DECISION & ORDER AFTER TRIAL The parties in this action, C.C. (hereinafter “Plaintiff”) and R.C. (hereinafter “Defendant”) were married on October 12, 1985 in Kings County, New York. The action for divorce was filed by the Plaintiff on July 7, 2020. A Preliminary Conference was held on October 6, 2020. A pendente lite order regarding spousal maintenance was granted on November 16, 2020, wherein the Defendant was directed to pay $4,500 per month directly to the plaintiff in addition to paying the mortgage and all carrying charges for the marital residence. On March 31, 2021, the Defendant was found to be in civil contempt for failing to comply with said orders issued by this Court. The matter came before this Court for trial on August 24, 25, 26 and 30, 2021. During the trial, both Plaintiff and Defendant testified, as well as Richard Gabor, an attorney and CPA, called by the Plaintiff. The issues for the Court to decide after trial are equitable distribution, spousal maintenance, and counsel fees. Equitable Distribution “The trial court is vested with broad discretion in making an equitable distribution of marital property…” Morille-Hinds v. Hinds, 169 AD3d 896, 898 [2d Dept 2019]. “When both spouses equally contribute to a marriage of long duration, the division of marital property should be as equal as possible; however equitable distribution does not necessarily mean equal distribution.” Id. Marital property is defined 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.” Domestic Relations Law §236B(1)(c). The parties require equitable distribution of the following: the marital residence, parties’ respective vehicles, Plaintiff’s September 11th Victim Compensation Fund, and the parties’ debt. Pursuant to Domestic Relations Law §236, marital property shall be distributed “equitably” between the parties and the Court has considered the following factors in determining the distribution of the parties’ assets: 1. The income and property of each party at the time of the marriage, and at the time of the commencement of the action; 2. The duration of the marriage and age and health of both parties; 3. The need of a custodial parent to occupy or own the marital residence and to use or own its household effects; 4. The loss of inheritance and pension rights upon dissolution of the marriage as of the date of dissolution; 5. The loss of health insurance benefits upon dissolution of the marriage; 6. Any award of maintenance under subdivision six of this part; 7. Any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services as a spouse, parent, wage earner and homemaker, and to the career or career potential of the other party. The court shall not consider as marital property subject to distribution the value of a spouse’s enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement. However, in arriving at an equitable division of marital property, the court shall consider the direct or indirect contributions to the development during the marriage of the enhanced earning capacity of the other spouse; 8. The liquid or non-liquid character of all marital property; 9. The probable future financial circumstances of each party; 10. The impossibility or difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest intact and free from any claim or interference by the other party; 11. The tax consequences to each party; 12. The wasteful dissipation of assets by either spouse; 13. Any transfer or encumbrance made in contemplation of a matrimonial action without fair consideration; 14. Any other factor which the court shall expressly find to be just and proper. Wasteful Dissipation and Credibility The Plaintiff claims that the Defendant wastefully dissipated marital assets, including marital bank accounts and the marital residence due to tax liabilities. A spouse who alleges that the other spouse has engaged in waste and dissipation of marital assets bears the burden of establishing such conduct by a preponderance of the evidence. See Raynor v. Raynor, 68 AD3d 836 [2d. Dept. 2009]. Courts have found that conduct that constitutes wasteful dissipation of marital assets can occur “as a result of positive conduct such as to secretly and wrongfully dissipate marital assets in anticipation of equitable distribution, or use of marital funds to pay personal expenses, or as a result of inaction, such as failure to take reasonable steps to preserve the value of assets or using marital assets in furtherance of an extramarital affair.” 