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Bauer v. Migliaccio

February 10, 1989

HARRY A. BAUER, PLAINTIFF,
v.
ANTHONY MIGLIACCIO, ET AL., DEFENDANTS



Gibson, J.s.c.

Gibson

This is an action by a judgment creditor who sought to partition certain properties previously owned by the debtor and to collect a proportionate share of the rents and profits. Plaintiff also requested that the court set aside a 1983 transfer of one of the properties which had occurred following the entry of plaintiff's judgments. At trial plaintiff indicated his willingness to abandon the partition claims without prejudice and to pursue instead his claim for one-half of the rental values. In turn, the debtor agreed that the 1983 transaction should be treated as a nullity, at least as to plaintiff. The matter was then tried without a jury, at the conclusion of which the court reserved decision in order to permit the attorneys to submit post-trial briefs. The following represents this court's findings of fact and conclusions of law.

FINDINGS OF FACT

Plaintiff Harry A. Bauer is a judgment creditor of defendant Anthony Migliaccio (debtor). Mr. Bauer's judgment was obtained in December 1982 and as of April 26, 1985, the amount remaining due was $137,633.41 plus $178.50 in costs. Mr. Bauer obtained Writs of Execution on his judgment and ultimately there was a sheriff's sale of the two pieces of real estate in which the debtor had an interest. One of the properties is known as 1128 Simpson Avenue, Ocean City, New Jersey, and was previously owned by the debtor's mother, Esther. In September 1968 she deeded her interest to herself and to the debtor as joint tenants with a right of survivorship. Esther Migliaccio is now in her eighties. In June 1983 Esther Migliaccio, the debtor and his wife, Charlotte Migliaccio, attempted to transfer their interest to Esther and the debtor's three children, namely, Marie Ann, Carla and Anthony, Jr. It was that transaction which plaintiff claimed was fraudulent and which defendant

has now stipulated should be void as against plaintiff. The other property involved is 937 Pelan Avenue, Ocean City, New Jersey. That property was owned by the debtor as a tenant by the entirety with his wife, Charlotte, and they both still occupy that property as their marital home.

As a result of the Writs of Execution previously referred to, a sheriff's sale was held in April 1985, at which point plaintiff acquired the debtor's interest in the above properties. Sometime thereafter, counsel for plaintiff contacted counsel for Mr. Migliaccio and a claim was made for compensation representing Mr. Migliaccio's use of the property. Although it is not clear exactly when that first contact was made, Exhibit P-4 makes reference to a letter from Mr. Bauer's attorney dated March 17, 1986. That letter apparently did not contain a formal demand for possession, but it is clear that plaintiff's counsel was asserting a claim for a share of the rental value. No resolution of the problem occurred at that time and counsel for both sides continued to try to settle the dispute.

On November 21, 1986, plaintiff's counsel wrote to counsel for the debtor and made a formal demand for possession. Although that demand was rejected, discussions continued regarding the possibility of deeding one of the two properties over to plaintiff as satisfaction for the entire debt. It was always clear that the properties were not capable of joint occupancy since each is a single-family residence. The Simpson Avenue property is occupied by defendant's elderly mother and the Pelan Avenue property is occupied by the debtor and his wife. Neither property generates any income, although obviously they have rental value.

The testimony at trial supports the conclusion that the Pelan Avenue property had a rental value of $625 per month for the year 1988, $600 per month for the year 1987, $575 for the year 1986 and $550 for the year 1985. The Simpson Avenue property had a rental value for 1988 at $600 per month, $575 per month for 1987, $550 per month for 1986 and $525 per month

for 1985. Although the expenses against these properties were not recited with precision, evidence was admitted reflecting the 1988 real estate taxes for Simpson Avenue at $1,051.80 and $1,158.34 for Pelan Avenue. Both properties were listed as having a repair and maintenance cost of $500 per year. Other expenses such as water, sewer and electric were also claimed but those expenses are the responsibility of the tenant/occupant. No expenses were listed for the earlier years but plaintiff offered to stipulate that the same figures would apply from 1985 forward. This court therefore will assume that to be true.

Although testimony was submitted regarding the market value of each of the properties, the valuations were confined to 1988 and no appraisal was offered as to their value in 1985 or thereafter; nor was there any testimony as to the value of the interest that Mr. Bauer obtained when he acquired the debtor's rights through the sheriff's sale which occurred in 1985.

Before concluding the factual findings, mention should also be made of the fact that at one point plaintiff obtained a wage execution against Mr. Migliaccio. Since the time of the execution (February 15, 1984) ten percent of Mr. Migliaccio's salary has been deducted and paid over to counsel for plaintiff. It is not clear as to exactly what the total amount of that collection has been over the last four and a half years; nor is it clear exactly what the interest accumulation has been on the total judgment. Up to now, however, no credit has been given against the judgment as a result of the wage execution or the sales.

ConclusionS OF LAW

As previously indicated, plaintiff initially demanded the partition of the two properties and sought to set aside a transfer of Mr. Migliaccio's interest in the Simpson Avenue property which had occurred in 1983. Both of these claims were withdrawn by stipulation and the debtor agreed that the 1983 conveyance is void. What remains is an action for an accounting as to rents

and profits, a declaration as to plaintiff's interest in the two properties and a determination of the amount still due on the judgment.

Pelan Avenue

The landmark cases dealing with the rights of a judgment creditor as against the interest of a debtor who holds property as a tenant by the entirety are King v. Greene, 30 N.J. 395 (1959) and more recently Newman v. Chase, 70 N.J. 254 (1976). Those cases make it clear that upon an execution sale initiated by the judgment creditor the creditor acquires the right of survivorship of the debtor as well as the interest of the latter in the life estate for the joint lives of both spouses. Newman v. Chase, id. at 260. It is also clear that although the judgment creditor then becomes a tenant in common with the non-debtor tenant, partition is by no means automatic and where the property is a single-family residence the presumption appears to be to the contrary. Although there is no automatic right of partition in such a setting, the creditor is nevertheless entitled to the alternative equitable remedy of an accounting from his co-tenant for a share of the rents, issues and profits. Newman v. Chase, id. at 267; Lohmann v. Lohmann, 50 N.J. Super. 37 (App.Div.1958).

Where, as here, the property involved is a residence as opposed to a commercial property, the only benefit inuring to the tenant not in possession is the value of the use and occupancy; in effect, the imputed rental value of the home.

Based on the above, plaintiff's sheriff's deed made him a tenant in common with a right of ...


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