Constructive Abandonment What Do you have to Prove?

Property Is Not Marital Property Where Neither Wife Nor Husband Hold Any Valuable Property Rights in It. Defendant Not Required to List Possible Future Rights to Marital Property in Bankruptcy Schedules.

In Mattioli v Mattioli,--- N.Y.S.2d ----, 2008 WL 275078 (N.Y.A.D. 4 Dept.) the Appellate Division held that Supreme Court properly refused to treat the former marital residence, which was titled in the names of plaintiff's parents or in one of their names, as marital property subject to equitable distribution, despite the fact that plaintiff paid her father $42,899 during the marriage as a down payment towards its purchase. The court erred, however, in basing its decision solely on the fact that title to the property was held by one or both of plaintiff's parents, rather than by plaintiff and/or defendant. That fact was not necessarily dispositive because Domestic Relations Law 236(B)(1)(c) defines marital property 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, regardless of the form in which title is held." Thus, the dispositive issue was whether plaintiff and/or defendant held "any valuable property rights" in the former marital residence, inasmuch as property is "not marital property [where] neither the wife nor the husband [holds] any valuable property rights" in it (Pulitzer v. Pulitzer, 134 A.D.2d 84, 88). While the parties in this case alluded to an agreement between plaintiff, defendant, and plaintiff's parents for the purchase of the former marital residence, no written agreement for the purchase and sale thereof was presented to the court. In the absence of a written contract, there was no evidence before the court that either plaintiff or defendant held the requisite "valuable property rights" in the former marital residence to render it marital property. The Appellate Division held that the court erred in applying the doctrine of judicial estoppel in precluding defendant from presenting evidence of funds received by plaintiff from the sale of the former marital residence. Defendant attempted to establish that the $8,000 to $9,000 received by plaintiff from the sale of the former marital residence was marital property in the form of appreciation in the value of the property resulting from improvements he made to it during the marriage. The Supreme Court erred in relying on its decision in Matter of Miller (Berti) (1 AD3d 885) when it applied the doctrine of judicial estoppel to the former marital residence. The record established that during the marriage defendant twice filed for bankruptcy under chapter 7 of the Bankruptcy Code and received discharges, and that he claimed in both bankruptcies that he was single and did not list the former marital residence as an asset in his bankruptcy schedules. The court thus determined that judicial estoppel prevented defendant from claiming any interest in funds received upon the sale of the former marital residence. That was error, inasmuch as the discussion of the doctrine of judicial estoppel in Miller was in the context of a bankruptcy proceeding, while here the issue concerned the property rights of the parties in a matrimonial action. [M]arital property rights are determined upon the granting of a divorce", and defendant was not required to list possible future rights to marital property in the bankruptcy schedules (see 11 USC s 541[a][2][A] ). It modified the judgment by remitting the matter to Supreme Court to reopen the proof at trial to permit defendant to submit evidence that the funds received by plaintiff from the sale of the former marital residence were marital property.