Alaa Khalil, Plaintiff, v. Mervat Mahmoud, Defendant. (2025)

The Court is called upon after trial to decide whether the intervenor has a one-half (50%) ownership interest in the two-family marital residence where the intervenor entered into a joint venture agreement, dated April 11, 2005, with the plaintiff-husband more than twenty (20) years ago [Intervenor's Exhibit 1 in evidence]. Plaintiff-husband and the intervenor allege that the intervenor financially contributed to the mortgage and carrying costs of the residence, lived in one of the two (2) apartments in the residence for approximately a decade with their children and then moved out and rented out that apartment to tenants for another decade while plaintiff-husband and defendant-wife continued to occupy the other apartment with their children, all of whom are emancipated at this time. The defendant-wife contends that the intervenor was never an owner of the residence and that the money they paid each month was only "rent" paid as "tenants". The defendant contends that the plaintiff-husband is using the intervenor to, in effect, attempt to defraud her by excluding one-half (50%) of the marital residence from the marital estate that would be subject to equitable distribution.

Procedural History

The plaintiff-husband commenced this divorce action by filing a summons and complaint on June 3, 2020 [NYSCEF #1]. Defendant filed a notice of appearance on July 14, 2020 [NYSCEF #2]. Defendant filed discovery demands and plaintiff filed responses to defendant's interrogatories in October 2020; thereafter, nothing was filed in the litigation until March 21, 2023, when plaintiff filed a consent to change attorney [NYSCEF #8]. Thereafter, defendant filed a notice of appearance of new counsel, dated April 3, 2023 [NYSCEF #9].

Nearly three (3) years after filing the summons, plaintiff for the first time filed a request for judicial intervention [R.J.I.] in April 2023 [NYSCEF #11]: this was the first time the Supreme Court was notified of the pending action.¹ In the preliminary conference order, dated July 7, 2023, the parties agreed that the plaintiff will obtain a divorce on grounds pursuant to Domestic Relations Law 170(7), irretrievable breakdown in the marital relationship for more than six (6) month, when all ancillary issues were resolved.

Plaintiff filed an affidavit of net worth, dated June 3, 2023 [NYSCEF #18], and defendant filed an affidavit of net worth, dated July 6, 2023 [NYSCEF #20]² . A preliminary conference was held on July 7, 2023 [NYSCEF #23].

A temporary order of protection was issued by Kings County Family Court in February 2023 in favor of the plaintiff against the defendant: the Supreme Court issued a mirrored temporary order of protection on consent [NYSCEF #22]. The parties consented to consolidate the Family Court proceedings into the Supreme Court proceeding; however, neither party sought to continue the temporary orders of protection but the application for an order of protection remains [NYSCEF #71].

In August 2023, plaintiff substituted in his third (3rd) attorney of record [NYSCEF #30]. In October 2023, defendant filed her notice of motion seeking pendente lite relief and plaintiff filed the cross-motion opposing pendente lite relief. The parties stipulated to adjourn the pending applications on consent from October to December 12, 2023, to accommodate a full briefing schedule for both motions [NYSCEF #70].

In December 2023, non-parties filed an order to show cause seeking leave to intervene [NYSCEF #107] asserting a one-half (50%) ownership interest in the marital residence. The Court issued a written decision and order dated July 3, 2024 [NSYCEF #219] in which the Court decided the pendente lite application and that referred the intervenor's application to an evidentiary hearing.

Evidentiary Hearing

The evidentiary hearing was conducted on July 15, 2024 [NYSCEF #250]; July 18, 2024 [NYSCEF #251]; July 30, 2024 [NYSCEF #246]; August 1, 2024 [NYSCEF #247]; and September 12, 2024 [NYSCEF #254].³ An Arabic interpreter interpreted for the intervenor and for various witnesses called by the intervenor.

The intervenor contends, and plaintiff-husband concedes, that they each share an equal one-half (50%) ownership interest in the residence and that only the plaintiff's one-half (50%) share is in the marital estate and subject to equitable distribution. The intervenor called numerous witnesses in support of their application. The plaintiff-husband supported the intervenors' application.

The Facts

The parties were married on July 23, 1989. Plaintiff-husband is fifty-nine (59) years old [NYSCEF #20]. He lists himself as a "cab driver" on his affidavit of net worth [NYSCEF #18]. Defendant-wife is sixty (60) years old. She lists her occupation as "driving instructor" on her affidavit of net worth [NYSCEF #20]. Three (3) children were born of the marriage, two of whom survive and one of whom is deceased: the parties' youngest child emancipated as of October 6, 2023.

