It is well settled that a Court may not Order distribution of marital assets pendente lite, nor Order the sale of the marital residence pendente lite. In the First Department case of Tagioni v Garcia 200 AD.3d 44 (First Department, 2021) the Court held that real property held as tenants by the entirety may not be ordered sold during the pendency of an action absent the parties’ consent. In Taglioni , supra, the Wife was the occupant of the marital residence and refused to sell the marital residence during the pendency of the marriage which was valued at $6 million dollars. The trial Court felt that this refusal could go on for years, presumably referring to how long divorce proceedings take to get to trial and ordered the sale of the marital residence. On appeal to the First Department, the First Department reversed, holding that the Wife would be allowed to stay in the apartment until final disposition of the divorce, relying in part on the holding of of Kahn v Kahn, 43 N.Y.2d 203.
In the Court of Appeals Case of Kahn, supra, the Court held that the Court has no power to sever the parties’ interest in real property held tenancy by the entirety without first altering the legal relationship of the husband and wife. Kahn v Kahn 43 N.Y.2d 203 (1977). So, if the parties hold their property as tenants by the entirety, this Court has no power to sever the parties interest in the real property absent a judgment. The same would apply to any Plaintiff (other than the mortgage holder where both parties were engaged in the mortgage transaction) who sought to foreclose as a result of, let us say, creditcard debt. A court would not be allowed to force a sale against the marital property to satisfy a judgment for credit card debt based on the principle that a Tenancy by the Entirety may not be severed to satisfy debt without an alteration of the marital relationship. What makes this right of survivorship different from a joint tenancy is that is incapable of being altered unless both spouses consent (see, Kahn v. Kahn, 43 N.Y.2d 203, 401 N.Y.S.2d 47, 371 N.E.2d 809; compare, Matter of Polizzo, 308 N.Y. 517, 127 N.E.2d 316; Matter of Suter, 258 N.Y. 104, 179 N.E. 310, with Matter of Klatzl, supra, 216 N.Y. at pp. 86-87, 110 N.E. 181; Hiles v. Fisher, supra). As eloquently put by the Court of Appeals in V.R.W., Inc. v. Klein, 68 N.Y.2d 560 (1986) holding in pertinent part:
“....As long as the marriage remains legally intact, both parties continue to be
seized of the whole. Similarly, involuntary partition is not available to either cotenant attempting to sever a tenancy by the entirety since a contrary rule would permit a “vindictive or irresponsible spouse to deprive the other of the comforts of
the marital home (see, Kahn v. Kahn, supra, 43 N.Y.2d at p. 208, 401 N.Y.S.2d
47, 371 N.E.2d 809; Anello v. Anello, 22 A.O.2d 694. 253 N.Y.S.2d 759; Vollaro v.
Vollaro, 144 App.Div. 242. 129 N.Y.S. 43)….” V.R.W., Inc, supra, page 4, last paragraph, page 5 first paragraph.
To conclude, the law as set forth in Kahn, supra and V.R.W Inc., supra is still governing law.
There is other law which is interesting and trend setting but which is not yet controlling law since the Appellate Courts have not yet overturned Kahn v Kahn, In D.R.D. v J.D.D, 74 Misc.3d 237, (Supreme Court Sullivan County, 2013) The lower court decision of Hon. Judge Dollinger held that the Court could order the sale of a marital residence where the paying party did not live in the marital residence, so there was no prejudice to him, and where the sale was necessary to stave off foreclosure and where the mortgage taxes and insurance owed exceed the equity in the residence, There, the Court asked that the Appellate Division rethink the state of the law and allow, in certain instances, ordering sale of marital property pendente lite, which is prior to trial. To conclude, Kahn, supra is still the prevailing law in the State of New York and that case disallows the sale or distribution of marital assets pendente lite, particularly real property held as tenants by the entirety.
Since the Dollinger cases is relied upon in certain lower courts, I must take this opportunity to distinguish D.R.D. v J.D.D, 74 Misc.3d 237, (Supreme Court Sullivan County, 2013) sequentially from most cases.
I wish to point that lower courts often grabble with cases that suggest that property should be sold pendent lite especially in grave situations where poverty and dire financial circumstances exist which threatens the wellbeing of children. In those such cases, perhaps the Court of Appeals will be confronted with just the right fact pattern where they can rule on such facts in order to avoid hardship befalling young children, I submit, however, that this would be the exception rather than the rule. First, in O.R,O, supra,, unlike the usual case there was an actual agreement in place to sell the house contingent upon the Mother finding alternative housing arrangements, which is a very special circumstances.
Second, in O.R.O., supra, unlike the usual case there was no equity in the house such that if the house were to be ordered sold the proceeds would only be enough to satisfy the mortgage and brokerage fees, stave off foreclosure, and stave off further mortgage payments. On the other hand, in the cases where millions of dollars are at stake, and where there are fluctuating market forces, such a ruling would not make senise since it could be used to force the lesser monied spouse out of their residence prior to a full blown trial.
Third, in D.R.O., supra, unlike most casers, the paying spouse was not residing in the marital residence, and hence the occupying spouse was living off the other party’s equity “rent free,” at the Husband’s expense, while the Husband was having to pay for a mortgage which exceeded the value of the equity in the house. In distinguishing D.R.O., supra from other more typical cases, where the marital residence is occupied by both parties not one party is benefiting over the other party because of the other’s exclusive occupancy.
Fourth, in O.R.O., supra, unlike many cases, there were children of the marriage which needed to be supported, such that the Court felt that the payments the Husband was making on a loan that exceeded the value of the home could have better be applied toward the support of the children.
In closing, it is usually more advantageous for the parties to delay the sale of the marital residence until a final determination of this matter.