009) .
This Court reaches the same conclusion with respect to the 12th Street property. It was owned by Husband and/or his mother prior to the marriage and was sold in 2011, some eight years after the Separation Agreement was executed. Here again, Wife's claims for a share of the proceeds of this property on a contribution theory are barred both by the Domestic Relations Law and the Separation Agreement. Moreover, even if her claims were legally sustainable, she failed to prove at trial efforts she made that resulted in any increase in the value of this property prior to its sale in 2011.
b. Properties Acquired after the Separation Agreement.
The real property located at * * * Port Richmond Avenue and * * Florida Avenue were acquired after execution of the parties' Separation Agreement in October of 2003. Port Richmond Avenue is titled in Husband's name. The home located at * * Florida Avenue is titled in both parties' names.
Wife first claims that the * * * Port Richmond Avenue property is "presumptively marital" because it was purchased after the date of marriage. However, as set forth at length above, the property was purchased after the entry of the parties' Separation Agreement, which cut off the accumulation of marital property. See Roth , Supra. Accordingly, there is no presumption that Wife has an interest in the property. Moreover, while Wife spent a considerable amount of effort at trial attempting to trace the funds used to purchase and maintain this asset over the years, her testimony amounted to little more than speculation. See Jolis v. Jolis , 111 Misc 2d 965 (Sup. Ct. NY Cty. 1981), affd 98 AD2d 692 (1st Dept. 1983) . Wife assumed that the money she gave Husband, in the amount of $1,300 a month went to maintain and improve the Port Richmond Avenue property; however, she had no evidence to support this claim. More credible is Husband's account that he used personal funds to obtain the property, and that he and his mother utilized rent from tenants to maintain it. Accordingly, as Wife failed to establish either direct or indirect contributions to this property, financial or otherwise, this Court finds that * * * Port Richmond Avenue is Husband's property free and clear of all claims of Wife. See Alper v. Alper , 77 AD3d 694 (2d Dept. 2010) .
The parties concede that the Florida Avenue property, which is titled in both names, is a jointly owned asset. However, as the property was acquired after the entry of their Separation Agreement, this Court finds that the parties co-own the property as tenants in common rather than the marital designation of tenants by the entirety. See e.g. Chernoff v. Chernoff , 31 AD3d 900 (3rd Dept. 2006) ; Petrucci v. Petrucci , 123 Misc 2d 925 (Sup. Ct. Erie Cty. 1984) . While a separation agreement, standing alone, is generally insufficient to convert a tenancy by the entirety into a tenancy in common, in the unusual circumstances of the present matter, the parties jointly purchased the property at issue while they were legally separated, and thus after the cutoff date for the accumulation of marital assets. Thus, the property was purchased by the parties as separate individuals, or tenants in common. See Lauriello v. Gallotta , 59 AD3d 497 (2d Dept. 2009) ; See also In Re Estate of Blumenthal , 236 NY 448 (1923) .
* * Florida Avenue was acquired in February of 2006. This home was the subject of major renovations and construction including a full roof raise and was refinanced several times. For example, in July 2006, the property was refinanced for $417,000 of which $22,514 was taken out as "cash out equity". The parties also opened a home equity line of credit on April 3, 2007 which Wife acknowledges agreeing to, although she claims not to have received any of the proceeds. In August 2010, this property was once again refinanced for a total sum of $409,300 of which $10,722 was taken out as cash.
Plaintiff credibly testified she was unaware of the July 2006 refinance of this jointly owned property and only learned about it after she filed this divorce action. Although her name and her alleged signature appear on the refinance document, Wife credibly testified that her signature is a forgery. After a consideration of the trial record, it is clear to this Court that Wife never signed the 2006 loan documents. In this regard Wife's credible testimony was supported by the testimony of Richard Picciochi, a forensic handwriting expert called as a witness at trial. Mr. Piccochi credibly testified that it was not Wife's signature on the loan documents. He further credibly opined that, based on his analysis of Husband's signature samples, he believed with a reasonable degree of certainty that Husband signed Wife's signature on the loan documents. Husband did not call his own handwriting expert at trial to counter this testimony.
