PETER GRASSO v. LINDA GRASSO
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
DOCKET NO. A-1174-05T11174-05T1
Submitted October 5, 2006 - Decided October 31, 2006
Before Judges Wefing, Parker and Yannotti.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-2182-03.
Lomberg & Del Vescovo, attorneys for appellant (Paul Lomberg, on the brief).
Respondent has not filed a brief.
Plaintiff Peter Grasso (Peter) appeals from an order entered by the Family Part on September 23, 2005, which among other things, imposed sanctions for failure to comply with the court's prior orders; permitted defendant Linda Grasso (Linda) to amend her pleadings and assert new claims; provided that a warrant would issue for Peter's arrest if he did not bring his support payments "current within a reasonable time"; and ordered the seizure and liquidation of Peter's business and its assets. We affirm.
The facts that inform our decision are relatively straightforward. The parties were married in 1991. A dual judgment of divorce was entered on February 23, 2004, dissolving the bonds of matrimony. An amended dual judgment of divorce was entered on April 14, 2004. The amended judgment required Peter to pay Linda $40,000 as equitable distribution on or before April 23, 2004. The judgment also required Peter to pay Linda $600 per week in alimony and child support, commencing after Linda vacated the marital residence, which was to occur sometime in June 2004. The amount of support was later reduced to $450 per week.
Title to the marital residence was held in the name of Peter's sister, Tina Grasso (Tina). In May 2004, Tina entered into a contract for the sale of the property. On or about June 24, 2004, Peter commenced an action against Tina and the contract purchasers in the Chancery Division, General Equity, seeking an injunction enjoining the sale and other relief. In his complaint, Peter alleged that he purchased the property in 1996 but the "paperwork" was held in Tina's name. Peter claimed that Tina obtained a mortgage loan of approximately $80,000 so that he could purchase the property. Peter alleged that he paid the mortgage, all "ownership costs," and had improved the property with approximately $200,000 in goods and services. Peter claimed that he and Tina agreed she would transfer title to him upon payment of the mortgage. On June 24, 2004, the General Equity judge entered an order temporarily enjoining the sale of the property.
On or about July 7, 2004, Linda filed a motion in this action seeking a declaration that Peter had violated her rights as a litigant by failing to pay her $40,000, as required by the amended dual judgment of divorce. Linda sought an order compelling Peter to comply with the judgment; permitting her to remain in the marital residence until Peter complied; re-opening equitable distribution to include a claim related to the marital residence as a result of Peter's fraud; and awarding Linda an equitable share of Peter's recovery in the General Equity case. Linda also sought an award of counsel fees for the motion. The judge entered an order on August 27, 2004 granting Linda's motion.
At or about this time, Linda filed a motion to intervene in the General Equity action. In support of the motion, Linda alleged that during the divorce proceeding, Peter had never disclosed his ownership interest in the marital residence. She asserted that Peter had "emphatically denied" having any such ownership rights. Linda's motion to intervene was granted by order entered on September 15, 2004.
On November 12, 2004, the judge entered an order in this case, which provided that any monies obtained by Peter in the General Equity action should be deposited into an escrow account and held there pending disposition of Linda's claims. The order further provided that Linda would have "complete uninterrupted use of the former marital residence" and barred Peter from any access or use of the same. The order also stated that Peter must remain 1,000 feet from the premises unless he was appearing for parenting time with the parties' minor child.
The parties to the General Equity action subsequently settled the dispute and placed their agreement on the record on April 18, 2005. Under the settlement, Tina would transfer title to Peter on or before May 12, 2005, contingent upon his receipt of a mortgage commitment by May 2, 2005. The parties agreed that Tina and Linda each would be paid $100,000 and the payment to Linda would be in settlement of her equitable distribution claim in this action. The parties additionally agreed that if Peter did not obtain the mortgage commitment by May 2, 2005, or the sale did not occur on May 12, 2005, the property would be listed with a broker and sold on the open market, with one-half of the proceeds paid to Tina and one-half paid to an escrow account where the proceeds would be held pending further order of the Family Part.
On May 13, 2005, an order was entered in this action requiring Peter to pay $450 per week in support through the Probation Department. The order also stated that Peter could enter the martial residence "for purposes related to the closing" provided he gave reasonable notice to Linda's attorney and obtained Linda's consent, "which shall not be unreasonably withheld."
On or about July 1, 2005, Peter moved in the General Equity action for an order allowing him to close on the sale of the marital residence pursuant to the settlement agreement. Linda filed a motion on or about July 7, 2005, to enforce the settlement; permit the listing of property for sale; declare that Peter's right to purchase the property had expired; and reinstate Linda's equitable distribution claim in the Family Part action. The General Equity judge entered an order on August 12, 2005, granting the relief sought by Linda.
On or about August 15, 2005, Linda filed a motion in this case seeking: leave to amend the pleadings; the transfer of any funds derived from the sale of the marital residence to an escrow account; distribution to Linda of $64,689.82 from the escrowed funds; a mandate that Peter pay $600 per week in alimony and child support by wage execution; seizure and liquidation of Peter's business and its property; an award of attorneys' fees for the application; and a directive that Peter pay any past due support and attorneys' fees previously awarded but unpaid.
The motions were heard on September 23, 2005. On that same day, the judge entered an order granting Linda's motion for leave to amend her pleadings to assert claims for fraud, punitive damages, sanctions and attorneys' fees. The judge additionally ordered that the proceeds of the sale of the marital home be placed in escrow and $64,689.82 paid to Linda from the escrowed funds. The judge directed Peter to pay Linda $450 per week by wage execution and ordered the seizure and liquidation of Peter's business and its assets, including, two Ford trucks and a Ford Explorer, with the proceeds of the sales to be deposited in the escrow account to ensure payment of support and to satisfy any judgment that may be entered against Peter. The judge also ordered Peter to pay $2,952 in attorneys' fees for the application and $3,600 for past due support. The order additionally stated that a warrant for Peter's arrest would be issued if he "fails to bring his support obligations current within a reasonable period of time." This appeal followed.
