On appeal from Superior Court of New Jersey, Chancery Division, Ocean County.
King, Gaulkin and Gruccio. The opinion of the court was delivered by: Gruccio, J.A.D.
Defendant William D. Starrett, III appeals from an order of the Superior Court, Chancery Division, Ocean County, enforcing plaintiff's rights in an equitable distribution provision in a judgment of divorce. R. 1:10-5. At issue is whether the New Jersey Superior Court lacked jurisdiction to enforce the judgment which was listed as an asset in a bankruptcy case that was previously closed.
The facts of the case are not in dispute. Plaintiff Margaret M. Starrett and defendant were divorced on May 6, 1982. Their property settlement agreement, incorporated in the final judgment of divorce, provided that defendant pay plaintiff $12,000 to indemnify her for certain debts, judgments and attorney's fees, and provided plaintiff with certain personal items, including an automobile. Defendant failed to comply with the terms of the divorce settlement. Plaintiff petitioned the court to enforce that portion of the final judgment of divorce which incorporated the property settlement agreement. On August 13, 1982, the court issued an order requiring defendant to post a $30,000 bond to guarantee performance of the judgment. When defendant failed to comply with that order, a bench warrant issued on September 3, 1982. Thereafter, the court ordered defendant to post $15,000 which was disbursed by the court to plaintiff and a judgment creditor. On May 4, 1983, an order was executed fixing the amount of the judgment at $23,751.57.
On June 3, 1983, plaintiff filed a voluntary petition for bankruptcy in United States District Court for the District of New Jersey, Bankruptcy Division, under Chapter 7 of the Bankruptcy Code. See 11 U.S.C. § 701, et seq. (1982). Plaintiff listed the judgment, including the liabilities for which she was to be indemnified by defendant, on the schedule of assets. See 11 U.S.C. § 521(1) (1982).
After the commencement of the bankruptcy case, in August 1983, defendant was arrested on the aforementioned bench warrant. Defendant, thereafter, filed an order to show cause and obtained a writ of habeas corpus in the United States District Court. That court found the Superior Court of New Jersey lacked jurisdiction over defendant because the Bankruptcy Court became vested with exclusive jurisdiction over plaintiff's claim when plaintiff filed bankruptcy. Accordingly, defendant was released after forfeiting his bail of $2,000 to the trustee in bankruptcy. The $2,000 was collected and distributed by the trustee according to bankruptcy code priorities. See 11 U.S.C. § 507 (1982).
On August 20, 1985, prior to receiving written notice that the bankruptcy case was closed, plaintiff sought to enforce her rights in the Superior Court of New Jersey. An order dismissing plaintiff's motion with prejudice was issued on November 13, 1985, on the basis that the United States District Court still had jurisdiction over the matter.
Plaintiff's bankruptcy file was closed by the court and the trustee discharged effective October 17, 1985. Plaintiff was notified of the closing sometime after the November 13, 1985 order was issued. Plaintiff again moved to enforce her rights to collect on the judgment in the Superior Court of New Jersey, which motion was granted on March 23, 1987.
Defendant first contends that plaintiff's August 20, 1985 motion was not properly before the Superior Court because the November 13, 1985 motion was dismissed with prejudice. He argues "[w]here a claim has been dismissed with prejudice, it is
considered an adjudication on the merits, and such dismissal bars reinstitution of the same claim. N.J. Civil ...