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Jones v Jones, 2024 NY Slip Op 02805 [227 AD3d 967]

May 22, 2024

Appellate Division, Second Department

[*1]

Alfred E. Jones, Jr., Appellant,

v

Maureen E. Jones, Respondent.

Alfred E. Jones, Jr., Farmingville, NY, appellant pro se.

Schwartz & Rubin Law, PLLC, Bellmore, NY (Scott R. Schwartz and Susan A. Rubin of counsel), for respondent.

In an action for a divorce and ancillary relief, the plaintiff appeals from a judgment of divorce of the Supreme Court, Suffolk County (David T. Reilly, J.), entered January 15, 2020. The judgment of divorce, insofar as appealed from, upon a decision of the same court dated November 16, 2018, made after a nonjury trial, (1) failed to award the plaintiff a separate property credit with respect to the purchase of the martial residence, (2) failed to equitably distribute the value of the marital residence, (3) directed the sale of the marital residence without providing the plaintiff with an option to purchase the defendant’s interest in the marital residence, (4) awarded the defendant a credit for the funds used to purchase a Genworth Financial Annuity in the plaintiff’s name prior to the marriage, and (5) failed to award the plaintiff attorneys’ fees.

Ordered that the judgment of divorce is modified, on the law and in the exercise of discretion, (1) by adding thereto a provision awarding the plaintiff a $50,000 separate property credit with respect to the purchase of the martial residence, (2) by adding thereto a provision evenly distributing the appraised value of the marital residence as of the time of trial, after deducting the $50,000 separate property credit awarded to the plaintiff with respect to the purchase of the marital residence, (3) by deleting the provision thereof directing the sale of the marital residence, and substituting therefor a provision directing that (a) the plaintiff shall have the option to purchase the defendant’s 50% interest in the marital residence, which is to be valued as of the time of trial as determined by the plaintiff’s expert appraiser after his separate property credit is deducted from that amount, said option to be exercised within four months of the service upon the plaintiff of a copy of this decision and order with notice of entry, and that (b) if the option is not exercised during that period in accordance with the terms of this decision and order, the marital residence is to be sold in accordance with the terms set forth in the judgment of divorce, and (4) by deleting the provision thereof awarding the defendant a credit for the funds used to purchase a Genworth Financial Annuity in the plaintiff’s name prior to the marriage; as so modified, the judgment of divorce is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Suffolk County, for further proceedings in accordance herewith and the entry of an appropriate amended judgment of divorce thereafter.

The parties were married on August 7, 1987. Prior to the marriage, the plaintiff acquired real property that became the parties’ marital residence. On June 25, 1987, less than two [*2] months before the parties were married, the plaintiff encumbered that property with a mortgage in the amount of $90,000. On April 23, 2007, after the mortgage on the marital residence was satisfied, the plaintiff added the defendant’s name to the deed to the marital residence. The plaintiff commenced this action for a divorce and ancillary relief in June 2015. A nonjury trial was held on the issue of equitable distribution.

The plaintiff, by placing the marital residence in both parties’ names, changed the character of the previously separate property to marital property ( see Spencer-Forrest v Forrest , 159 AD3d 762 [2018]; Diaco v Diaco , 278 AD2d 358, 359 [2000]; Schmidlapp v Schmidlapp , 220 AD2d 571 [1995]). However, where a party contributes his or her separate property towards the purchase of a marital asset, such as a marital residence, the party should be awarded a credit for the amount so contributed prior to the equitable division of the asset ( see Westreich v Westreich , 169 AD3d 972 , 977 [2019]; Coffey v Coffey , 119 AD2d 620 [1986]). Here, the Supreme Court improvidently exercised its discretion in failing to award the plaintiff a separate property credit with respect to the purchase of the marital residence. Contrary to the court’s finding, there was insufficient evidence in the record to demonstrate that the plaintiff waived an award of a separate property credit with respect to the purchase of the marital residence by adding the defendant’s name to the deed to the marital residence.

