Summary
overwhelming majority of jurisdictions find that a divorce judgment is a transfer of assets under the Uniform Fraudulent Transfer Act
Summary of this case from U.S. v. KirtlandOpinion
No. CV 09-5028152
August 28, 2009
MEMORANDUM OF DECISION RE MOTION TO DISMISS (#102)
In this case of first impression, the court is asked to decide whether the Uniform Fraudulent Transfer Act (UFTA) applies to a transfer of property made pursuant to a divorce judgment. In essence, the plaintiff, Regina Canty, administratrix of the estate of Shamaia L. Smith, seeks to employ the UFTA to reach assets distributed to the defendant, Kathleen J. Otto, by a divorce judgment that was entered between the defendant and her former husband. The plaintiff asserts that it is pursuing this action in order to satisfy a prejudgment remedy that was previously entered against the defendant's husband in a separate suit for the wrongful death of Smith. To this end, the plaintiff served an application for a prejudgment remedy and motion for disclosure of assets on the defendant on March 19, 2009. In response, the defendant has filed the instant motion to dismiss on the grounds that (1) the court is without subject matter jurisdiction to hear this claim because the plaintiff lacks standing, and (2) this claim is barred by the doctrines of res judicata and collateral estoppel. For the reasons more fully elucidated below, the court concludes that the plaintiff has standing to bring its UFTA claim, and that a motion to dismiss is an inappropriate procedural vehicle to assert claims of res judicata or collateral estoppel.
The Uniform Fraudulent Transfer Act is codified in Connecticut General Statutes § 52-552a et seq.
FACTS
The following undisputed facts and procedural history are necessary to the resolution of this issue. This action finds its genesis in Kenneth Otto's (Otto) murder of Shamaia Smith. On April 17, 2007, the East Hartford police department and the Connecticut state police found the charred remains of Smith buried on undeveloped property owned by Otto. The next day, Otto transferred by quitclaim deed, and without receiving any consideration, his entire interest in a home located at 149 Apache Way, Tewksbury, Massachusetts, to the defendant, who was his wife at the time. Otto was subsequently arrested for the murder of Smith at Bradley International Airport, where he was in possession of his passport and ten-thousand dollars in cash. After a jury trial, Otto was convicted on December 9, 2008, for the murder of Smith and for attempting to cover up his crime.
The parties were on separate litigation paths while the criminal investigation was ongoing in 2007. The defendant commenced her dissolution of marriage proceeding against Otto on April 23, 2007, and she then filed notices of lis pendens on real estate owned by her husband in the towns of Stafford and Ellington, Connecticut. On June 4, 2007, the court adjudicating the plaintiff's wrongful death suit granted a prejudgment remedy in the amount of $4,500,000 to secure any judgment ultimately rendered against Otto in that case, and the plaintiff promptly filed a certificate of attachment on the Ottos' marital property on June 7, 2007.
In June 2007, the plaintiff moved to intervene in the Ottos' divorce proceeding by virtue of her status as an attaching creditor. The defendant and Otto both joined in opposition to the plaintiff's intervention, claiming that the plaintiff was without standing. After a hearing on November 19, 2007, the court denied the plaintiff's motion to intervene, noting both that "[t]hird-party intervention . . . in this matter . . . would frustrate the already difficult task of determining the rights and responsibilities of the parties to a dissolution of marriage case" and that "[t]he court [was] not convinced that the estate [would be] unable to protect its rights by way of remedies afforded it in the civil court including but not limited to alleging that there have been fraudulent conveyances." Otto v. Otto, Superior Court, judicial district of Tolland, Docket No. FA 07 4007084 (November 27, 2007, Schluger, J.) (44 Conn. L. Rptr. 549). The plaintiff appealed the denial of her motion to intervene, which the Appellate Court dismissed without opinion on March 12, 2008.