Wife also credibly testified that notwithstanding the "notary jurat" on the bottom of these documents, which states that she "personally came before" the notary, that she did not attend the closing. The notary at issue, Christine Trimarche, who happens to be the wife of Husband's friend, testified at trial. Prior to her testimony, and after her name was mentioned as a likely trial witness, Husband contacted her to inform her that she would be called before this Court to testify. The record is unclear as to whether Husband coached Ms. Trimarche in what to say, but her testimony at trial was not credible.
Ms. Trimarche claimed that she did not recall any specific details of the closing. She did not remember Wife at all. However, she was somehow certain Wife was there, as she indicated that she would not have notarized her signature otherwise. When requested, she failed to offer copies of any identification allegedly given her to confirm Wife's identity or presence at the closing. Wife argues that a notary would generally demand that a signatory produce a driver's license, passport or some other documentary proof of identification which would be copied and maintained in a file. No such documentation was produced. After listening to this witness' testimony and observing her demeanor, this Court finds her testimony not credible and finds that contrary to the notary jurat, Wife did not appear before this notary on the date sworn to. This Court's findings in this regard are disturbing to say the least.
Accordingly, after examining the evidence and listening to the relevant witnesses, this Court finds that Husband forged Wife's name on the 2006 loan documents and further that Wife never attended the closing related to that refinance, notwithstanding the notarization of her forged signature by Ms. Trimarche.
Having found that Husband secured this financing utilizing Wife's name without her permission, this Court would generally be inclined to assess the entire resulting indebtedness to Husband. However, as with most issues in this case, the appropriate remedy cannot be so simple. In 2010, this property was refinanced for a second time. This transaction, which was entered into knowingly and voluntarily by Wife, assumed the fraudulent mortgage and transmuted it into a valid mortgage admittedly executed by both parties. As a result, Wife ratified the prior fraudulent transaction. See De Tata v. Tress , 4 AD2d 748 (2d Dept. 1957) See also, Della Rocco v. City of Schenectady , 278 AD2d 628 (3rd Dept. 2000) ; Banque National de Paris v. 1567 Broadway Ownership Assocs. , 214 AD2d 359 (1st Dept. 1995) .
Clearly, the burden was on Wife to read the 2010 loan documents signed by her which indicated that they were assuming and replacing the fraudulent 2006 financing. As with the Separation Agreement, Wife's sole defense is that she simply did not read the 2010 documents before she signed them and therefore, she did not realize that this legitimate mortgage replaced and ratified the prior forgery. Sadly, the legal effect of her failure to read the loan documents was a ratification of a debt which otherwise would not have bound her.
As this property was purchased by the parties after the Separation Agreement was signed, it is a jointly owned asset which is divisible pursuant to the Real Property Law. See RPAPL § 901 ; See also Perretta v. Peretta , 143 AD3d 878 (2d Dept. 2016) . While this Court often applies the Real Property Law presumption that property held by tenants in common is to be divided equally, it is not compelled to divide the net equity of this asset equally. Rather the Court may consider the equities of this case and make a just division of the proceeds. See Ripp v. Ripp , 38 AD2d 65 (2d Dept. 1971) ; See also Cook v. Petito , 208 AD2d 886 (2d Dept. 1994) ; Equity Search, Inc. v. Kao , 37 AD3d 1105 (4th Dept. 2007).
Applying these principles to this case, and based upon the evidence at trial, this Court finds that the home located at * * Florida Ave has a value of approximately $825,000 (Pl. Ex. 18). The outstanding mortgage associated with the property was $430,965 as of March 12, 2018. Accordingly, as of that date the net equity in the home totaled approximately $394,035. After balancing the equities as set forth below, this Court finds that the equity in the Florida Avenue property should be split sixty percent (60%) to Wife and forty percent (40%) to Husband. The Court finds that this unequal division of equity is fair and reasonable after considering the actions of Husband as against Wife as found by this Court after trial.
