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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1533-16T2
FUTURE CARE CONSULTANTS,
LLC,
Plaintiff-Appellant,
v.
BARBARA ABRAHAM and
IAN LIVINGSTONE,
Defendants-Respondents.
____________________________
Submitted November 16, 2017 – Decided December 18, 2017
Before Judges Simonelli and Haas.
On appeal from Superior Court of New Jersey,
Chancery Division, Hudson County, Docket No.
C-000187-15.
SB2, Inc., attorneys for appellant (John P.
Pendergast, on the briefs).
Bogart, Keane, Ryan, LLC, attorneys for
respondents (James F. Ryan, Jr., on the
brief).
PER CURIAM
Plaintiff Future Care Consultants, LLC (FCC) appeals from the
November 4, 2016 final judgment entered in favor of defendants
Barbara Abraham and Ian Livingstone following a bench trial. On
appeal, FCC contends that defendants violated the Uniform
Fraudulent Transfer Act (UFTA),
N.J.S.A. 25:2-25, with respect to
the transfer of property owned by Abraham's father, Alwyn Trotman.
We disagree and affirm.
Trotman was born in Guyana, South America, and owned property
there. The property involved in this matter is located in Jersey
City (the property). There is a one-family home on the property.
After Trotman's wife, Stella, died in 2006, he had difficulties
maintaining the property and paying his bills. Abraham began
paying her father's bills in 2007.
In December 2011, Trotman called Abraham and asked her to
assume full responsibility for the property. There was a tax lien
on the property at the time, which Abraham subsequently paid to
avoid a tax foreclosure. On December 28, 2011, Trotman executed
a deed, which Abraham, a non-lawyer, prepared, transferring
ninety-nine percent of his interest in the property to Abraham for
one dollar, and reserving a one-percent interest and life estate
(the 2011 deed). Trotman's one-percent interest would transfer
to Abraham upon his death. Trotman also executed a general power
of attorney to Abraham.
At the time Trotman executed the deed, he was ninety years
old, but was in good physical and mental health, travelled alone
to Guyana every six months, was in control of his own life, and
2 A-1533-16T2
made his own decisions. No one anticipated he would require
nursing home care, and neither he nor Abraham had ever heard of
and did not know anything about FCC. Abraham's sister, Olwin
Trotman Jones, confirmed that in December 2011, Trotman was in
good health, was "very sharp," and had served in the military.1
Jones also confirmed that she knew about the 2011 deed and the
circumstances surrounding the transfer of her father's interest
in the property to her sister.
Livingstone was a very close, long-time family friend who
lived in Trotman's home for three years after he immigrated from
Guyana, and frequently helped Trotman make repairs after he moved
out. Livingstone's and Abraham's parents were friends since the
time they lived in Guyana, and the families remained close friends
when they immigrated to the United States. Livingstone considered
the Trotman's as family, and called Trotman "Uncle Alwyn" and
Stella "Aunt Stella."
At the time Trotman executed the 2011 deed, the home was in
poor condition and required extensive repairs. Abraham and
Livingstone verbally agreed that Livingstone would assume
responsibility for the property's improvements, maintenance, and
repairs. There is no evidence that at that time, Abraham also
1
Abraham has other siblings who were not involved in this
litigation.
3 A-1533-16T2
agreed to transfer any or all of her interest in the property to
Livingstone, or that Abraham or Livingstone intended to sell the
property.
Trotman continued living in the home until May 2013, when he
became ill and was admitted to a nursing home. In June 2013, FCC,
the nursing home's fiscal agent, contacted Abraham about Trotman's
application for institutional Medicaid benefits. Abraham
disclosed the transfer of Trotman's interest in the property to
her in December 2011, and sent FCC a copy of the 2011 deed.
The Hudson County Division of Welfare (Division) subsequently
determined that Trotman was financially eligible for institutional
Medicaid benefits, effective November 1, 2013. However, the
Division imposed a penalty from November 1, 2013 to August 21,
2015, due to Trotman's transfer of the property for less than fair
market value within the five-year lookback period. See N.J.A.C.
10:71-4.10. Instead of discharging Trotman from the nursing home,
FCC allowed him to stay. At the time he died in June 2015, his
outstanding nursing home bill was $332,460.60.
By August 2014, the property was still "in terrible shape"
and Livingstone was trying to restore it to its original state and
make it livable. Because Livingstone had done all of the work and
spent all of his money on repairs to the property, Abraham executed
a deed, which she prepared, transferring fifty percent of her
4 A-1533-16T2
interest in the property to him. In November 2015, Abraham and
Livingstone executed an agreement, which memorialized their 2011
verbal agreement that Livingstone would assume responsibility for
improvements, maintenance, and repairs to the property. The
agreement also contained Livingstone's proposal to obtain
Abraham's remaining fifty-percent interest in the property in
exchange for continuing to improve, maintain, repair, and perform
other services related to the property.
