RAUL AUGUSTIN JIMENEZ V. RAUL ANIBAL JIMENEZ

Annotate this Case

(NOTE: The status of this decision is Published.)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2495-16T1

RAUL AUGUSTIN JIMENEZ, LIRIO
JIMENEZ, and LUIS JIMENEZ, APPROVED FOR PUBLICATION

Plaintiffs-Appellants, May 8, 2018

v. APPELLATE DIVISION

RAUL ANIBAL JIMENEZ,

Defendant-Respondent.
__________________________________

Argued April 23, 2018 – Decided May 8, 2018

Before Judges Sabatino, Ostrer and Rose.

On appeal from Superior Court of New Jersey,
Law Division, Middlesex County, Docket No.
L-0025-12.

Susan Schleck Kleiner argued the cause for
appellants.

Nicholas R. Jimenez argued the cause for
respondent.

The opinion of the court was delivered by

SABATINO, P.J.A.D.

This appeal poses the legal question of whether
N.J.S.A.

46:3-17.4, a provision enacted into law in 1988, precludes a

spouse's unsecured creditor from obtaining the forced partition

of real property the spouse and his non-debtor spouse own

together as tenants by the entirety. We hold the statute
prohibits such non-consensual partition. The statute supersedes

and nullifies earlier case law that had allowed such a

creditor's remedy in certain equitable circumstances.

The facts pertinent to our legal analysis are limited and

essentially undisputed. In October 2006, defendant Raul Anibal

Jimenez and his wife Gwyn Jimenez1 obtained a tract of real

property in Mansfield, New Jersey. The tract, which is said to

be about thirty acres, is undeveloped and has not been used as

the owners' marital residence. It is undisputed that defendant

and his wife own the property as tenants by the entirety.

In December 2011, plaintiffs Luis Jimenez, Raul Augustin

Jimenez, and Lirio Jimenez2 filed a complaint in the Law Division

against defendant seeking repayment on a line of credit they

extended to him, as well as the repayment of additional funds he

allegedly owed them in connection with a joint venture.

Defendant denied liability and brought counterclaims against

plaintiffs.

1
We note that Gwyn Jimenez, the co-owner of the parcel, was not
named as a party to this action. Because our legal conclusion
does not impair her interests in the property, we need not reach
whether she should have been included in the lawsuit or the
judgment enforcement proceedings as an indispensable party. See
R. 4:28-1.
2
The parties in the litigation are related to one another and
hence share the same surname.

2 A-2495-16T1
Before a jury trial commenced, the parties settled their

respective claims. They entered into a consent judgment on

February 21, 2014, to be paid by defendant to plaintiffs, in the

agreed-upon sum of $225,000. The consent judgment was "filed

and recorded as a lien" on March 24, 2014.

The consent judgment recited that plaintiffs agreed to stay

its execution until July 1, 2014. After that date passed, and

defendant still had not satisfied the judgment, plaintiffs

pursued collection efforts. They unsuccessfully attempted to

levy upon moneys due from numerous companies with which

defendant does business in New Jersey. Plaintiffs also docketed

the consent judgment in Pennsylvania, where defendant resides.

Bank account searches in New Jersey and Pennsylvania, as well as

a personal asset search of defendant, were unproductive.

In January 2016, defendant responded to a post-judgment

information subpoena concerning his finances. He claimed no

income from his business activities. He did reveal that he and

his wife own together a car, two real properties in

Pennsylvania, and the Mansfield parcel in New Jersey.

Plaintiffs have been unable thus far to obtain recovery of their

judgment out of the Pennsylvania real estate, or from any other

assets.

3 A-2495-16T1
In November 2016, plaintiffs moved in the Law Division

under Rule 4:59-1(d) to compel the partition and sale of the

Mansfield property. Defendant opposed the motion. He argued

that such a forced sale and partition of real property, which he

co-owns with his spouse as tenants by the entirety, is

prohibited by
N.J.S.A. 46:3-17.4.

In an oral opinion issued on January 6, 2017, the motion

judge denied plaintiffs' application. The judge recognized

that, under prior case law, a creditor could obtain the forced

partition and sale of interests in real estate owned by a

married couple as tenants by the entirety, depending upon the

relative equities involved. Nevertheless, the judge ruled, with

some reluctance, that
N.J.S.A. 46:3-17.4 now disallows such a

remedy. This appeal ensued.