This Court is deeply disturbed by Husband's obvious forgery of Wife's name on the 2006 refinance contract. When Husband signed Wife's name, he did so with the intent of defraud both parties involved, Wife and the lending institution. This fraud was carried out by Husband with the assistance of a complicit notary who happened to be married to his friend. While Wife admittedly ratified this fraudulent financing with a second legitimate loan in 2010, this Court finds that an award to Wife of 60% of the net equity of the Florida Ave property is an appropriate consequence for Husband's wrongful conduct. Wife also seeks to recover the amount of "cash out" proceeds from these loans. However, Wife's vague testimony as to what she believes Husband may have done with the money failed to contradict Husband's credible testimony that he used the funds to pay for considerable renovations to the property. As those renovations increased the properties' equity, Wife will recover her share of the investment when the property sells. The same is true for the withdrawals made by Wife from her 401(K) in 2004 and 2006. These funds, which were also invested in renovations to the Florida Avenue property, are equally accounted for in the net equity that will be derived from its sale.
Husband has sought the right of first refusal to buy-out Wife's share of the Florida Ave property and Wife has not objected to this request. Moreover, Wife has not requested the right to buy Husband out. Accordingly, Husband shall be granted the right to purchase Wife's share of the equity in the Florida Ave. home in accordance with the percentages indicated herein. See Rubackin v. Rubackin , 104 AD3d 872 (2d Dept. 2010) . However, as the appraisal of the home was conducted as of July of 2018 an updated appraisal is warranted. See Opperisano v. Opperisano , 35 AD3d 686 (2d Dept. 2006) .
Accordingly, the trial appraisal which was produced by Wonica Realtors shall be updated at a cost to be paid solely by Husband. Husband is hereby directed to retain Wonica to update their appraisal within 30 days of this Decision. A copy of the resulting updated report shall be sent to both parties. Husband will then have a period of 30 days from receipt to elect to utilize his buyout option by paying 60% of the equity in the property. In the event that Husband does not avail himself of his right to first refusal, then the property shall be listed for sale with a broker selected by Wife and to be sold on the open market at a listing price recommended by the broker. Wife shall then receive 60 % of the net equity of sale after the payment of all usual and customary fees, taxes and commissions. Husband shall receive 40% of the net equity after sale.
Equity is the value of the property minus the outstanding mortgage.
c. Unpaid Florida Avenue Mortgage Payments.
By this Court's Order dated December 29, 2017, Wife was ordered to pay one half of the monthly mortgage payments on Florida Avenue. It was established at trial that Wife failed to make four of these payments resulting in arrears of approximately $6,000 . Rather than letting the house fall into foreclosure, Husband voluntarily paid Wife's share but brought an enforcement motion to address his right to recover the funds spent. As there is no dispute that Wife failed to make these required payments, Husband shall be entitled to a payment of $6,000 out of Wife's share of the equity in the Florida Ave Property.
d. Business Interests.
Husband formed JS Homes Inc. in May 26, 2011 as a holding company to shelter various real estate interests. At the time of trial, the properties located at * * * Port Richmond Avenue and * * * Regis Drive were held by this company. At the time of the companies' formation Husband owned 60 percent of the ownership with his sons owning the other 40%. He then decreased his interest in 2016 when he transferred another 40% of his shares to his sons leaving him with a total ownership interest of 20%. Defendant credibly testified that JS Homes conducts no business aside from serving as the holding company for two Staten Island properties owned by him, and thus has no independent value other than its net asset value. See Blake v. Blake Agency, Inc. , 107 AD2d 139 (2d Dept. 1985) ; See also McDaniel v. 162 Columbia Hgts. Hous. Corp. , 25 Misc 3d 1024 (Kings Cty. Sup. Ct. 2009) .