In January 2016, Abraham executed a deed, which she prepared,
transferring her remaining fifty-percent interest in the property
to Livingstone. By that time, Livingstone had expended over
$200,000 for repairs to the property, and later gave Abraham money
to pay the taxes. Regarding the Trotman family's continued use
of the property thereafter, Livingston testified as follows:
[W]e're all family and the property is
everybody's own. Not because my name is on
the deed. [The Trotman family] can use the
property, they can have fun, do whatever they
need to do, spend time, whatever is necessary.
There's no restrictions on the property where
people, the family can't use it. None
whatsoever.
Livingstone also testified that he planned to keep the property
for sentimental value and have the Trotman family use it when
necessary.
5 A-1533-16T2
During her trial testimony, Abraham misstated that she still
had an ownership interest in the property. She subsequently
confirmed that she had transferred her entire interest to
Livingstone. The trial judge indicated that he would review the
trial transcript to determine if there should be further action
taken against Abraham based on her misrepresentation of her
ownership interest in the property. However, the judge did not
find that the misrepresentation was relevant to whether there was
a fraudulent transfer of the property in December 2011.
In a subsequent oral opinion, the judge found that FCC did
not meet its burden of proving there was a fraudulent transfer
under
N.J.S.A. 25:2-25(a) or (b). The judge found credible the
testimony of Abraham and Jones about the circumstances surrounding
the transfer in December 2011. The judge emphasized that the
transfer occurred one and one-half years prior to Trotman's
admission to the nursing home, no one anticipated at the time of
the transfer that Trotman would be facing a nursing home stay, and
the reasons for the transfer were totally unrelated to his
subsequent admission into a nursing home.
The judge noted there were four badges of fraud present in
the case: (1) the transfer of the property was to an insider,
Abraham; (3) the debtor, Trotman, retained possession or control
of the property through a life estate; (3) the transfer was of
6 A-1533-16T2
substantially all of the debtor's assets; and (4) the value of
consideration for the transfer, one dollar, was not reasonably
equivalent. However, the judge concluded that these badges of
fraud did not compel a finding of fraudulent transfer.
After rendering his decision, the judge stated he did not
intend to obtain the trial transcript or take any further action
against Abraham. The judge attributed Abraham's misrepresentation
of her ownership interest in the property to her not "know[ing]
much about what she was doing in terms of preparation of documents.
There was somewhat of a . . . language problem." This appeal
followed.
On appeal, FCC contends that defendants violated the UFTA.
Although FCC argues the judge abused his discretion in finding
Abraham's testimony credible to conclude there was no UFTA
violation, FCC does not challenge Jones' testimony.
Our review of a trial court's fact-finding in a non-jury case
is limited. Seidman v. Clifton Sav. Bank, S.L.A.,
205 N.J. 150,
169 (2011). "The general rule is that findings by the trial court
are binding on appeal when supported by adequate, substantial,
credible evidence. Deference is especially appropriate when the
evidence is largely testimonial and involves questions of
credibility." Ibid. (quoting Cesare v. Cesare,
154 N.J. 394, 411-
12 (1998)). The trial court enjoys the benefit, which we do not,
7 A-1533-16T2
of observing the parties' conduct and demeanor in the courtroom
and in testifying. Ibid. Through this process, trial judges
develop a feel of the case and are in the best position to make
credibility assessments. Ibid. As a factfinder, the judge can
believe all, some, or none of a witness's testimony. See State
v. Wesler,
137 N.J.L. 311, 314 (1948) (holding the factfinder is
"not bound to believe testimony of any witness in whole or in
part, but [rather] may reject what in their conscientious judgment
ought to be rejected and accept that which they believe credible"),
aff'd,
1 N.J. 58 (1948). We will defer to those credibility
assessments unless they are manifestly unsupported by the record.
Weiss v. I. Zapinsky, Inc.,
65 N.J. Super. 351, 357 (App. Div.
1961). However, we owe no deference to a trial court's
interpretation of the law, and review issues of law de novo.
Mountain Hill, LLC v. Twp. Comm. of Middletown,
403 N.J. Super.
146, 193 (App. Div. 2008), certif. denied,
199 N.J. 129 (2009).
Applying the above standards, we discern no reason to disturb
the judge's ruling. We are satisfied that the record amply
supports the judge's factual and credibility findings.
The UFTA provides as follows:
A transfer made or obligation incurred by a
debtor is fraudulent as to a creditor, whether
the creditor's claim arose before or after the
transfer was made or the obligation was
8 A-1533-16T2
incurred, if the debtor made the transfer or
incurred the obligation:
a. With actual intent to hinder, delay, or
defraud any creditor of the debtor; or
b. Without receiving a reasonably
equivalent value in exchange for the transfer
or obligation, and the debtor:
(1) 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;[2] or
(2) Intended to incur, or believed or
reasonably should have believed that the
debtor would incur, debts beyond the debtor’s
ability to pay as they become due.