48A NY Jur. 2d Domestic Relations 2756, Wasteful Dissipation of Assets as an Equitable Distribution Factor. “In a nonjury trial, evaluating the credibility of the respective witnesses and determining which of the proffered items of evidence are most credible are matters committed to the trial court’s sound discretion.” Ivani v. Ivani, 303 A.D.3d 639 (2d Dept. 2003). This Court has evaluated the credibility and demeanor of both the Plaintiff and Defendant during the trial. The Court found both parties’ testimony at times to be lacking credibility. The Defendant was often evasive and failed to answer questions as asked, even by the Court. Interestingly, during the Defendant’s testimony he stated that the Plaintiff, “was fearful of her own mortality because the cancer diagnosis was much worse and we decided between us that we were going to live for today and not be like some of our friends.” See transcript dated August 30, 2021 page 38. However, as a matter of credibility, the Court finds that neither party was particularly credible regarding their financial situation. The parties spent their marital income with reckless abandon. They went on vacations (or “business trips”), attended concerts, regularly visited casinos, and purchased luxury vehicles. The Plaintiff, though claiming the Defendant wastefully dissipated their assets, was complicit with the spending. In fact, the Plaintiff, who was unemployed and was not receiving timely spousal maintenance payments from the Defendant, continued to spend approximately $1,500 per month on clothing during the proceedings in this matter, as indicated on her Statement of Net Worth. In addition, she testified that she spent approximately $16,000 on their daughter’s sweet sixteen party. The Plaintiff, though claiming she is disabled, has not filed for disability as she stated “anything that I owed or my disability, would be hindered with the IRS tax situation…” Transcript dated August 26, 2021, page 177, line 2-5. During the marriage, both parties engaged in a pattern of mutual financial irresponsibility and wasteful dissipation of their assets, and even at the time of trial, they continued spending funds that they did not have. Therefore, the Court will specifically consider the wasteful dissipation of assets by both parties in determining equitable distribution and spousal maintenance. Plaintiff’s 9/11 Fund Award On or about March 27, 2019, the Plaintiff received $225,000 from the September 11th Victim Compensation Fund, due to illness and injuries she sustained on September 11, 2001. The funds were deposited in the account of the parties’ child, B.C., with C.C. listed as Custodian. The Plaintiff testified that the bank account was not used for marital purposes and further stated that the Defendant pressured the Plaintiff to use the funds to pay for outstanding debts. Plaintiff alleges that due to the fees incurred by the current case and the Defendant’s failure to pay his obligations, she was forced to exhaust her monies from the 9/11 award. It is clear to this Court, and does not appear to be in dispute by the Defendant, that for equitable distribution purposes, an award pursuant to the September 11th Victim Compensation Fund is the equivalent to the recovery in a personal injury action. See Howe v. Howe, 68 AD3d 38 [2d Dept. 2009]. The Plaintiff’s award funds were never comingled with marital funds, and though depleted, this Court finds that the Plaintiff’s 9/11 award shall remain her separate property. Marital Bank Accounts The Plaintiff claims that Defendant withdrew thousands of dollars of marital funds without any explanation of what the funds were used for. As such, the Plaintiff is seeking reimbursement for the funds dissipated by the Defendant. It is also clear to this Court, by the exhibits and testimony proffered, that the Defendant made numerous withdrawals of marital funds prior to and after commencement of the action in violation of automatic stays. Domestic Relations Law 236(B)(2)(b). However, even after trial, the purpose of the Defendant’s withdrawals remains unclear. The Defendant wrote checks to various people but failed to provide any credible explanation for the payments. Per the records entered into evidence by the Plaintiff, the Defendant removed approximately $238,005.51 from the marital accounts. Based upon this evidence, the Court finds that the Defendant wastefully dissipated the marital asset of the parties’ joint bank account without reason or explanation. As a result of his wasteful dissipation of a marital asset, the Court finds that the Plaintiff is entitled to repayment of 70 percent of the asset dissipated. See Shkreli v. Shkreli, 142 AD3d 546 [2d Dept. 2016]; Conceicao v. Conceicao, 203 AD2d 877 [2d Dept. 1994]. The Court finds that the additional 20 percent awarded to the Plaintiff is reasonable based upon the factors in Domestic Relations Law §236, specifically the duration of the marriage, the income of the parties and the health of the Plaintiff. Accordingly, the Court grants a money judgment in the favor of the Plaintiff in the sum