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Reid v. Reid

January 27, 1998

ALBERT REID, PLAINTIFF-RESPONDENT,
v.
MAGDELINE G. REID, DEFENDANT-APPELLANT.



Argued November 10, 1997

On appeal from the Superior Court of New Jersey, Chancery Division - Family Part, Monmouth County.

Before Judges Havey, Landau and Collester.

The opinion of the court was delivered by: Havey, P.j.a.d.

Defendant appeals from those provisions of a judgment of divorce denying her alimony and counsel fees, and rejecting her request for equitable distribution and her demand that the marriage be dissolved based on extreme cruelty. Defendant's application for equitable distribution was denied on the basis that the parties' marital assets had previously been distributed by settlement agreement during defendant's Chapter 7 bankruptcy proceedings between plaintiff and the Trustee in the Bankruptcy Court. We affirm.

Plaintiff Albert Reid and defendant Magdeline G. Reid were married on February 8, 1978. No children were born of the marriage. Prior to the marriage, plaintiff purchased Keansburg Amusement Park for $1.25 million. Defendant's income at the time of the marriage from his employment at Keansburg Amusement Park and House Chek, Inc., a home inspection business, was $25,000. Towards the latter part of the marriage, his income had increased to $75,000. Defendant owned a used furniture store, antique shop and bridal gown salon. She was also a part owner of a video store and engaged in various real estate transactions as a part owner of a real estate company.

The parties owned modest residences until, in 1985, they purchased a home in Rumson for $735,000.

In September 1988, defendant moved to Austin, Texas, with her son from a prior marriage. Plaintiff remained in New Jersey. While in Texas, defendant purchased a residential structure from Charles Trois for $1.2 million. However, after closing, a house inspection revealed that it was, according to defendant, uninhabitable due to wiring and structural defects. Defendant sued Trois and, after a trial in Texas, judgment was entered in favor of Trois on his cross-claim against defendant in the amount of $1.2 million, plus $2.5 million in punitive damages.

During the marriage, the parties formed a Missouri corporation known as Reid Enterprises, each holding a fifty-percent shareholder interest in the corporation. Reid Enterprises purchased Wilderness Safari Park for $1.5 million, each party contributing $150,000 towards the purchase price.

In November 1991, defendant filed a Chapter 11 bankruptcy petition in Missouri. On December 7, 1990, plaintiff filed a complaint for divorce in the Family Part, Chancery Division, Monmouth County.

By order dated May 21, 1991, Bankruptcy Court Judge See converted defendant's Chapter 11 proceeding into a Chapter 7 proceeding. On November 7, 1991, Judge See, with the consent of both parties (who were represented by counsel), granted the application of the trustee to assume jurisdiction "of all issues pertaining to the debtor's property, including marital property she may hold with Albert Reid."

The bankruptcy claim was tried on January 28 and 29, 1992. On February 24, 1992, Judge See entered an order awarding Reid Enterprises $201,500 in actual damages and $300,000 in punitive damages, plus post- judgment interest from January 29, 1992, on its cross-claim which alleged mismanagement, fraud and embezzlement by defendant. Plaintiff, as a 50% shareholder in Reid Enterprises, was denied any relief on his personal cross-claim.

The Trustee thereafter filed a motion for an order approving an agreement between the Trustee and plaintiff settling the equitable distribution issues. After a hearing, Judge See granted the motion on August 13, 1992. Under the settlement, defendant was awarded approximately $4.4 million in marital assets, all of which was paid to her creditors.

On July 1, 1994, defendant moved in the Family Part for a review and/or redetermination of equitable distribution. Judge Feldman denied defendant's request, finding such issues were already disposed of by the Bankruptcy Court. The Judge ordered that the only issues to be addressed during the divorce trial would be dissolution, alimony, and the apportionment of legal fees and costs. Over a nineteen-day period between January 10 and March 20, 1996, Judge Coogan heard testimony on those issues. During the trial, defendant moved to amend her counterclaim to include claims for breach of contract against plaintiff and Reid Enterprises. Judge Coogan denied the request. A written opinion was filed by Judge Coogan on July 31, 1996. ...


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