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Cockerham v. Westphalen

KENNETH COCKERHAM v. ADAM

WESTPHALEN ET AL.

(AC 46231)

Alvord, Moll and Clark, Js.

Syllabus

Pursuant to statute (§ 52-552e (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.’’

The defendant J appealed from the judgment of the trial court rendered for

the plaintiff on three counts of his complaint that asserted claims of

fraudulent transfer against J and her husband, the defendant W, pursuant

to the Connecticut Uniform Fraudulent Transfer Act (CUFTA) (§ 52-

552a et seq.). In September, 2004, on the advice of W, the plaintiff

transferred funds from his 401 (k) account into an individual retirement

account (IRA) comanaged by A Co., W’s employer. W subsequently

formed T Co., and he left his employment with A Co. in 2007. In 2008,

on the advice of W, the plaintiff transferred the balance of his IRA into

another entity, and the funds were subsequently transferred to a bank

account owned by T Co. so that W, as the sole member of T Co.,

could fully manage and invest the funds for the plaintiff. As part of this

transaction, T Co. issued an unsecured promissory note to the plaintiff

in the amount of $185,000. The plaintiff invested additional funds into

accounts held and managed by T Co. in 2009 and 2011, bringing the

plaintiff’s total principal investment to more than $227,000. Thereafter,

W mismanaged the plaintiff’s investments and was negligent in the handling of assets committed to him by the plaintiff by, inter alia, commingling the plaintiff’s assets with those of other investors, taking no steps

to secure the plaintiff’s investment, paying numerous personal expenses

with T Co.’s assets and transferring T Co.’s assets to his personal

accounts without the knowledge of investors. Between 2008 and 2012,

T Co. suffered significant losses, failed to provide the plaintiff with

periodic reports concerning T Co.’s poor financial condition and failed

to provide the plaintiff with any financial records reflecting the plaintiff’s

losses. On May 1, 2017, the promissory note from T Co. to the plaintiff
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Cockerham v. Westphalen

matured. Although W represented to the plaintiff that his assets were

secure, T Co. was unable to satisfy its obligation to the plaintiff because

it lacked assets sufficient to satisfy the note. W subsequently dissolved

T Co., giving no notice of the dissolution to the plaintiff or to any other

creditors. The plaintiff commenced the present action in May, 2018,

claiming, inter alia, that W and J fraudulently transferred to themselves

various moneys and assets belonging to T Co. in violation of CUFTA,

specifically § 52-552e. In July, 2018, the plaintiff applied for a prejudgment remedy against, inter alia, J and W, which was granted in January,

2019, as against W. While the litigation was ongoing, the Department of

Banking commenced an investigation into W, and, although it was

unclear from the record precisely when the department’s investigation

commenced, as of September, 2018, W had been made aware of the

investigation and had retained counsel. Due to this investigation, W

closed all his personal bank accounts. Between September, 2018, and

July, 2019, W conveyed more than $233,000, representing amounts he

had received for professional services he had rendered to various parties,

to J through a series of deposits into an account owned solely by her.

In July, 2020, the department issued orders that, inter alia, imposed a

fine of $900,000 against W and required him to pay restitution to the

plaintiff in the amount of $367,000. At trial, J testified that she did

not notice in November or December of 2018 that $100,000 had been

deposited into her sole personal bank account over a period of two

weeks and that she never looked at her bank statements. After the trial,

the court, inter alia, rendered judgment against J on three counts of

fraudulent transfer, concluding that W fraudulently transferred funds

to J between 2018 and 2019 in violation of CUFTA and under the common

law. The court found that, at the time of the transfers to J, W was unable

to pay fines and restitution orders imposed by the department and had

wound up T Co., leaving the plaintiff and others without any means of

recovering their investments of principal; that J never provided any

consideration for the infusion of funds into her account and used funds

from that account to pay various personal and household expenses; that

the transfer of funds by W into J’s personal account was fraudulent and

designed to place his personal assets beyond the reach of creditors and

potential creditors, including the plaintiff; and that any claim that J

was unaware of the purpose of the fraudulent transfer of funds lacked

credibility, that J possessed fraudulent intent and that she willingly and

actively participated in W’s attempt to shield assets and place those

assets beyond the reach of creditors, including the plaintiff. The court

also attached J’s assets in the amount of the funds fraudulently transferred to her by W. Held:

1. J could not prevail on her claim that the trial court erred in concluding

that the transfers from W were made with an actual intent to defraud

because its finding that both J and W participated in the transfer with
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Cockerham v. Westphalen

the actual intent to hinder or defraud the plaintiff from collecting on a

judgment was clearly erroneous:

a. The trial court properly rendered judgment for the plaintiff on his

statutory fraudulent transfer claim pursuant to § 52-552e (a) (1) because

its finding that the transfers were made with an actual intent to defraud

was not clearly erroneous: because § 52-552e (a) (1) does not require a

plaintiff to prove that a transferee shared in a transferor’s fraudulent

intent, the plaintiff was not required to prove that J shared in W’s intent

in order to prevail under § 52-552e (a) (1); moreover, the evidence presented at trial revealed that the transfers at issue satisfied many of the

factors set forth in § 52-552e (b) that courts may consider in determining

whether a transfer was made with actual intent to defraud, including

that the transfers were made to an insider, that, before the transfers

were made, W had been sued or threatened with suit by way of the

present action and the investigation by the department, that W was

insolvent or became insolvent shortly after the transfers were made or

the obligation was incurred, given that W was unable to pay the fine

and restitution imposed by the department, and that, at the time of the

transfers, he was unable to pay the amount that the plaintiff had invested

in T Co., that W retained possession or control of the property transferred

after the transfers were made given that J used the transferred funds to

pay various personal and household expenses as well as W’s personal

expenses, that W did not receive reasonably equivalent value in exchange

for the transfers to J given that the evidence adduced at trial showed that

W received no value whatsoever in exchange for the transfers because

he did not receive anything that he could use to satisfy or partially satisfy

a creditor’s claim, and that the transfers occurred shortly before and

shortly after the court granted the prejudgment attachment against W’s

assets and before the department imposed the fine against W and ordered

restitution to be paid to the plaintiff.

b. The trial court did not err in concluding that the transfers were actually

fraudulent under the common law: the court found that any claim that

J was unaware of the purpose of the fraudulent transfer of the funds

lacked credibility, that she possessed fraudulent intent and that she

willingly and actively participated in W’s attempt to shield assets and

place those assets beyond the reach of creditors, including the plaintiff,

and, as the fact finder, the court was entitled to make this credibility

determination as to J, and this court would not disturb those findings

on appeal; moreover, the trial court, as the finder of fact, was entitled

to infer from all of the circumstances surrounding the transfers that J

shared in W’s fraudulent intent.

