In Bartha v. Bartha, NYLJ , January 31, 2005 (1st Dept.,2005) the parties married on January 10, 1977. The couple had two children born in 1977 and 1978. The family, along with defendant's parents, moved to Manhattan in 1986, to a townhouse located on East 62nd Street, which was purchased in 1980 for $395,000, with cash totaling $199,699 obtained from a variety of sources, including a check from defendant's parents and a payment of separate funds belonging to plaintiff; the seller took back a mortgage for the remainder. Once the renovations on the building were completed, this townhouse contained the duplex apartment in which the parties resided, another apartment for defendant's parents, a rental apartment, and a physician's office unit on the first floor. Title to the property was placed in the name of defendant's parents at the time of the purchase. Subsequently, it was put jointly in defendant's and his mother's name. Although the parties disagreed as to the source of the mortgage payments between 1980 and 1985, it was undisputed that by 1988 the mortgage payments were made from the parties' joint account, as were the costs of the extensive renovations made on the property prior to their taking residence.

The Referee found that the townhouse on East 62nd Street was not marital property, but was in part the separate property of defendant and in part belonged to the parties' children. It was noted that defendant obtained title to 50 percent of the marital residence as a gift from his father and another 25 percent as an inheritance from his mother, while the remaining 25 percent had been willed by his mother to the children of the marriage. The Referee then found that plaintiff was entitled to a distributive award, calculated to include (1) half the money the marital estate would have received had they rented out the apartment supplied to defendant's parents (determined to be $400,000), (2) the income lost to plaintiff because she stayed home instead of working while the parties' children were young (determined to be $550,000), (3) half of the $1,112,467 in marital funds which the couple put into the marital residence, and (4) the $196,500 in separate property which plaintiff contributed over the years to the marital residence. The total distributive award thus came to a total of $1,227,733.50.

The Referee directed defendant to pay plaintiff maintenance of $2,000 per month for three years, and denied plaintiff an award of counsel fees.

The Appellate Division affirmed the determination awarding a divorce to plaintiff on grounds of cruel and inhuman treatment. It vacated the property distribution and maintenance awards and remanded for a new determination.

It held that Plaintiff's proof established by a preponderance of the credible evidence that defendant had engaged in a course of conduct which was harmful to the plaintiff's physical and mental health, thus rendering cohabitation unsafe or improper. Defendant intentionally traumatized plaintiff, a woman of Jewish origin born in Nazi-occupied Holland, with swastika-adorned articles and notes affixed around their home, and became enraged when she removed them. He ignored her need for support and assistance while she was undergoing surgery and treatment for breast cancer. He systematically cut off her access to marital funds and credit as a means of psychological abuse. Even plaintiff's assertion that defendant completely ceased speaking to her was not benign, but had to be understood in the context of the prior years' verbal abuse. Physical violence is not a prerequisite for a showing that plaintiff's physical or mental well being rendered it unsafe or improper for her to continue cohabiting with defendant, nor did plaintiff need an expert to prove that defendant's actions had the claimed effect on her mental condition, particularly in view of her explanation that she was the type of person who found it difficult to consider seeking psychological treatment.

The Referee's determination of the economic issues was rejected. The Manhattan townhouse on East 62nd Street, was purchased in 1980 for $395,000, and was valued by the neutral appraiser in June of 2002 at $5 million. It was error to accept at face value the claim that initially placing the townhouse in the names of defendant's parents, and defendant's subsequently holding joint title with his mother, rendered the property non-marital. Defendant's parents who took title to the townhouse when it was purchased in 1980, and defendant's father thereafter purported to gift his half of the house to defendant, while the other half remained in his mother's name, until at her death in 1997, when defendant inherited 50 percent of her interest in the property, with the remainder willed to her granddaughters, the parties' children. The names in whom title was placed does not end the analysis. It is central to the Equitable Distribution Law that the term "marital property" includes property acquired by either spouse during the marriage "regardless of the form in which title is held" (Domestic Relations Law §236B[1][c]). That one of the spouses acquired title to property jointly with another relative would not necessarily interfere with its being considered marital, at least to the extent of the spouse's established interest. The manner in which defendant's parents initially obtained title, and defendant then obtained title from his parents, supported the claim that the townhouse was truly the marital property of these parties, at least in part, from the outset, and that any additional interest that defendant acquired from his parents subsequently might similarly be considered marital property as well.

$45,095 of the $199,699 cash used for the purchase of the townhouse came from plaintiff's separate property. While $114,369 of the cash down payment came from a check from defendant's parents' account, in the context of the probate of his mother's estate, defendant took the position that at least $60,000 of that payment belonged to him and constituted marital assets. That defendant considered the funds held in his parents' names to belong in part to himself and his wife was illuminated by the manner in which he and his family handled their finances generally. For instance, while defendant's mother alone received the rents on the Rego Park building that she and defendant had purchased jointly before the marriage, the building's expenses were paid by plaintiff and defendant, from marital earnings. In the probate of his mother's estate, in which defendant successfully defended a challenge by his nephews to his right to inherit his mother's interest in the townhouse, defendant asserted that he and his parents had so thoroughly commingled their assets that while he had, technically, inherited property from his mother, the inheritance actually amounted to a repayment to him of financial loans that he and his wife had made to his mother over the course of many years.

The Appellate Division held that to the extent defendant establishes that a portion of the down payment for the Manhattan townhouse was from funds of his parents which had not been intermingled with marital funds, or from his own separate property, he was entitled to a credit for that contribution; but, otherwise, the property, or at least the 75 percent interest therein currently held in defendant's name, was marital property. The appreciation of the value of the house, from $395,000 to $5 million, was unrelated to the down payments, but very much related to the complete gutting and renovation which was largely overseen by plaintiff, and paid for out of the parties' marital funds Furthermore, the mortgage payments were made entirely from marital funds, at least from 1988 on, and possibly during the earlier years as well.

The need for reassessment of the equitable distribution award also necessitated reassessment of the court's maintenance award to plaintiff. The record failed to disclose how a maintenance award of $2,000 per month for three years would enable plaintiff, who lived in a small apartment in Washington Heights with her two adult daughters, to retain her predivorce standard of living. The question of whether or not plaintiff was entitled to an award of legal fees in connection with this matrimonial proceeding had to be reassessed in accordance with the final equitable distribution determination.