of $166,603.86. Tax Debt During most of the marriage, the Defendant was the sole income earner. The Plaintiff and Defendant filed joint taxes throughout the marriage; however, they failed to report and pay state and federal taxes for a number of years. This failure has resulted in hundreds of thousands of dollars being owed, fees and interest being assessed, and liens being placed on the marital residence. At the time of trial, the balance due on federal and state taxes is approximately $700,000 per the parties’ testimony. The Plaintiff alleges that this tax debt is a wasteful dissipation of marital assets. The Plaintiff testified that during the marriage the parties filed joint taxes, that she signed the joint tax returns, and that she acknowledged that the tax liabilities owed to the IRS and the State of NY are owed by her and the Defendant. Notably, despite this crippling debt held by the parties, the Plaintiff never filed for innocent spouse status with the IRS and neither party has filed for bankruptcy. The Defendant acknowledged the debt but as he stated, the parties were “encouraged just to keep spending money, sometimes not even care about the credit card bills.” See Transcript dated 8/30/2021, page 38. During the trial, both parties admitted to being convicted of falsifying business records in order to obtain Medicare coverage during the marriage. The Court finds this information persuasive regarding their combined financial history. As the Plaintiff has shared in the benefits derived from the parties’ failure to pay their taxes, she must also share in the financial liability arising out of tax liability. See Conway v. Conway, 29 AD3d 725, [2d Dept. 2006]. Based upon the foregoing, considering the equitable distribution factors, wasteful dissipation, the credibility of the parties, and the testimony of the Plaintiff’s expert, Richard Gabor, the Court finds that the IRS federal tax debt and the New York State tax debt is the responsibility of both parties, jointly and severally, and this Court will not apportion liability to one party over the other. Marital Residence The parties are seeking equitable distribution of the marital residence. The Defendant seeks to have the residence sold to satisfy the debts of the parties. The Plaintiff has proposed that the marital residence should be distributed to her, free of any state or federal tax liens. She further proposed that the Defendant will be responsible to ensure the mortgage payments are up-to-date and that Plaintiff will assume the mortgage going forward. However, in light of the extensive debt held by the parties, the Court does not find the Plaintiff’s proposal feasible. The Defendant testified that he borrowed money in the sum of approximately $140,000 from his sister to purchase the marital residence. Upon the sale of the parties’ property at 191 Pembrook Loop, Staten Island, New York, the Defendant failed to pay his sister back, however, there was no testimony as to why the Defendant failed to pay back his sister or why the debt ballooned to $466,000. Based upon the testimony and exhibits, the Defendant’s sister had or was going to obtain a judgment against the Defendant in the sum of $466,773.59. The Defendant acknowledged the debt but did not elaborate any information about it, therefore, based upon his lack of disclosure, this debt shall remain in the name of the Defendant only. Upon the Court’s finding that the tax debt is the obligation of both parties, that the personal loan is the obligation of the Defendant alone, and that the Plaintiff has a money judgment against the Defendant, the only reasonable resolution for the equitable distribution of the marital residence is that the home must be sold. Further, based upon the record provided, the obligations of the parties far outweigh any equity that they may have in the home. Generally, it is the responsibility of both parties to maintain the marital residence during the pendency of a divorce action. See Leeds v. Leeds, 281 AD2d 601 [2d Dept. 2001]. During the pendency of this action, the Court ordered the Defendant to pay spousal maintenance, as well as maintain the status quo on the marital home. Considering all of the equitable distribution factors, the mortgage, taxes, and utility arrears are the responsibility of the Defendant alone. If there is any equity left, after the payment of the mortgage, taxes, liens, and closing costs, the remainder shall go to the Plaintiff. From the date of this order until the sale of the home, the Plaintiff shall be responsible for all costs associated with the upkeep of the marital residence based upon the spousal maintenance award. Vehicles The parties testified that they currently own four (4) automobiles. The Plaintiff has use of the 2013 Mercedes Benz, titled