The sole question before us is the legal interpretation of

N.J.S.A. 46:3-17.4, which is contained within a series of

provisions at
N.J.S.A. 46:3-17.2 to -17.4. The statute was

approved on January 5, 1988. The statute became effective

ninety days after its adoption, and applies to "all tenancies

which are created on or after" that effective date. L. 1987, c.

357, § 10; see also Freda v. Commercial Tr. Co.,
118 N.J. 36, 40

(1990) (noting the statute's effective date and holding it

4 A-2495-16T1
inapplicable to a tenancy by the entirety created years before

that date).

The definitional portion of the statute, Section 17.2,

provides that a tenancy by entirety is created when "[a] husband

and wife together take title to an interest in real property or

personal property under a written instrument designating both of

their names as husband and wife . . . ."
N.J.S.A. 46:3-17.2(a).

A tenancy by the entirety also is created when a husband and

wife become lessees of property through a written instrument

containing an option to purchase it and designating both of

their names as husband and wife.
N.J.S.A. 46:3-17.2(b).

Lastly, a tenancy by the entirety is created when an owner

spouse conveys or transfers an interest in property to the non-

owner spouse and the former jointly, under written instrument,

designates both of their names as husband and wife.
N.J.S.A.

46:3-17.2(c).

"A tenancy by the entirety is a form of joint property

ownership available only to spouses that is created 'when

property is held by a husband and wife with each becoming seized

and possessed of the entire estate.'" N.T.B. v. D.D.B.,
442 N.J. Super. 205, 218 (App. Div. 2015) (quoting Capital Fin. Co.

of Del. Valley, Inc. v. Asterbadi,
389 N.J. Super. 219, 227 (Ch.

Div. 2006)). "Each co-tenant enjoys the right of survivorship:

5 A-2495-16T1
'after the death of one, the survivor takes the whole.'" Ibid.

(quoting Asterbadi,
389 N.J. Super. at 227) (internal citation

omitted). The historical, common-law genesis of these concepts

is predicated on the presumed unity of spouses. Tenancies by

the entirety "survive [in the law] as a means of protecting

marital assets during coverture and as security for one spouse

on the death of the other." Freda,
118 N.J. at 46.

"[A] tenant by the entirety can alienate his or her right

of survivorship, and a judgment creditor of either spouse may

levy and execute upon such right' . . . ." N.T.B., 442 N.J.

Super. at 218 (quoting Asterbadi, 389 N.J. Super. at 227).

Critically to the present case, however, "neither tenant may

force the involuntary partition of the subject property during

the marriage." Ibid. (citing Asterbadi,
389 N.J. Super. at
227).

Section 17.4, the key portion of the 1988 statute relevant

to the present case, states as follows:

Neither spouse may sever, alienate, or
otherwise affect their interest in the
tenancy by entirety during the marriage or
upon separation without the written consent
of both spouses.

[N.J.S.A. 46:3-17.4].

N.T.B. did not discuss this portion of the statute. Nor has it

been interpreted in any published New Jersey opinion involving,

6 A-2495-16T1
as here, an attempt by a third-party creditor to force the

partition and sale of real estate owned by spouses as tenants by

the entirety.

As plaintiffs emphasize, prior to the adoption of
N.J.S.A.

46:3-17.4, case law in our state had authorized courts to compel

the partition and sale of a spouse's interests in property held

in a tenancy by the entirety, in instances where equitable

considerations justified such a remedy. For example, in Newman

v. Chase,
70 N.J. 254, 262 (1976), the Supreme Court recognized

that "a debtor's interest in property held as tenant by the

entirety may be reached by his or her creditors." (emphasis

added). However, the Court qualified that point by stating that

"the remedy of partition is not automatically available to a

purchaser at [an] execution sale or to a grantee of a trustee in

bankruptcy . . . ." Ibid. (emphasis added). Rather, the

propriety of the remedy of partition was subject to the

"equitable discretion" of the court. Id. at 264. Such

equitable factors could include, for example, the interests of

the debtor's family members in not being dispossessed from their

home. Id. at 265-66. On the other hand, the Court also

recognized in Newman v. Chase the competing policy concern of

not automatically allowing delinquent debtors "'the opportunity

7 A-2495-16T1
to sequester substantial assets from just liabilities.'" Ibid.

(quoting Way v. Root,
140 N.W. 577, 579 (Mich. 1913)).

As the motion judge in this case rightly noted, but for the

Legislature's adoption of
N.J.S.A. 46:3-17.4, the court would

have possessed the equitable authority recognized in Newman v.

