Opinion
2013-04-9
Joseph C. ST. MARTIN, Plaintiff, v. Sandra E. ST. MARTIN, Defendant.
Joseph C. St. Martin, plaintiff pro se. Sandra E. St. Martin, defendant pro se.
Joseph C. St. Martin, plaintiff pro se. Sandra E. St. Martin, defendant pro se.
KENNETH R. FISHER, J.
This is defendant Sandra E. St. Martin's
post divorce motion seeking a finding of contempt and that plaintiff be punished with a fine or incarceration. Defendant avers that, pursuant to a divorce judgment of this court dated September 18, 2009, she was awarded the marital residence. Further, a comprehensive Separation and Property Settlement Agreement made defendant responsible for paying the first mortgage and plaintiff responsible for paying the second mortgage on the marital residence. The Judgment of Divorce incorporated, but did not merge the Agreement. Defendant brought a similar motion for contempt on these grounds and the court found plaintiff in contempt and levied a fine of $250. See Decision and Order, May 8, 2012, Fisher, J. Pursuant to the May 8, 2012, Decision and Judgment, the court found that the parties' Separation and Property Settlement Agreement was incorporated by reference into the parties' Judgment and that, by virtue thereof, “Husband agrees to payment [sic] the second mortgage in his name,” held by Bank of America, at least on a monthly basis as it becomes due. Defendant's affidavit on this application avers that plaintiff still has not made any payments on the second mortgage.
The paper work submitted had the caption reversed. The clerk is directed to correct the caption on defendant's motion papers.
Plaintiff has not responded to this motion in writing, but at oral argument conceded that he has not made any payment and contends that, following his bankruptcy in May 2012, he is no longer obligated to pay the second mortgage. Plaintiff also maintains that, following last year's decision, he duly paid the $250 fine and that the decision required him to do nothing more. In particular, he points to the language in that decision (at pp. 3–4) in which the court found that the agreement did not unequivocally require plaintiff to “pay off” the second mortgage in a lump sum. He extrapolates from this that the court found that it was ambiguous whether plaintiff was obligated at all to make payments on the second mortgage in his name.
As explained to him at oral argument, he is in error on the latter point. The court found in that decision that the language in the Agreement—“The husband agrees to payment [sic] the second mortgage in his name”—“supports the view that husband was to continue making the monthly payments on the second mortgage, ...” (at p. 3). The court further found that it was “sufficiently clear and unequivocal that husband was responsible for the mortgage payments, either monthly or by complete payoff” (at p. 4). A finding of contempt was made from the uncontroverted fact that he had made no payments since the “catch up” payments he made shortly after entry of the judgment. As stated, plaintiff does not contest defendant's allegation that no payments have been made since the May 2012 decision. Indeed, it appears from documents handed up in open court that the Bank of America, in a letter dated January 10, 2013 (hereby made a part of), gave notice of its intent to accelerate unless $9,115.17 was paid to it by February 19, 2013. Since that did not occur, the threatened foreclosure process has presumably begun.
Domestic Relations Law 245 provides:
Where a spouse, in an action for divorce ... or for the enforcement in this state of a judgment for divorce, separation, annulment or declaration of nullity of a void marriage rendered in another state, makes default in paying any sum of money as required by the judgment or order directing the payment thereof ... the aggrieved spouse may make application pursuant to the provisions of section seven hundred fifty-six of the judiciary law to punish the defaulting spouse for contempt ....
Enforcement via contempt pursuant to the Domestic Relations Law is only permitted upon a showing that less drastic enforcement measures are unavailable. Jackson v. Jackson, 7 A.D.3d 404, 776 N.Y.S.2d 477 (1st Dept.2004). Here, because the parties' agreement provides that plaintiff is to pay third-party Bank of America on a mortgage in his name only, resort to other less drastic enforcement measures, which would only provide funds to defendant (not the third party), are unavailable to defendant to enforce the terms of the parties' agreement.