After a trial in the dissolution of marriage case, Judge Schuman ordered Otto to transfer all but a minor portion of his assets to the defendant and to pay to the defendant one dollar per year in alimony for life. See Otto v. Otto, Superior Court, judicial district of Tolland, Docket No. FA 07 4007084 (June 3, 2008, Schuman, J.). Judge Schuman found that in the three years prior to Otto's arrest and pretrial detention, he had earned an average of $930,000 annually as a regional manager in the metals industry, while his wife earned approximately $20,000 annually as a part-time pharmacy technician. Although the parties had acquired a "substantial amount" of personal and real property, Kenneth Otto had used approximately $264,000 of his retirement account, as well as other funds, to pay attorneys fees, and still owed his attorneys an additional $12,500 in fees. Because of his incarceration, the judge found that Otto was unable to pay his wife an ordinary amount of alimony. Judge Schuman determined that "[b]ecause [Otto] is no longer able to pay that amount, the fair and equitable resolution of the case is to transfer to [Kathleen Otto] all of [Kenneth Otto's] interest in real and personal property, minus $12,500 needed to pay attorneys fees, and require [Kenneth Otto] to pay a modifiable alimony of $1 per year." Id.
Notwithstanding this allocation of assets, the defendant nevertheless acknowledged to the court during the divorce proceeding that she might still be required in the future to tender a portion of those assets to the plaintiff:
Q: You realize, ma'am, that if the Court were to award all the real and personal property that you've asked for today, that you still will have to fight somewhat of a battle against the estate of Shamaia Smith to actually obtain those assets in the future?
A: Yes.
Def. Br., Exhibit 13.
Following the dissolution proceeding, the plaintiff again appealed the denial of her motion to intervene, which was dismissed without opinion by the Appellate Court on September 10, 2008. Heeding Judge Schluger's suggestion that her rights might be vindicated in an action alleging fraudulent conveyances, the plaintiff commenced the present action on March 19, 2009. The claim underlying the application for prejudgment remedy alleges that the divorce judgment constitutes a fraudulent transfer because the sole reason that the defendant and Otto initiated their divorce proceeding was to shelter assets from Otto's creditors. Thus, the plaintiff argues, because the divorce proceeding was initiated to fraudulently transfer these assets to the defendant, that judgment can be avoided under either General Statutes § 52-552e or § 52-552f to the extent necessary to satisfy its prejudgment remedy against Otto for the wrongful death of Smith.
General Statutes § 52-552e states in relevant part:
(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, if the creditor's claim arose before the transfer was made or the obligation was incurred and if the debtor made the transfer or incurred the obligation: (1) With actual intent to hinder, delay or defraud any creditor of the debtor; or (2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor (A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction, or (B) intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due. insider of the debtor.
General Statutes § 52-552f states in relevant part:
(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.
(b) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time and the insider had reasonable cause to believe that the debtor was insolvent.
In response, the defendant filed the instant motion on May 8, 2009, seeking to dismiss the plaintiff's application for a prejudgment remedy. The defendant's motion, which was supported by the requisite memorandum of law, argues both that the court lacks subject matter jurisdiction to hear the underlying claim because the plaintiff is without standing, and that the issue of whether the plaintiff has a claim to the defendant's property may not be heard under the doctrines of res judicata and collateral estoppel since that issue was decided in the divorce proceeding. Subsequently, the plaintiff filed an objection to the defendant's motion, which was likewise supported by a memorandum of law, and the parties were heard at short calendar on June 1, 2009. The defendant filed a reply brief on June 9, 2009.
The plaintiff's memorandum of law in opposition to the motion to dismiss was received in a timely manner by the court, but was not filed until June 18, 2009.
DISCUSSION
The court pauses to quickly dispose of the defendant's arguments that the plaintiff's suit is foreclosed by the doctrines of res judicata and collateral estoppel. Our courts have long recognized that because the doctrines of res judicata and collateral estoppel do "not implicate a court's subject matter jurisdiction," they "must be raised as a special defense and may not be raised by a motion to dismiss, which is the appropriate vehicle to assert a lack of jurisdiction." (Internal quotation marks omitted.) Tuchman v. State, 89 Conn.App. 745, 762 n. 7, 878 A.2d 384, cert. denied, 275 Conn. 920, 883 A.2d 1252 (2005), citing Zizka v. Water Pollution Control Authority, 195 Conn. 682, 686-87, 490 A.2d 509 (1985). Accordingly, the court does not consider these arguments at this time because they fail to implicate the court's jurisdiction, and they are raised by the defendant in an inappropriate procedural vehicle.
