E.S.—Plaintiff v. L.R.S.—Defendant, 350249/07

Supreme Court, New York County, Part 31

Family Law

Decided: August 11, 2010

TRIAL DECISION AND ORDER

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The issues in this divorce action are equitable distribution of the marital assets and liabilities; maintenance and various issues arising from the pendente lite support orders; and attorney and expert fees. A trial was conducted on October 6, 7, 8, 9, 14, 15, 16, 20, 21, 22, 23, 28 and 30, 2009. It was agreed by the parties that the issue of attorney and expert fees would be addressed in papers that were submitted by counsel. Each party submitted a post-trial brief and reply brief. The court has reviewed all submitted papers. During the trial, the plaintiff (the "Wife") presented evidence, without opposition, warranting a divorce on the grounds of constructive abandonment.

The parties married on June 27, 1981 in a religious ceremony in New York County. The Wife is 55 years old and the Defendant (the "Husband") is 58 years old. There are two children of the marriage, a son (born May 1983) and daughter (born February 2, 1985). Each child is emancipated although as of trial, the daughter still attended college on a part time basis.

Prior to the marriage, the Husband worked for his family's wholesale business, Interstate Cigar. He was fired from that job early in the marriage in 1985. He then set up his own wholesale business. The business operated under several names, including International Trade Expo ("ITE"), Allstate Clearing, Inc. ("Allstate") and, in 2000, Betlar Merchandising ("Betlar"). Except during the very early years of the business when the Husband had a partner, the Husband was the sole owner of these business entities.

The Husband's corporations engaged in what he called an opportunistic purchasing business, commonly referred to as "grey market" activity or diversion of product. Manufacturers in the United States produced and sold product overseas which the manufacturers intended for resale outside of the United States. These products were typically sold overseas for a lower price than comparable products sold within the United States. Working with agents in foreign countries, the Husband purchased the product intended for overseas markets, and upon its re-

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delivery in the United States, sold the product to wholesalers at a price lower than if purchased directly from the manufacturer in the United States. Most of the products sold by the Husband's business were grocery items. The rest of the items were beauty or hair salon products.

Typically, ITE and, later, Betlar purchased the product with funds wired to overseas agents. Upon receiving the product, the company would warehouse the product, prepare it for resale (which sometimes required removing identification numbers), and deliver the product to the purchaser within the United States. Upon receiving payment for the product, the Husband calculated the percentage due to him for costs incurred and would then share profits on a deal-by-deal basis with the overseas agents. The money sent overseas might include in one transfer profits from a prior sale and payment for future product or just one or the other. ITE did not itself transfer the money overseas as a result of a lawsuit brought against ITE by Clorox. The Husband decided it was best to separate the buying and selling operations. Instead, ITE transferred money to Allstate which sent the funds overseas. Most frequently, Allstate wired money to Fortuna Trading Co. ("Fortuna"), an entity with a bank account in the Channel Islands, but other overseas business entities received funds from Allstate too. Fortuna was a business entity owned by Daniel Akerib, the Husband's primary overseas agent.

The Husband's business was run out of a studio apartment located in the same building where the parties resided, 425 East 58th Street, New York, New York (the "Studio Apartment"). Ultimately, the parties purchased the Studio Apartment.

The Wife, a college graduate, worked in sales before and early in the marriage. She sold cosmetics retail and then sold advertising for a magazine. She also worked in sales for her father's dress manufacturing business and as a secretary. She stopped working with the birth of the parties' first child. In 1991, once both children were in school, the Wife worked for the Husband's business. She became an integral part of its operation. The Husband often spent weeks traveling in Asia and Africa developing contacts with overseas agents. He testified that he traveled 25-30 percent of the time, although he traveled less in later years. The Wife managed the office. She maintained most of the companies' books and records and was responsible for wiring payments. She created and maintained the files for each deal. She tracked receipts and had contact with the various agents who worked for the business when they came to the office. She provided records to the accountant. She did not set the prices for any deal; the Husband determined the price. But the Wife spoke to the Husband, often several times a day when he was out of the country, to have him tell her at what price to buy or sell product. She then completed the deal.

The Wife also oversaw the family's finances. She deposited into the family's bank accounts all funds received from the business either as salary or distribution of profit and paid all of the family's bills. The parties maintained a joint account, but the Wife also maintained her own account. The Husband's salary received from his business over the years was typically in the range of $70-90,000 as reported on tax returns. The reported distributions received from the company averaged around $200,000-250,000 (but were significantly less in some years) (Ex. 8). The Wife testified that some of the family's bills were paid by her through the business. She testified that she also received for herself unreported "salary" of $1,700 to $1,900 a week from the business which she deposited into her own account.

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At the time the parties' married, the Husband's family held stock in a company called Bambu Sales, Inc. ("Bambu"). The company manufactured and sold to wholesalers cigarette rolling paper. The rolling paper is commonly known to be used for smoking marijuana, although there is no evidence that Bambu was involved in the drug trade. The Husband did not own stock at the time of the marriage, but he received Bambu shares at three different points during the marriage: 1991, 1994 and 2005. In 1997, the Husband began to receive a salary from Bambu in the amount of $1,000 to $1,200 a week. Not only did this provide some additional money to the family, but it also enabled the parties to receive medical insurance through Bambu. The Husband also received approximately $700 a month to lease a car. As a shareholder, the Husband received distribution checks quarterly, although some portion of the distribution was used to pay taxes. The Wife testified that she often deposited the weekly salary received from Bambu into her own bank account.

From the proceeds received from the Husband's business and Bambu, the parties lived a very comfortable lifestyle. They initially lived in an apartment owned by the Husband's father at 425 East 58th Street, New York, New York. In 1989, the Husband's father gifted the apartment to the parties. In 1994, the parties sold that apartment and purchased a 3 bedroom apartment in the same building for $875,000 (the "Marital Apartment"). The parties spent $500,000 renovating the apartment. They also acquired two brownstones in the Red Hook section of Brooklyn and a vacant lot as investment properties. The parties employed a full time housekeeper/nanny. The children attended private schools, camp and participated in paid extracurricular activities. They had tutors. The couple purchased significant pieces of jewelry (although neither party placed a value on the jewelry acquired) and the Husband collected and traded motorcycles (the Wife testified that he spent approximately $350,000 on motorcycles over the years of the marriage). The parties rented vacation homes in the Hamptons for a number of years. They enjoyed occasional vacations in Italy, the Far East, and Florida, often related to business. They frequently dined in restaurants, Peter Luger's Steakhouse being a particular favorite.

By 1999, the parties experienced serious marital difficulties. The Husband came to learn that the Wife had an affair in 1996 with someone known to him. She commenced a divorce proceeding in 1999, but withdrew the action. The couple sought to reconcile and engaged in therapy. The Husband testified that as a result of learning of his Wife's infidelity, he gained significant weight and developed diabetes. He acknowledged that he too had an affair sometime after he learned of the Wife's affair. He claimed he lost interest in the business, but the evidence also revealed that the Husband created Betlar in 2000. The effort to reconcile failed. The Husband began to do less work for the business. Both parties agree that by 2005 the business was largely defunct, but they were able to draw money from the business for a time thereafter. The Husband's ownership share in Bambu had grown to 25.314 percent by 2005 and the distributions he receives have significantly increased.

Notwithstanding the reconciliation efforts, the Wife testified that she knew the marriage was dead in 1999. In 2004 she retained a divorce attorney who she met with 15 times in 2005 and 10 times in 2006. The Wife acknowledged that for several years preceding the divorce action, she alone used the Studio Apartment and that the Husband stopped coming to work. The

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Husband testified that he was last in the Studio Apartment in 2006 on one occasion for a short period of time. The Wife commenced this action in 2007.