Ms. Gad is the intervenor. Mr. M (also referred to by his "nick name" Mr. T, is the husband of the intervenor. Testimony established that Mr. T and intervenor-wife immigrated to the United States from Egypt and that intervenor's husband worked as a street food vendor in Manhattan where he met and befriended plaintiff-husband, plaintiff-husband herein, who was working as a taxi driver, because he frequently stopped and purchased food at intervenor's husband's Halal food truck. Mr. T and plaintiff-husband testified that after years of being friends they decided to combine their financial resources in 2005 to purchase a two (2) family residence so that their families could live in the apartments because neither family could qualify or afford to purchase a home on their own at the time. It is not disputed that intervenor's husband's name (Mr. T) was not on the initial deed for the residence and was only added some years later and then several years intervenor's husband transferred his ownership interest in the marital residence to his wife, the intervenor herein [Intervenor's exhibit I6 in evidence, deed dated October 15, 2014] He testified that this transfer was to facilitate him obtaining more favorable financing terms to purchase another residence. Intervenor provided a copy of a homeowner's policy in the names of the plaintiff-husband and the intervenor dated February 2024 [Intervenor's exhibit I9 in evidence].

Defendant-wife is married to plaintiff-husband: she contends that the intervenor has no ownership interest in the marital residence, that the intervenor was only ever a tenant who paid rent, and that plaintiff-husband is attempting to keep one-half (50%) of the marital residence out of the marital estate so that she will not have access to it by way of equitable distribution. Defendant-wife denied that the intervenor ever had any ownership interest in the residence.

Witness: Mr. M (aka "Mr. T" is Intervenor's husband)

The intervenor-wife called Mr. T., her husband, as a witness on July 15, 2024 [NYSCEF #250]. Mr. T was excluded from the courtroom as a witness prior to his testimony. He testified that he has owned and operated a "food truck" since 1991 when he immigrated to the United States from Egypt [p. 113]. He testified that the intervenor is a one-half (50%) share owner of the marital residence with the plaintiff-husband. [#250, p. 114-115]. He testified that he and plaintiff-husband purchased the residence in 2005 and that thereafter they hired an attorney to prepare a joint venture agreement, dated April 11, 2005, outlining their rights and responsibilities related to the property [#250, p. 115; Intervenor exhibit 1 in evidence]. He testified that he met plaintiff-husband because plaintiff-husband was a regular customer at his food cart who came three or four times a week and that after about eight (8) years they discussed purchasing a residence together because they both wanted to purchase a residence but were not financially able to do so on their own [#250, p. 119]. Intervenor's husband, Mr. T, testified that at that time of the purchase he was not able to get a loan on his own so he and the plaintiff-husband agreed to "help each other" to purchase a residence because the plaintiff-husband could get a loan but was unable to afford a house on his own [#250, p. 119]. He also testified that due to his immigration status at the time of the purchase if his name was added to the deed the interest rate would have been higher so he and plaintiff-husband agreed that they would add his name later when his immigration status changed [#251, p. 173].

Intervenor's husband testified that he was present at the "whole process of the purchase of — the house purchase, from the beginning to the closing" (#251, p. 162). He testified credibly that "both families went and looked at the house" and then he and plaintiff-husband made an offer and that they both went "on the approvals and the procedures that followed" [#251, p. 163]. On cross-examination, intervenor's husband testified that plaintiff-husband "had good credit and he owned a medallion, so he had the credit to qualify for the loan" for the house [#246, p.33] and that the initial bank loan was approximately $750,000 and the mortgage payment was approximately $5,100 monthly [#246, p. 34] which they paid by renting out the basement and a garage space as well as paying for their shares for the apartments.

On cross-examination, intervenor's husband testified that after purchasing the house, plaintiff-husband told him how much his share of the mortgage was and any utilities such as gas and water and that he paid his one-half (50%) share of these joint expenses in cash each month and that he directly paid any utilities related only to the second-floor such as the electric bill and the gas for the kitchen [#246, pp. 42-45].

Intervenor's husband testified on cross-examination that from 2009 to the present time he and plaintiff-husband rented out the basement and shared the income. He testified that starting in 2016 the basement was rented to the defendant-wife in the underlying divorce action and that she conducted a hairdressing business out of the basement [#246, pp. 56-57].

