Deyeso v. Cavadi
Annotate this CasePetitioner Christina Deyeso appealed a superior court order that denied her petition for a declaratory judgment and injunctive relief, and awarded summary judgment in favor of respondent Jules Cavadi, permitting the forced sale of Deyeso's home. Deyeso and Stephen Barnes have three children together but never married. Deyeso is currently married to Keith Walsh, with whom she lives in Stratham at a home that she purchased in 1997. Cavadi held a 1991 judgment against Barnes. In September 2004, in a common-law "reach and apply" action, he sued Barnes and Deyeso in a Massachusetts trial court, alleging that Barnes paid for certain real estate held in Deyeso's name in Massachusetts and New Hampshire, including the Stratham property. A Massachusetts superior court found that Barnes had an equitable interest in the Property valued at $94,854, thus entitling Cavadi to an equitable lien on the Property in that amount. After accounting for mortgages on the property, the equity value remaining in the Property was $72,373.41. Deyeso appealed the Massachusetts trial court's decision to the Massachusetts Supreme Court, which upheld the portion of the trial court's order declaring Barnes's interest in the Property to be $94,854. Cavadi then obtained an order in Massachusetts allowing a public auction of the Property to recover the amount of Barnes's interest. Deyeso claimed that both she and her husband were entitled to homestead protection under RSA 480:1 (Supp. 2012), which, given the prior mortgages, would leave no equity for Cavadi in the event of a forced sale. The trial court then ruled in favor of Deyeso, concluding that, although her husband could claim the homestead protection due to his lack of ownership, her homestead interest prevailed over Cavadi's equitable lien. Cavadi then moved for reconsideration, and the the trial court eventually granted Cavadi's motion, concluding that, Deyeso's "conduct in this case amounts to fraudulent behavior" and, therefore, permitted the court to use "its equitable powers to negate [her] homestead exemption." Upon review, the New Hampshire Supreme Court reversed: "assuming, however, that Deyeso accepted the money from Barnes with the knowledge that he sought to avoid satisfying his debt to Cavadi, RSA 480:1 protects her homestead interest in the Property. . . . We therefore agree with Deyeso that, in the absence of a showing of fraud, deception, or other misconduct in the procurement of the funds used to purchase, invest in, or improve a homestead, the statutory homestead exemption applies ñ even when a judgment debtor's funds are so used with the intent of hindering or avoiding a creditor's legitimate claims."
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