2. J could not prevail on her claim that the trial court improperly determined

that the transfers to her were constructively fraudulent under the common law and § 52-552e (a) (2): the court’s finding that the transfers to

J left W unable to meet his financial obligations was not clearly erroneous, as the record revealed that W admitted at trial that he was unable
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Cockerham v. Westphalen

to pay the fine or restitution imposed on him by the department or the

amount that the plaintiff originally invested in T Co. and, further, that

he disclosed information regarding J’s personal checking account to the

department because of the pending investigation against him but that

by the time he had done so there was only a small amount of funds

remaining in the account; moreover, there was no support in the record

for J’s argument that she personally invested $750,000 into the T Co.

fund, suggesting that the transfers at issue could have been made as a

repayment of her investment into T Co., as W testified at trial that the

transfers to J’s bank account consisted solely of funds that he received

for professional services unrelated to T Co. and that he transferred the

funds because of the pending department investigation and, thus, based

on W’s own testimony, it was clear that the transfers at issue were wholly

unrelated to J’s alleged investment in T Co.; furthermore, although J

argued that love and affection is valid consideration between a husband

and wife, none of the cases cited by J in her appellate brief stands for the

proposition that love and affection may constitute valid consideration

for purposes of defeating a fraudulent transfer claim under the common

law or CUFTA, and, on the contrary, various courts have long held

that love and affection does not constitute adequate consideration for

purposes of defeating a fraudulent conveyance claim, and, accordingly,

in the absence of any evidence in the record to support J’s assertion

that W received adequate consideration or reasonably equivalent value

for the transfers, this court could not conclude that the trial court’s

finding that the transfers were made without consideration and not in

exchange for a reasonable equivalent value was clearly erroneous.

Argued January 31—officially released May 21, 2024

Procedural History

Action to recover damages for, inter alia, fraudulent

transfer, and for other relief, brought to the Superior

Court in the judicial district of Fairfield and tried to

the court, Hon. Dale W. Radcliffe, judge trial referee;

judgment for the plaintiff, from which the defendant

Jennifer Westphalen appealed to this court. Affirmed.

William W. Taylor, for the appellant (defendant Jennifer Westphalen).

Sabato P. Fiano, for the appellee (plaintiff).
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Cockerham v. Westphalen

Opinion

CLARK, J. The defendant Jennifer Westphalen1

appeals from the judgment of the trial court rendered

against her and in favor of the plaintiff, Kenneth Cockerham, on counts nine, ten, and eleven of the plaintiff’s

complaint, asserting claims of fraudulent transfer

against the defendant and her husband, Adam Westphalen (Westphalen), pursuant to the Connecticut Uniform

Fraudulent Transfer Act (CUFTA), General Statutes

§ 52-552a et seq. On appeal, the defendant claims that

the court erred in finding that Westphalen fraudulently

transferred money to the defendant under the common

law2 and pursuant to General Statutes § 52-552e. Specifically, the defendant argues that the court erred in finding that Westphalen possessed actual fraudulent intent,

1 The plaintiff, Kenneth Cockerham, brought the underlying action against

Adam Westphalen; his wife, Jennifer Westphalen; and five entities:

AssetMark, Inc., also known as AssetMark Investment Services; Vista Investment Advisors, LLC; Nereid II Fund, LLC; Mosaic Financial Strategies, LLC;

and Triton Investment Partners, LLC. Prior to trial, the claims pleaded against

all defendants except Adam Westphalen, Jennifer Westphalen, and Triton

Investment Partners, LLC, were withdrawn. The only defendant participating

in the present appeal is Jennifer Westphalen. Accordingly, all references to

the defendant in this opinion are to Jennifer Westphalen only. 2 Although the operative complaint only asserted statutory fraudulent

transfer claims, the court concluded that the plaintiff proved both actual

and constructive fraud under the common law and General Statutes § 52-

552e. On appeal, neither party has challenged the court’s judgment that the

defendant is liable for fraudulent transfers at common law on the basis that

the plaintiff did not plead a common-law claim. Instead, both parties briefed

the merits of the court’s judgment that the defendant was liable for fraudulent

transfers under the common law. Because neither party has raised any claim

of error with respect to the court’s judgment on the basis that the plaintiff

did not plead a common-law fraudulent transfer claim, we will not disturb

the court’s judgment on that basis. See Blumberg Associates Worldwide,

Inc. v. Brown & Brown of Connecticut, Inc., 311 Conn. 123, 164, 84 A.3d

840 (2014) (‘‘our system is an adversarial one in which the burden ordinarily

is on the parties to frame the issues, and the presumption is that issues not

raised by the parties are deemed waived’’); see also Guzman v. Yeroz, 167

Conn. App. 420, 426 n.5, 143 A.3d 661 (‘‘a court is not obligated to raise or

consider plain error if a party has failed to do so’’ (emphasis in original)),

cert. denied, 323 Conn. 923, 150 A.3d 1152 (2016).
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Cockerham v. Westphalen

that the defendant shared in that intent, and that the

transfers were made without consideration, leaving

Westphalen unable to meet his financial obligations. We

disagree with the arguments advanced by the defendant

and, accordingly, affirm the judgment of the trial court.

The following facts, as found by the court, and procedural history are relevant to our resolution of this

appeal. The plaintiff’s wife, Stacey Cockerham, is the

defendant’s cousin. The plaintiff first met Westphalen

in 1995, and in the years that followed, the couples

developed a friendship. Westphalen holds a master’s

degree in business administration from Cornell University and a degree in legal taxation from the New York

University School of Law. He has been a certified financial planner since 2003.

Between 1998 and 2007, Westphalen was employed

by AssetMark Investment Services (AssetMark). During

this time, he also held a 50 percent interest in Vista

Investment Advisors, LLC (Vista). In September, 2004,

on the advice of Westphalen, the plaintiff, who at the

time was employed by AT&T and participated in his

employer’s 401 (k) plan, transferred $173,000 from his

401 (k) account into an individual retirement account

(IRA) managed by AssetMark and Vista. AssetMark and

Vista played a dual role in managing the IRA. Vista’s

role was to communicate with the plaintiff about his

goals and objectives and then to provide AssetMark

with that information. AssetMark’s role was to take the

information given to it by Vista and to manage the

account through its investment platform.

While Westphalen was employed by AssetMark, he

formed Triton Investment Partners, LLC (Triton). Westphalen was the sole member of Triton and had complete

control, management, and authority over all matters

relating to Triton. Westphalen was subject to no outside

control or direction regarding Triton. Westphalen
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Cockerham v. Westphalen

claimed that he formed Triton to serve as a vehicle

through which he could manage the assets of family

members and close friends.

