Cosel v. Wendt

Summary

The First Circuit affirmed in part, reversed in part, and vacated in part the district court's grant of summary judgment to Molly Cosel in this diversity dispute over Massachusetts property formerly held by Molly and her ex-husband as tenants by the entirety. It vacated the portion of the judgment predicting that a divorce extinguishes a creditor's lien on entirety property, holding the district court must first resolve the factual dispute over whether the promissory note for over $1.5 million in family funds was valid as to Molly, who as a nonparty to the default judgment may restrain its enforcement under Restatement (Second) of Judgments § 76 without pursuing Rule 60(b) relief. The panel affirmed on alternative grounds that the Property remained Molly's principal residence so no valid execution was completed before the divorce, held the domestic relations exception does not bar the Trust's counterclaims, and reversed summary judgment on the counterclaim because genuine disputes of fact exist over whether the loan was spent on 'necessaries' under Mass. Gen. Laws ch. 209, § 1. The case was remanded for findings on the loan's validity and, if necessary, the necessaries question, with certification to the SJC available.