O'CONNELL v. Corcoran

¶1(dissenting). Because the Vermont court expressly declined to adjudicate the issue of equitable distribution, I would affirm the order of the Appellate Division.

¶2Plaintiff Maureen O’Connell and defendant John J. O’Connell were married in 1959. She was a nurse and he was, as he described, a laborer at a beer brewing company. When the company closed in the early 1960s, defendant was vice-president of the company. Defendant then went to work for an energy company where he remained until his retirement in 1994.1 Plaintiff, by contrast, became a homemaker about a year after the marriage, raising the first of eight children. All the children were raised in a two-story five-bedroom colonial home constructed in 1968 and 1969. While defendant was primarily responsible for building the home, plaintiff maintained it. Plaintiff’s parents financed significant improvement of the home’s garage.

¶3*187In 1982, the two separated. By then plaintiff had resumed her vocation as a nurse. Plaintiff moved to another home with all the children except for one who was away in school. Plaintiffs action for divorce that same year, based on cruel and inhuman treatment, was unsuccessful (O’Connell v O’Connell, 116 AD2d 823 [1986]). When plaintiff left with the children, she essentially took no marital property with her.

¶4About a decade later, in December 1994, plaintiff succeeded in obtaining a divorce in Vermont where she was not required to establish that defendant was at fault. It was enough that they had been living apart for more than six months and reconciliation was unlikely. The defendant appeared at the court in Vermont to contest the divorce proceeding. The Vermont court would not allow his attorney, who was not admitted in Vermont, to participate in the proceeding. Defendant proceeded pro se and protested the proceeding only on the grounds of the prior New York divorce. The Vermont court stated that it would take defendant’s opposition to be an objection to the jurisdiction of the court, and it denied defendant’s assertion that the New York proceeding was determinative.

¶5During the divorce proceeding in Vermont, the following discussion took place between plaintiffs counsel and the court after plaintiff testified:

“court: . . . am I to understand then, that questions of property division are conceded by you as to not appropriately being before this court?

“[counsel]: As far as I understand all of the property—

“court: You’re only asking at this point for a decree of divorce—

“[counsel]: Correct.

“court:—nothing ancillary to that?

“[counsel]: That’s it. Correct.

“court: And will you explain to the court why that is?

“[counsel]: Because as far as I know if any marital property exists, it exists in the State of New York and I don’t believe this court would have jurisdic*188tion to make orders with regard to the division of marital property assets in the State of New York.

“court: All right.”

¶6Plaintiff then commenced this action in New York Supreme Court seeking equitable distribution. Plaintiff relied on New York Domestic Relations Law § 236, which provides, as relevant, that “in proceedings to obtain a distribution of marital property following a foreign judgment of divorce,” the court “shall determine the respective rights of the parties in their separate or marital property, and shall provide for the disposition thereof in the final judgment.” (§ 236 [B] [5] [a].) Defendant moved to dismiss the action on the ground of res judicata and collateral estoppel. The trial court denied the motion and the Appellate Division affirmed, concluding, that in the Vermont action, “[n]o provision . . . was made for the distribution of marital property nor was the issue litigated or alluded to in any way” (226 AD2d 950, 951 [1996]). This Court dismissed the defendant’s motion for leave to appeal (88 NY2d 963 [1996]).

¶7Thereafter, the court awarded plaintiff approximately one half of the marital estate, including a share of the marital residence, defendant’s pension benefits, and various money accounts. The Appellate Division once again affirmed (290 AD2d 774 [2002]). The Appellate Division noted that the parties were both 62 years old at the time of the trial and that “defendant challenged and successfully defeated the 1982 divorce action, and subsequently failed to demonstrate any unfairness in permitting plaintiff to share in property acquired in the ensuing years” (290 AD2d at 777). This appeal ensued.

¶8By specifically granting courts the authority to make equitable distribution awards “following a foreign judgment of divorce,” section 236 contemplates that a party can obtain a divorce in one state while having property equitably distributed in New York. Nevertheless, section 236 is subject to article IV § 1 of the United States Constitution, which provides that “Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State” (see generally Matter of Luna v Dobson, 97 NY2d 178, 182-183 [2001]).

