Johnson v. Chapin

Friedman and McGuire, JJ.,

concur in part and dissent in part in a memorandum by McGuire, J., as follows: The majority is correct that the judgment of divorce and money judgment should be modified so as to vacate those portions of the distributive award to the wife representing (1) 50% of the amount by which the total of the expenditures during the marriage on improvements to the Claverack property exceeded the appreciation of the property, and (2) 50% of the appreciation of the Claverack property over the course of the marriage. The majority is also correct that the wife should be awarded 25% of the appreciation of the Claverack property over the course of the marriage, and the husband should be awarded credits against the distributive award in the amounts of (1) $548,460, representing the amount of the excess of the pendente lite maintenance award over the final maintenance award, and (2) $484,370.50, representing 50% of the amounts he spent during the pendency of the divorce action on the marital apartment (i.e., the Fifth Avenue cooperative).

I write separately with respect to these conclusions in part because my reasoning differs somewhat from the majority, but also because I believe the facts supporting certain of the conclusions should be stated in more detail. In addition, I believe that certain arguments by the parties that the majority does not address should be addressed. However, with respect to two other issues—Supreme Court’s unprecedented award to the wife of more than $640,000, representing 50% of all the maintenance, child support and equitable distribution payments the husband made during the marriage to his first wife (in accordance with his legal obligations to his first wife and their children), and the husband’s annual income as a partner of Compass Advisors—I respectfully disagree with virtually everything the majority has to say.

With respect to the Claverack property, which was the husband’s premarital property, Supreme Court did not err in accepting the valuation of the wife’s expert (Cash-Scher v Scher, 299 AD2d 193, 193 [2002]). Supreme Court did err, however, in two respects relating to the Claverack property. First, Supreme Court should not have included within the distributive award *363an amount equal to 50% of the amount ($444,796) by which the total of the expenditures during the marriage on improvements to the Claverack property exceeded the appreciation of the property. Supreme Court viewed these expenditures as “marital property,” but, as the husband correctly observes, “marital property” was not used to improve the Claverack property for the simple reason that no “marital property” existed until the commencement of this matrimonial action. As the Court of Appeals stated in O’Brien v O’Brien (66 NY2d 576, 583 [1985]), marital property “ ‘is a statutory creature, is of no meaning whatsoever during the normal course of a marriage and arises full-grown, like Athena, upon the signing of a separation agreement or the commencement of a matrimonial action’ ” (quoting Florescue, “Market Value,” Professional Licenses and Marital Property: A Dilemma in Search of a Horn, 1982 NY St BA Fam L Rev 13 [Dec.]). As is undisputed, the husband’s income was the source of the approximately $1.9 million expended on the Claverack property during the marriage.

That is not to say, however, that under no circumstances may a distributive award take into account payments made during the course of a marriage that reduce the separate indebtedness of one spouse or add to the value of one spouse’s separate property. To the contrary, Domestic Relations Law § 236 (B) (5) (d) (13) expressly and broadly authorizes the trial court to take into account “any other factor which the court shall expressly find to be just and proper” in determining an equitable distribution of marital property. Thus, in Carney v Carney (202 AD2d 907, 908 [1994]), what were described as “marital funds”—proceeds of the postjudgment sale of the marital residence—were used to pay the separate liability of the husband, and the Third Department ruled that the wife was entitled to a credit of one half of the amount paid to satisfy the liability. In subsequently explaining that ruling, the Third Department stated that “[ajuthority for that resolution can be found in the traditional notion that equity will intervene to remedy one spouse’s breach of fiduciary responsibility or unjust enrichment by virtue of his or her expenditure of marital funds” (Micha v Micha, 213 AD2d 956, 957 [1995]).

The funds expended by the husband to improve the Claverack property, however, certainly did not entail any unilateral breach of his obligations to the wife. Indeed, there is no evidence that the wife ever protested these expenditures by the husband, and she has never claimed that she did. At least some portion of the expenditures, moreover, was made for her benefit. Nor, given that the husband was the source of the funds expended on the *364Claverack property, can this component of the distributive award be justified as necessary or appropriate to remedy the unjust enrichment of the husband. The implications of Supreme Court’s approach are even less defensible. Under that approach, a spouse who uses his or her own income or assets during the marriage and makes what turns out to be poor or less than wholly successful investment decisions (or who has expensive hobbies) could face significant and potentially ruinous liability to his or her spouse if the marriage eventually dissolves.

