Opinion
25302/2005.
Decided December 20, 2010.
Michael Dikman, Esq., Attorney for Plaintiff, Dikman Dikman, Lake Success, New York.
Law Office of David I. Bliven, Attorney for Defendant, White Plains, New York.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of Defendant's Notice of Motion for an order (1) to appraise certain Plaintiff's properties and (2) to modify the interim award of counsel fees.
Papers Numbered
1-3 4-11 12-13 14-21
Notice of Motion and Affidavits Annexed .................................. Exhibits Annexed to Notice of Motion ..................................... Opposition to Notice of Motion and Affidavits Annexed .................... Exhibits Annexed to Opposition to Order to Show Cause .................... OTHER: ...................................................................Upon the foregoing cited papers, the Decision/Order on the Order to Show Cause is as follows:
The parties were married on March 31, 1996, and the action for divorce commenced on November 22, 2005.
By Order of this Court, dated April 21, 2009, Defendant was granted leave to seek appraisal of certain properties of Plaintiff upon a showing that either marital assets were used in connection with the properties at issue or that Defendant contributed to the increased value thereof ( Beige v Beige, 226 AD2d 412). Accordingly, Defendant submits this motion seeking to appraise and to assert a constructive trust claim against certain properties that Plaintiff inherited from his father's estate as well as a property that is still the subject of the probate/administration proceeding of Plaintiff's mother's estate.
According to the papers, Plaintiff was disinherited by his father and subsequently filed objections to his father's estate. Plaintiff and his sister, the executor of their father's estate, entered into a stipulation of settlement, which settled Plaintiff's objections to said estate. Pursuant to the stipulation of settlement, Plaintiff received the legal title of the properties located at 193-20 Jamaica Avenue, Hollis, New York and 193-30 Jamaica Avenue, Hollis, New York. Said transfer occurred on or about January 18, 2006, after this matrimonial action was commenced. Plaintiff became the legal title owner of the property located at 91-35 195th Street, Hollis, New York on or about February 19, 2004. Although defendant seeks a constructive trust on the property located at 193-55 85th Road, Hollis, New York, Plaintiff is not the title owner of said property as it is still the subject of the probate/administration proceeding of his mother's estate.
Pursuant to Domestic Relations Law § 236(B)(5), marital property is property acquired during the marriage and before the commencement of a matrimonial action. Separate property is property acquired by bequest, devise, or descent, or gift from a party other than the spouse, whether the bequest, devise or descent or gift occurred before or after the marriage (Domestic Relations Law § 236(B)(1)(d)). Even though it may be considered separate property, the Court must determine whether a constructive trust exists for Defendant's benefit.
The purpose of constructive trust is to prevent unjust enrichment. Therefore, before the Court may find that Plaintiff holds his inherited/separately owned property as trustee for the Defendant's benefit, Defendant has the burden of showing that there exists (1) a confidential or financial relationship, (2) a promise, (3) a transfer in reliance of that promise, and (4) unjust enrichment ( Martin v Martin, 169 AD2d 821). Each of these elements must be satisfied conjunctively to establish that a trust exists. Since the fundamental purpose of a constructive trust is to prevent unjust enrichment, it is therefore appropriate whenever necessary to satisfy the demands of justice such as correct some act of fraud or breach of duty or confidence ( Matter of Estate of Knappen, 237 AD2d 677). As Judge Cardozo so eloquently declared: "A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not, in good conscience, retain the beneficial interest, equity converts him into a trustee" ( Beatty v. Guggenheim Exploration Co., 225 NY 380).
In the instant case, the marriage between the parties is considered a confidential relationship from which springs trust and confidence. Defendant claims that Plaintiff told her that the properties were an investment in their future together. However, this alleged statement is insufficient to establish an expressed promise. A promise may be implied or inferred from conduct between the parties and the surrounding circumstances of what occurred between the parties that would lead to that conclusion. However, Defendant has failed to set forth facts to show what conduct or circumstances establish that a trust was created since marriage standing alone does not provide a basis for an implied promise to support a constructive trust ( Moftiz v Moftiz, 50 AD2d 901).
With respect to the third element, Defendant discusses at length the work she put into certain properties Plaintiff inherited in 1993, which are not the properties that are the subject of this motion. Therefore, the Court will only consider those facts relevant to show that either marital funds were used in connection with the properties or that Defendant contributed to the increased value thereof. Defendant also indicated that since 1991 she worked on properties in Plaintiff's father's estate; however, Defendant has not itemized the specific work she performed on the properties that are the subject of this motion. The properties were inherited in 2004 almost at the end of the marriage and 2006 during the pendency of this proceeding.
In Saff v. Saff, 61 AD2d 452, the court found that there was insufficient evidence to support a claim of constructive trust where the wife, as here, was a bookkeeper in husband's business and where the husband told her on various occasions "Baby girl, what is mine is yours; you're my wife. It's always all half yours, you're my wife." The court held that the transfer of jointly owned funds was not referable to any express or implied promise that the husband held one half of his interest in the business property for the benefit of the wife and there was no unjust enrichment of the husband.
Even if the Court were to find that there was a transfer in reliance of a promise, which it does not, the facts do not show that Defendant put sweat and financial equity into Plaintiff's inherited properties in reliance of a promise by Plaintiff to Defendant. Ultimately, Defendant has not shown that marital assets were used in connection with the properties at issue or that Defendant contributed to the increased value thereof. Therefore, Defendant has not shown unjust enrichment. Since Defendant has not met her burden of establishing the essential elements of a claim for constructive trust, that branch of her motion is denied.
Defendant's motion further seeks to modify the interim award of counsel fees, Defendant seeks $35,000 in counsel fees to cover anticipated hours of work of 54-69 hours for him and additional hours for legal assistants and paralegals. Defendant's counsel asserts that he charges $330 per hour; however, the amendment to the retainer agreement outlines an hourly rate of $310 per hour for attorneys, $150 per hour for paralegals and $100 per hour for legal secretaries. In the initial retainer agreement the hourly rate for attorneys was $150 per hour and $60 per hour for paralegals, which was a discounted rate, based on Defendant's income of $36,000 per year subject to increase if Defendant's income increases or Defendant obtains assets with equity in excess of $25,000. Significant is the fact that Defendant's retainer increased and thus, it is apparent that Defendant's income must be more than $36,000 or that she obtained assets with equity in excess of $25,000. Defendant fails to provide an updated statement of net worth so that the Court can establish her ability to pay her own counsel fees ( See Domestic Relations Law § 237; 22 NYCRR § 202.16[k][2]). Accordingly, the branch of
Defendant's motion seeking counsel fees is denied without prejudice to renew.
This constitutes the decision and order of the Court.