Decisions of Interest

Mother's Acceptance of New Stipulation Voids Daughters' Rights

A stipulation entered into 15 years after a divorce erased an ex-husband's duty to name his children as irrevocable beneficiaries of his pension funds upon his death. Miller v. Miller, 602434/09 (Sup. Ct., New York Cty., 1/5/10) (Rakower, J.).

When Eva Miller began divorce proceedings against her husband Lloyd in 1975, they entered into a stipulation providing that Lloyd would name their two daughters as irrevocable beneficiaries of a fund containing pension benefits Lloyd was to receive from the Board of Education of the City of New York. Fifteen years later, in 1990, Lloyd and Eva entered into another stipulation providing that he pay Eva $17,250 for settlement of all claims for alimony and child support. The 1990 stipulation stated that it superseded and replaced any and all prior agreements by the parties. After Lloyd's death, pension fund benefits were paid to Iris, Lloyd's wife at the time of his death, and the plaintiff daughters of Eva and Lloyd filed suit. The court dismissed the plaintiffs' complaint, finding that the 1990 Stipulation had, by its own terms, superseded and replaced the 1975 stipulation, along with any and all other “prior agreements or Court Orders” entered into by Decedent and Eva in their divorce proceedings. Accordingly, the plaintiffs' arguments as to whether they would be entitled to receive the decedent's post-retirement death benefits if the 1975 stipulation was in effect were academic, since the agreement to name the two daughters “irrevocable beneficiaries of a certain pension fund with the Board of Education of the City of New York” was no longer in effect after execution of the 1990 Stipulation.

Court Should Have Enforced Couple's Intent to Hold Title As Tenants in Common

Supreme Court, New York County, erred in failing to enforce an agreement between the ex-wife and the widow of a deceased to sell a cooperative apartment and divide the proceeds because, although a joint tenancy remained “on paper,” the deceased and his first wife had obviously intended to convert their co-ownership of the apartment into a tenancy in common upon their divorce. Beudert-Richard v. Richard (1st Dept., 1/20/10) (Saxe, J.P., Buckley, McGuire, Moskowitz, and Acosta JJ.).

Adam and Pamela Richard were married in 1978 when they purchased a cooperative apartment together. They took title to the co-op shares as joint tenants with rights of survivorship rather than as tenants by the entirety, because prior to the amendment of EPTL 6-2.1 and 6-2.2 on Jan. 1, 1996 (L 1995, ch 480), co-op shares were treated as personalty rather than realty, and a married couple's ownership interest in such shares could be as joint tenants or as tenants in common, but could not be as tenants by the entirety (see EPTL 6-2.1; Stewart v Stewart, 118 AD2d 455, 457 (1986)).

In April 1989, Pamela and Adam entered into a separation agreement providing for distribution of the marital property. The paragraph of the separation agreement concerning the apartment erroneously stated that the couple owned the apartment “as tenants by the entirety,” and gave Pamela exclusive possession during their child's minority, after which the apartment was to be sold and the net proceeds split. Their December 1989 divorce judgment, which incorporated but did not merge their separation agreement, stated that the marital property was to be distributed pursuant to the separation agreement.

Adam thereafter married plaintiff Michele Beudert-Richard. Adam died on Sept. 23, 1999, and his will bequeathed to Michele his ownership interest in the apartment. At the time of Adam's death, the obligation to sell the apartment under the separation agreement had not yet been triggered because his child with Pamela was then 16 years old. In 2007, several years after Adam and Pamela's son completed college and became emancipated, Michele and Pamela entered into a written agreement to sell the co-op and split the proceeds. While a sale was pending, the mistake in the title was noted. At that point, Pamela, seeking to exert her rights of survivorship in accordance with the joint tenancy, sought to rescind her 2007 agreement with Michelle. Supreme Court, New York County, sided with Pamela.