Further, inasmuch as “[t]he judgment of divorce directed the parties to comply with the terms of the ... [agreement]” “as if such terms or provisions were set forth in its entirety herein [i.e., the judgment of divorce],” a court may properly find plaintiff in contempt for failing his obligation to make payment on the second mortgage, Gordon v. Gordon, 210 A.D.2d 929, 929–30, 621 N.Y.S.2d 263 (4th Dept.1994), if not discharged in bankruptcy, despite the lack of separate decretal paragraphs in the judgment itself directing that such payments be made. Burn v. Burn, 101 A.D.3d 488, 489, 956 N.Y.S.2d 19 (1st Dept.2012).
As will be seen below, defendant may undertake to bring the second mortgage current and then be entitled to implied restitution/indemnification from plaintiff, in which case a money judgment or wage deduction order would be of assistance. But until she does so, her claim for indemnity implied by law does not accrue.
Plaintiff commenced his bankruptcy proceeding in 2011, which resulted in a discharge of all dischargeable debts under 11 U.S.C. 727 by order dated May 3, 2012. The court had no knowledge of these proceedings on the prior application for contempt. In open court on this application, plaintiff handed up the Bankruptcy Court's “Notice of Entry,” but he later supplied a copy of the actual discharge order. As both parties are unrepresented, the court obtained the gracious cooperation of the Western District Bankruptcy Court, which e-mailed the docket sheet together with the Chapter 7 Petition and various schedules (hereby made a part hereof). MJD Const., Inc. v. Woodstock Lawn & Home Maintenance, 293 A.D.2d 516, 517, 740 N.Y.S.2d 402 (2d Dept.2002) (“Supreme Court was entitled to take judicial notice of the record and judgment in the related bankruptcy proceeding”); RGH Liquidating Trust v. Deloitte & Touche LLP, 71 A.D.3d 198, 207–08, 891 N.Y.S.2d 324 (1st Dept.2009) (same) (collecting cases), rev'd on other gr., 17 N.Y.3d 397, 931 N.Y.S.2d 22, 955 N.E.2d 329 (2011). The first and second mortgages to Bank of America were duly listed, and was defendant who was listed as being owed “domestic support obligations” (Sch. E) consisting of “child support” in the listed amount of $4,654.94. She was also listed as a “co-debtor” (Sch. H), but she was not listed as a creditor with respect to plaintiff's obligation to pay the second mortgage. Accordingly, defendant presumably had knowledge of the bankruptcy proceedings and opportunity to contest the discharge of the second mortgage. However, it appears from the docket sheet that no such objection was made by her.
Accordingly, the court finds that the discharge granted to the plaintiff encompassed his personal liability to Bank of America on the second mortgage. As it stands now, the liability to Bank of America is discharged as to plaintiff's personal liability, thus leaving the bank free to pursue its in rem remedy against defendant and the property. Johnson v. Home State Bank, 501 U.S. 78, 82–83, 111 S.Ct. 2150, 2153, 115 L.Ed.2d 66 (1991); citing 11 U.S.C. § 524(a)(1), § 522(c)(2); In re Dumont, 581 F.3d 1104, 1108 (9th Cir.2009) (if after entry of a discharge order “the buyer stopped making payments or otherwise defaulted, then the creditor could reclaim its collateral but could not pursue a deficiency judgment against the debtor”); In Carman v. European Am. Bank & Trust Co., 78 N.Y.2d 1066, 1067, 576 N.Y.S.2d 90, 581 N.E.2d 1345 (1991); McArdle v. McGregor, 261 A.D.2d 591, 688 N.Y.S.2d 919 (2d Dept.1999).
