2006 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 2-16-2006 

# In Re: G alt ie ri P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 04-2256

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a nova . e du/thir dc ir c uit_2006

Thi s de c i sion i s br ou ght t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

. It h as be e n a c c ept e d for inclusion in 2006 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C a rl s on@l a

w . vi l l a no va . e du . Re c omme nde d C it at ion " In Re: G alt ie r i " (2006). 2006 D e cisio n s . P ape r 1573. http://d i git alc ommon s .l a

w . vi l l a nova . e du/thir dc ir c uit_2006/1573NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N O S. 04- 2256 and 04- 2257

________________ 

### IN RE : GAL TIER I, De bt or J OHN F. GALTI ERI v. J EANNE GALTIERI T h eo d o re J. L iscin sk i, Truste e Jo hnF . G altieri, Appe l l ant

N O . 04- 2259 IN R E : G A L T IE R I, D ebt or J OHN F . GALTI ERI

v. JE A N N E G A L T IE R I; KAR E N S CH E RMOND; RO NA LD R OSEN

### 2 T h e o d o re J. L isc in sk i,

T rus t ee Jo h n F . G a lti e ri, A ppel l ant

____________________________________ O n A p p ea l Fro m the U n it ed S tat es D istri ct C o u rt

Fort he D i s t r i ctof N ew J er s ey ( D . C . C i v. N os . 03- cv- 01271, 03- cv- 03547 and 04- cv- 01355) D i s t r i ctJ udge: H onor abl e D enni s M . C avana ugh

_______________________________________ Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

J A N U A R Y 3, 2006 B efore: R O T H , R E N D E L L A N D A M B R O , C i rcui tJudg es.

( Fi l ed: February16, 2006)

_______________________

OP I NI ON

_______________________ P E R C UR I AM 

### JohnF. Galtie riappeal s the Ap ri l 20, 20 04 order of the Un it ed Stat es Distri ct Co urt for the Dis tric t of N ew Je rs ey affirming threeruli ng s of the Un it ed Stat es B ankr up t c y C o urt f o r th e D i s tri c t

o f N e wJ e r s e y . W e w i l la f

f i rm. The hi s t ory

of thi s l i t i gat i on i s we l lknown t o the part i e s and t o thi s Court . The fa c t ua lba c kgr ound i s s e t

forth i n the Di s tri c t

Court ’ s opi ni on, and thus we do not r e c ount

### J ohn Ga l t i e ri ’ s pr e vi ous a ppe a l s t o thi s Court

ar e found at

C. A. Nos . 02- 4090, 1 

### 02- 4091, 03- 2407, 03- 3310, and 03- 2994. 3 it at len g th . S u f

f ice it t o sa yth a t G a lti e ri b ro u g h t f iv e p re v io u s a p p e a ls b e f o re th is C our t , t w o of w hi ch or i gi nat ed fr om hi s bankrupt cypr ocee di ngs , and al l of w hi ch r el at ed

1 to h is divo rce p roc ee d ing s in the N ew Jerse yS u p erior C o u rt , C h an ce ryD ivisi o n . G alt ieri and hi s ex- w i fe, appel l ee J eanne G al t i er i , have be en enga ged i n l i t i gat i on s i nce the y ear 2000. Si nce the t i m e of G al t i er i ’ s pr evi ous appea l s ar i s i ng fr om hi s bankrupt cy p r o c e e d i n g s , Ga l t i e r i b r o u g h tt h r e e a d v e r s a r yp r o c e e d i n g s i n Ba n k ru p t c yCo u r t . He s oughtdet erm i nat i on of i s s ues r el at i ng t o t he di vi s i on of ce r t ai n i t ems i n t he mar i t al es t at e, al l egi ng, i nt eral i a, t hatt he s t at e courtvi ol at ed s t at e l aw and the bankrupt cy aut om at i c s t ayi n rul i ng t hathi s N ew Y or k C i t yPol i ce D epart m entdi s abi l i t ypens i on and Soci al Secur i t ydi s abi l i t ybenef i t s ar e cons i der ed as i ncome forpurpos es of det erm i ni ng ali m o n yan d su p p o rto b li g ati o n s. In it s F eb rua ry2 5 , 2 0 0 3 o rde r, the B an k rup tcyC o u rt i ncorpor at ed the fi ndi ngs of i t s M ar ch 13, 2002 and J une 12, 2002 or der s , i n w hi ch i thad abs t ai ned on a pe r m i s s i ve bas i s under28 U . S. C . § 1334( c) ( 1) fr om deci di ng i s s ues r el at ed to th e sta te c o u rt p ro c e e d in g s. C o n c lu d in g th a t co n tin u e d a b ste n tio n in f a v o r o f th e sta te cou rtrem ai ned j ust i fi ed, t he B ank rupt cyC ou rtdis m i ssed the ad versaryproceed i ng s. S u b s e q u e n tly, o n M a y1 9 , 2 0 0 3 , th e s ta te c o u rt is s u e d a f in a l ju d g m e n t o f

d iv o rc e . I n i t s or der , t he s t at e courtm ade s peci fi c aw ar ds t o J eanne G al t i er i i n t he di s t r i but i on of