The court next addresses the defendant's argument that the plaintiff does not have standing to bring its UFTA claim because a collateral attack on the divorce judgment is outside the zone of interests protected by the UFTA. Specifically, the defendant avers that because our jurisprudence teaches that it is improper to set aside only a portion of a divorce judgment because of the unique equitable considerations that come into play in such decisions, allowing a UFTA challenge in this context would require the entire divorce judgment to be vacated and would, thereby, deprive divorce judgments of their finality. See Sunbury v. Sunbury, 210 Conn. 170, 174, 553 A.2d 612 (1989) (where trial court committed error regarding one aspect of a financial award, remand of entire divorce proceeding was required). The court is not persuaded.
The court begins by setting forth the relevant standard of review. "A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Cox v. Aiken, 278 Conn. 204, 210-11, 897 A.2d 71 (2006). "The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss." St. George v. Gordon, 264 Conn. 538, 544, 825 A.2d 90 (2003). "If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause." (Internal quotation marks omitted.) Missionary Society of Connecticut v. Board of Pardons Paroles, 278 Conn. 197, 201, 896 A.2d 809 (2006).
When a court "decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Cox v. Aiken, supra, 278 Conn. 211. "The motion to dismiss . . . admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone." (Internal quotation marks omitted.) Ferreira v. Pringle, 255 Conn. 330, 346-47, 766 A.2d 400 (2001). Nevertheless, where "the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue and need not conclusively presume the validity of the allegations of the complaint." Id.
Finally, in deciding a motion to dismiss alleging a lack of subject matter jurisdiction, "[t]he burden rests with the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute." (Internal quotation marks omitted.) Goodyear v. Discala, 269 Conn. 507, 511, 849 A.2d 791 (2004). Accordingly, it is "[t]he plaintiff [that] bears the burden of proving subject matter jurisdiction, whenever and however raised." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 265 Conn. 423, 430 n. 12, 829 A.2d 801 (2003).
The following principles inform the court's standing analysis. "Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless [one] has, in an individual or representative capacity, some real interest in the cause of action . . ." (Internal quotation marks omitted.) In re Shawn S., 262 Conn. 155, 164, 810 A.2d 799 (2002). "Standing is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy . . ." (Internal quotation marks omitted.) Water Pollution Control Authority v. OTP Realty, LLC, 76 Conn.App. 711, 714, 822 A.2d 257, cert. denied, 264 Conn. 920, 828 A.2d 619 (2003).
It is axiomatic that aggrievement is a basic requirement of standing. Indeed, "pleading and proof of aggrievement are prerequisites to the trial court's jurisdiction over the subject matter of a plaintiff's appeal." (Internal quotation marks omitted.) Stauton v. Planning Zoning Commission, 271 Conn. 152, 157, 856 A.2d 400 (2004). Generally, there are two broad yet distinct species of aggrievement: classical and statutory; either type will establish standing, and each has its own unique features. See Burton v. Comm'r of Environnzental Protection, 291 Conn. 789, 803, 970 A.2d 640 (2009). This case concerns statutory aggrieveinent. Unlike classical aggrievement, "[s]tatutory aggrievement exists by legislative fiat, not by judicial analysis of the particular facts of the case. In other words, in cases of statutory aggrievement, particular legislation grants standing to those who claim injury to an interest protected by that legislation." (Internal quotation marks omitted.) Pond View, LLC v. Planning Zoning Commission, 288 Conn. 143, 156, 953 A.2d 1 (2008).
