Opinion
06/15724.
Decided on April 4, 2008.
BANSBACH ZOGHLIN P.C., JOHN M. BANSBACH, ESQ., of Counsel, Attorneys for Plaintiff.
PANZARELLA COIA, PC, RICHARD COIA, ESQ., of Counsel, Attorneys for defendant Thomas G. Bryant.
WEIDMAN, VAZZANA, CORCORAN VOLTA, P.C., JAMES G. VAZZANA, ESQ., of Counsel, Attorneys for defendant George F. Davin.
Robert E. Bryant, the father of Thomas G. Bryant and husband of Marie T. Bryant and stepfather of George F. Davin, at the time his wife was admitted into plaintiff's nursing home on February 22, 2002 signed a contractual agreement with plaintiff to be responsible for his wife's nursing home services. (Ex A to Carmestro's affidavit dated February 15, 2008). He died on January 14, 2004, and Marie died 22 months thereafter on November 12, 2005. Neither Thomas G. Bryant nor Marie Bryant's estates have been made a party to this action.
Plaintiff alleges that the amount of $54,492.37 was incurred for nursing services for the period of June 1, 2005 to November 1, 2005, 1-1/2 years after Thomas G. Bryant's death. Plaintiff contends that during 2003 Robert E. Bryant transferred approximately $230,000 to his son, defendant Thomas G. Bryant without consideration, and retained $160,000 plus income of approximately $2,300 per month. Plaintiff further alleges that $44,000 of those transferred funds were from a joint Key Bank account with Marie T. Bryant. (Vazzana letter dated 2/18/08).
Plaintiff alleges that the transfers made by Robert E. Bryant rendered him unable to pay for those future expenses of Marie T. Bryant, which would be incurred on or after June 1, 2005, to be owed to the nursing home. Plaintiff seeks to set aside those transfers to the extent of $54,492.37 plus interest and attorney fees. Plaintiff has made only the transferee Robert E. Bryant a party asserting the transfers were in violation of Debtor and Creditor Law Section 273, and with the actual intent to hinder, delay or defraud present and future creditors in violation of Debtor Creditor Law Section 276, and, thereby, liable for counsel fees pursuant to Debtor Creditor Law Section 276-a).
Defendant Bryant denies that either he or his father fraudulently transferred any monies or that the transfers made would render his father or his stepmother unable to pay her bills. Defendant Bryant submits that his father paid for the care of his stepmother until his father's death and upon death left his stepmother more than she was entitled to under her elective share. The transfer did not render his father insolvent as he had retained $160,000 in joint assets, and monthly income of $2,300. He continued to pay his wife's nursing home expenses as he contracted until his death, at which time Marie received the $160,000 joint assets. She also had a monthly social security income of $1,100, and defendant Bryant asserts the amounts she had were sufficient to pay the plaintiff's debts.
Robert E. Bryant — Latta Road Nursing Home: No Creditor — Debtor Relationship:
The Debtor and Creditor Law Sections 273, 275, 276 and 276(a) is intended to benefit present and future creditors of the transferor. Plaintiff, although a creditor of Marie and Robert at the time of transfer in 2003, was not a future creditor for the period of June 1, 2005 to November 2, 2005. The contractual obligation between plaintiff and Robert E. Bryant terminated upon his death on January 14, 2004 at which time he was current on all his obligations with plaintiff. The defendant makes no claim that there was a continuing contractual obligation under the contract, which continued after Robert Bryant's demise. In fact, the plaintiff required Marie's son George F. Davin to sign a similar replacement contract, which contract was in effect during the subject period. ( New Rochelle Trust Co. V. Grab, 245 AD 837, (1935)).
Nor could plaintiff premise a future creditor relationship upon the husband's obligation to provide for his wife's necessities as that obligation, except in certain circumstances, not applicable here, also ends in death. No such claim is made here by the plaintiff.
Even for medicaid purposes, when the State has the benefit of a statutory implied contract, the husband is chargeable to the State with the recipient spouse's support only until the time of the community spouse's (husband) death. (Social Services Law Sec. 101(1) and (2)), and then only for services rendered prior to his death. ( In the matter of the Estate of Leon Schneider, 15 Misc 3d 1146A, (Surr.Ct., Nassau Cty., 2007); Matter of Craig, 82 NY2d 388, 390 (1993)). Further, recovery is only allowable if the husband "had sufficient means at the time of accrual of the obligation. Craig, supra, interpreting Social Services Law Sec. 366(3)(a)". ( In Re Estate of Tomeck, 8 NY3d 724, 835 (2007) (emphasis added).