Although the Fourth Department has opined in dicta that a mortgagor may, despite the discharge of a mortgage in bankruptcy, “reaffirm” that debt by entering into a modification agreement, Berretta v. Berretta, 201 A.D.2d 886, 887, 608 N.Y.S.2d 34 (4th Dept.1994), the court cannot discern how that could be done under federal law as it now exists. Here, plaintiff took advantage of a procedure sanctioned in the Second Circuit, known as the “ride through option” under which a debtor may retain possession of real property without being required to reaffirm or redeem under 11 U.S.C. § 521(a)(2)(A)-(B) so long as the payments to the creditor remain current. See In re Caraballo, 386 B.R. 398, 401–02 & n. 5 (D.Conn.2008); In re Sosa, 443 B.R. 263, 268–69 (D.R.I.2011) (confirming availability of the ride through option for real property, but leaving open the question “whether debtors can force a permanent ride through on their homes without reaffirming the underlying debt”). See also, BankBoston, N.A. v. Suarez, 198 F.3d 234, 1999 WL 753381 (2d Cir. Summary Order, September 20, 1999) (involving real property); In re Boodrow, 126 F.3d 43, 53 (2d Cir.1997) (bankruptcy court may allow “a debtor who is current on loan obligations to retain the collateral and keep making payments under the original loan agreement”) (involving personal property). Plaintiff listed both mortgages on Part A of his “Chapter 7 Individual Debtor's Statement of Intention,” not claiming the property as exempt and announcing his intention to “reaffirm” each debt, the first mortgage because his “ex-wife [was] to purchase/assume mortgage” and the second mortgage by reason of his intention to “negotiate with lender.” Plaintiff has admitted that he is not current with the second mortgage, and he has effectively admitted that he has not re-negotiated with the lender by virtue of his open court proclamation that he is no longer liable to pay that mortgage.
Despite the Fourth Department's reference to reaffirmation, a reaffirmation agreement at this stage is impossible because of the entry of the discharge order. 11 U.S.C. § 524(c)(1)(reaffirmation agreement “is enforceable ... only if (1) such agreement was made before the granting of the discharge under 727”). Bankruptcy law requires that the debtor file a “Statement of Intent” as a means to effectuate speedy settlements in bankruptcy cases, but it only requires that the debtor file the statement of intention, not to execute or perform the stated intention, which was in this case to reaffirm. 11 U.S.C. § 521(a)(2)(A)-(B). Where the ride through option is available, as in the Second Circuit,
the only consequence of a failure to execute the debtor's stated intention that this court finds in the statute applies to personal property only. 11 U.S.C. § 521(a)(6)(automatic termination of stay for failure timely to perform or execute a stated intention). “Congress specifically excluded real property from the new remedy.”
Compare Taylor v. AGE Fed. Credit Union, 3 F.3d 1512, 1516 (11th Cir.1993) (“if a debtor retains secured property, then the options of redemption and reaffirmation are applicable and the debtor is required to redeem or reaffirm”); In re Harris, 421 B.R. 597, 600 (S.D.Ga.2010)(“I agree the BAPCPA changes address the ride through as to personal property, not to real property....Prior to BAPCPA, the legal landscape under § 521(a)(2) in the Eleventh circuit was controlled by the Taylor case which did not allow a ride through .... [and therefore concluding that] in a chapter 7 case, I find a debtor must reaffirm the debt if he chooses to retain the secured real property”). The conflicting cases are canvassed in both opinions in In re Dumont, supra, 581 F.3d 1104.
In re Sosa, 443 B.R. at 268, 268–69 (“regarding the ride through' issue, several courts have held that the BAPCPA amendments to § 524(j) and § 521(a)(6), with additional changes to § 362(h), show Congress's intent to eliminate the ride through option only as to personal property, and to permit debtors to take advantage of the ride through option with respect to relevant real property' without reaffirming the underlying debt”) (quoting In re Caraballo, 386 B.R. at 402). In addition, in this case there is no question of stay termination as the discharge was entered nearly a year ago on May 3, 2012, and therefore no stay currently is in place.
Referring to Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), see below.
Nevertheless, that is not the end of the matter. Plaintiff's obligation to pay the second mortgage was imposed as part of the equitable distribution of marital property and debt under the Separation Agreement which was incorporated into the divorce decree. Under prior bankruptcy law, the classification of the obligation as property division or spousal or child support was important to the determination whether the obligation was discharged under section 727. While some New York cases held that was a matter which “is for the bankruptcy court to determine,” Hilsen v. Hilsen, 161 A.D.2d 459, 555 N.Y.S.2d 370 (1st Dept.1990); see also, Kovitz v. Tesmetges, 186 A.D.2d 32, 586 N.Y.S.2d 972 (1st Dept.1992); Blumenfeld v. Blumenfeld, 155 Misc.2d 592, 589 N.Y.S.2d 297 (Sup.Ct. Nassau Co.1992), more recent authority holds “that state and federal courts have concurrent jurisdiction over the issue of the dischargeability of a particular debt following the discharge of the debtor in bankruptcy.” Ross v. Sperow, 57 A.D.3d 1255, 1256, 871 N.Y.S.2d 736 (3d Dept.2008). See Eden v. Robert A. Chapski, Ltd., 405 F.3d 582, 586 (7th Cir.2005) (“there is no dispute that, with certain exceptions not relevant here, state courts have concurrent jurisdiction with the bankruptcy courts to determine whether or not a debt is dischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a)”); Chevron Oil Co. v. Dobie, 40 N.Y.2d 712, 714–15, 389 N.Y.S.2d 819, 358 N.E.2d 502 (1976); Barax v. Barax, 246 A.D.2d 382, 384, 667 N.Y.S.2d 733 (3d Dept.1998). The Ross and Barax cases involved an inquiry just as is presented in this case.
