FRAUDULENT CONVEYANCES Nassau Academy of Law CLE Live ...

770 N.Y.S.2d 421 Page 22 A.D.3d 780, 770 N.Y.S.2d 421, 2003 N.Y. Slip Op. 19961(Cite as: 2 A.D.3d 780, 770 N.Y.S.2d 421)wait in order to be eligible for Medicaid assistancebased on rates charged by nursing home at time thattransfers were made. McKinney's Debtor and CreditorLaw § 275.[3] Fraudulent Conveyances 64(2)186k64(2) Most Cited CasesThere was no basis to set aside transfers that nursinghome resident made to family members following herreceipt of personal injury settlement proceeds, in absenceof evidence that nursing home resident madetransfers with actual intent to hinder, delay, or defraudnursing home that subsequently sought to recoversum owed to it for resident's care as present orfuture creditor; resident retained assets reasonablycalculated to cover cost of her care for three-yearwaiting period until she became eligible for Medicaidbenefits. McKinney's Debtor and Creditor Law § 276.**422 Joan M. Secofsky, New York, N.Y., for appellant.Abrams, Fensterman, Fensterman, Flowers & Eisman,LLP, Lake Success, N.Y. (Nancy J. Klein andAngela C. Bellizzi of counsel), for respondent.GABRIEL M. KRAUSMAN, J.P., LEO F. McGIN-ITY, ROBERT W. SCHMIDT and REINALDO E.RIVERA, JJ.*780 In an action, inter alia, to set aside a conveyancepursuant to Debtor and Creditor Law article 10,the defendant appeals from an order of the SupremeCourt, Queens County (Dye, J.), dated January 8,2003, which denied her motion for summary judgmentdismissing the complaint.ORDERED that the order is reversed, on the law,with costs, the motion is granted, and the complaint isdismissed.On January 8, 1996, the defendant's 81-year-oldmother, Estelle Witt, entered a nursing home ownedand operated by the plaintiff. Approximately ninemonths later, in September 1996, Mrs. Witt receivedthe sum of $659,532 in settlement of a medical malpracticeaction. It is undisputed that Mrs. Witt gaveover $350,000 of the settlement funds to the defendantand other family members. However, even aftertransferring these funds, Mrs. Witt retained over$342,700 in various bank and brokerage accounts.Mrs. Witt left the plaintiff's facility in November1999, and moved to a nursing home in Texas. Approximatelythree months later, the plaintiff commencedthis action, inter alia, to recover a balance of$26,610.73 allegedly due for Mrs. Witt's care, uponthe theory that the September 1996 fund transfers tothe defendant and other family members constitutedfraudulent conveyances pursuant to Debtor andCreditor Law §§ 273, 275, and 276. After discoverywas conducted, the defendant moved for summaryjudgment, contending that the September 1996 fundtransfers were not fraudulent conveyances becausethey did not render her mother insolvent, and werenot made with the intent to defraud creditors. *781The Supreme Court denied the motion, concluding,inter alia, that there were issues of fact as to whetherMrs. Witt had a **423 "good indication" of futureinsolvency when she transferred funds to her familyin September 1996, and whether she made the transferswith intent to defraud. We now reverse.[1] Pursuant to Debtor and Creditor Law § 273, aconveyance made by a person who will be renderedinsolvent thereby is fraudulent as to creditors, withoutregard to his or her actual intent, if the conveyanceis made without fair consideration. An individualis "insolvent" within the meaning of the Debtorand Creditor Law when "the present fair saleablevalue of his [or her] assets is less than the amountthat will be required to pay his [or her] probable liabilityon * * * existing debts as they become absoluteand matured" (Debtor and Creditor Law §271[1] ). Here, in support of her motion for summaryjudgment, the defendant submitted uncontrovertedevidence that her mother, now deceased, retainedcash assets of over $342,700 after the subject intrafamilytransfers, and that she continued to receive apension and social security benefits. Furthermore,there is no evidence that Mrs. Witt had outstandingdebts to the plaintiff nursing home, or any othercreditor, when the transfers were made in September1996. Under these circumstances, the transfers didnot render Mrs. Witt insolvent (see St. Teresa's NursingHome v. Vuksanovich, 268 A.D.2d 421, 702N.Y.S.2d 92), and thus were not fraudulent conveyanceswithin the meaning of Debtor and CreditorLaw § 273.[2] Furthermore, the September 1996 transfers cannotbe deemed fraudulent as to creditors pursuant toDebtor and Creditor Law § 275. Debtor and CreditorLaw § 275 provides that a conveyance made without© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.