EQUITABLE DISTRIBUTION OF THE MARITAL PROPERTY

To distribute the parties' assets and liabilities, the court must first determine what constitutes marital property and the value of that property.

The Assets

Overseas Funds of ITE, Allstate and Betlar

The Wife contends that the Husband hid profits from his business in overseas accounts funneled primarily through Allstate to Fortuna in the Channel Islands, a Swiss bank account and to accounts in the Far East. She claims she did not realize the Husband was doing this until after the divorce action began when she reviewed some wire transfers. She testified that she confronted her Husband about the money and he said "You'll never find it."

In support of her position, she presented a report prepared by Holtz Rubenstein and Reminick ("HRR") (Ex. 80) and the testimony of an expert forensic accountant with that firm. After his review of the available business documents and certain depositions in this action, the accountant estimated that $13.4 million of the business' gross profits were unaccounted for. It is the Wife's position that the Husband drained this amount of money from the business.

Although copies of the business' and the parties' personal tax returns were provided, the accountant acknowledged that he had very few other business records available for review. All of the records had been maintained in the Studio Apartment. Both parties testified that a file was maintained for each deal entered into by the business. The file would include the date and cost of the purchase of product from overseas, records that the product was delivered to the warehouse, sale of the product to a wholesaler, and all wire transfers that occurred relative to the sale. Both parties concede that most of these records no longer exist. The accountant conducted his analysis relying on a limited number of pieces of files and some incomplete ledgers. The accountant also acknowledged that he did not have all of the business bank records. Moreover, he did not review any of the parties' personal bank accounts or credit card statements.

The Wife's theory fails on several grounds. Initially, the accountant opines "that $13.4 million in gross profits are unaccounted for." (Ex. 80, p. 1, emphasis added.). (In the conclusion of the report he eschews the word "gross". [Ex. 80, p. 20]). He provided a limited assessment of all of the necessary costs and overhead incurred in conducting the business. Such costs included the sharing of profits with partners to each transaction as testified to by the Husband, that would have to be deducted before determining the net profit available for distribution to the Husband's business.

The report provides the bald statement: "It would be unusual for an individual to operate in a high risk activity such as diversion of goods unless there was a potential for significant

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income." (Ex. 80, p. 10). The accountant provides no basis to support this conclusion or whether this conclusion falls within the expertise of an accountant.

Furthermore, the accountant reached his conclusion of the gross profit margin for the Husband's business by comparing his business to the gross profit margins for groupings of businesses collected by The Risk Management Association. However, the businesses contained in the statistical groupings were not comparable to the husband's business. For instance, although some of the businesses in the studies sold drug sundries, some of the businesses included in the study sold pharmaceutical drugs, as well as chemicals and allied products. The Husband's business sold none of those types of products.

Even more to the point, as the accountant acknowledged, he did not provide a valuation. Rather, he merely contends that $13.4 million is unaccounted for. There is simply no evidence that these funds exist anywhere. The Wife conceded that she was unable to locate any funds in Europe or any of the entities that the Husband's companies did business with, even though she hired investigators to conduct searches.

Indeed, if anything, the evidence suggests that while the business earned profits, the parties themselves spent unreported earnings derived from the business. A review of the parties' tax returns over the years that the Husband's business flourished revealed that he regularly received a reported salary of under $90,000 and distributions that hovered around $250,000 (although in some years he received significantly less in distributions). Yet during these years, the parties purchased and, at a cost of $500,000, renovated the Marital Apartment. They purchased the Studio Apartment, as well three investment properties in Brooklyn. The children attended private schools, had tutors and attended private camp. The parties rented summer homes in the Hamptons and went on trips abroad. The Husband purchased motorcycles or parts and they each purchased jewelry. The Wife conceded that she took unreported salary for herself in the amount of approximately $100,000 each year. Furthermore, the Wife conceded that the business regularly paid many of the parties' personal expenses.¹

It is more than a little curious that most of the business records do not exist. The Wife seeks to blame the Husband for this fact, but the evidence established that the Wife had as much, if not more, control of the records. She concedes that she regularly used the Studio Apartment where the business records were located, while the Husband stopped going to that apartment in 2005. The Wife began to seriously confer with divorce attorneys in 2004. She gave no evidence regarding the state of the records at that time or why she did not secure the records then. Furthermore, the Wife had access to the business bank accounts and signed wire transmissions. She had at least as much, if not more, access and opportunity to hide business funds as did the Husband.

For all of these reasons, the court concludes that the Wife failed to prove that the Husband dissipated or hid marital assets derived from his business.

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Bambu

Bambu existed long before the parties married. Originally, the Husband's father and his two siblings were the primary owners, but other family members and non-family members were shareholders (including Bambu's attorney, accountant and at least one employee of the family's other business). Over time, the Husband's parents acquired the shares held by other family members. According to the Husband's mother, these transfers were not recorded. She further testified that the company was run for a time by her son-in-law. He died in 1993 and she testified that some of Bambu's records were discarded at that time.

Although the business brings in a good income for the family now, in the 1980s and 1990s, the company was embroiled in several litigations resulting in Bambu or the Husband's mother having to pay significant sums of money to third parties. Ultimately, by buying out the other shareholders, and making the necessary legal payouts, the company stabilized. However, this process did not begin to resolve until 1997 after the Husband's uncle was bought out and litigation to dissolve Bambu was settled.²

The Husband's mother credibly testified that Bambu largely runs itself. She and her sister manage the day-to-day operation of the business. There is one manufacturer of the rolling paper, a company located in Spain. The paper is delivered to a warehouse near Newark airport. It is shipped to distributors who have worked with the company for many years. The mother testified that she sits by the phone and takes orders. Her sister writes the checks needed to pay for product or salaries and distributions. The mother signs all checks.

Both she and the Husband testified that although he is an employee of Bambu, he does no work for the company. He receives a salary so that the company can provide him health insurance. There is evidence that he attended one shareholders meeting in 1995, and that the mother may discuss the business with her children, but both the mother and Husband testified that the mother makes all business decisions. The only change in the business product was a recent effort to sell some clothing (e.g. tee-shirts) with the company logo. No credible evidence contradicted their testimony.

The Husband's Ownership Interest in Bambu

The Husband acquired Bambu shares at three different points of time during the marriage. Most recently, the Husband's mother transferred to him shares equivalent to an 8.011 percent interest in Bambu in January 2005. The mother transferred the same number of shares to her other children at that time and the gift is reflected in tax returns. The Wife concedes that these shares are the Husband's separate property.

1991 Transfer of 7.194 percent Interest in Bambu

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In 1991, the mother transferred to the Husband shares equivalent to a 7.194 percent interest in Bambu. The Husband asserts that these shares are his separate property having been gifted to him by his mother. The mother testified that her husband had, before his death, given the same percentage of shares to each of the couple's two daughters. She stated that her husband believed that the daughters and mother would need income derived from the business, whereas the son was able to work and earn his own income. After her husband's death in 1989, the mother believed she had enough money to meet her own needs and wanted to equalize the number of shares each of her children owned. Accordingly, she transferred the same number of shares to the Husband in 1991 as had previously been given to his siblings. The mother claims there are no documents reflecting this transfer because the company is a small family business, they never issued stock certificates, and many early documents of the business were not preserved.

The Wife countered that not only are there no corporate documents to reflect the transfer, but the transfer is not reflected on any tax returns. She contends that the shares were given to the Husband to prevent him from going into competition with Bambu. After the Husband was fired from his family's business in 1985, he was able to buy a supply of Bambu cigarette paper from a former manufacturer of the paper in Spain. The Husband then sought to sell the paper. To avoid the potential harm to Bambu, the corporation bought the paper from the Husband in 1991 and, in return paid him cash and transferred the Bambu shares to him. It is her contention that these shares are marital property.

