Opinion
54053
06-18-2018
Mary SEALE, Plaintiff, v. Michael SEALE, Defendant.
Wardlaw Associates, P.C., Saratoga Springs (Donna E. Wardlaw of counsel), for plaintiff. Bartlett, Pontiff, Stewart & Rhodes, P.C., Glens Falls (Karla Williams Buettner of counsel), for defendant.
Wardlaw Associates, P.C., Saratoga Springs (Donna E. Wardlaw of counsel), for plaintiff.
Bartlett, Pontiff, Stewart & Rhodes, P.C., Glens Falls (Karla Williams Buettner of counsel), for defendant.
Robert J. Muller, J.
This action to dissolve the parties' marriage was commenced in May 2010 and, while a Judgment of Divorce was entered in March 2014, the litigation has remained ongoing with several post-judgment motions. As relevant here, plaintiff filed a motion in July 2014 requesting, inter alia , a money judgment in her favor based upon defendant's failure to make payments for counsel fees and expert fees. The request was denied by Order entered on January 21, 2015, with Supreme Court (Bruening, J.) finding that defendant had paid all monies due and owing. Plaintiff thereafter appealed and that determination was reversed on October 26, 2017. The Third Department found that plaintiff's "request for a money judgment should have been granted" under Domestic Relations Law § 244 ( 154 AD3d 1190, 1194 [2017] ), further stating as follows:
"We disagree with Supreme Court's determination that no arrears were due when the motion was decided. Pursuant to the plain language of the equitable distribution provisions, the husband was required to make the expert fee payment and the first installment payment of counsel fees at the time of the first sale of his separate property after the divorce judgment was issued; this occurred in June 2014. The equitable distribution provisions expressly contemplate two separate counsel fee payments, with the second to become due at the time of the next separate property sale. That sale occurred in September 2014. The husband did not make the second counsel fee installment payment in September 2014; that payment was in arrears when the motion was decided. As the husband had made no prior application for relief and had not shown good cause for his failure to do so, Domestic Relations Law § 244 required issuance of a judgment in the amount of the remaining installment payment.
"It is undisputed that no arrears now remain outstanding. Nevertheless, the wife seeks interest for the periods in which the various payments were due but unpaid. Domestic Relations Law § 244 mandates the payment of interest upon arrears ‘if the default was willful, in that the obligated spouse knowingly, consciously and voluntarily disregarded the obligation under a lawful court order.’ A default is not willful when it arises from financial disability or from a sincere, though mistaken, belief that payments were not required, especially when that belief was based upon advice from counsel. Here, the husband owned, as his separate property, a number of valuable parcels of real estate, including several business properties. However, he contended that he was in significant financial distress and had no liquid resources other than sales of his separate property with which to satisfy his equitable distribution obligations. Notably, the recently-issued divorce judgment offers some implied support for this assertion by directing the husband to satisfy most of his equitable distribution obligations by selling parcels of his separate property. In addition to evidence specifically detailing the outstanding debts, tax obligations and other financial constraints that resulted in the husband's lack of liquid resources, his submissions established that the June 2014 separate property transaction yielded no funds from which payments could have been made to the wife and that the proceeds of the September 2014 sale, while adequate to permit payment of the other obligations, did not yield sufficient funds to cover the second counsel fee installment payment. As previously discussed, a showing of inability to pay does not preclude a judgment for arrears pursuant to Domestic Relations Law § 244. Nevertheless, for the purpose of determining the interest issue, we find that the husband met his burden to demonstrate that his defaults at the time of the property sales were not willful" (id. at 1195–1196 [citations and internal quotation marks omitted] ).
On November 3, 2017, plaintiff filed a money judgment against defendant for the amount of the remaining counsel fee installment payment—namely, $107,767.50. Defendant was served with the money judgment on January 9, 2018 and immediately requested that a satisfaction of judgment be filed, but plaintiff refused to comply with the request. Presently before the Court is (1) defendant's motion by Order to Show Cause for an Order vacating the money judgment, assessing a penalty against plaintiff for her failure to file a satisfaction of judgment and imposing costs and sanctions; and (2) plaintiff's cross motion for costs and sanctions. The motion and cross motion will be addressed ad seriatim .
