Summary
In Stratton v. Stratton, 39 Misc.3d 1230(A), 2013 WL 2249155 (Sup.Ct., Sullivan Cty.2013), when the husband refused to pay the mortgage, the court ordered interim sale of a marital residence under the theory that the sale was required to preserve the asset.
Summary of this case from Harlan v. HarlanOpinion
No. 4615–09.
2013-05-20
Lynne STRATTON, Plaintiff, v. Peter STRATTON, Defendant.
Lynne Stratton, Livingston Manor, Plaintiff, pro se. Peter Stratton, Mongaup Valley, Defendant, pro se.
Lynne Stratton, Livingston Manor, Plaintiff, pro se. Peter Stratton, Mongaup Valley, Defendant, pro se.
FRANK J. LaBUDA, J.
Plaintiff herein brings a motion seeking appointment of a “referee” to sell the marital residence and retain funds from the sale thereof to preserve the assets of the marriage. Defendant has failed to respond in any manner to the within motion, the return date of which was April 25, 2013. Although Plaintiff, who now represents herself, refers to appointment of a referee, the Court will treat the within motion as one for appointment of a receiver.
This matter has been pending before the Court for several years. Due to Defendant's ongoing willful failure to obey previous court orders, the Court has held Defendant in contempt on more than one occasion. Despite the contempt findings, which included placing Defendant in the Sullivan County Jail for 30 days, as well as additional orders of relief by the Court, Defendant has refused to comply with any and all of the Court's orders and has thwarted attempts by Plaintiff to move the matter along and resolve the outstanding issues.
BACKGROUND
Plaintiff and Defendant were married on April 1, 2004, following a domestic partnership that began in 1982. There are no children of the marriage. Plaintiff commenced this action for divorce by filing the Summons and Complaint with the Sullivan County Clerk on December 8, 2009. Defendant was timely and properly served with the Summons and Complaint on December 23, 2009. Both parties were residents of Sullivan County, State of New York, when this divorce action was commenced.
By Order to Show Cause dated December 29, 2009, Plaintiff moved for pendente lite relief. Defendant opposed Plaintiff's motion. On May 18, 2010, The Court (Hon. Robert A. Sackett) awarded Plaintiff pendente lite relief as follows: exclusive possession of the marital home in Livingston Manor, New York 12758, so long as she continued to reside there (and subject to the further order of the Court); Defendant to pay the household expenses of the marital home in a timely manner as they became due including: the monthly mortgage/and property tax payment of $2,796.00, all fuel oil and electric service invoices, all cable TV invoices, all homeowner's and vehicle insurance premiums, all medical dental and optical insurance premiums. In addition, the Court ordered Defendant to pay to Plaintiff spousal maintenance of $1,000.00 per month, including $5,000.00 retroactively, paid at a rate of $250.00 per month commencing June 1, 2010 and on the 1st day of every consecutive month thereafter until fully paid. The Court also awarded the sum of $5,000.00 as interim counsel fees to the Plaintiff for payment no later than June 15, 2010. The Court denied the Plaintiff's request for interim appraisal and accounting fees without prejudice.
Defendant failed in almost all respects to comply with the Court's pendente lite and other orders. Therefore, Plaintiff filed a contempt motion pursuant to Judiciary Law § 753 on August 12, 2010, for Defendant's failure to pay all of the pendente lite support set forth in the May 18, 2010, order. A contempt proceeding commenced on November 30, 2010, before the Hon. Robert A. Sackett, JSC. Judge Sackett conducted four fact finding hearings, at which Plaintiff presented sworn testimony that Defendant failed to make any payments, except health insurance, auto insurance, and $1,350.00 toward the mortgage. One Michael D'Abbraccio testified that the Defendant trained horses for him and did not pay rent as stated in Defendant's Net Worth Statement.
The Court rendered a decision and order on March 5, 2012. The Court found the Defendant earned in excess of $132,000.00 over 11 months from January, 2010, to November 2010, which imputed to $151,886.88 for 2010. Defendant failed to file the necessary tax returns for 2009, and did not produce witnesses and/or employees to testify about his expenses. Therefore, Defendant failed to prove he earned less than the $137,100.00 on his 2008 tax return, or that his expenses were greater in 2009.
