An article in the Legal Intelligencer discussed a recent Superior Court case in which the court denied a bank’s request to consolidate judgments against a husband and a wife in order to make a claim to property the spouses held jointly as tenants by the entireties.
The court’s majority opinion cited case law spanning the last one hundred years that has held that a creditor must obtain a joint judgment against both spouses in order to execute on joint property.
In the case at hand, ISN Bank v. Rajaratnam, a husband and wife took out a loan of more than $6 million to rehab condominiums. After the loan went into default, the bank obtained individual judgments against the husband and then the wife.
There was also a guaranty agreement that both the husband and wife signed in 2007, however the bank did not file suit against the husband pursuant to the 2007 guaranty agreement. The bank also did not include the husband as a party in its lawsuit against the wife. Based on these facts, the Superior Court upheld the trial court’s denial of the bank’s request to consolidate the judgments against the husband and the wife.
When spouses hold title jointly with rights of survivorship, their ownership is characterized as “tenants by the entireties.” This case illustrates the significance of holding property jointly, principally the protection it can provide to spouses who have individual liabilities.
If you are in need of advice regarding jointly held property and other issues related to your family, please do not hesitate to contact the family law attorneys at Petrelli Previtera Schimmel.