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A sharply divided appellate court has upheld an equitable distribution award that gave a wife a 35 percent share of her husband’s interest in a West Side townhouse he had purchased and managed. Grounding their analyses in different sections of the Domestic Relations Law ­— one defining “marital property” and the other defining “separate property” — a three-judge majority of the Appellate Division, First Department, and two dissenters last week reached diametrically opposite conclusions about whether the wife was entitled to anything from the property. The majority in Fields v. Fields, 301630/05, said it was marital property and the wife was entitled to a 35 percent share of its estimated $1.2 million value. By contrast, the dissenters argued that the building was separate property, and the wife had no interest in it. The First Department decision appears on page 17 of the print edition of today’s Law Journal. The majority opinion and dissent also took starkly different views of the marriage of Ronald and Lucille Fields. For the majority, Justice Roland T. Acosta ( See Profile) described the parties as having lived “continuously for over 31 years” in the building on West 107th Street that was “their marital residence.” For the two dissenters, Justice James M. McGuire ( See Profile) wrote that the two “have lived apart for approximately the past 30 years, though sharing occasional meals until 1997.” Arnold Davis, a solo practitioner who represented Mr. Fields, said the case will “definitely be appealed” on the strength of the two dissenting votes. Mr. Fields purchased the building in 1978, approximately eight years after the parties married, for $130,000 with a $30,000 down payment and by taking two mortgages from the sellers. The funds Mr. Fields used for the down payment came from his grandparents. Half of the $30,000 was in lieu of a bequest and half was a loan which Mr. Field’s mother agreed to repay. None of Ms. Fields’ money was used to pay for building expenses or capital improvements. A week after Mr. Fields bought the building, he transferred a one-half interest to his mother. Initially, Mr. and Ms. Fields, together with their then 5-year-old son, lived in the same apartment, but in 1979, after developing sinusitis, Ms. Fields moved into a separate apartment in the building. Four years later, after a burglary, Ms. Fields moved into a different apartment but made use of the duplex apartment where her husband and son lived to practice piano and take baths. Other apartments were rented out. At a hearing before a special referee in July 2006, an appraiser testified that the building was then worth $2.6 million. Taking out the $30,000 down payment and the amount of outstanding debt on the building, the referee concluded that Mr. Fields’ remaining half interest was marital property worth $1.2 million and set her share at 35 percent. Justice Jacqueline W. Silbermann ( See Profile), who retired at the end of last year, upheld the referee’s findings. After considering all the couple’s property, she awarded Ms. Fields $393,000. Majority’s Analysis The starting point for the majority’s ruling affirming Justice Silbermann’s decision was Domestic Relations Law §236(B)(1)(c) which defines “marital property” as “all property acquired by either or both spouses during the marriage” without regard to “the form in which title is held.” Mr. Fields’ position that the appreciation on the building is separate property “because his 69-year-old wife did not contribute to the down payment or management of the property,” Justice Acosta wrote, is “inconsistent” with the statutory definition of marital property. “That the husband used separate property for the down payment and that the property was titled in his and his mother’s name does not change the fact that his half interest in the property is a marital asset,” Justice Acosta wrote in an opinion joined by Justices Angela M. Mazzarelli ( See Profile) and Dianne T. Renwick ( See Profile). The appeal was argued on Oct. 1, 2008. “To deprive the wife of her equitable share of the value of this property is not only contrary to settled precedent,” Justice Acosta concluded, “but also against public policy.” The bottom line for the couple, Justice Acosta found, was that Mr. Fields was entitled to a credit for the separate property—the $30,000 down payment—but that the remaining $2.5 million increase in its value since the 1978 purchase had to be shared with his wife. Dissent’s Starting Point Justice McGuire in dissent looked to a separate section of the Domestic Relations Law (DRL) which defines “separate property” as property acquired before the marriage or property acquired by “bequest” or “gift,” DRL §236(B)(1)(d)(3). Applying that definition, Justice McGuire concluded that Mr. Field’s one half share of the appreciated value of the building is “separate property,” not subject to division. It is undisputed, he wrote, “that the only money the husband invested in the building was his initial $30,000, all of which was given by his grandparents. It is also undisputed that the wife did not contribute financially to the initial purchase and that none of the wife’s funds were ever used to pay for the building’s expenses.” Moreover, Justice McGuire added, because the building is separate property, Ms. Fields could not claim the appreciation in the building’s value as marital property under the statutory definition unless she could show that the increase in value was due “in part” to her efforts. Ms. Fields had “utterly failed” to make such a showing, he wrote. “The record also makes plain the wife’s claimed efforts made on the building’s behalf were actually performed for her own benefit or on a sporadic basis.” Justice McGuire recognized that the Domestic Relations Law credits “indirect contributions,” such as services of a spouse, parent and home maker in making equitable distribution calculations. But in rejecting such a credit for Ms. Fields, he noted the referee’s findings in 2006 that the parties have lived apart for the “past 28 years” though “they shared occasional meals until 1997.” “Nothing remotely indicates that the wife devoted more time than the husband to raising their son or that the husband was able to devote more time to the building because of the wife’s conduct,” he wrote. Justice James M. Catterson ( See Profile) joined the dissent. Justice Acosta countered that “it is not for this Court to dictate what a ‘normal’ marriage should be.” It is of “no moment” that the wife spent most of her time in one apartment, but showered and practiced piano in the apartment used by her husband, he added. “Married couples are free to live by whatever arrangement suits them best.” Harriet N. Cohen, a matrimonial specialist at Cohen Hennessey Bienstock & Rabin who is not involved in the case, said there is “uncertainty and unpredictability” in the law because of the “tension between the definitions of marital and separate property in the statute.” The ruling does not clarify the law, she added, but underscores that the way in which appreciation on property acquired with separate funds is classified “depends upon judges’ life experiences.” Ms. Fields was represented by Elliot R. Polland and Jessica Lee Leonard of Hoffman, Polland & Furman. @

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