I do not mean to suggest that the absence of liability should turn solely on whether the funds expended can be sufficiently linked to the income or assets of the spouse who expends the funds. Marriage, of course, is an “economic partnership” (see Price v Price, 69 NY2d 8, 14-16 [1986]). Accordingly, regardless of the extent to which the funds expended can be traced to one spouse or the other, a spouse who spends, with the knowledge of his or her partner, thousands of dollars annually on designer clothing or for season tickets to sporting events, should not have hanging over his or her head the prospect of having to pay to his or her partner one half of all the funds so expended in the event the marriage ultimately fails. At least in the absence of the kind of circumstances that support intervention by equity (see Micha v Micha, 213 AD2d at 957), the extent of the spending freedom of each marital partner is a matter for the partners and should not be policed on a retrospective basis by the courts upon the dissolution of a marriage.1

Second, Supreme Court erred in awarding the wife 50% of the appreciation of the Claverack property over the course of the marriage. Given that the marriage was not one of long duration, that the appreciation of the tenant house on the property was passive in nature (Price, 69 NY2d at 18 [passive appreciation of separate property, as a general rule, remains separate property]), that the funds expended to improve the property were the husband’s and that his involvement in the renovations was far more extensive, an award of 25% of the appreciation is more appropriate (see Ritz v Ritz, 21 AD3d 267 [2005]).

*365With respect to the relative involvement of each spouse in the Claverack renovations, I note that the wife conceded that the renovations were “primarily [the husbands’] artistic vision [as] he has better artistic vision in that field than I do.” The husband’s testimony on the following points was undisputed: he acted as the general contractor for the renovations and thus he “supervised . . . and coordinated all of the people working on the project, from the people digging the foundations to the plumbers, to the electricians”; he paid for all the improvements out of his own income; although he “consulted her on various things, [he] was really responsible for the renovations.” As for the tenant house, the trial evidence shows that with the exception of a new roof, only minor repairs and renovations were made to the house. The wife, moreover, had nothing to do with the roof replacement. Accordingly, any appreciation of the tenant house on account of the new roof should not be considered marital property (Price, 69 NY2d at 18 [“where the appreciation is not due, in any part, to the efforts of the titled spouse but to the efforts of others . . . the appreciation remains separate property”]).2

The husband should have received a credit against the distributive award of $548,460, representing the amount of the excess of the pendente lite maintenance award over the final maintenance award (see Pickard v Pickard, 33 AD3d 202 [2006], appeal dismissed 7 NY3d 897 [2006]; Galvano v Galvano, 303 AD2d 206 [2003]; Gad v Gad, 283 AD2d 200 [2001]). Contrary to the wife’s contention, the husband is not barred from raising the issue of whether he should receive such a credit because of the dismissal for failure to prosecute of his appeal from an order of Supreme Court denying his motion for a downward modification of the pendente lite award. In the first place, the bar that can arise when an appeal is dismissed for want of prosecution is discretionary (see Rubeo v National Grange Mut. Ins. Co., 93 NY2d 750, 756 [1999]). In any event, because a final award had not been made the husband could not have raised the issue of a credit against a final award on that prior appeal (see Ruffing v Union Carbide Corp., 1 AD3d 339, 340 [2003]). In the absence of any evidence that the pendente lite child support payments were not spent on the parties’ child, I would reject *366the husband’s contention that he also should receive an additional credit of $342,848, the amount by which the pendente lite child support award exceeded the final child support award.3

Our decision in Pickard (33 AD3d 202 [2006]) provides decisive support for another of the husband’s claims of error. In that case we ruled that the husband should not have received a credit of 100% of the amounts he spent during the pendency of the divorce action on the marital apartment, a cooperative, for maintenance and insurance. Rather, “[s]ince these payments maintained the value of the marital residence and both parties benefitted from the sale of the residence, [the husband] should have received a 50% credit for these payments” (33 AD3d at 205). Here, the marital apartment, a Fifth Avenue cooperative, was awarded to both spouses and, during the pendency of the divorce action, the husband made mortgage and maintenance payments totaling $968,741. Although I would reject the husband’s argument that he should receive a credit against the distributive award in the full amount of these payments, under Pickard he plainly is entitled to a 50% credit.