Westphalen left AssetMark in 2007. In 2008, on the

advice of Westphalen, the plaintiff transferred the balance of his IRA, in the amount of $187,048.86, into

an entity called Pensco Trust. After the funds were

transferred to Pensco Trust, they were subsequently

transferred to a Chase account owned by Triton so that

Westphalen, as the sole member of Triton, could fully

manage and invest the funds for the plaintiff. As part of

this transaction, Triton issued an unsecured promissory

note to the plaintiff in the amount of $185,000. Westphalen did not personally guarantee that promissory note.

In 2009, the plaintiff invested an additional $27,266.91

into accounts held and managed by Triton, followed

by an additional investment in 2011 in the amount of

$12,923.32, bringing the plaintiff’s total principal investment to $227,239.09.

Westphalen, as the sole member of Triton, mismanaged the plaintiff’s investments and ‘‘was negligent in

the handling of assets committed to him by [the plaintiff].’’ For example, once the plaintiff’s assets were controlled by Triton, Westphalen began to commingle the

plaintiff’s assets with those of other investors. Westphalen took no steps to secure the plaintiff’s investment.

Throughout the years, Westphalen paid numerous personal expenses with Triton assets and transferred Triton assets to his personal accounts without the knowledge of investors. Between 2008 and 2012, Triton

suffered losses between $1.5 and $2 million. During this

period, Triton did not provide the plaintiff with periodic

reports concerning Triton’s poor financial condition

and failed to provide the plaintiff with any financial

records reflecting the plaintiff’s losses.

On May 1, 2017, the operative promissory note from

Triton to the plaintiff matured. Although Westphalen
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Cockerham v. Westphalen

represented to the plaintiff that his assets were secure,

Triton was unable to satisfy its obligation to the plaintiff

because it lacked assets sufficient to satisfy the note.

Westphalen subsequently dissolved Triton, giving no

notice of the dissolution to the plaintiff or to any other

creditors.

The plaintiff commenced this action on May 17, 2018,

claiming, inter alia, that Westphalen, acting both as

an individual and as the sole member of Triton, had

mismanaged, dissipated, and ultimately lost the retirement funds the plaintiff had entrusted to Westphalen

and various limited liability and corporate entities. Relevant for present purposes, in counts nine, ten, and

eleven of the complaint, the plaintiff claimed that Westphalen and the defendant fraudulently transferred to

themselves various moneys and assets belonging to

‘‘Westphalen Entities’’3 in violation of § 52-552e.4 Specifically, count nine alleged a violation of § 52-552e (a)

3 The complaint alleged that the ‘‘Westphalen Entities’’ included Vista,

Triton, and two other entities, Mosaic Financial Strategies, LLC, and Nereid

II Fund, LLC, and that Westphalen was a principal and/or interest holder

in each of them. 4 General Statutes § 52-552e provides: ‘‘(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.

‘‘(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
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Cockerham v. Westphalen

(1), count ten alleged a violation of § 52-552e (a) (2)

(A), and count eleven alleged a violation of § 52-552e

(a) (2) (B).

On July 26, 2018, the plaintiff applied for a prejudgment remedy against the defendant, Westphalen, Triton,

and Mosaic Financial Strategies, LLC (Mosaic), pursuant to General Statutes § 52-278a et seq., in the amount

of $500,000. A hearing on the application was held

before the court, T. Welch, J., on November 8, 2018.

On January 7, 2019, the court granted the plaintiff’s

application for a prejudgment remedy against Westphalen and Triton. The court stated: ‘‘After a careful review

of the evidence, briefs, the corresponding legal principles and taking into consideration the defendants’ proposed defenses . . . the court finds that probable

cause exists to support the plaintiff’s claims against

[Westphalen] and [Triton] as to count three (negligent

misrepresentation) and count four (negligence) and

against [Triton] as to count eight (breach of contract).

The court does not find that the plaintiff has satisfied

his burden of proof relative to [the defendant] or

[Mosaic] as to any of the counts which were the subject

of the prejudgment remedy hearing nor has the plaintiff

satisfied his burden of proof relative to the first count

(promissory estoppel). Accordingly, pursuant to General Statutes § 52-278d, the court grants a prejudgment

attachment in favor of the plaintiff and against [Triton]

and [Westphalen] only, in the amount of $450,000.’’

While this litigation was ongoing, the Department of

Banking (department) commenced an investigation into

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.’’
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Cockerham v. Westphalen

Westphalen. Although it is unclear from the record precisely when the department’s investigation commenced, as of September, 2018, Westphalen had been

made aware of the investigation and had retained counsel. Due to this investigation, Westphalen closed all his

personal bank accounts. Beginning in September, 2018,

and continuing through July, 2019, Westphalen conveyed $233,069.28 to the defendant through a series of

deposits into an account owned solely by the defendant.

These transfers represented amounts that he had

received for professional services that he had rendered

to various parties. On July 27, 2020, the department

issued orders that, inter alia, imposed a fine of $900,000

against Westphalen and required him to pay restitution

to the plaintiff in the amount of $367,000.

The matter was subsequently tried to the court, Hon.

Dale W. Radcliffe, judge trial referee, on January 12

and 13, 2022.5 On June 22, 2022, the court rendered

judgment against the defendant on counts nine, ten, and

eleven of the complaint,6 concluding that Westphalen

fraudulently transferred funds to the defendant

between 2018 and 2019 in violation of CUFTA and under

the common law.7 The court stated: ‘‘Westphalen testified that he deposited income into an account solely

5 This matter was tried twice. The first trial commenced on October 10,

2019, and concluded on January 8, 2020, before the court, Hon. Edward F.

Stodolink, judge trial referee. On March 16, 2021, the defendant and Westphalen filed a motion for a mistrial predicated on the court’s failure to render

a timely decision pursuant to General Statutes § 51-183b, which requires

that a trial court render a decision within 120 days after the completion of

a civil trial. On April 22, 2021, the court, Stevens, J., granted the motion for

a mistrial, and a new trial was scheduled. 6 The court also rendered judgment against Westphalen on counts four,

five, seven, eight, and fifteen of the complaint and rendered judgment against

Triton on count eight of the complaint. 7 Although the plaintiff’s complaint alleged fraudulent transfers from the

Westphalen Entities to Westphalen and the defendant that occurred prior

to the date the complaint was filed, the evidence presented at trial, and on

which the trial court’s judgment is based, is predicated on transfers occurring

between Westphalen and the defendant in 2018 and 2019, after the complaint

was filed. The defendant, however, did not object on that basis to any of
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Cockerham v. Westphalen

in the name of [the defendant] and closed existing

accounts in his own name because of the proceedings

before the [department]. At the time of the transfers,

2018 and 2019, [Westphalen] was unable to pay fines

and restitution orders imposed by the [department] and

had wound up [Triton], leaving the plaintiff and others

without any means of recovering their investments of

principal.

