When Is 'Not Equal' Equitable?

It is well settled that Equitable Distribution does not mean equal distribution, and we counsel our clients that the tides shift toward “equal” the longer the parties are married ' particularly if there are children of the marriage. We also often default to thinking in terms of short marriages being unlikely to yield maintenance awards, particularly awards of any length. But is that what the cases are really telling us?

After examining numerous cases where there have been unequal divisions of assets, it remains difficult to decipher a clear pattern, although some trends are apparent. Of course, the lack of a pattern is consistent with the concept that the trier of fact is best positioned to determine what is equitable; however, this leaves us, the practitioners, scratching our heads and trying to guess what facts will sway a judge.

This article addresses the division of martial estates as a whole, and does not look at the division of business interests, enhanced earning capacity and related assets, which are typically divided unequally.

Division of Assets Consistent with Economic Contributions to the Marriage

One early approach in equitable distribution was that assets would be divided consistent with the parties' economic contributions to the marriage, as reflected on their tax returns. This approach was first applied in the seminal equitable distribution case of Kobylack v. Kobylack, 110 Misc.2d 402 (Sup. Ct. Westchester Cty. 1981), and affirmed in Kobylack v. Kobylack, 111 AD2d 22 (2nd Dept. 1985). Following a 10-year childless marriage, in which Mr. Kobylack earned 72% of the parties' combined income, he was awarded 72% of their marital assets. In the trial court decision, we learned that the “parties treated their marriage as an economic partnership albeit an unequal one,” contributing to the family expenses in proportion to their incomes. 110 Misc.2d at 405.

The court noted that neither party made sacrifices for the other's career, or earned less in his or her own career because of the marriage. There was no mention of household responsibilities, and no discussion of which party may have made greater contributions in that regard, although we learned that Mr. Kobylack was away from home on business for six months each year, and that Mrs. Kobylack had been unfaithful.

The formulaic Kobylack approach has been applied in other cases, including Mavra v. Mavra, 131 AD2d 447 (2nd Dept. 1987), where, following a marriage of unknown length during which the parties had children, the assets were distributed 75% to the wife and 25% to the husband, “in proportion based upon the ratio of the parties' respective earnings during the latter years of the marriage when most of the marital assets were acquired.” 131 AD2d at 448. It was also applied in Hansen v. Hansen, 137 AD2d 491 (2nd Dept. 1988), where the wife's pension was divided in proportion to the parties' earnings during the marriage: two-thirds to the wife, one-third to the husband.

The Shift Toward Considering Noneconomic Factors

Despite the previously cited cases, the trend of strictly applying relative income percentages to the pot of marital assets never really took off, as, shortly after Kobylack , one finds cases where the division of marital property is not precisely in line with the parties' respective earnings, and instead, other factors have been considered. In Kawasaki v. Kasting, 124 AD2d 1034 (4th Dept. 1986), the husband earned 81% of the family income in this childless 10-year marriage, but received only 65% of the marital assets after trial. Perhaps the shift of 16 percentage points was because “each party made significant nonmonetary contributions toward the maintenance of marital property and their horse business” 124 AD2d at 1035.

In Whispell v. Whispell, 144 AD2d 804 (3rd Dept. 1988), the shift went the other way. Following a 14-year marriage, in which the defendant generated 20% of the parties' income, he received just 11.5% of the marital property. The court cited his “sporadic employment, indolence, immoderate drinking and generally negative contribution to the marriage.” 144 AD2d at 805-806.

A variation on the Kobylack approach was applied in Rauch v. Rauch, 226 AD2d 1141 (4th Dept. 1996), where the court considered the separate property contributions each party made to the marriage ' 75% by the Wife, 25% by the Husband. The court made note of the parties' respective earnings (the Husband's annual earnings were nearly triple those of the Wife), but also noted that the Wife was unemployed during the last two years of the marriage, at the request of the Husband. Ultimately, following an eight-year, childless marriage, the marital assets were divided 65% to the Wife, thus giving more weight to the contributions of separate property than to earnings.

