Court Opinion

ID: 5897749
Source: CourtListenerOpinion
Date Created: 2022-01-13 03:10:16.846431+00
Date Added: 2024-06-11T08:45:33.780618
License: Public Domain

Kane, J. P., dissents and votes to modify in a memorandum. Kane, J. P. (dissenting).
In order to prevail under Debtor and Creditor Law § 273-a, a plaintiff is required to prove three elements: "(1) that the conveyance was made without fair consideration; (2) that the conveyor is a defendant in an action for money damages or that a judgment in such action has been docketed against him, and (3) that defendant has failed to satisfy the judgment” (Schoenberg v Schoenberg, 113 Misc 2d 356, 358, mod on other grounds 90 AD2d 827). The conveyance in question occurred during the pendency of plaintiff’s action for unpaid support, which should be considered an action for money damages under Debtor and Creditor Law § 273-a. Further, the judgment remains unsatisfied. Accordingly, the issue distills to a determination of whether factual issues exist upon the issue of fair consideration.
Defendants contend that the evidence submitted in opposition to plaintiff’s motion for summary judgment was sufficient to establish factual issues relating to the adequacy of the consideration involved in their transaction. According to defendants, the real estate was conveyed in satisfaction of an antecedent debt owed by Storch to Findlan. This debt accrued over a number of years in which Findlan was employed by Storch’s corporation but, due to financial difficulties, was not paid commensurate with her true worth. Plaintiff, on the other hand, argues that no such antecedent debt existed and that the transfer was gratuitous as evidenced by the notations on the deeds, which indicate that no real estate transfer taxes were paid. Additionally, plaintiff contends that there was no fair consideration as a matter of law because of defendants’ lack of good faith in connection with the challenged conveyances.
Pursuant to Debtor and Creditor Law § 272, good faith is an essential element of fair consideration (see, e.g., Julien J. Studley, Inc. v Lefrak, 66 AD2d 208, 213, affd 48 NY2d 954). The evidence of Storch’s history of nonpayment of child support, coupled with the timing of the execution and recorda*870tion of the deeds to Findlan, amply supports plaintiffs assertion that defendants lacked good faith in relation to the challenged conveyance. In response, defendants have failed to argue their own good faith. Consequently, in my opinion, Special Term properly resolved this issue in plaintiffs favor (see, Behar v Ordover, 92 AD2d 557, 558, appeal dismissed 59 NY2d 762).
Turning to the issue of counsel fees, I find that it was error for Special Term not to sever this portion of plaintiffs claim and direct that it proceed to trial. Although, on this motion it cannot be said as a matter of law that plaintiff established Storch’s actual fraudulent intent, plaintiff should be allowed to proceed to trial to attempt to prove Storch’s actual intent and, accordingly, establish her entitlement to counsel fees pursuant to Debtor and Creditor Law § 276-a (see, Schoenberg v Schoenberg, 90 AD2d 827).
I would therefore modify by directing that plaintiffs claim for counsel fees be set down for trial and, as so modified, I would affirm (see, supra).