Culp v. Culp

• Decision Date: 11 June 1990
• Citation: 577 A.2d 872,242 N.J.Super. 567
• Parties: Sharon M. CULP, Plaintiff, v. John F. CULP, III, Defendant.
• Court: New Jersey Superior Court

Page 567

242 N.J.Super. 567

577 A.2d 872

Sharon M. CULP, Plaintiff, v. John F. CULP, III, Defendant.

Superior Court of New Jersey, Chancery Division,

Family Part, Monmouth County.

Decided June 11, 1990.

Noel Tonneman, Woodbridge, for plaintiff (Wilentz, Goldman & Spitzer, Woodbridge, attorneys).

John F. Culp, pro se, did not appear.

Robert J. Chalfin, receiver, pro se.

Gianni Donati, Iselin, for Lexon Properties, Inc. (Greenbaum, Rowe, Smith, Ravin, Davis & Bergstein, Iselin, attorneys).

BASSLER, J.S.C.

In this matrimonial action, the receiver appointed by this court seeks, among other things, to vacate a writ of execution and levy issued against the receiver's bank account on behalf of a judgment creditor of defendant husband. The application is but a small skirmish in a larger matrimonial war ¹ being waged in New Jersey, Pennsylvania and Maryland by a pro-se defendant from an unidentified redoubt in the Austrian Tyrol. To put the matter in its proper perspective a short survey of the legal landscape is called for.

The Matrimonial Action.

Plaintiff Sharon M. Culp and defendant John F. Culp, III were married on July 3, 1971. Three children were born of the marriage; a child of plaintiff by a previous marriage was also adopted by defendant. All four children are currently unemancipated.

In the fall of 1987, after a marriage of 16 years duration, plaintiff filed a complaint for divorce. Defendant was then living in New Jersey and was represented by local counsel. The early engagement of the litigants saw the usual salvo of orders for support and applications for enforcement. Defendant was ordered to pay plaintiff unallocated support of $1,000 a week, the costs of the children's education at private schools and "roof" expenses.

From the inception of the law suit defendant frustrated every effort to obtain legitimate discovery of his extensive holdings. Interrogatories were served but went unanswered, orders to produce discovery were entered but were ignored.

Early in 1988, defendant retreated across the Delaware to the apparent safety of another jurisdiction--Pennsylvania. In a letter to plaintiff he wrote: "But I'm in Pa. now and you are on your own in N.J.!! Good luck!"

In the spring of 1988, plaintiff changed counsel. A short-lived truce followed. The parties through counsel signed a consent order on May 11 agreeing to the disposition of proceeds from defendant's sale of a cemetery in Pennsylvania. The consent order also provided that defendant's "support obligations ... shall continue in accordance with prior Court Orders." In the summer, defendant retained the firm of Pitney, Hardin, Kipp & Szuch, but by the winter that firm sought to be relieved of counsel, because defendant's failure to cooperate in the discovery process prevented counsel from effectively representing defendant and also from fulfilling their responsibilities as officers of the court. They were permitted to withdraw.

In December 1988, the court granted plaintiff's motion to bifurcate the matrimonial action to allow an immediate hearing on the cause of action for divorce while reserving on the issues of support and equitable distribution. ² In light of defendant's age and health, bifurcation was permitted to avoid the problems stemming from defendant's untimely death which would deprive the surviving spouse of equitable distribution under N.J.S.A. 2A:34-23 while excluding her, because of the moribund marriage, from an elective share under N.J.S.A. 3B:8-1. ³ See Carr v. Carr, 229 N.J.Super. 370, 551 A.2d 989 (App.Div.1988), certif. granted 114 N.J. 520, 555 A.2d 632 (1989). Consequently on Feb. 16, 1989 after taking plaintiff's testimony (defendant did not appear), a judgment of divorce was entered.