¶9Although defendant references res judicata and collateral estoppel, collateral estoppel or issue preclusion is not applicable in this case because only the issue of divorce was resolved by a final judgment on the merits (see Farrell v Mountain Folk, Inc., 169 Vt 568, 568-569, 730 A2d 597, 598 [1999]). The Vermont *189court did not resolve the issue of equitable distribution. There is no doubt that the Vermont court could have resolved that issue. Vermont Statutes Annotated, title 15, § 751 (a) reads in part, “Upon motion of either party to a proceeding under this chapter, the court shall settle the rights of the parties to their property, by including in its judgment provisions which equitably divide and assign the property.”

¶10The doctrine of res judicata, as articulated by the Vermont Supreme Court, “bars the litigation of a claim or defense if there exists a final judgment in former litigation in which the ‘parties, subject matter and causes of action are identical or substantially identical’ ” (Berlin Convalescent Ctr., Inc. v Stoneman, 159 Vt 53, 56, 615 A2d 141, 143 [1992], quoting Berisha v Hardy, 144 Vt 136, 138, 474 A2d 90, 91 [1984]). Unlike issue preclusion, “[i]t bars not only issues actually litigated but also those which ‘should have been raised in previous litigation’ ” (159 Vt at 56, 615 A2d at 143-144, quoting American Trucking Assns., Inc. v Conway, 152 Vt 363, 370, 566 A2d 1323, 1328 [1989]). The purpose of the judicially crafted rule is to “protect the courts and the parties against the burden of relitigation, encourage reliance on judicial decisions, prevent vexatious litigation and decrease the chances of inconsistent adjudication” (159 Vt at 57, 615 A2d at 144).

¶11In Roddy v Roddy (168 Vt 343, 721 A2d 124 [1998]), the court precluded a mother from seeking supplemental maintenance after entry of divorce and maintenance and child support orders without having to show a change of circumstances. The court found that the mother “could have, and should have, sought the maintenance supplement in connection with the original divorce and child support proceeding” (168 Vt at 347, 721 A2d at 127).

¶12In Grant v Grant (136 Vt 9, 383 A2d 627 [1978]), the parties appeared before the District Court of the Virgin Islands, which granted a divorce but did not award alimony although the decree provided the court would determine alimony upon motion. The former wife then commenced an action in Vermont seeking to modify the decree to provide for alimony although she did not allege a change of circumstances. The court noted that the record did not indicate why alimony was not awarded. It was clear, however, that “the failure to award alimony was not the result of a lack of power to do so; and secondly, all the evidence plaintiff presented to the Vermont trial court could have been presented to the Virgin Islands court” (136 Vt at 13, 383 A2d at 629).

¶13*190It does not necessarily follow that the Vermont Supreme Court would reach the same result in this case as it did in Roddyand Grant. Plaintiffs counsel did not fail to raise the issue of equitable distribution in the Vermont proceeding. Rather, counsel contended that the court lacked jurisdiction over property located in New York. The argument went directly to the court’s power and counsel’s ability to raise the issue in Vermont. What is clear is that there was no litigation on the merits of any equitable distribution claims in Vermont and, in fact, the Vermont court specifically concluded that it would not address such claims.

¶14In Ford v Franklin (129 Vt 114, 274 A2d 461 [1971]) a Nevada court with personal jurisdiction over the parties had granted a divorce decree which did not, among other things, dispose of jointly owned property located in Vermont.2 The court held that upon motion by either party, a Vermont court could distribute the property, which “was, and is located in Vermont, and under Vermont jurisdiction” (129 Vt at 122, 274 A2d at 466; cf. Poston v Poston, 161 Vt 591, 657 A2d 1076 [1993]; Avery v Bender, 124 Vt 309, 204 A2d 314 [1964]).