Supreme Court also erred in including within the distributive award the amount of $641,069, representing 50% of the amounts of maintenance, child support and equitable distribution paid by the husband during the marriage in accordance with his legal obligations to his first wife. As it is undisputed that the husband was the source of the more than $1.28 million that he paid to his first wife during the second marriage, this component of the distributive award was erroneous for essentially the same reasons Supreme Court erred in awarding 50% of the excess of the amounts expended to improve the Claverack property over its appreciation. As discussed below, moreover, this award represents bad public policy and is inconsistent with our recent decision in Kohl v Kohl (24 AD3d 219 [2005]).

In upholding this unprecedented award—the parties cite to no decision in which such an award was made or upheld—the majority breathes new irony into Samuel Johnson’s famous definition of remarriage as the triumph of hope over experience. What the majority fails to appreciate is that it thus raises the spectre of a remarriage penalty that will loom over many second marriages. Remarriage will be discouraged in the first instance whenever the previously divorced spouse is under an obligation to make maintenance, child support or equitable distribution payments to his or her first spouse. The longer the second marriage lasts, the greater the potential financial penalty if it also *367ends in divorce. Even when it does not deter a second marriage, this remarriage penalty will encourage the remarried spouse to file for divorce sooner rather than later if the second marriage encounters difficulties. Under the circumstances presented in this case, moreover, the penalty inflicted on the spouse who must pay once again a substantial portion of all maintenance, child support and equitable distribution payments that he or she previously paid to a first spouse also represents a windfall to the recipient spouse.

Putting aside the fact that the majority’s decision to uphold the award represents bad public policy and that the majority, unsurprisingly, cites not a single case in which such an award was made or upheld, the majority’s decision cannot be reconciled with our recent decision in Kohl (supra). In Kohl we held as follows: “Nor was the money given by the husband to his former wife and children of that marriage a wasteful dissipation of marital assets. Such gifts were not unreasonable in relation to the husband’s income and were consistent with the type of gift giving he had engaged in throughout his marriage to the wife” (24 AD3d at 219-220 [emphasis added]). The conflict is palpable. If a spouse is not on the hook upon the dissolution of a second marriage for 50% (or any portion) of the amount of payments made during the second marriage to a former spouse and the children of the earlier marriage that are gratuitously made but are not unreasonable in relation to the donor spouse’s income, it makes no sense to conclude that a spouse is on the hook upon the dissolution of a second marriage for 50% of the amount of such payments when they are required by law to be made and also are not unreasonable in relation to the income of the spouse obligated to make the payments. No rational public policy could support a rule of law that thus favors the making of the gratuitous payment even as it discourages the making of the legally required payment.

The majority attempts to defend this award of more than $640,000 as “the lot of any individual who enters into a marriage with outstanding debt.” According to the majority, the husband’s obligations to his former wife and their children are indistinguishable from “educational debt, credit card debt, or any other separate financial obligation.”

In the first place, however, the husband’s obligations can and should be distinguished from “educational debt, credit card debt [and] other separate financial obligation[s].” The husband’s obligations were essential components of the very judgment of divorce that permitted the second marriage lawfully to take place. Obviously, when a prospective spouse incurs any of these *368other forms of debt, doing so does not enable him or her subsequently to enter into a legally valid marriage.

