October 2003

Joinder and Intervention of Third Parties in Divorce Actions

Laura W. Morgan

When marital property is in the hands of third parties, either by fraudulent conveyance, dissipation, or because a distinct entity such as a trust or corporation is owned by the parties, the best practice is to join the third party as a party to the divorce suit. Without such joinder, due process principles might dictate that the third party is not bound by any decision the court might make with regards to the property.

Interestingly, however, a minority of states have held that a third-party claim can be litigated without actually joining the third party, so long as the result of the case does not prejudice the third party’s rights. Gerow v. Covill, 192 Ariz. 9, 960 P.2d 55 (Ct. App. 1998) (court can decide fraudulent conveyance issue without joining recipient, so long as recipient’s rights are not affected); Carroll v. Carroll, 55 Conn. App. 18, 737 A.2d 963 (1999) (where husband’s mother was not a party to divorce action, divorce court’s decision as to amount of debt would not bind husband in later action against mother); Colclasure v. Colclasure, 892 P.2d 676 (Okla. Ct. App. 1995) (proper to find that wife had 25% interest in business with third party; noting that third party would not be bound by the result). If the litigation does not prejudice the third party’s rights with regard to the property, however, there seems little use in not joining the third party.

Some states have even held that third party rights must be litigated separately. Boyle v. Boyle, 194 W. Va. 124, 128, 459 S.E.2d 401, 405 (1995); Timmerman v. Timmerman, 891 S.W.2d 540 (Mo. Ct. App. 1995).

Third parties cannot, however, intervene in a divorce action without a specific claim for a specific asset. General unsecured creditors may not intervene. Luthen v. Luthen, 596 N.W.2d 278 (Minn. Ct. App. 1999); Nielson v. Thompson, 982 P.2d 709 (Wyo. 1999). Third parties can intervene only to the extent that they possess a claim to ownership rights in a specific marital asset.