2021-0373, In the Matter of Brian Colsia and Allana Kelley-Colsia

McDonald on the brief), for the receiver. Ford, McDonald, McPartlin & Borden, P.A., of Portsmouth (Marc W.

brief), for intervenors Faith Deeter - Macomber and Foxtrot Delta, Inc. North Atlantic Legal, PLLC, of Portsmouth (Jonathan T. McPhee on the

Jr. and Hilary H. Rheaume on the brief), for intervenor Wayne Colsia. Bernstein, Shur, Sawyer & Nelson, P.A., of Manchester (Roy W. Tilsley,

for the respondent. Nadeau Legal PLLC, of Biddeford, Maine (Robert M. Nadeau on the brief),

Brian Colsia, the petitioner, filed no brief.

No. 2021 - 0373 9th Circuit Court - Merrimack Family Division

page is: https://www.courts.nh.gov/our - courts/supreme - court a.m. on the morning of their release. The direct address of the court’s home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by email at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concor d, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

approximately $ p. 2 2,000,000.00 in cash.” available to the court “for immediate division between the spouses $300,000.00,” the effect of which “afte r taxes, and receivership expenses” made $2,000,000.00) against receivership assets in exchange for the sum of or discharge d “all of Wayne Colsia’s mortgages or claims (in the face amount of for the court to authorize and approve the settlement. The resolution release d t he receiver negotiated a resolution with Wayne and, in October 2020, moved settlement that does not have the assent of” the husband and wife. Ther e after, resolution” and “shall seek [circuit] court approval prior to finalizing any receiver shall exercise his discretion in prosecuting the case and negotiating a Wayne Colsia, the husband’s brother. The circuit court ordered that “[t]he petition in superior court to challenge the validity of mortgages granted to In May 2020, the court granted the receiver’s motion for leave to file a

effect, the assets of the marital estate.” deem reasonable to recover and protect the assets of those entities, and, in prosecute such actions a nd to defend against such actions, as the receiver may assets in a commercially reasonable manner forthwith,” and “to initiate and accoun ts and credits of” the LLC s, “to arrange for the liquidation of all such T he receiver was authorized to “take full title to and control of all assets, recover property that has been improperly removed from the marital estate.” including “the right to bring suit to set aside a fraudulent transfer or otherwise estate owned thereby, which shall include any and all residual rights” addition, the receivership encompassed two LLC entitie s and “any and all real property that has been improperly removed from the marital estate.” In right to bring suit to set aside fraudulent transfers or otherwise recover include any and all i nchoate, equitable and/or residual rights, such as the including ten “real properties and any and all proceeds thereof, which shall appointment order, the court identified the scope of the rec eivership as to recover property that had been removed from the marital estate. In its A t the wife’s request, in February p. 2 2020, the court appoint ed the receiver

settle for less than that to which she was entitled. discovery and recovery of the assets so difficult and costly that the wife would several actions to h ide mar ital assets from the wife and the court and/or make Kelley - Colsia (wife). Shortly before and during the divorce, the husband t ook was initiated in March p. 2 2015 by Brian Colsia (husband) against his wife, Allana The following facts are supported by the record. This divorce proceeding

and remand. the receiver, Attorney Edmond J. Ford (receiver). See Sup. Ct. R. 8. We affirm Circuit Court (Derby, J.) granting the motion s to approve settlements filed by M AC DONALD, C.J. This interlocutory appeal is from an order of the

Danielle Colsia, self - represented party, filed no brief. p. 3 3

a better resolution.” wife “ha[d] not provided the co urt with any specific realistic alternative path to in the amount proposed is in the best interests of the marital estate” and the receiver “met his burden of proof in demonstrating that a settlement now and Like wise, r egarding the Foxtrot settlement, the court concluded that the

questionable mortgage that [the husband] gave Wayne. because of what it took to free the marital assets from the amount she could ask to be awarded out of [the husband’s] share will make more money available for equitable division than the ha[d] not shown that continuing all of the Superior Court litigation