Moreover, the record establishes that the wife was aware, before marrying the husband, of the terms of his prior judgment of divorce. With the “good” of the husband’s divorce judgment (i.e., the ability to marry the husband and the benefits, tangible and intangible, she realized over the course of their marriage), the wife took the “bad” (i.e., the husband’s financial obligations to his former spouse and their children). Even putting aside that the risk the second marriage could end in divorce was, as the majority puts it in a similar context, one “[t]he couple shared,” the majority’s determination to uphold the award is clearly wrong. To bestow upon the spouse an award of 50% of the amounts paid by the husband in accordance with his legal obligations to his first wife and their children wrongly assumes that the wife received no compensating benefits as a result of the marriage she was able to enter into because of the prior judgment of divorce.4 Clearly, the wife believed there were such benefits when she entered into the marriage with knowledge of the legal obligations imposed on the husband by that judgment of divorce.

A second flaw in the majority’s reasoning is that it proves far too much. Suppose that when W and H marry, W has $100,000 in educational debt (or owes $100,000 to a hospital for uninsured emergency surgery or to a judgment creditor as a result of a business deal that soured), that during the first 5 or 10 years of their marriage W consistently earns significantly more income than H, and that during that period W’s student loans (or the other debt) are repaid in full from W’s earnings. Under the majority’s reasoning, W must pay $50,000 to H if the marriage thereafter ends in divorce. That, after all, “is the lot of any individual who enters into a marriage with outstanding debt.”

The absence of any limiting principle in the majority’s reasoning prompts the following question: what is the majority’s position with respect to “the lot of an individual” who enters *369into a marriage with what he or she regards as a moral obligation to a charitable organization? If that individual consistently earns significantly more income than his or her spouse and contributes $5,000 or $10,000 annually to the charity, does the majority believe that if the marriage ends in divorce the contributing spouse must pay to the other spouse 50% of all the contributions (on a pre- or post-tax basis)? Given the majority’s contention that its decision to uphold the award is consistent with the holding in Kohl, neither a yes nor a no answer from the majority would make any sense.

For these reasons, I would vacate the award to the wife of 50% of all the maintenance, child support and equitable distribution payments made by the husband to his first wife during the parties’ marriage.

The other issue I disagree with the majority about is the husband’s earnings at Compass Advisors. Unfortunately, the majority’s discussion of this issue and the history of this litigation on that issue is riddled with errors. To begin, although the majority states that the husband “left” his position with hazard Freres, the uncontradicted testimony of the general counsel for hazard was that senior management decided and communicated to the husband in the fall of 2001, “a time of great tumult for hazard” when it was going through a restructuring, that the husband “should find other employment” arid that he did not have the option of continuing as a member of hazard. Thus, if the majority means to suggest that the husband voluntarily left hazard and incurred a huge decrease in his earnings, there is no support in the trial record for that notion.

With respect to his salary at Compass Advisors and the director fees he receives, the majority asserts that the husband has been “found incredible” with respect to “his reporting of his income and assets by the motion court ruling on the pendente lite support order, by the court reviewing the application for a downward modification of support, and by this Court on a prior appeal.” In key respects, this assertion is manifestly wrong. In fact, the motion court made no findings at all with respect to the husband’s credibility on this or any other issue. The motion court did refer, however, to “some omissions by both parties in recent [financial] reporting” (emphasis added). Notably, a review of the motion court’s decision and order reveals that it was decided before the husband had even begun working at Compass Advisors. Thus, the motion court could not possibly have made any findings on the husband’s credibility regarding his earnings at Compass Advisors.

Belatedly, the majority also writes that the motion court *370“imputed an average annual income to [the husband] of $2,273,680.” But this reflects no finding that the husband voluntarily had reduced his income. Rather, it is also clear from the decision and order that the sole basis for the court’s decision to impute that amount of income to the husband was that it reflected his average annual income from 1998 through 2001. The majority suggests otherwise. That is, it suggests that findings of wrongdoing by the husband were decisive in the motion court’s imputation of $2,273,680 in annual income to the husband. Thus, it states that the motion court “recognized the husband’s deception and nondisclosure of assets, and imputed an average annual income to him of $2,273,680.” The motion court, however, made neither a finding nor even a reference to “deception” by the husband. With respect to nondisclosure of assets, as noted above, the motion court stated that there were “some omissions by both parties in recent reporting” and commented somewhat cryptically that “[h]iding” one of the cars they owned was “not appropriate behavior” by the husband.