In order to ascertain whether a party has standing to make a claim under a statute, a court must, therefore, determine the interests and the parties that the statute was designed to protect. Thus, because "[t]he plaintiff must be within the zone of interests protected by the statute"; (citation omitted; internal quotation marks omitted.) St. George v. Gordon, supra, 264 Conn. 545-46; "the standing question in such cases is whether the . . . statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief." Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). "It has been [noted] that the `zone of interests' test bears a family resemblance to the `scope of the risk' doctrine in the law of torts . . . In tort law, it is not enough that the defendant's violation of the law caused injury to a plaintiff. The defendant must also owe that plaintiff a duty. Similarly, with respect to the law of [statutory] standing, it is not enough that a party is injured by an act or omission of another party. The defendant must also have violated some duty owed to the plaintiff." (Citation omitted; internal quotation marks omitted.) McWeeny v. Hartford, 287 Conn. 56, 65, 946 A.2d 862 (2008).
With these principles in mind, the court considers whether the plaintiff has met her jurisdictional burden of proof by demonstrating its claim to be cognizable under the UFTA. General Statutes § 52-552e(a) provides in relevant part: "A transfer made . . . by a debtor is fraudulent as to a creditor, if the creditor's claim arose before the transfer was made or the obligation was incurred and if the debtor made the transfer or incurred the obligation: (1) With actual intent to hinder, delay or defraud any creditor of the debtor; or (2) without receiving a reasonably equivalent value in exchange for the transfer or obligation . . ." Additionally, our courts have also relied on the principles set forth in Wendell Corp. Trustee v. Thurston, 239 Conn. 109, CT Page 14215 680 A.2d 1314 (1996), which states: "In the area of fraudulent conveyances, we have held that [t]he patty seeking to set aside a conveyance as fraudulent bears the burden of proving either: (1) that the conveyance was made without substantial consideration and rendered the transferor unable to meet his obligations; or (2) that the conveyance was made with a fraudulent intent in which the grantee participated." (Internal quotation marks omitted.) Id., 115-16. Accordingly, the plaintiff must demonstrate that: (1) the Ottos' divorce judgment was a "transfer" of assets for purposes of the UTTA; (2) it had a "claim" against Otto prior to the transfer of assets from Otto to the defendant; and (3) Otto's transfer of those assets to the defendant constitutes either actual or constructive fraud under the UFTA.
With respect to the first issue, whether the divorce judgment constitutes a "transfer" for purposes of the UFTA, the court concludes that it does. The term "transfer" is defined by General Statutes § 52-552b(12) to mean "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, or disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease and creation of a lien or other encumbrance." Although the text of the statute does not explicitly reference a divorce judgment, the expansive nature of its text confirms it to be broad enough to encompass a divorce judgment. A divorce judgment disposes of the parties' interests in the marital property. See General Statutes § 46b-81(a) ("the Superior Court may assign to either the husband or wife all or any part of the estate of the other"); see also General Statutes § 46b-81(b) ("[a] conveyance made pursuant to the decree shall vest title in the purchaser, and shall bind all persons entitled to life estates and remainder interests in the same manner as a sale ordered by the court pursuant to the provisions of section 52-500"). It is additionally noted that the personal and real property distributed by the court in this case clearly meet the definition of "assets," as that term is used in § 52-552b(12). Consequently, the divorce judgment here transferred assets.
The court's conclusion that the disposition of property effectuated by a divorce judgment fits comfortably within the UFTA's definition of the word "transfer" is further buttressed by the adjudication of this issue in other jurisdictions to have adopted the UFTA. Indeed, the overwhelming majority of jurisdictions to have considered whether a divorce judgment is a transfer of assets under the UFTA have resolved that question in the affirmative. See, e.g., Estes v. Titus, 481 Mich. 573, 580-81, 751 N.W.2d 493 (2008) (property settlement agreement incorporated into divorce judgment a transfer for purposes of UFTA); Mejia v. Reed, 31 Cal. 4th 657, 669, 74 P.3d 166 (2003) (same); Dowell v. Dennis, 998 P.2d 206, 212-13 (Ok.Civ.App. 2000) (same); Greeninger v. Cromwell, CT Page 14216 140 Or.App. 241, 246, 915 P.2d 479, cert. denied, 323 Ore. 690, 920 P.2d 549 (1996) (same); In re Hoyt, 97, B.R. 730 (1989) (contested divorce judgment treated as fraudulent transfer for purpose of resolving whether constructive fraud allegation was foreclosed by collateral estoppel in motion for summary judgment). Consequently, because "assets" were "transferred" from Otto to the defendant by virtue of the divorce judgment, and in view of the persuasive precedent from other jurisdictions to have considered this question, the court concludes that the divorce judgment at issue in this case is a "transfer" for purposes of the UFTA.