The court concluded that the wife

[superior] court.’” jurisdiction to settle the dispute with Wayne and that she “‘want[ed] her day in Rather, the wif e maintained her position that the family division lacked outcome than the outcome presented by the receiver,” none was presented. an “alternative scenario or legal theory that . . . would produce a better conduct.” The court noted that, although it had pressed the wife’s co unsel for division that favors her and disfavors [the husband] because of [his] fraudulent adverse effect on [the wife’s] right to ask [the circuit court] for a property of unencumbered money available for distribution” and “will also have no receiver had “presented a realistic proposal t hat will make a significant amount settlements. Regarding the Wayne settlement, the court reasoned that the Following hearings on the motions, the circuit court approved the

The wife objected to both proposed settlements. the Receivership Estate” was liable, and achieved “a reasonab ly just result.” that minimized “interest expense” and “attorney’s fees and expenses for which to resolve what amounted to bona fide debt of the marital estate under terms order. The receiver’s motion explained that the settlement agreement proposed secured by two mortgage s on one of the properties listed in the receivership settlement agreement with Foxtro t Delta, LLC (F oxtrot), which held two notes In addition, in January 2021, the receiver moved for approval of a

husband in the final allocation of the marital assets. imposing the burden of the expenses incurred in resolving the litigation on the risk of administrative insolvency, and allowed the court to do justic e by receiver explained that t he resolution minimized litigation expense, avoided the the terms proposed [was] in the best interests of the marital estate.” The Wayne. Based on these analyses, the receiver concluded that “settlement on money; and ( p. 3 3) a “third order analysis” of the risk of losing the litigation against fraud claim against Wayne; (2) a “second order analysis” of the time value of order analysis” of the range of possible financial outcomes of litigating the In support of the settlement, t he receiver’ s motion set forth: (1) a “first p. 4 4

his settlement powers. circuit court’s appointment order, she could challenge the receiver’s exercise of appoint a receiver with broad sett lement powers and failed to challenge the interlocutory appeal that, notwithstanding the fact that the wife moved to the wife’s specific challenges, we assume without deciding for purposes of this and the fo urth question in the negative. In light of those ans wers that address For the following reasons, we answer the first three questions in the affi rmative

such settlement powers? powers subsequently challenge the receiver’s ability to exercise issuance of an order providing the receiver with such settlement settlement powers and failed to challenge the Marital Cou rt’s 5. Can a party that moved to have a receiver appointed with broad

spouse’s objections? p. 4 4. Did the divorce court err in approving the settlements over a

under the foregoing circumstances? of a spouse and without review and approval by the superior court, intervenors regarding the aforesaid mortgages over the objections negotiate and approve a settlement with third parties and 3. Does a receiver appointed by a divorce court have authority to

the marital est ate? regarding the validity and enforceability of the mortgages against receiver’s settlement of litigation pending in another forum divorce proceeding, to assert and advocate for approval of the 2. Do third - pa rty mortgagees possess standing to intervene in a

validity of two other mortgages affecting the estate? any time filed an action in the superior court to determine the where in the other instance the ostensible intervenor has not at consp iracy - related fraud associated with those mortgages, and marital estate and a related question occasioned by alleged civil superior court regarding, the validity of two mortgages affecting the the settlements had been litigating, and remains in litigation in the prior to the receiver’ s appointment the spouse objecting to one of third parties and intervenors where in one instance since long marital estate [have] the authority to approve a settlement with 1. Does a divorce court that has appointed a receiver for the

following questions, pro posed by the wife, for our consideration: effectuation of the settlements pending appeal, and approved the transfer of the The circui t court subsequently granted the wife’s request for a stay of the p. 5 5

mortgages, this argument misconstrues the court’s order. The court expressly the settlements because it lacks the authority to determine the validity of To the extent the wife asserts that the circuit court erred in approving

both parties.” RSA 4 p. 5 58:16 - a, I (2018). or both parties, whether title to the property is he ld in the name of either or tangible or intangible property and assets, real or personal, belonging to either court and subject to [its] orders”). The assets of the marital estate includ e all discretion of the court, and when appoi nted he is virtually an officer of the (explaining that the appointment of a receiver “is a matter resting in the sound N.H. 615, 624 (2010); see Eastman v. Bank, 58 N.H. 421, 422 (1878) to protect the assets of the marital estate. In the Matter of O’Neil & O’Neil, 159 jurisdiction over a divorce necessarily include s authority to appoint a receiver Pursuant to its equity powers under RSA 490 - D:3, the circuit court’s