The Husband concedes that in 1987 he entered into an agreement to buy cigarette paper from a manufacturer in Spain who had previously produced paper for Bambu. The terms of the agreement specifically precluded sale of the product in places where Bambu held a trademark (Ex. 7). In 1987 and 1988 he filed to register the Bambu trademark for his own company in countries where the trademark had not been registered by Bambu. In 1987, his partner at the time, John Lawrence, made a two week trip to the Carribean and Central America to try to sell the product and was able to sell a small quantity of rolling paper in Barbados (Ex. 90). However, the Husband ultimately concluded that there was no market for the product in these areas and that his fledgling business could not afford to expend more money trying to sell the product or the cost of warehousing the paper. Finally, in 1991, he entered into an agreement to sell the remaining product he possessed to Bambu in return for $46,035. The payment for the product was made on behalf of Bambu by the Husband's mother and brother-in-law as reflected in a letter agreement, dated December 31, 1991. There is no mention in that letter of any transfer of stock (Ex. 86).

The court rejects the Wife's position and, from the credible evidence, concludes that these shares are the Husband's separate property. There is no evidence to support the Wife's contention that the shares were transferred to the Husband as part of the payment for the rolling paper he possessed. In the first instance, the Husband did not attempt to compete with Bambu. He did not try to infringe on Bambu's business by endeavoring to sell the product in areas where Bambu held a trademark. The Wife presented no evidence that in 1987 and 1988 when the Husband sought to register trademarks in other countries or actually sold the product that Bambu took any action. Surely if Bambu was concerned about protecting its trademark, it would have acted much sooner to come to an accommodation with the Husband to halt his activities. Indeed, as the Wife's own expert found, Bambu carefully monitors and pursues potential infringements

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on its trademark (Ex. 93, Main Report, pp. 10-11) Yet it wasn't until four years after the Husband began trying to sell his product that an agreement was reached whereby Bambu purchased the rolling paper from the Husband. Given that time lag, it is more credible to believe the Husband's testimony that Bambu's purchase of his rolling paper stock merely helped him out of a bad business decision. There was no evidence presented that the Husband endeavored to sell the paper at the behest of Bambu.

The court recognizes the heavy burden that a spouse faces in establishing that an asset acquired during the marriage is separate property, Price v. Price, 69 N.Y.2d 8, 15 (1986); Davis v. Davis, 128 A.D.2d 470 (1st Dept1987); Fields v. Fields, __ N.Y.3d __, 2010 NY Slip Op 04871 (2010); and concludes that the Husband met his burden. The court finds that his mother testified credibly to the events resulting in the transfer of shares to the Husband and that there is no basis to believe the transfer was in any way connected to the Husband's sale of the rolling paper to Bambu. Given how this company operates, the lack of documentation to support the transfer does not defeat the Husband's claim that these shares are his separate property

1994 Purchase of the 2.641 percent interest in Bambu owned by Joseph Cutuli

Joseph Cutuli was a longtime employee of Interstate Cigar, handling transportation and distribution of product for that entity. For his services, he received 4.826 shares of common stock in Bambu. In 1994 he was approached by Alan Sills, an attorney representing the Husband's mother, to see if he wanted to sell his shares. Cutuli was anxious to do so. On October 28, 1994, he entered into an agreement with the Husband and his two sisters to sell the shares to them. (Ex. 87). Both Cutuli and the mother testified that the mother paid for the stock, but no documentary evidence was offered to support this claim.

The Husband argues that these shares are his separate property in light of the fact that his mother actually paid for them. The court rejects this argument. There is no evidence that this stock was acquired by the Husband as a gift from his mother. The only written document involving this sale indicates that the shares were purchased from Cutuli by the Husband and his sisters. The fact that the mother may have paid for the shares does not require a finding that the shares were a gift from her to her children. In light of the strong policy in finding property acquired during the marriage to be marital property, the Husband must meet his burden to establish that a claimed asset is separate property. The court finds that the shares owned by the Husband derived from the Cutuli purchase are marital property. Fields, supra.³

Appreciation of the Husband's Separate Property Bambu Ownership Interest

To the extent that the court finds that any of the Husband's ownership interest is separate property, the Wife contends she is entitled to a distribution of the appreciation in value of the Husband's separate property interest in Bambu. As set forth above, the court finds that the shares received by the Husband in 1991 and 2005 are the Husband's separate property.

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The determination that the value of appreciation of separate property may constitute marital property was articulated in the seminal case Price v. Price, 69 NY2d 8 (1986). The Court of Appeals held that "Where separate property of one spouse has appreciated during the marriage…and where such appreciation was 'due in part' to the contributions or efforts of the nontitled spouse as parent and homemaker, the amount of that appreciation should be added to the sum of marital property for equitable distribution (§236 [B] [5]). Whether assistance of a nontitled spouse, when indirect, can be said to have contributed 'in part' to the appreciation of an asset depends primarily upon the nature of the asset and whether its appreciation was due in some measure to the time and efforts of the titled spouse." Price v. Price, 69 NY2d at17-8.

Nine years later, the Court elaborated on this holding in Hartog v. Hartog, 85 NY2d 36 (1995). Mr. Hartog, was the titled spouse of separate property family businesses. He was minimally involved in the operation of two companies. He urged the Court to find that unless the Wife could show a definitive and direct nexus between his activities and the appreciation in value of those businesses, any appreciation in value should be deemed to have accrued passively and not subject to equitable distribution. The Court disagreed and placed a lesser burden on the Wife "When a nontitled spouse's claim to appreciation in the other spouse's separate property is predicated solely on the nontitled spouse's indirect contributions, some nexus between the titled spouse's active efforts and the appreciation in the separate property is required." 85 NY2d at 46.

Mr. Hartog, in addition to being a shareholder, was a director and officer of the business, attended board of director meetings, discussed and conferred on business matters, signed checks on occasion, was a salaried employee and participated in the business profit-sharing plans. Although his participation was infrequent, these roles were sufficient to find that he was actively involved in the business and had a management role. "Through the husband's attendance at Board meetings and business discussions with family members, particularly during times of crisis, a reasonable finder of fact could determine that this active involvement contributed to the appreciated value of the businesses." 85 NY2d at 49.

This court finds that the Husband here does not have the same relationship with Bambu as Mr. Hartog was found to have with his family's business. The Husband was never an officer of the corporation. Although there is evidence that he attended one shareholders' meeting in 1995, there is no evidence that he attended any meetings of the Board of Directors. There was no evidence that he participated meaningfully in any business discussions. He does not sign checks for the company and there is no evidence that he participates in deciding the amount of distribution given to shareholders each year. The Wife's expert reported on the significant number of litigations confronted by Bambu in the 1980s and 1990s. Yet, other than innuendo raised by the Wife, there is no evidence that the Husband played any role in these matters.

The Wife argues that since the Husband received a salary from Bambu, he performed some service for the company. She relies on one response by the Husband's mother during her deposition when she said that the Husband worked for Bambu. However, at trial, the mother elaborated that since the Husband receives a salary she felt compelled to say he did something, even though he does not, to justify his receiving income and health insurance benefits. At most, it appears that on occasion the mother discusses her business plans with each of her children during informal discussions, but she and the Husband credibly testified that any business

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decision was always made by the mother. For all of these reasons, the court concludes that the Wife failed to meet her burden that she is entitled to a portion of any appreciation in the value of the Husband's separate property interest in Bambu. Golub v. Ganz, 22 AD3d 919 (3d Dept 2005); Lawson v. Lawson, 28 AD2d 795 (3d Dept 2001)

The court further notes that the Wife failed to provide convincing evidence regarding the amount of the appreciation in value of Bambu. The Wife presented the testimony of a forensic accountant who conducted a series of valuations based on the different dates of the Husband's acquisition of shares and different valuation dates depending on whether the asset was considered marital or separate property. The court finds his conclusions sufficiently biased to the Wife's benefit that they lack reliability.

