Plaintiff (s), MOTION DATE: 1/14/05. Defendant (s).

Transcription

1 ScAA/ SHORT FORM ORDER Present: SUPREME COURT CLAUDE EVANGELISTA, HON. UTE WOLFF LALY, STATE OF NEW YORK Justice mod TRIAL/lAS, PART 11 NASSAU COUNTY -against- Plaintiff (s), MOTION DATE: 1/14/05 INDEX No. :1022/03 MOTION SEQUENCE NO: 4 VLS ENTERPRI SES CORP., I LOVE YOU MARKETING, LTD., (d/b/a VELIS ASSOCIATES), PETER VELIS (a/k/a PETER TZILVELIS and PETER TSILVELIS) and JANE VELIS (a/k/a JANE TZILVELIS and JANE TSILVELIS), U. S. BANK NATIONAL ASSOCIATION and MATTEO PATISSO, Defendant (s). The following papers read on this motion for summary Notice of Motion/ Order to Show Cause Answering Affidavits. Replying Affidavits. Briefs: j udgmen t : Upon the foregoing papers, it is ordered that this motion by plaintiff for an order pursuant to CPLR 3212: (a) granting summary judgment in his favor dismissing defendant Matteo Patisso' s answer and counterclaim; (b) granting summary judgment in his favor on the first and second causes of action; (c) directing a trial on the issue of an award of money damages and (d) imposing a constructive trust is granted to the extent provided herein. This is an action by a judgment creditor to, inter alia, declare that the conveyance by defendant Peter Vel is (a/k/a Peter Tzilvelis and Peter Tsilvelis) of real property known as 3716 Jules

2 Evangelista v VLS Index No. 1022/03 Lane, Wantagh, New York, (" Premises ) to defendant Matteo Patisso to be fraudulent and void. The plaintiff' s complaint alleges that by deed dated August 13, 2002 and recorded in Nassau County on September 9, 2002 (defendant Velis) fraudulently conveyed and transferred the Premises to (defendant patisso) for an alleged consideration of ($25, ). The plaintiff' s complaint also alleges " upon information and belief " that defendant Velis "has no other assets out of which (plaintiff) herein could exact payment. The plaintiff' s complaint goes on to allege " upon information and belief " that " said Premises was not conveyed at arms' length or for valid consideration and (that) the selling and/or transferring of such Premises was a mere sham transfer done with the specific intent of hindering and delaying (plaintiff' s) efforts to collect monies lawfully owed to him by (defendant Velis). The plaintiff moves for summary judgment, inter alia, on the grounds that " the sale of (the) Premises from Velis to patisso in or about August, 2002 was fraudulent under Sections 273 -a and 273 of New York' s Debtor and Credi tor Law (\ DCL' ) because it was made wi thout fair consideration at a time when Velis was a judgment debtor as a result of an action for money damages, and because Velis became insol vent thereby. showing under DCL The court holds that the plaintiff has made a prima facie 273-a. Section 273-a reads as follows: Every conveyance made wi thout fair consideration when the person making it is a defendant in an action for money damages. or judgment in such an action has been docketed against him, is fraudulent as to the plaintiff in that action without regard to the actual intent of the defendant if, after final judgment for the plaintiff, the defendant fails to satisfy the judgment. Wi th respect to fair consideration, the plaintiff has attached a copy of an agreement between Mr. Patisso and Peter Tzil velis (i. e., Mr. Velis) entitled " Consideration Agreement/Buy- Out Agreement" in which Mr. Patisso agreed to pay Mr. Velis $25, 000. cash " on the date of the closing. In his affidavit, Mr. patisso

3 Evangelista v VLS - 3 Index No. 1022/03 admits paying $ in cash to Mr. Velis. The plaintiff has furthermore attached a copy of a real estate appraisal dated July 23, 2002 indicating that the value of the Premises is $330, (Plaintiff' s Exhibit N). In his affidavit, Mr. patisso states that he arranged for this appraisal. Since the "Consideration Agreement/Buy-Out Agreement" does not provide for any other money or property to be given to Mr. Velis, the plaintiff has made a prima facie showing that the Premises was not sold for a fair consideration. With respect to Mr. Velis being a judgment debtor, the plaintiff has attached a copy of a default judgment in the sum of $12, entered against Mr. Velis on July 23, 2002 in Supreme Court, New York County. In this regard, the plaintiff states that Mr. Velis has " failed to satisfy the judgment in any manner. " Thus, the plaintiff has made a prima facie showing that Mr. Velis was a judgment debtor on the date (i. e., August 13( 2002) he conveyed the Premises to Mr. Patisso and that the judgment has not been satisfied. The Court holds that the plaintiff has likewise made a prima facie showing under DCL ~ 273. Section 273 reads as follows: Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent is fraudulent as credi tors without regard to his actual intent if the conveyance is made or the obligation is incurred without a fair consideration. As already held, the plaintiff has made a prima facie showing that the Premises was conveyed to Mr. Patisso without fair consideration. With respect to Mr. Velis being insolvent on the date of the conveyance to Mr. Patisso, the Court notes that " the element of insolvency is presumed when a conveyance is made without fair consideration, and the burden of overcoming such presumption is on the transferee" (See United States v Alfano 34 F. Supp. 2d 827, 845). The burden of proof is now on defendant patisso " to produce evidentiary proof in admissible form sufficient to establish the

