Matter of Boudreau
Annotate this CaseDecided on October 24, 2006
Surrogate's Court, Richmond County
In the Matter of the Guardianship of JONATHAN BOUDREAU, SABRINA BOUDREAU, Minors Under Fourteen Years of Age.
G-37/05
John A. Fusco, J.
In these pending proceedings, consolidated for purpose of decision only, the underlying petition was brought seeking an Order to sell the infants' share of real property. Relating to that application, Kelly Boudreau, natural mother and guardian of the above named infants, the petitioner herein, through her attorney, has filed an Order to Show Cause to vacate a confession of judgment entered against her late husband, the decedent, by her late mother-in-law, Janet Boudreau, and to have said judgment removed from the record as a lien against the subject real property. Counsel for the fiduciary of the Estate of Janet Boudreau filed an affidavit in opposition, and the Guardian ad Litem, appointed to protect the interests of the infants herein, filed his affidavit supporting the motion. Finally, counsel for petitioner filed a reply affirmation in support of his application. All waived a hearing and submitted the matter to the Court for decision on the papers.
The facts herein are simple and not in dispute. The petitioner was married to decedent, John T. Boudreau, on August 4, 1990. Petitioner and decedent lived together as husband and wife at 185 Jamie Lane, Staten Island, New York until his death in December 2002. On October 24, 2002 the decedent signed a confession of judgment in the amount of $66,000.00 in favor of his mother, Janet Boudreau.
Furthermore, it is uncontroverted that at the time the confession of judgment was signed, Kelly Boudreau was in the process of retaining counsel and formally filing for divorce in Richmond County Supreme Court. It is further uncontroverted that this was common knowledge among all of the defendant's family members and by the decedent himself, inasmuch as Ms. Boudreau discussed with them the numerous problems between her and her late husband regarding his habitual drug use and the strain it was putting on their marriage.
After having reviewed all of the papers heretofore submitted herein, both in support of and in opposition to the motion, the Court determines that the confession of judgment must be vacated on both substantive and procedural grounds.
As to the substantive law, it is well established that confessions of judgment are always closely scrutinized and that courts should adopt a liberal attitude towards vacating a judgment by [*2]confession (Giryluk v Giryluk, 30 AD2d 22, affd 23 NY2d 894; Roe v Kestenberg, 23 AD2d 565, affd 16 NY2d 1023). Its purpose is to protect third parties from judgments entered on confession by collusion (Giryluk v Giryluk, supra).
This is particularly true when the confession of judgment is signed in favor of a close family member during the pendency of a divorce action, where any ambiguity must be resolved against the judgment creditor (see, McDaniel v Sangenino, 67 AD2d 698; Dempster v Overview Equities, Inc., 4 AD3rd 495).
Indeed, the Overview Court speaks of obligations incurred with intent to hinder, delay, or defraud either present or future creditors. The court therein provided "[m]oreover, direct evidence of fraudulent intent is often elusive. Therefore, courts will consider badges of fraud' which are circumstances that accompany fraudulent transfers so commonly that their presence gives rise to an inference of intent." The court continues that, among others, badges of fraud may include the close relationship among the parties to the transaction, and the transferor's knowledge of the creditor's claims, or claims so likely to arise as to be certain, and the transferor's inability to pay them.
The circumstances surrounding the confession of judgment herein are replete with "badges of fraud." At a time when the decedent's marriage was in trouble and his wife was consulting with counsel regarding divorce, the decedent signed a confession of judgment in favor of his mother for $66,000.00, allegedly borrowed from his mother while he was unemployed. This created a lien on the marital home, which could have been a valid target for equitable distribution, at a time when decedent was without other resources.
In any event, however, the judgment by confession is defective on another ground. CPLR 3218 provides that a judgment by confession may be entered without the necessity of an action upon "an affidavit executed by the defendant" which must contain, inter alia, a concise statement of the facts out of which the debt arose and a showing that the sum confessed is justly due or to become due. A concise statement of the facts, made under oath, is required so that any interested third party may investigate the matter and ascertain whether the confession of judgment was accurate and bona fide. The affidavit must separately state the amount of the loans, the dates upon which they were made, the amount of principal and the amount of interest (Wood v Mitchell, 117 NY 439.)
Thus, in the case of County Nat. Bank v Vogt, 28 AD2d 793, a judgment of confession was set aside where it appeared that the only description of the transaction in the affidavit was "money loaned by plaintiff to defendant and not repaid." In the instant case, the purported affidavit of confession of judgment is patently insufficient, and clearly fails to meet the requirements of CPLR 3218.
In light of this, and in consideration of the case law set forth above, the confession of judgment is hereby vacated and shall not be a lien on the subject premises.
Accordingly, now that the issue relating to the validity of the confession of judgment has been disposed of, the underlying matters relating to the sale of the infants' share of the real property are restored to the calendar for November 22, 2006 at 9:30 a.m., at which time the attorney for the guardian and the Guardian ad Litem shall appear to report on the status of the sale.
Settle decree.
Dated: October 24, 2006
[*3]
____________________________
JOHN A. FUSCO, Surrogate
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