Court Opinion

ID: 4428349
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:04:57.430363+00
Date Added: 2024-06-11T14:50:48.675993
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NOS. A-1764-17T1
                                                                     A-5345-17T1

TANYA KACAN,

          Plaintiff-Respondent,

v.

CLAUDIO BELUSIC,

     Defendant-Appellant.
_____________________________

TANYA KACAN,

          Plaintiff-Respondent,

v.

CLAUDIO BELUSIC,
MILAN BELUSIC,
and MERANDA BELUSIC,

     Defendants-Appellants.
_____________________________

                    Argued (A-1764-17) and Submitted (A-5345-17)
                    May 22, 2019 - Decided June 7, 2019

                    Before Judges Reisner and Mawla.
           On appeal from Superior Court of New Jersey,
           Chancery Division, Family Part, Bergen County,
           Docket No. FM-02-2237-11; and Chancery Division,
           Bergen County, Docket No. C-000303-17.

           Anthony J. Cariddi argued the cause for appellant in A-
           1764-17 (Cariddi & Garcia, attorneys; Carol J. Garcia,
           on the briefs in A-1764-17 and A-5345-17).

           Geri Landau Squire argued the cause for respondent in
           A-1764-17 (Cohn Lifland Pearlman Herrmann &
           Knopf, attorneys; Geri Landau Squire, of counsel and
           on the brief in A-1764-17; Andrew R. Macklin, of
           counsel and on the briefs in A-1764-17 and A-5345-
           17).

PER CURIAM

     These are back-to-back appeals, which we have consolidated for purposes

of this opinion. In A-1764-17, defendant Claudio Belusic appeals from an

October 31, 2017 order awarding plaintiff Tanya Kacan judgments for

enforcement of litigant's rights and counsel fees. In A-5345-17, defendants

Milan and Meranda Belusic, Claudio's 1 parents, appeal from a July 27, 2018

judgment in favor of Tanya to repay funds Claudio fraudulently transferred to

Milan and Meranda, and for counsel fees. We affirm.

1
  We utilize first names to distinguish Claudio from his parents because they
share a common surname and utilize Tanya's first name for the sake of
consistency. We intend no disrespect.
                                                                      A-1764-17T1
                                     2
      We take the following facts from the record. Following a nearly five-year

marriage, Tanya and Claudio were divorced by way of a Final Judgment of

Divorce (FJOD) entered in 2012, which incorporated a Divorce Settlement

Agreement (DSA). One child was born of the marriage.

      In pertinent part, the DSA recited that each party maintained a 401(k)

Retirement Account and waived equitable distribution of these assets. The DSA

required Claudio to turn over three rings to Tanya as a part of her equitable

distribution. Because the parties agreed to share physical custody of their child,

they agreed neither would be responsible for child support. However, Claudio

would be responsible to pay half the cost of the child's medical insurance, and

reasonable and necessary unreimbursed medical expenses.

      Shortly after entry of the FJOD, the parties began prolonged post-

judgment litigation due to Claudio's failure to comply with the terms of the DSA

and numerous post-judgment orders enforcing it. Claudio violated the parenting

time provisions of the DSA, and no longer enjoyed physical custody of the

parties' child. An order was entered in November 2014, requiring him to pay

child support and health insurance for the parties' daughter. The judge who

signed the order concluded:

            [Claudio] has demonstrated that he chooses to do as he
            pleases and not as he is ordered or as the Court Rules

                                                                          A-1764-17T1
                                        3
            require. He has not produced . . . his financial
            information. He has not paid his [c]ourt [o]rdered
            obligations. He ha[s] elected to ignore the obligations
            that he agreed to when signing the DSA. [Tanya] has
            had to file this motion to again enforce her rights. . . .
            [Claudio] has previously been ordered to pay counsel
            fees on three separate occasions. [Claudio] paid his
            attorneys. . . . [Tanya] is entitled to . . . counsel fee[s]
            of $6000.

      Another order was entered in May 2015, requiring Claudio to pay Tanya

$9000 as reimbursement for the rings he failed to return pursuant to the DSA.

The order also imposed monetary sanctions. The judge made the following

findings:

                    As for [Tanya]'s request to be reimbursed
            $11,751.99 for [Claudio] failing to return [her] rings as
            previously ordered . . . on January 25, 2013 and again
            . . . on November 17, 2014, the [c]ourt notes that . . .
            [Claudio] admits in his [c]ertification that he willfully
            defied both [c]ourt orders and sold the rings. . . .

