On appeal from the Superior Court, Chancery Division, Bergen County.
Pressler, Gaulkin and Baime. The opinion of the court was delivered by Pressler, P.J.A.D.
[214 NJSuper Page 547] This appeal raises basic questions respecting the effect of divorce on the preexisting right of a judgment creditor of one of the spouses to seek satisfaction of his judgment lien out of the debtor spouse's interest in a tenancy by the entirety. In Interchange State Bank v. Riegel, 190 N.J. Super. 139 (App.Div.1983), this court held that a judgment creditor who levies on the debtor spouse's interest in a tenancy by the entirety prior to entry of a divorce judgment automatically becomes, by virtue of the judgment, an equal tenant in common with the non-debtor spouse entitled to partition or execution sale to satisfy the lien. We disagree with that holding, which, in our
view, fails to take into account the fundamental effect of the equitable distribution law on the nature of the spouses' respective post-divorce rights in property held by them during coverture by the entireties. We, therefore, decline to follow Interchange State Bank, and hold that the creditor's post-divorce rights are defined and limited by the equitable distribution scheme incorporated into the judgment of divorce.
The issue is presented to us in the following manner. Plaintiff Renetta H. Daeschler filed a complaint for divorce against defendant Albert Daeschler in September 1982 seeking to terminate their 25-year marriage. She also sought equitable distribution of the marital assets, alimony, and support for the youngest child of the marriage, the two older children having been then emancipated. In December 1983, while the divorce action was pending, intervenor John Bruno Corporation*fn1 recovered a judgment against defendant alone in the amount of about $90,000 in an action on a debt incurred by him in the course of a disastrous business venture. Shortly after entry of the judgment, the intervenor obtained a writ of execution addressed to the Bergen County Sheriff. The sheriff's return, dated January 16, 1984, showed a levy against "all the right, title and interest" of defendant in the marital residence, owned by defendant and his wife as tenants by the entirety and in which they were then residing with two of their children. No levy was first made on defendant's personalty since, as the sheriff's return explained, "I was refused access to the premises."
The intervenor took no further action in respect of either its judgment or its levy during the pendency of the divorce action. That action was concluded by a final judgment entered on June 1, 1984, which terminated the marriage and adjudicated, following
a hearing, the financial rights of the parties. The full extent of that adjudication was to award the parties the automobile each was then using, to allow plaintiff a counsel fee of $1,500, and to provide, with respect to the marital residence, that it was to be owned "eighty percent (80%) by Renetta H. Daeschler, plaintiff, and twenty percent (20%) by Albert F. Daeschler, defendant." The judgment did not award either party any exclusive possessory rights to the house, nor did it direct its immediate sale. We gather from post-judgment certifications filed by the parties and the post-judgment deposition of defendant taken by the creditor pursuant to a discovery order that after the judgment of divorce was entered, both parties continued to reside in the house with the two children, that they contributed to the mortgage payments in their 80-20 adjudicated ownership ratio but contributed to all other maintenance expenses equally, that the plaintiff continued her employment by Bambergers in an office position while defendant continued his employment by Public Service Electric and Gas Company, that both then adult younger children were working, and that there were virtually no other marital assets of value. We also gather that the residence, worth something over $100,000, is encumbered by a single mortgage securing a present debt of about $50,000. Although we have not been favored with a transcript of the divorce hearing, plaintiff asserts in her post-judgment certification that the allocation of ownership of the marital premises was predicated upon a recognition of her pecuniary and nonpecuniary contributions to this long-standing marriage in the light of defendant's dissipation of a large portion of the marital assets by way of the business failure which resulted in this judgment debt.
Some 15 months after entry of the divorce decree, the intervenor filed a motion to intervene in the concluded divorce action. Relying on Interchange State Bank v. Riegel, supra, it sought the relief of modification of the judgment to declare the parties to be equal tenants in common of the marital residence, to adjudicate the creditor's right to succeed to defendant's
undivided half interest, and to compel a sale. The trial court denied the motion to intervene, and the creditor appealed. Pending the appeal, we remanded to the trial court for the making of findings of fact and conclusions of law. In accordance with our directive, the trial judge filed a letter opinion in which, without a specification of reasons, he concluded that the pre-divorce levy on the property had been "attempted" but not successful. He also concluded that by reason of the lapse of time between entry of the divorce judgment and the filing of the intervention motion, the creditor was "estopped" from intervening and barred therefrom by laches as well. For the reasons hereinafter set forth, we affirm the order denying intervention since we conclude, as a matter of the appellant's substantive rights, that it is not entitled to a modification of the divorce judgment but rather that its rights are limited to a 20% interest in a tenancy in common.
The nature of a tenancy by the entirety and the rights therein during coverture of a judgment creditor of one of the spouses are matters long since settled by the Supreme Court in King v. Greene, 30 N.J. 395 (1959), and Newman v. Chase, 70 N.J. 254 (1976). In sum, the interest of each of the spouses is that of an equal tenant in common during the joint lives of both with a right of survivorship. While that interest is subject to involuntary sale during coverture, the purchaser is not automatically entitled to partition but only to an accounting for half the imputed rental value of the premises less expenses. Accordingly, ...