Kobylack was cited by the Second Department as recently as 2010, in Alper v. Alper, 77 AD3d 694 (2nd Dept. 2010). However, in Alper, the court did not divide the parties' marital property in accordance with their respective reported incomes. Rather, where the parties had been married for 20 years but separated for 10 of those years, the court declined to award the plaintiff wife any equitable distribution, noting that “the plaintiff made little or no financial contribution to the marriage, but rather spent all her money on herself and her daughter from a prior marriage.” 77 AD2d at 696.

What Facts Warrant Which Type of Division?

If courts are not distributing assets in accordance with the parties' respective reported incomes in short marriages, what are they doing? Not surprisingly, the trend appears to be away from a strict application of a formula tied to the parties' incomes, and toward a broader look at non-economic contributions, even in childless marriages. But what separates a case with a 60/40 division from an 85/15 division? Again, not surprising, it's very unclear.

One can understand that a “minimal” contribution to the marriage would yield just 10% to 15% of marital assets in equitable distribution, as in Evans v. Evans, 57 AD3d 718 (2nd Dept. 2008). Similarly, in Wansi v. Wansi, 71 AD3d 599 (1st Dept. 2010), the First Department affirmed an award of 15% of the marital residence to the husband where he “made little, if any contribution” to the property.

“Minor and insignificant economic and noneconomic contributions to the marriage” yielded an award of 20% of the marital assets (reduced on appeal from an equal distribution at trial) in Sade v. Sade' 251 AD2d 646 (2nd Dept. 1998). (The Sade decision gives us no information about the length of the parties' marriage.) In Arrigo v. Arrigo, 38 AD3d 807 (2nd Dept. 2007), following a “relatively short” and childless marriage, the husband was awarded just 25% of marital assets given his “minimal” contributions to the union.

What separates the “minimal financial contributions” in Guha v. Guha, 61 AD3d 634 (2nd Dept. 2009), which yielded a 30% interest in the marital residence from the minimal contributions that led to an award of 15% in Evan s? Both cases were decided by the same court, one year apart, and the difference between 15% and 30% of an asset such as the marital residence could be significant. Curiously, while both decisions are silent regarding the length of the marriage, in the Evans decision, where the husband received a smaller share of the residence, we learn that there is at least one child of the marriage. On their faces, these cases render it impossible to tell the difference in the contributions by the parties.

Three different Second Department cases decided within three and a half years of one another divided the marital assets 60%/40%, and the facts in the three cases are remarkably different. In Palermo v. Palermo, 34 AD3d 548 (2nd Dept. 2006), the wife was awarded 40% of the marital assets after a 5 '-year childless marriage; the court said nothing about the parties' relative contributions to the marriage. Likewise, in Bernholc v. Bornstein, 72 AD3d 625 (2nd Dept. 2010), we are told almost nothing about the parties' contributions to the 15-year marriage in which the parties had one child. Yet, in Bernholc, the husband received just 40% of the assets. What made the result the same, despite the fact that the marriage in Bernholc was three times as long, and the parties had a child? Aren't we lead to believe that the presence of a child skews the cases toward equal distribution?

The third case in this set, Loria v. Loria, 46 AD3d 768 (2nd Dept. 2007), has some interesting facts. In Loria, the parties were married for just four years, and the wife did not work outside the home. Rather, she cared for the husband's four minor children from his prior marriage, ran the household and oversaw a renovation of the marital residence. And, for that, she received 40% of the marital assets.

Is There a Gender Bias?

It is interesting to note that in Evans, Wansi, Sade , Arrigo and Guha , the party that was awarded between 10% and 30% of marital assets was the husband. Perhaps that helps explain why in Booth v. Booth, 24 AD3d 1238 (4th Dept. 2005), the wife was awarded 30% of the marital assets even though the husband “contributed most of the family's support and was the primary caretaker of the children.” 24 AD3d at 1239. Had their roles been reversed, might the husband have received less than 30% of the marital property? Might his contributions have been labeled as “minimal”?

One exception to this trend of larger awards in favor of wives is Miller v. Xiao Mei , 295 AD2d 144 (1st Dept. 2002), where the wife was granted just 25% of marital assets where, after 2 ' years of marriage, the wife undertook “a pattern of bizarre behavior ' that caused [the husband] to fear for his safety.” Her “minimal” contributions to the marriage are also noted. It is worth mentioning that her 25% of marital assets totaled over $1,700,000.

