MARCIE SANDERS VS. SCOTT SANDERS (FM-02-2823-16, BERGEN COUNTY AND STATEWIDE)

New Jersey Superior Court Appellate Division·Decided July 21, 2020·No. A-5092-17T2·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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 NO. A-5092-17T2

MARCIE SANDERS, Plaintiff-Respondent,

v. SCOTT SANDERS,

Defendant-Appellant.

Submitted March 2, 2020 – Decided July 21, 2020 Before Judges Messano and Susswein.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2823-16.

Callagy Law, attorneys for appellant (Brian P. Mc Cann, on the briefs).

Hellring Lindeman Goldstein & Siegal LLP, attorneys for respondent (Sheryl Elizabeth Koomer, Bruce Steven Etterman, and Corinne Bridget Maloney, of counsel and on the brief).

PER CURIAM

Plaintiff Marcie Sanders and defendant Scott Sanders married in 2000.

When plaintiff filed her complaint for divorce in 2016, defendant was incarcerated, having been convicted and sentenced in federal district court for the Southern District of New York for multiple counts of mail fraud involving his livery cab business.1 Defendant filed a pro se answer to the complaint and also asserted a counterclaim.

At all times relevant to this appeal, plaintiff was employed as the manager of a private club in New York City. In 1998, she formed a corporation in New York to acquire and hold commercial property in Brooklyn (the Brooklyn property). In 2005, using marital assets and through a New York limited liability company with plaintiff as its sole officer, the parties acquired a commercial building in Queens (the Queens property). Defendant operated his business out of these two locations. In addition, during the marriage and using marital assets, the parties purchased a home on Staten Island, and properties in Saddle River and Fort Lauderdale, Florida, all in plaintiff's name. At the time of divorce proceedings, plaintiff was residing with the parties' children in the Saddle River property.

1 Initially, defendant was housed at a federal correctional facility in New Jersey. Later during the proceedings, he was moved to a federal institution in Miami, Florida.

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Early in the litigation, plaintiff served a subpoena and deposition notice on the parties' accountant. Defendant moved to quash, and plaintiff cross - moved, alleging defendant had altered the corporate records for the two New York real estate holding companies. The judge found that defendant altered the records while imprisoned to redirect to him all process served on the companies, and defendant had substituted himself for plaintiff as chief executive officer of the corporation holding the Brooklyn property. The judge entered an order in November 2016 (the November 2016 order) that gave defendant thirty days to "reinstate to their original state all records . . . altered with the New York Secretary of State," and restrained defendant "from affecting any asset and/or entity titled in plaintiff's name or held in joint names[.]"

In April 2017, plaintiff filed an order to show cause claiming that defendant violated the November 2016 order by failing to correct the records with the State of New York and terminating the real estate broker she hired to sell the Brooklyn and Queens properties. In May, the judge entered an order (the May 2017 order) again requiring defendant to correct the companies' records and restraining him from any further interference with plaintiff's management and sale of both properties, as well as the now vacant Staten Island property.

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After having already obtained an extension to respond to plaintiff's discovery demands, and now represented by counsel, defendant requested a further extension. At a case management conference held on June 29, 2017, the judge granted defendant a further extension to July 14 to provide discovery responses and file a previously ordered updated Case Information Statement (CIS). The order conditioned the extension upon defendant correcting the altered company records. In the interim, defendant had filed lawsuits against plaintiff regarding the New York companies and properties, as well as lis pendens against the real estate. Before filing responses to plaintiff's discovery demands, defense counsel moved to be relieved.

On August 4, 2017, the judge granted plaintiff's motion in aid of litigant's rights. He found that defendant had violated the November 2016 and May 2017 orders restraining him from interfering with plaintiff's control and sale of the properties. The August 2017 order sanctioned defendant $200 per day until he dismissed the New York lawsuits, restrained him again from interfering with plaintiff's efforts to sell the New York properties, ordered the release of $100,000 from defendant's individual retirement account to plaintiff to "establish a fund for the payment of her counsel fees and expenses" in defending the New York lawsuits and cancelling the lis pendens. Critically, for purposes

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of our opinion, the order provided that defendant's pleading would be stricken and default entered if he failed to "supply all discovery previously requested or ordered . . . by August 25, 2017[,] upon written confirmation by plaintiff's counsel."

On August 9, a second attorney filed a substitution of counsel. Two days before defendant's discovery responses were due, and one day before a scheduled case management conference, successor counsel requested an adjournment. On the day of the conference, August 24, 2017, counsel sent a letter to the court withdrawing from her representation of defendant; however, prior defense counsel appeared at the conference on defendant's behalf. Defendant still had not furnished discovery. The judge relieved both attorneys and entered an order providing that defendant had until September 29, 2017, to file a substitution of counsel or be subject to default. The order further provided that a default hearing pursuant to Rule 5:5-10 was now scheduled for October 26.

On September 29, successor counsel filed a substitution of attorney and reentered the case. A few days later, she filed a motion, returnable October 27, to: 1) vacate the August 2017 order threatening default unless defendant complied with discovery demands; 2) modify the November 2016 and May 2017

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orders to allow defendant "to be involved in the renting or selling" of the New York properties, or, alternatively, order plaintiff to provide defendant "in writing of all dealings and or communications related to the sale of [the] properties"; 3) escrow any closing proceeds; 4) order "[p]laintiff to provide an accounting of all marital monies received since . . . [d]efendant's incarceration"; and 5) set a final discovery schedule. On October 3, 2017, defendant filed a CIS.

On October 6, plaintiff filed a notice of proposed final judgment of divorce. See Rule 5:5-10 (requiring "[i]n those cases where equitable distribution, alimony, child support and other relief are sought and a default has been entered," that the plaintiff serve "a Notice of Proposed Final Judgment . . . not less than [twenty] days prior to the hearing date"). At a hearing on October 31, now represented by a third law firm, defendant moved to vacate default.2 The judge denied the motion, and we denied defendant's application for emergent relief. The default hearing took place on November 8, with plaintiff

2 It is unclear from the record why the default hearing did not take place on October 26.

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MARCIE SANDERS VS. SCOTT SANDERS (FM-02-2823-16, BERGEN COUNTY AND STATEWIDE) (MARCIE SANDERS VS. SCOTT SANDERS (FM-02-2823-16, BERGEN COUNTY AND STATEWIDE)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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