Case Law Shorts

Case Law Shorts     July 19, 2013        New York Appellate Division, Second Dept.

Deed/Fraudulent Conveyance/Debtor Creditor Law/ "Badges of Fraud"/Intent: Husband transferred property to wife. Judgment creditor sued to set aside the deed, arguing that husband made the transfer to avoid paying creditor, and moved for summary judgment. The Supreme Court, Kings County denied but the Second Dept. reversed…"'Pursuant to Debtor and Creditor Law § 276, [e]very conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay, or defraud either present or future creditors, is fraudulent as to both present and future creditors' (Matter of U.S. Bancorp Equip. Fin., Inc. v Rubashkin, 98 AD3d 1057, 1060; see Pen Pak Corp. v LaSalle Nat'l Bank of Chicago, 240 AD2d 384, 386).' 'Direct evidence of fraudulent intent is often elusive. Therefore, courts will consider badges of fraud,' which are circumstances that accompany fraudulent transfers so commonly that their presence gives rise to an inference of intent' (Pen Pak Corp. v LaSalle Nat'l Bank, 240 AD2d at 386, quoting MFS/Sun Life Trust-High Yield Series v Van Dusen Airport Servs. Co., 910 F Supp 913, 935 [SD NY 1995])."  The Court stated that husband transferred the property for inadequate consideration and continued to live in the premises. Husband argued that the transfer was made in anticipation of a divorce, but that the parties reconciled. However, the Court was not persuaded and stated that the evidence was insufficient.  5706 Fifth Ave., LLC v Louzieh, Appellate Division, Second Department, 2013 NY Slip Op 05187, July 10, 2013

Case Law Shorts  July 7, 2013     New York Appellate Divison, Second Dept.
MERS/Mortgage Foreclosure/Standing/Holder of Note and Mortgage: MERS, as nominee for lender, foreclosed and defendant countered with lack of standing. Defendant maintained that MERS did not own both the note and the mortgage when MERS filed the action. The Supreme Court, Suffolk County, granted summary judgment to MERS stating that the standing argument was "mere conclusory allegation, expression of hope or unsubstantiated claim.". On appeal, the Second Dept. reversed after searching the record, stating that MERS failed to prove ownership of both the note and the mortgage when it commenced the action.The Court was not pursuaded by language in the mortgage that authorized MERS to foreclose and further stated that a subsequent assignment of the note to a sustituted plaintiff did not prove that MERS owned both instruments when it commmenced the action. Homecomings Fin., LLC v Guldi,Appellate Division, Second Department, 2013 NY Slip Op 05048, July 3, 2013

Case Law Shorts  July 7, 2013     New York Appellate Division, Second Dept.
Easement/Driveway/Subdivision/Over-Burdening: Defendant subdivided a dominant parcel into three subparcels and attempted to construct a driveway over a dedicated easement to a road. Plaintiff sued to prevent the driveway arguing "reasonable use". The Supreme Court, Nassau County, dismissed the case but the Second Dept. reversed stating that although the defendant documented the grant of the easement, it failed to "conclusively establish, as a matter of law, that the construction of the driveway constituted a reasonable use of the easement, necessary and convenient for the purpose for which it was created, and that the driveway did not materially increase the burden on the servient estate." Shuttle Contr. Corp. v Peikarian, Appellate Division, Second Department,2013 NY Slip Op 05057, July 3, 2013