‘‘[The defendant] never provided any consideration

for the infusion of funds into her account and used

funds from that account to pay various personal and

household expenses. She also deposited her own

income into the account.

‘‘It is found that the transfer of funds by [Westphalen]

into [the defendant’s] personal account was fraudulent

and designed to place his personal assets beyond the

reach of creditors and potential creditors, including [the

plaintiff].

‘‘It is found that both actual and constructive fraud,

both at common law and pursuant to applicable statutes, has been proven by clear and convincing evidence.

‘‘It is found that any claim that [the defendant] was

unaware of the purpose of the fraudulent transfer of

funds lacks credibility. It is found by clear and convincing evidence that [the defendant] possessed fraudulent

the evidence presented in the trial court and has not challenged the court’s

judgment on that basis in this appeal. Because these causes of action, while

unpleaded, were actually litigated at trial, without objection, we will not

disturb the trial court’s judgment on the basis of a pleading irregularity. See

Gleason v. Durden, 211 Conn. App. 416, 431, 272 A.3d 1129 (‘‘[I]n the context

of a postjudgment appeal, if a review of the record demonstrates that an

unpleaded cause of action actually was litigated at trial without objection

such that the opposing party cannot claim surprise or prejudice, the judgment

will not be disturbed on the basis of a pleading irregularity. . . . In that

circumstance, provided the plaintiff has produced sufficient evidence to

prove the elements of his unpleaded claim, the defendant will be deemed

to have waived any defects in notice.’’ (Internal quotation marks omitted.)),

cert. denied, 343 Conn. 921, 275 A.3d 211 (2022).
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Cockerham v. Westphalen

intent and willingly and actively participated in the

attempt of [Westphalen] to shield assets and place those

assets beyond the reach of creditors, including [the

plaintiff].

‘‘It is found that the amount of money transferred by

[Westphalen] is $233,069.28.

‘‘Judgment may therefore enter, as to counts nine,

ten and eleven, as against both [Westphalen] and [the

defendant]. It is further found that an attachment

against the assets of [the defendant] should enter based

upon the fraudulent transfers of money into her

account, in the amount of $233,069.28.’’ This appeal

followed.

On appeal, the defendant claims that the court erred

‘‘in finding actual and constructive fraud at both common law and pursuant to [§ 52-552e]’’ because the evidence does not support the court’s findings that Westphalen possessed actual fraudulent intent, that the

defendant willingly and actively participated in the

alleged fraud, or that the transfers were made without

consideration, leaving Westphalen unable to meet his

financial obligations. We are not persuaded.

We begin by setting forth the standard of review and

legal principles relevant to this claim. ‘‘The determination of whether a fraudulent transfer took place is a

question of fact and it is axiomatic that [t]he trial court’s

[factual] findings are binding upon this court unless

they are clearly erroneous in light of the evidence and

the pleadings in the record as a whole. . . . We cannot

retry the facts or pass on the credibility of the witnesses.

. . . A finding of fact is clearly erroneous when there

is no evidence in the record to support it . . . or when

although there is evidence to support it, the reviewing

court on the entire evidence is left with the definite

and firm conviction that a mistake has been committed.

. . . The elements of fraudulent conveyance, including
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Cockerham v. Westphalen

whether the defendants acted with fraudulent intent,

must be proven by clear, precise and unequivocal evidence. . . . This standard, also referred to as the clear

and convincing standard, is met if the evidence induces

in the mind of the trier a reasonable belief that the facts

asserted are highly probably true, that the probability

that they are true or exist is substantially greater than

the probability that they are false or do not exist. . . .

Put another way, the clear and convincing standard

should operate as a weighty caution upon the minds of

all judges, and it forbids relief whenever the evidence

is loose, equivocal or contradictory.’’ (Citation omitted;

internal quotation marks omitted.) Featherston v.

Katchko & Son Construction Services, Inc., 201 Conn.

App. 774, 792, 244 A.3d 621 (2020), cert. denied, 336

Conn. 923, 246 A.3d 492 (2021).

In Connecticut, there exists both a common-law and

statutory cause of action for fraudulent conveyance. ‘‘A

party alleging a fraudulent transfer or conveyance under

the common law bears the burden of proving either:

(1) that the conveyance was made without substantial

consideration and rendered the transferor unable to

meet his obligations [(constructive fraud)] or (2) that

the conveyance was made with a fraudulent intent in

which the grantee participated [(actual fraud)].’’ (Internal quotation marks omitted.) McKay v. Longman, 332

Conn. 394, 417, 211 A.3d 20 (2019).

Under § 52-552e, on the other hand, ‘‘(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
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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.’’ With these principles in

mind, we turn to the defendant’s claims on appeal.

I

We first address the defendant’s claim that the court

erred in concluding that the transfers were made with

an actual intent to defraud pursuant to § 52-552e (a)

(1) and under the common law because its finding that

both the defendant and Westphalen participated in the

transfer with the actual intent to hinder or defraud

the plaintiff from collecting on a judgment was clearly

erroneous. We are not persuaded.

A

With respect to the court’s conclusion that the plaintiff was entitled to a judgment on his statutory fraudulent transfer claim, the defendant first argues that the

court’s finding that the transfers were made with an

actual intent to defraud was clearly erroneous because

‘‘[t]here is absolutely no clear and convincing evidence

of fraudulent intent on the part of [the defendant], and

therefore actual fraud cannot be found.’’ The plaintiff

correctly points out, however, that § 52-552e (a) (1)

does not require a plaintiff to prove that a transferee like

the defendant shared in a transferor’s fraudulent intent.

Section 52-552e (a) (1) provides: ‘‘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 . . . .’’ Unlike the common law,

the statutory cause of action for a fraudulent transfer
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based on a transferor’s actual intent to defraud a creditor does not require a plaintiff to prove that a transferee

shared the transferor’s fraudulent intent. In Kosiorek

v. Smigelski, 138 Conn. App. 695, 54 A.3d 564 (2012),

cert. denied, 308 Conn. 901, 60 A.3d 287 (2013), this

court explained that, ‘‘[p]rior to the adoption of [§ 52-

552e], the plaintiff had to prove (1) that the transferor

had intent to defraud the creditor and (2) that the transferee shared in the transferor’s fraudulent intent. . . .

The plain language in § 52-552e addresses the fraudulent intent of the debtor and makes no mention of the

fraudulent intent of the transferee.’’ (Emphasis omitted;

internal quotation marks omitted.) Id., 726. Therefore,

‘‘[w]ith respect to [claims] under § 52-552e . . . there

is no requirement for a fraudulent intent with respect

to the transferees.’’ (Emphasis added.) Id., 727. Because

a plaintiff is not required to prove that a transferee

shared in a transferor’s intent in order to prevail under

§ 52-552e (a) (1), the defendant’s claim, that the court

erred in holding her liable because its finding that she

shared in Westphalen’s fraudulent intent was clearly

erroneous, fails as a matter of law.