On cross-examination, Intervenor's husband testified that he, his wife and child and plaintiff-husband, his wife and their children all "toured" the house together two (2) times before they agreed to purchase it [#246, p. 7; p. 18] and that he provided one-half (50%) of the $15,000 downpayment in cash [#246, p. 11-12] and that after the purchase they each put $55,000 into repairs for the residence including the façade of the residence and fixing the garage [#246, pp. 19-22]. He conceded that he did not understand all of the terms of the venture agreement but that he understood "that it entitles me to 50 percent of the place and I'm taking the responsibility that I'm responsible for 50 percent of the expenses" [#246, p. 28].

On cross examination, intervenor's husband testified that his family and the intervenor's family shared a mailbox and that he checked the mail each day and "took what concerned me, my wife and children, and I left the rest of the mail" [#251, p. 167].

Intervenor's husband testified that pursuant to the terms of the joint venture agreement the plaintiff-husband added his name to the deed when his circumstances changed [#251, pp. 178-180]. In support, intervenor submitted the deed showing that Mr. T's name was added to the deed in April 2009 [Intervenor's exhibit I5 in evidence]. Intervenor's husband testified that he transferred his one-half (50%) ownership interest in the residence to his wife in or about 2014 because "[i]f I were to buy the house as a second home, it would be considered investment and I wouldn't get the benefit of being a first-time home buyer" [#251, p. 180] and he did purchase another home in September 2015 [#251, p. 182]. He testified that after his family moved out of the second floor apartment they leased the apartment to tenants directly and without any involvement of the plaintiff-husband or defendant-wife.

Intervenor's husband provided several lease agreements, the earliest dating in 2016 [Exhibit 11] and he testified that he mostly collected the rent himself on behalf of his wife, the intervenor. He testified that there are also three garage spots attached to the residence and that one was his to use, one was used by plaintiff-husband and that they rented out the third garage spot and used the money to "pay for the gas bill" [#251, p. 230].

Intervenor's husband testified that he provided his one-half (50%) share of the mortgage and expenses for the residence directly to plaintiff-husband in cash [#251, p. 188]. He testified that plaintiff-husband would contact him by phone or text message each month as to what his share of the expenses were and that he paid in cash when they saw one another because they saw each other "at least three times a week" [#251, p. 188-192]. In support, intervenor offered text messages into evidence as Intervenor's exhibit 14 in evidence. It was undisputed that both the intervenor and plaintiff-husband worked in cash income businesses and that the financial transactions related to improvements and maintenance of the residence were almost entirely made in cash. Intervenor's husband testified credibly that he often paid his share of utilities in cash using check cashing services.

He testified that even after he transferred his ownership interest in the residence to the intervenor-wife, he continued to collect the rent from tenants himself because "since we came to this country, I've been responsible for all the financial dealings. So it was not her responsibility to take care of that" [#251, p. 205].

Intervenor's husband testified credibly that in or about January 2023, defendant-wife called him and asked to visit him and intervenor-wife, and that when defendant-wife visited she asked that they agree to sell the house without plaintiff-husband so that they could keep one-half (50%) of the proceeds and that she could keep one-half (50%) of the proceeds and that she "had many complaints about things that happened between her and [plaintiff-husband]" and that "[i]t is in our nature, my wife and I, it's the way that we were raised, that we would not get involved in questions of things that are none of our business" and that they "treated her with the upmost kindness and we were gentle" but that they did not agree to her request that they attempt to, in effect, cut plaintiff-husband out of a sale of the marital residence [#251, p.. 206-207]. Notably, defendant-wife did not deny or dispute this testimony by the intervenor's husband or by the intervenor. The intervenor's husband and the intervenor testified credibly.

Witness: Plaintiff-Husband

Intervenor called plaintiff-husband as a witness on July 30, 2024 [NYSCEF #246, p. 72]. Plaintiff-husband testified that he immigrated to the United States from Egypt in 1984. He testified that he first discussed the plan to buy a residence with the intervenor's husband in 2004 and that at that time they agreed to "buy the house and everything 50/50" because neither of them believed that they could afford to purchase a house on their own [#246, p. 74-75]. He testified that he discussed this plan to buy a residence with the intervenors with the defendant-wife "because I can't afford to buy a house by myself" and that he subsequently introduced the defendant-wife to intervenor's husband and to intervenor's husband's wife and the intervenor's children when they went to see the residence [#246, p. 76]. He testified that after the families went to look at the residence together a second time "we like [sic] the house and when we were in there, my wife asked them to live downstairs and keep the backyard" and intervenor's husband's family "agreed and they took the second floor" and then they all "went out" for a "celebration for dinner" [#246, p. 77].