The court will highlight only a few problems with the valuation. In determining a base net free cash flow figure for the 2007 or 2009 valuation dates, the expert did not take an average of the past three years of the company's financial picture but used only the most recent year. He assumed an unrealistic perpetual growth rate for Bambu and concluded an increase in the growth rate from 2007 to 2009 based on the introduction by the company of a clothing line. However, he acknowledged that the only information he had regarding the clothing line came from a newspaper article and not from financial documents. In addition, he failed to adequately account for the specific risk factors attendant to this company.⁴

Accordingly, the court finds that the even if the Wife had proven she was entitled to a portion of the appreciation of the Husband's separate property, she failed to meet her burden in proving the value of the appreciation of the separate property. Davis v. Davis, 128 AD2d 470 (1st Dept 1987).

Real Estate

The Marital Apartment

Pursuant to a stipulation entered into by the parties on October 16, 2007, the Marital Apartment was sold and the net proceeds ($3,168,400) distributed 50 percent to each party, except that the Wife deducted $50,000 from the Husband's share due to damages claimed by the buyers to have been done to the apartment. The Wife contended that, of the parties, the Husband last resided in the apartment. However, the daughter also resided in the apartment immediately prior to the sale. The buyers demanded $100,000 which the Wife negotiated down to $50,000. The Husband did not attend the closing. The Wife apparently did not conduct her own walk-through. The Wife seeks to hold the Husband fully responsible for the $50,000 liability. The Husband

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claims since he was never consulted, this amount should be distributed equally in accordance with the parties' stipulation. Contrary to the Wife's position, the court concludes that this $50,000 is marital property.

The Studio Apartment

Vacant Lot — 297 Van Brunt Street, Brooklyn, NY

The parties agree that these properties will be sold and the net profits distributed equally. Neither party has ascribed a value to these assets. The parties previously sold two other properties in Brooklyn and distributed the profits.

Motorcycles

Throughout the marriage, the Husband purchased, sold and exchanged motorcycles as a hobby. The evidence established that many times, the Husband purchased cycles in disrepair and then refurbished the bikes. Sometimes he purchased vehicles in good condition. The Husband testified that he frequently sold or traded bikes after he refurbished them. The trades or sales would occur at "swap" events attended by other hobbyists. No documentation exists of these trades. The Wife contends that the Husband expended almost $350,000 during the marriage for this hobby and, contrary to his claim, never sold or traded his bikes. She also testified that in 2003, the Husband wrote a list of motorcycles and parts with dollar values totaling $1,240,000. The Wife testified that she asked the Husband to prepare the list because she was concerned about the amount of money they had spent on motorcycles and wanted to know their value and location. She claims the list accurately assigns value to the motorcycles owned by the Husband at that time. (Ex. 18). The Husband testified that he prepared the list in 2001. He and the Wife were arguing over the amount of money he spent on motorcycles. He contended that the list included not only cycles he owned, but ones he would like to own.

The parties agreed to have the motorcycles possessed at the time of the commencement of the action valued by a neutral expert, Peter Gagan. Mr. Gagan is a motorcycle consultant and has been involved with motorcycles almost all of his life. He has written a book on motorcycles and is regularly consulted by auction houses and individual owners on the valuation of cycles. Mr. Gagan conducted his valuation using photographs provided by the Husband since the motorcycles were in different geographical locations. (Ex. T). He concluded that the value of the bikes from the inventory he was given was $28,975. (Ex. U). The court found Mr. Gagan to be a credible witness.

The Wife does not really take exception to the expert's valuation, but claims he was not given an accurate inventory to value. In particular, she claims that the Husband skewed the appearance of the motorcycles to cause the expert to downgrade their value. However, it does not appear that the Wife objected to the inventory provided to the expert prior to trial. Accordingly, the court accepts, Mr. Gagan's valuation with respect to the inventory he was asked to value. In addition, the parties stipulated to the value of $6,500 for one additional motorcycle (Harley Davidson Road King Classic) not included in the inventory.

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The Wife's primary objection is that she claims that much of the motorcycle collection has disappeared. Given the time and money spent on this hobby, she finds it incredible that the collection is gone. She notes that the inventory of bikes given to the expert to appraise consisted of only 25 bikes whereas the Husband testified that he owned as many as 58 bikes at one time. She further notes that one of the bikes was so unique it was featured on a United States postage stamp and that it is inconceivable that the Husband parted with that cycle. The Husband does not dispute the claim that he expended significant funds during the marriage on his hobby, but counters that he never possessed the collection the Wife asserts he had. In any event, the Wife's claim regarding the number and condition of the cycles goes back to at least 2003, four years before this action began. The Husband concedes that after the commencement of this action he gave 4 motorcycles, including the bike pictured on the stamp, to his former business partner, Daniel Akerib, to repay, in part, a purported outstanding loan in the amount of $200,000 extended to the Husband at the time the parties bought their marital residence in 1994. The Husband claimed that the bikes repaid $100,000 of that loan. The Husband offered no documentary evidence of that loan. Mr. Akerib, who had been on the Husband's witness list, was never called to testify. The Husband testified that the only other bikes he still possessed were the ones in the inventory, or stipulated to as marital or separate property and that any other bikes he once possessed he had swapped or traded prior to the commencement of this action.

There is no evidence that he possessed any other bikes at the commencement of the action as claimed by the Wife. Moreover, when shown Ex.18, on which the Wife so strongly relies, Mr. Gagan found the listed prices for the bikes "generous."

The court cannot place a value on assets no longer in existence and cannot conclude that the Husband dissipated these assets. See, Mahoney-Buntzman v. Buntzman, 12 N.Y.3d 415 (2009). However, the court will add back to the marital property $100,000 for the motorcycles given to Mr. Akerib. Thus, the court finds the value of the motorcycle collection to be $135,475 and that this value is martial property.

Jewelry

There is a quantity of jewelry being held in a safe deposit box. Neither side had the jewelry appraised. This court initially issued an Order during trial (October 30, 2009) requiring the parties to sell the jewelry. That Order was held in abeyance in a subsequent Order dated April 20, 2010. Neither side presented sufficient evidence to establish that any jewelry is separate property. Accordingly, all jewelry held in the safe deposit box is martial property.

Brokerage Accounts/Securities

The parties agree that the following account is marital property and agree to its value:

Citibank…6218 $267,237

The parties agree on the value of the following accounts:

Citibank…0723 $530,479

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Citibank Annuities $582,939

The Husband contends that these two assets are 100 percent marital property. The Wife argues that she is entitled to separate property claims against these two assets.

The Wife testified that during the marriage she inherited money from her mother. Her mother died in March 2003. The Wife claimed that her mother told her to withdraw funds from the mother's bank accounts prior to her death. The Wife points to two deposits she made in December 2002 and January 2003 totaling $88,000. The Wife claims that she withdrew these funds from her mother's account. In addition, she also claims she received $390,763 from the estate after her mother passed away. It is the Wife's contention that these funds constitute her separate property. The Husband counters that to the extent the Wife received money from her mother, the funds were co-mingled with the parties' other property and have been transmuted into marital property. It is well-established that where separate assets are co-mingled with marital assets the separate property becomes transmuted into marital property. See, Popowich v. Korman, 73 A.D.3d 515 (1st Dept 2010); Wiener v. Wiener, 57 A.D.3d 241, 244 (1st Dept 2008); Glazer v. Glazer, 190 A.D.22d 951, 953 (3d Dept 1993).