in the name of the Defendant, which has an outstanding loan in the sum of approximately $18,000. The Defendant currently has use of the 2009 Mercedes Benz, titled in the name of the Defendant, which has no outstanding loan balance. The Defendant also has the use of a 2018 Mercedes Benz, titled in the name of the Defendant. The 2018 Mercedes Benz was purchased during the pendency of this action and has an outstanding loan in the sum of approximately $41,000. The parties’ daughter, Brianna, currently has use of the 2016 Mercedes Benz, titled in the name of the Plaintiff, with an outstanding loan balance of approximately $3,600. “While distribution of a marital property must be equitable, there is no requirement that the distribution of each item of marital property be on an equal or 50-50 basis.” Almeida v. Almeida, 150 AD3d 1058 [2d Dept 2017]. The Court is hereby ordering the parties to sell and/or return the 2013 and 2018 Mercedes Benz vehicles. By doing so, the parties’ monthly expense obligations will be reduced. The Defendant will retain the 2009 Mercedes Benz and the Plaintiff will retain the 2016 Mercedes Benz. The Defendant will bear the cost of the outstanding loan of the 2016 Mercedes Benz. Furthermore, if the parties agree and stipulate in writing, they can modify this portion of the Decision & Order, in order to continue providing their daughter with use of one of the vehicles. Spousal Maintenance A Court may order maintenance and consider the following, among other factors, “the standard of living of the parties during the marriage, the distribution of marital property, the duration of the marriage, the health and present and future earning capacity of the parties, the ability of the party seeking maintenance to become self-supporting, and the reduced or lost lifetime earning capacity of the party seeking maintenance.” Belilos v. Rivera, 164 AD3d 1411, 1414 [2d Dept 2018]. The parties’ standard of living during the marriage is a factor to be considered in determining the amount and duration of maintenance, “however, that in itself does not guarantee per se entitlement to an award of lifetime maintenance.” Appel v. Appel, 54 AD3d 786, 787 [2d Dept. 2008] citing Chalif v. Chalif, 298 AD2d 348 [2002]. “The amount and duration of spousal maintenance is committed to the sound discretion of the trial court, and each case is to be decided on its own unique facts.” Carr-Harris v. Carr Harris, 98 AD3d 548 [2d Dept. 2012]. Pursuant to Domestic Relations Law §236(B)(6)(e), the Court shall order post-divorce maintenance up to the income cap, “unless the court finds that the post-divorce maintenance guideline obligation is unjust or inappropriate, which finding shall be based upon consideration of any one or more of the following factors:” (a) the age and health of the parties; (b) the present or future earning capacity of the parties, including a history of limited participation in the workforce; (c) the need of one party to incur education or training expenses; (d) the termination of a child support award before the termination of the maintenance award when the calculation of maintenance was based upon child support being awarded which resulted in a maintenance award lower that it would have been had child support not been awarded; (e) the wasteful dissipation of marital property, including transfers or encumbrances made in contemplation of a matrimonial action without fair consideration; (f) the existence and duration of a pre-marital joint household or a pre-divorce separate household; (g) acts by one party against another that have inhibited or continue to inhibit a party’s earning capacity or ability to obtain meaningful employment. Such acts include but are not limited to acts of domestic violence as provided in section four hundred fifty-nine-a of the social services law; (h) the availability and cost of medical insurance for the parties; (i) the care of the children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws provided during the marriage that inhibits a party’s earning capacity; (j) the tax consequences to each party; (k) the standard of living of the parties established during the marriage; (l) the reduced or lost earning capacity of the payee as a result of having forgone or delayed education, training, employment or career opportunities during the marriage; (m) the equitable distribution of marital property and the income or imputed income on the assets so distributed; (n) the contributions and services of the payee as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and (o) any other factor which the court shall expressly find to be just and proper. In the instant matter, the Plaintiff testified that she has an Associates degree from Kingsborough Community College. At the time of