Opinion
No. 519966/2019
01-04-2023
SRW EQUITIES LLC, 63RD STREET REALTY II LLC and SAMUEL WIESNER; Plaintiffs, v. MICHAEL NUSSEN, and WILLIAM NUSSEN, Defendants,
Unpublished Opinion
PRESENT: HON. LEON RUCHELSMAN
DECISION AND ORDER
Leon Ruchelsman, Judge
The. plaintiffs -have, moved seeking summary judgment pursuant to CPLR §3212 concerning all the allegations of. the Complaint. The defendants oppose the motion. Papers were submitted by the parties and arguments held. After reviewing all the arguments this court now makes the following determination.
On March 20, 2017 the defendant Michael Nussen acquired property located at 1536 59th Street in Kings County. The purchase price was $1,275,000 and a mortgage was obtained by Michael Nussen in the amount $.800,000.00 from MB Financial Bank, NA. Further, on April 23, the plaintiffs obtained an. arbitration. award for $454,429.90. That award was confirmed by this court and on September 6, 2019 judgment was entered in the amount of $470,836.69, On April 30, 2019 a week after the arbitration award the defendant Michael Nussen deeded the property to his father, defendant. William NuSsen. The plaintiffs: instituted this action and have asserted allegations the transfer of the property violated debtor creditor law §§27 3-a, 27 4, 27 5, 27 6 and 2'7 6-a-The plaintiffs have now moved seeking summary judgment arguing there are no questions of fact the transfer of. the property was. a fraudulent transfer pursuant to the debtor creditor law.
Conclusions of Law
Where the material, facts at issue in a ease are. in dispute summary judgment cannot be granted (Zuckerman v. City of Hew York, 49 N.Y.S.2d 557, 427 N.Y.S.2d 595 [1980]). Generally it is for the jury, the trier of fact to determine the legal cause of any injury however where only one. conclusion may be. drawn from the facts then the question of legal cause may be decided by the trial court as a. matter of law (Marino v. Jamison, 189 A.D.3d 1021, 136 N.Y.S.3d 324 [2d Dept., 2021).
It is well settled that pursuant to. .§27.3 of the Debtor Creditor' Law every conveyance made- by a party which then renders. the party insolvent is fraudulent without regard to intent if the conveyance is made without, fair, consideration. (Paragon v. Paragon., 164 A.D.3d 1460, 84 N.Y.S.3d 582 [2d Dept., 201.8.],) . Further, such transfers, are fraudulent if the transferor had unreasonable-small capital to operate the business (Debtor Creditor Law §274) or intended, or believed the transferor would incur debts beyond his or her ability to pay them when they matured (Debtor Creditor Law §2.75) or even if fair, consideration was present the transfer was made with the intent to defraud (Debtor Creditor Law §27 6) .. Debtor Creditor Law §276. (.a) provides that where a plaintiff successfully establishes actual intent to defraud then such plaintiff may be entitled to reasonable, attorney's- fees (5706 Fifth Avenue LLC v. Louzieh, 108 A.D.3d 589, 969 N.Y.S.2d 141 [2d Dept. 2013]). Thus, the statutes require a two pronged inquiry namely whether, the conveyance rendered the party insolvent, and whether the conveyance was accompanied with fair consideration (Epstein v. Nieves, 258 A.D.2d 436, 682 N.Y.S.2d 917 [2d Dept, 1999]).
The defendants argue, that an agreement between William and Michael his son demonstrates the property was owned by William who rented it to. his son. Michael.. Indeed, Article 1 of that agreement, provides that "Party A [William], delivered to. Party B [Michael] the sum Of four hundred seventy five dollars ($475,000) for which, he shall buy the aforementioned apartment, and Party A. names Party B to be involved and to carry out all matters of purchasing the house/ and is his agent on all matters including signing documents (in the name of Party B)" (id., [NYSCEF Doc. No, 53]). Thus, pursuant to that agreement Michael was not intended to be the. owner of the property at all and was merely purchasing the property as an agent of his father. Further Article 3 provides that "due to the reason described below., the deed shall be recorded in the name of Party B; however, Party B fully acknowledges that the house belongs to party A alone and that Party B has no right thereto, neither in whole, nor in part, and that he has no: permission or right to utilize the house for any benefit, such as to put it up as collateral or to encumber it in order to obtain a loan etc. in any shape whatsoever:, including but not limited to refinance without written, permission by Party A" (id). That provision .further supports, the argument the property never belonged to Michael. Moreover, Michael Nussen provided an affidavit wherein he states that his father purchased the property in March 2017 and intended to rent an apartment to him (see. Affidavit of Michael Nussen, ¶3 [NYSCE.F Doc No, 41]). Michael thus insists- that he never owned the: property and. while the deed was in his name the return of the deed back to William was not a fraudulent, transfer (see. Affidavit of Michael Nussen, ¶17) .
However, Michael obtained a mortgage wherein he confirmed that he "lawfully own the property" (see. Mortgage, page 4 of 16 [NYSCEF Doc. No. 49]). Michael executed the mortgage, in. his individual capacity arid not as an agent of William.. Thus, it cannot be asserted that. "Michael Nussen was only the. nominal owner of this Property which was purchased completely by his father" (Affirmation in Opposition, ¶3 [NYSCEF Doc. No. 35]). Michael can hardly be termed a nominal owner and it can hardly be asserted that. William is the true owner considering the note and mortgage executed by Michael. Therefore, the inescapable conclusion that must be drawn is that Michael Owned the property and the transfer from Michael to William amounted to a fraudulent conveyance. Further, there has been no evidence of any consideration regarding the transfer and a. presumption exists, which, has not been overcome, that the transfer rendered Michael insolvent. Therefore, based on the foregoing, the motion seeking summary judgment regarding DCL. §273-a and DCL §274, DCL §275, DCL §276 and DCL §276 (a) is granted.
So ordered.