Summary
holding that love and affection do not constitute fair consideration for transfer of property for purposes of determining whether conveyance was fraudulent
Summary of this case from Khan v. Mahia (In re Khan)Opinion
May 9, 1994
Appeal from the Supreme Court, Queens County (Lerner, J.).
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the judgment is affirmed; and it is further,
Ordered that the respondent is awarded one bill of costs.
The appeal from the intermediate order dated April 14, 1992, must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see, Matter of Aho, 39 N.Y.2d 241, 248). The issues raised on appeal from the order dated April 14, 1992 are brought up for review and have been considered on the appeal from the judgment (see, CPLR 5501 [a] [1]).
We find, contrary to the defendants' contentions, that the circumstances of the present case provide clear and convincing evidence that the defendant Valerie Contaratos harbored actual intent to defraud present and future creditors by conveying real property to her daughter (see, Debtor and Creditor Law § 276; see, Bradley v. Kraemer, 191 A.D.2d 408, 409; Marine Midland Bank v. Murkoff, 120 A.D.2d 122). The evidence at trial before the Judicial Hearing Officer showed that Valerie Contaratos conveyed the property to her 19-year-old daughter for only $10 with knowledge of a claim against her by the plaintiff. The fact that this was an intrafamily conveyance is further evidence giving rise to an inference of fraud (see, Polkowski v. Mela, 143 A.D.2d 260, 262; Marine Midland Bank v. Murkoff, supra). The evidence at trial also demonstrated that this property was the only major asset of Valerie Contaratos, and that she remained residing on the property after the conveyance.
To the extent that the defendants argue that there was fair consideration for the conveyance because the property was given as a dowry in contemplation of the daughter's marriage, such an argument is irrelevant when there has been a finding of actual intent to defraud (see, Debtor and Creditor Law § 276; United Parcel Serv. v. Norris Corp., 102 Misc.2d 231). Whether fair consideration has been given is only relevant in an action to declare a conveyance invalid based upon constructive fraud (see, Debtor and Creditor Law § 273-a). In any event, even if the conveyance in this case was based upon "love and affection", this does not constitute fair consideration (see, Rush v. Rush, 19 A.D.2d 846; Farino v. Farino, 113 Misc.2d 374, 385; Orbach v Pappa, 482 F. Supp. 117).
In view of the evidence, we conclude that the award of attorneys' fees was proper (see, Debtor and Creditor Law § 276-a). The defendants' remaining contentions are either unpreserved for appellate review or without merit. Miller, J.P., Altman, Goldstein and Florio, JJ., concur.