                  . . . Most compelling to the [c]ourt is that
            [Claudio] was twice ordered, by two different judges,
            to return the rings to [Tanya] or to pay her the fair
            market value. [Claudio] twice ignored the [c]ourt's
            orders and instead sold off the rings[.]

Additionally, Claudio was ordered to pay unreimbursed medical and daycare

expenses for the parties' daughter. The judge also ordered him to pay the $6000

in attorney's fees previously ordered and $8154 in additional attorney's fees. As

part of her enforcement motion, Tanya requested that Claudio be compelled to

                                                                           A-1764-17T1
                                         4
liquidate his retirement account to satisfy his court-ordered obligations. The

judge denied her request without prejudice, but noted the court would entertain

sanctions "if [Claudio] violate[s] [the] order and continues to thumb his nose at

the orders of this [c]ourt and its [j]udges[.]"

      Claudio sought reconsideration of the order, which the court denied in an

order dated September 18, 2015.         Notably, this order required Claudio to

liquidate his retirement account to pay his court-ordered obligations.

      Claudio did not comply and instead filed a Chapter 7 Bankruptcy petition.

His bankruptcy petition stated his 401(k) had a value of $105,000. The petition

also named his mother as an unsecured creditor based on a "personal loan" in

the amount of $45,000.

      The bankruptcy discharge occurred in February 2016, and with the

bankruptcy stay lifted, Tanya filed another enforcement motion. On June 24,

2016, the Family Part judge entered an order finding the counsel fees previously

awarded to Tanya, the $9000 reimbursement, and $9200 accrual in additional

sanctions for failure to pay the reimbursement constituted non-dischargeable

domestic obligations. The order denied Tanya's request for Claudio to liquidate

his retirement account "pending clarification from the Bankruptcy Trustee or the

Bankruptcy Court that the requested relief is not subject to the automatic stay

                                                                         A-1764-17T1
                                         5
provisions in accordance with 11 U.S.C. §362(b)(2)(B)." On November 4, 2016,

the judge signed an order which noted "[p]laintiff's counsel . . . provided the

[c]ourt with correspondence and confirmation from . . . the Bankruptcy Trustee"

and ordered Claudio to liquidate his 401(k) account to pay his outstanding

financial obligations, which then amounted to $48,694.

      Claudio failed to comply and the judge entered two subsequent orders, in

March and April 2017, enforcing litigant's rights and awarding Tanya counsel

fees for her efforts. The judge entered an order in June 2017, scheduling a

plenary hearing to determine Claudio's ability to pay his obligations.

      Discovery in advance of the plenary hearing revealed Claudio had

liquidated $99,000 from his retirement account in February 2017, and

transferred the funds to a bank account in his name. The following day, he

transferred a total of $98,000, in separate equal amounts of $49,000, to Milan

and Meranda.

      Judge Terry Paul Bottinelli conducted a two-day plenary hearing and

issued a written decision on October 31, 2017. The judge noted Claudio never

appealed the September 18, 2015 or the November 4, 2016 orders, which

required him to liquidate his 401(k) and pay his obligations. The judge also

                                                                         A-1764-17T1
                                       6
noted Claudio had not appealed the June 24, 2016 order finding his unpaid court -

ordered obligations were non-dischargeable.

      At the hearing, the crux of Claudio's testimony was that the funds

transferred to his parents were to repay a debt he owed them. Judge Bottinelli

found Claudio's testimony lacked credibility. The judge noted he failed to

produce any credible evidence to establish the validity of the alleged debt, and

in any event, his debts had been discharged in the bankruptcy "nearly a year

before his 'repayment' to his parents." The judge also noted Claudio "admitted

to transferring money to his parents, which he knew to be in direct violation of

[c]ourt [o]rder" and had fabricated the story of the debt owed to his parents to

avoid satisfying his financial obligations to Tanya.

      The judge concluded Tanya demonstrated by clear and convincing

evidence that the money Milan and Meranda received constituted a fraudulent

transfer under the Uniform Fraudulent Transfer Act (UFTA), N.J.S.A. 25:2-20

to -34. The judge stated Tanya was "left to her own [devices] with regard to

enforcement remedies which could be perfected by bringing another action

against the defendant, his mother and father to [void] the transfer, enjoin the

parents from dissipating the asset, appointment of a receiver or [for] any other

relief . . . . [See] N.J.S.A. 25:2-29(a)."

                                                                         A-1764-17T1
                                             7
      Judge Bottinelli signed the October 31, 2017 order, which memorialized

the sums Claudio owed Tanya, namely, $50,574.71, comprised of statutory post-

judgment interest on $48,964 from February 7, 2017, and statutory post-

judgment interest on $1880.71 from April 13, 2017, payable until the debt was

satisfied. The judge also ordered Claudio to pay counsel fees of $17,666.92. 2

      Tanya subsequently filed a Chancery Division complaint naming Claudio,

Milan, and Meranda as defendants to compel the return of the funds. A one-day

plenary hearing occurred before Judge Robert P. Contillo.

