Court Opinion

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Date Created: 2015-10-13 22:28:46.302511+00
Date Added: 2024-06-11T12:46:34.161720
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Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-16-2006

In Re: Galtieri
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-2256

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Recommended Citation
"In Re: Galtieri " (2006). 2006 Decisions. Paper 1573.
http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1573

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                                        NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
     FOR THE THIRD CIRCUIT

     NOS. 04-2256 and 04-2257
       ________________

        IN RE: GALTIERI,

                               Debtor

       JOHN F. GALTIERI

                  v.

       JEANNE GALTIERI

        Theodore J. Liscinski,

                                 Trustee

           John F. Galtieri,

                                  Appellant

           NO. 04-2259

        IN RE: GALTIERI,

                               Debtor

       JOHN F. GALTIERI

                v.

       JEANNE GALTIERI;
      KAREN SCHERMOND;
        RONALD ROSEN
                                  Theodore J. Liscinski,

                                                         Trustee

                                     John F. Galtieri,

                                                         Appellant

                       ____________________________________

                    On Appeal From the United States District Court
                              For the District of New Jersey
              (D.C. Civ. Nos. 03-cv-01271, 03-cv-03547 and 04-cv-01355)
                    District Judge: Honorable Dennis M. Cavanaugh
                    _______________________________________

                       Submitted Under Third Circuit LAR 34.1(a)
                                  JANUARY 3, 2006

               Before: ROTH, RENDELL AND AMBRO, Circuit Judges.

                                (Filed: February 16, 2006)

                               _______________________

                                      OPINION
                               _______________________

PER CURIAM

       John F. Galtieri appeals the April 20, 2004 order of the United States District

Court for the District of New Jersey affirming three rulings of the United States

Bankruptcy Court for the District of New Jersey. We will affirm.

       The history of this litigation is well known to the parties and to this Court. The

factual background is set forth in the District Court’s opinion, and thus we do not recount

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it at length. Suffice it to say that Galtieri brought five previous appeals before this

Court,1 two of which originated from his bankruptcy proceedings, and all of which related

to his divorce proceedings in the New Jersey Superior Court, Chancery Division. Galtieri

and his ex-wife, appellee Jeanne Galtieri, have been engaged in litigation since the year

2000.

        Since the time of Galtieri’s previous appeals arising from his bankruptcy

proceedings, Galtieri brought three adversary proceedings in Bankruptcy Court. He

sought determination of issues relating to the division of certain items in the marital

estate, alleging, inter alia, that the state court violated state law and the bankruptcy

automatic stay in ruling that his New York City Police Department disability pension and

Social Security disability benefits are considered as income for purposes of determining

alimony and support obligations. In its February 25, 2003 order, the Bankruptcy Court

incorporated the findings of its March 13, 2002 and June 12, 2002 orders, in which it had

abstained on a permissive basis under 28 U.S.C. § 1334(c)(1) from deciding issues related

to the state court proceedings. Concluding that continued abstention in favor of the state

court remained justified, the Bankruptcy Court dismissed the adversary proceedings.

        Subsequently, on May 19, 2003, the state court issued a final judgment of divorce.

In its order, the state court made specific awards to Jeanne Galtieri in the distribution of

        1
        John Galtieri’s previous appeals to this Court are found at C.A. Nos. 02-4090,
02-4091, 03-2407, 03-3310, and 03-2994.

                                               3
marital property, including that she immediately receive 50% of the net proceeds from the

sale of the marital residence, 50% of the proceeds of a mortgage held by the parties, and

$30,000 for jewelry belonging to Jeanne Galtieri and taken by the Appellant. In addition,

after a hearing, the state court found that Jeanne Galtieri suffered from battered wife

syndrome and awarded Jeanne Galtieri a total of $400,000 damages on her claim of

spousal abuse under Tevis v. Tevis, 400 A.2d 1189 (N.J. 1979). The state court also

ordered Galtieri to pay permanent alimony via garnishment from his Social Security

disability benefits. Moreover, the state court awarded additional sums for counsel fees

and payment of pendente lite support arrears. Galtieri did not appear for the trial and did

not appeal the final judgment of divorce. However, he filed in Bankruptcy Court a

motion to enforce earlier orders of the state court regarding distribution of certain items

of the marital estate. After a hearing, the Bankruptcy Court denied Galtieri’s motion

without prejudice to his seeking state court remedies regarding those issues.