The court recognizes, of course, that if under federal law the determination is that the award of debt in this case was discharged in bankruptcy, that would be, for the state court, “the end of the inquiry.” Blumenfeld, 155 Misc.2d at 595, 589 N.Y.S.2d 297.See Spankowski v. Spankowski, 172 Wis.2d 285, 493 N.W.2d 737 (2000); Fitzgerald v. Fitzgerald, 144 Vt. 549, 481 A.2d 1044 (1984), these cases make it clear that the court cannot revive a discharged debt on a post judgment application for enforcement of the discharged obligation or for the purpose of “re-litigating the property distribution aspect of the divorce” without a violation of the Supremacy Clause because such would be “circumvent [ing] an adjudication of plaintiff's liability to her by the bankruptcy court.” Id. 144 Vt. at 552, 481 A.2d at 1046.
Bankruptcy law changed in respect to the domestic support obligation/property division dichotomy under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), Public Law 109–8, 119 Stat. 23.
Currently, “[i]n a Chapter 7 proceeding, an equitable distribution obligation is excepted from discharge under 11 U.S.C. § 523(a)(15).” In re St. Clair, 2011 WL 6888369, at *2–3 (Bankr.D.N.J. December 29, 2011). Section 523(a) provides in relevant part as follows: “A discharge under section 727 ... of this title does not discharge an individual debtor from any debt ... (15) to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5)[domestic support obligations] that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit” (bracketed material supplied).
The question of discharge in plaintiff's case remains open, because BAPCPA deleted § 523(a)(15) debts from the list of debts included in the category of debts which are discharged automatically if the creditor failed to file an adversary proceeding in bankruptcy court to obtain a declaration that the obligation was not discharged. Public Law 109–8, § 215(2)(amending 11 U.S.C. § 523(c)(1)).
Here, there is no question that the obligation imposed by the Separation Agreement incorporated into the divorce decree was “incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree” within the meaning of the statute. The Separation Agreement in this case contained a hold harmless clause applicable to the first mortgage running in favor of the husband, but lacked one in connection with the second mortgage which if inserted would have run in favor of the wife. Nor was there a general hold harmless provision included that would sweep in the obligations imposed by the Real Property section of the Agreement. Accordingly, whether the obligation imposed by that Agreement/decree to a third party, the Bank of America, is a debt “to a spouse, former spouse, or child of the debtor” within the meaning of the statute is, from a reading of the various (and varied) cases on the subject, not a settled question under bankruptcy law, but appears from the cases decided in the Second Circuit to have a definitive answer.
