Opinion
No. CV-02-0514379S
May 19, 2003
MEMORANDUM OF DECISION
This is an action seeking first an order voiding the transfer by the defendant, Nannette H. Wright (formerly Nannette Brossy), of her interest in her residence known as 15 Clifdon Drive, Simsbury, Connecticut (the property) to her present husband David B. Wright; and second, a judgment of foreclosure by sale of the premises by virtue of a judgment lien filed by the plaintiff on the property. Exhibits 1, 2, 18 and 19. The matter was tried to the court on various days ending April 3, 2003. The plaintiff claims that it is entitled to an order voiding the transfer of the property because the defendant Nannette Wright transferred the property in violation of the Fraudulent Transfer Act General Statutes, § 52-552 et seq.
A claim of fraudulent transfer must be shown by clear, precise and unequivocal evidence. Tyers v. Coma, 214 Conn. 8, 11 (1990); Tessitore v. Tessitore, 31 Conn. App. 40, 623 A.2d 496 (1993). The court finds that the following facts prove by clear, precise, convincing and unequivocal evidence that a voidable fraudulent transfer occurred as claimed by the plaintiffs.
By way of background, this case emanates from a custody proceeding in the Regional Family Trial Docket in the custody case of Brossy v. Brossy Docket No. FA 94-0365430S. In which Yolen and Perzin was named counsel for the minor children of Nannette Wright and Ann P. Coonley was named guardian ad litem for the children. The parents of the children were responsible for paying the fees incurred for these services. While the proceedings were ongoing and the plaintiff was providing services to the children, on July 26, 2000 Nannette Wright "for no consideration grant[ed] to David B. Wright [the co-defendant] . . . all of [her . . . rights, title and interest in and to . . . 15 Clifdon Drive Simsbury, Connecticut." Exhibit 13. At all relevant times prior to and after she transferred her interest in the property, Nannette Wright and the Brossy children have lived on the property and continue to do so. The plaintiffs introduced into evidence which showed that the transfer was made while CT Page 7034-ba Nannette Wright had debts in excess or her assets. That evidence consisted of affidavits filed by Nannette Wright in the custody proceedings and establish the following additional fads be clear, convincing and unequivocal evidence. The affidavits are dated March 29, 1997, May 2, 1997, November 21, 1997, January 12, 1998, February 11, 1998, February 3, 2000, November 24, 2000, February 26, 2001 and the last one was undated. Exhibits 3-11. They show that Nannette Wright had a 50% interest in property, her liabilities exceeded her assets, and the value of the property exceeded the debt secured by the property. Id. In signing the affidavit she certified that the statements made in the affidavit were true and accurate to the best of her knowledge and belief. Id. During the time these affidavits were filed, this court (Pickard, J.) entered an order dated January 26, 2001 in the custody case ordering Nannette Wright to pay 50% of the fees for legal and guardian ad litem services rendered to the Brossy children. Exhibit 15. The judgments were never satisfied and the amounts remain due and owing. The plaintiffs filed judgment liens on the property to secure the payment of the judgments and discovered the property had been transferred by Nannette to David and commenced this action seeking an order voiding the transfer and foreclosing the judgment lien.
The court finds that judgments, inclusive of accrued interest owing to Yolen and Perzin is $34,345.03 and judgments, inclusive of interest owed to Ann P. Coonley P.C. equals $22,234.90. Exhibit 21. The property is worth $350,00 as evidenced by an appraisal. Exhibit 12.