      Meranda testified and admitted she was aware Claudio was involved in a

post-judgment matrimonial litigation, and that she and Milan knew Claudio's

only asset after the divorce was his 401(k) account, both at the time of the

divorce in 2012, and when they received the transfers in February 2017. She

also admitted Claudio told them the source of the money was the 401(k).

Claudio also testified and admitted the alleged loan from his parents was

incurred prior to the bankruptcy and had been discharged.

      Judge Contillo issued a written decision on July 18, 2018. He found Milan

and Meranda were served with Claudio's bankruptcy petition and therefore knew

2
  The judge issued an amplification of his counsel fee ruling pursuant to Rule
2:5-1(b) on December 18, 2017.
                                                                        A-1764-17T1
                                       8
the alleged debt to them would be discharged. The judge found Milan and

Meranda's testimony that they were unaware of the Family Part orders requiring

Claudio to liquidate his 401(k) lacked credibility. Specifically, the judge stated:

            [T]hey were . . . aware that their son was embroiled in
            a bitter and protracted matrimonial action, including
            extensive post-judgment enforcement applications, and
            they were specifically aware that their son had no assets
            to speak of but for the 401K, which they believed was
            "tied up" in the matrimonial action, "not to be touched."
            They have no explanation as to how their impecunious
            son, who was dependent upon them for his expenses of
            daily living or for financing his matrimonial litigation,
            suddenly came up with $98,000 cash.

      The judge concluded Milan and Meranda failed to prove they were "good

faith transferees" pursuant to UFTA. He stated:

            I find that [Milan and Meranda] . . . are clearly insiders
            insofar as they are family members who were
            intimately familiar with their son's financial
            circumstances, including the acute financial distress
            occasioned by the ongoing matrimonial proceedings.

                   The [c]ourt further determines that [Milan and
            Meranda] failed to prove that the transfers were made
            for reasonably equivalent value since the only thing
            owed to them at the time of the transfers was, at best, a
            total of [$8000.] N.J.S.A. 25:2-30(a). Since they were
            not good faith transferees beyond the [$8000, they] are
            not entitled to any further reduction in the amount of
            the judgment which will be entered against [them.]
            N.J.S.A. 25:2-30(d).

                                                                           A-1764-17T1
                                        9
                    Accordingly, judgment will be entered
           against . . . Milan and Meranda . . . in favor of Tanya
           . . . in the amount of $83,615.74[.]

The judge also ordered Claudio to pay Tanya $22,029.61 in counsel fees.

     These appeals followed.

                                     I.

     In A-1764-17, Claudio raises the following arguments:

           I.  [THE] LOWER COURT WAS WITHOUT
           AUTHORITY TO INVADE THE RETIREMENT
           ACCOUNT OF THE DEFENDANT N.J.S.A. 25:2-1(b)
           WITHOUT A FINDING THAT THE FEES AND
           SANCTIONS WERE WITHIN THE EXCEPTION
           FOR CHILD SUPPORT.

                 ....

           II. THE LOWER COURT FAILED TO CONDUCT
           A HEARING IN A MANNER WHICH ALLOCATED
           THE PROPER BURDEN OF PROOF AS A MATTER
           OF LAW. THIS ERROR RESULTED IN FINDINGS
           OF FACT THAT DO NOT WARRANT THIS
           COURT'S    DEFERENCE    AS    TO    THE
           DETERMINATIONS OF CREDIBILITY.

                 ....

           III. FAILURE TO FILE A PROPER COMPLAINT
           HAS RESULTED IN THE MISUSE OF COURT
           RESOURCES AND THE ABILITY OF DEFENDANT
           TO     PRESENT    ADEQUATE     DEFENSES
           BORDERING ON DENIAL OF DUE PROCESS.

                                                                      A-1764-17T1
                                    10
     IV. FEES AND SANCTIONS IMPOSED ARE A
     CLEAR ABUSE OF DISCRETION.

In A-5345-17, Milan and Meranda raise the following arguments:

     I.   THE CHANCERY COURT FINDING THAT
     THE PRIOR RULING OF THE MATRIMONIAL
     COURT THAT A FRAUDULENT TRANSFER HAD
     OCCURRED     BETWEEN     THE    NAMED
     DEFENDANTS WAS BINDING UNDER THE
     DOCTRINE OF RES JUDICATA CONSTITUTED A
     DENIAL    OF   DUE   PROCESS.      RES
     JUDICATA/COLLATERAL     ESTOPPEL     IS
     INAPPLICABLE    BECAUSE    DEFENDANT-
     PARENTS HAD NOT BEEN JOINED AS
     INDISPENSABLE PARTIES IN THE PRIOR
     PROCEEDING.

