Tarone v. Tarone (In Re Tarone)

434 B.R. 41, 2010 WL 2892081
CourtUnited States Bankruptcy Court, E.D. New York
DecidedJuly 26, 2010
Docket8-19-71143
StatusPublished
Cited by21 cases

This text of 434 B.R. 41 (Tarone v. Tarone (In Re Tarone)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tarone v. Tarone (In Re Tarone), 434 B.R. 41, 2010 WL 2892081 (N.Y. 2010).

Opinion

AMENDED DECISION

CARLA E. CRAIG, Chief Judge.

This matter comes before the Court on the motion of Madeline K Tarone, John Ray, John Ray & Associates (“JR & A”), and Nieroda & Associates, P.C. (“N & A,” and together with Mrs. Tarone, Mr. Ray, and JR & A, the “Defendants”) to dismiss this adversary proceeding commenced by Gregory J. Tarone (the “Debtor”). Because matters outside the pleadings were presented and not excluded by the Court, and because all parties were given the opportunity to present pertinent material, pursuant to Rule 12(d) of the Federal Rules of Civil Procedure (the “Rules”), made applicable by Rule 7012 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), this motion will be treated as one for summary judgment under Rule 56, made applicable pursuant to Bankruptcy Rule 7056. For the following reasons, the motion is granted.

JURISDICTION

This Court has jurisdiction of this proceeding pursuant to 28 U.S.C. §§ 157(b)(1) and (b)(2)(I) and (0) and 1334, and the Eastern District of New York standing order of reference dated August 28, 1986. This decision constitutes the Court’s findings of fact and conclusions of law to the *45 extent required by Federal Rule of Bankruptcy Procedure 7052.

BACKGROUND

The following are undisputed facts or matters of which this Court may take judicial notice.

On December 22, 2005, the Debtor’s marriage to Mrs. Tarone was dissolved pursuant to a judgment of divorce issued by the New York State Supreme Court (the “State Court”).

On January 19, 2007, the Debtor filed a voluntary petition under Chapter 7 of the Bankruptcy Code. At the time of the filing, the State Court had not yet determined the issues of equitable distribution, maintenance, or recovery of counsel fees in the matrimonial action.

On May 1, 2007, an order was entered granting the Debtor a discharge pursuant to § 727 of the Bankruptcy Code. 1

On July 25, 2007, the Debtor filed a motion seeking, among other things, a determination that Mrs. Tarone, Mr. Ray, JR & A, and the Honorable Elaine Jackson Stack, the presiding judge in the matrimonial action, violated the automatic stay imposed by § 362. The Debtor also sought to vacate all post-petition orders issued by Justice Stack on the basis that they were issued in violation of § 362. Additionally, the Debtor sought turnover of his homestead exemption, which was $50,000 from the proceeds of the sale of the Debtor’s residence (the “Homestead Exemption”).

On August 7, 2007, a hearing was held on the Debtor’s motion. Based upon the record established at that hearing, on August 17, 2007, the Court entered an order lifting the automatic stay, to the extent applicable, allowing the State Court to determine “any issues relating to the termination of the parties’ marriage and the rights of the parties to Maintenance, [sjupport, and [ejquitable [distribution, if any.” (Compl. Ex. A at 2.) The order also provided that this Court would determine the treatment of any matrimonial claims under the Bankruptcy Code. (Id.) This Court retained its jurisdiction to determine whether Mrs. Tarone, Mr. Ray and JR & A are entitled to restrain or otherwise attach the Homestead Exemption. (Id at 2-3.) The chapter 7 trustee was directed to hold the Homestead Exemption in escrow until further order of the Court. (Id. at 3.) The order also provided that, pending the resolution of the Debtor’s motion, Mr. Ray, JR & A and Mrs. Tarone “be and hereby are, enjoined and restrained from presenting or prosecuting any claims in the [State Court], or in any other [cjourt, seeking to restrain and otherwise execute upon the Homestead Exemption claimed by the Debtor in this bankruptcy proceeding.” (Id at 2.)

On October 31, 2007, the State Court rendered a decision regarding divorce, maintenance, support, and equitable distribution. (Compl. Ex. B.) It determined that Mrs. Tarone and the Debtor have equal interests in a painting and two cars, but awarded Mrs. Tarone a piano on the basis that it was a gift from her parents. The State Court further held that it had jurisdiction to determine the rights of the parties in the Homestead Exemption because it was not part of the bankruptcy estate. (Compl. Ex. B at 18.) The State Court ultimately determined that Mrs. Tarone was entitled to 50% of the Homestead Exemption. (Id. at 18-19.) The State Court also awarded durational maintenance to Mrs. Tarone in the amount of *46 $20,000 annually, or $1,666.67 per month for 36 months. {Id. at 15.) The Debtor appealed this order.

By letter dated November 5, 2007, Mr. Ray sought to obtain possession of the piano, painting, and title and registration to a Lincoln Continental pursuant to the State Court’s October 31, 2007 order. (Compl. Ex. H.)

On December 10, 2007, the State Court issued an order directing the Debtor to pay Mrs. Tarone’s attorneys’ fees in the amount of $7,500 to N & A, and $50,000 to JR & A. (Compl. Ex. C at 7.) The State Court directed the Debtor to pay N & A’s fees within 120 days, and JR & A’s fees within 60 days. (Id.) The State Court further ordered that, if the Debtor failed to comply, N & A and JR & A were to be awarded judgment in the fee amounts, plus statutory interest. (Id. at 7-8.) The Debtor appealed this order.

On January 15, 2008, the State Court awarded Mrs. Tarone an additional $53,500, representing 50% of the surplus sale proceeds of the Debtor’s residence after the secured creditors’ claims were satisfied. (Compl. Ex. D at 3.) The State Court acknowledged that Mrs. Tarone’s right to collect this award from the estate vis-á-vis the other unsecured creditors was within the jurisdiction of the bankruptcy court. (Id.) The Debtor appealed this order.

On February 4, 2008, a continued hearing was held on the Debtor’s July 25, 2007 motion, seeking, in part, turnover of the Homestead Exemption. Thereafter, on March 3, 2008, based upon the record established at the February 4, 2008 hearing, this Court issued an order directing that the Homestead Exemption be released to the Debtor, unless the State Court directed otherwise before that date, in which case, the Homestead Exemption was to be released as directed by the State Court. (Compl. Ex. E.)

On March 10, 2008, upon the Debtor’s motion to the State Court seeking turnover of $20-25,000 of the Homestead Exemption, and seeking an order directing that the remainder be deposited in escrow with someone other than Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
434 B.R. 41, 2010 WL 2892081, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tarone-v-tarone-in-re-tarone-nyeb-2010.