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Friday, June 06, 2008

Improper to Fail to Award Credit for Marital Debts Paid By One Spouse

Improper to Fail to Award Credit for Marital Debts Paid By One Spouse


In Grasso v Grasso, --- N.Y.S.2d ----, 2008 WL 193262 (N.Y.A.D. 2 Dept.)
Supreme Court, awarded the defendant nondurational maintenance, directed him to pay the defendant retroactive maintenance and child support arrears without a credit to him for mortgage and real estate tax payments he made with respect to the marital residence, pursuant to a pendente lite support order, directed him to pay, in full, the principal and interest on all marital debts bearing the defendant's name, awarded him the sum of $103,000 from the net proceeds of the sale of the marital residence as reimbursement of his contribution of separate property, directed that, after the parties each received reimbursement of their contributions of separate property from the net proceeds of the sale of the marital residence, the remainder of those net proceeds be divided equally between them, refused to award him a credit of $1,700 for expenditures he incurred for the benefit of the defendant's daughter from a prior marriage and, refused to to award him a credit of $2,500 for legal fees he expended on behalf of the defendant's son from a prior marriage. The Appellate Division found that that while the husband correctly contended that the court improperly admitted into evidence and relied upon a determination of the Social Security Administration as to the wife's disability, there was other sufficient admissible evidence which supported the finding that the wife was totally disabled. It found that the husband correctly contended that, in directing him to pay maintenance and child support arrears, the Supreme Court erred in failing to credit him for the mortgage and real estate tax payments on the marital residence which he made pursuant to a pendente lite support order. The amounts for which the husband should have been credited, were more than sufficient to offset the maintenance and child support arrears calculated by the Supreme Court. The husband also correctly contended that the Supreme Court improvidently exercised its discretion by, in effect, holding him responsible for 100% of the credit card obligations that constituted the parties' marital debt as well as all the marital debt that was solely in the wife's name. The parties' marital debt would have been more appropriately distributed by allocating it equally between them, and offsetting it against the net proceeds of the sale of the marital residence after deduction of their contributions of separate property. The Supreme Court erred in failing to award the husband a credit for the sum of $1,700 in expenses he incurred on behalf of the wife's daughter from a prior marriage and the sum of $2,500 in fees expended from marital funds on behalf of the wife's son from a prior marriage. Since, at this juncture, the marital residence may already have been sold and the proceeds distributed, the matter was remitted to the Supreme Court, for a hearing and determination of the amount of the parties' marital debt, including accrued interest as of the commencement of the action, and the entry thereafter of an amended judgment directing the wife to pay 50% of the entire marital debt, including 50% of that portion of the marital debt previously satisfied by distribution of the parties' properties in this action. The Court noted that at the trial Supreme Court erred in precluding the husband from offering evidence in support of his contention that a loan taken out against his 401(k) account was used to satisfy the marital debt obligation and directed Supreme Court tol permit the husband to offer proof as to this at the hearing, and to credit him with the wife's portion of any marital debt which he proves was paid from the proceeds of this loan.