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D''Atria v. D''Atria

Decided: March 28, 1990.

MIRELLA D'ATRIA, PLAINTIFF,
v.
JOHN D'ATRIA, DEFENDANT



Harris, J.s.c.

Harris

OPINION

PREFACE

"'Curiouser and curiouser!' cried Alice"

Lewis Carroll

INTRODUCTION

The post-judgment application before the Court involves 1) a return of an Order to Show Cause,*fn1 2) a joint application for reconsideration, and 3) three motions in aid of litigant's rights

pursuant to R. 1:10. The issues stem from the convoluted Dual Judgment of Divorce of July 20, 1989 and its incorporated Property Settlement Agreement. Reduced to their essences, the issues exist because of the perception by the parties of continued mutual betrayal, and the murky equitable distribution package arranged through their short-lived compromise. The issues are complicated because of an appeal in the Superior Court of New Jersey, Appellate Division, and proceedings in the United States Bankruptcy Court for the Southern District of New York.

PROCEDURAL POSTURE OF THE ACTION AND FINDINGS OF FACT

Visitation

On the eve of Christmas Eve, this Court signed an Order to Show Cause, together with a mandatory injunction, which set a visitation schedule for the parties and their two children for the Christmas holidays (Christmas Eve and Christmas Day*fn2). Also incorporated in that Order to Show Cause was a provision permitting an application to modify the July 20, 1989 Judgment of Divorce to provide for a specific visitation schedule, rather than the ambiguous and undefined provision that:

"The husband shall have reasonable and liberal rights of visitation with the children . . . . In addition, the husband shall have the right of visitation with the children at such times as may be mutually agreed upon between the parties."*fn3

The return date for consideration of a new plan for visitation was adjourned from time to time, until it finally was reached for initial disposition on February 16, 1990.

Restrictive Covenant

The Property Settlement Agreement effectuated an unconventional distribution of assets, which required the transfer of some assets to the plaintiff from a corporate business entity (455 Realty Corp.) owned by the defendant. The defendant is also the owner of Showcase Tile, Inc., a retail and wholesale distributor of floor and wall tiles, which (either directly or through affiliates) operates a number of stores in the New York/New Jersey metropolitan area. The plaintiff belongs to a family that similarly (and competitively) operates a chain of ceramic and marble tile stores, the so-called Fuda Tile enterprise.*fn4

The Property Settlement Agreement provided, in pertinent part, that defendant, in addition to transferring personal assets, agreed to transfer assets from, and to make agreements on behalf of, Showcase Tile, Inc. and its affiliates. The most significant agreement of this nature was defendant's*fn5 promise not to "operate a ceramic tile store within a seven mile geographical radius from any presently owned Fuda Tile location . . . ."

On November 13, 1989, a "Revised Order to Show Cause" was signed by Judge Kahn which temporarily enjoined defendant (but not defendant's corporations) from, among other things, performing certain actions which were arguably contrary to the Property Settlement Agreement's restrictive covenant. Prior thereto, on November 2, 1989, Judge Kahn had enjoined not only defendant, but also Showcase Tile, Inc. from

any activities which were competitive with Fuda Tile.*fn6 The original Order to Show Cause was modified as to Showcase Tile, Inc. when it became apparent that the corporation was the subject of bankruptcy proceedings in the United States Bankruptcy Court for the Southern District of New York. Defendant has been named debtor-in-possession, and at present apparently continues to operate the Showcase Tile businesses.

Judge Kahn recused himself from further proceedings on the original and revised Orders to Show Cause (for reasons not here pertinent), and this Court was assigned to dispose of plaintiff's request for enforcement of the restrictive covenant as to defendant, individually. On January 19, 1990, this Court determined that 1) there were no genuine issues of material fact in dispute as to the distance (seven miles) from Showcase Tile's new Paramus store to the nearest operating Fuda Tile store and 2) the distance -- a radius of seven miles -- was to be measured in a straight line from store to store, and not by highway driving.*fn7 Based upon these findings, the Court entered an Order which permanently enjoined defendant from acting as an officer, director, or employee of any corporation which operates a ceramic tile store in violation of the Property Settlement Agreement. The Court tried to carefully segregate the roles of defendant which it was affecting. For example, no Order was entered which precluded defendant from acting in the capacity of debtor-in-possession under the direction and control of the Bankruptcy Court.

On February 2, 1990, an appeal to the Superior Court of New Jersey, Appellate Division was filed by defendant from this permanent injunction. Also, an application was made in the Bankruptcy Court for relief from this Court's Order, but the request was withdrawn. At the present time, there are no Orders of the Bankruptcy Court affecting this Court's Order of January 19, 1990.

Notwithstanding the January 19, 1990 permanent injunction, the Showcase Tile store in Paramus was fitted up, and has opened for business. Although there is no direct evidence that defendant has, himself, been seen in the store acting in a management capacity, the only logical conclusion to be drawn from the fact that this outlet is now operating, is that defendant had a hand in effectuating such action. Any contrary argument would, at least, reveal ...


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