The court finds insufficient evidence presented to support the Wife's contention that she

*14

received $88,000 from her mother. The Wife presented no evidence of withdrawals from her mother's account to match the deposits the Wife made into her own account.

However, the court finds that the Wife presented sufficient evidence to support her claim that she inherited $390,763 from her mother. She recalled the exact amount from her review of the mother's estate tax return. The Wife claims she deposited this amount into her separate checking account and used $268,882 of these funds to purchase an annuity. She also claimed that she loaned Betlar $100,000 and presented a check on her account for this amount. The court finds insufficient evidence to support the Wife's claim that she used her separate property to loan money to Betlar, especially given that the parties seemed to use the business and personal bank accounts interchangeably for personal expenses. However, the court is satisfied that the Wife has proven that she inherited and traced $268,882 and will accord her this claim of separate property. Pullman v. Pullman, 176 A.D.2d 113, 114 (1st Dept 1991).

Thus, the Wife is entitled to $268,882 as a separate property credit against these assets.

Bank Accounts

The parties agree that the following accounts are marital property and further agree to the vlaue of these accounts:

Citibank…8727 $36,162

Citibank Betlar…0693 $211,156

Wife's Citibank…7702 $60,791

Wife's Citibank Savings…1117 $49,946

Metlife shares

The parties agree that the 1,365 Metlife shares owned in the Husband's name are marital property. By stipulation, dated October 20, 2009, the parties agreed that the value of these shares as of the date of trial was $53,016. (Ex. KK). However, the stipulation left for trial the manner in which these assets would be distributed

Life Insurance

The parties agree that the following life insurance policies are marital property and agree to the cash value of these polices:

Met Life…060A $85,159 (Death benefit: $573,817)

Met Life…055A $229,121 (Death Benefit: $1,712,451)

New York Life…642 $237,858 (Death Benefit: $953,306)

Retirement Accounts

*15

The parties agree that the following retirement accounts are marital property and agree to the value of these accounts:

Wells Fargo IRA…2377 $7,225

Citibank ITE Profit Sharing Plan $25,681

Automobiles

The parties agree that the following vehicles are marital property and agree to their value:

1983 Mercedes Benz de minimis

2004 Mercedes Benz CLK $18,575

2005 GMC Denali $15,000

Other Property

The Husband argues that after the commencement of this action, the Wife purchased approximately $200,000 of beauty products and home supplies. He contends that she is stockpiling these products with a view to going into business to sell them. He contends that he should receive a credit against these expended funds.

The court rejects the Husband's argument and denies his claim. During this period of time, the Wife cleared out the Studio Apartment, the daughter moved into that apartment and the Wife moved into her own rental apartment. Expenditures were necessary to accomplish these purposes and were not, when taken as a whole, unreasonable. Moreover, as the Wife's attorney correctly notes, if the Wife intended to go into business, it is hard to imagine she would make the purchases from retail stores.

The Husband's HSBC Bank Accounts

The parties agree that the money deposited in the following accounts contain a portion of the Husband's share of the proceeds of the sale of the Marital Apartment and are his separate properties:

HSBC…752-8 $361,834

HSBC…442-5 $463,468

Rock Ridge Holdings LP

Each party was to use his or her share of the proceeds from the sale of the Marital Apartment to purchase a new residence for themselves, but apparently neither party did so. The Husband, instead used some of his share to invest in an entity called Rock Ridge Holdings L.P. This was a post-commencement investment. The Husband claims to have lost money. The Wife

*16

seeks no portion of this investment. The Husband bears the consequences of his loss. The amount of the Husband's holding in this asset as of the date of trial is $844,179

Security Deposit

The Husband rented an apartment post-commencement and posted a $12,000 security deposit. The Wife seeks no claim to this money. It is the Husband's separate property. (Ex. KK).

Akerib Loan

The Husband claims he borrowed money from his business associate, Daniel Akerib, at the time the parties purchased the Marital Residence, and that at the time of commencement of this action, $200,000 remained outstanding. He offered no documentary evidence of the existence of that loan or why it remained outstanding for all of these years. The court finds the loan does not exist or, if it does, the Husband is solely responsible for its repayment.

Statutory Factors

Marital property must be distributed equitably upon consideration of the circumstances of the case and the respective parties. DRL §236 (B) (5) (c). The court has considered each of the factors set forth in DRL §236 (B) (5) (d) to the extent applicable in reaching its decision.

This was a long term marriage. The parties are in their mid to late fifties. The Husband testified to be suffering from some medical issues, including diabetes (although no medical records were presented to substantiate his claims). The Wife appears to be in good health. It is unlikely that either party can achieve the same earning capacity they each previously enjoyed. At the time this action commenced, neither party was working, although the Husband received distributions and a salary from Bambu. The Husband suggested that the Wife may be receiving some income from the sale of cosmetics, but there was no evidence to support this claim. DRL §§236 (B) (5) (d) (1), (2) and (8)

The children of the marriage are emancipated. As a result, there is no need for one parent to occupy the marital residence and, in fact, the parties have already sold it and largely distributed the proceeds of the sale. DRL §236 (B) (5) (d) (3).

The retirement funds that exist are available for distribution. However, it is worth noting that the Husband will leave the marriage with a substantial separate property interest in Bambu. The Wife will lose any potential inheritance right she may have had to that asset. However, she will receive as her separate property money derived from the inheritance from her mother's estate. DRL §236 (B) (5) (d) (4)

Both parties agree that the Wife should receive an award of maintenance. They disagree on the amount and duration of that award. The court has considered its award of maintenance (see below) in fashioning the distribution of the marital property. DRL §236 (B) (5) (d) (5).

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Both parties fully contributed to the marriage. They worked effectively as partners in the Husband's business and contributed to its years of success. The Wife played the primary role in caring for the children of the marriage when they were young. Both parties participated in household responsibilities — the Wife took care of the family's finances; the Husband shopped for groceries and, on occasion, cooked. Each party has an equitable claim to the property acquired during the marriage. The Wife contributed to the acquisition of the martial property by her work for the husband's business and as homemaker; the Husband contributed as the primary wage earner and his help around the home in meeting the family's needs. DRL §236 (B) (d) (5) (6)

Most of the marital property is liquid, subject to division, or can be sold. To the extent that marital property, in particular the interest in Bambu, has not been valued, distribution is still possible. There has been no evidence presented that any property needs to be held intact. DRL §§236 (B) (d) (5) (8) and (9).

There is no evidence of any tax consequences to either party that needs to be considered. DRL §236 (B) (d) (5) (10).

The Wife claimed that the Husband hid business assets. The court finds there was insufficient evidence to support her contention. Similarly, the Husband contends that the Wife dissipated assets. The court concludes that although the Wife concedes taking unreported income from the business, the Husband was in a position to know of the money she expended. Moreover, it appears that she used at least some of the money for family expenses. There is insufficient evidence that she otherwise hid or dissipated assets. DRL §§236 (B) (d) (5) (11) and (12).

There is no other factor the court need consider. DRL §236 (B) (d) (5) (13).

Distribution

Upon consideration of these statutory factors, the court distributes the marital property as follows:

The parties will sell and each receive 50 percent of the net profit from the sale of the Studio Apartment and the lot located at 297 Van Brundt Street, Brooklyn, NY.