Chase to consider directing the partition of these spouses'

interests in the vacant Mansfield parcel. The parcel is not and

was not used as a marital residence, as the spouses apparently

live elsewhere. According to the complaint, some of the funds

extended by plaintiffs to defendant allegedly related to the

anticipated further development or sale of the Mansfield realty.

Moreover, plaintiffs have expended considerable efforts to

recover the judgment proceeds from other potential sources, but

so far to no avail.

Despite these apparent equities favoring plaintiffs, we

agree with defendant that N.J.S.A. 46:3-17.4 precludes the

partition and forced sale of the real property because defendant

and his wife own it as tenants by the entirety. We recognize

Section 17.4 literally commands that "neither spouse" may sever,

alienate, or otherwise affect their shared interests in the

tenancy by the entirety, and that plaintiffs are not Gwyn

Jimenez's "spouse." Even so, we conclude the statutory

prohibition applies to a situation where, as here, one spouse's

8 A-2495-16T1
failure to pay his personal debts to third-party creditors has

resulted in a money judgment entered against him alone.

Otherwise, a free-wheeling spouse, by amassing such individual

debt, could detrimentally "affect" the other spouse's interests

in their co-owned property.

A statute must be construed in a sensible fashion to give

meaning to its provisions. State v. Harper,
229 N.J. 228, 237-

38 (2017); Wilson ex rel. Manzano v. City of Jersey City,
209 N.J. 558, 572 (2012). There would have been little point for

the Legislature to have enacted Section 17.4 if it only intended

to continue established principles of case law regarding

tenancies by the entirety, such as the equitable concepts in

Newman v. Chase.3 The "default" approach in
N.J.S.A. 46:3-17.2 –

which essentially treats a wide range of conveyances of title

enumerating a "husband and wife" as tenancies by the entirety –

bespeaks a legislative intent to maximize each spouse's

protection from a non-consensual diminution of his or her

interests.

Although there is no reported New Jersey opinion directly

on point interpreting
N.J.S.A. 46:3-17.4 in this third-party

3
We realize that a separate objective of the 1988 statutory
scheme was to extend tenancies by the entirety status to
personal property. Even so, that change in the law could have
been accomplished without the inclusion of Section 17.4
affording maximum protection to such interests.

9 A-2495-16T1
creditor context, the interpretation we adopt today has been

echoed by other courts.4 For example, in In re Wanish,
555 B.R. 496, 499 (Bankr. E.D. Pa. 2016), the United States Bankruptcy

Court for the Eastern District of Pennsylvania highlighted the

difference in controlling New Jersey law before the adoption of

N.J.S.A. 46:3-17.4 (when Newman v. Chase and similar equity-

based case law applied to tenancies by the entirety) and

circumstances arising after the effective date of the statute in

1988. Quoting from a bankruptcy opinion from another federal

district that reached a similar conclusion, Wanish noted that:

the prohibition on a spouse's ability to
alienate his or her own interest in
entireties property under
N.J.S.A. 46:3-17.4
"evidences the legislature's intent to
preserve the entireties estate and to
elevate the interest of a married couple in
the protection of their entireties property
over the interest of a creditor of a single
spouse in executing on such property."

[Ibid. (emphasis added) (quoting In re
Montemoino,
491 B.R. 580, 589 (Bankr. M.D.
Fl. 2012)).]

That said, we do not preclude a remedy by a creditor

against property held by tenants by the entirety when the title

4
We do not rely on the contrary approach taken by a federal
district judge in New Jersey in SEC v. Antar,
120 F. Supp. 2d 431, 449-50 (D.N.J. 2000), a case cited by plaintiffs. There is
no indication that the district judge in Antar considered the
impact of
N.J.S.A. 46:3-17.4.

10 A-2495-16T1
was deeded as a fraudulent conveyance in order to avoid known

debts to creditors. See
N.J.S.A. 25:2-1 to -6 (the fraudulent

conveyance statute). Here, no fraudulent conveyance is alleged

by plaintiffs or indicated by the record.5

Affirmed.

5
By our holding in this third-party creditor context, we do not
in any way question or qualify the distinguishable authority of
a court to order the sale of a marital asset held by tenancy by
the entirety in the setting of a divorce action. Cf. Randazzo
v. Randazzo,
184 N.J. 101, 109-15 (2005);
N.J.S.A. 2A:34-23(h).

11 A-2495-16T1

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