New York City Court Rules on Division of Property in International Divorce Dispute

Panorama von Monaco-La TurbieDivorce is a matter of state law in the U.S. in almost every circumstance. Each state has jurisdiction over family law disputes within its territory, but more and more people’s lives are not contained within a single state. People living in New York City might own real property in another state, and assets can cross state lines in other ways. This can create complications in a divorce case, since state courts can only exercise jurisdiction over property located in that state. New York law allows courts to distribute property located in this state after issuance of a divorce decree in another state or another country. A recent order by a Manhattan court addressed a dispute over property located in New York City, between spouses whose divorce case was pending in Monaco. THA v. MAA, No. 161488/2015, dec. order (N.Y. Sup. Ct., N.Y. Cty., Jan. 18, 2017). The order offers an idea of how and when a party to a divorce should seek a New York court’s involvement in distribution of property.

The dispute in THA involves two main legal issues: the alleged concealment of marital property and the court’s jurisdiction over property located in New York City. In a divorce matter, the spouses must make a full disclosure of all marital property in their possession or subject to their control. Intentional concealment of marital property from the other spouse or the court can result in sanctions, and can also affect how the court orders the distribution of property.

In order to bring an action in a particular court, the plaintiff or petitioner must be able to show that the court has jurisdiction over the defendant, known as in personam jurisdiction, or over a particular item of property, known as in rem jurisdiction. A New York City court might have in personam jurisdiction over the parties to a divorce if they live here, but it would lack in rem jurisdiction over property located outside of the State of New York. If a divorce decree issued by a court outside of New York affects property located in New York, § 236(B)(5) of the Domestic Relations Law (DRL) allows the courts of this state to order the distribution of such property, mostly in accordance with New York law.

The wife in THA filed suit in Manhattan Supreme Court, alleging conversion and other claims against the husband. She alleged that he removed “several major works of contemporary art,” which she claimed was marital property, from a Manhattan apartment that she claimed was her separate property, “in apparent anticipation of a divorce proceeding in Monaco.” She had previously tried, without success, to initiate divorce proceedings in Manhattan. A court dismissed that case, partly on the ground that both parties’ primary residences were in Monaco.

The court dismissed the conversion lawsuit, finding it to be “premature at best, and misplaced at worst.” It noted that a suit under DRL § 236(B)(5) could be possible, but not while the divorce case in Monaco was still pending. That court, it found, had “proper jurisdiction over the parties for the purposes of divorce and distribution of property.” It dismissed the case without prejudice, meaning that the wife can re-file at a later date.

New York City family attorney Ingrid Gherman has guided her clients through difficult and emotional legal questions in divorce cases and other family law matters for more than thirty years. Please contact us online or at (212) 941-0767 today to schedule a confidential consultation to discuss your case with a member of our team.

More Blog Posts:

Can Ex-Spouses Keep Running a Business Together After a Divorce? New York Divorce Attorney Blog, October 2, 2015

New York Appellate Court Vacates Part of Divorce Judgment, Finding Issues of Property Distribution Remained in Dispute, New York Divorce Attorney Blog, September 2, 2015

New York Appellate Court Considers Whether a Marital Residence, Purchased Before the Marriage, Can Become Marital Property, New York Divorce Attorney Blog, August 5, 2015

Photo credit: Tobi 87 (Own work) [GFDL or CC BY-SA 3.0], via Wikimedia Commons.