the marriage in 1985, the Plaintiff was employed as a secretary and was in that position for approximately seventeen years before she stopped working on September 11, 2001. Thereafter, the Plaintiff worked part-time at Fortunoff and stopped working around 2006. The Plaintiff was diagnosed with 9/11 related breast cancer in 2009 and again in 2016. She has had approximately five (5) surgeries and takes daily chemotherapy medications. The Plaintiff testified that she is unable to work due to her cancer and side effects from medication but has not filed for any type of disability benefits due to the state and federal tax liens against her. She received 9/11 compensation funds in the sum of $225,000 in 2019. According to her testimony, she has less than $5,000 left from that award. “A court is not bound by a party’s account of his or her own finances, and where a party’s account is not believable, the court is justified in finding a true or potential income higher than that claimed.” See Elsayed v. Edrees, 141 A.D.3d 503, 505. The Court may also impute income based upon “money, goods, or services provided by relatives and friends.” See Matter of Picone v. Golio, 2019 N.Y. App. Div. LEXIS 1723 and DRL 240 1-b(5)(iv). Further, the court may “impute income on the basis of the party’s past income or demonstrated potential earnings.” Id. “In a nonjury trial, evaluating the credibility of the respective witnesses and determining which of the proffered items of evidence are most credible are matters committed to the trial court’s sound discretion.” Ivani v. Ivani, 303 A.D.3d 639 (2d Dept. 2003). Based upon the exhibits submitted during trial, the Defendant had an average income of approximately $210,000 from 2010 through 2020. Plaintiff’s Exhibit 38 at trial, the Defendant’s application to purchase a vehicle, listed his income at $250,000. Though the Defendant only earned approximately $144,442 in 2020, the Court does not find this amount during the Covid-19 pandemic representative on the Defendant’s earning history and potential. As such, the Court is imputing the Defendant’s income to be $210,000. Considering the factors of Domestic Relations Law §236(B)(6)(e), the Court has decided to order post-divorce spousal maintenance above the statutory cap of $192,000. Specifically, the Court has considered the age and respective health of the parties, including the Plaintiff’s cancer diagnoses. Furthermore, the Court considered the earning capacity of both the Plaintiff and Defendant. Though the Plaintiff testified somewhat about a domestic violence incident that occurred in June 2020, there was no testimony of a history of violence or control by the Defendant. Therefore, that incident, which was not detailed thoroughly during either parties’ testimony, was not given much weight. Finally, the court considered the wasteful dissipation of both parties, as marriage is an economic partnership. Based upon the duration of the marriage, applying the recommended statutory duration, the Plaintiff would be entitled to maintenance for a period of 35 percent to 50 percent of the length of the marriage (12 years 2 months to 17 years 4 months). Accordingly, the Court is awarding spousal maintenance on the Defendant’s imputed income of $210,000 per year, above the statutory cap, for a duration of fifteen (15) years. As such, the Defendant shall pay spousal maintenance in the sum of $5,250 per month directly to the Defendant. The calculations are set forth below: 1st Calculation (up to the statutory cap of $192,000): Plaintiff’s Income: $0 Defendant’s Income: $192,000 1st Calculation 30 percent of payor’s income: $57,600 Result #1 = $57,600 2nd Calculation Plaintiff’s Income: $0 Defendant’s Income: $192,000 Combined income: $192,000 40 percent of combined income: 76,800 minus payee’s income $0 Result #2 = $76,800 Lower of the 2 results: $57,600 ($4,800 per month) 2nd Calculation (beyond the statutory cap): Plaintiff’s Income: $210,000 Defendant’s Income: $0 1st Calculation 30 percent of payor’s income: Result #1 = $63,000 2nd Calculation Plaintiff’s Income: $0 Defendant’s Income: $210,000 Combined income: $210,000 40 percent of combined income: $84,000 minus payee’s income $0 Result #2 = $84,000 Lower of the 2 results: $63,000 ($5,250 per month) Counsel fees An award of counsel fees pursuant to Domestic Relations Law 237(a) “is a matter within the sound discretion of the trial court” and is “controlled by the equities and circumstances of each particular case.” See Quinn v. Quinn, 73 A.D.3d 887 (2d Dept 2010). A court may award counsel fees to a spouse “to enable that spouse to carry on or defend the action or proceeding, as in the court’s discretion, justice requires, having regard to the circumstances of the case of the respective parties.” Pezzollo