           A.      Denial of Motion to Vacate the Default
           against defendant-son was in error and
           constituted a continual denial of due process as
           to defendant-son as evidenced by the proceedings
           before the matrimonial court and demonstrated
           the Chancery Court's application of strict liability
           to all the defendant-parties.

     II. CHANCERY     COURT     COMMITTED
     REVERSIBLE ERROR BY HOLDING BOTH IN
     LAW AND FACT THAT DEFENDANT-PARENTS
     FAILED TO INTERVENE AND THEREBY
     CONDUCTED AN IMPERMISSIBLE BIFURCATED
     HEARING WHICH PERPETUATED THE ERROR
     WHICH     OCCURRED     BEFORE     THE
     MATRIMONIAL COURT.

           A.    Defendant-parents had no knowledge of
           the nature of the matter before the matrimonial
           court and therefore could not have been

                                                                  A-1764-17T1
                               11
                  reasonably expected to exercise their right to
                  intervene. The Chancery Court was aware of this
                  fact.

                  B.    The defendant-parents by not being made a
                  party in the matrimonial action were denied the
                  proper burden of proof thereby resulting in an
                  improper finding of law of insolvency.

            III. REVERSIBLE ERROR WAS COMMITTED BY
            THE CHANCERY COURT BY ITS IMPOSITION OF
            STRICT     LIABILITY        DURING     ITS
            CONSIDERATION OF        THE AFFIRMATIVE
            DEFENSES.   N.J.S.A. 25:2-30(a) UNDER THE
            UNIQUE CIRCUMSTANCES PRESENTED.

            IV. IT  WAS    INCUMBENT      UPON      THE
            CHANCERY COURT TO REVIEW WHETHER OR
            NOT THE CLAIM BEING BROUGHT FORWARD
            PURSUANT TO THE UNIFORM FRAUDULENT
            TRANSFER [ACT] WAS VALID. N.J.S.A. 25:2-1(b).

      The arguments raised by Claudio, Milan, and Meranda lack merit. R.

2:11-3(e)(1)(E). We affirm substantially for the reasons set forth in Judge

Botinelli's and Judge Contillo's opinions and add the following comments.

      Claudio's challenges to Judge Botinelli's decision ignore the validity of

the September 18, 2015, June 24, 2016, and November 4, 2016 orders. Claudio

never appealed these orders and instead violated them, and then beseeched the

trial judge for relief from his obligations, despite having unclean hands.

                  The doctrine of unclean hands embraces the
            principle that a court should not grant equitable relief

                                                                             A-1764-17T1
                                      12
            to a party who is a wrongdoer with respect to the subject
            matter of the suit. Faustin v. Lewis, 85 N.J. 507, 511
            (1981). It calls for the exercise of careful and just
            discretion in denying remedies where a suitor is guilty
            of bad faith, fraud or unconscionable acts in the
            underlying transaction. Untermann v. Untermann, 19
            N.J. 507, 517-18 (1955); Murray v. Lawson, 264 N.J.
            Super. 17, 37 (App. Div. 1993). If circumstances
            calling for its application are disclosed, then a court of
            equity, as a court of conscience, is justified in refusing
            to listen, even if the complaint is well founded.
            Goodwin Motor Corp. v. Mercedes-Benz of N. Am.,
            Inc., 172 N.J. Super. 263, 271 (App. Div. 1980).

            [Pellitteri v. Pellitteri, 266 N.J. Super. 56, 65 (App.
            Div. 1993).]

      Claudio was afforded every opportunity to explain why the judge should

not have enforced the several orders requiring him to pay Tanya. He had the

ability to pay, but instead chose to make a fraudulent transfer to his parents in

an attempt to impoverish himself. Claudio's unclean hands eliminated any

credible argument that he could not meet his court-ordered obligations.

      As for the arguments raised by Milan and Meranda, the record

demonstrates Judge Contillo's decision was not exclusively predicated on the

doctrine of res judicata.    The judge made his own findings of facts and

conclusions of law, and credibility findings, which are supported by the record

and legally unassailable. Milan and Meranda were afforded due process and

there were no procedural errors or mistaken applications of the law.

                                                                          A-1764-17T1
                                       13
Affirmed.

                 A-1764-17T1
            14