### 4

m ar i t al pr oper t y , i ncl udi ng t hats he i m m edi at el yr ece i ve 50% of the netpr ocee ds fr om t he s al e of the mar i t al r es i dence , 50% of the pr ocee ds of a mort gage he l d byt he part i es , and $30, 000 forj ew el r ybel ongi ng t o J eanne G al t i er i and t aken byt he A ppel l ant . I n addi t i on, aft era hea r i ng, the s t at e courtfound thatJ eanne G al t i er i s uffe r ed fr om bat t er ed w i fe s yndr om e and a w ar ded J eanne G al t i er i a t ot al of $400, 000 damages on hercl ai m of spou sal abu se und er Tev i s v. T evis , 40 0 A . 2d 11 89 (N . J. 19 79 ). T he st at e cou rtal so o rd e re d G a lti e ri to p a yp e rm a n e n t alim o n yv ia g a rn ish m e n t f ro m h is S o c ial S e c u rity di s abi l i t ybenef

i t s . M or eover , t he s t at e courtaw ar ded addi t i onal s um s forcouns el fee s a n d p a ym e n t o f

p e n d e n te lite su p p o rt a rre a rs. G a lti e ri d id n o t ap p e a r f o r th e trial a n d d id n o t ap p e a l th e f

in a l ju d g m e n t o f

d iv o rc e . H o w e v e r, h e f iled in B a n k ru p tcy C o u rt a mo t i o n t o e n f

o r c e e a r l i e ro r d e r s o f

t h e s t a t e c o u r tr e g a r d i n g d i s t r i b u t i o n o f c e r t a i n i t e ms of the mar i t al es t at e. A ft era hea r i ng, t he B ankrupt cyC our tdeni ed G al t i er i ’ s m ot i on w i t ho ut pr ej ud i ce t o h i s seeki ng st at e cou rtrem edies regar ding t ho se i ssues. G al t i er i al s o fi l ed tw o adver s arypr ocee di ngs i n B ankrupt cyC our tagai ns tt he T rus t ee of

t he bankrupt cyes t at e. I n one pr ocee di ng, G al t i er i s oughtdi s t r i but i on of bankrupt cyes t at e as s et s t o hi m s el f fr om t he pr ocee ds of the s al e of the mar i t al hom e, a s s e r t i n g , a mo n g o t h e rt h i n g s , t h a th e wa s e n t i t l e d t o a n e x e mp t i o n u n d e r1 1 U. S . C. § 5 2 2 (d)(1 ) (th e “ h o m estea d ” e x em p ti o n ). In th e o ther a d v ersa ryp roc ee d ing , G alt ieri s oughti nj unct i ve r el i ef f r om the s t at e court ’ s or der s –namel y , r el i ef f r om t he di vor ce jud g m en t. G alt ieri also so u g h t dam ag es a g ains t Jean n e G alt ieri an d h er state co u rt

### 5

c o u n se l f o r a lleg e d f

ra u d , an d d a m a g e s a g a in st th e T ru ste e f o r a lleg e d n e g lig e n t f

a ilu re to f ig h t th e T e v is c laim . T h e T ru ste e f iled a m o tio n f

o r su m m a ryju d g m e n t an d a m o tio n to appr ove di s t r i but i on of es t at e as s et s . A ft era hea r i ng, t he B ankrupt cyC our tdi s m i s s ed the adver s arypr ocee di ngs and appr oved the di s t r i but i on of as s et s . I n s o doi ng, t he B ankrupt cyC our tnot ed i t s ear l i erabs t ent i on on a w i de r ange of m atr i m oni al i s s ues b e f o re th e sta te c o u rt. T h e D istri ct C o u rtaf