A transfer made by a debtor is fraudulent as to a creditor, if the creditor's claim arose before the transfer was made and if the debtor made the transfer either with actual intent to hinder, delay or defraud any creditor of the debtor or without receiving a reasonably equivalent value in exchange for the transfer and the debtor was in or about to engage in a transaction for which the remaining assets of the debtor were unreasonably small in relation to the transaction or where the transferor intended to incur or reasonably should have believed that she would incur debts beyond her ability to pay as they became due. General Statutes § 52-552e (a). In determining whether actual intent existed, the court may consider among other things whether the debtor retained possession and control of the property transferred after the transfer, whether the transfer was concealed, whether the debtor had been sued or was threatened with suit prior to the transfer, whether the transfer consisted of substantially all the debtor's assets, whether the debtor moved or concealed assets, the value or consideration received by the debtor and whether the transfer occurred shortly before or shortly after the substantial debt was incurred. General Statutes § 52-552e (b). At the time of the transfer Nannette Wright was engaged in a protracted CT Page 7034-bb custody battle involving disputes over parental rights and responsibilities, including the responsibility to pay legal and guardian ad litem fees incurred to represent the Brossy children's interests in the case. Accordingly, Nannette Wright transferred her interest in the property without consideration or equivalent value at a time when she was engaged in a dispute which she knew or should have known would result in the incurrence of legal and other fees and expenses on behalf of her children for which she was jointly and severally liable, absent a contrary ruling of the court.
In addition, the court finds that Nannette had actual intent to hinder, delay and defraud creditors. She retained possession and control of the property after the transfer, the transfer was concealed from the court and the attorneys and guardian ad litem for the children by repeatedly filing false financial affidavits after the date of the transfer listing an interest in the property. The transfer was made while the debts to the plaintiffs were being incurred, the transfer consisted of substantially all of Nannette Wright's assets, finally, Nannette Wright received no consideration or other value whatsoever for the transfer.
In an action for relief against a transfer under Section 52-552e of the General Statutes, a creditor may obtain avoidance of the transfer to the extent necessary to satisfy the creditor's claim, subject to statutory defenses, none of which have been claimed by the defendants. General Statutes § 52-552h. Even if Mr. Wright claimed a defense, there is no evidence to support a claim that the transfer was made upon the default of leases or that Mr. Wright gave value in consideration for the transfer. General Statutes § 52-552i. A transferee acting in good faith has a statutory defense to a fraudulent transfer claim. The Uniform Fraudulent Transfer Act as adopted in Connecticut does not define the term good faith, however, fraudulent transfer is a subject which is well developed in bankruptcy law where, in order to prove good faith, the transfer must have occurred in an arms-length bargain, and the transferee must have no intent to, or knowledge of the fact that transaction will, hinder, delay, or defraud others. Bankruptcy. Code, 11 U.S.C.A. § 548(c). In re Colonial Realty Co., 210 B.R. 921 (1997). David Wright is not entitled to rely on the good faith defense as he admitted that knew his wife was insolvent at the time of the transfer and was also incurring legal and guardian ad litem expenses on behalf of her children. Whether a transferee acted in bad faith is a question of fact for the trier of fact. Zapolsky v. Sacks, 191 Conn. 194 (1983).
In an action for relief against a transfer as this is subdivision (1) of subsection (a) of Section 52-552h of the General Statutes, empowers a CT Page 7034-bc court to render judgment for the creditor equal to the value of the asset transferred, as adjusted under subsection (d) of Section 52-552i of the General Statutes or the amount necessary to satisfy the creditor's claim whichever is less. The creditor is also entitled to a lien on the assets of the transferee, an injunction against further transfers or other equitable relief. Id. The judgment may be rendered against the first transferee of the asset or the person for whose benefit the transfer was made. General Statutes § 52-552i (b). A fraudulent transferee is required to forfeit that which he wrongfully obtained via the fraudulent transfer. Litchfleld Asset Management Corp. v. Howell, 70 Conn. App. 133, 799 A.2d 298 (2002).
Nannette Wright's transfer of her 50% interest in the property known as 15 Clifdon Drive Simsbury, Connecticut is voided. The court finds the total debt to be $34,345.03. The court orders a foreclosure by sale to occur on Saturday, August 2, 2003, notice of the sale is to be published in the Hartford Courant on Sunday July 20, 2003 and July 27, 2003. The court awards an appraisal fee of $300.00. The sale is to be conducted in accordance with the standing order of the court pertaining to foreclosures sale in the New Britain Judicial District.
By the Court
Hon. Vanessa L. Bryant, P.J.