Plaintiff-husband testified credibly that he was testifying on behalf of intervenor's husband because:

This is a matter of principle. This man worked very hard to earn his money. He and I and our families shared food, and drinks together, and it is really ugly to deny him and his children their fair share of the house, and that's why I'm here to tell the truth, it is very simple. [#246, p. 77].

On cross-examination, plaintiff-husband testified that the defendant-wife was invited to but declined to attend the meetings with the lawyer regarding the joint venture agreement [#247, p. 5]. He testified that he asked the defendant to be on the deed with him for the residence but that "she refused to be on the deed because she believed that the mortgage interest is against our religion, and I respect that" [#247, p. 31].

Plaintiff-husband testified that he and Intervenor's husband rented out the basement of the residence but that they never had leases with anyone who rented the basement and that they each collected the rent from anyone leasing the basement and shared the money between them [#247, p. 27]. Plaintiff-husband and intervenor's husband both testified that defendant-wife has rented the basement from them for several years and uses the space for her beauty services business. Defendant-wife did not deny or dispute this testimony. The plaintiff-husbands testimony which was truthful and credible corroborated the testimony of the intervenor and the intervenor's husband as that of the numerous witnesses.

Real Estate Attorney: Mr. Richard Kaplan, Esq.

In support of the application, the intervenor called the real estate attorney who did the closing for the marital residence, who testified that he is a partner at a law firm and has been practicing law since 1985 primarily as a real estate attorney. He testified that in 2005, plaintiff-husband and intervenor's husband "came in to me, telling me that they were buying [the marital residence]" and that he "represented them in connection with the purchase of the property" [7/15/24, pp. 27-28]. Mr. Kaplan testified that he understood that at the time of closing the intervenor's husband's name was not put on the deed because intervenor's husband did not have good credit and that he would not qualify for financing and that plaintiff-husband was going on the title alone, even though they were going to be partners in the ownership of the property. Mr. Kaplan testified that he believed that the two families were going to live in the property [7/15/24, p. 28].

Mr. Kaplan testified that shortly after the closing the intervenor's husband and plaintiff-husband came back to him because they "wanted me to prepare a formal agreement setting forth their rights and liabilities with respect to the property" and so he prepared and notarized a joint venture agreement for them as to the residence [7/15/24, p. 29-30]. A copy of the joint venture agreement was entered into evidence as Intervenor's exhibit I1. On cross-examination, Mr. Kaplan testified that it was not his practice to require spouses to participate in real estate closings so it was not unusual that defendant-wife was not at the closing [NYSCEF #250].

The joint venture agreement provides that intervenor's husband would be added to the deed at any time he requested to be added. Intervenor's husband testified that at the time of the closing he believed that being on the deed would result in less favorable terms of the mortgage. Intervenor's husband testified that in or about 2009, the situation that he believed may negatively impact the mortgage terms changed and, at that time, the residence was placed into the joint names of plaintiff-husband and intervenor's husband pursuant to the terms of the joint venture agreement.

Real Estate Agent: Mr. Essam Alsayid

Intervenor called Mr. Essam Alsayid as a witness on July 15, 2024 [NYSCEF #250]. Mr. Alsayid testified that he works as a real estate agent and that intervenor's husband introduced him to plaintiff-husband and that he recognized defendant-wife (defendant-wife) because he sometimes saw her when he went to the house before he rented out the upstairs residence for intervenor's husband. Mr. Alsayid testified that in 2016, intervenor's husband contacted him to rent out the upstairs apartment and that thereafter he facilitated renting the apartment out three (3) times on behalf of intervenor's husband. In support, copies of tenant screening documents were entered into evidence. Mr. Alsayid testified that all his communications regarding renting out the upstairs apartment were with Intervenor's husband and intervenor-wife because she was listed as the landlord on the rental agreements and that he had no communication with plaintiff-husband or defendant-wife related to anything to do with renting out the second-floor apartment. The Court found Mr. Alsayid's testimony credible and that it corroborated the testimony of the intervenor's husband.

