FRAUDULENT CONVEYANCES Nassau Academy of Law CLE Live ...

Page 234 A.D.3d 231, 824 N.Y.S.2d 37, 2006 N.Y. Slip Op. 07985(Cite as: 34 A.D.3d 231, 824 N.Y.S.2d 37)Judgment debtors' actions through their agent in NewYork to move stock portfolio from state, if proved,would be sufficient to subject them to personal jurisdictionin New York in action alleging that transferwas fraudulent. McKinney's CPLR 302(a)(2);McKinney's Debtor and Creditor Law § 276.[3] Courts 106 19106 Courts106I Nature, Extent, and Exercise of Jurisdictionin General106k16 Jurisdiction of Property or Other Subject-MatterInvolved106k19 k. Situation of Personal Property.Most Cited CasesSecurities held by depository were not proper predicatesfor exercise of in rem jurisdiction in judgmentcreditor's action alleging that judgment debtors' transferof stock portfolio was fraudulent, where securitieswere held in fungible bulk and were not traceable toany particular individual.**38 Chadbourne & Parke LLP, New York (ThomasE. Butler of counsel), for appellantrespondent/appellant.Pillsbury Winthrop Shaw Pittman LLP, New York(David G. Keyko of counsel), for respondentappellant/respondent.FRIEDMAN, J.P., MARLOW, SULLIVAN,NARDELLI, GONZALEZ, JJ.*232 Order, Supreme Court, New York County (BarbaraR. Kapnick, J.), entered March 3, 2006, whichdenied defendants' CPLR 3211 motion insofar as itsought dismissal of the first cause of action in thesecond amended complaint and denied that branch ofdefendants' motion seeking vacatur of the previouslyissued order restraining disposition of certain disputedassets, but granted defendants' motion insofaras it sought dismissal of the second, third, fourth, andfifth causes of action in the second amended complaint,and order, same court and Justice, enteredMarch 20, 2006, which denied defendant's motion tovacate the preliminary injunction, unanimously affirmed,with one bill of costs in favor of plaintiff.Appeal from order, same court and Justice, enteredFebruary 8, 2005, unanimously dismissed, withoutcosts, as academic in light of the appeal from the subsequentorder.[1] In this action alleging the fraudulent transfer of astock portfolio, the motion court properly found thatplaintiff adequately pleaded a cause of action underDebtor and Creditor Law § 276 based upon “badgesof fraud” including, inter alia, the alleged transferpursuant to defendants' direction of the assets in thedisputed DORAW account from Lehman Brothers,Inc. in New York to Lehman Brothers Internationalin Europe while defendants were aware that plaintiffhad secured a default judgment against them in a relatedFlorida action considerably in excess of theDORAW account assets (see Wall St. Assocs. v.Brodsky, 257 A.D.2d 526, 529, 684 N.Y.S.2d 244[1999] ). Contrary to defendants' contention, plaintiff'sDebtor and Creditor Law § 276 claim did notrequire allegations that the transfer at issue had renderedthe subject assets totally and permanently unavailableor diminished. Plaintiff's allegations of a“deliberate attempt to stave off creditors by **39putting property in such a form and place that creditorscannot reach it” sufficed in support of their claim(Flushing Sav. Bank v. Parr, 81 A.D.2d 655, 656,438 N.Y.S.2d 374, appeal dismissed 54 N.Y.2d 770,443 N.Y.S.2d 61, 426 N.E.2d 752 [1981] ).[2] The actions of defendants through their agent inNew York to move the subject property from thisstate, if proved, would be sufficient to subject them topersonal jurisdiction pursuant to CPLR 302(a)(2) (seeBanco Nacional Ultramarino, S.A. v. Chan, 169Misc.2d 182, 188, 641 N.Y.S.2d 1006 [1996], affd.sub nom. Banco Nacional Ultramarino, S.A. v. MoneycenterTrust Co., 240 A.D.2d 253, 659 N.Y.S.2d734 [1997] ).Plaintiff satisfied the criteria for preliminary injunctiverelief (see City of New York v. Love Shack, 286A.D.2d 240, 242, 729 N.Y.S.2d 37 [2001] ).[3] Because the securities held by the depository areheld in *233 fungible bulk and are not traceable toany particular individual, they are not proper predicatesfor an exercise of in rem jurisdiction, and thesecond, third and fourth causes of action, premisedon an assertion of in rem jurisdiction over the depository-heldsecurities, were properly dismissed (seeMajique Fashions, Ltd. v. Warwick & Co. Ltd., 67A.D.2d 321, 326, 414 N.Y.S.2d 916 [1979] ).Finally, the fifth cause of action, seeking an account-© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.