As set forth above, the $50,000 the Wife withheld from the sale of the marital property as the cost necessary to pay the buyers of the Marital Apartment is marital property. The court finds that both parties poorly handled the sale of the Marital Apartment. The Husband, as the last resident, was responsible for making sure the apartment was clean. However, nothing prevented the Wife from making sure the apartment was in good order prior to the closing. Moreover, her decision to reduce the sales price of the apartment by $50,000 without her own inspection of the property was unwarranted. Accordingly, the court finds that each party is responsible for $25,000 of this cost. The Husband is entitled to a $25,000 credit from other assets.

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The motorcycle collection is valued at $135,475. The Husband will keep the motorcycles and the Wife will receive $67,737.50, less $25,000 from the closing cost set forth above, for a total of $42,737.50 from other assets.

The Citibank Annuities are marital property valued at $582,939. However, the Wife is entitled to a credit for her separate property inheritance in the amount of $268,82. She is also entitled to $42,737.50 for the value of the motorcycles. Accordingly, the Wife will receive $447,279.25 and the Husband shall receive $135,659.75 of this asset. The parties shall cooperate in completing any paperwork necessary to effect this distribution. The court notes that assets need not be distributed equally. Arvantides v. Arvantides, 64 N.Y.2d 1033, 1034 (1985); Naimollah v. DeUgarte, 18 A.D.3d 268 (1st Dep't 2005). In awarding this distribution, the court has considered the Husband's separate property ownership in Bambu that will provide him significant income going forward. Moreover, awarding the Wife a greater portion of the annuities will be a factor the court will consider in awarding maintenance.

The following accounts will be distributed 50 percent to each party:

Citibank…6218 $267,237

Citibank…0723 $530,479

Citibank…8727 $ 36,162

Citibank Betlar…0693 $211,156

Wife's Citibank…7702 $ 60,791

Wife's Citibank Savings…1117 $ 49,946

Total $1,155,771

Accordingly, from these accounts the parties will each receive $577,885.50

The Husband's 2.641 percent interest in Bambu derived from his purchase of shares from Joseph Cutuli is marital property. Each party shall receive 50 percent of this asset. For the reasons previously stated, the court finds there was inadequate proof as to the value of these shares. Thus, each party shall receive a 1.3205 percent interest in Bambu. Contrary to the Husband's claim, there was no evidence that these shares are held in trust and therefore, no impediment exists to this distribution being made. The Husband shall cause appropriate documentation to be issued to the Wife to record her interest in this asset and to ensure her receipt of distributions made by Bambu.

The parties own 1,365 shares of MetLife. At the time of trial, these shares had a value of $53,016. However, in light of market fluctuations, the court finds it appropriate to distribute 50 percent of the shares in kind to each party.

The cash value of the following life insurance policies shall be distributed 50 percent to each party.

Met Life…060A $85,159

Met Life…055A $229,121

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Total $314,280

Accordingly, from these policies, each party will receive $157,140.

A third life insurance policy, New York Life…643, with a cash value of $237,858 and a death benefit of $953,306, shall be maintained by the Husband to protect the award of maintenance. DRL §236B (8) (a). The Wife shall be named the beneficiary. When the Husband reaches the age of 75 he shall have the right to cash in this policy or change the beneficiary. The Husband will then pay the Wife $168,929 representing 50 percent of the cash value of the policy at the time of trial. If the Husband elects to maintain the policy for the benefit of the Wife, he will not owe her this cash value. In the alternative, the parties can agree to redeem this policy immediately and each receive 50 percent of its cash value. If the parties reach this agreement, no insurance will be required to protect the maintenance award.

The value of the retirement accounts are:

Wells Fargo IRA…2377 $ 7,225

Citibank ITE Profit Sharing Plan $25,681

Total $32,906

The automobiles owned by the parties have a total value of $33,575. The Husband shall retain the cars and shall transfer 100 percent of the retirement accounts to the Wife.

The jewelry held in the safe deposit box shall be sold and each party shall receive 50 percent of the proceeds. The jewelry will be sold by an agreed upon agent within 90 days of this decision.

Maintenance

The court may award maintenance where justice requires, having regard for the standard of living established during the marriage, the lack of sufficient income and property to provide for the reasonable needs of the recipient, and the ability to pay by the other party, as well as the circumstances of the case and the respective parties. DRL §236 (B) (6) (a). This court has considered each of the factors set forth in DRL §236 (B) (6) (a) to the extent applicable in reaching its findings.

The Wife will receive distributions in cash of over $1,000,000. Some of the distribution includes annuities. She will also receive 50 percent of the marital assets that still need to be sold, including real estate and jewelry. She received $1,788,000 from the sale of the Marital Apartment. She will also receive distributions from her percentage ownership in Bambu. Although the court does not have evidence of the actual value of some of the assets to be distributed, it is reasonable to assume that the Wife will have received well over $3,000,000. Based on past performance, it appears that the Husband will continue to receive distributions and salary from Bambu. The court recognizes that the Husband's ownership interest in Bambu, as well as any appreciation in the value of his interest, has been found to be largely his separate property. DRL §236 (B) (6) (a) (1).

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As previously noted, this was a long-term marriage. The parties are in their mid to late fifties. The Husband testified that he suffers from diabetes. The Wife is in good health. DRL §236 (B) (6) (a) (2). The children of the marriage are grown and need no parental care. DRL §236 (B) (6) (a) (6). The Wife did not delay developing an earning capacity as the result of having foregone employment to care for the children. The Wife worked for the Husband's business after the youngest child began to attend school. The Wife made significant contributions to the marriage and her Husband's career, both as the primary homemaker and as an employee of the Husband's business. However, it is unclear that the Wife's work experience enables her to find significant employment in today's job market. Each party presented expert testimony regarding the Wife's present earning capacity. The Husband's employment expert testified that in his opinion the Wife could market herself as a sales representative and could eventually earn approximately $80,000. The Wife's employment expert testified that she could earn in the range of $25-35,000. Although it does not appear that the Husband will likely work again, he will receive significant distributions and salary from Bambu. In 2009 he received salary and distribution from Bambu of approximately $1,000,000. DRL §§236 (B) (6) (a) (3), (4),(5) and (8).

Notwithstanding the parties' contentions, the court finds no evidence exists to support a conclusion that either party dissipated marital property. Rather, the court finds that the parties regularly paid for personal expenses from business accounts. It also appears that each party on occasion used marital funds for his or her own purposes and, perhaps, against the other parties' interest. The Husband spent significant money on motorcycles. The Wife, without the Husband's consent, may have used a greater share of the proceeds of the sale of Brooklyn properties previously owned by both parties for her own purposes. The court does not find any of these expenditures to constitute wasteful dissipation. Similarly, there is no evidence of a transfer of property in contemplation of this divorce action, except to the extent that money may have been used for attorney fees. Although each party suggested that the other hid funds or drew a greater share of marital funds for his or her own purpose, the evidence presented is not of such quality as to affect this court's maintenance decision. §§236 (B) (6) (a) (9), (10). No other statutory factor warrants consideration.

From all of these factors, the court concludes that an award of maintenance is appropriate. The parties lived an above-average lifestyle and enjoyed certain luxury items. However, it was not an extravagant lifestyle. The evidence revealed that the Husband receives substantial remuneration from Bambu, sufficient to enable both parties to enjoy a comfortable lifestyle. Although it is conceivable that the Wife could obtain employment, neither expert suggested that she could ever earn sufficient income to match the marital lifestyle. Moreover, given her age, it is questionable if she could develop a career that would make her truly self supporting. It is ironic that while the Husband claims he need not work (although he never provided medical documentation to support his claim), he contends that the Wife is capable of working. However, the Wife will receive significant assets from the distribution of the marital property, including most of the parties' annuities and retirement accounts. By granting the Wife maintenance, her assets will be able to grow, providing her greater financial security as she ages.

