## Facts

- Debra Goldman and Scott Goldman bought a marital home in 1985, taking title as tenants by the entirety.
- Debra filed for divorce in 1990.
- While the divorce was pending, Debra gave her divorce attorney, Phyllis Gelman, a $50,000 mortgage on the marital home to secure legal fees; Scott did not consent, and the mortgage was recorded in 1991.
- Scott learned of the recorded mortgage during the divorce case but did not bring it to the divorce court’s attention.
- In 1994, the divorce judgment awarded Scott exclusive title to the home and did not expressly address Gelman’s mortgage.
- After the divorce, Scott moved to discharge the mortgage; Gelman intervened to oppose discharge.
- The trial court discharged the mortgage; the intermediate appellate court reversed; Scott appealed to the state’s highest court.

## Issues

1. Whether a mortgage granted by one spouse on that spouse’s tenancy-by-the-entirety interest during a pending divorce is extinguished by a later divorce judgment awarding sole title to the other spouse.

## Decision

- The court affirmed the order upholding the mortgage.
- A spouse may mortgage or encumber that spouse’s rights in property held as tenants by the entirety, subject to the other spouse’s continuing rights.
- Divorce converts a tenancy by the entirety into a tenancy in common; the mortgaging spouse’s encumbered interest does not disappear but changes form.
- Because the divorce judgment did not expressly displace the recorded mortgage, the lien survived and continued to burden the interest that would have become the mortgaging spouse’s tenancy-in-common share, even though the home was later awarded to the other spouse.

## Legal Principles

- In a tenancy by the entirety, each spouse may sell, mortgage, or otherwise encumber that spouse’s own rights in the property without the other spouse’s consent, subject to the non-encumbering spouse’s rights.
- A divorce dissolving the marital relationship converts a tenancy by the entirety into a tenancy in common.
- A valid, recorded encumbrance placed on one spouse’s tenancy-by-the-entirety interest before divorce generally survives the divorce and follows the transformed interest, unless the matrimonial court expressly addresses and alters the lien.

## Conclusion

The court held that a recorded mortgage granted by one spouse on that spouse’s tenancy-by-the-entirety interest during a pending divorce remains enforceable after divorce and is not eliminated by a later award of exclusive title to the other spouse when the divorce judgment is silent on the lien.


Goldman v. Goldman, 711 N.Y.S.2d 128 (N.Y. 2000)