In the March 5, 2012, order, the Court held that the Plaintiff established by clear and convincing evidence that a lawful court order expressing an unequivocal mandate was in effect, that the Defendant alleged to have violated the order had actual knowledge of its terms, and that said violation defeated, impaired, impeded, or prejudiced the rights of Plaintiff. The Court found that the Defendant willfully failed to make payments to the Plaintiff and/or her attorney for the household bills as set forth in the May 18, 2010, order. Such a failure severely prejudiced Plaintiff who was without funds to pay for the basic necessities of life, food, shelter and clothing, and to fulfill the parties' obligations to maintain the marital residence/farm, the animals thereon, and pay for the insurance and utilities during the pendency of this matrimonial action.
The Court determined that Plaintiff accrued further damage to her credit, because the mortgage on the marital residence/farm repeatedly went into foreclosure (in addition to his willful and ongoing contemptuous behavior, Defendant interfered with the sale of the marital residence in 2011. A prospective purchaser submitted an offer of $275,000.00, but the sale could not move forward due to Defendant's refusal to sign the Contract of Sale). The Court held the Defendant liable for legal fees to the Plaintiff's attorney in the prosecution of the motion for contempt and awarded the sum of $15,720.47 with interest thereon at the statutory rate of nine percent (9%) per annum from the date of the bill, June 30, 2011.
The Court found Defendant in civil contempt for failing to comply with the pendente lite order and for failure to pay the mortgage, insurance, taxes, maintenance, maintenance arrears, legal fees, and utilities as directed. Pursuant to Judiciary Laws § 753, the Court further held that the Defendant's contempt was willful and unjustified.
On March 15, 2012, the Hon. Frank J. LaBuda, AJSC, was assigned to this matter and a status conference was held in Chambers on April 18, 2012. At that conference, Defendant admitted his failure to comply with the previous pendente lite order, indicated he was not concerned about being held in contempt, and indicated he had no intention of complying with any orders. As of the April 18, 2012, conference, Defendant was still not making payments as directed by the pendente lite order. When asked why he no longer had an attorney, he answered that he did not need one.
The parties appeared before the Court on April 30, 2012, for a hearing. Plaintiff testified that no payments had been received, that the Defendant did not make insurance payments on her truck, and, in fact, tried to take the plates off the truck a few days prior to the court appearance on April 30, 2012. The Court held the Defendant in continued contempt and directed Plaintiff to submit findings of fact, conclusions of law, and a proposed remedy.
The parties appeared, again, in court on August 20, 2012. The Court gave Defendant one last opportunity to comply with the outstanding orders and to sign a quitclaim deed transferring ownership of the marital residence to the Plaintiff so she could effectuate the sale of the farm and place the proceeds in her attorney's trust account. The Defendant remained defiant, refusing to comply with all of the Court's orders. The Court remanded Defendant to the Sullivan County Jail for 30 days, with $50,000.00 bail, cash or property bond. Defendant served the 30 days in jail.
At no time since serving the 30 days in jail has Defendant complied with the Court's orders. The marital residence, which Plaintiff continues to operate as a small farm on which she houses many animals, is once again in danger of foreclosure due to Defendant's ongoing, willful contemptuous conduct. The animals, including many horses, are in danger of going without food, once again due to Defendant's ongoing, willful contemptuous conduct.
In addition, due solely to Defendant's ongoing, willful contemptuous conduct, Plaintiff's attorney, Susan L. Gross, Esq., was owed over $28,000.00 in legal fees by Defendant as per the pendente lite order; Ms. Gross eventually made a motion to be relieved as counsel for Plaintiff and for attorneys fees, both of which this Court granted in open court on December 10, 2012, and by written money judgment dated January 8, 2013.
From January 8, 2013, to date, Defendant has continued in willful contempt: he has failed to make any payments to Plaintiff or a third party to prevent default and foreclosure on the marital residence, has failed to make payments to Plaintiff or a third party for care of the farm animals, and has thwarted all efforts on the part of Plaintiff to sell the marital residence. All of these willful and ongoing actions by Defendant have placed the significant marital assets and additional marital property at risk for dissipation.
DISCUSSION
New York law generally limits a court's power to alter title or direct the disposition of the marital residence held as tenants by the entirety during the pendency of a divorce proceeding until the legal relationship between the parties is altered. Kahn v. Kahn, 43 N.Y.2d 203 [1977];see also,Domestic Relations Law § 234. Since the Kahn decision in 1977, however, the New York legislature has enacted the equitable distribution law, found in DRL § 236B, and courts have recognized the judicial flexibility and discretion needed to issue orders necessary to preserve marital assets in danger of being dissipated during the pendency of the divorce proceeding. See, Lidsky v. Lidsky, 134 Misc.2d 511 [Sup.Ct. Westchester Co.1986].