*21

The court has reviewed the Wife's most recent net worth statement (Ex. 41) and has considered her testimony regarding her expenses. Certain of the expenses will no longer exist after the distribution of the parties' assets (e.g. the costs for the Studio Apartment). Moreover, the Wife conceded that she had been paying some of their daughter's expenses. That either parent may want to assist a grown child is admirable, but not the proper subject of a maintenance award.

In light of all of these factors, the court awards the Wife $14,000 a month in maintenance, taxable to the Wife and deductible to the Husband. This award shall be in effect from September 1, 2010 until August 31, 2013. Effective September 1, 2013, and until August 31, 2018, the Husband shall pay to the Wife maintenance in the amount $10,000 a month, taxable to the Wife, deductible to the Husband. Thereafter, the Husband shall pay permanent maintenance of $5,000 a month, taxable to the Wife, deductible to the Husband. This award shall terminate in accordance with the provisions of DRL §236 (B) (6) (c).

The Pendente Lite Maintenance Awards, Arrears, Security for Future Maintenance Payments

The parties engaged in extensive pre-trial litigation regarding the parties' assets and support for the Wife. Initially, it was agreed that the Husband would deposit a certain amount of money into the parties' joint bank account from which the Wife would draw money for her own needs and payment due on certain of the parties' assets. By order dated April 16, 2008, Justice Joan Lobis, then presiding over this case, directed the Husband to deposit $405,024 from funds distributed to him by Bambu into the parties' joint bank account and allowed the Wife to draw $200,000 from those funds for her own use. Judge Lobis further ordered at that time that if the Husband failed to deposit the requisite funds, the Husband would be required to pay $18,000 a month in tax-free pendente lite maintenance, retroactive to September 25, 2007.

The Husband did not deposit the $405,024, but instead tendered a check to the Wife in the amount of $112,000 with the explanation that the sum reflected the Wife's share of distributions paid to the Husband by Bambu, less taxes he needed to pay in connection with those distributions. Over the Wife's objection, the Husband deposited the $112,000 into the Wife's checking account.

The case was transferred to Justice Jacqueline Silbermann. In Motion Sequence 10, the Wife sought to invoke the default provision of Judge Lobis' Order requiring the Husband to pay $18,000 per month as tax free interim maintenance, plus $5,000 per month in retroactive arrears for his failure to deposit the full $405,024 in the parties' joint bank account. Judge Silbermann granted the Wife's application, but ordered that the maintenance would be retroactive only to May 1, 2008, two weeks after the date of Judge Lobis' order. Judge Silbermann based her decision, in part, on the fact that the Wife had received $112,000. Moreover, the Husband had paid taxes on the Bambu distribution. (Ex. 71)

The Wife now contends that she is entitled to arrears of the pendente lite support. The Husband did not owe the taxes in 2007 that he claimed he had to pay on the Bambu distribution. The Wife argues that she should receive $88,000 in accordance with the Husband's obligation to deposit the full amount of his Bambu distribution of $405,024 of which the Wife should have received $200,000 but only received $112,000.

*22

The Wife's application is denied. Judge Silbermann's award to the Wife of retroactive maintenance addressed the arrears owed to the Wife. The Husband was ordered to pay maintenance retroactive to the Wife to May 1, 2007. In light of the fact that the Wife had already received $112,000, Judge Silbermann did not need to address arrears before that date. In effect, the $112,000 became the $18,000 a month the Wife would have received retroactive to the date she brought her first pendente lite application.

Although the Husband had been late in meeting some of his temporary support payments, and the court finds some of the Husband's reasons for late payment without basis, as of the trial maintenance payments were up-to-date. At this time the court sees no basis to require security for the payment of the maintenance award going forward.

The Husband's application for credit for his claimed overpayment of pendente lite support is denied. Some of the Wife's expenses during the pendency of this action went to maintain joint assets (e.g., the Studio Apartment). Although the Husband complains that this asset should have been sold, the court notes that the Wife cooperated in the sale of the Marital Apartment which might not have been ordered to be sold pendente lite. As this action proceeded, the parties' daughter resided in the Studio Apartment. The Husband complained that he should not have had to bear the daughter's rental costs. However, the Husband conceded during trial that he also paid certain of the adult children's expenses. The court finds no purpose would be served in trying to parse the various expenses paid by the Wife and concludes that the award of pendente lite maintenance was appropriate. Moreover, the award of maintenance by this decision reduces the Husband's ongoing obligation.

The Wife's application for necessaries is denied. The court finds no evidence that the Wife owes money because she did not receive support. Even if she had to use savings to meet her expenses pending payments made by the Husband, he ultimately paid the support owed. As the Wife concedes, certain of her expenses were for the daughter's support for which an award of necessaries would be unwarranted. Moreover, certain of the Wife's expenditures, in particular the charges on her credit card, would not fall within the realm of "necessaries." The court is satisfied that the pendente lite award covered her costs and an award of necessaries is unwarranted. The court, therefore, need not consider the Husband's procedural arguments.

Attorney Fees

The Wife seeks attorney fees in the total amount of $582,084 and expert fees in the total amount of $266,804.04

The decision to award counsel and expert fees is left to the sound discretion of the court. Indigence is not a requirement. DeCabrera v. DeCabrera-Rosete, 70 NY2d 879 (1987). "The issue of such is controlled by the equities and circumstances of each particular case and the Court must consider the relative merits of the parties and their respective financial positions in determining whether an award is appropriate. (citations omitted)" Hackett v.Hackett, 147 AD2d 611 (2d Dept. 1989).

*23

The Wife seeks counsel fees for the representation she received from two different firms in this action. The Wife initially retained Steven J. Wohl of Stern Kaiser Panken & Wohl in December 2004. That firm continued to represent her until September 21, 2009, serving as co-counsel after the Wife retained Anthony J. Daniele on May 23, 2007 as litigation counsel. Mr. Wohl, in his affirmation, states Mr. Daniele consulted with him regarding negotiations, strategy and discovery. Mr. Wohl also met with the Wife periodically to discuss how the case was proceeding. The papers give no explanation as to why two firms were necessary to represent the Wife. The Wife paid Mr. Wohl in full. The court finds that the Wife is free to retain any number of attorneys, but no basis exists to require the Husband to pay for her desire to consult with multiple attorneys. The court awards no fees towards Mr. Wohl's costs.

Mr. Daniele claims the Wife was billed $529,141.13 by his firm. In his affirmation, he details the significant amount of motion practice and pre-trial efforts expended by counsel. From a review of his papers and those submitted by the Husband's counsel, the court cannot conclude, as the Wife suggests, that the Husband, any more than the Wife, caused this litigation to become unduly excessive.

Mr. Daniele acknowledges that the Wife has paid him $477,631.32 and that the Wife always paid her bills promptly. The Husband contends, and the evidence supports his position, that as part of her pre-litigation strategy, the Wife deposited marital funds into her own account. The court concludes that she used these funds to pay her attorneys and thus had the benefit of marital funds to pursue this litigation.

The court recognizes that as a result of his separate property interests, the Husband will have more assets than the Wife when this case is over. However, the court has awarded the Wife some separate property claims and a significant maintenance award. The marital property has largely been divided equally.

Taking all of these facts into account, the court awards $50,000 as attorney fees to be paid by the Husband to Mr. Daniele within 90 days of this decision and order.