Nor did this Court find the husband “incredible” on the issue of his “reporting of his income and assets” (or any other issue) when it affirmed the motion court’s pendente lite award. Rather, this Court stated only that “the motion court, when confronted with [the husband’s] apparently self-created unemployment and questionable claim of limited future earnings, was warranted in imputing income to him on the basis of his past earnings and earning capacity” (299 AD2d 294, 295 [2002]). Of course, this Court did not have before it the trial record. As noted above and as will also be discussed below, the trial record establishes that the husband’s unemployment was not self-created and his future earnings did decline precipitously.

It is true, however, that when Supreme Court denied the husband’s motion for a downward modification of the pendente lite child support and maintenance awards, it rejected the husband’s contention that his income had drastically decreased. In doing so, Justice Stackhouse, who also presided at trial, did not purport to find the husband “incredible.” It appears, moreover, that the motion was decided on the papers. As the majority stresses, Justice Stackhouse stated that the husband’s “ ‘economic position now is much, much better than it was in 2001‘ ” and that “ ‘[i]f anything, his income has increased’ ” (emphasis added by majority).

But if these pretrial findings were refuted by the trial evidence, they would be irrelevant. The majority believes they were substantiated by the trial evidence. In this regard, it states that “the wife’s position [is] that the husband anticipated ‘paper *371losses’ in the early years at Compass which would be ‘handsomely rewarded’ as deals matured and business grew.” The majority then asserts that the CFO of Compass Advisors “gave testimony which supported this position.” As a review of the CFO’s testimony makes clear, the CFO’s testimony unequivocally supported the husband’s position in every relevant respect.

The CFO, Lorraine Costelloe, testified, without contradiction by any other trial evidence, to the following: the husband’s annual base salary was $200,000, and he thus received slightly more than $100,000 in 2002 (reflecting the fact that he began working at Compass Advisors in mid-2002) and $200,000 in 2003; neither the husband nor any other partner had ever received a bonus payment; the husband never received any quarterly draws; the salary payments in 2002 and 2003 were the only compensation he received from the firm; in September of 2002, he loaned the firm $120,000 (and other partners also loaned money) because of the firm’s cash flow problems; in 2003, he loaned the firm about $29,000 (and other partners also loaned money) for the same reason; none of the loans by the husband have been repaid; in 2003, also for this reason, the firm stopped paying partners for six pay periods and the firm cut costs by, among other steps, reducing health insurance coverage and increasing co-pay requirements and deductibles and eliminating its life insurance plan; for a period of some months in 2003 the firm was in default with respect to interest payments owed to Commerzbank; the firm had an operating loss of just over $8,000,000 in 2001; the audited financial statement of the firm for 2002 (by KPMG) reflected an operating loss of $6,567,000; as Ms. Costelloe testified on January 4, 2004, an audited financial statement for 2003 had not been completed but the firm expected to break even due to a large fee of $3,000,000 that it had received in December; some $1,200,000 of that fee was used to pay bonuses to between 25 and 35 employees (not partners) of the firm.

With respect to Ms. Costelloe, the majority is correct only when it notes that she was among the trial witnesses who were found to be credible by Justice Stackhouse. The majority’s assertion that Ms. Costelloe “gave testimony which supported [the wife’s] position” is breathtakingly wrong. As is evident, just the opposite is true.5 Not surprisingly, the majority offers *372nothing by way of an attempt to respond to any of the. points I make regarding its erroneous reliance on the CFO’s testimony.6

The judgment of divorce requires the husband to pay to the wife: (a) taxable maintenance of $6,000 per month ($72,000 per year) for six years; (b) child support in the amount of $2,833 per month (approximately $34,000 per year); and (c) 100% of all additional costs for school tuition, inclusive of room and board, camp and medical expenses, an amount the husband asserts without contradiction to be approximately $40,000 per year. Whatever the precise tax rate for the husband would be, he clearly could not meet these obligations without gross annual income substantially in excess of the annual sum of these obligations (approximately $146,000), even considering that he can deduct the maintenance payments.