In connection with the second issue, whether the plaintiff had a "claim" against Otto prior to the transfer of assets from Otto to the defendant, the court likewise answers in the affirmative. For purposes of the UFTA, "`Claim' means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured." General Statutes § 52-552b(3). Noting that the "legislature chose to adopt a very broad definition of the term `claim,'" our Appellate Court has interpreted this definition to mean "that [a] plaintiff's claim [arises] on the date of the injury in the underlying action." Davenport v. Quinn, 53 Conn.App. 282, 304, 730 A.2d 1184 (1999). Thus, in this case, the plaintiff's UFTA claim arose on the date Smith was murdered, which was prior to both Otto transferring his land in Massachusetts to the defendant and to the defendant filing for divorce against Otto.
Having concluded that the plaintiff has a valid "claim" against Otto and that the divorce judgment was a "transfer" of "assets" from Otto to the defendant, the court next considers the third issue, whether the plaintiff has alleged either actual or constructive fraud. In resolving this question, the court inquires whether the undisputed facts support a conclusion that "either: (1) that the conveyance was made without substantial consideration and rendered the transferor unable to meet his obligations or (2) that the conveyance was made with a fraudulent intent in which the grantee participated." (Internal quotation marks omitted.) Certain Underwriters at Lloyd's, London v. Cooperman, 289 Conn. 383, 394-95, 957 A.2d 836 (2008). Significantly, the party seeking to set aside a fraudulent conveyance need not satisfy both of these tests. See, id. In this case, the plaintiff has alleged both that Otto's initial conveyance of the Massachusetts property by quitclaim deed to the defendant and that the Ottos' entire divorce proceeding was undertaken with the intent to shelter various assets from the plaintiff. Moreover, the plaintiff asserts that the timing of these transfers, occurring so quickly after Otto became a suspect in Smith's murder and well before Otto was convicted of that crime, offers a reasonable inference of fraudulent intent. Taken together, these facts support a claim of actual fraud because they support a conclusion that Otto and the defendant acted with "actual intent to hinder, delay or defraud" the plaintiff, to whom Otto is a debtor. General Statutes § 52-552e(a). Accordingly, the court concludes that the plaintiff's claim meets the statutory elements necessary to bring a claim of actual fraud under the UFTA.
Having concluded that the plaintiff has alleged facts sufficient to ground a claim of actual fraud under the UFTA, the court need not address whether facts grounding a claim of constructive fraud have likewise been adduced. The plaintiff need only allege facts sufficient to bring a cause of action under either actual or constructive fraud for it to have standing, and for the court to, consequently, have subject matter jurisdiction.
That does not end the court's standing inquiry, however, because the zone of interest test requires the plaintiff to demonstrate that the "statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief." Warth v. Seldin, supra, 422 U.S. 500. Thus, while the plaintiff's complaint satisfies the statutory elements necessary to bring a UFTA claim, the court must now resolve whether the defendant is correct that this suit constitutes an impermissible collateral attack on the judgment of another court, thereby precluding any judicial relief. In essence, the defendant argues that if she is correct that this court does not have authority to disturb the divorce judgment previously entered by Judge Schuman, then the plaintiff is not within the zone of interests protected by the UFTA because judicial relief cannot be provided Ergo, the defendant's argument concludes, the plaintiff does not have standing and this court is without subject matter jurisdiction. The court disagrees.
