Opinion
No. CV07-5012419S
November 14, 2007
MEMORANDUM OF DECISION RE DEFENDANT PATRICIA FERRIGNO'S MOTION TO DISMISS APPLICATION FOR PREJUDGMENT REMEDY
The plaintiff, a tenant of the New Haven Regional Food Terminal, Inc., has sublet some of its stalls at the food terminal to the defendant, Robert J. Ferrigno. The plaintiff alleges that Robert Ferrigno has failed to pay rent, and it has brought this action to collect it. The plaintiff, in a second count, also alleges that Robert Ferrigno has fraudulently transferred all of his right, title and interest in certain real property in Hamden to his wife, Patricia Ferrigno, and it has applied for a prejudgment remedy in which it seeks to attach the Hamden property to secure any judgment it receives in the underlying matter.
The defendant, Patricia Ferrigno, has now moved to dismiss the application for a prejudgment remedy. She contends first that the plaintiff's affidavit in support of its application for a prejudgment remedy recites facts relevant only to the first count of the proposed complaint, namely the debt allegedly owed by Robert Ferrigno to the plaintiff. The affidavit does not recite facts, she claims, that would tend to establish a cause of action in fraudulent conveyance as to her. She also contends that the plaintiff can not establish a cause of action for fraudulent transfer because the alleged transfer, which occurred on November 23, 2004, by far precedes the date on which the debt was incurred, which more than two years later. Additionally, she argues that by statute, spousal transfers occurring before the occurrence of a debt, even if for no consideration, can not be considered fraudulent transactions.
The plaintiff argues that Connecticut's Uniform Fraudulent Transfer Act, General Statutes § 52-552a et seq., supplements, rather than replaces, common law, and that its claim against Patricia Ferrigno rests on the theory that the common law precludes conveyances undertaken in expectation of debts to be incurred. The plaintiff cites Yale New Haven Hospital v. Hicks, 24 Conn. L. Rptr. 74 (1999), in which Judge Curran ruled that he was "not prepared to state . . . that UFTA has expressly provided for the abrogation of the common law. In light of the fact that there is ambiguity in the UFTA statute as to whether the legislature has expressly removed the right of future creditors, and the fact that the legislative history supports the proposition that the UFTA seeks to expand the common law as to fraudulent transfers, this court finds that the legislature has not acted in a clear and plain manner so as to displace the common law right as to fraudulent transfers."
The plaintiff argues that in order to establish a fraudulent conveyance claim at common law, it must show either "i) that the conveyance was made without substantial consideration and renders the transferor unable to meet his obligations, or ii) that the conveyance was made with a fraudulent intent in which the grantee participated" Rosenlicht v. Bradley, 2006 WL 146, 1096 (Conn.Super) May 8, 2006; Tyres v. Coma, 214 Conn. 8, 11 (1990). As the plaintiff's application and affidavit provide the court with no evidence regarding fraudulent intent on the part of either of the Ferrignos, it is clear that the plaintiff is focusing on its contention that this was a transfer for no consideration that left Robert Ferrigno unable to pay the debt that is the subject of this litigation.
Assuming, arguendo that the UFTA has not totally abrogated common-law remedies for fraudulent transfers, it is nonetheless apparent that it was indeed the intent of the Legislature to abrogate the cause of action for fraudulent transfer with regard to spousal transfers of assets made before the debt in question was incurred. During the course of the debates on the UFTA, Senator Anthony Avallone remarked, "What the amendment does is indicate that espousal [sic] transfers, any transfer between a husband and wife, even if it was for no consideration, which took place before the occurrence of a debt, would not be subject to a claim of fraudulent conveyance, if in fact, that particular loan had not been repaid. If that transfer takes place after the debt has been incurred, then it is subject to fraudulent conveyance." Remark of Senator Avallone, S.PROC. 1991 Session p. 2901.
"When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply . . . In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered . . . When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter . . ." (Internal quotation marks omitted.) Kinsey v. Pacific Employers Ins. Co., 277 Conn. 398, 404, 405, 891 A.2d 959 (2006).
Courts afford substantial weight to a legislator's description of the purpose of a statutory amendment if the description is direct and unequivocal and there is no indication of a contrary legislative intent. See, e.g., Oxford Tire Supply, Inc. v. Commissioner of Revenue Services, supra, 253 Conn. 692 ("[i]n the absence of anything in the scant legislative history of [Public Acts 1999, No. 99-225 § 30], to contradict Representative [Patricia] Widlitz' direct and unequivocal statement regarding the amendment's clarifying purpose, we afford substantial weight to her characterization of its objective and effect"); see also Connecticut National Bank v. Giacomi, 242 Conn. 17, 40-41, 699 A.2d 101 (1997) (Court afforded substantial weight to a legislator's unequivocal remark that the purpose of a statutory amendment was "not to change the law, but to clarify what I would consider the law [to be] . . . It's not saying something different." [Internal quotation marks omitted.]); State v. Magnano, 204 Conn. 259, 281-82, 282 n. 11, 528 A.2d 760 (1987) (relying on multiple legislators' comments that public act would clarify existing law, would apply retroactively and was enacted in response to prior judicial decisions).
"In determining whether or not a statute abrogates or modifies a common law rule the construction must be strict, and the operation of a statute in derogation of the common law is to be limited to matters clearly brought within its scope . . ." (Citations omitted.) Lynn v. Haybuster Mfg., Inc., 226 Conn. 282, 289-90, 627 A.2d 1288, (1983). While the legislature's authority to abrogate the common law is undeniable, the courts will not lightly impute such an intent to the legislature. Munroe v. Great American Ins. Co., 234 Conn. 182, 187, 661 A.2d 581, (1995). "[C]ourts must discharge their responsibility, in case-by-case adjudication, to assure that the body of the law — both common and statutory — remains coherent and consistent." Fahy v. Fahy, 227 Conn. 505, 513-14, 630 A.2d 1328, (1993)." Although the legislature may eliminate a common-law right by statute, the presumption that the legislature does not have such a purpose can be overcome only if the legislative intent is clearly and plainly expressed." Lynn v. Haybuster Mfg., Inc., supra, 226 Conn. 290.
In Hicks, supra, in which the court was dealing with an argument that the court lacked subject matter jurisdiction over a common-law fraudulent transaction claim, Judge Curran felt that the legislative history was ambiguous on that point and denied the motion before him, but it seems to this court that Senator Avallone's uncontradicted statement on the subject of spousal transfers actually leaves little room for doubt as to the legislature's intent with respect to this particular issue. Sen. Avallone made clear that among the purposes of the legislation was to eliminate fraudulent transaction liability for a spouse-to-spouse transfer when the debt in question had not yet been incurred, and with none of his colleagues' voices raised to the contrary, it must be assumed that this is precisely what the legislature had in mind.
Given that clear cut and uncontradicted statement of legislative purpose, the court is left to conclude that, at least with respect to spousal transfers prior to the occurrence of the debt which is the subject of the claim, the UFTA has abrogated common law and preempted the field. The plaintiff's affidavit reveals that although the lease was entered into the year before the transfer, the debt that is the subject of this litigation, namely nonpayment of rent which commenced in January of 2007, did not occur until more than two years after the transfer. In light of that statement of legislative purpose and the undisputed fact that the transfer between husband and wife in this case occurred a full two years prior to the debt, the plaintiff may not maintain a claim of fraudulent transfer with regard to the property now in the name of Patricia Ferrigno.
As fraudulent transfer is the only legal theory advanced in support of the application for a prejudgment remedy, the motion to dismiss that application is granted.