v. Pezzolo, 173 AD3d 918 [2d Dept. 2019]. During this matter, the Court, pendente lite, ordered the Defendant to pay counsel fees in the sum of $25,750. This pendente lite order was the subject of a contempt hearing. The Defendant was found to be in civil contempt for his failure to comply with the order and given the opportunity to purge. Counsel alleges that the Defendant has only made a payment of $9,000 with an outstanding balance of $16,750. Based upon the clear inequities between the parties and the lack of income of the Plaintiff, the Court finds it fair, equitable, and reasonable to order counsel fees in the sum of $15,750. The Court finds the Plaintiff’s counsel, Michael Coscia, Esq., to have a reasonable hourly fee of $525 per hour, based upon his extensive experience. Furthermore, the Court finds that in addition to the pendente lite counsel fees that was previously ordered, that an additional thirty (30) hours was necessary for trial. Due to the financial situation of the parties, the Court also finds that the Defendant shall be responsible for paying the expert fee for Richard Gabor, Esq., in the sum of $2,500. Conclusion In summary, the Court orders are as follows: ORDERED that the judgment of divorce is granted. Counsel shall submit separate findings of fact, conclusions of law, on notice, within sixty days, or the matter may be deemed abandoned; ORDERED that the parties shall agree on a listing broker for the sale of the marital property within ten business days of this Decision & Order; ORDERED that the marital property shall be listed for sale within thirty days of this Decision & Order; ORDERED that the broker shall determine the listing price of the property; ORDERED that the parties shall accept any offer on the home within ten percent of the recommended listing price; ORDERED that until the marital property is sold, the Plaintiff shall have exclusive use and occupancy of the residence; ORDERED that from the date of this Decision & Order, the Plaintiff shall be responsible for all mortgage payments, taxes, insurance and carrying charges of the marital residence until its sale; ORDERED that the Defendant shall be responsible for all mortgage payments, taxes, insurance, and carrying charge arrears of the marital residence up to the date of this Decision & Order; ORDERED that the Plaintiff is granted a money judgment against the Defendant in the sum of $166,603.86 based upon the Defendant’s wasteful dissipation of a marital asset; ORDERED that the state and federal tax debt is the obligation of both parties; ORDERED that the approximately $466,773.59 judgment issued against the Defendant by his sister shall remain his separate debt; ORDERED the proceeds from the sale of the home, if any, after the satisfaction of the liens, shall be distributed to the Plaintiff to satisfy her judgment against the Defendant; ORDERED any bank account currently held jointly by the parties shall be closed and distributed to the Plaintiff to satisfy her judgment against the Defendant; ORDERED that the Defendant will retain the 2009 Mercedes Benz and the Plaintiff will retain the 2016 Mercedes Benz. Title transfers of the vehicles shall be completed within thirty days of this Decision & Order. The Defendant will bear the cost of the title transfers and shall pay the balance on the outstanding loan of the 2016 Mercedes Benz upon the transfer of the vehicle; ORDERED that all other vehicles will be sold and proceeds, if any, shall be distributed to the Plaintiff to satisfy her judgment against the Defendant; ORDERED that any debts held by the parties accrued after the commencement of the action shall remain the parties’ separate debt; ORDERED that the Defendant shall pay spousal maintenance to the Plaintiff in the sum of $5,250 per month on the 1st day of each month commencing February 1, 2022, for a period of fifteen years, or until the remarriage or cohabitation of the Plaintiff, whichever comes first; ORDERED that counsel fees in the sum of $15,750 is awarded to the Plaintiff. This amount must be paid directly to her attorney, Michael Coscia, Esq. as follows: $5,000 on or before February 15, 2022; $5,000 on or before May 15, 2022; and $5,750 on or before August 15, 2022; ORDERED that the outstanding counsel fee balance of $16,750 ordered pendente lite by this Court must be paid on or before October 15, 2022; ORDERED that any modification of this order may be sought in this Court or any Court of competent jurisdiction or by written stipulation of the parties; ORDERED that this Decision & Order resolves all issues and outstanding motions. Any applications made that were not specifically addressed herein are hereby denied. This constitutes the Decision and Order of this Court after trial. Dated: January 10, 2022