*373In making these awards and this determination, Supreme Court inexplicably and erroneously concluded that at the time of trial the husband’s annual income as a partner at Compass Advisors was $600,000 annually (a salary of $200,000 and quarterly draws of $100,000). As discussed above, the uncontradicted testimony of Ms. Costelloe established that the husband never received a quarterly draw and that the firm had never made profits that could be distributed to the partners. Even assuming that the future prospects of the firm are bright, the permanent maintenance and child support awards and the direction that the husband pay 100% of the additional costs are excessive in light of the husband’s actual earned income of $330,000 annually (his salary at Compass Advisors plus the fees he received for serving as a director of certain entities).

Supreme Court, moreover, appears not to have considered or to have given insufficient consideration to the substantial investment income that the wife will be able to realize as a result of the equitable distribution to her of assets with a value in excess of $5 million (Domestic Relations Law § 236 [B] [6] [a] [1]; Carman v Carman, 22 AD3d 1004, 1006, 1009 [2005]; Love v Love, 250 AD2d 739, 740 [1998]). Nor did Supreme Court give adequate consideration to the wife’s ability to resume her legal or business career. Rather, without any evidentiary support, Supreme Court simply dismissed as “unlikely” that the wife could reestablish any such career. Obviously, as a former associate at a major New York City law firm who rose to the position of vice-president of business affairs of a division of the Walt Disney Company, the wife is a person with considerable talents, intelligence and experience. Indeed, Justice Fields stated in her decision on the pendente lite motion that in 1995, when the wife last was employed, “she earned about $930,000 in salary and stock options at the Walt Disney Company.”

As the majority stresses, Supreme Court found that during the pendency of the divorce action the husband was “spending approximately $63,000.00 a month for his own needs and those of his paramour.” Even assuming the accuracy of this finding—it was and remains vigorously disputed by the husband—it does not follow that it reflects hidden income. To the contrary, it also is possible that, as the husband maintains, preexisting assets rather than current income were used to make pendente lite payments to the wife and to support himself. Of course, the extent of the husband’s personal spending after the action was commenced might support a reasonable inference that he had undisclosed sources of income or expected his income to increase substantially in the near future. In making the permanent main*374tenance and support awards, however, Supreme Court did not purport to impute income to the husband on the basis of either inference. Nor did Supreme Court purport to find that existing assets were not the source of his spending. Rather, Supreme Court made the inexplicably wrong finding that “[a]t the time of trial [the husband] was earning a base salary of $200,000.00 annually and a quarterly draw of $100,000.00 which provided total annual earnings of $600,000.00.”

The extent of the misconduct by the husband during the pendency of the action relating to his financial affairs is simply not a matter that is before this Court for decision.7 Whatever the extent of that misconduct may be, the husband was entitled to have the permanent maintenance and child support awards computed on the basis of findings that are supported by the evidence. Supreme Court’s finding concerning the husband’s earnings at the time of trial, however, is manifestly wrong. The majority does not and cannot dispute this critical fact. Indeed, the majority ignores it.

Accordingly, I would remand for a new trial limited to the issues necessary to determine the appropriate amount of maintenance and child support (including the appropriate level of responsibility of the husband for the additional costs).8

. The majority appears to disagree with my position, based on the language quoted above from O’Brien (66 NY2d at 583), that the $1.9 million expended on the Claverack property was not “marital property.” The majority, however, neither discusses O’Brien nor offers any reason to conclude that these funds were “marital property.” The majority does not and cannot dispute that the husband’s income was the sole source of funding for the renovations. Curiously, the majority makes no mention of this uncontroverted fact in explaining its conclusion that a 75%-25% division of the appreciation “is a more equitable apportionment in the circumstances.” Presumably, it nonetheless considers this fact to be of more than passing relevance.

. In disputing this point, the majority overlooks the testimony that the tenant house was across a road from the main house and the other structures (and grounds) that were the subject of the extensive renovations. Moreover, there is no testimony from the wife or anyone else that she had anything to do with, as she put it, the “minor repairs and renovations” to the tenant house. Finally, it was undisputed at trial that some of the renovations to the tenant house occurred prior to the marriage.

. The majority also rejects this claim, albeit without stating its rationale for doing so.