firm ed the B an k rup tcyC o u rt ’s t h ree ruli n g s, an d G alt ieri appea l s . T he thr ee a ppeal s have be en cons ol i dat ed. W e have j ur i s di ct i on t o r evi ew t he D istri ct C o u rt ’s ord er u n d er 2 8 U . S . C . § 1 2 9 1 , an d w e e x erc ise p lena ryrev iew . In re S we d e l a n d De v e l o p me n tGr o u p , I n c . , 1 6 F . 3 d 5 5 2 , 5 5 9 ( 3 d Ci r . 1 9 9 4 ) . Ho we v e r , we obs erve thatG al t i er i agai n s eeks t o r ai s e i s s ues r el at i ng t o t he M ar ch 13, 2002 and J une 12, 2002 or der s of the B ankrupt cyC our t , i n w hi ch the B ankrupt cyC our tabs t ai ned on a p e rm iss iv e b a sis u n d e r 2 8 U .S .C . § 1 3 3 4 (c )(1 ) f ro m d e c id in g iss u e s re late d to th e sta te c o u rt p ro c e e d in g s. F o r in sta n c e , G a lti e ri a ss e rts th a t Je a n n e G a lti e ri’s s tate c o u rt T e v is claim w as b arred b ythe s tatu te of li m it ati o n s. T o the e x tent that the B an k rup tcyC o u rt det erm i ned thatperm i s s i ve abs t ent i on w as s t i l l w arr ant ed i n favorof the s t at e court , and t o t h e e x t e n tt h a tGa l t i e r i a p p e a l s t h a td e t e r mi n a t i o n i n h i s a p p e a l t o th i s Co u r t , we concl ude–as w e di d i n G al t i er i ’ s pr evi ous appea l atC . A . N o. 02- 4091, i n w hi ch he r ai s ed hi s s t atut e of l i m i t at i ons ar gum ent–t hats ect i on 1334( d) pr ecl udes r evi ew byt hi s C our tof th a t d e c is io n to a b s ta in . 

### Citing Pepp er v. Litt on , 308 U.S. 29 5 (19 39 ), Galtie riargu es

### Galtie rim ai ntai ns that he was hel d in d efault

by the s tatecourts , was denied 2 

### access to th e trial, an dw as n o t p ermittedto p articip ate inth e trial. H o w ev er, th e state c ourt judgm e nt

not e s that

Ga l t i e rifa i l e d t o a

ppe ar for the he ari ng, wi thout

not i c e or explanation in acc ordance with court rule s. Th e jud gm ent further no te s that Gal ti eri had b eeng iv enth e o p p o rtun ity to p articip ate at trial b y

telep h o n e b ut d idn o t m ak e h im self ava i l abl e unt i lthe s e c ond day of tri a l . The s t at e c ourt

thus de ni e d Ga l t i e ri ’ s t e l e phone requ est o nth e seco n dd ay o f trial to cro ss-ex amin e Jeann e G altieri an do th er w itn esses. G altieri d idn o t ap p eal th e state co urt’s j u d g m ent. 6 that the e xist enceof

fraud committe d o n the st at e c ourt by Je anne Galtie riand h er lawyers allo w s th is C o urt to rev iewth e state co urt issu es. We see n o reaso nto ap p ly such re as on ing in the ca sebefo reus. As the Bankruptcy Co urt noted, Gal ti eri’ s ch allen g es to th e p ro o f

s o f f eredinsup p o rt o f

Jeann e G altieri’s T ev is claim an dh er claim o f t ak e nj e w e l ry , a s w e l la s h i s s t at ut e o f l i mi t at i o n s arg ume nt

r e g ar d i n gth e T e v i s c l a i m, sh o u ldh av e b eenraisedat trial an do nap p eal to th e state ap p ellate co urts. 2 G al t i er i nextcont ends t hatt he B ankrupt cyC our t ’ s di s t r i but i on of bankrupt cy es t at e as s et s t o payt he s t at e courtj udgm entr egar di ng al i m onyarr ear s i s contr aryt o N ew J er s eyl aw . C i t i ng N . J . S. A . 2A : 34- 23 and ca s e l aw s uch as D ’ O r o v. D ’ O r o, 454 A . 2d 9 1 5 (C h . D iv . 1 9 8 2 ), af f ’d , 4 7 4 A .2 d 1 0 7 0 (A p p . D iv . 1 9 8 4 ), G a lti e ri a ss e rts th a t p ro p e rty equ i t ablydis t ri bu t ed in di vo rce i s i m m un e from al i m on yand supp ortob l i gati on s. T hu s, h e re a so n s th a t Je a n n e G a lti e ri c a n n o t law f u llye n f o rc e th e a rre a rs ju d g m e n t ag a in st h is hom es t ead e xempt i on under11 U . S. C . § 522( d) ( 1) beca us e the exe m pt i on or i gi nat es fr om his equ i t ablydis t ri bu t ed share of the m ari t al ho m e sal e proceed s. W e ar e notper s uaded byt hi s ar gum ent . T he s t at e s t atut e cont ai ns a codi fi cat i on of