       Galtieri also filed two adversary proceedings in Bankruptcy Court against the

Trustee of the bankruptcy estate. In one proceeding, Galtieri sought distribution of

bankruptcy estate assets to himself from the proceeds of the sale of the marital home,

asserting, among other things, that he was entitled to an exemption under 11 U.S.C.

§ 522(d)(1) (the “homestead” exemption). In the other adversary proceeding, Galtieri

sought injunctive relief from the state court’s orders–namely, relief from the divorce

judgment. Galtieri also sought damages against Jeanne Galtieri and her state court

                                              4
counsel for alleged fraud, and damages against the Trustee for alleged negligent failure to

fight the Tevis claim. The Trustee filed a motion for summary judgment and a motion to

approve distribution of estate assets. After a hearing, the Bankruptcy Court dismissed the

adversary proceedings and approved the distribution of assets. In so doing, the

Bankruptcy Court noted its earlier abstention on a wide range of matrimonial issues

before the state court.

       The District Court affirmed the Bankruptcy Court’s three rulings, and Galtieri

appeals. The three appeals have been consolidated. We have jurisdiction to review the

District Court’s order under 28 U.S.C. § 1291, and we exercise plenary review. In re

Swedeland Development Group, Inc., 16 F.3d 552, 559 (3d Cir. 1994). However, we

observe that Galtieri again seeks to raise issues relating to the March 13, 2002 and June

12, 2002 orders of the Bankruptcy Court, in which the Bankruptcy Court abstained on a

permissive basis under 28 U.S.C. § 1334(c)(1) from deciding issues related to the state

court proceedings. For instance, Galtieri asserts that Jeanne Galtieri’s state court Tevis

claim was barred by the statute of limitations. To the extent that the Bankruptcy Court

determined that permissive abstention was still warranted in favor of the state court, and

to the extent that Galtieri appeals that determination in his appeal to this Court, we

conclude–as we did in Galtieri’s previous appeal at C.A. No. 02-4091, in which he raised

his statute of limitations argument–that section 1334(d) precludes review by this Court of

that decision to abstain. Citing Pepper v. Litton, 308 U.S. 295 (1939), Galtieri argues

                                              5
that the existence of fraud committed on the state court by Jeanne Galtieri and her

lawyers allows this Court to review the state court issues. We see no reason to apply

such reasoning in the case before us. As the Bankruptcy Court noted, Galtieri’s

challenges to the proofs offered in support of Jeanne Galtieri’s Tevis claim and her claim

of taken jewelry, as well as his statute of limitations argument regarding the Tevis claim,

should have been raised at trial and on appeal to the state appellate courts.2

       Galtieri next contends that the Bankruptcy Court’s distribution of bankruptcy

estate assets to pay the state court judgment regarding alimony arrears is contrary to New

Jersey law. Citing N.J.S.A. 2A:34-23 and case law such as D’Oro v. D’Oro, 454 A.2d
915 (Ch. Div. 1982), aff’d, 474 A.2d 1070 (App. Div. 1984), Galtieri asserts that property

equitably distributed in divorce is immune from alimony and support obligations. Thus,

he reasons that Jeanne Galtieri cannot lawfully enforce the arrears judgment against his

homestead exemption under 11 U.S.C. § 522(d)(1) because the exemption originates from

his equitably distributed share of the marital home sale proceeds.

       We are not persuaded by this argument. The state statute contains a codification of

       2
         Galtieri maintains that he was held in default by the state courts, was denied
access to the trial, and was not permitted to participate in the trial. However, the state
court judgment notes that Galtieri failed to appear for the hearing, without notice or
explanation in accordance with court rules. The judgment further notes that Galtieri had
been given the opportunity to participate at trial by telephone but did not make himself
available until the second day of trial. The state court thus denied Galtieri’s telephone
request on the second day of trial to cross-examine Jeanne Galtieri and other witnesses.
Galtieri did not appeal the state court’s judgment.

                                              6
the holding of D’Oro, specifically, that “[w]hen a share of a retirement benefit is treated

as an asset for purposes of equitable distribution, the court shall not consider income

generated thereafter by that share for purposes of determining alimony.” See Innes v.