Nevertheless, the defendant also claims that the court

erred in holding her liable under § 52-552e (a) (1)

because its finding that Westphalen made the transfers

with the actual intent to hinder, delay, or defraud the

plaintiff also was clearly erroneous. Specifically, the

defendant argues that there was no evidence to support

such a finding. We disagree.

‘‘With respect to finding actual intent as set forth in

§ 52-552e (a) (1), [our Supreme Court has] stated that,

because fraudulent intent is almost always . . . proven

by circumstantial evidence, courts may consider numerous factors in determining whether a transfer was made

with actual intent to defraud.’’ (Internal quotation

marks omitted.) McKay v. Longman, supra, 332 Conn.

422. These factors are set forth in § 52-552e (b), which
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provides: ‘‘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.’’

In support of its finding that Westphalen transferred

funds to the defendant with actual intent to hinder,

delay, or defraud his creditors, the court stated that

‘‘Westphalen testified that he deposited income into an

account solely in the name of [the defendant], and

closed existing accounts in his own name, because of

the proceedings before the [department].’’ The court

further found ‘‘that the transfer of funds by [Westphalen] into [the defendant’s] personal account was fraudulent and designed to place his personal assets beyond

the reach of creditors and potential creditors, including

[the plaintiff].’’

On the basis of our review of the record, we conclude

that these findings were not clearly erroneous. At trial,

evidence was presented that Westphalen conveyed
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$233,069.28 to the defendant through a series of deposits that occurred between September, 2018, and July,

2019. Westphalen testified that these transfers represented amounts that he had received for professional

services that he had rendered to various parties, which

he subsequently deposited into a bank account owned

solely by the defendant.

The evidence presented at trial revealed that the

transfers at issue in this case satisfy many of the § 52-

552e (b) factors that ‘‘courts may consider . . . in

determining whether a transfer was made with ‘actual

intent’ to defraud.’’ McKay v. Longman, supra, 332

Conn. 422. To begin, there is no dispute that the transfers were made ‘‘to an insider.’’ General Statutes § 52-

552e (b) (1). The transfers were made by Westphalen

to his wife, the defendant. Pursuant to General Statutes

§ 52-552b (7), ‘‘ ‘[i]nsider’ includes . . . a relative of the

debtor’’ and, pursuant to § 52-552b (11), ‘‘ ‘[r]elative’

means . . . a spouse . . . .’’

Next, the evidence showed that ‘‘before the transfer

was made . . . the debtor had been sued or threatened

with suit . . . .’’ General Statutes § 52-552e (b) (4). This

action was commenced on May 17, 2018, and the transfers did not begin until September, 2018. Although it is

unclear from the record exactly when the department

commenced its investigation, Westphalen testified that,

as of September, 2018, before any of the transfers had

occurred, he had been made aware of the investigation

and had retained counsel. Indeed, Westphalen specifically testified that he transferred the funds to the defendant and closed all his personal bank accounts on the

advice of his attorney due to the pending department

investigation.8 Thus, Westphalen clearly had been sued

or threatened with suit before the transfers were made.

8 The following exchange took place during the direct examination of

Westphalen by the plaintiff’s counsel:

‘‘[The Plaintiff’s Counsel]: Okay. And we’ve already seen from the evidence

that, at this time, there were, in fact, other bank accounts that—that you
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The evidence also showed that ‘‘the debtor was insolvent or became insolvent shortly after the transfer was

made or the obligation was incurred . . . .’’ General

Statutes § 52-552e (b) (9). General Statutes § 52-552c,

which defines insolvency, provides in relevant part: ‘‘(a)

A debtor is insolvent if the sum of the debtor’s debts

is greater than all of the debtor’s assets at a fair valuation. (b) A debtor who is generally not paying his debts

as they become due is presumed to be insolvent. . . .’’

The court found that Westphalen was unable to pay the

fine and restitution imposed by the department and

that, ‘‘[a]t the time of the transfers, 2018 and 2019 . . .

[he] had wound up [Triton], leaving the plaintiff and

others without any means of recovering their investments of principal.’’ At trial, Westphalen admitted that

he was unable to pay the fine imposed on him by the

department, the restitution he was ordered to pay the

plaintiff by the department, or the amount that the plaintiff originally invested in Triton.9 It is clear, therefore,

were on either singly or jointly along with your wife at this time?

‘‘[Westphalen]: No. They weren’t open anymore.

‘‘[The Plaintiff’s Counsel]: [They] were not open. And—and why were—

why were your accounts not open anymore?

‘‘[Westphalen]: I just had closed them and then based on the [department]

stuff, they said don’t open any other—I was advised by an attorney not to

open any other accounts.

‘‘[The Plaintiff’s Counsel]: But why did you go ahead and close the accounts

with your name on them?

‘‘[Westphalen]: I don’t recall, at this point. I just—I closed them and was

normally using business accounts and those had to be closed because I

had a cease and desist so I had to put the money that I earned myself

somewhere . . . .’’ 9 The following exchange took place during the direct examination of

Westphalen by the plaintiff’s counsel:

‘‘[The Plaintiff’s Counsel]: And with respect to—with respect to your own

personal solvency, do you have the financial wherewithal to pay the fines

that have been imposed by the [department]?

‘‘[Westphalen]: No.

‘‘[The Plaintiff’s Counsel]: As to your own financial wherewithal do you

have sufficient solvency to pay the amount of restitution ordered by the

[department] to [the plaintiff]?

‘‘[Westphalen]: No.
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that Westphalen either was insolvent at the time of the

transfers or became insolvent shortly after the transfers

occurred.

Next, the evidence clearly supports the conclusion

that Westphalen ‘‘retained possession or control of the

property transferred after the transfer . . . .’’ General

Statutes § 52-552e (b) (2). The court found that the

defendant used the transferred funds ‘‘to pay various

personal and household expenses.’’ Westphalen’s personal expenses were paid primarily out of the transferred funds that were deposited into the defendant’s

account, and he testified that many household bills and

other expenses also were paid from the transferred

funds. Thus, there was uncontroverted evidence presented at trial to support a finding that Westphalen

retained most of the benefits of the subject funds after

he transferred them to the defendant. See Cadle Co. v.

White, Docket No. 302-CV-00030 (TPS), 2006 WL 798900,

*6 (D. Conn. March 21, 2006) (finding that debtor

retained actual and constructive control over funds

transferred to wife’s bank account where his personal

expenses, household bills, and home mortgage payments were paid using such funds).