Wife formed "Back to Basics Dog Training Inc." in 2010. To investigate the value of Wife's business, Husband had his friend, Al Rubin, search through Wife's personal papers including her business records which remained at the residence. Without Wife's knowledge or permission, Husband had Mr. Rubin copy Wife's files while Husband photographed his actions. Despite his surreptitious investigations, Husband failed to offer any reasonable analysis of value at trial regarding Wife's business.
Marital property includes all property acquired by either spouse during the marriage and before the execution of a separation agreement. See Spencer v. Spencer , 230 AD2d 645 (1st Dept. 1996) . The parties entered into their Separation Agreement in 2003. As Husband's holding company was formed in 2011 and Wife's dog training business in 2010, both are arguably beyond the purview of this Court's analysis as they are the respective parties' separate property. Moreover, in regard to Wife's business, Husband woefully failed to prove its value. This failure of proof would be fatal to any equitable distribution claim even if it were viable. See Seckler-Roode v. Roode , 36 AD3d 889 (2d Dept. 2007) ; See also Barnhart v. Barnhart , 148 AD3d 1264 (3rd Dept. 2017). Finally, to the extent that Wife attempted to establish that she contributed, directly or indirectly, to J.S. Homes, she failed to show any appreciation in the value of that business entity due to her efforts. See Xikis v. Xikis , 43 AD3d 1040 (2d Dept 2007) . This is especially true as Husband established that J.S. Homes had no means to increase in value other than by the passive appreciation of its real estate holdings. See Pauk v. Pauk , 232 AD2d 386 (2d Dept. 1996) .
e. Credit Card Debt .
Wife seeks equitable distribution of her credit card debt existing as of the commencement of this action. However, any distribution of marital credit card debt that existed in October of 2003 was resolved by the terms of the Separation Agreement, as that agreement resolved all claims for equitable distribution that existed at that time. To the extent that Wife seeks contribution to debts incurred in her name after October 18, 2003, those claims are barred by operation of the Domestic Relations Law as the parties stopped accumulating marital assets (and debts) upon the entry of the Separation Agreement. Accordingly, this Court finds that each party shall be responsible for debts in their respective names.
Counsel fees
Wife seeks an award of counsel fees in the amount of $109,944 pursuant to Domestic Relations Law Section 237(a). Wife argues that she is the less monied spouse in this action and thus that she is presumptively entitled to an award of counsel fees. In support of her application Wife's counsel has submitted an Affirmation of Services Rendered together with voluminous billing documentation. Husband has submitted an Affirmation in opposition to Wife's Affirmation of Services Rendered. Husband argues that Wife's application inappropriately includes fees related to a Family Court proceeding, and further argues that the income disparity claimed by Wife is illusory. Husband argues that each party should be responsible for their own attorney fees in this matter.
An award of reasonable counsel fees is a matter within the sound discretion of the trial court. The issue of counsel fees is controlled by the equities and circumstances of each particular case. See Nicodemus v. Nicodemus , 98 AD3d 605 (2d Dept. 2012) ; see also DRL § 237(a). While DRL § 237 permits consideration of many factors, paramount amongst these factors is financial need. See O'Halloran v. O'Halloran , 58 AD3d 704 (2d dept. 2009) ; See also, Silverman v. Silverman , 304 AD2d 41 (1st Dept. 2003). "An award of an attorney's fee will generally be warranted where there is a significant disparity in the financial circumstances of the parties". Cohen v. Cohen , 73 AD3d 832 (2d Dept. 2010) . The purpose of DRL § 237 is to "redress the economic disparity between the monied spouse and the non-monied spouse. See O'Shea v. O'Shea , 93 NY2d 187 (1999). Other factors to be considered include the relative merits of the parties' positions, and if either party engaged in conduct that resulted in a delay of the proceedings or unnecessary litigation. See Vitale v. Vitale , 112 AD3d 614 (2d Dept. 2013).