The case of In re Rogers, Not Reported in B.R., 2010 WL 1571196 (Bkrtcy.D.Conn., April 19, 2010) “reserve[d] for another day the issue of whether the requirement of an express ‘hold harmless' obligation persists under current Section 523(a)(15) and will look to cases decided under Old Section 523(a)(15) for guidance.” Looking to its prior decision in Pierce v. Pierce (In re Pierce), 323 B.R. 21, 29–30 (Bankr.D.Conn.2005) (collecting cases; decided under former section 523(a)(15)), the court adhered to “the view that the requisite ‘hold harmless' agreement did not have to be express but ‘may be implied from the underlying obligation to pay third parties.’ ” In re Rogers, supra, quoting Pierce, 323 B.R. at 32. The conflicting cases are collected in Pierce, 323 B.R. at 29–30, and in the more recent case of In re Langman, 465 B.R. 395, 406–08 (Bankr.D.N.J.2012), which did not decide the issue under § 523(a)(15), but in extended discussion described the view of the matter in the District of New Jersey. Id. 465 B.R. at 406–07 (“Judge Wolfson
upheld the Bankruptcy Court's determination of nondischargeability pursuant to § 523(a)(15), supporting the substance over form approach and finding that even though the indebtedness was made payable to a third party, the divorce decree had created a debt, fully enforceable as a judgment of the domestic relations court, and thus the debt was incurred at the time of the divorce and nondischargeable pursuant to § 523(a)(15)”). The court in Langman also took note of the similar view in the Second Circuit under § 523(a)(5). 465 B.R. at 406 (“Before the passage of BAPCPA, courts in this Circuit and many others had already broadly interpreted § 523(a)(5) to provide an exception from discharge for certain debts to third parties, such as law firms, when the debts were incurred by the spouse, ex-spouse, or child of the debtor in furtherance of domestic support obligations, on the principle that dischargeability must be determined by the substance of the liability rather than its form.”) Falk & Siemer, LLP v. Maddigan (In re Maddigan), 312 F.3d 589, 593 (2d Cir.2002)(citing Pauley v. Spong (In re Spong), 661 F.2d 6, 9 (2d Cir.1981)) (holding that “ ‘[t]he fact that the debt is payable to a third party (here, [a law firm] ) does not prevent classification of that debt as being owed to Maddigan's child’ ”). See Ross v. Sperow, 57 A.D.3d 1255, 1257, 871 N.Y.S.2d 736 (1st Dept.2008) (applying Spong's substance over form approach to a § 523(a)(5) non-discharge case)
Referring to the case of In re Prensky ( Prensky I ), 416 B.R. 406 (Bankr.D.N.J.2009) (Kaplan, J.), aff'd sub nom. Prensky v. Clair Greifer LLP (Prensky II), 2010 WL 2674039 (D.N.J. June 30, 2010) (Wolfson, J.)
Bankruptcy courts in the Second Circuit have agreed that the court would adhere to its pre-BAPCPA rulings cited immediately above. In re Rogowski, 462 B.R. 435, 444 (Bankr.E.D.N.Y.2011) (“This Court concludes that the Second Circuit would apply the current § 523(a)(5) in the same manner as it did [prior to BAPCPA], would attach no preclusiveness to the named payee in the divorce decree, and would require that the substance of the award should prevail, not its form.”); In re Rubenstein, Slip Copy, 2012 WL 837339 (Bkrtcy.D.Conn. March 9, 2012) (“join[ing] other bankruptcy courts in this Circuit in concluding that Spong and its progeny remain just as applicable after BAPCPA as they were before it”) (collecting cases). Although these cases arise under post BAPCPA § 523(a)(5), the same language was used in amended § 523(a)(15), and thus no limitation or narrowing of those debts intended to be non-dischargeable can be inferred. As recognized in In re Rogowski: “To the contrary, the BAPCPA amendments accord[ ] domestic and child support claimants a broad spectrum of special protections. The legislation creates a uniform and expanded definition of domestic support obligations” and provides DSOs with “the highest payment priority.... It also broadens the categories of nondischargeable family support obligations with the result that these debts will not be extinguished at the end of the bankruptcy process.” In re Rogowski, 462 B.R. at 444 n. 16 (quoting H.R. Rep. No 109–31(I), 109th Cong., 1st Sess. (2005), reprinted in 2005 U.S.C.C.A.N. 88, 102–03 (2005 WL 832198)) (emphasis supplied). Notwithstanding that these are § 523(a)(5) determinations, if it is true that “BAPCPA removed the balancing test from Section 523(a)(15) and made the distinction between domestic support obligations and other obligations arising from a divorce immaterial in a dischargeability analysis.” In re Ginzl, 430 B.R. 702, 707 (Bankr.M.D.Fla.2010) (quoted in In re Rogowski, 462 B.R. at 439 n. 16), then the same analysis is appropriate under § 523(a)(15).