Additionally, under § 52-552e (b) (8), evidence that

a transferor did not receive reasonably equivalent value

in exchange for a transfer may support a finding of

fraudulent intent. For the reasons that we explain more

fully in part II of this opinion, it is clear that Westphalen

did not receive anything from the defendant that constitutes reasonably equivalent value in exchange for the

transfers. The court found that ‘‘[the defendant] never

provided any consideration for the infusion of funds

‘‘[The Plaintiff’s Counsel]: Currently—and I understand we’re debating.

I’m not saying you’re obligated. I’m just asking on a pure math basis. Do

you have the solvency to pay back to [the plaintiff] the base amount of what

he invested in Triton in the amount of $227,000?

‘‘[Westphalen]: No.’’
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into her account . . . .’’ Pursuant to § 52-552d (a),

‘‘[v]alue is given for a transfer or an obligation if, in

exchange for the transfer or obligation, property is

transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the

promisor’s business to furnish support to the debtor or

another person.’’ The evidence adduced at trial showed

that Westphalen received no value whatsoever in

exchange for the transfers because he did not receive

anything that he could use to satisfy or partially satisfy

a creditor’s claim. See Cadle Co. v. White, supra, 2006

WL 798900, *9 (‘‘Courts in this district applying [CUFTA]

as well as courts interpreting the [Uniform Fraudulent

Transfer Act (UFTA)] in other jurisdictions have held

value to mean the type of consideration capable of

satisfying or partially satisfying a creditor’s claims. . . .

‘Value is to be determined in light of the purpose of the

[UFTA] to protect a debtor’s estate from being depleted

to the prejudice of the debtor’s unsecured creditors.

Consideration having no utility from a creditor’s viewpoint does not satisfy the statutory definition.’ [Unif.

Fraudulent Transfer Act (1984) § 3, comment 2, 7A

U.L.A. (Pt. II) 302 (2017)].’’ (Citations omitted.))

Finally, it is clear that ‘‘the transfer occurred shortly

before or shortly after a substantial debt was incurred

. . . .’’ General Statutes § 52-552e (b) (10). The transfers happened periodically between September, 2018,

and July, 2019. On January 7, 2019, the court granted

a prejudgment attachment in the amount of $450,000

against the assets of Westphalen. Additionally, Westphalen testified that, on July 27, 2020, shortly after the

transfers occurred, the department imposed a fine in

the amount of $900,000 against him and ordered him to

pay the plaintiff restitution in the amount of $367,000.10

10 The following exchange took place during the direct examination of

Westphalen by the plaintiff’s counsel:

‘‘[The Plaintiff’s Counsel]: Mr. Westphalen, is it a fair statement that on
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Thus, the transfers happened both shortly before and

shortly after Westphalen had incurred substantial debts

in the form of the department’s fine and restitution

order. He also was subject to the prejudgment attachment order.

In short, the evidence presented at trial supported

findings implicating at least six of the eleven statutory

factors that courts consider when determining whether

a transfer was made with an actual intent to hinder,

delay, or defraud creditors. Thus, on the basis of all of

this evidence, we conclude that the court’s finding that

the transfers to the defendant were fraudulent pursuant

to § 52-552e (a) (1) because Westphalen made them

with an actual intent to defraud his creditors was not

clearly erroneous.11

or about July 27, 2020 . . . the [department] issued an order against you

where it imposed a fine of $900,000 to be paid no later than forty-five days

after the order was mailed?

‘‘[Westphalen]: I never received proper notice of that.

‘‘[The Plaintiff’s Counsel]: Okay. Are you aware though that such an order

has been—has been imposed by the [department] that you have been fined

an amount of $900,000 that was to be paid no later than forty-five days after

the date of the order? . . .

‘‘[Westphalen]: I’m aware of it. Yes.

‘‘[The Plaintiff’s Counsel]: Okay. Mr. Westphalen, are you aware that the

[department] has ordered you to make restitution to [the plaintiff] in the

amount of $367,000 plus interest at 6 percent no later than forty-five days

after its order that was rendered on July 27, 2020?

‘‘[Westphalen]: I am since aware. Yes.’’

11 In her reply brief, the defendant argues that the court erred in finding

that Westphalen possessed actual fraudulent intent, stating: ‘‘It should be

noted that the transfers of funds from [Westphalen] to [the defendant] . . .

were commenced . . . after this action was filed . . . . In other words,

[the defendant] was already a defendant in the foregoing action when all

alleged fraudulent transfers to shield assets were made. Common sense

would tell anyone that if you wanted to dispose of and/or hide your assets,

you would not transfer the assets to another named defendant in the litigation

against you.’’ We interpret the defendant’s argument to be taking issue with

the court’s weighing of the evidence and the testimony that it chose to

credit. ‘‘It is well established that [i]n a case tried before a court, the trial

judge is the sole arbiter of the credibility of the witnesses and the weight

to be given specific testimony. . . . [T]he trial court is privileged to adopt

whatever testimony [it] reasonably believes to be credible. . . . On appeal,
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B

Next, the defendant claims that the court erred in

concluding that the transfers were actually fraudulent

under the common law because ‘‘[t]here is absolutely

no clear and convincing evidence of fraudulent intent

on the part of [the defendant], and therefore actual

fraud cannot be found.’’ The plaintiff counters that the

record supports the court’s finding that the defendant

shared in Westphalen’s fraudulent intent with respect

to the transfers. We agree with the plaintiff.

As noted earlier in this opinion, although a transferee’s intent is irrelevant for purposes of proving actual

fraud pursuant to § 52-552e (a) (1); see Kosiorek v.

Smigelski, supra, 138 Conn. App. 727; in order to prevail

on a common-law claim for fraudulent transfer on the

basis of actual fraud, a plaintiff must prove that the

transferee shared in the transferor’s fraudulent intent.

See Wieselman v. Hoeniger, 103 Conn. App. 591, 598,

930 A.2d 768 (to prevail on common law fraudulent

transfer claim based on actual fraud, ‘‘plaintiff ha[s] to

prove (1) that the transferor had intent to defraud the

creditor and (2) that the transferee shared in the transferor’s fraudulent intent’’ (emphasis added; internal

quotation marks omitted)), cert. denied, 284 Conn. 930,

934 A.2d 245 (2007).

In concluding that the transfers at issue in this case

were actually fraudulent under the common law, the

court first found, as discussed in part I A of this opinion,

that Westphalen transferred funds to the defendant with

we do not retry the facts or pass on the credibility of witnesses.’’ (Internal

quotation marks omitted.) Sakon v. Glastonbury, 111 Conn. App. 242, 252,

958 A.2d 801 (2008), cert. denied, 290 Conn. 916, 965 A.2d 554 (2009).

The trial court weighed both parties’ evidence and ultimately found that

Westphalen did possess actual fraudulent intent regardless of the timing of

the transfers. The court was free to discredit or find unpersuasive the

defendant’s evidence, and we decline the defendant’s invitation to reweigh

the evidence in her favor on appeal.
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the actual intent to hinder, delay, or defraud the plaintiff. Next, the court found that the defendant, as the

transferee, shared in Westphalen’s fraudulent intent,

stating ‘‘[i]t is found that any claim that [the defendant]

was unaware of the purpose of the fraudulent transfer

of the funds lacks credibility. It is found, by clear and

convincing evidence, that [the defendant] possessed

fraudulent intent and willingly and actively participated

in the attempt of [Westphalen] to shield assets and place

those assets beyond the reach of creditors, including

[the plaintiff].’’