Defendant's Motion
Defendant contends that he is entitled to an Order vacating the money judgment because the remaining counsel fee installment payment has been made and the Third Department expressly found that plaintiff is not entitled to an award of interest. In opposition, plaintiff contends that the Third Department found only that she is not entitled to prejudgment interest under Domestic Relations Law § 244 —which she is not seeking. Rather, she is seeking postjudgment interest under CPLR 5003. According to plaintiff, she is entitled to interest at the legal rate of 9% per annum on the remaining counsel fee installment payment of $107,767.50 from January 21, 2015—when the Order of Supreme Court denying the money judgment was entered—to December 7, 2015—when the remaining counsel fee installment payment was made. Plaintiff thus calculates the amount of interest as follows: $26.5728/day x 320 days = $8,503.30.
At the outset, the Court agrees that the Third Department found only that plaintiff was not entitled to prejudgment interest under Domestic Relation § 244—as reflected in those portions of the decision set forth above. The Third Department did not discuss postjudgment interest under CPLR 5003, the issue presently before this Court.
CPLR 2222 provides that, "[a]t the request of any party[,] the clerk shall docket as a judgment an order directing the payment of money." CPLR 5003 then provides that "[e]very order directing the payment of money which has been docketed as a judgment shall bear interest from the date of such docketing." "It is well settled that this ‘interest is not a penalty [but r]ather, ... is simply the cost of having the use of another person's money for a specified period’ " ( Colgate v. Broadwall Mgt. Corp. , 51 AD3d 437, 437 [2008], quoting Love v. State of New York , 78 NY2d 540, 544 [1991] ).
Here, the Third Department stated, in pertinent part:
"ORDERED that the order entered January 21, 2015 be modified, on the law, without costs, by reversing so much thereof as denied plaintiff's motion for a money judgment; said motion granted; and, as so modified, affirmed" ( 154 AD3d at 1198 ).
The Third Department therefore modified the Order of Supreme Court entered on January 21, 2015 so as to grant plaintiff's request for a money judgment in the amount of $107,767.50. While plaintiff could have requested that the clerk docket the Order as a judgment nunc pro tunc to January 21, 2015, she instead chose to file a money judgment "nunc pro tunc to January 21, 2015"—an approach which the Court does not find objectionable under the circumstances (see Matter of New York State Crime Victims Bd. v. Gordon , 66 AD3d 1213, 1215 [2009] ). Indeed, regardless of the approach taken, CPLR 5003 was triggered by operation of law with interest beginning to accrue on the $107,767.50 at 9% per annum from January 21, 2015 to the date of payment (see CPLR 5003, 5004 ). The Court therefore finds that defendant owes plaintiff postjudgment interest in the amount of $8,503.30—as requested.
While defendant contends that this Court cannot find that plaintiff is entitled to postjudgment interest under CPLR 5003 because the Third Department did not make such a finding, the Court is not persuaded. The Third Department did not need to make such a finding. Once the Order entered on January 21, 2015 was modified so as to grant the money judgment, CPLR 5003 applied by operation of law.
This notwithstanding, given the procedural posture of this case, the Court further finds that it is inequitable to allow the money judgment in the amount of $107,767.50 to remain against defendant when—as the Third Department observed—no arrears remain outstanding (see 154 AD3d at 1195 ). Indeed, defendant submitted an affidavit in support of the motion describing the prejudicial impact the money judgment has had on him:
"In an attempt to continue to rebuild my life after [this] matrimonial litigation ..., I am working towards ventures that require financing. However, all of the banks and financial institutions with which I have built relationships are reticent (at best) to continue to work with me and loan me money when I have a $107,000 wrongful judgment filed against me. Although I have had conversations with these banks and tried to explain the situation, the fact remains that they will not lend money to an individual with such a large judgment outstanding."