¶15In this case, the issue of equitable distribution of property was raised in the Vermont proceeding and neither the Vermont trial court nor the defendant challenged the assertion of the plaintiffs attorney that the court lacked jurisdiction over property located in New York. By using the term “[a] 11 right,” without more, the court placed its seal of approval on the argument of plaintiffs counsel. Whether the court did so because it genuinely believed in the merits of the argument or “to move the parties along” is irrelevant. When the defendant argued that the court should not exercise jurisdiction because of the New York divorce judgment, the court responded with the term “[a]ll right,” but immediately ruled as follows:

“The court will treat your opposition which was filed by letter and your recitation today as a motion to dismiss for lack of jurisdiction. The court will deny the motion on the following grounds . . . .”

¶16*191In contrast, when plaintiff’s counsel argued that the court lacked jurisdiction, the court stated only “[a] 11 right,” and did not otherwise challenge the assertion as it did when defendant objected to the court’s jurisdiction. Had the court disagreed with counsel’s statement, then it could be argued that plaintiff should have raised the issue in Vermont. In light of the court’s ruling, it cannot be said that plaintiff could have brought an equitable distribution claim in Vermont. Despite the expansive language of section 751, the court rendered itself powerless to decide the issue.

¶17The majority is troubled by the fact that plaintiff engaged in so-called forum shopping by going to Vermont after unsuccessfully seeking a divorce in New York. There is no New York statute, however, prohibiting plaintiffs conduct. There is no statute that provides that a plaintiff who was unsuccessful in seeking a divorce in New York may not come back to New York to litigate any related issues after obtaining a divorce in a foreign jurisdiction. In fact, the opposite is true. Similarly, there is no statute prohibiting a plaintiff who failed to obtain a divorce in New York from trying to do so in another state.

¶18The holding of the majority will do little to discourage another plaintiff who fails to obtain a divorce in New York from going to another state like Vermont. What it will do is ensure that plaintiffs will either seek equitable distribution of property in the foreign state (assuming the court has personal jurisdiction over the spouse), or make it clearer than the plaintiff did in this case that the court did not wish to exercise jurisdiction over the marital property.

¶19Separately, while the Vermont Supreme Court applied res judicata in Grantand in Roddy, the court has recognized that the judge-made doctrine is flexible and should not be applied mechanically (see Tudhope v Riehle, 167 Vt 174, 179, 704 A2d 765, 768 [1997], citing Delahunty v Massachusetts Mut. Life Ins. Co., 236 Conn 582, 591, 674 A2d 1290, 1295 [1996]; see also Jones v Murphy, 172 Vt 86, 772 A2d 502 [2001]). Although the issue of equitable distribution was not adjudicated, this was not due to plaintiffs desire to engage in piecemeal and vexatious litigation. It is also not the case that plaintiff wished to avail herself of the equitable distribution statute in New York, rather than the one in Vermont. Rather, the issue was not adjudicated out of a belief, accepted by the court, that the issue could not be resolved in Vermont.

¶20Vermont’s broadly worded equitable distribution statute evinces the importance Vermont attaches to ensuring that a for*192mer spouse receives his or her fair share of the marital property. A party may choose to forgo that right, but that is not what occurred here. This case would be different had the court instructed plaintiff to raise the issue of equitable distribution rather than failing to challenge the statement by plaintiff’s counsel that the court did not have jurisdiction.

¶21Roddyinvolved supplemental maintenance, which was pegged to the need of the children. The former wife would have had a remedy in Vermont if she could have shown a change of circumstances. Grantinvolved alimony, and the former spouse would also have had a remedy in Vermont upon proof of a change of circumstances. In addition, she could have commenced an action in the Virgin Islands since the court there retained jurisdiction over alimony.

¶22This case involves the outright disposition of property. If plaintiff is precluded from seeking her fair share of marital property, then she will receive no marital property from a long term marriage (she took almost no marital property when she left the marriage) in which she was primarily responsible for rearing eight children and maintaining the marital home. Plaintiff will not receive what the lower courts found she was entitled to—equal distribution of marital assets, including the marital home, defendant’s various investments and bank accounts, and his pension.

¶23The Full Faith and Credit Clause should not preclude the current action seeking equitable distribution.

¶24Accordingly, I would affirm the order of the Appellate Division.

¶25Chief Judge Kaye and Judges Rosenblatt, Graffeo and Read concur with Judge Ciparick; Judge G.B. Smith dissents and votes to affirm in a separate opinion.

¶26Order reversed, etc.