“The law favors preservation of marital assets.” Id., at 513. When a party's refusal to act causes the dissipation of assets or places those assets in danger of imminent dissipation, “it is no less necessary to the enforcement of the equitable distribution statute that the court have the power to direct an affirmative act as it is that the court have the power to restrain.” Id., at 514. “[S]ince the advent of the Equitable Distribution Law, marital property should be distributed in a manner which reflects the individual needs and circumstances of the parties' (Memorandum of governor Carey, 1980 McKinney's Session Laws of NY, at 1863).” St. Angelo v. St. Angelo, 130 Misc.2d 583 [Sup.Ct. Suffolk Co.1985]. It is unquestioned that courts have the power to direct one party to deliver possession to the other; that power, however, “necessarily includes the power to prevent a party from frustrating such delivery by improper disposition or wasteful dissipation of assets ... [and] is vital to meaningful enforcement and implementation of the equitable distribution statute.” Id., at 584. A temporary receiver may be appointed on motion, when property subject to the action is in danger of being lost, damaged or destroyed. CPLR § 6401(a).
In the case at bar, the marital residence has previously gone into foreclosure and has faced imminent foreclosure on other occasions during the four years this matter has been pending before the Court. During conferences on this matter, Defendant has indicated he is unconcerned about the Court's orders or being held in contempt, and that he does not intend to comply with any orders. Thirty days in jail did not persuade Defendant to comply with the Court's orders.
Defendant's ongoing, willful contempt, disregard, and disrespect for this Court's orders, has resulted in placing the most significant marital asset in imminent danger of dissipation through foreclosure and has placed farm animals in danger of starvation and neglect; he has done this not only by failing to make any payments as previously directed by this Court in the pendente lite order, but also by willfully and intentionally refusing to sign a contract of sale when Plaintiff presented a ready, willing and able buyer for the property. St. Angelo v. St. Angelo, 130 Misc.2d at 585. As was the case in St. Angelo, Defendant herein, who has a significant income, “has offered no justification for not contributing to the payments on the mortgage” and for refusing to sign the contract of sale previously offered. Id.
After hearing from both parties in open court and conducting numerous settlement conference in Chambers, this Court has determined Defendant's ongoing behavior is willful and spiteful, and will continue without court intervention. Under the circumstances, this Court, like the court in St. Angelo, will appoint a receiver to sell the marital residence on the open market, and to retain the proceeds from such sale in an attorney escrow account pending ultimate resolution of the equitable distribution of the marital assets.
Based on the foregoing, it is
ORDERED that Plaintiff's motion for a receiver to sell the marital residence is granted; and it is further
ORDERED that Michael Davidoff, Esq., Post Office Drawer 1040, Monticello, New York, 12701, (845) 794–5000, is hereby appointed, with the usual powers and directions, as receiver in this matter to immediately place the subject marital residence, in Livingston Manor, N.Y. 12758, on the real estate market directly or through a New York State licensed real estate broker; and it is further
ORDERED that the receiver shall not post an undertaking in this matter; and it is further
ORDERED that upon such sale of the subject marital residence, the receiver shall deposit the net proceeds (after deduction of broker's fee, receiver's fee and real estate-related taxes) of such sale into his attorney escrow account; and it is further
ORDERED that out of the net proceeds from the sale of the marital residence, the receiver shall pay to Plaintiff all of the monies due and owing to her pursuant to the outstanding pendente lite order, such sum to be recalculated at the time of such payout, and shall satisfy the money judgment previously granted by this Court in favor of Susan L. Gross, Esq., and against Defendant; and it is further
ORDERED that the remainder of the proceeds from the sale of the marital residence shall be placed in the receiver's attorney escrow account to be held for the benefit of the parties pending resolution of the equitable distribution of the marital assets; and it is further
ORDERED that the receiver or any other party to this action may at any time, upon proper and sufficient notice to all parties who have appeared herein, apply to this Court for instructions and additional powers whenever such instructions or additional powers shall be deemed necessary i order to enable the receiver to perform properly and legally the duties of his office as receiver; and it is further
ORDERED that the receiver shall comply with CPLR §§ 6401 through 6404 and Jud. Law § 35–a, except as exempted by this order.
This shall constitute the Decision and Order of this Court.