From the “You Can’t Make This Stuff Up” Department:
During the course of this Westchester County divorce action, Elizabeth Perry “engaged in inappropriate litigation behavior.” She refused to comply with court orders to produce documents or to submit to an examination before trial, she secreted assets (including millions of dollars of cash assets), and she apparently illicitly acquired documents and computer files belonging to her husband, Jeffrey.
The July 17, 2012 decision of Supreme Court Justice Alan D. Scheinkman (pictured) in Perry v. Perry, resolved a motion prompted by the wife’s alleged transmission to the husband of an unsigned, haphazardly redacted and truncated letter from an undisclosed attorney writing to “confirm” an understanding with the wife and which recommended the filing of a civil RICO action against the husband in the United States District Court. The document suggested that the litigation would be based on the husband’s failure to fully disclose his income and assets on his Statement of Net Worth.
Mr. Perry alleged that at the outset of the case, his wife’s first of 11 attorneys in this 19-month pending action made similar allegations. Although the husband attested to having provided tens of thousands of pages of documents, the wife refused to provide any.
It was also alleged that the wife had intercepted some nine boxes of files intended for the husband and hid them. Ms. Perry apparently orchestrated the hacking of her husband’s computer, including privileged matter. Mr. Perry alleged that in order to circumvent a restraint imposed by the Court, his wife put the housekeeper in a disguise and directed her to take a taxi to a storage unit in order to remove a suitcase full of jewelry. It was also claimed that Ms. Perry emptied a money market account of $5 million and removed valuable furniture, artwork and mirrors from the marital residence. Further, recent bank information indicated that of the approximately $11.5 million held in a particular Chase account of the wife in April 2012, there is only just over $1 million left.
On non-financial matters, the wife attempted to involve the police and commenced a now-dismissed family offense proceeding when her husband technically violated a driveway-pickup order when he entered the former marital residence in Scarsdale in order to convince his daughter to go with him on a planned vacation trip to Australia. As it happened, his wife’s absence from the home was also likely a violation of that portion of the order that required her to be inside the residence. While Ms. Perry’s effort to involve the police was not wholly successful (she did get Homeland Security officials to detain Mr. Perry and the children briefly upon return to this country), she obtained an ex parte Family Court temporary order of protection, which she used to derail the husband’s access to the children for a time.
Mr Perry also believed it was his wife, after Justice Scheinkman previously directed that Mr. Perry have custody of the children, who anonymously complained to Child Protective Services that the children were being held against their will at Mr. Perry’s residence. This claim was investigated and found to be unfounded.
Mr. Perry’s current motion was to enjoin Ms. Perry from filing any future actions against him, in any jurisdiction, without prior judicial approval.
Ms. Perry, herself, did not file an affidavit in opposition. However, her counsel submitted an affirmation in which counsel represented that her firm had nothing to do with any letter regarding a potential RICO claim. While disclaiming that her office had any “present intent” to file a RICO claim, counsel urged that there was no reason, should Ms. Perry possess a valid claim, for the Court to impede or impair Ms. Perry from presenting that valid claim.
Justice Scheinkman denied Mr. Perry’s motion. The Court noted that in General Atomic Company v. Felter (434 US 12 ), the United States Supreme Court held that a state court is without authority to enjoin parties before it from instituting new or additional litigation in federal court, even if the federal suit raises the same issues and events as were raised in state court and the federal suit is being brought for purposes of harassment.
Just two weeks after Mr. Perry obtained his Order to Show Cause to bring on this current motion, and on the business day after Ms. Perry’s divorce counsel signed her affirmation opposing the current motion, Ms. Perry filed a civil Federal court RICO action on Monday, July 9, 2012, using the services of different attorneys than those appearing for her in the divorce action.
Justice Scheinkman noted that Federal courts are fully capable of preventing their misuse for purposes of harassment through the imposition of sanctions or otherwise. Perhaps to help the Federal court along, Justice Scheinkman noted:
- First, Ms. Perry’s Federal allegation that her husband submitted a false net worth statement was ironic given (a) her own complete and utter failure to cooperate in disclosure, refusal to produce documents, refusal to be deposed, and continuing refusal to provide any accounting for the millions of dollars of assets in her possession; and (b) the total absence of any allegation, much less evidence, that Mr. Perry’s net worth statement in this case was false.
- Second, on May 30, 2012, after giving Ms. Perry repeated opportunities to comply with her disclosure obligations, Justice Scheinkman had issued an order: (a) precluding Plaintiff from testifying at the financial trial (except as called by her husband on his behalf); and (b) precluding Ms. Perry from using or relying at the financial trial on any document requested by her husband’s counsel but not produced prior to May 16, 2012 . (Given that Ms. Perry did not produce any documents, she was barred from using any documents at trial. Hence, it seemed highly unlikely that Ms. Perry would be able to establish in the divorce action that her husband’s net worth statement was false.)
- Third, if any items were left off Mr. Perry’s net worth statement, but he did provide documents regarding those items, it may well be that any error in the net worth statement was non-prejudicial and subject to amendment.
- Fourth, if Justice Scheinkman in the divorce action were to decide in the financial trial scheduled for two months from the decision that Mr. Perry’s net worth statement was not false, it would seem at least plausible that such a finding would have collateral estoppel effect in the Federal court.
- Fifth, it was well-settled under New York state matrimonial law that penalizing one party in the distribution of assets from a marital estate is appropriate where the party’s egregious economic misconduct has prevented the court from making an equitable determination. Thus, even if turns out that Mr. Perry did hide $1 million in assets, it is possible that Ms. Perry may not receive any share of those assets if she hid $10 to $12 million in assets.
- Sixth, the expenditure of funds by Ms. Perry on the pursuit of the Federal litigation may negatively impact on her claims to equitable distribution and the compelled expenditure of funds by Mr. Perry in defending the Federal litigation may impact on his claims to an equitable distribution in his favor.
- Seventh, any injury to Mr. Perry’s future employment prospects caused by any adverse publicity following from the institution of the Federal lawsuit may also be relevant to the issues of equitable distribution.
- Finally, and without intending to tread too deeply or firmly into matters before the Federal court, the portion of any allegedly secreted assets to which Ms. Parry would be entitled may be, under Federal court decisions, a matter dependent upon the resolution of the state court matrimonial action.
Thus, Justice Scheinkman suggested that perhaps Ms. Perry would be wise to “focus on the main event and defer the satellite litigation until a later date, if ever.”
Mr. Perry was represented by Robert Stephen Cohen, Esq., of Cohen Clair Lans Greifer & Thorpe LLP, New York City; Ms. Perry in the divorce action was represented by Leslie F. Barbara, Esq., of Davidoff Hutcher & Citron LLP, of New York City.