[N.J.S.A. 25:2-25.]
The purpose of the UFTA is to "prevent a debtor from placing his
or her property beyond a creditor's reach" to cheat a creditor and
to "allow the creditor to undo the wrongful transaction so as to
bring the property within the ambit of collection." Gilchinsky
v. Nat'l Westminster Bank N.J.,
159 N.J. 463, 475 (1999).
To determine if a conveyance constitutes a fraudulent
transfer, courts must engage in a two-part test. First, the court
must inquire "whether the debtor [or person making the conveyance]
has put some asset beyond the reach of creditors which would have
2
FCC does not contend that
N.J.S.A. 25:2-25(b)(1) applies.
9 A-1533-16T2
been available to them" if there had been no conveyance. Id. at
475-76 (alteration in the original) (quoting In re Wolensky's Ltd.
Partnership,
163 B.R. 615, 626-27 (Bankr. D.C. 1993)). Second,
the court must inquire "whether the debtor transferred the property
with an intent to defraud, delay, or hinder the creditor." Ibid.
This test requires the court to consider the totality of the
circumstances in each case. Id. at 476.
The party seeking to set aside the transfer bears the burden
of proving the debtor had the actual intent to defraud, delay, or
hinder the creditor. Ibid. To determine a debtor's actual intent,
courts should consider, among other factors, whether:
a. The transfer or obligation was to an
insider;
b. The debtor retained possession or control
of the property transferred after the
transfer;
c. The transfer or obligation was disclosed
or concealed;
d. Before the transfer was made or
obligation was incurred, the debtor had
been sued or threatened with suit;
e. The transfer was of substantially all the
debtor’s assets;
f. The debtor absconded;
g. The debtor removed or concealed assets;
h. The value of the consideration received
by the debtor was reasonably equivalent
10 A-1533-16T2
to the value of the asset transferred or
the amount of the obligation incurred;
i. The debtor was insolvent or became
insolvent shortly after the transfer was
made or the obligation was incurred;
j. The transfer occurred shortly before or
shortly after a substantial debt was
incurred; and
k. The debtor transferred the essential
assets of the business to a lienor who
transferred the assets to an insider of
the debtor.
[N.J.S.A. 25:2-26.]
Where several badges of fraud, as enumerated in
N.J.S.A. 25:2-26,
surround a transaction, a strong inference of fraud arises, which
a party can rebut using "strong, clear evidence" of a sufficient
explanation. Gilchinsky,
159 N.J. at 476, 484.
Here, factors a, b, e, and, arguably, factor h apply. Trotman
transferred the property to an insider;3 he retained possession of
the property after the transfer; the property appeared to be
Trotman's only valuable asset;4 and he did not receive fair market
value for the property. However, these badges of fraud did not
establish that Trotman transferred the property with the actual
3 N.J.S.A. 25:2-22(a)(1) defines an "insider," in relevant part,
as "[a] relative of the debtor."
4
The record does not reveal the value of Trotman's property in
Guyana at the time of the transfer.
11 A-1533-16T2
intent to hinder, delay, or defraud FCC or any other creditor,
N.J.S.A. 25:2-25(a), or intended to incur, or reasonably believed
or should have believed he would incur debts beyond his ability
to pay.
N.J.S.A. 25:2-25(b)(2). To the contrary, the evidence
confirms that Trotman's intent not to defraud creditors, but to
relieve himself of the responsibilities associated with owning it
and transfer it to his daughter, who was paying all of the bills.
What Abraham did with the property after the transfer and her
dealings with Livingstone are irrelevant to whether there was a
fraudulent transfer in December 2011. The UFTA only refers to the
debtor's actual intent at the time of the transfer, not to the
transferee's intent or actions upon receiving the asset.
The evidence also confirms that Trotman was in good mental
and physical health at the time of the transfer, capable of making
his own decisions, and no one anticipated he would require nursing
home care. There was no evidence that Trotman had any pressing
health condition at the time of the transfer to make him reasonably
believe he would require nursing home care.
We agree that FCC failed to prove Trotman made the transfer
with the actual intent to defraud, delay, or hinder it, or intended
to incur, or believed or reasonably should have believed he would
incur a nursing home debt he could not pay.
N.J.S.A. 25:2-25(a)
12 A-1533-16T2
and (b)(2). FCC's arguments to the contrary lack sufficient merit
to warrant further discussion. R. 2:11-3(e)(1)(E).
Affirmed.
13 A-1533-16T2
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