Post-Divorce Proceeding Results in Sanctions by New York Appellate Court

By Terra3 (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia CommonsAn New York appellate court sanctioned the plaintiff in a post-divorce lawsuit, finding the suit to be frivolous. The ex-husband (plaintiff) filed suit against the ex-wife (defendant), after the entry of their divorce, seeking to recover a sum of money that had been claimed by the plaintiff as a credit against the property division in the divorce case. The New York County Supreme Court found the lawsuit to be barred by the doctrine of res judicata, but it denied the defendant’s motion for sanctions and attorney’s fees. The Appellate Division, First Department reversed this part of the lower court’s ruling and remanded the case with instructions to impose sanctions and order the plaintiff to pay the defendant’s attorney’s fees and costs. Borstein v. Henneberry, 2015 NY Slip Op 05390.

The parties’ lengthy divorce was finalized in December 2009. The plaintiff, an attorney who represented himself during the proceeding, claimed that he had loaned $27,000 to the defendant for a business venture after the divorce had been filed. He included this amount in a list of credits in his proposed distribution of assets. The court addressed the property distribution in a 51-page order following a six-day trial. The order did not specifically mention the $27,000 loan, but it included a clause stating that “any arguments raised by the parties which have not been expressly addressed in this decision are rejected.” The plaintiff’s appeal of the court’s order, according to the appellate court’s ruling, did not mention the loan.

In 2010, the plaintiff filed suit against the defendant to recover the $27,000 loan. The complaint made no reference to the divorce action or the final judgment of divorce. The defendant filed a motion for summary judgment, which the New York County Supreme Court granted in June 2013. Res judicata prohibits the relitigation of claims that have already been subject to a final adjudication. Even though the divorce judgment did not specifically mention the loan, the court held that the clause in the judgment rejecting any unaddressed arguments constituted a final adjudication.

The court denied the defendant’s motion, brought under the provisions of the New York Judiciary Rules allowing sanctions for frivolous filings. It held that the plaintiff’s conduct “was not so frivolous as to warrant sanctions.” The appellate court disagreed. Under the sanctions rule, a court must examine the circumstances of the allegedly frivolous conduct, including the extent to which the party was able to “investigat[e] the legal or factual basis of the conduct,” as well as whether the person “continued [the conduct] when its lack of legal or factual basis was apparent.”

The appellate court noted that, as an attorney, the plaintiff should have known that res judicata precluded his lawsuit. It also noted that he was reportedly sanctioned twice during the divorce case. He was ordered to pay $7,500 towards the defendant’s attorney’s fees and later to reimburse her for $10,000. The court therefore ordered him to pay $5,000 in sanctions and remanded the case to determine a reasonable amount of attorney’s fees and costs.

In a New York divorce, a court must confirm an equitable division of a couple’s marital property. This can be a complicated and emotional process, especially if the spouses have accumulated a large amount of property, or if one spouse has an attachment to a particular item. An experienced and skilled family law attorney can help a person involved in a New York divorce proceeding understand their rights and protect their assets. Ingrid Gherman has practiced family law in New York City area for the past 30 years. Contact us online or at (212) 941-0767 today to schedule a confidential consultation.

More Blog Posts:

After Husband’s Death, New York Court Substitutes His Estate in Post-Divorce Proceeding, New York Divorce Attorney Blog, June 9, 2015

New York Appellate Court Reverses Order Requiring Supervised Visitation Between Mother and Teenage Children, New York Divorce Attorney Blog, May 11, 2015

Husband Seeks Summary Judgment in New York Divorce Case; Appellate Court Explains Why He Cannot Do That, New York Divorce Attorney Blog, March 24, 2015

Photo credit: By Terra3 (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons.