New York Court Discusses Consequences of Marital Misconduct in Divorce Actions

In many divorce actions, the main point of contention is the division of assets. While parties may not want to divide marital property during a divorce, behavior designed to hide such property will likely be uncovered by the courts, as demonstrated in a recent New York opinion issued in a divorce case. If you want to end your marriage and want to learn more about how it can impact you financially, it is in your best interest to speak with a New York divorce lawyer about what measures you can take to protect your interests.

Case Setting

It is reported that the wife instituted a divorce action. The court noted that the husband engaged in deliberate actions to obscure and hide marital assets. Specifically, the husband violated court orders restraining him from transferring assets or accessing safety deposit boxes. Moreover, the husband undertook transfers of ownership of his various businesses to his brother and a long-term employee, both before and after the wife initiated the divorce. He also engaged in transactions aimed at creating the appearance of having no assets, even going so far as to portray himself as earning a nominal income of only around $12,500 per year.

It is alleged that the trial court subsequently issued three judgments. The first one distributed marital property, including maintenance and child support, to the wife. The second judgment addressed attorneys’ fees, particularly for the wife’s attorneys, and the third judgment finalized the monetary aspects of the case. The husband appealed.

Consequences of Marital Misconduct in Divorce Actions

On appeal, the court rejected most of the husband’s contentions. First, it upheld the imputation of income to the husband. In doing so, it considered his conduct, which made it difficult to accurately determine his income, and found that imputing income based on the husband’s earning capacity was appropriate. Regarding maintenance, although the husband contested it without proper briefing, the court deemed the award of nondurational maintenance suitable given the circumstances. Additionally, the court upheld the decision not to credit the husband for certain expenses, considering the source of the funds.

Regarding the equitable distribution of assets, the court affirmed the award of 100% of known marital assets to the wife due to the husband’s actions, which hindered the court’s assessment of asset values. Despite a potential error in refusing to admit certain evidence, the court deemed it harmless. The court also considered the husband’s egregious behavior, including hiding assets and scheming, as grounds for the distribution award.

However, the court found an error in awarding attorneys’ fees to the wife’s attorney, as the wife had not paid or owed fees to the attorney beyond a nominal retainer fee. The court found that such an award didn’t align with the statute’s goal of addressing economic disparities between spouses. Therefore, the court vacated the judgment concerning attorneys’ fees and reversed the order related to them.

Meet with an Experienced New York Attorney

In divorce actions, the courts aim to divide marital assets in a fair manner, and if a party engages in misconduct in an attempt to sway judgment in their favor, it is likely to result in an adverse ruling. If you have questions about your rights and obligations with regard to marital assets in a divorce action, it is smart to meet with a lawyer. Ksenia Rudyuk is an experienced New York divorce attorney who can assess your case and help you seek a just outcome. You can contact Ms. Rudyuk by calling 212-706-2001 or using the form online to arrange a conference.

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