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Mistress sues widow for bigger share of 9/11 fund award
Thursday, May 27, 2004
BY MARGARET McHUGH
Star-Ledger Staff
Port Authority Police Officer Liam Callahan died trying to save people from the World Trade Center on 9/11, leaving behind a wife and four children.

But they were not his only survivors: Callahan died not knowing that his girlfriend, Kimberly Diaz, was pregnant .

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Diaz is now suing Callahan's widow, Joan, over what share 2-year-old Liam Diaz Callahan should get from the September 11th Victim Compensation Fund award.

Joan Callahan never knew about her husband's affair, and the Rockaway Township couple were about to celebrate their 20th wedding anniversary, her attorney said.

After a paternity test in September 2002 confirmed Liam Diaz Callahan was her husband's child, Joan Callahan applied to the federal September 11th Fund on behalf of herself and all five children, court records showed.

They stand to get a total of more than $1 million, with each child receiving roughly $145,000, once the award is finalized in mid- June, according to court documents.

But Diaz, 36, contends her son should get more.

Her suit says the September 11th Fund calculated the 44-year-old Callahan's worth to be $3.26 million based on his age and potential lost income, but the proposed award was reduced by "collateral offsets," the $2.2 million his family received in things such as life insurance and pension benefits.

The 22-year police veteran was earning a base salary of about $67,000 a year when he died, according to the Port Authority of New York and New Jersey.

Liam Diaz Callahan "may be entitled to some of that," said Diaz's attorney, James Dronzek, referring to the $2.2 million in collateral offsets.

Dronzek said that even if Liam Diaz Callahan isn't directly entitled to a share of the collateral offsets, Liam Callahan's estate should be paying child support. Just how much that should be would depend, in part, on whether some or all of the $2.2 million is part of the estate, the attorney said.

"It's too early in the process to know how much that might be," he said.

Joan Callahan's attorney, James McCreedy, said he will argue to a judge that Diaz's son isn't entitled to additional money "and then we'll let the court decide."

Superior Court Judge Kenneth MacKenzie has yet to issue any orders in the case.

Joan Callahan asked MacKenzie in April to approve putting her three younger children's shares of the September 11th Fund award into trust accounts established in their names, and placing Liam Diaz Callahan's into an account with the Morris County Surrogate's Office. As an adult, Callahan's oldest child could collect his share.

A few weeks later, Diaz filed suit seeking to freeze the distribution of the September 11th Fund award and asked for the estate of Liam Callahan to pay her child support. The boy now gets $848 a month in Social Security survivor benefits as the son of Liam Callahan, Dronzek said.

Tanya Hernandez, a professor of trusts and estates at Rutgers Law School-Newark, said if Liam Callahan named his wife as beneficiary of his life insurance and pension benefits, then Diaz's son would not have a claim on that money. However, if Callahan left the assets for "his children," then he would have a claim, Hernandez said.

"Nonmarital children are treated the same as marital children" for purposes of inheritance, she said. McCreedy would not reveal who Callahan listed as the beneficiary.

Through McCreedy, Joan Callahan declined to talk about the case. McCreedy said a relative of Diaz's contacted Joan Callahan a few months after 9/11 and told her about Diaz's affair with Liam Callahan, and that she was pregnant.

"First she finds out her husband is dead. Then she finds out about this other woman," McCreedy said. "Obviously, it's been a difficult time for her and it continues to be."

The Callahans would have celebrated their 20th wedding anniversary Sept. 12, 2001. In her lawsuit, Diaz says Liam Diaz Callahan was conceived on Sept. 10, 2001.

Joan Callahan had previously said her husband wasn't even scheduled to work the morning of Sept. 11, but had switched his shift so he could attend a night school association meeting. Callahan was among the first rescuers to enter the Twin Towers that day.

He had saved lives before. He prevented a young man from jumping from the roof of the Port Authority Bus Terminal in New York City in 1982. Eleven years later, he carried disabled people out of the World Trade Center when it was bombed in 1993. For that he received a police valor award.

According to her lawsuit, Diaz met Callahan on the job. Diaz was a Port Authority communications agent earning $48,339 a year, and she worked with Callahan at the Journal Square PATH station in Jersey City. The became romantically involved in March 1999, according to her sworn statement.

Margaret McHugh covers the Morris County courts. She can be