Witness: Mr. Yasser Mansour

The intervenor called Mr. Yasser Mansour, as a witness on July 15, 2024 [NYSCEF #250]. Mr. Mansour testified that he works as a plumber and that he did various plumbing jobs in the second-floor apartment for intervenor's husband, that he only communicated with intervenor's husband related to the jobs for the second floor, and that he was paid cash by intervenor's husband for any plumbing work for the second-floor apartment. He testified that when he did plumbing work on the first-floor apartment he only communicated with and was paid cash by plaintiff-husband for the work he did on the first-floor apartment. The Court found that he testified credibly and corroborated the testimony of the intervenor's husband and the plaintiff-husband.

Witness: Mr. Mansour Bhutta

The intervenor called, Mr. Mansour Bhutta, as a witness on July 15, 2024 [NYSCEF #250]. Mr. Bhutta testified that he works as a construction worker and that he met intervenor's husband in Manhattan at his food truck and that intervenor's husband introduced him to plaintiff-husband [plaintiff]. He testified that intervenor's husband and plaintiff-husband told him in 2005 that they purchased a house together and that intervenor's husband owned the second-floor apartment and that plaintiff-husband owned the first-floor apartment. Mr. Bhutta testified that after they purchased the residence in 2005, he did a series of interior construction jobs for the intervenor's husband in the second-floor apartment until 2021 including redoing the wood floors and interior painting [p. 86-91]. He testified credibly that all his communication related to work on the second-floor apartment was with intervenor's husband, who paid him in cash, and that he had no communication with anyone else about work done in the second-floor apartment.

Witness: Faten Ben Mohamed (virtually from Egypt)

Intervenor called Ms. Mohamed as a witness on July 18, 2024 [NYSCEF #251] who testified that he had been a tenant in the second-floor apartment from April 2020 to April 2021 [#251, p. 130-131]. She testified credibly that she paid rent, in cash, each month to intervenor's husband or sometimes to intervenor-wife [#251, pp. 132-135]. She testified that whenever repairs were needed that intervenor's husband sent people to fix the problem (#251, p. 146-148). In support, intervenor provided a lease agreement between the intervenor and Mr. Mohamad dated March 2020 as Intervenor's I12 in evidence.⁴

Intervenor's Direct Testimony: Ms. Iman G

Intervenor-wife testified on August 1, 2024 [NYSCEF #247] that she is the wife of Intervenor's husband. She testified that she immigrated to the United States in 1995 and that she met plaintiff-husband, defendant-wife and their children when they all went to look at the residence together in 2004 [#247, p. 36]. She testified that after they all saw the residence that the plaintiff-husband and defendant-wife came to the home she and intervenor's husband had at the time to discuss the partnership [#247, p. 37]. She testified that the families discussed the partnership and where each family would live in the residence and that the families saw one another "everyday" for the ten (10) years that they both lived in the residence before she and intervenor's husband and their family moved out of the residence into another home [#247, p. 38-39].

Intervenor testified credibly that in January 2023, after the request for judicial intervention was filed in April 2023, the defendant-wife called her and asked to speak to her and the intervenor's husband about the partnership and that she came and "spent about two hours, two hours in our home" and that "she spoke about a lot of things regarding her husband" including "many complaints" [#247, p. 40]. Intervenor-wife testified that defendant-wife "expressed that directly that she wanted us to sell the house together and since my name was on the house because she wanted to exclude [plaintiff-husband] him and she asked us to assist her in achieving that" and that "as we heard that she's asking that, we responded that we could not do such a thing and we had intended to sell the house and each gets their own share" [#247, p. 41].

Defendant-Wife's Demand for Use of Interpreter and Subsequent Waiver

The defendant-wife initially insisted that she could only proceed with an Arabic interpreter; however, the plaintiff-husband testified that the defendant-wife speaks "perfect" English and that in Egypt she "used to be an English teacher" and that she also "used to be a substitute teacher" in a public school near the residence [#246, p. 79]. He contends, in effect, that defendant-wife demanded the use of an interpreter to mislead the Court as to her knowledge and understanding of the ownership relationship between the two families by not being forthright about her level of sophistication with English. The defendant-wife eventually waived the interpreter during the trial on her own accord.