Accordingly, plaintiff has no standing as creditor to pursue transferred assets from the husband for the wife's debts, which occurred 1-1/2 years after the husband's death.
The numerous cases cited by plaintiff are distinguishable on the basis of the aforesaid distinctions.
Marie Bryant — Latta Road Nursing Home:
The claimed violation of the debtor-creditor law as to Marie Bryant requires a different analysis since between her and plaintiff there was always a creditor-debtor relationship.
At the time of Robert E. Bryant's 2003 transfer he also purportedly transferred $44,000 of a joint account with Marie. The law presumes that Marie is owner of one-half undivided interest of joint account, which is rebuttable upon proof of whose funds they are. Also, failure to take action after knowledge thereof may be ratification of the transfer of those funds by her. ( Kleinberg v. Heller, 38 NY2d 836, (1976)). Assuming one-half ownership in Marie, the resolution of which requires Marie and Robert's estate to be a party, ( Weston v. Vidal, 18 Misc 3d 1115A, (, Sup. Ct., Kings County), the issue then turns to whether that transfer of $22,000 caused Marie to become insolvent as to her future nursing home debt of $54,492.37 which occurred between June 1, 2005 and November 12, 2005.
The record does not show that the transfer of the $44,000 in 2003 left Mrs. Bryant unable to pay the nursing home expenses claimed by plaintiff. At the time of Robert's death, Marie through passage of joint ownership received an estate of approximately $160,000 plus $1,100 monthly from Social Security. It is not clear whether Robert's additional pensions and income, and the life insurance proceeds passed to her also. In any event, during the 22 months that she survived Robert she had at her disposal the total sum of at least $184,200 plus interest accruing thereon. $120,00 was paid to the nursing home, leaving $40,000 from the $160,000 plus the monthly income totaling $68,000 available for the creditors. (Letter of Vazzana dated 2/18/08). The $40,000 was transferred by George Davin to himself and his siblings through a power of attorney prior to the mother's demise.
Even if the Social Security income is not taken into account, the most that can be set aside by plaintiff is $14,492.37, from the 2003 joint account.
New York permits a creditor to set a conveyance aside under Sections 273, 276 and 278, only to the extent necessary to satisfy its own claim. It cannot set aside the conveyances completely and subject the excess to claims of others. ( Buckley Petroleum Products Inc. V. Schwartz, 28 AD2d 640, 641, (1967); Society of Milion Athena Inc. V. National Board of Greece, 281 NY 282, 293, (1939)).
In any event, the burden of proof is upon the claimant to show the debtor rendered herself insolvent in the payment of its debt, and failure to prove on the facts in the record requires dismissal. ( Grace Plaza v. Heitzler, 2 AD3d 780, (2nd Dept., 2003); Shelly v. Doe, 249 AD2d 756, (3rd Dept., 1998); Berner Trucking v. Brown, 281 AD2d 924, (4th Dept., 2001)). A creditor has no claim to set aside the transfer beyond the extent necessary to satisfy its own claim. ( A/S Kreditt-Finans v. Cia Venetico, 560 F Supp 705, 711, (ED. PA., 1983)).
Accordingly, the action against transferee Thomas Bryant except for the $44,000 joint funds is dismissed for failure to establish a debtor-creditor relationship with transferor, Robert E. Bryant. The action regarding transfer of the $44,000 joint fund is dismissed for failure to join the necessary parties, viz. the estates of Robert and Marie Bryant, and failure to show that such amount transferred left Marie Bryant unable to pay the debt claimed by plaintiff. ( Weston, supra).
This shall constitute the decision and order of the Court. The signing of this decision and order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the provisions of that rule regarding entry, filing and notice of entry. However, the filing of the underlying motion papers upon which this motion was made is hereby dispensed with pursuant to CPLR 2220. Attorney for the defendant Bryant is directed to enter this Decision/Order without notice and to serve all attorneys of record with a copy of this decision with notice of entry.
SO ORDERED.