Opinion
No. CV-04-0491205S
December 18, 2007
MEMORANDUM OF DECISION (#142)
This action, alleging violations of the Connecticut Uniform Fraudulent Transfer Act (UFTA), General Statutes § 52-552a, et seq., was filed in June 2004 by Marybeth Lightowler as the executrix of the estate of Victor Benedetto and individually (Lightowler). A revised complaint was filed on July 19, 2004, and on July 26, 2004, the defendant Bryant Esparo (Esparo) filed an answer and a jury claim. On September 18, 2007, Lightowler filed an objection to the jury claim (#142).
The revised complaint alleged that Laura Esparo, Bryant Esparo's mother, was indebted to Lightowler as a result of a judgment obtained in 1990 and that in December 2003 she transferred certain real property to Esparo subsequent to the receipt of post-judgment interrogatories. The revised complaint specifically alleged that "Laura Esparo transferred said real property with the intent to hinder, delay or defraud the Plaintiff in the collection of the debt." (¶ 15, which is incorporated in all three counts.) In the first and second counts, Lightowler sought that the transfer to be declared null and void and the conveyance set aside under the UFTA. In the third count, she sought damages pursuant to General Statutes § 52-552i(b).
Lightowler now maintains that she no longer is seeking statutory damages. On September 18, 2007, she filed a motion for leave to file an amended complaint (#141) which seeks, among other things, to withdraw that claim. Counsel has represented that even if the motion for leave is not granted, Lightowler intends to withdraw her claim for statutory damages. Accordingly, Lightowler maintains that this action is purely equitable and that there is no right to a jury trial. Esparo asserts that he was lawfully entitled to claim this action to the jury docket based on the allegations of the revised complaint and that if the court should deem the claims to be purely equitable it should exercise its discretion pursuant to General Statutes § 52-218 to submit the issues to a jury in light of his timely filed and longstanding claim to the jury docket.
General Statutes § 52-218 provides: "Upon the application of either party, the court may order any issue or issues of fact in any action demanding equitable relief to be tried to a jury of six." (Emphasis supplied.)
There is no constitutional right to a jury trial in equitable actions in Connecticut. Franchi v. Farmholme, Inc., 191 Conn. 201, 209, 464 A.2d 35 (1983). The nature of a cause of action is determinative of the right to a jury trial; however, the court may look to the form of relief sought in the action as a relevant factor. Id., 211; Gaudio v. Gaudio, 23 Conn.App. 287, 302-03, 580 A.2d 287, cert. denied, 217 Conn. 803, 584 A.2d 471 (1990).
The court must examine the operative pleadings. All three counts of Lightowler's July 19, 2004 revised complaint allege a statutory cause of action under the UFTA. The "UFTA is largely an adoption and clarification of the common law of fraudulent conveyance," (citation omitted; internal quotation marks, punctuation omitted), although it provides remedies to creditors that extend beyond the common law of "property and proceeds." Robinson v. Coughlin, 266 Conn. 1, 9, 830 A.2d 1114 (2003). In the first and second counts, Lightowler seeks to have the conveyance to Esparo declared null and void and set aside, a traditional equitable remedy. Gaudio, supra, 23 Conn.App. 303.
In addition, in the third count Lightowler seeks a specific statutory remedy of a "judgment for the value of the asset transferred." General Statutes § 52-552i(b). Although the common law provided a remedy at law for compensation in damages for the value of the fraudulent conveyance, Crepeau v. Gronager, 41 Conn.App. 302, 316, 675 A.2d 1361 (1996), in a case where an intentional fraudulent transfer was alleged, as here, the debtor had to prove wrongdoing on the part of both the transferor and transferee. See Bizzoco v. Chinitz, 193 Conn. 304, 312, 476 A.2d 572 (1984); cf. Nowsky v. Siedlecki, 83 Conn. 109, 117, 75 A. 135 (1910) (Judgment against transferee set aside because no facts in judgment file to establish that she participated in the intended fraud). Under the UFTA the transferee's intent is irrelevant to the statutory finding of an intentional fraudulent transfer which is based instead solely on the transferor's intent as determined pursuant to the factors set forth in § 52-552e(b). Wieselman v. Hoeniger, 103 Conn.App. 591, 598-99, 930 A.2d 571, cert. denied, 284 Conn. 930 (2007). Furthermore, while arguably similar to the common-law remedy for damages, the UFTA "does not vest the court with unfettered discretion to award damages" and any damages which are awarded must be within the limitations of its remedial scheme. Robinson v. Coughlin, supra, 266 Conn. 11. This analysis supports a conclusion that as alleged Lightowler's statutory cause of action is essentially equitable and there is no right to a jury trial, even if the statutory damages claim were to remain in the case. See Associated Investment Co. Ltd Partnership v. Williams Associates IV, 230 Conn. 148, 645 A.2d 505 (1994).
Nonetheless, the court retains considerable discretion to either permit or deny the submission of the factual issues in this case to a jury. Meyers v. Cornwell Quality Tools, Inc., 41 Conn.App. 19, 25-27, 674 A.2d 444 (1996). Both General Statutes § 52-218 and Practice Book § 16-10 permit the submission of "issues of fact in any action demanding equitable relief' to a jury. The procedure, however, is cumbersome because ultimately it is the court, and not the jury, that renders a judgment in an equitable action. "The proper course in most instances is to submit interrogatories covering only those issues upon which the court determines in its discretion the decision of the jury is appropriate and useful. If the answers of the jury are returned and accepted, the court determines any other issues necessary to a decision of the case and gives judgment accordingly." Dzubin v. Dzubin, 121 Conn. 646, 649, 186 A. 652 (1936).
Esparo maintains that his long expressed preference for a jury trial should trump Lightowler's untimely objection to his jury trial claim, particularly because "the parties dispute crucial issues of fact" regarding the transferor's intent. (Memorandum of Law in Opposition to Plaintiff's Objection, p. 6.) In light of the timeline, the court is reluctant to dash Esparo's expectation that a jury would make these factual determinations, but a judge is just as capable of resolving disputed issues of fact as a jury. Moreover, the court retains the discretion to decline a request to submit an equitable claim to a jury even in the absence of an objection from the opposing party. Edmunds v. CUNO, Inc., 277 Conn. 425, 436, 892 A.2d 938 (2006). In this UFTA case where the transferor's intent must be determined by applying the factors set forth in § 52-552e(b), Wieselman v. Hoeniger, supra, 103 Conn.App. 598-99, the court doubts the practicality of submitting the requisite interrogatories to a jury and has concerns about how the interrogatories might be framed, the potential for confusion and the burdens such a procedure would impose on the trial judge.
There is no question that Esparo has had a jury claim on file since July 26, 2004. However, although this case has been pending for a long time, it was stayed from October 25, 2005 through January 10, 2007 because Esparo filed for bankruptcy.
General Statutes § 52-552e(b) provides:
(b) In determining actual intent under subdivision (1) of subsection (a) of this section, consideration may be given, among other factors, to whether: (1) The transfer or obligation was to an insider, (2) the debtor retained possession or control of the property transferred after the transfer, (3) the transfer or obligation was disclosed or concealed, (4) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit, (5) the transfer was of substantially all the debtor's assets, (6) the debtor absconded, (7) the debtor removed or concealed assets, (8) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred, (9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred, (10) the transfer occurred shortly before or shortly after a substantial debt was incurred, and (11) the debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.
Accordingly, for all the reasons stated above, the court exercises its discretion and strikes this case from the jury trial list. A court trial date will be assigned in due course.