For these reasons, I reject the contrary view expressed in In re Weed, 479 B.R. 533, 538 (Bankr.D.Minn.2012), which in any event was unnecessary to that decision and may have been inspired by what the judge thought were “decisions ... not based on judicially-responsible construction of language that expressly and unambiguously created a class of protected creditor.” Whatever deference should be accorded that sentiment need not be decided, as this court chooses to follow Circuit and bankruptcy court precedent applicable here.
This construction of Section 523(a)(15) is consistent with applicable New York law, which would imply an obligation to hold harmless without an express hold harmless provision. If without a bankruptcy proceeding plaintiff refused to make payments on the second mortgage and defendant undertook to make them to avoid foreclosure, the law would imply an obligation on the part of plaintiff to repay her. Under New York law, “[i]t is nothing short of simple fairness to recognize that ‘(a) person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity’ (Restatement, Restitution, § 76).” McDermott v. City of New York, 50 N.Y.2d 211, 217, 428 N.Y.S.2d 643, 406 N.E.2d 460 (1980). “To prevent unjust enrichment, courts have assumed the duty of placing the obligation where in equity it belongs.” Id. “Thus, the rule developed that ‘[w]here payment by one person is compelled, which another should have made * * * a contract to reimburse or indemnify is implied by law.’ ” Id. (quoting Brown v. Rosenbaum, 287 N.Y. 510, 518–519, 41 N.E.2d 77 (1942)).
Similar considerations of state law, when combined with the Arkansas counterpart to N.Y. Dom. Rel. Law § 245, have led bankruptcy courts in that state to the conclusion that the presence or absence of a hold harmless clause is of no moment if the property settlement agreement incorporated into the divorce decree effectively “orders” payment of the debt to the third party, as this one does ( see discussion, above). In re Henson, 197 B.R. 299, 302–03 (Bankr.E.D.Ark.1996). See also, In re Douglas, 369 B.R. 462, 463 n. 2 (Bankr.E.D.Ark.2007); In re Sturdivant, 289 B.R. 392, 399 (Bankr.W.D.Ark.2003)(citing In re Henson, supra).
Accordingly, the provision of the divorce decree incorporating the property settlement agreement's allocation of the second mortgage debt to plaintiff and which directed the parties to comply with the terms of the agreement as if such terms were set forth in their entirety in the divorce decree, renders that debt non-dischargeable under § 523(a)(15), even though Bank of America could not invoke the discharge exception itself.
The exception applies only to debts incurred in a divorce or separation that are owed to a spouse or former spouse, and can be asserted only by the other party to the divorce or separation. If the debtor agrees to pay marital debts that were owed to third parties, those third parties do not have standing to assert this exception, since the obligations to them were incurred prior to the divorce or separation agreement. It is only the obligation owed to the spouse or former spouse an obligation to hold the spouse or former spouse harmless—which is within the scope of this section.
140 Cong. Rec. H10752, H10770 (daily ed. Oct. 4,1994); H.R. Rep. No. 835, 103rd Cong. 2d Sess. 55 (1994), reprinted in 1994 U.S.C.C.A.N. 3340, 3364, quoted in In re Poppleton, 382 B.R. 455, 457 (Bankr.D.Idaho 2008).
[I]n the case of an obligation to pay a debt owed to a third party, it is the obligation to hold the spouse or former spouse harmless that is presumptively nondischargeable under this section. See 140 Cong. Rec. H10752, H10770. “A property settlement incorporated by a divorce decree that apportions third party debt to one spouse means that the obligor-spouse indemnifies the obligee-spouse in the event that the obligee is required to pay.” In re Sturdivant, 289 B.R. 392, 399 (citing Johnston v. Henson (In re Henson), 197 B.R. 299, 303 (Bankr.E.D.Ark.1996)).
In re Douglas, 369 B.R. at 463–64 n. 2.See also, In re Beggs, 314 B.R. 401, 416 (Bankr.E.D.Ark.2004) (“It is only the obligation owed to the spouse or former spouse which falls within the scope of § 523(a)(15); in the case of an obligation to pay a debt owed to a third party, it is the obligation to hold the spouse or former spouse harmless that is presumptively nondischargeable under this section”).