Before addressing the substance of Wife's claim, Husband's Affirmation in Opposition makes a passing reference that applications for counsel fees were mutually waived in the parties' Separation Agreement. However, despite any alleged waiver, the issue of counsel fees has been extensively litigated by both parties throughout this proceeding, including in the very application which upheld the validity of the agreement. By Decision and Order dated December 19, 2017 Wife was awarded the sum of $10,000 in interim counsel fees, an amount that was paid by Husband without objection. While counsel fees are briefly mentioned in a "catch all" paragraph in the parties' Separation Agreement there is no indication that the parties intended for this waiver to address all applications for counsel fees that may be raised in a subsequent proceeding to divide their assets. Rather, it appears that they intended for the provision to waive an allocation of fees that existed at that time. In any event, this Court finds that Wife is entitled to a ruling on the merits of her application as there were significant issues that required extensive litigation, including the distribution of assets left out of the Separation Agreement and Husband's forging of loan documents. See Anonymous v. Anonymous , 123 AD3d 581 (1st Dept. 2014) ; See also Kessler v. Kessler , 33 AD3d 42 (2d Dept. 2006) ; Van Kipnis v. Van Kipnis , 11 NY3d 573 (2008) . In so ruling, the Court finds that the brief language related to counsel fees in the agreement is insufficient to amount to an "express waiver" of the right to seek future fees under DRL § 237. See Momberger v. Momberger , 103 AD3d 971 3rd Dept. 2013 .
Turning to the merits of Wife's application. The relative financial circumstances of the parties have been well established through the testimony and documentary evidence offered at trial. As indicated herein Wife's last reported income in evidence is from 2016 when she earned the sum of $21,806 from her self-employment. Husband, in contrast, earns the sum of $61,058 from his various sources of income. In addition, Husband has significant "separate property" real estate holdings as indicated herein. Wife has no assets of note other than the amount of equity she will receive from the sale of the Florida Avenue property. Accordingly, For the reasons set forth in this Decision as a whole, and after considering the totality of the circumstances, this Court finds that Husband is in the superior financial position to contribute to Wife's counsel fees. See Johnson v. Chapin , 49 AD3d 348 (1st Dept. 2008) ; See also, Sterling v. Sterling , 303 AD2d 290 (1st Dept. 2003). There is a rebuttable presumption that an award of counsel fees should be made to the less monied spouse. See Piccininni v. Piccininni , 107 N.Y.S.3d 873 (2d Dept. 2019) .
In addition to a financial analysis, the Court is further directed to consider positions taken by either party that result in excessive, or unnecessary litigation. See D'Angio v. D'Angio , 171 AD3d 1130 (2d Dept. 2019) ; See also Carlucci v. Carlucci , 174 AD3d 495 (2d Dept. 2019) . Here, Husband chose to contest the fact that he forged Wife's name on loan documents despite clear evidence that he did so. This required Wife to retain a handwriting expert at considerable expense and further necessitated a considerable amount of unnecessary litigation, including the testimony of the notary who assisted in the fraud. However, Wife also spent a considerable amount of trial time attempting to re-contest the validity of the parties' Separation Agreement, despite a prior clear ruling of this Court upholding its validity. In this regard, both parties unnecessarily extended a trial that should have been a straightforward division of assets. See Lugo v. Torres , 174 AD3d 594 (2d Dept. 2019) .