The plaintiff contends that he is entitled to a separate property credit for the entire value of the marital residence as of the date he added the defendant’s name to the deed to the marital residence. This contention lacks merit. “Under the equitable distribution statute, separate property is defined to include an increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse” ( Johnson v Chapin , 12 NY3d 461 , 466 [2009]; see Domestic Relations Law § 236 [B] [1] [d] [3]). “Thus, any appreciation in the value of separate property due to the contributions or efforts of the nontitled spouse will be considered marital property. This includes any direct contributions to the appreciation, such as when the nontitled spouse makes financial contributions towards the property, as well as when the nontitled spouse makes direct nonfinancial contributions, such as by personally maintaining, making improvements to, or renovating a marital residence” ( Johnson v Chapin , 12 NY3d at 466 [citation omitted]; see Embury v Embury , 49 AD3d 802 , 804 [2008]). In addition, under certain circumstances, appreciation, to the extent it was produced by the efforts of the titled spouse, should be considered a product of the marital partnership and, hence, marital property ( see Zaretsky v Zaretsky , 66 AD3d 885 , 888 [2009]).

In this action, given the defendant’s contribution to the marital residence, financial and otherwise, during the period between the parties’ marriage in 1987 and 2007, when title to the martial residence was transferred to both parties, the appreciation of the value of the marital residence during that period constituted marital property ( see Spencer-Forrest v Forrest , 159 AD3d at 765; Kilkenny v Kilkenny , 54 AD3d 816 , 818-819 [2008]; Michelini v Michelini , 47 AD3d 902 , 903 [2008]; Lagnena v Lagnena , 215 AD2d 445, 446 [1995]). Accordingly, the Supreme Court should have utilized the appraised value of the marital residence as of the time of the marriage, which was $140,000, and subtracted the amount of the mortgage on the marital residence as of the time of the marriage, which the parties do not dispute was $90,000, to arrive at the amount of the plaintiff’s separate property credit with respect to the purchase of the marital residence, which is $50,000.

The Supreme Court erred in not equitably distributing the marital residence. Where, as here, both spouses have made significant contributions to a marriage of long duration, the division of marital property should be as equal as possible ( see Silvers v Silvers , 197 AD3d 1195 [2021]). Under the circumstances of this case, given the 28-year duration of the marriage, the age and health of the parties, and the court’s determination that the marriage was a “joint enterprise” where the parties “pooled their interests for their mutual benefit,” an award to each party of 50% of the appraised value of the marital residence as of the time of trial of $350,000, after the plaintiff’s separate property credit is subtracted from that amount, is warranted.

The Supreme Court also improvidently exercised its discretion in directing the sale of the marital residence without providing the plaintiff with an option to purchase the defendant’s interest therein ( see Lamparillo v Lamparillo , 130 AD3d 580 [2015]; Aebly v Lally , 112 AD3d 561 , 563 [2013]). [*3] To exercise the option to purchase the defendant’s interest in the marital residence, the plaintiff shall, within four months after service upon him of a copy of this decision and order with notice of entry, pay the defendant 50% of the appraised value of the marital residence as of the time of trial as determined by his expert appraiser after his separate property credit is deducted from that amount. Upon receipt of these funds, the defendant shall convey her 50% interest in the marital residence to the plaintiff. In the event that the option to purchase is not successfully exercised by the plaintiff within the time allotted, the marital residence shall be sold in accordance with the terms set forth in the judgment of divorce. Within 30 days of service upon him of a copy of this decision and order with notice of entry, the plaintiff shall notify the defendant’s counsel, in writing, whether he intends to exercise the option. In the event the plaintiff fails to do so, he shall be deemed to have waived the option ( see Aebly v Lally , 112 AD3d at 563-564).

The Supreme Court should not have awarded the defendant a $10,000 credit to compensate her for the use of her individual funds to purchase a Genworth Financial Annuity for the plaintiff before the marriage. Since the annuity was acquired before the marriage, it was separate property not subject to equitable distribution ( see Domestic Relations Law § 236 [B] [1] [d] [1]; Sheehan v Sheehan , 161 AD3d 912 [2018]).

Under these circumstances, considering the overall financial circumstances of the parties and the circumstances of the case as a whole, the Supreme Court providently exercised its discretion in declining to award the plaintiff attorneys’ fees ( see Domestic Relations Law §§ 237 [c]; 238; Beckmann v Beckmann , 160 AD3d 799 [2018]). Connolly, J.P., Iannacci, Genovesi and Love, JJ., concur..