On appeal, the First Department noted that while a married couple's tenancy by the entirety automatically converts into a tenancy in common upon entry of a divorce judgment (see Goldman v. Goldman, 95 NY2d 120, 122 [2000]; Freigang v. Freigang, 256 AD2d 539, 539-540 (1998); 13 Warren's Weed, New York Real Property, Tenancy in Common, ' 2.08(1) (4th ed)), the same is not true for a married couple's joint tenancy, which remains in force upon divorce. However, General Obligations Law '3-309 allows a married couple to freely “convey or transfer real or personal property directly, the one to the other, without the intervention of a third person.” Therefore, a married couple may convert the form of tenancy in which they hold property by expressing in a writing an intent to do so. Thus, Adam and Pamela could have converted their ownership of the co-op from joint tenancy to a tenancy by the entirety. Their failure to do so appeared to be based on their incorrect understanding that their ownership already took that form, which would automatically become a tenancy in common upon their divorce. Said the court, “There can be little doubt from the language of their separation agreement that Adam and Pamela intended, and assumed, that upon entry of their divorce judgment they would automatically become tenants in common without any right of survivorship. Not only is there no indication that Adam intended to waive his (or his estate's) property interest in the co-op, or that Pamela thought he had done so, but in fact, the record contains numerous indications to the contrary.” Such indications included Pamela's 2007 agreement to split the proceeds of the apartment's sale with Michelle. The court therefore reversed and remanded the case for further proceedings.

Wife Gets No Part of Family Business

The court granted the plaintiff wife a divorce but refused to granted her a requested 50% of her husband's business, finding that she had not contributed in any substantial way to its development and success. Scher v. Scher, 29475-2007 (Sup. Ct., Suffolk Cty. 1/26/10) (Garguilo, J.).

In conjunction with her divorce, the wife asked for a 50% share of the marital portion of all the couple's business interests. The husband contended that the plaintiff was not a contributing member of an economic partnership with him and pointed out that the business in question had been started three years before the marriage. The court found the record was “quite clear” that the plaintiff offered “virtually nothing” to enhance the growth of the business interest and the accumulation of additional assets. Stated the court, “During the course of this short, rocky relationship, nothing tied the plaintiff to the marital home. There is no rearing of children, maintaining the marital abode and/or active participation in fostering the growth of defendant's enterprises. At the time the plaintiff took employment with her husband's companies, she abused her stature as the boss's wife. She came and went as she pleased and neglected accounts, costing the business dearly. She engaged in self-dealing by secretly siphoning money.” The court also found that the wife's children from a previous marriage were permitted by her to “run amok, damage, soil and show no respect for the defendant's proprietary rights” in his home and belongings.

The court, noting that equitable distribution did not necessarily mean equal distribution, declined to award the wife any portion of the value of the business. According to the court, this result was proper because “[t]he plaintiff's presence [in the marriage], as suggested by the record, was parasitic.”

Mother's Acceptance of New Stipulation Voids Daughters' Rights

A stipulation entered into 15 years after a divorce erased an ex-husband's duty to name his children as irrevocable beneficiaries of his pension funds upon his death. Miller v. Miller, 602434/09 (Sup. Ct., New York Cty., 1/5/10) (Rakower, J.).

When Eva Miller began divorce proceedings against her husband Lloyd in 1975, they entered into a stipulation providing that Lloyd would name their two daughters as irrevocable beneficiaries of a fund containing pension benefits Lloyd was to receive from the Board of Education of the City of New York. Fifteen years later, in 1990, Lloyd and Eva entered into another stipulation providing that he pay Eva $17,250 for settlement of all claims for alimony and child support. The 1990 stipulation stated that it superseded and replaced any and all prior agreements by the parties. After Lloyd's death, pension fund benefits were paid to Iris, Lloyd's wife at the time of his death, and the plaintiff daughters of Eva and Lloyd filed suit. The court dismissed the plaintiffs' complaint, finding that the 1990 Stipulation had, by its own terms, superseded and replaced the 1975 stipulation, along with any and all other “prior agreements or Court Orders” entered into by Decedent and Eva in their divorce proceedings. Accordingly, the plaintiffs' arguments as to whether they would be entitled to receive the decedent's post-retirement death benefits if the 1975 stipulation was in effect were academic, since the agreement to name the two daughters “irrevocable beneficiaries of a certain pension fund with the Board of Education of the City of New York” was no longer in effect after execution of the 1990 Stipulation.

Court Should Have Enforced Couple's Intent to Hold Title As Tenants in Common

Supreme Court, New York County, erred in failing to enforce an agreement between the ex-wife and the widow of a deceased to sell a cooperative apartment and divide the proceeds because, although a joint tenancy remained “on paper,” the deceased and his first wife had obviously intended to convert their co-ownership of the apartment into a tenancy in common upon their divorce. Beudert-Richard v. Richard (1st Dept., 1/20/10) (Saxe, J.P., Buckley, McGuire, Moskowitz, and Acosta JJ.).