In the Matter of Costa & Costa, 1 p. 5 56 N.H. 323, 326 (2007). court’s equitable decision absent an unsustainabl e exercise of discretion. See circumstances and exigencies of the case. Id. We will not overturn the circuit the sound discretion of the trial court, to be exercised according to the Co., 155 N.H. 19, 24 (2007). The propriety of awarding equitable relief rests in the requirements of a particular situation. See Chase v. Ameriquest Mortgage flexible equitable powers that allow it to shape and adjust the precise relief to court of equity.” RSA 490 - D:3 (2 010). Thus, t he circuit court has broad a nd matter jurisdicti on lies with the circuit court, it “shall have the powers of a circuit court where it has exclusive subject matter jurisdiction). Whe n subject statutes to the judicial branch family division shall be deemed to be to the divorce. See RSA 490 - D:2, I (2010); RSA 490 - F:18 (Supp. 2021) (references in The circuit court exercises exclusive jurisdiction over petitions for

and neg otiate resolutions to recover marital property. that the circuit court’s orders clearly authorized the receiver to bring litigation for damages against Wayne for wrongs done. In addition, the receiver asserts properties because they were fraudulently transferred; and (3) the wife’s claims owned and hidden by the husband; (2) the wife’s right to recover the real e state the marital estate which, in this case, include: (1) the real estate properties of equity, may appoint a receiver in a divorce proceeding to protect the assets of The receiver c ounters that the circuit court, having the powers of a court

the mortgages transferred to him from the husband. the wife’s superior cour t litigation against Wayne regarding the validity of com promise and settle claims against the marital estate” or to “usurp” appointment order “th at conferred any authority upon [the receiver] to mortgages.” Th e wife also asserts that there is “no language” in the the superior court has “exclusive authority to determine the validity of lacked authority to approve the Wayne and Foxtrot settlement s because Regarding the first question, t he wife asserts that the circuit court p. 6 6

litigat ing the validity of the mortgages. We agree with the receiver that the status was expressly limited to defending the propo sed settlements, not to the superior court’s jurisdiction. However, t he court’s grant of intervenor associated with their asserted mortgages” which, she asserts, is solely within regarding their alleged rights of payment and of any rights of compromise were granted intervenor status “to permit them to litigate and be heard proceeding.” In doing so, she incorrectly contends that Wayne and Foxtrot “effectively turn[ed] the marital dissolution proceeding into a creditor’s The wif e argues that granting intervenor status to Wayne and Foxtrot

limited intervenor status” in the circuit court. defending the receiver’s settlement.” Likewise, Foxtrot was “granted the same court level,” the court granted him status as an intervenor “for the purpose of direct and apparent to warrant limited intervention on that is sue at the trial Reasoning that “Wayne’s interest in approval of the settlement is sufficiently and his interest [is] direct and appare nt” (emphases and quotation omitted)). grant intervenor status when the intervenor has a “right involved in the trial Bank, 134 N.H. 32, 35 (1991) (explaining that a trial court has discretion to filing a motion to intervene.” Fam. Div. R. 2.7 (A); see Snyder v. N. H. Savings interest in the proceedings may seek to intervene as a pa rty in the action by Rules governing the circuit court provide that “[a]ny person asserting an possess standing to intervene in a divorce proceeding, i.e., Wayne and Foxtrot. The second transferred que stion asks whether “third - party mortgagees”