Witness: Ms. Mervat Mahmoud [defendant-wife]

Defendant's counsel called her client, the defendant-wife, as a witness on September 12, 2024 [NYSCEF #254] who conceded that the intervenor was "my neighbor" who "live [sic] upstairs in my house" [#254, p. 5]. She testified that she knew about the purchase of the house and that her only concern was whether it was "legal by the religion" but that the husband-plaintiff assured her that it was allowed under their religious beliefs [#254, pp. 6-7]. She testified that she only "recalled" going to see the residence once before it was purchased and while she did not deny that the intervenor's family was there, she testified that she did not "recall" who was there exactly when she saw the residence [#254, p. 7].

Defendant-wife testified that she did not know at the time the residence was purchased that intervenor's husband would be a one-half (50%) owner of the residence [#254, p. 10]. She testified that pursuant to her religious beliefs, men are to "buy houses" and women are to "keep the house" [#254, p. 11]. She testified that she left the residence and went back to Egypt to live for awhile until, she alleges, the plaintiff-husband "threatened" her and she returned to the United States [#245, pp. 11-13]. She asserted that the plaintiff-husband "never' told her that he had a formal partnership agreement with intervenor's husband and that she only saw the agreement for the first time in 2020 [#245, p. 14]. She conceded that she knew "there is money going on [sic] between them" but that she did not know the details and that she thought the intervenor was paying rent to live upstairs [#254, p. 17].

The defendant-wife testified that she did not believe the joint venture agreement to be legitimate because, she testified, there was a typo in the house number on one (1) page of the agreement. On cross-examination, she conceded that the house number is accurate in all other parts of the joint venture agreement. The house number appeared as X2XX throughout the agreement but as X6XX on one page. The typo defendant-wife appeared to base her attack on the joint venture agreement on a typo of one (1) digit in a four (4) digit number that only appeared on one page in the entire agreement where the house number was accurately typed in the rest of the document.

On cross-examination defendant-wife testified that she did not trust the plaintiff-husband and believed he engaged in financial misconduct to hide assets from her and that she only saw mortgage paperwork come in plaintiff-husband's name so she thought that the residence belonged only to him and that intervenor's husband and his family were tenants who paid rent each month to her husband [#254, pp. 50-71]. When questioned on cross-examination about the testimony of the witnesses she did not deny or dispute any of their testimony but asserted that she did not "recall" whether what they testified to was accurate or not and she asserted repeatedly that she did not "recall" details about meeting the intervenors and any discussions around the purchase of the residence.

The Court finds that the defendant-wife did not testify candidly and that her testimony wholly lacked credibility. The level of the defendant-wife's duplicity in her testimony was palpable: she readily offered self-serving testimony on direct examination but appeared to be unable to "recall" significant, important facts and details when cross-examined by the attorney for the intervenor. Defendant-wife did not deny the plaintiff-husband's credible testimony that he discussed purchasing the residence with the intervenor rather, defendant-wife merely stated that she could not "recall" any of the specific facts and circumstances testified to by the numerous other witnesses. Similarly, she alleged that she could not "recall" that the children of both families played in the backyard of the residence and any other basic questions posed by the intervenor's attorney on cross-examination and that there was a discussion between the families as to preferences of which family would live in which apartment.

Having had the opportunity to observe the testimony, the Court finds that while she appeared unwilling to directly contradict all the other witnesses' testimony, she appeared only able to "recall" questions posed to her by her attorney on direct testimony and was unable to "recall" the questions posed to her by intervenor's attorney on cross-examination. The Court does not find the defendant-wife's testimony candid or credible.

Notably, at the end of her testimony on cross-examination, after vigorously arguing that the intervenors were colluding with the plaintiff-husband in an attempt to keep one-half (50%) of the residence out of the marital estate, the defendant-wife apparently changed her position and asserted that "if the Court sees [Intervenor's husband] owns 50 percent then I am very glad to give it to him. I would not take anything that is not mine, sir" [#254, p. 89]. Nonetheless, thereafter, in the summation, defendant-wife through her attorney argued that if the Court found that the interventors are legal owners of a one-half (50%) interest in the residence that she should be awarded all (100%) of the remaining one-half (50%) ownership interest and that the plaintiff-husband should not be entitled to share in any equitable distribution of the martial portion in the residence.

