DIVORCE PLANNING COMES BACK TO BITE THIS HUSBAND

We have all heard stories about spouses hiding assets to keep them away from the other spouse during a divorce.  In fact, I am sure that many lawyers have even had clients ask how they can do it.  Hopefully, the lawyer told them the straight answer -don't do it - and if you do and get caught, it will be far worse for you. 

A litigant named Eric Barzda learned this the hard way as noted in the unreported decision (non precedential) Appellate Division decision released on March 3, 2010.

In this case, in 1996, Mr. Barzda was  was going through a divorce proceedings with his former wife.  While the divorce  was pending and even thereafter, he feared that his wife would assert a claim against property in Hightstown he acquired with his girlfriend, the defendant in this matter.  In order to  shield this property from a claim from his wife, he transferred his interest in the property to the girlfriend for $1.  However, he claimed that there was an oral agreement that he would be a silent partner.  He later filed for bankruptcy relief and did not list this property as owned by him in the bankruptcy - obtaining a discharge in what was deemed a no asset case.

In 2006, after the romantic relationship ended, the plaintiff here filed suit seeking his equitable share of the property. The trial court, as affirmed by the Appellate Division, used the concept of judicial estoppel to deny him relief.  Judicial estoppel essentially prevents litigants from taking inconsistent positions regarding the same issue/property in different legal proceedings. 

In an interesting quote, the Appellate Division said:

Here, plaintiff's conduct provides almost a textbook example of facts calling for the applicability of judicial estoppel. By his own words, plaintiff attempted to conceal his alleged interest in this real property to mislead his former espouse and frustrate any attempt on her part to seek legal recognition of a potential equitable interest in the property. In furtherance of this scheme, plaintiff deliberately failed to disclose his alleged interest in the petition he filed under oath before the federal bankruptcy court in order to induce that tribunal to give him relief from the legitimate claims of his creditors.

It will be interesting to see if in light of this, the ex-wife goes after him for fraud in the divorce.  In any event, the saying "don't do the crime if you can't do the time" seems particularly applicable here.

HELL HAS NO FURY LIKE A HUSBAND'S SCORN

As the saying goes “Hell has no fury like a woman scorned,” but in a recent unpublished New Jersey Appellate Division decision the opposite was true.  In Weitz v. Weitz, App. Div. Docket No. A-1760-08T1, decided February 25, 2010, the defendant, Arthur Weitz, appealed from orders denying his post-judgment motions to terminate payment of alimony and for reconsideration.

Mr. Weitz and his ex-wife, Susan Weitz, were married in 1966 and divorced in 1994.  As part of the final judgment of divorce, a Property Settlement Agreement was entered into by the parties.  The Agreement required Mr. Weitz to pay alimony from 1994 until 2006, but if he was unemployed for a period exceeding 1 month than he would not have to pay for that month.  However, any months Mr. Weitz did not pay alimony would be tacked onto the termination date of the alimony.  The Agreement also stated that if Ms. Weitz remarried, died, or cohabitated with another man, alimony would immediately terminate. 

From 1995 to 2007, Mr. Weitz had been incarcerated and had twenty-two orders entered against him for failing to pay alimony.  By 2008, Mr. Weitz was $15,000 in arrears.  In 2008, he filed a motion to terminate alimony based on Ms. Weitz's cohabitation with another man.  The Court denied his motion, finding that all the money owed to Ms. Weitz was prior to her cohabitation, which did not occur until 2007. Mr. Weitz appealed.

The Appellate Court affirmed the trial court's decision, finding that Mr. Weitz had the ability to pay, but Mr. Weitz was “determined not to pay” alimony and was “a committed unemployed or underemployed person.”  The Appellate Court further determined that Ms. Weitz’s cohabitation was irrelevant because it did not occur until after alimony was scheduled to terminate.  As a result, Mr. Weitz was again ordered to pay.

This is an extreme example of what happens when an individual simply refuses to pay alimony.  In this case it appears that hell has no fury like an ex-husbands scorn.
 

EVEN CELEBRITIES HAVE PROBLEMS DIVIDING THEIR PERSONAL PROPERTY IN DIVORCE

In today's New York Daily News, there was an article that actress Kate Walsh and her husband are going to flip a coin to determine who gets to pick first and then they will alternate picks as they divide their personal property in divorce.

You don't have to be a celebrity to follow the alternate selection method.  In fact it is very common when people cannot mutually agree upon a distribution of their furniture, furnishings and personal property.  Another method sometimes used is that one spouse makes two ostensibly equal lists of the personal property and the other spouse gets to choose which list they want.  There are obviously many other ways to accomplish this as well.  There are no absolute rules, other than perhaps, the custodial parent will get the children's furniture. 

Perhaps the only other absolute rule is that judges (and attorneys) hate getting involved in this type of dispute. 

Of course, that is not to say that there cannot be disputes about valuable items like furs, jewelry, art, antiques, collections, etc.  That, however, is very different than ordinary furnishings and household items that tend to have little value once you bring them home.

So if you are divorcing and cannot agree on the distribution of the furniture, etc., you too can act like a celebrity, flip and coin and alternate picking until it is all gone.

SUPREME COURT DECISION IN KAY V. KAY EXPECTED TO BE RELEASED ON 1/6/10

Previously, I blogged on the Appellate Division's reported (precedential) decision in Kay v. Kay.  The New Jersey Supreme Court granted Certification and the New Jersey Judiciary web site advises that the decision will be released on January 6, 2010.  

To reiterate what this case is about, the Appellate Division held that when the estate of a spouse who died while an action for divorce is pending presents a claim for equitable relief related to marital property, the court may not refuse to consider the equities arising from the facts of that case solely on the ground that the estate may not assert equitable claims against the marital estate sounding in constructive trust, resulting trust, quasicontract or unjust enrichment. In that case, the husband died basically penniless and the wife had assets in excess of $650,000 at the time.
 

Check back soon for a post on the Supreme Court's decision.

MUSINGS ON PRINCIPLE VS. LITIGATION

I have a matter now that will likely go to trial in the early part of the new year.  It appears inevitable. 

Sometimes there are just those cases where a client is put in the impossible position of having to make a "Hobson's choice" accepting a patently unfair or otherwise unpalatable settlement or taking their chances at trial.  I am not talking about accepting a deal that is on the low end of the "realm of reason" or agreeing to a little more or a little less in parenting time.  Rather, in order to get the case over with and "stop the bleeding", they have faced with the proposition of having to take less than is reasonable or agree to more/less parenting time then is fair, appropriate and/or in the best interests of the children. 

One can only hope that if the choice is trial, that the judge will see that the other side is simply not reasonable.  In that case, the hope is that the trial judge will make a generous award of counsel fees to make the oppressed party whole, or close to it, for having deal with unreasonable positions, etc.  I had a trial last year where the husband refused to negotiate, at ll.  He sought alimony, without basis, and made us try every single issue, including the exemption of clearly premarital property, the exemption of clearly post complaint property, even the exemption of the engagement ring.  In that case, even though my client earned far more than her husband, she was awarded a generous counsel fees. 

Again, she had no choice but to try the case.  Unfortunately, that appears to be the case for my current client if the choice is made by the client to fight for what she is entitled to.