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Marshall v. Matthei

January 26, 2000


Before Judges Stern, Kestin and Wefing.

The opinion of the court was delivered by: Kestin, J.A.D.


Submitted: November 10, 1999

On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Essex County.

These three appeals are before us on leave granted. We consolidate them for the purposes of this opinion. All arise from the same civil matter filed in March 1993. The complaint in two counts embodied a claim for the value of professional services rendered. In February 1992, defendant, Warren D. Matthei, had retained plaintiff, Ellen C. Marshall, an attorney at law, to represent him in a Union County matrimonial proceeding. The amount claimed due in Marshall's suit was the $76,558.30 balance owing on her fee for services rendered through the divorce trial, until August 16, 1992, and in connection with a substitution of attorneys thereafter. A default judgment was entered on April 20, 1995, for the amount claimed plus costs, including those connected with service of process in England where defendant was residing at the time. The total of the judgment was $85,553.87.

The judgment of divorce in the underlying matrimonial matter had been entered on November 12, 1992, following a twenty-three day trial. That judgment, inter alia, required Matthei to pay $50,000 per year toward the support of his three children, and $100,000 per year in alimony to his former spouse. On the basis of a determination that the proceeds of a wrongful termination claim by Matthei against his former employer might be subject to equitable distribution, the judgment required Matthei to keep his former spouse informed of the progress of negotiations, and enjoined him from disposing of the settlement proceeds until the court could make a definitive equitable distribution determination. A prior order had required Matthei to deposit any settlement proceeds with the court, subject to equitable distribution. Matthei appealed from the judgment of divorce, but that appeal was dismissed on March 10, 1994, on the former spouse's unopposed motion based on the argument that Matthei had "lied to the court, perjured himself, and defrauded the court and the [former spouse]" in respect of the settlement.

Settlement of the wrongful termination claim had occurred on April 15, 1993. In a July 22, 1993 certification filed with the court, however, Matthei denied that any settlement had transpired or that he had received any funds from his former employer on account of his claim.

In October 1993, Matthei moved to England. In January 1994, he stopped paying alimony and child support, and a bench warrant was issued on that basis. On August 12, 1996, Matthei was arrested on the bench warrant as he attempted to re-enter the United States. After a hearing on August 13, 1996, Judge Melvin S. Whitken entered an order for Matthei's incarceration by reason of his failure to discharge his child support and alimony obligations, pending his compliance or a determination that he lacked the ability to pay.

Judge Whitken held an ability-to-pay hearing on August 29 and September 5, 1996, and rendered a decision on that issue on September 13, 1996. He found that Matthei had received $2.74 million from the settlement after taxes, and was delinquent in his child support and alimony obligations in the sum of $296,350. The judge recounted in detail how Matthei had disposed of the proceeds of the settlement by expenditure, investment and payment over to his new wife, *fn1 and found that Matthei had the ability to pay the child support and alimony ordered. Based on R. 1:10-3, Matthei's continued incarceration was ordered pending payment of child support and alimony arrearages and the posting of $1.4 million to guarantee payment of the former spouse's equitable distribution claim regarding the settlement. Contempt of court charges were referred to the Union County Prosecutor's Office.

On September 23, 1996, Marshall filed an application for issuance of a writ of capias ad satisfaciendum (writ or ca. sa.) in respect of her judgment in this matter. At the hearing on the application, on October 10, 1996, Judge Kenneth R. Stein held Matthei to be collaterally estopped from relitigating the issues previously adjudicated by Judge Whitken. Judge Stein found that Matthei had conveyed his property with the intent to defraud creditors, and was refusing to apply available assets in payment of Marshall's judgment. See 2A:17-78; see also 2A:15-42. Accordingly, Judge Stein issued the writ.

Matthei did not seek appellate review of either Judge Whitken's R. 1:10-3 order of September 13, 1996, or Judge Stein's issuance of the ca. sa. on October 10, 1996. Matthei made a number of pro se procedural applications to the trial court, including some seeking consolidation of the matrimonial matter and this action, or dismissal of the ca. sa. on entire controversy grounds. All these applications were denied.

Almost two years later, on August 7, 1998, Judge Whitken determined that continued incarceration in the matrimonial matter would be punitive rather than coercive because "continued incarceration is not going to produce" the approximate value of the matrimonial judgment. On August 28, 1998, Judge Whitken, inter alia, ordered Matthei's release contingent upon payment to his former spouse of $20,000, the estimated value of books which Matthei had acknowledged he owned. The order provided, however, that it would "not [operate to] release [Matthei] from incarceration imposed under any presently pending criminal matter or other civil matters, such as but not limited to, any capias bond."

Judge Whitken held another hearing on December 11, 1998. He then issued an order releasing Matthei from his R. 1:10-3 incarceration without any payment in the matrimonial matter on the basis that continued incarceration would be punitive rather than coercive. Matthei was remanded, however, "pursuant to any other detainers or other orders in other civil or criminal matters which still require his incarceration."

On December 17, 1998, Judge Stein held a hearing on Matthei's motion to dismiss the ca. sa. in this matter on the ground that it had no coercive effect and had become punitive in nature. Some testimony was taken from Matthei concerning his assets. Matthei argued that the ability-to-pay determination in the matrimonial matter should not have been given collateral estoppel effect, and that he should be able to show he did not fraudulently transfer his assets. He noted that his wife in England had recently divorced him and, as he had not seen the divorce judgment, "[t]hey could have taken everything away from me." He sought dismissal of the writ because "it was granted without any competent evidence," and he asked that the court hold another hearing.

On January 21, 1999, Judge Stein denied Matthei's motion to dismiss the ca. sa. He determined that the writ had not "ceased to serve its coercive purpose and . . . become punitive[;]" noting also that Matthei remained incarcerated on criminal charges, and dismissal of the writ would not release Matthei from his incarceration regarding those charges. In A-4386-98, Matthei appeals from the order of January 21, 1999.

In September 1998, Matthei had filed a petition for a writ of habeas corpus in the United States District Court for the District of New Jersey. On December 2, 1998, that petition was dismissed without prejudice by consent "for failure to exhaust state court remedies." On December 4, 1998, Matthei filed a habeas corpus petition in the Superior Court of New Jersey. That petition was denied by Judge Stein in an order entered on February 16, 1999. In a letter ...

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