### 7

t he hol di ng of D ’ O r o, s peci fi cal l y , t hat“[w ] hen a s har e of a r et i r ementbenef i ti s t r eat ed a s a n a s s e tf

o rp u rp o s e s o f

e q u i t a b l e d i s t r i b u t i o n , t h e c o u r ts h a l l n o tc o n s i d e ri n c o me gener at ed ther eaf

t erbyt hats har e forpurpos es of det erm i ni ng al i m ony . ” See I nnes v. I nnes , 569 A . 2d 770, 774- 75 ( N . J . 1990) ( ci t i ng N . J . S. A . 2A : 34- 23) . T hi s i s s o w hether th e c o u rt m a k e s a n in iti a l alim o n ya w a rd o r a m o d if ica tio n th e re to . Id . at 7 7 5 . D e sp ite G a lti e ri’s v ig o ro u s re lian c e o n th is c o n c e p t, th e p ro h ib iti o n a g a in st “ d o u b le d ip p in g ” is n o t i m p li ca ted in the B an k rup tcyC o u rt ’s ord er d ism issi n g G alt ieri ’s ad v ersa ry p roc ee d ing s an d d istri b u ti n g b an k rup tcyestate a ssets. Itis do u b tfu l th at G alt ieri ’s claim ed ex em p ti o n in h is sha re o f p roc ee d s fro m the m arit al ho m e sa le co n sti tutes a sh are of a “ r et i r ementbenef

i t ” forw hi ch “doubl e di ppi ng” i s notperm i t t ed. See St eneke n v. S ten e k e n , 8 7 3 A .2 d 5 0 1 , 5 0 5 -5 0 9 a n d n .5 . M o re im p o rta n tly , the B a n k ru p tcy C o u rt d id notm ake orm odi fyan al i m onydet er m i nat i on i n di s t r i but i ng as s et s of the bankrupt cy est at e. R at her, t he B ank rupt cyC ou rtexp l ai ned t hat 11 U . S . C . § 5 22 (c) (1) al l ow s access to p rop ertyo therw ise ex em p t un d er 1 1 U . S . C . § 5 2 2 (d)(1 ) fo r th e a li m o n yarrea rs j udgm ent , w hi ch exc eeds t he amountof G al t i er i ’ s cl ai m ed exe m pt i on. W e r ej ect G alt ieri ’s “d o u b le-dipp ing ” the o ryo f a tt ac k o n the B an k rup tcyC o u rt ’s ord er. G a lti e ri a lso a rg u e s th a t, i n its in ter im o rd e r d a ted S e p tem b e r 1 6 , 2 0 0 2 , the sta te c o u rt in c o rre c tlyc a teg o riz e d h is N e w Y o rk C ityd isa b ili typ e n sio n a n d S o c ial S e c u rity di s abi l i t ybenef

i tas i ncome forpurpos es of det erm i ni ng hi s al i m onyobl i gat i on. I ns t ead, h e m a in tain s th a t th e p e n sio n a n d d isa b ili tyb e n e f its a re m a rital a ss e ts s u b jec t to e q u itab leG al t i er i t hen pr ocee ds t o ar gue thatt he pens i on and di s abi l i t ybenef i t s ar e not 3 s u b je c t to e q u ita b le d is tr ib u tio n , e ith e r, b e c a u s e th e yb e lo n g to h im a lo n e . 

### I nt e r e s t i n g l y, o nth is p o int, G altieri ref

eren ces sev eral N ewJersey cases inh is b rief

, statin g th at “w h ile the a s s e t wa s not s ubje c t t o e qui t abl e di s tribut i on, none the l e s s , i nc om e the r e fr om m ay be consider ed as a fact or in al imony awards.”Ap pell ant’ s Br. at 39 (App el lant’s em

ph as es re m ov ed). Th is re ferencethus se em s t o b ri ng Galtie rifu ll -c ircl e t o the st at e c ourt ’s c onc lus i on that

the pe ns i on and di s abi l i ty be ne fi t s c ons t i t

ut e i nc om e for

pur pos e s of d e t e rmi n i n g a l i m o ny. 8 di s t r i but i on, and, underhi s “doubl e di ppi ng” ar gum ent , t hos e as s et s ar e “i m m une” f r om al i m ony . O nce a gai n, t he B ankrupt cyC our tdet erm i ned thatperm i s s i ve abs t ent i on on