Innes, 569 A.2d 770, 774-75 (N.J. 1990) (citing N.J.S.A. 2A:34-23). This is so whether

the court makes an initial alimony award or a modification thereto. Id. at 775. Despite

Galtieri’s vigorous reliance on this concept, the prohibition against “double dipping” is

not implicated in the Bankruptcy Court’s order dismissing Galtieri’s adversary

proceedings and distributing bankruptcy estate assets. It is doubtful that Galtieri’s

claimed exemption in his share of proceeds from the marital home sale constitutes a share

of a “retirement benefit” for which “double dipping” is not permitted. See Steneken v.

Steneken, 873 A.2d 501, 505-509 and n.5. More importantly, the Bankruptcy Court did

not make or modify an alimony determination in distributing assets of the bankruptcy

estate. Rather, the Bankruptcy Court explained that 11 U.S.C. § 522(c)(1) allows access

to property otherwise exempt under 11 U.S.C. § 522(d)(1) for the alimony arrears

judgment, which exceeds the amount of Galtieri’s claimed exemption. We reject

Galtieri’s “double-dipping” theory of attack on the Bankruptcy Court’s order.

       Galtieri also argues that, in its interim order dated September 16, 2002, the state

court incorrectly categorized his New York City disability pension and Social Security

disability benefit as income for purposes of determining his alimony obligation. Instead,

he maintains that the pension and disability benefits are marital assets subject to equitable

                                              7
distribution, and, under his “double dipping” argument, those assets are “immune” from

alimony.3 Once again, the Bankruptcy Court determined that permissive abstention on

these issues was warranted in favor of the state court. To the extent that Galtieri appeals

that abstention decision, we conclude–as we did in Galtieri’s previous appeal at C.A.

No. 02-4090 in which he disputed the state court’s treatment of the pension and disability

benefits–that 28 U.S.C. § 1334(d) precludes review by this Court. We note that the

Bankruptcy Court specifically found that neither the pension nor the disability benefits are

property of the bankruptcy estate, and in effect, Galtieri is seeking review of a state court

matter. Such review should be pursued in the state court system.

       Finally, we address Galtieri’s argument that the state court’s judgment of divorce

directing him to pay counsel fees is unenforceable against him, his property, or against the

bankruptcy estate. Galtieri relies on Bankruptcy Code provisions, noting the statutory

distinction between non-dischargeable alimony and support obligations versus the

exception for a liability merely designated as alimony or support (unless the liability is

“actually in the nature of” alimony or support). See, e.g., 11 U.S.C. § 523(a)(5)(B).

       3
         Galtieri then proceeds to argue that the pension and disability benefits are not
subject to equitable distribution, either, because they belong to him alone. Interestingly,
on this point, Galtieri references several New Jersey cases in his brief, stating that “while
the asset was not subject to equitable distribution, nonetheless, income therefrom may be
considered as a factor in alimony awards.” Appellant’s Br. at 39 (Appellant’s emphases
removed). This reference thus seems to bring Galtieri full-circle to the state court’s
conclusion that the pension and disability benefits constitute income for purposes of
determining alimony.

                                              8
Here, the state court ordered the fees to be paid directly to counsel, with “the intention . . .

to designate all counsel fees as support for the Defendant [Jeanne Galtieri] and, as such,

they shall be non-dischargeable in bankruptcy. . . .” (N.J. Super. Ct. Ch. Div. May 19,

2003 Judgment at 7-8.) Galtieri argues that these fees are not “actually” in the nature of

alimony, and the fee awards are thus unenforceable in bankruptcy, presumably because he

has received a discharge of his debts. We note that Galtieri does not dispute the

Bankruptcy Court’s treatment of the counsel fee awards as having accrued post-petition,

and he acknowledges that the fees would be paid from post-petition funds (i.e., from his

pension and disability payments), not from the bankruptcy estate. We discern no error in

the Bankruptcy Court’s findings and conclusions on this subject. To the extent that

Galtieri argues that the state court’s award of counsel fees is unenforceable against him

personally in his post-bankruptcy status, or that the fee award is otherwise unjust, such

matters are within the province of the state courts.

       We have considered all of the arguments in Galtieri’s submissions to this Court,

and we find them to be without merit. To the extent that Galtieri appeals the Bankruptcy

Court’s decisions to abstain under 28 U.S.C. § 1334(c)(1), we lack jurisdiction to review

the abstention decisions. On the remaining issues, we will affirm.

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