Defendant's motion is therefore granted to the extent that the money judgment filed on November 3, 2017 is vacated. Defendant, however, is directed to pay counsel for plaintiff the postjudgment interest due and owing in the amount of $8,503.30 within thirty (30) days of the date of this Decision and Order.
Turning now to the second aspect of defendant's motion, defendant contends that plaintiff should have filed a satisfaction of judgment and must be penalized $100.00 as a result of her failure to do so.
CPLR 5020 (c) provides, in pertinent part:
"When [a] judgment is fully satisfied, if the person required to execute and file [a satisfaction of judgment] fails or refuses to do so within twenty days after receiving full satisfaction, then the judgment creditor shall be subject to a penalty of one hundred dollars recoverable by the judgment debtor."
Insofar as plaintiff is entitled to post judgment interest under CPLR 5003, the Court declines to impose any penalty as a result of her refusal to file a satisfaction of judgment. The second aspect of defendant's motion is therefore denied.
Finally, with respect to the third aspect of the motion, defendant contends that he is entitled to costs and sanctions because plaintiff's conduct in filing the money judgment was frivolous and undertaken only to harm him financially.
Courts may impose discretionary costs or sanctions against a party who engages in "frivolous conduct" (Rules of Chief Admin of Cts [ 22 NYCRR] § 130–1.1 [a] [b] ). Conduct will be deemed frivolous if "(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false" (Rules of Chief Admin of Cts [ 22 NYCRR] § 130–1.1 [c]; see Kinge v. State of New York , 302 AD2d 667, 670 [2003] ).
Given the Third Department's decision reversing that aspect of the January 21, 2015 Order which denied plaintiff's request for a money judgment—together with this Court's determination that postjudgment interest remains due and owing on the money judgment—the Court cannot find that plaintiff's conduct in filing the money judgment was entirely frivolous. While defendant perhaps felt harassed by such filing—and rightfully so—it was nonetheless based in law. As such, the third aspect of defendant's motion is denied.
Based upon the foregoing, defendant's motion is granted to the extent that the money judgment is vacated and the motion is otherwise denied. Defendant shall pay counsel for plaintiff the postjudgment interest due and owing in the amount of $8,503.30 within thirty (30) days of the date of this Decision and Order.
Plaintiff's Cross Motion
Plaintiff contends that she is entitled to costs and sanctions because defendant's motion is frivolous. For the reasons set forth above, the Court finds this contention to be wholly without merit and denies the cross motion in its entirety.
The parties' remaining contentions, to the extent not specifically addressed herein, are either without merit or have been rendered academic by this decision.
Therefore, having considered the Affidavit of Karla Williams Buettner, Esq. with exhibits attached thereto, sworn to February 14, 2018, submitted in support of the motion; Affirmation of Donna E. Wardlaw, Esq. with exhibit attached thereto, dated March 9, 2018, submitted in opposition to the motion and in support of the cross motion; Reply Affidavit of Karla Williams Buettner, Esq. with exhibit attached thereto, sworn to March 15, 2018, submitted in further support of the motion and in opposition to the cross motion; and Reply Affidavit of Michael Seale with exhibit attached thereto, sworn to March 15, 2018, submitted in further support of the motion and in opposition to the cross motion, it is hereby
ORDERED that defendant's motion is granted to the extent that the money judgment entered by plaintiff on November 3, 2017 is vacated and the motion is otherwise denied; and it is further
ORDERED that defendant shall pay counsel for plaintiff $8,503.30 in postjudgment interest within thirty (30) days of the date of this Decision and Order; and it is further
ORDERED that plaintiff's cross motion is denied in its entirety.
The original of this Decision and Order has been filed by the Court together with the Notice of Cross Motion dated March 8, 2018 and the submissions enumerated above. Counsel for plaintiff is hereby directed to obtain a filed copy of the Decision and Order for service with notice of entry in accordance with CPLR 5513.