| Henry v Soto-Henry |
| 2011 NY Slip Op 08627 [89 AD3d 617] |
| November 29, 2011 |
| Appellate Division, First Department |
| Christopher Henry, Respondent, v Marisa Soto-Henry,Appellant. |
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Order, Supreme Court, New York County (Tandra L. Dawson, J.), entered on or aboutNovember 3, 2010, which, to the extent appealed from, as limited by the brief, denied defendant'smotion to vacate the sale of the marital residence, unanimously reversed, on the facts and in theexercise of discretion, without costs, the order vacated as appealed, and the matter remanded fora hearing on whether the sale of the marital residence was a fraudulent conveyance, with thepurchasers to be joined as necessary parties, and, in the event defendant prevails, the salevacated, and in any event, said hearing to be followed by further proceedings, including a trial onthe issue of equitable distribution.
In October 2009, defendant was granted exclusive use and occupancy of the maritalresidence, where she continues to reside with the parties' two children. Shortly before a trial onequitable distribution was scheduled to take place, plaintiff transferred the marital residence,which he had purchased several years prior to the marriage, to his aunt, Hilma Gray, and a friend,Michael Pottinger (the purchasers), for $200,000. The purchasers then commenced proceedingsin Civil Court seeking to evict defendant.
Defendant is a creditor to plaintiff as to equitable distribution of assets in a pending divorceeven though the claim may be unmatured and unliquidated at the time of the conveyance (Debtorand Creditor Law § 270; see Kasinski v Questel, 99 AD2d 396 [1984], appealdismissed 62 NY2d 977 [1984]; Soldano v Soldano, 66 AD2d 839 [1978]).Appreciation in the value of the separate property of one spouse due to the direct or indirectcontributions of the other spouse would constitute marital property subject to equitabledistribution (see Domestic Relations Law § 236 [B] [1] [d] [3]; Hartog vHartog, 85 NY2d 36, 45-46 [1995]; Price v Price, 69 NY2d 8, 17-18 [1986]).
Defendant's allegations, if true, show that the sale of the apartment to purchasers was afraudulent conveyance in that it was made with "actual intent . . . to hinder, delay,or defraud" her by defeating the award of exclusive possession and depriving her of her potentialequitable share in the apartment (Debtor and Creditor Law § 276; see also Spencer vHylton-Spencer, 273 AD2d 374, 374-375 [2000], lv denied 96 NY2d 708 [2001]). Insupport, defendant pointed to many badges of fraud, including the timing of the sale, shortlybefore a hearing on equitable distribution was to commence, and the transfer of the apartment toplaintiff's aunt and friend, who were aware that defendant occupied the apartment (see Dempster v Overview Equities, 4AD3d 495 [2004], lv denied 3 NY3d 612 [2004]). Plaintiff's assertion that the salewas [*2]necessary to avoid foreclosure did not utterly refute thesecontentions.
Although defendant did not provide proof of inadequate consideration, at oral argumentcounsel for plaintiff and defendant both offered to produce an appraisal if given the opportunityto do so. Plaintiff's counsel also stated that the apartment sold at a lower price because "right now[it] qualifies as an occupied apartment." Further, Supreme Court had noted in a prior order datedSeptember 17, 2010 that plaintiff was very evasive and did not provide straightforward answerswhen questioned regarding foreclosure proceedings, the amount of arrears owed on the mortgagefor the marital residence and his actions regarding his attempt to sell the marital residence.
Given these circumstances, a hearing is warranted to determine whether the sale of themarital residence was a fraudulent conveyance.
We note that the purchasers are necessary parties to the hearing because their interest in thepremises would be affected by an order vacating the sale. We also note that counsel for thepurchasers were heard at oral argument on defendant's motion and asked that the sale not be setaside because they were bona fide purchasers. They also moved before this Court on multipleoccasions to lift the stay of eviction we granted. Consequently, we direct that the purchasers beadded as parties on remand with respect to the determination of the fraudulent conveyance issue.Concur—Andrias, J.P., Friedman, Catterson, Renwick and DeGrasse, JJ.
Motion to vacate stay of eviction pending resolution of the appeal denied.