*24

The Wife also seeks an award of $109,858.50 for the services provided by HHR, the accounting firm that conducted the evaluation pertaining to the alleged $13.4 million of business profits the Husband hid overseas. The Husband argues that the Wife aggressively pursued this claim even though she knew the claim could not be proven. Notwithstanding the Wife's control of the office and the records of the Husband's business, and her litigation planning since 2004, surprisingly few records existed for an evaluation to be done. She testified to making efforts to locate accounts overseas, but found none. Prior to retaining HHR, she retained another forensic accountant to review the existing records and then discharged him. The report prepared by HHR, concededly not a valuation, at most concluded, from a review of very limited documents, that as much as $13.4 million in gross profits were unaccounted for. The Report did not suggest that this money still existed. Inadequate consideration was given to certain costs of doing business or the parties' use of the business profits. The Wife refused to abandon her position that these funds existed even when it became evident during trial that she could not prove her position. The court finds she is solely responsible for these expert fees.

The Wife also seeks an award of $156,945.58 for the services provided by Eisner LLP for its valuation of the Husband's Bambu shares and the appreciation in value of those shares. In three separate applications before the three different judges who presided over the case, the Wife sought a neutral expert to value the Husband's Bambu interest. Each time her application was denied. The evidence available to the court strongly suggested that the Husband's interest in Bambu was his separate property (See, Ex. 71, p. 5). Although this court has awarded to the Wife a small percentage of the Bambu shares, the cost incurred by the Wife to investigate this issue are excessive. The court awards to the Wife $15,000 towards the cost she incurred.

Accordingly, it is hereby

ORDERED, that the parties shall sell and each receive 50 percent of the net profit from the sale of the Studio Apartment and the lot located at 297 Van Brundt Street, Brooklyn, NY. The process of selling these assets shall begin forthwith; and it is further

ORDERED, that Defendant shall receive a $25,000 credit as his portion of the $50,000 Plaintiff withheld from the sale of the Marital Residence; and it is further

ORDERED, that Defendant shall retain possession of the motorcycle collection; and it is further

ORDERED, that Plaintiff shall receive $447,279.25 and Defendant shall receive $135,659.75 of the Citibank Annuities. Each party shall receive a proportionate share of any accrued interest. Plaintiff's portion of this asset reflects her 50 percent distribution plus $268,882 representing her separate property inheritance and $42,737.50 representing her portion of the value of the motorcycle collection after crediting the Defendant $25,000 derived from the sale of the Marital Residence. The parties shall cooperate in completing any paperwork necessary to effect this distribution; and it is further

ORDERED, that each party shall receive $577,885.50, plus an equal distribution of any accrued interest, derived from the following accounts: Citibank…6218; Citibank…0723; Citibank…8727; Citibank Betlar…0693; Plaintiff's Citibank…7702; Plaintiff's Citibank Savings…1117. The parties shall cooperate to complete any paperwork necessary to effect this distribution; and it is further

ORDERED, that Defendant shall cause to be transferred to the Plaintiff a 1.3205 percent interest in Bambu. Defendant shall cause appropriate documentation to be issued to the Plaintiff to record her interest in this asset and to ensure her receipt of distributions made by Bambu; and it is further

ORDERED, that each party shall receive 682.5 shares of their MetLife stock. The parties shall cooperate in completing the necessary paperwork to effect this distribution; and it is further

ORDERED, that the cash value of the following life insurance policies shall be distributed 50 percent to each party: Met Life…060A and Met Life…055A. From this distribution each party shall receive $157,140 plus any accrued cash value to be distributed 50 percent to each party. A third life insurance policy, New York Life…643, with a cash value of $237,858 and a death

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benefit of $953,306, shall be maintained by the Defendant to protect the award of maintenance. DRL §236B (8) (a). The Plaintiff shall be named the beneficiary. When the Defendant reaches the age of 75 he shall have the right to cash in this policy or change the beneficiary. If he does so, Defendant shall then pay the Plaintiff $168,929 representing 50 percent of the cash value of the policy at the time of trial. If Defendant elects to maintain the policy for the benefit of Plaintiff, he will not owe her this cash value. In the alternative, the parties can agree to redeem this policy immediately and each receive 50 percent of its cash value. If the parties reach this agreement, no insurance will be required to protect the maintenance award. The parties shall cooperate to complete any necessary documents to effectuate this Order provision; and it is further

ORDERED, that the Plaintiff shall receive 100 percent of the following retirement accounts: Wells Fargo IRA…2377 and Citibank ITE Profit Sharing Plan for a total value of $32,906. The parties shall cooperate to effectuate a transfer of these assets; and it is further

ORDERED, that Defendant shall retain possession and sole ownership of the marital property automobiles; and it is further

ORDERED, that the jewelry held in the safe deposit box shall be sold and each party shall receive 50 percent of the proceeds. The jewelry will be sold by an agreed upon agent within 90 days of this decision and order; and it is further

ORDERED, that the following assets are the Defendant's separate property: the 7.194 percent interest in Bambu he received in 1991; the 8.011 percent interest in Bambu he received in 2005; 100 percent of the funds in his HSBC…752-8 and HSBC…442-5 accounts; 100 percent of his interest in Rockridge Holdings LLP; the $12,000 security deposit for his present renal apartment; and it is further

ORDERED, that the Defendant is 100 percent liable for the Daniel Akerib loan in the amount of $200,000; and it is further

ORDERED, that Defendant shall pay to Plaintiff $14,000 a month in maintenance, taxable to the Plaintiff and deductible to Defendant, effective from September 1, 2010 until August 31, 2015. Effective September 1, 2015, and until August 31, 2018, Defendant shall pay to Plaintiff maintenance in the amount $10,000 a month, taxable to the Plaintiff, deductible to Defendant. Effective September 1, 2018 Defendant shall pay permanent maintenance of $5,000 a month, taxable to the Wife, deductible to the Husband. This award shall terminate in accordance with the provisions of DRL §236 (B) (6) (c); and it is further

ORDERED, that Defendant shall pay to Plaintiff's counsel Anthony Daniele $50,000 as attorney fees on behalf of Plaintiff, said fees to be paid within 90 days of this Decision and Order without further notice; and it is further

ORDERED, that Defendant shall pay to Plaintiff $15,000 for the fees she incurred in retaining Eisner LLP, said fees to be paid within 90 days of this Decision and Order; and it is further

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ORDERED, that any relief requested that is not specifically granted has been considered by the court and is hereby denied.

This opinion constitutes the decision and order of the court.

1. These expenses were paid primarily through money earned from the Husband's business. The parties did not receive salary from Bambu until 1997 and it wasn't until after the Husband's business largely ceased operations that he received substantial distributions from Bambu.

2. The Wife's own expert noted: "Legal and professional fees as reflected in Bambu's tax returns for the period 2003 through 2008 have stabilized and have not exceeded $60,000 in any year during such period indicating that legal matters from the former S. entities that hampered Bambu's operating profits in earlier years have diminished." (Ex. 93, Main Report, p. 11).

3. The court finds that the Husband provided insufficient evidence to establish that these shares are held in trust. No trust documents were proffered. Thus, there is no impediment to the distribution of the shares.

4. Although found by this court to be marital property, the expert's valuation of the Cutuli shares was problematic. In determining the original acquisition price of the stock, the accountant failed to consider contemporary transactions of sale of Bambu stock, including the stock sold by Mr. Cutuli, David Fund (Bambu's lawyer) and a court-determined valuation arising from litigation in 1995. The expert placed a value on the stock received by the Husband from the Cutuli purchase at $1.1 million whereas all three of the actual transactions around that times had values of $1.8 to $1.9 million. The difference in these numbers would significantly affect the valuation.

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