Maintenance Awards In Cases with Unequal Division of Assets

In most short-marriage cases, there is no award of spousal support. See, e.g., Szewczuk v. Szewczuk, 107 AD3d 692 (2nd Dept 2013) (no award of maintenance after a short marriage during which the wife continued to be employed); Spathis v. Dulimof-Spathis' 103 AD3d 599 (1st Dept. 2013) leave to appeal dismissed in part, leave to appeal denied in part, 22 NY3d 913 (2013) (no award of maintenance where wife received spousal support pendente lite for longer than the time the parties were married). However, there are a few notable exceptions in the cases discussed above in which courts ordered unequal division of assets.

The Miller decision, supra , stands out, not only because the wife drew the short end of the stick on equitable distribution, but also because, despite her receipt of a distributive award of over $1,700,000, her “minimal” contributions to the marriage, and the “relatively short” duration of the marriage, the wife was awarded spousal maintenance of $7,000 per month for five years. This is particularly significant when you consider that the court noted that she held a master's degree in bilingual education.

Also of note is Faello v. Faello, 43 AD3d 1102 (2nd Dept. 2007), where, again, it was the wife who was granted just 15% of the marital residence. In addition, however, she also received an award of maintenance for 54 months. (The Faello decision is silent regarding the length of the marriage, and what factors were considered in awarding the wife just 15% of the assets, as well as what warranted 4 ' years of spousal support.)

On the other hand, in Sade, supra, where the appellate division reduced an equal division of assets to an award of 20% to the husband, the appeals court also vacated the trial court's award of spousal support to the husband in the amount of $140 per week for three years. Again, had the gender roles been reversed, would the outcome have been different?

Conclusion

What can we take away from these cases?

It seems that courts continue to determine equitable distribution based on a variety of factors. Gender may be playing a role, as most of the reported decisions over the past 10 years in which there is an unequal distribution of assets, the women received the greater share of the marital estate. Where the women were awarded 25% or less of the assets, they might just get an award of maintenance too.

Karen M. Platt, a partner of Mayerson Abramowitz & Kahn, LLP, which limits its practice to Matrimonial, Divorce and Family Law, is recognized by both Best Lawyers in America and Super Lawyers.

It is well settled that Equitable Distribution does not mean equal distribution, and we counsel our clients that the tides shift toward “equal” the longer the parties are married ' particularly if there are children of the marriage. We also often default to thinking in terms of short marriages being unlikely to yield maintenance awards, particularly awards of any length. But is that what the cases are really telling us?

After examining numerous cases where there have been unequal divisions of assets, it remains difficult to decipher a clear pattern, although some trends are apparent. Of course, the lack of a pattern is consistent with the concept that the trier of fact is best positioned to determine what is equitable; however, this leaves us, the practitioners, scratching our heads and trying to guess what facts will sway a judge.

This article addresses the division of martial estates as a whole, and does not look at the division of business interests, enhanced earning capacity and related assets, which are typically divided unequally.

Division of Assets Consistent with Economic Contributions to the Marriage

One early approach in equitable distribution was that assets would be divided consistent with the parties' economic contributions to the marriage, as reflected on their tax returns. This approach was first applied in the seminal equitable distribution case of Kobylack v. Kobylack , 110 Misc.2d 402 (Sup. Ct. Westchester Cty. 1981), and affirmed in Kobylack v. Kobylack , 111 AD2d 22 (2nd Dept. 1985). Following a 10-year childless marriage, in which Mr. Kobylack earned 72% of the parties' combined income, he was awarded 72% of their marital assets. In the trial court decision, we learned that the “parties treated their marriage as an economic partnership albeit an unequal one,” contributing to the family expenses in proportion to their incomes. 110 Misc.2d at 405.

The court noted that neither party made sacrifices for the other's career, or earned less in his or her own career because of the marriage. There was no mention of household responsibilities, and no discussion of which party may have made greater contributions in that regard, although we learned that Mr. Kobylack was away from home on business for six months each year, and that Mrs. Kobylack had been unfaithful.