Adam and Pamela Richard were married in 1978 when they purchased a cooperative apartment together. They took title to the co-op shares as joint tenants with rights of survivorship rather than as tenants by the entirety, because prior to the amendment of EPTL 6-2.1 and 6-2.2 on Jan. 1, 1996 (L 1995, ch 480), co-op shares were treated as personalty rather than realty, and a married couple's ownership interest in such shares could be as joint tenants or as tenants in common, but could not be as tenants by the entirety (see EPTL 6-2.1; Stewart v Stewart, 118 AD2d 455, 457 (1986)).

In April 1989, Pamela and Adam entered into a separation agreement providing for distribution of the marital property. The paragraph of the separation agreement concerning the apartment erroneously stated that the couple owned the apartment “as tenants by the entirety,” and gave Pamela exclusive possession during their child's minority, after which the apartment was to be sold and the net proceeds split. Their December 1989 divorce judgment, which incorporated but did not merge their separation agreement, stated that the marital property was to be distributed pursuant to the separation agreement.

Adam thereafter married plaintiff Michele Beudert-Richard. Adam died on Sept. 23, 1999, and his will bequeathed to Michele his ownership interest in the apartment. At the time of Adam's death, the obligation to sell the apartment under the separation agreement had not yet been triggered because his child with Pamela was then 16 years old. In 2007, several years after Adam and Pamela's son completed college and became emancipated, Michele and Pamela entered into a written agreement to sell the co-op and split the proceeds. While a sale was pending, the mistake in the title was noted. At that point, Pamela, seeking to exert her rights of survivorship in accordance with the joint tenancy, sought to rescind her 2007 agreement with Michelle. Supreme Court, New York County, sided with Pamela.

On appeal, the First Department noted that while a married couple's tenancy by the entirety automatically converts into a tenancy in common upon entry of a divorce judgment ( see Goldman v. Goldman , 95 NY2d 120, 122 [2000]; Freigang v. Freigang , 256 AD2d 539, 539-540 (1998); 13 Warren's Weed, New York Real Property, Tenancy in Common, ' 2.08(1) (4th ed)), the same is not true for a married couple's joint tenancy, which remains in force upon divorce. However, General Obligations Law '3-309 allows a married couple to freely “convey or transfer real or personal property directly, the one to the other, without the intervention of a third person.” Therefore, a married couple may convert the form of tenancy in which they hold property by expressing in a writing an intent to do so. Thus, Adam and Pamela could have converted their ownership of the co-op from joint tenancy to a tenancy by the entirety. Their failure to do so appeared to be based on their incorrect understanding that their ownership already took that form, which would automatically become a tenancy in common upon their divorce. Said the court, “There can be little doubt from the language of their separation agreement that Adam and Pamela intended, and assumed, that upon entry of their divorce judgment they would automatically become tenants in common without any right of survivorship. Not only is there no indication that Adam intended to waive his (or his estate's) property interest in the co-op, or that Pamela thought he had done so, but in fact, the record contains numerous indications to the contrary.” Such indications included Pamela's 2007 agreement to split the proceeds of the apartment's sale with Michelle. The court therefore reversed and remanded the case for further proceedings.

Wife Gets No Part of Family Business

The court granted the plaintiff wife a divorce but refused to granted her a requested 50% of her husband's business, finding that she had not contributed in any substantial way to its development and success. Scher v. Scher, 29475-2007 (Sup. Ct., Suffolk Cty. 1/26/10) (Garguilo, J.).

In conjunction with her divorce, the wife asked for a 50% share of the marital portion of all the couple's business interests. The husband contended that the plaintiff was not a contributing member of an economic partnership with him and pointed out that the business in question had been started three years before the marriage. The court found the record was “quite clear” that the plaintiff offered “virtually nothing” to enhance the growth of the business interest and the accumulation of additional assets. Stated the court, “During the course of this short, rocky relationship, nothing tied the plaintiff to the marital home. There is no rearing of children, maintaining the marital abode and/or active participation in fostering the growth of defendant's enterprises. At the time the plaintiff took employment with her husband's companies, she abused her stature as the boss's wife. She came and went as she pleased and neglected accounts, costing the business dearly. She engaged in self-dealing by secretly siphoning money.” The court also found that the wife's children from a previous marriage were permitted by her to “run amok, damage, soil and show no respect for the defendant's proprietary rights” in his home and belongings.

The court, noting that equitable distribution did not necessarily mean equal distribution, declined to award the wife any portion of the value of the business. According to the court, this result was proper because “[t]he plaintiff's presence [in the marriage], as suggested by the record, was parasitic.”