The Law

In this case, plaintiff-husband and defendant-wife are the plaintiff and defendant in an on-going matrimonial action and the instant evidentiary hearing was ordered based upon the application of the intervenor. The intervenor contends, and plaintiff-husband concedes, that the marital estate subject to the divorce action only includes one-half (50%) of the marital residence (a two-family home in Brooklyn) because that residence was purchased more than twenty (20) years ago as a joint financial venture between the intervenor's family and the parties' to the divorce action. The intervenor contends that pursuant to a joint venture agreement, the two families each have an equal one-half (50/50%) ownership interest in the residence and that they have financially shared the cost of the residence, including the downpayment, the monthly mortgage, taxes, insurance, and other shared costs associated with the property. The intervenor and the plaintiff-husband (plaintiff-husband) in the underlying divorce both contend that the marital estate only includes a one-half (50%) ownership interest in the residence and that any claim the defendant-wife may have to equitable distribution of the residence is limited to the plaintiff-husband's one-half (50%) ownership interest.

It is well-established that the "Court's determination regarding the credibility of the witnesses is entitled to great weight" because the Court had the opportunity to see and hear the witnesses (Nunez v Spellen, -- NYS3d --, 2025 NY Slip Op 00965 [2 Dept.,2025][February 19, 2025]; see also Shpigel v Nuryev, -- NYS3d --, 2025 NY Slip Op 00872 [2 Dept.,2025][February 13, 2025]; Mitchell-George v George, -- NYS3d --, 234 AD3d 969 [2 Dept.,2025][January 29, 2025].

Defendant-wife concedes that the intervenor's family lived upstairs in the second-floor apartment for more than a decade but, she contends, they were tenants who provided cash as rent and not as their share of contribution towards the mortgage costs. She asserts that plaintiff-husband is attempting to collude with the intervenor to defraud her out of one-half (50%) of the value of the residence. Defendant-wife contends that the residence is entirely marital property subject to equitable distribution in the underlying divorce action and that she is entitled to one-half (50%) of the value of the residence in equitable distribution in the underlying divorce action. Defendant-wife asserts that she bases this allegation of fraud on the fact that there is a numerical disparity of the house street number on one (1) page of the joint venture agreement although the correct house number appears in all other pages of the agreement.⁵

The Court finds that the credible testimony of the attorney, the plaintiff-husband and the intervenors were consistent and that the joint venture agreement was consistent throughout with only one partial numerical error in one place which is clearly a typographical error and not, as defendant-wife asserts, a credible basis to find that the document is fraudulent particularly where there are no other inconsistencies and there is overwhelmingly credible testimony by numerous other witnesses, including witnesses who are not parties to this action, that the parties to the divorce and the intervenors were actively engaged in a financial joint venture when they purchases the residence which is further supported by credible testimony from numerous witnesses such as construction workers and tenants that the plaintiff-husband held himself out as the owner of the first-floor apartment and the intervenors held themselves out as the owners of the second-floor apartment at all times.

The Court finds that the intervenor, plaintiff-husband, the attorney who represented plaintiff-husband in the closing and who prepared the joint venture agreement between plaintiff-husband and intervenor's husband, and numerous witnesses called by the intervenor, all of whom testified credibly. Moreover, that credible testimony was supported by extensive documentary exhibits that was entered into evidence, including the joint venture agreement.

The Court recognizes the cultural traditions that defendant-wife testified to related to her assertion that she did not participate in the parties' financial deals; however, despite the overwhelming documentary evidence and the unanimous testimony of numerous witnesses spanning nearly two decades, the defendant-wife maintained her litigation position that defies the facts presented and continued to assert her claim of fraud even where there was no proof of any such scenario and where the documentary proof had been provided to defendant's counsel before the trial. Defendant-wife failed to remember significant factual details of the transaction and, purportedly, the life she lived along-side the intervenors' family in the two-family residence for more than a decade.

In effect, defendant-wife contends that the plaintiff-husband colluded with the intervenor's husband to engage in a long-term scheme over more than two decades (20 years) to defraud her of one-half (50%) ownership interest in the marital residence in the event there was one day a divorce. "The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages" (City of Long Beach v Agostisi, 221 AD3d 776, 778 [2 Dept.,2023]). Here, there is no credible testimony or documentary evidence in support of defendant-wife's position except her self-serving testimony which the Court found was not credible.

