Elliott Scheinberg

This article updates relevant issues examined in prior discussions.

'Spinelli v. Spinelli'

The Appellate Division aptly described Spinelli v. Spinelli, 2019 NY Slip Op 06553 (3d Dept. 2019) as a "unique case," which is a simultaneous lesson in proper appellate practice and in how appellate practice can be a trap for the uninitiated. Although the Appellate Division stated that it was "precluded from revisiting the equitable distribution award by the wife's failure to appeal from the judgment [of divorce]," the relief reflects the appellate court's kind heart, a/k/a interests of justice.

After trial, Supreme Court issued a decision finding that the husband had, inter alia, engaged in an ongoing pattern of conversion of marital assets and continuous wasteful dissipation of marital assets, which prevented the court from determining the value of the parties' business and accompanying debt and resulted in the husband reaping all of the benefits of the business while burdening the wife with much of the debt.

A judgment of divorce was entered which, inter alia, ordered the husband to pay the premiums necessary to maintain a certain life insurance policy for the benefit of the wife and the children, which policy had lapsed prior to the entry of judgment. The court also ordered that the husband receive 25% of the wife's retirement accounts and that the husband's retirement accounts be divided equally.

Neither party perfected an appeal from the judgment. The parties engaged in negotiations regarding the lapsed insurance policy, and the fact that the value of his retirement account was approximately one-half of the value submitted to, and considered by, Supreme Court when it entered judgment.

The wife moved for an order, inter alia, compelling the husband to provide life insurance and redistributing the retirement accounts. Although the husband asserted that he was attempting to comply with the judgment by obtaining a new life insurance policy, the parties eventually agreed that the husband was uninsurable due to his advanced age and the state of his health. The husband filed a cross motion seeking an order directing immediate payment to him of his 25% interest in the wife's retirement accounts. During the pendency of the motions, the wife obtained two policies insuring the husband, one for $100,000 and one for $150,000, with annual premiums of $2,950 and $4,445, respectively.

By amended order, Supreme Court, inter alia, ordered the husband to pay the annual premiums for both of the new policies until the parties' youngest child graduates from college—not to exceed four years after his graduation from high school—and then continue to pay the premium for the $100,000 policy for an additional 10 years and, further, reaffirmed its division of the retirement assets. The wife appealed contending that the order failed to comply with the judgment in two principal respects: by failing to ensure that the husband provided life insurance and by depriving her of the intended share of the retirement accounts. She argued for "reversal" and "urged the appellate court to make her whole by refashioning the equitable distribution award." The Appellate Division stated: "We are precluded from revisiting the equitable distribution award by the wife's failure to appeal from the judgment."

The wife's counsel emphasized that he provided Supreme Court with proof that the life insurance policy had lapsed before it rendered its decision to which the Appellate Division responded: "There were two proper means available to correct that error—a post-trial motion made within 15 days after decision (CPLR 4404[b]; 4405) or appeal from the judgment. The wife did neither; therefore, she was bound by the judgment, subject to correction of a mistake that does not affect a substantial right of a party (CPLR 5019[a])."

On appeal, the husband asserted that Supreme Court had the authority to correct the error in the judgment that resulted from the award of the lapsed insurance policy. The wife had acknowledged that the husband could not provide a $500,000 replacement policy, even if ordered to do so, and, thus, requested alternative relief.

"In this unique case," the Appellate Division stated, "based on the parties' respective positions, we agree that the substantial rights of the parties would not be affected by correction of the judgment to provide a suitable replacement for the insurance policy. The wife represents, without contradiction, that the $100,000 and $150,000 replacement policies had also lapsed; therefore, Supreme Court's well-intentioned order directing the husband to pay the premiums on these policies afforded the wife no benefit. Moreover, the parties conceded the impracticability of the husband obtaining meaningful life insurance coverage given his age and medical history."

"In light of these considerations," the Appellate Division computed and ordered the husband to pay the wife a sum equal to the premiums that he would have paid on the lapsed $500,000 insurance policy, plus its cash value, plus statutory interest.

Failure To Perfect an Appeal

The parties' failure to perfect an appeal, in Spinelli, justifies a brief review of the risks attendant to taking an appeal, i.e., filing a notice of appeal, not perfecting the appeal without taking any of the three easy steps set forth by the Court of Appeals, below, and then seeking the same relief in a subsequent appeal are set forth in Rubeo v. Natl. Grange Mut. Ins. Co., 93 N.Y.2d 750 (1999) and in Bray v. Cox, 38 N.Y.2d 350 (1976). In essence, "a prior dismissal for want of prosecution acts as a bar to a subsequent appeal as to all questions that were presented on the earlier appeal [because] if no penalty were imposed for failing to prosecute an earlier appeal, litigants could use the appellate process as a means of 'delaying enforcement of judgments and the inevitable payment of just debts and obligations … Further [] as a prudential matter, an appellant should not "have two opportunities to appeal to this [C]ourt on identical issues," Rubeo, 93 N.Y.2d at 754 (citing Bray, 38 N.Y.2d at 353). Significantly, "the dismissal of an appeal for want of prosecution to be on the merits of all claims which could have been litigated had the appeal been timely argued or submitted" (Bray, 38 N.Y.2d at 355), meaning that the dismissal delivers a res judicata punch. See Malay v. City of Syracuse, 25 N.Y.3d 323 (2015).

The foregoing notwithstanding, the Rubeo court left the door open for subsequent appellate review: "The message is clear and consistent: The filing of an appeal is not inconsequential. An appeal left untended may be dismissed as abandoned, and appellant may be precluded from later appealing the same issue." Rubeo, 93 N.Y.2d at 757. Appellate decisions have simultaneously walked through this open door (Prisco v. Prisco, 131 A.D.3d 524 (2d Dept. 2015) ("As a general rule, we do not consider any issue raised on a subsequent appeal that was raised, or could have been raised, in an earlier appeal that was dismissed for lack of prosecution, although we have the inherent jurisdiction to do so."); Budoff v. City of New York, 164 A.D.3d 737 (2d Dept. 2018)), and have declined to extend this judicial discretion: "[T]he plaintiff, could have been raised [the specified issues] on his appeal from the amended judgment of divorce []. By decision and order on motion of this Court [] that appeal was dismissed for failure to timely perfect. The dismissal of that appeal constituted an adjudication on the merits with respect to all issues which could have been reviewed on that appeal … We decline to exercise our discretion in the instant appeal to determine the merits of these issues." Cohen v. Cohen, 172 A.D.3d 999, 1001-02 (2d Dept. 2019) (citing Rubeo).

The Court of Appeals offered ready guidance, set forth in three easy steps, as how to avoid this situation: "[P]laintiff could have avoided his present predicament in several ways. He could have timely perfected his original appeal. He could have moved the Appellate Division for an extension of time to perfect that appeal … If plaintiff knew that he could not perfect the first appeal in a timely manner, he could have withdrawn it …" Rubeo, 93 N.Y.2d at 755

Elliott Scheinberg is a member of NYSBA Committee on Courts of Appellate Jurisdiction. He is the author of The New York Civil Appellate Citator (NYSBA, 2 vols., 2019) and Contract Doctrine and Marital Agreements in New York, (NYSBA, 2 vols., 4th ed., 2020). He is a Fellow of the American Academy of Matrimonial Lawyers.