Peter argues that: 1) the judge abused his discretion by allowing defendant to amend her pleadings and should have required Linda to seek relief from the final judgment by filing a motion pursuant to R. 4:50-1; 2) the judge erroneously awarded Linda $19,700 in sanctions and should have held an ability-to- pay hearing; 3) the judge erred when he ordered the seizure and liquidation of his business and its property; and 4) the judge erroneously failed to specify the circumstances under which Peter may be arrested for failure to pay support.
We first consider Peter's contention that the judge erred by allowing Linda to amend her pleadings. We note that this provision of the September 23, 2005, order is not a final judgment and therefore it is not subject to appeal as of right pursuant to R. 2:2-3(a). However, the issues here been briefed and we are convinced that the parties would benefit from our decision concerning this provision of the order at this time. We therefore grant leave to appeal from this provision of the order pursuant to R. 2:4-4(b)(2).
We are satisfied that the judge did not abuse his discretion in allowing Linda to amend her pleadings. The record shows that the parties agreed that Linda would receive $40,000 in equitable distribution, as was reflected in the amended judgment of divorce entered on April 14, 2004. Linda has alleged, however, that before this agreement was made, Peter never informed her of his ownership interest in the marital residence. Indeed, Linda has asserted that Peter "emphatically denied any ownership rights" in the property. In our view, Linda has alleged sufficient facts to allow her to assert claims for fraud, punitive damages, sanctions and attorneys' fees arising from Peter's alleged failure to disclose his ownership interest in the marital residence.
Peter argues that the judge should have required Linda to file a motion pursuant to R. 4:50-1 for relief from the final divorce judgment. However, by order dated August 27, 2004, the judge had already re-opened equitable distribution respecting Peter's claim to the marital residence. Another motion for relief from the judgment was not required.
Peter additionally argues that the judge erred by allowing Linda to introduce new claims in this case before final resolution of the General Equity action. We disagree. The order at issue was entered on September 23, 2005, which was after the judge entered the order enforcing the settlement in the General Equity matter. Thus, the General Equity case had been resolved before the Family Part judge allowed Linda to amend her pleadings. The later filing by Peter of a notice of appeal from the order entered in the General Equity action had no effect whatsoever upon the authority of the Family Part to enter the September 23, 2005, order.
We likewise find no merit in Peter's contention that the judge abused his discretion by awarding Linda $19,700 as sanctions. Peter argues that the sanctions were imposed because he did not pay Linda $40,000, as required by the amended judgment of divorce. However, the record shows that the sanctions were not imposed because of Peter's failure to pay Linda the $40,000. Rather, the sanctions were imposed because Peter had not paid support and attorneys' fees as previously ordered by the court.
Peter further contends that the judge should have conducted a hearing on his ability to pay before the sanctions were imposed. In opposing the motion for sanctions, Peter submitted a certification in which he said that, at one point in time, his bank accounts had been frozen by a creditor. Peter stated that this action "crippled" him financially and he has since been "struggling to stay afloat." Peter admitted that he owned a business but said that its assets were "deeply hindered by loans." Peter's assertions that he was experiencing severe financial difficulties were not supported by documentary proof. In our view, Peter's bare allegations were not sufficient to require a hearing on his ability to pay the sanctions.
We turn to Peter's contention that the judge erred in ordering the seizure and sale of his business and its assets. Linda sought this relief because of Peter's history of non-compliance with the court orders, his alleged fraud, and the fact that she had been compelled to file "countless" motions and incurred "tens-of-thousands" of dollars in legal fees to ensure that Peter complied with the court's orders. Linda asserted that seizure of the business assets was necessary because she anticipated future non-compliance with the court-ordered support payments and the funds were required to satisfy a judgment that might be entered against Peter.
We note that the order providing for the seizure and sale of Peter's business and its assets has not been stayed. If the business and its assets have been seized and liquidated, the issues raised by Peter concerning this provision of the order would be moot.
Nevertheless, we are satisfied that the judge did not abuse his discretion in granting this relief. The record reflects repeated instances of Peter's non-compliance with the court's orders. The judge expressly found that Peter had acted in bad faith. In the circumstances, judge had the discretion to order the seizure and sale of Peter's business and its property. The relief ordered was reasonably necessary to ensure future support payments and payment of any judgment entered in Linda's favor.
We next consider Peter's contention that the judge erred by entering an order which states that a warrant would issue for Peter's arrest if he failed to "bring his support obligations current within a reasonable period of time." Peter contends that the order fails to provide him with clear guidance as to when a warrant may issue. We disagree. In our view, this provision of the order gives Peter sufficient guidance respecting the circumstances under which a warrant might be issued in the event Peter fails to meet his support obligations.
Peter further contends that the order permits his incarceration without determining whether he has the ability to make support payments. Again, we disagree. We trust that the court will first afford Peter an opportunity to be heard and a coercive order of incarceration will not be entered until the judge has determined that Peter was capable of making the support payments and willfully refused to do so. See Pasqua v. Council, 186 N.J. 127, 141 n.2 (2006).
The order erroneously referred to Peter as defendant; however, it is clear that the restrictions on access to the marital residence apply to him.
Peter also appealed from the August 12, 2005, order entered in the General Equity action. In an opinion also filed this date, we affirm the order enforcing the settlement. Grasso v. Grasso, No. A-6656-04T1 (App. Div.).
October 31, 2006