3 th e se iss u e s w a s w a rra n ted in f a v o r o f th e sta te c o u rt. T o th e e x ten t th a t G a lti e ri a p p e a ls t h a ta b s t e n t i o n d e c i s i o n , we c o n c l u d e – a s we d i d i n Ga l t i e r i ’ s p r e v i o u s a p p e a l a tC. A. N o . 0 2 -4 0 9 0 in w h ich h e d isp u ted th e sta te c o u rt’s tre a tm e n t o f th e p e n sio n a n d d isa b ili ty b e n e f its

– th a t 2 8 U .S .C . § 1 3 3 4 (d ) p re c lu d e s re v ie w b yth is C o u rt . W e not e thatt he B an k rup tcyC o u rtsp ec ifi ca ll yfo u n d that n eith er the p en sion n o r th e d isab il ityb en ef it s are p rop ertyo f th e b an k rup tcyestate, an d in ef fe ct, G alt ieri is seek ing rev iew o f a stat e c o u rt ma t t e r . S u c h r e v i e w s h o u l d b e p u r s u e d i n t h e s t a t e c o u r ts y s t e m. Fi nal l y , w e addr es s G al t i er i ’ s ar gum entt hatt he s t at e court ’ s j udgm entof di vor ce di r ect i ng hi m t o paycouns el fee s i s unenfor cea bl e aga i ns thi m , hi s pr oper t y , oragai ns tt he b an k rup tcyestate. G alt ieri reli es o n B an k rup tcyC o d e p rov isi o n s, n o ti n g the s tatu tory di s t i nct i on betw een non- di s char geabl e al i m onyand s uppor tobl i gat i ons ver s us t he e x c e p tio n f

o r a liab ili tym e re lyd e sig n a ted a s a lim o n yo r su p p o rt (u n les s th e liab ili tyis

“ a c tu a lly in th e n a tu re o f ” a lim o n yo r s u p p o rt ). S e e , e .g ., 1 1 U .S .C . § 5 2 3 (a )( 5 )( B ).

### 9

H e re , th e s ta te c o u rt o rd e re d th e f e e s to b e p a id d ir e c tly to c o u n s e l, w ith “ th e in te n tio n . . . t o des i gnat e al l couns el fee s as s uppor tfort he D efe ndant[J eanne G al t i er i ] and, as s uch, t heys hal l be non- di s char geabl e i n bankrupt cy . . . . ” ( N . J . Super . C t . C h. D i v. M ay19, 2003 J udgm entat7- 8. ) G al t i er i ar gues t hatt hes e fe es ar e not“ac tual l y ” i n t he natur e of al i m ony , and the fe e aw ar ds ar e thus unenfor cea bl e i n bankrupt cy , pr es um abl ybeca us e he has r ece i ved a di s char ge of hi s debt s . W e not e thatG al t i er i does notdi s put e the B ankrupt cyC our t ’ s t r eatm entof the couns el fee aw ar ds as havi ng acc rued pos t - pet i t i on, a n d h e a c k n o w led g e s th a t th e f e e s w o u ld b e p a id f

ro m p o st-p e tit io n f

u n d s (i.e ., f

ro m h is p e n sio n a n d d isa b ili typ a ym e n ts), n o t f ro m th e b a n k ru p tcy es tate . W e d isc e rn n o e rro r in t he B ankrupt cyC our t ’ s fi ndi ngs and conc l us i ons on t hi s s ubj ect . T o t he ext entt hat G a lti e ri a rg u e s th a t th e sta te c o u rt’s a w a rd o f c o u n se l f

e e s is u n e n f

o rc e a b le a g a in st h im per s onal l yi n hi s pos t - bankrupt cys t atus , ort hatt he fe e aw ar d i s ot herw i s e unj us t , s uch m at t ers are w i t hin the p rovi nce o f t he st at e cou rt s. W e h a v e c o n sid e re d a ll o f th e a rg u m e n ts in G a lti e ri’s s u b m iss io n s to th is C o u rt, and w e fi nd t hem t o be w i t houtm er i t . T o t he ext entthatG al t i er i appea l s t he B ankrupt cy C our t ’ s deci s i ons t o abs t ai n under28 U . S. C . § 1334( c) ( 1) , w e l ack j ur i s di ct i on t o r evi ew t h e a b s t e n t i o n d e c i s i o n s . On t h e r e ma i n i n g i s s u e s , we wi l l a f f i r m.

### 10