That leaves for consideration just what remedies are available for plaintiff's default of his obligation to pay the second mortgage. A finding of civil contempt requires the violation of a clear and unequivocal mandate set forth in an order or judgement of the court. Additionally, the moving party bears the burden of proof and “the contempt must be established by clear and convincing evidence.” Matter of Rothschild v. Edwards, 63 A.D.3d 744, 745, 880 N.Y.S.2d 687 (2d Dept.2009). “The law is clear that there need not be a willful refusal to obey a court order before a party may be adjudged in civil contempt. It is not necessary that such disobedience be deliberate; rather, the mere act of disobedience, regardless of its motive, is sufficient to sustain a finding of civil contempt if such disobedience defeats, impairs, impedes or prejudices the rights of a party.” King v. King, 124 Misc.2d 946, 949, 478 N.Y.S.2d 762 (Sup.Ct. 1984) (citing Great Neck Pennysaver v. Central Nassau Pub., 65 A.D.2d 616–617, 409 N.Y.S.2d 544); accord Matter of McCormick v. Axelrod, 59 N.Y.2d 574, 583, 466 N.Y.S.2d 279, 453 N.E.2d 508.
Similar to the court finding on May 8, 2012, it is sufficiently clear and unequivocal that husband was responsible for the mortgage payments, either monthly or by complete payoff. As it is uncontroverted that he has failed to make the monthly payments since about the time of the execution of the judgment, including after this court found him in contempt (since his hold harmless liability to his former spouse has not been discharged), the court finds that there is probable cause to believe that he is in contempt.
Under Judiciary Law § 770 a fine or imprisonment may only be ordered “[i]f it is determined that the accused has committed the offense charged; and that it was calculated to, or actually did, defeat, impair, impede, or prejudice the rights or remedies of a party to an action.” Plaintiff's failure to pay the monthly payments on the second mortgage places defendant in danger of losing the house through a foreclosure action and, as such, his actions would defeat, impair, and impede her right to possession and use of the marital residence as provided in the parties' agreement, incorporated but not merged in the judgment. On the other hand, plaintiff has defended on the ground that he thought that the second mortgage was discharged. In the circumstances, the court cannot find on the present record and without adversary fact finding that, pursuant to Judiciary Law § 770, plaintiff's action was calculated to, or actually did impair and impede defendant's right to possession and use of the former marital residence.
Furthermore, pursuant to Judiciary Law § 770, upon any finding of contempt, plaintiff may be punished by fine or imprisonment, or both. This court previously imposed a fine of $250 plus costs. Accordingly, it may be appropriate that plaintiff be considered for a sentence of incarceration. However, the court must consider Judiciary Law § 770:
Upon the return of an application to punish for contempt, or upon a hearing held upon a warrant of commitment issued pursuant to section seven hundred seventy-two or seven hundred seventy-three of this article, the court shall inform the offender that he or she has the right to the assistance of counsel, and when it appears that the offender is financially unable to obtain counsel, the court may in its discretion assign counsel to represent him or her. If it is determined that the accused has committed the offense charged; and that it was calculated to, or actually did, defeat, impair, impede, or prejudice the rights or remedies of a party to an action or special proceeding, brought in the court, or before the judge or referee; the court, judge, or referee must make a final order directing that he or she be punished by fine or imprisonment, or both, as the nature of the case requires. A warrant of commitment must issue accordingly ...
In consideration of the above, the matter is adjourned to permit plaintiff to obtain counsel. Wills v. Wills, 283 A.D.2d 1023, 1024–1025, 723 N.Y.S.2d 920 (4th Dept.2001). The new date for appearance of counsel is: April 22, 2013 at 9:45 a.m.
In the meantime, plaintiff would do well to purge any possible finding of contempt via rescuing the property from default. Absent that, a more workable solution is for defendant to undertake herself to bring the second mortgage current or pay it off entirely if the Bank will accept payment from her. Once she does so, she would be entitled to a money judgment and other remedies, or perhaps an income deduction order, on the non-discharged obligation to hold her harmless for any payments she is forced to make, under CPLR article 52.
Defendant's motion for an order of contempt is held and decision is reserved pending further proceedings as set forth above.
SO ORDERED.