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Siegel v. Siegel

April 23, 1990

ARLENE S. SIEGEL, PLAINTIFF,
v.
RICHARD L. SIEGEL, DEFENDANT



Berman, J.s.c.

Berman

To fully comprehend the two novel questions before this Court, a brief background is indicated.

On January 31, 1990, this Court entered a Final Judgment of Divorce after three weeks of trial, dissolving the marriage, and resolving the myriad of economic issues.*fn1 Of present consequence are only two portions: the permanent alimony of $5,000.00 per month, and the equitable distribution payout to

the Plaintiff of $36,666.85 by March 1, 1990, and two installments of $125,000.00 by January 15, 1991 and January 15, 1992.

While no appeal was taken by either party within the time prescribed by the Rules, the Defendant filed a Voluntary Petition for Reorganization in the United States Bankruptcy Court for the District of New Jersey, the resultant effect being a stay of the Plaintiff's payout of the aforesaid $286,666.85. The Plaintiff moves for an elevation in the amount of her alimony contending that since the issues of alimony and equitable distribution are inexorably intertwined in the financial quilt, her loss of the payout dictates an increase in alimony to substitute for the loss of income that would have been generated by that payout.

The dual novelty raised by the Plaintiff is her application for this modification while the bankruptcy action is in progress, and her supplemental demand for counsel fees for her bankruptcy attorney.

Initially, one simply cannot lose sight of the fact that this Court's role as arbiter in the most emotionally taut sector of civil litigation is to be fair. The Defendant's petition, a model of deviant frivolity, discloses that his assets greatly exceed his liabilities. He delineates $1,453,150.00 of assets against $898,542.03 of liabilities -- inclusive of the Plaintiff's equitable distribution of $286,666.85. Though the Defendant's creditors will have their fight in the bankruptcy tribunal, this Court cannot help but observe that the Defendant's assets have been dramatically understated, and his liabilities greatly exaggerated, if not in fact contrived. By way of example, his total liabilities include substantial amounts which he himself categorizes as "contingent", aside from other questionable liabilities which include unproven gambling losses. And while this Court cannot inject itself into those bankruptcy proceedings, it nevertheless is manifestly obvious that his filing produces the salutary effect of deferring at best, jeopardizing at worst, the Plaintiff's "nest egg" allowed to her from thirty years of marriage.

While this State has yet to pass upon the vitality of an application for increasing alimony while the payor is in "reorganization" in the United States Bankruptcy Court, at least two other jurisdictions have dealt with this question.

In Eckert v. Eckert, 144 Wis. 2d 770, 424 N.W. 2d 759 (1988), the Plaintiff was awarded "maintenance" of $150.00 per week for eighteen months. That Judgment also required the Defendant to assume certain credit card indebtedness; but when he obtained a discharge of that obligation, causing the creditors to pursue her, it precipitated an application to increase the maintenance and delete the eighteen month termination date. The Trial Court did not increase the maintenance level, but vacated the eighteen month termination date. The Wisconsin Court of Appeals concluded that the maintenance modification did not "re-create" discharged debts; did not frustrate the "fresh start" objective of the bankruptcy code; and did not violate the supremacy clause of the United States Constitution. Id. 424 N.W. 2d at 761.

A California Court of Appeals arrived at a similar conclusion, reducing the wife's support in light of her discharge in bankruptcy of debts, which then became the obligation of the husband. In re Marriage of Clements, 134 Cal.App. 3d 737, 184 Cal.Rptr. 756 (1982).

Accordingly, every notion of fundamental fairness, in addition to the persuasive authority set forth in other jurisdictions, compels this Court to conclude that the Plaintiff has presented a classic Lepis*fn2 change of circumstances, dictating an additional increment to her monthly alimony since she must now exhaust ...


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