The formulaic Kobylack approach has been applied in other cases, including Mavra v. Mavra , 131 AD2d 447 (2nd Dept. 1987), where, following a marriage of unknown length during which the parties had children, the assets were distributed 75% to the wife and 25% to the husband, “in proportion based upon the ratio of the parties' respective earnings during the latter years of the marriage when most of the marital assets were acquired.” 131 AD2d at 448. It was also applied in Hansen v. Hansen , 137 AD2d 491 (2nd Dept. 1988), where the wife's pension was divided in proportion to the parties' earnings during the marriage: two-thirds to the wife, one-third to the husband.

The Shift Toward Considering Noneconomic Factors

Despite the previously cited cases, the trend of strictly applying relative income percentages to the pot of marital assets never really took off, as, shortly after Kobylack , one finds cases where the division of marital property is not precisely in line with the parties' respective earnings, and instead, other factors have been considered. In Kawasaki v. Kasting , 124 AD2d 1034 (4th Dept. 1986), the husband earned 81% of the family income in this childless 10-year marriage, but received only 65% of the marital assets after trial. Perhaps the shift of 16 percentage points was because “each party made significant nonmonetary contributions toward the maintenance of marital property and their horse business” 124 AD2d at 1035.

In Whispell v. Whispell , 144 AD2d 804 (3rd Dept. 1988), the shift went the other way. Following a 14-year marriage, in which the defendant generated 20% of the parties' income, he received just 11.5% of the marital property. The court cited his “sporadic employment, indolence, immoderate drinking and generally negative contribution to the marriage.” 144 AD2d at 805-806.

A variation on the Kobylack approach was applied in Rauch v. Rauch , 226 AD2d 1141 (4th Dept. 1996), where the court considered the separate property contributions each party made to the marriage ' 75% by the Wife, 25% by the Husband. The court made note of the parties' respective earnings (the Husband's annual earnings were nearly triple those of the Wife), but also noted that the Wife was unemployed during the last two years of the marriage, at the request of the Husband. Ultimately, following an eight-year, childless marriage, the marital assets were divided 65% to the Wife, thus giving more weight to the contributions of separate property than to earnings.

Kobylack was cited by the Second Department as recently as 2010, in Alper v. Alper , 77 AD3d 694 (2nd Dept. 2010). However, in Alper, the court did not divide the parties' marital property in accordance with their respective reported incomes. Rather, where the parties had been married for 20 years but separated for 10 of those years, the court declined to award the plaintiff wife any equitable distribution, noting that “the plaintiff made little or no financial contribution to the marriage, but rather spent all her money on herself and her daughter from a prior marriage.” 77 AD2d at 696.

What Facts Warrant Which Type of Division?

If courts are not distributing assets in accordance with the parties' respective reported incomes in short marriages, what are they doing? Not surprisingly, the trend appears to be away from a strict application of a formula tied to the parties' incomes, and toward a broader look at non-economic contributions, even in childless marriages. But what separates a case with a 60/40 division from an 85/15 division? Again, not surprising, it's very unclear.

One can understand that a “minimal” contribution to the marriage would yield just 10% to 15% of marital assets in equitable distribution, as in Evans v. Evans , 57 AD3d 718 (2nd Dept. 2008). Similarly, in Wansi v. Wansi , 71 AD3d 599 (1st Dept. 2010), the First Department affirmed an award of 15% of the marital residence to the husband where he “made little, if any contribution” to the property.

“Minor and insignificant economic and noneconomic contributions to the marriage” yielded an award of 20% of the marital assets (reduced on appeal from an equal distribution at trial) in Sade v. Sade ' 251 AD2d 646 (2nd Dept. 1998). (The Sade decision gives us no information about the length of the parties' marriage.) In Arrigo v. Arrigo , 38 AD3d 807 (2nd Dept. 2007), following a “relatively short” and childless marriage, the husband was awarded just 25% of marital assets given his “minimal” contributions to the union.

What separates the “minimal financial contributions” in Guha v. Guha , 61 AD3d 634 (2nd Dept. 2009), which yielded a 30% interest in the marital residence from the minimal contributions that led to an award of 15% in Evan s? Both cases were decided by the same court, one year apart, and the difference between 15% and 30% of an asset such as the marital residence could be significant. Curiously, while both decisions are silent regarding the length of the marriage, in the Evans decision, where the husband received a smaller share of the residence, we learn that there is at least one child of the marriage. On their faces, these cases render it impossible to tell the difference in the contributions by the parties.