At trial, the defendant testified that she did not notice

in November or December of 2018 that $100,000 had

been deposited into her bank account over a period of

two weeks. She further testified that this was her sole

personal bank account and that she ‘‘never looked at

[her bank] statements ever.’’ The court found that ‘‘any

claim that [the defendant] was unaware of the purpose

of the fraudulent transfer of the funds lacks credibility.’’

As the fact finder, the court was entitled to make this

credibility determination as to the defendant, and we

will not disturb these findings on appeal. See Featherston v. Katchko & Son Construction Services, Inc.,

supra, 201 Conn. App. 792 (‘‘[w]e cannot retry the facts

or pass on the credibility of the witnesses’’ (internal

quotation marks omitted)). Moreover, the court, as the

finder of fact, was entitled to infer from all of the circumstances surrounding the subject transfers that the

defendant shared in Westphalen’s fraudulent intent. See

Wieselman v. Hoeniger, supra, 103 Conn. App. 600

(‘‘[T]he determination of the question of fraudulent

intent is clearly an issue of fact which must often be

inferred from surrounding circumstances. . . . Such a

fact is, then, not ordinarily proven by direct evidence,

but rather, by inference from other facts proven—the

indicia or badges of fraud.’’ (Internal quotation marks

omitted.)).
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On the basis of our review of the record, we conclude

that the court’s findings that Westphalen made the

transfers to the defendant with the actual intent to

hinder, delay, or defraud the plaintiff and that the defendant shared in this fraudulent intent were not clearly

erroneous.

II

Although our determination that the court did not

err in finding the defendant liable under both the common-law and statutory causes of action because the

transfers were made with an actual intent to hinder,

delay, or defraud the plaintiff is a sufficient basis on

which to affirm the trial court’s judgment; see McKay

v. Longman, supra, 332 Conn. 417 (party need not prove

both actual and constructive fraud to prevail on fraudulent transfer claim); we conclude that the defendant’s

challenge to the court’s determination that the transfers

were constructively fraudulent under the common law

and pursuant to § 52-552e (a) (2) also fails.

In order to prove that a transfer was constructively

fraudulent under the common law, a party must prove

‘‘that the conveyance was made without substantial

consideration and rendered the transferor unable to

meet his obligations . . . .’’ Id. Similarly, under § 52-

552e (a) (2), ‘‘[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 . . . (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
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to pay as they became due.’’ Pursuant to § 52-552d (a),

‘‘[v]alue is given for a transfer or an obligation if, in

exchange for the transfer or obligation, property is

transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the

promisor’s business to furnish support to the debtor or

another person.’’

On appeal, the defendant first argues that ‘‘there was

insufficient proof that [Westphalen] could not pay his

fines and restitution as required by the [department].’’

Specifically, the defendant contends that ‘‘[t]he plaintiff

has not proven by clear and convincing evidence that

[Westphalen] had left himself insolvent, as to an alleged

debt owed to the plaintiff, at the time of the conveyance(s), and therefore the claim of fraudulent conveyance must fail.’’ In support of that contention, the defendant maintains that ‘‘[t]here was no evidence at the

time of trial to show what [Westphalen’s] elaborate

home in Easton, Connecticut, was appraised or valued

for during the various dates of alleged fraudulent conveyance(s) of funds’’ and that Westphalen testified to

various income streams that were not identified by the

court as sources of income. We are not persuaded.

In support of its finding that the transfers rendered

Westphalen unable to meet his financial obligations,

the court found that Westphalen was unable to pay the

fines and restitution orders imposed by the department

and that, ‘‘[a]t the time of the transfers, 2018 and 2019

. . . [he] had wound up [Triton], leaving the plaintiff

and others without any means of recovering their investments of principal.’’ Our review of the record reveals

that Westphalen admitted at trial that he was unable

to pay the fine or restitution imposed on him by the

department or the amount that the plaintiff originally
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invested in Triton.12 He further testified that he disclosed information regarding the defendant’s personal

checking account, where he had been transferring his

income, to the department because of the pending

investigation against him, but by the time he had done

so there was only $2696 remaining in the account.13

As a result, the court’s finding that the transfers left

Westphalen unable to meet his financial obligations was

not clearly erroneous.

The defendant next claims that there ‘‘clearly was

evidence that monetary consideration was passed

between [Westphalen] and [the defendant] in response

to [Westphalen’s] deposits in [the defendant’s]

account.’’ In support of this claim, the defendant argues

that the court ‘‘failed to make a finding of fact as to

what [the defendant’s] income was’’ and states that she

invested ‘‘$750,000, by way of her personal inheritance,

into the Triton fund,’’ suggesting that the transfers at

issue could have been made as a repayment of her

investment into Triton. The defendant’s arguments are

wholly without merit.

In support of its determination that the transfers were

made without adequate consideration, the court found

that ‘‘[the defendant] never provided any consideration

for the infusion of funds into her account and used

funds from that account to pay various personal and

12 See footnote 9 of this opinion.

13 Westphalen testified as follows during cross-examination by the plaintiff’s counsel:

‘‘[The Plaintiff’s Counsel]: Isn’t it a fair statement, sir, that in the—in the

approximate year before the submission of this financial affidavit [to the

department], approximately $260,000 of your income had gone into this

account . . . ?

‘‘[Westphalen]: Well, yeah, we’ve agreed to that. Yes.

‘‘[The Plaintiff’s Counsel]: Okay. And so, but as of the date that you actually

disclosed the account to the [department], the balance in there was only

$2696, correct?

‘‘[Westphalen]: Well, yeah, it’s right there. Yes, correct.’’
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household expenses. She also deposited her own

income into the account.’’ The defendant’s argument on

appeal that her alleged investment in Triton constituted

adequate consideration for the transfers at issue finds

no support in the record. Westphalen testified that the

transfers to the defendant’s bank account consisted

solely of funds that he received for professional services

unrelated to Triton and that he transferred the funds

because of the pending department investigation. Thus,

based on Westphalen’s own testimony, it is clear that

the transfers at issue were wholly unrelated to the

defendant’s alleged investment in Triton.

