Cockerham v. Westphalen

Citations

• 225 Conn. App. 484

Syllabus

Pursuant to statute (§ 52-552e (a)), ''[a] transfer made or obligation incurred by a debtor is fraudulent as to a creditor, if the creditor's claim arose before the transfer was made or the obligation was incurred and if the debtor made the transfer or incurred the obligation: (1) With actual intent to hinder, delay or defraud any creditor of the debtor; or (2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor (A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction, or (B) intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due.'' The defendant J appealed from the judgment of the trial court rendered for the plaintiff on three counts of his complaint that asserted claims of fraudulent transfer against J and her husband, the defendant W, pursuant to the Connecticut Uniform Fraudulent Transfer Act (CUFTA) (§ 52- 552a et seq.). In September, 2004, on the advice of W, the plaintiff transferred funds from his 401 (k) account into an individual retirement account (IRA) comanaged by A Co., W's employer. W subsequently formed T Co., and he left his employment with A Co. in 2007. In 2008, on the advice of W, the plaintiff transferred the balance of his IRA into another entity, and the funds were subsequently transferred to a bank account owned by T Co. so that W, as the sole member of T Co., could fully manage and invest the funds for the plaintiff. As part of this transaction, T Co. issued an unsecured promissory note to the plaintiff in the amount of $185,000. The plaintiff invested additional funds into accounts held and managed by T Co. in 2009 and 2011, bringing the plaintiff's total principal investment to more than $227,000. Thereafter, W mismanaged the plaintiff's investments and was negligent in the han- d