"The essential elements of a joint venture are an agreement manifesting the intent of the parties to be associated as joint venturers, a contribution by the coventurers to the joint undertaking (i.e., a combination of property, financial resources, effort, skill or knowledge), some degree of joint proprietorship and control over the enterprise; and a provision for the sharing of profits and losses" (MacKay v Paesano, 185 AD3d 915, 916 [2 Dept.,2020]). Here, the elements of a joint venture were all clearly established by the consistent and credible testimony of numerous witnesses and, moreover, the coventurers formalized the terms of the joint venture in an agreement prepared by an attorney who also testified credibly as to the facts and circumstances surrounding the purported coventurers coming to him to prepare the agreement.

There is no legal support for defendant-wife's claim that the plaintiff-husband engaged in any form of fraud against her even if she was not aware that the residence was jointly owned by the intervenors and the record does not support defendant-wife's contention that the intervenor's financial involvement in the residence was only "rent". The Court finds that defendant-wife's contention that the intervenors were merely tenants is not supported by any testimony other than her own, which the Court found was not credible, and her contention is contradicted by the extensive documentary evidence including the joint venture agreement, the deed transfer, the twenty (20) plus year history of payments and the testimony of the numerous tenants who rented the apartment from the intervenors.

Conclusion

The Court finds that the record supports that the intervenor and the plaintiff-husband each own a one-half (50%) ownership interest in the residence. As such, the intervenor's motion is granted.

It is conceded that plaintiff-husband obtained his one-half (50%) ownership interest in the residence during the marriage. There is a presumption that property acquired during a marriage is marital property subject to equitable distribution (see Fields v Fields, 15 NY3d 158 [2010]; see also Silvers v Silvers, 197 AD3d 1195 [2 Dept.,2021]). As such, the one-half (50%) ownership interest in the residence owned by plaintiff-husband is subject to the matrimonial action and the parties may raise any legally relevant claims as to the equitable distribution thereof [DRL 236(B)(1)(c); 236(B)(1)(d)(1)].

Conclusion

That portion of plaintiff's order to show cause [motion sequence #2] seeking to sell the property and to hold his one-half (50%) of the proceeds in escrow pending a determination of equitable distribution in the divorce action is referred to the trial court. Unless evidence is presented of a consent stipulation or a transcript of a proceeding memorializing such an agreement, between the parties and the intervenor to sell the residence and place the proceeds from the plaintiff's one-half (50%) share in escrow pending determination as to the equitable distribution between the parties in the divorce action. The Court cannot order equitable distribution prior to trial (see generally Taglioni v Garcia, 157 NYS3d 7 [1 Dept.,2021]; see also Capurso v Capurso, 878 NYS2d 754 [2 Dept.,2009]; see also Kayden v Kayden, 234 AD2d 345 [2 Dept.,1996])). If there is an agreement, either party may settle an order on notice together with the agreement or a transcript of the minutes where the agreement was made.

The intervenor's order to show cause [motion sequence #3] seeking to intervene as having a one-half (50%) ownership interest in the residence are granted to the extent detailed herein.

The parties in the divorce action and counsel are already scheduled to appear for oral argument on a pending motion in the divorce action on April 11, 2025 at 9:30 a.m.. At that appearance, the Court will select a date for trial on the financial issues.

ENTER:

Hon. Jeffrey S. Sunshine

J.S.C.

FOOTNOTES

1.   NYCRR 202.16(d) requires that a RJI be filed no later than 45 days from service of the summons "unless both parties file a notice of no necessity with the court, in which event the request for judicial intervention may be filed no later than 120 days from the date of service of the summons and complaint or summons with notice upon the defendant". The Court notes that both parties were represented by different counsel at that time.

2.   The decretal paragraph on page one of defendant's affidavit of net worth lists July 6, 2022; however, the notary page says July 6, 2023, which is also the date it was uploaded to NYSCEF.

3.   The Court notes that all three (3) of the attorneys were prepared for trial and zealously represented their client's positions.

4.   Intervenor also offered into evidence a lease agreement between intervenor and another tenant from April 2021 for one (1) year as Intervenors exhibit I13 in evidence and another lease agreement between intervenor and another tenant from July 2016 for one (1) year as Intervenor's exhibit I11 in evidence.

5.   The Court does not believe that defendant-wife's contention that the transfer document that were filed inaccurately reflect the real estate tax consequences defeats the right of the plaintiff and intervenor as to the status of ownership.

Jeffrey S. Sunshine, J.