Court Opinion

ID: 7840619
Source: CourtListenerOpinion
Date Created: 2022-09-08 16:59:50.208754+00
Date Added: 2024-06-11T16:03:11.012480
License: Public Domain

Covello, J., with whom Callahan, J.,
joins, dissenting. The majority has overlooked the fact that an application to set aside a fraudulent conveyance is an equitable cause of action and has, therefore, errone*447ously applied the three year limitation on actions founded upon a tort. This was not an action founded upon a tort.
The cause of action set forth in the plaintiffs complaint is identical to the creditors’ bill in equity which existed in those jurisdictions where law and equity were administered by separate tribunals. Vail v. Hammond, 60 Conn. 374, 383, 22 A. 954 (1891). The plaintiff’s amended complaint alleged that it had obtained a judgment against Rubin and that Rubin had fraudulently transferred the property in question to avoid the debt due the plaintiff. The plaintiff sought by way of relief that the conveyance be set aside.1
“ ‘[I]n this State, where the same court administers both law and equity, and where legal and equitable *448remedies can be granted in the same action, a creditor can in the same complaint have judgment for his debt and also the necessary equitable aid to obtain payment out of any property of the debtor which the law court■ could not reach. ’ Huntington v. Jones, 72 Conn. 45, 49, 43 Atl. 564 [1899]. . . .” (Emphasis added.) Finance Corporation of New England, Inc. v. Scard, 100 Conn. 712, 716-17, 124 A. 715 (1924).
“A judgment creditor who complains that his debtor has transferred all his property, when insolvent, tó his wife, by a voluntary and fraudulent conveyance, and that she participated in the fraud, has, among other remedies, one at law for compensation damages against both the wrong-doers; and one in equity to have the fraudulent conveyance set aside. ” (Emphasis added.) Nowsky v. Siedlecki, 83 Conn. 109, 112, 75 A. 135 (1910).
In adopting the three year tort statute of limitations, the majority refers to our holdings in Murphy v. Dantowitz, 142 Conn. 320, 114 A.2d 194 (1955), and White v. Amenta, 110 Conn. 314, 148 A. 345 (1930). Both Murphy and Amenta dealt with the question of whether tort causes of action not yet reduced to judgment could be combined with equitable actions which sought to set aside fraudulent conveyances.2 In each instance we held that it was possible to combine both the tort and equitable causes of action even though the tort claims were just that (i.e., claims) and had not yet been reduced to judgment. This, however, is not the situation in the present case. The plaintiff here had already reduced its cause of action to judgment and was *449calling solely on the court’s equitable powers to set aside the alleged fraudulent conveyance. Since this was purely an application to the court to use its equitable powers, no statute of limitations is applicable.
If the defendants claimed that the passage of time, for whatever the reason, should bar the plaintiffs claim for equitable relief, the appropriate analysis should have considered whether the plaintiff’s claim was barred by the doctrine of laches, i.e., “an inexcusable delay in asserting a right . . . [so as] to prejudice him against whom the claim is made”; Kiley v. Doran, 105 Conn. 218, 228, 134 A. 792 (1926); or through application of the doctrine of equitable estoppel. “The office of an equitable estoppel is ‘to show what equity and good conscience require, under the particular circumstances of the case, irrespective of what might otherwise be the legal rights of the parties.’ Canfield v. Gregory, 66 Conn. 9, 17, 33 Atl. 536 [1895].” Newfield Building Co. v. Mohican Co., 105 Conn. 488, 500, 136 A. 78 (1927).
The trial court concluded that Rubin wanted “to protect his equity in the property and to exclude his creditors who might be subsequent encumbrancers by having a strict foreclosure that would necessarily include present and future creditors.” The trial court further concluded that Paul “would have had to place her head in the sand to be unaware of the events coming to pass in 1977 and 1978 . . . . ”
Despite Paul’s participation in a gross fraud, the trial court allowed her and thereby her husband, Rubin, to keep their ill gotten gains based upon the fact that the plaintiff: (1) knew the location of Rubin’s residence since 1975; (2) knew of the foreclosure of the Birch Mountain Road premises in 1978; and (3) knew that Rubin was living on these premises in 1980.
The trial court, however, made no findings as to the plaintiff’s knowledge of the $10,000 mortgage without *450consideration to Rubin’s mother, the assignment of the second mortgage to the parents of Rubin’s attorney, the redemption by Paul at the foreclosure sale in consideration of nothing more than a promissory note, and most critically, the fact that there was a personal relationship between Rubin and Paul. These facts were the heart of the fraud. Had the totality of these circumstances been exposed, as they should have been, to a laches or equitable estoppel analysis, the plaintiff's claim would not be barred and the obviously inequitable result that has been reached here surely could have been avoided.

 The amended complaint read as follows: “(1) At all times hereinafter mentioned, the defendant, John Rubin hereinafter referred to as the defendant owner, was indebted to the plaintiff in the sum of $236,968.78, now formalized in a judgment entered in the Superior Court for the Judicial District of Hartford on May 14, 1984.
(2) On or about June 7, 1978, the defendant owner, John Rubin allowed to be transferred to Linda Paul, the defendant transferee, his wife, through a foreclosure action, certain property located at 329 Birch Mountain Road, Manchester, Connecticut with the intent of avoiding the plaintiffs debt or of hindering its collection. Said foreclosure action was arranged for and manipulated by the defendant owner or his agents for the purpose of removing encumbrances from the property and avoiding the debt to this plaintiff.
(3) The defendant transferee knew that the defendant owner was indebted to the plaintiff, and in accepting the conveyance knowingly aided, abetted and conspired with the defendant owner for the purpose and intent aforesaid.
(4) The conveyance deprived the defendant owner of sufficient means to satisfy his indebtedness to plaintiff.
wherefore, the plaintiff claims:
(a) damages;
(b) that the conveyance be set aside and be declared null and void as to the plaintiff; and
(c) punitive damages and the cost of this action.”
The claims for damages are surplusage as that matter had already been determined in the earlier Superior Court action.

 In Murphy v. Dantowitz, 142 Conn. 320, 114 A.2d 194 (1955), the plaintiff sought to recover for personal injuries sustained as the result of the defendants’ alleged negligence in maintaining a defective condition in a tenement house. In White v. Amenta, 110 Conn. 314, 148 A.2d 345 (1930), both the plaintiff and the defendant claimed their entitlement to damages as the result of the other’s negligence in connection with an automobile collision.