Three different Second Department cases decided within three and a half years of one another divided the marital assets 60%/40%, and the facts in the three cases are remarkably different. In Palermo v. Palermo , 34 AD3d 548 (2nd Dept. 2006), the wife was awarded 40% of the marital assets after a 5 '-year childless marriage; the court said nothing about the parties' relative contributions to the marriage. Likewise, in Bernholc v. Bornstein , 72 AD3d 625 (2nd Dept. 2010), we are told almost nothing about the parties' contributions to the 15-year marriage in which the parties had one child. Yet, in Bernholc, the husband received just 40% of the assets. What made the result the same, despite the fact that the marriage in Bernholc was three times as long, and the parties had a child? Aren't we lead to believe that the presence of a child skews the cases toward equal distribution?

The third case in this set, Loria v. Loria , 46 AD3d 768 (2nd Dept. 2007), has some interesting facts. In Loria, the parties were married for just four years, and the wife did not work outside the home. Rather, she cared for the husband's four minor children from his prior marriage, ran the household and oversaw a renovation of the marital residence. And, for that, she received 40% of the marital assets.

Is There a Gender Bias?

It is interesting to note that in Evans, Wansi, Sade , Arrigo and Guha , the party that was awarded between 10% and 30% of marital assets was the husband. Perhaps that helps explain why in Booth v. Booth , 24 AD3d 1238 (4th Dept. 2005), the wife was awarded 30% of the marital assets even though the husband “contributed most of the family's support and was the primary caretaker of the children.” 24 AD3d at 1239. Had their roles been reversed, might the husband have received less than 30% of the marital property? Might his contributions have been labeled as “minimal”?

One exception to this trend of larger awards in favor of wives is Miller v. Xiao Mei , 295 AD2d 144 (1st Dept. 2002), where the wife was granted just 25% of marital assets where, after 2 ' years of marriage, the wife undertook “a pattern of bizarre behavior ' that caused [the husband] to fear for his safety.” Her “minimal” contributions to the marriage are also noted. It is worth mentioning that her 25% of marital assets totaled over $1,700,000.

Maintenance Awards In Cases with Unequal Division of Assets

In most short-marriage cases, there is no award of spousal support. See, e.g., Szewczuk v. Szewczuk , 107 AD3d 692 (2nd Dept 2013) (no award of maintenance after a short marriage during which the wife continued to be employed); Spathis v. Dulimof-Spathis ' 103 AD3d 599 (1st Dept. 2013) leave to appeal dismissed in part, leave to appeal denied in part, 22 NY3d 913 (2013) (no award of maintenance where wife received spousal support pendente lite for longer than the time the parties were married). However, there are a few notable exceptions in the cases discussed above in which courts ordered unequal division of assets.

The Miller decision, supra , stands out, not only because the wife drew the short end of the stick on equitable distribution, but also because, despite her receipt of a distributive award of over $1,700,000, her “minimal” contributions to the marriage, and the “relatively short” duration of the marriage, the wife was awarded spousal maintenance of $7,000 per month for five years. This is particularly significant when you consider that the court noted that she held a master's degree in bilingual education.

Also of note is Faello v. Faello , 43 AD3d 1102 (2nd Dept. 2007), where, again, it was the wife who was granted just 15% of the marital residence. In addition, however, she also received an award of maintenance for 54 months. (The Faello decision is silent regarding the length of the marriage, and what factors were considered in awarding the wife just 15% of the assets, as well as what warranted 4 ' years of spousal support.)

On the other hand, in Sade, supra, where the appellate division reduced an equal division of assets to an award of 20% to the husband, the appeals court also vacated the trial court's award of spousal support to the husband in the amount of $140 per week for three years. Again, had the gender roles been reversed, would the outcome have been different?

Conclusion

What can we take away from these cases?

It seems that courts continue to determine equitable distribution based on a variety of factors. Gender may be playing a role, as most of the reported decisions over the past 10 years in which there is an unequal distribution of assets, the women received the greater share of the marital estate. Where the women were awarded 25% or less of the assets, they might just get an award of maintenance too.

Karen M. Platt, a partner of Mayerson Abramowitz & Kahn, LLP, which limits its practice to Matrimonial, Divorce and Family Law, is recognized by both Best Lawyers in America and Super Lawyers.