Any application for counsel fees must be supported by itemized billing documentation that shows not only the time spent on each service, but also that the applying party has complied with the matrimonial billing rules set forth in 22 NYCRR 1400.2. See Greco v. Greco , 161 AD3d 950 (2d Dept. 2018) ; See also Fermon v. Fermon , 135 AD3d 1045 (3rd Dept. 2016) . Here, Wife has provided voluminous documentation that establishes that she has been billed a total of $121,965 with a current balance due of $103,944 . However, as correctly argued by Husband, Wife's attorney has failed to separate out fees incurred by his firm in relation to their Family Court representation of Wife. See Macaluso v. Macaluso , 145 AD3d 1295 (3rd Dept. 2016) . This representation, which occurred outside the jurisdiction of this Court, is not properly raised before it. "In a matrimonial action, the court is not authorized to award counsel fees to either party for legal services rendered in a non-matrimonial action or proceeding, even where the two actions are related." Bradley v. Bradley , 95 AD3d 780 (1st Dept. 2012) ; See also Anonymous v. Anonymous , 258 AD2d 547 (2d Dept. 1998) .
Accordingly, this Court is tasked with the difficult job of deciphering Wife's billing documentation to determine what amounts are attributable to this divorce proceeding verses those attributable to the Family Court proceeding, or the subsequent appeal of the Family Court's Decision. A review of the documentation provided reveals that at least $16,000 can clearly be attributed to the Family Court litigation. However, there are hundreds of other itemized entries where it is impossible to determine if file review, attorney conferences, emails, phone calls or legal research was related to this action, the Family Court action, or both. Husband argues that the Family Court litigation amounts to approximately $30,000 of Wife's total bill. After considering Wife's application, and Husband's opposition thereto, the sum of $30,000 seems to be a reasonable approximation of fees related to Family Court litigation. Accordingly, after the sum of $30,000 is subtracted from the $109,944 sought by Wife, the remaining sum of $79,944 is subject to this Court's jurisdiction.
After consideration of the totality of the circumstances, with significant weight being afforded to the excess litigation caused by Husband's decision to forge Wife's name on loan documents, together with the financial disparity between the parties, it is hereby Ordered that Husband shall pay the sum of $37,500 representing a fifty percent (50%) contribution to the $79,944 in counsel fees properly subject to the jurisdiction of this Court. See Chaudry v. Chaudry , 95 AD3d 1058 (2d Dept. 2012) ; See also Raynor v. Raynor , 68 AD3d 835 (2d Dept. 2009) . This award shall be payable directly to Wife's Counsel in three equal payments of $12,491 . The first such payment shall be due on or before January 17, 2020. The second payment shall be due on or before March 13, 2020 and the last payment shall be due on or before May 8, 2020. In the event that a single installment payment is missed, the entire amount will become due and owing, and Wife's attorney shall be authorized to file a Money Judgment on notice to Husband for the entire amount without the necessity of additional motion practice.
Conclusion
As per the consent order of this Court dated April 24, 2017, the parties agreed that Wife would be granted a divorce on the ground that the parties' marriage broke down irretrievably for a period of six months pursuant to Domestic Relations Law section 170(7). This agreement on the issue of grounds was supported by the testimony of both parties at trial which substantiated that the parties' marriage was broken down irretrievably. In accordance with the testimony at trial, and upon the agreement of the parties, Wife is hereby granted a Judgment of Divorce pursuant to DRL § 170(7).
As there are no children of this union, there are no issues of custody, visitation or child support to be adjudicated by this Court. The issue of spousal maintenance is resolved as per the terms of the parties' Separation Agreement wherein both parties agreed to waive the same. Regarding the distribution of assets, Husband shall be entitled to keep all properties titled in his name, as set forth at length herein. The only jointly titled property, * * Florida Avenue in Staten Island, New York, shall be distributed 60% to Plaintiff Wife and 40% to Defendant Husband. Husband shall have the right of first refusal to buy out Wife's share of the property as set forth herein. Wife's application for an award of counsel fees is granted in the amount of $37,500 payable in installments as indicated herein.
Plaintiff Wife is hereby directed to file a Judgment of Divorce in accordance with the rulings of this Court, together with Findings of Fact and Conclusions of Law. This documentation is to be filed within 30 days of the issuance of this Decision.
This constitutes the Decision of the Court after trial, in the event that an application was made during or before trial, and not specifically addressed herein, that application is hereby denied.