Last, the defendant argues that ‘‘it has long been held

in Connecticut that between a husband and wife ‘love

and affection’ is valid consideration,’’ citing to Middlebury v. Steinmann, 189 Conn. 710, 716 n.3, 458 A.2d

393 (1983); Varley v. Varley, 170 Conn. 455, 460, 365

A.2d 1212 (1976); and Candee v. Connecticut Savings

Bank, 81 Conn. 372, 378, 71 A. 551 (1908). At the outset,

we note that none of the cases cited by the defendant

stands for the proposition that love and affection may

constitute valid consideration for purposes of defeating

a fraudulent transfer claim under the common law. See

Middlebury v. Steinmann, supra, 716 n.3 (finding inadequate consideration for transfer of property because

‘‘[l]ove and affection . . . does not provide legal consideration which would support enforcement of a promise’’); Varley v. Varley, supra, 460 (‘‘[c]onsideration of

love and affection is not legal consideration which

would support enforcement of a promise’’ (internal quotation marks omitted)); Candee v. Connecticut Savings

Bank, supra, 378 (‘‘[a] good consideration is that of

blood or natural affection, and a gift made for such a

consideration ought to prevail unless it be found to

interfere with the rights of creditors and purchasers’’).

On the contrary, our Supreme Court has long held that
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love and affection does not constitute adequate consideration for purposes of defeating a fraudulent conveyance claim under the common law. See Redfield v. Buck,

35 Conn. 328, 337–38 (1868). In Redfield, the court held

that an insolvent grantor’s conveyance to his sister of

all of his property, in consideration only of love and

affection, was a constructively fraudulent transfer. Id.

The court stated that a transfer was constructively

fraudulent if it was ‘‘made by a grantor who was largely

indebted and insolvent, and the property conveyed was

all or nearly all he possessed, and the conveyances were

wholly gratuitous and without other consideration than

love and affection . . . .’’ Id.

The defendant’s argument with respect to the statutory fraudulent transfer claim under § 52-552e (a) (2)

fares no better. To prevail on a fraudulent transfer claim

on the basis of constructive fraud under § 52-552e (a)

(2), a plaintiff must prove that a transfer was made

‘‘without receiving a reasonably equivalent value in

exchange for the transfer or obligation . . . .’’ General

Statutes § 52-552e (a) (2).

‘‘[T]he drafters of the UFTA believed that value must

be considered from the standpoint of the creditor’’;

Cadle Co. v. White, supra, 2006 WL 798900, *9; and

the commentary to the UFTA specifically states that

‘‘ ‘[v]alue’ is to be determined in light of the purpose

of the [UFTA] to protect a debtor’s estate from being

depleted to the prejudice of the debtor’s unsecured

creditors. Consideration having no utility from a creditor’s viewpoint does not satisfy the statutory definition.

The definition does not specify all the kinds of consideration that do not constitute value for the purposes of

this Act—e.g., love and affection.’’ Unif. Fraudulent

Transfer Act (1984) § 3, comment 2, supra, 7A U.L.A.

(Pt. II) 302; see, e.g., United States v. West, 299 F. Supp.

661, 666 (D. Del. 1969) (‘‘[s]ince ‘the question of fair

consideration as it pertains to an alleged fraudulent
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conveyance must be determined from the standpoint

of creditors’ . . . it is clear that no fair equivalent is

exchanged when the conveyance is simply for natural

love and affection’’ (citation omitted)).

Consistent with that commentary, federal courts in

Connecticut and elsewhere have held that, in order for

an exchange to be of reasonably equivalent value under

CUFTA and other states’ versions of the UFTA, it must

be something with monetary value capable of satisfying

a creditor’s claims. See In re Rose, Docket No. 17-21333

(JJT), 2019 WL 1410633, *4 (Bankr. D. Conn. March 26,

2019) (‘‘Only consideration of substantially equivalent

value leaves the debtor in a financially similar position

after the conveyance. A conveyance made for consideration of nominal or no monetary value leaves the debtor

in a much weakened financial position which hinders

his creditors. This is precisely the scenario the [UFTA]

attempts to prevent. Recognizing consideration of no

monetary value as a defense to a fraudulent conveyance

would emasculate the statute.’’ (Internal quotation

marks omitted.)); Cadle Co. v. White, supra, 2006 WL

798900, *9 (‘‘[c]ourts in this district applying [CUFTA]

as well as courts interpreting the UFTA in other jurisdictions have held value to mean the type of consideration

capable of satisfying or partially satisfying a creditor’s

claims’’); Cadle Co. v. Jones, Docket No. 3:00CV316

(WWE), 2004 WL 2049321, *6 (D. Conn. August 20, 2004)

(‘‘in considering whether fraudulent intent exists, the

relevant inquiry is not simply whether the debtor

received some type of consideration, but whether that

consideration was in the form available for execution

by creditors’’);In re Ogalin, 303 B.R. 552, 559 (Bankr. D.

Conn. 2004) (‘‘the relevant inquiry is not simply whether

[the debtor] received consideration, but whether that

consideration was in a form available for execution by

creditors, i.e. an assessment of the extent to which such

creditors were deprived of the value of the diverted
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Cockerham v. Westphalen

property’’); In re Kennedy, 279 B.R. 455, 463 (Bankr.

D. Conn. 2002) (‘‘The only other form of value suggested

by the [d]efendant was her provision of household and

other marital services to the [d]ebtor. The [c]ourt

rejects this suggestion . . . [and concludes that] such

services were in the nature of those naturally and traditionally exchanged between spouses without consideration, and hence provided no basis of exchange value

for purposes of fraudulent transfer analysis.’’); see also

In re McFarland, 619 Fed. Appx. 962, 975 (11th Cir.

2015) (‘‘[t]his [c]ourt has held that ‘love and affection’

are inadequate consideration to be reasonably equivalent value for a transfer’’); In re Marlar, 267 F.3d 749,

755–56 (8th Cir. 2001) (affirming bankruptcy court conclusion that ten dollars plus love and affection did not

constitute reasonably equivalent value as matter of

law); Tavenner v. Smoot, 257 F.3d 401, 408 (4th Cir.

2001) (when interpreting similar statute, 11 U.S.C. § 548,

‘‘courts have consistently held that a transfer motivated

by love and affection does not constitute reasonably

equivalent value’’), cert. denied, 534 U.S. 1116, 122 S.

Ct. 926, 151 L. Ed. 2d 890 (2002).

In the absence of any evidence in the record to support the defendant’s assertion that Westphalen received

adequate consideration or reasonably equivalent value

for the transfers, we cannot conclude that the court’s

finding that the transfers were made without consideration and not in exchange for a reasonable equivalent

value was clearly erroneous.

The judgment is affirmed.

In this opinion the other judges concurred.