While the defendant is certainly correct that "[a] collateral attack on a judgment is a procedurally impermissible substitute for an appeal"; see Papic v. Burke, 113 Conn.App. 198, 222, 965 A.2d 633 (2009); it does not follow that an action brought under the UFTA is necessarily an impermissible collateral attack. To the contrary, our jurisprudence recognizes an exception to the rule against collateral attacks, for the benefit of strangers to a judgment that did not have an opportunity to litigate their claim in the previous action. Indeed, "a stranger to a judgment may attack such judgment in a later proceeding on the ground of fraud where the stranger's interests, which accrued prior to the judgment under attack, have been adversely affected, regardless of whether such attack is labeled `collateral' or `direct.'" (Internal quotation marks omitted.) Dowell v. Dennis, supra, 998 P.2d 206, 212; see also, 50 C.S.J., Judgment § 510 (2006) ("[a] stranger to the record, may attack the judgment on the ground of want of jurisdiction, or for fraud or collusion"); 50 C.S.J., Judgment § 511 (2006) ("[a] creditor whose rights or claims would be injuriously affected by enforcement of a judgment against his debtor may impeach it for fraud in a proper case"); 27 A C.S.J., Divorce § 420 (2006) (stranger to divorce judgment may collaterally attack that judgment); 24 Am.Jur.2d, Divorce and Separation § 447 (2009) (stranger to divorce judgment may collaterally attack that judgment); see, e.g., Schmidt v. Retirement Board of San Francisco City and County Employees, 37 Cal.App.4th 1204, 44 Cal.Rptr.2d 297 (1995) (a decision purporting to bind, to the findings of an earlier action, third parties who had no notice or right to be heard deprives those third parties of property without due process); Terra-Nova Investments v. Rosewell, 235 Ill.App.3d 330, 601 N.E.2d 1109 (1992) (only the parties and their privies to a prior judgment can be barred from challenging the judgment in a collateral attack); Fremont Indemnity Co. v. Industrial Commission of Arizona, 144 Ariz. 339, 697 P.2d 1089 (1985) (stranger to litigation may not be bound by the judgment in a later proceeding); cf. Tippin v. Tippin, 148 Conn. 1, 6, 166 A.2d 448 (1960) (in case where third party challenged validity of foreign divorce judgment, "to have standing to make [a collateral attack], she would have to prove, at the outset and as the first issue, that she had a legally protected interest adversely affected by the decree"). Accordingly, our legal tradition has long recognized an exception to the rule against collateral attacks for parties, like the plaintiff in this case, who could not litigate their claim in the original action, and who allege that the underlying judgment was in some way fraudulently obtained and that a previously held legal interest has been adversely affected by the decree.
It is, therefore, significant that the plaintiff in this case was unable to litigate her UFTA claim in the context of the Otto's divorce proceeding despite her efforts to intervene. This inability establishes the plaintiff's status as a "stranger" to the previous litigation. This is not to say that the plaintiff should have been allowed to intervene. As Judge Shluger noted in his memorandum of decision, Connecticut courts have routinely denied the intervention of third-party creditors in a divorce proceeding. See Otto v. Otto, Superior Court, judicial district of Tolland, Docket No. FA 07 4007084 (November 27, 2007, Schluger, J.) (44 Conn. L. Rptr. 549); see also Inkel v. Inkel, Superior Court, judicial district of Hartford, Docket No. FA 06 4021023 (June 15, 2006, Epstein, J.) [41 Conn. L. Rptr. 526] (unless a party of right, only necessary parties may be joined or intervene in dissolution of marriage proceeding). Thus, the family court was without jurisdiction to hear the plaintiff's UFTA claims, and these allegations of fraud were not, and could not have been, litigated because third-party creditors are not deemed necessary parties to divorce proceedings. Consequently, the plaintiff is a stranger to the Otto's divorce judgment, and fundamental fairness strongly counsels in favor of giving the plaintiff her day in court.