4 Evangelista v VLS Index No. 1022/03 existence of material issues of fact which require a trial of the action (Alvarez v Prospect Hosp., 68 N. Y. 2d 320, 324). The Court holds that defendant patisso has not met this burden. Mr. Patisso states that he "purchased the premises known as 3716 Jules Lane, Wantagh, New York, from Defendant Peter Vel is, for adequate consideration, in an arms length transaction. Mr. patisso further states that he "had absolutely no knowledge that Mr. Velis had a judgment against him by the Plaintiff, nor did he (i. e., Mr. Velis) ever disclose it to (him) or to anyone else (he) knew or worked wi th. " Mr. patisso additionally states that the judgment against Mr. Velis "did not appear on the title search that (he) had performed on the Premises, which was done by Junction Abstract. Mr. patisso goes on to state that " contrary to the Plaintiff' allegations, the Premises were not transferred to (him) for the sole consideration of $25, Mr. patisso states that " (he) agreed to take the Premises subject to the I. S. federal tax liens in the amount of $50, , and the existing mortgage now held by Bank of America, which has increased to nearly $200, , as of approximately four months ago (i. e., four months from December 21, 2004) at which time (he) reinstated the mortgage for the price of $62, In another paragraph of his affidavit, Mr. patisso indicates that he " assumed" Federal tax liens in the sum $50, and the first mortgage in the amount of $159, Mr. patisso also states that he negotiated the release of New York State tax liens totaling $405, "for the payment of $5, " The court holds that Mr. patisso' s conflicting statements that he either took the Premises " subject" to the Federal tax liens and the first mortgage or that he " assumed" the Federal tax liens and the first mortgage does not establish that these items are consideration. While the assumption of a mortgage constitutes tangible consideration (see united States v McCombs 30 F. 3d 310, 325; Gavenda v Orleans County, 2002 U. S. Dist. LEXIS 25515, p. 7 (W. D. N. )), it is the rule that the assumption of a mortgage must Gavenda v Orleans County, supra; General be in writing (see Obligations Law ~ 5-705). Mr. patisso has not produced a written assumption of the mortgage. In addition there has been no production of a written assumption of the Federal tax liens. to the release of the New York State tax liens negotiated by Mr.

5 ..j;"" Evangelista v VLS Index No. 1022/03 patisso and his payment of $5, for that purpose, the court holds that this is not consideration because the benefit flows only to Mr. Patisso. Mr. Patisso maintains that " (he) purchased the Premises in exchange for consideration in the approximate amount of $240, " The court holds, however, that the evidentiary proof before the court shows that Mr. patisso purchased the Premises for a cash payment of $25, to Mr. Velis - nothing more. As a matter of law, $25, is not a fair consideration for a property valued at $330, Accordingly, the plaintiff is granted judgment declaring that the conveyance of the real property known as 3716 Jules Lane, Wantagh, New York, by defendant Peter Velis (a/k/a Peter Tzilvelis and Peter Tsilvelis) to defendant Matteo patisso on August 13, 2002 is fraudulent and void as to the plaintiff. Furthermore, a constructive trust is hereby imposed over the Premises and defendants Peter Velis and Matteo patisso are enjoined from transferring or encumbering the Premises without leave of the Court. The trial of the issue of money damages will be scheduled upon the service and filing of a note of issue and certificate of readiness. Finally, defendant Matteo patisso' s counterclaim for money damages based upon the plaintiff filing a notice of pendency against the Premises is hereby severed and dismissed. The plaintiff' s application to dismiss defendant Patisso' s answer is, however, denied. No grounds have been alleged for putting said defendant into default. Dated: fe8 1 6 Z005 Ll Lt lw / ENTER evangelista COUNTY fee" NAf ) county \ t:d /S OFF'