approve the settlements proposed by the receiver to recover marital property. resolution.” Accordingly, we conclude that the circuit court had authority to receiver to “exercise his discretion in prosecuting the case and nego tiating a to challenge the validity of mortgages granted to him expressly authorized the order granting the receiver’s motion to file suit against Wayne in superior court recover and protect the . . . assets of the marital estate.” Further, the court’s and to defend against such actions, as the receiver may deem reasonable to the marital estate” and the authority to “initiate and prosecute such actions transfers or otherwise recover property that had been improperly removed from and/or residual rights, such as the right to bring suit to set aside fraudulent provided that the receivership encompassed “any and all inchoate, equitable marital properties” over he r objections. The appointment order expressly wife’s litigation in superio r court against Wayne or to “settle claims against the contains “no language” conferring authority on the receiver to “hijack” the Likewise, we reject the wife’s argum ent that the appointment order

litigation.” the realm of reasonableness for a settlement, given the costs, delay and risks of court was “evaluating whether the receiver’s proposed settlement falls within to Wayne.” Rather, in determining the best interests of the marital estate, the kind of finding on the actual merits of the fraud or priority claims as they relate stated that, by approving the settlements, it was “not ruling or making any p. 7 7

disfavors [the husband] because of [the husba nd’s] fraudulent conduct.” wife’s] right to ask [the] court for a property division that favors her and distribution. Approving the settlement will also have no adverse effect on [the [would] make a si gnificant amount of unencumbered money available for the court determined that “the receiver ha[d] presented a realistic proposal that marital estate for both parties and further prolong this divorce.” In addition, col lection,” rejecting the proposed settlement “seem[ed] likely to deplete the litigation strategy and a plan for a more advantageous resolution and produce a better result. The court concluded that, “without a clear alternative money,” and found that there was no evidence that further litigation would adjustment for the small risk of an unfavorable out c ome and the time value of settlement with Wayne as a “‘litigation costs’ settlement proposal, with an In reaching its decision, the court characterized the receiver’s proposed

matter of law. See In re Estate of Locke, 148 N.H. p. 7 754, 755 (2002). decision unless it is unsupported by the evidence or plainly erroneous as a settlements proposed by the receiver. We will uphold the circuit court’s The fourth question asks whet her the circuit court erred in approving the

mortgage” w ere within the court’s equitable jurisdiction. court’s approval of “a settlement of all the claims stemming from Wayne’s with the court that both the creation of a receivership at her urging and the absence of any lega l authority presented by the wife to the contrary, we agree of marital property by [the circuit court] in this divorce proceeding.” In the wife] would have separate and apart from her interest in an equitable division “unable to find and articulate any standing in [the superior court] that [the equitable division [of] marital property.” Thus, t he court determined, it was because [it] granted her a pre - judgment attachment to secure her right to attaching creditor,” the court reasoned, “she is only an attaching creditor standing to participate in various Superior Court actions because she is an between divorcing spouses. “To the extent that [the wife] has been granted from the court’s statutory power under RSA 458:16 - a to equitably divide assets however, the wife’s interest in the assets subject to the receivership arose solely “the authority of the superior court itself.” As the circuit court explained, court to litigate the validity of the husband’s mortgages granted to Wayne and settlement agreements, the circuit court “usurp [ed]” her efforts in superior above in response to the first question, argues that, by approving the without the superior court’s approval. The wife, repeating her arguments and approve the Wayne and Foxtrot settlements over the wife’s objection and The third question asks whether the receiver had authority to negotiate

Wayne and Foxtrot. sustainably exercised its discretion in granting limited intervenor status to business judgment.” Accordingly, we conclude that the circuit court intervenors “to provide insight into the appro priateness of the receiver’s circuit court did not unsustai nably exercise its discretion by allow ing the p. 8 8

HICKS, BASSETT, HANTZ MARCONI, and DONOVAN, JJ., concurred.

plainly erroneous as a matter of law, we find no error. motions to approve the settlements is supported by the record and is not determinations were erroneous. Given that the court’s decision to grant the not challen ge the receiver’s analysis or put forth any argument that the court’s Our review of the evidence supports the circuit court’s findings. The wife does not provided the court with any specific realistic path to a better resolution.” proposed is in the best interests of the marital estate” and that the wife “ha[d] his burden of proof in demonstrating that a settlement now and in the amount the best interests of the marital estate, determining that the receiver had “met Likewise, the court found the proposed settlement with Foxtrot was in