Court docket sells trip house to pay alimony and simply distribution arrears | Fox Rothschild LLP

When the parties settle their cases, many, if not most, expect that their agreement that they have been negotiating for months or years will finally bring them some peace. When someone agrees to do something in an agreement that ultimately has the effect of a court order after it has been incorporated into a divorce decree, it is not unreasonable to expect that you will both do what is required of you and you will benefit from the bargain too. More often than one might hope, a debtor simply fails to make payments. Sometimes it’s because of job loss or business reversal, and other times they just don’t want to. They got what they wanted from the agreement, but they just don’t want to pay. This often results in a parade of enforcement motions following judgment after enforcement motions. Very often the request will be met with a counter-proposal that includes one diversion or one diversion after another to make it appear as if both parties are not complying, as this would circumvent the requirement of compliance.

What can a court do if one party simply fails to make payments under the agreement? Well, in WSH v. VLP, an unreported (non-precedent) decision released February 16, 2022, the trial court had enough and ordered that the beach house that the defendant received in equitable distribution should be sold to pay the arrears. The facts of the case are fairly simple. The parties divorced in 2017. The defendant was to pay the plaintiff $5,000 a month in child support for 5 years. She was also required to pay $400,000 in equitable distributions of $33,333.33 on September 1, 2016, 2017 and 2018, with the remaining $300,000 paid in monthly installments over 9.4 years beginning in 2021 were to be paid.

Shortly after the divorce decree, she defaulted on payments and there were successful enforcement motions in 2017 and 2019. The 2019 order led to this appeal, but the order was never stayed and therefore the defendant had to continue to comply. She didn’t, and when the next enforcement order was filed in January 2020, her child support arrears totaled more than $86,000 and she had failed to make a $33,000 just distribution payment. The plaintiff filed for the sale of the coastal home to settle the arrears, which the court granted. The trial court also found that since the defendant had three houses, the sale of that house would not leave her and the children homeless, although I’m not sure this should matter under the law.

Not surprisingly, the appeals division upheld the trial court’s order. The court quickly dismissed the defendant’s first argument, which was that the trial court did not have jurisdiction to hear the 2020 motion because of the pending appeal. The argument was unfounded as the Court Rules expressly provide that while a court of first instance is otherwise deprived of jurisdiction, this is not the case for enforcement. Indeed Rule 2:9-1(a). states: “However, the trial court retains jurisdiction to enforce judgments and orders under R. 1:10” while those orders are being appealed.

The Appellate Division also rejected the argument that the forced sale of the beach house went beyond the scope of enforcement by altering the terms of equitable distribution prescribed in the divorce decree, finding:

The equitable distribution agreed by the parties and ordered by the court included both VLP retaining sole ownership of the North Wildwood property and VLP paying WSH $400,000 in installments over several years. VLP acquired title to the home but failed to honor its payment obligation to WSH The March 20, 2020 and July 24, 2020 orders
enforce VLP’s cash payment obligations for fair distribution; they do not alter the equitable distribution of property among the parties. The court did not order the transfer of the North Wildwood home to WSH, but instead ordered the liquidation of one of VLP’s assets to satisfy their equitable distribution and alimony arrears. …..

The family branch “has broad powers to achieve substantial justice” and can tailor an appropriate remedy for violations of its orders. finger v. Zenn, 335 NJ Super. 438, 447 (App. Div. 2000).

Citing the Randazzo case, which involved the sale of a house pending litigation, the court found:

While Randazzo did deal with the sale of properties prior to the final divorce judgment, VLP does not provide a compelling argument as to why the court’s ability to provide an adequate remedy in a divorce proceeding should be less comprehensive if a party insists on separating after the judgment refuse with court orders determining their equitable distribution
and maintenance obligations.

As a result, the court ruled:

Given VLP’s blatant refusal to comply with court orders ordering it to make fair distribution and alimony payments, ordering the court to sell the North Wildwood property was a reasonable exercise of its discretion. This also applied to the appointment of a proxy to carry out the sale of the property, as VLP is notoriously reluctant to comply with court orders.

In other states, the courts actually do have a contempt trial and can put people in jail if someone doesn’t comply. While it’s arguably possible in New Jersey, it rarely, if ever, happens. But there must be remedial action for continued non-compliance. There’s a saying I’ve heard over the years that goes something like “play around and find out” (although the actual word in the saying isn’t “mess”). In this case, the defendant found that repeated violations of the orders ultimately had serious consequences.

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