. Of course, a different result might well be appropriate if the source of the funds used by the previously divorced spouse to satisfy, in whole or in part, his or her financial obligations to a former spouse is the income or separate assets of the second spouse. In such a case, equity might intervene to prevent unjust enrichment (Micha, 213 AD2d at 957). For this reason, my position is by no means inconsistent with the decision of the Second Department in Dewell v Dewell (288 AD2d 252 [2001]), a case upon which the majority relies. The opinion in Dewell, after all, does not indicate whether the income of the wife, the husband or both spouses was used to reduce the husband’s separate debt.

. Just before its assertion that Ms. Costelloe’s testimony “supported [the wife’s erroneous] position,” the majority writes that “[t]he record . . . reflects] that when defendant joined Compass, its ‘Deal Log’ listed $97 mil*372lion of deals at various stages of completion.” This statement adopts the position asserted by the wife in her brief (and at trial) that “[w]hen [the husband] joined Compass Advisors, the firm boasted $97 million of deals in various stages of completion.” Again, however, the record squarely contradicts this effort by the wife to portray Compass Advisors as a firm on the brink of achieving staggering profits. To be sure, at one point on cross-examination, Ms. Costelloe answered “Yes” to a question asking her with respect to the “Deal Log” whether “they [were] at various stages of completion.” But this isolated snippet of testimony gives a misleading account of the “Deal Log.” In fact, Ms. Costelloe testified, and no other trial evidence contradicted her, to the following: the “Deal Log” was prepared in the beginning of 2002; the firm had been retained on only three of the deals, earning $1,700,000 in fees; every other deal, listed under various categories, reflected “prospective clients,” “prospects” or business the firm “hope[d] to get”; as of January 2004 the firm no longer maintained such a “Deal Log.” Moreover, placing such a rosy spin on the “Deal Log” is at odds with the uncontradicted testimony of Ms. Costelloe that these prospective deals in the beginning of 2002 did not keep the firm from losing over $6.5 million in 2002 or from just breaking even in 2003. On this score, finally, two other points should be made. First, the majority’s reliance on increases in the firm’s gross revenues between 2001 and 2003 is ingenuous. Obviously, the majority should not wholly ignore the expense side of the ledger; nor, of course, should the majority ignore as well the actual results for 2002 and 2003. Second, the majority is misleading with its reference to Ms. Costelloe’s testimony to the effect that from the end of 2001 to the end of 2003 the firm had a ten-fold increase in its retainers. As Ms. Costelloe also testified, the firm grew substantially during the same period by, among other things, opening a London office and increasing the number of employees. Again, the majority myopically focuses on only one side of the financial ledger. Furthermore, Ms. Costelloe’s uncontradicted testimony regarding the actual results for 2002 and 2003 is surely of transcendent importance relative to the increase in its retainers.

. The majority misleadingly states that Ms. Costelloe “testified that as of 2003 the Compass partners had not yet received their quarterly draws” (emphasis added). The word “yet” is entirely the majority’s. Contrary to this effort to suggest that Ms. Costelloe testified that the partners were on the verge of receiving quarterly draws, Ms. Costelloe gave no such testimony.

. I would note, however, that despite Justice Stackhouse’s statement that the husband “stonewalled Justice Maijory Fields . . . [by] hiding the five million dollars he had made in 2000,” Justice Fields made no such finding in her written decision. Rather, Justice Fields simply noted that although the husband’s memorandum of law “states he ‘was earning a substantial income as a partner’ at the investment banking firm [hazard],. . . there is no hint of his 2000 income in any of his papers.” Surely, neither the husband nor his counsel thought that the obvious—the absence of any statement about his 2000 income—could be hidden. And, as the husband has argued, his motion in March of 2002 before Justice Fields for a reduction in the pendente lite payments was based on his income in 2002, after his employment at hazard ended and before he began working at Compass Advisors.

. The husband would be free to maintain that he should receive an additional credit against the distributive award to the extent the permanent maintenance and child support awards were reduced on remand. I would also make clear that the parties would be free to take whatever action they deemed appropriate in the event either or both of them believed a change in circumstances since the trial warranted a modification of the awards.