98 A.D.3d 27
N.Y. App. Div.2012Background
- Former marital residence is a rent-controlled rental apartment in Richmond County; the defendant and plaintiff resided there from 1960 (marriage in 1969) until 2004 when the defendant was court-ordered to vacate after criminal conduct; plaintiff continued to live there and pay rent; divorce finalized December 21, 2006 without addressing apartment possession or ownership; defendant sought a determination that the leasehold was his separate property and sole possession in January 2011; Supreme Court had previously said it lacked authority to decide possession and that Housing Part should decide; holdover proceeding in 2007-2010 found no landlord-tenant relationship; appellate court remanded for consideration of possession under Domestic Relations Law § 234.
- The controlling issue is whether the leasehold constitutes distributable property under DRL § 236 (B) (1) or neither; the court also considers whether collateral estoppel or res judicata bars relief and whether the Supreme Court had authority to decide possession.
- The court ultimately holds that the leasehold is not marital or separate property distributable under DRL and that the Supreme Court has authority to award possession under DRL § 234; the matter is remitted to the Supreme Court for a determination on possession.
- The decision discusses the policy and procedural framework for rent-controlled properties and equitable distribution, citing several precedents on rental apartments and possession orders.
- The court acknowledges rent-controlled tenants’ benefits but concludes leaseholds in rental units are not subject to equitable distribution; possession can be awarded under § 234 while § 236 distributions are not triggered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the apartment leasehold is distributable property under DRL § 236 (B) (1). | Cudar argues leasehold is marital property or at least subject to distribution. | Cudar contends leasehold is his separate property. | Leasehold is not distributable property under § 236 (B) (1). |
| Whether collateral estoppel or res judicata bars relief on possession. | Plaintiff argues doctrines bar relitigation of possession. | Defendant argues prior rulings do not bar possession issues. | Not barred; earlier ruling that possession could be decided in Housing/other forum left issue open. |
| Whether the Supreme Court had authority to determine possession of the apartment. | Supreme Court previously indicated it had no authority to decide possession. | Argues that possession should be decided by the trial court. | Supreme Court has authority to determine possession under DRL § 234. |
| Whether the court can award sole possession of the apartment despite non-distributable status. | Court should award possession to plaintiff given relations and conduct. | Court should award possession to defendant as owner/occupant. | Yes; § 234 allows possession orders for non-distributable property; remanded for new determination of possession. |
Key Cases Cited
- Fedoff v Fedoff, 41 AD3d 114 (1st Dept 2007) (not distributable property where no expectation of conversion to ownership)
- Pulitzer v Pulitzer, 134 AD2d 84 (1st Dept 1988) (cooperative shares not marital property when not acquired during marriage)
- S.A. v K.F., 22 Misc 3d 1115(A) (Sup Ct Kings Co 2009) (possession awarded where non-distributable property; wife kept apartment)
- Schwimmer v Schwimmer, 26 Misc 3d 1213(A) (Sup Ct N.Y. County 2009) (no evidence of imminent conversion to ownership; distribution not warranted)
- Cenci v Cenci, (see NYLJ 1989) (Supreme Court Kings Co 1989) (court could determine possession under §234 even if leasehold not distributable)
- Braschi v Stahl Assoc. Co., 74 NY2d 201 (1989) (rent-control framework; distinguishes possession and distribution)
- Xiao Yang Chen v Fischer, 6 NY3d 94 (2005) (final divorce judgment can affect rights beyond issues litigated)