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Deborah A. Keil v. Edwin A. Keil

June 2, 2011

DEBORAH A. KEIL, APPELLANT,
v.
EDWIN A. KEIL, RESPONDENT.



Appeal from a judgment of the Supreme Court (Lynch, J.), entered April 22, 2010 in Columbia County, ordering, among other things, equitable distribution of the parties' marital property, upon a decision of the court.

The opinion of the court was delivered by: Spain, J.

MEMORANDUM AND ORDER

Calendar Date: April 29, 2011

Before: Peters, J.P., Spain, Rose and Stein, JJ.

The parties were married in 1980 and had no children. Plaintiff commenced this divorce action in 2006; the parties thereafter agreed to a divorce in favor of defendant and the issues of equitable distribution and maintenance were heard at a bench trial. Given the length of the marriage and the contributions of each of the parties to the marriage and to the family business holdings, Supreme Court generally distributed the marital property on a 50/50 basis, awarded plaintiff nondurational maintenance and denied her request for counselfees. Plaintiff now appeals.

Plaintiff first contends that Supreme Court failed to equitably distribute certain marital assets. A trial court's determination of equitable distribution is discretionary, based on the unique circumstances of each case, and such determinations will not be overturned on review unless they fail to properly account for the guiding statutory factors enumerated in Domestic Relations Law § 236 (B) (5) (d) (see Fields v Fields, 15 NY3d 158, 170 [2010]; Mairs v Mairs, 61 AD3d 1204, 1206 [2009]; Altieri v Altieri, 35 AD3d 1093, 1094 [2006]). This Court, however, has the "authority to conduct a broad review of any such award" (Mairs v Mairs, 61 AD3d at 1206; see Majauskas v Majauskas, 61 NY2d 481, 493-494 [1984]).

It is well settled that property obtained prior to marriage is generally separate property (see Domestic Relations Law § 236 [B] [1] [d] [1]; Lewis v Lewis, 6 AD3d 837, 838 [2004]; Zanger v Zanger, 1 AD3d 865, 866-867 [2003]). On the other hand, there is a presumption that property acquired during a marriage is marital property, and the burden of demonstrating that it is separate property is on the party making that assertion (see Domestic Relations Law § 236 [B] [1] [c]; Fields v Fields, 15 NY3d at 163; Stahl v Stahl, 80 AD3d 932, 932 [2011]; Cease v Cease, 72 AD3d 1450, 1451 [2010]). Moreover, "[c]ommingling separate property with marital property funds can result in separate property becoming marital property" (Armstrong v Armstrong, 72 AD3d 1409, 1415 [2010]).

With respect to the marital home, the residence was acquired by defendant before the marriage and he never added plaintiff's name to the deed. As such, it is defendant's separate property (see Domestic RelationLaw § 236 [B] [1] [d] [1]; Albanese v Albanese, 69 AD3d 1005, 1005 [2010]). "'However, any appreciation in value of such separate property may be subject to distribution if there is a nexus between the titled spouse's efforts and the increase in value and those efforts were aided or facilitated by the nontitled spouse'" (Albanese v Albanese, 69 AD3d at 1006, quoting Van Dyke v Van Dyke, 273 AD2d 589, 592 [2000]). The court must be able to discern the value of such separate property as of the date of the marriage, and the value of the same at the end of the marriage, in order to make an accurate distributive award. Notably, the nontitled spouse bears the burden of establishing the marital component of separate property (see id.).

As to the value of the marital interest, the record reflects that defendant purchased the property in 1966 for $8,500. However, neither plaintiff nor defendant presented any expert testimony to demonstrate the value of the property at the start or at the end of the marriage. The parties testified to the value of improvements to the marital residence, including defendant's concession that those improvements cost a total of approximately $75,000 during the marriage. As Supreme Court awarded plaintiff $57,500 or the greater share of the $75,000 in improvements, we cannot agree with plaintiff that the court abused its discretion in making such award given the limited record evidence before it.

With respect to the marital furnishings, as no proof was offered by either side as to their value, we cannot say that Supreme Court abused its discretion in distributing the bulk of the marital furnishings to defendant in conjunction with its award to him of the marital residence (see Butler v Butler, 256 AD2d 1041, 1045-1046 [1998], lv denied 93 NY2d 805 [1999]).

We agree with plaintiff that Supreme Court erred in distributing as marital property the funds of a Smith Barney account (#670-09249-10) funded by her with premarital earnings. Plaintiff testified -- without contradiction -- that she acquired this particular account in her name prior to the parties' marriage and that she made no contributions or withdrawals during the marriage. Accordingly, this account, worth about $6,900 at the end of 2006, is plaintiff's separate property and not subject to equitable distribution (see London v London, 21 AD3d 602, 603 [2005]).

Regarding the farm property, evidence that property obtained during a marriage was a gift to only one spouse, if unrebutted, can satisfy the donee's burden to prove that it is separate property (see Chiotti v Chiotti, 12 AD3d 995, 996 [2004]; Zanger v Zanger, 1 AD3d at 866-867; Allen v Allen, 263 AD2d 691, 692 [1999]; compare Daisernia v Daisernia, 188 AD2d 944, 945 [1992]). However, evidence that a spouse's separate property was substantially improved through economic and/or non-economic contributions of the other spouse can strip the property of its character as separate property (see Domestic Relations Law § 236 [B] [1] [d] [3]; Dashnaw v Dashnaw, 11 AD3d 732, 733 [2004]; Seidman v Seidman, 226 AD2d 1011, 1012 [1996]; Verrilli v Verrilli, 172 AD2d 990, 991 [1991], lv denied 78 NY2d 863 [1991]).

Here, defendant's father deeded the farm to defendant and his brother, as tenants in common, for no consideration shortly after the parties were married. In 1998, defendant purchased his brother's interest in the farm for $50,000, paying his brother a monthly sum, until defendant received a disability settlement of $27,000, which he used to pay the balance due. Further, during the marriage, the parties improved the farm by remodeling the main house and adding apartments to the property. The record supports the conclusion that these improvements were paid for with marital funds as well as with rents collected from the property, and defendant confirmed that plaintiff made non-economic contributions to the improvement and development of the farm. Based on the foregoing, Supreme Court found the farm to be separate property, however, due to the use of marital funds to purchase a portion of the brother's interest and to improve the property, the court found 15% of the farm to be marital property.

On our review of the record, keeping in mind plaintiff's economic contributions towards the purchase of half of the farm, as well as her economic and non-economic contributions towards improving the property, we conclude that 50% of the farm was marital property, of which plaintiff is entitled to one half (compare Dashnaw v Dashnaw, 11 AD3d at 733; Seidman v Seidman, 226 AD2d at 1012). Accordingly, based on the uncontradicted appraisal of the farm completed by defendant's expert, plaintiff's distributive award for the farm should be increased to $122,500, or 25% of its full value ($490,000) less the $27,000 of separate property (disability proceeds) used by defendant to pay the balance due for his brother's ...


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