Tuesday, January 15, 2019

DIVORCE - ALLOCATION OF MARITAL DEBT



Lynch v Lynch, 2019 NY Slip Op 00105, Decided on January 9, 2019, Appellate Division, Second Department:

"The plaintiff claims that the Supreme Court erred in various respects in its allocation of responsibility for marital debt. In general, expenses incurred prior to the commencement of a divorce action constitute marital debt and should be equally shared by the parties (see Minervini v Minervini, 152 AD3d 666, 668; Bogdan v Bogdan, 260 AD2d 521, 522). The court has broad discretion in allocating the debts of the parties to a matrimonial action (see Minervini v Minervini, 152 AD3d at 668; DiFiore v DiFiore, 87 AD3d 971, 974-975).

The plaintiff asserts that only $14,300 of the $95,937.26 outstanding on the parties' home equity line of credit (hereinafter HELOC) was used for marital purposes, and that the balance was used by the defendant to pay for college and living expenses of his children and to satisfy his maintenance obligations to his prior wife. We perceive no error in the Supreme Court's allocation of responsibility for the HELOC debt. As the court stated, the plaintiff established only that the defendant may have borrowed the sum of $30,000 from the HELOC to make a scheduled lump sum payment to his prior wife. This is not the sort of expenditure made during the marriage that may be second-guessed by the courts in a later divorce action (see Mahoney-Buntzman v Buntzman, 12 NY3d 415, 421-422). The record demonstrates that the plaintiff was well aware of the defendant's maintenance obligations to his prior wife, and that the plaintiff provided input in the establishment and modification of those obligations.

While the plaintiff claims that the Supreme Court's allocation of debt was inappropriate in a large number of instances, we find her position to have merit only in one respect. The court granted the defendant an equitable distribution credit for one-half of the amount he paid to satisfy the student loans he took out while studying for his MBA degree. These loans were obtained during the marriage, but were satisfied by the defendant after the commencement of this action. While the court declined to require the plaintiff to pay any portion of the balance of these loans as of the time of commencement, by granting the defendant an equitable distribution credit for one-half of the amount that he paid to satisfy those loans, the court effectively made the plaintiff responsible for one-half of this liability. Given that the plaintiff was not granted a distributive award based on the value of the MBA degree, and given the court's determination not to obligate the plaintiff to pay any portion of the balance of these loans herself, the provision giving the defendant an equitable distribution credit for one-half of the amount he paid to satisfy these loans should be deleted."

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