For purposes of this exception to the rule against collateral attack on the judgments of another court, the word "stranger" refers to a litigant who is not a party to the prior action or in privity with a party to that action. See 50 C.S.J., Judgment § 510 (2006); 50 C.S.J., Judgment § 511 (2006); 27 A C.S.J., Divorce § 420 (2006); see also Tippin v. Tippin, supra, 148 Conn. 6 ("[s]ince the plaintiff here was not a party to the Alabama divorce proceedings; she is a stranger making a collateral attack on the decree").
Indeed, it is noted that at least one court has held a creditor's claim under the UFTA is not an impermissibly collateral attack on a divorce judgment because (1) the divorce court had no jurisdiction to determine the rights of a creditor and (2) a creditor cannot appeal a divorce judgment. See Estes v. Titus, supra, 481 Mich. 592-93. While the court here does not rely on that line of reasoning to conclude that a suit brought pursuant to the UFTA in Connecticut is not an impermissible collateral attack on the defendant's divorce judgment, the court does find this analysis persuasive. Like the plaintiff in Estes, the plaintiff in this case is likewise prevented from raising its UFTA claim in the context of the Otto's divorce proceeding, and the plaintiff is likewise foreclosed from appealing the divorce judgment.
Having concluded that the plaintiff satisfies the elements necessary to bring its UFTA claims, and that a UFTA claim falls within the established exception to collateral attacks on the judgment of another court, the court next addresses the defendant's argument that our case law forbids a court to set aside only a portion of a divorce judgment due the unique equitable considerations that come into play in such decisions. See Sunbury v. Sunbury, supra, 210 Conn. 170 (where trial court committed error regarding one aspect of a financial award, remand of entire divorce proceeding was required). Although that argument merits thoughtful analysis, it is nevertheless unavailing. Unlike traditional collateral attacks on the judgment of a court, which seek vacatur for want of jurisdiction, the relief afforded under the UFTA is narrow, and does not require the entire divorce judgment to be vacated. See Estes v. Titus, supra, 481 Mich. 587-89. This is because a UFTA claim is not premised on any irregularity in the divorce proceedings and does not seek to invalidate the divorce judgment itself. Instead, an independent UFTA claim seeks to litigate an issue that the family court was incapable of assessing for itself, and allows a successful plaintiff to avoid the transfer of specific property or to attach specific assets that were transferred. Thus, Sunbury v. Sunbury, supra, 210 Conn. 170, and its progeny are inapposite to this case because the relief sought in a UFTA claim is not predicated upon any fault of the family court and because its remedy is limited to allowing a successful plaintiff to access only specific assets that it demonstrates to have been fraudulently transferred in the first place. See Estes v. Titus, supra, 481 Mich. 593.
Finally, the court turns to address defendant's argument that the plaintiff's UFTA claim in this case is actually an allegation that "Judge Schuman engaged in fraud or entered a `sham' judgment." It bears emphasis that a UFTA suit alleging a fraudulent transfer to have occurred by virtue of a contested divorce judgment is not tantamount to an allegation that the family court is in any way involved in the alleged fraud. As previously noted, a family court is not authorized to adjudicate a third-party UFTA claim in the context of a divorce proceeding, so there no opportunity to hear evidence as to the possibility of such fraud. Although it is far from novel for parties to a divorce proceeding to collude to fraudulently induce the court to enter a divorce judgment that suits their ends; the integrity of the court in such cases is not called into question See, e.g., Baker v. Baker, 187 Conn. 315, 322, 445 A.2d 912 (1982) (imposing requirement of honest disclosure between litigating parties and court). Accordingly, the court rejects the defendant's assertion that the plaintiff's UFTA claim in this case implicates Judge Schuman. That misguided analysis confuses fraud by the court with fraud upon the court and ignores the narrow parameters within which Judge Schuman was obligated to adjudicate the Otto's divorce.
CONCLUSION
For the reasons set forth above, the court denies the defendant's motion to dismiss because the claims of res judicata and collateral estoppel are not properly resolved in this context and because the plaintiff has met her burden in demonstrating that she has standing to bring a UFTA claim against the defendant.