When defendant violated a May 2, 1988 order restraining defendant from disposing of, and encumbering, assets by transferring property in Maryland and Pennsylvania to a trust and to his sons from a prior marriage, plaintiff retained Pennsylvania and Maryland counsel. Hostilities now commenced on a new front. But in the spring of 1989, defendant abandoned the battlefield and fled to Europe with over $900,000 in funds from a New York account, leaving behind a son armed with a power of attorney.

The Appointment of a Custodial Receiver

and Receiver in aid of Execution.

"Courts do not sit for the idle ceremony of making orders and pronouncing judgments, the enforcement of which may be flouted, obstructed, and violated with impunity...." Berry v. Midtown Service Corp., 104 F.2d 107, 110-111 (2 Cir.1939). Relying on a seldom invoked section of the divorce law-- N.J.S.A. 2A:34-23 ⁴, and in response to plaintiff's application, the court appointed Robert J. Chalfin as a custodial receiver to collect the rental income from the tenants of a building owned by defendant in Mechanisburg, Pennsylvania. Although the appointment of a custodial receiver to implement a pendente lite support order may be unusual, it is not without precedent. See Adams v. Adams, 125 N.J.Eq. 166, 4 A.2d 58 (E. & A. 1939).

Shortly after Chalfin's appointment as custodial receiver under N.J.S.A. 2A:34-23, the court, on June 21, 1989, appointed him a statutory receiver in aid of execution under N.J.S.A. 2A:17-66. This was appropriate in view of that fact that on January 26, 1989 a judgment was entered against defendant in favor of plaintiff for support arrears in the amount of $91,256.28 and on August 28, 1989 a second judgment for support arrears was entered in the amount of $93,384.51.

This court's concern about appointing a receiver to collect rents from property in Pennsylvania was alleviated by the fact that the Court of Common Pleas of Berks County, Pennsylvania was registering, adopting and enforcing the orders of this court as "if entered as original orders" in that court. "State lines do not and should not make court barriers." Woodhouse v. Woodhouse, 17 N.J. 409, 417, 111 A.2d 631 (1955). Cf. Higginbotham v. Higginbotham, 92 N.J.Super. 18, 222 A.2d 120 (App.Div.1966).

The Execution and Levy on the Receiver's Bank Account.

On November 10, 1988, Lexon Properties, Inc. in the Pennsylvania Court of Common Pleas recovered (by confession) a judgment against defendant in excess of one million dollars. Subsequently, Lexon filed suit in New Jersey on this judgment and on October 13, 1989 obtained, in the Superior Court of New Jersey, a default judgment against defendant in the amount of $1,144,410.66. On March 6, 1990 the Law Division of the Superior Court issued a writ of execution commanding the Sheriff of Middlesex County to satisfy the judgment "out of the personal property of the judgment debtor within your County...." The sheriff levied on the receiver's checking account which contained the rental income collected from the office building in Pennsylvania. The receiver now seeks to vacate the writ and levy.

The execution and levy on the receiver's bank account must, of course, be vacated: "Receivers are arms of the court of chancery." The Scranton etc. Co. v. Neonlite Corp. of America, 105 N.J.Eq. 708, 712, 149 A. 369 (Ch.1930). When a court has appointed a custodial receiver under N.J.S.A. 2A:34-23 to collect rents to be applied toward satisfaction of court-ordered support or alimony, those funds are beyond the reach of a judgment creditor because the funds are in custodia legis.

When a court has acquired jurisdiction over the funds of an insolvent corporation and has appointed receivers to administer them a-coordinate branch of the same court cannot take the funds out of the hands of such receivers and place them in possession of others appointed by it in another proceeding. [The Scranton etc. Co. v. Neonlite Corp. of America, supra at 712, 149 A. 369]

The rationale of the rule is "based upon a necessity, incident to orderly judicial procedure, for any court which has acquired primary jurisdiction over property to continue the exercise of that jurisdiction free from embarrassment or conflicts with other courts arising from other claims against the same property." Fredd v. Darnell, 107 N.J.Eq. 249, 152 A. 236 (Ch.19...