If Assets Are “Frozen” In A New Jersey Divorce Court Order, Does It Apply To Third Parties?
No. If a New Jersey Divorce Court generates an order restraining both husband and wife from dissipating certain assets, it does not apply to any third parties who have possession of the asset. This lawyer studied the following case in which a court order “freezing” two Ferraris only applied to the ex-husband and not the car dealership.
As an experienced New Jersey divorce attorney, I know that the division of marital assets can be a long complicated battle in any case. When the couple is wealthy it only leads to more complications. Sometimes New Jersey Family Part judges will enter a restraining order preventing either party from selling or transferring marital property, until the court can conduct a fair and equitable distribution. In Durrani v. Wide World of Cars, LLC., ex-wife Ishrat Durrani, appealed an order from the Superior Court of New Jersey, Family Part of Bergen County, because it dismissed her complaint against her ex-husband’s attorneys. She argued that his attorneys violated a Family Part order that restrained both her and her ex-husband, Sikander, from dissipating assets. Her complaint alleged that Wide World of Cars, LLC, and Rogers McCaron & Habas, P.C., her husband’s attorneys, caused her damages by releasing to her ex-husband, two Ferrari’s that he had title to, and that this action violated the Family Part order. She argued that the Family Part dismissed that complaint on virtually the same grounds as the court had dismissed her earlier complaint against Wide World of Cars, a facility that stored luxury cars.
Ishrat and Sikander Durrani got married in Pakistan in 1975, and had three children together. During the marriage, Sikander formed numerous businesses in the United States that became incredibly successful. One business, Techna USA, was named as the fifth largest minority-owned business in the New York area by Crain magazine. It made $227,000,000 in revenue in 2007, and was projected to make $244,499,000 in revenue for 2008. The couple enjoyed a highly extravagant lifestyle and owned over twenty-five luxury cars, and several boats and properties.
On appeal, Ishrat’s arguments only challenged the order that dismissed her complaint against Wide World of Cars. The trial court had found that the Family Part order did not apply to Wide World of Cars, and thus the company did violate the terms of the restraining order by releasing the cars to Sikander. Ishrat argued that that Family Part should have treated the injunction as also restraining Wide World of Cars from releasing the cars. She also argued that the Family Part was incorrect in concluding that she did not have a valid cause of action for fraud, unjust enrichment, conversion, or civil conspiracy against Wide World of Cars.
Ishrat had filed for divorce in 2010. During that time, the two Ferraris were registered and titled to Sikander, and had been stored at Wide World of Cars since December 2009. During the divorce action Ishrat wanted sole possession of the two Ferraris. Her attorneys advised Wide World of Cars to not transfer, release, mortgage, sell or release possession of the cars to anyone including Sikander without Ishrat’s written consent.
The Family Part of Bergen County entered a mutual restraining order in July 2010. According to the terms of the restraining order, both Ishrat and Sikander were restrained from dissipating, transferring, selling, or gifting any assets of the marriage. The two Ferraris were specifically listed in the order.
While World Wide Cars continued to store the Ferraris, in 2012 Sikander received an email from them stating that the credit cards they had on file were being declined, and that they could no longer hold the cars. In response, he stated that he would give them information on where to drop off the cars, and that were not to be dropped off at the marital residence. At first Sikander stated his attorneys might be able to hold the cars at their office. Ultimately, on January 24, 2012, Sikander’s representative picked up the cars from Wide World of Cars, and took them to an undisclosed location.
A year later Ishrat found out that the Ferraris were no longer being stored at Wide World of Cars. On April 30, 2013, the Family Part issued a judgment of divorce that awarded Ishrat the right to keep all of the marital assets located in the United States. The location of the two Ferraris however was unknown.
Ishrat filed a complaint against Wide World of Cars on February 18, 2014 and alleged conversion, fraud, unjust enrichment, and civil conspiracy. Later on, she amended her complaint to include claims against Rogers McCaron & Habas, P.C., her husband’s attorneys. Wide World of Cars filed a motion to dismiss, under Rule 4:6-2(e) for failure to state a cause of action, while McCaron filed an answer and cross-claims for contribution and indemnification against Wide World of Cars. Judge Rachelle Lea Harz heard Wide World of Car’s motion, and found that the Family Part’s restraining order did not apply to them, and there was no proof suggesting that they helped Sikander sell the cars. Releasing the cars to him did not constitute “engaging in encumbering, mortgaging, disposal, transfer of ownership, assigning or gifting of the Ferraris to a third-party.” The Judge reviewed Rule 4:6-2 and converted the motion to one for summary judgment. She addressed each cause of action, and held that letting Sikander pick up the cars from the Wide World of Cars location was not a violation of the Family Part’s restraining order. Furthermore, Ishrat’s claims of conversion and civil conspiracy were legally insufficient. There was no illegal act committed by Wide World of Cars. The claims against the McCarron firm were similarly converted into a motion of summary judgment and dismissed following oral argument on November 13, 2014. Ishrat appealed to the New Jersey Appellate Division.
The Appellate Panel started it opinion by noting that Ishrat failed to properly identify the order under appeal in her notice of appeal. According to Rule 2: 5-1(f)(3)(A), a notice of appeal has to state the specific decision, judgment, rule or action, that is being appealed. Usually, the New Jersey Appellate Division will not review issues raised in an order that has not been included in a notice of appeal. However, they may review an order not listed in a notice of appeal when the basis for the order is the same as an order included in the notice of appeal. In Ishrat’s case information statement, she attempted to raise the issue of the earlier dismissal by referencing the earlier order and claiming that the dismissal of the McCarron defendants was primarily based on the same reasoning as the earlier order. Therefore, the New Jersey Appellate Division chose to review her appeal.
In light of the factual record and applicable legal principles, the New Jersey Appellate Division found Ishrat’s claims to have no merit. The appellate panel affirmed the order for the same reasons stated by Judge Harz. The Family Part’s restraining order was not applicable to Wide World of Cars. Furthermore, it did not participate in any sales or transfers prohibited by the restraining order anyway. To accept Ishrat’s argument would mean that Wide World of Cars would have had to keep storing the cars even without being compensated. That would be wholly unreasonable and the New Jersey Appellate Division found no legal reason to force Wide World of Cars to do so. Moreover, the express terms of the restraining applied only to Ishrat and Sikander. As the bailee of Sikander’s cars, Wide World of Cars was legally required to transfer possession of the cars to whomever held title to them, which was Sikander. Therefore, because Ishrat’s arguments were not supported by the facts, the New Jersey Appellate Division upheld the order of the Family Part.
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